<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the year ended December 31, 1998 Commission file number 001-13337
STONERIDGE, INC.
---------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Ohio 34-1598949
------------------------------- -------------------
(State or Other Jurisdiction of I.R.S. Employer
Incorporation or Organization) Identification No.)
9400 East Market Street, Warren, Ohio 44484
------------------------------------- ---------------
(Address of Principal Executive Offices) (Zip Code)
(330) 856-2443
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Registrant's Telephone Number, Including Area Code
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Exchange on Which Registered
------------------- ----------------------------
Common Shares, without par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
Based on the closing price of March 22, 1999, the aggregate market
value of common stock held by nonaffiliates of the registrant was $172.4
million.
The number of Common Shares, without par value, issued and outstanding
as of March 22, 1999 was 22,397,311.
DOCUMENTS INCORPORATED BY REFERENCE
Definitive Proxy Statement for the Annual Meeting of Shareholders to be
held on May 3, 1999, into Part III, Items 10, 11, 12 and 13.
<PAGE>
INDEX
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STONERIDGE, INC. -- FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
Part I.
Item 1. Business 3
Item 2. Properties 8
Item 3. Legal Proceedings 8
Item 4. Submission of Matters to a Vote of Security Holders 8
Part II.
Item 5. Market for Registrant's Common Equity and Related Shareholder Matters 9
Item 6. Selected Financial Data 10
Item 7. Management's Discussion and Analysis of Financial Condition and Results 11
of Operations
Item 8. Financial Statements and Supplementary Data 16
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial 38
Disclosure
Part III.
Item 10. Directors and Executive Officers of the Registrant 39
Item 11. Executive Compensation 39
Item 12. Security Ownership of Certain Beneficial Owners and Management 39
Item 13. Certain Relationships and Related Transactions 39
Part IV.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K 40
Signatures 42
</TABLE>
2
<PAGE>
Forward-Looking Statements
Portions of this report may contain "forward-looking statements" under
the Private Securities Litigation Reform Act of 1995. These statements appear in
a number of places in this report and include statements regarding the intent,
belief or current expectations of the Company, its directors or its officers
with respect to, among other things, the Company's (i) future product and
facility expansion, (ii) acquisition strategy, and (iii) investments and new
product development. The forward-looking statements in this report are subject
to risks and uncertainties that could cause actual events or results to differ
materially from those expressed in or implied by the statements. Factors which
may cause actual results to differ materially from those in the forward-looking
statements include, among other factors, the loss of a major customer, a decline
in automotive, medium and heavy-duty truck or agricultural vehicle production,
the failure to achieve successful integration of any acquired company or
business, including Hi-Stat Manufacturing Co., Inc., and Delta Schoeller, Ltd.,
or a decline in general economic conditions in any of the various countries in
which the Company operates. Further information concerning issues that could
materially affect financial performance is contained in the Company's periodic
filings with the Securities and Exchange Commission.
PART I.
ITEM 1. BUSINESS
The Company
The Company was founded in 1965 as a manufacturer of wire harnesses for
the agricultural vehicle market. In 1987, the Company began to transition away
from contract manufacturing into a value-added designer and manufacturer of
highly engineered products by developing internal engineering capabilities and
pursuing an acquisition program to expand product offerings. The Company
completed its initial public offering on October 10, 1997 (the Offering).
The Company is a leading independent designer and manufacturer of
highly engineered electrical and electronic components, modules and systems for
the automotive, medium and heavy-duty truck and agricultural vehicle markets.
The Company's products interface with a vehicle's mechanical and electrical
systems to activate equipment and accessories, display and monitor vehicle
performance, and control and distribute electrical power and signals. The
Company has a leading market position in the design and manufacture of
electrical and electronic components, modules and systems for the medium and
heavy-duty truck and agricultural vehicle markets. In the automotive market, the
Company designs and manufactures specially designed and engineered electrical
and electronic components and modules, typically on a sole-source basis.
Recent Acquisitions and Joint Ventures
In December 1998, the Company purchased all of the outstanding common
shares of Hi-Stat Manufacturing Co., Inc., a manufacturer of engineered sensors,
switches and solenoids for measuring speed, pressure, temperature and fluid
levels in vehicles. Hi-Stat primarily serves the automotive industry. Cash
consideration paid by the Company with respect to this purchase was
approximately $362.0 million.
In October 1997, the Company purchased 50% of the outstanding common
stock of PST Industria Eletronica da Amazonia Ltda. (PST), a Brazilian
electronic components business which specializes in electronic vehicle security
devices. Total cash consideration paid by the Company with respect to this
investment was $17.7 million, including fees and expenses.
In August 1997, the Company entered into two joint venture agreements
with Connecto AB, a Swedish manufacturer of power distribution systems. Pursuant
to the terms of the agreements, the Company expects to pay approximately $2.4
million for a 60% interest in a Brazilian joint venture and $1.1 million for a
40% interest in a European joint venture. The joint ventures are establishing
production facilities in Brazil and Europe for the purpose of manufacturing and
selling power distribution systems in South America and Europe, respectively. In
addition, the joint ventures will pursue sales and marketing efforts for other
products and services of the joint venture partners.
3
<PAGE>
In April 1996, seeking to leverage its capabilities and diversify its
OEM customer base, the Company acquired approximately 45% of Berifors AB
(Berifors), a Sweden-based manufacturer of electronic display panels and
instrumentation for the European truck and commercial vehicle markets. In
October 1997, the Company acquired the remaining 55% of Berifors, in exchange
for 757,063 common shares of the Company. As a result of this acquisition,
the Company is a worldwide supplier of instrumentation displays for heavy-duty
trucks to Mercedes Benz, Volvo and Scania.
In November 1995, the Company acquired the business, machinery and
equipment, intellectual property rights and purchase contracts of the actuator
business of an original equipment manufacturer (OEM) supplier.
Discontinuance of Certain Contract Manufacturing Business
A division of General Motors has notified the Company that it is
discontinuing all outsourcing of its wire harness requirements under contract
manufacturing arrangements. The Company believes that by mid-1999 the General
Motors division will produce in-house substantially all of its wire harness
requirements previously supplied by the Company. The Company's net sales under
this arrangement totaled approximately $84.1 million, $95.1 million and $105.6
million for 1998, 1997 and 1996, respectively, or approximately 16.7%, 21.2%
and 29.0% of total net sales for such periods.
Products
The Company's products include vehicle electrical power and
distribution systems, electronic and electrical switch products,
electronic instrumentation and information display products, actuator products
and sensor products.
The Company's principal product categories are:
Power and Distribution Systems. The Company designs and manufactures
electrical power and signal distribution components, modules and
systems, including fully integrated automotive and truck wiring systems
and highly engineered products, such as power distribution panels, for
the automotive, medium and heavy-duty truck and agricultural vehicle
markets. Power distribution systems regulate, coordinate and direct the
operation of the entire electrical system within a vehicle or
compartment. A significant portion of the Company's current power
distribution business consists of contract manufacturing of wire
harnesses for a division of General Motors.
Electronic and Electrical Switch Products. The Company designs and
manufactures integrated electronic and electromechanical switch
products which include hidden switches and customer-activated switches.
These switches transmit a signal to a control device which activates
specific functions. Hidden switches are those switches which are not
typically seen by vehicle passengers but are utilized to activate or
deactivate selected functions such as brake lights, cruise control
functions and electronic safety features related to air bag and anti-
lock braking systems. Customer-activated switches are used by a
vehicle's operator or passengers to manually activate headlights, rear
defrosters, heated seats and other accessories. The Company sells these
products principally to the automotive market.
Electronic Instrumentation and Information Display Products. The
Company designs and manufactures electronic instrument clusters, driver
message centers, power conversion products, tachographs, multiplexed
modules and electrical systems and electronic switch modules. These
products collect, store and display vehicle information such as speed,
pressure, maintenance data, trip information, operator performance,
temperature, distance traveled, and driver messages related to vehicle
performance. These products utilize state-of-the-art hardware, software
and multiplexing technology and are sold principally to the medium and
heavy duty truck and agricultural vehicle markets.
Actuator Products. The Company designs and manufactures
electromechanical actuator products that enable users to deploy power
functions in a vehicle and can be designed to integrate switching and
control functions. These products include power door lock and four-
wheel-drive actuators and are sold principally to the automotive
market.
4
<PAGE>
Sensor Products. The Company designs and manufactures sensor products
that measure temperature, pressure, speed and fluid levels. These
products monitor and measure the physical variables affecting the
performance vehicle systems. Sensor products are employed in most major
vehicle systems, including the powertrain, fuel, braking, climate
control and steering systems. The Company sells these products
principally to the automotive market.
Production Materials
The principal production materials used in the Company's manufacturing
processes include wire, cable, plastic housings, and certain electrical
components such as fuses, relays, and connectors. The Company generally
purchases such materials subject to annual contracts. Such materials are readily
available from multiple sources, but the Company generally establishes
collaborative relationships with a qualified supplier for each of its key
production materials in order to lower costs and enhance service and quality.
Patents and Intellectual Property
The Company maintains and has pending various U.S. and foreign patents
and other rights to intellectual property relating to its business, which it
believes are appropriate to protect the Company's interests in existing
products, new inventions, manufacturing processes and product developments. The
Company does not believe any single patent is material to its business, nor
would the expiration or invalidity of any patent have a material adverse effect
on its business or its ability to compete. The Company is not currently engaged
in any infringement litigation, nor are there any claims pending by or against
the Company.
Industry Cyclicality and Seasonality
The markets for the Company's products have historically been cyclical.
Because the Company's products are used principally in the production of
vehicles for the automotive, medium and heavy-duty truck and agricultural
vehicle markets, its sales and therefore its results of operations are
significantly dependent on the general state of the economy and other factors
which affect these markets. A decline in automotive, medium and heavy-duty truck
and agricultural vehicle production could adversely impact the Company.
Approximately 56%, 65% and 72% of the Company's net sales in 1998, 1997 and
1996
respectively, were made to the automotive market and approximately 44%, 33% and
27% of the net sales in 1998, 1997 and 1996 respectively, were derived from the
medium and heavy-duty and agricultural vehicle markets.
Demand for the Company's products has been seasonal. The Company
typically experiences decreased net sales during the third calendar quarter of
each year due to the impact of scheduled OEM plant shutdowns in July for
vacations and new model changeovers. The fourth quarter is also impacted by
plant shutdowns for the holidays.
Reliance on Major Customers
The Company is dependent on a small number of principal customers for a
significant percentage of its net sales. The loss of any significant portion of
its sales to these customers or any other significant customers would have a
material adverse impact on the financial condition and results of operations of
the Company. The contracts the Company has entered into with many of its
customers provide for supplying the customers' requirements for a particular
model, rather than for manufacturing a specific quantity of products. Such
contracts range from one year to the life of the model, which is generally three
to seven years. Therefore, the loss of a contract for a major model or a
significant decrease in demand for certain key models or group of related models
sold by any of the Company's major customers could have a material adverse
impact on the Company. The Company also competes to supply products for
successor models and is subject to the risk that the customer will not select
the Company to produce products on any such model, which could have a material
adverse impact on the financial condition and results of operations of the
Company.
5
<PAGE>
The following table presents the major customers, as a percentage of
net sales, of the Company for the years ended December 31, 1998, 1997 and 1996:
Year Ended December 31,
-----------------------
Customer 1998 1997 1996
---- ---- ----
General Motors 25% 32% 39%
Ford 18 21 18
Navistar 10 5 5
Deere 9 10 10
Other 38 32 28
-- -- --
Total 100% 100% 100%
Backlog
The majority of the Company's products are not on a backlog status.
They are produced from readily available materials such as wire, cable, housings
and electronic components and have a relatively short manufacturing cycle. Each
operating unit of the Company maintains its own inventories and production
schedules. Production capacity is adequate to handle current requirements and
will be expanded to handle increased growth where needed.
Competition
Markets for the Company's products are highly competitive. Quality,
service, price, timely delivery, and technological innovation are the primary
elements of competition. The Company competes for new business both at the
beginning of the development of new models and upon the redesign of existing
models. New model development generally begins two to five years before the
marketing of such models to the public. Once a supplier has been selected to
provide parts for a new program, an OEM usually will continue to purchase those
parts from the selected supplier for the life of the program, although not
necessarily for any model redesigns.
Product Development
In order to increase its vehicle platform penetration, the Company has
invested, and intends to continue to invest, significant amounts in its
technology and design capabilities. The Company's product development
expenditures were $17.4 million, $14.1 million and $9.3 million for 1998, 1997
and 1996, respectively, or 4.1%, 4.0% and 3.6% of core electrical and electronic
components, modules and systems sales for such periods. These development
efforts have strengthened the Company's ability to provide higher value-added
products and systems, and have resulted in the introduction of new products such
as the four-wheel-drive actuator (shift on demand) and the auto-stick (which
enables a driver to manually shift an automatic transmission using a unique
electronic switch). The Company's technical centers in Massachusetts, Michigan,
Ohio, Brazil, Mexico and Sweden develop and test both new and existing products
and concepts. In addition, through its advanced technologies group comprised of
dedicated engineers, the Company concentrates on the development of its next
generation of products. To further increase vehicle platform penetration, the
Company has developed collaborative relationships with the design and
engineering departments of its key OEM customers. These collaborative efforts
have resulted both in the development of new and complementary products and the
enhancement of existing products.
Environmental and Other Regulations
The Company's operations are subject to various federal, state, local
and foreign laws and regulations governing, among other things, emissions to
air, discharge to waters and the generation, handling, storage, transportation,
treatment and disposal of waste and other materials. The Company believes that
its business, operations and facilities have been and are being operated in
compliance in all material respects with applicable environmental and health and
safety laws and regulations, many of which provide for substantial fines and
criminal sanctions for violations.
6
<PAGE>
Employees
As of December 31, 1998, the Company, including Berifors, had
approximately 6,600 employees, approximately 1,300 of whom were salaried and the
balance of whom were paid on an hourly basis. Except for certain employees
located in Chihuahua, Mexico, and Orebro and Stockholm, Sweden, the Company's
employees are not represented by a union. The Company believes that its
relations with its employees are excellent. The Company believes strongly in
employee education and sponsors a number of educational opportunities and
programs for its employees.
Executive Officers
The executive officers of the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
D.M. Draime 65 Chairman of the Board of Directors, Assistant Secretary and
Director
Cloyd J. Abruzzo 48 President, Chief Executive Officer, Assistant Treasurer and
Director
Kevin P. Bagby 47 Vice President of the Company, Chief Financial Officer and
Treasurer
Sten Forseke 39 Vice President of the Company and Managing Director of
Berifors AB
Gerald V. Pisani 58 Vice President of the Company and President of Stoneridge
Engineered Products Group
David L. Thomas 49 Vice President of the Company and President of Alphabet Group
Avery S. Cohen 62 Secretary and Director
</TABLE>
D.M. Draime, founder of the Company, has served as Chairman of the
Board of Directors of the Company and its predecessors since 1965 and as a
director of the Company since 1988.
Cloyd J. Abruzzo has served as President and Chief Executive Officer of
the Company or its predecessors since June 1993 and as a director of the Company
since 1990. From 1984 to June 1993, Mr. Abruzzo was the Vice President and Chief
Financial Officer of the Company or its predecessor. Mr. Abruzzo serves as a
director of Second National Bank of Warren.
Kevin P. Bagby has served as Vice President of the Company, Chief
Financial Officer and Treasurer since joining the Company in July 1995. Mr.
Bagby was employed by Kelsey-Hayes as Director of Business Analysis from June
1994 to July 1995 and as Director of Finance for the Foundation Brakes Business
Unit from January 1991 to June 1994.
Sten Forseke, a co-founder of Berifors, has served as Vice President of
the Company since the acquisition of Berifors in 1997 and Managing Director of
Berifors since 1988.
Gerald V. Pisani has served as Vice President of the Company since 1989
and President of the Stoneridge Engineered Products Group since 1985.
David L. Thomas has served as Vice President of the Company and
President of the Alphabet Group since 1989.
Avery S. Cohen has served as Secretary and a director of the Company
since 1988. He has been a partner in the law firm of Baker & Hostetler LLP since
1993. From 1989 to 1993, Mr. Cohen was a partner with the law firm of Benesch,
Friedlander, Coplan & Aronoff.
7
<PAGE>
ITEM 2. PROPERTIES
The Company currently owns or leases thirteen manufacturing facilities,
which together contain approximately 1.25 million square feet of manufacturing
space. The following table provides information regarding the Company's
facilities:
<TABLE>
<CAPTION>
Owned/ Square
Location Use Leased Status Footage
-------- --- ------------- -------
<S> <C> <C> <C>
Arlington Heights, Illinois Sales/Engineering Office Leased 1,000
Bloomfield, Michigan Sales Office Leased 1,000
Boston, Massachusetts Division Office & Manufacturing Owned 166,100
Canton, Massachusetts Division Office & Manufacturing Owned 126,500
Cortland, Ohio Engineering Office Leased 11,400
El Paso, Texas Office/Warehouse Leased 22,400
Farmington Hills, Michigan Sales/Engineering Office Leased 5,400
Greenwood, South Carolina(1) Manufacturing Leased 56,000
Kent, Ohio Manufacturing Owned 70,000
Lexington, Ohio Manufacturing Owned 155,000
Mansfield, Ohio Manufacturing Owned 4,000
Mebane, North Carolina Manufacturing Leased 51,000
Orwell, Ohio Manufacturing Owned 72,000
Portland, Indiana Manufacturing Owned 196,000
Sarasota. Florida Division Office & Manufacturing Owned 125,000
Warren, Ohio Corporate Office Owned 7,500
Warren, Ohio Division Office Leased 15,300
Bromma, Sweden Division Office & Engineering Leased 16,100
Chihuahua, Mexico Manufacturing Owned 133,000
Indaiatuba, Brazil Manufacturing Leased 10,200
Juarez, Mexico Manufacturing Owned 178,000
Munich, Germany Sales/Engineering Office Leased 1,000
Orebro, Sweden Manufacturing Leased 56,000
Sao Paulo, Brazil Sales/Engineering Office Leased 200
Stuttgart, Germany Sales/Engineering Office Leased 1,000
</TABLE>
(1) Plant idled in first quarter of 1997.
Positron, a 50% equity investment of the Company, leases a production
facility in Manaus, Brazil, and owns a sales office in Campinas, Brazil.
ITEM 3. LEGAL PROCEEDINGS
The Company has no pending litigation which it believes will have a
material adverse impact upon the Company. The Company is subject to the risk of
exposure to product liability claims in the event that the failure of any of its
products causes personal injury or death to users of the Company's products, and
there can be no assurance that the Company will not experience any material
product liability losses in the future. In addition, if any of the Company's
products proves to be defective, the Company may be required to participate in a
government-imposed or OEM-instituted recall involving such products. The Company
maintains insurance against such liability claims.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of 1998.
8
<PAGE>
PART II.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
On March 22, 1999, the Company had 22,397,311 Common
Shares without par value, issued and outstanding, which were owned by 110
shareholders of record, including Common Shares held in "streetname" by nominees
who are recordholders and approximately 2,110 beneficial owners.
The Company has neither paid nor declared dividends on its Common
Shares since its Offering, except for the payment or declaration of
S-corporation distributions of $85,600,000 to pre-Offering shareholders. The
Company currently intends to retain earnings for acquisitions, working capital,
capital expenditures, general corporate purposes and reduction in outstanding
indebtedness. Accordingly, the Company does not expect to pay cash dividends in
the foreseeable future.
High and low sales prices (as reported on the New York Stock Exchange
"NYSE" composite tape) for the Common Shares for each
quarter during 1997 and 1998.
Quarter Ended High Low
------------- ---- ---
1997 March 31 N/A N/A
June 30 N/A N/A
September 30 N/A N/A
December 31 20 7/8 13 7/8
1998 March 31 20 14 7/8
June 30 23 1/16 18 1/4
September 30 21 7/8 14 5/8
December 31 22 7/8 13 7/8
N/A -- The Company began trading on the NYSE on October 10, 1997.
The Company's Common Shares are traded on the NYSE under the symbol
SRI.
9
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected historical and pro forma
financial data for the Company and should be read in conjunction with the
consolidated financial statements and notes related thereto and other financial
information included elsewhere herein. The selected historical data was derived
from the Company's consolidated financial statements, which were audited by
Arthur Andersen LLP, the Company's independent accountants.
<TABLE>
<CAPTION>
Year Ended
December 31,
------------------------------------------------
------------------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Statement of Income Data:
Net sales $503,821 $449,506 $363,748 $278,043 $225,531
Gross profit 124,239 108,192 75,606 66,331 60,557
Operating income 56,722 52,366 28,912 28,822 28,015
Income before income taxes 56,036 50,895 24,595 26,808 25,671
Net income $ 33,400 $ 46,964 $ 24,071 $ 26,154 $ 26,666
================================================
Basic and diluted net income per share $ 1.49 $ 2.92 $ 1.73 $ 1.88 $ 1.92
================================================
Pro Forma Data (Unaudited):
Income before income taxes $ 56,036 $ 50,895 $ 24,595 $ 26,808 $ 25,671
Provision for income taxes 22,636 21,181 10,295 10,991 10,525
------------------------------------------------
Pro forma net income $ 33,400 $ 29,714 $ 14,300 $ 15,817 $ 15,146
================================================
Pro forma basic and diluted net income
per share $ 1.49 $ 1.36 $ 0.66 $ 0.73 $ 0.70
================================================
Other Data:
Product development expenses $ 17,418 $ 14,114 $ 9,263 $ 6,664 $ 5,997
Capital expenditures 10,919 12,256 14,083 14,767 9,046
Depreciation and amortization 14,422 13,237 9,966 7,979 6,870
Balance Sheet Data:
Working capital $ 42,184 $ 44,856 $ 39,957 $ 34,851 $ 30,654
Total assets 638,116 235,073 178,487 172,298 119,915
Long-term debt, net of current portion 322,724 9,139 51,156 47,999 28,845
Shareholders' equity 190,542 157,210 84,633 73,720 63,112
</TABLE>
10
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
Year Ended December 31, 1998 Compared To Year Ended December 31, 1997
Net Sales. Net sales for the year ended December 31, 1998 increased by
$54.3 million, or 12.1%, to $503.8 million from $449.5 million for the same
period in 1997. Sales of core electrical and electronic components, modules and
systems increased by $65.3 million, or 18.4%, to $419.7 million for 1998
compared with $354.4 million for the same period in 1997. Sales related to the
Berifors AB acquisition that was completed concurrently with the Company's
initial public offering in October 1997, accounted for $32.6 million of the
$65.3 million increase in 1998. Excluding the impact of the Berifors AB
acquisition, sales revenue of core products increased by $32.7 million, or 9.2%,
compared with the same period in 1997.
Sales for the year ended December 31, 1998 for North America increased
$19.2 million to $456.8 million from $437.6 million for the same period in 1997.
North American sales accounted for 90.7% of total sales for the year ended
December 31, 1998 compared with 97.4% for the same period in 1997. Sales outside
North America increased $35.1 million to $47.0 million from $11.9 million for
the same period in 1997. This increase was due primarily to the Berifors
acquisition. Sales outside North America accounted for 9.3% of total sales for
the year ended December 31, 1998 compared with 2.6% for the same period in 1997.
Sales of contract manufacturing wire harnesses of $84.1 million were
$11.0 million, or 11.6%, lower than 1997, reflecting declining customer
production levels. As expected, contract manufacturing sales declined to 16.7%
of the Company's total sales revenue for the year 1998 compared with 21.2% of
total sales for the same period in 1997.
Cost of Goods Sold. Cost of goods sold for the year 1998 increased by
$38.3 million, or 11.2%, to $379.6 million from $341.3 million in the year 1997.
As a percentage of sales, cost of goods sold decreased to 75.3% in 1998 from
75.9% in 1997.
Selling, General and Administrative Expenses. Selling, general and
administrative (SG&A) expenses for the year of 1998 increased by $11.7 million,
or 20.9%, to $67.5 million from $55.8 million in the same period in 1997. As a
percentage of sales, SG&A expenses increased to 13.4% for 1998 from 12.4% in
1997. The increase reflected the consolidation of Berifors AB, which accounted
for $2.3 million of the increase. In addition, the Company increased its
investment in product development by $3.3 million.
Other Income. Other income for 1997 was $1.7 million, which represented
a gain on the sale of equipment.
Interest Expense. Interest expense for the year 1998 decreased by $2.5
million, or 78.6%, to $0.7 million from $3.2 million in the year 1997. The
decrease was primarily due to a lower average outstanding indebtedness.
Income Before Income Taxes. As a result of the foregoing, income before
taxes increased by $5.1 million for the year 1998 to $56.0 million from $50.9
million in 1997. Excluding the one-time gain on sale of equipment, the increase
in income before taxes would have been $6.8 million or 13.8%.
Provision for Income Taxes. The Company recognized provisions for
income taxes of $22.6 million and $5.1 million for federal, state and foreign
income taxes for the years 1998 and 1997, respectively. This increase in the tax
provision was due to the change in tax status from an S corporation to a C
corporation. Accordingly, had the Company been subject to federal and state
income taxes at the corporate level for all of 1997, the Company would have
recorded a provision for income taxes of approximately $21.2 million for the
year ended December 31, 1997.
Net Income. Net income decreased by $13.6 million to $33.4 million in
the year 1998 from $47.0 million in the year 1997 due to the change in tax
status from an S corporation to a C corporation. Had the Company been subject to
federal and state income taxes at the corporate level, the Company's pro forma
net income would have been $29.7 million for the year ended December 31, 1997.
11
<PAGE>
Year Ended December 31, 1997 Compared To Year Ended December 31, 1996
Net Sales. Net sales for 1997 increased by $85.8 million, or 23.6%, to
$449.5 million from $363.7 million in 1996. Sales of core electrical and
electronic components, modules and systems increased by $96.2 million, or 37.3%,
to $354.4 million during 1997 compared with $258.2 million in 1996. Net sales of
contract manufacturing wire harnesses of $95.1 million were 9.9% lower than
1996, reflecting declining customer production levels. As expected, contract
manufacturing sales declined to 21.2% of total sales revenue for the year
compared with 29.0% in 1996. Concurrent with its initial public offering, the
Company acquired Berifors AB, a Swedish manufacturer of electronic
instrumentation and information display systems. The acquisition, which occurred
in October 1997, increased sales revenue by $10.1 million in 1997. Excluding the
impact of the Berifors AB acquisition, sales revenue of core products increased
by $86.1 million, or 33.3%, compared with 1996.
Sales for 1997 of actuator products increased by $41.8 million to $72.3
million from $30.5 million in 1996. Full production of actuator products
(acquired in late 1995) was not reached until approximately November 1996. The
1997 launch of a new four-wheel-drive actuator product significantly increased
shipments of actuator products. Sales for 1997 of power distribution products,
exclusive of contract manufacturing, increased by $25.7 million, or 30.8%, to
$109.2 million due to increased market penetration in the medium and heavy duty
truck market and higher net sales to the agricultural vehicle market of $15.5
million and $7.1 million, respectively. Passenger car/light truck market product
introductions increased power distribution sales by $3.1 million. Sales for 1997
of electrical instrumentation and information displays increased by $8.6
million, or 22.9%, due principally to the introduction of new information
clusters for the medium and heavy duty truck market. Sales for 1997 of switch
products increased by $5.4 million, or 5.0%, reflecting higher production levels
in served markets and new product launches.
Cost of Goods Sold. Cost of goods sold for 1997 increased by $53.2
million, or 18.5%, to $341.3 million from $288.1 million in 1996. As a
percentage of sales, cost of goods sold decreased to 75.9% in 1997 from 79.2% in
1996 while the corresponding gross profit margin increased to 24.1% in 1997 from
20.8% in 1996. The improvement in gross profit margin primarily resulted from
improved operating leverage associated with increased product sales. The
consolidation of two power distribution/contract manufacturing facilities
eliminated certain fixed costs and also contributed to the increase in gross
margin.
Selling, General and Administrative Expenses. Selling, general and
administrative (SG&A) expenses for 1997 increased by $9.1 million, or 19.6%, to
$55.8 million from $46.7 million in 1996. As a percentage of sales, SG&A
expenses decreased to 12.4% for 1997 from 12.8% in 1996. The acquisition of
Berifors AB increased SG&A by $2.2 million, which included $1.6 million in
product development costs, compared with the same period in 1996. Product
development expenses increased $4.9 million in 1997 or 52.4% to $14.1 million
from $9.2 million in 1996. Other marketing support and administrative overhead
costs increased an additional $7.9 million due to increased infrastructure
requirements to support higher sales levels and the launch of the actuator
product line. These increases were offset by a $4.3 million decrease in expenses
due to the expiration of the actuator products transition services agreement in
October 1996.
Other Income. Other income of $1.7 million for 1997 represents a gain
on the sale of equipment.
Interest Expense. Interest expense for 1997 decreased by $1.1 million,
or 25.8%, to $3.2 million from $4.3 million in 1996. The decrease was due to a
lower average outstanding indebtedness.
Income Before Income Taxes. As a result of the foregoing, income before
taxes increased by $26.3 million for 1997 to $50.9 million from $24.6 million in
1996.
Provision for Income Taxes. Prior to October 1997, the Company was an S
corporation for federal and, where qualified, state income tax purposes.
Accordingly, the Company recognized provisions for income taxes of $5.1 million
and $0.5 million for federal, state and foreign income taxes for 1997 and 1996,
respectively. Had the Company been subject to federal and state income taxes at
the corporate level for all of 1997 and 1996, the Company would have recorded
provisions for income taxes of $21.2 million and $10.3 million for 1997 and
1996, respectively.
12
<PAGE>
Income Tax Benefit from the Reinstatement of Deferred Taxes. In
connection with the Company's initial public offering in October 1997, the
Company terminated its S corporation status. Accordingly, the Company became
subject to federal and state income taxes as a C corporation. As a result, a net
current deferred income tax asset and a net non-current deferred income tax
liability of $4.1 million and $ 2.9 million, respectively, were recorded with an
offsetting benefit to income of $1.2 million.
Net Income. As a result of the foregoing, net income increased by $22.9
million, or 95.0%, to $47.0 million in 1997 from $24.1 million in 1996. Had the
Company been subject to federal and state income taxes at the corporate level,
the Company's pro forma net income would have been $29.7 million and $14.3
million for 1997 and 1996, respectively.
Liquidity and Capital Resources
Net cash provided from operating activities was $46.0 million and $63.8
million for the years ended December 31, 1998 and 1997, respectively. The
decrease in net cash from operating activities of $17.8 million was due
primarily to the decrease in net income of $13.6 million, reflecting the change
in the Company's tax status from an S corporation to a C corporation.
Net cash used for investing activities was $368.7 million and $27.7
million for the years ended December 31, 1998 and 1997, respectively. The
increase in cash used for investing activities of $341.0 million was primarily
the result of the acquisition of Hi-Stat Manufacturing Co., Inc. (Hi-Stat). The
Company purchased Hi-Stat on December 31, 1998 for approximately $362.0 million
in cash. Approximately $307.0 million of goodwill was recorded in conjunction
with the Hi-Stat acquisition. Management believes that anticipated favorable
business prospects and purchase structure justify the purchase price. The
transaction was financed by a combination of existing cash from Stoneridge
together with funds from a new $425.0 million senior secured credit facility.
Offsetting the acquisition of Hi-Stat was a decrease in net capital expenditures
of $2.8 million and the 1997 investment in PST of $17.7 million.
Net cash provided by and used for financing activities was $323.3
million and $35.2 million for the years ended December 31, 1998 and 1997,
respectively. Primarily, as a result of the Hi-Stat acquisition, long-term debt
increased $334.5 million for the year ended December 31, 1998.
On December 30, 1998 and in conjunction with the purchase transaction
described above, the Company entered into a new senior secured credit facility
with its senior lender National City Bank and Donaldson, Lufkin, & Jenrette as
the lead arrangers. The credit facility consists of a $100 million Senior
Secured Revolving Facility, a $150 million Senior Secured Term Loan A, and a
$175 million Senior Secured Term Loan B. The $100 million revolving facility and
the $150 million term facility expire on December 31, 2003 and require a
commitment fee of 0.37% to 0.50% on the unused balance. Interest is payable
quarterly at the Company's option of either (i) the prime rate plus a margin of
.25% to 1.50% or (ii) LIBOR plus a margin of 1.75% to 3.00%, depending upon the
Company's ratio of consolidated total debt to consolidated earnings before
interest, taxes, depreciation and amortization, as defined. The $175 million
term facility expires on December 31, 2005. Interest is payable quarterly at the
Company's option of either (i) the prime rate plus a margin of 2.00% or (ii)
LIBOR plus a margin of 3.50%.
The Company has entered into six interest rate swap agreements with a
total notional amount of $370.0 million. The interest rate swap agreements
exchange variable interest rates on the senior secured credit facility for fixed
interest rates. The Company does not use derivatives for speculative or profit-
motivated purposes. To the extent that the notional amount of the swap
agreements exceed the carrying value of the underlying debt, a mark to market
adjustment is reflected in the financial statements.
Management believes that cash flows from operations and the
availability of funds from the Company's credit facilities will provide
sufficient liquidity to meet the Company's growth and operating needs.
13
<PAGE>
Inflation and International Presence
Management believes that the Company's operations have not been
adversely affected by inflation. By operating internationally, the Company is
affected by the economic conditions of certain countries. Based on the current
economic conditions in these countries, management believes they are not
significantly exposed to adverse economic conditions.
Recently Issued Accounting Standards
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130 (SFAS 130), oReporting Comprehensive Income.o SFAS
130 establishes new rules for the reporting and display of comprehensive income
and its components. The adoption of SFAS 130 requires that certain items
including currency translation adjustments be included in other comprehensive
income, which prior to adoption were reported separately in shareholders'
equity.
Effective January 1, 1998 the Company adopted Statement of Financial
Accounting Standards No. 131 (SFAS 131), oDisclosures about Segments of an
Enterprise and Related Information.o SFAS 131 requires the financial statement
disclosures for operating segments, products and services, and geographic areas.
The Company operates in one business segment based on the criteria set forth in
SFAS 131. Therefore, SFAS 131 will not affect the Company's financial position,
results of operations or financial statement disclosures.
The Company is required to adopt Statement of Financial Accounting
Standards No. 133 (SFAS 133), oAccounting for Derivative Instruments and Hedging
Activitieso for its fiscal year ending 2000. SFAS 133 establishes new accounting
and reporting standards for derivatives and hedging activities. The Company has
not yet evaluated the financial accounting and reporting impact of SFAS 133.
Year 2000
The Company has conducted an evaluation of the actions necessary in
order to gain assurance that its information and non-information technology
systems will be able to function without disruption with respect to the
application of dating systems in the Year 2000. As a result of this evaluation,
the Company is engaged in the process of upgrading, replacing and testing
information systems, computer applications and other systems to be able to
operate without disruption due to Year 2000 issues. The Company's remedial
actions are scheduled to be completed by the end of the third quarter of 1999.
There can be no assurance that the remedial actions being implemented
by the Company will be able to be completed by the time necessary to avoid Year
2000 dating systems problems or that the cost of doing so will not be in excess
of the amounts discussed below. If the Company is unable to complete its
remedial actions in the planned timeframe, contingency plans will be developed
to address systems that may not be Year 2000 compliant. These contingency plans
could include accelerating the implementation of third party Year 2000 compliant
software.
The Company estimates total historical Year 2000 expenditures to be
approximately $1.5 million. Year 2000 expenditures relate to modifying software,
purchasing new software and hardware, and replacing non-compliant software and
hardware. Year 2000 expenditures to be incurred through December 31, 1999 are
estimated to be an additional $2.7 million. These costs include both internal
and external personnel costs related to the assessment process, as well as the
cost of purchasing certain hardware and software. There can be no guarantee that
these estimates will be achieved, and actual results may differ from those
planned. The cost of remedial actions to rectify non-information technology
systems is not anticipated to be material to the Company's financial position
or
results of operations. The Company intends to use cash provided from operations
to fund expenditures related to Year 2000 issues.
The Company currently believes the most likely worst case scenario with
respect to the Year 2000 issue is a disruption in the supply of products and
services from the Company's vendors, including utility providers. Such a supply
disruption could result in the Company not being able to produce certain
products for a period of time, which could have a material adverse effect on the
financial condition and results of operations of the Company.
14
<PAGE>
The Company intends to develop contingency plans to address potential
third party system failures resulting from a Year 2000 problem. The Company has
an ongoing assessment process to gain assurances and certifications of
customers' and suppliers' Year 2000 readiness programs. Based on the results of
the assessment process, the Company will develop contingency plans for those
suppliers who are unable or unwilling to develop remediation plans to become
Year 2000 compliant. Although these plans are not yet complete, the Company
expects that these plans will include a combination of the resourcing of
materials to Year 2000 compliant vendors and the stockpiling of components. The
Company expects the implementation of these plans to occur by the end of the
third quarter of 1999.
Portions of this Year 2000 section contain statements that constitute
forward-looking statements. The forward-looking statements include statements
regarding the Company's intent, belief and expectations with respect to, among
other things, the timing of the Company's Year 2000 remedial actions and the
development of the Company's contingency plans, and the future expenses related
to the Company's Year 2000 compliance programs. Investors are cautioned that any
such forward-looking statement is not a guarantee and involves risks and
uncertainties, and that actual events may differ materially from those in the
forward-looking statement as a result of various factors, including, among
others, the discovery of a currently unknown material Year 2000 issue, the
failure of third parties to address Year 2000 issues, the failure to implement
the Company's Year 2000 plan as scheduled, and a material increase in the costs
of external consultants.
ITEM 7A. QUANTITIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to certain market risks, primarily resulting
from the effects of changes in interest rates. To reduce exposures to market
risks resulting from fluctuations in interest rates, the Company uses derivative
financial instruments. Specifically, the Company uses interest rate swap
agreements to mitigate the effects of interest rate fluctuations on net income
by changing the floating interest rates on certain portions of the Company's
debt to fixed interest rates. For more information on these interest rate
exposures, see Note 2 and Note 12 of the Company's Notes to Consolidated
Financial Statements included elsewhere herein. The effect of changes in
interest rates on the Company's net income generally has been small relative to
other factors that also affect net income, such as sales and operating margins.
The Company does not enter into financial instruments for trading
purposes. Management believes that its use of these instruments to reduce risk
is in the Company's best interest.
The Company's risks related to commodity price and foreign currency
exchange risks have historically not been material. The Company does not expect
the effects of these risks to be material based on current operating and
economic conditions in the countries and markets in which it operates.
15
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
Page
Consolidated Financial Statements: ----
----------------------------------
<S> <C>
Report of Independent Public Accountants 17
Consolidated Balance Sheets as of December 31, 1998 18
and 1997
Consolidated Statements of Income for the Years Ended 19
December 31, 1998, 1997 and 1996
Consolidated Statements of Shareholders' Equity for the Years 20
Ended December 31, 1998, 1997 and 1996
Consolidated Statements of Cash Flows for the Years Ended 21
December 31, 1998, 1997 and 1996
Notes to Consolidated Financial Statements 22
Financial Statement Schedule:
-----------------------------
Report of Independent Public Accountants 36
Schedule II--Valuation and Qualifying Accounts 37
</TABLE>
16
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders of
Stoneridge, Inc.:
We have audited the accompanying consolidated balance sheets of
Stoneridge, Inc. (an Ohio corporation) and Subsidiaries as of December 31, 1998
and 1997 and the related consolidated statements of income, shareholders' equity
and cash flows for each of the three years in the period ended December 31,
1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Stoneridge, Inc. and
Subsidiaries as of December 31, 1998 and 1997, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1998 in conformity with generally accepted accounting principles.
Arthur Andersen LLP
Cleveland, Ohio,
January 28, 1999.
17
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31
-----------
1998 1997
---- ----
(in thousands,
except share data)
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents................................................... $ 1,876 $ 1,338
Accounts receivable, less allowance for doubtful accounts
of $1,006 and $231........................................................ 84,655 57,873
Inventories................................................................. 53,273 38,594
Prepaid expenses and other.................................................. 5,983 6,842
Deferred income taxes....................................................... 11,679 5,829
-------- -------
Total current assets...................................................... 157,466 110,476
-------- -------
Property, Plant and Equipment, net........................................... 94,770 58,696
Other Assets:
Goodwill, net............................................................... 351,501 45,985
Other intangible assets, net................................................ 3,928 907
Investments and other....................................................... 30,451 19,009
-------- -------
Total Assets.............................................................. $638,116 $235,073
======== =======
Liabilities and Shareholders' Equity
Current Liabilities:
Current portion of long-term debt........................................... $ 21,213 $ 456
Accounts payable............................................................ 45,835 31,459
Accrued expenses and other.................................................. 48,234 31,105
Accrued shareholder distributions........................................... -- 2,600
-------- -------
Total current liabilities................................................. 115,282 65,620
-------- -------
Long-Term Debt, net of current portion....................................... 322,724 9,139
Deferred Income Taxes........................................................ 8,088 3,104
Other........................................................................ 1,480 --
-------- -------
Total long term liabilities............................................... 332,292 12,243
-------- -------
Shareholders' Equity:
Preferred shares, without par value, 5,000,000 authorized, none issued...... -- --
Common shares, without par value, 60,000,000 authorized,
22,397,311 issued and outstanding at December 31, 1998 and 1997, stated at.. -- --
Additional paid-in capital.................................................. 141,506 141,506
Retained earnings........................................................... 49,330 15,930
Accumulated other comprehensive income...................................... (294) (226)
---- ----
190,542 157,210
-------- -------
Total Liabilities and Shareholders' Equity............................ $638,116 $235,073
======== ========
</TABLE>
The accompanying notes to consolidated financial statements are
an integral part of these consolidated balance sheets.
18
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
For the years ended December 31,
1998 1997 1996
---- ---- ----
(in thousands, except per share data)
<S> <C> <C> <C>
Net Sales............................................ $503,821 $449,506 $363,748
Costs and Expenses:
Cost of goods sold............................... 379,582 341,314 288,142
Selling, general and administrative expenses 67,517 55,826 46,694
-------- -------- --------
Operating income.............................. 56,722 52,366 28,912
Gain on sale of fixed assets..................... -- (1,733) --
Interest expense, net............................ 686 3,204 4,317
-------- -------- --------
Income Before Income Taxes........................... 56,036 50,895 24,595
-------- -------- --------
Provision for income taxes....................... 22,636 5,098 524
Income tax benefit from the reinstatement of
deferred income taxes......................... -- (1,167) --
-------- -------- --------
Net Income........................................... $ 33,400 $ 46,964 $ 24,071
======== ======== ========
Basic and Diluted Net Income per Share............... $ 1.49 $ 2.92 $ 1.73
======== ======== ========
Weighted Average Shares Outstanding.................. 22,397 16,073 13,941
======== ======== ========
Pro Forma Income Data (Unaudited):
Income before income taxes........................... $ 56,036 $ 50,895 $ 24,595
Pro forma adjustment--provision for income taxes 22,636 21,181 10,295
------ ------ ------
Pro forma net income................................. $ 33,400 $ 29,714 $ 14,300
======== ======== ========
Pro forma basic and diluted net income per share $ 1.49 $ 1.36 $ 0.66
======== ======== ========
Pro forma weighted average shares outstanding........ 22,397 21,830 21,655
======== ======== ========
</TABLE>
The accompanying notes to consolidated financial statements are
an integral part of these consolidated statements.
19
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Accumulated
Other
Number Additional Retained Comprehensive Comprehensive
of Shares Paid-In Capital Earnings Income Income
--------- --------------- -------- ------ ------
(in thousands)
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1995..................................... 13,909 $ 7,958 $ 65,762 $ --
Net income and comprehensive income............................ -- -- 24,071 -- $24,071
Exercise of share options, net................................. 55 225 -- -- =======
Compensation expense
from share option plans...................................... -- 450 -- --
Capital contribution........................................... -- 562 -- --
Distributions declared......................................... -- -- (14,395) --
------ ----- ------- ------
Balance, December 31, 1996..................................... 13,964 9,195 75,438 --
Net income..................................................... -- -- 46,964 -- $46,964
Other comprehensive income:
Currency translation adjustments, net of tax................. -- -- -- (226) (226)
-------
Comprehensive income......................................... $46,738
Exercise of share options...................................... 438 2,513 -- -- =======
Compensation expense
from share option plans...................................... -- 450 -- --
Issuance of shares in public offering, net..................... 6,728 108,693 -- --
Issuance of shares to Company management....................... 510 8,326 -- --
Acquisition of Berifors AB..................................... 757 12,329 -- --
Distributions declared......................................... -- -- (106,472) --
------ ----- ------- ------
Balance, December 31, 1997..................................... 22,397 141,506 15,930 (226)
Net income..................................................... -- -- 33,400 -- $33,400
Other comprehensive income:
Currency translation adjustments, net of tax.................. -- -- -- (68) (68)
------ ----- ------- ------ -------
Comprehensive income....................................... $33,332
=======
Balance, December 31, 1998..................................... 22,397 $141,506 $49,330 $ (294)
====== ======== ======= =======
</TABLE>
The accompanying notes to consolidated financial statements are
an integral part of these consolidated statements.
20
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the years ended December 31,
1998 1997 1996
---- ---- ----
(in thousands)
<S> <C> <C> <C>
Operating Activities:
Net income............................................................................... $ 33,400 $ 46,964 $ 24,071
Adjustments to reconcile net income to net cash
from operating activities--
Depreciation and amortization........................................................... 14,422 13,237 9,966
Deferred income taxes................................................................... (1,702) (1,087) --
Gain on sale of fixed assets............................................................ -- (1,733) --
Compensation expense for stock options.................................................. -- 450 450
Income tax benefit from the reinstatement of
deferred income taxes................................................................ -- (1,167) --
Changes in operating assets and liabilities--
Accounts receivable, net............................................................. (7,162) (5,521) 2,694
Inventories.......................................................................... (1,918) (4,036) (3,730)
Prepaid expenses and other........................................................... 1,761 (1,564) 4,599
Other assets, net.................................................................... (3,854) (466) (1,014)
Accounts payable..................................................................... 4,004 6,526 (12,854)
Accrued expenses and other........................................................... 7,037 12,228 1,089
--------- --------- --------
Net cash from operating activities................................................ 45,988 63,831 25,271
--------- --------- --------
Investing Activities:
Capital expenditures..................................................................... (10,919) (12,256) (14,083)
Proceeds from sale of fixed assets....................................................... 3,758 2,300 4,850
Equity investments....................................................................... -- (17,722) (8,834)
Business acquisitions.................................................................... (361,520) -- --
--------- --------- --------
Net cash from investing activities................................................ (368,681) (27,678) (18,067)
--------- --------- --------
Financing Activities:
Shareholder distributions paid........................................................... (2,600) (104,972) (13,201)
Proceeds from long-term debt............................................................. 1,286 789 3,512
Repayments of long-term debt............................................................. (8,469) (3,072) (410)
Net borrowings (repayments) under credit agreement....................................... 341,729 (47,449) 2,745
Debt issuance costs...................................................................... (8,615) -- --
Share options exercised, net............................................................. -- 2,513 225
Proceeds from issuance of common shares, net............................................. -- 117,019 --
--------- --------- --------
Net cash from financing activities................................................ 323,331 (35,172) (7,129)
--------- --------- --------
Effect of exchange rates changes on cash and cash equivalents............................ (100) -- --
Net change in cash and cash equivalents.................................................. 538 981 75
Cash and cash equivalents at beginning of period......................................... 1,338 357 282
---------- --------- --------
Cash and cash equivalents at end of period............................................... $ 1,876 $ 1,338 $ 357
========== ========= ========
Supplemental disclosure of cash flow information:
Cash paid for interest................................................................... $ 952 $ 3,281 $ 3,844
========== ========= ========
Cash paid for income taxes............................................................... $ 22,979 $ 591 $ 383
========== ========= ========
Noncash investing and financing activities:
Common shares issued for acquisition of Berifors AB...................................... $ -- $ 12,329 $ --
========== ========= ========
</TABLE>
The accompanying notes to consolidated financial statements are
an integral part of these consolidated statements.
21
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except for share and per share data)
1. Nature of Business
Stoneridge is an independent designer and manufacturer of engineered
electrical and electronic components, modules and systems for the automotive,
medium and heavy duty truck, and agricultural vehicle markets. Stoneridge
operates in one business segment.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements include the accounts
of Stoneridge and its wholly-owned and majority-owned subsidiaries
(collectively, the Company). All significant intercompany transactions and
balances have been eliminated in consolidation.
Cash and Cash Equivalents
The Company considers all short-term investments with original
maturities of three months or less to be cash equivalents. Cash equivalents are
stated at cost, which approximates fair value.
Accounts Receivable
Revenues are principally generated from the automotive, medium and
heavy duty truck, and agricultural vehicle markets. Due to the nature of these
industries, a significant portion of sales and related accounts receivable are
concentrated in a relatively low number of customers. In 1998, three customers
accounted for approximately 25%, 18% and 10% of net sales, while the top five
customers accounted for 72% of net sales. The same three customers accounted for
approximately 32%, 21% and 10% of the Company's 1997 net sales, and its top five
customers accounted for approximately 76% of its 1997 net sales. Accounts
receivable from the Company's five largest customers aggregated approximately
$51,927 and $45,210 at December 31, 1998, and 1997, respectively.
A division of General Motors has notified the Company that it is
discontinuing all outsourcing of its wire harness requirements under contract
manufacturing arrangements. The Company believes that by mid 1999, the General
Motors division will produce in-house substantially all of its wire harness
requirements previously supplied by the Company. In 1998, the Company's net
sales under this arrangement totaled approximately $84.1 million and contributed
approximately $4.9 million in operating income. There can be no assurance that
the Company will be able to offset reductions in its sales and operating profits
resulting from the reduction in sales to the General Motors division.
22
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(in thousands, except for share and per share data)
Inventories
Cost is determined by the last-in, first-out (LIFO) method for
approximately 76% and 100% of the Company's inventories at December 31, 1998 and
1997, respectively, and by the first-in, first-out (FIFO) method for all other
inventories. Inventory cost includes material, labor and overhead. Inventories
consist of the following at December 31:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Raw materials $ 32,453 $ 24,725
Work in progress 10,673 9,397
Finished goods 12,379 6,723
Less-LIFO reserve (2,232) (2,251)
---------------------
Total $ 53,273 $ 38,594
=====================
</TABLE>
Property, Plant and Equipment
Property, plant and equipment are recorded at cost and consist of the
following at December 31:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Land and land improvements $ 5,355 $ 3,756
Buildings and improvements 42,345 32,795
Machinery and equipment 63,012 37,154
Office furniture and fixtures 16,444 8,242
Tooling 22,663 16,729
Vehicles 477 3,977
Leasehold improvements 818 1,018
--------------------
151,114 103,671
Less-Accumulated depreciation
and amortization 56,344 44,975
--------------------
$ 94,770 $ 58,696
====================
</TABLE>
Depreciation is provided by both the straight-line and accelerated
methods over the estimated useful lives of the assets. Depreciation expense for
the years ended December 31, 1998, 1997 and 1996 was $11,779, $11,273 and
$8,686, respectively. Depreciable lives within each property classification are
as follows:
Buildings and improvements 10--40 years
Machinery and equipment 5--10 years
Office furniture and fixtures 3--10 years
Tooling 2--5 years
Vehicles 3--5 years
Leasehold improvements 3--8 years
23
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(in thousands, except for share and per share data)
Maintenance and repair expenditures that are not considered betterments
and do not extend the useful life of property are charged to expense as
incurred. Expenditures for improvements and major renewals are capitalized. When
assets are retired or otherwise disposed of, the related cost and accumulated
depreciation are removed from the accounts, and any gain or loss on the
disposition is credited or charged to income.
Goodwill and Other Intangibles
Goodwill represents the excess of the purchase price paid over the fair
market value of acquired assets and assumed liabilities. Goodwill is being
amortized over 40 years on a straight-line basis. Other intangible assets are
being amortized over two to thirteen years on a straight-line basis. Goodwill
and other intangible asset amortization expense totaled approximately $1,453,
$1,495 and $1,180 in 1998, 1997 and 1996, respectively. Accumulated amortization
as of December 31, 1998, and 1997 was $8,422 and $6,969, respectively. The
Company regularly evaluates its accounting for goodwill and other intangible
assets. Impairment would be recognized when events or changes in circumstances
indicate that the carrying amount of the asset may not be recoverable.
Measurement of the amount of impairment will be based on appraisal, market value
of similar assets or estimated discounted future cash flows resulting from the
use and ultimate disposition of the asset.
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following
at December 31:
1998 1997
---- ----
Compensation-related obligations $14,717 $11,699
Insurance-related obligations 7,241 3,491
Income Taxes 2,012 5,812
Other 24,264 10,103
------------------------
$48,234 $31,105
========================
Income Taxes
Prior to the initial public offering (Offering) discussed in Note 3,
the Company was an S corporation. As an S corporation, the Company's profits
were taxed directly to its shareholders for federal income tax and certain state
income tax purposes. Certain state taxes were paid directly by the Company.
Concurrent with the Offering, the Company terminated its S corporation status.
The Company is subject to federal, state and foreign income taxes.
The Company accounts for income taxes, using the provisions of
Statement of Financial Accounting Standards No. 109 (SFAS 109), oAccounting for
Income Taxes.o Deferred income taxes reflect the tax consequences on future
years of differences between the tax bases of assets and liabilities and their
financial reporting amounts. Future tax benefits are recognized to the extent
that realization of such benefits is more likely than not.
24
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(in thousands, except for share and per share data)
Foreign Currency Translation Adjustment
The financial statements of foreign subsidiaries, where the local
currency is the functional currency, are translated into U.S. dollars using
exchange rates in effect at the period end for assets and liabilities and
average exchange rates during each reporting period for results of operations.
Adjustments resulting from translation of financial statements are reflected as
accumulated other comprehensive income.
The financial statements of foreign subsidiaries where the U.S. dollar
is the functional currency and which have certain transactions denominated in a
local currency are remeasured as if the functional currency were the U.S.
dollar. The remeasurement of local currencies into U.S. dollars creates
translation adjustments which are included in net income. All translation and
transaction activities were insignificant in 1998, 1997 and 1996.
Revenue Recognition
The Company recognizes revenues from the sale of products at the point
of passage of title, which is generally at the time
of shipment.
Product Development Expenses
Expenses associated with the development of new products and changes to
existing products are charged to expense as incurred. The costs amounted to
$17,418, $14,114 and $9,263 in 1998, 1997, and 1996, respectively.
Stock-Based Compensation
The Company has elected to follow Accounting Principles Board Opinion
No. 25, oAccounting for Stock Issued to Employeeso (APB 25), and related
interpretations in accounting for its employee stock options. Under APB 25,
since the exercise price of employee share options equals the market price of
the shares on the date of grant, no compensation expense is recorded. The
Company has adopted the disclosure-only provisions of Statement of Financial
Accounting Standards No. 123 (SFAS 123), oAccounting for Stock-Based
Compensation.o
Financial Instruments and Derivative Financial Instruments
Financial instruments held by the Company include cash and cash
equivalents, accounts receivable, accounts payable, long-term debt and interest
rate swap agreements. The carrying value of cash and cash equivalents, accounts
receivable and payables is considered to be representative of fair value because
of the short maturity of these instruments. The fair values of borrowings under
the long-term debt facilities are based on rates available to the Company for
debt with comparable terms and maturities.
The interest rate swap agreements convert floating-rate debt under the
Company's credit facility to fixed-rate debt. As the outstanding balance on the
Company's credit facilities was less than the notional amount of the interest
rate swap agreements, the market value attributable to the difference was
recognized in interest expense in 1998 and 1997.
25
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(in thousands, except for share and per share data)
Accounting Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
including certain self-insured risks and liabilities, and disclosure of
contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses during the
reporting period. Since actual results could differ from those estimates, the
Company revises its estimates and assumptions as new information becomes
available.
Accounting Standards
The Company adopted Statement of Financial Accounting Standard No. 121
(SFAS 121), oAccounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of,o in 1996. SFAS 121 requires long-lived
assets and certain identifiable intangible assets to be reviewed for impairment
whenever circumstances indicate that the carrying amount of an asset may not be
recoverable. The adoption of this Standard did not have an effect on the
Company's financial statements. Management periodically reviews the
realizability of long-lived assets of the Company in accordance with SFAS 121.
The Company adopted Statement of Financial Accounting Standard No. 128
(SFAS 128), oEarnings per Share,o in 1997. SFAS 128 requires the presentation of
basic earnings per share and diluted earnings per share. Basic earnings per
share is computed by dividing net income by the weighted average number of
common shares outstanding. Diluted earnings per share is calculated by dividing
net income by all weighted average dilutive potential common shares that were
outstanding during the period. Potentially dilutive securities are not
significant and do not create differences between reported basic and diluted
earnings per share for all periods presented.
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130 (SFAS 130), oReporting Comprehensive Incomeo. SFAS
130 establishes new rules for the reporting and display of comprehensive income
and its components. The adoption of SFAS 130 requires that certain items
including currency translation adjustments be included in other comprehensive
income, which prior to adoption were reported separately in shareholders'
equity. Prior year financial statements have been reclassified to conform to the
requirements of this statement.
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 131 (SFAS 131), oDisclosures about Segments of an
Enterprise and Related Information.o SFAS 131 requires the financial statement
disclosures for operating segments, products and services, and geographic areas.
The Company operates in one business segment based on the criteria set forth in
SFAS 131. Therefore, SFAS 131 will not affect the Company's financial position,
results of operations or financial statement disclosures.
The Company will be required to adopt Statement of Financial Accounting
Standards No. 133 (SFAS 133), oAccounting for Derivative Instruments and Hedging
Activitieso for its fiscal year ending 2000. SFAS 133 establishes accounting and
reporting standards for derivatives and hedging activities. The Company has not
yet evaluated the financial accounting and reporting impact of SFAS 133.
26
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(in thousands, except for share and per share data)
3. Offering of Common Shares
On October 10, 1997, the Company completed its Offering of 6,727,500
Common Shares, resulting in net proceeds (after deducting issuance costs) of
$108,693. Net proceeds from the Offering were used to pay an $83,000 S
corporation distribution, and the remaining proceeds were used to repay net
borrowings under the credit facility discussed in Note 6. Concurrent with the
initial public offering, certain officers and management of the Company
purchased 510,181 Common Shares (Management Reinvestment), resulting in net
proceeds of $8,326. In 1998, a final S corporation distribution of $2,600 was
paid.
In connection with the Offering, the Company amended its Articles of
Incorporation to change the authorized share capital of the Company from 37,724
shares of Class A Common, voting, without par value, and 87,276 shares of Class
B Common, non-voting, without par value, to 60,000,000 Common Shares, without
par value and 5,000,000 shares of voting preferred shares, without par value.
The amended Articles of Incorporation provided that each Class A Common Share
and Class B Common Share automatically became 139.0856 Common Shares. All
applicable share and per share data have been adjusted accordingly in these
financial statements.
4. Acquisitions
On December 31, 1998, the Company purchased all of the outstanding
common shares of Hi-Stat Manufacturing Co., Inc. (Hi-Stat) for approximately
$362,000. Hi-Stat manufactures engineered sensors, switches and solenoids for
the automotive industry. The transaction was accounted for as a purchase.
Accordingly, the assets acquired and liabilities assumed of Hi-Stat are included
in the consolidated balance sheet as of December 31, 1998. The purchase price
was funded with the Company's cash on hand and with proceeds from the credit
facilities discussed in Note 6. All assets acquired and liabilities assumed were
stated at fair value. The purchase price paid in excess of identifiable net
assets was allocated to goodwill. The purchase price has been allocated based
on preliminary appraisals and evaluations and is subject to further review and
refinement. The components of intangible assets included in the allocation of
purchase price, along with the related straight-line amortization periods, are:
<TABLE>
<CAPTION>
Amortization
Amount Period (years)
-------- --------------
<S> <C> <C>
Non-compete covenants $ 590 2
Patents 2,580 6-13
Goodwill 306,613 40
--------
Total $309,783
========
</TABLE>
The results of operations of Hi-Stat are included in the accompanying
financial statements from the date of acquisition.
The unaudited pro forma consolidated results of operations as though
Hi-Stat had been acquired at the beginning of fiscal 1998 and 1997 are as
follows:
<TABLE>
1998 1997
---- ----
<S> <C> <C>
Net sales $659,151 $584,965
Operating income $ 73,269 $ 73,286
Net income $ 24,736 $ 22,772
Basic and diluted net income per share $ 1.10 $ 1.04
</TABLE>
27
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(in thousands, except for share and per share data)
The pro forma data do not purport to be indicative of the results that
would have been obtained had these events actually occurred at the beginning of
the periods presented and is not intended to be a projection of future results.
The pro forma amounts reflect the results of operations for the Company, Hi-Stat
and the following purchase accounting and other adjustments for the periods
presented:
. Elimination of certain costs and interest expense of Hi-Stat
which are expected to be nonrecurring.
. Interest expense on borrowings used to fund the acquisition
. Amortization of intangible assets based on the purchase price
allocation
. Estimated income tax effect on the results of operations and
the pro forma adjustments assuming both companies were subject
to tax as C corporations
. 1997 pro forma earnings per share assumes outstanding shares as
discussed in Note 13
In April 1996, the Company purchased 45% of the outstanding common
stock of Berifors AB (Berifors), a Sweden-based manufacturer of electronic
instrumentation and information displays for the European truck and commercial
vehicle markets, for approximately $8,834. The investment was accounted for
under the equity method of accounting. The excess of the amount paid over the
book value of the assets acquired, totaling $7,200, is being amortized over 40
years on a straight-line basis. On October 10, 1997, the Company acquired the
remaining 55% of Berifors, in exchange for 757,063 Common Shares. The
transaction was accounted for as a purchase. The excess of the purchase price
over the book value of assets acquired, totaling $10,439, is being amortized
over 40 years on a straight-line basis. The results of operations of Berifors
are consolidated in the accompanying financial statements from October 1997.
5. Investments
In October 1997, the Company purchased 50% of the outstanding common
stock of PST Industria Eletronica da Amazonia Ltda. (PST), a Brazilian
electronic components business that specializes in electronic vehicle security
devices. The investment is accounted for under the equity method of accounting.
Total cash consideration paid by the Company with respect to this investment was
$17,722 including fees and expenses. The allocation of purchase price resulted
in intangibles, primarily non-compete covenants and goodwill of $2,000 and
$12,622, respectively, which are being amortized over periods of two to 40
years. Amortization expense was $1,190 and $469 in 1998 and 1997, respectively.
The acquisition was financed with borrowings under the credit facility discussed
in Note 6. In 1998, the Company issued a $5,000 note to PST. The proceeds of the
note were used for the repayment of existing debt. The note is secured by
certain assets of PST.
In August 1997, the Company entered into two joint venture agreements
with Connecto AB, a Swedish manufacturer of power distribution systems. Pursuant
to the terms of the agreements, the Company expects to pay approximately $2,400
for a 60% interest in a Brazilian joint venture and $1,100 for a 40% interest in
a European joint venture. The Brazilian joint venture will be consolidated with
the results of the Company and the European joint venture will be accounted for
under the equity method of accounting. As of December 31, 1998, the Company
incurred costs of approximately $260 related to these joint ventures. The joint
ventures are establishing production facilities in Brazil and Europe for the
purpose of manufacturing and selling power distribution systems in South America
and Europe, respectively. In addition, the joint ventures will pursue sales and
marketing efforts for other products and services of joint venture partners to
the extent practicable. The Company finances its investments in the joint
ventures through borrowings under the credit facility discussed in Note 6.
28
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(in thousands, except for share and per share data)
6. Long-Term Debt
The Company has a $425,000 credit agreement with a bank group. The
credit agreement has three components: a $100,000 revolving credit facility, a
$150,000 term facility and a $175,000 term facility. The $100,000 revolving
facility and the $150,000 term facility expire on December 31, 2003, and require
a commitment fee of 0.37% to 0.50% on the unused balance. Interest is payable
quarterly at either (i) the prime rate plus a margin of .25% to 1.50% or (ii)
LIBOR plus a margin of 1.75% to 3.00%, depending upon the Company's ratio of
consolidated total debt to consolidated earnings before interest, taxes,
depreciation and amortization, as defined. The $175,000 term facility expires on
December 31, 2005. Interest is payable quarterly at either (i) the prime rate
plus a margin of 2.00% or (ii) LIBOR plus a margin of 3.50%.
The weighted average interest rate in effect for the years ended
December 31, 1998, 1997 and 1996 was approximately 7.1%, 7.1% and 7.4%,
respectively, including the effects of the interest rate swap agreements.
Long-term debt consists of the following at December 31:
1998 1997
---- ----
Borrowings under credit facility $342,150 $ 497
Borrowings repaid in 1998 -- 8,345
Other 1,787 753
-----------------
343,937 9,595
Current maturities 21,213 456
=================
$322,724 $9,139
=================
The credit agreement contains various covenants that require, among
other things, the maintenance of certain minimum amounts of consolidated net
worth and consolidated EBITDA and certain specified ratios of consolidated total
debt, to consolidated EBITDA, interest coverage and fixed charge coverage.
Restrictions may also include limits on capital expenditures and dividends. The
Company was in compliance with these covenants at December 31, 1998.
Future maturities of long-term debt as of December 31, 1998 are as
follows:
1999 $21,213
2000 24,728
2001 32,122
2002 39,408
2003 60,216
Thereafter 166,250
29
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(in thousands, except for share and per share data)
7. Income Taxes
The provision for income tax included in the accompanying financial
statements represents federal, state and foreign income taxes for fiscal 1998
and the period October 9, 1997, to December 31, 1997, and state income taxes for
certain states for the period January 1, 1997, to October 8, 1997 and fiscal
1996. The provision for income taxes consists of the following for the years
ended December 31:
<TABLE>
1998 1997 1996
---- --- ----
<S> <C> <C> <C>
Current:
Federal $20,414 $ 4,441 $ --
State and foreign 3,924 1,744 524
-------------------------
24,338 6,185 524
Deferred:
Federal (1,489) (983) --
State and foreign (213) (104) --
--------------------------
(1,702) (1,087) --
--------------------------
Total $22,636 $ 5,098 $ 524
==========================
</TABLE>
A reconciliation of the Company's effective income tax rate to the
statutory federal tax rate for 1998 is as follows:
1998
----
Statutory federal income tax rate 35.0%
State income taxes, net of federal tax benefit 4.7
Goodwill amortization 0.8
Other items (0.1)
-----
Effective income tax rate 40.4%
======
A reconciliation of the Company's effective income tax rate to the
statutory federal tax rate has been omitted for 1997 and 1996, as presentation
of such information is not meaningful.
Unremitted earnings of foreign subsidiaries are $878 as of December 31,
1998. Because these earnings have been indefinitely reinvested in foreign
operations, no provision has been made for U.S. income taxes. It is
impracticable to determine the amount of unrecognized deferred taxes with
respect to these earnings; however, foreign tax credits would be available to
reduce U.S. income taxes in the event of a distribution.
As a result of the Company's conversion to C corporation status on
October 9, 1997, current deferred income tax assets and noncurrent deferred
income tax liabilities of approximately $4,073 and $2,906, respectively, were
recorded, offsetting a cumulative effect benefit of $1,167.
In conjunction with the acquisition of Hi-Stat on December 31, 1998,
the Company recorded deferred income tax assets and noncurrent deferred income
tax liabilities of approximately $4,172 and $5,072, respectively.
30
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(in thousands, except for share and per share data)
Deferred tax assets and liabilities consist of the following at
December 31:
1998 1997
---- ----
Deferred tax assets:
Inventories $ 1,632 $1,103
Employee Benefits 1,806 2,371
Insurance 2,834 1,504
Other nondeductible reserves 7,710 2,396
---------------
Gross deferred tax assets 13,982 7,374
Deferred tax liabilities
Depreciation and amortization 7,953 2,899
Other 2,438 1,750
---------------
Gross deferred tax liabilities 10,391 4,649
---------------
Net deferred tax asset $ 3,591 $2,725
===============
8. Operating Lease Commitments
The Company leases equipment, vehicles and a building from third
parties under operating lease agreements.
The Company also leases some of its facilities from certain related
parties. The leases are accounted for as operating leases and are for various
terms with additional renewal options. The Company is generally responsible for
repairs and maintenance, taxes and insurance.
For the years ended December 31, 1998, 1997 and 1996, lease expense
totaled $3,015, $2,313 and $2,255, respectively, under these agreements.
Future minimum operating lease commitments at December 31, 1998, are as
follows:
Third Related
Party Party
----- -----
1999 $3,194 $576
2000 2,553 576
2001 1,779 466
2002 1,347 252
2003 1,233 252
Thereafter -- 212
31
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(in thousands, except for share and per share data)
9. Share Option Plans
In March 1995, the Company granted 90,545 options to key executives to
purchase Common Shares at $4.82 per share. The options were vested upon grant,
and all options were exercised in June 1996.
In June 1996, the Company granted an additional 438,119 options to
directors and key executives to purchase Common Shares at $5.74 per share. The
options were exercised prior to the Offering. The Company recorded compensation
expense of $450 in 1997 and 1996, in the accompanying consolidated financial
statements relative to these options.
In October 1997, the Company adopted a Long-Term Incentive Plan
(Incentive Plan). The Company has reserved 1,000,000 Common Shares for issuance
under the Incentive Plan. Under the Incentive Plan, the Company granted options
to purchase 498,000 Common Shares to management with exercise prices equal to
the fair market value of the Company's Common Shares at the date of grant. The
options will vest two years after the date of grant.
Information relating to the Company's outstanding options is as
follows:
Shares Average Exercise
Option Prices Price
------ ------ -----
Outstanding,
December 31, 1996 -- $ -- $ --
Granted in 1997 498,000 16.44-17.50 17.48
-------
Outstanding,
December 31, 1997 498,000 16.44-17.50 17.48
Forfeited in 1998 (6,000) 17.50 17.50
-----
Outstanding,
December 31, 1998 492,000 16.44-17.50 17.48
=======
Of the outstanding options issued and outstanding under the Incentive
Plan, none are currently exercisable as of December 31, 1998.
The following pro forma information regarding net income and earnings
per share is required by SFAS 123, and has been determined as if the Company had
accounted for its share options under the fair value method of that Statement.
The fair value for these options was estimated at the date of grant using a
Black-Scholes option pricing model with the following weighted average
assumptions:
Risk-free interest rate 5.97-6.16%
Expected dividend yield 0.0%
Expected lives 7.5 years
Expected volatility 33.19%
32
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(in thousands, except for share and per share data)
The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected share price
volatility. Because the Company's share options have characteristics
significantly different from traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its share options.
For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The
Company's pro forma net earnings per share were as follows:
1998 1997
---- ----
Net income - as reported $33,400 $46,964
Net income - pro forma $31,236 $46,485
Basic and diluted earnings per share - as reported $ 1.49 $ 2.92
Basic and diluted earnings per share - pro forma $ 1.39 $ 2.89
10. Employee Benefit Plans
The Company has certain defined contribution profit sharing and 401(k)
plans covering substantially all of the employees. Company contributions are
generally discretionary; however, a portion of these contributions are based
upon a percentage of employee compensation, as defined in the plans. The
Company's policy is to fund all benefit costs accrued. There are no unfunded
prior service costs. For the years ended December 31, 1998, 1997 and 1996,
contributions amounted to $3,149, $3,274 and $2,481, respectively.
The Company does not provide any other material retirement,
postretirement or postemployment benefits to its employees.
11. Related Party Transactions
In 1996, the Company sold a building to an affiliated entity for
$2,200. The excess of the sales price over the carrying value of the building
was $562 and was recorded as a capital contribution. During 1996, prior to the
sale of this building, the Company received approximately $235 in lease payments
and recognized related depreciation and interest expense totaling approximately
$108.
The Company provided management services to a related company in the
amount of $300 annually and also paid the salary of a certain key employee of
the related company, amounting to $76 and $180 in 1997 and 1996, respectively.
Beginning on September 1, 1997, the salary payments were paid by the related
company.
33
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(in thousands, except for share and per share data)
12. Fair Value of Financial Instruments
A financial instrument is cash or a contract that imposes an obligation
to deliver, or conveys a right to receive cash or another financial instrument.
The carrying values of cash and cash equivalents, accounts receivable and
payables are considered to be representative of fair value because of the short
maturity of these instruments. In management's opinion, the estimated fair value
of the Company's long-term debt approximates book value, as under the terms of
the borrowing arrangements, a significant portion of the obligations are subject
to fluctuating market rates of interest.
The Company uses derivative financial instruments to reduce exposures
to market risks resulting from fluctuations in interest rates. The Company does
not enter into financial instruments for trading purposes. Management believes
that its use of these instruments to reduce risk is in the Company's best
interest.
Derivative financial instruments as of December 31, 1998, and 1997,
include the following interest rate swap agreements:
Notional Amount Expected
1998 1997 Fixed Rate Paid Maturity Date
---- ---- --------------- -------------
20,000 20,000 6.545-7.795 Feb. 01, 1999
25,000 25,000 7.03-9.28 Aug 01, 1999
75,000 -- 7.00-8.25 Dec. 29, 2000
75,000 -- 7.00-8.25 Dec. 29, 2000
87,500 -- 8.81 Dec. 31, 2001
87,500 -- 8.81 Dec. 31, 2001
The fair market value of these interest rate swap agreements, which was
estimated based on quoted market sources and approximated a net payable of $220
and $157, at December 31, 1998 and 1997, respectively.
The interest rate swap agreements require the Company to pay a fixed
interest rate to counterparties while receiving a floating interest rate based
on LIBOR. The fixed rate paid to the counterparties is dependent on the
Company's ratio of consolidated total debt to consolidated EBITDA as defined by
the Company's $425,000 credit agreement discussed in Note 6. The counterparties
to each of the interest rate swap agreements are major commercial banks.
Management believes that losses related to credit risk are remote.
13. Unaudited Pro Forma Information
The unaudited pro forma net income in the consolidated statements of
income for the years ended December 31, 1997 and 1996, assumes that the Company
was subject to income taxes as a C corporation.
Unaudited pro forma net income per share for the years ended December
31, 1997 and 1996, has been calculated by dividing pro forma net income by the
weighted average number of Common Shares outstanding, the number of Common
Shares issued in connection with the Offering discussed in Note 3 (6,727,500),
the number of Common Shares issued in connection with the exercise of share
options as discussed in Note 9 (438,119), and the number of Common Shares issued
in connection with the Management Reinvestment discussed in Note 3 (510,181).
34
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(in thousands, except for share and per share data)
14. Commitments and Contingencies
In the ordinary course of business, the Company is involved in various
legal proceedings, workers' compensation and product liability disputes. The
Company is of the opinion that the ultimate resolution of these matters will not
have a material adverse effect on the results of operations or the financial
position of the Company.
15. Unaudited Quarterly Financial Data
The following is a condensed summary of actual quarterly results of
operations for 1998 and 1997:
<TABLE>
<CAPTION>
Quarter Ended,
----------------------------------
Dec. 31 Sep. 30 June 30 Mar. 31
------- ------- ------- -------
(in millions, except per share data)
<S> <C> <C> <C> <C>
1998
Net sales $132.6 $118.2 $121.8 $131.2
Gross profit 33.7 29.2 29.6 31.7
Operating income 13.8 12.2 14.7 16.0
Net income $ 8.0 $ 7.2 $ 8.8 $ 9.4
=================================
Basic and diluted net income per share $ 0.36 $ 0.32 $ 0.39 $ 0.42
=================================
1997
Net sales $126.8 $103.9 $110.8 $108.0
Gross profit profit 29.0 26.0 27.3 25.9
Operating income 12.1 12.3 14.3 13.7
Net income $ 8.4 $ 11.1 $ 13.1 $ 14.4
=================================
Basic and diluted net income per share $ 0.52 $ 0.69 $ 0.82 $ 0.89
=================================
</TABLE>
See Note 3 regarding the Company's Offering of Common Shares in
October 1997.
Results reflect the partial acquisition of Berifors AB in April 1996
and full consolidation of Berifors AB in October 1997.
35
<PAGE>
Report of Independent Public Accountants
To the Board of Directors and Shareholders of Stoneridge, Inc.:
We have audited in accordance with generally accepted auditing
standards, the consolidated financial statements of Stoneridge, Inc. and
Subsidiaries included in this Form 10-K, and have issued our report thereon
dated January 28, 1999. Our audits were made for the purpose of forming an
opinion on those financial statements taken as a whole. The schedule on page 37
is the responsibility of the Company's management and is presented for purposes
of complying with the Securities and Exchange Commission's rules and is not part
of the basic financial statements. This schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.
Arthur Andersen LLP
Cleveland, Ohio,
January 28, 1999.
36
<PAGE>
STONERIDGE, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
Liabilities
Balance at Charged to Assumed in Balance at
Beginning Costs and Purchase End of
of Period Expenses Accounting Write-offs Period
---------- ---------- ------------ ---------- ------
(in thousands)
<S> <C> <C> <C> <C> <C>
Allowance for doubtful accounts:
Year ended December 31, 1996 453 43 -- 231 265
Year ended December 31, 1997 265 20 -- 54 231
Year ended December 31, 1998 231 254 545 24 1,006
</TABLE>
37
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There has been no disagreement between the management of the Company
and the Company's accountants on any matter of accounting principles or
practices of financial statement disclosures.
38
<PAGE>
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item 10 is incorporated by reference
to the information under the headings "Election of Directors" and "Section 16(a)
Beneficial Ownership Reporting Compliance" contained in the Company's Proxy
Statement in connection with its Annual Meeting of Shareholders to be held on
May 3, 1999, and the information under the heading "Executive Officers" in Part
I of this Annual Report on Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item 11 is incorporated by reference
to the information under the heading "Executive Compensation" contained in the
Company's Proxy Statement in connection with its Annual Meeting of Shareholders
to be held on May 3, 1999.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item 12 is incorporated by reference
to the information under the heading "Security Ownership of Certain Beneficial
Owners and Management" contained in the Company's Proxy Statement in connection
with its Annual Meeting of Shareholders to be held on May 3, 1999.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item 13 is incorporated by reference
to the information under the heading "Certain Relationships and Related
Transactions" contained in the Company's Proxy Statement in connection with its
Annual Meeting of Shareholders to be held on May 3, 1999.
39
<PAGE>
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this Form 10-K.
<TABLE>
<CAPTION>
Page in
Form 10-K
---------
1. Consolidated Financial Statements:
<S> <C>
Report of Independent Public Accountants 17
Consolidated Balance Sheet as of December 31, 1998 and 1997 18
Consolidated Statements of Income for the years ended 19
December 31, 1998, 1997 and 1996
Consolidated Statements of Shareholders' Equity for the years 20
ended December 31, 1998, 1997, and 1996
Consolidated Statement of Cash Flows for the years ended
December 31, 1998, 1997 and 1996 21
Note to Consolidated Financial Statements 22
2. Financial Statement Schedules:
Report of Independent Public Accountants 36
Schedule II - Valuation and Qualifying Accounts 37
</TABLE>
All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.
(b) The following reports on Form 8-K were filed during the quarter
ended December 31, 1998.
None.
(c) The exhibits listed on the Index to Exhibits on page 41 are filed
with this Form 10-K or incorporated by reference as set forth
below.
(d) Additional Financial Statement Schedules.
None.
40
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Exhibit
- ------ -------
3.1 Proposed Form of Second Amended and Restated Articles of
Incorporation of the Company (incorporated by reference to Exhibit
3.1 to the Company's Registration Statement on Form S-1 (No. 333-
33285)).
3.2 Proposed Form of Amended and Restated Code of Regulations of the
Company (incorporated by reference to Exhibit 3.2 to the Company's
Registration Statement on Form S-1 (No. 333-33285)).
4.1 Common Share Certificate (incorporated by reference to Exhibit 4.1
to the Company's Annual Report on Form 10-K for the year ended
December 31, 1997).
10.1 Long-Term Incentive Plan (incorporated by reference to Exhibit
10.1 to the Company's Registration Statement on Form S-1 (No. 333-
33285)).
10.2 Lease dated October 1, 1993 between D.M. Draime and Alphabet, Inc.
(the Company's predecessor) with respect to the Company's
Greenwood, South Carolina facility (incorporated by reference to
Exhibit 10.2 to the Company's Registration Statement on Form S-1
(No. 333-33285)).
10.3 Lease Agreement between Industrial Development Associates and the
Alphabet Division, with respect to the Company's Mebane, North
Carolina facility (incorporated by reference to Exhibit 10.3 to
the Company's Registration Statement on Form S-1 (No. 333-33285)).
10.4 Lease Agreement between Hunters Square, Inc. and Alphabet, Inc.,
with respect to the Company's division headquarters for the
Alphabet Division (incorporated by reference to Exhibit 10.4 to
the Company's Registration Statement on Form S-1 (No. 333-33285)).
10.5 Contract Manufacturing Agreement dated January 3, 1993 with a
division of General Motors (incorporated by reference to Exhibit
10.5 to the Company's Registration Statement on Form S-1 (No. 333-
33285)).
10.6 Share Exchange Agreement relating to the Berifors Acquisition
(incorporated by reference to Exhibit 10.6 to the Company's
Registration Statement on Form S-1 (No. 333-33285)).
10.7 Joint Venture and Shareholders' Agreements and Cooperation
Agreement with Connecto AB (incorporated by reference to Exhibit
10.7 to the Company's Registration Statement on Form S-1 (No. 333-
33285)).
10.8 Credit Agreement dated as of December 30, 1998 among Stoneridge,
Inc., as Borrower, the Lending Institutions Named Therein, as
Lenders, DLJ Capital Funding, Inc., as Syndication Agent, National
City Bank, as Administrative Agent and Collateral Agent, PNC Bank,
NA as Documentation Agent, filed herewith.
10.9 Agreement with DAV (Labinal) dated June 9, 1994 (incorporated by
reference to Exhibit 10.9 to the Company's Registration Statement
on Form S-1 (No. 333-33285)).
10.10 Proposed Form of Tax Indemnification Agreement (incorporated by
reference to Exhibit 10.10 to the Company's Registration Statement
on Form S-1 (No. 333-33285)).
10.11 Agreement for the Purchase and Sale of Quotas of P.S.T. Industria
Eletronica da Amazonia Ltda dated October 29, 1997(incorporated by
reference to Exhibit 10.11 to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1997).
10.12 Quotaholders' Agreement among Marcos Ferretti, Sergio De Cerqueira
Leite, Stoneridge, Inc. and P.S.T. Industria Eletronica da
Amazonia Ltda dated October 29, 1997 (incorporated by reference to
Exhibit 10.12 to the Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1997).
10.13 Stock Purchase Agreement by and among Stoneridge, Inc. and the
Shareholders of Hi-Stat Manufacturing Co., Inc., dated as of
December 7, 1998 (incorporated by reference to Exhibit 2.1 to the
Company's Current Report on Form 8-K as of December 31, 1998).
10.14 Form of Change in Control Agreement, filed herewith.
21.1 Subsidiaries of the Company, filed herewith.
27.1 Financial Data Schedule for the year ended December 31, 1998,
filed herewith.
41
<PAGE>
SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) 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.
STONERIDGE, INC.
Date: March 31, 1999 /s/ KEVIN P. BAGBY
--------------------------------------------
Kevin P. Bagby
Treasurer and Chief Financial Officer
(Principal Financial and Accounting Officer)
Pursuant to the requirements of Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
<S> <C>
Date: March 31, 1999 /s/ D.M. DRAIME
-----------------------------------------
D.M. Draime
Chairman of the Board of Directors
Date: March 31, 1999 /s/ CLOYD J. ABRUZZO
-----------------------------------------
Cloyd J. Abruzzo
President and Chief Executive Officer
(Principal Executive Officer)
Date: March 31, 1999 /s/ AVERY S. COHEN
-----------------------------------------
Avery S. Cohen
Secretary and Director
Date: March 31, 1999 /s/ RICHARD E. CHENEY
-----------------------------------------
Richard E. Cheney
Director
Date: March 31, 1999 /s/ SHELDON J. EPSTEIN
-----------------------------------------
Sheldon J. Epstein
Director
Date: March 31, 1999 /s/ C.J. HIRE
-----------------------------------------
C.J. Hire
Director
Date: March 31, 1999 /s/ RICHARD G. LEFAUVE
-----------------------------------------
Richard G. LeFauve
Director
Date: March 31, 1999 /s/ EARL L. LINEHAN
-----------------------------------------
Earl L. Linehan
Director
</TABLE>
42
<PAGE>
EXHIBIT 10.8
================================================================================
================================================================================
CREDIT AGREEMENT
dated as of
December 30, 1998
Among
STONERIDGE, INC.
as Borrower
THE LENDING INSTITUTIONS NAMED THEREIN
as Lenders
DLJ CAPITAL FUNDING, INC.
as Syndication Agent
NATIONAL CITY BANK
as Administrative Agent and Collateral Agent
PNC BANK, NATIONAL ASSOCIATION
as Documentation Agent
$100,000,000 Revolving Facility
$150,000,000 Term A Facility
$175,000,000 Term B Facility
Arranged by National City Bank and
Donaldson, Lufkin & Jenrette Securities Corporation
as Lead Arrangers
================================================================================
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS AND TERMS............................................1
1.1. Certain Defined Terms............................................1
1.2. Computation of Time Periods.....................................24
1.3. Accounting Terms................................................24
1.4. Currency Equivalents............................................24
SECTION 2. AMOUNT AND TERMS OF LOANS.......................................25
2.1. Commitments for Loans...........................................25
2.2. Minimum Borrowing Amounts, etc.; Pro Rata Borrowings............25
2.3. Notice of Borrowing.............................................26
2.4. Disbursement of Funds...........................................26
2.5. Notes; Loan Accounts............................................27
2.6. Conversions.....................................................28
2.7. Interest........................................................28
2.8. Selection and Continuation of Interest Periods..................30
2.9. Increased Costs, Illegality, etc................................31
2.10. Breakage Compensation...........................................33
2.11. Change of Lending Office; Replacement of Lenders................33
SECTION 3. LETTERS OF CREDIT...............................................34
3.1. Letters of Credit...............................................34
3.2. Letter of Credit Requests: Notices of Issuance..................35
3.3. Agreement to Repay Letter of Credit Drawings....................35
3.4. Letter of Credit Participations.................................36
3.5. Increased Costs.................................................37
3.6. Guaranty of Letter of Credit Obligations of Other Letter of
Credit Obligors .............................................38
SECTION 4. FEES; COMMITMENTS...............................................39
4.1. Fees............................................................39
4.2. Voluntary Termination/Reduction of Commitments..................41
4.3. Mandatory Adjustments of Commitments, etc.......................41
SECTION 5. PAYMENTS........................................................42
5.1. Voluntary Prepayments...........................................42
5.2. Scheduled Repayments and Mandatory Prepayments..................43
5.3. Method and Place of Payment.....................................48
5.4. Net Payments....................................................48
SECTION 6. CONDITIONS PRECEDENT............................................50
6.1. Conditions Precedent at Closing Date............................50
6.2. Conditions Precedent to All Credit Events.......................54
SECTION 7. REPRESENTATIONS AND WARRANTIES..................................55
7.1. Corporate Status, etc...........................................55
7.2. Subsidiaries....................................................55
7.3. Corporate Power and Authority, etc..............................55
7.4. No Violation....................................................55
<PAGE>
7.5. Governmental Approvals..........................................55
7.6. Litigation......................................................55
7.7. Use of Proceeds; Margin Regulations.............................56
7.8. Financial Statements, etc.......................................56
7.9. No Material Adverse Change......................................57
7.10. Tax Returns and Payments........................................57
7.11. Title to Properties, etc........................................57
7.12. Lawful Operations, etc..........................................57
7.13. Environmental Matters...........................................57
7.14. Compliance with ERISA...........................................58
7.15. Intellectual Property, etc......................................58
7.16. Investment Company..............................................58
7.17. Year 2000 Computer Matters......................................58
7.18. Existing Indebtedness...........................................59
7.19. Burdensome Contracts; Labor Relations...........................59
7.20. Security Interests..............................................59
7.21. Hi-Stat Acquisition Documents, etc..............................59
7.22. True and Complete Disclosure....................................60
SECTION 8. AFFIRMATIVE COVENANTS...........................................60
8.1. Reporting Requirements..........................................60
8.2. Books, Records and Inspections..................................63
8.3. Insurance.......................................................63
8.4. Payment of Taxes and Claims.....................................64
8.5. Corporate Franchises............................................64
8.6. Good Repair.....................................................64
8.7. Compliance with Statutes, etc...................................64
8.8. Compliance with Environmental Laws..............................64
8.9. Fiscal Years, Fiscal Quarters...................................65
8.10. Hedge Agreements, etc...........................................65
8.11. Certain Subsidiaries to Join in Subsidiary Guaranty.............66
8.12. Additional Security; Further Assurances.........................67
8.13. Casualty and Condemnation.......................................69
8.14. Landlord/Mortgagee Waivers; Bailee Letters......................69
8.15. Senior Debt.....................................................70
SECTION 9. NEGATIVE COVENANTS..............................................70
9.1. Changes in Business.............................................70
9.2. Consolidation, Merger, Acquisitions, Asset Sales, etc...........70
9.3. Liens...........................................................71
9.4. Indebtedness....................................................72
9.5. Advances, Investments, Loans and Guaranty Obligations...........73
9.6. Dividends, etc..................................................74
9.7. Minimum Consolidated Net Worth..................................74
9.8. Consolidated Total Debt/Consolidated EBITDA Ratio...............75
9.9. Interest Coverage Ratio.........................................75
9.10. Fixed Charge Coverage Ratio.....................................76
9.11. Minimum Consolidated EBITDA.....................................76
9.12. Consolidated Capital Expenditures...............................77
9.13. Certain Leases..................................................77
ii
<PAGE>
9.14. Limitation on Certain Restrictive Agreements....................77
9.15. Prepayments and Refinancings of Other Debt, etc.................78
9.16. Transactions with Affiliates....................................78
9.17. Modifications of Hi-Stat Acquisition Documents, etc.............78
9.18. Plan Terminations, Minimum Funding, etc.........................78
SECTION 10. EVENTS OF DEFAULT...............................................79
10.1. Events of Default...............................................79
10.2. Acceleration, etc...............................................81
10.3. Application of Liquidation Proceeds.............................81
SECTION 11. THE AGENTS......................................................82
11.1. Appointments....................................................82
11.2. Delegation of Duties............................................82
11.3. Exculpatory Provisions..........................................83
11.4. Reliance by Agents..............................................83
11.5. Notice of Default...............................................83
11.6. Non-Reliance....................................................83
11.7. Indemnification.................................................84
11.8. The Agents in Their Individual Capacity.........................84
11.9. Successor Agents................................................84
11.10. Other Agents....................................................84
SECTION 12. MISCELLANEOUS...................................................85
12.1. Payment of Expenses etc.........................................85
12.2. Right of Setoff.................................................86
12.3. Notices.........................................................86
12.4. Benefit of Agreement............................................86
12.5. No Waiver: Remedies Cumulative..................................88
12.6. Payments Pro Rata...............................................89
12.7. Calculations: Computations......................................89
12.8. Governing Law; Submission to Jurisdiction; Venue; Waiver of
Jury Trial ...................................................90
12.9. Counterparts....................................................90
12.10. Effectiveness...................................................90
12.11. Headings Descriptive............................................90
12.12. Amendment or Waiver.............................................90
12.13. Survival of Indemnities.........................................91
12.14. Domicile of Loans...............................................91
12.15. Confidentiality.................................................92
12.16. Lender Register.................................................92
12.17. Limitations on Liability of the Letter of Credit Issuers........92
12.18. General Limitation of Liability.................................93
12.19. No Duty.........................................................93
12.20. Lenders and Agent Not Fiduciary to Borrower, etc................93
12.21. Survival of Representations and Warranties......................93
iii
<PAGE>
- ---------------
ANNEX I - INFORMATION AS TO SUBSIDIARIES
ANNEX II - DESCRIPTION OF EXISTING INDEBTEDNESS
ANNEX III - DESCRIPTION OF EXISTING LIENS
ANNEX IV - DESCRIPTION OF EXISTING ADVANCES, LOANS,
INVESTMENTS AND GUARANTEES
ANNEX V - DESCRIPTION OF LETTERS OF CREDIT DEEMED
ISSUED UNDER THE CREDIT AGREEMENT
EXHIBIT A-1 - FORM OF TERM A NOTE
EXHIBIT A-2 - FORM OF TERM B NOTE
EXHIBIT A-3 - FORM OF REVOLVING NOTE
EXHIBIT B-1 - FORM OF NOTICE OF BORROWING
EXHIBIT B-2 - FORM OF NOTICE OF CONVERSION
EXHIBIT B-3 - FORM OF LETTER OF CREDIT REQUEST
EXHIBIT C-1 - FORM OF SUBSIDIARY GUARANTY
EXHIBIT C-2 - FORM OF SECURITY AGREEMENT
EXHIBIT C-3 - FORM OF COLLATERAL ASSIGNMENT OF PATENTS
EXHIBIT C-4 - FORM OF COLLATERAL ASSIGNMENT OF TRADEMARKS
EXHIBIT C-5 - FORM OF PLEDGE AGREEMENT
EXHIBIT C-6 - FORM OF CLOSING DATE MORTGAGE (Boston Massachusetts)
EXHIBIT C-7 - FORM OF CLOSING DATE MORTGAGE (Canton, Massachusetts)
EXHIBIT C-8 - FORM OF CLOSING DATE MORTGAGE (Kent, Ohio)
EXHIBIT C-9 - FORM OF CLOSING DATE MORTGAGE (Orwell, Ohio)
EXHIBIT C-10 - FORM OF CLOSING DATE MORTGAGE (Portland, Indiana)
EXHIBIT C-11 - FORM OF CLOSING DATE MORTGAGE (Warren, Ohio)
EXHIBIT C-12 - FORM OF LANDLORD WAIVER
EXHIBIT C-13 - FORM OF MORTGAGEE WAIVER
EXHIBIT C-14 - FORM OF BAILEE WAIVER
EXHIBIT D-1 - FORM OF OPINION OF COUNSEL TO THE BORROWER
EXHIBIT D-2 - FORM OF SOLVENCY CERTIFICATE
EXHIBIT E - FORM OF ASSIGNMENT AGREEMENT
EXHIBIT F - FORM OF SECTION 5.4(b)(ii) CERTIFICATE
iv
<PAGE>
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of December 30, 1998, among the following:
(i) STONERIDGE, INC., an Ohio corporation (herein, together with its
successors and assigns, the "Borrower");
(ii) the lending institutions signatory hereto (each a "Lender" and
collectively, the "Lenders");
(iii) DLJ CAPITAL FUNDING, INC., a Delaware corporation, as
syndication agent (the "Syndication Agent");
(iv) NATIONAL CITY BANK, a national banking association, as the
administrative agent (the "Administrative Agent") and as the collateral
agent (the "Collateral Agent"); and
(v) PNC BANK, NATIONAL ASSOCIATION, a national banking association,
as the documentation agent (the "Documentation Agent"):
PRELIMINARY STATEMENTS:
(1) Unless otherwise defined herein, all capitalized terms used herein and
defined in section 1 are used herein as so defined.
(2) The credit facilities provided for herein have been arranged for the
Borrower by National City Bank, a national banking association, and Donaldson,
Lufkin & Jenrette Securities Corporation (collectively, the "Lead Arrangers").
(3) The Borrower has applied to the Lenders for credit facilities in order
to (i) finance the acquisition of Hi-Stat Manufacturing Co., Inc., a Florida
corporation (herein, together with its successors and assigns, "Hi-Stat"), and
(ii) provide working capital and funds for other lawful purposes.
(4) Subject to and upon the terms and conditions set forth herein, the
Lenders are willing to make available to the Borrower the credit facilities
provided for herein.
NOW, THEREFORE, it is agreed:
SECTION 1. DEFINITIONS AND TERMS.
1.1. Certain Defined Terms. As used herein, the following terms shall have
the meanings herein specified unless the context otherwise requires. Defined
terms in this Agreement shall include in the singular number the plural and in
the plural the singular:
"Acquisition" shall mean and include (i) any acquisition on a going
concern basis (whether by purchase, lease or otherwise) of any facility and/or
business operated by any person who is not a Subsidiary of the Borrower, and
(ii) acquisitions of a majority of the outstanding equity or other similar
interests in any such person (whether by merger, stock purchase or otherwise).
"Additional Security Document" shall have the meaning provided in section
8.12(a).
"Adjusted Eurodollar Rate" shall mean with respect to each Interest Period
for a Eurodollar Loan, (A) either (i) the rate per annum for deposits in Dollars
of amounts in same day funds comparable to the outstanding principal amount of
the Eurodollar Loan for which an interest rate is then being determined for a
maturity most nearly
<PAGE>
comparable to such Interest Period which appears on page 3750 of the Dow Jones
Telerate Screen as of 11:00 A.M. (local time at the Notice Office) on the date
which is two Business Days prior to the commencement of such Interest Period, or
(ii) if such a rate does not appear on such page, an interest rate per annum
equal to the average (rounded upward to the nearest whole multiple of 1/16 of 1%
per annum, if such average is not such a multiple) of the rate per annum at
which deposits in Dollars are offered to each of the Reference Banks by prime
banks in the London interbank Eurodollar market for deposits of amounts in
Dollars in same day funds comparable to the outstanding principal amount of the
Eurodollar Loan for which an interest rate is then being determined with
maturities comparable to the Interest Period to be applicable to such Eurodollar
Loan, determined as of 11:00 A.M. (London time) on the date which is two
Business Days prior to the commencement of such Interest Period, in each case
divided (and rounded upward to the nearest whole multiple of 1/16th of 1%) by
(B) a percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves and without benefit of credits for
proration, exceptions or offsets which may be available from time to time)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or any successor category
of liabilities under Regulation D).
"Administrative Agent" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to section 11.9.
"Administrative Questionnaire" shall mean an Administrative Questionnaire
in a form supplied to the Lenders by the Administrative Agent and completed by
each Lender.
"Affiliate" shall mean, with respect to any person, any other person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such person. A person shall be deemed to control a second
person if such first person possesses, directly or indirectly, the power (i) to
vote 10% or more of the securities having ordinary voting power for the election
of directors or managers of such second person or (ii) to direct or cause the
direction of the management and policies of such second person, whether through
the ownership of voting securities, by contract or otherwise. Notwithstanding
the foregoing, (x) a director, officer or employee of a person shall not, solely
by reason of such status, be considered an Affiliate of such person; and (y)
neither the Administrative Agent nor any Lender shall in any event be considered
an Affiliate of the Borrower or any other Credit Party or any of their
respective Subsidiaries.
"Agent" shall mean the Administrative Agent, the Collateral Agent or the
Syndication Agent, as applicable.
"Agreement" shall mean this Credit Agreement, as the same may be from time
to time further modified, amended and/or supplemented.
"Alternative Currency" shall mean and include any lawful currency other
than Dollars which is (i) readily and freely transferable and convertible into
Dollars, and (ii) is acceptable to the Required Revolving Lenders and any
applicable Letter of Credit Issuer.
"Applicable Lending Office" shall mean, with respect to each Lender, (i)
such Lender's Domestic Lending Office in the case of Borrowings consisting of
Prime Rate Loans and (ii) such Lender's Eurodollar Lending Office in the case of
Borrowings consisting of Eurodollar Loans.
"Asset Sale" shall mean the sale, transfer or other disposition (including
by means of Sale and Lease-Back Transactions, and by means of mergers,
consolidations, and liquidations of a corporation, partnership or limited
liability company of the interests therein of the Borrower or any Subsidiary) by
the Borrower or any Subsidiary to any person other than the Borrower or any
Subsidiary of any of their respective assets, provided that the term Asset Sale
specifically excludes (i) any sales, transfers or other dispositions of
inventory, or obsolete or excess furniture, fixtures, equipment or other
property, real or personal, tangible or intangible, in each case in the ordinary
course of business, and (ii) any Event of Loss.
"Assignment Agreement" shall mean an Assignment Agreement substantially in
the form of Exhibit E hereto.
2
<PAGE>
"Authorized Officer" shall mean any officer or employee of the Borrower
designated as such in writing to the Administrative Agent by the Borrower.
"Bankruptcy Code" shall have the meaning provided in section 10.1(h).
"Borrower" shall have the meaning provided in the first paragraph of this
Agreement.
"Borrowing" shall mean a Revolving Borrowing or a Term Borrowing, as the
case may be.
"Borrowing Base" shall mean as of any date an amount equal to the sum of
(i) 85% of Eligible Domestic Receivables,
(ii) the lesser of (x) $10,000,000, or (y) 50% of Eligible Foreign
Receivables,
(iii) 50% of Eligible Domestic Inventory, and
(iv) the lesser of (x) $5,000,000, or (y) 20% of Eligible Foreign
Inventory, and
each as determined from time to time by the Administrative Agent and notified to
the Borrower and the Lenders on the basis of the information shown in the most
recent Borrowing Base Certificate delivered to the Administrative Agent pursuant
hereto, provided that if a Borrowing Base Certificate has not been timely
delivered to the Administrative Agent as required by section 8.1(d) with respect
to the preceding calendar month, the Administrative Agent may, in its sole
discretion, upon notice to the Borrower and the Lenders, reduce any of the above
percentages until the Business Day following the date such Borrowing Base
Certificate is actually delivered to the Administrative Agent.
"Borrowing Base Certificate" shall have the meaning specified in section
8.1(e).
"Borrowing Base Termination Date" shall mean. if at such time no Default
under section 10.1(a) or Event of Default shall have occurred and be continuing,
(i) December 31, 2001, or (ii) such earlier date, if any, as of which the
Borrower shall have delivered to the Administrative Agent and the Lenders its
written undertaking to comply with section 9.8 of this Agreement as if such
section 9.8 had been amended so as not to permit the Borrower at any time to
have a ratio of its Consolidated Total Debt to Consolidated EBITDA for its
Testing Period most recently ended in excess of 2.50 to 1.00 (and effective upon
such delivery such section 9.8 of this Agreement shall be deemed to have been so
amended). The Administrative Agent shall notify the Borrower and the Lenders of
the occurrence of the Borrowing Base Termination Date, specifying the same.
"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
in the city in which the Payment Office is located a legal holiday or a day on
which banking institutions are authorized by law or other governmental actions
to close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day which
is a Business Day described in clause (i) and which is also a day for trading by
and between banks in U.S. dollar deposits in the interbank Eurodollar market.
"Capital Lease" as applied to any person shall mean any lease of any
property (whether real, personal or mixed) by that person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that person.
"Capitalized Lease Obligations" shall mean all obligations under Capital
Leases of the Borrower or any of its Subsidiaries in each case taken at the
amount thereof accounted for as liabilities identified as "capital lease
obligations" (or any similar words) on a consolidated balance sheet of the
Borrower and its Subsidiaries prepared in accordance with GAAP.
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"Cash Equivalents" shall mean any of the following:
(i) securities issued or directly and fully guaranteed or insured by
the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America
is pledged in support thereof) having maturities of not more than one year
from the date of acquisition;
(ii) U.S. dollar denominated time deposits, certificates of deposit
and bankers' acceptances of (x) any Lender or (y) any bank whose
short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from Moody's is at least P-1 or the equivalent
thereof (any such bank, an "Approved Bank"), in each case with maturities
of not more than three months from the date of acquisition;
(iii) commercial paper issued by any Lender or Approved Bank or by
the parent company of any Lender or Approved Bank and commercial paper
issued by, or guaranteed by, any industrial or financial company with a
short- term commercial paper rating of at least A-1 or the equivalent
thereof by S&P or at least P-1 or the equivalent thereof by Moody's, or
guaranteed by any industrial company with a long term unsecured debt
rating of at least A or A2, or the equivalent of each thereof, from S&P or
Moody's, as the case may be, and in each case maturing within 90 days
after the date of acquisition;
(iv) investments in money market funds substantially all the assets
of which are comprised of securities of the types described in clauses (i)
through (iii) above;
(v) investments in money market funds access to which is provided as
part of "sweep" accounts maintained with a Lender or an Approved Bank;
(vi) investments in industrial development revenue bonds which (i)
"re-set" interest rates not less frequently than quarterly, (ii) are
entitled to the benefit of a remarketing arrangement with an established
broker dealer, and (iii) are supported by a direct pay letter of credit
covering principal and accrued interest which is issued by an Approved
Bank; and
(vii) investments in pooled funds or investment accounts consisting
of investments of the nature described in the foregoing clause (vi).
"Cash Proceeds" shall mean, with respect to (i) any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment constituting interest, but only as and
when so received) received by the Borrower and/or any Subsidiary from such Asset
Sale, and (ii) any Event of Loss, the aggregate cash payments, including all
insurance proceeds and proceeds of any award for condemnation or taking,
received in connection with such Event of Loss.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. ss. 9601 et seq.
"Change of Control" shall mean and include any of the following:
(i) during any period of two consecutive calendar years, individuals
who at the beginning of such period constituted the Borrower's Board of
Directors (together with any new directors (x) whose election by the
Borrower's Board of Directors was, or (y) whose nomination for election by
the Borrower's shareholders was (prior to the date of the proxy or consent
solicitation relating to such nomination), approved by a vote of at least
two-thirds of the directors then still in office who either were directors
at the beginning of such period or whose election or nomination for
election was previously so approved), shall cease for any reason to
constitute a majority of the directors then in office;
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(ii) any person or group (as such term is defined in section
13(d)(3) of the 1934 Act), other than the Borrower, any trustee or other
fiduciary holding securities under an employee benefit plan of the
Borrower, or any members of the Current Holder Group, shall acquire,
directly or indirectly, beneficial ownership (within the meaning of Rule
13d-3 and 13d-5 of the 1934 Act) of more than 35%, on a fully diluted
basis, of the economic or voting interest in the Borrower's capital stock;
(iii) the shareholders of the Borrower approve a merger or
consolidation of the Borrower with any other person, other than a merger
or consolidation which would result in the voting securities of the
Borrower outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted or exchanged for
voting securities of the surviving or resulting entity) more than 75% of
the combined voting power of the voting securities of the Borrower or such
surviving or resulting entity outstanding after such merger or
consolidation;
(iv) the shareholders of the Borrower approve a plan of complete
liquidation of the Borrower or an agreement or agreements for the sale or
disposition by the Borrower of all or substantially all of the Borrower's
assets; and/or
(vi) any "change in control" or any similar term as defined in any
of the indentures, credit agreements or other instruments governing any
Indebtedness of the Borrower or any of its Subsidiaries with an
outstanding principal amount, or providing for commitments to lend in an
outstanding principal amount, of at least $10,000,000 (or the equivalent
amount in any other currency).
As used in this definition, the term"Current Holder Group" shall mean (i) Max
Draime, (ii) those other persons who are officers and directors of the Borrower
at the Effective Date, (iii) the spouses, heirs, legatees, descendants and blood
relatives to the third degree of consanguinity of any such person, (iv) the
executors and administrators of the estate of any such person, and any court
appointed guardian of any such person, and (v) any trust, family partnership or
similar investment entity for the benefit of any such person referred to in the
foregoing clauses (i), (ii) and (iii) or any other persons (including for
charitable purposes), so long as one or more members of the Current Holder Group
has the exclusive or a joint right to control the voting and disposition of
securities held by such trust, family partnership or other investment entity.
"Closing Date" shall mean the date, on or after the Effective Date, upon
which the conditions specified in section 6.1 are satisfied.
"Closing Date Mortgaged Property" shall have the meaning provided in
section 6.1(k).
"Closing Date Mortgage Policy" shall have the meaning provided in section
6.1(k).
"Closing Date Mortgages" shall have the meaning provided in section
6.1(c).
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the Effective
Date and any subsequent provisions of the Code, amendatory thereof, supplemental
thereto or substituted therefor.
"Collateral" shall mean any collateral covered by any Security Document.
"Collateral Agent" shall mean the Administrative Agent acting as
Collateral Agent for the Lenders pursuant to the Security Documents.
"Commitment" shall mean, with respect to each Lender, its Term A
Commitment, if any, its Term B Commitment, if any, or its Revolving Commitment,
if any, or any or all of such Commitments of a Lender, as applicable.
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"Commitment Fee" shall have the meaning provided in section 4.1(a).
"Consolidated Amortization Expense" shall mean, for any period, all
amortization expenses of the Borrower and its Subsidiaries, all as determined
for the Borrower and its Subsidiaries on a consolidated basis in accordance with
GAAP.
"Consolidated Capital Expenditures" shall mean, for any period, the
aggregate of all expenditures (whether paid in cash or accrued as liabilities
and including in all events amounts expended or capitalized under Capital Leases
but excluding any amount representing capitalized interest) by the Borrower and
its Subsidiaries during that period that, in conformity with GAAP, are or are
required to be included in the property, plant or equipment reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries.
"Consolidated Cash Income Tax Expense" shall mean, for any period, all
provisions for taxes based on the net income of the Borrower or any of its
Subsidiaries (including, without limitation, any additions to such taxes, and
any penalties and interest with respect thereto), all as determined for the
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP,
but excluding therefrom any portion thereof which represents for such period an
addition to the consolidated deferred taxes of the Borrower and its Subsidiaries
as determined in accordance with GAAP.
"Consolidated Cash Interest Expense" shall mean, for any period, total
interest expense (including that which is capitalized, that which is
attributable to Capital Leases and the pre-tax equivalent of dividends payable
on Redeemable Preferred Stock) of the Borrower and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of the Borrower
and its Subsidiaries including, without limitation, all commissions, discounts
and other fees and charges owed with respect to letters of credit and net costs
under Hedge Agreements, but excluding, however, (i) any amortization or
write-off of deferred financing costs; and (ii) interest (and the pre-tax
equivalent of dividends on Redeemable Stock) which is not payable in cash with
respect to such period
"Consolidated Depreciation Expense" shall mean, for any period, all
depreciation expenses of the Borrower and its Subsidiaries, all as determined
for the Borrower and its Subsidiaries on a consolidated basis in accordance with
GAAP.
"Consolidated EBIT" shall mean, for any period, Consolidated Net Income
for such period; plus (A) the sum of the amounts for such period included in
determining such Consolidated Net Income of (i) Consolidated Cash Interest
Expense, (ii) Consolidated Cash Income Tax Expense, and consolidated deferred
tax expense, (iii) amortization or write-off of deferred financing costs and
charges for prepayment penalties on prepayment of Indebtedness, and (iv)
extraordinary and other non-recurring non-cash losses and charges; less (B)
gains on sales of assets and other extraordinary gains and other non-recurring
non-cash gains; all as determined for the Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP, except that in computing
Consolidated Net Income for purposes of this definition, there shall be excluded
therefrom (x) the income, (or loss) of any entity (other than Wholly-Owned
Subsidiaries of the Borrower) in which the Borrower or any of its Subsidiaries
has a joint, minority or other equity interest, except to the extent of the
amount of dividends or other distributions actually paid to the Borrower or any
of its Wholly-Owned Subsidiaries during such period, and (y) the income of any
Subsidiary of the Borrower to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary; and provided that, notwithstanding anything to
the contrary contained herein, the Borrower's Consolidated EBIT for any Testing
Period shall (x) include the appropriate financial items for any person or
business unit which has been acquired by the Borrower for any portion of such
Testing Period prior to the date of acquisition, adjusted, if appropriate, in
the case of the Hi-Stat Acquisition, by up to approximately $17.4 million, to
eliminate the effect of certain items of expense related to the operation of
Hi-Stat as a private entity, and (y) exclude the appropriate financial items for
any person or business unit which has been disposed of by the Borrower, for the
portion of such Testing Period prior to the date of disposition.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT for
such period; plus the sum (without duplication) of the amounts for such period
included in determining such Consolidated EBIT of (i)
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Consolidated Depreciation Expense, and (ii) Consolidated Amortization Expense,
all as determined for the Borrower and its Subsidiaries on a consolidated basis
in accordance with GAAP; provided that, notwithstanding anything to the contrary
contained herein, the Borrower's Consolidated EBITDA for any Testing Period
shall (x) include the appropriate financial items for any person or business
unit which has been acquired by the Borrower for any portion of such Testing
Period prior to the date of acquisition adjusted, if appropriate and without
duplication, in the case of the Hi-Stat Acquisition, to eliminate the effect of
certain items of expense related to the operation of Hi-Stat as a private
entity, and (y) exclude the appropriate financial items for any person or
business unit which has been disposed of by the Borrower, for the portion of
such Testing Period prior to the date of disposition.
"Consolidated Net Income" shall mean for any period, the net income (or
loss), without deduction for minority interests, of the Borrower and its
Subsidiaries on a consolidated basis for such period taken as a single
accounting period determined in conformity with GAAP.
"Consolidated Net Working Capital" shall mean current assets (excluding
cash and Cash Equivalents), minus current liabilities, all as determined for the
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.
"Consolidated Net Worth" shall mean at any time for the determination
thereof all amounts which, in conformity with GAAP, would be included under the
caption "total stockholders' equity" (or any like caption) on a consolidated
balance sheet of the Borrower as at such date, provided that in no event shall
Consolidated Net Worth include any amounts in respect of Redeemable Stock.
"Consolidated Total Assets" shall mean with respect to any person at any
date of determination the net book value of all assets which would appear on a
consolidated balance sheet of such person and its consolidated Subsidiaries at
such date which is prepared in accordance with GAAP.
"Consolidated Total Debt" shall mean the sum (without duplication) of all
Indebtedness of the Borrower and of each of its Subsidiaries, all as determined
on a consolidated basis; provided that Consolidated Total Debt shall be computed
without regard to (i) the Borrower's existing synthetic lease transaction
involving property initially valued at approximately $10.6 million, and (ii) net
obligations under Hedge Agreements.
"Continue", "Continuation" and "Continued" each refers to a continuation
of Eurodollar Loans for an additional Interest Period as provided in section
2.8.
"Convert", "Conversion" and "Converted" each refers to a conversion of
Loans of one Type into Loans of another Type, pursuant to section 2.6, 2.8(b),
2.9 or 5.2.
"Credit Documents" shall mean this Agreement, the Notes, the Subsidiary
Guaranty, the Security Documents and any Letter of Credit Document.
"Credit Event" shall mean the making of any Loans and/or the issuance of
any Letter of Credit.
"Credit Party" shall mean the Borrower and each of its Subsidiaries and
Affiliates which is a party to any Credit Document.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with, respect to which a Lender
Default is in effect.
"Designated Hedge Agreement" shall mean any Hedge Agreement to which the
Borrower or any of its Subsidiaries is a party which, pursuant to a written
instrument signed by the Administrative Agent, has been designated as a
Designated Hedge Agreement so that the Borrower's or Subsidiaries's
counterparty's credit exposure thereunder
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will be entitled to share in the benefits of the Subsidiary Guaranty and the
Security Documents to the extent the Subsidiary Guaranty and such Security
Documents provide guarantees or security for creditors of the Borrower or any
Subsidiary under Designated Hedge Agreements. The Administrative Agent may,
without the approval or consent of the Lenders, designate a Hedge Agreement as a
Designated Hedge Agreement if the counterparty is a Lender or an Affiliate of a
Lender and the maximum credit exposure of such counterparty under such Hedge
Agreement to the Borrower and its Subsidiaries is reasonably determined by the
Administrative Agent, in accordance with its own customary valuation practices,
not to exceed $20,000,000; however, if the counterparty is not a Lender or an
Affiliate of a Lender, or such credit exposure is so determined by the
Administrative Agent to be greater than $20,000,000, the Administrative Agent
shall only designate the Hedge Agreement involving such counterparty as a
Designated Hedge Agreement if the Administrative Agent is instructed to do so by
the Required Lenders. The Administrative Agent may impose as a condition to any
designation of a Designated Hedge Agreement a requirement that the counterparty
enter into an intercreditor or similar agreement with the Administrative Agent
under which recoveries from the Borrower and its Subsidiaries with respect to
such Designated Hedge Agreement will be shared in a manner consistent with the
provisions of section 10.3 hereof.
"DLJ" shall mean DLJ Capital Funding, Inc., a Delaware corporation, and
its successors and assigns.
"Documentation Agent" shall have the meaning provided in the introductory
paragraph of this Agreement and shall include any successor to the Documentation
Agent appointed pursuant to section 11.9.
"Dollars", "U.S. dollars" and the sign "$" each means lawful money of the
United States.
"Domestic Lending Office" shall mean, with respect to any Lender, the
office of such Lender specified as its Domestic Lending Office in its
Administrative Questionnaire or in the Assignment Agreement pursuant to which it
became a Lender, or such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Administrative Agent.
"Domestic Subsidiary" shall mean any Subsidiary organized under the laws
of the United States of America, any State thereof, the District of Columbia, or
any United States possession, the chief executive office and principal place of
business of which is located in, and which conducts the majority of its business
within, the United States of America and its territories and possessions.
"Effective Date" shall have the meaning provided in section 12.10.
"Eligible Domestic Inventory" shall mean the lesser of the fair market
value, or the gross book value less any applicable reserves for shrinkage,
obsolescence or slow-moving goods (determined in accordance with GAAP), of the
raw materials, work-in-progress and finished goods inventory owned by the
Borrower or by any of its Domestic Subsidiaries which is a party to the Security
Agreement, valued on a first-in-first-out basis (before deduction of LIFO
reserve), provided that no inventory shall be considered Eligible Domestic
Inventory, unless it is:
(1) subject to a first priority perfected security interest in favor
of the Collateral Agent created pursuant to any of the Security Documents;
(2) in conformity in all material respects with (A) all standards
imposed by any governmental agency or authority, and (B) all
representations, warranties and covenants with respect to inventory
contained in this Agreement or any of the other Credit Documents;
(3) in the case of finished goods, in good and saleable condition
(as determined in accordance with GAAP and any applicable legal
requirements;
(4) located in the United States or in transit to or from the United
States; and
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(5) not subject to any claim which a supplier or other creditor of
the Borrower or any Subsidiary has asserted which might have priority over
the security interest of the Collateral Agent granted pursuant to any of
the Security Documents.
No Eligible Foreign Inventory shall in any event constitute Eligible Domestic
Inventory.
"Eligible Domestic Receivables" shall mean the gross outstanding balance,
less all financial charges, late fees and other fees which are unearned, and
less reserves for doubtful accounts determined in accordance with GAAP, of trade
accounts receivable arising out of sales of goods or performance of services, in
the ordinary course of business, by the Borrower or any of its Domestic
Subsidiaries which is a party to the Security Agreement, provided that no
account will be treated as an Eligible Domestic Receivable if:
(1) it is not subject to a first priority perfected security
interest in favor of the Collateral Agent created pursuant to any of the
Security Documents;
(2) the account debtor has disputed liability on the account, or
asserted any claim against the Borrower or any of its Subsidiaries, to the
extent of the amount of the claim or the amount in dispute;
(3) the accounts of such account debtor represent more than 10% of
the Eligible Domestic Receivables (other than (x) each account debtor
whose total unpaid accounts exceed such 10% if such account debtor has a
Dun & Bradstreet rating of 5A3 or better (or the equivalent by any other
rating service), and (y) each other account debtor whose credit quality is
reasonably acceptable to the Administrative Agent in accordance with its
customary standards for evaluating account collateral, giving reasonable
consideration to the actual and potential customer base of the Borrower
and other persons engaged in the same industries), but only such excess
shall not be Eligible Domestic Receivables;
(4) it has remained unpaid for a period exceeding 90 days after the
date of the invoice therefor, or the date the related goods are shipped or
delivered, if earlier;
(5) the account debtor is an Affiliate of the Borrower or any of its
Subsidiaries;
(6) the Borrower or any of its Domestic Subsidiaries, in order to be
entitled to collect the account, is required to perform any additional
substantial service for, or perform or incur any additional obligation to,
the account debtor;
(7) the account debtor has filed a petition for relief under the
Bankruptcy Code (or similar action under any successor law), made a
general assignment for the benefit of creditors, had filed against it any
petition or other application for relief under the Bankruptcy Code (or
similar action under any successor law), failed, suspended business
operations, become insolvent, called a meeting of its creditors for the
purpose of obtaining any financial concession or accommodation, or had or
suffered a receiver or a trustee to be appointed for all or a significant
portion of its assets or affairs;
(8) the account is denominated in other than United States Dollars,
payable outside the United States or payable by an account debtor located
outside the United States, unless such account is fully backed by an
irrevocable letter of credit on terms, and issued by a financial
institution, acceptable to the Collateral Agent, and such irrevocable
letter of credit has been assigned to and is in the possession of the
Collateral Agent;
(9) the account is an account of the United States Government, the
government of any state of the United States or any political subdivision
thereof, or any agency or instrumentality of any of the foregoing, unless
the Collateral Agent has perfected a first priority security interest in
such account, subject to compliance with the Assignment of Claims Act of
1940, as amended, or other similar applicable laws or regulations; or.
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(10) in cases where 10% or more in dollar amount of the accounts due
from an account debtor are or have become ineligible under clause (4)
above; the Collateral Agent believes, in its reasonable business judgment
that collection of accounts from such account debtor is insecure.
No Eligible Foreign Receivables shall in any event constitute Eligible Domestic
Receivables.
"Eligible Foreign Inventory" shall mean the lesser of the fair market
value, or the gross book value less any applicable reserves for shrinkage,
obsolescence or slow-moving goods (determined in accordance with GAAP), of the
raw materials, work-in-progress and finished goods inventory owned by any of the
Foreign Subsidiaries of the Borrower, valued on a first-in-first-out basis
(before deduction of LIFO reserve), provided that no inventory shall be
considered Eligible Foreign Inventory, unless it is:
(1) either (A) subject to a first priority perfected security
interest in favor of the Collateral Agent created pursuant to any of the
Security Documents, or (B) free of any security interest or Lien securing
any Indebtedness;
(2) in conformity in all material respects with (A) all standards
imposed by any governmental agency or authority, and (B) all
representations, warranties and covenants with respect to inventory
contained in this Agreement or any of the other Credit Documents;
(3) in the case of finished goods, in good and saleable condition
(as determined in accordance with GAAP and any applicable legal
requirements;
(4) located outside the United States or in transit to or from a
location outside the United States; and
(5) not subject to any claim which a supplier or other creditor of
the Borrower or any Subsidiary has asserted with respect thereto.
"Eligible Foreign Receivables" shall mean the gross outstanding balance,
less all financial charges, late fees and other fees which are unearned, and
less reserves for doubtful accounts determined in accordance with GAAP, of trade
accounts receivable arising out of sales of goods or performance of services, in
the ordinary course of business, by any of the Foreign Subsidiaries of the
Borrower, provided that no account will be treated as an Eligible Foreign
Receivable if:
(1) it is not either (A) subject to a first priority perfected
security interest in favor of the Collateral Agent created pursuant to any
of the Security Documents, or (B) free of any security interest or Lien
securing any Indebtedness;
(2) the account debtor has disputed liability on the account, or
asserted any claim against the Borrower or any of its Subsidiaries, to the
extent of the amount of the claim or the amount in dispute;
(3) the accounts of such account debtor represent more than 10% of
the Eligible Domestic Receivables (other than (x) each account debtor
whose total unpaid accounts exceed such 10% if such account debtor has a
Dun & Bradstreet rating of 5A3 or better (or the equivalent by any other
rating service), and (y) each other account debtor whose credit quality is
reasonably acceptable to the Administrative Agent in accordance with its
customary standards for evaluating account collateral, giving reasonable
consideration to the actual and potential customer base of the applicable
Foreign Subsidiary and other persons engaged in the same industries), but
only such excess shall not be Eligible Foreign Receivables;
(4) it has remained unpaid for a period exceeding 90 days after the
date of the invoice therefor, or the date the related goods are shipped or
delivered, if earlier;
(5) the account debtor is an Affiliate of the Borrower or any of its
Subsidiaries;
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(6) the Foreign Subsidiary, in order to be entitled to collect the
account, is required to perform any additional substantial service for, or
perform or incur any additional obligation to, the account debtor;
(7) the account debtor has filed a petition for relief under the
Bankruptcy Code (or similar action under any successor law), made a
general assignment for the benefit of creditors, had filed against it any
petition or other application for relief under the Bankruptcy Code (or
similar action under any successor law), failed, suspended business
operations, become insolvent, called a meeting of its creditors for the
purpose of obtaining any financial concession or accommodation, or had or
suffered a receiver or a trustee to be appointed for all or a significant
portion of its assets or affairs; or
(8) in cases where 10% or more in dollar amount of the accounts due
from an account debtor are or have become ineligible under clause (4)
above; the Collateral Agent believes, in its reasonable business judgment
that collection of accounts from such account debtor is insecure.
"Eligible Transferee" shall mean and include a commercial bank, financial
institution or other "accredited investor" (as defined in SEC Regulation D), in
each case which
(i) is not disapproved in writing by the Borrower in a notice given
to a requesting Lender and the Administrative Agent, specifying the
reasons for such disapproval, within five Business Days following the
giving of notice to the Borrower of the identity of any proposed
transferee (any such disapproval by the Borrower must be reasonable),
provided that the Borrower shall not be entitled to exercise the foregoing
right of disapproval if and so long as any Event of Default shall have
occurred and be continuing, and provided, further, that for purposes of
transfers by the initial Lender or Lenders hereunder on or prior to the
Syndication Date, those specific or types of financial institutions which
the Administrative Agent, the Syndication Agent or any Lead Arranger has
identified to the Borrower prior to the Effective Date as potential
Lenders hereunder and which the Borrower indicated at such time were
acceptable to it, shall be considered Eligible Transferees; and
(ii) is not a direct competitor of the Borrower or engaged in the
same or similar principal lines of business as the Borrower and its
Subsidiaries considered as a whole, or is not an Affiliate of any such
competitor of the Borrower and its Subsidiaries.
"Environmental Claims" shall mean any and all administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens, notices of
non-compliance or violation, investigations or proceedings relating in any way
to any Environmental or Mining Law or any permit issued under any such law
(hereafter "Claims"), including, without limitation, (i) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental or Mining Law, and (ii) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the storage, treatment or Release (as defined
in CERCLA) of any Hazardous Materials or arising from alleged injury or threat
of injury to health, safety or the environment.
"Environmental Law" shall mean any applicable Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy and rule of common law now or
hereafter in effect and in each case as amended, and any binding and enforceable
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment issued to or rendered against
the Borrower or any of its Subsidiaries relating to the environment, employee
health and safety or Hazardous Materials, including, without limitation, CERCLA;
RCRA; the Federal Water Pollution Control Act, 33 U.S.C. ss. 2601 et seq.; the
Clean Air Act, 42 U.S.C. ss. 7401 et seq.; the Safe Drinking Water Act, 42
U.S.C. ss. 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et
seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42
U.S.C. ss. 11001 et seq., the Hazardous Material Transportation Act, 49 U.S.C.
ss. 1801 et seq. and the Occupational Safety and Health Act, 29 U.S.C. ss. 651
et seq. (to the extent it regulates occupational exposure to Hazardous
Materials); and any state and local or foreign counterparts or equivalents, in
each case as amended from time to time.
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the
Effective Date and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in section 3(9) of
ERISA) which together with the Borrower or a Subsidiary of the Borrower would be
deemed to be a "single employer" (i) within the meaning of section 414(b),(c),
(m) or (o) of the Code or (ii) as a result of the Borrower or a Subsidiary of
the Borrower being or having been a general partner of such person.
"Eurodollar Lending Office" shall mean, with respect to any Lender, the
office of such Lender specified as its Eurodollar Lending Office in its
Administrative Questionnaire or in the Assignment Agreement pursuant to which it
became a Lender, or such other office or offices for Eurodollar Loans of such
Lender as such Lender may from time to time specify to the Borrower and the
Administrative Agent.
"Eurodollar Loans" shall mean each Loan bearing interest at the rates
provided in section 2.7(b).
"Event of Default" shall have the meaning provided in section 10.1.
"Event of Loss" shall mean, with respect to any property, (i) the actual
or constructive total loss of such property or the use thereof, resulting from
destruction, damage beyond repair, or the rendition of such property permanently
unfit for normal use from any casualty or similar occurrence whatsoever, (ii)
the destruction or damage of a portion of such property from any casualty or
similar occurrence whatsoever under circumstances in which such damage cannot
reasonably be expected to be repaired, or such property cannot reasonably be
expected to be restored to its condition immediately prior to such destruction
or damage, within 90 days after the occurrence of such destruction or damage,
(iii) the condemnation, confiscation or seizure of, or requisition of title to
or use of, any property, or (iv) in the case of any property located upon a
Leasehold, the termination or expiration of such Leasehold.
"Excess Cash Flow" shall mean, for any period, the excess of (i)
Consolidated EBITDA for such period, over (ii) the sum for such period of (A)
Consolidated Cash Interest Expense, (B) Consolidated Cash Income Tax Expense,
(C) Consolidated Capital Expenditures, (D) the increase, if any, in Consolidated
Net Working Capital, (E) scheduled or mandatory repayments, prepayments or
redemptions of the principal of Indebtedness and the stated or liquidation value
of Redeemable Stock (including required reductions in committed credit
facilities), and (F) without duplication of any amount included under the
preceding clause (E), scheduled payments representing the principal portion of
Capitalized Lease Obligations.
"Excess Cash Flow Prepayment Amount" shall have the meaning provided in
section 5.2(c).
"Existing Indebtedness" shall have the meaning provided in section 7.18.
"Existing Indebtedness Agreements" shall have the meaning provided in
section 7.18.
"Existing Letter of Credit" shall have the meaning provided in section
3.1(d).
"Facility" shall mean the Revolving Facility, the Term A Facility or the
Term B Facility, or any of them, as applicable.
"Facing Fee" shall have the meaning provided in section 4.1(c).
"Federal Funds Effective Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions
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received by the Administrative Agent from three Federal Funds brokers of
recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to in,
section 4.1.
"Financial Projections" shall have the meaning provided in section 7.8(d).
"Fixed Charge Coverage Ratio" shall mean, for any Testing Period, the
ratio of (i) Consolidated EBITDA for such Testing Period, to (ii) the sum of (A)
Consolidated Cash Interest Expense, (B) Consolidated Cash Income Tax Expense,
(C) Consolidated Capital Expenditures, (D) scheduled or mandatory repayments,
prepayments or redemptions of the principal of Indebtedness (including required
reductions in committed credit facilities), (E) without duplication of any
amount included under the preceding clause (D), scheduled payments representing
the principal portion of Capitalized Lease Obligations, and (F) the sum of all
payments for dividends, stock repurchases or other retirements, and other
purposes described in section 9.6, if any, in each case on a consolidated basis
for the Borrower and its Subsidiaries for such Testing Period; provided that,
notwithstanding anything to the contrary contained herein, the Borrower's Fixed
Charge Coverage Ratio for any Testing Period shall be computed by giving effect
to (x) the inclusion of the appropriate financial items for any person or
business unit which has been acquired by the Borrower for any portion of such
Testing Period prior to the date of acquisition, and (y) the exclusion of the
appropriate financial items for any person or business unit which has been
disposed of by the Borrower, for the portion of such Testing Period prior to the
date of disposition.
"Foreign Subsidiary" shall mean any Subsidiary (i) which is not
incorporated in the United States and substantially all of whose assets and
properties are located, or substantially all of whose business is carried on,
outside the United States, or (ii) substantially all of whose assets consist of
Subsidiaries that are Foreign Subsidiaries as defined in clause (i) of this
definition.
"GAAP" shall mean 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 section 9, including
defined terms as used therein, are subject (to the extent provided therein) to
sections 1.3 and 12.7(a).
"Guaranty Obligations" shall mean as to any person (without duplication)
any obligation of such person guaranteeing any Indebtedness ("primary
Indebtedness") of any other person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, any obligation of
such person, whether or not contingent, (a) to purchase any such primary
Indebtedness or any property constituting direct or indirect security therefor,
(b) to advance or supply funds (i) for the purchase or payment of any such
primary Indebtedness or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary Indebtedness of the
ability of the primary obligor to make payment of such primary Indebtedness, or
(d) otherwise to assure or hold harmless the owner of such primary Indebtedness
against loss in respect thereof, provided, however, that the term Guaranty
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Guaranty
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary Indebtedness in respect of which such Guaranty Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such person is required to perform
thereunder) as determined by such person in good faith.
"Hedge Agreement" shall mean (i) any interest rate swap agreement, any
interest rate cap agreement, any interest rate collar agreement or other similar
agreement or arrangement designed to protect against fluctuations in interest
rates, and (ii) any currency swap agreement, forward currency purchase agreement
or similar agreement or arrangement designed to protect against fluctuations in
currency exchange rates.
"Hazardous Materials" shall mean (i) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; and (ii) any chemicals, materials or substances defined as or
included in the definition of "hazardous substances", "hazardous
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wastes", "hazardous materials", "restricted hazardous materials", "extremely
hazardous wastes", "restrictive hazardous wastes", "toxic substances", "toxic
pollutants", "contaminants" or "pollutants", or words of similar meaning and
regulatory effect, under any applicable Environmental or Mining Law.
"Hi-Stat" shall have the meaning provided in the Preliminary Statements of
this Agreement.
"Hi-Stat Acquisition" shall have the meaning provided in section 7.21.
"Hi-Stat Acquisition Documents" shall mean the Hi-Stat Stock Purchase
Agreement all ancillary agreements between or among any of such parties or their
Affiliates related thereto, including, without limitation, any "side letters",
any agreements with any officers or Affiliates of any of such persons or any of
their Subsidiaries, and the "disclosure schedule" or similar document furnished
to the Borrower pursuant to such Stock Purchase Agreement.
"Hi-Stat Stock Purchase Agreement" shall mean the Stock Purchase
Agreement, dated as of December 7, 1998, among the Borrower and the stockholders
of Hi-Stat.
"Indebtedness" of any person shall mean without duplication:
(i) all indebtedness of such person for borrowed money;
(ii) all bonds, notes, debentures and similar debt securities of
such person;
(iii) the deferred purchase price of capital assets or services
which in accordance with GAAP would be shown on the liability side of the
balance sheet of such person;
(iv) the face amount of all letters of credit issued for the
account of such person and, without duplication, all drafts drawn
thereunder;
(v) all obligations, contingent or otherwise, of such person in
respect of bankers' acceptances;
(vi) all Indebtedness of a second person secured by any Lien on
any property owned by such first person, whether or not such indebtedness
has been assumed;
(vii) all Capitalized Lease Obligations of such person;
(viii) the present value, determined on the basis of the implicit
interest rate, of all basic rental obligations under all "synthetic"
leases (i.e. leases accounted for by the lessee as operating leases under
which the lessee is the "owner" of the leased property for Federal income
tax purposes);
(ix) all obligations of such person to pay a specified purchase
price for goods or services whether or not delivered or accepted, i.e.,
take-or-pay and similar obligations;
(x) all net obligations of such person under Hedge Agreements;
(xi) the full outstanding balance of trade receivables, notes or
other instruments sold with full recourse (and the portion thereof subject
to potential recourse, if sold with limited recourse), other than in any
such case any thereof sold solely for purposes of collection of delinquent
accounts;
(xii) the stated value, or liquidation value if higher, of all
Redeemable Stock of such person; and
(xiii) all Guaranty Obligations of such person;
provided that (x) neither trade payables nor other similar accrued expenses, in
each case arising in the ordinary course of business, nor obligations in respect
of insurance policies or performance or surety bonds which themselves are not
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guarantees of Indebtedness (nor drafts, acceptances or similar instruments
evidencing the same nor obligations in respect of letters of credit supporting
the payment of the same), shall constitute Indebtedness; and (y) the
Indebtedness of any person shall in any event include (without duplication) the
Indebtedness of any other entity (including any general partnership in which
such person is a general partner) to the extent such person is liable thereon as
a result of such person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide expressly
that such person is not liable thereon.
"Interest Coverage Ratio" shall mean, for any Testing Period, the ratio of
(i) Consolidated EBITDA to (ii) Consolidated Cash Interest Expense, in each case
on a consolidated basis for the Borrower and its Subsidiaries for such Testing
Period; provided that, notwithstanding anything to the contrary contained
herein, the Borrower's Interest Coverage Ratio for any Testing Period shall be
computed by giving effect to (x) the inclusion of the appropriate financial
items for any person or business unit which has been acquired by the Borrower
for any portion of such Testing Period prior to the date of acquisition,
including the pro forma interest expense for such period on the Indebtedness
incurred to finance such acquisition, and (y) the exclusion of the appropriate
financial items for any person or business unit which has been disposed of by
the Borrower, for the portion of such Testing Period prior to the date of
disposition.
"Interest Period" with respect to any Eurodollar Loan shall mean the
interest period applicable thereto, as determined pursuant to section 2.8.
"Lead Arrangers" shall have the meaning provided in the Preliminary
Statements of this Agreement.
"Leaseholds" of any person means all the right, title and interest of such
person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Lender" shall have the meaning provided in the first paragraph of this
Agreement.
"Lender Default" shall mean (i) the refusal (which has not been retracted)
of a Lender in violation of the requirements of this Agreement to make available
its portion of any incurrence of Loans or to fund its portion of any
unreimbursed payment under section 3.4(c) or (ii) a Lender having notified the
Administrative Agent and/or the Borrower that it does not intend to comply with
the obligations under section 2.1 and/or section 3.4(c), in the case of either
(i) or (ii) 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.
"Lender Register" shall have the meaning provided in section 12.16.
"Letter of Credit" shall have the meaning provided in section 3.1(a).
"Letter Allocating Initial Commitments" shall mean the letter delivered by
the Lead Arrangers to the Borrower, the Agents and the initial Lenders hereunder
prior to the Effective Date identifying the Revolving Commitment, the Term A
Commitment and/or Term B Commitment, as applicable, of each of such initial
Lenders. The Letter Allocating Initial Commitments provides for a Total
Revolving Commitment of $100,000,000, a Total Term A Commitment of $150,000,000
and a Total Term B Commitment of $175,000,000.
"Letter of Credit Documents" shall have the meaning specified in section
3.2(a).
"Letter of Credit Fee" shall have the meaning provided in section 4.1(b).
"Letter of Credit Issuer" shall mean (i) in respect of each Existing
Letter of Credit, the Lender that has issued same as of the Effective Date; and
(ii) in respect of any other Letter of Credit, (1) NCB, and/or (2) such other
Lender that is requested, and agrees, to so act by the Borrower, and is approved
by the Administrative Agent.
"Letter of Credit Outstandings" shall mean, at any time, the sum, without
duplication, of (i) the aggregate Stated Amount of all outstanding Letters of
Credit and (ii) the aggregate amount of all Unpaid Drawings.
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"Letter of Credit Request" shall have the meaning provided in section
3.2(a).
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (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" shall have the meaning provided in section 2.1.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean any or all of the following: (i) any
material adverse effect on the business, operations, property, assets,
liabilities or condition (financial or otherwise) of, when used with reference
to the Borrower and/or any of its Subsidiaries, the Borrower and its
Subsidiaries, taken as a whole, or when used with reference to any other person,
such person and its Subsidiaries, taken as a whole, as the case may be; (ii) any
material adverse effect on the ability of the Borrower or any other Credit Party
to perform its obligations under the Credit Documents to which it is a party;
(iii) any material adverse effect on the ability of the Borrower and its
Subsidiaries, taken as a whole, to pay their liabilities and obligations as they
mature or become due; or (iv) any material adverse effect on the validity,
effectiveness or enforceability, as against any Credit Party, of any of the
Credit Documents to which it is a party.
"Material Subsidiary" shall mean, at any time, with reference to any
person, any Subsidiary of such person (i) that has assets at such time
comprising 5% or more of the consolidated assets of such person and its
Subsidiaries, or (ii) whose operations in the current fiscal year are expected
to, or whose operations in the most recent fiscal year did (or would have if
such person had been a Subsidiary for such entire fiscal year), represent 5% or
more of the consolidated earnings before interest, taxes, depreciation and
amortization of such person and its Subsidiaries for such fiscal year.
"Maturity Date" shall mean the Revolving Maturity Date, the Term A
Maturity Date or the Term B Maturity Date, as applicable.
"Minimum Borrowing Amount" shall mean (i) for Prime Rate Loans,
$1,000,000, with minimum increments thereafter of $500,000, and (ii) for
Eurodollar Loans, $5,000,000, with minimum increments thereafter of $1,000,000.
"Moody's" shall mean Moody's Investors Service, Inc. and its successors.
"Multiemployer Plan" shall mean a multiemployer plan, as defined in
section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is
making or accruing an obligation to make contributions or has within any of the
preceding three plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" shall mean an employee benefit plan, other than a
Multiemployer Plan, to which the Borrower or any ERISA Affiliate, and one or
more employers other than the Borrower or an ERISA Affiliate, is making or
accruing an obligation to make contributions or, in the event that any such plan
has been terminated, to which the Borrower or an ERISA Affiliate made or accrued
an obligation to make contributions during any of the five plan years preceding
the date of termination of such plan.
"NCB" shall mean National City Bank, a national banking association,
together with its successors and assigns.
"Net Cash Proceeds" shall mean, with respect to (i) any Asset Sale, the
Cash Proceeds resulting therefrom net of (A) reasonable and customary expenses
of sale incurred in connection with such Asset Sale, and other reasonable and
customary fees and expenses incurred, and all state, and local taxes paid or
reasonably estimated to be payable by such person, as a consequence of such
Asset Sale and the payment of principal, premium and interest of Indebtedness
(other than the Obligations) secured by the asset which is the subject of the
Asset Sale and required to be, and which is, repaid under the terms thereof as a
result of such Asset Sale, (B) amounts of any distributions
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payable to holders of minority interests in the relevant person or in the
relevant property or assets and (C) incremental federal, state and local income
taxes paid or payable as a result thereof; and (ii) any Event of Loss, the Cash
Proceeds resulting therefrom net of (A) reasonable and customary expenses
incurred in connection with such Event of Loss, and local taxes paid or
reasonably estimated to be payable by such person, as a consequence of such
Event of Loss and the payment of principal, premium and interest of Indebtedness
(other than the Obligations) secured by the asset which is the subject of the
Event of Loss and required to be, and which is, repaid under the terms thereof
as a result of such Event of Loss, (B) amounts of any distributions payable to
holders of minority interests in the relevant person or in the relevant property
or assets and (C) incremental federal, state and local income taxes paid or
payable as a result thereof
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
"Non-Defaulting Lender" shall mean each Lender other than a Defaulting
Lender.
"Note" shall mean a Revolving Note, a Term A Note or a Term B Note, as
applicable.
"Notice of Borrowing" shall have the meaning provided in section 2.3(a).
"Notice of Conversion" shall have the meaning provided in section 2.6.
"Notice Office" shall mean the office of the Administrative Agent at
National City Center, 1900 East Ninth Street, Cleveland, Ohio 44114, Attention:
Agent Services Division (facsimile: (216) 575-2481), or such other office,
located in a city in the United States Eastern Time Zone, as the Administrative
Agent may designate to the Borrower from time to time.
"Obligations" shall mean all amounts, direct or indirect, contingent or
absolute, of every type or description, and at any time existing, owing by the
Borrower or any other Credit Party to the Administrative Agent, the Collateral
Agent, any Lender or any Letter of Credit Issuer pursuant to the terms of this
Agreement or any other Credit Document.
"Participant" shall have the meaning provided in section 3.4(a).
"Payment Office" shall mean the office of the Administrative Agent at
National City Center, 1900 East Ninth Street, Cleveland, Ohio 44114, Attention:
Agent Services (facsimile: (216) 575-2481), or such other office, located in a
city in the United States Eastern Time Zone, as the Administrative Agent may
designate to the Borrower from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to section 4002 of ERISA, or any successor thereto.
"Percentage" shall mean at any time for any Lender with a Commitment, the
percentage obtained by dividing such Lender's Commitment by the Total
Commitment, provided, that if the Total Commitment has been terminated, the
Percentage for each Lender shall be determined by dividing such Lender's
Commitment immediately prior to such termination by the Total Commitment
immediately prior to such termination.
"Permitted Acquisition" shall mean and include any Acquisition as to which
all of the following conditions are satisfied:
(i) such Acquisition (A) involves a line or lines of business which
is complementary to the lines of business in which the Borrower and its
Subsidiaries, considered as an entirety, are engaged on the Effective
Date, and (B) involves a line or lines of business which has generated a
positive earnings before interest, income taxes, depreciation and
amortization for its most recently completed four full fiscal quarters for
which financial information is available, unless the Required Lenders
specifically approve or consent to such Acquisition in writing;
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(ii) such Acquisition is not actively opposed by the Board of
Directors (or similar governing body) of the selling person or the person
whose equity interests are to be acquired, unless all of the Lenders
specifically approve or consent to such Acquisition in writing;
(iii) the aggregate consideration for such Acquisition and all other
Acquisitions completed after the Closing Date (other than the Hi-Stat
Acquisition), including the principal amount of any assumed Indebtedness
and (without duplication) any Indebtedness of any acquired person or
persons, does not exceed $50,000,000 (such amount being subject to annual
increase, commencing in the year 2000 (based on fiscal year ended December
31, 1999), by an amount equal to (x) 12.5% of Excess Cash Flow for the
preceding fiscal year, minus (y) the amount expended for dividends and
stock repurchases during such preceding fiscal year as contemplated by
section 9.6 hereof), unless the Required Lenders specifically approve or
consent to such Acquisition in writing;
(iv) the Borrower would, after giving effect to such Acquisition, on
a pro forma basis, (A) have a ratio of (x) Consolidated Total Debt, to (y)
Consolidated EBITDA for its most recent Testing Period (determined on an
annualized basis for any Testing Period ending prior to December 31,
1999), of not more than 3.50 to 1.00, and (B) be in compliance with the
financial covenants contained in sections 9.8, 9.9, 9.10 and 9.11; and
(v) at least 10 Business Days prior to the completion of such
transaction the Borrower shall have delivered to the Lenders a certificate
of a responsible financial or accounting officer of the Borrower
demonstrating, in reasonable detail, the computation of the ratios
referred to in sections 9.8, 9.9, 9.10 and 9.11 on a pro forma basis, such
pro forma ratios being determined as if (x) such Acquisition had been
completed at the beginning of the most recent Testing Period for which
financial information for the Borrower and the business or person to be
acquired, is available and has been delivered to the Lenders at least 10
Business Days prior to the completion of such transaction (which shall in
the case of the acquired business include audited financial statements for
the most recent fiscal year, unless the same are unavailable and unaudited
financial statements are acceptable to the Required Lenders), and (y) any
such Indebtedness, or other Indebtedness incurred to finance such
Acquisition, had been outstanding for such entire Testing Period;
provided, that the term Permitted Acquisition specifically excludes the Hi-Stat
Acquisition and any loans, advances or minority investments otherwise permitted
pursuant to section 9.5.
"Permitted Liens" shall mean Liens permitted by section 9.3.
"person" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan as defined in
section 4001 of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute by) the Borrower or a Subsidiary of the
Borrower or an ERISA Affiliate, and each such plan for the five year period
immediately following the latest date on which the Borrower, or a Subsidiary of
the Borrower or an ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in section 6.1(c).
"PNC Bank" shall mean PNC Bank, National Association, a national banking
association, and its successors and assigns.
"Prime Rate" shall mean, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time which rate per annum shall at all
times be equal to the greater of (i) the rate of interest established by NCB in
Cleveland, Ohio, from time to time, as its prime rate, whether or not publicly
announced, which interest rate may or
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may not be the lowest rate charged by it for commercial loans or other
extensions of credit; and (ii) the Federal Funds Effective Rate in effect from
time to time plus 1/2 of 1% per annum.
"Prime Rate Loan" shall mean each Loan bearing interest at the rate
provided in section 2.7(a).
"Prohibited Transaction" shall mean a transaction with respect to a Plan
that is prohibited under section 4975 of the Code or section 406 of ERISA and
not exempt under section 4975 of the Code or section 408 of ERISA.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the same
may be amended from time to time, 42 U.S.C.ss. 6901 et seq.
"Real Property" of any person shall mean all of the right, title and
interest of such person in and to land, improvements and fixtures, including
Leaseholds.
"Redeemable Stock" shall mean with respect to any person any capital stock
or similar equity interests of such person that (i) is by its terms subject to
mandatory redemption, in whole or in part, pursuant to a sinking fund, scheduled
redemption or similar provisions, at any time prior to the latest Maturity Date;
or (ii) otherwise is required to be repurchased or retired on a scheduled date
or dates, upon the occurrence of any event or circumstance, at the option of the
holder or holders thereof, or otherwise, at any time prior to the latest
Maturity Date under this Agreement, other than any such repurchase or retirement
occasioned by a "change of control" or similar event.
"Reference Banks" shall mean (i) NCB and (ii) any other Lender or Lenders
selected as a Reference Bank by the Administrative Agent and the Required
Lenders, provided, that if any of such Reference Banks is no longer a Lender,
such other Lender or Lenders as may be selected by the Administrative Agent
acting on instructions from the Required Lenders.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing margin requirements.
"Reportable Event" shall mean an event described in section 4043 of ERISA
or the regulations thereunder with respect to a Plan, other than those events as
to which the notice requirement is waived under subsections .22, .23, .25, .27,
.28, .29, .30, .31, .32, .34, .35, .62, .63, .64, .65 or .67 of PBGC Regulation
section 4043.
"Required Lenders" shall mean Non-Defaulting Lenders whose outstanding
Loans and Unutilized Commitments constitute at least 51% of the sum of the total
outstanding Loans and Unutilized Commitments of Non-Defaulting Lenders (provided
that, for purposes hereof, neither the Borrower, nor any of its Affiliates,
shall be included in (i) the Lenders holding such amount of the Loans or having
such amount of the Unutilized Commitments, or (ii) determining the aggregate
unpaid principal amount of the Loans or Unutilized Commitments).
"Required Revolving Lenders" shall mean Non-Defaulting Lenders whose
outstanding Revolving Loans and Unutilized Revolving Commitments constitute at
least 51% of the sum of the total outstanding Revolving Loans and Unutilized
Revolving Commitments of Non-Defaulting Lenders (provided that, for purposes
hereof, neither the Borrower, nor any of its Affiliates, shall be included in
(i) the Lenders holding such amount of the Revolving Loans or having such amount
of the Unutilized Revolving Commitments, or (ii) determining the aggregate
unpaid principal amount of the Revolving Loans or Unutilized Revolving
Commitments).
"Required Term A Lenders" shall mean Non-Defaulting Lenders whose
outstanding Term A Loans and Unutilized Term A Commitments constitute at least
51% of the sum of the total outstanding Term A Loans and Unutilized Term A
Commitments of Non-Defaulting Lenders (provided that, for purposes hereof,
neither the Borrower, nor any of its Affiliates, shall be included in (i) the
Lenders holding such amount of the Term A Loans or
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having such amount of the Unutilized Term A Commitments, or (ii) determining the
aggregate unpaid principal amount of the Term A Loans or Unutilized Term A
Commitments).
"Required Term B Lenders" shall mean Non-Defaulting Lenders whose
outstanding Term B Loans and Unutilized Term B Commitments constitute at least
51% of the sum of the total outstanding Term B Loans and Unutilized Term B
Commitments of Non-Defaulting Lenders (provided that, for purposes hereof,
neither the Borrower, nor any of its Affiliates, shall be included in (i) the
Lenders holding such amount of the Term B Loans or having such amount of the
Unutilized Term B Commitments, or (ii) determining the aggregate unpaid
principal amount of the Term B Loans or Unutilized Term B Commitments).
"Revolving Borrowing" shall mean the incurrence of Revolving Loans
consisting of one Type of Loan, by the Borrower from all of the Lenders having
Commitments in respect thereof on a pro rata basis on a given date (or resulting
from Conversions or Continuations on a given date), having in the case of
Eurodollar Loans the same Interest Period.
"Revolving Commitment" shall mean, with respect to each Lender, the
amount, if any, set forth opposite such Lender's name in the Letter Allocating
Initial Commitments as its "Revolving Commitment" as the same may be reduced
from time to time pursuant to section 4.2, 4.3 and/or 10.2 or adjusted from time
to time as a result of assignments to or from such Lender pursuant to section
12.4.
"Revolving Facility" shall mean the credit facility evidenced by the Total
Revolving Commitment.
"Revolving Facility Percentage" shall mean at any time for any Lender with
a Revolving Commitment, the percentage obtained by dividing such Lender's
Revolving Commitment by the Total Revolving Commitment, provided, that if the
Total Revolving Commitment has been terminated, the Revolving Facility
Percentage for each Lender shall be determined by dividing such Lender's
Revolving Commitment immediately prior to such termination by the Total
Revolving Commitment immediately prior to such termination.
"Revolving Loan" shall have the meaning provided in section 2.1(c).
"Revolving Maturity Date" shall mean December 31, 2003, or such earlier
date on which the Total Revolving Commitment is terminated.
"Revolving Note" shall have the meaning provided in section 2.5(a).
"Sale and Lease-Back Transaction" shall mean any arrangement with any
person providing for the leasing by the Borrower or any Subsidiary of the
Borrower of any property (except for temporary leases for a term, including any
renewal thereof, of not more than one year and except for leases between the
Borrower and a Subsidiary or between Subsidiaries), which property has been or
is to be sold or transferred by the Borrower or such Subsidiary to such person.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., and its successors.
"Scheduled Repayment" shall have the meaning provided in section 5.2(a).
"SEC" shall mean the United States Securities and Exchange Commission.
"SEC Regulation D" shall mean Regulation D as promulgated under the
Securities Act of 1933, as amended, as the same may be in effect from time to
time.
"Section 5.4(b)(ii) Certificate" shall have the meaning provided in
section 5.4(b)(ii).
"Security Agreement" shall have the meaning provided in section 6.1(c).
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"Security Documents" shall mean the Security Agreement, the Pledge
Agreement, each Closing Date Mortgage, and each other document pursuant to which
any Lien or security interest is granted by any Credit Party to the Collateral
Agent as security for any of the Obligations.
"Standard Permitted Liens" shall mean the following:
(i) Liens for taxes not yet delinquent or Liens for taxes being
contested in good faith and by appropriate proceedings for which adequate
reserves (in the good faith judgment of the management of the Borrower)
have been established;
(ii) Liens in respect of property or assets imposed by law which
were incurred in the ordinary course of business, such as carriers',
warehousemen's, materialmen's and mechanics' Liens and other similar Liens
arising in the ordinary course of business, which do not in the aggregate
materially detract from the value of such property or assets or materially
impair the use thereof in the operation of the business of the Borrower or
any Subsidiary;
(iii) Liens created by this Agreement or the other Credit
Documents;
(i) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under section 10.1(g);
(v) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security; and mechanic's Liens, carrier's Liens, and other Liens to secure
the performance of tenders, statutory obligations, contract bids,
government contracts, performance and return-of- money bonds and other
similar obligations, incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for borrowed money),
whether pursuant to statutory requirements, common law or consensual
arrangements;
(vi) Leases or subleases granted to others not interfering in any
material respect with the business of the Borrower or any of its
Subsidiaries and any interest or title of a lessor under any lease not in
violation of this Agreement;
(vii) easements, rights-of-way, zoning or other restrictions,
charges, encumbrances, defects in title, prior rights of other persons,
and obligations contained in, or to which the rights of the owner or
lessor are subject, arising under coal leases, deeds, damage or subsidence
waivers, and similar instruments, in each case which do not involve, and
are not likely to involve at any future time, either individually or in
the aggregate, (A) a substantial and prolonged interruption or disruption
of the mining activities of the Borrower and its Subsidiaries considered
as an entirety, or (B) a Material Adverse Effect; and
(viii) Liens arising from the rights of lessors under leases
(including financing statements regarding property subject to lease) not
in violation of the requirements of this Agreement, provided that such
Liens are only in respect of the property subject to, and secure only, the
respective lease (and any other lease with the same or an affiliated
lessor);
"Stated Amount" of each Letter of Credit shall mean the maximum available
to be drawn thereunder (regardless of whether any conditions or other
requirements for drawing could then be met).
"Subsidiary" of any person shall mean and include (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such
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person directly or indirectly through Subsidiaries, has more than a 50% equity
interest at the time. Unless otherwise expressly provided, all references herein
to "Subsidiary" shall mean a Subsidiary of the Borrower.
"Subsidiary Guarantor" shall mean any Subsidiary which is a party to the
Subsidiary Guaranty.
"Subsidiary Guaranty" shall have the meaning provided in section 6.1(c).
"Subordinated Indebtedness" shall mean any Indebtedness which has been
subordinated to the Obligations in such manner and to such extent as the
Administrative Agent (acting on instructions from the Required Lenders) may
require.
"Syndication Agent" shall have the meaning provided in the introductory
paragraph of this Agreement and shall include any successor to the Syndication
Agent appointed pursuant to section 11.9.
"Syndication Date" shall mean the earlier of (i) the date which is 120
days after the Effective Date, and (ii) the date which the Lead Arrangers and
the Syndication Agent determine in their sole discretion (and the Syndication
Agent notifies the Borrower and the Administrative Agent) that the primary
syndication by the initial Lender or Lenders hereunder of portions of its Term
Loan Commitment and its Revolving Commitment to new Lenders has been completed.
"Taxes" shall have the meaning provided in section 5.4.
"Term A Borrowing" shall mean the incurrence of Term A Loans consisting of
one Type of Loan, by the Borrower from all of the Lenders having Commitments in
respect thereof on a pro rata basis on a given date (or resulting from
Conversions or Continuations on a given date), having in the case of Eurodollar
Loans the same Interest Period.
"Term A Commitment" shall mean, with respect to each Lender, the amount,
if any, set forth opposite such Lender's name in the Letter Allocating Initial
Commitments as its "Term A Commitment" as the same may be reduced from time to
time pursuant to sections 4.2, 4.3 and/or 10.2 or adjusted from time to time as
a result of assignments to or from such Lender pursuant to section 12.4.
"Term A Facility" shall mean the credit facility evidenced by the Total
Term A Commitment.
"Term A Loan" shall have the meaning provided in section 2.1(a).
"Term A Maturity Date" shall mean December 31, 2003, or such earlier date
on which the Total Term A Commitment is terminated.
"Term A Note" shall have the meaning provided in section 2.5(a).
"Term B Borrowing" shall mean the incurrence of Term B Loans consisting of
one Type of Loan, by the Borrower from all of the Lenders having Commitments in
respect thereof on a pro rata basis on a given date (or resulting from
Conversions or Continuations on a given date), having in the case of Eurodollar
Loans the same Interest Period.
"Term Borrowing" shall mean a Term A Borrowing or a Term B Borrowing, as
applicable.
"Term B Commitment" shall mean, with respect to each Lender, the amount,
if any, set forth opposite such Lender's name in the Letter Allocating Initial
Commitments as its "Term B Commitment" as the same may be reduced from time to
time pursuant to sections 4.2, 4.3 and/or 10.2 or adjusted from time to time as
a result of assignments to or from such Lender pursuant to section 12.4.
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"Term B Facility" shall mean the credit facility evidenced by the Total
Term B Commitment.
"Term B Loan" shall have the meaning provided in section 2.1(b).
"Term B Maturity Date" shall mean December 31, 2005, or such earlier date
on which the Total Term B Commitment is terminated.
"Term B Note" shall have the meaning provided in section 2.5(a).
"Term B Prepayment Premium" shall have the meaning provided in section
5.1(g).
"Term Loan" shall mean a Term A Loan or a Term B Loan, as applicable.
"Term Note" shall have the meaning provided in section 2.5(a).
"Testing Period" shall mean for any determination a single period
consisting of the four consecutive fiscal quarters of the Borrower then last
ended (whether or not such quarters are all within the same fiscal year), except
that if a particular provision of this Agreement indicates that a Testing Period
shall be of a different specified duration, such Testing Period shall consist of
the particular fiscal quarter or quarters then last ended which are so indicated
in such provision.
"Title Company" shall have the meaning provided in section 6.1(k).
"Total Commitment" shall mean the sum of the Total Revolving Commitment,
the Total Term A Commitment and the Total Term B Commitment.
"Total Revolving Commitment" shall mean the sum of the Revolving
Commitments of the Lenders.
"Total Term A Commitment" shall mean the sum of the Term A Commitments of
the Lenders.
"Total Term B Commitment" shall mean the sum of the Term B Commitments of
the Lenders.
"Type" shall mean any type of Loan determined with respect to the interest
option applicable thereto, i.e., a Prime Rate Loan or a Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code.
"Unfunded Current Liability" of any Plan shall mean the amount, if any, by
which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year exceeds the fair market value
of the assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 87, based upon the actuarial assumptions used
by the Plan's actuary in the most recent annual valuation of the Plan.
"United States" and "U.S." each means United States of America.
"Unpaid Drawing" shall have the meaning provided in section 3.3(a).
"Unutilized Commitment" for any Lender at any time shall mean the excess
of (i) such Lender's Commitment at such time over (ii) the sum of (x) the
principal amount of Loans made by such Lender and outstanding at such time and
(y) if such Lender has a Revolving Commitment, such Lender's Revolving Facility
Percentage of Letter of Credit Outstandings at such time.
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"Unutilized Total Commitment" shall mean, at any time, the excess of (i)
the Total Commitment at such time over (ii) the sum of (x) the aggregate
principal amount of all Loans then outstanding plus (y) the aggregate Letter of
Credit Outstandings at such time.
"Unutilized Total Revolving Commitment" shall mean, at any time, the
excess of (i) the Total Revolving Commitment at such time over (ii) the sum of
(x) the aggregate principal amount of all Revolving Loans then outstanding plus
(y) the aggregate Letter of Credit Outstandings at such time.
"Unutilized Total Term A Commitment" shall mean, at any time, the excess
of (i) the Total Term A Commitment at such time over (ii) the aggregate
principal amount of all Term A Loans then outstanding.
"Unutilized Total Term B Commitment" shall mean, at any time, the excess
of (i) the Total Term B Commitment at such time over (ii) the aggregate
principal amount of all Term B Loans then outstanding.
"Wholly-Owned Subsidiary" shall mean each Subsidiary of the Borrower at
least 95% of whose capital stock, equity interests and partnership interests,
other than director's qualifying shares or similar interests, are owned directly
or indirectly by the Borrower.
"Written", "written" or "in writing" shall mean any form of written
communication or a communication by means of telex, facsimile transmission,
telegraph or cable.
1.2. Computation of Time Periods. In this Agreement in the computation of
periods of time from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each means "to but
excluding".
1.3. Accounting Terms. Except as otherwise specifically provided herein,
all terms of an accounting or financial nature shall be construed in accordance
with GAAP, as in effect from time to time; provided that, if the Borrower
notifies the Administrative Agent that the Borrower requests an amendment to any
provision of section 8 or 9 hereof to eliminate the effect of any change
occurring after the Effective Date in GAAP or in the application thereof to such
provision (or if the Administrative Agent notifies the Borrower that the
Required Lenders request an amendment to any such provision hereof for such
purposes), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance with the requirements of this
Agreement.
1.4. Currency Equivalents. For purposes of this Agreement, except as
otherwise specified herein, (i) the equivalent in Dollars of any Alternative
Currency shall be determined by using the quoted spot rate at which the
Administrative Agent offers to exchange Dollars for such Alternative Currency at
its Payment Office at 9:00 A.M. (local time at the Payment Office) two Business
Days prior to the date on which such equivalent is to be determined, and (ii)
the equivalent in any Alternative Currency of Dollars shall be determined by
using the quoted spot rate at which the Administrative Agent's Payment Office
offers to exchange such Alternative Currency for Dollars at the Payment Office
at 9:00 A.M. (local time at the Payment Office) two Business Days prior to the
date on which such equivalent is to be determined; provided, that (A) the
equivalent in Dollars of any Unpaid Drawing in respect of any Letter of Credit
denominated in an Alternative Currency shall be determined at the time the
drawing under such Letter of Credit was paid or disbursed by the applicable
Letter of Credit Issuer; (B) for purposes of sections 2.1(a), 3.1(b) and 5.2,
the equivalent in Dollars of the Stated Amount of any Letter of Credit
denominated in an Alternative Currency shall be calculated (x) on the date of
the issuance of the respective Letter of Credit, (y) on the first Business Day
of each calendar month thereafter and (z) in any other case where the same is
required or permitted to be calculated, on such other day as the Administrative
Agent may, in its sole discretion, consider appropriate; and (C) for purposes of
sections 4.1(b) and (c), the equivalent in Dollars of the Stated Amount of any
Letter of Credit denominated in an Alternative Currency shall be calculated on
the first day of each calendar month in the quarterly period in which the
respective payment is due pursuant to said sections.
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SECTION 2. AMOUNT AND TERMS OF LOANS.
2.1. Commitments for Loans. Subject to and upon the terms and conditions
herein set forth, each Lender severally agrees to make a loan or loans (each a
"Loan" and, collectively, the "Loans") to the Borrower, which Loans shall be
drawn, to the extent such Lender has a commitment under a Facility for the
Borrower, under the applicable Facility, as set forth below:
(a) Term Loan A Facility. Loans under the Term Loan A Facility (each
a "Term A Loan" and, collectively, the "Term A Loans"): (i) can only be
incurred on the Closing Date in the entire amount of the Unutilized Total
Term A Commitment; (ii) except as otherwise provided, may, at the option
of the Borrower, be incurred and maintained as, or Converted into, Term A
Loans which are Prime Rate Loans or Eurodollar Loans, in each case
denominated in Dollars, provided that all Term A Loans made as part of the
same Term Borrowing shall, unless otherwise specifically provided herein,
consist of Term A Loans of the same Type; and (iii) shall not exceed for
any Lender at the time of incurrence thereof the aggregate principal
amount of the Term Loan A Commitment, if any, of such Lender at such time.
Once prepaid or repaid, Term A Loans may not be reborrowed.
(b) Term Loan B Facility. Loans under the Term Loan B Facility (each
a "Term B Loan" and, collectively, the "Term B Loans"): (i) can only be
incurred on the Closing Date in the entire amount of the Unutilized Total
Term B Commitment; (ii) except as otherwise provided, may, at the option
of the Borrower, be incurred and maintained as, or Converted into, Term B
Loans which are Prime Rate Loans or Eurodollar Loans, in each case
denominated in Dollars, provided that all Term B Loans made as part of the
same Term Borrowing shall, unless otherwise specifically provided herein,
consist of Term B Loans of the same Type; and (iii) shall not exceed for
any Lender at the time of incurrence thereof the aggregate principal
amount of the Term Loan B Commitment, if any, of such Lender at such time.
Once prepaid or repaid, Term B Loans may not be reborrowed.
(c) Revolving Facility. Loans under the Revolving Facility (each a
"Revolving Loan" and, collectively, the "Revolving Loans"): (i) may be
incurred by the Borrower at any time and from time to time on and after
the Closing Date and prior to the date the Total Revolving Commitment is
terminated; (ii) except as otherwise provided, may, at the option of the
Borrower, be incurred and maintained as, or Converted into, Revolving
Loans which are Prime Rate Loans or Eurodollar Loans, in each case
denominated in Dollars, provided that all Revolving Loans made as part of
the same Revolving Borrowing shall, unless otherwise specifically provided
herein, consist of Revolving Loans of the same Type; (iii) may be repaid
or prepaid and reborrowed in accordance with the provisions hereof; and
(iv) shall not exceed for any Lender at any time outstanding that
aggregate principal amount which, when added to the product at such time
of (A) such Lender's Revolving Facility Percentage, times (B) the
aggregate Letter of Credit Outstandings, equals the Revolving Commitment
of such Lender at such time. In addition, no Revolving Loans shall be
incurred at any time if after giving effect thereto the Borrower would be
required to prepay Revolving Loans in accordance with section 5.2(b).
2.2. Minimum Borrowing Amounts, etc.; Pro Rata Borrowings. (a) The
aggregate principal amount of each Borrowing by the Borrower shall not be less
than the Minimum Borrowing Amount. More than one Borrowing may be incurred by
the Borrower on any day, provided that (i) if there are two or more Borrowings
on a single day by the Borrower under the same Facility which consist of
Eurodollar Loans, each such Borrowing shall have a different initial Interest
Period, and (ii) at no time shall there be more than 10 Borrowings of Eurodollar
Loans outstanding hereunder.
(b) All Borrowings under a Facility shall be made by the Lenders having
Commitments under such Facility pro rata on the basis of their respective
Commitments under such Facility. It is understood that no Lender shall be
responsible for any default by any other Lender in its obligation to make Loans
hereunder and that each Lender shall be obligated to make the Loans provided to
be made by it hereunder, regardless of the failure of any other Lender to
fulfill its Commitment hereunder.
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2.3. Notice of Borrowing. (a) Whenever the Borrower desires to incur
Loans, it shall give the Administrative Agent at its Notice Office,
(A) Borrowings of Eurodollar Loans: prior to 12:00 noon (local time
at its Notice Office), at least three Business Days' prior written or
telephonic notice (in the case of telephonic notice, promptly confirmed in
writing if so requested by the Administrative Agent) of each Borrowing of
Eurodollar Loans to be made hereunder, or
(B) Borrowings of Prime Rate Loans: prior to 12:00 noon (local time
at its Notice Office) on the proposed date thereof written or telephonic
notice (in the case of telephonic notice, promptly confirmed in writing if
so requested by the Administrative Agent) of each Borrowing of Prime Rate
Loans to be made hereunder.
Each such notice (each such notice, a "Notice of Borrowing") shall (if requested
by the Administrative Agent to be confirmed in writing), be substantially in the
form of Exhibit B-1, and in any event shall be irrevocable and shall specify:
(i) the Facility under which such Borrowing is to be incurred; (ii) the
aggregate principal amount of the Loans to be made pursuant to such Borrowing;
(iii) the date of the Borrowing (which shall be a Business Day); (iv) whether
the Borrowing shall consist of Prime Rate Loans or Eurodollar Loans; and (v) if
the requested Borrowing consists of Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Administrative Agent shall promptly give each
Lender which has a Commitment under any applicable Facility written notice (or
telephonic notice promptly confirmed in writing) of each proposed Borrowing
under such Facility, of such Lender's proportionate share thereof and of the
other matters covered by the Notice of Borrowing relating thereto.
(b) Without in any way limiting the obligation of the Borrower to confirm
in writing any telephonic notice permitted to be given hereunder, 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 an Authorized Officer of the
Borrower entitled to give telephonic notices under this Agreement on behalf of
the Borrower. In each such case, the Administrative Agent's record of the terms
of such telephonic notice shall be conclusive absent manifest error.
2.4. Disbursement of Funds. (a) No later than 2:00 P.M. (local time at the
Payment Office) on the date specified in each Notice of Borrowing, each Lender
will make available its pro rata share, if any, of each Borrowing requested to
be made on such date in the manner provided below. All amounts shall be made
available to the Administrative Agent in U.S. dollars and immediately available
funds at the Payment Office and the Administrative Agent promptly will make
available to the Borrower by depositing to its account at the Payment Office the
aggregate of the amounts so made available in the type of funds received. Unless
the Administrative Agent shall have been notified by any Lender prior to the
date of Borrowing that such Lender does not intend to make available to the
Administrative Agent its portion of the Borrowing or Borrowings to be made on
such date, the Administrative Agent may assume that such Lender has made such
amount available to the Administrative Agent on such date of Borrowing, and the
Administrative Agent, in reliance upon such assumption, may (in its sole
discretion and without any obligation to do so) make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made available
to the Administrative Agent by such Lender and the Administrative Agent has made
available same to the Borrower, the Administrative Agent shall be entitled to
recover such corresponding amount from such Lender. If such Lender does not pay
such corresponding amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent shall promptly notify the Borrower, and the
Borrower shall immediately pay such corresponding amount to the Administrative
Agent. The Administrative Agent shall also be entitled to recover from such
Lender or the Borrower, as the case may be, interest on such corresponding
amount in respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the Borrower to the date such
corresponding amount is recovered by the Administrative Agent, at a rate per
annum equal to (x) if paid by such Lender, the overnight Federal Funds Effective
Rate or (y) if paid by the Borrower, the then applicable rate of interest,
calculated in accordance with section 2.7, for the respective Loans (but without
any requirement to pay any amounts in respect thereof pursuant to section 2.10).
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(b) Nothing herein and no subsequent termination of the Commitments
pursuant to section 4.2 or 4.3 shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder and in existence from time to
time or to prejudice any rights which the Borrower may have against any Lender
as a result of any default by such Lender hereunder.
2.5. Notes; Loan Accounts. (a) Forms of Notes. The Borrower's obligation
to pay the principal of, and interest on, the Loans made to it by each Lender
shall be evidenced (i) if a Term A Loan, by a promissory note of the Borrower
substantially in the form of Exhibit A-1 (each a "Term A Note" and,
collectively, the "Term A Notes"), (ii) if a Term B Loan, by a promissory note
of the Borrower substantially in the form of Exhibit A-2 (each a "Term B Note"
and, collectively, the "Term B Notes"), and (iii) if a Revolving Loan, by a
promissory note of the Borrower substantially in the form of Exhibit A-3 with
blanks appropriately completed in conformity herewith (each a "Revolving Note"
and, collectively, the "Revolving Notes").
(b) Term A Notes. The Term A Note issued by the Borrower to a Lender with
a Term A Commitment shall: (i) be executed by the Borrower; (ii) be payable to
the order of such Lender and be dated on or prior to the Closing Date; (iii) be
payable in the principal amount of Term A Loans evidenced thereby; (iv) be
payable in installments as provided in section 5.2(a) and mature on the Term A
Maturity Date; (v) bear interest as provided in section 2.7 in respect of the
Prime Rate Loans or Eurodollar Loans, as the case may be, evidenced thereby;
(vi) be subject to mandatory prepayment as provided in section 5.2; and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(c) Term B Notes. The Term B Note issued by the Borrower to a Lender with
a Term B Commitment shall: (i) be executed by the Borrower; (ii) be payable to
the order of such Lender and be dated on or prior to the Closing Date; (iii) be
payable in the principal amount of Term B Loans evidenced thereby; (iv) be
payable in installments as provided in section 5.2(a) and mature on the Term B
Maturity Date; (v) bear interest as provided in section 2.7 in respect of the
Prime Rate Loans or Eurodollar Loans, as the case may be, evidenced thereby;
(vi) be subject to mandatory prepayment as provided in section 5.2; and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(d) Revolving Notes. The Revolving Note issued by the Borrower to a Lender
with a Revolving Commitment shall: (i) be executed by the Borrower; (ii) be
payable to the order of such Lender and be dated on or prior to the Closing
Date; (iii) be payable in the principal amount of Revolving Loans evidenced
thereby; (iv) mature on the Revolving Maturity Date; (v) bear interest as
provided in section 2.7 in respect of the Prime Rate Loans or Eurodollar Loans,
as the case may be, evidenced thereby; (vi) be subject to mandatory prepayment
as provided in section 5.2; and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents.
(e) Loan Accounts of Lenders. Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of
the Borrower to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder.
(f) Loan Accounts of Administrative Agent. The Administrative Agent shall
maintain accounts in which it shall record (i) the amount of each Loan made
hereunder, the Type thereof, the particular Facility under which such Loan was
made, and the Interest Period and applicable interest rate if such Loan is a
Eurodollar Loan, (ii) the amount of any principal due and payable or to become
due and payable from the Borrower to each Lender hereunder, and (iii) the amount
of any sum received by the Administrative Agent hereunder for the account of the
Lenders and each Lender's share thereof.
(g) Effect of Loan Accounts, etc. The entries made in the accounts
maintained pursuant to section 2.5(e) and (f) shall be prima facie evidence of
the existence and amounts and amounts of the obligations recorded therein;
provided, that the failure of any Lender or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay or prepay the Loans in accordance with the terms of
this Agreement.
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(h) Endorsements of Amounts on Notes Prior to Transfer. Each Lender will,
prior to any transfer of any of the Notes issued to it by the Borrower, endorse
on the reverse side thereof or the grid attached thereto the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in any such notation shall not affect the Borrower's obligations in
respect of such Loans.
2.6. Conversions. The Borrower shall have the option to Convert on any
Business Day all or a portion at least equal to the applicable Minimum Borrowing
Amount of the outstanding principal amount of its Loans of one Type owing by it
pursuant to a single Facility into a Borrowing or Borrowings pursuant to the
same Facility of another Type of Loans which can be made pursuant to such
Facility, provided that: (i) no partial Conversion of a Borrowing of Eurodollar
Loans shall reduce the outstanding principal amount of the Eurodollar Loans made
pursuant to such Borrowing to less than the Minimum Borrowing Amount applicable
thereto; (ii) any Conversion of Eurodollar Loans into Prime Rate Loans shall be
made on, and only on, the last day of an Interest Period for such Eurodollar
Loans; (iii) Prime Rate Loans may only be Converted into Eurodollar Loans if no
Default under section 10.1(a) or Event of Default is in existence on the date of
the Conversion unless the Required Revolving Lenders, the Required Term A
Lenders or the Required Term B Lenders, as applicable, otherwise agree; (iv)
Prime Rate Loans may not be Converted into Eurodollar Loans during any period
when such Conversion is not permitted under section 2.9; and (v) Borrowings of
Eurodollar Loans resulting from this section 2.6 shall conform to the
requirements of section 2.2. Each such Conversion shall be effected by the
Borrower giving the Administrative Agent at its Notice Office, prior to 12:00
noon (local time at such Notice Office), at least three Business Days', in the
case of Conversion into a Eurodollar Loans (or prior to 12:00 noon (local time
at such Notice Office) same Business Day's, in the case of a Conversion into
Prime Rate Loans), prior written notice (or telephonic notice promptly confirmed
in writing if so requested by the Administrative Agent) (each a "Notice of
Conversion"), substantially in the form of Exhibit B-2, specifying the Loans to
be so converted, the Type of Loans to be converted into and, if to be converted
into a Borrowing of Eurodollar Loans, the Interest Period to be initially
applicable thereto. The Administrative Agent shall give each Lender prompt
notice of any such proposed Conversion affecting any of its Loans. For the
avoidance of doubt, the prepayment or repayment of any Revolving Loans out of
the proceeds of other Revolving Loans by the Borrower is not considered a
Conversion of Revolving Loans into other Revolving Loans.
2.7. Interest. (a) Interest on Prime Rate Loans. During such periods as a
Loan is a Prime Rate Loan, it shall bear interest at a fluctuating rate per
annum which shall at all times be equal to the Prime Rate in effect from time to
time plus the Applicable Prime Rate Margin for such Loan.
(b) Interest on Eurodollar Loans. During such periods as a Loan is a
Eurodollar Loan, it shall bear interest at a rate per annum which shall at all
times during an Interest Period therefor be relevant Adjusted Eurodollar Rate
for such Eurodollar Loan for such Interest Period plus the Applicable Eurodollar
Margin for such Loan.
(c) Default Interest. Notwithstanding the above provisions, if a Default
under section 10.1(a) or Event of Default is in existence, all outstanding
amounts of principal and, to the extent permitted by law, all overdue interest,
in respect of each Loan shall bear interest, payable on demand, at a rate per
annum equal to 2% per annum above the interest rate which is or would be
applicable from time to time pursuant to section 2.7(a). If any amount (other
than the principal of and interest on the Loans) payable by the Borrower under
the Credit Documents is not paid when due, such amount shall bear interest,
payable on demand, at a rate per annum equal to 2% per annum above the interest
rate which is or would be applicable from time to time pursuant to section
2.7(a).
(d) Accrual and Payment of Interest. Interest shall accrue from and
including the date of any Borrowing to but excluding the date of any prepayment
or repayment thereof and shall be payable:
(i) in respect of each Prime Rate Loan, quarterly in arrears on the
last Business Day of each March, June, September and December, and
(ii) in respect of each Eurodollar Loan, on the last day of each
Interest Period applicable thereto and, in the case of an Interest Period
in excess of three months, on the dates which are successively three
months after the commencement of such Interest Period, and
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<PAGE>
(iii) on any repayment, prepayment or Conversion (on the amount
repaid, prepaid or Converted), at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand.
(e) Computations of Interest. All computations of interest hereunder shall
be made in accordance with section 12.7(b).
(f) Information as to Interest Rates. Each Reference Bank agrees to
furnish the Administrative Agent timely information for the purpose of
determining the Adjusted Eurodollar Rate for any Borrowing consisting of
Eurodollar Loans. If any one or more of the Reference Banks shall not timely
furnish such information, the Administrative Agent shall determine the Adjusted
Eurodollar Rate on the basis of timely information furnished by the remaining
Reference Banks. The Administrative Agent upon determining the interest rate for
any Borrowing shall promptly notify the Borrower (on behalf of any applicable
Borrower) and the Lenders thereof.
(g) Interest Rate Margins. As used herein the terms "Applicable Prime Rate
Margin" and "Applicable Eurodollar Margin" shall mean the applicable rates
determined in accordance with the following provisions.
(i) Applicable Margin for Term B Loans. In the case of the Term B
Loans, the Applicable Prime Rate Margin is 200 basis points per annum and
the Applicable Eurodollar Margin is 350 basis points per annum.
(ii) Applicable Margins for Revolving Loans and Term A Loans. In the
case of the Revolving Loans and the Term A Loans, the Applicable Prime
Rate Margin or Applicable Eurodollar Margin, as the case may be, is the
particular rate per annum determined by the Administrative Agent in
accordance with the Pricing Grid Table which appears below, based on the
Borrower's ratio of Consolidated Total Debt to Consolidated EBITDA, as
computed in accordance with section 9.8 hereof, and such Pricing Grid
Table, and the following provisions:
(A) Initially, until changed hereunder in accordance with the
following provisions, the Applicable Prime Rate Margin for Revolving
Loans and Term A Loans will be 150 basis points per annum, and the
Applicable Eurodollar Margin for Revolving Loans and Term A Loans
will be 300 basis points per annum.
(B) Commencing with the fiscal quarter of the Borrower ended
on or nearest to June 30, 1999, and continuing with each fiscal
quarter thereafter, the Administrative Agent will determine the
Applicable Prime Rate Margin or Applicable Eurodollar Margin for any
Revolving Loan or Term A Loan in accordance with the Pricing Grid
Table, based on the Borrower's ratio of (x) Consolidated Total Debt
as of the end of the fiscal quarter, to (y) Consolidated EBITDA for
the Testing Period ended on the last day of the fiscal quarter, as
computed in accordance with section 9.8 hereof, and identified in
such Pricing Grid Table. Changes in the Applicable Prime Rate Margin
or Applicable Eurodollar Margin based upon changes in such ratio
shall become effective on the first day of the month following the
receipt by the Administrative Agent pursuant to section 8.1(a) or
(b) of the financial statements of the Borrower, accompanied by the
certificate and calculations referred to in section 8.1(c),
demonstrating the computation of such ratio, based upon the ratio in
effect at the end of the applicable period covered (in whole or in
part) by such financial statements.
(C) Notwithstanding the above provisions, during any period
when (1) the Borrower has failed to timely deliver its consolidated
financial statements referred to in section 8.1(a) or (b),
accompanied by the certificate and calculations referred to in
section 8.1(c), (2) a Default under section 10.1(a) has occurred and
is continuing, or (3) an Event of Default has occurred and is
continuing, the Applicable Prime Rate Margin and the Applicable
Eurodollar Margin for Revolving Loans and Term A Loans shall be the
highest rate per annum indicated therefor in the Pricing Grid Table,
regardless of the Borrower's ratio of Consolidated Total Debt to
Consolidated EBITDA at such time.
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<PAGE>
(D) Any changes in the Applicable Prime Rate Margin or
Applicable Eurodollar Margin for Revolving Loans or Term A Loans
shall be determined by the Administrative Agent in accordance with
the above provisions and the Administrative Agent will promptly
provide notice of such determinations to the Borrower and the
Lenders. Any such determination by the Administrative Agent pursuant
to this section 2.7(g) shall be conclusive and binding absent
manifest error.
PRICING GRID TABLE
FOR
REVOLVING LOANS AND TERM A LOANS
(Expressed in Basis Points)
<TABLE>
<CAPTION>
=========================================================================================
Ratio of Applicable Prime Applicable Applicable
Consolidated Total Debt Rate Margin Eurodollar Margin Commitment Fee
to Rate
Consolidated EBITDA
=========================================================================================
<S> <C> <C> <C>
Greater than 3.00 to 1.00 150.00 300.00 50.00
- -----------------------------------------------------------------------------------------
Greater than 2.50 to 1.00 and
Less than or equal to 3.00 to 1.00 112.50 262.50 50.00
- -----------------------------------------------------------------------------------------
Greater than 2.00 to 1.00 and
Less than or equal to 2.50 to 1.00 75.00 225.00 50.00
- -----------------------------------------------------------------------------------------
Greater than 1.50 to 1.00 and
Less than or equal to 2.00 to 1.00 50.00 200.00 37.50
- -----------------------------------------------------------------------------------------
Less than or equal to 1.50 to 1.00 25.00 175.00 37.50
=========================================================================================
</TABLE>
2.8. Selection and Continuation of Interest Periods. (a) The Borrower
shall have the right
(x) at the time it gives a Notice of Borrowing or Notice of
Conversion in respect of the making of, Conversion into, a Borrowing of
Eurodollar Loans, to select in such Notice the Interest Period to be
applicable to such Borrowing, and
(y) prior to 12:00 noon (local time at the Notice Office) on the
third Business Day prior to the expiration of an Interest Period
applicable to a Borrowing under a Facility of Eurodollar Loans, to elect
by giving the Administrative Agent written or telephonic notice (in the
case of telephonic notice, promptly confirmed in writing if so requested
by the Administrative Agent) to Continue all or the Minimum Borrowing
Amount of the principal amount of such Loans as one or more Borrowings of
Eurodollar Loans and to select the Interest Period to be applicable to any
such Borrowing (any such notice, a "Notice of Continuation"),
which Interest Period shall, at the option of the Borrower, be a one, two, three
or six month period; provided, that notwithstanding anything to the contrary
contained above, the Borrower's right to select an Interest Period or to effect
any Continuation shall be subject to the applicable provisions of section 2.9
and to the following:
(i) the initial Interest Period for any Borrowing of Eurodollar
Loans shall commence on the date of such Borrowing (the date of a
Borrowing resulting from a Conversion or Continuation shall be the date of
such Conversion or Continuation) and each Interest Period occurring
thereafter in respect of such Borrowing shall commence on the day on which
the next preceding Interest Period expires;
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<PAGE>
(ii) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last Business Day
of such calendar month;
(iii) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided that if any Interest Period would
otherwise expire on a day which is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) subject to the foregoing clauses (i) through (iii), (A) only a
one month Interest Period shall be available to be selected prior to the
Syndication Date; and (B) all Loans which constitute Eurodollar Loans and
are outstanding during said period shall have been incurred or Converted
or Continued into one or more Borrowings, with all such Borrowings to have
an Interest Period which commences and ends on the same date;
(v) no Interest Period for any Eurodollar Loan may be selected
which would end after the Maturity Date applicable thereto;
(vi) no Interest Period with respect to any Term A Borrowing may be
elected that would extend beyond any date upon which a Scheduled Repayment
is required to be made in respect of the Term A Loans if, after giving
effect to the selection of such Interest Period, the aggregate principal
amount of Term A Loans maintained as Eurodollar Loans with Interest
Periods ending after such date would exceed the aggregate principal amount
of Term A Loans permitted to be outstanding after such Scheduled
Repayment;
(vii) no Interest Period with respect to any Term B Borrowing may be
elected that would extend beyond any date upon which a Scheduled Repayment
is required to be made in respect of the Term B Loans if, after giving
effect to the selection of such Interest Period, the aggregate principal
amount of Term B Loans maintained as Eurodollar Loans with Interest
Periods ending after such date would exceed the aggregate principal amount
of Term B Loans permitted to be outstanding after such Scheduled
Repayment;
(viii)each Borrowing resulting from a Continuation shall be in at
least the Minimum Borrowing Amount applicable thereto; and
(ix) no Interest Period may be elected at any time when a Default
under section 10.1(a) or an Event of Default is then in existence unless
the Required Revolving Lenders, the Required Term A Lenders or the
Required Term B Lenders, as applicable, otherwise agree.
(b) If upon the expiration of any Interest Period the Borrower has failed
to (or may not) elect a new Interest Period to be applicable to the respective
Borrowing of Eurodollar Loans as provided above, the Borrower shall be deemed to
have elected to Convert such Borrowing to Prime Rate Loans effective as of the
expiration date of such current Interest Period.
2.9. Increased Costs, Illegality, etc. (a) In the event that (x) in the
case of clause (i) below, the Administrative Agent or (y) in the case of clauses
(ii) and (iii) below, any Lender, shall have determined on a reasonable basis
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto):
(i) on any date for determining the Adjusted Eurodollar Rate for
any Interest Period that, by reason of any changes arising after the
Effective Date affecting the interbank Eurodollar market, adequate and
fair means do not exist for ascertaining the applicable interest rate on
the basis provided for in the definition of Adjusted Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder in an amount
which such Lender deems material with respect to any
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Eurodollar Loans (other than any increased cost or reduction in the amount
received or receivable resulting from the imposition of or a change in the
rate of taxes or similar charges) because of (x) any change since the
Effective Date in any applicable law, governmental rule, regulation,
guideline, order or request (whether or not having the force of law), or
in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, guideline,
order or request (such as, for example, but not limited to, a change in
official reserve requirements, but, in all events, excluding reserves
includable in the Eurodollar Rate pursuant to the definition thereof)
and/or (y) other circumstances adversely affecting the interbank
Eurodollar market or the position of such Lender in such market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has become unlawful by compliance by such Lender in good faith with
any change since the Effective Date in any law, governmental rule,
regulation, guideline or order, or the interpretation or application
thereof, or would conflict with any thereof not having the force of law
but with which such Lender customarily complies or has become
impracticable as a result of a contingency occurring after the Effective
Date which materially adversely affects the interbank Eurodollar market;
then, and in any such event, such Lender (or the Administrative Agent in the
case of clause (i) above) shall (x) on or promptly following such date or time
and (y) within 10 Business Days of the date on which such event no longer exists
give notice (by telephone confirmed in writing) to the Borrower and to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in
the case of clause (i) above, Eurodollar Loans shall no longer be available
until such time as the Administrative Agent notifies the Borrower and the
Lenders that the circumstances giving rise to such notice by the Administrative
Agent no longer exist, and any Notice of Borrowing, Notice of Conversion or
Notice of Continuation given by the Borrower with respect to Eurodollar Loans
which have not yet been incurred, Converted or Continued shall be deemed
rescinded by the Borrower or, in the case of a Notice of Borrowing, shall, at
the option of the Borrower, be deemed converted into a Notice of Borrowing for
Prime Rate Loans to be made on the date of Borrowing contained in such Notice of
Borrowing, (y) in the case of clause (ii) above, the Borrower shall pay to such
Lender, upon written demand therefor, such additional amounts (in the form of an
increased rate of, or a different method of calculating, interest or otherwise
as such Lender shall determine) as shall be required to compensate such Lender,
for such increased costs or reductions in amounts receivable hereunder (a
written notice as to the additional amounts owed to such Lender, showing the
basis for the calculation thereof, which basis must be reasonable, submitted to
the Borrower by such Lender shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) and (z) in the case of clause
(iii) above, the Borrower shall take one of the actions specified in section
2.9(b) as promptly as possible and, in any event, within the time period
required by law.
(b) At any time that any Eurodollar Loan is affected by the circumstances
described in section 2.9(a)(ii) or (iii), the Borrower may (and in the case of a
Eurodollar Loan affected pursuant to section 2.9(a)(iii) the Borrower shall)
either (i) if the affected Eurodollar Loan is then being made pursuant to a
Borrowing, by giving the Administrative Agent telephonic notice (confirmed
promptly in writing) thereof on the same date that the Borrower was notified by
a Lender pursuant to section 2.9(a)(ii) or (iii), cancel said Borrowing, convert
the related Notice of Borrowing into one requesting a Borrowing of Prime Rate
Loans or require the affected Lender to make its requested Loan as a Prime Rate
Loan, or (ii) if the affected Eurodollar Loan is then outstanding, upon at least
one Business Day's notice to the Administrative Agent, require the affected
Lender to Convert each such Eurodollar Loan into a Prime Rate Loan, provided
that if more than one Lender is affected at any time, then all affected Lenders
must be treated the same pursuant to this section 2.9(b).
(c) If any Lender shall have determined that after the Effective Date, the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
by law with the interpretation or administration thereof, or compliance by such
Lender or its parent corporation with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank, or comparable agency, in each case made subsequent to the Effective Date,
has or would have the effect of reducing by an amount reasonably deemed by such
Lender to be material the rate of return on such Lender's or its parent
corporation's capital or assets as a consequence of such Lender's commitments or
obligations hereunder to a level
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<PAGE>
below that which such Lender or its parent corporation could have achieved but
for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's or its parent corporation's policies with respect to
capital adequacy), then from time to time, within 15 days after demand by such
Lender (with a copy to the Administrative Agent), the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender or its
parent corporation for such reduction. Each Lender, upon determining in good
faith that any additional amounts will be payable pursuant to this section
2.9(c), will give prompt written notice thereof to the Borrower, which notice
shall set forth, in reasonable detail, the basis of the calculation of such
additional amounts, which basis must be reasonable, although the failure to give
any such notice shall not release or diminish any of the Borrower's obligations
to pay additional amounts pursuant to this section 2.9(c) upon the subsequent
receipt of such notice.
(d) Notwithstanding anything in this Agreement to the contrary, (i) no
Lender shall be entitled to compensation or payment or reimbursement of other
amounts under section 2.9, 3.5 or 5.4 for any amounts incurred or accruing more
than 180 days prior to the giving of notice to the Borrower of additional costs
or other amounts of the nature described in such sections, and (ii) no Lender
shall demand compensation for any reduction referred to in section 2.9(c) or
payment or reimbursement of other amounts under section 3.5 or 5.4 if it shall
not at the time be the general policy or practice of such Lender to demand such
compensation, payment or reimbursement in similar circumstances under comparable
provisions of other credit agreements.
2.10. Breakage Compensation. The Borrower shall compensate each applicable
Lender, upon its written request (which request shall set forth the detailed
basis for requesting and the method of calculating such compensation), for all
reasonable losses, expenses and liabilities (including, without limitation, any
loss, expense or liability incurred by reason of the liquidation or reemployment
of deposits or other funds required by such Lender to fund its Eurodollar Loans)
which such Lender may sustain: (i) if for any reason (other than a default by
such Lender or the Administrative Agent) a Borrowing of Eurodollar Loans does
not occur on a date specified therefor in a Notice of Borrowing, Notice of
Conversion or Notice of Continuation (whether or not withdrawn by the Borrower
or deemed withdrawn pursuant to section 2.9(a)); (ii) if any repayment,
prepayment or Conversion of any of its Eurodollar Loans occurs on a date which
is not the last day of an Interest Period applicable thereto; (iii) if any
prepayment of any of its Eurodollar Loans is not made on any date specified in a
notice of prepayment given by the Borrower; or (iv) as a consequence of (x) any
other default by the Borrower to repay its Eurodollar Loans when required by the
terms of this Agreement or (y) an election made pursuant to section 2.9(b).
2.11. Change of Lending Office; Replacement of Lenders. (a) Each Lender
agrees that, upon the occurrence of any event giving rise to the operation of
section 2.9(a)(ii) or (iii), 2.9(c), 3.5 or 5.4 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 Applicable Lending
Office for any Loans or Commitment affected by such event, provided that such
designation is made on such terms that such Lender and its Applicable 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.
(b) If any Lender requests any compensation, reimbursement or other
payment under section 2.9(a)(ii) or (iii), 2.9(c) or 3.5 with respect to such
Lender, or if the Borrower is required to pay any additional amount to any
Lender or governmental authority pursuant to section 5.4, or if any Lender is a
Defaulting Lender, then the Borrower may, at its sole expense and effort, upon
notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with the restrictions
contained in section 12.4(c)), all its interests, rights and obligations under
this Agreement to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment); provided that (i)
the Borrower shall have received the prior written consent of the Administrative
Agent, which consent shall not be unreasonably withheld, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other amounts,
including any breakage compensation under section 2.10 hereof), and (iii) in the
case of any such assignment resulting from a claim for compensation,
reimbursement or other payments required to be made under section 2.9(a)(ii) or
(iii), 2.9(c) or 3.5 with respect to such Lender, or resulting from any required
payments to any Lender or governmental authority pursuant to section
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<PAGE>
5.4, such assignment will result in a reduction in such compensation,
reimbursement or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.
(c) Nothing in this section 2.11 shall affect or postpone any of the
obligations of the Borrower or the right of any Lender provided in section 2.9,
3.5 or 5.4.
SECTION 3. LETTERS OF CREDIT.
3.1. Letters of Credit. (a) Subject to and upon the terms and conditions
herein set forth, the Borrower may request a Letter of Credit Issuer at any time
and from time to time on or after the Closing Date and prior to the date that is
15 Business Days prior to the Maturity Date to issue, for the account of the
Borrower, any of its Subsidiaries, or any Affiliate which is at least 45% owned
by the Borrower and its Subsidiaries (the Borrower, any such Subsidiary or any
such Affiliate, a "Letter of Credit Obligor"), and in support of worker
compensation, liability insurance, releases of contract retention obligations,
contract performance guarantee requirements and other bonding obligations of the
Borrower or any such other Letter of Credit Obligor incurred in the ordinary
course of its business, and such other standby obligations of the Borrower and
the other Letter of Credit Obligors that are acceptable to the Letter of Credit
Issuer, and subject to and upon the terms and conditions herein set forth, such
Letter of Credit Issuer agrees to issue from time to time, irrevocable standby
letters of credit denominated and payable in Dollars or an Alternative Currency
in such form as may be approved by such Letter of Credit Issuer and the
Administrative Agent (each such letter of credit (and each Existing Letter of
Credit described in section 3.1(d)), a "Letter of Credit" and collectively, the
"Letters of Credit").
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be issued
the Stated Amount of which, when added to the Letter of Credit Outstandings at
such time, would exceed either (x) $10,000,000 or (y) when added to the
aggregate principal amount of all Revolving Loans then outstanding, an amount
equal to the Total Revolving Commitment at such time; (ii) no individual Letter
of Credit (other than any Existing Letter of Credit) shall be issued which has
an initial Stated Amount less than $100,000 unless such lesser Stated Amount is
acceptable to the Letter of Credit Issuer; and (iii) each Letter of Credit shall
have an expiry date (including any renewal periods) occurring not later than the
earlier of (A) one year from the date of issuance thereof, unless a longer
period is approved by the relevant Letter of Credit Issuer and Lenders (other
than any Defaulting Lender) holding a majority of the Total General Revolving
Commitment, and (B) 15 Business Days prior to the Maturity Date, in each case on
terms acceptable to the Administrative Agent and the relevant Letter of Credit
Issuer. In addition, no Letter of Credit shall be issued or increased in amount
if after giving effect thereto the Borrower would be required to prepay
Revolving Loans in accordance with section 5.2(b).
(c) Notwithstanding the foregoing, in the event a Lender Default exists,
no Letter of Credit Issuer shall be required to issue any Letter of Credit
unless either (i) such Letter of Credit Issuer has entered into arrangements
satisfactory to it and the Borrower to eliminate such Letter of Credit Issuer's
risk with respect to the participation in Letters of Credit of the Defaulting
Lender or Lenders, including by cash collateralizing such Defaulting Lender's or
Lenders' Revolving Facility Percentage of the Letter of Credit Outstandings; or
(ii) the issuance of such Letter of Credit, taking into account the potential
failure of the Defaulting Lender or Lenders to risk participate therein, will
not cause the Letter of Credit Issuer to incur aggregate credit exposure
hereunder with respect to Revolving Loans and Letter of Credit Outstandings in
excess of its Revolving Commitment, and the Borrower has undertaken, for the
benefit of such Letter of Credit Issuer, pursuant to an instrument satisfactory
in form and substance to such Letter of Credit Issuer, not to thereafter incur
Loans or Letter of Credit Outstandings hereunder which would cause the Letter of
Credit Issuer to incur aggregate credit exposure hereunder with respect to
Revolving Loans and Letter of Credit Outstandings in excess of its Revolving
Commitment.
(d) Annex V hereto contains a description of all letters of credit
outstanding on, and to continue in effect after, the Closing Date. Each such
letter of credit issued by a bank that is or becomes a Lender under this
Agreement on the Effective Date (each, an "Existing Letter of Credit") shall
constitute a "Letter of Credit" for all purposes of
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<PAGE>
this Agreement, issued, for purposes of section 3.4(a), on the Closing Date, and
the Borrower, the Administrative Agent and the applicable Lenders hereby agree
that, from and after such date, the terms of this Agreement shall apply to such
Letters of Credit, superseding any other agreement theretofore applicable to
them to the extent inconsistent with the terms hereof.
3.2. Letter of Credit Requests: Notices of Issuance. (a) Whenever it
desires that a Letter of Credit be issued, the Borrower shall give the
Administrative Agent and the Letter of Credit Issuer written or telephonic
notice (in the case of telephonic notice, promptly confirmed in writing if so
requested by the Administrative Agent) which, if in the form of written notice
shall be substantially in the form of Exhibit B-3, or transmit by electronic
communication (if arrangements for doing so have been approved by the Letter of
Credit Issuer), prior to 12:00 noon (local time at its Notice Office) at least
three Business Days (or such shorter period as may be acceptable to the relevant
Letter of Credit Issuer) prior to the proposed date of issuance (which shall be
a Business Day) (each a "Letter of Credit Request"), which Letter of Credit
Request shall include such supporting documents that such Letter of Credit
Issuer customarily requires in connection therewith (including, in the case of a
Letter of Credit for an account party other than the Borrower, an application
for, and if applicable a reimbursement agreement with respect to, such Letter of
Credit). Any such documents executed in connection with the issuance of a Letter
of Credit, including the Letter of Credit itself, are herein referred to as
"Letter of Credit Documents". In the event of any inconsistency between any of
the terms or provisions of any Letter of Credit Document and the terms and
provisions of this Agreement respecting Letters of Credit, the terms and
provisions of this Agreement shall control. The Administrative Agent shall
promptly notify each Lender of each Letter of Credit Request.
(b) Each Letter of Credit Issuer shall, on the date of each issuance of a
Letter of Credit by it, give the Administrative Agent, each applicable Lender
and the Borrower written notice of the issuance of such Letter of Credit,
accompanied by a copy to the Administrative Agent of the Letter of Credit or
Letters of Credit issued by it. Each Letter of Credit Issuer shall provide to
the Administrative Agent a quarterly (or monthly if requested by any applicable
Lender) summary describing each Letter of Credit issued by such Letter of Credit
Issuer and then outstanding and an identification for the relevant period of the
daily aggregate Letter of Credit Outstandings represented by Letters of Credit
issued by such Letter of Credit Issuer.
3.3. Agreement to Repay Letter of Credit Drawings. (a) The Borrower hereby
agrees to reimburse (or cause any Letter of Credit Obligor for whose account a
Letter of Credit was issued to reimburse) each Letter of Credit Issuer, by
making payment directly to such Letter of Credit Issuer in immediately available
funds at the payment office of such Letter of Credit Issuer, for any payment or
disbursement made by such Letter of Credit Issuer under any Letter of Credit
(each such amount so paid or disbursed until reimbursed, an "Unpaid Drawing")
immediately after, and in any event on the date on which, such Letter of Credit
Issuer notifies the Borrower (or any such other Letter of Credit Obligor for
whose account such Letter of Credit was issued) of such payment or disbursement
(which notice to the Borrower (or such other Letter of Credit Obligor) shall be
delivered reasonably promptly after any such payment or disbursement), such
payment to be made in Dollars (and in the amount which is the Dollar equivalent
of any such payment or disbursement made or denominated in an Alternative
Currency), with interest on the amount so paid or disbursed by such Letter of
Credit Issuer, to the extent not reimbursed prior to 1:00 P.M. (local time at
the payment office of the Letter of Credit Issuer) on the date of such payment
or disbursement, from and including the date paid or disbursed to but not
including the date such Letter of Credit Issuer is reimbursed therefor at a rate
per annum which shall be the rate then applicable to Revolving Loans which are
Prime Rate Loans (plus an additional 2% per annum if not reimbursed by the third
Business Day after the date of such payment or disbursement), any such interest
also to be payable on demand.
(b) The Borrower's obligation under this section 3.3 to reimburse, or
cause another Letter of Credit Obligor to reimburse, each Letter of Credit
Issuer with respect to Unpaid Drawings (including, in each case, interest
thereon) shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
Borrower or any other Letter of Credit Obligor may have or have had against such
Letter of Credit Issuer, the Administrative Agent, any other Letter of Credit
Issuer or any Lender, including, without limitation, any defense based upon the
failure of any drawing under a Letter of Credit to conform to the terms of the
Letter of Credit or any non-application or misapplication by the beneficiary of
the proceeds of such drawing, provided, however that the Borrower shall not be
obligated to reimburse, or cause another Letter of Credit
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Obligor to reimburse, a Letter of Credit Issuer for any wrongful payment made by
such Letter of Credit Issuer under a Letter of Credit as a result of acts or
omissions constituting willful misconduct or gross negligence on the part of
such Letter of Credit Issuer.
3.4. Letter of Credit Participations. (a) Immediately upon the issuance by
a Letter of Credit Issuer of any Letter of Credit (and on the Closing Date with
respect to any Existing Letter of Credit), such Letter of Credit Issuer shall be
deemed to have sold and transferred to each Lender with a Revolving Commitment,
and each such Lender (each a "Participant") shall be deemed irrevocably and
unconditionally to have purchased and received from such Letter of Credit
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such Lender's Revolving Facility Percentage, in such Letter of
Credit, each substitute letter of credit, each drawing made thereunder, the
obligations of the Borrower under this Agreement with respect thereto (although
Letter of Credit Fees shall be payable directly to the Administrative Agent for
the account of the Lenders as provided in section 4.1(b) and the Participants
shall have no right to receive any portion of any fees of the nature
contemplated by section 4.1(c)), the obligations of any Letter of Credit Obligor
under any Letter of Credit Documents pertaining thereto, and any security for,
or guaranty pertaining to, any of the foregoing. Upon any change in the
Revolving Commitments of the Lenders pursuant to section 12.4(c), it is hereby
agreed that, with respect to all outstanding Letters of Credit and Unpaid
Drawings, there shall be an automatic adjustment to the participations pursuant
to this section 3.4 to reflect the new Revolving Facility Percentages of the
assigning and assignee Lender.
(b) In determining whether to pay under any Letter of Credit, a Letter of
Credit Issuer shall not have any obligation relative to the Participants other
than to determine that any documents required to be delivered under such Letter
of Credit have been delivered and that they appear to comply on their face with
the requirements of such Letter of Credit. Any action taken or omitted to be
taken by a Letter of Credit Issuer under or in connection with any Letter of
Credit if taken or omitted in the absence of gross negligence or willful
misconduct, shall not create for such Letter of Credit Issuer any resulting
liability.
(c) In the event that a Letter of Credit Issuer makes any payment under
any Letter of Credit and the Borrower shall not have reimbursed (or caused any
applicable Letter of Credit Obligor to reimburse) such amount in full to such
Letter of Credit Issuer pursuant to section 3.3(a), such Letter of Credit Issuer
shall promptly notify the Administrative Agent, and the Administrative Agent
shall promptly notify each Participant of such failure, and each Participant
shall promptly and unconditionally pay to the Administrative Agent for the
account of such Letter of Credit Issuer, the amount of such Participant's
Revolving Facility Percentage of such payment in U.S. Dollars (the
Administrative Agent having determined in the case of any payment by a Letter of
Credit Issuer made in an Alternative Currency the equivalent thereof in Dollars)
and in same day funds, provided, however, that no Participant shall be obligated
to pay to the Administrative Agent its Revolving Facility Percentage of such
unreimbursed amount for any wrongful payment made by such Letter of Credit
Issuer under a Letter of Credit as a result of acts or omissions constituting
willful misconduct or gross negligence on the part of such Letter of Credit
Issuer. If the Administrative Agent so notifies any Participant required to fund
a payment under a Letter of Credit prior to 11:00 A.M. (local time at its Notice
Office) on any Business Day, such Participant shall make available to the
Administrative Agent for the account of the relevant Letter of Credit Issuer
such Participant's Revolving Facility Percentage of the amount of such payment
on such Business Day in same day funds. If and to the extent such Participant
shall not have so made its Revolving Facility Percentage of the amount of such
payment available to the Administrative Agent for the account of the relevant
Letter of Credit Issuer, such Participant agrees to pay to the Administrative
Agent for the account of such Letter of Credit Issuer, forthwith on demand such
amount, together with interest thereon, for each day from such date until the
date such amount is paid to the Administrative Agent for the account of such
Letter of Credit Issuer at the Federal Funds Effective Rate. The failure of any
Participant to make available to the Administrative Agent for the account of the
relevant Letter of Credit Issuer its Revolving Facility Percentage of any
payment under any Letter of Credit shall not relieve any other Participant of
its obligation hereunder to make available to the Administrative Agent for the
account of such Letter of Credit Issuer its Revolving Facility Percentage of any
payment under any Letter of Credit on the date required, as specified above, but
no Participant shall be responsible for the failure of any other Participant to
make available to the Administrative Agent for the account of such Letter of
Credit Issuer such other Participant's Revolving Facility Percentage of any such
payment.
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(d) Whenever a Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Administrative Agent has received for
the account of such Letter of Credit Issuer any payments from the Participants
pursuant to section 3.4(c) above, such Letter of Credit Issuer shall pay to the
Administrative Agent and the Administrative Agent shall promptly pay to each
Participant which has paid its Revolving Facility Percentage thereof, in U.S.
dollars and in same day funds, an amount equal to such Participant's Revolving
Facility Percentage of the principal amount thereof and interest thereon
accruing after the purchase of the respective participations, as and to the
extent so received.
(e) The obligations of the Participants to make payments to the
Administrative Agent for the account of each Letter of Credit Issuer with
respect to Letters of Credit shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;
(ii) the existence of any claim, set-off defense or other right
which the Borrower (or any other Letter of Credit Obligor) may have at any
time against a beneficiary named in a Letter of Credit, any transferee of
any Letter of Credit (or any person for whom any such transferee may be
acting), the Administrative Agent, any Letter of Credit Issuer, any
Lender, or other person, whether in connection with this Agreement, any
Letter of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the Borrower
(or any other Letter of Credit Obligor) and the beneficiary named in any
such Letter of Credit), other than any claim which the Borrower (or any
other Letter of Credit Obligor which is the account party with respect to
a Letter of Credit) may have against any applicable Letter of Credit
Issuer for gross negligence or wilful misconduct of such Letter of Credit
Issuer in making payment under any applicable Letter of Credit;
(iii) any draft, certificate or other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents: or
(v) the occurrence of any Default or Event of Default.
(f) To the extent the Letter of Credit Issuer is not indemnified by the
Borrower, the Participants will reimburse and indemnify the Letter of Credit
Issuer, in proportion to their respective Revolving Facility Percentages, for
and against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, costs, expenses or disbursements of whatsoever kind
or nature which may be imposed on, asserted against or incurred by the Letter of
Credit Issuer in performing its respective duties in any way related to or
arising out of its issuance of Letters of Credit, provided that no Participants
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, costs, expenses or disbursements
resulting from the Letter of Credit Issuer's gross negligence or willful
misconduct.
3.5. Increased Costs. If after the Effective Date, the adoption of any
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Letter of Credit Issuer or any Lender with any
request or directive (whether or not having the force of law) by any such
authority, central bank or comparable agency (in each case made subsequent to
the Effective Date) shall either (i) impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement against Letters of
Credit issued by such Letter of Credit Issuer or such
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Lender's participation therein, or (ii) shall impose on such Letter of Credit
Issuer or any Lender any other conditions affecting this Agreement, any Letter
of Credit or such Lender's participation therein; and the result of any of the
foregoing is to increase the cost to such Letter of Credit Issuer or such Lender
of issuing, maintaining or participating in any Letter of Credit, or to reduce
the amount of any sum received or receivable by such Letter of Credit Issuer or
such Lender hereunder (other than any increased cost or reduction in the amount
received or receivable resulting from the imposition of or a change in the rate
of taxes or similar charges), then, upon demand to the Borrower by such Letter
of Credit Issuer or such Lender (a copy of which notice shall be sent by such
Letter of Credit Issuer or such Lender to the Administrative Agent), the
Borrower shall pay to such Letter of Credit Issuer or such Lender such
additional amount or amounts as will compensate any such Letter of Credit Issuer
or such Lender for such increased cost or reduction. A certificate submitted to
the Borrower by any Letter of Credit Issuer or any Lender, as the case may be (a
copy of which certificate shall be sent by such Letter of Credit Issuer or such
Lender to the Administrative Agent), setting forth, in reasonable detail, the
basis for the determination of such additional amount or amounts necessary to
compensate any Letter of Credit Issuer or such Lender as aforesaid shall be
conclusive and binding on the Borrower absent manifest error, although the
failure to deliver any such certificate shall not release or diminish any of the
Borrower's obligations to pay additional amounts pursuant to this section 3.5.
Reference is hereby made to the provisions of section 2.10(d) for certain
limitations upon the rights of a Letter of Credit Issuer or Lender under this
section.
3.6. Guaranty of Letter of Credit Obligations of Other Letter of Credit
Obligors. (a) The Borrower hereby unconditionally guarantees, for the benefit of
the Administrative Agent and the Lenders, the full and punctual payment of the
Obligations of each Other Letter of Credit Obligor under each Letter of Credit
Document to which such Other Letter of Credit Obligor is now or hereafter
becomes a party. Upon failure by any such Other Letter of Credit Obligor to pay
punctually any such amount, the Borrower shall forthwith on demand by the
Administrative Agent pay the amount not so paid at the place and in the currency
and otherwise in the manner specified in this Agreement or any applicable Letter
of Credit Document.
(b) As a separate, additional and continuing obligation, the Borrower
unconditionally and irrevocably undertakes and agrees, for the benefit of the
Administrative Agent and the Lenders, that, should any amounts not be
recoverable from the Borrower under section 3.6(a) for any reason whatsoever
(including, without limitation, by reason of any provision of any Credit
Document or any other agreement or instrument executed in connection therewith
being or becoming void, unenforceable, or otherwise invalid under any applicable
law) then, notwithstanding any notice or knowledge thereof by any Lender, the
Administrative Agent, any of their respective Affiliates, or any other person,
at any time, the Borrower as sole, original and independent obligor, upon demand
by the Administrative Agent, will make payment to the Administrative Agent, for
the account of the Lenders and the Administrative Agent, of all such obligations
not so recoverable by way of full indemnity, in such currency and otherwise in
such manner as is provided in the Credit Documents.
(c) The obligations of the Borrower under this section shall be
unconditional and absolute and, without limiting the generality of the foregoing
shall not be released, discharged or otherwise affected by the occurrence, one
or more times, of any of the following:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect to any obligation of any Other Letter of Credit Obligor
under any Letter of Credit Document, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to this
Agreement, any Note or any other Credit Document;
(iii) any release, non-perfection or invalidity of any direct or
indirect security for any obligation of the Borrower under this Agreement,
any Note or any other Credit Document or of any Other Letter of Credit
Obligor under any Letter of Credit Document;
(iv) any change in the corporate existence, structure or ownership
of any Other Letter of Credit Obligor or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any Other Letter of
Credit Obligor or its assets or any resulting release or discharge of any
obligation of any Other Letter of Credit Obligor contained in any Letter
of Credit Document;
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(v) the existence of any claim, set-off or other rights which the
Borrower may have at any time against any Other Letter of Credit Obligor,
the Administrative Agent, any Lender or any other person, whether in
connection herewith or any unrelated transactions;
(vi) any invalidity or unenforceability relating to or against any
Other Letter of Credit Obligor for any reason of any Letter of Credit
Document, or any provision of applicable law or regulation purporting to
prohibit the payment by any Other Letter of Credit Obligor of any
Obligations in respect of any Letter of Credit; or
(vii) any other act or omission to act or delay of any kind by any
Other Letter of Credit Obligor, the Administrative Agent, any Lender or
any other person or any other circumstance whatsoever which might, but for
the provisions of this section, constitute a legal or equitable discharge
of the Borrower's obligations under this section.
(d) The Borrower's obligations under this section 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 Borrower under
the Credit Documents and by any Other Letter of Credit Obligor under the Letter
of Credit Documents shall have been paid in full. If at any time any payment of
any of the Obligations of any Other Letter of Credit Obligor in respect of any
Letter of Credit Documents is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization of such Other Letter
of Credit Obligor, the Borrower's obligations under this section with respect to
such payment shall be reinstated at such time as though such payment had been
due but not made at such time.
(e) The Borrower 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 any Other
Letter of Credit Obligor or any other person, or against any collateral or
guaranty of any other person.
(f) Until the indefeasible payment in full of all of the Obligations and
the termination of the Commitments of the Lenders hereunder, the Borrower shall
have no rights, by operation of law or otherwise, upon making any payment under
this section to be subrogated to the rights of the payee against any Other
Letter of Credit Obligor with respect to such payment or otherwise to be
reimbursed, indemnified or exonerated by any Other Letter of Credit Obligor in
respect thereof.
(g) In the event that acceleration of the time for payment of any amount
payable by any Other Letter of Credit Obligor under any Letter of Credit
Document is stayed upon insolvency, bankruptcy or reorganization of such Other
Letter of Credit Obligor, all such amounts otherwise subject to acceleration
under the terms of any applicable Letter of Credit Document shall nonetheless be
payable by the Borrower under this section forthwith on demand by the
Administrative Agent.
SECTION 4. FEES; COMMITMENTS.
4.1. Fees. (a) Commitment Fees. (i) The Borrower agrees to pay to the
Administrative Agent fees ("Commitment Fees") for the account of each
Non-Defaulting Lender which has a Revolving Commitment for the period from and
including the Effective Date to, but not including, the Revolving Maturity Date
or, if earlier, the date upon which the Total Revolving Commitment has been
terminated, computed for each day at a rate per annum equal to the Applicable
Commitment Fee Rate for such day on the amount of such Lender's Revolving
Facility Percentage of the Unutilized Total Revolving Commitment for such day.
Commitment Fees shall be due and payable in arrears on the last Business Day of
each March, June, September and December and on the Revolving Maturity Date or,
if earlier, the date upon which the Total Revolving Commitment has been
terminated.
(ii) As used herein the term "Applicable Commitment Fee Rate" shall mean
the particular rate per annum determined by the Administrative Agent in
accordance with the Pricing Grid Table which appears in section 2.7(g),
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based on the Borrower's ratio of Consolidated Total Debt to Consolidated EBITDA,
as computed in accordance with section 9.8 hereof, and such Pricing Grid Table,
and the following provisions:
(A) Initially, until changed hereunder in accordance with the
following provisions, the Applicable Commitment Fee Rate will be 50 basis
points per annum.
(B) Commencing with the fiscal quarter of the Borrower ended on or
nearest to June 30, 1999, and continuing with each fiscal quarter
thereafter, the Administrative Agent will determine the Applicable
Commitment Fee Rate in accordance with the Pricing Grid Table, based on
the Borrower's ratio of (x) Consolidated Total Debt as of the end of the
fiscal quarter, to (y) Consolidated EBITDA for the Testing Period ended on
the last day of the fiscal quarter, as computed in accordance with section
9.8 hereof, and identified in such Pricing Grid Table. Changes in the
Applicable Commitment Fee Rate based upon changes in such ratio shall
become effective on the first day of the month following the receipt by
the Administrative Agent pursuant to section 8.1(a) or (b) of the
financial statements of the Borrower, accompanied by the certificate and
calculations referred to in section 8.1(c), demonstrating the computation
of such ratio, based upon the ratio in effect at the end of the applicable
period covered (in whole or in part) by such financial statements.
(C) Notwithstanding the above provisions, during any period when (1)
the Borrower has failed to timely deliver its consolidated financial
statements referred to in section 8.1(a) or (b), accompanied by the
certificate and calculations referred to in section 8.1(c), (2) a Default
under section 10.1(a) has occurred and is continuing, or (3) an Event of
Default has occurred and is continuing, the Applicable Commitment Fee Rate
shall be the highest rate per annum indicated therefor in the Pricing Grid
Table, regardless of the Borrower's ratio of Consolidated Total Debt to
Consolidated EBITDA at such time.
(D) Any changes in the Applicable Commitment Fee rate shall be
determined by the Administrative Agent in accordance with the above
provisions and the Administrative Agent will promptly provide notice of
such determinations to the Borrower and the Lenders. Any such
determination by the Administrative Agent pursuant to this section
4.1(a)(ii) shall be conclusive and binding absent manifest error.
(b) Letter of Credit Fees. The Borrower agrees to pay to the
Administrative Agent, for the account of each Non-Defaulting Lender which has a
Revolving Commitment, pro rata on the basis of its Revolving Facility
Percentage, a fee in respect of each Letter of Credit (the "Letter of Credit
Fee"), payable on the date of issuance (or any increase in the amount, or
renewal or extension) thereof, computed at a rate per annum equal to the
Applicable Eurodollar Margin then in effect for Revolving Loans, on the Stated
Amount thereof for the period from the date of issuance (or increase, renewal or
extension) to the expiration date thereof (including any extensions of such
expiration date which may be made at the election of the account party or
beneficiary). The Borrower also agrees to pay additional Letter of Credit Fees,
on demand, at the rate of 200 basis points per annum, on the Stated Amount of
each Letter of Credit, for any period when a Default under section 10.1(a) or
Event of Default is in existence.
(c) Facing Fees. The Borrower agrees to pay directly to each Letter of
Credit Issuer, for its own account, a fee in respect of each Letter of Credit
issued by it (a "Facing Fee"), payable on the date of issuance (or any increase
in the amount, or renewal or extension) thereof, computed at the rate of 1/8 of
1% per annum on the Stated Amount thereof for the period from the date of
issuance (or increase, renewal or extension) to the expiration date thereof
(including any extensions of such expiration date which may be made at the
election of the beneficiary thereof).
(d) Additional Charges of Letter of Credit Issuer. The Borrower agrees to
pay directly to each Letter of Credit Issuer upon each issuance of, drawing
under, and/or amendment, extension, renewal or transfer of, a Letter of Credit
issued by it such amount as shall at the time of such issuance, drawing,
amendment, extension, renewal or transfer be the administrative or processing
charge which such Letter of Credit Issuer is customarily charging for issuances
of, drawings under or amendments, extensions, renewals or transfers of, letters
of credit issued by it.
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(e) Other Fees. The Borrower shall pay to the Administrative Agent, the
Syndication Agent and the Lead Arrangers on the Effective Date and thereafter,
for its or their own account and/or for distribution to the Lenders, such fees
as heretofore agreed by the Borrower and the Administrative Agent, the
Syndication Agent and the Lead Arrangers.
(f) Computations of Fees. All computations of Fees shall be made in
accordance with section 12.7(b).
4.2. Voluntary Termination/Reduction of Commitments. Upon at least three
Business Days' prior written notice (or telephonic notice confirmed in writing)
to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Lenders), the
Borrower shall have the right to:
(a) terminate the Total Commitment, provided that (i) all
outstanding Loans are contemporaneously prepaid in accordance with
section 5.1, and (ii) either (A) no Letters of Credit remain
outstanding, or (B) the Borrower shall contemporaneously either (x)
cause all outstanding Letters of Credit to be surrendered for
cancellation (any such Letters of Credit to be replaced by letters
of credit issued by other financial institutions acceptable to the
Required Revolving Lenders), or (y) the Borrower shall pay to the
Administrative Agent an amount in cash and/or Cash Equivalents equal
to 100% of the Letter of Credit Outstandings and the Administrative
Agent shall hold such payment as security for the reimbursement
obligations of the Borrower hereunder in respect of Letters of
Credit pursuant to a cash collateral agreement to be entered into in
form and substance reasonably satisfactory to the Administrative
Agent and the Borrower (which shall permit certain investments in
Cash Equivalents satisfactory to the Administrative Agent and the
Borrower until the proceeds are applied to the secured obligations);
(b) terminate the Total Term A Commitment, provided that all
outstanding Term A Loans are contemporaneously prepaid in accordance
with section 5.1;
(c) terminate the Total Term B Commitment, provided that all
outstanding Term B Loans are contemporaneously prepaid in accordance
with section 5.1;
(d) partially and permanently reduce the Unutilized Total
Revolving Commitment, provided that (i) any such reduction shall
apply to proportionately and permanently reduce the Revolving
Commitment of each of the Lenders; (ii) any partial reduction of the
Unutilized Total Revolving Commitment pursuant to this section
4.2(c) shall be in the amount of at least $5,000,000 (or, if
greater, in integral multiples of $1,000,000); and (iii) after
giving effect to any such partial reduction of the Unutilized Total
Revolving Commitment, (A) the Unutilized Total Revolving Commitment
then in effect shall exceed the then aggregate outstanding principal
amount of the Term Loans by at least $10,000,000; and (B) unless the
Borrowing Base Termination Date shall already have occurred, the
Borrower could then incur, in compliance with the Borrowing Base
then in effect and the applicable provisions of this Agreement, at
least $5,000,000 of additional Revolving Loans; and/or
(e) after the incurrence of Term Loans on the Closing Date,
partially and permanently reduce the Total Term A Commitment or the
Total Term B Commitment only by making Scheduled Repayments of Term
Loans pursuant to section 5.2, and prepayments of Term Loans
pursuant to sections 5.1 and 5.2.
The Borrower may not reduce the Unutilized Total Term A Commitment or the
Unutilized Total Term B Commitment, in whole or in part, prior to the Borrowing
of Term Loans on the Closing Date.
4.3. Mandatory Adjustments of Commitments, etc. (a) The Total Commitment
(and the Commitment of each Lender) shall terminate on January 15, 1999, unless
the Closing Date has occurred on or prior to such date.
(b) The Total Term A Commitment shall terminate (and the Term A Commitment
of each Lender shall terminate) on the earlier of (x) the Term A Maturity Date
and (y) the date on which a Change of Control occurs.
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(c) The Total Term B Commitment shall terminate (and the Term B Commitment
of each Lender shall terminate) on the earlier of (x) the Term B Maturity Date
and (y) the date on which a Change of Control occurs.
(d) The Total Revolving Commitment (and the Revolving Commitment of each
Lender) shall terminate on the earlier of (x) the Revolving Maturity Date and
(y) the date on which a Change of Control occurs.
(e) The Total Term A Commitment shall be permanently reduced, without
premium or penalty, at the time of each (i) voluntary prepayment of Term A Loans
pursuant to section 5.1, and (ii) Scheduled Repayment or mandatory prepayment of
Term A Loans pursuant to section 5.2, in an amount equal to the aggregate
principal amount of the Term A Loans so repaid or prepaid.
(f) The Total Term B Commitment shall be permanently reduced at the time
of each
(i) voluntary prepayment of Term B Loans pursuant to section 5.1,
without premium or penalty, except for any Term B Prepayment Premium which
may be payable at such time,
(ii) Scheduled Repayment of Term B Loans pursuant to section 5.2,
without premium or penalty, and
(iii) mandatory prepayment of Term B Loans pursuant to section 5.2,
without premium or penalty, except for any Term B Prepayment Premium which
may be payable at such time,
in an amount equal to the aggregate principal amount of the Term B Loans so
repaid or prepaid.
SECTION 5. PAYMENTS.
5.1. Voluntary Prepayments. The Borrower shall have the right to prepay
any of its Loans, in whole or in part, without premium or penalty (except as
specified below), from time to time on the following terms and conditions:
(a) the Borrower shall give the Administrative Agent at the Notice
Office written or telephonic notice (in the case of telephonic notice,
promptly confirmed in writing if so requested by the Administrative Agent)
of its intent to prepay the Loans, the amount of such prepayment and (in
the case of Eurodollar Loans) the specific Borrowing(s) pursuant to which
made, which notice shall be received by the Administrative Agent by
(i) 12:00 noon (local time at the Notice Office) three
Business Days prior to the date of such prepayment, in the case of
any prepayment of Eurodollar Loans, or
(ii) 12:00 noon (local time at the Notice Office) on the date
of such prepayment, in the case of any prepayment of Prime Rate
Loans,
and which notice shall promptly be transmitted by the Administrative Agent
to each of the affected Lenders;
(b) in the case of prepayment of any Borrowings under the Revolving
Facility, each partial prepayment of any such Borrowing shall be in an
aggregate principal of at least $1,000,000 or an integral multiple of
$500,000 in excess thereof, in the case of Prime Rate Loans, and at least
$5,000,000 or an integral multiple of $1,000,000 in excess thereof, in the
case of Eurodollar Loans;
(c) in the case of prepayment of any Borrowings under the Term A
Facility or the Term B Facility, (i) such prepayment shall be applied to
reduce the Scheduled Repayments in respect of such Facility in inverse
order of maturity, and (ii) each partial prepayment of any such Borrowing
shall be in an aggregate principal of at least $1,000,000 or an integral
multiple of $500,000 in excess thereof, in the case of Prime
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Rate Loans, and at least $5,000,000 or an integral multiple of $1,000,000
in excess thereof, in the case of Eurodollar Loans;
(d) no prepayment of any Term Loans pursuant to this section 5.1
shall be made if after giving effect thereto and any Revolving Borrowings
made in connection therewith (i) the Unutilized Total Revolving Commitment
would not be at least $10,000,000, or (ii) if such prepayment is made
prior to the Borrowing Base Termination Date, the Borrower could not,
because of the Borrowing Base then in effect or any other provisions of
this Agreement, immediately incur at least $5,000,000 principal amount of
additional Revolving Loans;
(e) no partial prepayment of any Loans made pursuant to a Borrowing
shall reduce the aggregate principal amount of such Loans outstanding
pursuant to such Borrowing to an amount less than the Minimum Borrowing
Amount applicable thereto;
(f) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied pro rata among such Loans;
(g) in the case of any such prepayment of the Term B Loans, such
prepayment shall be accompanied by a prepayment premium (a "Term B
Prepayment Premium") in the amount of 2% of the amount prepaid, if such
prepayment is made prior to the first anniversary of the Closing Date, or
in the amount of 1% of the amount prepaid, if such prepayment is made on
or after the first anniversary of the Closing Date and prior to the second
anniversary of the Closing Date (there being no Term B Prepayment Premium
for any subsequent voluntary prepayments of Term B Loans); and
(h) each prepayment of Eurodollar Loans pursuant to this section 5.1
on any date other than the last day of the Interest Period applicable
thereto shall be accompanied by any amounts payable in respect thereof
under section 2.10.
5.2. Scheduled Repayments and Mandatory Prepayments. The Loans shall be
subject to mandatory repayment or prepayment in accordance with the following
provisions:
(a) Scheduled Repayments of Term Loans. On each of the dates set
forth below the Borrower shall be required to, and shall, repay the
principal amount of its Term Loans in the amount set forth opposite such
date, except that the payment due on the Maturity Date of any Term Loans
under a Facility shall in any event be in the amount of the entire
remaining principal amount of the outstanding Term Loans under such
Facility (each such repayment, as the same may be reduced pursuant to
section 5.1(c) or sections 5.2(c), (d), (e), (f) or (g)), a "Scheduled
Repayment"):
==========================================================================
Date Term A Loans Term B Loans
==========================================================================
March 31, 1999 $4,687,500 $437,500
--------------------------------------------------------------------------
June 30, 1999 $4,687,500 $437,500
--------------------------------------------------------------------------
September 30, 1999 $4,687,500 $437,500
--------------------------------------------------------------------------
December 31, 1999 $4,687,500 $437,500
--------------------------------------------------------------------------
March 31, 2000 $5,625,000 $437,500
--------------------------------------------------------------------------
June 30, 2000 $5,625,000 $437,500
--------------------------------------------------------------------------
September 30, 2000 $5,625,000 $437,500
--------------------------------------------------------------------------
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==========================================================================
Date Term A Loans Term B Loans
==========================================================================
December 31, 2000 $5,625,000 $437,500
--------------------------------------------------------------------------
March 31, 2001 $7,500,000 $437,500
--------------------------------------------------------------------------
June 30, 2001 $7,500,000 $437,500
--------------------------------------------------------------------------
September 30, 2001 $7,500,000 $437,500
--------------------------------------------------------------------------
December 31, 2001 $7,500,000 $437,500
--------------------------------------------------------------------------
March 31, 2002 $9,375,000 $437,500
--------------------------------------------------------------------------
June 30, 2002 $9,375,000 $437,500
--------------------------------------------------------------------------
September 30, 2002 $9,375,000 $437,500
--------------------------------------------------------------------------
December 31, 2002 $9,375,000 $437,500
--------------------------------------------------------------------------
March 31, 2003 $10,312,500 $437,500
--------------------------------------------------------------------------
June 30, 2003 $10,312,500 $437,500
--------------------------------------------------------------------------
September 30, 2003 $10,312,500 $437,500
--------------------------------------------------------------------------
December 31, 2003 $10,312,500 $437,500
--------------------------------------------------------------------------
March 31, 2004 $11,250,000
--------------------------------------------------------------------------
June 30, 2004 $11,250,000
--------------------------------------------------------------------------
September 30, 2004 $11,250,000
--------------------------------------------------------------------------
December 31, 2004 $11,250,000
--------------------------------------------------------------------------
March 31, 2005 $30,375,000
--------------------------------------------------------------------------
June 30, 2005 $30,375,000
--------------------------------------------------------------------------
September 30, 2005 $30,375,000
--------------------------------------------------------------------------
December 31, 2005 $30,375,000
==========================================================================
(b) Mandatory Prepayment of Revolving Loans, etc. if Outstanding
Revolving Loans and Letter of Credit Outstandings Exceed Total Revolving
Commitment or Borrowing Base. If on any date (after giving effect to any
other payments on such date) the sum of (i) the aggregate outstanding
principal amount of Revolving Loans plus (ii) the aggregate amount of
Letter of Credit Outstandings, exceeds (x) the Total Revolving Commitment
as then in effect, or (y) if the Borrowing Base Termination Date shall not
have occurred, the lesser of the Total Revolving Commitment as then in
effect or the Borrowing Base as then in effect, the Borrower shall prepay
on such date that principal amount of Revolving Loans and, after Revolving
Loans have been paid in full, Unpaid Drawings, in an aggregate amount at
least equal to such excess and conforming in the case of partial
prepayments of Revolving Loans to the requirements as to the amounts of
partial prepayments of Revolving Loans which are contained in section 5.1.
If, after giving effect to the prepayment of Revolving Loans and Unpaid
Drawings, the aggregate amount of Letter of Credit Outstandings exceeds
the lesser of (x) the Total Revolving Commitment as then in effect, or (y)
the Borrowing Base as then
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in effect, the Borrower shall pay to the Administrative Agent an amount in
cash and/or Cash Equivalents equal to such excess and the Administrative
Agent shall hold such payment as security for the reimbursement
obligations of the Borrower hereunder in respect of Letters of Credit
pursuant to a cash collateral agreement to be entered into in form and
substance reasonably satisfactory to the Administrative Agent and the
Borrower (which shall permit certain investments in Cash Equivalents
satisfactory to the Administrative Agent and the Borrower until the
proceeds are applied to the secured obligations).
(c) Mandatory Prepayment---Excess Cash Flow. Within 10 days after
the date in each calendar year on which the Borrower delivers its audited
financial statements to the Lenders pursuant to section 8.1(a) hereof with
respect to the preceding fiscal year of the Borrower (or, if the Borrower
fails to do so as required by said section 8.1(a), within 10 days after
the last date by which such audited financial statements are required to
have been so delivered pursuant to said section 8.1(a)), commencing with
the financial statements for the fiscal year ended December 31, 1998, the
Borrower shall prepay the principal of the Loans in an aggregate amount
(an "Excess Cash Flow Prepayment Amount"), conforming to the requirements
as to the amount of partial prepayments contained in section 5.1, at least
equal to 75% of the amount of Excess Cash Flow for such fiscal year.
Prepayments of the Loans pursuant to this section 5.2(c) shall be applied
(i) first, to the Term Loans, with the Excess Cash Flow Prepayment Amount
being allocated among the Term A Loans and the Term B Loans in the same
proportion as the then outstanding Term A Loans bear to the then
outstanding Term B Loans, and with the Excess Cash Flow Prepayment Amount
so allocated being applied to reduce the applicable Scheduled Repayments
in inverse order of their maturity, and (ii) second, after no Term Loans
are outstanding, to the Revolving Loans. The Borrower shall be entitled to
credit against the Excess Cash Flow Prepayment Amount payable on any date
the principal amount of Term Loans prepaid pursuant to section 5.1
subsequent to the end of the preceding fiscal year and on or prior to the
date such Excess Cash Flow Prepayment Amount is payable.
(d) Mandatory Prepayment---Certain Proceeds of Asset Sales. If
during any fiscal year of the Borrower, the Borrower and its Subsidiaries
have received cumulative Cash Proceeds during such fiscal year from one or
more Asset Sales of at least $2,000,000, not later than the third Business
Day following the date of receipt of any Cash Proceeds in excess of such
amount, an amount, conforming to the requirements as to the amount of
partial prepayments contained in section 5.1, at least equal to 100% of
the Net Cash Proceeds then received in excess of such amount from any
Asset Sale, shall be applied as a mandatory prepayment of principal of
first, the outstanding Term Loans, with the amount of such prepayment
being allocated among the Term A Loans and the Term B Loans in the same
proportion as the then outstanding Term A Loans bear to the then
outstanding Term B Loans, and second, after no Term Loans are outstanding,
the outstanding Revolving Loans; provided, that (i) if no Default under
section 10.1(a) or Event of Default shall have occurred and be continuing,
(ii) the Borrower and its Subsidiaries have scheduled Consolidated Capital
Expenditures during the following 12 months, and (iii) the Borrower
notifies the Administrative Agent of the amount and nature thereof and of
its intention to reinvest all or a portion of such Net Cash Proceeds in
such Consolidated Capital Expenditures during such 12 month period, then
no such prepayment shall be required to the extent of the amount of such
Net Cash Proceeds as to which the Borrower so indicates such reinvestment
will take place. If at the end of any such 12 month period any portion of
such Net Cash Proceeds has not been so reinvested, the Borrower will
immediately make a prepayment of the principal of first, the outstanding
Term Loans, and second, after no Term Loans are outstanding, the
outstanding Revolving Loans, as provided above, in an amount, conforming
to the requirements as to amount of partial prepayments contained in
section 5.1, at least equal to such remaining amount. Prepayments of the
Term Loans pursuant to this section 5.2(d) shall be applied to the
Scheduled Repayments in inverse order of their maturity.
(e) Mandatory Prepayment---Certain Proceeds of Equity Sales. Not
later than the Business Day following the date of the receipt by the
Borrower and/or any Subsidiary of the cash proceeds (net of underwriting
discounts and commissions, placement agent fees and other customary fees
and costs associated therewith) from any sale or issuance of equity
securities by the Borrower or any Subsidiary after the Closing Date (other
than (i) any inter-company sale to the Borrower or any Subsidiary and (ii)
any sale or issuance to management, employees (or key employees) or
directors pursuant to stock option or similar plans for the benefit of
management, employees (key employees) or directors generally), the
Borrower will prepay the
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<PAGE>
principal of first, the outstanding Term Loans, with the amount of such
prepayment being allocated among the Term A Loans and the Term B Loans in
the same proportion as the then outstanding Term A Loans bear to the then
outstanding Term B Loans, and second, after no Term Loans are outstanding,
the outstanding Revolving Loans, in an aggregate amount, conforming to the
requirements as to the amounts of partial prepayments contained in section
5.1, which is not less than (x) 100% of such net proceeds, or (y) if less,
an amount equal to the then aggregate outstanding principal amount of the
outstanding Loans, if any. Prepayments of the Term Loans pursuant to this
section 5.2(e) shall be applied to the Scheduled Repayments in inverse
order of their maturity.
(f) Mandatory Prepayment---Certain Proceeds of Debt Securities. Not
later than the Business Day following the date of the receipt by the
Borrower of the cash proceeds (net of underwriting discounts and
commissions, placement agent fees and other customary fees and costs
associated therewith) from any sale or issuance of debt securities by the
Borrower after the Closing Date in an underwritten public offering, Rule
144A offering, or private placement with one or more institutional
investors, the Borrower will prepay the principal of first, the
outstanding Term Loans, with the amount of such prepayment being allocated
among the Term A Loans and the Term B Loans in the same proportion as the
then outstanding Term A Loans bear to the then outstanding Term B Loans,
and second, after no Term Loans are outstanding, the outstanding Revolving
Loans, in an aggregate amount, conforming to the requirements as to the
amounts of partial prepayments contained in section 5.1, which is not less
than (x) 100% of such net proceeds, or (y) if less, an amount equal to the
then aggregate outstanding principal amount of the outstanding Loans, if
any. Prepayments of the Term Loans pursuant to this section 5.2(f) shall
be applied to the Scheduled Repayments in inverse order of their maturity.
(g) Mandatory Prepayment---Certain Proceeds of an Event of Loss. If
during any fiscal year of the Borrower, the Borrower and its Subsidiaries
have received cumulative Cash Proceeds during such fiscal year from one or
more Events of Loss of at least $5,000,000, not later than the third
Business Day following the date of receipt of any Cash Proceeds in excess
of such amount, an amount, conforming to the requirements as to the amount
of partial prepayments contained in section 5.1, at least equal to 100% of
the Net Cash Proceeds then received in excess of such amount from any
Event of Loss, shall be applied as a mandatory prepayment of principal of
first, the outstanding Term Loans, with the amount of such prepayment
being allocated among the Term A Loans and the Term B Loans in the same
proportion as the then outstanding Term A Loans bear to the then
outstanding Term B Loans, and second, after no Term Loans are outstanding,
the outstanding Revolving Loans; provided, that notwithstanding the
foregoing, any such Net Cash Proceeds representing proceeds of business
interruption insurance may instead be applied first, to the principal of
outstanding Revolving Loans, and second, after no Revolving Loans are
outstanding, to the principal of Term Loans, but otherwise in accordance
with the above provisions. Prepayments of the Term Loans pursuant to this
section 5.2(g) shall be applied to the Scheduled Repayments in inverse
order of their maturity.
Notwithstanding the foregoing, in the event any property suffers an
Event of Loss and (i) the Cash Proceeds received in any fiscal year as a
result of such Event of Loss are less than $20,000,000, (ii) no Default
under section 10.1(a) or Event of Default has occurred and is continuing,
(iii) the Borrower notifies the Administrative Agent and the Lenders in
writing that it intends to rebuild or restore the affected property, that
such rebuilding or restoration can be accomplished within 18 months out of
such Cash Proceeds and other funds available to the Borrower, then no such
prepayment of the Loans shall be required if the Borrower immediately
deposits such Cash Proceeds in a cash collateral deposit account over
which the Collateral Agent shall have sole dominion and control, and which
shall constitute part of the Collateral under the Security Documents and
may be applied as provided in section 10.3 if an Event of Default occurs
and is continuing . So long as no Default under section 10.1(a) or Event
of Default has occurred and is continuing, the Collateral Agent is
authorized to disburse amounts from such cash collateral deposit account
to or at the direction of the Borrower for application to the costs of
rebuilding or restoration of the affected property. Any amounts not so
applied to the costs of rebuilding or restoration or as provided in
section 10.3 shall be applied to the prepayment of the Loans as provided
above.
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<PAGE>
(h) Mandatory Prepayment---Change of Control. On the date of which a
Change of Control occurs, notwithstanding anything to the contrary
contained in this Agreement, no further Borrowings shall be made and the
then outstanding principal amount of all Loans, if any, and other
Obligations, shall become due and payable and shall be prepaid in full,
together with accrued interest and Fees (and in the case of any such
required prepayment of Term B Loans, any premium which would then be
payable if such prepayment had instead been made pursuant to section 5.1)
and the Borrower shall contemporaneously either (i) cause all outstanding
Letters of Credit to be surrendered for cancellation (any such Letters of
Credit to be replaced by letters of credit issued by other financial
institutions acceptable to the Required Revolving Lenders), or (ii) the
Borrower shall pay to the Administrative Agent an amount in cash and/or
Cash Equivalents equal to 100% of the Letter of Credit Outstandings and
the Administrative Agent shall hold such payment as security for the
reimbursement obligations of the Borrower hereunder in respect of Letters
of Credit pursuant to a cash collateral agreement to be entered into in
form and substance reasonably satisfactory to the Administrative Agent and
the Borrower (which shall permit certain investments in Cash Equivalents
satisfactory to the Administrative Agent and the Borrower until the
proceeds are applied to the secured obligations).
(i) Term B Prepayment Premium on Mandatory Prepayment Related to
Change of Control. Any mandatory prepayment of Term B Loans pursuant to
section 5.2(h) prior to the second anniversary of the Closing Date shall
be accompanied by the Term B Prepayment Premium on the amount prepaid
which would have been payable if the Borrower had instead voluntarily
prepaid such Term B Loans pursuant to section 5.1 hereof.
(j) Right of Term B Lenders to Forego Certain Mandatory Prepayments.
Each Term B Lender shall have the right to forego the application to its
Term B Loans of any mandatory prepayment of Loans required to be made
pursuant to section 5.2(c), (d), (e), (f) or (g), in accordance with the
following provisions:
(i) The Administrative Agent shall, on or prior to 3:00 P. M.
(local time at the Notice Office) on the date it receives
immediately available funds from the Borrower in respect of a
mandatory prepayment of Loans pursuant to section 5.2(c), (d), (e),
(f) or (g), give each Term B Lender written or telephonic notice of
(A) the amount of such mandatory prepayment, (B) the portion thereof
proposed to be applied to the Term B Loans of such Term B Lender in
accordance with section 5.2(c), (d), (e), (f) or (g), as applicable,
and (C) such Term B Lender's right to forego the application to its
Term B Loans of the portion of such mandatory prepayment, which
notice shall request such Term B Lender to confirm to the
Administrative Agent whether or not it wishes to forego such
application to its Term B Loans.
(ii) If any Term B Lender so indicates its desire to forego
such application to the prepayment of its Term B Loans by giving the
Administrative Agent written or telephonic notice to such effect by
5:00 P. M. (local time at the Notice Office) on the date such Term B
Lender receives such written or telephonic notice from the
Administrative Agent, the amount of the applicable prepayment which
otherwise would have been applied to its Term B Loans shall,
notwithstanding anything to the contrary contained in this section
5.2, be applied instead to the prepayment of Term A Loans, and after
no Term A Loans are outstanding, to the prepayment of the Revolving
Loans.
(iii) The Administrative Agent may act without liability upon
the basis of any such telephonic notice or written notice believed
by the Administrative Agent in good faith to be from an authorized
representative of a Term B Lender. In the case of each such
telephonic notice, the Administrative Agent's record of the terms of
such telephonic notice shall be conclusive absent manifest error.
(iv) Any Term B Lender which does not respond to the
Administrative Agent within the time period specified above to a
notice from the Administrative Agent requesting it to confirm
whether or not it wishes to exercise its right to forego the
application of its portion of such
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<PAGE>
prepayment to its Term B Loans pursuant to this section 5.2(j) shall
be deemed to have waived such right to forego such application.
(v) Notwithstanding anything to the contrary contained in this
Agreement, the Administrative Agent may defer, until the next
Business Day, the distribution to the Lenders of any portion of any
mandatory prepayment of Loans received by the Administrative Agent
pursuant to section 5.2(c), (d), (e), (f) or (g), as applicable, as
to which the Administrative Agent is determining whether or not the
Term B Lenders wish to exercise their rights under this section
5.2(j).
(k) Particular Loans to be Prepaid. With respect to each repayment
or prepayment of Loans required by this section 5.2, the Borrower shall
designate the Types of Loans which are to be repaid or prepaid and the
specific Borrowing(s) pursuant to which such repayment or prepayment is to
be made, provided that (i) the Borrower shall first so designate all Loans
that are Prime Rate Loans and Eurodollar Loans with Interest Periods
ending on the date of repayment or prepayment prior to designating any
other Eurodollar Loans for repayment or prepayment, (ii) if the
outstanding principal amount of Eurodollar Loans made pursuant to a
Borrowing is reduced below the applicable Minimum Borrowing Amount as a
result of any such repayment or prepayment, then all the Loans outstanding
pursuant to such Borrowing shall be converted into Prime Rate Loans, and
(iii) each repayment and prepayment of any Loans made pursuant to a
Borrowing shall be applied pro rata among such Loans. In the absence of a
designation by the Borrower as described in the preceding sentence, the
Administrative Agent shall, subject to the above, make such designation in
its sole discretion with a view, but no obligation, to minimize breakage
costs owing under section 2.10. Any repayment or prepayment of Eurodollar
Loans pursuant to this section 5.2 shall in all events be accompanied by
such compensation as is required by section 2.10.
5.3. Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Administrative Agent for the ratable (based on its pro rata share) account of
the Lenders entitled thereto, not later than 12:00 noon (local time at the
Payment Office) on the date when due and shall be made at the Payment Office in
immediately available funds and in lawful money of the United States of America,
it being understood that written notice by the Borrower to the Administrative
Agent to make a payment from the funds in the Borrower's account at the Payment
Office shall constitute the making of such payment to the extent of such funds
held in such account. Any payments under this Agreement which are made later
than 12:00 noon (local time at the Payment Office) shall be deemed to have been
made on the next succeeding Business Day. Whenever any payment to be made
hereunder shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such extension.
5.4. Net Payments. (a) All payments made by the Borrower hereunder, under
any Note or any other Credit Document, will be made without setoff, counterclaim
or other defense. Except as provided for in section 5.4(b), all such payments
will be made free and clear of, and without deduction or withholding for, any
present or future taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature now or hereafter imposed by any jurisdiction or by
any political
48
<PAGE>
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding, except as provided in the second succeeding sentence, any tax,
imposed on or measured by the net income or net profits of a Lender pursuant to
the laws of the jurisdiction under which such Lender is organized or the
jurisdiction in which the principal office or Applicable Lending Office of such
Lender is located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect to such non excluded taxes, levies
imposts, duties, fees, assessments or other charges (all such nonexcluded taxes
levies, imposts, duties, fees assessments or other charges being referred to
collectively as "Taxes"). If any Taxes are so levied or imposed, the Borrower
agrees to pay the full amount of such Taxes and such additional amounts as may
be necessary so that every payment by it of all amounts due hereunder, under any
Note or under any other Credit Document, after withholding or deduction for or
on account of any Taxes will not be less than the amount provided for herein or
in such Note or in such other Credit Document. If any amounts are payable in
respect of Taxes pursuant to the preceding sentence, the Borrower agrees to
reimburse each Lender, upon the written request of such Lender for taxes imposed
on or measured by the net income or profits of such Lender pursuant to the laws
of the jurisdiction in which such Lender is organized or in which the principal
office or Applicable Lending Office of such Lender is located or under the laws
of any political subdivision or taxing authority of any such jurisdiction in
which the principal office or Applicable Lending Office of such Lender is
located and for any withholding of income or similar taxes imposed by the United
States of America as such Lender shall determine are payable by, or withheld
from, such Lender in respect of such amounts so paid to or on behalf of such
Lender pursuant to the preceding sentence and in respect of any amounts paid to
or on behalf of such Lender pursuant to this sentence, which request shall be
accompanied by a statement from such Lender setting forth, in reasonable detail,
the computations used in determining such amounts. The Borrower will furnish to
the Administrative Agent within 45 days after the date the payment of any Taxes,
or any withholding or deduction on account thereof, is due pursuant to
applicable law certified copies of tax receipts, or other evidence satisfactory
to the Lender, evidencing such payment by the Borrower. The Borrower will
indemnify and hold harmless the Administrative Agent and each Lender, and
reimburse the Administrative Agent or such Lender upon its written request, for
the amount of any Taxes so levied or imposed and paid or withheld by such
Lender.
(b) Each Lender that is not a United States person (as such term is
defined in section 7701(a)(30) of the Code) for Federal income tax purposes
agrees to provide to the Borrower and the Administrative Agent on or prior to
the Effective Date, or in the cases of a Lender that is an assignee or
transferee of an interest under this Agreement pursuant to section 12.4 (unless
the respective Lender was already a Lender hereunder immediately prior to such
assignment or transfer and such Lender is in compliance with the provisions of
this section 5.4(b)), on the date of such assignment or transfer to such Lender,
(i) two accurate and complete original signed copies of Internal Revenue Service
Form 4224 or 1001 (or successor forms) certifying to such Lender's entitlement
to a complete exemption from United States withholding tax with respect to
payments to be made under this Agreement, any Note or any other Credit Document,
or (ii) if the Lender is not a "bank" within the meaning of section 881(c)(3)(A)
of the Code and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (i) above, (x) a certificate substantially in the form of
Exhibit F (any such certificate, a "Section 5.4(b)(ii) Certificate") and (y) two
accurate and complete original signed copies of Internal Revenue Service Form
W-8 (or successor form) certifying to such Lender's entitlement to a complete
exemption from United States withholding tax with respect to payments of
interest to be made under this Agreement, any Note or any other Credit Document.
In addition, each Lender agrees that from time to time after the Effective Date,
when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will deliver to
the Borrower and the Administrative Agent two new accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001, or Form W-8 and a
Section 5.4(b)(ii) Certificate, as the case may be, and such other forms as may
be required in order to confirm or establish the entitlement of such Lender to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement, any Note or any other Credit Document,
or it shall immediately notify the Borrower and the Administrative Agent of its
inability to deliver any such Form or Certificate, in which case such Lender
shall not be required to deliver any such Form or Certificate pursuant to this
section 5.4(b). Notwithstanding anything to the contrary contained in section
5.4(a), but subject to section 12.4(c) and the immediately succeeding sentence,
(x) the Borrower shall be entitled, to the extent it is required to do so by
law, to deduct or withhold income or other similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the account of any
Lender which is not a United States person (as such term is defined in section
7701(a)(30) of the Code) for United States federal income tax purposes and which
has not provided to the Borrower such forms that establish a complete exemption
from such deduction or withholding and (y) the Borrower shall not be obligated
pursuant to section 5.4(a) hereof to gross-up payments to be made to a Lender in
respect of income or similar taxes imposed by the United States or any
additional amounts with respect thereto (I) if such Lender has not provided to
the Borrower the Internal Revenue Service forms required to be provided to the
Borrower pursuant to this section 5.4(b) or (II) in the case of a payment other
than interest, to a Lender described in clause (ii) above, to the extent that
such forms do not establish a complete exemption from withholding of such taxes.
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this section 5.4 and except as specifically provided for in section
12.4(c), the Borrower agrees to pay additional amounts and indemnify each Lender
in the manner set forth in section 5.4(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any Taxes
deducted or withheld by it as described in the previous sentence as a result of
any changes after the Effective Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating
to the deducting or withholding of income or similar Taxes.
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(c) If any Lender, in its sole opinion, determines that it has finally and
irrevocably received or been granted a refund in respect of any Taxes paid as to
which indemnification has been paid by the Borrower pursuant to this section, it
shall promptly remit such refund (including any interest received in respect
thereof), net of all out-of-pocket costs and expenses; provided, that the
Borrower agrees to promptly return any such refund (plus interest) to such
Lender in the event such Lender is required to repay such refund to the relevant
taxing authority. Any such Lender shall provide the Borrower with a copy of any
notice of assessment from the relevant taxing authority (redacting any unrelated
confidential information contained therein) requiring repayment of such refund.
Nothing contained herein shall impose an obligation on any Lender to apply for
any such refund.
(d) Reference is hereby made to the provisions of section 2.10(d) for
certain limitations upon the rights of a Lender under this section.
SECTION 6. CONDITIONS PRECEDENT.
6.1. Conditions Precedent at Closing Date. The obligation of the Lenders
to make Loans, and of any Letter of Credit Issuer to issue Letters of Credit, is
subject to the satisfaction of each of the following conditions on the Closing
Date:
(a) Effectiveness; Notes. On or prior to the Closing Date, (i) the
Effective Date shall have occurred and (ii) there shall have been
delivered to the Administrative Agent for the account of each Lender each
appropriate Note executed by the Borrower, in each case, in the amount,
maturity and as otherwise provided herein.
(b) Fees, etc. The Borrower shall have paid or caused to be paid all
fees required to be paid by it on or prior to such date pursuant to
section 4.1 hereof and all reasonable fees and expenses of the
Administrative Agent and of special counsel to the Administrative Agent
which have been invoiced on or prior to such date in connection with the
preparation, execution and delivery of this Agreement and the other Credit
Documents and the consummation of the transactions contemplated hereby and
thereby.
(c) Other Credit Documents. The Credit Parties named therein shall
have duly executed and delivered and there shall be in full force and
effect, and original counterparts shall have been delivered to the
Administrative Agent, in sufficient quantities for the Agents and the
Lenders, of, (i) the Subsidiary Guaranty (as modified, amended or
supplemented from time to time in accordance with the terms thereof and
hereof, the "Subsidiary Guaranty"), substantially in the form attached
hereto as Exhibit C-1, (ii) the Security Agreement (as modified, amended
or supplemented from time to time in accordance with the terms thereof and
hereof, the "Security Agreement"), substantially in the form attached
hereto as Exhibit C-2; (iii) the Collateral Assignment of Patents and
Security Agreement (as modified, amended or supplemented from time to time
in accordance with the terms thereof and hereof, the "Collateral
Assignment of Patents"), substantially in the form attached hereto as
Exhibit C-3; (iv) the Collateral Assignment of Trademarks and Security
Agreement (as modified, amended or supplemented from time to time in
accordance with the terms thereof and hereof, the "Collateral Assignment
of Trademarks"), substantially in the form attached hereto as Exhibit C-4;
(v) the Pledge Agreement (as modified, amended or supplemented from time
to time in accordance with the terms thereof and hereof, the "Pledge
Agreement"), substantially in the form attached hereto as Exhibit C-5; and
(vi) the mortgages, deeds of trust and similar instruments (as modified,
amended or supplemented from time to time in accordance with the terms
thereof and hereof, the "Closing Date Mortgages"), substantially in the
respective forms attached hereto as Exhibits C-6 through C-11, encumbering
the following properties:
(1) 166,100 square foot division office and manufacturing
facility and related property owned by the Borrower and located in
Boston, Massachusetts;
(2) 126,000 square foot division office and manufacturing
facility and related property owned by the Borrower and located in
Canton, Massachusetts;
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(3) 70,000 square foot manufacturing facility and related
property owned by the Borrower and located in Kent, Ohio;
(4) 72,000 square foot and manufacturing facility and related
property owned by the Borrower and located in Orwell, Ohio;
(5) 196,000 square foot manufacturing facility and related
property owned by the Borrower and located in Portland, Indiana; and
(6) 7,500 square foot corporate office and related property
owned by the Borrower and located in Warren, Ohio.
(d) Corporate Resolutions and Approvals. The Administrative Agent
shall have received, in sufficient quantity for the Administrative Agent
and the Lenders, certified copies of the resolutions of the Board of
Directors of the Borrower and each other Credit Party, approving the
Credit Documents to which the Borrower or any such other Credit Party, as
the case may be, is or may become a party, and of all documents evidencing
other necessary corporate action and governmental approvals, if any, with
respect to the execution, delivery and performance by the Borrower or any
such other Credit Party of the Credit Documents to which it is or may
become a party.
(e) Incumbency Certificates. The Administrative Agent shall have
received, in sufficient quantity for the Administrative Agent and the
Lenders, a certificate of the Secretary or an Assistant Secretary of the
Borrower and of each other Credit Party, certifying the names and true
signatures of the officers of the Borrower or such other Credit Party, as
the case may be, authorized to sign the Credit Documents to which the
Borrower or such other Credit Party is a party and any other documents to
which the Borrower or any such other Credit Party is a party which may be
executed and delivered in connection herewith.
(f) Opinion of Counsel. On the Closing Date, the Administrative
Agent shall have received an opinion, addressed to the Administrative
Agent and each of the Lenders and dated the Closing Date, from Baker &
Hostetler LLP, special counsel to the Borrower, substantially in the form
of Exhibit F hereto and covering such other matters incident to the
transactions contemplated hereby as the Administrative Agent may
reasonably request, such opinion to be in form and substance satisfactory
to the Administrative Agent.
(g) Existing Credit Agreement. Contemporaneously with the Closing
Date, the Borrower shall have terminated the commitments of the lenders
under its Credit Agreement, dated as of August 4, 1998, as amended,
prepaid any borrowings thereunder, and if required in connection with such
termination, made effective provision for any letters of credit issued
thereunder to become Existing Letters of Credit deemed issued hereunder.
(h) Recordation of Security Documents, Delivery of Collateral,
Taxes, etc. The Security Documents (or proper notices or financing
statements in respect thereof) shall have been duly recorded, published
and filed in such manner and in such places as is required by law to
establish, perfect, preserve and protect the rights and security interests
of the parties thereto and their respective successors and assigns, all
collateral items required to be physically delivered to the Collateral
Agent thereunder shall have been so delivered, accompanied by any
appropriate instruments of transfer, and all taxes, fees and other charges
then due and payable in connection with the execution, delivery,
recording, publishing and filing of such instruments and the issue and
delivery of the Notes shall have been paid in full.
(i) Evidence of Insurance. The Collateral Agent shall have received
certificates of insurance and other evidence, satisfactory to it, of
compliance with the insurance requirements of this Agreement and the
Security Documents.
(j) Search Reports. The Administrative Agent shall have received
completed requests for information on Form UCC-11, or search reports from
one or more commercial search firms acceptable to
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the Administrative Agent, listing all of the effective financing
statements filed against any Credit Party which is a party to any Security
Document in any jurisdiction in which such Credit Party maintains an
office or in which any Collateral of such Credit Party is located,
together with copies of such financing statements.
(k) Title Policies and Other Documents Relating to Closing Date
Mortgaged Properties. As to each Real Property subjected to the Lien of a
Closing Date Mortgage (a "Closing Date Mortgaged Property"), the
Collateral Agent shall have received:
(i) an American Land Title Association ( ALTA) mortgagee title
insurance policy or policies, or unconditional commitments therefor
(a "Closing Date Mortgage Policy") issued by a title insurance
company reasonably satisfactory to the Collateral Agent (a "Title
Company"), in an amount not less than the amount reasonably required
therefor by the Administrative Agent and the Syndication Agent
(taking into account the estimated value of the property involved),
insuring fee simple title to, or a valid leasehold interest in, such
Closing Date Mortgaged Property vested in the Borrower and assuring
the Collateral Agent that the applicable Closing Date Mortgage
creates a valid a and enforceable first priority mortgage lien on
the respective Closing Date Mortgaged Property encumbered thereby,
subject only to a standard survey exception, which Closing Date
Mortgage Policy (1) shall include an endorsement for mechanics'
liens, for revolving, "variable rate" and future advances under this
Agreement and for any other matters reasonably requested by any
Agent and (2) shall provide for affirmative insurance and such
reinsurance as any Agent may reasonably request, all of the
foregoing in form and substance reasonably satisfactory to the
Administrative Agent and the Syndication Agent;
(ii) a title report issued by the Title Company with respect
thereto, dated not more than 30 days prior to the Closing Date and
satisfactory in form and substance to the Administrative Agent and
the Syndication Agent;
(iii) copies of all recorded documents listed as exceptions to
title or otherwise referred to in the Closing Date Mortgage Policy
or in such title report;
(iv) evidence, which may be in the form of a letter from the
Title Company or from an insurance broker, surveyor or engineer, as
to whether (1) such Closing Date Mortgaged Property is a Flood
Hazard Property, and (2) the community in which such Flood Hazard
Property is located is participating in the National Flood Insurance
Program, and if such Closing Date Mortgaged Property is a Flood
Hazard Property, evidence that the Borrower has obtained flood
insurance in respect of such Flood Hazard Property to the extent
required under the applicable regulations of the Board of Governors
of the Federal Reserve System;
(v) a certificate of the Borrower identifying any Phase I,
Phase II or other environmental report received in draft or final
form by any Credit Party during the two year period prior to the
Closing Date with respect to such Closing Date Mortgaged Property
and/or the operations conducted therefrom, or stating that no such
draft or final form reports have been requested or received by any
Credit Party (or its counsel), together with true and correct copies
of all such environmental reports so listed (in draft form, if not
finalized); and all such environmental reports shall be satisfactory
in form and substance to the Administrative Agent and the
Syndication Agent; and
(vi) an opinion of local counsel admitted to practice in the
jurisdiction in which such Closing Date Mortgaged Property is
located, addressed to the Collateral Agent and authorizing the other
Agents and the Lenders and their successors, assigns and
participants to rely thereon, satisfactory in form and substance to
the Administrative Agent and the Syndication Agent, as to the
validity and effectiveness of such Closing Date Mortgage as a lien
on the Closing Date Mortgaged Property encumbered thereby, and
covering such other matters of law in connection with the
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execution, delivery, recording and enforcement of such Closing Date
Mortgage as any Agent may reasonably request.
In addition, the Borrower shall have paid or caused to be paid all costs
and expenses payable in connection with all of such actions, including but
not limited to (x) all mortgage, intangibles or similar taxes or fees,
however characterized, payable in respect of this Agreement, the execution
and delivery of the Notes, any of the Closing Date Mortgages or any of the
other Credit Documents or the recording of any of the same or any other
documents related thereto; and (y) all expenses and premiums of the Title
Company in connection with the issuance of such policy or policies of
title insurance and to all costs and expenses required for the recording
of the Closing Date Mortgages or any other Credit Documents or any other
related documents in the appropriate public records. If and to the extent
that any of the requirements contained in this section 6.1(k) is not
satisfied at and as of the Closing Date and the Lenders nevertheless
actually fund one or more Borrowings on the Closing Date, the Borrower
shall have delivered to the Administrative Agent its irrevocable
undertaking to cause the requirements contained in this section 6.1(k) to
be satisfied within 60 days following the Closing Date.
(l) Hi-Stat Acquisition. Contemporaneously with the Closing Date,
the Borrower shall have completed the acquisition of Hi-Stat, as
contemplated by the Hi-State Acquisition Documents, and prepaid or caused
to be prepaid all indebtedness for borrowed money and debt securities of
Hi-Stat and it Subsidiaries (other than intercompany Indebtedness). There
shall have been no material change in or modification or waiver of any of
the terms, conditions or provisions of any of the Hi-Stat Acquisition
Documents, and there shall have been no material matters disclosed in any
supplemental disclosure materials relating to any of the Hi-Stat
Acquisition Documents, which shall have been made, become effective or
been furnished, subsequent to the date the Hi-Stat Acquisition Documents
were furnished to the Agents and the Lenders pursuant to section 7.21
hereof, which is not acceptable to any Agent or Lender, in its sole
discretion. Each of the conditions precedent to the obligations of the
Borrower to consummate the Hi-Stat Acquisition which is contained in any
of the Hi-Stat Acquisition Documents shall have been fulfilled (without
any material waiver thereto not acceptable to any Agent or Lender as
provided above) to the satisfaction of the Administrative Agent and the
Syndication Agent and each of the Lenders. Without limiting the generality
of the foregoing, the aggregate purchase price consideration payable by
the Borrower for the Hi-Stat Acquisition shall not exceed $362,000,000
(less the amount of Net Company Debt, as defined in the Hi-Stat Stock
Purchase Agreement), subject to adjustment as provided in section 2.2 and
other applicable provisions of the Hi-Stat Stock Purchase Agreement, and
the Hi-Stat Acquisition shall have been consummated in compliance with the
terms of the Hi-Stat Acquisition Documents and all applicable laws, and
all material governmental and third party approvals in connection with the
Hi-Stat Acquisition contemplated by the Hi-Stat Acquisition Documents and
otherwise referred to herein or therein shall have been obtained and
remain in effect, and all applicable waiting periods under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
regulations thereunder, and under any other applicable laws or
regulations, shall have expired without any action being taken by any
competent authority (including any court having jurisdiction) which
restrains or prevents such transactions or imposes, in the judgment of the
Required Lenders, materially adverse conditions upon the consummation of
the Hi-Stat Acquisition or the continued operation of the Borrower's
businesses or the business to be acquired by the Borrower in the Hi-Stat
Acquisition. Each of the Administrative Agent and the Syndication Agent
and the Lenders shall be satisfied, in its sole discretion, with (i) such
"due diligence" review as it shall undertake with regard to the
properties, business, operations and prospects of the business to be
acquired, and the liabilities to be assumed (or to which the Borrower and
its Subsidiaries will be subject), in the Hi-Stat Acquisition, the
projected cost savings which the Borrower estimates it can realistically
achieve for the acquired business, and Y2K computer compliance matters
associated with the assimilation and operation of the acquired business,
(ii) the terms of the H-Stat Acquisition Documents, (iii) all disclosure
documentation referred to in the Hi-Stat Acquisition Documents, and (iv)
any and all environmental studies and other reports and evaluations which
the Borrower shall have obtained in connection with the Hi-Stat
Acquisition and provided to the Agents and the Lenders.
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(m) Solvency Certificate. The Administrative Agent shall have
received, in sufficient quantities for the Lenders, a duly executed
solvency certificates substantially in the form attached hereto as Exhibit
D-2, and such certificate shall be satisfactory in form and substance to
each of the Lenders.
(n) Borrowing Base Certificate; Unused Availability. The Borrower
shall have delivered to the Administrative Agent, in sufficient quantities
for the Lenders, a Borrowing Base Certificate as of a recent date. After
giving effect to the Hi-Stat Acquisition and the use of the proceeds of
the initial Borrowings hereunder, the Unutilized Total Revolving
Commitment and the Borrowing Base shall be sufficient to permit at least
$25,000,000 of additional Revolving Loans to be incurred hereunder.
(o) No Material Adverse Change in Loan Syndication or Capital
Markets. During the period from the Effective Date to the Closing Date,
there shall not have occurred a material disruption or material adverse
change in financial, banking, loan syndication or capital market
conditions generally or in the market for new issuance of high yield
securities or syndicated leveraged loans which, in the Lead Arrangers'
sole judgment, could be expected to materially adversely affect the
syndication of portions or all of the Facilities to additional Lenders.
(p) Ratings from Rating Agencies. The Borrower shall have obtained
rating letters from Moody's and S&P containing ratings on the Revolving
Facility, the Term A Facility and the Term B Facility which are acceptable
to the Lead Arrangers in their sole discretion.
(q) Proceedings and Documents. All corporate and other proceedings
and all documents incidental to the transactions contemplated hereby shall
be satisfactory in substance and form to the Administrative Agent and the
Lenders and the Administrative Agent and its special counsel and the
Lenders shall have received all such counterpart originals or certified or
other copies of such documents as the Administrative Agent or its special
counsel or any Lender may reasonably request.
6.2. Conditions Precedent to All Credit Events. The obligations of the
Lenders to make each Loan and/or of a Letter of Credit Issuer to issue each
Letter of Credit is subject, at the time thereof, to the satisfaction of the
following conditions:
(a) Notice of Borrowing, etc. The Administrative Agent shall have
received a Notice of Borrowing meeting the requirements of section 2.3
with respect to the incurrence of Loans or a Letter of Credit Request
meeting the requirement of section 3.2 with respect to the issuance of a
Letter of Credit.
(b) No Default; Representations and Warranties. At the time of each
Credit Event and also after giving effect thereto, (i) there shall exist
no Default or Event of Default and (ii) all representations and warranties
of the Credit Parties contained herein or in the other Credit Documents
shall be true and correct in all material respects with the same effect as
though such representations and warranties had been made on and as of the
date of such Credit Event, except to the extent that such representations
and warranties expressly relate to an earlier specified date, in which
case such representations and warranties shall have been true and correct
in all material respects as of the date when made.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrower to each of the Lenders that all of
the applicable conditions specified in section 6.1 and/or 6.2, as the case may
be, have been satisfied as of the times referred to in sections 6.1 and 6.2. All
of the certificates, legal opinions and other documents and papers referred to
in this section 6, unless otherwise specified, shall be delivered to the
Administrative Agent for the account of each of the Agents and the Lenders and,
except for the Notes, in sufficient counterparts for each of the Agents and the
Lenders, and the Administrative Agent will promptly distribute to the other
Agents and the Lenders their respective Notes and the copies of such other
certificates, legal opinions and documents.
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SECTION 7. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lenders to enter into this Agreement and to make
the Loans, and/or to issue and/or to participate in the Letters of Credit
provided for herein, the Borrower makes the following representations and
warranties to, and agreements with, the Lenders, all of which shall survive the
execution and delivery of this Agreement and each Credit Event:
7.1. Corporate Status, etc. Each of the Borrower and its Subsidiaries (i)
is a duly organized or formed and validly existing corporation, partnership or
limited liability company, as the case may be, in good standing under the laws
of the jurisdiction of its formation and has the corporate, partnership or
limited liability company power and authority, as applicable, to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage, and (ii) has duly qualified and is authorized to
do business in all jurisdictions where it is required to be so qualified except
where the failure to be so qualified would not have a Material Adverse Effect.
7.2. Subsidiaries. Annex I hereto lists, as of the date hereof, each
Subsidiary of the Borrower (and the direct and indirect ownership interest of
the Borrower therein).
7.3. Corporate Power and Authority, etc. Each Credit Party has the
corporate or other organizational power and authority to execute, deliver and
carry out the terms and provisions of the Credit Documents to which it is party
and has taken all necessary corporate or other organizational action to
authorize the execution, delivery and performance of the Credit Documents and
the Hi-Stat Acquisition Documents to which it is party. Each Credit Party has
duly executed and delivered each Credit Document and Hi-Stat Acquisition
Document to which it is party and each Credit Document and Hi-Stat Acquisition
Document to which it is party constitutes the legal, valid and binding agreement
or obligation of such Credit Party enforceable in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).
7.4. No Violation. Neither the execution, delivery and performance by any
Credit Party of the Credit Documents or Hi-Stat Acquisition Documents to which
it is party nor compliance with the terms and provisions thereof (i) will
contravene any provision of any law, statute, rule, regulation, order, writ,
injunction or decree of any court or governmental instrumentality applicable to
such Credit Party or its properties and assets, (ii) will conflict with or
result in any breach of, any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien (other than the Liens created
pursuant to the Security Documents) upon any of the property or assets of such
Credit Party pursuant to the terms of any promissory note, bond, debenture,
indenture, mortgage, deed of trust, credit or loan agreement, or any other
material agreement or other instrument, to which such Credit Party is a party or
by which it or any of its property or assets are bound or to which it may be
subject, or (iii) will violate any provision of the certificate or articles of
incorporation, code of regulations or by-laws, or other charter documents of
such Credit Party.
7.5. Governmental Approvals. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required as a
condition to (i) the execution, delivery and performance by any Credit Party of
any Credit Document or Hi-Stat Acquisition Document to which it is a party, or
(ii) the legality, validity, binding effect or enforceability of any Credit
Document to which any Credit Party is a party, except the filing and recording
of financing statements and other documents necessary in order to perfect the
Liens created by the Security Documents, and the filing of required information
under and the expiration of any applicable waiting periods provided under, the
Hart-Scott- Rodino Antitrust Improvements Act of 1976, as amended, and the
regulations thereunder.
7.6. Litigation. There are no actions, suits or proceedings pending or,
to, the knowledge of the Borrower, threatened with respect to the Borrower or
any of its Subsidiaries (i) that have, or could reasonably be expected to have,
a Material Adverse Effect, or (ii) which question the validity or enforceability
of any of the Credit
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Documents, or of any action to be taken by the Borrower or any of the other
Credit Parties pursuant to any of the Credit Documents.
7.7. Use of Proceeds; Margin Regulations. (a) The proceeds of all Term
Loans shall be utilized to effect the Hi-Stat Acquisition and the proceeds of
all other Loans and Credit Events shall be utilized for lawful purposes not
inconsistent with the requirements of this Agreement.
(b) No part of the proceeds of any Credit Event will be used directly or
indirectly to purchase or carry Margin Stock, or to extend credit to others for
the purpose of purchasing or carrying any Margin Stock, in violation of any of
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System. The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying any Margin Stock. At no time would
more than 25% of the value of the assets of the Borrower or of the Borrower and
its consolidated Subsidiaries that are subject to any "arrangement" (as such
term is used in section 221.2(g) of such Regulation U) hereunder be represented
by Margin Stock.
7.8. Financial Statements, etc. (a) The Borrower has furnished to the
Lenders and the Agents complete and correct copies of (i) the audited
consolidated balance sheets of the Borrower and its consolidated subsidiaries as
of December 31, 1997 and December 31, 1996 and the related audited consolidated
statements of income, shareholders' equity, and cash flows of the Borrower and
its consolidated subsidiaries for the fiscal years then ended, accompanied by
the report thereon of Arthur Andersen LLP; (ii) the condensed consolidated
balance sheets of the Borrower and its consolidated subsidiaries as of September
30, 1998, and the related condensed consolidated statements of income and of
cash flows of the Borrower and its consolidated subsidiaries for the three
fiscal quarter period then ended, as included in the Borrower's Report on Form
10-Q filed with the SEC; (iii) the audited consolidated balance sheets of
Hi-Stat and its consolidated subsidiaries as of December 31, 1997 and December
31, 1996 and the related audited consolidated statements of income,
shareholders' equity, and cash flows of Hi-Stat and its consolidated
subsidiaries for the fiscal years then ended, accompanied by the report thereon
of its independent public accountants; and (iv) the condensed consolidated
balance sheets of Hi-Stat and its consolidated subsidiaries as of September 30,
1998, and the related condensed consolidated statements of income and of cash
flows of Hi-Stat and its consolidated subsidiaries for the three fiscal quarter
period then ended. All such financial statements have been prepared in
accordance with GAAP, consistently applied (except as stated therein), and
fairly present, in all material respects, the financial position of the entities
described in such financial statements as of the respective dates indicated and
the consolidated results of their operations and cash flows for the respective
periods indicated, subject in the case of any such financial statements which
are unaudited, to normal audit adjustments, none of which will involve a
Material Adverse Effect. The Borrower and its Subsidiaries did not have, as of
the date of the latest financial statements referred to above, and will not have
as of the Closing Date after giving effect to the consummation of the Hi-Stat
Acquisition and the incurrence of Loans hereunder, any material or significant
contingent liability or liability for taxes, long-term lease or unusual forward
or long-term commitment that is not reflected in the foregoing financial
statements or the notes thereto in accordance with GAAP and which in any such
case is material in relation to the business, operations, properties, assets or
condition (financial or otherwise) of the Borrower and its Subsidiaries
(including Hi-Stat and its Subsidiaries).
(b) The Borrower has received consideration which is the reasonable
equivalent value of the obligations and liabilities that the Borrower has
incurred to the Administrative Agent and the Lenders. The Borrower now has
capital sufficient to carry on its business and transactions and all business
and transactions in which it is about to engage and is now solvent and able to
pay its debts as they mature and the Borrower, as of the Closing Date, owns
property having a value, both at fair valuation and at present fair salable
value, greater than the amount required to pay the Borrower's debts; and the
Borrower is not entering into the Credit Documents with the intent to hinder,
delay or defraud its creditors. For purposes of this section 7.8(b), "debt"
means any liability on a claim, and "claim" means (x) right to payment whether
or not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured; or (y) right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.
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(c) The Borrower has delivered to the Lenders prior to the execution and
delivery of this Agreement a copy of the Borrower's Report on Form 10-K as filed
(without Exhibits) with the SEC for its fiscal year ended December 31, 1997,
which contains a general description of the business and affairs of the Borrower
and its Subsidiaries (before giving effect to the Hi-Stat Acquisition).
(d) The Borrower has delivered or caused to be delivered to the Lenders
prior to the execution and delivery of this Agreement financial projections
prepared by management of the Borrower for the Borrower and its Subsidiaries and
with respect to the Hi-Stat Acquisition (the "Financial Projections"). The
Financial Projections were prepared on behalf of the Borrower in good faith
after taking into account historical levels of business activity of the Borrower
and its Subsidiaries, historical financial information with respect to the
properties and business to be acquired pursuant to the Hi-Stat Acquisition, as
supplied by the seller, known trends, including general economic trends, and all
other information, assumptions and estimates considered by management of the
Borrower and its Subsidiaries to be pertinent thereto, taking into account the
fact that such management is not intimately familiar with the properties and
business acquired pursuant to the Hi-Stat Acquisition; provided, that no
representation or warranty is made as to the impact of future general economic
conditions or as to whether the Borrower's projected consolidated results as set
forth in the Financial Projections will actually be realized. No facts are known
to the Borrower at the date hereof which, if reflected in the Financial
Projections, would result in a material adverse change in the assets,
liabilities, results of operations or cash flows reflected therein.
7.9. No Material Adverse Change. Since December 31, 1997, there has been
no change in the condition, business, affairs or condition (financial or
otherwise) of the Borrower and its Subsidiaries taken as a whole, or their
properties and assets considered as an entirety, except for (i) changes incident
to the completion of the Hi-Stat Acquisition, as contemplated hereby, including
the incurrence of the additional Indebtedness contemplated hereby to be incurred
to finance and support the Hi-Stat Acquisition, and (ii) other changes none of
which, individually or in the aggregate, has had or could reasonably be expected
to have, a Material Adverse Effect.
7.10. Tax Returns and Payments. Each of the Borrower and each of its
Subsidiaries has filed all federal income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it which have become due, other than
those not yet delinquent and except for those contested in good faith. The
Borrower and each of its Subsidiaries has established on its books such charges,
accruals and reserves in respect of taxes, assessments, fees and other
governmental charges for all fiscal periods as are required by GAAP. The
Borrower knows of no proposed assessment for additional federal, foreign or
state taxes for any period, or of any basis therefor, which, individually or in
the aggregate, taking into account such charges, accruals and reserves in
respect thereof as the Borrower and its Subsidiaries have made, could reasonably
be expected to have a Material Adverse Effect.
7.11. Title to Properties, etc. The Borrower and each of its Subsidiaries
has good and marketable title, in the case of real property, and good title (or
valid Leaseholds, in the case of any leased property), in the case of all other
property, to all of its properties and assets free and clear of Liens other than
Liens permitted by section 9.3. The interests of the Borrower and each of its
Subsidiaries in the properties reflected in the most recent balance sheet
referred to in section 7.8, taken as a whole, were sufficient, in the judgment
of the Borrower, as of the date of such balance sheet for purposes of the
ownership and operation of the businesses conducted by the Borrower and such
Subsidiaries.
7.12. Lawful Operations, etc. Except for known situations or incidents
which are reserved for on the most recent consolidated balance sheet referred to
in section 7.8 or which, if not so reserved, could not reasonably be expected to
have a Material Adverse Effect, the Borrower and each of its Subsidiaries is in
full compliance with all material requirements imposed by law, whether federal
or state, including (without limitation) Environmental Laws and zoning
ordinances.
7.13. Environmental Matters. (a) The Borrower and each of its Subsidiaries
is in compliance with all Environmental Laws governing its business, except to
the extent that any such failure to comply (together with any resulting
penalties, fines or forfeitures) would not reasonably be expected to have a
Material Adverse Effect. All licenses, permits, registrations or approvals
required for the business of the Borrower and each of its Subsidiaries
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under any Environmental Law have been secured and the Borrower and each of its
Subsidiaries is in substantial compliance therewith, except for such licenses,
permits, registrations or approvals the failure to secure or to comply therewith
is not reasonably likely to have a Material Adverse Effect. Neither the Borrower
nor any of its Subsidiaries has received written notice, or otherwise knows,
that it is in any respect in noncompliance with, breach of or default under any
Environmental Laws, and no event has occurred and is continuing which, with the
passage of time or the giving of notice or both, would constitute noncompliance,
breach of or default thereunder, except in each such case, such noncompliance,
breaches or defaults as would not reasonably be expected to, in the aggregate,
have a Material Adverse Effect. There are no Environmental Claims pending or, to
the best knowledge of the Borrower, threatened wherein an unfavorable decision,
ruling or finding would reasonably be expected to have a Material Adverse
Effect.
(b) Hazardous Materials have not at any time been (i) generated, used,
treated or stored on, or transported to or from, any Real Property of the
Borrower or any of its Subsidiaries or (ii) released on any such Real Property,
in each case where such occurrence or event is not in compliance with
Environmental Laws and is reasonably likely to have a Material Adverse Effect.
7.14. Compliance with ERISA. Compliance by the Borrower with the
provisions hereof and Credit Events contemplated hereby will not involve any
prohibited transaction within the meaning of ERISA or section 4975 of the Code.
The Borrower and each of its Subsidiaries, (i) has fulfilled all obligations
under minimum funding standards of ERISA and the Code with respect to each Plan
that is not a Multiemployer Plan or a Multiple Employer Plan, (ii) has satisfied
all respective contribution obligations in respect of each Multiemployer Plan
and each Multiple Employer Plan, (iii) is in compliance in all material respects
with all other applicable provisions of ERISA and the Code with respect to each
Plan, each Multiemployer Plan and each Multiple Employer Plan, and (iv) has not
incurred any liability under the Title IV of ERISA to the PBGC with respect to
any Plan, any Multiemployer Plan, any Multiple Employer Plan, or any trust
established thereunder. No Plan or trust created thereunder has been terminated,
and there have been no Reportable Events, with respect to any Plan or trust
created thereunder or with respect to any Multiemployer Plan or Multiple
Employer Plan, which termination or Reportable Event will or could result in the
termination of such Plan, Multiemployer Plan or Multiple Employer Plan and give
rise to a material liability of the Borrower or any ERISA Affiliate in respect
thereof. Neither the Borrower nor any ERISA Affiliate is at the date hereof, or
has been at any time within the two years preceding the date hereof, an employer
required to contribute to any Multiemployer Plan or Multiple Employer Plan, or a
"contributing sponsor" (as such term is defined in section 4001 of ERISA) in any
Multiemployer Plan or Multiple Employer Plan. Neither the Borrower nor any ERISA
Affiliate has any contingent liability with respect to any post-retirement
"welfare benefit plan" (as such term is defined in ERISA) except as has been
disclosed to the Lenders in writing.
7.15. Intellectual Property, etc. The Borrower and each of its
Subsidiaries has obtained or has the right to use all material patents,
trademarks, service marks, trade names, copyrights, licenses and other rights
with respect to the foregoing necessary for the present and planned future
conduct of its business, without any known conflict with the rights of others,
except for such patents, trademarks, service marks, trade names, copyrights,
licenses and rights, the loss of which, and such conflicts, which in any such
case individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect.
7.16. Investment Company Act, etc. Neither the Borrower nor any of its
Subsidiaries is subject to regulation with respect to the creation or incurrence
of Indebtedness under the Investment Borrower Act of 1940, as amended, the
Interstate Commerce Act, as amended, the Federal Power Act, as amended, the
Public Utility Holding Company Act of 1935, as amended, or any applicable state
public utility law.
7.17. Year 2000 Computer Matters. The Borrower and its Subsidiaries have
reviewed the areas within their business and operations which could be adversely
affected by, and have developed or are developing a program to address on a
timely basis the "Year 2000 Computer Issue" (that is, the risk that computer
applications used by the Borrower and its Subsidiaries may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date after December 31, 1999). Based on such review and
program, the Borrower reasonably believes that the "Year 2000 Computer Issue" is
not reasonably likely to have a Material Adverse Effect.
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7.18. Existing Indebtedness. Annex II sets forth a true and complete list,
as of the date or dates set forth therein, of all Indebtedness of the Borrower
and each of its Subsidiaries, on a consolidated basis, which (i) has an
outstanding principal amount of at least $1,000,000, or may be incurred pursuant
to existing commitments or lines of credit, or (ii) is secured by any Lien on
any property of the Borrower or any Subsidiary, and which will be outstanding on
the Closing Date after giving effect to any Borrowing hereunder which is
expected to be made on the Closing Date, other than the Indebtedness created
under the Credit Documents (all such Indebtedness, whether or not in a principal
amount meeting such threshold and required to be so listed on Annex II, herein
the "Existing Indebtedness"). The Borrower has provided to the Administrative
Agent prior to the date of execution hereof true and complete copies (or summary
descriptions) of all agreements and instruments governing the Indebtedness
listed on Annex II (the "Existing Indebtedness Agreements").
7.19. Burdensome Contracts; Labor Relations. Neither the Borrower nor any
of its Subsidiaries (i) is subject to any burdensome contract, agreement,
corporate restriction, judgment, decree or order, (ii) is a party to any labor
dispute affecting any bargaining unit or other group of employees generally,
(iii) is subject to any material strike, slow down, workout or other concerted
interruptions of operations by employees of the Borrower or any Subsidiary,
whether or not relating to any labor contracts, (iv) is subject to any
significant pending or, to the knowledge of the Borrower, threatened, unfair
labor practice complaint, before the National Labor Relations Board, and (v) is
subject to any significant pending or, to the knowledge of the Borrower,
threatened, grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement, (vi) is subject to any significant
pending or, to the knowledge of the Borrower, threatened, significant strike,
labor dispute, slowdown or stoppage, or (vii) is, to the knowledge of the
Borrower, involved or subject to any union representation organizing or
certification matter with respect to the employees of the Borrower or any of its
Subsidiaries, except (with respect to any matter specified in any of the above
clauses), for such matters as, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
7.20. Security Interests. Once executed and delivered, and until
terminated in accordance with the terms thereof, each of the Security Documents
creates, as security for the obligations purported to be secured thereby, a
valid and enforceable perfected security interest in and Lien on all of the
Collateral subject thereto from time to time, in favor of the Collateral Agent
for the benefit of the Secured Creditors referred to in the Security Documents,
superior to and prior to the rights of all third persons and subject to no other
Liens, except that the Collateral under the Security Documents may be subject to
Permitted Liens. No filings or recordings are required in order to perfect the
security interests created under any Security Document except for filings or
recordings required in connection with any such Security Document which shall
have been made, or for which satisfactory arrangements have been made, upon or
prior to the execution and delivery thereof. All recording, stamp, intangible or
other similar taxes required to be paid by any person under applicable legal
requirements or other laws applicable to the property encumbered by the Security
Documents in connection with the execution, delivery, recordation, filing,
registration, perfection or enforcement thereof have been paid.
7.21. Hi-Stat Acquisition Documents, etc. The Borrower has delivered to
the Agents and the Lenders prior to the Effective Date true, correct and
complete copies of all of the Hi-Stat Acquisition Documents. The Hi-Stat
Acquisition Documents constitute all of the agreements, disclosure schedules,
side letters and other documents relating to the acquisition by the Borrower of
Hi-Stat from the current stockholders of Hi-Stat (the "Hi-Stat Acquisition") and
any related arrangements between the Borrower or any of its Subsidiaries and any
of such stockholders or any executive or other officers of Hi-Stat or any of its
Subsidiaries. Each Hi-Stat Acquisition Document which has been executed and
delivered as the Effective Date is, and each Hi-Stat Acquisition Document which
is executed and delivered at the time of the consummation of the Hi-Stat
Acquisition will be at such time, the legal, valid and binding agreement or
obligation of each party thereto, enforceable in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law). At and as of
the Closing Date, (i) to the best of the Borrower's knowledge, all of the
representations and warranties contained in the Hi-Stat Acquisition Documents or
made in any other certificate or other document delivered in connection
therewith will be true and correct in all material respects, (ii) all of the
terms, covenants, agreements and conditions contained therein required to be
performed or complied with at or prior to such time will have been duly
performed or complied with in all material respects, (iii) all material consents
and approvals
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of, and filings and registrations with, and all other actions in respect of, all
governmental agencies, authorities or instrumentalities required to be obtained,
given, filed or taken by any party to any of the Hi-Stat Acquisition Documents
or any of its Subsidiaries in order to make or consummate each component of the
transactions contemplated thereby will have been obtained, given, filed or taken
and are or will be in full force and effect (or effective judicial relief with
respect thereto will have been obtained) except for filings, consents or notices
not required by federal or state securities laws to be made at such time, which
filings, consents or notices have been or will be made during the period in
which they are required to be made. and (iv) each component of such transactions
shall have been consummated in accordance, in all material respects, with the
applicable Hi-Stat Acquisition Documents and in compliance, in all material
respects, with all applicable laws.
7.22. True and Complete Disclosure. 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 the Administrative Agent or any Lender
for purposes of or in connection with this Agreement or any transaction
contemplated herein, other than the Financial Projections (as to which
representations are made only as provided in section 7.8), is, and all other
such factual information (taken as a whole) hereafter furnished by or on behalf
of such person in writing to any Lender will be, true and accurate 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, except that any such
future information consisting of financial projections prepared by the Borrower
is only represented herein as being based on good faith estimates and
assumptions believed by such persons 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 materially from the projected results.
SECTION 8. AFFIRMATIVE COVENANTS.
The Borrower hereby covenants and agrees that on the Effective Date and
thereafter so long as this Agreement is in effect and until such time as the
Total Commitment has been terminated, no Notes remain outstanding and the Loans,
together with interest, Fees and all other Obligations incurred hereunder and
under the other Credit Documents, have been paid in full:
8.1. Reporting Requirements. The Borrower will furnish to each Lender and
the Administrative Agent:
(a) Annual Financial Statements. As soon as available and in any
event within 90 days after the close of each fiscal year of the Borrower,
the consolidated and consolidating balance sheets of the Borrower and its
consolidated Subsidiaries as at the end of such fiscal year and the
related consolidated and consolidating statements of income, of
stockholders' equity and of cash flows for such fiscal year, in each case
setting forth comparative figures for the preceding fiscal year, all in
reasonable detail and accompanied by the opinion with respect to such
consolidated financial statements of independent public accountants of
recognized national standing selected by the Borrower, which opinion shall
be unqualified and shall (i) state that such accountants audited such
consolidated financial statements in accordance with generally accepted
auditing standards, that such accountants believe that such audit provides
a reasonable basis for their opinion, and that in their opinion such
consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Borrower and its
consolidated subsidiaries as at the end of such fiscal year and the
consolidated results of their operations and cash flows for such fiscal
year in conformity with generally accepted accounting principles, or (ii)
contain such statements as are customarily included in unqualified reports
of independent accountants in conformity with the recommendations and
requirements of the American Institute of Certified Public Accountants (or
any successor organization). Any such consolidating financial statements
may at the Borrower's option exclude, or present as a group, any
Subsidiary or Subsidiaries other than Hi-Stat.
(b) Quarterly Financial Statements. As soon as available and in any
event within 45 days after the close of each of the quarterly accounting
periods in each fiscal year of the Borrower, the unaudited consolidated
and consolidating balance sheets of the Borrower and its consolidated
Subsidiaries as at the end
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of such quarterly period and the related unaudited consolidated and
consolidating statements of income and of cash flows for such quarterly
period and/or for the fiscal year to date, and setting forth, in the case
of such unaudited consolidated statements of income and of cash flows,
comparative figures for the related periods in the prior fiscal year, and
which shall be certified on behalf of the Borrower by the Chief Financial
Officer or other Authorized Officer of the Borrower, subject to changes
resulting from normal year-end audit adjustments.
(c) Officer's Compliance Certificates. At the time of the delivery
of the financial statements provided for in sections 8.1(a) and (b), a
certificate on behalf of the Borrower of the Chief Financial Officer or
other Authorized Officer of the Borrower to the effect that, to the best
knowledge of the Borrower, no Default or Event of Default exists or, if
any Default or Event of Default does exist, specifying the nature and
extent thereof and the actions the Borrower proposes to take with respect
thereto, which certificate shall set forth the calculations required to
establish compliance with the provisions of sections 9.4(c), 9.7, 9.8,
9.9, 9.10, 9.11, 9.12 and 9.13 of this Agreement.
(d) Borrowing Base Certificates. As soon as practicable and in any
event within 30 days after the end of each calendar month, (i) a written
report, reasonably satisfactory in form and scope to the Administrative
Agent, as to the inventory and accounts receivable of the Borrower and its
Subsidiaries, setting forth the type, amount, value, location and aging of
the Borrower's and such Subsidiaries' inventory and accounts receivable as
of the end of such month, and (ii) a borrowing base certificate as to such
inventory and accounts receivable in a form reasonably satisfactory in
scope and form to the Administrative Agent (a "Borrowing Base
Certificate") relating to the calendar month just ended.
(e) Budgets and Forecasts. Not later than 30 days prior to the
commencement of any fiscal year of the Borrower and its Subsidiaries, a
consolidated budget in reasonable detail for each of the four fiscal
quarters of such fiscal year, and (if and to the extent prepared by
management of the Borrower) for any subsequent fiscal years, as
customarily prepared by management for its internal use, setting forth,
with appropriate discussion, the forecasted balance sheet, income
statement, operating cash flows and capital expenditures of the Borrower
and its Subsidiaries for the period covered thereby, and the principal
assumptions upon which forecasts and budget are based.
(f) Notice of Default, Litigation or Certain Matters Involving Major
Customers or Suppliers. Promptly, and in any event within three Business
Days, in the case of clause (i) below, or five Business Days, in the case
of clause (ii) or (iii) below, after the Borrower or any of its
Subsidiaries obtains knowledge thereof, notice of
(i) the occurrence of any event which constitutes a Default or
Event of Default, which notice shall specify the nature thereof, the
period of existence thereof and what action the Borrower proposes to
take with respect thereto,
(ii) any litigation or governmental or regulatory proceeding
pending against the Borrower or any of its Subsidiaries which is
likely to have a Material Adverse Effect or a material adverse
effect on the ability of the Borrower to perform its obligations
hereunder or under any other Credit Document, and
(iii) any significant adverse change (in the Borrower's
reasonable judgment) in the Borrower's or any Subsidiary's
relationship with, or any significant event or circumstance which is
in the Borrower's reasonable judgment likely to adversely affect the
Borrower's or any Subsidiary's relationship with, (A) any customer
(or related group of customers) representing more than 10% of the
Borrower's consolidated revenues during its most recent fiscal year,
or (B) any supplier which is material to the operations of the
Borrower and its Subsidiaries considered as an entirety.
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(g) ERISA. Promptly, and in any event within 10 days after the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate knows of
the occurrence of any of the following, the Borrower will deliver to each
of the Lenders a certificate on behalf of the Borrower of an Authorized
Officer of the Borrower setting forth the full details as to such
occurrence and the action, if any, that the Borrower, such Subsidiary or
such ERISA Affiliate is required or proposes to take, together with any
notices required or proposed to be given to or filed with or by the
Borrower, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan
participant or the Plan administrator with respect thereto:
(i) that a Reportable Event has occurred with respect to any
Plan;
(ii) the institution of any steps by the Borrower, any ERISA
Affiliate, the PBGC or any other person to terminate any Plan;
(iii) the institution of any steps by the Borrower or any
ERISA Affiliate to withdraw from any Plan;
(iv) the institution of any steps by the Borrower or any
Subsidiary to withdraw from any Multiemployer Plan or Multiple
Employer Plan, if such withdrawal could result in withdrawal
liability (as described in Part 1 of Subtitle E of Title IV of
ERISA) in excess of $2,000,000;
(v) a non-exempt "prohibited transaction" within the meaning
of section 406 of ERISA in connection with any Plan;
(vi) that a Plan has an Unfunded Current Liability exceeding
$5,000,000;
(vii) any material increase in the contingent liability of the
Borrower or any Subsidiary with respect to any post-retirement
welfare liability; or
(viii) the taking of any action by, or the threatening of the
taking of any action by, the Internal Revenue Service, the
Department of Labor or the PBGC with respect to any of the
foregoing.
(h) Environmental Matters. Promptly upon, and in any event within 10
Business Days after, an officer of the Borrower or any of its Subsidiaries
obtains knowledge thereof, notice of one or more of the following
environmental matters: (i) any pending or threatened material
Environmental Claim against the Borrower or any of its Subsidiaries or any
Real Property owned or operated by the Borrower or any of its
Subsidiaries; (ii) any condition or occurrence on or arising from any Real
Property owned or operated by the Borrower or any of its Subsidiaries that
(A) results in material noncompliance by the Borrower or any of its
Subsidiaries with any applicable Environmental Law or (B) would reasonably
be expected to form the basis of a material Environmental Claim against
the Borrower or any of its Subsidiaries or any such Real Property; (iii)
any condition or occurrence on any Real Property owned, leased or operated
by the Borrower or any of its Subsidiaries that could reasonably be
expected to cause such Real Property to be subject to any material
restrictions on the ownership, occupancy, use or transferability by the
Borrower or any of its Subsidiaries of such Real Property under any
Environmental Law; and (iv) the taking of any material removal or remedial
action in response to the actual or alleged presence of any Hazardous
Material on any Real Property owned, leased or operated by the Borrower or
any of its Subsidiaries as required by any Environmental Law or any
governmental or other administrative agency. All such notices shall
describe in reasonable detail the nature of the Environmental Claim, the
Borrower's or such Subsidiary's response thereto and the potential
exposure in dollars of the Borrower and its Subsidiaries with respect
thereto.
(i) SEC Reports and Registration Statements. Promptly after
transmission thereof or other filing with the SEC, copies of all
registration statements (other than the exhibits thereto and any
registration statement on Form S-8 or its equivalent) and all annual,
quarterly or current reports that the Borrower or any of its Subsidiaries
files with the SEC on Form 10-K, 10-Q or 8-K (or any successor forms).
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(j) Annual and Quarterly Reports, Proxy Statements and other Reports
Delivered to Stockholders Generally. Promptly after transmission thereof
to its stockholders, copies of all annual, quarterly and other reports and
all proxy statements that the Borrower furnishes to its stockholders
generally.
(k) Press Releases. Promptly after the release thereof to any news
organization or news distribution organization, copies of any press
releases and other similar statements intended to be made available
generally by the Borrower or any of its Subsidiaries to the public
concerning material developments relating to the Borrower or any of its
Subsidiaries.
(l) Other Information. With reasonable promptness, such other
information or documents (financial or otherwise) relating to the Borrower
or any of its Subsidiaries as any Lender may reasonably request from time
to time.
8.2. Books, Records and Inspections. The Borrower will, and will cause
each of its Subsidiaries to, (i) keep proper books of record and account, in
which full and correct entries shall be made of all financial transactions and
the assets and business of the Borrower or such Subsidiaries, as the case may
be, in accordance with GAAP; and (ii) permit, upon at least two Business Days'
notice to the Chief Financial Officer of the Borrower, officers and designated
representatives of the Administrative Agent or any of the Lenders to visit and
inspect any of the properties or assets of the Borrower and any of its
Subsidiaries in whomsoever's possession (but only to the extent the Borrower or
such Subsidiary has the right to do so to the extent in the possession of
another person), to examine the books of account of the Borrower and any of its
Subsidiaries, and make copies thereof and take extracts therefrom, and to
discuss the affairs, finances and accounts of the Borrower and of any of its
Subsidiaries with, and be advised as to the same by, its and their officers and
independent accountants and independent actuaries, if any, all at such
reasonable times and intervals and to such reasonable extent as the
Administrative Agent or any of the Lenders may request.
8.3. Insurance. (a) The Borrower will, and will cause each of its
Subsidiaries to, (i) maintain insurance coverage by such insurers and in such
forms and amounts and against such risks as are generally consistent with the
insurance coverage maintained by the Borrower and its Subsidiaries at the date
hereof, and (ii) forthwith upon any Lender's written request, furnish to such
Lender such information about such insurance as such Lender may from time to
time reasonably request, which information shall be prepared in form and detail
satisfactory to such Lender and certified by an Authorized Officer of the
Borrower.
(b) The Borrower will, and will cause each of its Subsidiaries which is a
Credit Party to, at all times keep their respective property which is subject to
the Lien of any Security Document insured in favor of the Collateral Agent, and
all policies or certificates (or certified copies thereof) with respect to such
insurance (and any other insurance maintained by the Borrower or any such
Subsidiary) (i) shall be endorsed to the Collateral Agent's satisfaction for the
benefit of the Collateral Agent (including, without limitation, by naming the
Collateral Agent as loss payee (with respect to Collateral) or, to the extent
permitted by applicable law, as an additional insured), (ii) shall state that
such insurance policies shall not be canceled without 30 days' prior written
notice thereof (or 10 days' prior written notice in the case of cancellation for
the non-payment of premiums) by the respective insurer to the Collateral Agent,
(iii) shall provide that the respective insurers irrevocably waive any and all
rights of subrogation with respect to the Collateral Agent and the Lenders, and
(iv) shall in the case of any such certificates or endorsements in favor of the
Collateral Agent, be delivered to or deposited with the Collateral Agent. In no
event shall the Borrower be required to deposit the actual insurance policies
with the Collateral Agent. The Administrative Agent shall deliver copies of any
certificates of insurance to a Lender upon such Lender's reasonable request.
(c) If the Borrower or any of its Subsidiaries shall fail to maintain all
insurance in accordance with this section 8.3, or if the Borrower or any of its
Subsidiaries shall fail to so endorse and deliver or deposit all endorsements or
certificates with respect thereto, the Administrative Agent and/or the
Collateral Agent shall have the right (but shall be under no obligation), upon
prior written notice to the Borrower, to procure such insurance and the Borrower
agrees to reimburse the Administrative Agent or the Collateral Agent, as the
case may be, on demand, for all costs and expenses of procuring such insurance.
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8.4. Payment of Taxes and Claims. The Borrower will pay and discharge, and
will cause each of its Subsidiaries to pay and discharge, all taxes, assessments
and governmental charges or levies imposed upon it or upon its income or
profits, or upon any properties belonging to it, prior to the date on which
penalties attach thereto, and all lawful claims which, if unpaid, might become a
Lien or charge upon any properties of the Borrower or any of its Subsidiaries;
provided that neither the Borrower nor any of its Subsidiaries shall be required
to pay any such tax, assessment, charge, levy or claim which is being contested
in good faith and by proper proceedings if it has maintained adequate reserves
with respect thereto in accordance with GAAP; and provided, further, that the
Borrower will not be considered to be in default of any of the provisions of
this sentence if the Borrower or any Subsidiary fails to pay any such amount
which, individually or in the aggregate, is immaterial. Without limiting the
generality of the foregoing, the Borrower will, and will cause each of its
Subsidiaries to, pay in full all of its wage obligations to its employees in
accordance with the Fair Labor Standards Act (29 U.S.C. sections 206-207) and
any comparable provisions of applicable law.
8.5. Corporate Franchises. The Borrower will do, and will cause each of
its Subsidiaries to do, or cause to be done, all things necessary to preserve
and keep in full force and effect its corporate existence, rights and authority,
provided that nothing in this section 8.5 shall be deemed to prohibit (i) any
transaction permitted by section 9.2; (ii) the termination of existence of any
Subsidiary if (A) the Borrower determines that such termination is in its best
interest and (B) such termination is not adverse in any material respect to the
Lenders; or (iii) the loss of any rights, authorities or franchises if the loss
thereof, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
8.6. Good Repair. The Borrower will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used or
useful in its business in whomsoever's possession they may be, are kept in good
repair, working order and condition, normal wear and tear excepted, and that
from time to time there are made in such properties and equipment all needful
and proper repairs, renewals, replacements, extensions, additions, betterments
and improvements, thereto, to the extent and in the manner customary for
companies in similar businesses.
8.7. Compliance with Statutes, etc. The Borrower will, and will cause each
of its Subsidiaries to, comply, in all material respects, with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, other than those the noncompliance
with which would not have, and which would not be reasonably expected to have, a
Material Adverse Effect.
8.8. Compliance with Environmental Laws. Without limitation of the
covenants contained in section 8.7 hereof,
(a) The Borrower will comply, and will cause each of its
Subsidiaries to comply, in all material respects, with all Environmental
Laws applicable to the ownership, lease or use of all Real Property now or
hereafter owned, leased or operated by the Borrower or any of its
Subsidiaries, and will promptly pay or cause to be paid all costs and
expenses incurred in connection with such compliance, except to the extent
that such compliance with Environmental Laws is being contested in good
faith and by appropriate proceedings and for which adequate reserves have
been established to the extent required by GAAP, and an adverse outcome in
such proceedings is not reasonably expected to have a Material Adverse
Effect.
(b) The Borrower will keep or cause to be kept, and will cause each
of its Subsidiaries to keep or cause to be kept, all such Real Property
free and clear of any Liens imposed pursuant to such Environmental Laws
which are not permitted under section 9.3.
(c) Neither the Borrower nor any of its Subsidiaries will generate,
use, treat, store, release or dispose of, or permit the generation, use,
treatment, storage, release or disposal of, Hazardous Materials on any
Real Property now or hereafter owned, leased or operated by the Borrower
or any of its Subsidiaries or transport or permit the transportation of
Hazardous Materials to or from any such Real Property other than in
compliance with applicable Environmental Laws and in the ordinary course
of business, except for such
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noncompliance as would not have, and which would not be reasonably
expected to have, a Material Adverse Effect.
(d) If required to do so under any applicable order of any
governmental agency, the Borrower will undertake, and cause each of its
Subsidiaries to undertake, any clean up, removal, remedial or other action
necessary to remove and clean up any Hazardous Materials from any Real
Property owned, leased or operated by the Borrower or any of its
Subsidiaries in accordance with, in all material respects, the
requirements of all applicable Environmental Laws and in accordance with,
in all material respects, such orders of all governmental authorities,
except to the extent that the Borrower or such Subsidiary is contesting
such order in good faith and by appropriate proceedings and for which
adequate reserves have been established to the extent required by GAAP.
(e) In the event the Administrative Agent notifies the Borrower that
the Required Lenders have determined on the basis of an environmental
report or assessment delivered by the Borrower pursuant to the provisions
of this section 8.8(f), or otherwise, that a Closing Date Mortgage
encumbering any particular Closing Date Mortgaged Property should be
released and discharged because of substantial concerns of the Required
Lenders with respect to environmental matters revealed in such
environmental report or assessment, or otherwise recognized by the
Required Lenders, the Required Lenders may cause the Collateral Agent to
release and discharge such Closing Date Mortgage, subject to any later
determination by the Required Lenders notified to the Borrower by the
Administrative Agent that an Additional Security Document in the form of a
mortgage, deed of trust or similar instrument covering such Closing Date
Mortgaged Property should be executed and delivered hereunder.
(f) At the written request of the Administrative Agent or the
Required Lenders, which request shall specify in reasonable detail the
basis therefor, at any time and from time to time after the Lenders
receive notice under section 8.1(h) for any Environmental Claim involving
potential expenditures by the Borrower or any of its Subsidiaries in
excess of $3,000,000 in the aggregate for any Real Property, the Borrower
will provide, at its sole cost and expense, an environmental site
assessment report concerning any such Real Property now or hereafter
owned, leased or operated by the Borrower or any of its Subsidiaries,
prepared by an environmental consulting firm reasonably acceptable to the
Administrative Agent, indicating the presence or absence of Hazardous
Materials and the potential cost of any removal or a remedial action in
connection with any Hazardous Materials on such Real Property. If the
Borrower fails to provide the same within 90 days after such request was
made, the Administrative Agent may order the same, and the Borrower shall
grant and hereby grants, to the Administrative Agent and the Lenders and
their agents, access to such Real Property and specifically grants the
Administrative Agent and the Lenders an irrevocable non-exclusive license,
subject to the rights of tenants, to undertake such an assessment, all at
the Borrower's expense.
8.9. Fiscal Years, Fiscal Quarters. If the Borrower shall change any of
its or any of its Subsidiaries' fiscal years or fiscal quarters (other than the
fiscal year or fiscal quarters of a person which becomes a Subsidiary, made at
the time such person becomes a Subsidiary to conform to the Borrower's fiscal
year and fiscal quarters), the Borrower will promptly, and in any event within
30 days following any such change, deliver a notice to the Administrative Agent
and the Lenders describing such change and any material accounting entries made
in connection therewith and stating whether such change will have any impact
upon any financial computations to be made hereunder, and if any such impact is
foreseen, describing in reasonable detail the nature and extent of such impact.
If the Required Lenders determine that any such change will have any impact upon
any financial computations to be made hereunder which is adverse to the Lenders,
the Borrower will, if so requested by the Administrative Agent, enter into an
amendment to this Agreement, in form and substance reasonably satisfactory to
the Administrative Agent and the Required Lenders, modifying any of the
financial covenants or related provisions hereof in such manner as the Required
Lenders determine is necessary to eliminate such adverse effect.
8.10. Hedge Agreements, etc. (a) The Borrower will, and will cause each of
its Subsidiaries to, enter into Hedge Agreements (i) in order to provide
protection to the Borrower or any such Subsidiary from fluctuations and other
changes in interest rates and currency exchange rates, as and to the extent
considered reasonably necessary by the Borrower, but without exposing the
Borrower or its Subsidiaries to predominantly speculative risks unrelated to
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the amount of assets, Indebtedness or other liabilities intended to be subject
to coverage on a notional basis under all such Hedge Agreements; and (ii) in the
case of any Hedge Agreement entered into after the Effective Date, only if the
proposed form thereof (including any proposed pricing or other material terms)
has been provided to the Administrative Agent contemporaneously with the entry
into such Hedge Agreement.
(b) Without limitation of the foregoing, the Borrower will obtain on or
before January 31, 1999, and thereafter maintain in effect for a period of at
least two years, a Hedge Agreement, in form and substance satisfactory to the
Administrative Agent and the Lead Arrangers, with a notional amount (or
declining notional amounts) at least equal to 50% of the originally scheduled
outstanding principal amount of the Term Loans during such period, protecting
the Borrower against such changes in interest rates as can be obtained at
reasonable cost in light of prevailing market conditions.
8.11. Certain Subsidiaries to Join in Subsidiary Guaranty. (a) In the
event Hi-Stat and its Domestic Subsidiaries are not parties to the Subsidiary
Guaranty on the Closing Date, within 5 Business Days following the Closing Date,
the Borrower will cause Hi-Stat, and each of its Domestic Subsidiaries (if any),
to deliver to the Administrative Agent, in sufficient quantities for the other
Agents and the Lenders, (i) a joinder supplement, satisfactory in form and
substance to the Administrative Agent and the Required Lenders, duly executed by
Hi-Stat and each such Subsidiary, pursuant to which Hi-Stat and each such
Subsidiary joins in the Subsidiary Guaranty as a guarantor thereunder, and (ii)
if any such person is a corporation, resolutions of the Board of Directors of
such person, certified by the Secretary or an Assistant Secretary of such person
as duly adopted and in full force and effect, authorizing the execution and
delivery of such joinder supplement, or if any such person is not a corporation,
such other evidence of the authority of such person to execute such joinder
supplement as the Administrative Agent may reasonably request.
(b) In the event that at any time after the Closing Date
(x) the Borrower has any Subsidiary (other than a Foreign Subsidiary
as to which section 8.11(c) applies) which is not a party to the
Subsidiary Guaranty, or
(y) an Event of Default shall have occurred and be continuing and
the Borrower has any Subsidiary which is not a party to the Subsidiary
Guaranty,
the Borrower will notify the Administrative Agent in writing of such event,
identifying the Subsidiary in question and referring specifically to the rights
of the Administrative Agent and the Lenders under this section. The Borrower
will, within 30 days following request therefor from the Administrative Agent
(who may give such request on its own initiative or upon request by the Required
Lenders), cause such Subsidiary to deliver to the Administrative Agent, in
sufficient quantities for the Lenders, (i) a joinder supplement, reasonably
satisfactory in form and substance to the Administrative Agent and the Required
Lenders, duly executed by such Subsidiary, pursuant to which such Subsidiary
joins in the Subsidiary Guaranty as a guarantor thereunder, and (ii) if such
Subsidiary is a corporation, resolutions of the Board of Directors of such
Subsidiary, certified by the Secretary or an Assistant Secretary of such
Subsidiary as duly adopted and in full force and effect, authorizing the
execution and delivery of such joinder supplement, or if such Subsidiary is not
a corporation, such other evidence of the authority of such Subsidiary to
execute such joinder supplement as the Administrative Agent may reasonably
request.
(c) Notwithstanding the foregoing or the provisions of section 8.12
hereof, the Borrower shall not, unless an Event of Default shall have occurred
and be continuing, be required to pledge (or cause to be pledged) any stock or
other equity interests in any Foreign Subsidiary which is not a first tier
Foreign Subsidiary, or more than 65% of the stock or other equity interests in
any Foreign Subsidiary which is a first tier Foreign Subsidiary, or to cause a
Foreign Subsidiary to join in the Subsidiary Guaranty or to become a party to
the Security Agreement or any other Security Document, if (i) to do so would
subject the Borrower to liability for additional United States income taxes by
virtue of section 956 of the Code in an amount the Borrower considers material,
and (ii) the Borrower provides the Administrative Agent with documentation,
including computations prepared by the Borrower's internal tax officer, its
independent accountants or tax counsel, reasonably acceptable to the Required
Lenders, in support thereof.
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8.12. Additional Security; Further Assurances. (a) Within 30 days
following the Closing Date, the Borrower will cause Hi-Stat and each of its
Domestic Subsidiaries to, grant the Collateral Agent for the benefit of the
Secured Creditors (as defined in the Security Documents) security interests,
pledges, liens and mortgages or deeds of trust, pursuant to new documentation
(each an "Additional Security Document") or joinder in any existing Security
Document to which it is not already a party, in all of its assets, interests and
properties, subject to obtaining any required consents from third parties
(including third party lessors and co-venturers) necessary to be obtained for
the granting of a Lien on the assets, interests or properties involved (with the
Borrower hereby agreeing to use its reasonable best efforts to obtain such
consents), and also subject to the provisions of section 8.11(c). Such
Additional Security Documents shall include, without limitation, mortgages,
deeds of trust and similar instruments covering the following Real Properties of
Hi-Stat:
(1) 5,000 square foot storage facility located at 2650 Whitfield
Avenue, Manatee County, Florida;
(2) fabrication facility located at 320 South Mill Street, in
Lexington, Ohio;
(3) manufacturing and assembly facility located at 345 South Mill
Street, in Lexington, Ohio;
(4) manufacturing and assembly facility located at 7290 26th Court
East, Manatee County, Florida;
(5) corporate office facility located at 7292 26th Court East,
Manatee County, Florida; and
(6) tool and die facility located at 1414 Park Avenue East, Madison
Township, Ohio.
(b) In the event that at any time after the Closing Date
(x) the Borrower or any Subsidiary acquires, or a person which has
become a Subsidiary owns or holds, an interest in any Real Property,
assets, stock, securities or any other property or interest, located in
the United States or arising out of business conducted in or from the
United States, which is not at the time included in the Collateral and is
not subject to a Permitted Lien securing Indebtedness, the Borrower will
notify the Administrative Agent in writing of such event, identifying the
property or interests in question and referring specifically to the rights
of the Administrative Agent and the Lenders under this section,
(y) the Borrower or any Subsidiary at any time owns or holds an
interest in any Real Property, assets, stock, securities or any other
property or interest, located in the United States or arising out of
business conducted in or from the United States, (1) which is not at the
time included in the Collateral and is not subject to a Permitted Lien
securing Indebtedness, and (2) as to which the Administrative Agent on its
own initiative or upon instructions from the Required Lenders has notified
the Borrower that it requires that the same be included in the Collateral,
or
(z) an Event of Default shall have occurred and be continuing and
the Borrower or any Subsidiary at any time owns or holds an interest in
any Real Property, assets, stock, securities or any other property or
interest, located within or outside of the United States or arising out of
business conducted from any location within or outside the United States,
which is not at the time included in the Collateral and is not subject to
a Permitted Lien securing Indebtedness,
the Borrower will, or will cause such Subsidiary to, within 30 days following
request by the Collateral Agent (who may make such request on its own initiative
or upon instructions from the Required Lenders), grant the Collateral Agent for
the benefit of the Secured Creditors (as defined in the Security Documents)
security interests and mortgages or deeds of trust, pursuant to an Additional
Security Document") or joinder in any existing Security Document, in such
assets, interests or properties of the Borrower or any Subsidiary, subject to
obtaining any required consents from third parties (including third party
lessors and co-venturers) necessary to be obtained for the granting of a Lien on
the interests or assets involved (with the Borrower hereby agreeing to use its
reasonable best efforts to obtain such
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consents), and also subject to the provisions of section 8.11(c); provided that
notwithstanding the foregoing, the Borrower need not notify the Administrative
Agent under this section 8.12(b) of any leasehold interest which is acquired or
held by the Borrower or any Subsidiary.
(c) Each Additional Security Document (i) shall be granted pursuant to
documentation reasonably satisfactory in form and substance to the
Administrative Agent and the Syndication Agent, which documentation shall in the
case of Real Property owned in fee be accompanied by such Phase I environmental
reports or assessments, a mortgage policy of title insurance (subject to a
standard survey exception), and other supporting documentation requested by and
reasonably satisfactory in form and substance to the Administrative Agent and
the Syndication Agent; and (ii) shall constitute a valid and enforceable
perfected Lien upon the interests or properties so included in the Collateral,
superior to and prior to the rights of all third persons and subject to no other
Liens except those permitted by section 9.3 or otherwise agreed by the
Administrative Agent at the time of perfection thereof and (in the case of Real
Property or interests therein) such other encumbrances as may be set forth in
the mortgage policy, if any, relating to such Additional Security Document which
shall be delivered to the Collateral Agent together with such Additional
Security Document and which shall be satisfactory in form and substance to the
Collateral Agent and the Administrative Agent and the Syndication Agent. The
Borrower, at its sole cost and expense, will cause each Additional Security
Document or instruments related thereto to be duly recorded or filed in such
manner and in such places as are required by law to establish, perfect, preserve
and protect the Liens created thereby required to be granted pursuant to the
Additional Security Document, and will pay or cause to be paid in full all
taxes, fees and other charges payable in connection therewith. Furthermore, the
Borrower shall cause to be delivered to the Collateral Agent such opinions of
local counsel, appraisals, title insurance, surveys, environmental assessments,
consents of landlords, lien waivers from landlords or mortgagees and other
related documents as may be reasonably requested by the Collateral Agent or any
other Agent in connection with the execution, delivery and recording of any
Additional Security Document, all of which documents shall be in form and
substance reasonably satisfactory to the Collateral Agent and the Administrative
Agent and the Syndication Agent, except that no leasehold Mortgage, title
insurance or surveys shall be required for any leasehold properties (unless the
lessee has a nominal or bargain purchase option).
(d) The Borrower will, and will cause each of its Subsidiaries to, at the
expense of the Borrower, make, execute, endorse, acknowledge, file and/or
deliver to the Collateral Agent from time to time such conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, and other
assurances or instruments and take such further steps relating to the Collateral
covered by any of the Security Documents as the Collateral Agent or any other
Agent may reasonably require. If at any time the Collateral Agent or any other
Agent determines, based on applicable law, that all applicable taxes (including,
without limitation, mortgage recording taxes or similar charges) were not paid
in connection with the recordation of any mortgage or deed of trust, the
Borrower shall promptly pay the same upon demand.
(e) The Borrower will if requested by any Lender at any time, in order to
meet any legal requirement applicable to such Lender, provide to the Collateral
Agent and the Lenders, at the sole cost and expense of the Borrower, appraisals
and other supporting documentation relating to any Closing Date Mortgage or any
mortgage or deed of trust delivered as an Additional Security Document
hereunder, as specified by any Lender, meeting the appraisal and other
documentation requirements of the Real Estate Reform Amendments of the Financial
Institution Reform, Recovery and Enforcement Act of 1989, as amended, or any
other legal requirements applicable to any Lender, which in the case of any such
appraisal shall be prepared by one or more valuation firms of national standing,
acceptable to the Required Lenders, utilizing appraisal standards satisfying
such Amendments, Act or other legal requirements.
(f) For the avoidance of doubt, the Borrower shall have no obligation to
cause to be delivered any survey of a Closing Date Mortgaged Property so as to
permit a Title Company to eliminate by endorsement the "survey exception" to the
Title Policy for such Closing Date Mortgaged Property.
(g) Notwithstanding the foregoing provisions of this section 8.12, in the
event the Administrative Agent notifies the Borrower that the Required Lenders
have determined on the basis of an environmental report or assessment delivered
by the Borrower pursuant to the provisions of section 8.12(c) that an Additional
Security Document encumbering any particular Real Property should not be
delivered under this section 8.12, the Borrower shall be
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relieved of its obligation in this section 8.12 to deliver or cause to be
delivered an Additional Security Document in the form of a mortgage, deed of
trust or similar instrument covering such Real Property, subject to any later
determination by the Required Lenders notified to the Borrower by the
Administrative Agent that an Additional Security Document in the form of a
mortgage, deed of trust or similar instrument covering such Real Property should
be executed and delivered hereunder.
(h) As promptly as practicable after the date (i) any Credit Party has any
Collateral located in a jurisdiction as to which the Agents shall not previously
have received a search report listing all effective UCC financing statements
filed against such Credit Party in such jurisdiction and containing copies of
all such effective UCC financing statements, (ii) any person first becomes a
Domestic Subsidiary of the Borrower, or (iii) any UCC financing statement is
filed against any Credit Party to perfect security interests granted pursuant to
the Security Agreement, the Borrower will, at its expense, cause to be delivered
to the Agents and the Lenders search reports listing all effective UCC financing
statements filed against such person or Credit Party in each applicable
jurisdiction and containing copies of all such effective UCC financing
statements. In addition, whenever requested by the Administrative Agent, but not
more frequently than once in any 12-month period, the Borrower will promptly
provide the Agents and the Lenders with such new or updated title, lien,
judgment, patent, trademark and UCC financing statement searches or reports as
to the Borrower or any Domestic Subsidiary, or any Collateral of any Credit
Party, as the Administrative Agent may specify to the Borrower in its request.
(i) The Collateral Agent is authorized, without the consent of any of the
Lenders, to (i) enter into any modification of any Security Document which the
Collateral Agent reasonably believes is required to conform to the mandatory
requirements of local law, or to local customs followed by financial
institutions with respect to similar collateral documents involving property
located in any particular jurisdiction, (ii) in the case of any Security
Document relating to property located in a particular jurisdiction which imposes
a tax with respect to such Security Document based on the amount of the
obligations secured thereby, expressly limit the amount of such secured
obligations which are secured by such property to such amount as, in the
Collateral Agent's good faith judgment, is appropriate so that the amount of
such tax is reasonable in light of the estimated value of the property located
in such jurisdiction, and/or (iii) designate the amount of title insurance
coverage for any title insurance policy provided hereunder in an amount
reasonably believed by the Collateral Agent to be representative of the fair
value of the property covered thereby.
(j) The Borrower will provide the Administrative Agent with sufficient
copies of each Additional Security Document and any additional supporting
documents delivered in connection therewith for distribution of copies thereof
to the other Agents and the Lenders, and the Administrative Agent will promptly
so distribute such copies.
8.13. Casualty and Condemnation. (a) The Borrower will promptly (and in
any event within 10 days) furnish to the Administrative Agent and the Lenders
written notice of any Event of Loss involving any property included in the
Collateral which is reasonably believed to be in excess of $5,000,000.
(b) If any Event of Loss results in Net Proceeds (whether in the form of
insurance proceeds, a condemnation award or otherwise), a portion or all of
which is required to be applied as a prepayment of the Loans or to the
rebuilding or restoration of any affected property pursuant to section 5.2, the
Collateral Agent is authorized to collect such Net Proceeds and, if received by
any Credit Party, the Borrower will, or will cause any applicable Credit Party,
to pay over such Net Proceeds to the Collateral Agent.
8.14. Landlord/Mortgagee Waivers; Bailee Letters. The Borrower will
promptly (and in any event within 60 days following the Closing Date, in the
case of any Collateral in existence as of the Closing Date) obtain, and will
maintain in effect, (a) waivers from landlords and mortgagees having any
interest in any Real Property on which any tangible items of Collateral having a
value of at least $250,000 are located, substantially in the form attached
hereto as Exhibits C-12 and C-13, or otherwise reasonably acceptable to the
Administrative Agent, and (b) bailee letters, substantially in the form attached
hereto as Exhibit C-14, or otherwise reasonably acceptable to the Administrative
Agent, from persons unrelated to any of the Credit Parties who are parties to
the Security Agreement to whom any tangible items of Collateral having a value
of at least $500,000 have been delivered for storage, use in the manufacture of
products for the Borrower and its Subsidiaries, consignment or similar purposes.
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8.15. Senior Debt. The Borrower will at all times ensure that (i) the
claims of the Lenders in respect of the Obligations of the Borrower will in all
respects rank prior to the claims of every unsecured creditor of the Borrower,
and (ii) any Indebtedness of the Borrower which is subordinated in any manner to
the claims of any other creditor of the Borrower will be subordinated in like
manner to such claims of the Lenders.
SECTION 9. NEGATIVE COVENANTS.
The Borrower hereby covenants and agrees that on the Effective Date and
thereafter for so long as this Agreement is in effect and until such time as the
Total Commitment has been terminated, no Notes remain outstanding and the Loans,
together with interest, Fees and all other Obligations incurred hereunder and
under the other Credit Documents, have been paid in full:
9.1. Changes in Business. Neither the Borrower nor any of its Subsidiaries
will engage in any business if, as a result, the general nature of the business,
taken on a consolidated basis, which would then be engaged in by the Borrower
and its Subsidiaries, would be substantially changed from the general nature of
the business engaged in by the Borrower and its Subsidiaries on the Effective
Date (but giving effect to the completion of the Hi-Stat Acquisition).
9.2. Consolidation, Merger, Acquisitions, Asset Sales, etc. The Borrower
will not, and will not permit any Subsidiary to, (1) wind up, liquidate or
dissolve its affairs, (2) enter into any transaction of merger or consolidation,
(3) make or otherwise effect any Acquisition, (4) sell or otherwise dispose of
any of its property or assets outside the ordinary course of business, or
otherwise make or otherwise effect any Asset Sale, or (5) agree to do any of the
foregoing at any future time, except that the following shall be permitted:
(a) Certain Intercompany Mergers, etc. If no Default or Event of
Default shall have occurred and be continuing or would result therefrom,
(i) the merger, consolidation or amalgamation of any Domestic
Subsidiary with or into the Borrower or another Subsidiary which is
both a Domestic Subsidiary and a Wholly-Owned Subsidiary, so long as
in any merger, consolidation or amalgamation involving the Borrower,
the Borrower is the surviving or continuing or resulting
corporation;
(ii) the merger, consolidation or amalgamation of any Foreign
Subsidiary with or into another Subsidiary which is both a Foreign
Subsidiary and a Wholly-Owned Subsidiary;
(iii) the liquidation, winding up or dissolution of any
Subsidiary of the Borrower;
(iv) the transfer or other disposition of any property by the
Borrower to any Domestic Subsidiary which is a Wholly-Owned
Subsidiary, or by any Domestic Subsidiary to the Borrower or to any
other Domestic Subsidiary which is a Wholly-Owned Subsidiary of the
Borrower; and
(v) the transfer or other disposition of any property by a
Foreign Subsidiary to the Borrower or to any Domestic Subsidiary, or
to another Foreign Subsidiary which is a Wholly-Owned Subsidiary;
shall each be permitted, if after giving effect thereto at least 60% of
the Consolidated Total Assets of the Borrower are owned directly by the
Borrower and not indirectly through Subsidiaries.
(b) Other Mergers, etc. Involving the Borrower. The Borrower may
consolidate or merge with any other corporation, or sell, transfer or
otherwise dispose of all or substantially all of the property and assets
of the Borrower and its Subsidiaries to any person, if (i) the surviving,
continuing or resulting corporation of such merger or consolidation (if
other than the Borrower) or the acquiring person unconditionally assumes
the obligations of the Borrower under the Credit Documents pursuant to an
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assumption agreement in form and substance reasonably satisfactory to the
Required Lenders, (ii) no Event of Default has occurred and is continuing
or would result therefrom, (iii) no Change of Control would be occasioned
thereby; and (iv) if any such merger or consolidation is entered into for
the purpose of effecting an Acquisition, such Acquisition is permitted by
section 9.2(c).
(c) Acquisitions. The Hi-Stat Acquisition shall be permitted to be
completed as contemplated by section 6.1 hereof; and if no Default or
Event of Default shall have occurred and be continuing or would result
therefrom, the Borrower or any Subsidiary may make any Acquisition which
is a Permitted Acquisition, provided that all of the conditions contained
in the definition of the term Permitted Acquisition are satisfied.
(d) Permitted Dispositions. If no Default or Event of Default shall
have occurred and be continuing or would result therefrom, the Borrower or
any of its Subsidiaries may (i) sell any property, land or building
(including any related receivables or other intangible assets) to any
person which is not a Subsidiary of the Borrower, or (ii) sell the entire
capital stock (or other equity interests) and Indebtedness of any
Subsidiary owned by the Borrower or any other Subsidiary to any person
which is not a Subsidiary of the Borrower, or (iii) permit any Subsidiary
to be merged or consolidated with a person which is not an Affiliate of
the Borrower, or (iv) consummate any other Asset Sale with a person who is
not a Subsidiary of the Borrower; provided that:
(A) the consideration for such transaction represents fair
value (as determined by management of the Borrower), and at least
75% of such consideration consists of cash,
(B) the aggregate consideration for all such transactions
effected in any fiscal year does not exceed $5,000,000, and
(C) contemporaneously with the completion of such transaction
the Borrower prepays its Loans as and to the extent required by
section 5.2 hereof.
(e) Leases. The Borrower or any of its Subsidiaries may enter into
leases of property or assets not constituting Acquisitions, provided such
leases are not otherwise in violation of this Agreement.
(f) Capital Expenditures: The Borrower and it Subsidiaries shall be
permitted to make any Consolidated Capital Expenditures permitted pursuant
to section 9.11.
(g) Permitted Investments. The Borrower and it Subsidiaries shall be
permitted to make the investments permitted pursuant to section 9.5.
To the extent the Required Lenders (or all of the Lenders as shall be required
by section 12.12) waive the provisions of this section 9.2 with respect to the
sale, transfer or other disposition of any Collateral, or any Collateral is
sold, transferred or disposed of as permitted by this section 9.2, (i) such
Collateral shall be sold, transferred or disposed of free and clear of the Liens
created by the respective Security Documents; (ii) if such Collateral includes
all of the capital stock of a Subsidiary which is a party to the Subsidiary
Guaranty or whose stock is pledged pursuant to the Pledge Agreement, such
capital stock shall be released from the Pledge Agreement and such Subsidiary
shall be released from the Subsidiary Guaranty; and (iii) the Administrative
Agent and the Collateral Agent shall be authorized to take actions deemed
appropriate by them in order to effectuate the foregoing.
9.3. Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of the Borrower or any such Subsidiary whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable or notes with or without
recourse to the Borrower or any of its Subsidiaries, other than for purposes of
collection of delinquent accounts in the ordinary course of business) or assign
any right to receive income, or file or permit the filing of any financing
statement under the UCC or any other similar notice of Lien under any similar
recording or notice statute, except that the foregoing restrictions shall not
apply to:
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(a) Standard Permitted Liens: the Standard Permitted Liens;
(b) Existing Liens, etc.: Liens (i) in existence on the Effective
Date which are listed, and the Indebtedness secured thereby and the
property subject thereto on the Effective Date described, in Annex III, or
(ii) arising out of the refinancing, extension, renewal or refunding of
any Indebtedness secured by any such Liens, provided that the principal
amount of such Indebtedness is not increased and such Indebtedness is not
secured by any additional assets;
(c) Foreign Subsidiary Liens: Liens on assets and properties of
Foreign Subsidiaries, securing Indebtedness permitted under section
9.4(c); and
(d) Purchase Money Liens and Liens on Acquired Properties: Liens
which
(i) are placed upon equipment or machinery or improvements to
Real Property (including the associated Real Property) used in the
ordinary course of business of the Borrower or any Subsidiary at the
time of (or within 180 days after) the acquisition of such equipment
or machinery or the completion of such improvements by the Borrower
or any such Subsidiary to secure Indebtedness incurred to pay or
finance all or a portion of the purchase price or other cost
thereof, provided that the Lien encumbering the equipment or
machinery so acquired or the Real Property so improved does not
encumber any other asset of the Borrower or any such Subsidiary; or
(ii) are existing on property or other assets at the time
acquired by the Borrower or any Subsidiary or on assets of a person
at the time such person first becomes a Subsidiary of the Borrower;
provided that (A) any such Liens were not created at the time of or
in contemplation of the acquisition of such assets or person by the
Borrower or any of its Subsidiaries; (B) in the case of any such
acquisition of a person, any such Lien attaches only to the property
and assets of such person; and (C) in the case of any such
acquisition of property or assets by the Borrower or any Subsidiary,
any such Lien attaches only to the property and assets so acquired
and not to any other property or assets of the Borrower or any
Subsidiary;
provided that (1) the Indebtedness secured by any such Lien does not
exceed 100% of the fair market value of the property and assets to which
such Lien attaches, determined at the time of the acquisition or
improvement of such property or asset or the time at which such person
becomes a Subsidiary of the Borrower (except in the circumstances
described in clause (ii) above to the extent such Liens constituted
customary purchase money Liens at the time of incurrence and were entered
into in the ordinary course of business), and (2) the Indebtedness secured
thereby is permitted by section 9.4(d).
9.4. Indebtedness. The Borrower will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness of the Borrower or any of its Subsidiaries, except:
(a) Credit Documents: Indebtedness incurred under this Agreement and
the other Credit Documents;
(b) Existing Indebtedness: Existing Indebtedness; and any
refinancing, extension or renewal of any such Existing Indebtedness
effected on terms approved by the Administrative Agent and the Syndication
Agent prior to the date of such refinancing, extension or renewal, such
approval not to be unreasonably withheld or delayed; provided that any
Existing Indebtedness identified in Annex II or otherwise referred to in
section 6.1 as being intended to be refinanced by Loans incurred hereunder
or otherwise retired, may not be otherwise refinanced;
(c) Foreign Subsidiary Borrowings and Capitalized Lease Obligations:
Indebtedness for borrowed money and Capitalized Lease Obligations incurred
by Foreign Subsidiaries, provided that (i) the aggregate outstanding
principal amount of all such Indebtedness (including, without limitation,
the amount
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of any intercompany loans and advances), together with the outstanding
Capitalized Lease Obligations of the Foreign Subsidiaries, which is
outstanding at any time, does not exceed $25,000,000; and (ii) at no time
shall the portion of such Indebtedness and Capitalized Lease Obligations
obtained by the Foreign Subsidiaries from borrowings or Capital Lease
transactions with banks or financial institutions (A) exceed $10,000,00 at
any time on or prior to December 31, 1999, or $15,000,000 at any time
thereafter, or (B) be guaranteed by, or otherwise supported by collateral
granted by, the Borrower or any of its Domestic Subsidiaries;
(d) Capitalized Lease Obligations and Purchase Money Indebtedness:
Indebtedness consisting of Capital Lease Obligations of the Borrower and
its Subsidiaries, and Indebtedness secured by a Lien on any property of
the Borrower or any Subsidiary referred to in section 9.3(d), provided
that at the time of any incurrence thereof after the date hereof, and
after giving effect thereto, (i) the Borrower would be in compliance with
sections 9.8, 9.9, 9.10 and 9.11, and no Event of Default shall have
occurred and be continuing or would result therefrom; and (ii) the
aggregate outstanding principal amount (using Capitalized Lease
Obligations in lieu of principal amount, in the case of any Capital Lease)
of all Indebtedness permitted by this clause (d) does not exceed 5% of the
Borrower's Consolidated Net Worth as of the date of the financial
statements then most recently furnished to the Lenders pursuant to this
Agreement;
(e) Intercompany Debt: the following: (i) unsecured Indebtedness of
the Borrower owed to any of its Subsidiaries, provided such Indebtedness
constitutes Subordinated Indebtedness; and (ii) unsecured Indebtedness of
any of the Borrower's Subsidiaries to the Borrower or to another
Subsidiary of the Borrower, provided that in the case of any such
unsecured Indebtedness of Foreign Subsidiaries, such Indebtedness is
within the limitations provided in section 9.4(c);
(f) Hedge Agreements: Indebtedness of the Borrower and its
Subsidiaries under Hedge Agreements; and
(g) Guaranty Obligations: any Guaranty Obligations permitted by
section 9.5.
9.5. Advances, Investments, Loans and Guaranty Obligations. The Borrower
will not, and will not permit any of its Subsidiaries to, (1) lend money or
credit or make advances to any person, (2) purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, or other investment in, any person, (3) create, acquire or hold
any Subsidiary, (4) be or become a party to any joint venture or partnership, or
(5) be or become obligated under any Guaranty Obligations (other than those
which may be created in favor of the Lenders pursuant to the Credit Documents),
except:
(a) the Borrower or any of its Subsidiaries may invest in cash and
Cash Equivalents;
(b) any endorsement of a check or other medium of payment for
deposit or collection, or any similar transaction in the normal course of
business;
(c) the Borrower and its Subsidiaries may acquire and hold
receivables owing to them in the ordinary course of business and payable
or dischargeable in accordance with customary trade terms;
(d) investments acquired by the Borrower or any of its Subsidiaries
(i) in exchange for any other investment held by the Borrower or any such
Subsidiary in connection with or as a result of a bankruptcy, workout,
reorganization or recapitalization of the issuer of such other investment,
or (ii) as a result of a foreclosure by the Borrower or any of its
Subsidiaries with respect to any secured investment or other transfer of
title with respect to any secured investment in default;
(e) loans and advances to employees for business-related travel
expenses, moving expenses, costs of replacement homes, business machines
or supplies, automobiles and other similar expenses, in each case incurred
in the ordinary course of business, shall be permitted;
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(f) to the extent not permitted by the foregoing clauses, the
existing loans, advances, investments and guarantees described on Annex IV
hereto;
(g) investments of the Borrower and its Subsidiaries in Hedge
Agreements;
(h) existing investments in any Subsidiaries and any additional
investments in any Subsidiary Guarantor;
(i) intercompany loans and advances permitted by section 9.4(e);
(j) the Acquisitions permitted by section 9.2; and loans, advances
and investments of any person which are outstanding at the time such
person becomes a Subsidiary of the Borrower as a result of an Acquisition
permitted by section 9.2, but not any increase in the amount thereof;
(k) any unsecured Guaranty Obligation incurred by the Borrower or
any Subsidiary with respect to (i) Indebtedness of a Wholly-Owned
Subsidiary of the Borrower which is permitted under section 9.4 without
restriction upon the ability of the Borrower or any Subsidiary to
guarantee the same, or (ii) other obligations of a Wholly-Owned Subsidiary
of the Borrower which are not prohibited by this Agreement;
(l) additional loans, advances and investments in AlphaConn do
Brasil and Positron made after September 30, 1998 in an aggregate
cumulative amount (taking into account repayment of any loans or advances
to such persons during such period) not in excess of $7,500,000, provided
that at the time of any such additional loan, advance or investment and
after giving effect thereto no Event of Default shall have occurred and be
continuing or shall result therefrom; and
(m) additional loans, advances and investments to other persons (not
including any Foreign Subsidiary of the Borrower), not otherwise permitted
by the foregoing clauses, made after September 30, 1998 in an aggregate
cumulative amount (taking into account repayment of any loans or advances
to such persons during such period) not in excess of $5,000,000, provided
that at the time of any such additional loan, advance or investment and
after giving effect thereto no Event of Default shall have occurred and be
continuing or shall result therefrom.
9.6. Dividends, etc. The Borrower will not (i) directly or indirectly
declare, order, pay or make any dividend (other than dividends payable solely in
common stock of the Borrower) or other distribution on or in respect of any
capital stock of any class of the Borrower, whether by reduction of capital or
otherwise, or (ii) directly or indirectly make, or permit any of its
Subsidiaries to directly or indirectly make, any purchase, redemption,
retirement or other acquisition of any capital stock of any class of the
Borrower (other than for a consideration consisting solely of capital stock of
the same class of the Borrower) or of any warrants, rights or options to acquire
or any securities convertible into or exchangeable for any capital stock of the
Borrower, except that the Borrower may declare and pay cash dividends on its
common stock during any fiscal year if immediately prior to and immediately
after giving effect to such action (A) no Default under section 10.1(a) or Event
of Default shall have occurred and be continuing, (B) the Borrower shall be in
compliance with section 9.7, and (C) the aggregate amount so expended is not in
excess of 5% of the Borrower's Excess Cash Flow for the preceding fiscal year.
9.7. Minimum Consolidated Net Worth. The Borrower will not permit its
Consolidated Net Worth at any time to be less than $180,000,000, except that (i)
effective as of the end of the Borrower's fiscal quarter ended on or nearest to
March 31, 1999, and as of the end of each fiscal quarter thereafter, the
foregoing amount (as it may from time to time be increased as herein provided),
shall be increased by 50% of the Consolidated Net Income of the Borrower for the
fiscal quarter ended on such date, if any (there being no reduction in the case
of any such Consolidated Net Income which reflects a deficit), (ii) the
foregoing amount (as it may from time to time be increased as herein provided),
shall be increased by an amount equal to 100% of the cash proceeds (net of
underwriting discounts and commissions and other customary fees and costs
associated therewith) from any sale or issuance of equity by the Borrower after
September 30, 1998 (other than Redeemable Stock and any sale or issuance to
management or employees or employee benefit plans pursuant to employee benefit
plans of general application), (iii) the foregoing
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amount (as it may from time to time be increased as herein provided), shall be
increased by an amount equal to 100% of (x) the principal amount of Indebtedness
or (y) the higher of stated value or liquidation value of Redeemable Stock, as
the case may be, held by any person other than the Borrower or any of its
Subsidiaries, which is converted or exchanged after September 30, 1998 into
common stock of the Borrower or any of its Subsidiaries, and (iv) the foregoing
amount (as it may from time to time be increased as herein provided), shall be
increased by an amount equal to 100% of the increase in Consolidated Net Worth
attributable to the issuance of common stock or other equity interests (other
than Redeemable Stock) subsequent to September 30, 1998 as consideration in any
Acquisitions permitted under section 9.2.
9.8. Consolidated Total Debt/Consolidated EBITDA Ratio. The Borrower will
not at any time permit the ratio of (i) the amount of its Consolidated Total
Debt at such time to (ii) its Consolidated EBITDA for its Testing Period most
recently ended, to exceed the ratio specified below for any Testing Period:
================================================================================
Testing Period Ratio
================================================================================
December 31, 1998 3.75 to 1.00
- --------------------------------------------------------------------------------
March 31, 1999 3.75 to 1.00
- --------------------------------------------------------------------------------
June 30, 1999 3.50 to 1.00
- --------------------------------------------------------------------------------
September 30, 1999 3.50 to 1.00
- --------------------------------------------------------------------------------
December 31, 1999 3.25 to 1.00
- --------------------------------------------------------------------------------
March 31, 2000 3.25 to 1.00
- --------------------------------------------------------------------------------
June 30, 2000 3.00 to 1.00
- --------------------------------------------------------------------------------
September 30, 2000 3.00 to 1.00
- --------------------------------------------------------------------------------
December 31, 2000 and thereafter through September 30, 2001 2.75 to 1.00
- --------------------------------------------------------------------------------
December 31, 2001 and thereafter 2.50 to 1.00
================================================================================
9.9. Interest Coverage Ratio. The Borrower will not permit its Interest
Coverage Ratio for any Testing Period to be less than the ratio specified below:
================================================================================
Testing Period Ratio
================================================================================
Fiscal Quarter ended March 31, 1999, but determined on an
annualized basis rather than on the basis of the four fiscal
quarters then ended 3.00 to 1.00
- --------------------------------------------------------------------------------
Two Fiscal Quarters ended June 30, 1999, but determined on
an annualized basis rather than on the basis of the four
fiscal quarters then ended 3.00 to 1.00
- --------------------------------------------------------------------------------
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================================================================================
Testing Period Ratio
================================================================================
Three Fiscal Quarters ended September 30, 1999, but
determined on an annualized basis rather than on the basis
of the four fiscal quarters then ended 3.00 to 1.00
- --------------------------------------------------------------------------------
December 31, 1999 and thereafter through September 30, 2000 3.50 to 1.00
- --------------------------------------------------------------------------------
December 31, 2000 and thereafter 4.00 to 1.00
================================================================================
9.10. Fixed Charge Coverage Ratio. The Borrower will not permit its Fixed
Charge Coverage Ratio for any Testing Period to be less than the ratio specified
below:
================================================================================
Testing Period Ratio
================================================================================
Fiscal Quarter ended March 31, 1999, but determined on an
annualized basis rather than on the basis of the four fiscal
quarters then ended 1.05 to 1.00
- --------------------------------------------------------------------------------
Two Fiscal Quarters ended June 30, 1999, but determined on
an annualized basis rather than on the basis of the four
fiscal quarters then ended 1.05 to 1.00
- --------------------------------------------------------------------------------
Three Fiscal Quarters ended September 30, 1999, but
determined on an annualized basis rather than on the basis
of the four fiscal quarters then ended 1.05 to 1.00
- --------------------------------------------------------------------------------
December 31, 1999 1.05 to 1.00
- --------------------------------------------------------------------------------
March 31, 2000 and thereafter through September 30, 2002 1.10 to 1.00
- --------------------------------------------------------------------------------
December 31, 2002 and thereafter through September 30, 2003 1.15 to 1.00
- --------------------------------------------------------------------------------
December 31, 2003 and thereafter 1.20 to 1.00
================================================================================
9.11. Minimum Consolidated EBITDA. The Borrower will not permit its
Consolidated EBITDA for any Testing Period to be less than the amount specified
below, provided, that in the event the Borrower and/or its Subsidiaries complete
any Acquisition after the Effective Date (other than the Hi-Stat Acquisition),
each of the amounts specified below shall be increased by an amount equal to 85%
of the consolidated earnings before interest, income taxes, depreciation and
amortization attributable to the business and assets acquired in each such
Acquisition for the most recent period of four fiscal quarters preceding the
date such Acquisition is completed:
================================================================================
Testing Period Ratio
================================================================================
December 31, 1998 and thereafter through September 30, 1999 $105,000,000
- --------------------------------------------------------------------------------
December 31, 1999 and thereafter through September 30, 2000 $110,000,000
- --------------------------------------------------------------------------------
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================================================================================
Testing Period Ratio
================================================================================
December 31, 2000 and thereafter through September 30, 2001 $125,000,000
- --------------------------------------------------------------------------------
December 31, 2001 and thereafter $140,000,000
================================================================================
At the time the Borrower and/or its Subsidiaries complete an Acquisition
requiring an adjustment to the foregoing amounts, the Borrower will deliver to
the Administrative Agent and the Lenders a certificate of its chief financial or
accounting officer or another Authorized Officer, reasonably satisfactory in
form and substance to the Administrative Agent, as to the amounts of such
adjustments, and setting forth the calculations and other financial information
(including copies of financial statements of the business acquired in the
Acquisition) used in determining such adjustments.
9.12. Consolidated Capital Expenditures. The Borrower will not, and will
not permit any of its Subsidiaries to, make or incur Consolidated Capital
Expenditures during any fiscal year of the Borrower in excess of the amount
specified below, except that in the event actual Consolidated Capital
Expenditures for any fiscal year are less than such amount, 50% of the
difference may be carried over to the next fiscal year, but not any subsequent
fiscal year:
================================================================================
Fiscal Year Amount
================================================================================
December 31, 1999 $30,000,000
- --------------------------------------------------------------------------------
December 31, 2000 $26,000,000
- --------------------------------------------------------------------------------
December 31, 2001 $30,000,000
- --------------------------------------------------------------------------------
December 31, 2002 and each fiscal year
thereafter $32,000,000
================================================================================
9.13. Certain Leases. The Borrower will not permit the aggregate payments
(excluding any property taxes, insurance or maintenance obligations paid by the
Borrower and its Subsidiaries as additional rent or lease payments) by the
Borrower and its Subsidiaries on a consolidated basis under agreements to rent
or lease any real or personal property for a period exceeding 12 months
(including any renewal or similar option periods), other than any leases
constituting Capital Leases, to exceed 5% of the Borrower's Consolidated Net
Worth as of the date of the financial statements then most recently furnished to
the Lenders pursuant to this Agreement.
9.14. Limitation on Certain Restrictive Agreements. The Borrower will not,
and will not permit any of its Subsidiaries to, directly or indirectly, enter
into, incur or permit to exist or become effective, any "negative pledge"
covenant or other agreement, restriction or arrangement that prohibits,
restricts or imposes any condition upon (a) the ability of the Borrower or any
Subsidiary to create, incur or suffer to exist any Lien upon any of its property
or assets as security for Indebtedness, or (b) the ability of any such
Subsidiary to pay dividends or make any other distributions on its capital stock
or any other interest or participation in its profits owned by the Borrower or
any Subsidiary of the Borrower, or pay any Indebtedness owed to the Borrower or
a Subsidiary of the Borrower, or to make loans or advances to the Borrower or
any of the Borrower's other Subsidiaries, or transfer any of its property or
assets to the Borrower or any of the Borrower's other Subsidiaries, except for
such restrictions existing under or by reason of (i) applicable law, (ii) this
Agreement and the other Credit Documents, (iii) customary provisions restricting
subletting or assignment of any lease governing a leasehold interest, (iv)
customary provisions restricting assignment of any licensing agreement entered
into in the ordinary course of business, (v) customary provisions restricting
the transfer or further encumbering of assets subject to Liens permitted under
section 9.3(b) or (c), (vi)
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restrictions contained in the Existing Indebtedness Agreements as in effect on
the Effective Date (and any similar restrictions contained in any agreement
governing any refinancing or refunding thereof not prohibited by this
Agreement), (vii) customary restrictions affecting only a Subsidiary of the
Borrower under any agreement or instrument governing any of the Indebtedness of
a Subsidiary permitted pursuant to 9.4, (viii) restrictions affecting any
Foreign Subsidiary of the Borrower under any agreement or instrument governing
any Indebtedness of such Foreign Subsidiary permitted pursuant to 9.4, and
customary restrictions contained in "comfort" letters and guarantees of any such
Indebtedness, (ix) any document relating to Indebtedness secured by a Lien
permitted by section 9.3, insofar as the provisions thereof limit grants of
junior liens on the assets securing such Indebtedness, and (x) any operating
lease or Capital Lease, insofar as the provisions thereof limit grants of a
security interest in, or other assignments of, the related leasehold interest to
any other person.
9.15. Prepayments and Refinancings of Other Debt, etc. The Borrower will
not, and will not permit any of its Subsidiaries to, make (or give any notice in
respect thereof) any voluntary or optional prepayment or redemption or
acquisition for value of (including, without limitation, by way of depositing
with the trustee with respect thereto money or securities before due for the
purpose of paying when due) or exchange of, or refinance or refund, any
Indebtedness of the Borrower or its Subsidiaries which has an outstanding
principal balance (or Capitalized Lease Obligation, in the case of a Capital
Lease) greater than $3,000,000 (other than the Obligations and intercompany
loans and advances among the Borrower and its Subsidiaries); provided that (i)
the Borrower or any Subsidiary may prepay any such Indebtedness which is
Existing Indebtedness in connection with a refinancing thereof effected in
accordance with section 9.4(b), and (ii) any Foreign Subsidiary may prepay any
such Indebtedness owed by it to banks or other financial institutions in
connection with a refinancing thereof effected with other banks or financial
institutions in accordance with section 9.4(c).
9.16. Transactions with Affiliates. The Borrower will not, and will not
permit any Subsidiary to, enter into any transaction or series of transactions
with any Affiliate (other than, in the case of the Borrower, any Subsidiary, and
in the case of a Subsidiary, the Borrower or another Subsidiary) other than in
the ordinary course of business of and pursuant to the reasonable requirements
of the Borrower's or such Subsidiary's business and upon fair and reasonable
terms no less favorable to the Borrower or such Subsidiary than would obtain in
a comparable arm's-length transaction with a person other than an Affiliate,
except (i) sales of goods to an Affiliate for use or distribution outside the
United States which in the good faith judgment of the Borrower complies with any
applicable legal requirements of the Code, or (ii) agreements and transactions
with and payments to officers, directors and shareholders which are either (A)
entered into in the ordinary course of business and not prohibited by any of the
provisions of this Agreement, or (B) entered into outside the ordinary course of
business, approved by the directors or shareholders of the Borrower, and not
prohibited by any of the provisions of this Agreement.
9.17. Modifications of Hi-Stat Acquisition Documents, etc. The Borrower
will not enter into any material modification of any of the terms, conditions or
provisions of any of the Hi-Stat Acquisition Documents, or grant any consent or
waiver of any of such terms, conditions or provisions, or release or discharge
any person from any material obligations thereunder. The Borrower will take all
reasonable actions to enforce the obligations of all other parties to any of the
Hi-Stat Acquisition Documents, and will contemporaneously with the assertion or
resolution of any purchase price adjustment, or indemnity claim, made under any
Hi-Stat Acquisition Document, provide the Agents and the Lenders with written
notice thereof, describing in reasonable detail the full particulars thereof.
9.18. Plan Terminations, Minimum Funding, etc. The Borrower will not, and
will not permit any ERISA Affiliate to, (i) terminate any Plan or Plans so as to
result in liability of the Borrower or any ERISA Affiliate to the PBGC in excess
of, in the aggregate, the amount which is equal to the greater of (x)
$3,000,000, or (y) 5% of the Borrower's Consolidated Net Worth as of the date of
the then most recent financial statements furnished to the Lenders pursuant to
the provisions of this Agreement, (ii) permit to exist one or more events or
conditions which reasonably present a material risk of the termination by the
PBGC of any Plan or Plans with respect to which the Borrower or any ERISA
Affiliate would, in the event of such termination, incur liability to the PBGC
in excess of such amount in the aggregate, or (iii) fail to comply with the
minimum funding standards of ERISA and the Code with respect to any Plan.
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SECTION 10. EVENTS OF DEFAULT.
10.1. Events of Default. Any of the following specified events shall
constitute an Event of Default (each an "Event of Default"):
(a) Payments: the Borrower shall (i) default in the payment when due
of any principal of the Loans or any reimbursement obligation in respect
of any Unpaid Drawing; or (ii) default, and such default shall continue
for five or more days, in the payment when due of any interest on the
Loans or any Fees or any other amounts owing hereunder or under any other
Credit Document; or
(b) Representations, etc.: any representation, warranty or statement
made by the Borrower or any other Credit Party herein or in any other
Credit Document or in any statement or certificate delivered or required
to be delivered pursuant hereto or thereto shall prove to be untrue in any
material respect on the date as of which made or deemed made; or
(c) Certain Negative Covenants: the Borrower shall default in the
due performance or observance by it of any term, covenant or agreement
contained in sections 9.2 through 9.13, inclusive, of this Agreement; or
(d) Other Covenants: the Borrower shall default in the due
performance or observance by it of any term, covenant or agreement
contained in this Agreement or any other Credit Document, other than those
referred to in section 10.1(a) or (b) or (c) above, and such default is
not remedied within 30 days after the earlier of (i) an officer of the
Borrower obtaining actual knowledge of such default and (ii) the Borrower
receiving written notice of such default from the Administrative Agent or
the Required Lenders (any such notice to be identified as a "notice of
default " and to refer specifically to this paragraph); or
(e) Cross Default Under Other Agreements: the Borrower or any of its
Subsidiaries shall (i) default in any payment with respect to any
Indebtedness (other than the Obligations) owed to any Lender, or having an
unpaid principal amount or Capitalized Lease Obligation of $5,000,000 or
greater, and such default shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Indebtedness, or (ii) default in the observance or performance of any
agreement or condition relating to any such Indebtedness or contained in
any instrument or agreement evidencing, securing or relating thereto (and
all grace periods applicable to such observance, performance or condition
shall have expired), or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Indebtedness (or a trustee or agent
on behalf of such holder or holders) to cause any such Indebtedness to
become due prior to its stated maturity; or any such Indebtedness of the
Borrower or any of its Subsidiaries shall be declared to be due and
payable, or shall be required to be prepaid (other than by a regularly
scheduled required prepayment or redemption, prior to the stated maturity
thereof); or (iii) without limitation of the foregoing clauses, the
Borrower or any of its Subsidiaries shall default in any payment
obligation under a Designated Hedge Agreement, and such default shall
continue after the applicable grace period, if any, specified in such
Designated Hedge Agreement or any other agreement or instrument relating
thereto; or
(f) Other Credit Documents: the Subsidiary Guaranty or any Security
Document (once executed and delivered) shall cease for any reason (other
than termination in accordance with its terms) to be in full force and
effect; or any Credit Party shall default in any payment obligation
thereunder; or any Credit Party shall default in any material respect in
the due performance and observance of any other obligation thereunder and
such default shall continue unremedied for a period of at least 30 days
after notice by the Administrative Agent or the Required Lenders; or any
Credit Party shall (or seek to) disaffirm or otherwise limit its
obligations thereunder otherwise than in strict compliance with the terms
thereof; or
(g) Judgments: (i) one or more judgments, orders or decrees shall be
entered against the Borrower and/or any of its Subsidiaries involving a
liability (other than a liability covered by insurance, as to which the
carrier has adequate claims paying ability and has not effectively
reserved its rights) of
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$5,000,000 or more in the aggregate for all such judgments, orders and
decrees for the Borrower and its Subsidiaries, and any such judgments or
orders or decrees shall not have been vacated, discharged or stayed or
bonded pending appeal within 30 days (or such longer period, not in excess
of 60 days, during which enforcement thereof, and the filing of any
judgment lien, is effectively stayed or prohibited) from the entry
thereof; or (ii) one or more judgments, orders or decrees shall be entered
against the Borrower and/or any of its Subsidiaries involving a required
divestiture of any material properties, assets or business reasonably
estimated to have a fair value in excess of $10,000,000, and any such
judgments, orders or decrees shall not have been vacated, discharged or
stayed or bonded pending appeal within 30 days (or such longer period, not
in excess of 60 days, during which enforcement thereof, and the filing of
any judgment lien, is effectively stayed or prohibited) from the entry
thereof; or
(h) Bankruptcy, etc.: any of the following shall occur:
(i) the Borrower, any of its Material Subsidiaries or any
other Credit Party (the Borrower and each of such other persons,
each a "Principal Party") shall commence a voluntary case concerning
itself under Title 11 of the United States Code entitled
"Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or
(ii) an involuntary case is commenced against any Principal
Party under the Bankruptcy Code and the petition is not controverted
within 10 days, or is not dismissed within 60 days, after
commencement of the case; or
(iii) a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the
property of any Principal Party; or
(iv) any Principal Party commences (including by way of
applying for or consenting to the appointment of, or the taking of
possession by, a rehabilitator, receiver, custodian, trustee,
conservator or liquidator (collectively, a "conservator") of itself
or all or any substantial portion of its property) any other
proceeding under any reorganization, arrangement, adjustment of
debt, relief of debtors, dissolution, insolvency, liquidation,
rehabilitation, conservatorship or similar law of any jurisdiction
whether now or hereafter in effect relating to such Principal Party;
or
(v) any such proceeding is commenced against any Principal
Party to the extent such proceeding is consented by such person or
remains undismissed for a period of 60 days; or
(vi) any Principal Party is adjudicated insolvent or
bankrupt; or
(vii) any order of relief or other order approving any such
case or proceeding is entered; or
(viii) any Principal Party suffers any appointment of any
conservator or the like for it or any substantial part of its
property which continues undischarged or unstayed for a period of 60
days; or
(ix) any Principal Party makes a general assignment for the
benefit of creditors; or
(x) any corporate (or similar organizational) action is taken
by any Principal Party for the purpose of effecting any of the
foregoing; or
(i) ERISA: (i) any of the events described in clauses (i) through
(viii) of section 8.1(g) shall have occurred; or (ii) there shall result
from any such event or events the imposition of a lien, the granting of a
security interest, or a liability or a material risk of incurring a
liability; and (iii) any such event or events or any such lien, security
interest or liability, individually, and/or in the aggregate, in the
opinion of the Required Lenders, has had, or could reasonably be expected
to have, a Material Adverse Effect.
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10.2. Acceleration, etc. Upon the occurrence of any Event of Default, and
at any time thereafter, if any Event of Default shall then be continuing, the
Administrative Agent shall, upon the written request of the Required Lenders, by
written notice to the Borrower, take any or all of the following actions,
without prejudice to the rights of the Administrative Agent, the Collateral
Agent or any Lender to enforce its claims against the Borrower or any other
Credit Party in any manner permitted under applicable law:
(a) declare the Total Commitment terminated, whereupon the
Commitment of each Lender shall forthwith terminate immediately without
any other notice of any kind;
(b) declare the principal of and any accrued interest in respect of
all Loans, all Unpaid Drawings and all other Obligations owing hereunder
and thereunder (including, without limitation, in the case of any Term B
Loans, any Term B Prepayment Premium which would then be payable if such
Term B Loans had then been prepaid pursuant to section 5.1) to be,
whereupon the same shall become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower;
(c) terminate any Letter of Credit which may be terminated in
accordance with its terms;
(d) direct the Borrower to pay (and the Borrower hereby agrees that
on receipt of such notice or upon the occurrence of an Event of Default
with respect to the Borrower under section 10.1(h), it will pay) to the
Administrative Agent an amount of cash equal to the aggregate Stated
Amount of all Letters of Credit then outstanding (such amount to be held
as security for the Borrower's (and any Subsidiary which is an account
party) reimbursement obligations in respect thereof); and/or
(e) exercise any other right or remedy available under any of the
Credit Documents or applicable law;
provided that, if an Event of Default specified in section 10.1(h) shall occur
with respect to the Borrower, the result which would occur upon the giving of
written notice by the Administrative Agent as specified in clauses (a) and/or
(b) above shall occur automatically without the giving of any such notice.
10.3. Application of Liquidation Proceeds. All monies received by the
Administrative Agent, the Collateral Agent or any Lender from the exercise of
remedies hereunder or under the other Credit Documents or under any other
documents relating to this Agreement shall, unless otherwise required by the
terms of the other Credit Documents or by applicable law, be applied as follows:
(i) first, to the payment of all expenses (to the extent not
otherwise paid by the Borrower or any of the other Credit Parties)
incurred by the Administrative Agent and the Lenders in connection with
the exercise of such remedies, including, without limitation, all
reasonable costs and expenses of collection, reasonable documented
attorneys' fees, court costs and any foreclosure expenses;
(ii) second, to the payment pro rata of interest then accrued on
the outstanding Loans;
(iii) third, to the payment pro rata of any fees then accrued and
payable to the Administrative Agent, any Letter of Credit Issuer or any
Lender under this Agreement in respect of the Loans or the Letter of
Credit Outstandings;
(iv) fourth, to the payment pro rata of (A) the principal balance
then owing on the outstanding Loans and in the case of any Term B Loans,
any Term B Prepayment Premium which would then be payable if such Term B
Loans had then been prepaid pursuant to section 5.1, (B) the amounts then
due under Designated Hedge Agreements to creditors of the Borrower or any
Subsidiary, subject to confirmation by the Administrative Agent of any
calculations of termination or other payment amounts being made in
accordance with normal industry practice, and (C) the Stated Amount of the
Letter of Credit Outstandings (to be held and applied by the
Administrative Agent as security for the reimbursement obligations in
respect thereof);
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(v) fifth, to the payment to the Lenders of any amounts then
accrued and unpaid under sections 2.9, 2.10, 3.5 and 5.4 hereof, and if
such proceeds are insufficient to pay such amounts in full, to the payment
of such amounts pro rata;
(vi) sixth, to the payment pro rata of all other amounts owed by
the Borrower to the Administrative Agent, to any Letter of Credit Issuer
or any Lender under this Agreement or any other Credit Document, and to
any counterparties under Designated Hedge Agreements of the Borrower and
its Subsidiaries, and if such proceeds are insufficient to pay such
amounts in full, to the payment of such amounts pro rata; and
(vii) finally, any remaining surplus after all of the Obligations
have been paid in full, to the Borrower or to whomsoever shall be lawfully
entitled thereto.
SECTION 11. THE AGENTS.
11.1. Appointments. (a) Each Lender hereby irrevocably designates and
appoints NCB as Administrative Agent (such term to include, for the purposes of
this section 11, NCB acting as Collateral Agent) to act as specified herein and
in the other Credit Documents, and each such Lender hereby irrevocably
authorizes NCB as the Administrative Agent for such Lender, to take such action
on its behalf under the provisions of this Agreement and the other Credit
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Credit Documents, together with such other powers as are reasonably
incidental thereto.
(b) Each Lender hereby irrevocably designates and appoints PNC Bank as
Documentation Agent to act as specified herein and in the other Credit
Documents, and each such Lender hereby irrevocably authorizes PNC Bank as the
Documentation Agent for such Lender, to take such action on its behalf under the
provisions of this Agreement and the other Credit Documents and to exercise such
powers and perform such duties as are expressly delegated to the Documentation
Agent by the terms of this Agreement and the other Credit Documents, together
with such other powers as are reasonably incidental thereto.
(c) Each Lender hereby irrevocably designates and appoints DLJ as
Syndication Agent to act as specified herein and in the other Credit Documents,
and each such Lender hereby irrevocably authorizes DLJ as the Syndication Agent
for such Lender, to take such action on its behalf under the provisions of this
Agreement and the other Credit Documents and to exercise such powers and perform
such duties as are expressly delegated to the Syndication Agent by the terms of
this Agreement and the other Credit Documents, together with such other powers
as are reasonably incidental thereto.
(d) Each Agent agrees to act as such upon the express conditions contained
in this section 11. Notwithstanding any provision to the contrary elsewhere in
this Agreement, no Agent shall have any duties or responsibilities, except those
expressly set forth herein or in the other Credit Documents, nor any fiduciary
relationship with any Lender or any other Agent, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or otherwise exist against any Agent. The provisions of this
section 11 are solely for the benefit of the Agents and the Lenders, and the
Borrower and its Subsidiaries shall not have any rights as a third party
beneficiary of any of the provisions hereof. In performing its functions and
duties under this Agreement, an Agent shall act solely as agent of the Lenders
and does not assume and shall not be deemed to have assumed any obligation or
relationship of agency or trust with or for the Borrower or any of its
Subsidiaries.
11.2. Delegation of Duties. An Agent may execute any of its duties under
this Agreement or any other Credit Document by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. An Agent shall not be responsible for the
negligence or misconduct of (i) any other Agent, or (ii) any agents or
attorneys-in-fact selected by it with reasonable care except to the extent
otherwise required by section 11.3.
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11.3. Exculpatory Provisions. Neither an Agent nor any of its respective
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
person under or in connection with this Agreement (except for its or such
person's own gross negligence or willful misconduct) or (ii) responsible in any
manner to any of the Lenders or other Agents for any recitals, statements,
representations or warranties made by the Borrower or of its Subsidiaries or any
of their respective officers contained in this Agreement, any other Credit
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by such Agent under or in connection with, this
Agreement or any other Credit Document or for any failure of the Borrower or any
Subsidiary of the Borrower or any of their respective officers to perform its
obligations hereunder or thereunder. No Agent shall be under any obligation to
any Lender or any other Agent to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement, or to inspect the properties, books or records of the Borrower or any
of its Subsidiaries. An Agent shall not be responsible to any Lender or any
other Agent for the effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Agreement or any Credit Document or for
any representations, warranties, recitals or statements made herein or therein
or made in any written or oral statement or in any financial or other
statements, instruments, reports, certificates or any other documents in
connection herewith or therewith furnished or made by such Agent to the Lenders
or any other Agent or by or on behalf of the Borrower or any of its Subsidiaries
to any Agent or any Lender or be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained herein or therein or as to the use of the proceeds of
the Loans or of the existence or possible existence of any Default or Event of
Default.
11.4. Reliance by Agents. Each Agent shall be entitled to rely, and shall
be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, facsimile
transmission, telex or teletype message, statement, order or other document or
conversation believed by it, in good faith, to be genuine and correct and to
have been signed, sent or made by the proper person or persons and upon advice
and statements of legal counsel (including, without limitation, counsel to the
Borrower or any of its Subsidiaries), independent accountants and other experts
selected by such Agent. Each Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Credit Document
unless it shall first receive such advice or concurrence of the Required Lenders
as it deems appropriate or it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. Each Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Credit Documents in accordance with a request of
the Required Lenders (or all of the Lenders, as to any matter which, pursuant to
section 12.12, can only be effectuated with the consent of all Lenders), and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders.
11.5. Notice of Default. No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder, other
than, in the case of the Administrative Agent only, a Default in the payment of
principal of or interest on the Loans under section 10.1(a), unless such Agent
has received notice from a Lender, another Agent or the Borrower referring to
this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that an Agent receives such a
notice, such Agent shall give prompt notice thereof to the Lenders and the other
Agents. The Administrative Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders, provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
11.6. Non-Reliance. Each Lender expressly acknowledges that neither any
Agent or Lead Arranger, nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates, have made any representations or warranties to
it and that no act by any Agent or Lead Arranger hereinafter taken, including
any review of the affairs of the Borrower or any of its Subsidiaries, shall be
deemed to constitute any representation or warranty by such Agent or Lead
Arranger to any Lender or any other Agent or Lead Arranger. Each Lender
represents to the Agents and the Lead Arrangers that it has, independently and
without reliance upon any Agent, any Lead Arranger or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, assets, operations,
property, financial and other conditions, prospects and creditworthiness of the
Borrower and its Subsidiaries and made its own decision to make its Loans and
participate in
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Letters of Credit hereunder, and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon any Agent or
Lead Arranger, or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement, and to make such investigation as it deems necessary to inform itself
as to the business, assets, operations, property, financial and other
conditions, prospects and creditworthiness of the Borrower and its Subsidiaries.
No Agent or Lead Arranger shall have any duty or responsibility to provide any
Lender or any other Agent or Lead Arranger with any credit or other information
concerning the business, operations, assets, property, financial and other
conditions, prospects or creditworthiness of the Borrower or any of its
Subsidiaries which may come into the possession of such Agent or Lead Arranger
or any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
11.7. Indemnification. The Lenders agree to indemnify each Agent in its
capacity as such ratably according to their respective Loans and Unutilized
Commitments, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, reasonable expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Obligations) be imposed on,
incurred by or asserted against an Agent in its capacity as such in any way
relating to or arising out of this Agreement or any other Credit Document, or
any documents contemplated by or referred to herein or the transactions
contemplated hereby or any action taken or omitted to be taken by an Agent under
or in connection with any of the foregoing, but only to the extent that any of
the foregoing is not paid by the Borrower, provided that no Lender shall be
liable to an Agent for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting solely from such Agent's gross
negligence or willful misconduct. If any indemnity furnished to an Agent for any
purpose shall, in the opinion of such Agent, be insufficient or become impaired,
such Agent may call for additional indemnity and cease, or not commence, to do
the acts indemnified against until such additional indemnity is furnished. The
agreements in this section 11.7 shall survive the payment of all Obligations.
11.8. The Agents in Their Individual Capacity. An Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Borrower, its Subsidiaries and their Affiliates as though not
acting as an Agent hereunder. With respect to the Loans made by it and all
Obligations owing to it, an Agent shall have the same rights and powers under
this Agreement as any Lender and may exercise the same as though it were not an
Agent, and the terms "Lender" and "Lenders" shall include each Agent in its
individual capacity.
11.9. Successor Agents. An Agent may resign as such upon 20 Business Days'
notice to the Lenders and the Borrower. The Required Lenders shall appoint from
among the Lenders a successor Agent for the Lenders, subject to (unless an Event
of Default shall have occurred and be continuing) prior approval by the Borrower
of such successor (such approval not to be unreasonably withheld or delayed),
whereupon such successor agent shall succeed to the rights, powers and duties of
the resigning Agent, and the term "Administrative Agent", "Documentation Agent"
or "Syndication Agent", as applicable, shall include such successor agent
effective upon its appointment, and the resigning Agent's rights, powers and
duties as such Agent shall be terminated, without any other or further act or
deed on the part of such former Agent or any of the parties to this Agreement.
After a retiring Agent's resignation hereunder as an Agent, the provisions of
this section 11 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was an Agent under this Agreement.
11.10. Other Agents. Any Lender or other party hereto identified herein as
an Arranger, Lead Arranger, Co-Agent, Managing Agent, Manager or any other
corresponding title, other than "Administrative Agent", "Collateral Agent",
"Documentation Agent" or "Syndication Agent", shall have no right, power,
obligation, liability, responsibility or duty under this Agreement or any other
Credit Document except in the case of any such person which is also a Lender,
those applicable to all Lenders as such. Each Lender acknowledges that it has
not relied, and will not rely, on any Lender or other person so identified in
deciding to enter into this Agreement or in taking or not taking any action
hereunder.
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SECTION 12. MISCELLANEOUS.
12.1. Payment of Expenses etc. (a) Whether or not the transactions
contemplated hereby are consummated, the Borrower agrees to pay (or reimburse
the Administrative Agent, the Collateral Agent, the Lead Arrangers, the
Documentation Agent and the Syndication Agent for) all reasonable out-of-pocket
costs and expenses of the Administrative Agent, the Collateral Agent, the Lead
Arrangers, the Documentation Agent and the Syndication Agent in connection with
the negotiation, preparation, execution and delivery of the Credit Documents and
the documents and instruments referred to therein, including, without
limitation, the reasonable fees and disbursements of Jones, Day, Reavis & Pogue,
special counsel to the Administrative Agent.
(b) The Borrower agrees to pay (or reimburse the Administrative Agent, the
Lead Arrangers, the Documentation Agent, the Syndication Agent and the initial
Lenders party hereto for) all reasonable out-of-pocket costs and expenses of the
Administrative Agent, the Lead Arrangers, the Documentation Agent, the
Syndication Agent and the initial Lenders party hereto in connection with the
syndication on or prior to the Syndication Date of portions of the Loans and
Commitments of the initial Lenders to Eligible Transferees who may become
additional Lenders hereunder, including, without limitation, the reasonable fees
and disbursements of internal or special counsel for any of such persons.
(c) The Borrower agrees to pay (or reimburse the Agents and the Lenders
for) all reasonable out-of-pocket costs and expenses of the Agents and the
Lenders in connection with any amendment, waiver or consent relating to any of
the Credit Documents which is requested by any Credit Party, including, without
limitation, the reasonable fees and disbursements of Jones, Day, Reavis & Pogue,
special counsel to the Administrative Agent.
(d) The Borrower agrees to pay (or reimburse the Agents and the Lenders
for) all reasonable out-of-pocket costs and expenses of the Agents and the
Lenders in connection with the enforcement of any of the Credit Documents or the
other documents and instruments referred to therein, including, without
limitation, (i) the reasonable fees and disbursements of Jones, Day, Reavis &
Pogue, special counsel to the Administrative Agent, and (ii) the reasonable fees
and disbursements of any individual counsel to any Lender (including allocated
costs of internal counsel).
(e) Without limitation of the preceding section 12.1(d), in the event of
the bankruptcy, insolvency, rehabilitation or other similar proceeding in
respect of the Borrower or any of its Subsidiaries, the Borrower agrees to pay
all costs of collection and defense, including reasonable attorneys' fees in
connection therewith and in connection with any appellate proceeding or
post-judgment action involved therein, which shall be due and payable together
with all required service or use taxes.
(f) The Borrower agrees to pay and hold each Agent and each of the Lenders
harmless from and against any and all present and future stamp and other similar
taxes with respect to the foregoing matters and save each Agent and each of the
Lenders harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
any such indemnified person) to pay such taxes.
(g) The Borrower agrees to indemnify each Agent and each Lender, its
officers, directors, employees, representatives and agents (collectively, the
"Indemnitees") from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses reasonably incurred by any of them as a
result of, or arising out of, or in any way related to, or by reason of
(i) any investigation, litigation or other proceeding (whether or
not any Lender is a party thereto) related to the entering into and/or
performance of any Credit Document or the use of the proceeds of any Loans
hereunder or the consummation of any transactions contemplated in any
Credit Document, other than any such investigation, litigation or
proceeding arising out of transactions solely between any of the Lenders
or the Administrative Agent, transactions solely involving the assignment
by a Lender of all or a portion of its Loans and Commitments, or the
granting of participations therein, as provided in this Agreement, or
arising solely out of any examination of a Lender by any regulatory or
other governmental authority having jurisdiction over it, or
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(ii) the actual or alleged presence of Hazardous Materials in the
air, surface water or groundwater or on the surface or subsurface of any
Real Property owned, leased or at any time operated by the Borrower or any
of its Subsidiaries, the release, generation, storage, transportation,
handling or disposal of Hazardous Materials at any location, whether or
not owned or operated by the Borrower or any of its Subsidiaries, if the
Borrower or any such Subsidiary could have or is alleged to have any
responsibility in respect thereof, the non-compliance of any such Real
Property with foreign, federal, state and local laws, regulations and
ordinances (including applicable permits thereunder) applicable thereto,
or any Environmental Claim asserted against the Borrower or any of its
Subsidiaries, in respect of any such Real Property,
including, in each case, without limitation, the reasonable documented fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding (but excluding any such losses, liabilities,
claims, damages or expenses to the extent incurred by reason of the gross
negligence or willful misconduct of the person to be indemnified or of any other
Indemnitee who is such person or an Affiliate of such person). To the extent
that the undertaking to indemnify, pay or hold harmless any person set forth in
the preceding sentence may be unenforceable because it is violative of any law
or public policy, the Borrower shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
12.2. Right of Setoff. In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence and during the continuance of an Event of Default,
each Lender is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to the Borrower or to
any other person, any such notice being hereby expressly waived, to set off and
to appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by such Lender (including, without
limitation, by branches and agencies of such Lender wherever located) to or for
the credit or the account of the Borrower against and on account of the
Obligations and liabilities of the Borrower to such Lender under this Agreement
or under any of the other Credit Documents, including, without limitation, all
interests in Obligations the Borrower purchased by such Lender pursuant to
section 12.4(c), and all other claims of any nature or description arising out
of or connected with this Agreement or any other Credit Document, irrespective
of whether or not such Lender shall have made any demand hereunder and although
said Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
12.3. Notices. Except as otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
telegraphic, telex, facsimile transmission or cable communication) and mailed,
telegraphed, telexed, transmitted, cabled or delivered, if to the Borrower, at
9400 East Market Street, Warren, Ohio 44484, attention: Vice President & Chief
Financial Officer (facsimile: (330) 856-3618); if to any Lender at its address
specified for such Lender on its Administrative Questionnaire or the Assignment
Agreement pursuant to which it became a Lender hereunder; if to the
Administrative Agent, at its Notice Office; or at such other address as shall be
designated by any party in a written notice to the other parties hereto. All
such notices and communications shall be mailed, telegraphed, telexed,
telecopied, or cabled or sent by overnight courier, and shall be effective when
received.
12.4. Benefit of Agreement. (a) Successors and Assigns Generally. This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors and assigns, provided that
the Borrower may not assign or transfer any of its rights or obligations
hereunder without the prior written consent of all the Lenders, and, provided,
further, that any assignment by a Lender of its rights and obligations hereunder
shall be effected in accordance with section 12.4(c).
(b) Participations. Notwithstanding the foregoing, each Lender may at any
time grant participations in any of its rights hereunder or under any of the
Notes to (x) another Lender that is not a Defaulting Lender or to an Affiliate
of such Lender which is a commercial bank, financial institution or other
"accredited investor" (as defined in SEC Regulation D), and (y) one or more
Eligible Transferees, provided that in the case of any such participation,
(i) the participant shall not have any rights under this Agreement
or any of the other Credit Documents, including rights of consent,
approval or waiver (the participant's rights against such Lender in
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respect of such participation to be those set forth in the agreement
executed by such Lender in favor of the participant relating thereto),
(ii) such Lender's obligations under this Agreement (including,
without limitation, its Commitment hereunder) shall remain unchanged,
(iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations,
(iv) such Lender shall remain the holder of any Note for all
purposes of this Agreement, and
(v) the Borrower, the Administrative Agent, and the other Lenders
shall continue to deal solely and directly with the selling Lender in
connection with such Lender's rights and obligations under this Agreement,
and all amounts payable by the Borrower hereunder shall be determined as
if such Lender had not sold such participation, except that the
participant shall be entitled to the benefits of sections 2.9 and 2.10 of
this Agreement to the extent that such Lender would be entitled to such
benefits if the participation had not been entered into or sold,
and, provided further, that no Lender shall transfer, grant or sell any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (w) extend the final scheduled
maturity or change the Scheduled Repayments of the Loans in which such
participant is participating, or reduce the rate or extend the time of payment
of interest or Fees thereon (except in connection with a waiver of the
applicability of any post-default increase in interest rates), or reduce the
principal amount thereof, or increase such participant's participating interest
in any Commitment over the amount thereof then in effect (it being understood
that a waiver of any Default or Event of Default shall not constitute a change
in the terms of any such Commitment), (x) change any of the Borrowing Base
provisions of this Agreement, including any related definitions, in any respect
materially adverse to the Lenders, (y) release all or any substantial portion of
the Collateral, or release any guarantor from its guaranty of any of the
Obligations, except strictly in accordance with the terms of the Credit
Documents, or (z) consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Agreement.
(c) Assignments by Lenders. Notwithstanding the foregoing, (x) any Lender
may assign all or a fixed portion of its Loans and/or Commitment, and its rights
and obligations hereunder, which does not have to be pro rata among the
Facilities, to another Lender that is not a Defaulting Lender, or to an
Affiliate of any Lender (including itself) and which is not a Defaulting Lender
and which is a commercial bank, financial institution or other "accredited
investor" (as defined in SEC Regulation D), and (y) any Lender may assign all,
or if less than all, a fixed portion, equal to at least $1,000,000 in the
aggregate for the assigning Lender or assigning Lenders, of its Loans and/or
Commitment and its rights and obligations hereunder, which does not have to be
pro rata among the Facilities, to one or more Eligible Transferees, each of
which assignees shall become a party to this Agreement as a Lender by execution
of an Assignment Agreement, provided that
(i) in the case of any assignment of a portion of any Loans and/or
Commitment of a Lender, such Lender shall retain a minimum fixed portion
of all Loans and Commitments equal to at least $1,000,000,
(ii) at the time of any such assignment the Lender Register shall
be deemed modified to reflect the Commitments of such new Lender and of
the existing Lenders,
(iii) upon surrender of the old Notes, new Notes will be issued, at
the Borrower's expense, to such new Lender and to the assigning Lender,
such new Notes to be in conformity with the requirements of section 2.5
(with appropriate modifications) to the extent needed to reflect the
revised Commitments,
(iv) in the case of clause (y) only, the consent of the
Administrative Agent and each Letter of Credit Issuer shall be required in
connection with any such assignment (which consent shall not be
unreasonably withheld or delayed), and
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(v) the Administrative Agent shall receive at the time of each such
assignment, from the assigning or assignee Lender, the payment of a
non-refundable assignment fee of $3,500,
and, provided further, that such transfer or assignment will not be effective
until the Assignment Agreement in respect thereof is recorded by the
Administrative Agent on the Lender Register maintained by it as provided herein.
To the extent of any assignment pursuant to this section 12.4(c) the
assigning Lender shall be relieved of its obligations hereunder with respect to
its assigned Commitments.
At the time of each assignment pursuant to this section 12.4(c) to a
person which is not already a Lender hereunder and which is not a United States
person (as such term is defined in section 7701(a)(30) of the Code) for Federal
income tax purposes, the respective assignee Lender shall provide to the
Borrower and the Administrative Agent the appropriate Internal Revenue Service
Forms (and, if applicable a Section 5.4(b)(ii) Certificate) described in section
5.4(b). To the extent that an assignment of all or any portion of a Lender's
Commitment and related outstanding Obligations pursuant to this section 12.4(c)
would, at the time of such assignment, result in increased costs under section
2.9 from those being charged by the respective assigning Lender prior to such
assignment, then the Borrower shall not be obligated to pay such increased costs
(although the Borrower shall be obligated to pay any other increased costs of
the type described above resulting from changes after the date of the respective
assignment).
Nothing in this section 12.4(c) shall prevent or prohibit any Lender from
pledging its Notes or Loans to a Federal Reserve Bank in support of borrowings
made by such Lender from such Federal Reserve Bank.
(d) No SEC Registration or Blue Sky Compliance. Notwithstanding any other
provisions of this section 12.4, no transfer or assignment of the interests or
obligations of any Lender hereunder or any grant of participation therein shall
be permitted if such transfer, assignment or grant would require the Borrower to
file a registration statement with the SEC or to qualify the Loans under the
"Blue Sky" laws of any State.
(e) Representations of Lenders. Each Lender initially party to this
Agreement hereby represents, and each person that became a Lender pursuant to an
assignment permitted by this section 12.4 will, upon its becoming party to this
Agreement, represent that it is a commercial lender, other financial institution
or other "accredited" investor (as defined in SEC Regulation D) which makes or
acquires loans in the ordinary course of its business and that it will make or
acquire Loans for its own account in the ordinary course of such business,
provided that subject to the preceding sections 12.4(b) and (c), the disposition
of any promissory notes or other evidences of or interests in Indebtedness held
by such Lender shall at all times be within its exclusive control.
12.5. No Waiver: Remedies Cumulative. No failure or delay on the part of
the Administrative Agent or any Lender in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between the Borrower and the Administrative Agent or any Lender shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the Administrative
Agent or any Lender would otherwise have. No notice to or demand on the Borrower
in any case shall entitle the Borrower to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand.
12.6. Payments Pro Rata. (a) The Administrative Agent agrees that promptly
after its receipt of each payment from or on behalf of the Borrower in respect
of any Obligations, it shall distribute such payment to the Lenders (other than
any Lender that has expressly waived in writing its right to receive its pro
rata share thereof) pro rata based upon their respective shares, if any, of the
Obligations with respect to which such payment was received. As to any such
payment received by the Administrative Agent prior to 1:00 P.M. (local time at
the Payment Office) in funds which are immediately available on such day, the
Administrative Agent will use all reasonable efforts to distribute such payment
in immediately available funds on the same day to the Lenders as aforesaid.
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(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans or Fees, of a sum which with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total of such
Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations to such Lenders in such amount as shall result in a proportional
participation by all of the Lenders in such amount, provided that if all or any
portion of such excess amount is thereafter recovered from such Lender, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding sections 12.6(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Lenders which are not Defaulting Lenders, as opposed to
Defaulting Lenders.
12.7. Calculations: Computations. (a) The financial statements to be
furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Lenders); provided, that if at any time the computations
determining compliance with section 9 utilize accounting principles different
from those utilized in the financial statements furnished to the Lenders, such
computations shall set forth in reasonable detail a description of the
differences and the effect upon such computations.
(b) All computations of interest on Eurodollar Loans hereunder and all
computations of Commitment Fees, Letter of Credit Fees and other Fees hereunder
shall be made on the actual number of days elapsed over a year of 360 days, and
all computations of interest on Prime Rate Loans hereunder shall be made on the
actual number of days elapsed over a year of 365 or 366 days, as applicable.
12.8. Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury
Trial. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF OHIO, TO THE FULLEST
EXTENT PERMITTED BY LAW, THE BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY JURISDICTION OTHER THAN THE STATE
OF OHIO GOVERNS THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS. Any legal
action or proceeding with respect to this Agreement or any other Credit Document
may be brought in the Court of Common Pleas of Cuyahoga County, Ohio, or of the
United States for the Northern District of Ohio, and, by execution and delivery
of this Agreement, the Borrower hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. The Borrower hereby further irrevocably consents to the
service of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the Borrower at its address for notices pursuant to section
12.3, such service to become effective 30 days after such mailing or at such
earlier time as may be provided under applicable law. Nothing herein shall
affect the right of the Administrative Agent or any Lender to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against the Borrower in any other jurisdiction.
(b) The Borrower hereby irrevocably waives any objection which it may now
or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in section 12.8(a) above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
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OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
12.9. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same agreement. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
12.10. Effectiveness. This Agreement shall become effective on the date
(the "Effective Date") on which the Borrower and each of the Lenders shall have
signed a copy hereof (whether the same or different copies) and shall have
delivered the same to the Administrative Agent at the Notice Office of the
Administrative Agent or, in the case of the Lenders, shall have given to the
Administrative Agent telephonic (confirmed in writing), written telex or
facsimile transmission notice (actually received) at such office that the same
has been signed and mailed to it.
12.11. Headings Descriptive. The headings of the several sections and
other portions of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.
12.12. Amendment or Waiver. (a) Neither this Agreement nor any terms
hereof or thereof may be amended, changed, waived, discharged or terminated
unless such amendment, change, waiver, discharge or termination is in writing
signed by the Borrower and (w) the Required Revolving Lenders, if it affects
only the Revolving Commitments and/or the Revolving Loans, (x) the Required Term
A Lenders, if it affects only the Term A Commitments and/or the Term A Loans,
(y) the Required Term B Lenders, if it affects only the Term B Commitments
and/or the Term B Loans, or (z) in all other cases, the Required Lenders,
provided that no such change, waiver, discharge or termination shall, without
the consent of each Lender (other than a Defaulting Lender) affected thereby,
(i) change the amount or time of payment of the Scheduled
Repayments provided for in section 5.2, extend any maturity date provided
for herein applicable to a Loan or a Commitment, reduce the rate or extend
the time of payment of interest (other than as a result of waiving the
applicability of any post-default increase in interest rates) or Fees
thereon, or reduce the principal amount thereof, or increase the
Commitment of any Lender over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default shall not
constitute a change in the terms of any Commitment of any Lender),
(ii) change the amount or time of any Scheduled Repayments,
voluntary or mandatory prepayments, or Commitment reductions to which any
Revolving Lenders, Term A Lenders or Term B Lenders (each a "Class of
Lenders") are entitled (a "Benefitted Class of Lenders"), in any manner
adverse to the interests of any other Class of Lenders (an "Affected Class
of Lenders"), unless such change has also been consented to by each
Affected Class of Lenders, acting with the consent of (A) the Required
Revolving Lenders, if the Revolving Lenders are an Affected Class of
Lenders, (B) the Required Term A Lenders, if the Term A Lenders are an
Affected Class of Lenders, and/or (C) the Required Term B Lenders, if the
Term B Lenders are an Affected Class of Lenders (it being understood and
agreed that any amendment, modification, termination or waiver which only
postpones or reduces any Scheduled Repayment, voluntary or mandatory
prepayment, or Commitment reduction from those set forth in sections 4 and
5 of this Agreement with respect to one Class of Lenders but not any other
Class of Lenders shall not be deemed to be adverse to any other Class of
Lenders for purposes of this clause (ii)),
(iii) release the Borrower from any obligations as a guarantor of
its Subsidiaries' obligations under any Credit Document,
(iv) release any Credit Party from the Subsidiary Guaranty, except
in connection with a transaction permitted by section 9.2(d),
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(v) release all or any substantial portion of the Collateral,
except in connection with a transaction permitted by section 9.2(d),
(vi) have the effect of securing additional Indebtedness (other
than Indebtedness comprising the Obligations and any Designated Hedge
Agreements) by any Collateral, unless the amendment, modification or
change having such effect shall have been approved by (A) the Required
Revolving Lenders (except that for this purpose the percentage contained
in the definition of Required Revolving Lenders shall be deemed changed to
from 51% to 66+2/3%), (B) the Required Term A Lenders (except that for
this purpose the percentage contained in the definition of Required Term A
Lenders shall be deemed changed to from 51% to 66+2/3%), and (C) the
Required Term B Lenders (except that for this purpose the percentage
contained in the definition of Required Term B Lenders shall be deemed
changed to from 51% to 66+2/3%),
(vii) change any of the Borrowing Base provisions of this
Agreement, including any related definitions, in any respect materially
adverse to the Lenders,
(viii) change the definition of the term "Change of Control" or any
of the provisions of section 4.3 or 5.2 which are applicable upon a Change
of Control,
(ix) amend, modify or waive any provision of this section 12.12,
or section 11.7, 12.1, 12.4, 12.6 or 12.7(b), or any other provision of
any of the Credit Documents pursuant to which the consent or approval of
all Lenders is by the terms of such provision explicitly required,
(x) reduce the percentage specified in, or otherwise modify, the
definition of Required Term A Lenders, Required Term B Lenders, Required
Revolving Lenders or Required Lenders, or
(xi) consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Agreement.
(b) No provision of section 3 or 11 may be amended without the consent of
(x) any Letter of Credit Issuer adversely affected thereby or (y) the
Administrative Agent, respectively.
(c) The Administrative Agent and the Collateral Agent will not enter into
any amendment, change, waiver, discharge or termination of any of the other
Credit Documents, except as specifically provided therein or as authorized as
contemplated by a request of the Required Lenders (or all of the Lenders, as to
any matter which, pursuant to this section 12.12, can only be effectuated with
the consent of all Lenders).
(d) Any waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it was given. Any amendment,
modification, termination, waiver or consent effected in accordance with this
section 12.12 shall be binding upon each Lender at the time outstanding, each
future Lender and, if signed by the Borrower, on the Borrower. For purposes of
this section 12.12, the Syndication Agent and the Administrative Agent shall
jointly have primary responsibility, together with the Borrower, for the
negotiation, preparation and documentation relating to any amendment,
modification or waiver of this Agreement, any other Credit Document or any other
agreement or document related hereto or thereto contemplated pursuant to this
section 12.12.
12.13. Survival of Indemnities. All indemnities set forth herein
including, without limitation, in section 2.9, 2.10, 3.5, 5.4, 11.7 or 12.1
shall survive the execution and delivery of this Agreement and the making and
repayment of Loans.
12.14. Domicile of Loans. Each Lender may transfer and carry its Loans at,
to or for the account of any branch office, subsidiary or affiliate of such
Lender, provided that the Borrower shall not be responsible for costs arising
under section 2.9 resulting from any such transfer (other than a transfer
pursuant to section 2.11) to the extent not otherwise applicable to such Lender
prior to such transfer.
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12.15. Confidentiality. Each Lender shall hold all non-public information
obtained pursuant to the requirements of this Agreement in accordance with its
customary procedure for handling confidential information of this nature and in
accordance with safe and sound banking practices. Notwithstanding the foregoing,
any Lender may in any event make disclosures of, and furnish copies of such
information (i) to another Lender; (ii) when reasonably required by any bona
fide transferee or participant in connection with the contemplated transfer of
any Loans or Commitment or participation therein (provided that each such
prospective transferee and/or participant shall execute an agreement for the
benefit of the Borrower with such prospective transferor Lender and/or
participant containing provisions substantially identical to those contained in
this section 12.15); (iii) to its parent corporation or corporations and its and
their Affiliates, and to its and their auditors and attorneys; and (iv) as
required or requested by any governmental agency or representative thereof or
pursuant to legal process, provided that, unless specifically prohibited by
applicable law or court order, each Lender shall notify the Borrower of any
request by any governmental agency or representative thereof (other than any
such request in connection with an examination of the financial condition of
such Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information. In no event shall any
Lender be obligated or required to return any materials furnished by or on
behalf of the Borrower or any of its Subsidiaries. The Borrower hereby agrees
that the failure of a Lender to comply with the provisions of this section 12.15
shall not relieve the Borrower of any of the obligations to such Lender under
this Agreement and the other Credit Documents.
12.16. Lender Register. The Borrower hereby designates the Administrative
Agent to serve as its agent, solely for purposes of this section 12.16, to
maintain a register (the "Lender Register") on or in which it will record the
names and addresses of the Lenders, and the Commitments from time to time of
each of the Lenders, the Loans made to the Borrower by each of the Lenders and
each repayment and prepayment in respect of the principal amount of such Loans
of each such Lender. Failure to make any such recordation, or (absent manifest
error) any error in such recordation, shall not affect the Borrower's
obligations in respect of such Loans. With respect to any Lender, the transfer
of the Commitment of such Lender and the rights to the principal of, and
interest on, any Loan made pursuant to such Commitment shall not be effective
until such transfer is recorded on the Lender Register maintained by the
Administrative Agent with respect to ownership of such Commitment and Loans and
prior to such recordation all amounts owing to the transferor with respect to
such Commitment and Loans shall remain owing to the transferor. The registration
of assignment or transfer of all or part of any Commitments and Loans shall be
recorded by the Administrative Agent on the Lender Register only upon the
acceptance by the Administrative Agent of a properly executed and delivered
Assignment Agreement pursuant to section 12.4(c). The Borrower agrees to
indemnify the Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Administrative Agent in performing its duties under
this section 12.16, except to the extent attributable to the gross negligence or
wilful misconduct of the Administrative Agent. The Lender 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.
12.17. Limitations on Liability of the Letter of Credit Issuers. The
Borrower assumes all risks of the acts or omissions of any beneficiary or
transferee of any Letter of Credit with respect to its use of such Letters of
Credit. Neither any Letter of Credit Issuer nor any of its officers or directors
shall be liable or responsible for: (a) the use which may be made of any Letter
of Credit or any acts or omissions of any beneficiary or transferee in
connection therewith; (b) the validity, sufficiency or genuineness of documents,
or of any endorsement thereon, even if such documents should prove to be in any
or all respects invalid, insufficient, fraudulent or forged; (c) payment by a
Letter of Credit Issuer against presentation of documents that do not comply
with the terms of a Letter of Credit, including failure of any documents to bear
any reference or adequate reference to such Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, except that the Borrower (or a Subsidiary which is the account party
in respect of the Letter of Credit in question) shall have a claim against a
Letter of Credit Issuer, and a Letter of Credit Issuer shall be liable to the
Borrower (or such Subsidiary), to the extent of any direct, but not
consequential, damages suffered by the Borrower (or such Subsidiary) which the
Borrower (or such Subsidiary) proves were caused by (i) such Letter of Credit
Issuer's willful misconduct or gross negligence in determining whether documents
presented under a Letter of Credit comply with the terms of such Letter of
Credit or (ii) such Letter of Credit Issuer's willful failure to make lawful
payment under any Letter of Credit after the presentation to it of documentation
strictly complying with the terms and conditions of such Letter of Credit. In
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furtherance and not in limitation of the foregoing, a Letter of Credit Issuer
may accept documents that appear on their face to be in order, without
responsibility for further investigation.
12.18. General Limitation of Liability. No claim may be made by the
Borrower, any Lender, the Administrative Agent, any Letter of Credit Issuer or
any other person against the Administrative Agent, any Letter of Credit Issuer,
or any other Lender or the Affiliates, directors, officers, employees, attorneys
or agents of any of them for any damages other than actual compensatory damages
in respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Agreement or
any of the other Credit Documents, or any act, omission or event occurring in
connection therewith; and each of the Borrower, each Lender, the Administrative
Agent and each Letter of Credit Issuer hereby, to the fullest extent permitted
under applicable law, waives, releases and agrees not to sue or counterclaim
upon any such claim for any special, consequential or punitive damages, whether
or not accrued and whether or not known or suspected to exist in its favor.
12.19. No Duty. All attorneys, accountants, appraisers, consultants and
other professional persons (including the firms or other entities on behalf of
which any such person may act) retained by the Administrative Agent or any
Lender with respect to the transactions contemplated by the Credit Documents
shall have the right to act exclusively in the interest of the Administrative
Agent or such Lender, as the case may be, and shall have no duty of disclosure,
duty of loyalty, duty of care, or other duty or obligation of any type or nature
whatsoever to the Borrower, to any of its Subsidiaries, or to any other person,
with respect to any matters within the scope of such representation or related
to their activities in connection with such representation.
12.20. Lenders and Agent Not Fiduciary to Borrower, etc. The relationship
among the Borrower and its Subsidiaries, on the one hand, and the Administrative
Agent, each Letter of Credit Issuer and the Lenders, on the other hand, is
solely that of debtor and creditor, and the Administrative Agent, each Letter of
Credit Issuer and the Lenders have no fiduciary or other special relationship
with the Borrower and its Subsidiaries, and no term or provision of any Credit
Document, no course of dealing, no written or oral communication, or other
action, shall be construed so as to deem such relationship to be other than that
of debtor and creditor.
12.21. Survival of Representations and Warranties. All representations and
warranties herein shall survive the making of Loans and the issuance of Letters
of Credit hereunder, the execution and delivery of this Agreement, the Notes and
the other documents the forms of which are attached as Exhibits hereto, the
issue and delivery of the Notes, any disposition thereof by any holder thereof,
and any investigation made by the Administrative Agent or any Lender or any
other holder of any of the Notes or on its behalf. All statements contained in
any certificate or other document delivered to the Administrative Agent or any
Lender or any holder of any Notes by or on behalf of the Borrower or of its
Subsidiaries pursuant hereto or otherwise specifically for use in connection
with the transactions contemplated hereby shall constitute representations and
warranties by the Borrower hereunder, made as of the respective dates specified
therein or, if no date is specified, as of the respective dates furnished to the
Administrative Agent or any Lender.
[The remainder of this page is intentionally blank; the next
page is a signature page.]
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Agreement to be duly executed and delivered as of the date first above
written.
STONERIDGE, INC.
By:
-------------------------------------
Kevin P. Bagby, Vice President--
Finance & Chief Financial Officer
NATIONAL CITY BANK, DLJ CAPITAL FUNDING, INC.,
individually and as Administrative individually and as Syndication Agent
Agent and as Collateral Agent
By: By:
------------------------------------- ----------------------------------
Michael P. McCuen, Vice President Managing Director
PNC BANK, NATIONAL ASSOCIATION,
individually and as Documentation
Agent
By:
-------------------------------------
Title:
94
<PAGE>
ANNEX I
INFORMATION AS TO SUBSIDIARIES
<TABLE>
<CAPTION>
=====================================================================================
Percentage of
Outstanding Stock
Name of Type of Jurisdiction or other Equity
Subsidiary Organization Where Interests Owned
Organized (Indicating whether
owned by the
Borrower or a
specified Subsidiary)
=====================================================================================
<S> <C> <C> <C>
Alphabet de Mexico company Mexico 99.5%, by the
Borrower (acquired
9/82)
- -------------------------------------------------------------------------------------
TED de Mexico company Mexico 99.5%, by the
Borrower (acquired
2/1/92)
- -------------------------------------------------------------------------------------
Berifors AB company Sweden 45.2%, by the
Borrower, 27.4% by
Stoneridge AB, 27.4%
by Bernt & Sten AB
(acquired 10/17/97)
- -------------------------------------------------------------------------------------
Berifors Production AB company Sweden 100%, by Berifors AB
(acquired 10/17/97)
- -------------------------------------------------------------------------------------
Berifors Electronics I Bromma AB company Sweden 100% by Berifors AB
(acquired 10/17/97)
- -------------------------------------------------------------------------------------
Bernt & Stern AB company Sweden 100% by the Borrower
(acquired 10/17/97)
- -------------------------------------------------------------------------------------
Stoneridge AB company Sweden 100%, by the
Borrower (acquired
10/1/97)
- -------------------------------------------------------------------------------------
Stoneridge GmbH company Germany 100%, by Berifors AB
(acquired 10/17/97)
- -------------------------------------------------------------------------------------
60% by the Borrower
AlphaConn do Brazil Ltda. company Brazil (acquired 11/1/97)
=====================================================================================
</TABLE>
<PAGE>
ANNEX II
DESCRIPTION OF EXISTING INDEBTEDNESS
Borrowed Money:
1. Stoneridge Synthetic Aircraft Lease
GECC / First Merit
Amount: $10,600,000
2. Berifors Outstanding Revolver
Amount: 20 million Swedish Krona
Capital Leases:
3. Transportation Electronics Capital Lease
Obligation: $511,000
4. Berifors Capital Lease Equipment
Obligation: $398,000
5. Alphabet Capital Lease
Obligation: $38,000
<PAGE>
ANNEX III
DESCRIPTION OF EXISTING LIENS
Borrowed Money:
1. Stoneridge Synthetic Aircraft Lease
GECC / First Merit
Amount: $10,600,000
Capital Leases:
2. Transportation Electronics Capital Lease
Obligation: $511,999
3. Berifors Capital Lease Equipment
Obligation: $398,000
4. Alphabet Capital Lease
Obligation: $38,000
<PAGE>
ANNEX IV
DESCRIPTION OF EXISTING ADVANCES, LOANS, INVESTMENTS AND GUARANTEES
1. Intercompany loan to Berifors
Dated: 3/31/98
Amount: $5,800,000
2. Intercompany loan to Positron
Dated: 1/30/98
Amount: $5,000,000
3. Intercompany loan #1 to AlphaConn do Brazil
Dated: 4/30/98
Amount: $500,000
4. Intercompany loan #2 to AlphaConn do Brazil
Dated: 7/30/98
Amount: $225,000
5. Intercompany loan #3 to AlphaConn do Brazil
Dated: 8/18/98
Amount: $500,000
6. TED de Mexico Advance
Amount: $847,000
6. Existing Investment in Industrial Development Associates Limited
Partnership
Ownership: 30%
Approx. -$283,000 capital account
7. Existing Investment in Connecto Alphabet Joint Venture
Ownership: 40%
Approx. $620,000 capital account
8. Existing Investment in Positron
Ownership: 50%
Amount: $16,064,000
9. Guarantee of obligations of
Industrial Development Associates Limited Partnership
Amount: Less than $2,500,000
<PAGE>
ANNEX V
DESCRIPTION OF LETTERS OF CREDIT DEEMED ISSUED UNDER
THE CREDIT AGREEMENT
<TABLE>
<CAPTION>
LETTER OF ORIGINAL DATE AND NO./ EXPIRATION
CREDIT ISSUER APPLICANT BENEFICIARY AMOUNT DATE
==============================================================================================
<S> <C> <C> <C> <C>
National City Bank Stoneridge, Inc. # 5003 $435,000 3/19/99
Travelers Indemnity Co.
Pittsburgh, Pa.
==============================================================================================
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
==============================================================================================
</TABLE>
<PAGE>
EXHIBIT A-1
TERM A NOTE
$____________ Cleveland, Ohio
_________, 1998
FOR VALUE RECEIVED, the undersigned STONERIDGE, INC., an Ohio corporation
(herein, together with its successors and assigns, the "Borrower"), hereby
promises to pay to the order of ____________________ (the "Lender"), in lawful
money of the United States of America and in immediately available funds, at the
Payment Office (such terms and certain other capitalized terms used herein
without definition shall have the respective meanings ascribed thereto in the
Credit Agreement referred to below), of National City Bank (the "Administrative
Agent"), the principal sum of ________________ DOLLARS AND ____ CENTS
($_______), which amount represents the unpaid principal amount of all Term A
Loans made by the Lender to the Borrower pursuant to the Credit Agreement, on
the Term A Maturity Date, and prior thereto, in installments on the dates and in
the amounts provided in section 5.2(a) of the Credit Agreement.
The Borrower promises also to pay interest in like currency and funds at
the Payment Office on the unpaid principal amount of each Term A Loan made by
the Lender from the date of such Term A Loan until paid at the rates and at the
times provided in section 2.7 of the Credit Agreement.
This Note is one of the Term A Notes referred to in the Credit Agreement,
dated as of December 30, 1998, among the Borrower, the financial institutions
from time to time party thereto (including the Lender), the other Agents from
time to time party thereto, and National City Bank, as Administrative Agent (as
from time to time in effect, the "Credit Agreement"), and is entitled to the
benefits thereof and of the other Credit Documents. As provided in the
Agreement, this Note is subject to mandatory prepayment prior to the Term A
Maturity Date, in whole or in part.
In case an Event of Default shall occur and be continuing, the principal
of and accrued interest on this Note may be declared to be due and payable in
the manner and with the effect provided in the Credit Agreement.
The Borrower hereby waives presentment, demand, protest or notice of any
kind in connection with this Note. No failure to exercise, or delay in
exercising, any rights hereunder on the part of the holder hereof shall operate
as a waiver of any such rights.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW
OF THE STATE OF OHIO.
STONERIDGE, INC.
By:
-----------------------------------
Title:
<PAGE>
LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
========================================================================================================
Amount
of
Date Amount Type Principal Unpaid
of of of Interest Paid or Principal Made
Notation Loan Loan Period Prepaid Balance By
========================================================================================================
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
========================================================================================================
</TABLE>
<PAGE>
EXHIBIT A-2
TERM B NOTE
$____________ Cleveland, Ohio
_________, 1998
FOR VALUE RECEIVED, the undersigned STONERIDGE, INC., an Ohio corporation
(herein, together with its successors and assigns, the "Borrower"), hereby
promises to pay to the order of ____________________ (the "Lender"), in lawful
money of the United States of America and in immediately available funds, at the
Payment Office (such terms and certain other capitalized terms used herein
without definition shall have the respective meanings ascribed thereto in the
Credit Agreement referred to below), of National City Bank (the "Administrative
Agent"), the principal sum of ________________ DOLLARS AND ____ CENTS
($________), which amount represents the unpaid principal amount of all Term B
Loans made by the Lender to the Borrower pursuant to the Credit Agreement, on
the Term B Maturity Date, and prior thereto, in installments on the dates and in
the amounts provided in section 5.2(a) of the Credit Agreement.
The Borrower promises also to pay interest in like currency and funds at
the Payment Office on the unpaid principal amount of each Term B Loan made by
the Lender from the date of such Term B Loan until paid at the rates and at the
times provided in section 2.7 of the Credit Agreement.
This Note is one of the Term B Notes referred to in the Credit Agreement,
dated as of December 30, 1998, among the Borrower, the financial institutions
from time to time party thereto (including the Lender), the other Agents from
time to time party thereto, and National City Bank, as Administrative Agent (as
from time to time in effect, the "Credit Agreement"), and is entitled to the
benefits thereof and of the other Credit Documents. As provided in the
Agreement, this Note is subject to mandatory prepayment prior to the Term B
Maturity Date, in whole or in part.
In case an Event of Default shall occur and be continuing, the principal
of and accrued interest on this Note may be declared to be due and payable in
the manner and with the effect provided in the Credit Agreement.
The Borrower hereby waives presentment, demand, protest or notice of any
kind in connection with this Note. No failure to exercise, or delay in
exercising, any rights hereunder on the part of the holder hereof shall operate
as a waiver of any such rights.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW
OF THE STATE OF OHIO.
STONERIDGE, INC.
By:
-----------------------------------
Title:
<PAGE>
LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
========================================================================================================
Amount
of
Date Amount Type Principal Unpaid
of of of Interest Paid or Principal Made
Notation Loan Loan Period Prepaid Balance By
========================================================================================================
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
========================================================================================================
</TABLE>
<PAGE>
EXHIBIT A-3
REVOLVING NOTE
$________________ Cleveland, Ohio
_________, 1998
FOR VALUE RECEIVED, the undersigned STONERIDGE, INC., an Ohio corporation
(herein, together with its successors and assigns, the "Borrower"), hereby
promises to pay to the order of _______________________ (the "Lender"), in
lawful money of the United States of America and in immediately available funds,
at the Payment Office (such term and certain other terms used herein without
definition shall have the meanings ascribed thereto in the Credit Agreement
referred to below) of National City Bank (the "Administrative Agent"), the
principal sum of ________________ DOLLARS AND ____ CENTS ($________) or, if
less, the then unpaid principal amount of all Revolving Loans made by the Lender
to the Borrower pursuant to the Agreement, on the Revolving Maturity Date.
The Borrower promises also to pay interest in like currency and funds at
the Payment Office on the unpaid principal amount of each Revolving Loan made by
the Lender from the date of such Revolving Loan until paid at the rates and at
the times provided in section 2.7 of the Credit Agreement.
This Note is one of the Revolving Notes referred to in the Credit
Agreement, dated as of December 30, 1998, among the Borrower, the financial
institutions from time to time party thereto (including the Lender), the other
Agents from time to time party thereto, and National City Bank, as
Administrative Agent (as from time to time in effect, the "Credit Agreement"),
and is entitled to the benefits thereof and of the other Credit Documents. As
provided in the Credit Agreement, this Note is subject to mandatory prepayment
prior to the Revolving Maturity Date, in whole or in part.
In case an Event of Default shall occur and be continuing, the principal
of and accrued interest on this Note may be declared to be due and payable in
the manner and with the effect provided in the Credit Agreement.
The Borrower hereby waives presentment, demand, protest or notice of any
kind in connection with this Note. No failure to exercise, or delay in
exercising, any rights hereunder on the part of the holder hereof shall operate
as a waiver of any such rights.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW
OF THE STATE OF OHIO.
STONERIDGE, INC.
By:
-----------------------------------
Title:
<PAGE>
LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
========================================================================================================
Amount
of
Date Amount Type Principal Unpaid
of of of Interest Paid or Principal Made
Notation Loan Loan Period Prepaid Balance By
========================================================================================================
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
========================================================================================================
</TABLE>
<PAGE>
EXHIBIT B-1
NOTICE OF BORROWING
[Date]
National City Bank,
as Administrative Agent for the Lenders party
to the Credit Agreement referred to below
1900 East Ninth Street
Cleveland, Ohio 44114
Attention: Commercial Loan Operations
Re: Notice of Borrowing under the Credit Agreement,
dated as of December 30, 1998
Ladies and Gentlemen:
The undersigned, Stoneridge, Inc. (the "Borrower"), refers to the Credit
Agreement, dated as of December 30, 1998 (as amended from time to time, the
"Credit Agreement", the terms defined therein being used herein as therein
defined), among the Borrower, the financial institutions from time to time party
thereto (the "Lenders"), the other Agents from time to time party thereto, and
National City Bank, as Administrative Agent for such Lenders, and hereby gives
you notice, irrevocably, pursuant to section 2.3(a) of the Credit Agreement,
that the undersigned hereby requests one or more Borrowings under the Credit
Agreement, and in that connection sets forth in the schedule attached hereto the
information relating to each such Borrowing (collectively the "Proposed
Borrowing") as required by section 2.3(a) of the Credit Agreement.
The undersigned hereby specifies that the Proposed Borrowing will consist
of Loans as indicated in the schedule attached hereto.
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties of the Credit Parties
contained in the Credit Agreement and the other Credit Documents are and
will be true and correct in all material respects, before and after giving
effect to the Proposed Borrowing and to the application of the proceeds
thereof, as though made on such date, except to the extent that such
representations and warranties expressly relate to an earlier specified
date, in which case such representations and warranties were true and
correct in all material respects as of the date when made; and
(B) no Default or Event of Default has occurred and is continuing,
or would result from such Proposed Borrowing or from the application of
the proceeds thereof.
Very truly yours,
STONERIDGE, INC.
By:
-----------------------------------
Title:
<PAGE>
BORROWING SCHEDULE
Proposed Borrowing #1:
<TABLE>
<CAPTION>
====================================================================================================================================
Business Day Aggregate Interest Period
of Facility Type of Amount if Loans are
Proposed Loans of Loans Eurodollar
Borrowing Loans
====================================================================================================================================
<S> <C> <C> <C> <C>
Revolving Prime Rate Loans
Facility
Eurodollar Loans One Month
______, 19____ Term A $____________
Facility Two Months
[Circle one of
Term B above] Three Months
Facility
Six Months
[Circle one of [Circle one of
above] above]
====================================================================================================================================
</TABLE>
Proposed Borrowing #2:
<TABLE>
<CAPTION>
====================================================================================================================================
Business Day Aggregate Interest Period
of Facility Type of Amount if Loans are
Proposed Loans of Loans Eurodollar
Borrowing Loans
====================================================================================================================================
<S> <C> <C> <C> <C>
Revolving Prime Rate Loans
Facility
Eurodollar Loans One Month
______, 19____ Term A $____________
Facility Two Months
[Circle one of
Term B above] Three Months
Facility
Six Months
[Circle one of [Circle one of
above] above]
====================================================================================================================================
</TABLE>
<PAGE>
Proposed Borrowing #1:
<TABLE>
<CAPTION>
====================================================================================================================================
Business Day Aggregate Interest Period
of Facility Type of Amount if Loans are
Proposed Loans of Loans Eurodollar
Borrowing Loans
====================================================================================================================================
<S> <C> <C> <C> <C>
Revolving Prime Rate Loans
Facility
Eurodollar Loans One Month
______, 19____ Term A $____________
Facility Two Months
[Circle one of
Term B above] Three Months
Facility
Six Months
[Circle one of [Circle one of
above] above]
====================================================================================================================================
</TABLE>
Proposed Borrowing #2:
<TABLE>
<CAPTION>
====================================================================================================================================
Business Day Aggregate Interest Period
of Facility Type of Amount if Loans are
Proposed Loans of Loans Eurodollar
Borrowing Loans
====================================================================================================================================
<S> <C> <C> <C> <C>
Revolving Prime Rate Loans
Facility
Eurodollar Loans One Month
______, 19____ Term A $____________
Facility Two Months
[Circle one of
Term B above] Three Months
Facility
Six Months
[Circle one of [Circle one of
above] above]
====================================================================================================================================
</TABLE>
2
<PAGE>
EXHIBIT B-2
NOTICE OF CONVERSION
[Date]
National City Bank,
as Administrative Agent for the Lenders party
to the Credit Agreement referred to below
1900 East Ninth Street
Cleveland, Ohio 44114
Attention: Commercial Loan Operations
Re: Notice of Conversion of General Revolving
Loans, Denominated in Dollars, of one Type
into another Type, pursuant to the Credit Agreement,
dated as of December 30, 1998
Ladies and Gentlemen:
The undersigned, Stoneridge, Inc. (the "Borrower"), refers to the
Credit Agreement, dated as of December 30, 1998 (as amended from time to time,
the "Credit Agreement", the terms defined therein being used herein as therein
defined), among the Borrower, the financial institutions from time to time party
thereto (the "Lenders"), the other Agents from time to time party thereto, and
National City Bank, as Administrative Agent for such Lenders, and hereby gives
you notice, irrevocably, pursuant to section 2.6 of the Credit Agreement, that
the undersigned hereby requests one or more Conversions of Loans, outstanding
pursuant to a Borrowing under a Facility, consisting of one Type of Loan, into
Loans under the same Facility of another Type, pursuant to section 2.6 of the
Credit Agreement, and in that connection sets forth in the schedule attached
hereto the information relating to each such Conversion.
Very truly yours,
STONERIDGE, INC.
By:
-----------------------------------
Title:
<PAGE>
CONVERSION SCHEDULE
Proposed Conversion #1
[of the Loans described in the first table below
into the Loans described in the second table below]
<TABLE>
<CAPTION>
====================================================================================================================================
Aggregate Interest Period
Date of Loans Facility Type of Amount if Loans are
Loans of Loans Eurodollar
Loans
====================================================================================================================================
<S> <C> <C> <C> <C>
Revolving Prime Rate Loans
Facility
Eurodollar Loans One Month
______, 19____ Term A $____________
Facility Two Months
[Circle one of
Term B above] Three Months
Facility
Six Months
[Circle one of [Circle one of
above] above]
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================================
Aggregate Interest Period
Date of Loans Facility Type of Amount if Loans are
Loans of Loans Eurodollar
Loans
====================================================================================================================================
<S> <C> <C> <C> <C>
Revolving Prime Rate Loans
Facility
Eurodollar Loans One Month
______, 19____ Term A $____________
Facility Two Months
[Circle one of
Term B above] Three Months
Facility
Six Months
[Circle one of [Circle one of
above] above]
====================================================================================================================================
</TABLE>
<PAGE>
Proposed Conversion #2
[of the Loans described in the first table below
into the Loans described in the second table below]
<TABLE>
<CAPTION>
====================================================================================================================================
Aggregate Interest Period
Date of Loans Facility Type of Amount if Loans are
Loans of Loans Eurodollar
Loans
====================================================================================================================================
<S> <C> <C> <C> <C>
Revolving Prime Rate Loans
Facility
Eurodollar Loans One Month
______, 19____ Term A $____________
Facility Two Months
[Circle one of
Term B above] Three Months
Facility
Six Months
[Circle one of [Circle one of
above] above]
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================================
Aggregate Interest Period
Date of Loans Facility Type of Amount if Loans are
Loans of Loans Eurodollar
Loans
====================================================================================================================================
<S> <C> <C> <C> <C>
Revolving Prime Rate Loans
Facility
Eurodollar Loans One Month
______, 19____ Term A $____________
Facility Two Months
[Circle one of
Term B above] Three Months
Facility
Six Months
[Circle one of [Circle one of
above] above]
====================================================================================================================================
</TABLE>
2
<PAGE>
EXHIBIT B-3
LETTER OF CREDIT REQUEST
No. ______________1
Dated __________2
National City Bank,
as Administrative Agent for the Lenders party
to the Credit Agreement referred to below
1900 East Ninth Street
Cleveland, Ohio 44114
Attention: International Department/ Letter of Credit Operations
-----------------------------------------------------
Ladies and Gentlemen:
The undersigned, Stoneridge, Inc. (the "Borrower"), refers to the Credit
Agreement, dated as of December 30, 1998 (as amended, modified or supplemented
from time to time, the "Credit Agreement", the capitalized terms defined therein
being used herein as therein defined), among the Borrower, the financial
institutions from time to time party thereto (the "Lenders"), the other Agents
from time to time party thereto, and National City Bank, as Administrative Agent
for such Lenders.
The undersigned hereby requests that _________, as a Letter of Credit
Issuer, issue a Letter of Credit on ______, 199_ (the "Date of Issuance") in the
aggregate amount of [U.S.$ ] [amount in specified Alternative Currency], for the
account of ____________________.
The beneficiary of the requested Letter of Credit will be _________, 3 and
such Letter of Credit will be in support of __________ 4 and will have a stated
termination date of ____________________.5
The undersigned hereby certifies that after giving effect to the requested
issuance of the Letter of Credit:
(i) $_________ principal amount of Revolving Loans will be
outstanding; and
(ii) the Letter of Credit Outstandings will be $___________.
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the Date of Issuance:
- -----------------------------------
1 Letter of Request Number.
2 Date of Letter of Request (at least five Business Days prior to the Date
of Issuance or such lesser number as may be agreed by the relevant Letter
of Credit Issuer).
3 Insert name and address of beneficiary.
4 Insert description of the supported obligations, name of agreement and/or
the commercial transaction to which this Letter of Credit Request relates.
5 Insert last date upon which drafts may be presented (which may not be
beyond the 15th Business Day next preceding the Maturity Date).
<PAGE>
(A) the representations and warranties of the Credit Parties
contained in the Credit Agreement and the other Credit Documents are and
will be true and correct in all material respects, before and after giving
effect to the Proposed Borrowing and to the application of the proceeds
thereof, as though made on such date, except to the extent that such
representations and warranties expressly relate to an earlier specified
date, in which case such representations and warranties were true and
correct in all material respects as of the date when made; and
(B) no Default or Event of Default has occurred and is continuing,
or would result after giving effect to the issuance of the Letter of
Credit requested hereby.
Copies of all documentation with respect to the supported transaction are
attached hereto.
Very truly yours,
STONERIDGE, INC.
By:
----------------------------------
Title:
2
<PAGE>
EXHIBIT C-1
-----------------------------------
FORM OF
SUBSIDIARY GUARANTY
-----------------------------------
<PAGE>
================================================================================
================================================================================
THE SUBSIDIARIES OF STONERIDGE, INC.
NAMED HEREIN
as Guarantors
With
NATIONAL CITY BANK,
as Administrative Agent
-----------------------------
SUBSIDIARY GUARANTY
dated as of
December 30, 1998
-----------------------------
================================================================================
<PAGE>
SUBSIDIARY GUARANTY
SUBSIDIARY GUARANTY, dated as of December 30, 1998 (as amended, modified
or supplemented from time to time, "this Guaranty"), made by each of the
undersigned (each, together with its successors and assigns, a "Guarantor" and
collectively, the "Guarantors"), with NATIONAL CITY BANK, a national banking
association, as Administrative Agent (herein, together with its successors and
assigns in such capacity, the "Administrative Agent") for itself and the other
Lenders (defined below), for the benefit of (i) the Administrative Agent, (ii)
the Lenders from time to time party to the Credit Agreement referred to below,
and (iii) the Designated Hedge Creditors referred to below:
PRELIMINARY STATEMENTS:
(1) Except as otherwise defined herein, terms used herein and defined in
the Credit Agreement (as defined below) shall be used herein as therein defined.
Certain terms used herein are defined in section 1 hereof.
(2) This Guaranty is made pursuant to the Credit Agreement, dated as of
the date hereof (herein, as amended or otherwise modified, restated or replaced
from time to time, the "Credit Agreement"), among Stoneridge, Inc., an Ohio
corporation (herein, together with its successors and assigns, the "Borrower"),
the financial institutions named as lenders therein (herein, together with their
successors and assigns, the "Lenders"), the other Agents named therein, and
National City Bank, as the Administrative Agent for the Lenders under the Credit
Agreement, providing, among other things, for loans or advances or other
extensions of credit to or for the benefit of the Borrower of up to
$425,000,000, with such loans or advances being evidenced by promissory notes
(the "Notes", such term to include all notes and other securities issued in
exchange therefor or in replacement thereof).
(3) The Borrower or any of its Subsidiaries may from time to time be party
to one or more Designated Hedge Agreements (as defined in the Credit Agreement).
Any institution that participates, and in each case their subsequent assigns, as
a counterparty to any Designated Hedge Agreement (collectively, the "Designated
Hedge Creditors," and the Designated Hedge Creditors together with the Agents
and the Lenders, collectively the "Creditors"), shall benefit hereunder as
herein provided.
(4) This Guaranty is made for the benefit of the Administrative Agent and
the Creditors to guarantee the payment of the principal of and interest on the
Notes and the payment and performance by the Borrower of its obligations under
the Credit Agreement, the other Credit Documents to which the Borrower is a
party, and the payment and performance by the Borrower (and any of its
Subsidiaries or Affiliates) of its obligations under Designated Hedge
Agreements. This Guaranty is one of the Credit Documents referred to in the
Credit Agreement.
(5) Each Guarantor is a direct or indirect Subsidiary of the Borrower.
(6) It is a condition to the making of Loans and the issuance of, and
participation in, Letters of Credit, under the Credit Agreement that each
Guarantor shall have executed and delivered this Guaranty.
(7) Each Guarantor will obtain benefits from the incurrence of Loans by
the Borrower, and the issuance of Letters of Credit for the account of the
Borrower or any of its Subsidiaries, under the Credit Agreement and,
accordingly, desires to execute this Guaranty in order to satisfy the condition
described in the preceding paragraph and to induce the Lenders to make Loans to
the Borrower, and to issue and participate in Letters of Credit for the account
of the Borrower or any of its Subsidiaries.
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Guarantor, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby makes the following representations and
warranties to the Administrative Agent and the Creditors and hereby covenants
and agrees with the Administrative Agent and each Creditor as follows:
<PAGE>
1. Certain Definitions. As used in this Guaranty, the following terms
shall have the meanings herein specified unless the context otherwise requires:
"Credit Document Obligations" shall mean and include:
(i) the principal of and interest on the Notes issued by,
and the Loans made to, the Borrower under the Credit Agreement,
(ii) all reimbursement obligations and Unpaid Drawings with
respect to Letters of Credit issued under the Credit Agreement, and
(iii) all other obligations and liabilities owing by the
Borrower or any of its Subsidiaries or Affiliates to the
Administrative Agent, any other Agent or any of the Lenders under
the Credit Agreement and the other Credit Documents to which the
Borrower or any of its Subsidiaries or Affiliates is now or may
hereafter become a party (including, without limitation,
indemnities, Fees and other amounts payable thereunder),
in all cases whether now existing, or hereafter incurred under, arising
out of, or in connection with, the Credit Agreement or any of such other
Credit Documents, including any such interest or other amounts which, but
for any automatic stay under section 362(a) of the Bankruptcy Code, would
become due.
"Designated Hedge Document" shall mean and include (i) each
Designated Hedge Agreement to which the Borrower or any of its
Subsidiaries or Affiliates is now or may hereafter become a party, and
(ii) each confirmation, transaction statement or other document executed
and delivered in connection therewith to which the Borrower or any of its
Subsidiaries or Affiliates is now or may hereafter become a party.
"Designated Hedge Document Obligations" shall mean and include all
obligations and liabilities owing by the Borrower or any of its
Subsidiaries or Affiliates under all existing and future Designated Hedge
Documents, in all cases whether now existing, or hereafter incurred under,
arising out of, or in connection with, any Designated Hedge Document,
including any such amounts which, but for any automatic stay under section
362(a) of the Bankruptcy Code, would become due.
"Guaranteed Documents" shall mean and include (i) the Credit
Agreement, the Notes and the other Credit Documents to which the Borrower
is now or may hereafter become a party, and (ii) each Designated Hedge
Agreement and other Designated Hedge Document to which the Borrower or any
of its Subsidiaries or Affiliates is now or may hereafter become a party.
"Guaranteed Obligations" shall mean and include the Credit Document
Obligations and the Designated Hedge Document Obligations.
2. Guaranty by the Guarantors, etc. (a) Each Guarantor, jointly and
severally, irrevocably and unconditionally guarantees:
(i) to the Administrative Agent, the other Agents and the Lenders
the full and prompt payment when due (whether at the stated maturity, by
acceleration or otherwise) of all of the Credit Document Obligations of
the Borrower and each of its other Subsidiaries and Affiliates; and
(ii) to each Designated Hedge Creditor the full and prompt payment
when due (whether at the stated maturity, by acceleration or otherwise) of
all of the Designated Hedge Document Obligations of the Borrower and each
of its other Subsidiaries and Affiliates.
Such guaranty is an absolute, unconditional, present and continuing guaranty of
payment and not of collectibility and is in no way conditioned or contingent
upon any attempt to collect from the Borrower or any other Subsidiary or
Affiliate of the Borrower, or any other action, occurrence or circumstance
whatsoever.
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(b) In addition to the foregoing, each Guarantor also, jointly and
severally, irrevocably and unconditionally guarantees that each of the terms,
conditions, covenants and agreements of the Borrower under the Credit Agreement,
and of the Borrower and its other Subsidiaries and Affiliates under the other
Guaranteed Documents, will be duly and punctually performed and observed
strictly in accordance with the terms thereof and that if for any reason
whatsoever the Borrower or such other Subsidiary or Affiliate shall fail to do
so, such Guarantor shall duly and punctually perform and observe, or cause the
Borrower or such other Subsidiary or Affiliate, as applicable, to duly and
punctually perform and observe, the same. Such guaranty is an absolute,
unconditional, present and continuing guaranty of performance and is in no way
conditioned or contingent upon any attempt to enforce performance by the
Borrower or any other Subsidiary or Affiliate of the Borrower, or any other act,
occurrence or circumstance whatsoever.
(c) In addition to the foregoing, each Guarantor, jointly and severally,
unconditionally and irrevocably, guarantees the payment of any and all
Guaranteed Obligations to the Administrative Agent and the Creditors, whether or
not due or payable by the obligor thereon, upon the occurrence in respect of the
Borrower or other applicable obligor of any bankruptcy or insolvency proceeding
or case under the Bankruptcy Code, and unconditionally and irrevocably, jointly
and severally, promises to pay such Guaranteed Obligations to the Administrative
Agent, for the benefit of the Administrative Agent and the Creditors, on demand,
in such currency and otherwise in such manner as is provided in the Guaranteed
Documents governing such Guaranteed Obligations.
(d) As a separate, additional and continuing obligation, each Guarantor
unconditionally and irrevocably undertakes and agrees, for the benefit of the
Administrative Agent and the Creditors, that, should any amounts constituting
Guaranteed Obligations not be recoverable from the Borrower or other applicable
obligor for any reason whatsoever (including, without limitation, by reason of
any provision of any Guaranteed Document or any other agreement or instrument
executed in connection therewith being or becoming, at any time, voidable, void,
unenforceable, or otherwise invalid under any applicable law), then
notwithstanding any notice or knowledge thereof by the Administrative Agent, any
Creditor, any of their respective Affiliates, or any other person, each
Guarantor, jointly and severally, as sole, original and independent obligor,
upon demand by the Administrative Agent, will make payment to the Administrative
Agent, for the account of the Creditors and the Administrative Agent, of all
such obligations not so recoverable by way of full indemnity, in such currency
and otherwise in such manner as is provided in the Guaranteed Documents.
(e) Each Guarantor understands, agrees and confirms that the
Administrative Agent and the Creditors may enforce this Guaranty up to the full
amount of the Guaranteed Obligations against any Guarantor without proceeding
against any other Guarantor, the Borrower or other person, against any security
for all or any portion of the Guaranteed Obligations, or under any other
guaranty covering all or any portion of the Guaranteed Obligations. All payments
by each Guarantor under this Guaranty shall be made in such currency and
otherwise in such manner as is provided in the Guaranteed Documents to which
such payments relate.
3. Subordination. (a) Any Indebtedness of the Borrower now or hereafter
held by any Guarantor is hereby subordinated to the Indebtedness of the Borrower
to the Administrative Agent and the Creditors; and such Indebtedness of the
Borrower to any Guarantor, if the Administrative Agent, after an Event of
Default has occurred so requests, shall be collected, enforced and received by
such Guarantor as trustee for the Administrative Agent and the Creditors and be
paid over to the Administrative Agent, for the benefit of the Administrative
Agent and the Creditors, on account of the Indebtedness of the Borrower to the
Administrative Agent and the Creditors, but without affecting or impairing in
any manner the liability of such Guarantor under the other provisions of this
Guaranty. Prior to the transfer by any Guarantor of any note or negotiable
instrument evidencing any Indebtedness of the Borrower to such Guarantor, such
Guarantor shall mark such note or negotiable instrument with a legend that the
same is subject to this subordination.
(b) If and to the extent that any Guarantor makes any payment to the
Administrative Agent or any Creditor or to any other person pursuant to or in
respect of this Guaranty, any reimbursement or similar claim which such
Guarantor may have against the Borrower by reason thereof shall be subject and
subordinate to the prior termination of the Total Commitment and indefeasible
payment in full of all Guaranteed Obligations owed to the Administrative Agent
and the Creditors.
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4. Guarantors' Obligations Absolute, etc. The obligations of each
Guarantor under this Guaranty shall be absolute and unconditional, shall not be
subject to any counterclaim, setoff, deduction or defense based on any claim
such Guarantor may have against the Borrower or any other person, including,
without limitation, the Administrative Agent, any Creditor, any of their
respective Affiliates, or any other Guarantor, and shall remain in full force
and effect without regard to, and shall not be released, suspended, abated,
deferred, reduced, limited, discharged, terminated or otherwise impaired or
adversely affected by any circumstance or occurrence whatsoever, other than
indefeasible payment in full of, and complete performance of, all of the
Guaranteed Obligations, including, without limitation:
(1) any increase in the amount of the Guaranteed Obligations
outstanding from time to time, including, without limitation, any increase
in the aggregate outstanding amount of the Loans and Letters of Credit
above any specific maximum amount referred to herein or in the Credit
Agreement as in effect on the date hereof, and any increase in any
interest rate, Fee or other amount applicable to any portion of the
Guaranteed Obligations or otherwise payable under any Guaranteed Document;
(2) any direction as to the application of any payment by the
Borrower or by any other person;
(3) any incurrence of additional Guaranteed Obligations at any time
or under any circumstances, including, without limitation, (x) during the
continuance of a Default or Event of Default, (y) at any time when all
conditions to such incurrence have not been satisfied, or (z) in excess of
borrowing base, sublimit or other similar or dissimilar limitations
contained in the Credit Agreement or any of the other Guaranteed
Documents;
(4) any renewal or extension of the time for payment or maturity of
any of the Guaranteed Obligations, or any amendment or modification of, or
addition or supplement to, or deletion from, the Credit Agreement, any
other Guaranteed Document, or any other instrument or agreement applicable
to the Borrower or any other person, or any part thereof, or any
assignment, transfer or other disposition of any thereof;
(5) any failure of the Credit Agreement, any other Guaranteed
Document, or any other instrument or agreement applicable to the Borrower
or any other person, to constitute the legal, valid and binding agreement
or obligation of any party thereto, enforceable in accordance with its
terms, or any irregularity in the form of any Guaranteed Document;
(6) any failure on the part of the Borrower or any other person to
perform or comply with any term or provision of the Credit Agreement, any
other Guaranteed Document, or any such other instrument or agreement;
(7) any waiver, consent, extension, indulgence or other action or
inaction (including, without limitation, any lack of diligence, any
failure to mitigate damages or marshall assets, or any election of
remedies) under or in respect of (x) the Credit Agreement, any other
Guaranteed Document, or any such other instrument or agreement, or (y) any
obligation or liability of the Borrower or any other person;
(8) any exercise or non-exercise of any right, power or remedy under
or in respect of the Credit Agreement, any other Guaranteed Document, or
any such other instrument or agreement, or any such obligation or
liability, including, without limitation, (x) any failure of the
Administrative Agent or any Creditor to give notice of any Default or
Event of Default under any Guaranteed Document, or to advance funds for
the protection or preservation of, or provision of insurance for, or
payment of taxes on, any property which is collateral security for any of
the Guaranteed Obligations, and (y) any act or failure to act on the part
of the Administrative Agent or any Creditor, in any manner referred to in
this Guaranty, or otherwise, which may deprive such Guarantor of its right
to (A) subrogation against the Borrower to recover full reimbursement or
indemnity for any payments made pursuant to this Guaranty, or (B)
contribution from
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any other Guarantor for any such payments made by it, or which otherwise
may adversely affect the amount recoverable upon the exercise of any such
right of subrogation or contribution;
(9) any application of any amounts by whomsoever paid or howsoever
realized to the Guaranteed Obligations or any other liabilities owed to
the Administrative Agent or any Creditor, regardless of the order or
priority of any such application, and regardless of what liabilities of
the Borrower or any other person remain unpaid;
(10) any settlement or compromise of any of the Guaranteed
Obligations, any security therefor or guaranty thereof;
(11) any payment made to the Administrative Agent or any Creditor on
the Guaranteed Obligations which the Administrative Agent or any Creditor
repays, returns or otherwise restores to the Borrower or any other
applicable obligor pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding;
(12) any subordination of any of the claims of the Administrative
Agent or any Creditor to any claims of any creditors of the Borrower or
any other person, or any subordination of any liens or security interests
in favor of the Administrative Agent or any Creditor to any liens or
security interests of any other person;
(13) any sale, exchange, release, surrender or foreclosure of, or
any realization upon, or other dealing with, in any manner and in any
order, any property, rights or interests by whomsoever at any time
granted, assigned, pledged or mortgaged to secure, or howsoever securing,
the Guaranteed Obligations, or any other liabilities or obligations
(including any of those hereunder), or any portion of any thereof;
(14) the existence of any right of setoff, offset or banker's lien,
or any failure to exercise rights in respect thereof, or any release
thereof;
(15) any furnishing of any new or additional security or any new or
additional guaranty to or for the benefit of the Administrative Agent or
any Creditor, or any acceptance thereof, including, without limitation,
any addition of any Guarantor to this Guaranty;
(16) any release of any security or any guaranty by or at the
direction of the Administrative Agent or any Creditor, or any release or
discharge of, or limitation of recourse against, any person furnishing any
security or guaranty, including, without limitation, any release or
discharge of any Guarantor from this Guaranty;
(17) any limitation on any person's liability or obligation under
the Credit Agreement, any other Guaranteed Document, or any such other
instrument or agreement, or any such obligation or liability, or any
termination, cancellation, avoidance, commercial or other frustration,
impracticability, invalidity, unenforceability or ineffectiveness, in
whole or in part, of the Credit Agreement, any other Guaranteed Document,
or any such other instrument or agreement or any such obligation or
liability or any term or provision of any thereof;
(18) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition, arrangement or other similar
proceeding relating to the Borrower or to any of its properties or assets,
or any such proceeding by, among or on behalf of any of its creditors, as
such, or any proceeding for the voluntary liquidation or dissolution or
other winding up of the Borrower, whether or not insolvency or bankruptcy
proceedings, or any assignment for the benefit of its creditors, or any
other marshaling of its assets, or any action taken by any trustee or
receiver or by any court in any such proceeding;
(19) any disallowance or limitation of any claim of the
Administrative Agent, any Creditor, or any other person, in any such
proceeding;
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(20) any change in the ownership of all or any part of the capital
stock of, or other equity interests in, the Borrower, any of its
Subsidiaries or Affiliates, or any other person, or any merger or
consolidation involving the Borrower, any of its Subsidiaries or
Affiliates, or any other person, or any purchase, acquisition, sale, lease
or disposition by the Borrower, any of its Subsidiaries or Affiliates, or
any other person, of any assets or properties;
(21) any breach by the Borrower or any of its other Subsidiaries or
Affiliates of any of their representations or warranties contained in any
of the Guaranteed Documents or any other certificate or document executed
and delivered in connection therewith;
(22) any inability of the Borrower to create or incur any
Subordinated Indebtedness or other Indebtedness, or the existence of any
contractual or other restriction upon the ability of the Borrower to issue
and sell shares of its capital stock, to purchase, sell, lease or
otherwise dispose of assets, to incur Subordinated Indebtedness or other
Indebtedness, or to otherwise conduct its business affairs;
(23) any assignment, transfer or other disposition, in whole or in
part, by the Borrower or any other person of its interest in any of the
property, rights or interests constituting security for all or any portion
of the Guaranteed Obligations or any other Indebtedness, liabilities or
obligations;
(24) any failure of any of the Credit Documents, or any other
agreement or instrument securing all or any portion of the Guaranteed
Obligations, to effectively subject any property, rights or interests to
any liens or security interests purported to be granted or created
thereby, or any failure of any such liens or security interests to be or
become perfected or to establish or maintain the priority over other liens
and security interests contemplated thereby;
(25) any condemnation or taking of, or any encumbrance on or
interference with any use of, or any damage to, or any destruction of, any
such property, or any part thereof or interest therein;
(26) any lack of notice to, or knowledge by, any Guarantor of any of
the matters referred to above; and/or
(27) any other circumstance or occurrence, whether similar or
dissimilar to any of the foregoing, which could or might constitute a
defense available to, or a discharge of the obligations of, a guarantor or
other surety.
5. Waivers. Each Guarantor unconditionally waives, to the maximum extent
permitted under any applicable law now or hereafter in effect, insofar as its
obligations under this Guaranty are concerned, (i) notice of any of the matters
referred to in section 4, (ii) all notices required by statute, rule of law or
otherwise to preserve any rights against such Guarantor hereunder, including,
without limitation, any demand, presentment, proof or notice of dishonor or
non-payment of any Guaranteed Obligation, notice of acceptance of this Guaranty,
notice of the incurrence of any Guaranteed Obligation, notice of any failure on
the part of the Borrower, any of its Subsidiaries or Affiliates, or any other
person, to perform or comply with any term or provision of the Credit Agreement,
any other Guaranteed Document or any other agreement or instrument to which the
Borrower or any other person is a party, or notice of the commencement of any
proceeding against any other person or its any of its property or assets, (iii)
any right to the enforcement, assertion or exercise against the Borrower or
against any other person or any collateral of any right, power or remedy under
or in respect of the Credit Agreement, the other Guaranteed Documents or any
other agreement or instrument, and (iv) any requirement that such Guarantor be
joined as a party to any proceedings against the Borrower or any other person
for the enforcement of any term or provision of the Credit Agreement, the other
Guaranteed Documents, this Guaranty or any other agreement or instrument.
6. Subrogation Rights. Until such time as the Guaranteed Obligations have
been paid in full in cash and otherwise fully performed and the Total Commitment
under the Credit Agreement has been terminated, each Guarantor hereby
irrevocably waives all rights of subrogation which it may at any time otherwise
have as a result of this Guaranty (whether contractual, under section 509 of the
Bankruptcy Code, or otherwise) to the claims of the
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Administrative Agent and/or the Creditors against the Borrower, any other
Guarantor or any other guarantor of or surety for the Guaranteed Obligations and
all contractual, statutory or common law rights of reimbursement, contribution
or indemnity from the Borrower or any other Guarantor which it may at any time
otherwise have as a result of this Guaranty.
7. Separate Actions. A separate action or actions may be brought and
prosecuted against any Guarantor whether or not action is brought against any
other Guarantor, any other guarantor or the Borrower, and whether or not any
other Guarantor, any other guarantor of the Borrower or the Borrower be joined
in any such action or actions.
8. Guarantors Familiar with Borrower's Affairs, etc. Each Guarantor
confirms that an executed (or conformed) copy of each of the Credit Documents
has been made available to its principal executive officers, that such officers
are familiar with the contents thereof and of this Guaranty, and that it has
executed and delivered this Guaranty after reviewing the terms and conditions of
the Credit Agreement, the other Credit Documents and this Guaranty and such
other information as it has deemed appropriate in order to make its own credit
analysis and decision to execute and deliver this Guaranty. Each Guarantor
confirms that it has made its own independent investigation with respect to the
creditworthiness of the Borrower and its other Subsidiaries and Affiliates and
is not executing and delivering this Guaranty in reliance on any representation
or warranty by the Administrative Agent or any Creditor or any other person
acting on behalf of the Administrative Agent or any Creditor as to such
creditworthiness. Each Guarantor expressly assumes all responsibilities to
remain informed of the financial condition of the Borrower and its other
Subsidiaries and Affiliates and any circumstances affecting (i) the Borrower's
or any other Subsidiary's or Affiliate's ability to perform its obligations
under the Credit Agreement and the other Guaranteed Documents to which it is a
party, or (ii) any collateral securing, or any other guaranty for, all or any
part of the Borrower's or such other Subsidiary's or Affiliate's payment and
performance obligations thereunder; and each Guarantor further agrees that the
Administrative Agent and the Creditors shall have no duty to advise any
Guarantor of information known to them regarding such circumstances or the risks
such Guarantor undertakes in this Guaranty.
9. Covenant Not to Cause Events of Default under Credit Agreement, etc.
Each Guarantor covenants and agrees that on and after the date hereof and until
this Guaranty is terminated in accordance with section 26 hereof, such Guarantor
shall take, or will refrain from taking, as the case may be, all actions that
are necessary to be taken or not taken so that no violation of any provision,
covenant or agreement contained in section 8 or 9 of the Credit Agreement, and
so that no Default or Event of Default, is caused by the actions of such
Guarantor or any of its Subsidiaries.
10. Representations and Warranties. Each Guarantor represents and warrants
that:
(a) it is a duly organized or formed and validly existing
corporation, partnership or limited liability company, as the case may be,
in good standing (or in full force and effect, as the case may be) under
the laws of the jurisdiction of its formation and has the corporate,
partnership or limited liability company power and authority, as
applicable, to own its property and assets and to transact the business in
which it is engaged and presently proposes to engage;
(b) it has the corporate or other organizational power and authority
to execute, deliver and carry out the terms and provisions of the Credit
Documents to which it is party and has taken all necessary corporate or
other organizational action to authorize the execution, delivery and
performance of the Credit Documents to which it is party;
(c) it has duly executed and delivered each Credit Document to which
it is party and each Credit Document to which it is party constitutes the
legal, valid and binding agreement or obligation of such Guarantor
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws generally
affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law);
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(d) neither the execution, delivery and performance by such
Guarantor of the Credit Documents to which it is party nor compliance with
the terms and provisions thereof (i) will contravene any provision of any
law, statute, rule, regulation, order, writ, injunction or decree of any
court or governmental instrumentality applicable to such Guarantor or its
properties and assets, (ii) will conflict with or result in any breach of,
any of the terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (other than any Lien created
pursuant to the Credit Documents) upon any of the property or assets of
such Guarantor pursuant to the terms of any promissory note, bond,
debenture, indenture, mortgage, deed of trust, credit or loan agreement,
or any other material agreement or other instrument, to which such
Guarantor is a party or by which it or any of its property or assets are
bound or to which it may be subject, or (iii) will violate any provision
of the certificate or articles of incorporation, code of regulations or
by-laws, or other charter or organizational documents of such Guarantor;
(e) no order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by,
any foreign or domestic governmental or public body or authority, or any
subdivision thereof, is required to authorize or is required as a
condition to (i) the execution, delivery and performance by such Guarantor
of any Credit Document to which it is a party, or (ii) the legality,
validity, binding effect or enforceability of any Credit Document to which
such Guarantor is a party, other than filings and recordings necessary to
establish or perfect any security interests or other Liens created
pursuant to the Credit Documents;
(f) there are no actions, suits or proceedings pending or, to, the
knowledge of such Guarantor, threatened with respect to such Guarantor
which question the validity or enforceability of any of the Credit
Documents to which such Guarantor is a party, or of any action to be taken
by such Guarantor pursuant to any of the Credit Documents to which it is a
party; and
(g) as of the date such Guarantor has become a party to this
Guaranty, (i) such Guarantor has received consideration which is the
reasonable equivalent value of the obligations and liabilities that such
Guarantor has incurred to the Administrative Agent and the Creditors under
this Guaranty and the other Credit Documents to which such Guarantor is a
party; (ii) such Guarantor has capital sufficient to carry on its business
and transactions and all business and transactions in which it is about to
engage and is solvent and able to pay its debts as they mature; (iii) such
Guarantor owns property having a value, both at fair valuation and at
present fair salable value, greater than the amount required to pay its
debts; and (iv) such Guarantor is not entering into the Credit Documents
to which it is a party with the intent to hinder, delay or defraud its
creditors.
11. Continuing Guaranty; Remedies Cumulative, etc. This Guaranty is a
continuing guaranty, all liabilities to which it applies or may apply under the
terms hereof shall be conclusively presumed to have been created in reliance
hereon, and this Guaranty shall remain in full force and effect until terminated
as provided in section 26 hereof. No failure or delay on the part of the
Administrative Agent or any Creditor in exercising any right, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein expressly specified are cumulative and not
exclusive of any rights or remedies which the Administrative Agent or any
Creditor would otherwise have. No notice to or demand on any Guarantor in any
case shall entitle such Guarantor to any other further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or any Creditor to any other or further action in any
circumstances without notice or demand. It is not necessary for the
Administrative Agent or any Creditor to inquire into the capacity or powers of
the Borrower or any of its Subsidiaries or the officers, directors, partners or
agents acting or purporting to act on its behalf, and any indebtedness made or
created in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.
12. Enforcement Expenses. The Guarantors hereby jointly and severally
agree to pay, to the extent not paid pursuant to section 12.1 of the Credit
Agreement, all reasonable out-of-pocket costs and expenses of the Administrative
Agent and each Creditor in connection with the enforcement of this Guaranty and
any amendment,
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waiver or consent relating hereto (including, without limitation, the reasonable
fees and disbursements of counsel employed by the Administrative Agent or any of
the Creditors).
13. Successors and Assigns. This Guaranty shall be binding upon each
Guarantor and its successors and assigns, and shall inure to the benefit of the
Administrative Agent and the Creditors and their successors and assigns to the
extent permitted under the Credit Agreement (or any Designated Hedge Document,
in the case of an Designated Hedge Creditor).
14. Amendments and Waivers. Neither this Guaranty nor any provision hereof
may be changed, waived, discharged or terminated except with the written consent
of the Required Lenders (or to the extent required by section 12.12 of the
Credit Agreement, with the written consent of each Lender) and each Guarantor
affected thereby (it being understood that the addition or release of any
Guarantor hereunder shall not constitute a change, waiver, discharge or
termination affecting any Guarantor other than the Guarantor so added or
released), provided, however, that no such change, waiver, modification or
variance shall be made to this section 14 without the consent of each Secured
Creditor adversely affected thereby, provided further that any change, waiver,
modification or variance affecting the rights and benefits of a single Class of
Secured Creditors (and not all Secured Creditors in a like or similar manner)
shall require the written consent of the Requisite Creditors of such Class of
Secured Creditors. For the purpose of this Guaranty, the term "Class" shall mean
each class of Secured Creditors, i.e., whether (x) the Lenders as holders of the
Credit Document Obligations or (y) the Designated Hedge Creditors as holders of
the Designated Hedge Obligations. For the purpose of this Guaranty, the term
"Requisite Creditors" of any Class shall mean each of (x) with respect to the
Credit Document Obligations, the Required Lenders and (y) with respect to the
Designated Hedge Obligations, the holders of 51% of all obligations outstanding
from time to time under the Designated Hedge Agreements.
15. Headings Descriptive. The headings of the several sections of this
Guaranty are inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Guaranty.
16. Severability. Any provision of this Guaranty which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
17. Right of Setoff. In addition to any rights now or hereafter granted
under applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of an Event of Default (such term to mean
any "Event of Default" as defined in the Credit Agreement or any payment default
under any Designated Hedge Agreement after any applicable grace period), each
Creditor is hereby authorized at any time or from time to time, without notice
to any Guarantor or to any other person, any such notice being expressly waived,
to set off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by such Creditor
to or for the credit or the account of such Guarantor, against and on account of
the obligations and liabilities of such Guarantor to such Creditor under this
Guaranty, irrespective of whether or not the Administrative Agent or such
Creditor shall have made any demand hereunder and although said obligations,
liabilities, deposits or claims, or any of them, shall be contingent or
unmatured. Each Creditor agrees to promptly notify the relevant Guarantor after
any such set off and application, provided, however, that the failure to give
such notice shall not affect the validity of such set off and application.
18. Notices. All notices requests, demands or other communications
pursuant hereto shall be made in writing (including telegraphic, telex,
facsimile transmission or cable communication) and mailed, telegraphed, telexed,
transmitted, cabled or delivered, if to any Guarantor, at the address specified
for it in Annex II to the Credit Agreement (or if no such address is specified,
to it c/o the Borrower), with a courtesy copy to the Borrower at its address
specified in or pursuant to the Credit Agreement; if to the Administrative Agent
or any Lender, as provided in the Credit Agreement; if to any Designated Hedge
Creditor, as provided in the Designated Hedge Agreement to which it is a party;
or in any case at such other address as any of the persons listed above may
hereafter notify the others in writing. All such notices and communication shall
be mailed, telegraphed, telexed, facsimile transmitted, or cabled or sent by
overnight courier, and shall be effective when received.
9
<PAGE>
19. Reinstatement. If claim is ever made upon the Administrative Agent or
any Creditor for recission, repayment, recovery or restoration of any amount or
amounts received by the Administrative Agent or any Creditor in payment or on
account of any of the Guaranteed Obligations and any of the aforesaid payees
repays all or part of said amount by reason of (x) any judgment, decree or order
of any court or administrative body having jurisdiction over such payee or any
of its property, or (y) any settlement or compromise of any such claim effected
by such payee with any such claimant (including the Borrower), then and in such
event (i) any such judgment, decree, order, settlement or compromise shall be
binding upon each Guarantor, notwithstanding any revocation hereof or other
instrument evidencing any liability of the Borrower, (ii) each Guarantor shall
be and remain liable to the aforesaid payees hereunder for the amount so repaid
or otherwise recovered or restored to the same extent as if such amount had
never originally been received by any such payee, and (iii) this Guaranty shall
continue to be effective or be reinstated, as the case may be, all as if such
repayment or other recovery had not occurred.
20. Governing Law; Venue; Waiver of Jury Trial. (a) THIS GUARANTY AND THE
RIGHTS AND OBLIGATIONS OF THE ADMINISTRATIVE AGENT, THE CREDITORS AND OF THE
UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAW OF THE STATE OF OHIO. Any legal action or proceeding with respect to this
Guaranty may be brought in the Courts of the State of Ohio, or of the United
States of America for the Northern District of Ohio, and, by execution and
delivery of this Guaranty, each Guarantor hereby irrevocably accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. Each Guarantor hereby irrevocably consents to the
service of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered mail, return receipt
requested, to such Guarantor at its address provided herein, such service to
become effective 30 days after such mailing, or such earlier time as may be
provided by applicable law. Nothing herein shall affect the right of the
Administrative Agent or any of the Creditors to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against each Guarantor in any other jurisdiction.
(b) Each Guarantor hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Guaranty or any other
Credit Document or Guaranteed Document brought in the courts referred to in
section 20(a) above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that such action or proceeding brought in any
such court has been brought in an inconvenient forum.
(c) EACH GUARANTOR, THE ADMINISTRATIVE AGENT AND EACH CREDITOR HEREBY
IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY, THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
21. Sale of Capital Stock of a Guarantor. In the event that all of the
capital stock of one or more Guarantors is sold or otherwise disposed of or
liquidated in compliance with the requirements of section 9.2 of the Credit
Agreement (or such sale or other disposition has been approved in writing by the
Required Lenders (or all Lenders if required by section 12.12 of the Credit
Agreement)) and the proceeds of such sale, disposition or liquidation are
applied, to the extent applicable, in accordance with the provisions of the
Credit Agreement, such Guarantor shall be released from this Guaranty and this
Guaranty shall, as to each such Guarantor or Guarantors, terminate, and have no
further force or effect (it being understood and agreed that the sale of one or
more persons that own, directly or indirectly, all of the capital stock or other
equity interests of any Guarantor shall be deemed to be a sale of such Guarantor
for the purposes of this section 21).
22. Contribution Among Guarantors. Each Guarantor, in addition to the
subrogation rights it shall have against the Borrower under applicable law as a
result of any payment it makes hereunder, shall also have a right of
contribution against all other Guarantors in respect of any such payment pro
rata among same based on their respective net fair value as enterprises,
provided any such right of contribution shall be subject and subordinate to the
prior payment in full of the Guaranteed Obligations (and such Guarantor's
obligations in respect thereof).
10
<PAGE>
23. Full Recourse Obligations; Effect of Fraudulent Transfer Laws, etc. It
is the desire and intent of each Guarantor, the Administrative Agent and the
Creditors that this Guaranty shall be enforced as a full recourse obligation of
each Guarantor to the fullest extent permissible under the laws and public
policies applied in each jurisdiction in which enforcement is sought. If and to
the extent that the obligations of any Guarantor under this Guaranty would, in
the absence of this sentence, be adjudicated to be invalid or unenforceable
because of any applicable state or federal law relating to fraudulent
conveyances or transfers, then the amount of such Guarantor's liability
hereunder in respect of the Guaranteed Obligations shall be deemed to be reduced
ab initio to that maximum amount which would be permitted without causing such
Guarantor's obligations hereunder to be so invalidated.
24. Payments Free and Clear of Setoffs, Counterclaims and Taxes, etc. (a)
All payments made by any Guarantor hereunder will be made without setoff,
counterclaim or other defense and, except as provided for in section 24(b), all
such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding, except as provided in the
second succeeding sentence, any tax, imposed on or measured by the net income or
net profits of a Creditor pursuant to the laws of the jurisdiction under which
such Creditor is organized or the jurisdiction in which the principal office or
Applicable Lending Office of such Creditor is located or any subdivision thereof
or therein) and all interest, penalties or similar liabilities with respect to
such non excluded taxes, levies imposts, duties, fees, assessments or other
charges (all such nonexcluded taxes levies, imposts, duties, fees assessments or
other charges being referred to collectively as "Taxes"). If any Taxes are so
levied or imposed, the applicable Guarantor agrees to pay the full amount of
such Taxes and such additional amounts as may be necessary so that every payment
by it of all amounts due hereunder, after withholding or deduction for or on
account of any Taxes will not be less than the amount provided for herein. If
any amounts are payable in respect of Taxes pursuant to the preceding sentence,
the applicable Guarantor agrees to reimburse each Creditor, upon the written
request of such Creditor for taxes imposed on or measured by the net income or
profits of such Creditor pursuant to the laws of the jurisdiction in which such
Creditor is organized or in which the principal office or Applicable Lending
Office of such Creditor is located or under the laws of any political
subdivision or taxing authority of any such jurisdiction in which the principal
office or Applicable Lending Office of such Creditor is located and for any
withholding of income or similar taxes imposed by the United States of America
as such Creditor shall determine are payable by, or withheld from, such Creditor
in respect of such amounts so paid to or on behalf of such Creditor pursuant to
the preceding sentence, which request shall be accompanied by a statement from
such Creditor setting forth, in reasonable detail, the computations used in
determining such amounts. The applicable Guarantor will furnish to the
Administrative Agent within 45 days after the date the payment of any Taxes, or
any withholding or deduction on account thereof, is due pursuant to applicable
law certified copies of tax receipts, or other evidence satisfactory to the
applicable Creditor, evidencing such payment by the applicable Creditor. Each
applicable Guarantor will indemnify and hold harmless the Administrative Agent
and each Creditor, and reimburse the Administrative Agent or such Creditor upon
its written request, for the amount of any Taxes so levied or imposed and paid
or withheld by such Creditor.
(b) Notwithstanding anything to the contrary contained in section 24(a),
(i) any applicable Guarantor shall be entitled, to the extent it is required to
do so by law, to deduct or withhold income or other similar taxes imposed by the
United States (or any political subdivision or taxing authority thereof or
therein) from any amounts payable hereunder for the account of any Creditor
which is not a United States person (as such term is defined in section
7701(a)(30) of the Code) for United States federal income tax purposes and which
has not provided to the Borrower such forms that establish a complete exemption
from such deduction or withholding; and (ii) any applicable Guarantor shall not
be obligated pursuant to section 24(a) hereof to gross-up payments to be made to
a Creditor in respect of income or similar taxes imposed by the United States or
any additional amounts with respect thereto if such Lender has not provided to
the Borrower such forms.
25. Judgment Currency. (a) If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due hereunder in any currency (the
"Original Currency") into another currency (the "Other Currency") each
Guarantor, the Administrative Agent and the Creditors, by their acceptance of
the benefits hereof, agree, to the fullest extent that they may effectively do
so, that the rate of exchange used shall be that at which in accordance with
normal banking procedures the Administrative Agent could purchase the Original
Currency with the Other Currency at the Payment Office on the second Business
Day preceding that on which final judgment is given.
11
<PAGE>
(b) The obligation of a Guarantor in respect of any sum due in the
Original Currency from it to any Creditor or the Administrative Agent hereunder
shall, notwithstanding any judgment in any Other Currency, be discharged only to
the extent that on the Business Day following receipt by such Creditor or the
Administrative Agent (as the case may be) of any sum adjudged to be so due in
such Other Currency such Creditor or the Administrative Agent (as the case may
be) may in accordance with normal banking procedures purchase U.S. Dollars with
such Other Currency; if the amount of the Original Currency so purchased is less
than the sum originally due to such Creditor or the Administrative Agent (as the
case may be) in the Original Currency, such Guarantor agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify such Creditor or
the Administrative Agent (as the case may be) against such loss, and if the
amount of the Original Currency so purchased exceeds the sum originally due to
any Creditor or the Administrative Agent (as the case may be) in the Original
Currency, such Creditor or the Administrative Agent (as the case may be) agrees
to remit to such Guarantor such excess.
26. Termination. After the termination of the Total Commitment and all
Designated Hedge Agreements, when no Note nor Letter of Credit is outstanding
and when all Loans and other Guaranteed Obligations (other than unasserted
indemnity obligations) have been paid in full, the Administrative Agent, at the
request and expense of the Borrower and/or any of the Guarantors, will execute
and deliver to the Guarantors a proper instrument or instruments acknowledging
the satisfaction and termination of this Guaranty.
27. Enforcement by Administrative Agent. The Creditors agree that this
Guaranty may be enforced only by the action of the Administrative Agent, acting
upon the instructions of the Required Lenders, and that no Creditor shall have
any right individually to seek to enforce or to enforce this Guaranty, it being
understood and agreed that such rights and remedies may be exercised by the
Administrative Agent for the benefit of the Creditors upon the terms of this
Guaranty. The Administrative Agent and the Creditors further agree that this
Guaranty may not be enforced against any director, officer or employee of any
Guarantor, as such.
28. Effectiveness as to Hi-Stat. Notwithstanding anything to the contrary
contained herein, this Guaranty shall not be effective or binding upon Hi-Stat
until 12:01 A.M. on January 1, 1999.
29. Counterparts. This Guaranty may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
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<PAGE>
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed
and delivered as of the date first above written.
HI-STAT MANUFACTURING CO., INC.,
as a Guarantor
By: __________________________________
Vice President
NATIONAL CITY BANK,
as Administrative Agent
By:___________________________________
Vice President
13
<PAGE>
EXHIBIT C-2
------------------
FORM OF
SECURITY AGREEMENT
------------------
<PAGE>
================================================================================
STONERIDGE, INC.
as an Assignor
THE OTHER ASSIGNORS NAMED HEREIN
as Assignors
With
NATIONAL CITY BANK,
as Collateral Agent
--------------------------
SECURITY AGREEMENT
dated as of
December 30, 1998
--------------------------
================================================================================
<PAGE>
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of December 30, 1998 (as amended, modified,
or supplemented from time to time, "this Agreement"), among each of the
undersigned (each, together with its successors and assigns, an "Assignor" and
collectively, the "Assignors"), and NATIONAL CITY BANK, a national banking
association, as collateral agent (herein, together with its successors and
assigns in such capacity, the "Collateral Agent"), for the benefit of the
Secured Creditors (as defined below):
PRELIMINARY STATEMENTS:
(1) Except as otherwise defined herein, terms used herein and defined in
the Credit Agreement (as defined below) shall be used herein as therein defined.
Certain terms used herein are defined in section 9 hereof.
(2) This Agreement is made pursuant to the Credit Agreement, dated as of
the date hereof (herein, as amended or otherwise modified, restated or replaced
from time to time, the "Credit Agreement"), among Stoneridge, Inc., an Ohio
corporation (herein, together with its successors and assigns, the "Borrower"),
the financial institutions named as lenders therein (herein, together with their
successors and assigns, the "Lenders"), the other Agents named therein, and
National City Bank, as the Administrative Agent for the Lenders under the Credit
Agreement, providing, among other things, for loans or advances or other
extensions of credit to or for the benefit of the Borrower of up to
$425,000,000, with such loans or advances being evidenced by promissory notes
(the "Notes", such term to include all notes and other securities issued in
exchange therefor or in replacement thereof).
(3) The Borrower or any of its Subsidiaries may from time to time be party
to one or more Designated Hedge Agreements (as defined in the Credit Agreement).
Any institution that participates, and in each case their subsequent assigns, as
a counterparty to any Designated Hedge Agreement(collectively, the "Designated
Hedge Creditors," and the Designated Hedge Creditors together with the Agents
and the Lenders, collectively the "Secured Creditors"), shall benefit hereunder
as herein provided.
(4) Pursuant to the Subsidiary Guaranty, each Subsidiary Guarantor has
jointly and severally guaranteed to the Secured Creditors the payment when due
of the Guaranteed Obligations (as defined in the Subsidiary Guaranty).
(5) It is a condition precedent to the making of Loans and the issuance
of, and participation in, Letters of Credit under the Credit Agreement that each
Assignor shall have executed and delivered to the Collateral Agent this
Agreement.
(6) Each Assignor desires to execute this Agreement to satisfy the
condition described in the preceding paragraph.
NOW, THEREFORE, in consideration of the benefit accruing to each Assignor,
the receipt and sufficiency of which are hereby acknowledged, each Assignor
hereby makes the following representations and warranties and hereby covenants
and agrees as follows:
1. SECURITY INTERESTS.
1.1. Grant of Security Interests. (a) As security for the prompt and
complete payment and performance when due of all of the Secured Obligations,
each Assignor does hereby sell, assign and transfer unto the Collateral Agent,
and does hereby grant to the Collateral Agent, for the benefit of the Collateral
Agent and the Secured Creditors, a continuing security interest of first
priority in, all of the right, title and interest of such Assignor in, to and
under all of the following, whether now existing or hereafter from time to time
acquired (collectively, the "Collateral"):
(i) each and every Receivable,
(ii) all Contracts, together with all Contract Rights arising thereunder,
(iii) all Inventory,
<PAGE>
(iv) all Equipment,
(v) all Marks, together with the registrations and right to all renewals
thereof, and the goodwill of the business of such Assignor
symbolized by the Marks,
(vi) all Patents and Copyrights,
(vii) all computer programs of such Assignor and all intellectual property
rights therein and all other Proprietary Information of such
Assignor, including, but not limited to, Trade Secrets,
(viii) all Permits,
(ix) the Cash Collateral Account and all monies, securities and
instruments deposited or required to be deposited in such Cash
Collateral Account,
(x) all other Goods, General Intangibles, Chattel Paper, Documents,
Instruments and other personal property of every kind, type and
description, and
(xi) all Proceeds and products of any and all of the foregoing;
provided that the foregoing security interest shall not extend to, and the term
Collateral shall not include, any item or items of equipment (as defined in
section 9-109(2) of the Uniform Commercial Code of any applicable jurisdiction),
or any Proceeds thereof, in which an Assignor has granted (or a vendor has
retained) a "purchase money security interest" (as defined in section 9-107 of
the Uniform Commercial Code of any applicable jurisdiction), in compliance with
section 9.3(d) of the Credit Agreement, if the terms of the security agreement
or related documents governing such purchase money security interest prohibit
such Assignor from granting a security interest therein as provided in this
Agreement.
(b) The security interest of the Collateral Agent under this Agreement
extends to all Collateral of the kind, type and description which is the subject
of this Agreement which any Assignor may acquire at any time during the
continuation of this Agreement.
1.2. Power of Attorney. Each Assignor hereby constitutes and appoints the
Collateral Agent its true and lawful attorney, irrevocably, with full power
after the occurrence of and during the continuance of an Event of Default (in
the name of such Assignor or otherwise) to act, require, demand, receive,
compound and give acquittance for any and all monies and claims for monies due
or to become due to the Assignor under or arising out of the Collateral, to
endorse any checks or other instruments or orders in connection therewith and to
file any claims or take any action or institute any proceedings which the
Collateral Agent may deem to be necessary or advisable in the premises, which
appointment as attorney is coupled with an interest.
2. GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS.
Each Assignor represents, warrants and covenants, which representations,
warranties and covenants shall survive execution and delivery of this Agreement,
as follows:
2.1. Necessary Filings. Assuming the filing in the appropriate filing
offices of those UCC-1 financing statements delivered to the Collateral Agent
pursuant to section 6.1(h) of the Credit Agreement and the filings of the
patent, trademark and copyright security agreements with the United States
Patent and Trademark Office and the United States Copyright Office, all filings,
registrations and recordings necessary or appropriate to create, preserve,
protect and perfect the security interest granted by such Assignor to the
Collateral Agent hereby in respect of the Collateral have been accomplished and
the security interest granted to the Collateral Agent pursuant to this Agreement
in and to the Collateral constitutes a perfected security interest therein
superior and prior to the rights of all other persons therein (except that the
Collateral may be subject to the security interests evidenced by the financing
statements disclosed on Annex A hereto (the "Permitted Filings")) and subject to
no other Liens (except Permitted Liens) and is entitled to all the rights,
priorities and benefits afforded by the Uniform Commercial Code or other
relevant law as enacted in any relevant jurisdiction to perfected security
interests, subject to compliance with the Assignment of Claims Act of 1940, as
amended.
2.2. No Liens. Each Assignor is, and as to Collateral acquired by it from
time to time after the date hereof such Assignor will be, the owner of all
Collateral free from any Lien, security interest, encumbrance or other right,
title or interest of any person (other than evidenced by the Permitted
2
<PAGE>
Filings and Liens permitted under the Credit Agreement), and such Assignor shall
defend the Collateral against all claims and demands of all persons at any time
claiming the same or any interest therein adverse to the Collateral Agent.
2.3. Other Financing Statements. There is no financing statement (or
similar statement or instrument of registration under the law of any
jurisdiction) covering or purporting to cover any interest of any kind in the
Collateral except as disclosed in Annex A hereto and so long as the Total
Commitment has not been terminated or any Letter of Credit remains outstanding
or any of the Secured Obligations remain unpaid or any Designated Hedge
Agreement remains in effect, no Assignor will execute or authorize to be filed
in any public office any financing statement (or similar statement or instrument
of registration under the law of any jurisdiction) or statements relating to the
Collateral, except financing statements filed or to be filed in respect of and
covering the security interests granted hereby such Assignor or as otherwise
permitted by the Credit Agreement.
2.4. Chief Executive Office, etc; Records. The chief executive office (and
the registered office of each Assignor which is a corporation) of each Assignor
is located at the address indicated on Annex B hereto. The U.S. Federal Tax I.D.
Number of each Assignor is set forth on Annex B hereto. No Assignor will move
its chief executive office (or registered office in the case of an Assignor
which is a corporation) except to such new location as such Assignor may
establish in accordance with the last sentence of this section 2.4. The
originals of all documents evidencing all Receivables and Contract Rights of
such Assignor and the only original books of account and records of such
Assignor relating thereto are, and will continue to be, kept at such chief
executive office, or at such new locations as such Assignor may establish in
accordance with the last sentence of this section 2.4. All Receivables and
Contract Rights of such Assignor are, and will continue to be, maintained at,
and controlled and directed (including, without limitation, for general
accounting purposes) from, the office locations described above, or such new
locations as such Assignor may establish in accordance with the last sentence of
this section 2.4. No Assignor shall establish new locations for such offices
until (i) it shall have given to the Collateral Agent not less than 30 days'
prior written notice (or such lesser notice as shall be acceptable to the
Collateral Agent in the case of a new record location to be established in
connection with newly acquired Contracts) of its intention so to do, clearly
describing such new location and providing such other information in connection
therewith as the Collateral Agent may reasonably request, and (ii) with respect
to such new location, it shall have taken all action, satisfactory to the
Collateral Agent, to maintain the security interest of the Collateral Agent in
the Collateral intended to be granted hereby at all times fully perfected and in
full force and effect.
2.5. Location of Inventory and Equipment. All Inventory and Equipment held
on the date hereof by each Assignor is located at one of the locations shown on
Annex C attached hereto. Each Assignor agrees that all Inventory and Equipment
now held or subsequently acquired by it shall be kept at (or shall be in
transport to or from) any one of the locations shown on Annex C hereto, or such
new location as such Assignor may establish in accordance with the last sentence
of this section 2.5. An Assignor may establish a new location for Inventory and
Equipment only if (i) it shall have given to the Collateral Agent not less than
30 days' prior written notice of its intention so to do, clearly describing such
new location and providing such other information in connection therewith as the
Collateral Agent may reasonably request, and (ii) with respect to such new
location, it shall have taken all action reasonably satisfactory to the
Collateral Agent to maintain the security interest of the Collateral Agent in
the Collateral intended to be granted hereby at all times in fully perfected and
in full force and effect.
2.6. Trade Names; Change of Name. No Assignor has or operates in any
jurisdiction under, or in the preceding five years has had or has operated in
any jurisdiction under, any trade names, fictitious names or other names
(including, without limitation, any names of divisions or operations) except its
legal name and such other trade, fictitious or other names as are listed on
Annex D hereto. Each Assignor has only operated under each name set forth in
Annex D in the jurisdiction or jurisdictions set forth opposite each such name
on Annex D. No Assignor shall change its legal name or assume or operate in any
jurisdiction under any trade, fictitious or other name except those names listed
on Annex D hereto in the jurisdictions listed with respect to such names and new
names (including, without limitation, any names of divisions or operations)
and/or jurisdictions established in accordance with the last sentence of this
section 2.6. No Assignor shall assume or operate in any jurisdiction under any
new trade, fictitious or other name or operate under any existing name in any
additional jurisdiction until (i) it shall have given to the Collateral Agent
not less than 30 days' prior written notice of its intention so to do, clearly
describing in such new name and/or jurisdiction and, in the case of a new name,
the jurisdictions in which such new name shall be used and providing such other
information in connection therewith as the Collateral Agent may reasonably
request, and (ii) with respect to such new name and/or new jurisdiction, it
shall have taken all action to maintain the security interest of the Collateral
Agent in the Collateral intended to be granted hereby at all times fully
perfected and in full force and effect.
2.7. Recourse. This Agreement is made with full recourse to the relevant
Assignor and pursuant to and upon all the warranties, representations,
covenants, and agreements on the part of such Assignor contained herein, in the
Designated Hedge Agreements and otherwise in writing in connection herewith or
therewith.
3
<PAGE>
3. SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS;
INSTRUMENTS.
3.1. Additional Representations and Warranties. As of the time when each
of its accounts receivable arises, each Assignor shall be deemed to have
represented and warranted that, except in such respects as do not impair in any
material respect the value or collectibility of its accounts receivable taken as
a whole, and except in such other respects as may from time be disclosed by such
Assignor to the Administrative Agent in writing: such receivable, and all
records, papers and documents relating thereto (if any) are, to the best
knowledge of the Assignor after due inquiry, genuine and in all respects what
they purport to be, and that all papers and documents (if any) relating thereto,
to the best knowledge of the Assignor after due inquiry, (i) will represent the
genuine, legal, valid and binding obligation of the account debtor, subject to
adjustments customary in the business of such Assignor, and evidencing
indebtedness unpaid and owed by the respective account debtor arising out of the
performance of labor or services or the sale or lease and delivery of the
merchandise listed therein, or both, (ii) will be the only original writings
evidencing and embodying such obligation of the account debtor named therein
(other than copies created for general accounting purposes), (iii) will evidence
true and valid obligations, enforceable in accordance with their respective
terms, subject to adjustments customary in the business of such Assignor, and
(iv) will be in compliance and will conform with all applicable federal, state
and local laws and applicable laws of any relevant foreign jurisdiction.
3.2. Maintenance of Records. Each Assignor will keep and maintain at its
own cost and expense satisfactory and complete records of its Receivables and
Contracts, including, but not limited to, the originals of all documentation
(including each Contract) with respect thereto, records of all payments
received, all credits granted thereon, all merchandise returned and all other
dealings therewith, and such Assignor will make the same available to the
Collateral Agent for inspection, at such Assignor's own cost and expense, at any
and all reasonable times upon demand and upon reasonable advance notice. If the
Collateral Agent so directs, each Assignor shall legend, in form and manner
reasonably satisfactory to the Collateral Agent, the Receivables and Contracts,
as well as books, records and documents of such Assignor evidencing or
pertaining to the Receivables with an appropriate reference to the fact that the
Receivables and Contracts have been assigned to the Collateral Agent and that
the Collateral Agent has a security interest therein.
3.3. Modification of Terms; etc. No Assignor shall rescind or cancel any
indebtedness evidenced by any Receivable or under any Contract, or modify any
term thereof or make any adjustment with respect thereto, or extend or renew the
same, or compromise or settle any material dispute, claim, suit or legal
proceeding relating thereto, or sell any Receivable or Contract, or interest
therein, without the prior written consent of the Collateral Agent, except (i)
as permitted by section 3.4 hereof and (ii) so long as no Event of Default is
then in existence in respect of which the Collateral Agent has given notice that
this exception is no longer applicable, the Assignor may rescind, cancel,
modify, make adjustments with respect to, extend or renew any Contracts or
indebtedness evidenced by any Receivable, or compromise or settle any such
dispute, claim, suit, or legal proceeding, or sell any Receivable or Contract or
interest therein, in the ordinary course of business. Each Assignor will duly
fulfill all obligations on its part to be fulfilled under or in connection with
the Receivables and Contracts and will do nothing to materially impair the
rights of the Collateral Agent in the Receivables or Contracts.
3.4. Collection. Each Assignor shall endeavor to cause to be collected
from the account debtor named in each of its Receivables or obligor under any
Contract, as and when due (including, without limitation, amounts which are
delinquent, such amounts to be collected in accordance with generally accepted
lawful collection procedures) any and all amounts owing under or on account of
such Receivable or Contract, and apply forthwith upon receipt thereof all such
amounts as are so collected to the outstanding balance of such Receivable or
under such Contract, except that, so long as no Event of Default is then in
existence in respect of which the Collateral Agent has given notice that this
exception is no longer applicable, such Assignor may allow in the ordinary
course of business as adjustments to amounts owing under its Receivables and
Contracts (i) an extension or renewal of the time or times of payment, or
settlement for less than the total unpaid balance, which such Assignor finds
appropriate in accordance with sound business judgment and (ii) a refund or
credit due as a result of returned or damaged merchandise or improperly
performed services. The reasonable out-of-pocket costs and expenses (including,
without limitation, attorneys' fees) of collection, whether incurred by such
Assignor or the Collateral Agent, shall be borne by such Assignor.
3.5. Direction to Account Debtors, etc. Upon the occurrence and during the
continuance of an Event of Default, and if the Collateral Agent so directs the
relevant Assignor, to the extent permitted by applicable law, such Assignor
agrees (x) to cause all payments on account of the Receivables to be made
directly to the Cash Collateral Account, (y) that the Collateral Agent may, at
its option, directly notify the obligors with respect to any Receivables to make
payments with respect thereto as provided in preceding clause (x), and (z) that
the Collateral Agent may enforce collection of any such Receivables and may
adjust, settle or compromise the amount of payment thereof. The Collateral Agent
may apply any or all amounts then in, or thereafter deposited in, the Cash
Collateral Account in the manner provided in section 7.4 of this Agreement. The
reasonable out-of-pocket costs and expenses (including attorneys' fees) of
collection, whether incurred by such Assignor or the Collateral Agent, shall be
borne by such Assignor.
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3.6. Instruments. If any Assignor owns or acquires any Instrument, such
Assignor will within 10 days notify the Collateral Agent thereof, and upon
request by the Collateral Agent promptly deliver such Instrument to the
Collateral Agent appropriately endorsed to the order of the Collateral Agent as
further security hereunder.
3.7. Further Actions. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to its Receivables, Contracts, Instruments and other property or
rights covered by the security interest hereby granted, as the Collateral Agent
may reasonably require to give effect to the purposes of this Agreement.
4. SPECIAL PROVISIONS CONCERNING TRADEMARKS.
4.1. Additional Representations and Warranties. Each Assignor represents
and warrants that it is the true and lawful owner or licensee of the Marks
listed in Annex E attached hereto and that said listed Marks constitute all the
marks registered in the United States Patent and Trademark Office that such
Assignor now owns or uses in connection with its business, other than any such
marks which are (i) owned but not used and (ii) not material to its business.
Each Assignor represents and warrants that it owns or is licensed to use all
Marks that it uses, and that it owns all of the registrations listed on Annex E.
Each Assignor further warrants that it is aware of no third party claim that any
aspect of such Assignor's present or contemplated business operations infringes
or will infringe any trademark or service mark in a manner which could have a
material effect on the financial condition, business or property of such
Assignor.
4.2. Licenses and Assignments. Each Assignor hereby agrees not to divest
itself of any right under a Mark other than in the ordinary course of business
absent prior written approval of the Collateral Agent.
4.3. Infringements. Each Assignor agrees, promptly upon learning thereof,
to notify the Collateral Agent in writing of the name and address of, and to
furnish such pertinent information that may be available with respect to, any
party who may be infringing or otherwise violating any of such Assignor's rights
in and to any Mark that has a material effect on the financial condition,
business or property of such Assignor taken as a whole (each such Mark, a
"Significant Mark"), or with respect to any party claiming that such Assignor's
use of any Significant Mark violates any property right of that party, to the
extent that such infringement or violation could have a material effect on the
financial condition, business or property of such Assignor. Each Assignor
further agrees, unless otherwise directed by the Collateral Agent, diligently to
prosecute any person infringing any Significant Mark in a manner consistent with
its past practice and in the ordinary course of business, and when it is
commercially reasonable to do so.
4.4. Preservation of Marks. Each Assignor agrees to use or license the use
of its Significant Marks in interstate commerce during the time in which this
Agreement is in effect, sufficiently to preserve such Marks as trademarks or
service marks registered under the laws of the United States.
4.5. Maintenance of Registration. Each Assignor shall, at its own expense,
diligently process all documents required by the Trademark Act of 1946, 15
U.S.C. ss.ss.1051 et seq. to maintain trademark registration which would
reasonably be expected to have a Material Adverse Effect, including but not
limited to affidavits of use and applications for renewals of registration in
the United States Patent and Trademark Office for all of its Marks pursuant to
15 U.S.C. ss.ss.1058(a), 1059 and 1065, and shall pay all fees and disbursements
in connection therewith, and shall not abandon any such filing of affidavit of
use or any such application of renewal prior to the exhaustion of all
administrative and judicial remedies without prior written consent of the
Collateral Agent, which consent shall not be unreasonably withheld.
4.6. Future Registered Marks. If any mark registration issues hereafter to
an Assignor as a result of any application now or hereafter pending before the
United States Patent and Trademark Office, within 30 days of receipt of such
certificate such Assignor shall deliver a copy of such certificate, and a grant
of security in such mark to the Collateral Agent, confirming the grant thereof
hereunder, the form of such confirmatory grant to be substantially the same as
the form hereof.
4.7. Remedies. If an Event of Default shall occur and be continuing, the
Collateral Agent may, by written notice to the relevant Assignor, take any or
all of the following actions: (i) declare the entire right, title and interest
of such Assignor in and to each of the Marks, together with all trademark rights
and rights of protection to the same, vested, in which event such rights, title
and interest shall immediately vest, in the Collateral Agent for the benefit of
the Secured Creditors, in which case such Assignor agrees to execute an
assignment in form and substance reasonably satisfactory to the
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Collateral Agent, of all its rights, title and interest in and to the Marks to
the Collateral Agent for the benefit of the Secured Creditors; (ii) take and use
or sell the Marks and the goodwill of such Assignor's business symbolized by the
Marks and the right to carry on the business and use the assets of the Assignor
in connection with which the Marks have been used; and (iii) direct such
Assignor to refrain, in which event such Assignor shall refrain, from using the
Marks in any manner whatsoever, directly or indirectly, and, if requested by the
Collateral Agent, change such Assignor's corporate name to eliminate therefrom
any use of any Mark and execute such other and further documents that the
Collateral Agent may request to further confirm this and to transfer ownership
of the Marks and registrations and any pending trademark application in the
United States Patent and Trademark Office to the Collateral Agent.
5. SPECIAL PROVISIONS CONCERNING PATENTS AND COPYRIGHTS.
5.1. Additional Representations and Warranties. Each Assignor represents
and warrants that it is the true and lawful owner or licensee of all rights in
the Patents listed in Annex F attached hereto and in the Copyright registrations
listed in Annex G attached hereto, that said Patents constitute all the United
States patents and applications for United States patents that such Assignor now
owns and that said Copyrights constitute all the registered United States
copyrights that such Assignor now owns, other than any such Patents,
applications and registrations which are (i) owned but not used and (ii) not
material to its business. Each Assignor represents and warrants that it owns or
is licensed to practice under all Patents and Copyright registrations that it
now owns, uses or practices under. Each Assignor further warrants that it is
aware of no third party claim that any aspect of such Assignor's present or
contemplated business operations infringes or will infringe any patent or any
copyright in a manner which could have a material effect on the financial
condition, business or property of such Assignor.
5.2. Licenses and Assignments. Each Assignor hereby agrees not to divest
itself of any right under a Patent or Copyright other than in the ordinary
course of business absent prior written approval of the Collateral Agent, which
such approval shall not be unreasonably withheld.
5.3. Infringements. Each Assignor agrees, promptly upon learning thereof,
to furnish the Collateral Agent in writing with all pertinent information
available to such Assignor with respect to any infringement or other violation
of such Assignor's rights in any Patent that has a material effect on the
financial condition, business or property of such Assignor taken as a whole
(each such Patent, a "Significant Patent") or Copyright, or with respect to any
claim that practice of any Significant Patent or Copyright violates any property
right of that party, to the extent that such infringement or violation could
have a material effect on the financial condition, business or property of such
Assignor. Each Assignor further agrees, absent direction of the Collateral Agent
to the contrary, diligently to prosecute any person infringing any Significant
Patent or Copyright about which it has knowledge in a manner consistent with its
past practice and in the ordinary course of business, and when it is
commercially reasonable to do so.
5.4. Maintenance of Patents. At its own expense, each Assignor shall make
timely payment of all post-issuance fees required pursuant to 35 U.S.C.ss.41 to
maintain in force rights under each Patent.
5.5. Prosecution of Patent Applications. At its own expense, each Assignor
shall diligently prosecute all applications for United States patents listed on
Annex F hereto, and shall not abandon any such application, except in favor of a
continuation application based on such application, prior to exhaustion of all
administrative and judicial remedies, absent written consent of the Collateral
Agent, which such consent shall not be unreasonably withheld.
5.6. Other Patents and Copyrights. Within 30 days of acquisition of a
United States Patent or Copyright, or of filing of an application for a United
States Patent or Copyright, the relevant Assignor shall deliver to the
Collateral Agent a copy of said Patent or Copyright, as the case may be, with a
grant of security as to such Patent or Copyright, as the case may be, confirming
the grant thereof hereunder, the form of such confirmatory grant to be
substantially the same as the form hereof.
5.7. Remedies. If an Event of Default shall occur and be continuing, the
Collateral Agent may by written notice to the relevant Assignor take any or all
of the following actions: (i) declare the entire right, title and interest of
such Assignor in each of the Patents and Copyrights vested, in which event such
right, title and interest shall immediately vest in the Collateral Agent for the
benefit of the Secured Creditors, in which case such Assignor agrees to execute
an assignment in form and substance reasonably satisfactory to the Collateral
Agent of all its right, title, and interest to such Patents and Copyrights to
the Collateral Agent for the benefit of the Secured Creditors; (ii) take and
practice or sell the Patents and Copyrights; (iii) direct such Assignor to
refrain, in which event such Assignor shall refrain, from practicing the Patents
and Copyrights directly or indirectly, and such Assignor shall execute such
other and further documents as the Collateral Agent may request further to
confirm this and to transfer ownership of the Patents and Copyrights to the
Collateral Agent for the benefit of the Secured Creditors.
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6. PROVISIONS CONCERNING ALL COLLATERAL.
6.1. Protection of Collateral Agent's Security. Each Assignor will do
nothing to impair the rights of the Collateral Agent in the Collateral. Each
Assignor will at all times keep its Inventory and Equipment insured in favor of
the Collateral Agent, at its own expense, to the extent required by the Credit
Agreement against fire, theft and all other risks to which such Collateral may
be subject; all policies or certificates with respect to such insurance shall be
endorsed to the Collateral Agent's satisfaction for the benefit of the
Collateral Agent (including, without limitation, by naming the Collateral Agent
as an additional insured and loss payee) and copies thereof shall be delivered
upon request to the Collateral Agent. If an Assignor shall fail to insure such
Inventory and/or Equipment to the extent required by the Credit Agreement, or if
such Assignor shall fail to so endorse all policies or certificates with respect
thereto, the Collateral Agent shall have the right (but shall be under no
obligation) to procure such insurance and such Assignor agrees to reimburse the
Collateral Agent for all costs and expenses of procuring such insurance. The
Collateral Agent shall apply any proceeds of such insurance received by it in
accordance with the applicable provisions of the Credit Agreement and this
Agreement, it being understood and agreed that, unless otherwise provided in the
Credit Agreement, the Assignor shall be permitted to first use any such proceeds
to repair and/or replace the relevant Collateral. Each Assignor assumes all
liability and responsibility in connection with the Collateral acquired by it
and the liability of such Assignor to pay its obligations shall in no way be
affected or diminished by reason of the fact that such Collateral may be lost,
destroyed, stolen, damaged or for any reason whatsoever unavailable to such
Assignor.
6.2. Warehouse Receipts Non-negotiable. Each Assignor agrees that if any
warehouse receipt or receipt in the nature of a warehouse receipt is issued with
respect to any of its Inventory, such warehouse receipt or receipt in the nature
thereof shall not be "negotiable" (as such term is used in section 7-104 of the
Uniform Commercial Code as in effect in any relevant jurisdiction or under other
relevant law).
6.3. Further Actions. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such lists, descriptions and designations of its Collateral,
warehouse receipts, receipts in the nature of warehouse receipts, bills of
lading, documents of title, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Collateral and other property or rights
covered by the security interest hereby granted, which the Collateral Agent
reasonably deems appropriate or advisable to perfect, preserve or protect its
security interest in the Collateral.
6.4. Financing Statements. Each Assignor agrees to sign and deliver to the
Collateral Agent such financing statements, in form acceptable to the Collateral
Agent, as the Collateral Agent may from time to time reasonably request or as
are necessary or desirable in the opinion of the Collateral Agent to establish
and maintain a valid, enforceable, first priority security interest in the
Collateral as provided herein and the other rights and security contemplated
hereby all in accordance with the Uniform Commercial Code as enacted in any and
all relevant jurisdictions or any other relevant law. Each Assignor will pay any
applicable filing fees and related expenses. Each Assignor authorizes the
Collateral Agent to file any such financing statements without the signature of
such Assignor.
7. REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT.
7.1. Remedies; Obtaining the Collateral Upon Default. Each Assignor agrees
that, if any Event of Default shall have occurred and be continuing, then and in
every such case, subject to any mandatory requirements of applicable law then in
effect, the Collateral Agent, in addition to any rights now or hereafter
existing under applicable law, shall have all rights as a secured creditor under
the Uniform Commercial Code in all relevant jurisdictions and may:
(i) personally, or by agents or attorneys, immediately retake
possession of the Collateral or any part thereof, from such Assignor or
any other person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon such
Assignor's premises where any of the Collateral is located and remove the
same and use in connection with such removal any and all services,
supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement, instrument
or other obligation (including, without limitation, the Receivables)
constituting the Collateral to make any payment required by the terms of
such instrument or agreement directly to the Collateral Agent;
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(iii) sell, assign or otherwise liquidate, or direct such Assignor
to sell, assign or otherwise liquidate, any or all of the Collateral or
any part thereof, and take possession of the proceeds of any such sale or
liquidation;
(iv) withdraw any or all monies, securities and/or instruments in
the Cash Collateral Account for application to the Secured Obligations in
accordance with section 7.4 hereof; and
(v) take possession of the Collateral or any part thereof, by
directing such Assignor in writing to deliver the same to the Collateral
Agent at any place or places designated by the Collateral Agent, in which
event such Assignor shall at its own expense;
(A) forthwith cause the same to be moved to the place or
places so designated by the Collateral Agent and there delivered to
the Collateral Agent,
(B) store and keep any Collateral so delivered to the
Collateral Agent at such place or places pending further action by
the Collateral Agent as provided in section 7.2, and
(C) while the Collateral shall be so stored and kept, provide
such guards and maintenance services as shall be necessary to
protect the same and to preserve and maintain them in good
condition;
it being understood that such Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by the Assignor of said obligation.
7.2. Remedies; Disposition of the Collateral. Upon the occurrence and
continuance of an Event of Default, any Collateral repossessed by the Collateral
Agent under or pursuant to section 7.1 and any other Collateral whether or not
so repossessed by the Collateral Agent, may be sold, assigned, leased or
otherwise disposed of under one or more contracts or as an entirety, and without
the necessity of gathering at the place of sale of the property to be sold, and
in general in such manner, at such time or times, at such place or places and on
such terms as the Collateral Agent may, in compliance with any mandatory
requirements of applicable law, determine to be commercially reasonable. Any of
the Collateral may be sold, leased or otherwise disposed of, in the condition in
which the same existed when taken by the Collateral Agent or after any overhaul
or repair which the Collateral Agent shall determine to be commercially
reasonable. Any such disposition which shall be a private sale or other private
proceedings permitted by such requirements shall be made upon not less than 10
days' written notice to such Assignor specifying the time at which such
disposition is to be made and the intended sale price or other consideration
therefor, and shall be subject, for the 10 days after the giving of such notice,
to the right of the relevant Assignor or any nominee of the relevant Assignor to
acquire the Collateral involved at a price or for such other consideration at
least equal to the intended sale price or other consideration so specified. Any
such disposition which shall be a public sale permitted by such requirements
shall be made upon not less than 10 days' written notice to the relevant
Assignor specifying the time and place of such sale and, in the absence of
applicable requirements of law, shall be by public auction (which may, at the
Collateral Agent's option, be subject to reserve), after publication of notice
of such auction not less than 10 days prior thereto in two newspapers in general
circulation in the city where such Collateral is located. To the extent
permitted by any such requirement of law, the Collateral Agent on behalf of the
Secured Creditors (or certain of them) may bid for and become the purchaser (by
bidding in Secured Obligations or otherwise) of the Collateral or any item
thereof, offered for sale in accordance with this section without accountability
to the relevant Assignor (except to the extent of surplus money received as
provided in section 7.4). If, under mandatory requirements of applicable law,
the Collateral Agent shall be required to make disposition of the Collateral
within a period of time which does not permit the giving of notice to the
Assignor as hereinabove specified, the Collateral Agent need give the relevant
Assignor only such notice of disposition as shall be reasonably practicable in
view of such mandatory requirements of applicable law.
7.3. Waiver of Claims. Except as otherwise provided in this Agreement,
EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE
AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S TAKING POSSESSION
OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING,
WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT
REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH THE ASSIGNOR WOULD OTHERWISE HAVE
UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and
each Assignor hereby further waives, to the extent permitted by law:
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(i) all damages occasioned by such taking of possession except any
damages which are the direct result of the Collateral Agent's gross
negligence or wilful misconduct;
(ii) all other requirements as to the time, place and terms of sale
or other requirements with respect to the enforcement of the Collateral
Agent's rights here-under; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law
in order to prevent or delay the enforcement of this Agreement or the
absolute sale of the Collateral or any portion thereof, and each Assignor,
for itself and all who may claim under it, insofar as it or they now or
hereafter lawfully may, hereby waives the benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the relevant Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity against the
relevant Assignor and against any and all persons claiming or attempting to
claim the Collateral so sold, optioned or realized upon, or any part thereof,
from, through and under the relevant Assignor.
7.4. Application of Proceeds. (a) The proceeds of any Collateral obtained
pursuant to section 7.1 or disposed of pursuant to section 7.2 shall be applied
to the Secured Obligations owed to the Collateral Agent and the other Secured
Creditors as provided in section 10.3 of the Credit Agreement.
(b) All payments required to be made to the (i) Lenders hereunder shall be
made to the Administrative Agent for the account of the respective Lenders and
(ii) Designated Hedge Creditors hereunder shall be made to the paying agent
under the applicable Designated Hedge Agreement or, in the case of Designated
Hedge Agreements without a paying agent, directly to the applicable Designated
Hedge Creditor.
(c) It is understood that the Assignors shall remain jointly and severally
liable to the extent of any deficiency between (x) the amount of the proceeds of
the Collateral and the amount of the sum referred to in clause (a)(i) and (ii)
of this section 7.4 and (y) the aggregate outstanding amount of the Secured
Obligations.
7.5. Remedies Cumulative. Each and every right, power and remedy hereby
specifically given to the Collateral Agent shall be in addition to every other
right, power and remedy specifically given under this Agreement, any Designated
Hedge Agreement or the other Credit Documents or now or hereafter existing at
law or in equity, or by statute and each and every right, power and remedy
whether specifically herein given or otherwise existing may be exercised from
time to time or simultaneously and as often and in such order as may be deemed
expedient by the Collateral Agent. All such rights, powers and remedies shall be
cumulative and the exercise or the beginning of exercise of one shall not be
deemed a waiver of the right to exercise of any other or others. No delay or
omission of the Collateral Agent in the exercise of any such right, power or
remedy and no renewal or extension of any of the Secured Obligations shall
impair any such right, power or remedy or shall be construed to be a waiver of
any Default or Event of Default or an acquiescence therein. In the event that
the Collateral Agent shall bring any suit to enforce any of its rights hereunder
and shall be entitled to judgment, then in such suit the Collateral Agent may
recover reasonable expenses, including attorneys' fees, and the amounts thereof
shall be included in such judgment.
7.6. Discontinuance of Proceedings. In case the Collateral Agent shall
have instituted any proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall
have been discontinued or abandoned for any reason or shall have been determined
adversely to the Collateral Agent, then and in every such case the relevant
Assignor, the Collateral Agent and each holder of any of the Secured Obligations
shall be restored to their former positions and rights hereunder with respect to
the Collateral subject to the security interest created under this Agreement,
and all rights, remedies and powers of the Collateral Agent shall continue as if
no such proceeding had been instituted.
7.7. Collateral Agent to Act on Behalf of Secured Creditors. The Secured
Creditors agree by their acceptance of the benefits hereof that this Agreement
may be enforced on their behalf only by the action of the Collateral Agent,
acting upon the instructions of the Required Lenders. No other Secured Creditor
shall have any right individually to seek to enforce or to enforce this
Agreement or to realize upon the security to be granted hereby, it being
understood and agreed that such rights and remedies may be exercised by the
Collateral Agent, for the benefit of the Secured Creditors, upon the terms of
this Agreement.
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8. INDEMNITY.
8.1. Indemnity. (a) The Assignors jointly and severally agree to
indemnify, reimburse and hold the Collateral Agent, each Secured Creditor and
its respective successors, assigns, employees, agents and servants (hereinafter
in this section 8.1 referred to individually as "Indemnitee", and collectively
as "Indemnitees") harmless from any and all liabilities, obligations, losses,
damages, penalties, claims, demands, actions, suits, judgments and any and all
reasonable out-of-pocket costs and expenses (including reasonable attorneys'
fees and expenses) (for the purposes of this section 8.1 the foregoing are
collectively called "expenses") of whatsoever kind and nature imposed on,
asserted against or incurred by any of the Indemnitees in any way relating to or
arising out of this Agreement, any Designated Hedge Agreement, any other Credit
Document or the documents executed in connection herewith and therewith or in
any other way connected with the enforcement of any of the terms of, or the
preservation of any rights under any thereof, or in any way relating to or
arising out of the manufacture, ownership, ordering, purchase, delivery,
control, acceptance, lease, financing, possession, operation, condition, sale,
return or other disposition, or use of the Collateral (including, without
limitation, latent or other defects, whether or not discoverable), the violation
of the laws of any country, state or other governmental body or unit, any tort
(including, without limitation, claims arising or imposed under the doctrine of
strict liability, or for or on account of injury to or the death of any person
(including any Indemnitee), or property damage), or contract claim; provided
that no Indemnitee shall be indemnified pursuant to this section 8.1(a) for
losses, damages or liabilities to the extent caused by the gross negligence or
wilful misconduct of such person to be indemnified or of any other Indemnitee
who is such person or an affiliate of such person. If any claim is asserted
against any Indemnitee, such Indemnitee shall promptly notify the Assignor and
each Indemnitee may, and if requested by the Assignor shall, in good faith,
contest the validity, applicability and amount of such claim with counsel
selected by such Indemnitee, and shall permit the Assignor to participate in
such contest. In addition, in connection with any claim covered by this section
8.1 against more than one Indemnitee, all such Indemnitees shall be represented
by the same legal counsel selected by such Indemnitees; provided, however, that
if such legal counsel determines in good faith that representing all such
Indemnitees would or could result in a conflict of interest under the laws or
ethical principles applicable to such legal counsel or that a defense or
counterclaim is available to an Indemnitee that is not available to all such
Indemnitees, then to the extent reasonably necessary to avoid such a conflict of
interest or to permit unqualified assertion of such defense or counterclaim,
each Indemnitee shall be entitled to separate representation by a legal counsel
selected by that Indemnitee. Each Assignor agrees that upon written notice by
any Indemnitee of the assertion of such a liability, obligation, loss, damage,
penalty, claim, demand, action, judgment or suit, such Assignor shall assume
full responsibility for the defense thereof. Each Indemnitee agrees to use its
best efforts to promptly notify the relevant Assignor of any such assertion of
which such Indemnitee has knowledge.
(b) Without limiting the application of section 8.1(a), the Assignors
jointly and severally agree to pay, or reimburse the Collateral Agent for (if
the Collateral Agent shall have incurred fees, costs or expenses because an
Assignor shall have failed to comply with its obligations under this Agreement
or any Credit Document), any and all out-of-pocket fees, costs and expenses of
whatever kind or nature incurred in connection with the creation, preservation
or protection of the Collateral Agent's Liens on, and security interest in, the
Collateral, including, without limitation, all fees and taxes in connection with
the recording or filing of instruments and documents in public offices, payment
or discharge of any taxes or Liens upon or in respect of the Collateral,
premiums for insurance with respect to the Collateral and all other fees, costs
and expenses in connection with protecting, maintaining or preserving the
Collateral and the Collateral Agent's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Collateral.
(c) Without limiting the application of section 8.1(a) or (b), the
Assignors jointly and severally agree to pay, indemnify and hold each Indemnitee
harmless from and against any loss, costs, damages and expenses which such
Indemnitee may suffer, expend or incur in consequence of or growing out of any
material misrepresentation by an Assignor in this Agreement, or in any statement
or writing contemplated by or made or delivered pursuant to or in connection
with this Agreement.
(d) If and to the extent that the obligations of any Assignor under this
section 8.1 are unenforceable for any reason, each Assignor hereby agrees to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
8.2. Indemnity Obligations Secured by Collateral; Survival. Any amounts
paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Secured Obligations secured by the Collateral.
The indemnity obligations of the Assignors contained in this section 8 shall
continue in full force and effect notwithstanding the full payment of all the
Notes issued under the Credit Agreement and all of the other Secured Obligations
and notwithstanding the discharge thereof.
10
<PAGE>
9. DEFINITIONS.
The following terms shall have the meanings herein specified unless the
context otherwise requires. Such definitions shall be equally applicable to the
singular and plural forms of the terms defined.
"Agreement" shall mean this Security Agreement as the same may be
modified, supplemented or amended from time to time in accordance with its
terms.
"Assignor" shall have the meaning specified in the first paragraph of this
Agreement.
"Business Day" means any day excluding Saturday, Sunday and any day which
shall be at the Payment Office of the Administrative Agent a legal holiday or a
day on which banking institutions are authorized by law to close.
"Cash Collateral Account" shall mean a cash collateral account maintained
with, and in the sole dominion and control of, the Collateral Agent for the
benefit of the Secured Creditors (such cash collateral account shall be interest
bearing if it is the general policy of the Collateral Agent in syndicated credit
agreements in which it acts as collateral agent to establish such cash
collateral accounts as interest bearing accounts; otherwise such cash collateral
account shall be non-interest bearing).
"Chattel Paper" shall have the meaning assigned that term under the
Uniform Commercial Code as in effect on the date hereof in the State of Ohio.
"Collateral" shall have the meaning provided in section 1.1(a).
"Collateral Agent" shall have the meaning specified in the first paragraph
of this Agreement.
"Contract Rights" shall mean all rights of an Assignor (including, without
limitation, all rights to payment) under each Contract.
"Contracts" shall mean, to the extent permitted to be assigned by the
terms thereof or by applicable law, all contracts between an Assignor and one or
more additional parties (but shall include Cash Equivalents).
"Copyrights" shall mean any U.S. copyright to which an Assignor now or
hereafter has title, as well as any application for a U.S. copyright hereafter
made by such Assignor.
"Credit Agreement" shall have the meaning provided in the Preliminary
Statements of this Agreement.
"Designated Hedge Creditors" shall have the meaning provided in the
Preliminary Statements of this Agreement.
"Documents" shall have the meaning assigned that term under the Uniform
Commercial Code as in effect on the date hereof in the State of Ohio.
"Equipment" shall mean any "equipment," as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of Ohio,
now or hereafter owned by an Assignor and, in any event, shall include, but
shall not be limited to, all machinery, equipment, furnishings, fixtures and
vehicles now or hereafter owned by an Assignor and any and all additions,
substitutions and replacements of any of the foregoing, wherever located,
together with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto.
"Event of Default" shall mean any Event of Default under, and as defined
in, the Credit Agreement, or any payment default, after any applicable grace
period, under any Designated Hedge Agreement.
"General Intangibles" shall have the meaning assigned that term under the
Uniform Commercial Code as in effect on the date hereof in the State of Ohio.
"Goods" shall have the meaning assigned that term under the Uniform
Commercial Code as in effect on the date hereof in the State of Ohio.
11
<PAGE>
"Indemnitee" shall have the meaning provided in section 8.1.
"Instrument" shall have the meaning assigned that term under the Uniform
Commercial Code as in effect on the date hereof in the State of Ohio (but shall
not include Cash Equivalents).
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof, wherever located, together
with all goods, supplies, incidentals, packaging materials, labels, materials
and any other items used or usable in manufacturing, processing, packaging or
shipping same; in all stages of production -- from raw materials through
work-in-process to finished goods -- and all products and proceeds of whatever
sort and wherever located and any portion thereof which may be returned,
rejected, reclaimed or repossessed by the Collateral Agent or an Assignor from
an Assignor's customers, and shall specifically include all "inventory" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of Ohio, now or hereafter owned by the Assignor.
"Lender" shall have the meaning provided in the Preliminary Statements of
this Agreement.
"Marks" shall mean any trademarks and service marks now held or hereafter
acquired by an Assignor, which are registered in the United States Patent and
Trademark Office, as well as any unregistered marks used by an Assignor in the
United States and trade dress including logos and/or designs in connection with
which any of these registered or unregistered marks are used.
"Patents" shall mean any U.S. patent to which an Assignor now or hereafter
has title, as well as any application for a U.S. patent now or hereafter made by
an Assignor.
"Permits" shall mean, to the extent permitted to be assigned by the terms
thereof or by applicable law, all licenses, permits, rights, orders, variances,
franchises or authorizations of or from any governmental authority or agency.
"Proceeds" shall have the meaning assigned that term under the Uniform
Commercial Code as in effect in the State of Ohio on the date hereof or under
other relevant law and, in any event, shall include, but not be limited to, (i)
any and all proceeds of any insurance, indemnity, warranty or guaranty payable
to the Collateral Agent or an Assignor from time to time with respect to any of
the Collateral, (ii) any and all payments (in any form whatsoever) made or due
and payable to an Assignor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under color of
governmental authority) and (iii) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Proprietary Information" means all information and know-how worldwide,
including, without limitation, technical data; manufacturing data; research and
development data; data relating to compositions, processes and formulations,
manufacturing and production know-how and experience; management know-how;
training programs; manufacturing, engineering and other drawings;
specifications; performance criteria; operating instructions; maintenance
manuals; technology; technical information; software; engineering and computer
data and databases; design and engineering specifications; catalogs; promotional
literature; financial, business and marketing plans; inventions and invention
disclosures.
"Receivables" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of Ohio,
now or hereafter owned by an Assignor and, in any event, shall include, but
shall not be limited to, all of an Assignor's rights to payment for goods sold
or leased or services performed by an Assignor, whether now in existence or
arising from time to time hereafter, including, without limitation, rights
evidenced by an account, note, contract, security agreement, chattel paper, or
other evidence of indebtedness or security, together with (a) all security
pledged, assigned, hypothecated or granted to or held by an Assignor to secure
the foregoing, (b) all of an Assignor's right, title and interest in and to any
goods, the sale of which gave rise thereto, (c) all guarantees, endorsements and
indemnifications on, or of, any of the foregoing, (d) all powers of attorney for
the execution of any evidence of indebtedness or security or other writing in
connection therewith, (e) all books, records, ledger cards, and invoices
relating thereto, (f) all evidences of the filing of financing statements and
other statements and the registration of other instruments in connection
therewith and amendments thereto, notices to other creditors or secured parties,
and certificates from filing or other registration officers, (g) all credit
information, reports and memoranda relating thereto, and (h) all other writings
related in any way to the foregoing.
"Secured Creditors" shall have the meaning provided in the Preliminary
Statements of this Agreement.
12
<PAGE>
"Secured Obligations" shall mean any and all of the following:
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under section 362(a) of the
Bankruptcy Code, would become due) of the Borrower and/or its Subsidiaries
and Affiliates to any of the Agents or the Lenders, whether now existing
or hereafter incurred under, arising out of or in connection with the
Credit Agreement and the other Credit Documents to which the Borrower or
any of its Subsidiaries or Affiliates is now or hereafter may become a
party, and the due performance and compliance by the Borrower and each of
its Subsidiaries and Affiliates with all of the terms, conditions and
agreements contained in the Credit Agreement and such other Credit
Documents, including without limitation (x) in the case of the Borrower,
all such obligations and indebtedness of the Borrower and its Subsidiaries
and Affiliates under the Credit Agreement and the other Credit Documents,
and (y) in the case of each other Assignor, all such obligations and
indebtedness under the Subsidiary Guaranty to which such Assignor is a
party which relate to any of the foregoing (all such obligations and
liabilities under this clause (i), being herein collectively called the
"Credit Document Obligations");
(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under section 362(a) of the
Bankruptcy Code, would become due) and liabilities of each Assignor or any
other Subsidiary of the Borrower now existing or hereafter incurred under,
arising out of or in connection with any Designated Hedge Agreement with
any of the Secured Creditors, and the due performance and compliance by
such Assignor with all of the terms, conditions and agreements contained
therein, including, in the case of Assignors other than the Borrower, all
obligations of such Assignor under the Subsidiary Guaranty in respect of
any Designated Hedge Agreement (all such obligations and liabilities under
this clause (ii) being herein collectively called the "Designated Hedge
Obligations");
(iii) any and all sums advanced by the Collateral Agent in order to
preserve the Collateral or preserve its security interest in the
Collateral; and
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities of any
Assignor referred to in clauses (i) and (ii) above, after an Event of
Default shall have occurred and be continuing, the reasonable expenses of
re-taking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, or of any exercise by the
Collateral Agent of its rights hereunder, together with reasonable
attorneys' fees and court costs.
"Significant Mark" shall have the meaning provided in section 4.3 of this
Agreement.
"Significant Patent" shall have the meaning provided in section 5.3 of
this Agreement.
"Trade Secrets" means any secretly held existing engineering and other
data, information, production procedures and other know-how relating to the
design, manufacture, assembly, installation, use, operation, marketing, sale and
servicing of any products or business of an Assignor worldwide whether written
or not written.
10. MISCELLANEOUS.
10.1. Notices. All notices and other communications hereunder shall be in
writing and shall be delivered or mailed by first class mail, postage prepaid,
addressed:
(i) if to any Assignor, at its address contained in the Credit
Agreement or the Subsidiary Guaranty, as the case may be;
13
<PAGE>
(ii) if to the Collateral Agent, at:
National City Bank,
as Collateral Agent
National City Center
1900 East Ninth Street
Cleveland, Ohio 44114
Attn.: Agent Services
Fax No.: (216) 575-2481;
with copies to:
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Attn.: John W. Sager, Esq.
Tel. No.: (216) 586-7228
Fax No.: (216) 579-0212
(iii) if to any Lender (other than the Collateral Agent), at such
address as such Lender shall have specified in the Credit Agreement;
(iv) if to any Designated Hedge Creditor, at such address as such
Designated Hedge Creditor shall have specified in writing to each Assignor
and the Collateral Agent;
or at such other address as shall have been furnished in writing by any person
described above to the party required to give notice hereunder.
10.2. Waiver; Amendment. (a) None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by each Assignor and the Collateral Agent (with
the consent of the Required Lenders or, to the extent required by section 12.12
of the Credit Agreement, all of the Lenders), provided, however, that no such
change, waiver, modification or variance shall be made to section 7.4 hereof or
this section 10.2 without the consent of each Secured Creditor adversely
affected thereby, provided further that any change, waiver, modification or
qvariance affecting the rights and benefits of a single Class of Secured
Creditors (and not all Secured Creditors in a like or similar manner) shall
require the written consent of the Requisite Creditors of such Class of Secured
Creditors. For the purpose of this Agreement, the term "Class" shall mean each
class of Secured Creditors, i.e., whether (x) the Lenders as holders of the
Credit Document Obligations or (y) the Designated Hedge Creditors as holders of
the Designated Hedge Obligations. For the purpose of this Agreement, the term
"Requisite Creditors" of any Class shall mean each of (x) with respect to the
Credit Document Obligations, the Required Lenders and (y) with respect to the
Designated Hedge Obligations, the holders of at least 51% of all obligations
outstanding from time to time under the Designated Hedge Agreements.
(b) No delay on the part of the Collateral Agent in exercising any of
its rights, remedies, powers and privileges hereunder or partial or single
exercise thereof, shall constitute a waiver thereof. No notice to or demand on
any Assignor in any case shall entitle it to any other or further notice or
demand in similar or other circumstances or constitute a waiver of any of the
rights of the Collateral Agent to any other or further action in any
circumstances without notice or demand.
10.3. Obligations Absolute. The obligations of each Assignor under this
Agreement shall be absolute and unconditional and shall remain in full force and
effect without regard to, and shall not be released, suspended, discharged,
terminated or otherwise affected by, any circumstance or occurrence whatsoever,
including, without limitation:
(a) any lack of validity or enforceability of the Credit Agreement,
the Notes, any other Credit Document, any Designated Hedge Agreement, or
any other agreement or instrument relating thereto;
14
<PAGE>
(b) any renewal, extension, amendment or modification of, or
addition or supplement to, or any waiver, consent, extension, indulgence
or other action or inaction under or in respect of, the Credit Agreement,
the Notes, any other Credit Document, or any Designated Hedge Agreement,
or any other agreement or instrument relating thereto, including, without
limitation, any increase in the Secured Obligations resulting from the
extension of additional credit to the Borrower or any of its Subsidiaries
or otherwise;
(c) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Secured
Obligations;
(d) any manner of application of collateral, or proceeds thereof, to
all or any of the Secured Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Secured Obligations or
any other assets of the Borrower or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of the Borrower or any of its Subsidiaries;
(f) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to
the Borrower or any of its Subsidiaries or Affiliates, or any action taken
with respect to this Agreement by any trustee or receiver, or by any
court, in any such proceeding, whether or not an Assignor shall have
notice or knowledge of any of the foregoing; or
(g) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, an Assignor as a guarantor or
surety for the Secured Obligations.
This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by the Collateral Agent, the Administrative Agent or
any Secured Creditor upon the insolvency, bankruptcy or reorganization of the
Borrower or any of its Subsidiaries or Affiliates or otherwise, all as though
such payment had not been made.
10.4. Successors and Assigns. This Agreement shall be binding upon each
Assignor and its successors and assigns and shall inure to the benefit of the
Collateral Agent and its successors and assigns, provided that no Assignor may
transfer or assign any or all of its rights or obligations hereunder without the
written consent of the Collateral Agent. All agreements, statements,
representations and warranties made by each Assignor herein or in any
certificate or other instrument delivered by such Assignor or on its behalf
under this Agreement shall be considered to have been relied upon by the Secured
Creditors and shall survive the execution and delivery of this Agreement and the
other Credit Documents regardless of any investigation made by the Secured
Creditors on their behalf.
10.5. Headings Descriptive. The headings of the several sections of this
Agreement are inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.
10.6. 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.
10.7. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF OHIO.
10.8. Assignors' Duties. It is expressly agreed, anything herein contained
to the contrary notwithstanding, that each Assignor shall remain liable to
perform all of the obligations, if any, assumed by it with respect to the
Collateral and the Collateral Agent shall not have any obligations or
liabilities with respect to any Collateral by reason of or arising out of this
Agreement, nor shall the Collateral Agent be required or obligated in any manner
to perform or fulfill any of the obligations of an Assignor under or with
respect to any Collateral.
10.9. Termination: Release. (a) After the termination of the Total
Commitment and all Designated Hedge Agreements, when no Note nor Letter of
Credit is outstanding and when all Loans and other Secured Obligations have been
paid in full, this Agreement shall terminate, and the Collateral Agent, at the
request and expense of the Assignors, will execute and deliver to the relevant
Assignor a proper instrument or instruments (including Uniform Commercial Code
termination statements on form UCC-3) acknowledging the satisfaction and
termination of this Agreement, and will
15
<PAGE>
duly assign, transfer and deliver to the relevant Assignor (without recourse and
without any representation or warranty) such of the Collateral as may be in the
possession of the Collateral Agent and as has not theretofore been sold or
otherwise applied or released pursuant to this Agreement.
(b) So long as no payment default on any of the Secured Obligations is in
existence or would exist after the application of proceeds as provided below,
the Collateral Agent shall, at the request of the relevant Assignor, release any
or all of the Collateral, provided that (x) such release is permitted by the
terms of the Credit Agreement (it being agreed for such purposes that a release
will be deemed "permitted by the terms of the Credit Agreement" if the proposed
transaction constitutes an exception contained in section 9.2 of the Credit
Agreement) or otherwise has been approved in writing by the Required Lenders and
(y) the proceeds of such Collateral are to be applied as required pursuant to
the Credit Agreement or any consent or waiver entered into with respect thereto.
(c) At any time that an Assignor desires that the Collateral Agent take
any action to give effect to any release of Collateral pursuant to the foregoing
section 10.9(a) or (b), it shall deliver to the Collateral Agent a certificate
signed by a principal executive officer stating that the release of the
respective Collateral is permitted pursuant to section 10.9(a) or (b). In the
event that any part of the Collateral is released as provided in section
10.9(b), the Collateral Agent, at the request and expense of an Assignor, will
duly release such Collateral and assign, transfer and deliver to such Assignor
(without recourse and without any representation or warranty) such of the
Collateral as is then being (or has been) so sold and as may be in the
possession of the Collateral Agent and has not theretofore been released
pursuant to this Agreement. The Collateral Agent shall have no liability
whatsoever to any Secured Creditor as the result of any release of Collateral by
it as permitted by this section 10.9. Upon any release of Collateral pursuant to
section 10.9(a) or (b), none of the Secured Creditors shall have any continuing
right or interest in such Collateral, or the proceeds thereof.
10.10. Collateral Agent. By accepting the benefits of this Agreement, each
Secured Creditor acknowledges and agrees that the rights and obligations of the
Collateral Agent shall be as set forth in section 11 of the Credit Agreement.
Notwithstanding anything to the contrary contained in section 10.2 of this
Agreement or section 12.12 of the Credit Agreement, this section 10.10, and the
duties and obligations of the Collateral Agent set forth in this section 10.10,
may not be amended or modified without the consent of the Collateral Agent.
11. COLLATERAL OF HI-STAT.
Notwithstanding anything to the contrary contained herein, the grant
hereunder by Hi-Stat of security interests in its Collateral, and its
representations, warranties, covenants and obligations contained herein with
respect thereto, shall not be effective until 12:01 A.M. on January 1, 1999.
12. WAIVER OF JURY TRIAL.
EACH ASSIGNOR AND THE COLLATERAL AGENT EACH HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
16
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
STONERIDGE, INC., HI-STAT MANUFACTURING CO., INC.,
as an Assignor as an Assignor
By: By:
-------------------------------- --------------------------------
Vice President--Finance Vice President
and Chief Financial Officer
NATIONAL CITY BANK ,
as Collateral Agent
By:
--------------------------------
Vice President
17
<PAGE>
ANNEX A
to
SECURITY AGREEMENT
SCHEDULE OF EXISTING FINANCING STATEMENTS
Stoneridge, Inc.
UCC Search Results
<TABLE>
<CAPTION>
=====================================================================================================================
Jurisdiction Debtor Secured Party File No. Collateral
(Date)
=====================================================================================================================
<S> <C> <C> <C> <C>
Indiana Secretary Stoneridge, Inc. National City Bank as Agent 1897942 Blanket
of State 9400 East Market Street 1900 East 9th Street (3/1/94)
Warren, Ohio 44484 Cleveland, OH 44114
Partial Release
---------------
2098093
(1/16/97)
- ---------------------------------------------------------------------------------------------------------------------
Massachusetts Stoneridge Corporation Cambridge Factors 215513 Blanket
Secretary of the 131 Main St. 7777 Glades Rd. (2/10/94)
Commonwealth Reading, MA 01867 Suite 112
Boca Raton, FL 33434
- ---------------------------------------------------------------------------------------------------------------------
Stoneridge, Inc. National City Leasing Corp. 341703 Computer
Pollack Engineered Products Group P.O. Box 36040 (10/2/95) Equipment
195 Freeport Street Louisville, KY 40233
Boston, MA 02122
- ---------------------------------------------------------------------------------------------------------------------
Stoneridge, Inc. National City Leasing Corp. 411243 Equipment
Pollack Engineered Products Group P.O. Box 36040 (8/19/96) Lease
[illegible address] Louisville, KY 40233
- ---------------------------------------------------------------------------------------------------------------------
Stoneridge, Inc. National City Leasing Corp. 411244 Equipment
Pollack Engineered Products Group P.O. Box 36040 (8/19/96) Lease
[illegible address] Louisville, KY 40233
- ---------------------------------------------------------------------------------------------------------------------
Michigan Secretary Stoneridge, Inc. USL Capital Corporation 68519B Equipment
of State 9400 East Market Street 733 Front Street (3/15/96) Lease
Warren, OH 44484 San Francisco, CA 94111
- ---------------------------------------------------------------------------------------------------------------------
North Carolina Stoneridge, Inc. Clear
Secretary of State
- ---------------------------------------------------------------------------------------------------------------------
South Carolina Stoneridge, Inc. Clear
Secretary of State
- ---------------------------------------------------------------------------------------------------------------------
Texas Secretary of Stoneridge Inc. Geo-Vest Inc. 9500151930 Gas Unit
State POB 141136 POB 1157 (8/3/95)
Dallas, TX 75214 Kilgore, Texas 75663-1157
(1 of 61 debtors - refer to UCC-1)
- ---------------------------------------------------------------------------------------------------------------------
Stoneridge Inc. Geo-Vest Inc. 9500213083 Gas Unit
POB 141136 POB 1157 (11/2/95)
Dallas, TX 75214 Kilgore, Texas 75663
(1 of 50 debtors - refer to UCC-1) Amendment
---------
338232
(9/24/97)
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================================
Jurisdiction Debtor Secured Party File No. Collateral
(Date)
=====================================================================================================================
<S> <C> <C> <C> <C>
Stoneridge Inc. Geo-Vest Inc. 9600087228 Gas Unit
POB 141136 POB 1157 (5/2/96)
Dallas, TX 75214 Kilgore, Texas 75663
(1 of 56 debtors - refer to UCC-1)
- ---------------------------------------------------------------------------------------------------------------------
Stoneridge Inc. Geo-Vest Inc. 9600192047 Gas Unit
POB 141136 POB 1157 (9/27/96)
Dallas, TX 75214 Kilgore, Texas 75663
(1 of 56 debtors - refer to UCC-1)
- ---------------------------------------------------------------------------------------------------------------------
Stoneridge Inc. Geo-Vest Inc. 9700031116 Gas Unit
POB 141136 POB 1157 (2/18/97)
Dallas, TX 75214 Kilgore, Texas 75663
(1 of 56 debtors - refer to UCC-1)
- ---------------------------------------------------------------------------------------------------------------------
Stoneridge Inc. IBM Credit Corporation 9700042538 IBM
11801 Miriam Dr Suit 1133 Westchester Avenue (3/4/97) Equipment
El Paso, TX 79936-7431 White Plains, NY 10604
- ---------------------------------------------------------------------------------------------------------------------
Stoneridge Incorporated Geo-Vest Inc. 9700213777 Gas Unit
POB 185 POB 1157 (10/15/97)
Kilgore, TX 75663-0185 Kilgore, Texas 75663
(1 of 48 debtors - refer to UCC-1)
- ---------------------------------------------------------------------------------------------------------------------
Stoneridge Incorporated Geo-Vest Inc. 9800006461 Gas Unit
POB 185 POB 1157 (1/12/98)
Kilgore, TX 75663-0185 Kilgore, Texas 75663
(1 of 40 debtors - refer to UCC-1)
- ---------------------------------------------------------------------------------------------------------------------
Stoneridge Incorporated Geo-Vest Inc. 9800018788 Gas & Oil
POB 185 POB 1157 (1/28/98) Units
Kilgore, TX 75663-0185 Kilgore, Texas 75663
(1 of 53 debtors - refer to UCC-1)
- ---------------------------------------------------------------------------------------------------------------------
Stoneridge Incorporated Geo-Vest Inc. 9800152857 Gas Unit
POB 185 POB 1157 (7/27/98)
Kilgore, TX 75663-0185 Kilgore, Texas 75663
(1 of 55 debtors - refer to UCC-1)
- ---------------------------------------------------------------------------------------------------------------------
/1/Stoneridge, Inc. C Leasing Company
- ---------------------------------------------------------------------------------------------------------------------
2Ohio Secretary Stoneridge, Inc. USL Capital Corporation AM57410
of State (3/15/96)
- ---------------------------------------------------------------------------------------------------------------------
Stoneridge, Inc. General Electric Capital AM67925
Corporation (4/24/96)
- ---------------------------------------------------------------------------------------------------------------------
Stoneridge, Inc. General Electric Capital AN62977
Corporation (5/7/97)
- ---------------------------------------------------------------------------------------------------------------------
Stoneridge, Inc. Ervin Leasing Company AP0041957
(4/9/98)
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------
/1/Copies are on order and will be forwarded upon receipt
/2/Copies for all Ohio filings are on order and information on listing
obtained from abstract information and not directly from filings
2
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================================
Jurisdiction Debtor Secured Party File No. Collateral
(Date)
(Date)
=====================================================================================================================
<S> <C> <C> <C> <C>
Stoneridge, Inc. Yale Financial Services, Inc. AP0058013
(6/2/98)
- ---------------------------------------------------------------------------------------------------------------------
Stoneridge, Inc. Forsythe/McArthur Associates AP0056900
Inc. (6/16/98)
- ---------------------------------------------------------------------------------------------------------------------
Stoneridge, Inc. Yale Financial Services, Inc. AP0068981
(6/22/98)
- ---------------------------------------------------------------------------------------------------------------------
Stoneridge, Inc. Heller Financial AP0089446
(10/7/98)
=====================================================================================================================
</TABLE>
Hi-Stat Manufacturing
UCC Search Results
<TABLE>
<CAPTION>
=====================================================================================================================
Jurisdiction Debtor Secured Party File No. Collateral
(Date)
=====================================================================================================================
<S> <C> <C> <C> <C>
Florida Secretary Hi-Stat Manufacturing Co., Inc. Sun Bank, National Association 93-234265 Blanket
of State 7292 26th Court East 200 South Orange Avenue (11/12/93)
Sarasota, Florida 34243 Post Office Box 3833
Orlando, Florida 32897 Cont. &
Amendment
---------
98-186503
(8/20/98)
- ---------------------------------------------------------------------------------------------------------------------
Hi-Stat Manufacturing Company, Interactive Process Controls Corp97-286427 Assembly
Inc. 117 Eastman Street (12/22/97) System Project
7290 26th Court East So. Easton, MA 02375
Sarasota, FL 34243
- ---------------------------------------------------------------------------------------------------------------------
Michigan Hi-Stat Manufacturing Co., Inc. Sun Bank, National Association C778161 Blanket
Secretary of State 7292 26th Court East 200 South Orange Avenue (11/15/93)
Sarasota, FL 34243 Post Office Box 3833
Orlando, Florida 32897 Continuation
------------
D412288
(8/20/98)
- ---------------------------------------------------------------------------------------------------------------------
/3/Ohio Secretary
of State Hi-Stat Manufacturing Co., Inc. Sun Bank, National Association AK64210
=====================================================================================================================
</TABLE>
- ----------
/3/Copies for all Ohio filings are on order and information on listing
obtained from abstract information and not directly from filings
3
<PAGE>
ANNEX B
to
SECURITY AGREEMENT
SCHEDULE OF CHIEF EXECUTIVE OFFICES
<TABLE>
<CAPTION>
===============================================================================================
ASSIGNOR TAX I.D. NO. ADDRESS
===============================================================================================
<S> <C> <C>
Stoneridge, Inc. 34-1598949 9400 East Market Street
Warren, Ohio 44484
- -----------------------------------------------------------------------------------------------
Hi-Stat Manufacturing Co., Inc. 59-2594590 7292 26th Court East
Sarasota, Florida 34243
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
===============================================================================================
</TABLE>
<PAGE>
ANNEX C
to
SECURITY AGREEMENT
SCHEDULE OF EQUIPMENT
AND INVENTORY LOCATIONS
================================================================================
ASSIGNOR ADDRESS
================================================================================
Stoneridge, Inc. Stoneridge, Inc.
85 West Algonquin Road
Arlington Heights, Illinois 60005
- --------------------------------------------------------------------------------
Stoneridge, Inc. Stoneridge, Inc.
195 Freeport Street
Boston, Massachusetts 02122
- --------------------------------------------------------------------------------
Stoneridge, Inc. Stoneridge, Inc.
300 Dan Road
Canton, Massachusetts 02021
- --------------------------------------------------------------------------------
Stoneridge, Inc. Stoneridge, Inc.
80 Erie Street
Cortland, Ohio 44410
- --------------------------------------------------------------------------------
Stoneridge, Inc. Stoneridge, Inc.
11801 Miriam Drive, Suite B-2
El Paso, Texas 79936
- --------------------------------------------------------------------------------
Stoneridge, Inc. Stoneridge, Inc.
104 Stoneridge Court
Greenwood, South Carolina 29649
- --------------------------------------------------------------------------------
Stoneridge, Inc. Stoneridge, Inc.
1510 Saint Clair Avenue
Kent, Ohio 44240
- --------------------------------------------------------------------------------
Stoneridge, Inc. Stoneridge, Inc.
1404 Dogwood Way
Melbane, North Carolina 27303
- --------------------------------------------------------------------------------
Stoneridge, Inc. Stoneridge, Inc.
56 Main Street
Northhampton, Massachusetts 01060
- --------------------------------------------------------------------------------
Stoneridge, Inc. Stoneridge, Inc.
7530 Staley Road
Orwell, Ohio 44076
- --------------------------------------------------------------------------------
<PAGE>
================================================================================
ASSIGNOR ADDRESS
================================================================================
Stoneridge, Inc. Stoneridge, Inc.
700 Industrial Drive
Portland, Indiana 47371
- --------------------------------------------------------------------------------
Stoneridge, Inc. Stoneridge, Inc.
39395 West 12 Mile Road
Farmington Hills, Michigan 48331
- --------------------------------------------------------------------------------
Stoneridge, Inc. Stoneridge, Inc.
9400 East Market Street
Warren, Ohio 44484
- --------------------------------------------------------------------------------
Stoneridge, Inc. Stoneridge, Inc.
8700 East Market Street
Warren, Ohio 44484
- --------------------------------------------------------------------------------
Stoneridge, Inc. Stoneridge, Inc.
Prol.Ave. Las Americas
S/N Parque Industrial Las Americas
Chihuahua, Chih Mexico 31220
- --------------------------------------------------------------------------------
Stoneridge, Inc. Stoneridge, Inc.
c/o TED de Mexico
Antonio J. Bermudez 950
Juarez, Mexico 31220
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Hi-Stat Manufacturing Co., Inc. Hi-Stat Manufacturing Co., Inc.
2350 Franklin Road, Suite 200
Bloomfield Hills, Michigan 48302
- --------------------------------------------------------------------------------
Hi-Stat Manufacturing Co., Inc. Hi-Stat Manufacturing Co., Inc.
345 South Mill Street
Lexington, Ohio 44904
- --------------------------------------------------------------------------------
Hi-Stat Manufacturing Co., Inc. Hi-Stat Manufacturing Co., Inc.
7292 26th Court East
Sarasota, Florida 34243
- --------------------------------------------------------------------------------
Hi-Stat Manufacturing Co., Inc. Hi-Stat Manufacturing Co., Inc.
1414 Park Avenue East
Madison, Ohio 44057
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
2
<PAGE>
ANNEX D
to
SECURITY AGREEMENT
SCHEDULE OF TRADE AND FICTITIOUS NAMES
Name Jurisdiction Where Used
- -------------------------- ------------------------------
Pollack Engineered Products Worldwide
Joseph Pollack Company Worldwide
Transportation Electronics Division Worlwide
Alphabet Worldwide
<PAGE>
ANNEX E
to
SECURITY AGREEMENT
SCHEDULE OF MARKS
The information contained in the Collateral Assignment of Trademarks and
Security Agreement, executed and delivered contemporaneously herewith, is
incorporated herein.
<PAGE>
ANNEX F
to
SECURITY AGREEMENT
SCHEDULE OF PATENTS AND APPLICATIONS
The information contained in the Collateral Assignment of Patents and Security
Agreement, executed and delivered contemporaneously herewith, is incorporated
herein.
<PAGE>
ANNEX G
to
SECURITY AGREEMENT
SCHEDULE OF COPYRIGHTS AND APPLICATIONS
---None---
<PAGE>
EXHIBIT C-3
------------------
FORM OF
COLLATERAL ASSIGNMENT OF PATENTS
------------------
<PAGE>
COLLATERAL ASSIGNMENT OF PATENTS
AND SECURITY AGREEMENT
THIS COLLATERAL ASSIGNMENT OF PATENTS AND SECURITY AGREEMENT, dated as of
December 30, 1998 (this "Agreement"), between STONEBRIDGE, INC., an Ohio
corporation whose principal place of business is located at 9400 East Market
Street, Warren, Ohio 44484 (herein, together with its successors and assigns,
the "Borrower"), and NATIONAL CITY BANK, a national banking association whose
principal place of business is located at National City Center, 1900 East Ninth
Street, Cleveland, Ohio 44114, as collateral agent (herein, together with its
successors and assigns in such capacity, the "Collateral Agent" ), for the
benefit of the Secured Creditors (as defined below):
PRELIMINARY STATEMENTS:
(1) Except as otherwise defined herein, terms used herein and defined in
the Credit Agreement (as defined below) shall be used herein as therein defined.
(2) This Agreement is made pursuant to the Credit Agreement, dated as of
the date hereof (herein, as amended or otherwise modified, restated or replaced
from time to time, the "Credit Agreement"), among the Borrower, the financial
institutions named as lenders therein (herein, together with their successors
and assigns, the "Lenders"), the other Agents named therein, and National City
Bank, as the Administrative Agent for the Lenders under the Credit Agreement,
providing, among other things, for loans or advances or other extensions of
credit to or for the benefit of the Borrower of up to $425,000,000, with such
loans or advances being evidenced by promissory notes (the "Notes", such term to
include all notes and other securities issued in exchange therefor or in
replacement thereof).
(3) The Borrower or any of its Subsidiaries may from time to time be party
to one or more Designated Hedge Agreements (as defined in the Credit Agreement).
Any institution that participates, and in each case their subsequent assigns, as
a counterparty to any Designated Hedge Agreement(collectively, the "Designated
Hedge Creditors," and the Designated Hedge Creditors together with the Agents
and the Lenders, collectively the "Secured Creditors"), shall benefit hereunder
as herein provided.
(4) Pursuant to the Subsidiary Guaranty, each Subsidiary Guarantor has
jointly and severally guaranteed to the Secured Creditors the payment when due
of the Guaranteed Obligations (as defined in the Subsidiary Guaranty).
(5) It is a condition precedent to the making of Loans and the issuance
of, and participation in, Letters of Credit under the Credit Agreement that the
Borrower shall have executed and delivered to the Collateral Agent this
Agreement.
(6) The Borrower desires to execute this Agreement to satisfy the
condition described in the preceding paragraph.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order, among other things,
to induce the Lenders to make Loans and other credit facilities available to the
Borrower pursuant to the Credit Agreement, the parties hereto hereby agree as
follows:
1. Security for Secured Obligations. This Agreement is made by the
Borrower with the Collateral Agent,, for the benefit of the Secured Creditors,
to secure:
(a) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under section 362(a) of the
Bankruptcy Code, would become due) of the Borrower and/or its Subsidiaries
and Affiliates to the Agents and the Lenders, whether now existing or
hereafter incurred under, arising out of, or in connection with the Credit
Agreement and the other Credit Documents to which the Borrower or any of
its Subsidiaries or Affiliates is now or hereafter becomes a party, and
the due performance and compliance by the Borrower and its Subsidiaries
and Affiliates with all of the terms, conditions and agreements contained
in the Credit Agreement and such other Credit Documents (all such
obligations and liabilities under this clause (a), being herein
collectively called the "Credit Document Obligations");
<PAGE>
(b) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under section 362(a) of the
Bankruptcy Code, would become due) and liabilities of the Borrower or any
Subsidiary of the Borrower now existing or hereafter incurred under,
arising out of or in connection with any Designated Hedge Agreement with
any of the Secured Creditors, and the due performance and compliance by
the Borrower and any such Subsidiary with all of the terms, conditions and
agreements contained therein (all such obligations and liabilities
described in this clause (ii) being herein collectively called the
"Designated Hedge Obligations");
(c) any and all sums advanced by the Collateral Agent in order to
preserve the Collateral (as hereinafter defined) or preserve its security
interest in the Collateral; and
(d) in the event of any proceeding for the collection or enforcement
of any indebtedness, obligations, or liabilities of the Borrower or any
Subsidiary referred to in clauses (a), (b) and (c) above, after an Event
of Default shall have occurred and be continuing, the reasonable expenses
of retaking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, or of any exercise by the
Collateral Agent of its rights hereunder, together with reasonable
attorneys' fees and court costs.
All such obligations, liabilities, sums and expenses set forth in clauses (a)
through (d) of this section 1 being herein collectively called the "Secured
Obligations", it being acknowledged and agreed that the "Secured Obligations"
shall include extensions of credit of the types described above, whether
outstanding on the date of this Agreement or extended from time to time after
the date of this Agreement.
2. Assignment and Grant of Security Interest. (a) As security for the
prompt payment and performance of the Secured Obligations, the Borrower hereby
assigns, transfers, conveys and grants to the Collateral Agent, for the benefit
of the Secured Creditors, a security interest in, a general lien upon and/or a
right of set-off against (whether now owned or hereafter by the Borrower and
whether acquired in the United States or elsewhere in the world) all right,
title and interest of the Borrower in and to the following (hereafter
collectively called the "Collateral"):
(i) all letters patent issued by the United States Patent and
Trademark Office (including, without limitation, those listed on Schedule
A to this Agreement);
(ii) all applications for letters patent to be issued by the United
States Patent and Trademark Office (including, without limitation, those
listed on Schedule A to this Agreement);
(iii) all letters patent issued by any other country or any office,
agency or other governmental authority thereof;
(iv) all applications for letters patent to be issued by any office,
agency or other governmental authority referred to in clause (ii) above;
(v) all registrations and recordings with respect to any of the
foregoing;
(vi) all reissues, continuations, continuations-in-part, extensions
and divisions of any of the foregoing;
(vii) all licenses and other agreements relating in whole or in part
to any patents, inventions, processes, production methods, proprietary
information or know-how covered by any of the foregoing, including all
rights to payments in respect thereof;
(viii) all rights to sue for past, present or future infringements
of any of the foregoing;
(ix) all goodwill related to any of the foregoing;
(x) to the extent not included above, all general intangibles (as
such terms is defined in the Uniform Commercial Code of the State of Ohio)
of the Borrower related to the foregoing; and
(xi) all proceeds of any and all of the foregoing;
whether now existing or hereafter created or acquired, as to all of the above.
2
<PAGE>
(b) Unless an Event of Default shall have occurred and be continuing, the
Collateral Agent hereby grants to the Borrower, without representation or
warranty of any kind, express or implied, the exclusive, nontransferable right
and license to use the Collateral, for the Borrower's own benefit and account.
The Borrower agrees not to sell or assign its interest in, or grant any
sublicense under, the license granted to the Borrower in this paragraph, without
the prior written consent of the Collateral Agent. Upon the occurrence and
during the continuance of any Event of Default, the Borrower's license with
respect to the Collateral as set forth in this paragraph shall terminate
automatically without any requirement of notice to the Borrower of such
termination, and the Collateral Agent shall thereupon have, in addition to all
other rights and remedies given it by this Agreement, those allowed by the
federal laws of the United States and the rights and remedies of a secured party
under the Uniform Commercial Code as enacted in any jurisdiction in which any of
the Collateral may be located.
3. Continuing Liability. The Borrower hereby expressly agrees that,
anything herein to the contrary notwithstanding, it shall remain liable under
each license, interest and obligation assigned to the Collateral Agent hereunder
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 thereof. The Collateral Agent shall have no obligation or liability
under any such license, interest or obligation by reason of or arising out of
this Agreement or the assignment thereof to the Collateral Agent or the receipt
by the Collateral Agent of any payment relating to any such license, interest or
obligation pursuant thereto, nor shall the Collateral Agent be required or
obligated in any manner to perform or fulfill any of the obligations of the
Borrower thereunder or pursuant thereto, or to make any payment, or to make any
inquiry as to the nature or the sufficiency of any payment received by it or the
sufficiency of any performance by any party under any such license, interest or
obligation, or to present or file any claim, or to take any action to collect or
enforce any performance or the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
4. Remedies. If an Event of Default has occurred and is continuing, the
Collateral Agent may exercise, in addition to all other rights and remedies
granted to it in this Agreement, the Credit Agreement and any other Security
Document, all rights and remedies of a secured party under the Uniform
Commercial Code or any other applicable law. Without limiting the generality of
the foregoing, the Borrower expressly agrees that in any such event the
Collateral Agent, without demand of performance or other demand, advertisement
or notice of any kind (except the notice specified below of time and place of
public or private sale) to or upon the Borrower or any other person (all and
each of which demands, advertisements and/or notices are hereby expressly
waived), may forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or sell or otherwise dispose of and deliver said
Collateral (or contract to do so), or any part thereof, in one or more parcels
at public or private sale or sales, at any exchange, broker's board or at any of
the Collateral Agent's offices or elsewhere at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk, and the Collateral Agent shall apply the net proceeds (after expenses) of
any such sale, lease, assignment or other disposition against the Secured
Obligations in accordance with section 10.3 of the Credit Agreement, the
Borrower remaining liable for any deficiency therein. After payment in full of
all of the Secured Obligations (including those not yet due and payable at the
time of the application referred to above), the Collateral Agent shall remit any
surplus net proceeds to the Borrower (or its successors or assigns) or otherwise
as a court of competent jurisdiction may direct. The Collateral Agent shall have
the right upon any such public sale or sales, and, to the extent permitted by
law, upon any such private sale or sales, to purchase the whole or any part of
the Collateral so sold, free of any right or equity or redemption in the
Borrower, which right or equity is hereby expressly waived and released. To the
extent permitted by applicable law, the Borrower waives all claims, damages and
demands against the Collateral Agent arising out of the repossession, retention
or sale of the Collateral. The Borrower agrees that the Collateral Agent need
not give more than 10 days' notice of the time after which a private sale may
take place and that such notice is reasonable notification of such matter.
5. Grant of License to Use Intangibles. For the purpose of enabling the
Collateral Agent to exercise rights and remedies under section 4 hereof at such
time as the Collateral Agent, without regard to this section 5, shall be
lawfully entitled to exercise such rights and remedies and for no other purpose,
the Borrower hereby grants to the Collateral Agent an irrevocable, non-exclusive
license (exercisable without payment of royalty or other compensation to the
Borrower) to use, assign or sublicense any of the Collateral, now owned or
hereafter acquired by the Borrower, and wherever the same may be located,
including in such license reasonable access to all media in which any of the
licensed items may be recorded or stored and to all computer programs used for
the compilation or printout thereof.
6. Representations and Warranties, etc. The Borrower agrees that it will
at its expense forever warrant and, at the Collateral Agent's request defend the
Collateral Agent's and the Borrower's respective interests in the Collateral
from any and all claims and demands of any other person that it will not grant,
create or permit to exist any Lien upon or security interest in the Collateral
in favor of any other person except as expressly permitted under section 9.3 of
the Credit Agreement. The Borrower represents and warrants to the Collateral
Agent that: (a) the Borrower has full power, authority and legal right and
capacity to incur and perform its obligations hereunder, (b) this Agreement
constitutes the legal, valid and binding obligation of the Borrower, enforceable
in accordance with its terms, (c) the making and performance by the Borrower of
this Agreement and the grant of the security interest hereunder have been duly
authorized by all necessary corporate action, and do not and will violate the
provisions of any applicable law or applicable regulation, the Borrower's
certificate of articles of incorporation or by-laws, and do not and will not
result in a breach of, or constitute a default under, or
3
<PAGE>
require any consent (other than consents which have been obtained which are in
full force and effect and copies of which have been delivered to the Collateral
Agent) or create any lien, charge or encumbrance under, any agreement,
instrument or document or the provisions of any order, writ, judgment,
injunction, decree, determination or award of any court, government or
governmental agency or instrumentality, applicable to the Borrower or to any of
the assets of the Borrower to which the Borrower is a party or by which the
Borrower or any of the assets of the Borrower may be bound or affected, (d) so
long as the Secured Obligations remain outstanding, the Borrower at all times
will be the sole direct or indirect beneficial owner of the Collateral
hereunder, and (e) this Agreement grants to the Collateral Agent a first
priority lien upon and first priority perfected secured interest in the
Collateral subject to no lien or security interest except as expressly permitted
under section 9.3 of the Credit Agreement.
7. Notices. All notices or other communications hereunder shall be given
in the manner and to the addresses determined under section 12.3 of the Credit
Agreement.
8. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall not invalidate 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.
9. No Waiver; Cumulative Remedies. The Collateral Agent shall not by any
act, delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder, and no waiver shall be valid unless in writing, signed by
the Collateral Agent, and then only to the extent therein set forth. A waiver by
the Collateral Agent or any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the Collateral Agent
would otherwise have had on any future occasion. No failure to exercise nor any
delay in exercising on the part of the Collateral Agent any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies hereunder provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights and
remedies provided by law.
10. Waivers; Amendments. None of the terms and provisions of this
Agreement may be waived, altered, modified or amended except by an instrument in
writing executed by the parties hereto.
11. Limitations by Law. All rights, remedies and powers provided by
sections 4 and 5 hereof may be exercised only to the extent that the exercise
thereof does not violate any applicable provisions of law, and all the
provisions of sections 4 and 5 hereof are intended to be subject to all
applicable mandatory provisions of law which may be controlling and to be
limited to the extent necessary so that they will not render this Agreement
invalid, unenforceable in whole or in part, or not entitled to be recorded,
registered or filed under the provision of any applicable law.
12. Successors and Assigns. This Agreement shall be binding upon the
Borrower and the Collateral Agent and their respective successors and assigns
and shall inure to the benefit of the Borrower, the Collateral Agent and the
Lenders and their respective successors and assigns, and nothing herein or in
the Credit Agreement or any other Security Document or Credit Document is
intended or shall be construed to give any other person any right, remedy or
claim under, to or in respect of this Agreement, the Credit Agreement or any
other Security Document or Credit Document.
13. Termination and Reassignment. The Collateral Agent agrees that upon
the termination or expiration of the Credit Agreement and the Security Documents
and the payment in full of all the Secured Obligations, the Collateral Agent
will, if the Lenders have no remaining Commitments under the Credit Agreement,
upon the request and at the expense of the Borrower execute all such documents
as may be reasonably requested by the Borrower to release the security interests
created hereby and to reassign (without representation or warranty) to the
Borrower the Borrower's patent and other rights assigned hereby.
14. Reference to Separate Security Agreement. This Agreement has been
entered into by the Borrower and the Collateral Agent primarily for recording
purposes as contemplated by the Security Agreement, dated as of the date hereof,
between the Borrower and any other Assignors named therein, as debtors, and the
Collateral Agent, as secured party for the benefit of the Secured Creditors (as
defined therein). In the event of any inconsistency between any of the terms or
provisions hereof and the terms and provisions of such Security Agreement, the
terms and provisions of such Security Agreement shall govern.
15. Applicable Law. This Agreement shall be governed by, and be construed
and interpreted in accordance with, the laws of the State of Ohio.
16. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be an original and all of which
4
<PAGE>
collectively shall be one and the same agreement.
17. Jury Trial Waiver. THE BORROWER AND THE COLLATERAL AGENT EACH WAIVE
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT OR OTHERWISE, BETWEEN THE COLLATERAL AGENT AND THE BORROWER
ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
set forth above.
STONERIDGE, INC.
By:
--------------------------------------
Kevin P. Bagby, Vice President-Finance
NATIONAL CITY BANK,
as Collateral Agent
By:
--------------------------------------
Michael P. McCuen, Vice President
5
<PAGE>
Schedule A
to Collateral Assignment of
Patents
and Security Agreement
UNITED STATES PATENTS ISSUED
================================================================================
ISSUE EXPIRATION
CASE DESCRIPTION PATENT # COUNTRY DATE DATE
================================================================================
Pressure Switch and Circuit 4,318,673 U.S. 03/09/82 03/09/99
Means
- --------------------------------------------------------------------------------
Multi-Circuit Electrical 4,343,974 U.S. 08/10/82 08/10/99
Switch
- --------------------------------------------------------------------------------
Thermally Responsive 4,413,247 U.S. 11/01/83 11/01/00
Electrical Switch
- --------------------------------------------------------------------------------
Means and Method of
Manufacture
- --------------------------------------------------------------------------------
Thermal Sensor Assembly 4,866,410 U.S. 09/12/89 09/12/06
- --------------------------------------------------------------------------------
Liquid Level Sensing 5,026,954 U.S. 06/25/91 06/25/08
Switch Assembly
- --------------------------------------------------------------------------------
Pressure Transducer with 4,718,278 U.S. 01/12/88 01/12/05
Improved Calibration
- --------------------------------------------------------------------------------
Speed and Distance Sensor 4,646,042 U.S. 02/24/87 02/24/04
- --------------------------------------------------------------------------------
Pressure Transducer 5,228,334 U.S. 07/20/93 07/20/10
- --------------------------------------------------------------------------------
Pressure Transducer 5,343,754 U.S. 09/06/94 09/06/11
- --------------------------------------------------------------------------------
Apparatus for Applying 5,581,865 U.S. 12/10/96 02/02/15
Annular Seals, Grommets,
Bushings, Sleeves and the
Like to Associated Structure
- --------------------------------------------------------------------------------
Liquid Level Sensing 4,609,796 U.S. 09/02/86 09/02/03
Switch
- --------------------------------------------------------------------------------
Flow Control Solenoid 5,535,725 U.S. 07/16/96 07/16/14
Means
- --------------------------------------------------------------------------------
Mandrel Assembly 5,823,520 U.S. 10/20/98 10/20/15
- --------------------------------------------------------------------------------
Door Lock Actuator with 5,584,515 U.S. 12/17/96 12/30/14
Double Lock
- --------------------------------------------------------------------------------
Modular Actuator 5,503,441 U.S. 04/02/96 09/30/13
- --------------------------------------------------------------------------------
Free Wheel Double Lock 5,577,583 U.S. 11/26/96 03/16/15
Clutch
- --------------------------------------------------------------------------------
Deck Lid Latch Actuator 5,498,040 U.S. 03/12/96 07/28/14
- --------------------------------------------------------------------------------
<PAGE>
================================================================================
ISSUE EXPIRATION
CASE DESCRIPTION PATENT # COUNTRY DATE DATE
================================================================================
Key Head (Design) D358,543 U.S. 05/23/95 05/23/09
- --------------------------------------------------------------------------------
Adjunct Actuator (Design) D374,599 U.S. 10/15/96 10/15/10
- --------------------------------------------------------------------------------
Second Generation 5,577,782 U.S. 11/26/96 12/11/15
Latchuator (CIP)
- --------------------------------------------------------------------------------
Adjunct Actuator Latch 5,855,130 U.S. 01/05/98
Mechanism for Vehicle
Door Lock
- --------------------------------------------------------------------------------
Toggle Switch D280,615 U.S. 09/17/85 09/17/99
- --------------------------------------------------------------------------------
Automotive Switch 4,698,466 U.S. 10/06/87 10/06/04
- --------------------------------------------------------------------------------
Clutch Actuator Switch 4,649,238 U.S. 03/10/87 03/10/04
- --------------------------------------------------------------------------------
Universal Anti-Lock Brake 4,964,678 U.S. 10/23/90 10/23/07
Switch Linkage
- --------------------------------------------------------------------------------
Safety Ignition Switch 5,237,133 U.S. 08/17/93 08/17/10
- --------------------------------------------------------------------------------
Reverser Switch 5,179,364 U.S. 02/17/98 02/17/15
- --------------------------------------------------------------------------------
Latchuator 5,474,339 U.S. 12/12/95 10/15/13
- --------------------------------------------------------------------------------
Direct Connect Trailer Tow 5,800,188 U.S. 09/01/98 09/01/15
- --------------------------------------------------------------------------------
Manual Clutch Switching 4,684,769 U.S. 08/04/87 08/04/04
System
- --------------------------------------------------------------------------------
Front-Removable Gauge 5,672,823 U.S. 09/30/97 09/30/14
- --------------------------------------------------------------------------------
Actuator for 4-Wheel Drive 5,788,008 U.S. 08/04/98 08/07/15
Vehicle
- --------------------------------------------------------------------------------
Automotive Inertia Switch 5,777,285 U.S. 07/07/98 07/07/15
and method
- --------------------------------------------------------------------------------
Angular Position Sensor for 5,831,554 U.S. 11/03/98 11/03/15
Pivoted Control Device
- --------------------------------------------------------------------------------
Automobile Electric door 4,819,866 U.S. 04/11/89 07/29/07
Lock Actuator
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
2
<PAGE>
UNITED STATES PATENTS PENDING
================================================================================
Name Filed Allowed
================================================================================
Actuator Housing 05/21/98
- --------------------------------------------------------------------------------
Adjunct Actuator 07/11/95 (Appln.deferred)
- --------------------------------------------------------------------------------
Method of forming Vehicle Door Lock Actuator 04/18/97 (Appln.deferred)
- --------------------------------------------------------------------------------
Automative Brake Switch 01/13/97 11/18/98
- --------------------------------------------------------------------------------
Tow Socket Connector 12/08/97 11/02/98
- --------------------------------------------------------------------------------
Actuator with Dual Operating Outlets 05/06/98 (Provisional Appln.)
- --------------------------------------------------------------------------------
Door Lock Actuator 06/11/98 (Provisional Appln.)
- --------------------------------------------------------------------------------
Temperature Responsive Probe Apparatus 12/29/97
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
3
<PAGE>
EXHIBIT C-4
------------------
FORM OF
COLLATERAL ASSIGNMENT OF TRADEMARKS
------------------
<PAGE>
COLLATERAL ASSIGNMENT OF TRADEMARKS
AND SECURITY AGREEMENT
THIS COLLATERAL ASSIGNMENT OF TRADEMARKS AND SECURITY AGREEMENT, dated as
of December 30, 1998 (this "Agreement"), between STONEBRIDGE, INC., an Ohio
corporation whose principal place of business is located at 9400 East Market
Street, Warren, Ohio 44484 (herein, together with its successors and assigns,
the "Borrower"), and NATIONAL CITY BANK, a national banking association whose
principal place of business is located at National City Center, 1900 East Ninth
Street, Cleveland, Ohio 44114, as collateral agent (herein, together with its
successors and assigns in such capacity, the "Collateral Agent" ), for the
benefit of the Secured Creditors (as defined below):
PRELIMINARY STATEMENTS:
(1) Except as otherwise defined herein, terms used herein and defined in
the Credit Agreement (as defined below) shall be used herein as therein defined.
(2) This Agreement is made pursuant to the Credit Agreement, dated as of
the date hereof (herein, as amended or otherwise modified, restated or replaced
from time to time, the "Credit Agreement"), among the Borrower, the financial
institutions named as lenders therein (herein, together with their successors
and assigns, the "Lenders"), the other Agents named therein, and National City
Bank, as the Administrative Agent for the Lenders under the Credit Agreement,
providing, among other things, for loans or advances or other extensions of
credit to or for the benefit of the Borrower of up to $425,000,000, with such
loans or advances being evidenced by promissory notes (the "Notes", such term to
include all notes and other securities issued in exchange therefor or in
replacement thereof).
(3) The Borrower or any of its Subsidiaries may from time to time be party
to one or more Designated Hedge Agreements (as defined in the Credit Agreement).
Any institution that participates, and in each case their subsequent assigns, as
a counterparty to any Designated Hedge Agreement(collectively, the "Designated
Hedge Creditors," and the Designated Hedge Creditors together with the Agents
and the Lenders, collectively the "Secured Creditors"), shall benefit hereunder
as herein provided.
(4) Pursuant to the Subsidiary Guaranty, each Subsidiary Guarantor has
jointly and severally guaranteed to the Secured Creditors the payment when due
of the Guaranteed Obligations (as defined in the Subsidiary Guaranty).
(5) It is a condition precedent to the making of Loans and the issuance
of, and participation in, Letters of Credit under the Credit Agreement that the
Borrower shall have executed and delivered to the Collateral Agent this
Agreement.
(6) The Borrower desires to execute this Agreement to satisfy the
condition described in the preceding paragraph.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order, among other things,
to induce the Lenders to make Loans and other credit facilities available to the
Borrower pursuant to the Credit Agreement, the parties hereto hereby agree as
follows:
1. Security for Secured Obligations. This Agreement is made by the
Borrower with the Collateral Agent,, for the benefit of the Secured Creditors,
to secure:
(a) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under section 362(a) of the
Bankruptcy Code, would become due) of the Borrower and/or its Subsidiaries
and Affiliates to the Agents and the Lenders, whether now existing or
hereafter incurred under, arising out of, or in connection with the Credit
Agreement and the other Credit Documents to which the Borrower or any of
its Subsidiaries or Affiliates is now or hereafter becomes a party, and
the due performance and compliance by the Borrower and its Subsidiaries
and Affiliates with all of the terms, conditions and agreements contained
in the Credit Agreement and such other Credit Documents (all such
obligations and liabilities under this clause (a), being herein
collectively called the "Credit Document Obligations");
<PAGE>
(b) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under section 362(a) of the
Bankruptcy Code, would become due) and liabilities of the Borrower or any
Subsidiary of the Borrower now existing or hereafter incurred under,
arising out of or in connection with any Designated Hedge Agreement with
any of the Secured Creditors, and the due performance and compliance by
the Borrower and any such Subsidiary with all of the terms, conditions and
agreements contained therein (all such obligations and liabilities
described in this clause (ii) being herein collectively called the
"Designated Hedge Obligations");
(c) any and all sums advanced by the Collateral Agent in order to
preserve the Collateral (as hereinafter defined) or preserve its security
interest in the Collateral; and
(d) in the event of any proceeding for the collection or enforcement
of any indebtedness, obligations, or liabilities of the Borrower or any
Subsidiary referred to in clauses (a), (b) and (c) above, after an Event
of Default shall have occurred and be continuing, the reasonable expenses
of retaking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, or of any exercise by the
Collateral Agent of its rights hereunder, together with reasonable
attorneys' fees and court costs.
All such obligations, liabilities, sums and expenses set forth in clauses (a)
through (d) of this section 1 being herein collectively called the "Secured
Obligations", it being acknowledged and agreed that the "Secured Obligations"
shall include extensions of credit of the types described above, whether
outstanding on the date of this Agreement or extended from time to time after
the date of this Agreement.
2. Assignment and Grant of Security Interest. (a) As security for the
prompt payment and performance of the Secured Obligations, the Borrower hereby
assigns, transfers, conveys and grants to the Collateral Agent, for the benefit
of the Secured Creditors, a security interest in, a general lien upon and/or a
right of set-off against (whether now owned or hereafter by the Borrower and
whether acquired in the United States or elsewhere in the world) all right,
title and interest of the Borrower in and to the following (hereafter
collectively called the "Collateral"):
(i) all trademarks, trade names and service marks registered with
the United States Patent and Trademark Office (including, without
limitation, those listed on Schedule A to this Agreement);
(ii) all applications for the registration of trademarks, trade
names and service marks filed with the United States Patent and Trademark
Office (including, without limitation, those listed on Schedule A to this
Agreement);
(iii) all trademarks, trade names and service marks registered with
any office, agency or other governmental authority of any State, the
District of Columbia or any possession or terretory of the United States;
(iv) all trademarks, trade names and service marks registered with
any office, agency or other governmental authority of any other country or
any province, department or other governmental subdivision thereof;
(v) all registrations and recordings with respect to any of the
foregoing;
(vi) all reissues, extensions and renewals of any of the foregoing;
(vii) all corporate names, business names, trade styles, logos,
other source or business identifiers; allinformation, customer lists,
identification of supplier, data, plans, blueprints, specifications,
designs, drawings, recorded knowledge, surveys, engineering reports, test
reports, manuals, materials standards, processing standards, performance
standards, catalogs, computer and automatic machinery software and
programs, and the like pertaining to operations by the Borrower in, on or
about any of its plants or warehouses; all field repair data, sales data
and other information relating to sales or service of products now or
hereafter manufactured on or about any of its plants; and all accounting
information pertaining to operations in, on or about any of its plants and
all media in which or on which all of the information or knowledge or data
or records relating to its plants and warehouses may be recorded or stored
and all computer programs used for the compilation or printout of such
information, knowledge, records or data, and the Collateral Agent shall
keep all such information, knowledge, records or data strictly
confidential and limit dissemination thereof solely among its officers and
their designees, auditors and regulatory authorities (on an "as necessary"
basis);
(viii)all licenses and other agreements relating in whole or in part
to any of the foregoing, including all rights to payments in
2
<PAGE>
respect thereof;
(ix) all rights to sue for past, present or future infringements of
any of the foregoing;
(x) all goodwill related to any of the foregoing;
(xi) to the extent not included above, all general intangibles (as
such terms is defined in the Uniform Commercial Code of the State of Ohio)
of the Borrower related to the foregoing; and
(xii) all proceeds of any and all of the foregoing;
whether now existing or hereafter created or acquired, as to all of the above.
(b) Unless an Event of Default shall have occurred and be continuing, the
Collateral Agent hereby grants to the Borrower, without representation or
warranty of any kind, express or implied, the exclusive, nontransferable right
and license to use the Collateral, for the Borrower's own benefit and account.
The Borrower agrees not to sell or assign its interest in, or grant any
sublicense under, the license granted to the Borrower in this paragraph, without
the prior written consent of the Collateral Agent. Upon the occurrence and
during the continuance of any Event of Default, the Borrower's license with
respect to the Collateral as set forth in this paragraph shall terminate
automatically without any requirement of notice to the Borrower of such
termination, and the Collateral Agent shall thereupon have, in addition to all
other rights and remedies given it by this Agreement, those allowed by the
federal laws of the United States and the rights and remedies of a secured party
under the Uniform Commercial Code as enacted in any jurisdiction in which any of
the Collateral may be located.
3. Continuing Liability. The Borrower hereby expressly agrees that,
anything herein to the contrary notwithstanding, it shall remain liable under
each license, interest and obligation assigned to the Collateral Agent hereunder
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 thereof. The Collateral Agent shall have no obligation or liability
under any such license, interest or obligation by reason of or arising out of
this Agreement or the assignment thereof to the Collateral Agent or the receipt
by the Collateral Agent of any payment relating to any such license, interest or
obligation pursuant thereto, nor shall the Collateral Agent be required or
obligated in any manner to perform or fulfill any of the obligations of the
Borrower thereunder or pursuant thereto, or to make any payment, or to make any
inquiry as to the nature or the sufficiency of any payment received by it or the
sufficiency of any performance by any party under any such license, interest or
obligation, or to present or file any claim, or to take any action to collect or
enforce any performance or the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
4. Remedies. If an Event of Default has occurred and is continuing, the
Collateral Agent may exercise, in addition to all other rights and remedies
granted to it in this Agreement, the Credit Agreement and any other Security
Document, all rights and remedies of a secured party under the Uniform
Commercial Code or any other applicable law. Without limiting the generality of
the foregoing, the Borrower expressly agrees that in any such event the
Collateral Agent, without demand of performance or other demand, advertisement
or notice of any kind (except the notice specified below of time and place of
public or private sale) to or upon the Borrower or any other person (all and
each of which demands, advertisements and/or notices are hereby expressly
waived), may forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or sell or otherwise dispose of and deliver said
Collateral (or contract to do so), or any part thereof, in one or more parcels
at public or private sale or sales, at any exchange, broker's board or at any of
the Collateral Agent's offices or elsewhere at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk, and the Collateral Agent shall apply the net proceeds (after expenses) of
any such sale, lease, assignment or other disposition against the Secured
Obligations in accordance with section 10.3 of the Credit Agreement, the
Borrower remaining liable for any deficiency therein. After payment in full of
all of the Secured Obligations (including those not yet due and payable at the
time of the application referred to above), the Collateral Agent shall remit any
surplus net proceeds to the Borrower (or its successors or assigns) or otherwise
as a court of competent jurisdiction may direct. The Collateral Agent shall have
the right upon any such public sale or sales, and, to the extent permitted by
law, upon any such private sale or sales, to purchase the whole or any part of
the Collateral so sold, free of any right or equity or redemption in the
Borrower, which right or equity is hereby expressly waived and released. To the
extent permitted by applicable law, the Borrower waives all claims, damages and
demands against the Collateral Agent arising out of the repossession, retention
or sale of the Collateral. The Borrower agrees that the Collateral Agent need
not give more than 10 days' notice of the time after which a private sale may
take place and that such notice is reasonable notification of such matter.
5. Grant of License to Use Intangibles. For the purpose of enabling the
Collateral Agent to exercise rights and remedies under section 4 hereof at such
time as the Collateral Agent, without regard to this section 5, shall be
lawfully entitled to exercise such rights and remedies
3
<PAGE>
and for no other purpose, the Borrower hereby grants to the Collateral Agent an
irrevocable, non-exclusive license (exercisable without payment of royalty or
other compensation to the Borrower) to use, assign or sublicense any of the
Collateral, now owned or hereafter acquired by the Borrower, and wherever the
same may be located, including in such license reasonable access to all media in
which any of the licensed items may be recorded or stored and to all computer
programs used for the compilation or printout thereof.
6. Representations and Warranties, etc. The Borrower agrees that it will
at its expense forever warrant and, at the Collateral Agent's request defend the
Collateral Agent's and the Borrower's respective interests in the Collateral
from any and all claims and demands of any other person that it will not grant,
create or permit to exist any Lien upon or security interest in the Collateral
in favor of any other person except as expressly permitted under section 9.3 of
the Credit Agreement. The Borrower represents and warrants to the Collateral
Agent that: (a) the Borrower has full power, authority and legal right and
capacity to incur and perform its obligations hereunder, (b) this Agreement
constitutes the legal, valid and binding obligation of the Borrower, enforceable
in accordance with its terms, (c) the making and performance by the Borrower of
this Agreement and the grant of the security interest hereunder have been duly
authorized by all necessary corporate action, and do not and will violate the
provisions of any applicable law or applicable regulation, the Borrower's
certificate of articles of incorporation or by-laws, and do not and will not
result in a breach of, or constitute a default under, or require any consent
(other than consents which have been obtained which are in full force and effect
and copies of which have been delivered to the Collateral Agent) or create any
lien, charge or encumbrance under, any agreement, instrument or document or the
provisions of any order, writ, judgment, injunction, decree, determination or
award of any court, government or governmental agency or instrumentality,
applicable to the Borrower or to any of the assets of the Borrower to which the
Borrower is a party or by which the Borrower or any of the assets of the
Borrower may be bound or affected, (d) so long as the Secured Obligations remain
outstanding, the Borrower at all times will be the sole direct or indirect
beneficial owner of the Collateral hereunder, and (e) this Agreement grants to
the Collateral Agent a first priority lien upon and first priority perfected
secured interest in the Collateral subject to no lien or security interest
except as expressly permitted under section 9.3 of the Credit Agreement.
7. Notices. All notices or other communications hereunder shall be given
in the manner and to the addresses determined under section 12.3 of the Credit
Agreement.
8. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall not invalidate 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.
9. No Waiver; Cumulative Remedies. The Collateral Agent shall not by any
act, delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder, and no waiver shall be valid unless in writing, signed by
the Collateral Agent, and then only to the extent therein set forth. A waiver by
the Collateral Agent or any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the Collateral Agent
would otherwise have had on any future occasion. No failure to exercise nor any
delay in exercising on the part of the Collateral Agent any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies hereunder provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights and
remedies provided by law.
10. Waivers; Amendments. None of the terms and provisions of this
Agreement may be waived, altered, modified or amended except by an instrument in
writing executed by the parties hereto.
11. Limitations by Law. All rights, remedies and powers provided by
sections 4 and 5 hereof may be exercised only to the extent that the exercise
thereof does not violate any applicable provisions of law, and all the
provisions of sections 4 and 5 hereof are intended to be subject to all
applicable mandatory provisions of law which may be controlling and to be
limited to the extent necessary so that they will not render this Agreement
invalid, unenforceable in whole or in part, or not entitled to be recorded,
registered or filed under the provision of any applicable law.
12. Successors and Assigns. This Agreement shall be binding upon the
Borrower and the Collateral Agent and their respective successors and assigns
and shall inure to the benefit of the Borrower, the Collateral Agent and the
Lenders and their respective successors and assigns, and nothing herein or in
the Credit Agreement or any other Security Document or Credit Document is
intended or shall be construed to give any other person any right, remedy or
claim under, to or in respect of this Agreement, the Credit Agreement or any
other Security Document or Credit Document.
13. Termination and Reassignment. The Collateral Agent agrees that upon
the termination or expiration of the Credit Agreement and the Security Documents
and the payment in full of all the Secured Obligations, the Collateral Agent
will, if the Lenders have no remaining Commitments under the Credit Agreement,
upon the request and at the expense of the Borrower execute all such documents
as may be reasonably requested
4
<PAGE>
by the Borrower to release the security interests created hereby and to reassign
(without representation or warranty) to the Borrower the Borrower's trademark
and other rights assigned hereby.
14. Reference to Separate Security Agreement. This Agreement has been
entered into by the Borrower and the Collateral Agent primarily for recording
purposes as contemplated by the Security Agreement, dated as of the date hereof,
between the Borrower and any other Assignors named therein, as debtors, and the
Collateral Agent, as secured party for the benefit of the Secured Creditors (as
defined therein). In the event of any inconsistency between any of the terms or
provisions hereof and the terms and provisions of such Security Agreement, the
terms and provisions of such Security Agreement shall govern.
15. Applicable Law. This Agreement shall be governed by, and be construed
and interpreted in accordance with, the laws of the State of Ohio.
16. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be an original and all of which collectively shall be one
and the same agreement.
17. Jury Trial Waiver. THE BORROWER AND THE COLLATERAL AGENT EACH WAIVE
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT OR OTHERWISE, BETWEEN THE COLLATERAL AGENT AND THE BORROWER
ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
set forth above.
STONERIDGE, INC.
By:
--------------------------------------
Kevin P. Bagby, Vice President-Finance
NATIONAL CITY BANK,
as Collateral Agent
By:
--------------------------------------
Michael P. McCuen, Vice President
5
<PAGE>
Schedule A
to Collateral Assignment of
Trademarks
and Security Agreement
I. TRADEMARKS, TRADE NAMES, SERVICE MARKS, ETC.
REGISTERED WITH THE UNITED STATES PATENT AND
TRADEMARK OFFICE:
================================================================================
Date of Date of
Case Mark TM# Country Filing Issue
================================================================================
HS and Design 1,805,921 U.S. 03/09/93 11/23/93
- --------------------------------------------------------------------------------
HI-STAT 1,804,277 U.S. 03/09/93 11/16/93
- --------------------------------------------------------------------------------
Alpha Design 2,198,411 U.S. 10/10/97 10/20/98
- --------------------------------------------------------------------------------
ALPHABET 2,198,412 U.S. 10/10/97 10/20/98
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------
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================================================================================
<PAGE>
2
<PAGE>
II. APPLICATIONS FOR TRADEMARKS, TRADE NAMES, SERVICE MARKS, ETC.
FILED WITH THE UNITED STATES PATENT AND TRADEMARK OFFICE:
================================================================================
Case Mark Country Date Filed
================================================================================
Pollack U.S. 07/09/98
- --------------------------------------------------------------------------------
S(stylized) Cl.40 U.S. 07/09/98
- --------------------------------------------------------------------------------
S(stylized) Cl.9 U.S. 10/10/97
- --------------------------------------------------------------------------------
Stoneridge Cl.40 U.S. 07/01/98
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================================================================================
3
<PAGE>
EXHIBIT C-5
-----------------------------------
FORM OF
PLEDGE AGREEMENT
-----------------------------------
<PAGE>
================================================================================
STONERIDGE, INC.
as a Pledgor
And
THE OTHER PLEDGORS NAMED HEREIN
With
NATIONAL CITY BANK,
as Collateral Agent, as Pledgee
-----------------------------
PLEDGE AGREEMENT
dated as of
December 30, 1998
-----------------------------
================================================================================
<PAGE>
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of December 30, 1998 (as amended, modified, or
supplemented from time to time, "this Agreement"), made by each of the
undersigned (each, together with its successors and assigns, a "Pledgor" and
collectively, the "Pledgors"), in favor of NATIONAL CITY BANK, a national
banking association, as Collateral Agent (herein, together with its successors
and assigns in such capacity, the "Pledgee"), for the benefit of the Secured
Creditors (as defined below):
PRELIMINARY STATEMENTS:
(1) Except as otherwise defined herein, terms used herein and defined in
the Credit Agreement (as defined below) shall be used herein as therein defined.
(2) This Agreement is made pursuant to the Credit Agreement, dated as of
the date hereof (herein, as amended or otherwise modified, restated or replaced
from time to time, the "Credit Agreement"), among Stoneridge, Inc., an Ohio
corporation (herein, together with its successsors and assigns, the "Borrower"),
the financial institutions named as lenders therein (herein, together with their
successors and assigns, the "Lenders"), the other Agents named therein, and
National City Bank, as the Administrative Agent for the Lenders under the Credit
Agreement, providing, among other things, for loans or advances or other
extensions of credit to or for the benefit of the Borrower of up to
$425,000,000, with such loans or advances being evidenced by promissory notes
(the "Notes", such term to include all notes and other securities issued in
exchange therefor or in replacement thereof).
(3) The Borrower or any of its Subsidiaries may from time to time be party
to one or more Designated Hedge Agreements (as defined in the Credit Agreement).
Any institution that participates, and in each case their subsequent assigns, as
a counterparty to any Designated Hedge Agreement (collectively, the "Designated
Hedge Creditors"; and the Designated Hedge Creditors together with the Agents
and the Lenders, collectively the "Secured Creditors"), shall benefit hereunder
as herein provided.
(4) Pursuant to the Subsidiary Guaranty, each Subsidiary Guarantor has
jointly and severally guaranteed to the Secured Creditors the payment when due
of the Guaranteed Obligations (as defined in the Subsidiary Guaranty).
(5) It is a condition precedent to the making of Loans and the issuance
of, and participation in, Letters of Credit under the Credit Agreement that each
Pledgor shall have executed and delivered to the Pledgee this Agreement.
(6) Each Pledgor desires to execute this Agreement to satisfy the
condition described in the preceding paragraph.
NOW, THEREFORE, in consideration of the benefits accruing to each Pledgor,
the receipt and sufficiency of which are hereby acknowledged, each Pledgor
hereby makes the following representations and warranties to the Pledgee and
hereby covenants and agrees with the Pledgee as follows:
1. SECURITY FOR SECURED OBLIGATIONS.
This Agreement is made by each Pledgor to the Pledgee, for the benefit of
the Secured Creditors, to secure:
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under section 362(a) of the
Bankruptcy Code, would become due) of the Borrower and/or its Subsidiaries
and Affiliates to any of the Agents or the Lenders, whether now existing
or hereafter incurred under, arising out of, or in connection with the
Credit Agreement and the other Credit Documents to which the Borrower or
any of its Subsidiaries or Affiliates is now or hereafter may become a
party, and the due performance and compliance by the Borrower and its
Subsidiaries and Affiliates with all of the terms, conditions and
agreements contained in the Credit Agreement and such other Credit
Documents, including without limitation (x) in the case of the Borrower,
all such obligations and indebtedness of the Borrower and its Subsidiaries
and Affiliates under the Credit Agreement and the other Credit Documents,
and (y) in the case of each other Pledgor, all such obligations and
indebtedness under the Subsidiary Guaranty to which such
<PAGE>
Pledgor is a party which relate to any of the foregoing (all such
obligations and liabilities under this clause (i), being herein
collectively called the "Credit Document Obligations");
(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under section 362(a) of the
Bankruptcy Code, would become due) and liabilities of the Borrower or any
Subsidiary of the Borrower now existing or hereafter incurred under,
arising out of or in connection with any Designated Hedge Agreement with
any of the Secured Creditors and the due performance and compliance by the
Borrower and such Subsidiaries with all of the terms, conditions and
agreements contained therein, including, in the case of Pledgors other
than the Borrower, all obligations of such Pledgor under the Subsidiary
Guaranty in respect of any Designated Hedge Agreement (all such
obligations and liabilities described in this clause (ii) being herein
collectively called the "Designated Hedge Obligations");
(iii) any and all sums advanced by the Pledgee in order to preserve
the Collateral (as hereinafter defined) or preserve its security interest
in the Collateral; and
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities of such
Pledgor referred to in clauses (i), (ii) and (iii) above, after an Event
of Default (as such term is defined in the Security Agreement) shall have
occurred and be continuing, the reasonable expenses of retaking, holding,
preparing for sale or lease, selling or otherwise disposing of or
realizing on the Collateral, or of any exercise by the Pledgee of its
rights hereunder, together with reasonable attorneys' fees and court
costs.
All such obligations, liabilities, sums and expenses set forth in clauses (i)
through (iv) of this section 1 being herein collectively called the "Secured
Obligations", it being acknowledged and agreed that the "Secured Obligations"
shall include extensions of credit of the types described above, whether
outstanding on the date of this Agreement or extended from time to time after
the date of this Agreement.
2. CERTAIN DEFINITIONS; INITIAL REPRESENTATIONS, ETC.
2.1. Definitions. As used herein:
"Borrower" shall have the meaning provided in the Preliminary
Statements.
"Credit Agreement" shall have the meaning provided in the
Preliminary Statements.
"Credit Document Obligations" shall have the meaning provided in
clause (i) of section 1.
"Designated Hedge Creditors" shall have the meaning provided in the
Preliminary Statements.
"Designated Hedge Obligations" shall have the meaning provided in
clause (ii) of section 1.
"Equity Interests" shall mean (i) all of the partnership interests
in a general or limited partnership at any time owned or held by any
Pledgor, and (ii) all of the membership interests in a limited liability
company at any time owned or held by any Pledgor.
"Foreign Corporation" shall mean a corporation that is not organized
under the laws of the United States or any State or territory thereof.
"Intercompany and Third Party Notes" shall mean all promissory notes
from time to time issued to, or held by, any Pledgor.
"Noticed Event of Default" shall mean (i) an Event of Default
specified in section 10.1(h) of the Credit Agreement and (ii) any other
Event of Default under the Credit Agreement in respect of which the
Pledgee has given the Borrower notice that such Event of Default
constitutes a Noticed Event of Default.
"Pledged Entity" shall mean the issuer of any Equity Interests.
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"Pledged Equity Interests" shall mean all Equity Interests at any
time pledged or required to be pledged under this Agreement.
"Pledged Notes" shall mean all Intercompany and Third Party Notes at
any time pledged or required to be pledged under this Agreement.
"Pledged Securities" shall mean all Pledged Stock and all Pledged
Notes.
"Pledged Stock" shall mean all Stock at any time pledged or required
to be pledged under this Agreement.
"Secured Creditors" shall have the meaning provided in the
Preliminary Statements.
"Secured Debt Agreement" shall have the meaning provided in section
5.
"Secured Obligations" shall have the meaning provided in section 1.
"Securities" shall mean all of the Stock and Intercompany and Third
Party Notes.
"Stock" shall mean (i) all of the issued and outstanding shares of
stock of any corporation (other than a Foreign Corporation) at any time
directly owned by any Pledgor; and (ii) all of the issued and outstanding
shares of capital stock of any Foreign Corporation at any time owned by
any Pledgor, provided that such Pledgor shall not be required to pledge
hereunder (and the term "Stock" shall not include): (x) more than 65% of
the total combined voting power of all classes of capital stock of any
first tier Foreign Corporation entitled to vote, or (y) any of the capital
stock of a Foreign Corporation that is not a first tier subsidiary of the
Borrower.
"Termination Date" shall have the meaning provided in section 17(a).
2.2. Representations and Warranties as to Collateral Initially Pledged
Hereunder. Each Pledgor represents and warrants that on the date hereof:
(a) the Stock owned by it consists of the number and type of shares
of the stock of the corporations as described in Annex A hereto;
(b) such Pledgor is the holder of record and sole beneficial owner
of such Stock;
(c) such Stock constitutes that percentage of the issued and
outstanding capital stock of the issuing corporation as is set forth in
Annex A hereto;
(d) the Intercompany and Third Party Notes held by such Pledgor
consist of the promissory notes described in Annex B hereto;
(e) the Equity Interests held by such Pledgor constitutes that
percentage of the entire interest of each Pledged Entity as is set forth
on Annex C hereto; and
(f) such Pledgor owns or possesses no other Securities or Equity
Interests.
3. PLEDGE OF SECURITIES, GRANT OF SECURITY INTERESTS, ETC.
3.1. Pledge. To secure the Secured Obligations and for the purposes set
forth in section 1, each Pledgor hereby pledges and grants to the Pledgee a
first priority continuing security interest in, and as part of such grant and
pledge, hereby transfers and assigns to the Pledgee all of the following whether
now existing or hereafter acquired (collectively, the "Collateral"):
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(a) such Pledgor's Equity Interest and all of such Pledgor's right,
title and interest in each Pledged Entity including, without limitation:
(i) all the capital thereof and its interest in all profits,
losses and other distributions to which such Pledgor shall at any
time be entitled in respect of such Equity Interest;
(ii) all other payments due or to become due to such Pledgor
in respect of such Equity Interest, whether under any partnership
agreement, limited liability company agreement or otherwise, whether
as contractual obligations, damages, insurance proceeds or
otherwise;
(iii) all of its claims, rights powers, privileges, authority,
options, security interests, liens and remedies, if any, under any
partnership agreement, limited liability company agreement or at law
or otherwise in respect of such Equity Interest;
(iv) all present and future claims if any, of the Pledgor
against any Pledged Entity for moneys loaned or advanced, for
services rendered or otherwise;
(v) all of such Pledgor's rights under any partnership
agreement, limited liability company agreement or at law to exercise
and enforce every right, power, remedy, authority, option and
privilege of such Pledgor relating to the Equity Interest including
any power to terminate, cancel or modify any partnership agreement
or limited liability company agreement, to execute any instruments
and to take any and all other action on behalf of and in the name of
such Pledgor in respect of the Equity Interest and any Pledged
Entity, to make determinations, to exercise any election (including,
but not limited to, election of remedies) or option or to give or
receive any notice, consent, amendment, waiver or approval, together
with full power and authority to demand, receive, enforce, collect
or receipt for any of the foregoing, to enforce or execute any
checks, or other instruments or orders, to file any claims and to
take any action in connection with any of the foregoing;
(vi) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, distributions, dividends, rights and
other property at any time and from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all thereof; and
(vii) to the extent not otherwise included, all proceeds of
any or all of the foregoing;
(b) all Pledged Securities owned by such Pledgor on the date hereof,
if any, and such Pledgor hereby pledges and deposits as security with the
Pledgee and delivers to the Pledgee certificates or instruments therefor
duly endorsed in blank in the case of Intercompany and Third Party Notes
and accompanied by undated stock powers duly executed in blank by such
Pledgor in the case of Stock, or such other instruments of transfer as are
acceptable to the Pledgee; and
(c) all of such Pledgor's right, title and interest in and to such
Pledged Securities (and in and to all certificates or instruments
evidencing such Securities), which such Pledgor hereby assigns, transfers,
hypothecates, mortgages, charges and sets over to the Pledgee;
all of which Collateral is to be held and dealt with by the Pledgee upon the
terms and conditions set forth in this Agreement.
For the avoidance of doubt, the Borrower and the Pledgee confirm that
shares of the Borrower in AlphaConn do Brasil Ltda. are not being pledged
hereunder because of restrictions under Brazilian law and the organizal
documents for such company.
3.2. Subsequently Acquired Securities and Equity Interests. If a Pledgor
shall acquire (by purchase, stock dividend or otherwise) any additional
Securities and/or Equity Interests at any time or from time to time after the
date hereof which are represented by certificates or instruments, such Pledgor
will forthwith pledge and deposit such Securities and/or Equity Interests as
security with the Pledgee and deliver to the Pledgee certificates or instruments
thereof, duly endorsed in blank in the case of Intercompany and Third Party
Notes and accompanied by undated stock powers duly executed in blank in the case
of Stock, by such Pledgor or such other instruments of transfer as are
acceptable to the Pledgee, and will promptly thereafter deliver to the Pledgee a
certificate executed by a principal executive officer of such Pledgor describing
such Securities and/or Equity Interests and certifying that the same have been
duly pledged with the Pledgee hereunder. No Pledgor shall be required at any
time to pledge hereunder any (i) Stock or Equity
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Interests which is more than 65% of the total combined voting power of all
classes of capital stock or other equity securities of any first tier Foreign
Subsidiary entitled to vote, or (ii) any Stock or Equity Interests in any person
which is not a first tier Subsidiary of the Borrower.
3.3. Uncertificated Securities and/or Equity Interests. Notwithstanding
anything to the contrary contained in sections 3.1 and 3.2, if any Securities
and/or Equity Interests (whether or not now owned or hereafter acquired) are
uncertificated securities, a Pledgor shall promptly notify the Pledgee thereof,
and shall promptly take all actions required to perfect the security interest of
the Pledgee under applicable law (including, in any event, under sections 8-313
and 8-321 of the Uniform Commercial Code if applicable). Each Pledgor further
agrees to take such actions as the Pledgee deems reasonably necessary or
desirable to effect the foregoing and to permit the Pledgee to exercise any of
its rights and remedies hereunder, and agrees to provide an opinion of counsel
reasonably satisfactory to the Pledgee with respect to any such pledge of
uncertificated securities and/or Equity Interests promptly upon the request of
the Pledgee.
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC.
The Pledgee shall have the right to appoint one or more sub-agents for the
purpose of retaining physical possession of the Pledged Securities, which may be
held (in the discretion of the Pledgee) in the name of the relevant Pledgor,
endorsed or assigned in blank or in favor of the Pledgee or any nominee or
nominees of the Pledgee or a sub-agent appointed by the Pledgee.
5. VOTING, ETC. WHILE NO EVENT OF DEFAULT.
Unless and until a Noticed Event of Default shall have occurred and be
continuing, each Pledgor shall be entitled to exercise all voting rights
attaching to any and all Collateral owned by it, and to give consents, waivers
or ratifications in respect thereof, provided that no vote shall be cast or any
consent, waiver or ratification given or any action taken which would violate,
result in breach of any covenant contained in or be inconsistent with, any of
the terms of this Agreement, any other Credit Document or any Designated Hedge
Agreement (collectively, the "Secured Debt Agreements"), or which would have the
effect of impairing the position or interests of the Pledgee or any Secured
Creditor therein. All such rights of such Pledgor to vote and to give consents
waivers and ratifications shall cease in case a Noticed Event of Default shall
occur and be continuing and section 7 hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS.
Unless and until a Noticed Event of Default shall have occurred and be
continuing, all cash dividends or other amounts payable in respect of the
Collateral shall be paid to the relevant Pledgor, provided that all dividends,
distributions or other amounts payable in respect of the Collateral which are
reasonably determined by the Pledgee to represent in whole or in part an
extraordinary, liquidating or other distribution in return of capital not
permitted by the Credit Agreement shall be paid, to the extent so determined to
represent an extraordinary, liquidating or other distribution in return of
capital, to the Pledgee and retained by it as part of the Collateral (unless
such cash dividends and/or distributions are applied to repay the Secured
Obligations pursuant to section 9 of this Agreement). The Pledgee shall also be
entitled to receive directly, and to retain as part of the Collateral:
(i) all other or additional stock, other securities, partnership
interests, membership interests or property (other than cash) paid or
distributed by way of dividend or otherwise in respect of the Collateral;
(ii) all other or additional stock, other securities, partnership
interests, membership interests or property (including cash) paid or
distributed in respect of the Collateral by way of stock-split, spin-off,
split-up, reclassification, combination of shares or similar
rearrangement; and
(iii) all other or additional stock, other securities, partnership
interests, membership interests or property (including cash) which may be
paid in respect of the Collateral by reason of any consolidation, merger,
exchange of stock, conveyance of assets, liquidation or similar corporate,
partnership or limited liability company reorganization.
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All dividends, distributions or other payments which are received by any Pledgor
contrary to the provisions of this section 6 or section 7 shall be received in
trust for the benefit of the Pledgee, shall be segregated from other property or
funds of such Pledgor and shall be forthwith paid over to the Pledgee as
Collateral in the same form as so received (with any necessary endorsement).
7. REMEDIES IN CASE OF AN EVENT OF DEFAULT.
In case a Noticed Event of Default shall have occurred and be continuing,
the Pledgee shall be entitled to exercise all of the rights, powers and remedies
(whether vested in it by this Agreement or any other Secured Debt Agreement or
by law) for the protection and enforcement of its rights in respect of the
Collateral, including, without limitation all the rights and remedies of a
secured party upon default under the Uniform Commercial Code of the State of
Ohio, and the Pledgee shall be entitled, without limitation to exercise any or
all of the following rights which each Pledgor hereby agrees to be commercially
reasonable:
(i) to receive all amounts payable in respect of the Collateral
otherwise payable under section 6 to a Pledgor;
(ii) to transfer all or any part of the Collateral into the
Pledgee's name or the name of its nominee or nominees;
(iii) to accelerate any Pledged Note which may be accelerated in
accordance with its terms, and take any other lawful action to collect
upon any Pledged Note (including, without limitation, to make any demand
for payment thereon);
(iv) to vote all or any part of the Collateral (whether or not
transferred into the name of the Pledgee) and give all consents, waivers
and ratifications in respect of the Collateral and otherwise act with
respect thereto as though it were the outright owner thereof (each Pledgor
hereby irrevocably constituting and appointing the Pledgee the proxy and
attorney-in-fact of such Pledgor, with full power of substitution to do
so); and
(v) at any time or from time to time to sell, assign and deliver,
or grant options to purchase, all or any part of the Collateral, or any
interest therein, at any public or private sale, without demand of
performance, advertisement or notice of intention to sell or of the time
or place of sale or adjournment thereof or to redeem or otherwise (all of
which are hereby waived by each Pledgor), for cash, on credit or for other
property, for immediate or future delivery without any assumption of
credit risk, and for such price or prices and on such terms as the Pledgee
in its absolute discretion may determine, provided that at least 10 days'
notice of the time and place of any such sale shall be given to the
relevant Pledgor; each purchaser at any such sale shall hold the property
so sold absolutely free from any claim or right on the part of any
Pledgor, and each Pledgor hereby waives and releases to the fullest extent
permitted by law any right or equity of redemption with respect to the
Collateral, whether before or after sale hereunder, all rights, if any, of
marshaling the Collateral and any other security for the Secured
Obligations or otherwise, and all rights, if any, of stay and/or appraisal
which it now has or may at any time in the future have under rule of law
or statute now existing or hereafter enacted; at any such sale, unless
prohibited by applicable law, the Pledgee on behalf of all Secured
Creditors (or certain of them) may bid for and purchase (by bidding in
Secured Obligations or otherwise) all or any part of the Collateral so
sold free from any such right or equity of redemption; and neither the
Pledgee nor any Secured Creditor shall be liable for failure to collect or
realize upon any or all of the Collateral or for any delay in so doing nor
shall it be under any obligation to take any action whatsoever with regard
thereto.
8. REMEDIES CUMULATIVE; PLEDGEE TO ACT FOR SECURED CREDITORS.
8.1. Remedies Cumulative, etc. Each right, power and remedy of the Pledgee
provided for in this Agreement or any other Secured Debt Agreement now or
hereafter existing at law or in equity or by statute shall be cumulative and
concurrent and shall be in addition to every other such right, power or remedy.
The exercise or beginning of the exercise by the Pledgee of any one or more of
the rights, powers or remedies provided for in this Agreement or any other
Secured Debt Agreement or now or hereafter existing at law or in equity or by
statute or otherwise shall not preclude the simultaneous or later exercise by
the Pledgee or any Secured Creditor of all such other rights, powers or
remedies, and no failure or delay on the part of the Pledgee or any Secured
Creditor to exercise any such right, power or remedy shall operate as a waiver
thereof. Unless otherwise required by the Credit Documents, no notice to or
demand upon any Pledgor in any case shall entitle it to any other or further
notice or demand in similar other circumstances or constitute a waiver of any of
the rights of the Pledgee or any other Secured Creditor to any other further
action in any circumstances without demand or notice.
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8.2. Pledgee to Act on Behalf of Secured Creditors. The Secured Creditors
agree by their acceptance of the benefits hereof that this Agreement may be
enforced on their behalf only by the action of the Pledgee, acting upon the
instructions of the Required Lenders (or, after all Credit Document Obligations
have been paid in full, instructions of the holders of at least the majority of
the outstanding Designated Hedge Obligations) and that no other Secured Creditor
shall have any right individually to seek to enforce or to enforce this
Agreement or to realize upon the security to be granted hereby, it being
understood and agreed that such rights and remedies may be exercised by the
Pledgee, for the benefit of the Secured Creditors, upon the terms of this
Agreement.
9. APPLICATION OF PROCEEDS.
(a) All moneys collected by the Pledgee upon any sale or other disposition
of the Collateral pursuant to the terms of this Agreement, together with all
other moneys received by the Pledgee hereunder, shall be applied to the Secured
Obligations owed to the Collateral Agent and the other Secured Creditors as
provided in section 10.3 of the Credit Agreement.
(b) All payments required to be made to the (i) Lenders hereunder shall be
made to the Administrative Agent for the account of the respective Lenders and
(ii) Designated Hedge Creditors hereunder shall be made to the paying agent
under the applicable Designated Hedge Agreement or, in the case of Designated
Hedge Agreements without a paying agent, directly to the applicable Designated
Hedge Creditor.
(c) It is understood and agreed that each Pledgor shall remain liable to
the extent of any deficiency between (x) the amount of the proceeds of the
Collateral applied pursuant to clause (i) of section 9(a) and (y) the aggregate
outstanding amount of the Secured Obligations.
10. PURCHASERS OF COLLATERAL.
Upon any sale of the Collateral by the Pledgee hereunder (whether by
virtue of the power of sale herein granted, pursuant to judicial process or
otherwise), the receipt of the Pledgee or 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 Pledgee or such
officer or be answerable in any way for the misapplication or nonapplication
thereof.
11. INDEMNITY.
Each Pledgor jointly and severally agrees (i) to indemnify and hold
harmless the Pledgee and the Secured Creditors from and against any and all
claims, demands, losses, judgments and liabilities (including liabilities for
penalties) of whatsoever kind or nature, and (ii) to reimburse the Pledgee and
the Secured Creditors for all reasonable costs and expenses, including
reasonable attorneys' fees, growing out of or resulting from this Agreement or
the exercise by the Pledgee of any right or remedy granted to it hereunder or
under any other Secured Debt Agreement except, with respect to clauses (i) and
(ii) above, for those arising from the Pledgee's gross negligence or willful
misconduct. In no event shall the Pledgee be liable, in the absence of gross
negligence or willful misconduct on its part, for any matter or thing in
connection with this Agreement other than to account for moneys or other
property actually received by it in accordance with the terms hereof or thereof.
If and to the extent that the obligations of each Pledgor under this section 11
are unenforceable for any reason, each Pledgor hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law.
12. FURTHER ASSURANCES; ETC.
12.1. Further Assurances. Each Pledgor agrees that it will join with the
Pledgee in executing and, at the Pledgor's own expense, file and refile under
the Uniform Commercial Code such financing statements, continuation statements
and other documents in such offices as the Pledgee may deem reasonably necessary
or appropriate and wherever required or permitted by law in order to perfect and
preserve the Pledgee's security interest in the Collateral hereunder and hereby
authorizes the Pledgee to file financing statements and amendments thereto
relative to all or any part of the Collateral without the signature of such
Pledgor where permitted by law, and agrees to do such further acts and things
and to execute and deliver to the Pledgee such additional conveyances,
assignments, agreements and instruments as the Pledgee may reasonably require or
deem advisable to carry into effect the purposes of this Agreement or to further
assure and confirm unto the Pledgee its rights, powers and remedies hereunder or
thereunder.
12.2. Pledges of Stock of Foreign Corporations; and Pledges of Equity
Interests in Pledged Entities Which are Foreign Entities. In the case of the
pledge hereunder of any Stock issued by a Foreign Corporation or the pledge of
Equity Interests
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in any Pledged Entity organized under the laws of a jurisdiction located outside
the United States of America, the applicable Pledgor will promptly execute and
deliver to the Collateral Agent a separate pledge document covering such Stock
or Equity Interests, conforming to the requirements of the law in which the
Foreign Corporation or Pledged Entity is organized and satisfactory to the
Collateral Agent, together with an opinion of local counsel as to the perfection
of the security interest provided for therein, whereupon the collateral covered
thereby shall be deemed released from this Agreement and no shall longer be
Collateral hereunder.
13. THE PLEDGEE AS AGENT.
The Pledgee will hold in accordance with this Agreement all items of the
Collateral at any time received under this Agreement. It is expressly understood
and agreed that the obligations of the Pledgee as holder of the Collateral and
interests therein and with respect to the disposition thereof, and otherwise
under this Agreement, are only those expressly set forth in this Agreement. The
Pledgee shall act hereunder on the terms and conditions set forth herein and in
section 11 of the Credit Agreement.
14. TRANSFER BY THE PLEDGORS.
No Pledgor will sell or otherwise dispose of, grant any option with
respect to, or mortgage, pledge or otherwise encumber any of the Collateral or
any interest therein (except in accordance with the terms of this Agreement and
the Credit Documents).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS.
(a) Each Pledgor represents, warrants and covenants that:
(i) it is the legal, beneficial and record owner of, and has
good and marketable title to, all Securities pledged by it
hereunder, subject to no pledge, lien, mortgage, hypothecation,
security interest, charge, option or other encumbrance whatsoever,
except the liens and security interests created by this Agreement;
(ii) it has full power, authority and legal right to pledge
all the Pledged Securities pledged by it pursuant to this Agreement;
(iii) all the shares of the Pledged Stock have been duly and
validly issued and are fully paid and nonassessable;
(iv) to such Pledgor's knowledge, each of the Intercompany
and Third Party Notes, when executed by the obligor thereof and
pledged by such Pledgor hereunder, will be the legal, valid and
binding obligation of the obligor thereof, enforceable in accordance
with its terms;
(v) it will defend the Pledgee's right, title and interest
in and to the Equity Interests and in and to the Collateral pledged
by it pursuant hereto or in which it has granted a security interest
pursuant hereto against the claims and demands of all other persons
whomsoever, and such Pledgor covenants and agrees that it will have
like title to and right to pledge any other property at any time
hereafter pledged to the Pledgee as Collateral hereunder and will
likewise defend the right thereto and security interest therein of
the Pledgee;
(vi) it is the legal and beneficial owner of and has good
title to its Equity Interests and has good title to all of the other
Collateral pledged by it pursuant hereto or in which it has granted
a security interest pursuant hereto, free and clear of all claims,
pledges, liens, encumbrances and security interests of every nature
whatsoever, except such as are created pursuant to this Agreement
and any Permitted Liens, and has the unqualified right to pledge and
grant a security interest in the same as herein provided without the
consent of any other person, firm, association or entity which has
not been obtained;
(vii) it has corporate or other organizational power,
authority and legal right to pledge the Equity Interests pledged by
it pursuant to this Agreement and such Equity Interest has been
validly acquired and is fully paid for and is duly and validly
pledged hereunder;
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(viii) it is not in default in the payment of any portion of
any mandatory capital contribution, if any, required to be made
under any partnership agreement or limited liability company
agreement to which such Pledgor is a party, and such Pledgor is not
in violation of any other material provisions of any partnership
agreement or limited liability company agreement to which such
Pledgor is a party, or otherwise in default or violation thereunder,
no Equity Interest is subject to any defense, offset or
counterclaim, nor have any of the foregoing been asserted or alleged
against such Pledgor by any person with respect thereto and as of
the Initial Borrowing Date, there are no certificates, instruments,
documents or other writings (other than the partnership agreements,
limited liability company agreements, and certificates, if any,
delivered to the Collateral Agent) which evidence any Equity
Interest of such Pledgor;
(ix) the pledge and assignment of the Equity Interests
pursuant to this Agreement, together with the relevant filings,
consents or recordings (which filings and recordings have been made
or obtained), creates a valid, perfected and continuing first
security interest in such Equity Interests and the proceeds thereof,
subject to no prior lien or encumbrance or to any agreement
purporting to grant to any third party a lien or encumbrance on the
property or assets of such Pledgor which would include the
Collateral;
(x) there are no currently effective financing statements
under the UCC covering any property which is now or hereafter may be
included in the Collateral and such Pledgor will, without the prior
written consent of the Pledgee, execute and, until the Termination
Date (as hereinafter defined), there will not ever be on file in any
public office any enforceable financing statement or statements
covering any or all of the Collateral, except financing statements
filed or to be filed in favor of the Pledgee as secured party;
(xi) it shall give the Pledgee prompt notice of any written
claim relating to the Collateral and shall deliver to the Pledgee a
copy of each other demand, notice or document received by it which
may adversely affect the Pledgee's interest in the Collateral
promptly upon, but in any event within 10 days after, such Pledgor's
receipt thereof;
(xii) it shall not withdraw as a partner or member of any
Pledged Entity, or file or pursue or take any action which may,
directly or indirectly, cause a dissolution or liquidation of or
with respect to any Pledged Entity or seek a partition of any
property of any Pledged Entity, except as permitted by the Credit
Agreement; and
(xiii) a notice in the form set forth in Annex D attached
hereto and by this reference made a part hereof (such notice the
"Notice of Pledge"), appropriately completed, notifying each Pledged
Entity of the existence of this Agreement and a certified copy of
this Agreement have been delivered by such Pledgor to the relevant
Pledged Entity, and such Pledgor has received and delivered to the
Pledgee an acknowledgment in the form set forth in Annex D attached
hereto (such acknowledgment, the "Pledged Entity Acknowledgment"),
duly executed by the relevant Pledged Entity.
(b) Each Pledgor covenants and agrees that it will defend the Pledgee's
right, title and security interest in and to the Collateral (including the
proceeds thereof) against the claims and demands of all persons whomsoever.
(c) Each Pledgor covenants and agrees that it will take no action which
would violate or be inconsistent with any of the terms of any Secured Debt
Agreement or which would have the effect of impairing the position or interests
of the Pledgee or any Secured Creditor under any Secured Debt Agreement except
as permitted by the Credit Agreement.
16. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC.
The obligations of each Pledgor under this Agreement shall be absolute and
unconditional and shall remain in full force and effect without regard to, and
shall not be released, suspended, discharged, terminated or otherwise affected
by, any circumstance or occurrence whatsoever, including, without limitation:
(a) any lack of validity or enforceability of the Credit Agreement,
the Notes, any other Credit Document, any Designated Hedge Agreement, or
any other agreement or instrument relating thereto;
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(b) any renewal, extension, amendment or modification of, or
addition or supplement to, or any waiver, consent, extension, indulgence
or other action or inaction under or in respect of, the Credit Agreement,
the Notes, any other Credit Document, or any Designated Hedge Agreement,
or any other agreement or instrument relating thereto, including, without
limitation, any increase in the Secured Obligations resulting from the
extension of additional credit to the Borrower or any of its Subsidiaries
or otherwise;
(c) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Secured
Obligations;
(d) any manner of application of collateral, or proceeds thereof, to
all or any of the Secured Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Secured Obligations or
any other assets of the Borrower or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of the Borrower or any of its Subsidiaries;
(f) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to
the Borrower or any of its Subsidiaries or Affiliates, or any action taken
with respect to this Agreement by any trustee or receiver, or by any
court, in any such proceeding, whether or not a Pledgor shall have notice
or knowledge of any of the foregoing; or
(g) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, a Pledgor as a guarantor or
surety for the Secured Obligations.
This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by the Collateral Agent, the Administrative Agent or
any Secured Creditor upon the insolvency, bankruptcy or reorganization of the
Borrower or any of its Subsidiaries or Affiliates or otherwise, all as though
such payment had not been made.
17. TERMINATION; RELEASE.
(a) After the Termination Date (as defined below), this Agreement shall
terminate (provided that all indemnities set forth herein including, without
limitation, in section 11 hereof shall survive any such termination) and the
Pledgee, at the request and expense of the relevant Pledgor, will execute and
deliver to the relevant Pledgor a proper instrument or instruments acknowledging
the satisfaction and termination of this Agreement as provided above, and will
duly assign, transfer and deliver to the relevant Pledgor (without recourse and
without any representation or warranty) such of the Collateral as may be in the
possession of the Pledgee and as has not theretofore been sold or otherwise
applied or released pursuant to this Agreement, together with any moneys at the
time held by the Pledgee hereunder. As used in this Agreement, "Termination
Date" shall mean the date upon which the Total Commitment and all Designated
Hedge Agreements have been terminated, no Letter of Credit nor Note under the
Credit Agreement is outstanding and all other Secured Obligations have been paid
in full.
(b) In the event that any part of the Collateral is sold in connection
with a sale permitted by section 9.2 of the Credit Agreement or is otherwise
released at the direction of the Required Lenders (or all the Lenders if
required by section 12.12 of the Credit Agreement), and the proceeds of such
sale or sales or from such release are to be applied in accordance with the
terms of the Credit Agreement to the extent required to be so applied, the
Pledgee, at the request and expense of such Pledgor will release such Collateral
from this Agreement, and will duly assign, transfer and deliver to such Pledgor
(without recourse and without any representation or warranty) such of the
Collateral as is then being (or has been) so sold or released and as may be in
possession of the Pledgee and has not theretofore been released pursuant to this
Agreement.
(c) At any time that a Pledgor desires that Collateral be released as
provided in the foregoing section 17(a) or (b), it shall deliver to the Pledgee
a certificate signed by an executive officer stating that the release of the
respective Collateral is permitted pursuant to section 17(a) or (b). The Pledgee
shall have no liability whatsoever to any Secured Creditor as the result of any
release of Collateral by it as permitted by this section 17.
(d) Certain Collateral shall be automatically released from this Agreement
as provided in section 12.2.
10
<PAGE>
18. NOTICES, ETC.
All notices and other communications hereunder shall be in writing and
shall be delivered or mailed by first class mail postage prepaid, addressed:
(i) if to any Pledgor, at its address specified in or pursuant to
the Subsidiary Guaranty;
(ii) if to the Pledgee, at:
National City Bank,
as Administrative Agent
National City Center
127 Public Square
Cleveland, Ohio 44114
Attn.: Agent Services
Fax No.: (216) 575-2481;
with copies to:
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Attn.: John W. Sager, Esq.
Tel. No.: (216) 586-7228
Fax No.: (216) 579-0212
(ii) if to any Lender (other than the Pledgee), at such address as
such Lender shall have specified in the Credit Agreement;
(iii) if to any Designated Hedge Creditor, at such address as such
Designated Hedge Creditor shall have specified in writing to the Pledgors
and the Pledgee;
or at such address as shall have been furnished in writing by any person
described above to the party required to give notice hereunder.
19. WAIVER; AMENDMENT.
None of the terms and conditions of this Agreement may be changed, waived,
modified or varied in any manner whatsoever unless in writing duly signed by
each Pledgor and the Pledgee (with the consent of the Required Lenders or, to
the extent required by section 12.12 of the Credit Agreement, all of the
Lenders); provided, however, that no such change, waiver, modification or
variance shall be made to section 9 hereof or this section 20 without the
consent of each Secured Creditor adversely affected thereby, provided further,
that any change, waiver, modification or variance affecting the rights and
benefits of a single Class of Secured Creditors (and not all Secured Creditors
in a like or similar manner) shall require the written consent of the Requisite
Creditors of such Class of Secured Creditors. For the purpose of this Agreement,
the term "Class" shall mean each class of Secured Creditors, i.e., whether (x)
the Lenders as holders of the Credit Document Obligations or (y) the Designated
Hedge Creditors as holders of the Designated Hedge Obligations. For the purpose
of this Agreement, the term "Requisite Creditors" of any Class shall mean each
of (x) with respect to each of the Credit Document Obligations, the Required
Lenders and (y) with respect to the Designated Hedge Obligations, the holders of
at least 51% of all obligations outstanding from time to time under the
Designated Hedge Agreements.
20. PLEDGEE NOT BOUND.
(a) Nothing herein shall be construed to make the Pledgee liable as a
general partner or limited partner of any Pledged Entity or a shareholder of any
corporation, and the Pledgee by virtue of this Agreement or otherwise (except as
referred to in the following sentence) shall not have any of the duties,
obligations or liabilities of a general partner or limited partner of any
Pledged Entity or a stockholder of any corporation. The parties hereto
11
<PAGE>
expressly agree that, unless the Pledgee shall become the absolute owner of a
Equity Interest or Stock pursuant hereto, this Agreement shall not be construed
as creating a partnership or joint venture among the Pledgee and/or a Pledgor.
(b) Except as provided in the last sentence of section 20(a), the Pledgee,
by accepting this Agreement, did not intend to become a general partner, limited
partner or member of any Pledged Entity or a shareholder of any corporation or
otherwise be deemed to be a co-venturer with respect to any Pledgor or any
Pledged Entity or a shareholder of any corporation either before or after an
Event of Default shall have occurred. The Pledgee shall have only those powers
set forth herein and shall assume none of the duties, obligations or liabilities
of a general partner or limited partner of any Pledged Entity or of a Pledgor.
(c) The Pledgee shall not be obligated to perform or discharge any
obligation of a Pledgor as a result of the collateral assignment hereby
effected.
(d) The acceptance by the Pledgee of this Agreement, with all the rights,
powers, privileges and authority so created, shall not at any time or in any
event obligate the Pledgee to appear in or defend any action or proceeding
relating to the Collateral to which it is not a party, or to take any action
hereunder or thereunder, or to expend any money or incur any expenses or perform
or discharge any obligation, duty or liability under the Collateral.
21. PLEDGE OF HI-STAT STOCK.
Notwithstanding anything to the contrary contained herein, the pledge by
the Borrower of the shares of Hi-Stat identified in Annex A hereto, and the
Borrower's representations, warranties, covenants and obligations contained
herein with respect thereto, shall not be effective until 12:01 A.M. on January
1, 1999.
22. MISCELLANEOUS.
This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect, subject to release
and/or termination as set forth in section 12.2 and 17, (ii) be binding upon
each Pledgor, its successors and assigns; provided, however, that no Pledgor
shall assign any of its rights or obligations hereunder without the prior
written consent of the Pledgee (with the prior written consent of the Required
Lenders or to the extent required by section 12.12 of the Credit Agreement, all
of the Lenders), and (iii) inure, together with the rights and remedies of the
Pledgee hereunder, to the benefit of the Pledgee, the Secured Creditors and
their respective successors, transferees and assigns. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF OHIO. The
headings of the several sections and subsections in this Agreement are for
purposes of reference only and shall not limit or define the meaning hereof.
This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.
In the event that any provision of this Agreement shall prove to be invalid or
unenforceable, such provision shall be deemed to be severable from the other
provisions of this Agreement which shall remain binding on all parties hereto.
23. WAIVER OF JURY TRIAL.
EACH PLEDGOR AND THE PLEDGEE EACH HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
* * *
12
<PAGE>
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.
STONERIDGE, INC.,
as a Pledgor
By: __________________________________
Vice President--Finance
and Chief Financial Officer
NATIONAL CITY BANK,
as Collateral Agent, as Pledgee
By: __________________________________
Vice President
13
<PAGE>
ANNEX A
to
Pledge Agreement
LIST OF PLEDGED STOCK
<TABLE>
<CAPTION>
=======================================================================================================
Name of Type Number
Pledgor Issuing of of Certificate Percentage
Corporation Shares Shares No. Owned/Pledged
=======================================================================================================
<S> <C> <C> <C> <C> <C>
Stoneridge, Inc. Alphabet de Mexico * * 99.5% / 65.00%
- -------------------------------------------------------------------------------------------------------
Stoneridge, Inc. TED de Mexico * * 99.5% / 65.00%
- -------------------------------------------------------------------------------------------------------
Stoneridge, Inc. Berifors AB * * 100% / 65.00%
- -------------------------------------------------------------------------------------------------------
Stoneridge, Inc. Berifors Production AB * * 100% / 65.00%
- -------------------------------------------------------------------------------------------------------
Stoneridge, Inc. Bernt & Stern AB * * 100% / 65.00%
- -------------------------------------------------------------------------------------------------------
Stoneridge, Inc. Hi-Stat Manufacturing Co., common stock 300 100% / 100%
Inc.
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
=======================================================================================================
</TABLE>
- ----------
o Certificates for shares to be delivered reasonably promptly following
execution and delivery of this Agreement. Also please refer to section
12.2 of this Agreement.
<PAGE>
ANNEX B
to
Pledge Agreement
LIST OF INTERCOMPANY AND THIRD PARTY NOTES
================================================================================
Issuer Payee Principal Amount Interest Rate Maturity Date
================================================================================
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
<PAGE>
ANNEX C
to
Pledge Agreement
LIST OF PLEDGED ENTITIES
================================================================================
NAME OF PLEDGED ENTITY TYPE OF ORGANIZATION
================================================================================
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
<PAGE>
ANNEX D
to
Pledge Agreement
PLEDGE NOTICE
[Letterhead of Pledgor]
[Date]
TO: [NAME OF PLEDGED ENTITY]
Notice is hereby given that, pursuant to a Pledge Agreement (a true and
correct copy of which is attached hereto), dated as of December 30, 1998 (as
amended, modified or supplemented from time to time in accordance with the terms
thereof, the "Pledge Agreement"), among the pledgors party thereto, including
the undersigned (the "Pledgor") and National City Bank, as Collateral Agent, as
Pledgee (herein, together with its successors and assigns in such capacity, the
"Pledgee") for the Secured Creditors described therein, the Pledgor has pledged
and assigned to the Pledgee for the benefit of the Secured Creditors, and
granted to the Pledgee for the benefit of the Secured Creditors a continuing
security interest in, all right, title and interest of the Pledgor, whether now
existing or hereafter arising or acquired, as a [limited] [general] [partner]
[member] in [NAME OF PLEDGED ENTITY] (the "Pledged Entity"), and in, to and
under the [TITLE OF APPLICABLE AGREEMENT] (the "Governing Agreement"),
including, without limitation:
(i) all the capital of the Pledged Entity and the Pledgor's
interest in all profits, losses and other distributions to which the
Pledgor shall at any time be entitled in respect of such [partnership]
[membership] interest;
(ii) all other payments due or to become due to the Pledgor in
respect of such [partnership] [membership] interest, whether under the
Governing Agreement or otherwise, whether as contractual obligations,
damages, insurance proceeds or otherwise;
(iii) all of its claims, rights, powers, privileges, authority,
options, security interest, liens and remedies, if any, under the
Governing Agreement or at law or otherwise in respect of such
[partnership] [membership] interest;
(iv) all present and future claims, if any, of the Pledgor against
the Pledged Entity for moneys loaned or advanced, for services rendered or
otherwise;
(v) all of the Pledgor's rights under the Governing Agreement or
at law to exercise and enforce every right, power, remedy, authority,
option and privilege of the Pledgor relating to the [partnership]
[membership] interest, including any power to terminate, cancel or modify
the Governing Agreement, to execute any instruments and to take any and
all other action on behalf of and in the name of the Pledgor in respect of
the Equity Interest and the Pledged Entity, to make determinations, to
exercise any election (including, but not limited, election of remedies)
or option or to give or receive any notice, consent, amendment, waiver or
approval, together with full power and authority to demand, receive,
enforce, collect or receipt for any of the foregoing or to enforce or
execute any checks, or other instruments or orders, to file any claims and
to take any action in connection with any of the foregoing;
(vi) all other property hereafter delivered in substitution for or
in addition to any of the foregoing, all certificates and instruments
representing or evidencing such other property and all cash, securities,
interest, dividends, rights and other property at any time and from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all thereof; and
(vii) to the extent not otherwise included, all proceeds of any or
all of the foregoing.
Pursuant to the Pledge Agreement, the Pledged Entity is hereby authorized
and directed to register the Pledgor's pledge to the Pledgee on behalf of the
Secured Creditors of the interest of the Pledgor on the Pledged Entity's books.
<PAGE>
The Pledgor and the Pledged Entity each hereby consents, notwithstanding
anything to the contrary contained in the Governing Agreement or any other
agreement for the benefit of the Pledgor or the Pledged Entity relating thereto,
to (i) the grant by any other Pledgor of a security interest to the Pledgee in
its Equity Interest, its interest in the Governing Agreement and its other
rights and interests relating thereto, as described above, pursuant to the
Pledge Agreement; and (ii) any sale, transfer or other disposition by the
Pledgee of any Equity Interest of the Pledgee or any other Pledgor any or other
rights or interests in connection with the foreclosure of such security interest
or the exercise of any other remedies available to the Pledgee under or in
connection with the Pledge Agreement in respect thereof.
The Pledgor hereby requests the Pledged Entity to indicate the Pledged
Entity's acceptance of this Notice and consent to and agreement with its terms
and provisions by signing a copy hereof where indicated on the attached page and
returning the same to the Pledgee on behalf of the Secured Creditors.
[NAME OF PLEDGOR]
By:______________________________________
Title:
2
<PAGE>
ACKNOWLEDGMENT
[NAME OF PLEDGED ENTITY] (the "Pledged Entity") hereby (i) acknowledges
receipt of a copy of the assignment by [NAME OF PLEDGOR] (the "Pledgor") of its
interest under the [TITLE OF APPLICABLE AGREEMENT] (the "Governing Agreement")
pursuant to the terms of the Pledge Agreement, dated as of December 30, 1998 (as
amended, modified or supplemented from time to time in accordance with the terms
thereof, the "Pledge Agreement"), among the Pledgors party thereto, including
the Pledgor, and National City Bank, as Collateral Agent, as Pledgee (herein,
together with its successors and assigns, the "Pledgee") on behalf of the
Secured Creditors described therein; (ii) confirms its agreement to all of the
terms and provisions of the letter to which this acknowledgment is attached; and
(iii) confirms the registration of the Pledgor's pledge of its interest to the
Pledgee on behalf of the Secured Creditors on the Pledged Entity's books.
Dated: ____________, 199__
[NAME OF PLEDGED ENTITY]
By: ____________________________________
Title:
3
<PAGE>
EXHIBIT C-6
-----------------------------------
FORM OF
CLOSING DATE MORTGAGE
(Boston, Massachusetts)
-----------------------------------
<PAGE>
================================================================================
STONERIDGE, INC.
as the Mortgagor
To
NATIONAL CITY BANK
as the Collateral Agent
----------------------------
DEED OF FIRST MORTGAGE,
ASSIGNMENT OF LEASES
AND
SECURITY AGREEMENT
(Total Indebtedness Not to Exceed $500,000,000)
---------------------------
Relating to Property Located at Boston, Massachusetts
================================================================================
<PAGE>
DEED OF FIRST MORTGAGE, ASSIGNMENT OF LEASES AND
SECURITY AGREEMENT
(Total Indebtedness Not to Exceed $500,000,000)
THIS DEED OF FIRST MORTGAGE, ASSIGNMENT OF LEASES AND SECURITY AGREEMENT,
dated as of December 30, 1998 (as amended, modified, or supplemented from time
to time, "this Mortgage"), by (i) STONERIDGE, INC., an Ohio corporation
(hereinafter, together with its successors and assigns, called the "Borrower" or
the "Mortgagor") which is duly qualified to transact business in the
jurisdiction in which the real property referred to below is located, whose
address is 9400 East Market Street, Warren, Ohio 44484, in favor of (ii)
NATIONAL CITY BANK, a national banking association, as collateral agent under
the Credit Agreement referred to below (herein, together with its successors and
assigns in such capacity, the "Collateral Agent"), whose address is 1900 East
Ninth Street, Cleveland, Ohio 44114, for the benefit of the Secured Creditors
(as defined below):
PRELIMINARY STATEMENTS:
(A) Except as otherwise defined herein, terms used herein and defined in
the Credit Agreement (as defined below) shall be used herein as therein defined.
(B) The Mortgagor claims title to the Land (as hereinafter defined)
through an instrument recorded in Volume ____, Page _____ et seq. of the
official real estate records of _____ County, Massachusetts.
(C) This Mortgage is made pursuant to the Credit Agreement, dated as of
the date hereof (herein, as amended or otherwise modified, restated or replaced
from time to time, the "Credit Agreement"), among the Borrower, the financial
institutions named as lenders therein (herein, together with their successors
and assigns, the "Lenders"), the other Agents named therein, and National City
Bank, as the Administrative Agent for the Lenders under the Credit Agreement,
providing, among other things, for loans or advances or other extensions of
credit to or for the benefit of the Borrower of up to $425,000,000, with such
loans or advances being evidenced by promissory notes (the "Notes", such term to
include all notes and other securities issued in exchange therefor or in
replacement thereof).
(D) The Borrower or any of its Subsidiaries may from time to time be party
to one or more Designated Hedge Agreements (as defined in the Credit Agreement).
Any institution that participates, and in each case their subsequent assigns, as
a counterparty to any Designated Hedge Agreement (collectively, the "Designated
Hedge Creditors"; and the Designated Hedge Creditors together with the Agents
and the Lenders, collectively the "Secured Creditors"), shall benefit hereunder
as herein provided.
(E) Pursuant to the Subsidiary Guaranty, each Subsidiary Guarantor has
jointly and severally guaranteed to the Secured Creditors the payment when due
of the Guaranteed Obligations (as defined in the Subsidiary Guaranty).
(F) It is a condition precedent to the making of Loans and the issuance
of, and participation in, Letters of Credit under the Credit Agreement that the
Mortgagor shall have executed and delivered to the Collateral Agent this
Mortgage.
(G) The Mortgagor desires to execute this Mortgage to satisfy the
condition described in the preceding paragraph.
(H) The execution and delivery of this Mortgage has been duly authorized
by the Mortgagor, and all things necessary to make this Mortgage a valid,
binding and legal instrument according to its terms, have been done and
performed.
NOW, THEREFORE, in consideration of the sum of $1.00, and other good and
valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, received to the Mortgagor's full satisfaction from the
Collateral Agent, and in consideration of the payments or loans or advances or
other credit facilities made or to be made hereafter to or for the benefit of
the Borrower by the Lenders, the Mortgagor DOES HEREBY grant, bargain, sell,
mortgage, warrant, convey, alien, remise, release, assign, transfer, grant a
security interest in, set over, deliver, confirm and convey unto the Collateral
Agent, upon the terms and conditions of this Mortgage, with power of sale,
including STATUTORY POWER OF SALE (as provided in Chapter 183, ss. 21 of the
Massachusetts General Laws), and with MORTGAGE COVENANTS (as provided in Chapter
183, ss. 19 of the Massachusetts General Laws), each and all of the real
properties and interests in real properties, and further grants to the
Collateral Agent
<PAGE>
a security interest in and to all other property and interests, described in the
following Granting Clauses (all of such property and interests hereinafter
collectively called the "Premises").
GRANTING CLAUSES
All the estate, right, title and interest of the Mortgagor in, to
and under, or derived from:
GRANTING CLAUSE FIRST
Land
All those certain lot(s), piece(s) or parcel(s) of land more
particularly described in Exhibit 1 attached hereto and made a part
hereof, as the description of the same may be amended or supplemented from
time to time and all and the reversions or remainders in and to said land
and the tenements, hereditaments, easements, rights-of-way or use, rights
(including alley, drainage, crop, timber and cutting, agricultural,
horticultural, mineral, water, oil and gas rights), privileges, royalties
and appurtenances to said land, now or hereafter belonging or in anywise
appertaining thereto, including any such right, title, interest in, to or
under any agreement or right granting, conveying or creating, for the
benefit of said land, any easement, right or license in any way affecting
other property and in, to or under any streets, ways, alleys, vaults,
gores or strips of land adjoining said land or any parcel thereof, or in
or to the air space over said land, all rights of ingress and egress by
motor vehicles to parking facilities on or within said land, and all
claims or demands of the Mortgagor, either at law or in equity, in
possession or expectancy, of, in or to the same (all of the foregoing
hereinafter collectively called the "Land").
GRANTING CLAUSE SECOND
Improvements
All buildings, structures and other improvements now or hereafter
located on the Land, and all appurtenances and additions thereto and
betterments, renewals, substitutions and replacements thereof, owned by
the Mortgagor or in which the Mortgagor has or shall acquire an interest
(all of the foregoing hereinafter collectively called the "Improvements").
GRANTING CLAUSE THIRD
Fixtures and Equipment
Without limitation of the foregoing Granting Clauses, (i) all
"fixtures" (as defined in the Uniform Commercial Code of the State in
which the Premises are located), (ii) all "equipment" (as defined in the
Uniform Commercial Code of the State in which the Premises are located),
(iii) all other fixtures, chattels and articles of personal property
(other than "inventory", as defined in the Uniform Commercial Code of the
State in which the Premises are located), and (iv) all additions,
betterments, improvements, modifications, renewals, alterations, repairs,
attachments, parts, accessories, appurtenances, substitutions and
replacements of or to any of the foregoing, in each case now or hereafter
owned or otherwise acquired by the Mortgagor or in which the Mortgagor now
has or shall hereafter acquire an interest, wherever situated, and now or
hereafter located on, attached or affixed to, contained in or used in
connection with, the properties referred to in Granting Clause First or
Granting Clause Second, or placed on any part thereof, though not attached
or affixed thereto, including, without limitation, all of the following:
(1) all automobiles, trucks and trailers, and all other automotive or
transportation vehicles and equipment; (2) all machines and machinery and
other apparatus; (3) all engines and motors; (4) all lathes; (5) all drill
presses, punch presses and other presses; (6) all sorting, assembly,
installation and production line equipment; (7) all robotic equipment,
devices and systems; (8) all boilers, turbines, stokers, smelters,
electric arc furnaces, ladle arc furnaces, reheat furnaces and/or other
furnaces and related equipment; (9) all rolling mills, coilers and cooling
beds; (10) all stamping, cutting, drilling, jigging, bending, shaping,
fitting, molding, milling, injection, sizing, patterning, fastening,
connecting, heat treating, galvanizing, painting, embossing, coloring,
identification, measuring, monitoring, quality assurance, finishing and/or
processing machines, equipment and systems; (11) all fabrication equipment
and systems; (12) all packaging, receiving and shipping equipment and
systems; (13) all scales; (14) all counting, measurement, testing,
monitoring, calibration and analytical devices,
2
<PAGE>
equipment and systems; (15) all design and quality assurance or control
equipment (including robotics); (16) all welding equipment and systems;
(17) all soldering equipment and systems; (18) all hydraulic equipment and
hydraulics; (19) all tooling, dies, jigs, casts, molds, patterns, models,
stencils and drawings; (20) all generators, transformers, switches,
substations, pumps, compressors, dynamos and batteries; (21) all cranes
and hoists; (22) all conveyors; (23) all computers; (24) all computer
monitors, drives, servers, and other hardware and software (whether owned,
leased or licensed); (25) all computing equipment; (26) all electronic
data processing equipment; (27) all operating and maintenance manuals, as
well as all plans, specifications and operating instructions, for all
equipment and fixtures; (28) all gas, oil kerosene and other fuels; (29)
all industrial gases and containers therefor; (30) all consumable
supplies; (31) all spare parts, replacement parts, appliances, utensils,
tools, implements and fittings; (32) all repair and maintenance equipment;
(33) all tanks (whether free standing, anchored or otherwise installed in
place, readily movable, above or below ground, or otherwise), drums,
vessels, containers, racks, pallets, skids, bins and shelves or shelving;
(34) all forklifts, liftrucks, pallet movers, dollies, carts, and other
materials handling equipment; (35) all shipping containers; (36) all rail
cars; (37) all pipelines, pipes, ducts and conduits; (38) all wiring and
all electric or other power surge or interruption protection equipment;
(39) all water and other towers; (40) all call systems, dispatch systems,
public address systems, switchboards, telephones, mobile phones, beepers,
two-way (or more) radios, aerials, antennas and other telecommunication,
teleconferencing (including video) and other communication equipment; (41)
all desks, tables, cabinets, bureaus, credenzas, chairs, benches, couches,
coat racks, safes and vaults, photocopy machines, facsimile, telex and
cable machines, postage meters, televisions, video machines, radios,
coffee, soft drink, beverage and fast food machines, lockers, bulletin
boards, photographs, works of art and other decorations, lawn ornaments,
signs, plants and shrubbery (both indoor and outdoor), sinks, basins,
stoves, ranges, microwaves, ovens, dishwashers, refrigerators, ice makers,
cafeteria equipment and supplies, wash tubs, showers, partitions, screens,
awnings, shades, blinds, curtains, draperies, carpets, rugs, furniture and
furnishings; (42) all heating, lighting, power, plumbing, water,
ventilating, cooling, air conditioning, refrigerating, gas, oil, steam,
electrical, solar, waste, incinerating and/or compacting plants, systems,
fixtures and equipment; (43) all elevators and escalators; (44) all vacuum
and other cleaning systems including window washing equipment; (45) all
lawn, parking and sidewalk maintenance equipment, including lawn mowers,
leaf blowers, snow blowers, plows and vacuums; (46) all dust and noise
suppression systems and equipment; (47) all air, water and other pollution
control systems and equipment; (48) all safety systems and equipment; (49)
all office supplies; (50) all industrial hygiene equipment and supplies;
(51) all security alarms and cameras, and all identification, timekeeping,
access and surveillance systems and equipment; and (52) all sprinkler
systems and other fire detection, prevention and extinguishing apparatus.
If the Lien of this Mortgage in any item of Fixtures and Equipment is
subject to a purchase money or other security interest therein which is
permitted under this Mortgage, then all of the right, title and interest
of the Mortgagor in and to such item is hereby assigned to the Collateral
Agent, together with the benefits of all deposits and payments now or
hereafter made thereon by or on behalf of the Mortgagor (all of the
foregoing property, rights and interests described in this Granting Clause
Third, collectively the "Fixtures and Equipment").
GRANTING CLAUSE FOURTH
Permits, Licenses and Franchises and General Intangibles
Without limitation of the foregoing Granting Clauses, all permits,
licenses, franchises, privileges, grants, consents, exemptions, concession
agreements, development rights, building variances, certificates of
occupancy or operation, and other authorizations or approvals, now or
hereafter issued or granted by any governmental authority with respect to
the ownership of the Premises, or with respect to the ownership,
construction or operation of the Premises, and all "general intangibles"
(as defined in the Uniform Commercial Code of the State in which the
Premises are located) relating in any way to the Premises or the use or
operation thereof, together with and any renewals or extensions of any of
the foregoing, provided that the lien of this Mortgage shall not apply to,
and there shall be excluded from the ambit of this Granting Clause Fourth,
any of the foregoing permits, licenses, franchises, privileges, grants,
consents, exemptions, concession agreements, development rights, building
variances, certificates of occupancy or operation, and other
authorizations or approvals and any other "general intangibles", which, by
their express terms or by reason of applicable law would become void or
voidable if mortgaged, pledged or assigned by the Mortgagor hereunder.
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GRANTING CLAUSE FIFTH
Leasehold and Other Contractual Interests
All the leases, lettings and licenses of, and all other contracts
and agreements affecting, the Land, the Improvements, the Fixtures and
Equipment and/or any other property or rights mortgaged or otherwise
conveyed or encumbered hereby, or any part thereof, now or hereafter
entered into, and all amendments, modifications, supplements, additions,
extensions and renewals thereof, and all right, title and interest of the
Mortgagor thereunder, including cash and securities deposited thereunder,
the right to receive and collect the rents, income, proceeds, issues and
profits payable thereunder and the rights to enforce, whether at law or in
equity or by any other means, all provisions and options thereof.
GRANTING CLAUSE SIXTH
Assignment of Rents, Income and Profits
All rents, income, profits, proceeds and any and all cash collateral
to be derived from the Premises, or the use and occupation thereof, or
under any contract or bond relating to the construction or reconstruction
of the Premises, including all rents, royalties, revenue, rights, deposits
(including security deposits) and benefits accruing to the Mortgagor under
all leases now or hereafter covering the Premises, whether before or after
foreclosure or during the full period of redemption, if any, and the right
to receive the same and apply them against the Secured Obligations or
against the Mortgagor's other obligations hereunder, together with all
contracts, bonds, leases and other documents evidencing the same now or
hereafter in effect and all rights of the Mortgagor thereunder. Nothing
contained in the preceding sentence shall be construed to bind the
Collateral Agent to the performance of any of the provisions of any such
contract, bond, lease or other document or otherwise impose any obligation
upon the Collateral Agent (including any liability under a covenant of
quiet enjoyment contained in any lease or under applicable law in the
event that any tenant shall have been joined as a party defendant in any
action to foreclose this Mortgage and shall have been foreclosed of all
right, title and interest and all equity of redemption in the Premises),
except that the Collateral Agent shall be accountable for any money
actually received pursuant to such assignment. The assignment of said
rents, income, profits, proceeds and cash collateral, and of the aforesaid
rights with respect thereto and to the contracts, bonds, leases and other
documents evidencing the same is intended to be and is an absolute present
assignment from the Mortgagor to the Collateral Agent and not merely the
passing of a security interest.
GRANTING CLAUSE SEVENTH
Other and After Acquired Property
Any and all moneys and other property, of every kind and nature,
which may from time to time be subjected to the lien hereof by the
Mortgagor, through a supplement to this Mortgage or otherwise, or by any
other person or entity, or which may come into the possession of or be
subject to the control of the Collateral Agent, it being the intention and
agreement of the Mortgagor that all property hereafter acquired or
constructed by the Mortgagor shall forthwith upon acquisition or
construction thereof by the Mortgagor and without any act or deed by the
Mortgagor be subject to the lien and security interest of this Mortgage as
if such property were now owned by the Mortgagor and were specifically
described in this Mortgage and conveyed or encumbered hereby or pursuant
hereto, and the Collateral Agent is hereby authorized to receive any and
all such property as and for additional security hereunder.
GRANTING CLAUSE EIGHTH
Proceeds and Awards
All unearned premiums, accrued, accruing or to accrue under
insurance policies now or hereafter obtained by the Mortgagor, all
proceeds of the conversion, voluntary or involuntary, of any of the
property described in these Granting Clauses into cash or other liquidated
claims, including proceeds of hazard, title and other insurance, and all
claims, entitlements, judgments, damages, awards, settlements and
compensation (including interest thereon) heretofore or hereafter accruing
or made to or for the benefit of the present and all subsequent owners of
the Land, the Improvements, the Fixtures and Equipment and/or any other
property or rights encumbered or conveyed hereby for any injury to or
decrease in the value thereof for any reason, or by any
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governmental or other lawful authority for the taking by eminent domain,
condemnation or otherwise of all or any part thereof, including awards for
any change of grade of streets.
TO HAVE AND TO HOLD the Premises unto the Collateral Agent, its successors
and assigns, forever, for the purposes and uses herein set forth, until such
time as all of the Secured Obligations which are secured hereby shall have been
paid in full.
The property, interests and rights hereinabove mentioned, whether owned in
fee or held under lease, is hereinafter referred to as the "Real Property
Collateral" to the extent that the same is realty, and as the "Personal Property
Collateral" to the extent that the same is personalty. The Real Property and the
Personal Property Collateral collectively constitute the Premises.
It is also agreed that if any of the property herein mortgaged is of a
nature so that a security interest therein can be perfected under the Uniform
Commercial Code, this Mortgage shall constitute a security agreement and the
Mortgagor agrees to execute, deliver and file or refile any financing statement,
continuation statement, or other instruments the Collateral Agent may require
from time to time to perfect or renew such security interest under the Uniform
Commercial Code. This Mortgage shall be effective as a financing statement filed
as a fixture filing with respect to all fixtures included within the Premises
and is to be filed for record in the Office of the County Recorder or County
Clerk where the Premises (including such fixtures) are situated. The mailing
address of the Mortgagor is set forth at the beginning of this Mortgage and the
address of the Collateral Agent from which information concerning the security
interest may be obtained is the address of the Collateral Agent set forth at the
beginning of this Mortgage.
If the Mortgagor hereafter acquires any real property, or any interest in
real property, in addition to the Real Property Collateral, which is adjacent
to, or contiguous with, the Land, or otherwise is intended or required to be
subjected to the lien of this Mortgage, the Mortgagor will subject the same to
the lien of this Mortgage by instrument supplemental hereto, satisfactory in
form and substance to the Collateral Agent.
The conditions of this Mortgage are such that the Mortgagor has executed
and delivered this Mortgage for the purpose of securing the performance of its
covenants and agreements contained herein and in any agreement or instrument
made with respect to any Secured Obligations secured hereby and to secure the
payment when due (whether at the stated maturity, by acceleration or otherwise)
of the following indebtedness, liabilities and obligations (including
obligations which, but for the automatic stay under section 362(a) of the
Bankruptcy Code, would become due), now existing or hereafter arising
(collectively, the "Secured Obligations"), for the benefit of the Secured
Creditors, although not necessarily in the order of priority set forth below:
(a) $100,000,000 aggregate principal amount of Revolving Loans made or
to be made to the Mortgagor under the Credit Agreement, maturing on
or before December 31, 2003, with interest thereon as provided in
the Credit Agreement;
(b) $150,000,000 aggregate principal amount of Term A Loans made or to
be made to the Mortgagor under the Credit Agreement, maturing on or
before December 31, 2003, with interest thereon as provided in the
Credit Agreement;
(c) $175,000,000 aggregate principal amount of Term B Loans made or to
be made to the Mortgagor under the Credit Agreement, maturing on or
before December 31, 2005, with interest thereon as provided in the
Credit Agreement;
(d) all reimbursement obligations in respect of Letters of Credit issued
under the Credit Agreement in an aggregate amount not exceeding
$10,000,000;
(e) all obligations and liabilities of the Mortgagor or any Subsidiary
of the Mortgagor under or in connection with any Designated Hedge
Agreement, now or hereafter entered into with or assigned to any of
the Secured Creditors (all such obligations and liabilities
described in this clause (e) being herein collectively called the
"Designated Hedge Obligations");
(f) all advances or disbursements of the Collateral Agent or any Secured
Creditor with respect to the Premises for the payment of taxes,
levies, assessments, insurance, insurance premiums or costs incurred
in the protection of the Premises, as provided in section 5301.233
of the Ohio Revised Code, and without limitation of the preceding
provisions of this clause (f), all other sums expended or advanced
by or on behalf of the Collateral Agent pursuant to any term or
provision of this Mortgage or any other agreement or instrument
relating to or securing any of the foregoing for the purpose of
protecting or preserving the Premises or the priority of the Lien of
this Mortgage, including, all advances or disbursements of the
Collateral Agent for the payment of taxes, levies, assessments,
insurance, insurance premiums or costs incurred in the protection of
the Premises; and
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(g) all other liabilities, obligations and indebtedness of the
Mortgagor, its Subsidiaries and Affiliates, and/or any other Credit
Party, incurred under or arising out of or in connection with the
Credit Agreement, the Notes, the other Credit Documents and the
Designated Hedge Agreements, and the due performance and compliance
by the Mortgagor, its Subsidiaries and Affiliates, and any other
Credit Party with all of the terms, conditions, covenants and
agreements contained in the Credit Agreement, the Notes, such other
Credit Documents and the Designated Hedge Agreements;
but only to the extent that the total unpaid Secured Obligations, exclusive of
liabilities and obligations referred to in the preceding clause (f), in the
aggregate and exclusive of the interest on the Secured Obligations, does not
exceed the maximum amount specified in this Mortgage, which is $500,000,000, and
as security for the payment of the Secured Obligations, the Mortgagor has
granted to the Collateral Agent hereunder a lien against the Premises. In
accordance with the provisions of the Notes, the whole of the principal sum of
the Loans which are then unpaid may be declared and become due and payable upon
the occurrence of an Event of Default under the Credit Agreement. This Mortgage
is given for the purpose of creating a lien on the Premises and expressly is to
secure the Secured Obligations, for the benefit of the Secured Creditors,
including but not limited to future advances and other extensions of credit,
whether such advances or other extensions of credit are obligatory or to be made
at the option of the Secured Creditors (or any of them) or otherwise, to the
same extent as if such future advances or other extensions of credit were made
on the date of the execution of this Mortgage. The total amount of the Secured
Obligations may decrease or increase from time to time and the Lenders or other
Secured Creditors may hereafter, as described in this Mortgage, at any time
after this Mortgage is delivered to the county recorder or county clerk for
record, make additional loans, advances or other extensions of credit to or for
the benefit of the Mortgagor or any of its Subsidiaries or Affiliates; provided,
however, that the total unpaid balance of the Secured Obligations which are
secured at any one time by this Mortgage, shall not exceed $500,000,000, plus
interest thereon and any advances or disbursements made for the payment of
taxes, levies or insurance on the Premises with interest on such disbursements.
Any such further loans or advances or other extensions of credit, with interest,
shall be secured by this Mortgage.
PROVIDED, NEVERTHELESS, that if the Secured Obligations which are secured
hereby shall be paid in full when due, and if all of the provisions of the
Credit Agreement, the Notes, the other Credit Documents and the Designated Hedge
Agreements shall be timely performed and observed, then the lien of this
Mortgage and the interest of the Collateral Agent in the Premises shall be
released at the cost of the Mortgagor, but this Mortgage shall otherwise, except
as specifically provided herein, remain in full force and effect.
The Mortgagor, intending to bind its successors and assigns, hereby
covenants and agrees with the Collateral Agent, its successors and assigns, for
its benefit and for the benefit of the Secured Creditors, as follows:
SECTION 1. PAYMENT OF SECURED OBLIGATIONS,
PERFORMANCE OF OBLIGATIONS, ETC.
(a) Payment of Secured Obligations. The Mortgagor shall pay or cause to be
paid the principal of and interest on the Loans and all other amounts included
in the Secured Obligations in accordance with the terms and provisions of the
Credit Agreement, the Notes, the other Credit Documents and the Designated Hedge
Agreements.
(b) Performance of Other Obligations. The Mortgagor will keep and perform
or cause to be kept and performed all covenants, agreements, conditions and
stipulations contained in the other Credit Documents or the Designated Hedge
Agreements which are binding on or otherwise applicable to the Mortgagor.
(c) Waiver of Acceptance, etc. The Mortgagor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Secured Obligations and this Mortgage and any requirement that the Collateral
Agent or any Secured Creditor protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any right or take
any action against any other person, or any collateral, or pursue any other
remedy in the power of the Collateral Agent or any other Secured Creditor.
SECTION 2. TITLE TO PREMISES, PROTECTION OF LIEN OF MORTGAGE, ETC.
(a) Title to Premises, etc. The Mortgagor represents to and covenants with
the Collateral Agent, its successors and assigns, that (i) the Mortgagor has and
will have good, marketable and insurable fee simple title to the Land, free and
clear of all liens, charges and encumbrances of every kind and character,
subject only to Permitted Encumbrances; (ii) the Mortgagor has and will have
full corporate power and lawful authority to encumber and convey the Premises as
provided herein; (iii) the Mortgagor owns and will own all of the Fixtures and
Equipment, free and clear of all liens, charges and encumbrances of every
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kind and character, subject only to Permitted Encumbrances; (iv) this Mortgage
is and will remain a valid and enforceable first priority lien on, and first
priority security interest in, the Premises, subject only to Permitted
Encumbrances; and (v) the Mortgagor hereby warrants and will forever warrant and
defend such title and the validity, enforceability and priority of the lien and
security interest hereof against the claims of all persons and parties
whomsoever.
(b) Protection of Lien; Defense of Action. If the lien, security interest,
validity or priority of this Mortgage, or if title or any of the rights of the
Mortgagor or the Collateral Agent in or to the Premises, shall be endangered or
questioned, or shall be attacked directly or indirectly, or if any action or
proceeding is commenced, to which action or proceeding the Collateral Agent is
made a party by reason of the execution of this Mortgage, or in which it becomes
necessary to defend or uphold the lien of this Mortgage, or the priority thereof
or possession of the Premises, or otherwise to perfect the security hereunder,
or if any suit, action, legal proceeding or dispute of any kind is commenced in
which the Collateral Agent is made a party or appears as party plaintiff or
defendant, affecting the interest created herein, or the Premises, including,
but not limited to, bankruptcy, probate and administration proceedings, other
foreclosure proceedings or any condemnation action involving the Premises, then
the Mortgagor will promptly notify the Collateral Agent thereof (unless the
Collateral Agent has initiated or been served with process in respect thereof)
and the Mortgagor will diligently endeavor to cure any defect which may be
developed or claimed, and will take all necessary and proper steps for the
defense of such action or proceeding, including the employment of counsel, the
prosecution or defense of litigation and, subject to the Collateral Agent's
approval, the compromise, release or discharge of any and all adverse claims.
The Collateral Agent (whether or not named as a party to such actions or
proceedings), is hereby authorized and empowered (but shall not be obligated) to
take such additional steps as it may deem necessary or proper for the
prosecution, defense and control of any such action or proceeding or the
protection of the lien, security interest, validity or priority of this Mortgage
or of such title or rights, including the employment of counsel, the prosecution
or defense of litigation, the compromise, release or discharge of such adverse
claims, the purchase of any tax title and the removal of prior liens and
security interests. The Mortgagor shall, on demand, reimburse the Collateral
Agent for all expenses (including attorneys' fees and disbursements) incurred by
it in connection with the foregoing matters, and the person incurring such
expenses shall be subrogated to all rights of the person receiving such payment.
All such costs and expenses of the Collateral Agent, until reimbursed by the
Mortgagor, shall be part of the Secured Obligations and shall be deemed to be
secured by this Mortgage.
SECTION 3. TAXES AND IMPOSITIONS.
(a) Taxes on the Premises. The Mortgagor will pay when due, and before any
penalty, interest or cost for non-payment thereof may be added thereto, all
taxes, assessments, vault, water and sewer rents, rates, charges and
assessments, levies, permits, inspection and license fees and other governmental
and quasi-governmental charges, general and special, ordinary and extraordinary,
foreseen and unforeseen, heretofore or hereafter assessed, levied or otherwise
imposed against or upon, or which may become a Lien upon, the Premises or any
part thereof or any appurtenance thereto, or the revenues, rents, issues, income
and profits of the Premises or arising in respect of the occupancy, use or
possession thereof (collectively, "Impositions"). The Mortgagor will also pay
any penalty, interest or cost for non-payment of Impositions which may become
due and payable, and such penalties, interest or cost shall be included within
the term Impositions.
(b) Receipts. Unless the Mortgagor is making monthly deposits with the
Collateral Agent pursuant to section 4, or unless the Collateral Agent otherwise
directs, the Mortgagor will furnish to the Collateral Agent, upon its request,
proof of payment at the time same is made, and thereafter, upon receipt,
validated receipts showing payment in full of all Impositions.
(c) Income and Other Taxes. The Mortgagor will promptly pay all income,
franchise and other taxes owing by the Mortgagor, and any stamp taxes which may
be required to be paid in connection with the Secured Obligations, this Mortgage
or any other Credit Document or Designated Hedge Agreement, together with any
interest or penalties thereon, and the Mortgagor will pay any and all taxes,
charges, filing, registration and recording fees, excises and levies imposed
upon the Collateral Agent, the Administrative Agent or the Secured Creditors by
reason of execution of the Credit Agreement, the Notes, this Mortgage, the other
Credit Documents or any Designated Hedge Agreement, or ownership of this
Mortgage or any mortgage supplemental hereto, any security instrument with
respect to any Fixtures and Equipment or any instrument of further assurance.
(d) Brundage Clause. In the event of the enactment after the date hereof
of any law in the State in which the Premises are located or any other
governmental entity deducting from the value of the Premises for the purpose of
taxation any lien or security interest thereon, or changing in any way the laws
for the taxation of mortgages, deeds of trust or other liens or debts secured
thereby, or the manner of collection of such taxes, so as to affect this
Mortgage, the Secured Obligations, the Collateral Agent, the Administrative
Agent or any of the Secured Creditors, then, and in such event, the
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Mortgagor shall, on demand, pay to (or reimburse) the Collateral Agent, the
Administrative Agent or such Secured Creditors, the amount of all taxes,
assessments, charges or liens for which the Collateral Agent, the Administrative
Agent or any of the Secured Creditors is or may be liable as a result thereof,
provided that if any such payment or reimbursement shall be unlawful or would
constitute usury or render the Secured Obligations wholly or partially usurious
under applicable law, then the Collateral Agent may, at its option, declare the
Secured Obligations immediately due and payable or require the Mortgagor to pay
or reimburse the Collateral Agent, the Administrative Agent or any of the
Secured Creditors for payment of the lawful and non-usurious portion thereof.
(e) Right to Contest Impositions. Notwithstanding anything to the contrary
contained in this section 3, the Mortgagor shall have the right to protest
and/or contest any Imposition imposed upon the Premises or any part thereof,
provided that and so long as (1) the same is done by the Mortgagor upon prior
written notice to the Collateral Agent and at the Mortgagor's sole cost and
expense and with due diligence and continuity so as to resolve such protest
and/or contest as promptly as possible; (2) neither the Premises nor any part
thereof is or will be in immediate danger of being forfeited or lost by reason
of such protest or contest; (3) if required by the Collateral Agent, the
Mortgagor shall establish a reserve or other security with the Collateral Agent
in an amount and in form and substance satisfactory to the Collateral Agent for
application to the cost of curing or removing the same from record pursuant to
clause (4) below; (4) in any event, each such contest shall be concluded and the
tax assessment, penalties, interest and costs shall be paid prior to the date
such judgment becomes final or any writ or order is issued under which the
Premises may be sold pursuant to such judgment; and (5) the Mortgagor agrees in
writing to indemnify and hold harmless the Collateral Agent and the Secured
Creditors from and against any and all expenses, claims, demands, obligations,
liabilities, suits, actions and penalties upon or arising out of such protest
and/or contest. Pending the determination of any such protest or contest, the
Mortgagor shall not be obligated to pay any such Imposition unless nonpayment of
such Imposition will subject the Premises or any part thereof to sale or other
liability or forfeit by reason of non-payment. In addition, to the extent that
the same may be permitted by law, the Mortgagor shall have the right to apply
for the conversion of any Imposition to make the same payable in annual
installments over a period of years, and upon such conversion the Mortgagor
shall be obligated only to pay and discharge said periodic installments as
required by this section 3.
SECTION 4. TAX AND INSURANCE DEPOSITS.
(a) Amount of Deposits. To further secure the Mortgagor's obligations
under sections 3 and 10, but not in lieu thereof, the Collateral Agent, at its
option, following the occurrence and during the continuance of an Event of
Default, may require that the Mortgagor deposit with the Collateral Agent,
monthly on the first day of each month, a sum equal to one-twelfth (1/12) of the
estimated annual cost of all Impositions levied on the Premises, and a sum equal
to one-twelfth (1/12) of the estimated annual insurance premiums required to
keep the Improvements and the Fixtures and Equipment insured as required by
section 10 hereof, and the Mortgagor shall, accordingly, make such deposits. In
addition, if required by the Collateral Agent, the Mortgagor shall also deposit
with the Collateral Agent a sum of money which, together with the aforesaid
monthly installments, will be sufficient to make each of said payments of
Impositions and premiums, at least 10 days before such payments are due. If the
amount of any such payments is not ascertainable at the time any such deposit is
required to be made, the deposit shall be made on the basis of the Collateral
Agent's estimate thereof, and, when such amount is fixed for the then-current
year, the Mortgagor shall promptly deposit any deficiency with the Collateral
Agent.
(b) Use of Deposits. All funds so deposited shall, until so applied,
constitute additional security for the Secured Obligations, shall be held by the
Collateral Agent in a separate account, without interest (except to the extent
required under applicable law), may be commingled with other funds of the
Collateral Agent and, provided that no Event of Default shall have occurred and
be continuing hereunder, shall be applied in payment of the aforesaid amounts
prior to their becoming delinquent, to the extent that Collateral Agent shall
have such funds on hand, and provided, further, that the Collateral Agent shall
have no obligation to use said funds to pay any installment of Impositions prior
to the last day on which payment thereof may be made without penalty or interest
or to pay an insurance premium prior to the due date thereof. It shall be the
Mortgagor's responsibility to furnish the Collateral Agent with bills or
invoices therefor in sufficient time to pay the same before any penalty or
interest attaches and before said policies of insurance lapse, and the
Collateral Agent shall have no responsibility for payment of the same in the
absence of such bills or invoices. If an Event of Default hereunder shall have
occurred and be continuing, or if any of the Secured Obligations shall have been
accelerated as provided in the Credit Agreement or any Designated Hedge
Agreement, all funds so deposited may, at the Collateral Agent's option, be
applied to the Secured Obligations in the order determined by the Collateral
Agent or to cure said Event of Default or as provided in this section.
(c) Transfer of Mortgage. Upon an assignment or other transfer of this
Mortgage, the Collateral Agent shall have the right to pay over the balance of
such deposits in its possession to the assignee or other successor, and the
Collateral Agent shall thereupon be completely released from all liability with
respect to such deposits and the Mortgagor or the owner of the Premises shall
look solely to the assignee or transferee with respect thereto. This provision
shall apply to every transfer of such deposits to a new assignee or transferee.
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(d) Transfer of Premises. A permissible transfer of record title to the
Premises shall automatically transfer to the new owner the beneficial interest
in any deposits under this section. Upon full payment and satisfaction of this
Mortgage or, at the Collateral Agent's option, at any prior time, the balance of
amounts deposited in the Collateral Agent's possession shall be paid over to the
record owner of the Premises, and no other person shall have any right or claim
thereto in any event.
(e) Depository. The Mortgagor agrees, at the Collateral Agent's request
and at the Mortgagor's expense, to make the aforesaid deposits with the
Collateral Agent or such service or financial institution as the Collateral
Agent may from time to time designate in lieu of the Collateral Agent.
SECTION 5. LIENS AND LIABILITIES.
(a) Discharge of Mechanic's Liens, etc. The Mortgagor will pay, bond or
otherwise discharge, from time to time when the same shall become due, all
lawful claims and demands of mechanics, materialmen, laborers and others which,
if unpaid, might result in, or permit the creation of, a lien on the Premises,
or on the revenues, rents, issues, income or profits arising therefrom and, in
general, the Mortgagor shall do, or cause to be done, at the Mortgagor's sole
cost and expense, everything necessary to fully preserve the lien, security
interest and priority of this Mortgage.
(b) Creation of Liens. The Mortgagor will not, without the Collateral
Agent's consent, create, place or permit to be created or placed, or through any
act or failure to act acquiesce in the placing of, or allow to remain, any deed
of trust, mortgage, voluntary or involuntary lien, whether statutory,
constitutional or contractual, security interest, encumbrance or charge, or
conditional sale or other title retention document, against or covering the
Premises, prior to, on a parity with or subordinate to the lien of this
Mortgage, other than the following ("Permitted Encumbrances"): (i) the lien of
this Mortgage; (ii) the Permitted Liens (as defined in the Credit Agreement);
and (iii) such other matters of record as may be described in Exhibit 2 or as to
which the Collateral Agent has otherwise specifically consented in writing. If
any of the foregoing, other than Permitted Encumbrances, becomes attached to the
Premises without such consent, the Mortgagor will promptly cause the same to be
discharged and released.
(c) No Consent of Collateral Agent to Liens to be Implied. Nothing in the
Credit Agreement, the Notes, this Mortgage, the other Credit Documents or any
Designated Hedge Agreement shall be deemed or construed in any way as
constituting the consent or request by the Collateral Agent, express or implied,
to any contractor, subcontractor, laborer, mechanic or materialman for the
performance of any labor or the furnishing of any material for any improvement,
construction, alteration or repair of the Premises.
(d) Right to Contest. Notwithstanding anything to the contrary contained
in this section 5, the Mortgagor shall have the right to contest in good faith
the validity of any such lien, encumbrance, charge or security interests,
provided that and so long as (1) the same is done by the Mortgagor upon prior
written notice to the Collateral Agent and at the Mortgagor's sole cost and
expense and with due diligence and continuity so as to resolve as promptly as
possible such question of validity; (2) neither the Premises nor any part
thereof will be in immediate danger of being forfeited or lost by reason of such
contest; (3) such contest shall not subject the Collateral Agent to prosecution
for a criminal offense or a claim for civil liability; (4) if required by the
Collateral Agent, the Mortgagor shall either bond such lien, encumbrance, charge
or security interest or establish a reserve or other security with the
Collateral Agent in an amount and in form and substance satisfactory to the
Collateral Agent for application towards the cost of curing or removing the same
from record pursuant to clause (5) below; (5) the Mortgagor shall thereafter
diligently proceed to cause such lien, encumbrance or charge to be removed and
discharged prior to the date the Premises is listed for an in rem action with
respect to such lien, encumbrance or charge or any writ or order is issued under
which the Premises may be sold pursuant to a final judgment; (6) the Mortgagor
agrees in writing to indemnify and hold harmless the Collateral Agent and the
Secured Creditors from and against any and all expenses, claims, demands,
obligations, liabilities, suits, actions and penalties upon or arising out of
such contest and (7) no Event of Default hereunder shall have occurred and be
continuing.
SECTION 6. TRANSFERS AND MERGERS; LEASES, ETC.
The Mortgagor shall not (i) sell, assign, transfer or otherwise dispose of
the Premises or any part thereof or interest therein, or (ii) merge or
consolidate with any other person, or (iii) lease all or any portion of the
Premises to any other person, except pursuant to a lease which is subject and
subordinate in all respects to this Mortgage, or (iv) enter into any contract or
agreement to do any of the foregoing, expressly including, without limitation,
any land contract, lease/purchase, lease/option or option agreement, except to
the extent permitted by, and in compliance with the requirements of, section 9.2
of the Credit Agreement.
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SECTION 7. MAINTENANCE; ALTERATIONS; REPAIR
OR RESTORATION OF LOSS OR DAMAGE
CAUSED BY CASUALTY; PREPAYMENT
UPON EVENT OF LOSS.
(a) Repair and Maintenance. The Mortgagor will operate and maintain the
Premises in good order, repair and operating condition, ordinary wear and tear
excepted, and will promptly make all necessary repairs, renewals, replacements,
additions and improvements to the Premises, interior and exterior, structural
and nonstructural, foreseen and unforeseen, required by law or any restrictive
covenant affecting the Premises or otherwise necessary so that the Premises will
at all times be in good operating condition, ordinary wear and tear excepted,
and fit and proper for the purposes for which it is used and operated at the
date hereof. The Mortgagor shall not in any event commit waste upon the Premises
or suffer waste to be committed thereon.
(b) Replacement of Fixtures and Equipment. The Mortgagor will keep the
Premises fully equipped and will replace all worn-out or obsolete Fixtures and
Equipment with Fixtures and Equipment comparable thereto when new, and will not,
without the Collateral Agent's consent, remove from the Premises any item of the
Fixtures and Equipment covered by this Mortgage unless (i) the same is replaced
by the Mortgagor with an item of equal suitability and value when new, owned by
the Mortgagor and subject to the lien and security interest of this Mortgage,
free and clear of any lien or security interest (other than Permitted
Encumbrances), or (ii) in the case of any such Fixtures and Equipment which is
obsolete and surplus to its needs, the same is disposed of in the ordinary
course of business and in compliance with section 9.2 of the Credit Agreement.
(c) Alterations of Improvements, etc. No buildings, structures or other
substantial Improvements on the Premises shall be altered in any material
respect or demolished or removed by the Mortgagor, provided that the Mortgagor
may make alterations and additions (including structural alterations) to the
Improvements if (i) such alterations do not materially reduce the value or
marketability of the Premises or the uses or utility of the Premises; or (ii)
such alterations are required by applicable law, rule or regulation.
(d) Event of Loss, etc. If the Improvements or the Fixtures and Equipment
suffer any damage or loss or are destroyed by fire, rain, storm, flood,
earthquake, or any other casualty, whether or not covered by insurance, the
Mortgagor will (i) if the same constitutes an Event of Loss requiring prepayment
of any of the Loans pursuant to section 5.2 of the Credit Agreement, so prepay
such Loans as provided in the Credit Agreement, or (ii) otherwise repair,
replace or restore the Improvements and/or Fixtures and Equipment to the
condition in which they are required to be maintained hereunder immediately
prior to such damage, loss or destruction
SECTION 8. COMPLIANCE WITH LAWS AND INSURANCE REQUIREMENTS, ETC.
(a) Compliance with Laws, etc. The Mortgagor covenants that the Premises
will at all times be constructed, installed, maintained and operated in
compliance with all applicable requirements of:
(i) all laws, rules, regulations, orders, authorizations, permits
and licenses of all governmental authorities, federal, state and local,
having jurisdiction over the Mortgagor, the Premises or any part thereof,
including, without limitation, (w) all Environmental Laws, (x) the
Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq., (y) the
Americans with Disabilities Act of 1990, and (z) all state and local laws
and ordinances related to handicapped access and all rules, regulations,
and orders issued pursuant thereto including, without limitation, the
Americans with Disabilities Act Accessibility Guidelines for Buildings and
Facilities (collectively as referred to in clause (y) and this clause (z),
"Access Laws"); and
(ii) all restrictive covenants affecting any portion or all of the
Real Property Collateral; .
other than those requirements (A) being contested in good faith by appropriate
proceedings, as to which adequate reserves are established to the extent
required under GAAP, and (B) the noncompliance with which would not have, and
which would not be reasonably expected to have, a Material Adverse Effect.
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(b) Alterations Affecting Compliance with Access Laws. Notwithstanding any
provisions set forth herein or in any other document regarding the Collateral
Agent's approval of alterations of the Real Property Collateral, the Mortgagor
shall not alter the Real Property Collateral in any manner which would increase
in any material respect the responsibilities of the Mortgagor for compliance
with the applicable Access Laws without the prior written approval of the
Collateral Agent. The foregoing shall apply to tenant improvements constructed
by the Mortgagor or by any of its tenants. The Collateral Agent may condition
any such approval upon receipt of a certificate of Access Law compliance from an
architect, engineer, or other person acceptable to the Collateral Agent.
(c) Notice of Violation of Access Laws. The Mortgagor does hereby agree to
give prompt notice to the Collateral Agent of the receipt by the Mortgagor of
any complaints related to violation of any Access Laws and of the commencement
of any proceedings or investigations which relate to compliance with applicable
Access Laws.
(d) Licenses and Permits, etc. The Mortgagor shall (i) observe and comply
with all conditions and requirements necessary to preserve and extend any and
all rights, licenses, permits (including but not limited to zoning variances,
special exceptions and non-conforming uses), privileges, franchises and
concessions which are applicable to the Premises or any part thereof or which
have been granted to or contracted for by the Mortgagor in connection with any
existing or presently contemplated use of the Premises, and (ii) obtain and keep
in full force and effect all necessary governmental and municipal approvals as
may be necessary from time to time to comply in all material respects with all
Environmental Laws, all Access Laws and other statutory or regulatory
requirements; except in any such case referred to in clause (i) or (ii) above
where the noncompliance would not have, and would not be reasonably expected to
have, a Material Adverse Effect.
(e) Flood Hazards; Utilities; Streets. The Mortgagor represents and
warrants that (i) the Premises are not located in an area identified by the
Secretary of Housing and Urban Development or a successor thereto as an area
having special flood hazards pursuant to the terms of the National Flood
Disaster Protection Act of 1973, as amended; (ii) the Premises are served by all
utilities required for the present use thereof; and (iii) all streets necessary
to serve the Premises for the use thereof as herein contemplated have been
completed and are serviceable and have been dedicated or accepted by the
appropriate governmental entities.
(f) Zoning; Title Matters. The Mortgagor will not (i) initiate or support
any zoning reclassification of the Premises, seek any variance under existing
zoning ordinances applicable to the Premises or use or permit the use of the
Premises in a manner which would result in such use becoming a non-conforming
use under applicable zoning ordinances, (ii) modify, amend or supplement any
Permitted Encumbrances, (iii) impose any restrictive covenants or encumbrances
upon the Premises, execute or file any subdivision plat affecting the Premises
or consent to the annexation of the Premises to any municipality or (iv) permit
or suffer the Premises to be used by the public or any person in such manner as
might make possible a claim of adverse usage or possession or of any implied
dedication or easement.
(g) Insurance Requirements. The Mortgagor shall observe and comply with
any and all conditions and requirements attached to or made a part of the
insurance relating to the Premises which is maintained in accordance with
section 10.
SECTION 9. ENVIRONMENTAL MATTERS.
(a) Without limitation of the provisions of section 8 hereof, the
Mortgagor hereby (i) reaffirms its representations contained in section 7.13 of
the Credit Agreement, (ii) covenants to perform and observe all of the terms and
provisions of the Credit Agreement relating to compliance by it with
Environmental Laws and notice by it and indemnification by it of Environmental
Claims, including, without limitation, the covenants contained in section 8.8 of
the Credit Agreement and the indemnification obligations contained in section
12.1 of the Credit Agreement; and (iii) agrees that all of the Secured Creditors
shall be considered Indemnitees as defined in section 12.1(g) of the Credit
Agreement.
(b) Any costs or expenses reasonably incurred by a person to be
indemnified hereunder for which the Mortgagor is responsible shall be paid to
the person to be indemnified on demand, and failing prompt reimbursement, shall
be added to the Secured Obligations and earn interest at the interest rate
provided in the last sentence of section 2.7(c) of the Credit Agreement, or such
lesser rate as is the maximum legally permissible rate of interest (the "Default
Rate"), until paid in full.
(c) The Mortgagor's representations, warranties, and obligations under
this section shall not be terminated, released, discharged, extinguished, or
otherwise affected by any foreclosure of any lien, indebtedness or obligation,
any satisfaction of the Secured Obligations or the release or discharge of the
Premises or any part thereof or any other action or thing, except and unless
such representations, warranties, and obligations are expressly
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released in writing by the Collateral Agent, which writing shall refer
particularly to this section. The provisions of this section may be enforced at
any time by any of the Secured Creditors, the Collateral Agent or any other
person entitled to be indemnified hereunder and, without limiting the foregoing,
shall survive the payment or other satisfaction by any means of the obligations
evidenced by the Notes and the release and discharge of this Mortgage, except in
the case of a specific written release by the Collateral Agent as to this
section, as referred to above.
SECTION 10. INSURANCE.
(a) Required Insurance. The Mortgagor will maintain insurance with
responsible companies in such amounts and against such risks as is usually
carried by owners of similar businesses and properties (and with such
deductibles and levels of self-insurance as are usually maintained by owners of
similar businesses and properties and as are consistent with the Mortgagor's
practices as of the date of the execution and delivery hereof), provided that in
any event the Mortgagor will maintain:
(i) All Risk Extended Coverage Insurance: insurance against loss or
damage covering the Improvements, the Fixtures and Equipment and all other
tangible personal property of the Mortgagor located on the Premises by
reason of any loss or damage by fire, storms, and other hazards, perils,
casualties and risks, including without limitation risks usually covered
by extended coverage policies issued in the jurisdiction in which the
Improvements are located, which insurance shall:
(A) name National City Bank, as Collateral Agent as an
additional insured and as loss payee,
(B) provide coverage in an amount not less than the greater of
(x) 100% of the replacement costs of the Improvements and the
Fixtures and Equipment, (y) the full insurable value of the
Improvements and the Fixtures and Equipment, and (z) the amount
applicable to the Improvements and the Fixtures and Equipment
necessary so that neither the Mortgagor (or any of its Affiliates)
or the Collateral Agent shall be considered or shall become a
co-insurer of any loss under such policy, and
(C) provide for a deductible or self-insurance retention in an
amount consistent with the Mortgagor's current practices or such
greater amount as is reasonably acceptable to the Collateral Agent;
(ii) Flood Insurance: if the area in which the Real Property
Collateral is located has been designated as flood prone or a flood risk
area, as defined by the Flood Disaster Protection Act of 1973, as amended,
flood insurance, which insurance shall:
(A) name National City Bank, as Collateral Agent as an
additional insured and as loss payee,
(B) provide coverage in an amount not less than the greater of
(x) 100% of the replacement costs of the Improvements and the
Fixtures and Equipment, (y) the full insurable value of the
Improvements and the Fixtures and Equipment, and (z) the amount
applicable to the Improvements and the Fixtures and Equipment
necessary so that neither the Mortgagor (or any of its Affiliates)
or the Collateral Agent shall be considered or shall become a
co-insurer of any loss under such policy; provided that if flood
insurance in the required amount is not available, flood insurance
shall be maintained in the maximum amount available;
(C) provide for a deductible or self-insurance retention of an
amount reasonably acceptable to the Collateral Agent; and
(D) comply with any additional requirements of the National
Flood Insurance Program as set forth in such Act;
(iii) Commercial General Liability Insurance: insurance against
claims for bodily injury, death or property damage occurring on, in or
about the Premises and any other facilities owned, leased or used by the
Mortgagor (including adjoining streets, sidewalks and waterways), which
insurance shall:
(A) name National City Bank, as Collateral Agent as an
additional insured,
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(B) provide coverage in an amount not less than $1,000,000 per
occurrence and $2,000,000 in the aggregate, plus umbrella coverage
of not less than $3,000,000; and
(C) provide for a deductible or self-insurance retention in an
amount consistent with the Mortgagor's current practices or such
greater amount as is reasonably acceptable to the Collateral Agent;
(iv) Workers' Compensation Insurance: insurance against claims for
injuries to or death of employees (including Employers' Liability
Insurance) to the extent required by applicable law;
(v) Business Interruption Insurance: insurance against loss of
operating income for a period of at least six months, occasioned by reason
of any peril affecting the operations of the Mortgagor; and
(vi) Other Insurance: such other and additional insurance, in such
amounts and with such coverages as are then customary for property similar
in use and located in the same state in which the Premises is located.
Such insurance shall be written by financially responsible companies selected by
the Mortgagor and having an A.M. Best rating of "A-" or better and being in a
financial size category of "VII" or larger, or by other companies acceptable to
the Collateral Agent, and (other than workers' compensation insurance) shall
name the Collateral Agent, as loss payee (in the case of insurance described in
items (i) and (ii)) or as an additional named insured (in the case of the
insurance described in items (iii), (v) and (vi) above), in each case as its
interests may appear. Each policy referred to in this section shall provide that
it will not be canceled or reduced or expire except after not less than 30 days'
written notice to the Collateral Agent and shall also provide that the interests
of the Collateral Agent shall not be invalidated by an act or negligence of the
Mortgagor or any person having an interest in any facility owned, leased or used
by the Mortgagor nor by occupancy or use of any facility owned, leased or used
by the Mortgagor for purposes more hazardous than permitted by such policy nor
by any foreclosure or other proceedings relating to any facility owned, leased
or used by the Mortgagor. The Mortgagor will advise the Collateral Agent
promptly of any policy cancellation, reduction or amendment. All of such
insurance shall be primary and non-contributing with any insurance which may be
carried by the Collateral Agent. All insurance policies, to the extent of its
interest, are to be for the benefit of and first payable in case of loss to the
Collateral Agent as first mortgagee without contribution. At or prior to the
time of the initial Borrowing by the Mortgagor, it will provide to the
Collateral Agent (x) certificates or endorsements naming the Collateral Agent as
an additional insured or loss payee with respect to the casualty and liability
insurance maintained as required hereby with respect to the Premises, and (y) if
requested to do so, copies of all insurance policies maintained by it as
required hereby. The Mortgagor shall deliver to the Collateral Agent
contemporaneously with the expiration or replacement of any policy of insurance
required to be maintained hereunder a certificate as to the new or renewal
policy.
(b) Proceeds of Insurance. All amounts recoverable under any policy of
casualty insurance are hereby assigned to the Collateral Agent. In the event of
a loss, and if an Event of Default has occurred and is continuing or if any
required prepayment of any of the Secured Obligations is required to be made at
such time or as a result thereof, the Collateral Agent is authorized and
empowered, at its option, to adjust or compromise any loss covered by any
insurance policies on the Premises, to collect and receive the proceeds
therefrom and, after deducting from such proceeds any expenses incurred by it in
the collection or handling thereof, to apply the net proceeds to the Secured
Obligations in accordance with the provisions of the Credit Agreement. If any
such net proceeds are not to be so applied, the Collateral Agent is authorized
to apply the net proceeds in any one or more of the following ways, subject to
the applicable provisions of the Credit Agreement: (i) use the same or any part
thereof to fulfill any of the covenants contained herein as the Collateral Agent
may determine; (ii) use the same or any part thereof to replace and restore the
Premises to a condition satisfactory to the Collateral Agent; or (iii) release
the same or any part thereof to the Mortgagor to cover the cost of repair or
restoration of the Improvements.
(c) Power of Attorney. The Collateral Agent is hereby irrevocably
appointed by the Mortgagor as attorney for the Mortgagor to assign any policy to
itself or its nominees in the event of the foreclosure of this Mortgage. In the
event of foreclosure of this Mortgage, or other transfer of title of the
Premises in lieu of foreclosure, all right, title and interest of the Mortgagor
in and to any insurance policies then in force shall pass to the purchaser or
grantee thereof.
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SECTION 11. CONDEMNATION.
(a) Condemnation. The Mortgagor will give the Collateral Agent immediate
notice of the actual or threatened commencement of any proceedings under eminent
domain affecting all or any part of the Premises or any easement therein or
appurtenance thereof, including severance and consequential damage and change in
grade of streets, and will deliver to the Collateral Agent copies of any and all
papers served in connection with any such proceedings. The Mortgagor agrees that
all awards heretofore or hereafter made by any public or quasi-public authority
to the present and all subsequent owners of the Premises by virtue of an
exercise of the right of eminent domain by such authority, including any award
for taking of title, possession or right of access to a public way, or for any
change of grade or streets affecting the Premises, are hereby assigned to the
Collateral Agent. If case of any such proceedings, and if an Event of Default
has occurred and is continuing or if any required prepayment of any of the
Secured Obligations is required to be made at such time or as a result thereof,
the Collateral Agent is authorized and empowered, at its option, to collect and
receive the proceeds of any such awards from the authorities making the same and
to give proper receipts therefor, and after deducting from such proceeds any
expenses incurred by the Collateral Agent in the collection or handling thereof,
to apply the net proceeds to the Secured Obligations in accordance with the
provisions of the Credit Agreement. If any such net proceeds are not to be so
applied, the Collateral Agent is authorized, at its option, to apply the net
proceeds in any one or more of the following ways, subject to the applicable
provisions of the Credit Agreement: (A) use the same or any part thereof to
fulfill any of the covenants contained herein as the Collateral Agent may
determine; (B) use the same or any part thereof to replace and restore the
Premises to a condition satisfactory to the Collateral Agent; or (C) release the
same or any part thereof to the Mortgagor to cover the cost of repair or
restoration of the Improvements.
(b) Further Assurances. The Mortgagor hereby covenants and agrees to and
with the Collateral Agent, upon the request of the Collateral Agent to make,
execute and deliver any and all assignments and other instruments sufficient for
the purpose of assigning all such awards to the Collateral Agent, free and clear
and discharged of any and all encumbrances of any kind or nature whatsoever
except as above stated.
(c) Installment Payment of Secured Obligations Not Impaired.
Notwithstanding any taking under the power of eminent domain, alteration of the
grade of any street, or other injury to or decrease in value of the Premises by
any public or quasi-public authority or corporation, the Mortgagor shall
continue to pay installments on the Secured Obligations owed by it and any
reduction in the principal sum resulting from the application by the Collateral
Agent of such award or payment as hereinafter set forth shall be deemed to take
effect only on the date of such receipt.
SECTION 12. RIGHT OF COLLATERAL AGENT TO MAKE PAYMENTS ON BEHALF OF
MORTGAGOR, ETC.
(a) Right of Collateral Agent to Make Payments, etc. In the event the
Mortgagor shall fail to comply with any or all of its covenants, agreements,
conditions and stipulations herein set forth, then the Collateral Agent shall
after notice to the Mortgagor be and hereby is authorized and empowered at its
option, but without legal obligation to do so, to pay or perform the same
without waiver of any other remedy. In addition, the Collateral Agent is
authorized and empowered at its option, but without legal obligation to do so,
upon not less than two business Days' prior notice to the Chief Financial
Officer of the Mortgagor, to enter, or have its agents enter, the Premises
whenever necessary for the purpose of inspecting the Premises and curing any
default hereunder. The Mortgagor agrees that the Collateral Agent shall
thereupon have a claim against the Mortgagor for all sums paid by the Collateral
Agent for such defaults so cured, together with a lien upon the Premises for the
sum so paid plus interest at the Default Rate.
(b) Collateral Agent Protected; Further Rights, etc. The Collateral Agent,
in making any payment herein and hereby authorized in the place and stead of the
Mortgagor (i) relating to taxes, assessments, water rates, sewer rentals and
other governmental or municipal charges, fines, impositions or liens asserted
against the Premises, may do so according to any bill, statement or estimate
procured from the appropriate public authority without inquiry into the validity
thereof; or (ii) relating to any adverse title, lien, statement of lien,
encumbrance, claim or charge, shall be the sole judge of the validity of same;
or (iii) otherwise relating to any purpose herein and hereby authorized, but not
enumerated in this section, may do so whenever, in its good faith judgment and
discretion, such payment shall seem necessary or desirable to protect the full
security intended to be created by this Mortgage. In connection with any such
payment, the Collateral Agent, at its option, may and is hereby authorized to
obtain a continuation report of title prepared by a title insurance company, the
cost and expenses of which shall be repayable by the Mortgagor upon demand and
shall be secured hereby.
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SECTION 13. SECURITY AGREEMENT PROVISIONS.
This Mortgage is hereby deemed to be as well a security agreement for the
purpose of creating hereby a security interest securing the Secured Obligations
in and to the Personal Property Collateral. Without derogating any of the
provisions of this Mortgage, the Mortgagor by this Mortgage:
(a) grants to the Collateral Agent a security interest in all of the
Mortgagor's right, title and interest in and to all Personal
Property Collateral, including, but not limited to, the items
referred to above, together with all additions, accessions and
substitutions and all similar property hereafter acquired and used
or obtained for use on, or in connection with, the Real Property
Collateral; the proceeds of the Personal Property Collateral are
intended to be secured hereby; provided, however, that such intent
shall never constitute an expressed or implied consent on the part
of the Collateral Agent to the sale of any or all Personal Property
Collateral except as specifically permitted under any of the
applicable provisions of this Mortgage or any of the other Credit
Documents;
(b) agrees that the security interest hereby granted by this Mortgage
shall secure the payment of the Secured Obligations;
(c) agrees not to sell, convey, mortgage or grant a security interest
in, or otherwise dispose of or encumber, any of the Personal
Property Collateral or any of the Mortgagor's right, title or
interest therein, except in compliance with the requirements of
section 9.2 of the Credit Agreement;
(d) agrees that if any of the Mortgagor's rights in the Personal
Property Collateral are voluntarily or involuntarily transferred,
whether by sale, creation of a security interest, attachment, levy,
garnishment or other judicial process, without the written consent
of the Collateral Agent, such transfer shall constitute a default by
the Mortgagor under the terms of this Mortgage;
(e) authorizes the Collateral Agent to file, in the jurisdiction where
this Mortgage will be given effect, financing statements covering
the Personal Property Collateral and at the request of the
Collateral Agent, the Mortgagor shall join the Collateral Agent in
executing one or more of such financing statements pursuant to the
Uniform Commercial Code in a form satisfactory to the Collateral
Agent and the Mortgagor shall pay the cost of filing the same in all
public offices at any time and from time to time wherever the
Collateral Agent deems filing or recording of any financing
statements or of this Mortgage to be desirable or necessary; and
(f) acknowledges that the Mortgagor, as of the date hereof, has joined
the Collateral Agent in the execution of one or more Uniform
Commercial Code financing statements to be filed to perfect the
security interest in the Personal Property created by this Mortgage.
SECTION 14. FILINGS AND RECORDINGS.
The Mortgagor agrees at all time to cause this Mortgage, and each
amendment or modification hereof or supplement hereto, and financing statements
covering personal property (and continuation statements in respect thereof), if
necessary or appropriate under the Uniform Commercial Code, as in effect in the
jurisdiction in which the Real Property Collateral is located, and all
assignments of leases, to be recorded, registered and filed, and kept recorded,
registered and filed, in such manner and in such places as appropriate, and
shall comply with all applicable statutes and regulations in order to establish,
preserve and protect the security and priority of this Mortgage, and such
assignments and the rights of the Collateral Agent thereunder. The Mortgagor
shall pay, or cause to be paid, all taxes, fees and other charges incurred in
connection with such recording, registration, filing and compliance.
SECTION 15. RIGHT OF SETOFF.
In addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
and during the continuance of an Event of Default, each Secured Creditor is
hereby authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Mortgagor or to any other person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by such Secured Creditor (including, without limitation,
by branches and agencies of such Secured Creditor wherever located) to or for
the credit or the account of the Mortgagor against and on account of the
obligations and liabilities of the Mortgagor to such Secured Creditor under the
Notes, any other Credit Documents or any Designated Hedge Agreement, including,
without limitation, all interests in Loans purchased by such Secured Creditor
pursuant to section 12.4(c) of the Credit Agreement, and all other claims of any
nature or description arising out of or connected with the Notes or any other
Credit Document or any
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Designated Hedge Agreement, irrespective of whether or not such Secured Creditor
shall have made any demand hereunder and although said Loans, liabilities or
claims, or any of them, shall be contingent or unmatured.
SECTION 16. EVENTS OF DEFAULT.
Any Event of Default under the Credit Agreement, any payment default by
the Borrower or any of its Subsidiaries under any Designated Hedge Agreement,
and/or any Event of Default relating to the Borrower or any of its Subsidiaries
under any Designated Hedge Agreement, shall constitute an Event of Default
("Event of Default") under this Mortgage.
SECTION 17. REMEDIES.
If an Event of Default, under and as defined in section 16 of this
Mortgage, has occurred and is continuing:
(a) The Collateral Agent, the Administrative Agent and the Secured
Creditors may exercise any one or more of the remedies specified in
section 10.2 of the Credit Agreement or otherwise available at law or in
equity.
(b) Without limitation of the foregoing or any of the other
provisions of this section 17, the Collateral Agent shall have, in
addition to all other rights and remedies hereunder, the STATUTORY POWER
OF SALE (as provided in Chapter 183, ss. 21 of the Massachusetts General
Laws).
(c) To the extent permitted by applicable law, the Collateral Agent
may enter upon the Premises or any portion thereof and may exclude the
Mortgagor therefrom; and having and holding the same, may use, operate,
manage, and control the Premises and conduct business in connection
therewith, including, without limitation the continuation of the
construction of the Improvements if not previously completed, either
personally or by its superintendents, managers, agents, servants,
attorneys or receivers; and upon every such entry, the Collateral Agent,
at the expense of the Mortgagor and from time to time, may maintain the
Premises and may insure and reinsure the same, as may seem to the
Collateral Agent to be necessary or advisable; and, at the expense of the
Mortgagor and from time to time, the Collateral Agent may make all
repairs, renewals, replacements, alterations, additions, betterments and
improvements thereto and thereon, as to the Collateral Agent may seem
necessary or advisable, and if the construction of the Improvements has
not been completed, may cause such construction to be continued to
completion or to such stage of completion as the Collateral Agent
considers necessary or advisable; and in every such case the Collateral
Agent shall have the right to carry on the construction thereof, enter
into, terminate, cancel and/or enforce contracts or leases related
thereto, manage and operate the Premises and carry on the business
thereof, and otherwise exercise all rights which the Mortgagor might
otherwise have with respect thereto, in the name of the Mortgagor or
otherwise, as the Collateral Agent shall deem best or advisable; and the
Collateral Agent shall be entitled to collect all rents, earnings,
revenues, issues, profits and income of the Premises, awards made for the
taking of or injury to the Premises through eminent domain or otherwise,
including awards or damages for change of grade, and also return premiums
or other payments upon insurance, and said rents, earnings, revenues,
issues, profits and income, awards, damages, premiums and payments are
hereby assigned to the Collateral Agent, and after deducting the expenses
and costs of conducting the business thereof and of all betterments,
additions, alterations, replacements, repairs and for taxes, assessments,
insurance and prior or other charges upon or with respect to the Premises
or any portion thereof, as well as just and reasonable compensations for
the services of all counsel, agents, employees, receivers and other
persons properly engaged or employed, the Collateral Agent shall apply the
proceeds as provided in section 18.
(d) To the extent permitted by applicable law, the Collateral Agent
is hereby authorized and empowered by the Mortgagor to sell the Premises
in such manner as may be prescribed by law, by advertisement and public
sale as provided by the laws of the jurisdiction in which the Real
Property Collateral is located, or to foreclose this Mortgage by judicial
proceedings and sell the Premises pursuant to such proceedings as
permitted by applicable law. The Mortgagor does hereby authorize the
Collateral Agent to sell the Premises together or in lots or parcels, as
to the Collateral Agent shall seem expedient, and to execute and deliver
to the purchaser or purchasers of such property good and sufficient deeds
thereof with covenants of general, special or limited warranty or such
other instruments of conveyance, assignment or transfer as the Collateral
Agent may deem appropriate. Payment of the purchase price to the
Collateral Agent shall satisfy the obligation of the purchaser at any such
sale therefor, and he shall not be bound to look after the application
thereof. The Collateral Agent shall cause notice of any such sale to be
mailed to the Mortgagor; but, except as otherwise provided by any
applicable provision of law, failure so to mail any such notice shall not
affect the validity of any such sale. If the Collateral Agent, acting on
behalf of any or all of the holders of the Notes or other Secured
Obligations,
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or any or all such holders acting on their own behalf, is the highest
bidder, the Collateral Agent or such holders, as the case may be, may
purchase at any sale or sales (whether statutory foreclosure or public
sale or sales conducted as hereinabove authorized) and may, in paying the
purchase price, turn in any of the Notes or other Secured Obligations held
by them, in lieu of cash, up to the entire amount owing thereunder,
whether for principal, interest or other amounts, which amount as so
designated as being turned over shall be considered distribution of the
proceeds of such sale. The provisions set forth above as to public sale or
sales in lieu of statutory foreclosure are not intended as an exclusive
method of foreclosure hereunder or to deprive the Collateral Agent of any
other legal or equitable remedy available under applicable law.
Accordingly, it is specifically agreed that the remedy of foreclosure by
the Collateral Agent's sale as hereinabove provided for shall be
cumulative and shall not in any wise be construed as an exclusive remedy,
and the Collateral Agent shall be fully entitled to a statutory court
foreclosure and to avail itself of any and all other legal or equitable
remedies available under the laws of the jurisdiction in which the Real
Property Collateral is located.
(e) The Mortgagor hereby authorizes the Collateral Agent to demand
and receive, in the place and stead of the Mortgagor, all amounts that may
become due under any and each lease, rental, contract, easement and other
right of the Mortgagor pertaining or in any way relating to the Premises
or any part thereof, and, when received, to apply the same to the costs
and expenses incurred by the Collateral Agent incurred hereunder and to
the Secured Obligations. No demand for, and no receipt or application of
any such amount shall be deemed to minimize, subordinate or affect in any
way the lien hereof and rights hereunder of the Collateral Agent or any
rights of a purchaser of any portion of the Premises at any foreclosure or
other sale hereunder, as against the person from whom the amount was
demanded or received, or his executors, administrators, successors or
assigns, or anyone claiming under such Tenant Lease, rental, contract or
other right.
(f) The Collateral Agent may exercise all rights and remedies
granted by law and more particularly the Uniform Commercial Code,
including, but not limited to, the right to take possession of the
Personal Property Collateral, and for this purpose may peaceably enter
upon any premises on which any or all of the Personal Property Collateral
is situated, without being deemed guilty of trespass and without liability
for damages thereby occasioned, and take possession of and operate the
Personal Property Collateral or remove it therefrom; the Collateral Agent
shall have the further right to take any action it deems necessary,
appropriate or desirable, at its option and in its discretion, to repair,
refurbish or otherwise prepare the Personal Property Collateral for sale,
lease or other use or disposition and to sell at public or private sales
or otherwise dispose of, lease or utilize the Personal Property Collateral
and any part thereof in any manner authorized or permitted by law and to
apply the proceeds thereof toward payment of any costs and expenses,
including reasonable attorneys' fees and legal expenses, to the extent
permitted by law, thereby incurred by the Collateral Agent and toward
payment of the Secured Obligations and all other indebtedness described in
this Mortgage, in such order and manner as may be provided in the Credit
Agreement or this Mortgage or in the event such provisions are not
applicable in such order and manner as the Collateral Agent may elect.
SECTION 18. COSTS OF ENFORCEMENT; APPLICATION OF
PROCEEDS; MORTGAGOR LIABLE FOR
DEFICIENCY, ETC.
(a) Costs of Enforcement; Application of Proceeds. In case of (i)
foreclosure of this Mortgage in any court of law or equity, whether or not any
order or decree shall have been entered therein, and to the extent permitted by
law, a reasonable sum shall be allowed for attorney's fees of the Collateral
Agent in such proceedings, for stenographer's fees and for all moneys expended
for documentary evidence and the cost of a complete abstract of title and title
report for the purpose of such foreclosure, such sums to be secured by the lien
hereunder, and, to the extent permitted by law, there shall be included in any
judgment or decree foreclosing this Mortgage and be paid out of such rents,
issues and profits or out of the proceeds of any sale made in pursuance of any
such judgment or decree, or (ii) any other realization by the Collateral Agent
upon or with respect to the Premises or any part or portion thereof, the
proceeds thereof shall be applied as follows:
(1) first, to the payment or reimbursement of the Collateral Agent
for all costs and expenses of such suit or suits or other enforcement
activities of the Collateral Agent, including, but not limited to, the
costs of advertising, sale and conveyance, including attorneys',
solicitors' and stenographers' fees, if permitted by law, outlays for
documentary evidence and the cost of such abstract, examination of title
and title report;
(2) second, to the extent proceeds remain after the application
pursuant to preceding clause (1), to reimburse the Collateral Agent for
all moneys advanced by the Collateral Agent, if any, for any purpose
authorized in this Mortgage with interest at the Default Rate;
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(3) third, to the extent proceeds remain after the application
pursuant to preceding clause (2), an amount equal to the outstanding
Secured Obligations shall be applied by the Collateral Agent to the
Secured Obligations in such amount and order of priority as may be
provided in section 10.3 of the Credit Agreement; and
(4) fourth, to the extent remaining after the application pursuant
to the preceding clauses (1), (2) and (3) and payment in full of the
Secured Obligations which are secured hereby, to the Mortgagor or to
whomever may be lawfully entitled to receive such payment.
(b) Mortgagor Liable for Deficiency. It is understood that the Mortgagor
shall remain liable to the extent of any deficiency between (x) the amount of
the proceeds of the Premises and the amount of the sum referred to in the
foregoing clauses (1) and (2) and (y) the aggregate outstanding amount of the
Secured Obligations.
SECTION 19. RECEIVER.
In the event an action shall be instituted to foreclose this Mortgage, or
prior to foreclosure but after default, the Collateral Agent shall be entitled
to the appointment of a receiver of the rents, issues and profits of the
Premises as a matter of right, with power to collect the rents, issues and
profits of the Premises due and becoming due during the period of default and/or
the pendency of such foreclosure suit to and including the date of confirmation
of the sale under such foreclosure and during the redemption period, if any,
after such confirmation, such rents, issues and profits being hereby expressly
assigned and pledged as security for the payment of the Secured Obligations
secured by this Mortgage without regard to the value of the Premises or the
solvency of any person or persons liable for the payment of the Secured
Obligations and regardless of whether the Collateral Agent has an adequate
remedy at law. The Mortgagor for itself and for any subsequent owner hereby
waives any and all defenses to the application for a receiver as above provided
and hereby specifically consents to such appointment, but nothing herein
contained is to be construed to deprive the holder of this Mortgage of any other
right or remedy or privilege it may now have under the law to have a receiver
appointed. The provision for the appointment of a receiver and the assignment of
such rents, issues and profits is made an express condition upon which the Loans
hereby secured are made. In such event, the court shall at once on application
of the Collateral Agent or its attorney in such action, appoint a receiver to
take immediate possession of, manage and control the Premises, for the benefit
of the holder or holders of the Secured Obligations and of any other parties in
interest, with power to collect the rents, issues and profits of the Premises
during the pendency of such action, and to apply the same toward the payment of
the several obligations herein mentioned and described, notwithstanding that the
same or any part thereof is occupied by the Mortgagor or any other person. The
rights and remedies herein provided for shall be deemed to be cumulative and in
addition to and not in limitation of those provided by law and if there be no
receiver so appointed, the Collateral Agent itself may proceed to collect the
rents, issues and profits from the Premises. From any such rents, issues, and
profits collected by the receiver or by the Collateral Agent prior to a
foreclosure sale, there shall be deducted the cost of collection thereof and the
expenses of operation of the Premises, including but not limited to real estate
commissions, receiver's fee and the reasonable fees of its attorney, if any, and
the Collateral Agent's attorney's fees, if permitted by law, and court costs,
the remainder to be applied against the Secured Obligations. In the event the
rents, issues and profits are not adequate to pay all tax and other expenses of
operation, the Collateral Agent may, but is not obligated to, advance to any
receiver the amounts necessary to operate, maintain and repair, if necessary,
the Premises and any such amounts so advanced, together with interest thereon at
the Default Rate from and after the date of advancement, shall be secured by
this Mortgage and have the same priority of collection as the principal of the
Secured Obligations.
SECTION 20. LIABILITY OF MORTGAGOR NOT AFFECTED.
No sale of the Premises, no forbearance on the part of the Collateral
Agent, no extension of the time for the payment of the Secured Obligations and
no change in the terms of the payment thereof consented to by the Collateral
Agent shall in any way whatsoever operate to release, discharge, modify, change
or affect the original liability of the Mortgagor hereunder or the original
liability of the Mortgagor or any other obligor under any of the Secured
Obligations, either in whole or in part. No waiver by the Collateral Agent of
any breach of any covenant of the Mortgagor herein contained shall be construed
as a waiver of any subsequent breach of the same or any other covenant herein
contained. The failure of the Collateral Agent and/or the Secured Creditors to
exercise the option for acceleration of maturity and/or foreclosure (including
sale under power of sale hereunder) following any default as aforesaid or to
exercise any other option granted to the Collateral Agent hereunder in any one
or more instances, or the acceptance by the Collateral Agent and/or the Secured
Creditors of partial payments hereunder shall not constitute a waiver of any
such default, nor extend or affect the grace period, if any, but such option
shall remain continuously in force with respect to any unremedied or uncured
default. Acceleration of maturity once claimed hereunder by the Collateral Agent
may, at the option of the Collateral Agent, be rescinded by written
acknowledgment to that effect by the Collateral Agent, but the tender and
acceptance of partial payments alone shall not in any way affect or rescind such
acceleration of maturity, or extend or affect the grace period, if any. the
Collateral Agent
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may pursue any of its rights without first exhausting its rights hereunder and
all rights, powers and remedies conferred upon the Collateral Agent herein are
in addition to each and every right which the Collateral Agent may have
hereunder at law or equity and may be enforced concurrently therewith.
SECTION 21. REMEDIES CUMULATIVE.
Each remedy or right of the Collateral Agent shall not be exclusive of but
shall be in addition to every other remedy or right now or hereafter existing at
law or in equity. No delay in the exercise or omission to exercise any remedy or
right accruing on any default shall impair any such remedy or right or be
construed to be a waiver of any such default or acquiescence therein, nor shall
it affect any subsequent default of the same or of a different nature. Every
such remedy or right may be exercised concurrently or independently and when and
as often as may be deemed expedient by the Collateral Agent.
SECTION 22. COLLATERAL AGENT SUBROGATED
TO PRIOR LIENS PAID OUT OF LOAN PROCEEDS.
Should the proceeds of any Loans made by any Lender to the Mortgagor, the
repayment of which is hereby secured, or any part thereof, or any amount paid
out or advanced by the Collateral Agent or any Lender, be used directly or
indirectly to pay off, discharge or satisfy, in whole or in part, any prior lien
or encumbrance upon the Premises or any part thereof, then the Collateral Agent
shall be subrogated to such other liens or encumbrances and upon any additional
security held by the holder thereof and shall have the benefit of the priority
of all of the same.
SECTION 23. FURTHER ASSURANCES.
The Mortgagor shall execute, acknowledge and deliver any and all such
further acts, conveyances, documents, mortgages and assurances as the Collateral
Agent may reasonably require for accomplishing the purpose hereof forthwith upon
the request of the Collateral Agent, whether in writing or otherwise. The
Mortgagor, within 10 days upon request by mail, shall furnish a written
statement duly acknowledged of the amount due upon this Mortgage and the Secured
Obligations (both unpaid principal and accrued interest and all other items
included in the Secured Obligations) and whether any offset or defenses exist
against the Secured Obligations, and any other information which might
reasonably be requested in connection with the sale of the Secured Obligations,
or any portion thereof or interest therein, to any third party, or an audit of
the Collateral Agent, and which may be relied on for such purposes.
SECTION 24. MORTGAGOR'S OBLIGATIONS ABSOLUTE.
The lien of this Mortgage and the obligations of the Mortgagor hereunder
shall be absolute and unconditional and shall remain in full force and effect
without regard to, and shall not be released, suspended, discharged, terminated
or otherwise affected by, any circumstance or occurrence whatsoever, including,
without limitation:
(a) any lack of validity or enforceability of the Credit Agreement,
the Notes, any other Credit Document, any Designated Hedge Agreement, or
any other agreement or instrument relating thereto;
(b) any renewal, extension, amendment or modification of, or
addition or supplement to, or any waiver, consent, extension, indulgence
or other action or inaction under or in respect of, the Credit Agreement,
the Notes, any other Credit Document, or any Designated Hedge Agreement,
or any other agreement or instrument relating thereto, including, without
limitation, any increase in the Secured Obligations resulting from the
extension of additional credit to the Mortgagor or any of its Subsidiaries
or otherwise;
(c) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Secured
Obligations;
(d) any manner of application of collateral, or proceeds thereof, to
all or any of the Secured Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Secured Obligations or
any other assets of the Mortgagor or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of the Mortgagor or any of its Subsidiaries;
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(f) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to
the Mortgagor or any of its Subsidiaries or Affiliates, or any action
taken with respect to this Mortgage by any trustee or receiver, or by any
court, in any such proceeding, whether or not the Mortgagor shall have
notice or knowledge of any of the foregoing; or
(i) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Mortgagor as a guarantor or
surety for the Secured Obligations.
This Mortgage shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by the Collateral Agent or any Secured Creditor upon
the insolvency, bankruptcy or reorganization of the Mortgagor or any of its
Subsidiaries or Affiliates or otherwise, all as though such payment had not been
made.
SECTION 25. NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telex, facsimile transmission or cable communication) and mailed,
telegraphed, telexed, transmitted, cabled or delivered, if to the Mortgagor, at
9400 East Market Street, Warren, Ohio 44484, attention: Vice President & Chief
Financial Officer (facsimile: (330) 856-3618); if to the Collateral Agent, at
1900 East Ninth Street, Cleveland, Ohio 44114, attention Agent Services
(facsimile: (216) 575-2481; or at such other address as shall be designated by
any such person in a written notice to the other person. All such notices and
communications shall be mailed, telegraphed, telexed, telecopied, or cabled or
sent by overnight courier, and shall be effective when received.
SECTION 26. DISCHARGE OF MORTGAGE; RELEASE OF PROPERTY.
(a) Discharge of Mortgage. After the termination of the Total Commitment
and all Designated Hedge Agreements and when all Loans and other Secured
Obligations have been paid in full, this Mortgage shall terminate, and the
Collateral Agent, at the request and expense of the Mortgagor, will execute and
deliver to the Mortgagor a proper instrument or instruments (including Uniform
Commercial Code termination statements on form UCC-3) acknowledging the
satisfaction and termination of this Mortgage, and will duly assign, transfer
and deliver to the Mortgagor (without recourse and without any representation or
warranty) such of the Personal Property Collateral as may be in the possession
of the Collateral Agent and as has not theretofore been sold or otherwise
applied or released pursuant to this Mortgage. In case of failure of the
Collateral Agent to promptly so release this Mortgage, all claims for statutory
penalties and damages are hereby waived.
(b) Release of Collateral. So long as no payment default on any of the
Secured Obligations is in existence or would exist after the application of
proceeds as provided below, the Collateral Agent shall, at the request of the
Mortgagor, release any or all of the Real Property Collateral and/or Personal
Property Collateral, provided that (x) such release is permitted by the terms of
section 9.2 of the Credit Agreement) or otherwise has been approved in writing
by the Required Lenders (or all of the Lenders, if required by section 12.12 of
the Credit Agreement) and (y) if required pursuant to the provisions of section
5.2 of the Credit Agreement, the proceeds of such Collateral are applied to the
prepayment of the Loans.
(c) Request for Release; Effect of Release. At any time that the Mortgagor
desires that the Collateral Agent take any action to give effect to any release
of any or all of the Premises pursuant to the foregoing paragraph (a) or (b), it
shall deliver to the Collateral Agent a certificate signed by a principal
executive officer stating that the release of the respective portion of or all
of the Real Property Collateral and/or Personal Property Collateral is permitted
pursuant to paragraph (a) or (b). In the event that any part of the Premises is
released as provided in paragraph (a), the Collateral Agent, at the request and
expense of the Mortgagor, will duly release such part of the Premises and
assign, transfer and deliver to the Mortgagor (without recourse and without any
representation or warranty) such of the part of the Premises as is then being
(or has been) so sold and as may be in the possession of the Collateral Agent
and has not theretofore been released pursuant to this Mortgage. The Collateral
Agent shall have no liability whatsoever to any Secured Creditor as the result
of any release of all or any part of the Premises by it as permitted by this
section. Upon any release of all or any part of the Premises pursuant to
paragraph (a) or (b), none of the Collateral Agent or any of the Secured
Creditors shall have any continuing right or interest in the same, or the
proceeds thereof.
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SECTION 27. MISCELLANEOUS.
(a) Acknowledgment of Receipt of Copies of Credit Documents. The Mortgagor
acknowledges that it has received from the Collateral Agent without charge a
true and correct copy of this Mortgage and each other Credit Document executed
and delivered on or prior to the date hereof.
(b) Indemnification. The Collateral Agent and its successors and assigns
shall be entitled to all of the benefits of the indemnification provisions of
the Credit Agreement and the other Credit Documents. All of the terms and
provisions of section 12.1 of the Credit Agreement (including any defined terms
used therein) are by this reference thereto hereby incorporated into this
Mortgage for the benefit of the Collateral Agent and its successors and assigns
as fully as if written out at length herein, and any references in such section
of the Credit Agreement to the "Borrower" shall be deemed to refer to, and
constitute obligations of, the Mortgagor.
(c) Subsequent Services of Counsel to Collateral Agent. To the extent
services are required of the Collateral Agent's counsel and/or special counsel
after the date hereof, which are normally incident to the closing, amendment,
alteration, and enforcement of this Mortgage, and all provisions herein
contained, the Mortgagor shall, to the extent permitted by law, pay the
reasonable fees therefor, promptly upon the rendering of such a bill and
delivery thereof to the Mortgagor.
(d) No Partnership or Joint Venture. Neither this Mortgage, the Credit
Agreement, the Notes, any other Secured Obligations, any of the other Credit
Documents, or any of the Designated Hedge Agreements, are intended or shall be
construed as creating a partnership or joint venture between the Mortgagor, on
the one hand, and the Collateral Agent or any other holder of any of the Secured
Obligations, on the other hand; and the relationship of the Mortgagor and the
Collateral Agent hereunder shall solely be that of Mortgagor and collateral
agent for the holders of the Secured Obligations.
(e) Election of Collateral Agent to Subordinate. At the option of the
Collateral Agent (acting on instructions from all of the Lenders), this Mortgage
shall become subject and subordinate in whole or in part (but not in respect to
the priority of entitlement to insurance proceeds or any award in condemnation)
to any or all leases and/or subleases of all or any part of the Premises upon
the execution by the Collateral Agent and recording thereof, at any time
hereafter, in the appropriate recorder's office, a unilateral declaration to
that effect.
(f) Waiver of Homestead and Exemption Rights, etc. To the extent permitted
by law with respect to the Secured Obligations or any renewals or extensions
thereof, the Mortgagor waives and renounces any and all homestead and exemption
rights, as well as the benefit of all valuation and appraisement privileges, and
also moratoriums under or by virtue of the constitution and laws of the
jurisdiction in which the Real Property Collateral is located or any other state
or of the United States, now existing or hereafter enacted.
(g) Covenants Run with the Land. All the covenants of the Mortgagor
contained in this Mortgage shall run with the Land.
(h) Usury Savings Clause. All agreements in the Credit Agreement, in the
Notes, in this Mortgage, in any other Credit Document or in any Designated Hedge
Agreement are expressly limited so that in no contingency or event whatsoever,
whether by reason of advancement or acceleration of maturity of any of the
Secured Obligations, or otherwise, shall the amount paid or agreed to be paid
hereunder or thereunder for interest or for the use, forbearance or detention of
money exceed the highest lawful rate permitted under applicable usury laws. If,
from any circumstance whatsoever, fulfillment of any provision of the Credit
Agreement, of the Notes, of this Mortgage, of any other Credit Document or of
any Designated Hedge Agreement, at the time performance of such provision shall
be due, shall involve transcending the limit of validity prescribed by
applicable usury laws which a court of competent jurisdiction may deem
applicable hereto, then, ipso facto, the obligation to be fulfilled shall be
reduced to the limit of such validity and if, from any circumstance whatsoever,
the Collateral Agent or any Secured Creditor shall ever receive hereunder or
under the other Credit Documents or any Designated Hedge Agreement as interest,
or for the use, forbearance or detention of money, an amount which would exceed
the highest lawful rate, the receipt of such excess shall be deemed a mistake
and shall be canceled automatically or, if theretofore paid, such excess shall
be credited against the principal amount of the Secured Obligations or any fees
or other amounts included in the Secured Obligations to which the same may
lawfully be credited, and any portion of such excess not capable of being so
credited shall be rebated to the Mortgagor.
(i) Governing Law; Successors and Assigns; Severability, etc. This
Mortgage shall be construed and enforced according to the laws of the
jurisdiction in which the Real Property Collateral is located, and shall be
binding upon the Mortgagor, its successors and assigns, any subsequent owners of
the Premises, and shall inure to the benefit of the Collateral Agent, its
successors and assigns. Any provision of this Mortgage which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability
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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.
(j) No Modification. None of the terms and conditions of this Mortgage may
be changed, waived, modified or varied in any manner whatsoever unless in
writing duly signed by the Mortgagor and the Collateral Agent (with the consent
of the Required Lenders or, to the extent required by section 12.12 of the
Credit Agreement, all of the Lenders), provided, however, that no such change,
waiver, modification or variance shall be made to this section 27(j) without the
consent of each Secured Creditor adversely affected thereby, provided further
that any change, waiver, modification or variance affecting the rights and
benefits of a single Class of Secured Creditors (and not all Secured Creditors
in a like or similar manner) shall require the written consent of the Requisite
Creditors of such Class of Secured Creditors. For the purpose of this Mortgage,
the term "Class" shall mean each class of Secured Creditors, i.e., whether (x)
the Lenders as holders of the Credit Document Obligations or (y) the Designated
Hedge Creditors as holders of the Designated Hedge Obligations. For the purpose
of this Mortgage, the term "Requisite Creditors" of any Class shall mean each of
(x) with respect to the Credit Document Obligations, the Required Lenders and
(y) with respect to the Designated Hedge Obligations, the holders of at least
51% of all obligations outstanding from time to time under the Designated Hedge
Agreements.
(k) Agency Provisions. By accepting the benefits of this Mortgage, each
Lender acknowledges and agrees that the rights and obligations of the Collateral
Agent shall be as set forth in section 11 of the Credit Agreement.
Notwithstanding anything to the contrary contained in of this Mortgage, the
duties and obligations of the Collateral Agent set forth or incorporated into
the provisions of this Mortgage may not be amended or modified without the
consent of the Collateral Agent.
(l) Collateral Agent to Act on Behalf of Secured Creditors. The Secured
Creditors agree by their acceptance of the benefits hereof that this Mortgage
may be enforced on their behalf only by the action of the Collateral Agent,
acting upon the instructions of the Required Lenders (or, after all Credit
Document Obligations have been paid in full, instructions of the holders of at
least the majority of the outstanding Designated Hedge Obligations) and that no
other Secured Creditor shall have any right individually to seek to enforce or
to enforce this Mortgage or to realize upon the security to be granted hereby,
it being understood and agreed that such rights and remedies may be exercised by
the Collateral Agent, for the benefit of the Secured Creditors, upon the terms
of this Mortgage.
(m) Waiver of Trial By Jury. THE MORTGAGOR AND THE COLLATERAL AGENT EACH
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS MORTGAGE OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
(n) Time of Essence. It is specifically agreed that time is of the essence
with respect to this Mortgage and that the waiver of the rights or options, or
obligations secured hereby, shall not at any time thereafter be held to be
abandonment of such rights. Notice of the exercise of any right or option
granted to the Collateral Agent herein, or in the Secured Obligations, is not
required to be given.
(o) STATUTORY CONDITION. This Mortgage is upon the STATUTORY CONDITION and
also upon the other conditions herein set forth, all of which shall be binding
on the Mortgagor and those claiming under the Mortgagor. For the breach of the
aforesaid STATUTORY CONDITION or any of the other conditions herein set forth,
the Collateral Agent or any subsequent holder of this Mortgage shall have the
STATUTORY POWER OF SALE in addition to any other remedy or remedies provided
herein.
(p) Counterparts. This Mortgage may be executed by the Mortgagor in
counterparts, each of which shall be an original and all of which collectively
shall constitute one and the same instrument.
22
<PAGE>
IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage to be duly
executed and delivered as of the date first set forth above.
Signed and acknowledged STONERIDGE, INC.
in the presence of:
___________________________ By: _____________________________
Print Name: Kevin P. Bagby
Vice President--Finance
and Chief Financial Officer
___________________________
Print Name:
23
<PAGE>
STATE OF OHIO )
) SS.:
COUNTY OF CUYAHOGA )
BEFORE ME, a Notary Public in and for said County and State, personally
appeared the above named STONERIDGE, INC., an Ohio corporation, by Kevin P.
Bagby, its Vice President--Finance and Chief Financial Officer, who acknowledged
that he did sign the foregoing instrument and that the same is his free act and
deed personally and as such officer.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at
Cleveland, Ohio, this ____ day of December, 1998.
___________________________________
Notary Public
[Notarial Seal]
This Instrument Prepared By:
John W. Sager, Esq.
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
24
<PAGE>
EXHIBIT 1
TO
DEED OF FIRST MORTGAGE, ASSIGNMENT OF LEASES
AND SECURITY AGREEMENT
The following described real estate, to-wit:
LEGAL DESCRIPTION
BOSTON, MASSACHUSETTS
PARCEL I
- --------
A parcel of land in that part of Boston known as Dorchester, Suffolk County,
Massachusetts, with the buildings thereon numbered 33-35-37-39-41 Beach Street
and bounded and described as follows:
SOUTHEASTERLY by Beach Street, ninety-four (94) feet;
SOUTHWESTERLY by land now or formerly of Clapp, one hundred fifty-three and
50/100 (153.50) feet;
NORTHWESTERLY by land of the Old Colony Railroad Company, one hundred and
four (104) feet; and
NORTHEASTERLY by Lot A on plan made by Harry R. Feldman, Engineer dated
April 26, 1955, recorded with Suffolk Deeds in Book 7055, Page
563, one hundred seventy-nine and 70/100 (179.70) feet.
PARCEL I ALSO IS DESCRIBED AS FOLLOWS:
Commencing at a point on the westerly sideline of Beach Street at a distance
S16(degree) 26'15"W, 409.08 feet from southwest corner of Beach and Freeport
Streets;
Thence running S16(degree) 26'15"W, along said sideline of Beach Street 93.93
feet to a point at lands of George C. Isaac;
Thence running N72(degree) 58'55"W, along the lands of George C. Isaac, 152.26
feet to a non-tangent point of curvature of curve to the right having a radius
of 1707.53 feet, at lands of Massachusetts Bay Transportation Authority;
Thence running northerly along a curve to the right having a radius of 1707.53
feet, 93.43 feet to a point;
Thence running N15(degree) 45'38"E, 3.05 feet to a corner at other lands of
Grantee;
The prior two (2) courses running along lands of Massachusetts Bay
Transportation Authority;
Thence running S73(degree) 36'43"E, along other lands of Grantee, 180.09 feet to
point of commencement.
<PAGE>
Parcel I has an area of 15,538 square feet (0.357 acres).
PARCEL II
- ---------
The land with the buildings thereon, situate in that part of said Boston,
formerly Dorchester, Suffolk County, Massachusetts, bounded and described as
follows:
NORTHEASTERLY by Freeport Street, one hundred ninety and 90/100 (190.09)
feet;
SOUTHEASTERLY by Beach Street, three hundred forty-three and 38/100 (343.38)
feet (incorrectly stated as 243.38 feet on the plan
hereinafter mentioned);
SOUTHWESTERLY by land now or formerly of Anna M.E. Anderson, one hundred
eighty and 66/10 (180.66) feet;
NORTHWESTERLY by land now or formerly of the Old Colony Railroad Company,
three hundred eighty-nine and 46/100 (389.46) feet.
The above described premises are shown on a plan entitled "Plan of Land in the
Dorchester District, Boston, Massachusetts," drawn by G.H. Sherman, Surveyor,
dated December 2, 1910, and recorded with Suffolk Registry of Deeds, Book 3514,
Page 465, as comprising two parcels of land.
PARCEL II ALSO IS DESCRIBED AS FOLLOWS:
Commencing at a point at the southwest corner of Freeport Street and Beach
Street in Boston (Dorchester) Massachusetts;
Thence running S16(degree) 26'15"W, along westerly sideline of Beach Street,
343.13 feet to a point other lands of Grantee;
Thence running N73(degree) 36'36"W, along other lands of Grantee 180.87 feet to
a point at lands of Massachusetts Bay Transportation Authority;
Thence running N15(degree) 45'38"E, along lands of Massachusetts Bay
Transportation Authority, 389.21 feet to a point on southerly sideline of
Freeport Street;
Thence running S59(degree) 39'40"E, along southerly sideline of Freeport Street,
191.06 feet to point of commencement.
Parcel II has an area of 67, 015 square feet (1.539 acres).
PARCEL III
- ----------
A certain parcel of land with the building thereon situated in that part of
Boston, Suffolk County, Massachusetts, formerly Dorchester, numbered 29 Beach
Street in the present numbering of said Street, in the district called Harrison
Square, and being shown as Lot A on a plan of land entitled "Plan of Land
Subdivision, Dorchester, Mass.," by Harry R. Feldman, Engineer, dated April 25,
1955 and recorded with Suffolk Registry of Deeds in Book 7055, Page 563, bounded
as follows:
2
<PAGE>
EASTERLY by said Beach Street, sixty-six (66) feet;
SOUTHERLY by Lot B as shown on said plan, one hundred seventy-nine and
70/100 (179.70) feet;
WESTERLY by land now or formerly supposed to be of Old Colony Railroad
Company, sixty-six and 01/100 (66.01) feet; and
NORTHERLY by land now or formerly supposed to be of Shawmut Engineering
Company, one hundred eight and 66/100 (180.66) feet.
Excepting, however, from said Parcel III as above described as much thereof as
has been conveyed to the Old Colony Railroad Company from the southwesterly
corner of the premises.
PARCELL III ALSO IS DESCRIBED AS FOLLOWS:
Commencing at a point on westerly sideline of Beach Street, distant S16(degree)
25'15"W, 343.13 feet from Southwest corner of Beach and Freeport Streets;
Thence running S16(degree) 26'15"W, along said sideline of Beach Street, 65.95
feet to point at other lands of Grantee;
Thence running N73(degree) 36'43"W, along other lands of Grantee, 180.09 feet to
a point at lands of Massachusetts Bay Transportation Authority;
Thence running N15(degree) 45'38"E, along lands of Massachusetts Bay
Transportation Authority 65.96 feet to a point;
Thence running S73(degree) 36'36"E, along other lands of Grantee 180.87 feet to
point of commencement;
Parcel III has an area of 11,903 square feet (0.273 acres).
PARCELS I, II & III, COMBINED, ARE DESCRIBED AS FOLLOWS:
- -------------------------------------------------------
Parcel #1
Commencing at a point at the southwest corner of Freeport Street and Beach
Street in Boston (Dorchester) Massachusetts;
Thence running S16(degree) 26'15"W, along the westerly sideline of Beach Street
503.01 feet to a point at lands of George C. Isaac;
Thence running N72(degree) 58'55"W, along lands of George C Isaac, 152.26 feet
to a point of nontangency of a curve to the right having a radius of 1707.53
feet at lands of Massachusetts Bay Transportation Authority;
Thence running in a northerly direction along a curve to the right, having a
radius of 1707.53 feet, 93.43 feet to a point;
Thence running N15(degree) 45'38"E, 458.22 feet to a point on the southerly
sideline of Freeport Street;
The prior two (2) courses running along lands of Massachusetts Bay
Transportation Authority;
3
<PAGE>
Thence running S59(degree) 39'40"E, along southerly line of Freeport Street
191.06 feet to a point of commencement.
Parcel #1 has an area of 94,456 sq. ft. (2.168 ac.).
PARCEL IV
- ---------
The land with the buildings thereon situated in that part of Boston, Suffolk
County, Massachusetts, known as Dorchester, being No. 608 Beach Street and shown
as Lot A on a plan of land on Beach Street in Dorchester, A.W. Badger, Surveyor,
dated June 15, 1946, recorded with Suffolk Deeds, Book 6238, Page 211, bounded
and described as follows:
Beginning at a point in the Easterly line of Beach Street at the Southwesterly
corner of the granted premises and at the Northwesterly corner of Lot B shown on
said plan and running
EASTERLY on said Lot B, seventy-six and 70/100 (76.70) feet to land now
or late of Battles; thence
NORTHERLY on land of said Battles, forty-one and 64/100 (41.64) feet;
thence
WESTERLY eighty-nine and 10/100 (89.10) feet to Beach Street; thence
SOUTHERLY on Beach Street, sixty-one (61) feet to the point of
beginning.
Containing 4,237 square feet of land according to said plan.
PARCEL IV ALSO IS DESCRIBED AS FOLLOWS:
Commencing at a point on the easterly sideline of Beach Street, said point being
distant S16(degree) 26'15"W, 124.50 feet from the southerly sideline of Freeport
Street.
Thence running S60(degree) 25'48"E, along other lands of Grantee, 89.50 feet to
a point at lands of local #103 I.B.E.W. Building Corp.;
Thence running S30(degree) 51'51"W, along lands of Local #103 I.B.E.W. Building
Corp., 41.64 feet to a point;
Thence running N73(degree) 48'54"W, along other lands of Grantee, 76.79 feet to
a point on easterly sideline of Beach Street;
Thence running N16(degree) 26'15"E, along easterly sideline of Beach Street,
61.00 feet to point of commencement.
Parcel IV has an area of 4,205 square feet (0.097 acres).
PARCEL V
- --------
The following four described parcels of land:
Parcel One (V-1)
4
<PAGE>
A certain parcel of land situated in said Dorchester, District of said Boston,
being shown as lot F on a plan recorded with Suffolk Registry of Deeds in Book
2236, Page 133, bounded and described according to said plan as follows:
SOUTHWESTERLY by Lot C, fifty and 12/100 (50.12) feet;
NORTHWESTERLY by Lot E, eight-eight and 61/100 (88.61) feet;
NORTHEASTERLY partly of land now or formerly of Moulton and partly on land
of William Pope, Trustee, eighty-six and 95/100 (86.95) feet;
and
SOUTHEASTERLY by land now or formerly of F.H. Abbott, ninety-five and 88/100
(95.88) feet.
PARCEL V-1 ALSO IS DESCRIBED AS FOLLOWS:
Commencing at the northwest corner of the herein described parcel at the
northeast corner of Parcel V-2 as elsewhere described;
Thence running S73(degree) 39'17"E, along other lands of Grantee and along lands
of Local #103 I.B.E.W. Building Corp., 86.95 feet to a point at lands of Helen
G. West;
Thence running S38(degree) 44'26"W, along lands of Helen G. West and Nancy A.
Cannon and crossing the end of a private way called Harrison Park, 95.88 feet to
a point;
Thence running N73(degree) 25'17"W, along other lands of Grantee and along
southerly sideline of said Harrison Park, 50.13 feet to a point at southeast
corner of said Parcel V-2;
Thence running N16(degree) 09'33"E, along other lands of Grantee (Parcel V-2)
and crossing said Harrison Park, 88.44 feet to point of commencement.
Parcel V-1 has an area of 6,071 square feet (0.139 acres) and contains a portion
of a private way called Harrison Park.
Parcel Two V-2)
- ---------------
A certain parcel of land situated in said Dorchester district of said Boston,
being shown as Lot E on said plan, and bounded and described according to said
plan as follows:
SOUTHWESTERLY by the Southerly line of Harrison Park, fifty-three and 96/100
(53.96) feet;
NORTHWESTERLY by Lot D, eighty-eight and 32/100 (88.32) feet;
NORTHEASTERLY by land now or formerly of Moulton, fifty-four and 18/100
(54.18) feet; and
SOUTHEASTERLY by Lot F, eighty-eight and 61/100 (88.61) feet.
PARCEL V-2 ALSO IS DESCRIBED AS FOLLOWS:
5
<PAGE>
Commencing at the northwest corner of the herein described premises - said point
being the northeast corner of Parcel V-4 as elsewhere described;
Thence running S73(degree) 39'17"E, along other lands of Grantee, 54.18 feet to
a point;
Thence running S16(degree) 09'33"W, along other lands of Grantee, and crossing a
private way named Harrison Park, 88.44 feet to a point;
Thence running N73(degree) 25'17"W, along other lands of Grantee and along
southerly limit of said Harrison Park, 53.96 feet to a point at the southeast
corner of Parcel V-4 as elsewhere described;
Thence running N16(degree) 00'56"E, along other lands of Grantee (Parcel V-4)
and crossing said Harrison Park, 88.23 feet to a point of commencement.
Parcel V-2 has an area of 4,776 square feet (0.110 acres), and contains a
portion of a private way called Harrison Park.
Parcel Three (V-3)
- ------------------
A certain parcel of land with the buildings thereon situated in Boston, in that
part called Dorchester, at harrison Square, and being shown on a plan entitled
"Plan of Estate Wm. Pope, Dec'd., situated at Harrison Sq., Dorchester," drawn
April 5, 1865, by L. Briggs, Surveyor, recorded with Suffolk Deeds, Book 1401,
Page 250, bounded and described as follows:
NORTHWESTERLY by Beach Street, one hundred fifty-six and 5/10 (156.5) feet;
NORTHEASTERLY by land formerly of Nathan P. Prescott now or late of Bradley,
about one hundred forty (140) feet;
SOUTHEASTERLY by land now or late of Sarah A.F. Pope, about one hundred
twenty (120) feet; and
SOUTHWESTERLY by land now or late of Otis Shepard, about one hundred
twenty-seven (127) feet.
PARCEL V-3 ALSO IS DESCRIBED AS FOLLOWS:
Commencing at a point on the easterly sideline of Beach Street in Dorchester,
Massachusetts - said point being S16(degree) 26'15"W, 224.50 feet from southerly
line of Freeport Street;
Thence running S58(degree) 33'31"E, along other lands of Grantee, 139.80 feet to
a point at lands of Local #103, I.B.E.W. Building Corp.;
Thence running S20(degree) 15'52"W, along lands of Local #103, I.B.E.W. Building
Corp., 120.37 feet to a point;
Thence running N73(degree) 39'17"W, along other lands of Grantee, 127.00 feet to
a point on the easterly sideline of Beach Street;
Thence running N16(degree) 26'15"E, along said sideline of Beach Street, 156.50
feet to a point of commencement.
Parcel V-3 has an area of 18,192 square feet (0.418 acres).
6
<PAGE>
Parcel Four (V-4)
- -----------------
The land in the Dorchester District of said Boston with the buildings thereon,
numbered 1 and 2 Harrison Park, and being the lot marked D on a plan by William
H. Whitney, C.E., dated October 21, 1893, copies May 11, 1897 and recorded with
Suffolk Deeds, Book 2236, Page 132, and bounded and described as follows:
NORTHWESTERLY on Beach Street, eighty-seven and 97/100 (87.97) feet;
NORTHEASTERLY on land now or formerly of F.A. Moulton, sixty-one and 94/100
(61.94) feet;
SOUTHEASTERLY by Lot E on said plan, eighty-eight and 32/100 (88.32) feet;
and
SOUTHWESTERLY by Lot C on said plan, sixty-two and 59/100 (62.59) feet.
PARCEL V-4 ALSO IS DESCRIBED AS FOLLOWS:
Commencing at a point on the easterly sideline of Beach Street in Dorchester
Massachusetts -said point being distant S16(degree) 26'15"W, 381.00 feet from
the southerly sideline of Freeport Street;
Thence running S73(degree) 39'17"E, along other lands of Grantee, 61.94 feet to
a point;
Thence running S16(degree) 00'56"W, along other lands of Grantee, and crossing a
private way called "Harrison Park", 88.23 feet to a point;
Thence running N73(degree) 25'18"W, along other lands of Grantee and along
southerly sideline of Harrison Park, 62.59 feet to a point on the easterly
sideline of Beach Street;
Thence running N16(degree) 26'15"E, along said sideline of Beach Street and
crossing the end of a private way named Harrison Park, 87.97 feet to point of
commencement.
Parcel V-4 has an area of 5,485 square feet (0.126 acres) and contains a portion
of a private way called Harrison Park.
PARCEL VI
- ---------
The land with the buildings thereon, situated in that part of said Boston,
called Dorchester, being Lot B as shown on a Plan by A.W. Badger, Surv., dated
June 15, 1946, duly recorded in Suffolk Deeds, Book 6238, Page 211, and bounded
and described as follows:
NORTHWESTERLY by Beach Street, 39.00 feet;
NORTHERLY by Lot A as shown on said Plan, 76.70 feet;
SOUTHEASTERLY by land now or formerly of Battles, 8.36 feet;
7
<PAGE>
NORTHEASTERLY by the same, 78.40 feet;
SOUTHEASTERLY again, by land now or formerly of Pope, 50.20 feet;
SOUTHWESTERLY by land or formerly of Faunce, 139.80 feet.
PARCEL VI ALSO IS DESCRIBED AS FOLLOWS:
Commencing at a point on the easterly sideline of Beach Street in Dorchester,
Massachusetts - said point being distant S16(degree) 26'15"W, 185.50 feet from
the southerly sideline of Freeport Street;
Thence running S73(degree) 48'54"E, along other lands of Grantee, 76.79 feet to
a point;
Thence running S30(degree) 51'51"W, 11.36 feet to a point;
Thence running S61(degree) 12'08"E, 78.40 feet to a point;
Thence running S34(degree) 25'35"W, 50.20 feet to a point;
The prior three (3) courses running along lands of Local #103, I.B.E.W. Building
Corp.;
Thence running N58(degree) 33'31"W, along other lands of Grantee, 139.80 feet to
a point on easterly sideline of Beach Street;
Thence running N16(degree) 26'15"E, along said sideline of Beach Street, 39.00
feet to point of commencement.
Parcel VI has an area of 7,074 square feet (0.162 acres).
PARCEL VII
- ----------
The land with the buildings thereon situated in that part of Boston which was
formerly Dorchester, Suffolk County, Massachusetts, bounded and described as
follows:
NORTHERLY by Freeport Street, one hundred twenty and 72/100 (120.72)
feet;
EASTERLY by land now or formerly of Battles about one hundred eleven
and 40/100 (111.40) feet
SOUTHERLY by land now or formerly of Mahoney, about eighty-nine and
50/100 (89.50) feet; and
WESTERLY by Beach Street, about one hundred twenty-four and 50/100
(124.50) feet.
8
<PAGE>
PARCEL VII ALSO IS DESCRIBED AS FOLLOWS:
Commencing at the southeast corner of Beach and Freeport Streets in Boston
(Dorchester) Mass.;
Thence running S59(degree) 39'40"E, 5.07 feet to a point;
Thence running S55(degree)34'00"E, 115.65 feet to a point at lands of Local #103
I.B.E.W. Building Corp.;
The prior two (2) courses running along the southerly sideline of Freeport
Street;
Thence running S30(degree) 51'51"W, along lands of Local #103, I.B.E.W. Building
Corp., 111.40 feet to a point.
Thence running N60(degree) 25'48"W, along other lands of Grantee, 89.50 feet to
a point on easterly sideline of Beach Street;
Thence running N16(degree) 26'15"E, along said sideline of Beach Street, 124.50
feet to point of commencement.
Parcel VII has an area of 12,158 square feet (0.279 acres).
PARCEL VIII
- -----------
Parcel One (VIII-Part 1)
- -----------------------
The land with the buildings thereon situated on and now known as and numbered 22
Beach Street in that part of Boston, Suffolk County, Massachusetts, formerly
Dorchester, and being Lot C-1 on a Plan of land by Marcello J. Guarino, Civil
Engineer, dated October 7, 1955, recorded with Suffolk Registry of Deeds, Book
302, bounded and described as follows:
SOUTHWESTERLY on said Plan, thirty-two and 49/100 (32.49) feet; thence
turning and running
SOUTHEASTERLY by Lot C-2 on said plan and partly through the center of a
common passageway eighty (80) feet long and eight (8) feet
wide on said plan, one hundred fifty-three and 5/100 (153.5)
feet, more or less, thence turning and running
NORTHEASTERLY thirty-five (35) feet; thence turning and running
NORTHWESTERLY by the southerly side of Harrison park, as shown on said plan,
one hundred sixty-six and 67/100 (166.67) feet to the point of
beginning.
PARCEL VIII-PART 1 ALSO IS DESCRIBED AS FOLLOWS:
Commencing at a point on the easterly sideline of Beach Street in Dorchester,
Massachusetts at a distance of S16(degree) 26'15"W, 501.46 feet from the
southerly sideline of Freeport Street;
Thence running S73(degree) 26'59"E, along other lands of Grantee, 153.40 feet to
a point at lands of Nancy C. Cannon;
Thence running S38(degree) 44'26"W, along lands of Nancy C. Cannon and of John
F. Corrigan et al., 64.35 feet to a point at lands of Kevin L. Spry et al.;
9
<PAGE>
Thence running N74(degree) 19'08"W, along lands of Kevin L. Spry et al., 128.99
feet to a point on easterly sideline of Beach Street;
Thence running N16(degree) 26'15"E, along said sideline of Beach Street, 61.54
feet to point of commencement.
Parcel VIII-Part I has an area of 8,539 square feet (0.196 acres).
Parcel Two (VIII-Part 2)
- ------------------------
The land with the buildings thereon situated in that part of Boston, Suffolk
County, Massachusetts, known as Dorchester, with the building thereon numbered
24 Beach Street, being Lot C-2 on a plan by marcello J. Guarino, Civil Engineer,
dated October 27, 1955, recorded in Suffolk Registry of Deeds, bounded and
described as follows:
Starting at a point on the Easterly sideline of Beach Street at a distance of
32.49 feet Southerly, from the intersection of the Easterly sideline of Beach
Street, and the Southerly sideline of Harrison Road.
Thence running Southeasterly by Lot C-1 on said plan and partly through the
center of a common passageway 80 feet long and 8 feet wide on said plan, 153.5
feet more or less;
Thence turning and running Southwesterly, 64.35 feet;
Thence turning and running Northwesterly, 128.99 feet to the Easterly sideline
of Beach Street;
Thence turning and running Northeasterly by said Easterly sideline of Beach
Street, 61.54 feet to the point of beginning.
PARCEL VIII-PART 2 ALSO IS DESCRIBED AS FOLLOWS:
Commencing at a point on the easterly sideline of Beach Street in Dorchester,
Massachusetts at a distance of S16(degree) 26'15"W, 468.97 feet from the
southerly sideline of Freeport Street;
Thence running S73(degree) 25'18"E, along other lands of Grantee, and along
southerly limit of a private way called Harrison Park, 166.68 feet to a point at
lands of Nancy A. Cannon;
Thence running S38(degree) 44'26"W, along lands of Nancy A. Cannon 35.00 feet to
a point;
Thence running N73(degree) 26'59"W, along other lands of Grantee, 153.40 feet to
a point on easterly sideline of Beach Street;
Thence running N16(degree) 26'15"E, along said sideline of Beach Street, 32.49
feet to a point of commencement.
Parcel VIII-Part 2 has an area of 5.193 square feet (0.119 acres).
PARCELS IV, V-1, V-2, V-3, V-4, VI, VII, VIII-PART 1 and VIII-PART 2, COMBINED,
- ---------- ---- ---- ---- ---- -- ---- ------------ ----------- --------
ALSO ARE DESCRIBED AS FOLLOWS:
- -----------------------------
PARCEL #2
- ---------
10
<PAGE>
Commencing at a point on southeasterly corner of Freeport Street and Beach
Street in Boston (Dorchester) Massachusetts;
Thence running S59(degree) 39'40"E, 5.07 feet to a point;
Thence running S55(degree) 34'00"E, 115.65 feet to a point at lands of Local
#103, I.B.E.W. Building Corporation;
The prior two (2) courses running along Southerly sideline of Freeport Street;
Thence running S30(degree) 51'51"W, 164.50 feet to a point;
Thence running S61(degree) 12'08"E, 78.40 feet to a point;
Thence running S34(degree) 25'35"W, 50.20 feet to a point;
Thence running S20(degree) 15'52"W, 120.37 feet to a point;
Thence running S73(degree) 39'17"E, 76.07 feet to a point at lands of Helen G.
West;
The prior five (5) courses running along lands of Local #103, I.B.E.W. Building
Corporation;
Thence running S38(degree) 44'26"W, along lands of Helen G. West, Nancy A.
Cannon and John F Corrigan et al., 195.23 feet to corner at lands of Kevin L.
Spry;
Thence running N74(degree) 19'08"W, along lands of Kevin L. Spry, 128.99 feet to
a point on the Easterly sideline of Beach Streets;
Thence running N16(degree) 26'15"E, along said Easterly sideline, 563.00 feet to
a point of commencement.
Parcel #2 has an area of 7,693 square feet (1.646 acres).
[End of Exhibit 1]
11
<PAGE>
EXHIBIT 2
TO
DEED OF FIRST MORTGAGE, ASSIGNMENT OF LEASES
AND SECURITY AGREEMENT
Permitted Encumbrances
1. Any liens thereon for taxes, assessments, charges, excises, levies and
other governmental charges which are not due and payable.
2. Any matters of record affecting the Premises on the date this Mortgage is
recorded.
3. Zoning ordinances, if any.
[End of Exhibit 2]
<PAGE>
EXHIBIT C-7
------------------------
FORM OF
CLOSING DATE MORTGAGE
(Canton, Massachusetts)
------------------------
<PAGE>
================================================================================
STONERIDGE, INC.
as the Mortgagor
To
NATIONAL CITY BANK
as the Collateral Agent
----------------------------
DEED OF FIRST MORTGAGE,
ASSIGNMENT OF LEASES
AND
SECURITY AGREEMENT
(Total Indebtedness Not to Exceed $500,000,000)
---------------------------
Relating to Property Located at Canton, Massachusetts
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DEED OF FIRST MORTGAGE, ASSIGNMENT OF LEASES AND
SECURITY AGREEMENT
(Total Indebtedness Not to Exceed $500,000,000)
THIS DEED OF FIRST MORTGAGE, ASSIGNMENT OF LEASES AND SECURITY AGREEMENT,
dated as of December 30, 1998 (as amended, modified, or supplemented from time
to time, "this Mortgage"), by (i) STONERIDGE, INC., an Ohio corporation
(hereinafter, together with its successors and assigns, called the "Borrower" or
the "Mortgagor") which is duly qualified to transact business in the
jurisdiction in which the real property referred to below is located, whose
address is 9400 East Market Street, Warren, Ohio 44484, in favor of (ii)
NATIONAL CITY BANK, a national banking association, as collateral agent under
the Credit Agreement referred to below (herein, together with its successors and
assigns in such capacity, the "Collateral Agent"), whose address is 1900 East
Ninth Street, Cleveland, Ohio 44114, for the benefit of the Secured Creditors
(as defined below):
PRELIMINARY STATEMENTS:
(A) Except as otherwise defined herein, terms used herein and defined in
the Credit Agreement (as defined below) shall be used herein as therein defined.
(B) The Mortgagor claims title to the Land (as hereinafter defined)
through an instrument recorded in Volume ____, Page _____ et seq. of the
official real estate records of _____ County, Massachusetts.
(C) This Mortgage is made pursuant to the Credit Agreement, dated as of
the date hereof (herein, as amended or otherwise modified, restated or replaced
from time to time, the "Credit Agreement"), among the Borrower, the financial
institutions named as lenders therein (herein, together with their successors
and assigns, the "Lenders"), the other Agents named therein, and National City
Bank, as the Administrative Agent for the Lenders under the Credit Agreement,
providing, among other things, for loans or advances or other extensions of
credit to or for the benefit of the Borrower of up to $425,000,000, with such
loans or advances being evidenced by promissory notes (the "Notes", such term to
include all notes and other securities issued in exchange therefor or in
replacement thereof).
(D) The Borrower or any of its Subsidiaries may from time to time be party
to one or more Designated Hedge Agreements (as defined in the Credit Agreement).
Any institution that participates, and in each case their subsequent assigns, as
a counterparty to any Designated Hedge Agreement (collectively, the "Designated
Hedge Creditors"; and the Designated Hedge Creditors together with the Agents
and the Lenders, collectively the "Secured Creditors"), shall benefit hereunder
as herein provided.
(E) Pursuant to the Subsidiary Guaranty, each Subsidiary Guarantor has
jointly and severally guaranteed to the Secured Creditors the payment when due
of the Guaranteed Obligations (as defined in the Subsidiary Guaranty).
(F) It is a condition precedent to the making of Loans and the issuance
of, and participation in, Letters of Credit under the Credit Agreement that the
Mortgagor shall have executed and delivered to the Collateral Agent this
Mortgage.
(G) The Mortgagor desires to execute this Mortgage to satisfy the
condition described in the preceding paragraph.
(H) The execution and delivery of this Mortgage has been duly authorized
by the Mortgagor, and all things necessary to make this Mortgage a valid,
binding and legal instrument according to its terms, have been done and
performed.
NOW, THEREFORE, in consideration of the sum of $1.00, and other good and
valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, received to the Mortgagor's full satisfaction from the
Collateral Agent, and in consideration of the payments or loans or advances or
other credit facilities made or to be made hereafter to or for the benefit of
the Borrower by the Lenders, the Mortgagor DOES HEREBY grant, bargain, sell,
mortgage, warrant, convey, alien, remise, release, assign, transfer, grant a
security interest in, set over, deliver, confirm and convey unto the Collateral
Agent, upon the terms and conditions of this Mortgage, with power of sale,
including STATUTORY POWER OF SALE (as provided in Chapter 183, ss. 21 of the
Massachusetts General Laws), and with MORTGAGE COVENANTS (as provided in Chapter
183, ss. 19 of the Massachusetts General Laws), each and all of the real
properties and interests in real properties, and further grants to the
Collateral Agent
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a security interest in and to all other property and interests, described in the
following Granting Clauses (all of such property and interests hereinafter
collectively called the "Premises").
GRANTING CLAUSES
All the estate, right, title and interest of the Mortgagor in, to
and under, or derived from:
GRANTING CLAUSE FIRST
Land
All those certain lot(s), piece(s) or parcel(s) of land more
particularly described in Exhibit 1 attached hereto and made a part
hereof, as the description of the same may be amended or supplemented from
time to time and all and the reversions or remainders in and to said land
and the tenements, hereditaments, easements, rights-of-way or use, rights
(including alley, drainage, crop, timber and cutting, agricultural,
horticultural, mineral, water, oil and gas rights), privileges, royalties
and appurtenances to said land, now or hereafter belonging or in anywise
appertaining thereto, including any such right, title, interest in, to or
under any agreement or right granting, conveying or creating, for the
benefit of said land, any easement, right or license in any way affecting
other property and in, to or under any streets, ways, alleys, vaults,
gores or strips of land adjoining said land or any parcel thereof, or in
or to the air space over said land, all rights of ingress and egress by
motor vehicles to parking facilities on or within said land, and all
claims or demands of the Mortgagor, either at law or in equity, in
possession or expectancy, of, in or to the same (all of the foregoing
hereinafter collectively called the "Land").
GRANTING CLAUSE SECOND
Improvements
All buildings, structures and other improvements now or hereafter
located on the Land, and all appurtenances and additions thereto and
betterments, renewals, substitutions and replacements thereof, owned by
the Mortgagor or in which the Mortgagor has or shall acquire an interest
(all of the foregoing hereinafter collectively called the "Improvements").
GRANTING CLAUSE THIRD
Fixtures and Equipment
Without limitation of the foregoing Granting Clauses, (i) all
"fixtures" (as defined in the Uniform Commercial Code of the State in
which the Premises are located), (ii) all "equipment" (as defined in the
Uniform Commercial Code of the State in which the Premises are located),
(iii) all other fixtures, chattels and articles of personal property
(other than "inventory", as defined in the Uniform Commercial Code of the
State in which the Premises are located), and (iv) all additions,
betterments, improvements, modifications, renewals, alterations, repairs,
attachments, parts, accessories, appurtenances, substitutions and
replacements of or to any of the foregoing, in each case now or hereafter
owned or otherwise acquired by the Mortgagor or in which the Mortgagor now
has or shall hereafter acquire an interest, wherever situated, and now or
hereafter located on, attached or affixed to, contained in or used in
connection with, the properties referred to in Granting Clause First or
Granting Clause Second, or placed on any part thereof, though not attached
or affixed thereto, including, without limitation, all of the following:
(1) all automobiles, trucks and trailers, and all other automotive or
transportation vehicles and equipment; (2) all machines and machinery and
other apparatus; (3) all engines and motors; (4) all lathes; (5) all drill
presses, punch presses and other presses; (6) all sorting, assembly,
installation and production line equipment; (7) all robotic equipment,
devices and systems; (8) all boilers, turbines, stokers, smelters,
electric arc furnaces, ladle arc furnaces, reheat furnaces and/or other
furnaces and related equipment; (9) all rolling mills, coilers and cooling
beds; (10) all stamping, cutting, drilling, jigging, bending, shaping,
fitting, molding, milling, injection, sizing, patterning, fastening,
connecting, heat treating, galvanizing, painting, embossing, coloring,
identification, measuring, monitoring, quality assurance, finishing and/or
processing machines, equipment and systems; (11) all fabrication equipment
and systems; (12) all packaging, receiving and shipping equipment and
systems; (13) all scales; (14) all counting, measurement, testing,
monitoring, calibration and analytical devices,
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equipment and systems; (15) all design and quality assurance or control
equipment (including robotics); (16) all welding equipment and systems;
(17) all soldering equipment and systems; (18) all hydraulic equipment and
hydraulics; (19) all tooling, dies, jigs, casts, molds, patterns, models,
stencils and drawings; (20) all generators, transformers, switches,
substations, pumps, compressors, dynamos and batteries; (21) all cranes
and hoists; (22) all conveyors; (23) all computers; (24) all computer
monitors, drives, servers, and other hardware and software (whether owned,
leased or licensed); (25) all computing equipment; (26) all electronic
data processing equipment; (27) all operating and maintenance manuals, as
well as all plans, specifications and operating instructions, for all
equipment and fixtures; (28) all gas, oil kerosene and other fuels; (29)
all industrial gases and containers therefor; (30) all consumable
supplies; (31) all spare parts, replacement parts, appliances, utensils,
tools, implements and fittings; (32) all repair and maintenance equipment;
(33) all tanks (whether free standing, anchored or otherwise installed in
place, readily movable, above or below ground, or otherwise), drums,
vessels, containers, racks, pallets, skids, bins and shelves or shelving;
(34) all forklifts, liftrucks, pallet movers, dollies, carts, and other
materials handling equipment; (35) all shipping containers; (36) all rail
cars; (37) all pipelines, pipes, ducts and conduits; (38) all wiring and
all electric or other power surge or interruption protection equipment;
(39) all water and other towers; (40) all call systems, dispatch systems,
public address systems, switchboards, telephones, mobile phones, beepers,
two-way (or more) radios, aerials, antennas and other telecommunication,
teleconferencing (including video) and other communication equipment; (41)
all desks, tables, cabinets, bureaus, credenzas, chairs, benches, couches,
coat racks, safes and vaults, photocopy machines, facsimile, telex and
cable machines, postage meters, televisions, video machines, radios,
coffee, soft drink, beverage and fast food machines, lockers, bulletin
boards, photographs, works of art and other decorations, lawn ornaments,
signs, plants and shrubbery (both indoor and outdoor), sinks, basins,
stoves, ranges, microwaves, ovens, dishwashers, refrigerators, ice makers,
cafeteria equipment and supplies, wash tubs, showers, partitions, screens,
awnings, shades, blinds, curtains, draperies, carpets, rugs, furniture and
furnishings; (42) all heating, lighting, power, plumbing, water,
ventilating, cooling, air conditioning, refrigerating, gas, oil, steam,
electrical, solar, waste, incinerating and/or compacting plants, systems,
fixtures and equipment; (43) all elevators and escalators; (44) all vacuum
and other cleaning systems including window washing equipment; (45) all
lawn, parking and sidewalk maintenance equipment, including lawn mowers,
leaf blowers, snow blowers, plows and vacuums; (46) all dust and noise
suppression systems and equipment; (47) all air, water and other pollution
control systems and equipment; (48) all safety systems and equipment; (49)
all office supplies; (50) all industrial hygiene equipment and supplies;
(51) all security alarms and cameras, and all identification, timekeeping,
access and surveillance systems and equipment; and (52) all sprinkler
systems and other fire detection, prevention and extinguishing apparatus.
If the Lien of this Mortgage in any item of Fixtures and Equipment is
subject to a purchase money or other security interest therein which is
permitted under this Mortgage, then all of the right, title and interest
of the Mortgagor in and to such item is hereby assigned to the Collateral
Agent, together with the benefits of all deposits and payments now or
hereafter made thereon by or on behalf of the Mortgagor (all of the
foregoing property, rights and interests described in this Granting Clause
Third, collectively the "Fixtures and Equipment").
GRANTING CLAUSE FOURTH
Permits, Licenses and Franchises and General Intangibles
Without limitation of the foregoing Granting Clauses, all permits,
licenses, franchises, privileges, grants, consents, exemptions, concession
agreements, development rights, building variances, certificates of
occupancy or operation, and other authorizations or approvals, now or
hereafter issued or granted by any governmental authority with respect to
the ownership of the Premises, or with respect to the ownership,
construction or operation of the Premises, and all "general intangibles"
(as defined in the Uniform Commercial Code of the State in which the
Premises are located) relating in any way to the Premises or the use or
operation thereof, together with and any renewals or extensions of any of
the foregoing, provided that the lien of this Mortgage shall not apply to,
and there shall be excluded from the ambit of this Granting Clause Fourth,
any of the foregoing permits, licenses, franchises, privileges, grants,
consents, exemptions, concession agreements, development rights, building
variances, certificates of occupancy or operation, and other
authorizations or approvals and any other "general intangibles", which, by
their express terms or by reason of applicable law would become void or
voidable if mortgaged, pledged or assigned by the Mortgagor hereunder.
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GRANTING CLAUSE FIFTH
Leasehold and Other Contractual Interests
All the leases, lettings and licenses of, and all other contracts
and agreements affecting, the Land, the Improvements, the Fixtures and
Equipment and/or any other property or rights mortgaged or otherwise
conveyed or encumbered hereby, or any part thereof, now or hereafter
entered into, and all amendments, modifications, supplements, additions,
extensions and renewals thereof, and all right, title and interest of the
Mortgagor thereunder, including cash and securities deposited thereunder,
the right to receive and collect the rents, income, proceeds, issues and
profits payable thereunder and the rights to enforce, whether at law or in
equity or by any other means, all provisions and options thereof.
GRANTING CLAUSE SIXTH
Assignment of Rents, Income and Profits
All rents, income, profits, proceeds and any and all cash collateral
to be derived from the Premises, or the use and occupation thereof, or
under any contract or bond relating to the construction or reconstruction
of the Premises, including all rents, royalties, revenue, rights, deposits
(including security deposits) and benefits accruing to the Mortgagor under
all leases now or hereafter covering the Premises, whether before or after
foreclosure or during the full period of redemption, if any, and the right
to receive the same and apply them against the Secured Obligations or
against the Mortgagor's other obligations hereunder, together with all
contracts, bonds, leases and other documents evidencing the same now or
hereafter in effect and all rights of the Mortgagor thereunder. Nothing
contained in the preceding sentence shall be construed to bind the
Collateral Agent to the performance of any of the provisions of any such
contract, bond, lease or other document or otherwise impose any obligation
upon the Collateral Agent (including any liability under a covenant of
quiet enjoyment contained in any lease or under applicable law in the
event that any tenant shall have been joined as a party defendant in any
action to foreclose this Mortgage and shall have been foreclosed of all
right, title and interest and all equity of redemption in the Premises),
except that the Collateral Agent shall be accountable for any money
actually received pursuant to such assignment. The assignment of said
rents, income, profits, proceeds and cash collateral, and of the aforesaid
rights with respect thereto and to the contracts, bonds, leases and other
documents evidencing the same is intended to be and is an absolute present
assignment from the Mortgagor to the Collateral Agent and not merely the
passing of a security interest.
GRANTING CLAUSE SEVENTH
Other and After Acquired Property
Any and all moneys and other property, of every kind and nature,
which may from time to time be subjected to the lien hereof by the
Mortgagor, through a supplement to this Mortgage or otherwise, or by any
other person or entity, or which may come into the possession of or be
subject to the control of the Collateral Agent, it being the intention and
agreement of the Mortgagor that all property hereafter acquired or
constructed by the Mortgagor shall forthwith upon acquisition or
construction thereof by the Mortgagor and without any act or deed by the
Mortgagor be subject to the lien and security interest of this Mortgage as
if such property were now owned by the Mortgagor and were specifically
described in this Mortgage and conveyed or encumbered hereby or pursuant
hereto, and the Collateral Agent is hereby authorized to receive any and
all such property as and for additional security hereunder.
GRANTING CLAUSE EIGHTH
Proceeds and Awards
All unearned premiums, accrued, accruing or to accrue under
insurance policies now or hereafter obtained by the Mortgagor, all
proceeds of the conversion, voluntary or involuntary, of any of the
property described in these Granting Clauses into cash or other liquidated
claims, including proceeds of hazard, title and other insurance, and all
claims, entitlements, judgments, damages, awards, settlements and
compensation (including interest thereon) heretofore or hereafter accruing
or made to or for the benefit of the present and all subsequent owners of
the Land, the Improvements, the Fixtures and Equipment and/or any other
property or rights encumbered or conveyed hereby for any injury to or
decrease in the value thereof for any reason, or by any
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governmental or other lawful authority for the taking by eminent domain,
condemnation or otherwise of all or any part thereof, including awards for
any change of grade of streets.
TO HAVE AND TO HOLD the Premises unto the Collateral Agent, its successors
and assigns, forever, for the purposes and uses herein set forth, until such
time as all of the Secured Obligations which are secured hereby shall have been
paid in full.
The property, interests and rights hereinabove mentioned, whether owned in
fee or held under lease, is hereinafter referred to as the "Real Property
Collateral" to the extent that the same is realty, and as the "Personal Property
Collateral" to the extent that the same is personalty. The Real Property and the
Personal Property Collateral collectively constitute the Premises.
It is also agreed that if any of the property herein mortgaged is of a
nature so that a security interest therein can be perfected under the Uniform
Commercial Code, this Mortgage shall constitute a security agreement and the
Mortgagor agrees to execute, deliver and file or refile any financing statement,
continuation statement, or other instruments the Collateral Agent may require
from time to time to perfect or renew such security interest under the Uniform
Commercial Code. This Mortgage shall be effective as a financing statement filed
as a fixture filing with respect to all fixtures included within the Premises
and is to be filed for record in the Office of the County Recorder or County
Clerk where the Premises (including such fixtures) are situated. The mailing
address of the Mortgagor is set forth at the beginning of this Mortgage and the
address of the Collateral Agent from which information concerning the security
interest may be obtained is the address of the Collateral Agent set forth at the
beginning of this Mortgage.
If the Mortgagor hereafter acquires any real property, or any interest in
real property, in addition to the Real Property Collateral, which is adjacent
to, or contiguous with, the Land, or otherwise is intended or required to be
subjected to the lien of this Mortgage, the Mortgagor will subject the same to
the lien of this Mortgage by instrument supplemental hereto, satisfactory in
form and substance to the Collateral Agent.
The conditions of this Mortgage are such that the Mortgagor has executed
and delivered this Mortgage for the purpose of securing the performance of its
covenants and agreements contained herein and in any agreement or instrument
made with respect to any Secured Obligations secured hereby and to secure the
payment when due (whether at the stated maturity, by acceleration or otherwise)
of the following indebtedness, liabilities and obligations (including
obligations which, but for the automatic stay under section 362(a) of the
Bankruptcy Code, would become due), now existing or hereafter arising
(collectively, the "Secured Obligations"), for the benefit of the Secured
Creditors, although not necessarily in the order of priority set forth below:
(a) $100,000,000 aggregate principal amount of Revolving Loans made or
to be made to the Mortgagor under the Credit Agreement, maturing on
or before December 31, 2003, with interest thereon as provided in
the Credit Agreement;
(b) $150,000,000 aggregate principal amount of Term A Loans made or to
be made to the Mortgagor under the Credit Agreement, maturing on or
before December 31, 2003, with interest thereon as provided in the
Credit Agreement;
(c) $175,000,000 aggregate principal amount of Term B Loans made or to
be made to the Mortgagor under the Credit Agreement, maturing on or
before December 31, 2005, with interest thereon as provided in the
Credit Agreement;
(d) all reimbursement obligations in respect of Letters of Credit issued
under the Credit Agreement in an aggregate amount not exceeding
$10,000,000;
(e) all obligations and liabilities of the Mortgagor or any Subsidiary
of the Mortgagor under or in connection with any Designated Hedge
Agreement, now or hereafter entered into with or assigned to any of
the Secured Creditors (all such obligations and liabilities
described in this clause (e) being herein collectively called the
"Designated Hedge Obligations");
(f) all advances or disbursements of the Collateral Agent or any Secured
Creditor with respect to the Premises for the payment of taxes,
levies, assessments, insurance, insurance premiums or costs incurred
in the protection of the Premises, as provided in section 5301.233
of the Ohio Revised Code, and without limitation of the preceding
provisions of this clause (f), all other sums expended or advanced
by or on behalf of the Collateral Agent pursuant to any term or
provision of this Mortgage or any other agreement or instrument
relating to or securing any of the foregoing for the purpose of
protecting or preserving the Premises or the priority of the Lien of
this Mortgage, including, all advances or disbursements of the
Collateral Agent for the payment of taxes, levies, assessments,
insurance, insurance premiums or costs incurred in the protection of
the Premises; and
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(g) all other liabilities, obligations and indebtedness of the
Mortgagor, its Subsidiaries and Affiliates, and/or any other Credit
Party, incurred under or arising out of or in connection with the
Credit Agreement, the Notes, the other Credit Documents and the
Designated Hedge Agreements, and the due performance and compliance
by the Mortgagor, its Subsidiaries and Affiliates, and any other
Credit Party with all of the terms, conditions, covenants and
agreements contained in the Credit Agreement, the Notes, such other
Credit Documents and the Designated Hedge Agreements;
but only to the extent that the total unpaid Secured Obligations, exclusive of
liabilities and obligations referred to in the preceding clause (f), in the
aggregate and exclusive of the interest on the Secured Obligations, does not
exceed the maximum amount specified in this Mortgage, which is $500,000,000, and
as security for the payment of the Secured Obligations, the Mortgagor has
granted to the Collateral Agent hereunder a lien against the Premises. In
accordance with the provisions of the Notes, the whole of the principal sum of
the Loans which are then unpaid may be declared and become due and payable upon
the occurrence of an Event of Default under the Credit Agreement. This Mortgage
is given for the purpose of creating a lien on the Premises and expressly is to
secure the Secured Obligations, for the benefit of the Secured Creditors,
including but not limited to future advances and other extensions of credit,
whether such advances or other extensions of credit are obligatory or to be made
at the option of the Secured Creditors (or any of them) or otherwise, to the
same extent as if such future advances or other extensions of credit were made
on the date of the execution of this Mortgage. The total amount of the Secured
Obligations may decrease or increase from time to time and the Lenders or other
Secured Creditors may hereafter, as described in this Mortgage, at any time
after this Mortgage is delivered to the county recorder or county clerk for
record, make additional loans, advances or other extensions of credit to or for
the benefit of the Mortgagor or any of its Subsidiaries or Affiliates; provided,
however, that the total unpaid balance of the Secured Obligations which are
secured at any one time by this Mortgage, shall not exceed $500,000,000, plus
interest thereon and any advances or disbursements made for the payment of
taxes, levies or insurance on the Premises with interest on such disbursements.
Any such further loans or advances or other extensions of credit, with interest,
shall be secured by this Mortgage.
PROVIDED, NEVERTHELESS, that if the Secured Obligations which are secured
hereby shall be paid in full when due, and if all of the provisions of the
Credit Agreement, the Notes, the other Credit Documents and the Designated Hedge
Agreements shall be timely performed and observed, then the lien of this
Mortgage and the interest of the Collateral Agent in the Premises shall be
released at the cost of the Mortgagor, but this Mortgage shall otherwise, except
as specifically provided herein, remain in full force and effect.
The Mortgagor, intending to bind its successors and assigns, hereby
covenants and agrees with the Collateral Agent, its successors and assigns, for
its benefit and for the benefit of the Secured Creditors, as follows:
SECTION 1. PAYMENT OF SECURED OBLIGATIONS, PERFORMANCE OF OBLIGATIONS,
ETC.
(a) Payment of Secured Obligations. The Mortgagor shall pay or cause to be
paid the principal of and interest on the Loans and all other amounts included
in the Secured Obligations in accordance with the terms and provisions of the
Credit Agreement, the Notes, the other Credit Documents and the Designated Hedge
Agreements.
(b) Performance of Other Obligations. The Mortgagor will keep and perform
or cause to be kept and performed all covenants, agreements, conditions and
stipulations contained in the other Credit Documents or the Designated Hedge
Agreements which are binding on or otherwise applicable to the Mortgagor.
(c) Waiver of Acceptance, etc. The Mortgagor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Secured Obligations and this Mortgage and any requirement that the Collateral
Agent or any Secured Creditor protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any right or take
any action against any other person, or any collateral, or pursue any other
remedy in the power of the Collateral Agent or any other Secured Creditor.
SECTION 2. TITLE TO PREMISES, PROTECTION OF LIEN OF MORTGAGE, ETC.
(a) Title to Premises, etc. The Mortgagor represents to and covenants with
the Collateral Agent, its successors and assigns, that (i) the Mortgagor has and
will have good, marketable and insurable fee simple title to the Land, free and
clear of all liens, charges and encumbrances of every
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kind and character, subject only to Permitted Encumbrances; (ii) the Mortgagor
has and will have full corporate power and lawful authority to encumber and
convey the Premises as provided herein; (iii) the Mortgagor owns and will own
all of the Fixtures and Equipment, free and clear of all liens, charges and
encumbrances of every kind and character, subject only to Permitted
Encumbrances; (iv) this Mortgage is and will remain a valid and enforceable
first priority lien on, and first priority security interest in, the Premises,
subject only to Permitted Encumbrances; and (v) the Mortgagor hereby warrants
and will forever warrant and defend such title and the validity, enforceability
and priority of the lien and security interest hereof against the claims of all
persons and parties whomsoever.
(b) Protection of Lien; Defense of Action. If the lien, security interest,
validity or priority of this Mortgage, or if title or any of the rights of the
Mortgagor or the Collateral Agent in or to the Premises, shall be endangered or
questioned, or shall be attacked directly or indirectly, or if any action or
proceeding is commenced, to which action or proceeding the Collateral Agent is
made a party by reason of the execution of this Mortgage, or in which it becomes
necessary to defend or uphold the lien of this Mortgage, or the priority thereof
or possession of the Premises, or otherwise to perfect the security hereunder,
or if any suit, action, legal proceeding or dispute of any kind is commenced in
which the Collateral Agent is made a party or appears as party plaintiff or
defendant, affecting the interest created herein, or the Premises, including,
but not limited to, bankruptcy, probate and administration proceedings, other
foreclosure proceedings or any condemnation action involving the Premises, then
the Mortgagor will promptly notify the Collateral Agent thereof (unless the
Collateral Agent has initiated or been served with process in respect thereof)
and the Mortgagor will diligently endeavor to cure any defect which may be
developed or claimed, and will take all necessary and proper steps for the
defense of such action or proceeding, including the employment of counsel, the
prosecution or defense of litigation and, subject to the Collateral Agent's
approval, the compromise, release or discharge of any and all adverse claims.
The Collateral Agent (whether or not named as a party to such actions or
proceedings), is hereby authorized and empowered (but shall not be obligated) to
take such additional steps as it may deem necessary or proper for the
prosecution, defense and control of any such action or proceeding or the
protection of the lien, security interest, validity or priority of this Mortgage
or of such title or rights, including the employment of counsel, the prosecution
or defense of litigation, the compromise, release or discharge of such adverse
claims, the purchase of any tax title and the removal of prior liens and
security interests. The Mortgagor shall, on demand, reimburse the Collateral
Agent for all expenses (including attorneys' fees and disbursements) incurred by
it in connection with the foregoing matters, and the person incurring such
expenses shall be subrogated to all rights of the person receiving such payment.
All such costs and expenses of the Collateral Agent, until reimbursed by the
Mortgagor, shall be part of the Secured Obligations and shall be deemed to be
secured by this Mortgage.
SECTION 3. TAXES AND IMPOSITIONS.
(a) Taxes on the Premises. The Mortgagor will pay when due, and before any
penalty, interest or cost for non-payment thereof may be added thereto, all
taxes, assessments, vault, water and sewer rents, rates, charges and
assessments, levies, permits, inspection and license fees and other governmental
and quasi-governmental charges, general and special, ordinary and extraordinary,
foreseen and unforeseen, heretofore or hereafter assessed, levied or otherwise
imposed against or upon, or which may become a Lien upon, the Premises or any
part thereof or any appurtenance thereto, or the revenues, rents, issues, income
and profits of the Premises or arising in respect of the occupancy, use or
possession thereof (collectively, "Impositions"). The Mortgagor will also pay
any penalty, interest or cost for non-payment of Impositions which may become
due and payable, and such penalties, interest or cost shall be included within
the term Impositions.
(b) Receipts. Unless the Mortgagor is making monthly deposits with the
Collateral Agent pursuant to section 4, or unless the Collateral Agent otherwise
directs, the Mortgagor will furnish to the Collateral Agent, upon its request,
proof of payment at the time same is made, and thereafter, upon receipt,
validated receipts showing payment in full of all Impositions.
(c) Income and Other Taxes. The Mortgagor will promptly pay all income,
franchise and other taxes owing by the Mortgagor, and any stamp taxes which may
be required to be paid in connection with the Secured Obligations, this Mortgage
or any other Credit Document or Designated Hedge Agreement, together with any
interest or penalties thereon, and the Mortgagor will pay any and all taxes,
charges, filing, registration and recording fees, excises and levies imposed
upon the Collateral Agent, the Administrative Agent or the Secured Creditors by
reason of execution of the Credit Agreement, the Notes, this Mortgage, the other
Credit Documents or any Designated Hedge Agreement, or ownership of this
Mortgage or any mortgage supplemental hereto, any security instrument with
respect to any Fixtures and Equipment or any instrument of further assurance.
(d) Brundage Clause. In the event of the enactment after the date hereof
of any law in the State in which the Premises are located or any other
governmental entity deducting from the value of the Premises for the purpose of
taxation any lien or security interest thereon, or changing in any way the laws
for the taxation of mortgages, deeds of trust or other liens or debts secured
thereby, or the manner of collection of such taxes, so as to affect this
Mortgage, the Secured Obligations, the Collateral Agent, the Administrative
Agent or any of the Secured Creditors, then, and in such event, the
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Mortgagor shall, on demand, pay to (or reimburse) the Collateral Agent, the
Administrative Agent or such Secured Creditors, the amount of all taxes,
assessments, charges or liens for which the Collateral Agent, the Administrative
Agent or any of the Secured Creditors is or may be liable as a result thereof,
provided that if any such payment or reimbursement shall be unlawful or would
constitute usury or render the Secured Obligations wholly or partially usurious
under applicable law, then the Collateral Agent may, at its option, declare the
Secured Obligations immediately due and payable or require the Mortgagor to pay
or reimburse the Collateral Agent, the Administrative Agent or any of the
Secured Creditors for payment of the lawful and non-usurious portion thereof.
(e) Right to Contest Impositions. Notwithstanding anything to the contrary
contained in this section 3, the Mortgagor shall have the right to protest
and/or contest any Imposition imposed upon the Premises or any part thereof,
provided that and so long as (1) the same is done by the Mortgagor upon prior
written notice to the Collateral Agent and at the Mortgagor's sole cost and
expense and with due diligence and continuity so as to resolve such protest
and/or contest as promptly as possible; (2) neither the Premises nor any part
thereof is or will be in immediate danger of being forfeited or lost by reason
of such protest or contest; (3) if required by the Collateral Agent, the
Mortgagor shall establish a reserve or other security with the Collateral Agent
in an amount and in form and substance satisfactory to the Collateral Agent for
application to the cost of curing or removing the same from record pursuant to
clause (4) below; (4) in any event, each such contest shall be concluded and the
tax assessment, penalties, interest and costs shall be paid prior to the date
such judgment becomes final or any writ or order is issued under which the
Premises may be sold pursuant to such judgment; and (5) the Mortgagor agrees in
writing to indemnify and hold harmless the Collateral Agent and the Secured
Creditors from and against any and all expenses, claims, demands, obligations,
liabilities, suits, actions and penalties upon or arising out of such protest
and/or contest. Pending the determination of any such protest or contest, the
Mortgagor shall not be obligated to pay any such Imposition unless nonpayment of
such Imposition will subject the Premises or any part thereof to sale or other
liability or forfeit by reason of non-payment. In addition, to the extent that
the same may be permitted by law, the Mortgagor shall have the right to apply
for the conversion of any Imposition to make the same payable in annual
installments over a period of years, and upon such conversion the Mortgagor
shall be obligated only to pay and discharge said periodic installments as
required by this section 3.
SECTION 4. TAX AND INSURANCE DEPOSITS.
(a) Amount of Deposits. To further secure the Mortgagor's obligations
under sections 3 and 10, but not in lieu thereof, the Collateral Agent, at its
option, following the occurrence and during the continuance of an Event of
Default, may require that the Mortgagor deposit with the Collateral Agent,
monthly on the first day of each month, a sum equal to one-twelfth (1/12) of the
estimated annual cost of all Impositions levied on the Premises, and a sum equal
to one-twelfth (1/12) of the estimated annual insurance premiums required to
keep the Improvements and the Fixtures and Equipment insured as required by
section 10 hereof, and the Mortgagor shall, accordingly, make such deposits. In
addition, if required by the Collateral Agent, the Mortgagor shall also deposit
with the Collateral Agent a sum of money which, together with the aforesaid
monthly installments, will be sufficient to make each of said payments of
Impositions and premiums, at least 10 days before such payments are due. If the
amount of any such payments is not ascertainable at the time any such deposit is
required to be made, the deposit shall be made on the basis of the Collateral
Agent's estimate thereof, and, when such amount is fixed for the then-current
year, the Mortgagor shall promptly deposit any deficiency with the Collateral
Agent.
(b) Use of Deposits. All funds so deposited shall, until so applied,
constitute additional security for the Secured Obligations, shall be held by the
Collateral Agent in a separate account, without interest (except to the extent
required under applicable law), may be commingled with other funds of the
Collateral Agent and, provided that no Event of Default shall have occurred and
be continuing hereunder, shall be applied in payment of the aforesaid amounts
prior to their becoming delinquent, to the extent that Collateral Agent shall
have such funds on hand, and provided, further, that the Collateral Agent shall
have no obligation to use said funds to pay any installment of Impositions prior
to the last day on which payment thereof may be made without penalty or interest
or to pay an insurance premium prior to the due date thereof. It shall be the
Mortgagor's responsibility to furnish the Collateral Agent with bills or
invoices therefor in sufficient time to pay the same before any penalty or
interest attaches and before said policies of insurance lapse, and the
Collateral Agent shall have no responsibility for payment of the same in the
absence of such bills or invoices. If an Event of Default hereunder shall have
occurred and be continuing, or if any of the Secured Obligations shall have been
accelerated as provided in the Credit Agreement or any Designated Hedge
Agreement, all funds so deposited may, at the Collateral Agent's option, be
applied to the Secured Obligations in the order determined by the Collateral
Agent or to cure said Event of Default or as provided in this section.
(c) Transfer of Mortgage. Upon an assignment or other transfer of this
Mortgage, the Collateral Agent shall have the right to pay over the balance of
such deposits in its possession to the assignee or other successor, and the
Collateral Agent shall thereupon be completely released from all liability with
respect to such deposits and the Mortgagor or the owner of the Premises shall
look solely to the assignee or transferee with respect thereto. This provision
shall apply to every transfer of such deposits to a new assignee or transferee.
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(d) Transfer of Premises. A permissible transfer of record title to the
Premises shall automatically transfer to the new owner the beneficial interest
in any deposits under this section. Upon full payment and satisfaction of this
Mortgage or, at the Collateral Agent's option, at any prior time, the balance of
amounts deposited in the Collateral Agent's possession shall be paid over to the
record owner of the Premises, and no other person shall have any right or claim
thereto in any event.
(e) Depository. The Mortgagor agrees, at the Collateral Agent's request
and at the Mortgagor's expense, to make the aforesaid deposits with the
Collateral Agent or such service or financial institution as the Collateral
Agent may from time to time designate in lieu of the Collateral Agent.
SECTION 5. LIENS AND LIABILITIES.
(a) Discharge of Mechanic's Liens, etc. The Mortgagor will pay, bond or
otherwise discharge, from time to time when the same shall become due, all
lawful claims and demands of mechanics, materialmen, laborers and others which,
if unpaid, might result in, or permit the creation of, a lien on the Premises,
or on the revenues, rents, issues, income or profits arising therefrom and, in
general, the Mortgagor shall do, or cause to be done, at the Mortgagor's sole
cost and expense, everything necessary to fully preserve the lien, security
interest and priority of this Mortgage.
(b) Creation of Liens. The Mortgagor will not, without the Collateral
Agent's consent, create, place or permit to be created or placed, or through any
act or failure to act acquiesce in the placing of, or allow to remain, any deed
of trust, mortgage, voluntary or involuntary lien, whether statutory,
constitutional or contractual, security interest, encumbrance or charge, or
conditional sale or other title retention document, against or covering the
Premises, prior to, on a parity with or subordinate to the lien of this
Mortgage, other than the following ("Permitted Encumbrances"): (i) the lien of
this Mortgage; (ii) the Permitted Liens (as defined in the Credit Agreement);
and (iii) such other matters of record as may be described in Exhibit 2 or as to
which the Collateral Agent has otherwise specifically consented in writing. If
any of the foregoing, other than Permitted Encumbrances, becomes attached to the
Premises without such consent, the Mortgagor will promptly cause the same to be
discharged and released.
(c) No Consent of Collateral Agent to Liens to be Implied. Nothing in the
Credit Agreement, the Notes, this Mortgage, the other Credit Documents or any
Designated Hedge Agreement shall be deemed or construed in any way as
constituting the consent or request by the Collateral Agent, express or implied,
to any contractor, subcontractor, laborer, mechanic or materialman for the
performance of any labor or the furnishing of any material for any improvement,
construction, alteration or repair of the Premises.
(d) Right to Contest. Notwithstanding anything to the contrary contained
in this section 5, the Mortgagor shall have the right to contest in good faith
the validity of any such lien, encumbrance, charge or security interests,
provided that and so long as (1) the same is done by the Mortgagor upon prior
written notice to the Collateral Agent and at the Mortgagor's sole cost and
expense and with due diligence and continuity so as to resolve as promptly as
possible such question of validity; (2) neither the Premises nor any part
thereof will be in immediate danger of being forfeited or lost by reason of such
contest; (3) such contest shall not subject the Collateral Agent to prosecution
for a criminal offense or a claim for civil liability; (4) if required by the
Collateral Agent, the Mortgagor shall either bond such lien, encumbrance, charge
or security interest or establish a reserve or other security with the
Collateral Agent in an amount and in form and substance satisfactory to the
Collateral Agent for application towards the cost of curing or removing the same
from record pursuant to clause (5) below; (5) the Mortgagor shall thereafter
diligently proceed to cause such lien, encumbrance or charge to be removed and
discharged prior to the date the Premises is listed for an in rem action with
respect to such lien, encumbrance or charge or any writ or order is issued under
which the Premises may be sold pursuant to a final judgment; (6) the Mortgagor
agrees in writing to indemnify and hold harmless the Collateral Agent and the
Secured Creditors from and against any and all expenses, claims, demands,
obligations, liabilities, suits, actions and penalties upon or arising out of
such contest and (7) no Event of Default hereunder shall have occurred and be
continuing.
SECTION 6. TRANSFERS AND MERGERS; LEASES, ETC.
The Mortgagor shall not (i) sell, assign, transfer or otherwise dispose of
the Premises or any part thereof or interest therein, or (ii) merge or
consolidate with any other person, or (iii) lease all or any portion of the
Premises to any other person, except pursuant to a lease which is subject and
subordinate in all respects to this Mortgage, or (iv) enter into any contract or
agreement to do any of the foregoing, expressly including, without limitation,
any land contract, lease/purchase, lease/option or option agreement, except to
the extent permitted by, and in compliance with the requirements of, section 9.2
of the Credit Agreement.
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SECTION 7. MAINTENANCE; ALTERATIONS; REPAIR OR RESTORATION OF LOSS OR
DAMAGE CAUSED BY CASUALTY; PREPAYMENT UPON EVENT OF LOSS.
(a) Repair and Maintenance. The Mortgagor will operate and maintain the
Premises in good order, repair and operating condition, ordinary wear and tear
excepted, and will promptly make all necessary repairs, renewals, replacements,
additions and improvements to the Premises, interior and exterior, structural
and nonstructural, foreseen and unforeseen, required by law or any restrictive
covenant affecting the Premises or otherwise necessary so that the Premises will
at all times be in good operating condition, ordinary wear and tear excepted,
and fit and proper for the purposes for which it is used and operated at the
date hereof. The Mortgagor shall not in any event commit waste upon the Premises
or suffer waste to be committed thereon.
(b) Replacement of Fixtures and Equipment. The Mortgagor will keep the
Premises fully equipped and will replace all worn-out or obsolete Fixtures and
Equipment with Fixtures and Equipment comparable thereto when new, and will not,
without the Collateral Agent's consent, remove from the Premises any item of the
Fixtures and Equipment covered by this Mortgage unless (i) the same is replaced
by the Mortgagor with an item of equal suitability and value when new, owned by
the Mortgagor and subject to the lien and security interest of this Mortgage,
free and clear of any lien or security interest (other than Permitted
Encumbrances), or (ii) in the case of any such Fixtures and Equipment which is
obsolete and surplus to its needs, the same is disposed of in the ordinary
course of business and in compliance with section 9.2 of the Credit Agreement.
(c) Alterations of Improvements, etc. No buildings, structures or other
substantial Improvements on the Premises shall be altered in any material
respect or demolished or removed by the Mortgagor, provided that the Mortgagor
may make alterations and additions (including structural alterations) to the
Improvements if (i) such alterations do not materially reduce the value or
marketability of the Premises or the uses or utility of the Premises; or (ii)
such alterations are required by applicable law, rule or regulation.
(d) Event of Loss, etc. If the Improvements or the Fixtures and Equipment
suffer any damage or loss or are destroyed by fire, rain, storm, flood,
earthquake, or any other casualty, whether or not covered by insurance, the
Mortgagor will (i) if the same constitutes an Event of Loss requiring prepayment
of any of the Loans pursuant to section 5.2 of the Credit Agreement, so prepay
such Loans as provided in the Credit Agreement, or (ii) otherwise repair,
replace or restore the Improvements and/or Fixtures and Equipment to the
condition in which they are required to be maintained hereunder immediately
prior to such damage, loss or destruction
SECTION 8. COMPLIANCE WITH LAWS AND INSURANCE REQUIREMENTS, ETC.
(a) Compliance with Laws, etc. The Mortgagor covenants that the Premises
will at all times be constructed, installed, maintained and operated in
compliance with all applicable requirements of:
(i) all laws, rules, regulations, orders, authorizations, permits
and licenses of all governmental authorities, federal, state and local,
having jurisdiction over the Mortgagor, the Premises or any part thereof,
including, without limitation, (w) all Environmental Laws, (x) the
Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq., (y) the
Americans with Disabilities Act of 1990, and (z) all state and local laws
and ordinances related to handicapped access and all rules, regulations,
and orders issued pursuant thereto including, without limitation, the
Americans with Disabilities Act Accessibility Guidelines for Buildings and
Facilities (collectively as referred to in clause (y) and this clause (z),
"Access Laws"); and
(ii) all restrictive covenants affecting any portion or all of the
Real Property Collateral; .
other than those requirements (A) being contested in good faith by appropriate
proceedings, as to which adequate reserves are established to the extent
required under GAAP, and (B) the noncompliance with which would not have, and
which would not be reasonably expected to have, a Material Adverse Effect.
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(b) Alterations Affecting Compliance with Access Laws. Notwithstanding any
provisions set forth herein or in any other document regarding the Collateral
Agent's approval of alterations of the Real Property Collateral, the Mortgagor
shall not alter the Real Property Collateral in any manner which would increase
in any material respect the responsibilities of the Mortgagor for compliance
with the applicable Access Laws without the prior written approval of the
Collateral Agent. The foregoing shall apply to tenant improvements constructed
by the Mortgagor or by any of its tenants. The Collateral Agent may condition
any such approval upon receipt of a certificate of Access Law compliance from an
architect, engineer, or other person acceptable to the Collateral Agent.
(c) Notice of Violation of Access Laws. The Mortgagor does hereby agree to
give prompt notice to the Collateral Agent of the receipt by the Mortgagor of
any complaints related to violation of any Access Laws and of the commencement
of any proceedings or investigations which relate to compliance with applicable
Access Laws.
(d) Licenses and Permits, etc. The Mortgagor shall (i) observe and comply
with all conditions and requirements necessary to preserve and extend any and
all rights, licenses, permits (including but not limited to zoning variances,
special exceptions and non-conforming uses), privileges, franchises and
concessions which are applicable to the Premises or any part thereof or which
have been granted to or contracted for by the Mortgagor in connection with any
existing or presently contemplated use of the Premises, and (ii) obtain and keep
in full force and effect all necessary governmental and municipal approvals as
may be necessary from time to time to comply in all material respects with all
Environmental Laws, all Access Laws and other statutory or regulatory
requirements; except in any such case referred to in clause (i) or (ii) above
where the noncompliance would not have, and would not be reasonably expected to
have, a Material Adverse Effect.
(e) Flood Hazards; Utilities; Streets. The Mortgagor represents and
warrants that (i) the Premises are not located in an area identified by the
Secretary of Housing and Urban Development or a successor thereto as an area
having special flood hazards pursuant to the terms of the National Flood
Disaster Protection Act of 1973, as amended; (ii) the Premises are served by all
utilities required for the present use thereof; and (iii) all streets necessary
to serve the Premises for the use thereof as herein contemplated have been
completed and are serviceable and have been dedicated or accepted by the
appropriate governmental entities.
(f) Zoning; Title Matters. The Mortgagor will not (i) initiate or support
any zoning reclassification of the Premises, seek any variance under existing
zoning ordinances applicable to the Premises or use or permit the use of the
Premises in a manner which would result in such use becoming a non-conforming
use under applicable zoning ordinances, (ii) modify, amend or supplement any
Permitted Encumbrances, (iii) impose any restrictive covenants or encumbrances
upon the Premises, execute or file any subdivision plat affecting the Premises
or consent to the annexation of the Premises to any municipality or (iv) permit
or suffer the Premises to be used by the public or any person in such manner as
might make possible a claim of adverse usage or possession or of any implied
dedication or easement.
(g) Insurance Requirements. The Mortgagor shall observe and comply with
any and all conditions and requirements attached to or made a part of the
insurance relating to the Premises which is maintained in accordance with
section 10.
SECTION 9. ENVIRONMENTAL MATTERS.
(a) Without limitation of the provisions of section 8 hereof, the
Mortgagor hereby (i) reaffirms its representations contained in section 7.13 of
the Credit Agreement, (ii) covenants to perform and observe all of the terms and
provisions of the Credit Agreement relating to compliance by it with
Environmental Laws and notice by it and indemnification by it of Environmental
Claims, including, without limitation, the covenants contained in section 8.8 of
the Credit Agreement and the indemnification obligations contained in section
12.1 of the Credit Agreement; and (iii) agrees that all of the Secured Creditors
shall be considered Indemnitees as defined in section 12.1(g) of the Credit
Agreement.
(b) Any costs or expenses reasonably incurred by a person to be
indemnified hereunder for which the Mortgagor is responsible shall be paid to
the person to be indemnified on demand, and failing prompt reimbursement, shall
be added to the Secured Obligations and earn interest at the interest rate
provided in the last sentence of section 2.7(c) of the Credit Agreement, or such
lesser rate as is the maximum legally permissible rate of interest (the "Default
Rate"), until paid in full.
(c) The Mortgagor's representations, warranties, and obligations under
this section shall not be terminated, released, discharged, extinguished, or
otherwise affected by any foreclosure of any lien, indebtedness or obligation,
any satisfaction of the Secured Obligations or the release or discharge of the
Premises or any part thereof or any other action or thing, except and unless
such representations, warranties, and obligations are expressly
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released in writing by the Collateral Agent, which writing shall refer
particularly to this section. The provisions of this section may be enforced at
any time by any of the Secured Creditors, the Collateral Agent or any other
person entitled to be indemnified hereunder and, without limiting the foregoing,
shall survive the payment or other satisfaction by any means of the obligations
evidenced by the Notes and the release and discharge of this Mortgage, except in
the case of a specific written release by the Collateral Agent as to this
section, as referred to above.
SECTION 10. INSURANCE.
(a) Required Insurance. The Mortgagor will maintain insurance with
responsible companies in such amounts and against such risks as is usually
carried by owners of similar businesses and properties (and with such
deductibles and levels of self-insurance as are usually maintained by owners of
similar businesses and properties and as are consistent with the Mortgagor's
practices as of the date of the execution and delivery hereof), provided that in
any event the Mortgagor will maintain:
(i) All Risk Extended Coverage Insurance: insurance against loss or
damage covering the Improvements, the Fixtures and Equipment and all other
tangible personal property of the Mortgagor located on the Premises by
reason of any loss or damage by fire, storms, and other hazards, perils,
casualties and risks, including without limitation risks usually covered
by extended coverage policies issued in the jurisdiction in which the
Improvements are located, which insurance shall:
(A) name National City Bank, as Collateral Agent as an
additional insured and as loss payee,
(B) provide coverage in an amount not less than the greater
of (x) 100% of the replacement costs of the Improvements and the
Fixtures and Equipment, (y) the full insurable value of the
Improvements and the Fixtures and Equipment, and (z) the amount
applicable to the Improvements and the Fixtures and Equipment
necessary so that neither the Mortgagor (or any of its Affiliates)
or the Collateral Agent shall be considered or shall become a co-
insurer of any loss under such policy, and
(C) provide for a deductible or self-insurance retention in
an amount consistent with the Mortgagor's current practices or such
greater amount as is reasonably acceptable to the Collateral Agent;
(ii) Flood Insurance: if the area in which the Real Property
Collateral is located has been designated as flood prone or a flood risk
area, as defined by the Flood Disaster Protection Act of 1973, as amended,
flood insurance, which insurance shall:
(A) name National City Bank, as Collateral Agent as an
additional insured and as loss payee,
(B) provide coverage in an amount not less than the greater of
(x) 100% of the replacement costs of the Improvements and the
Fixtures and Equipment, (y) the full insurable value of the
Improvements and the Fixtures and Equipment, and (z) the amount
applicable to the Improvements and the Fixtures and Equipment
necessary so that neither the Mortgagor (or any of its Affiliates)
or the Collateral Agent shall be considered or shall become a
co-insurer of any loss under such policy; provided that if flood
insurance in the required amount is not available, flood insurance
shall be maintained in the maximum amount available;
(C) provide for a deductible or self-insurance retention of an
amount reasonably acceptable to the Collateral Agent; and
(D) comply with any additional requirements of the National
Flood Insurance Program as set forth in such Act;
(iii) Commercial General Liability Insurance: insurance against
claims for bodily injury, death or property damage occurring on, in or
about the Premises and any other facilities owned, leased or used by the
Mortgagor (including adjoining streets, sidewalks and waterways), which
insurance shall:
(A) name National City Bank, as Collateral Agent as an
additional insured,
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(B) provide coverage in an amount not less than $1,000,000 per
occurrence and $2,000,000 in the aggregate, plus umbrella coverage
of not less than $3,000,000; and
(C) provide for a deductible or self-insurance retention in an
amount consistent with the Mortgagor's current practices or such
greater amount as is reasonably acceptable to the Collateral Agent;
(iv) Workers' Compensation Insurance: insurance against claims for
injuries to or death of employees (including Employers' Liability
Insurance) to the extent required by applicable law;
(v) Business Interruption Insurance: insurance against loss of
operating income for a period of at least six months, occasioned by reason
of any peril affecting the operations of the Mortgagor; and
(vi) Other Insurance: such other and additional insurance, in such
amounts and with such coverages as are then customary for property similar
in use and located in the same state in which the Premises is located.
Such insurance shall be written by financially responsible companies selected by
the Mortgagor and having an A.M. Best rating of "A-" or better and being in a
financial size category of "VII" or larger, or by other companies acceptable to
the Collateral Agent, and (other than workers' compensation insurance) shall
name the Collateral Agent, as loss payee (in the case of insurance described in
items (i) and (ii)) or as an additional named insured (in the case of the
insurance described in items (iii), (v) and (vi) above), in each case as its
interests may appear. Each policy referred to in this section shall provide that
it will not be canceled or reduced or expire except after not less than 30 days'
written notice to the Collateral Agent and shall also provide that the interests
of the Collateral Agent shall not be invalidated by an act or negligence of the
Mortgagor or any person having an interest in any facility owned, leased or used
by the Mortgagor nor by occupancy or use of any facility owned, leased or used
by the Mortgagor for purposes more hazardous than permitted by such policy nor
by any foreclosure or other proceedings relating to any facility owned, leased
or used by the Mortgagor. The Mortgagor will advise the Collateral Agent
promptly of any policy cancellation, reduction or amendment. All of such
insurance shall be primary and non-contributing with any insurance which may be
carried by the Collateral Agent. All insurance policies, to the extent of its
interest, are to be for the benefit of and first payable in case of loss to the
Collateral Agent as first mortgagee without contribution. At or prior to the
time of the initial Borrowing by the Mortgagor, it will provide to the
Collateral Agent (x) certificates or endorsements naming the Collateral Agent as
an additional insured or loss payee with respect to the casualty and liability
insurance maintained as required hereby with respect to the Premises, and (y) if
requested to do so, copies of all insurance policies maintained by it as
required hereby. The Mortgagor shall deliver to the Collateral Agent
contemporaneously with the expiration or replacement of any policy of insurance
required to be maintained hereunder a certificate as to the new or renewal
policy.
(b) Proceeds of Insurance. All amounts recoverable under any policy of
casualty insurance are hereby assigned to the Collateral Agent. In the event of
a loss, and if an Event of Default has occurred and is continuing or if any
required prepayment of any of the Secured Obligations is required to be made at
such time or as a result thereof, the Collateral Agent is authorized and
empowered, at its option, to adjust or compromise any loss covered by any
insurance policies on the Premises, to collect and receive the proceeds
therefrom and, after deducting from such proceeds any expenses incurred by it in
the collection or handling thereof, to apply the net proceeds to the Secured
Obligations in accordance with the provisions of the Credit Agreement. If any
such net proceeds are not to be so applied, the Collateral Agent is authorized
to apply the net proceeds in any one or more of the following ways, subject to
the applicable provisions of the Credit Agreement: (i) use the same or any part
thereof to fulfill any of the covenants contained herein as the Collateral Agent
may determine; (ii) use the same or any part thereof to replace and restore the
Premises to a condition satisfactory to the Collateral Agent; or (iii) release
the same or any part thereof to the Mortgagor to cover the cost of repair or
restoration of the Improvements.
(c) Power of Attorney. The Collateral Agent is hereby irrevocably
appointed by the Mortgagor as attorney for the Mortgagor to assign any policy to
itself or its nominees in the event of the foreclosure of this Mortgage. In the
event of foreclosure of this Mortgage, or other transfer of title of the
Premises in lieu of foreclosure, all right, title and interest of the Mortgagor
in and to any insurance policies then in force shall pass to the purchaser or
grantee thereof.
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SECTION 11. CONDEMNATION.
(a) Condemnation. The Mortgagor will give the Collateral Agent immediate
notice of the actual or threatened commencement of any proceedings under eminent
domain affecting all or any part of the Premises or any easement therein or
appurtenance thereof, including severance and consequential damage and change in
grade of streets, and will deliver to the Collateral Agent copies of any and all
papers served in connection with any such proceedings. The Mortgagor agrees that
all awards heretofore or hereafter made by any public or quasi-public authority
to the present and all subsequent owners of the Premises by virtue of an
exercise of the right of eminent domain by such authority, including any award
for taking of title, possession or right of access to a public way, or for any
change of grade or streets affecting the Premises, are hereby assigned to the
Collateral Agent. If case of any such proceedings, and if an Event of Default
has occurred and is continuing or if any required prepayment of any of the
Secured Obligations is required to be made at such time or as a result thereof,
the Collateral Agent is authorized and empowered, at its option, to collect and
receive the proceeds of any such awards from the authorities making the same and
to give proper receipts therefor, and after deducting from such proceeds any
expenses incurred by the Collateral Agent in the collection or handling thereof,
to apply the net proceeds to the Secured Obligations in accordance with the
provisions of the Credit Agreement. If any such net proceeds are not to be so
applied, the Collateral Agent is authorized, at its option, to apply the net
proceeds in any one or more of the following ways, subject to the applicable
provisions of the Credit Agreement: (A) use the same or any part thereof to
fulfill any of the covenants contained herein as the Collateral Agent may
determine; (B) use the same or any part thereof to replace and restore the
Premises to a condition satisfactory to the Collateral Agent; or (C) release the
same or any part thereof to the Mortgagor to cover the cost of repair or
restoration of the Improvements.
(b) Further Assurances. The Mortgagor hereby covenants and agrees to and
with the Collateral Agent, upon the request of the Collateral Agent to make,
execute and deliver any and all assignments and other instruments sufficient for
the purpose of assigning all such awards to the Collateral Agent, free and clear
and discharged of any and all encumbrances of any kind or nature whatsoever
except as above stated.
(c) Installment Payment of Secured Obligations Not Impaired.
Notwithstanding any taking under the power of eminent domain, alteration of the
grade of any street, or other injury to or decrease in value of the Premises by
any public or quasi-public authority or corporation, the Mortgagor shall
continue to pay installments on the Secured Obligations owed by it and any
reduction in the principal sum resulting from the application by the Collateral
Agent of such award or payment as hereinafter set forth shall be deemed to take
effect only on the date of such receipt.
SECTION 12. RIGHT OF COLLATERAL AGENT TO MAKE PAYMENTS ON BEHALF OF
MORTGAGOR, ETC.
(a) Right of Collateral Agent to Make Payments, etc. In the event the
Mortgagor shall fail to comply with any or all of its covenants, agreements,
conditions and stipulations herein set forth, then the Collateral Agent shall
after notice to the Mortgagor be and hereby is authorized and empowered at its
option, but without legal obligation to do so, to pay or perform the same
without waiver of any other remedy. In addition, the Collateral Agent is
authorized and empowered at its option, but without legal obligation to do so,
upon not less than two business Days' prior notice to the Chief Financial
Officer of the Mortgagor, to enter, or have its agents enter, the Premises
whenever necessary for the purpose of inspecting the Premises and curing any
default hereunder. The Mortgagor agrees that the Collateral Agent shall
thereupon have a claim against the Mortgagor for all sums paid by the Collateral
Agent for such defaults so cured, together with a lien upon the Premises for the
sum so paid plus interest at the Default Rate.
(b) Collateral Agent Protected; Further Rights, etc. The Collateral Agent,
in making any payment herein and hereby authorized in the place and stead of the
Mortgagor (i) relating to taxes, assessments, water rates, sewer rentals and
other governmental or municipal charges, fines, impositions or liens asserted
against the Premises, may do so according to any bill, statement or estimate
procured from the appropriate public authority without inquiry into the validity
thereof; or (ii) relating to any adverse title, lien, statement of lien,
encumbrance, claim or charge, shall be the sole judge of the validity of same;
or (iii) otherwise relating to any purpose herein and hereby authorized, but not
enumerated in this section, may do so whenever, in its good faith judgment and
discretion, such payment shall seem necessary or desirable to protect the full
security intended to be created by this Mortgage. In connection with any such
payment, the Collateral Agent, at its option, may and is hereby authorized to
obtain a continuation report of title prepared by a title insurance company, the
cost and expenses of which shall be repayable by the Mortgagor upon demand and
shall be secured hereby.
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SECTION 13. SECURITY AGREEMENT PROVISIONS.
This Mortgage is hereby deemed to be as well a security agreement for the
purpose of creating hereby a security interest securing the Secured Obligations
in and to the Personal Property Collateral. Without derogating any of the
provisions of this Mortgage, the Mortgagor by this Mortgage:
(a) grants to the Collateral Agent a security interest in all of the
Mortgagor's right, title and interest in and to all Personal
Property Collateral, including, but not limited to, the items
referred to above, together with all additions, accessions and
substitutions and all similar property hereafter acquired and used
or obtained for use on, or in connection with, the Real Property
Collateral; the proceeds of the Personal Property Collateral are
intended to be secured hereby; provided, however, that such intent
shall never constitute an expressed or implied consent on the part
of the Collateral Agent to the sale of any or all Personal Property
Collateral except as specifically permitted under any of the
applicable provisions of this Mortgage or any of the other Credit
Documents;
(b) agrees that the security interest hereby granted by this Mortgage
shall secure the payment of the Secured Obligations;
(c) agrees not to sell, convey, mortgage or grant a security interest
in, or otherwise dispose of or encumber, any of the Personal
Property Collateral or any of the Mortgagor's right, title or
interest therein, except in compliance with the requirements of
section 9.2 of the Credit Agreement;
(d) agrees that if any of the Mortgagor's rights in the Personal
Property Collateral are voluntarily or involuntarily transferred,
whether by sale, creation of a security interest, attachment, levy,
garnishment or other judicial process, without the written consent
of the Collateral Agent, such transfer shall constitute a default by
the Mortgagor under the terms of this Mortgage;
(e) authorizes the Collateral Agent to file, in the jurisdiction where
this Mortgage will be given effect, financing statements covering
the Personal Property Collateral and at the request of the
Collateral Agent, the Mortgagor shall join the Collateral Agent in
executing one or more of such financing statements pursuant to the
Uniform Commercial Code in a form satisfactory to the Collateral
Agent and the Mortgagor shall pay the cost of filing the same in all
public offices at any time and from time to time wherever the
Collateral Agent deems filing or recording of any financing
statements or of this Mortgage to be desirable or necessary; and
(f) acknowledges that the Mortgagor, as of the date hereof, has joined
the Collateral Agent in the execution of one or more Uniform
Commercial Code financing statements to be filed to perfect the
security interest in the Personal Property created by this Mortgage.
SECTION 14. FILINGS AND RECORDINGS.
The Mortgagor agrees at all time to cause this Mortgage, and each
amendment or modification hereof or supplement hereto, and financing statements
covering personal property (and continuation statements in respect thereof), if
necessary or appropriate under the Uniform Commercial Code, as in effect in the
jurisdiction in which the Real Property Collateral is located, and all
assignments of leases, to be recorded, registered and filed, and kept recorded,
registered and filed, in such manner and in such places as appropriate, and
shall comply with all applicable statutes and regulations in order to establish,
preserve and protect the security and priority of this Mortgage, and such
assignments and the rights of the Collateral Agent thereunder. The Mortgagor
shall pay, or cause to be paid, all taxes, fees and other charges incurred in
connection with such recording, registration, filing and compliance.
SECTION 15. RIGHT OF SETOFF.
In addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
and during the continuance of an Event of Default, each Secured Creditor is
hereby authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Mortgagor or to any other person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by such Secured Creditor (including, without limitation,
by branches and agencies of such Secured Creditor wherever located) to or for
the credit or the account of the Mortgagor against and on account of the
obligations and liabilities of the Mortgagor to such Secured Creditor under the
Notes, any other Credit Documents or any Designated Hedge Agreement, including,
without limitation, all interests in Loans purchased by such Secured Creditor
pursuant to section 12.4(c) of the Credit Agreement, and all other claims of any
nature or description arising out of or connected with the Notes or any other
Credit Document or any
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Designated Hedge Agreement, irrespective of whether or not such Secured Creditor
shall have made any demand hereunder and although said Loans, liabilities or
claims, or any of them, shall be contingent or unmatured.
SECTION 16. EVENTS OF DEFAULT.
Any Event of Default under the Credit Agreement, any payment default by
the Borrower or any of its Subsidiaries under any Designated Hedge Agreement,
and/or any Event of Default relating to the Borrower or any of its Subsidiaries
under any Designated Hedge Agreement, shall constitute an Event of Default
("Event of Default") under this Mortgage.
SECTION 17. REMEDIES.
If an Event of Default, under and as defined in section 16 of this
Mortgage, has occurred and is continuing:
(a) The Collateral Agent, the Administrative Agent and the Secured
Creditors may exercise any one or more of the remedies specified in
section 10.2 of the Credit Agreement or otherwise available at law or in
equity.
(b) Without limitation of the foregoing or any of the other
provisions of this section 17, the Collateral Agent shall have, in
addition to all other rights and remedies hereunder, the STATUTORY POWER
OF SALE (as provided in Chapter 183, ss. 21 of the Massachusetts General
Laws).
(c) To the extent permitted by applicable law, the Collateral Agent
may enter upon the Premises or any portion thereof and may exclude the
Mortgagor therefrom; and having and holding the same, may use, operate,
manage, and control the Premises and conduct business in connection
therewith, including, without limitation the continuation of the
construction of the Improvements if not previously completed, either
personally or by its superintendents, managers, agents, servants,
attorneys or receivers; and upon every such entry, the Collateral Agent,
at the expense of the Mortgagor and from time to time, may maintain the
Premises and may insure and reinsure the same, as may seem to the
Collateral Agent to be necessary or advisable; and, at the expense of the
Mortgagor and from time to time, the Collateral Agent may make all
repairs, renewals, replacements, alterations, additions, betterments and
improvements thereto and thereon, as to the Collateral Agent may seem
necessary or advisable, and if the construction of the Improvements has
not been completed, may cause such construction to be continued to
completion or to such stage of completion as the Collateral Agent
considers necessary or advisable; and in every such case the Collateral
Agent shall have the right to carry on the construction thereof, enter
into, terminate, cancel and/or enforce contracts or leases related
thereto, manage and operate the Premises and carry on the business
thereof, and otherwise exercise all rights which the Mortgagor might
otherwise have with respect thereto, in the name of the Mortgagor or
otherwise, as the Collateral Agent shall deem best or advisable; and the
Collateral Agent shall be entitled to collect all rents, earnings,
revenues, issues, profits and income of the Premises, awards made for the
taking of or injury to the Premises through eminent domain or otherwise,
including awards or damages for change of grade, and also return premiums
or other payments upon insurance, and said rents, earnings, revenues,
issues, profits and income, awards, damages, premiums and payments are
hereby assigned to the Collateral Agent, and after deducting the expenses
and costs of conducting the business thereof and of all betterments,
additions, alterations, replacements, repairs and for taxes, assessments,
insurance and prior or other charges upon or with respect to the Premises
or any portion thereof, as well as just and reasonable compensations for
the services of all counsel, agents, employees, receivers and other
persons properly engaged or employed, the Collateral Agent shall apply the
proceeds as provided in section 18.
(d) To the extent permitted by applicable law, the Collateral Agent
is hereby authorized and empowered by the Mortgagor to sell the Premises
in such manner as may be prescribed by law, by advertisement and public
sale as provided by the laws of the jurisdiction in which the Real
Property Collateral is located, or to foreclose this Mortgage by judicial
proceedings and sell the Premises pursuant to such proceedings as
permitted by applicable law. The Mortgagor does hereby authorize the
Collateral Agent to sell the Premises together or in lots or parcels, as
to the Collateral Agent shall seem expedient, and to execute and deliver
to the purchaser or purchasers of such property good and sufficient deeds
thereof with covenants of general, special or limited warranty or such
other instruments of conveyance, assignment or transfer as the Collateral
Agent may deem appropriate. Payment of the purchase price to the
Collateral Agent shall satisfy the obligation of the purchaser at any such
sale therefor, and he shall not be bound to look after the application
thereof. The Collateral Agent shall cause notice of any such sale to be
mailed to the Mortgagor; but, except as otherwise provided by any
applicable provision of law, failure so to mail any such notice shall not
affect the validity of any such sale. If the Collateral Agent, acting on
behalf of any or all of the holders of the Notes or other Secured
Obligations,
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or any or all such holders acting on their own behalf, is the highest
bidder, the Collateral Agent or such holders, as the case may be, may
purchase at any sale or sales (whether statutory foreclosure or public
sale or sales conducted as hereinabove authorized) and may, in paying the
purchase price, turn in any of the Notes or other Secured Obligations held
by them, in lieu of cash, up to the entire amount owing thereunder,
whether for principal, interest or other amounts, which amount as so
designated as being turned over shall be considered distribution of the
proceeds of such sale. The provisions set forth above as to public sale or
sales in lieu of statutory foreclosure are not intended as an exclusive
method of foreclosure hereunder or to deprive the Collateral Agent of any
other legal or equitable remedy available under applicable law.
Accordingly, it is specifically agreed that the remedy of foreclosure by
the Collateral Agent's sale as hereinabove provided for shall be
cumulative and shall not in any wise be construed as an exclusive remedy,
and the Collateral Agent shall be fully entitled to a statutory court
foreclosure and to avail itself of any and all other legal or equitable
remedies available under the laws of the jurisdiction in which the Real
Property Collateral is located.
(e) The Mortgagor hereby authorizes the Collateral Agent to demand
and receive, in the place and stead of the Mortgagor, all amounts that may
become due under any and each lease, rental, contract, easement and other
right of the Mortgagor pertaining or in any way relating to the Premises
or any part thereof, and, when received, to apply the same to the costs
and expenses incurred by the Collateral Agent incurred hereunder and to
the Secured Obligations. No demand for, and no receipt or application of
any such amount shall be deemed to minimize, subordinate or affect in any
way the lien hereof and rights hereunder of the Collateral Agent or any
rights of a purchaser of any portion of the Premises at any foreclosure or
other sale hereunder, as against the person from whom the amount was
demanded or received, or his executors, administrators, successors or
assigns, or anyone claiming under such Tenant Lease, rental, contract or
other right.
(f) The Collateral Agent may exercise all rights and remedies
granted by law and more particularly the Uniform Commercial Code,
including, but not limited to, the right to take possession of the
Personal Property Collateral, and for this purpose may peaceably enter
upon any premises on which any or all of the Personal Property Collateral
is situated, without being deemed guilty of trespass and without liability
for damages thereby occasioned, and take possession of and operate the
Personal Property Collateral or remove it therefrom; the Collateral Agent
shall have the further right to take any action it deems necessary,
appropriate or desirable, at its option and in its discretion, to repair,
refurbish or otherwise prepare the Personal Property Collateral for sale,
lease or other use or disposition and to sell at public or private sales
or otherwise dispose of, lease or utilize the Personal Property Collateral
and any part thereof in any manner authorized or permitted by law and to
apply the proceeds thereof toward payment of any costs and expenses,
including reasonable attorneys' fees and legal expenses, to the extent
permitted by law, thereby incurred by the Collateral Agent and toward
payment of the Secured Obligations and all other indebtedness described in
this Mortgage, in such order and manner as may be provided in the Credit
Agreement or this Mortgage or in the event such provisions are not
applicable in such order and manner as the Collateral Agent may elect.
SECTION 18. COSTS OF ENFORCEMENT; APPLICATION OF PROCEEDS; MORTGAGOR
LIABLE FOR DEFICIENCY, ETC.
(a) Costs of Enforcement; Application of Proceeds. In case of (i)
foreclosure of this Mortgage in any court of law or equity, whether or not any
order or decree shall have been entered therein, and to the extent permitted by
law, a reasonable sum shall be allowed for attorney's fees of the Collateral
Agent in such proceedings, for stenographer's fees and for all moneys expended
for documentary evidence and the cost of a complete abstract of title and title
report for the purpose of such foreclosure, such sums to be secured by the lien
hereunder, and, to the extent permitted by law, there shall be included in any
judgment or decree foreclosing this Mortgage and be paid out of such rents,
issues and profits or out of the proceeds of any sale made in pursuance of any
such judgment or decree, or (ii) any other realization by the Collateral Agent
upon or with respect to the Premises or any part or portion thereof, the
proceeds thereof shall be applied as follows:
(1) first, to the payment or reimbursement of the Collateral Agent
for all costs and expenses of such suit or suits or other enforcement
activities of the Collateral Agent, including, but not limited to, the
costs of advertising, sale and conveyance, including attorneys',
solicitors' and stenographers' fees, if permitted by law, outlays for
documentary evidence and the cost of such abstract, examination of title
and title report;
(2) second, to the extent proceeds remain after the application
pursuant to preceding clause (1), to reimburse the Collateral Agent for
all moneys advanced by the Collateral Agent, if any, for any purpose
authorized in this Mortgage with interest at the Default Rate;
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(3) third, to the extent proceeds remain after the application
pursuant to preceding clause (2), an amount equal to the outstanding
Secured Obligations shall be applied by the Collateral Agent to the
Secured Obligations in such amount and order of priority as may be
provided in section 10.3 of the Credit Agreement; and
(4) fourth, to the extent remaining after the application pursuant
to the preceding clauses (1), (2) and (3) and payment in full of the
Secured Obligations which are secured hereby, to the Mortgagor or to
whomever may be lawfully entitled to receive such payment.
(b) Mortgagor Liable for Deficiency. It is understood that the Mortgagor
shall remain liable to the extent of any deficiency between (x) the amount of
the proceeds of the Premises and the amount of the sum referred to in the
foregoing clauses (1) and (2) and (y) the aggregate outstanding amount of the
Secured Obligations.
SECTION 19. RECEIVER.
In the event an action shall be instituted to foreclose this Mortgage, or
prior to foreclosure but after default, the Collateral Agent shall be entitled
to the appointment of a receiver of the rents, issues and profits of the
Premises as a matter of right, with power to collect the rents, issues and
profits of the Premises due and becoming due during the period of default and/or
the pendency of such foreclosure suit to and including the date of confirmation
of the sale under such foreclosure and during the redemption period, if any,
after such confirmation, such rents, issues and profits being hereby expressly
assigned and pledged as security for the payment of the Secured Obligations
secured by this Mortgage without regard to the value of the Premises or the
solvency of any person or persons liable for the payment of the Secured
Obligations and regardless of whether the Collateral Agent has an adequate
remedy at law. The Mortgagor for itself and for any subsequent owner hereby
waives any and all defenses to the application for a receiver as above provided
and hereby specifically consents to such appointment, but nothing herein
contained is to be construed to deprive the holder of this Mortgage of any other
right or remedy or privilege it may now have under the law to have a receiver
appointed. The provision for the appointment of a receiver and the assignment of
such rents, issues and profits is made an express condition upon which the Loans
hereby secured are made. In such event, the court shall at once on application
of the Collateral Agent or its attorney in such action, appoint a receiver to
take immediate possession of, manage and control the Premises, for the benefit
of the holder or holders of the Secured Obligations and of any other parties in
interest, with power to collect the rents, issues and profits of the Premises
during the pendency of such action, and to apply the same toward the payment of
the several obligations herein mentioned and described, notwithstanding that the
same or any part thereof is occupied by the Mortgagor or any other person. The
rights and remedies herein provided for shall be deemed to be cumulative and in
addition to and not in limitation of those provided by law and if there be no
receiver so appointed, the Collateral Agent itself may proceed to collect the
rents, issues and profits from the Premises. From any such rents, issues, and
profits collected by the receiver or by the Collateral Agent prior to a
foreclosure sale, there shall be deducted the cost of collection thereof and the
expenses of operation of the Premises, including but not limited to real estate
commissions, receiver's fee and the reasonable fees of its attorney, if any, and
the Collateral Agent's attorney's fees, if permitted by law, and court costs,
the remainder to be applied against the Secured Obligations. In the event the
rents, issues and profits are not adequate to pay all tax and other expenses of
operation, the Collateral Agent may, but is not obligated to, advance to any
receiver the amounts necessary to operate, maintain and repair, if necessary,
the Premises and any such amounts so advanced, together with interest thereon at
the Default Rate from and after the date of advancement, shall be secured by
this Mortgage and have the same priority of collection as the principal of the
Secured Obligations.
SECTION 20. LIABILITY OF MORTGAGOR NOT AFFECTED.
No sale of the Premises, no forbearance on the part of the Collateral
Agent, no extension of the time for the payment of the Secured Obligations and
no change in the terms of the payment thereof consented to by the Collateral
Agent shall in any way whatsoever operate to release, discharge, modify, change
or affect the original liability of the Mortgagor hereunder or the original
liability of the Mortgagor or any other obligor under any of the Secured
Obligations, either in whole or in part. No waiver by the Collateral Agent of
any breach of any covenant of the Mortgagor herein contained shall be construed
as a waiver of any subsequent breach of the same or any other covenant herein
contained. The failure of the Collateral Agent and/or the Secured Creditors to
exercise the option for acceleration of maturity and/or foreclosure (including
sale under power of sale hereunder) following any default as aforesaid or to
exercise any other option granted to the Collateral Agent hereunder in any one
or more instances, or the acceptance by the Collateral Agent and/or the Secured
Creditors of partial payments hereunder shall not constitute a waiver of any
such default, nor extend or affect the grace period, if any, but such option
shall remain continuously in force with respect to any unremedied or uncured
default. Acceleration of maturity once claimed hereunder by the Collateral Agent
may, at the option of the Collateral Agent, be rescinded by written
acknowledgment to that effect by the Collateral Agent, but the tender and
acceptance of partial payments alone shall not in any way affect or rescind such
acceleration of maturity, or extend or affect the grace period, if any. the
Collateral Agent
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may pursue any of its rights without first exhausting its rights hereunder and
all rights, powers and remedies conferred upon the Collateral Agent herein are
in addition to each and every right which the Collateral Agent may have
hereunder at law or equity and may be enforced concurrently therewith.
SECTION 21. REMEDIES CUMULATIVE.
Each remedy or right of the Collateral Agent shall not be exclusive of but
shall be in addition to every other remedy or right now or hereafter existing at
law or in equity. No delay in the exercise or omission to exercise any remedy or
right accruing on any default shall impair any such remedy or right or be
construed to be a waiver of any such default or acquiescence therein, nor shall
it affect any subsequent default of the same or of a different nature. Every
such remedy or right may be exercised concurrently or independently and when and
as often as may be deemed expedient by the Collateral Agent.
SECTION 22. COLLATERAL AGENT SUBROGATED TO PRIOR LIENS PAID OUT OF LOAN
PROCEEDS.
Should the proceeds of any Loans made by any Lender to the Mortgagor, the
repayment of which is hereby secured, or any part thereof, or any amount paid
out or advanced by the Collateral Agent or any Lender, be used directly or
indirectly to pay off, discharge or satisfy, in whole or in part, any prior lien
or encumbrance upon the Premises or any part thereof, then the Collateral Agent
shall be subrogated to such other liens or encumbrances and upon any additional
security held by the holder thereof and shall have the benefit of the priority
of all of the same.
SECTION 23. FURTHER ASSURANCES.
The Mortgagor shall execute, acknowledge and deliver any and all such
further acts, conveyances, documents, mortgages and assurances as the Collateral
Agent may reasonably require for accomplishing the purpose hereof forthwith upon
the request of the Collateral Agent, whether in writing or otherwise. The
Mortgagor, within 10 days upon request by mail, shall furnish a written
statement duly acknowledged of the amount due upon this Mortgage and the Secured
Obligations (both unpaid principal and accrued interest and all other items
included in the Secured Obligations) and whether any offset or defenses exist
against the Secured Obligations, and any other information which might
reasonably be requested in connection with the sale of the Secured Obligations,
or any portion thereof or interest therein, to any third party, or an audit of
the Collateral Agent, and which may be relied on for such purposes.
SECTION 24. MORTGAGOR'S OBLIGATIONS ABSOLUTE.
The lien of this Mortgage and the obligations of the Mortgagor hereunder
shall be absolute and unconditional and shall remain in full force and effect
without regard to, and shall not be released, suspended, discharged, terminated
or otherwise affected by, any circumstance or occurrence whatsoever, including,
without limitation:
(a) any lack of validity or enforceability of the Credit Agreement,
the Notes, any other Credit Document, any Designated Hedge Agreement, or
any other agreement or instrument relating thereto;
(b) any renewal, extension, amendment or modification of, or
addition or supplement to, or any waiver, consent, extension, indulgence
or other action or inaction under or in respect of, the Credit Agreement,
the Notes, any other Credit Document, or any Designated Hedge Agreement,
or any other agreement or instrument relating thereto, including, without
limitation, any increase in the Secured Obligations resulting from the
extension of additional credit to the Mortgagor or any of its Subsidiaries
or otherwise;
(c) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Secured
Obligations;
(d) any manner of application of collateral, or proceeds thereof, to
all or any of the Secured Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Secured Obligations or
any other assets of the Mortgagor or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of the Mortgagor or any of its Subsidiaries;
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(f) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to
the Mortgagor or any of its Subsidiaries or Affiliates, or any action
taken with respect to this Mortgage by any trustee or receiver, or by any
court, in any such proceeding, whether or not the Mortgagor shall have
notice or knowledge of any of the foregoing; or
(i) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Mortgagor as a guarantor or
surety for the Secured Obligations.
This Mortgage shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by the Collateral Agent or any Secured Creditor upon
the insolvency, bankruptcy or reorganization of the Mortgagor or any of its
Subsidiaries or Affiliates or otherwise, all as though such payment had not been
made.
SECTION 25. NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telex, facsimile transmission or cable communication) and mailed,
telegraphed, telexed, transmitted, cabled or delivered, if to the Mortgagor, at
9400 East Market Street, Warren, Ohio 44484, attention: Vice President & Chief
Financial Officer (facsimile: (330) 856-3618); if to the Collateral Agent, at
1900 East Ninth Street, Cleveland, Ohio 44114, attention Agent Services
(facsimile: (216) 575-2481; or at such other address as shall be designated by
any such person in a written notice to the other person. All such notices and
communications shall be mailed, telegraphed, telexed, telecopied, or cabled or
sent by overnight courier, and shall be effective when received.
SECTION 26. DISCHARGE OF MORTGAGE; RELEASE OF PROPERTY.
(a) Discharge of Mortgage. After the termination of the Total Commitment
and all Designated Hedge Agreements and when all Loans and other Secured
Obligations have been paid in full, this Mortgage shall terminate, and the
Collateral Agent, at the request and expense of the Mortgagor, will execute and
deliver to the Mortgagor a proper instrument or instruments (including Uniform
Commercial Code termination statements on form UCC-3) acknowledging the
satisfaction and termination of this Mortgage, and will duly assign, transfer
and deliver to the Mortgagor (without recourse and without any representation or
warranty) such of the Personal Property Collateral as may be in the possession
of the Collateral Agent and as has not theretofore been sold or otherwise
applied or released pursuant to this Mortgage. In case of failure of the
Collateral Agent to promptly so release this Mortgage, all claims for statutory
penalties and damages are hereby waived.
(b) Release of Collateral. So long as no payment default on any of the
Secured Obligations is in existence or would exist after the application of
proceeds as provided below, the Collateral Agent shall, at the request of the
Mortgagor, release any or all of the Real Property Collateral and/or Personal
Property Collateral, provided that (x) such release is permitted by the terms of
section 9.2 of the Credit Agreement) or otherwise has been approved in writing
by the Required Lenders (or all of the Lenders, if required by section 12.12 of
the Credit Agreement) and (y) if required pursuant to the provisions of section
5.2 of the Credit Agreement, the proceeds of such Collateral are applied to the
prepayment of the Loans.
(c) Request for Release; Effect of Release. At any time that the Mortgagor
desires that the Collateral Agent take any action to give effect to any release
of any or all of the Premises pursuant to the foregoing paragraph (a) or (b), it
shall deliver to the Collateral Agent a certificate signed by a principal
executive officer stating that the release of the respective portion of or all
of the Real Property Collateral and/or Personal Property Collateral is permitted
pursuant to paragraph (a) or (b). In the event that any part of the Premises is
released as provided in paragraph (a), the Collateral Agent, at the request and
expense of the Mortgagor, will duly release such part of the Premises and
assign, transfer and deliver to the Mortgagor (without recourse and without any
representation or warranty) such of the part of the Premises as is then being
(or has been) so sold and as may be in the possession of the Collateral Agent
and has not theretofore been released pursuant to this Mortgage. The Collateral
Agent shall have no liability whatsoever to any Secured Creditor as the result
of any release of all or any part of the Premises by it as permitted by this
section. Upon any release of all or any part of the Premises pursuant to
paragraph (a) or (b), none of the Collateral Agent or any of the Secured
Creditors shall have any continuing right or interest in the same, or the
proceeds thereof.
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<PAGE>
SECTION 27. MISCELLANEOUS.
(a) Acknowledgment of Receipt of Copies of Credit Documents. The Mortgagor
acknowledges that it has received from the Collateral Agent without charge a
true and correct copy of this Mortgage and each other Credit Document executed
and delivered on or prior to the date hereof.
(b) Indemnification. The Collateral Agent and its successors and assigns
shall be entitled to all of the benefits of the indemnification provisions of
the Credit Agreement and the other Credit Documents. All of the terms and
provisions of section 12.1 of the Credit Agreement (including any defined terms
used therein) are by this reference thereto hereby incorporated into this
Mortgage for the benefit of the Collateral Agent and its successors and assigns
as fully as if written out at length herein, and any references in such section
of the Credit Agreement to the "Borrower" shall be deemed to refer to, and
constitute obligations of, the Mortgagor.
(c) Subsequent Services of Counsel to Collateral Agent. To the extent
services are required of the Collateral Agent's counsel and/or special counsel
after the date hereof, which are normally incident to the closing, amendment,
alteration, and enforcement of this Mortgage, and all provisions herein
contained, the Mortgagor shall, to the extent permitted by law, pay the
reasonable fees therefor, promptly upon the rendering of such a bill and
delivery thereof to the Mortgagor.
(d) No Partnership or Joint Venture. Neither this Mortgage, the Credit
Agreement, the Notes, any other Secured Obligations, any of the other Credit
Documents, or any of the Designated Hedge Agreements, are intended or shall be
construed as creating a partnership or joint venture between the Mortgagor, on
the one hand, and the Collateral Agent or any other holder of any of the Secured
Obligations, on the other hand; and the relationship of the Mortgagor and the
Collateral Agent hereunder shall solely be that of Mortgagor and collateral
agent for the holders of the Secured Obligations.
(e) Election of Collateral Agent to Subordinate. At the option of the
Collateral Agent (acting on instructions from all of the Lenders), this Mortgage
shall become subject and subordinate in whole or in part (but not in respect to
the priority of entitlement to insurance proceeds or any award in condemnation)
to any or all leases and/or subleases of all or any part of the Premises upon
the execution by the Collateral Agent and recording thereof, at any time
hereafter, in the appropriate recorder's office, a unilateral declaration to
that effect.
(f) Waiver of Homestead and Exemption Rights, etc. To the extent permitted
by law with respect to the Secured Obligations or any renewals or extensions
thereof, the Mortgagor waives and renounces any and all homestead and exemption
rights, as well as the benefit of all valuation and appraisement privileges, and
also moratoriums under or by virtue of the constitution and laws of the
jurisdiction in which the Real Property Collateral is located or any other state
or of the United States, now existing or hereafter enacted.
(g) Covenants Run with the Land. All the covenants of the Mortgagor
contained in this Mortgage shall run with the Land.
(h) Usury Savings Clause. All agreements in the Credit Agreement, in the
Notes, in this Mortgage, in any other Credit Document or in any Designated Hedge
Agreement are expressly limited so that in no contingency or event whatsoever,
whether by reason of advancement or acceleration of maturity of any of the
Secured Obligations, or otherwise, shall the amount paid or agreed to be paid
hereunder or thereunder for interest or for the use, forbearance or detention of
money exceed the highest lawful rate permitted under applicable usury laws. If,
from any circumstance whatsoever, fulfillment of any provision of the Credit
Agreement, of the Notes, of this Mortgage, of any other Credit Document or of
any Designated Hedge Agreement, at the time performance of such provision shall
be due, shall involve transcending the limit of validity prescribed by
applicable usury laws which a court of competent jurisdiction may deem
applicable hereto, then, ipso facto, the obligation to be fulfilled shall be
reduced to the limit of such validity and if, from any circumstance whatsoever,
the Collateral Agent or any Secured Creditor shall ever receive hereunder or
under the other Credit Documents or any Designated Hedge Agreement as interest,
or for the use, forbearance or detention of money, an amount which would exceed
the highest lawful rate, the receipt of such excess shall be deemed a mistake
and shall be canceled automatically or, if theretofore paid, such excess shall
be credited against the principal amount of the Secured Obligations or any fees
or other amounts included in the Secured Obligations to which the same may
lawfully be credited, and any portion of such excess not capable of being so
credited shall be rebated to the Mortgagor.
(i) Governing Law; Successors and Assigns; Severability, etc. This
Mortgage shall be construed and enforced according to the laws of the
jurisdiction in which the Real Property Collateral is located, and shall be
binding upon the Mortgagor, its successors and assigns, any subsequent owners of
the Premises, and shall inure to the benefit of the Collateral Agent, its
successors and assigns. Any provision of this Mortgage which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability
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<PAGE>
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.
(j) No Modification. None of the terms and conditions of this Mortgage may
be changed, waived, modified or varied in any manner whatsoever unless in
writing duly signed by the Mortgagor and the Collateral Agent (with the consent
of the Required Lenders or, to the extent required by section 12.12 of the
Credit Agreement, all of the Lenders), provided, however, that no such change,
waiver, modification or variance shall be made to this section 27(j) without the
consent of each Secured Creditor adversely affected thereby, provided further
that any change, waiver, modification or variance affecting the rights and
benefits of a single Class of Secured Creditors (and not all Secured Creditors
in a like or similar manner) shall require the written consent of the Requisite
Creditors of such Class of Secured Creditors. For the purpose of this Mortgage,
the term "Class" shall mean each class of Secured Creditors, i.e., whether (x)
the Lenders as holders of the Credit Document Obligations or (y) the Designated
Hedge Creditors as holders of the Designated Hedge Obligations. For the purpose
of this Mortgage, the term "Requisite Creditors" of any Class shall mean each of
(x) with respect to the Credit Document Obligations, the Required Lenders and
(y) with respect to the Designated Hedge Obligations, the holders of at least
51% of all obligations outstanding from time to time under the Designated Hedge
Agreements.
(k) Agency Provisions. By accepting the benefits of this Mortgage, each
Lender acknowledges and agrees that the rights and obligations of the Collateral
Agent shall be as set forth in section 11 of the Credit Agreement.
Notwithstanding anything to the contrary contained in of this Mortgage, the
duties and obligations of the Collateral Agent set forth or incorporated into
the provisions of this Mortgage may not be amended or modified without the
consent of the Collateral Agent.
(l) Collateral Agent to Act on Behalf of Secured Creditors. The Secured
Creditors agree by their acceptance of the benefits hereof that this Mortgage
may be enforced on their behalf only by the action of the Collateral Agent,
acting upon the instructions of the Required Lenders (or, after all Credit
Document Obligations have been paid in full, instructions of the holders of at
least the majority of the outstanding Designated Hedge Obligations) and that no
other Secured Creditor shall have any right individually to seek to enforce or
to enforce this Mortgage or to realize upon the security to be granted hereby,
it being understood and agreed that such rights and remedies may be exercised by
the Collateral Agent, for the benefit of the Secured Creditors, upon the terms
of this Mortgage.
(m) Waiver of Trial By Jury. THE MORTGAGOR AND THE COLLATERAL AGENT EACH
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS MORTGAGE OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
(n) Time of Essence. It is specifically agreed that time is of the essence
with respect to this Mortgage and that the waiver of the rights or options, or
obligations secured hereby, shall not at any time thereafter be held to be
abandonment of such rights. Notice of the exercise of any right or option
granted to the Collateral Agent herein, or in the Secured Obligations, is not
required to be given.
(o) STATUTORY CONDITION. This Mortgage is upon the STATUTORY CONDITION and
also upon the other conditions herein set forth, all of which shall be binding
on the Mortgagor and those claiming under the Mortgagor. For the breach of the
aforesaid STATUTORY CONDITION or any of the other conditions herein set forth,
the Collateral Agent or any subsequent holder of this Mortgage shall have the
STATUTORY POWER OF SALE in addition to any other remedy or remedies provided
herein.
(p) Counterparts. This Mortgage may be executed by the Mortgagor in
counterparts, each of which shall be an original and all of which collectively
shall constitute one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage to be duly
executed and delivered as of the date first set forth above.
Signed and acknowledged STONERIDGE, INC.
in the presence of:
By:
- -------------------- ----------------------------
Print Name: Kevin P. Bagby
Vice President--Finance
and Chief Financial Officer
- --------------------
Print Name:
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STATE OF OHIO )
) SS.:
COUNTY OF CUYAHOGA )
BEFORE ME, a Notary Public in and for said County and State, personally
appeared the above named STONERIDGE, INC., an Ohio corporation, by Kevin P.
Bagby, its Vice President--Finance and Chief Financial Officer, who acknowledged
that he did sign the foregoing instrument and that the same is his free act and
deed personally and as such officer.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at
Cleveland, Ohio, this ____ day of December, 1998.
---------------------------
Notary Public
[Notarial Seal]
This Instrument Prepared By:
John W. Sager, Esq.
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
24
<PAGE>
EXHIBIT 1
TO
DEED OF FIRST MORTGAGE, ASSIGNMENT OF LEASES
AND SECURITY AGREEMENT
The following described real estate, to-wit:
LEGAL DESCRIPTION
CANTON MASSACHUSETTS
that certain parcel of land in Canton, Norfolk County, Massachusetts, shown as
Lot 41 on the plan entitled "Subdivision Plan of Land Being a Subdivision of Lot
37 Shown on Land Court Plan No. 37081N, Canton, Mass.", prepared by Harry R.
Feldman, Inc., dated October 24, 1994, stamped "Approval Under Subdivision
Control Law Not Required" by the Canton Planning Board on November 1, 1994.
[End of Exhibit 1]
<PAGE>
EXHIBIT 2
TO
DEED OF FIRST MORTGAGE, ASSIGNMENT OF LEASES
AND SECURITY AGREEMENT
Permitted Encumbrances
1. Any liens thereon for taxes, assessments, charges, excises, levies and
other governmental charges which are not due and payable.
2. Any matters of record affecting the Premises on the date this Mortgage is
recorded.
3. Zoning ordinances, if any.
[End of Exhibit 2]
<PAGE>
EXHIBIT C-8
------------------------
FORM OF
CLOSING DATE MORTGAGE
(Canton, Massachusetts)
------------------------
<PAGE>
================================================================================
STONERIDGE, INC.
as the Mortgagor
To
NATIONAL CITY BANK
as the Collateral Agent
----------------------------
OPEN-END FIRST MORTGAGE,
ASSIGNMENT OF LEASES
AND
SECURITY AGREEMENT
(Total Indebtedness Not to Exceed $500,000,000)
---------------------------
Relating to Property Located in Kent, Ohio
================================================================================
<PAGE>
OPEN-END FIRST MORTGAGE, ASSIGNMENT OF LEASES AND
SECURITY AGREEMENT
(Total Indebtedness Not to Exceed $500,000,000)
THIS OPEN-END FIRST MORTGAGE, ASSIGNMENT OF LEASES AND SECURITY AGREEMENT,
dated as of December 30, 1998 (as amended, modified, or supplemented from time
to time, "this Mortgage"), by (i) STONERIDGE, INC., an Ohio corporation
(hereinafter, together with its successors and assigns, called the "Borrower" or
the "Mortgagor") which is duly qualified to transact business in the
jurisdiction in which the real property referred to below is located, whose
address is 9400 East Market Street, Warren, Ohio 44484, in favor of (ii)
NATIONAL CITY BANK, a national banking association, as collateral agent under
the Credit Agreement referred to below (herein, together with its successors and
assigns in such capacity, the "Collateral Agent"), whose address is 1900 East
Ninth Street, Cleveland, Ohio 44114, for the benefit of the Secured Creditors
(as defined below):
PRELIMINARY STATEMENTS:
(A) Except as otherwise defined herein, terms used herein and defined in
the Credit Agreement (as defined below) shall be used herein as therein defined.
(B) This Mortgage is made pursuant to the Credit Agreement, dated as of
the date hereof (herein, as amended or otherwise modified, restated or replaced
from time to time, the "Credit Agreement"), among the Borrower, the financial
institutions named as lenders therein (herein, together with their successors
and assigns, the "Lenders"), the other Agents named therein, and National City
Bank, as the Administrative Agent for the Lenders under the Credit Agreement,
providing, among other things, for loans or advances or other extensions of
credit to or for the benefit of the Borrower of up to $425,000,000, with such
loans or advances being evidenced by promissory notes (the "Notes", such term to
include all notes and other securities issued in exchange therefor or in
replacement thereof).
(C) The Borrower or any of its Subsidiaries may from time to time be party
to one or more Designated Hedge Agreements (as defined in the Credit Agreement).
Any institution that participates, and in each case their subsequent assigns, as
a counterparty to any Designated Hedge Agreement (collectively, the "Designated
Hedge Creditors"; and the Designated Hedge Creditors together with the Agents
and the Lenders, collectively the "Secured Creditors"), shall benefit hereunder
as herein provided.
(D) Pursuant to the Subsidiary Guaranty, each Subsidiary Guarantor has
jointly and severally guaranteed to the Secured Creditors the payment when due
of the Guaranteed Obligations (as defined in the Subsidiary Guaranty).
(E) It is a condition precedent to the making of Loans and the issuance
of, and participation in, Letters of Credit under the Credit Agreement that the
Mortgagor shall have executed and delivered to the Collateral Agent this
Mortgage.
(F) The Mortgagor desires to execute this Mortgage to satisfy the
condition described in the preceding paragraph.
(G) The execution and delivery of this Mortgage has been duly authorized
by the Mortgagor, and all things necessary to make this Mortgage a valid,
binding and legal instrument according to its terms, have been done and
performed.
NOW, THEREFORE, in consideration of the sum of $1.00, and other good and
valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, received to the Mortgagor's full satisfaction from the
Collateral Agent, and in consideration of the payments or loans or advances or
other credit facilities made or to be made hereafter to or for the benefit of
the Borrower by the Lenders, the Mortgagor DOES HEREBY grant, bargain, sell,
mortgage, warrant, convey, alien, remise, release, assign, transfer, grant a
security interest in, set over, deliver, confirm and convey unto the Collateral
Agent, upon the terms and conditions of this Mortgage, with power of sale, each
and all of the real properties and interests in real properties, and further
grants to the Collateral Agent a security interest in and to all other property
and interests, described in the following Granting Clauses (all of such property
and interests hereinafter collectively called the "Premises").
<PAGE>
GRANTING CLAUSES
All the estate, right, title and interest of the Mortgagor in, to
and under, or derived from:
GRANTING CLAUSE FIRST
Land
All those certain lot(s), piece(s) or parcel(s) of land more
particularly described in Exhibit 1 attached hereto and made a part
hereof, as the description of the same may be amended or supplemented from
time to time and all and the reversions or remainders in and to said land
and the tenements, hereditaments, easements, rights-of-way or use, rights
(including alley, drainage, crop, timber and cutting, agricultural,
horticultural, mineral, water, oil and gas rights), privileges, royalties
and appurtenances to said land, now or hereafter belonging or in anywise
appertaining thereto, including any such right, title, interest in, to or
under any agreement or right granting, conveying or creating, for the
benefit of said land, any easement, right or license in any way affecting
other property and in, to or under any streets, ways, alleys, vaults,
gores or strips of land adjoining said land or any parcel thereof, or in
or to the air space over said land, all rights of ingress and egress by
motor vehicles to parking facilities on or within said land, and all
claims or demands of the Mortgagor, either at law or in equity, in
possession or expectancy, of, in or to the same (all of the foregoing
hereinafter collectively called the "Land").
GRANTING CLAUSE SECOND
Improvements
All buildings, structures and other improvements now or hereafter
located on the Land, and all appurtenances and additions thereto and
betterments, renewals, substitutions and replacements thereof, owned by
the Mortgagor or in which the Mortgagor has or shall acquire an interest
(all of the foregoing hereinafter collectively called the "Improvements").
GRANTING CLAUSE THIRD
Fixtures and Equipment
Without limitation of the foregoing Granting Clauses, (i) all
"fixtures" (as defined in the Uniform Commercial Code of the State in
which the Premises are located), (ii) all "equipment" (as defined in the
Uniform Commercial Code of the State in which the Premises are located),
(iii) all other fixtures, chattels and articles of personal property
(other than "inventory", as defined in the Uniform Commercial Code of the
State in which the Premises are located), and (iv) all additions,
betterments, improvements, modifications, renewals, alterations, repairs,
attachments, parts, accessories, appurtenances, substitutions and
replacements of or to any of the foregoing, in each case now or hereafter
owned or otherwise acquired by the Mortgagor or in which the Mortgagor now
has or shall hereafter acquire an interest, wherever situated, and now or
hereafter located on, attached or affixed to, contained in or used in
connection with, the properties referred to in Granting Clause First or
Granting Clause Second, or placed on any part thereof, though not attached
or affixed thereto, including, without limitation, all of the following:
(1) all automobiles, trucks and trailers, and all other automotive or
transportation vehicles and equipment; (2) all machines and machinery and
other apparatus; (3) all engines and motors; (4) all lathes; (5) all drill
presses, punch presses and other presses; (6) all sorting, assembly,
installation and production line equipment; (7) all robotic equipment,
devices and systems; (8) all boilers, turbines, stokers, smelters,
electric arc furnaces, ladle arc furnaces, reheat furnaces and/or other
furnaces and related equipment; (9) all rolling mills, coilers and cooling
beds; (10) all stamping, cutting, drilling, jigging, bending, shaping,
fitting, molding, milling, injection, sizing, patterning, fastening,
connecting, heat treating, galvanizing, painting, embossing, coloring,
identification, measuring, monitoring, quality assurance, finishing and/or
processing machines, equipment and systems; (11) all fabrication equipment
and systems; (12) all packaging, receiving and shipping equipment and
systems; (13) all scales; (14) all counting, measurement, testing,
monitoring, calibration and analytical devices, equipment and systems;
(15) all design and quality assurance or control equipment (including
robotics); (16) all welding equipment and systems; (17) all soldering
equipment and systems; (18) all hydraulic equipment and hydraulics; (19)
all tooling, dies, jigs, casts, molds, patterns, models, stencils and
drawings; (20) all generators, transformers, switches, substations, pumps,
compressors, dynamos and batteries; (21) all cranes and hoists; (22) all
conveyors; (23) all computers; (24) all computer monitors, drives,
servers, and other
2
<PAGE>
hardware and software (whether owned, leased or licensed); (25) all
computing equipment; (26) all electronic data processing equipment; (27)
all operating and maintenance manuals, as well as all plans,
specifications and operating instructions, for all equipment and fixtures;
(28) all gas, oil kerosene and other fuels; (29) all industrial gases and
containers therefor; (30) all consumable supplies; (31) all spare parts,
replacement parts, appliances, utensils, tools, implements and fittings;
(32) all repair and maintenance equipment; (33) all tanks (whether free
standing, anchored or otherwise installed in place, readily movable, above
or below ground, or otherwise), drums, vessels, containers, racks,
pallets, skids, bins and shelves or shelving; (34) all forklifts,
liftrucks, pallet movers, dollies, carts, and other materials handling
equipment; (35) all shipping containers; (36) all rail cars; (37) all
pipelines, pipes, ducts and conduits; (38) all wiring and all electric or
other power surge or interruption protection equipment; (39) all water and
other towers; (40) all call systems, dispatch systems, public address
systems, switchboards, telephones, mobile phones, beepers, two-way (or
more) radios, aerials, antennas and other telecommunication,
teleconferencing (including video) and other communication equipment; (41)
all desks, tables, cabinets, bureaus, credenzas, chairs, benches, couches,
coat racks, safes and vaults, photocopy machines, facsimile, telex and
cable machines, postage meters, televisions, video machines, radios,
coffee, soft drink, beverage and fast food machines, lockers, bulletin
boards, photographs, works of art and other decorations, lawn ornaments,
signs, plants and shrubbery (both indoor and outdoor), sinks, basins,
stoves, ranges, microwaves, ovens, dishwashers, refrigerators, ice makers,
cafeteria equipment and supplies, wash tubs, showers, partitions, screens,
awnings, shades, blinds, curtains, draperies, carpets, rugs, furniture and
furnishings; (42) all heating, lighting, power, plumbing, water,
ventilating, cooling, air conditioning, refrigerating, gas, oil, steam,
electrical, solar, waste, incinerating and/or compacting plants, systems,
fixtures and equipment; (43) all elevators and escalators; (44) all vacuum
and other cleaning systems including window washing equipment; (45) all
lawn, parking and sidewalk maintenance equipment, including lawn mowers,
leaf blowers, snow blowers, plows and vacuums; (46) all dust and noise
suppression systems and equipment; (47) all air, water and other pollution
control systems and equipment; (48) all safety systems and equipment; (49)
all office supplies; (50) all industrial hygiene equipment and supplies;
(51) all security alarms and cameras, and all identification, timekeeping,
access and surveillance systems and equipment; and (52) all sprinkler
systems and other fire detection, prevention and extinguishing apparatus.
If the Lien of this Mortgage in any item of Fixtures and Equipment is
subject to a purchase money or other security interest therein which is
permitted under this Mortgage, then all of the right, title and interest
of the Mortgagor in and to such item is hereby assigned to the Collateral
Agent, together with the benefits of all deposits and payments now or
hereafter made thereon by or on behalf of the Mortgagor (all of the
foregoing property, rights and interests described in this Granting Clause
Third, collectively the "Fixtures and Equipment").
GRANTING CLAUSE FOURTH
Permits, Licenses and Franchises and General Intangibles
Without limitation of the foregoing Granting Clauses, all permits,
licenses, franchises, privileges, grants, consents, exemptions, concession
agreements, development rights, building variances, certificates of
occupancy or operation, and other authorizations or approvals, now or
hereafter issued or granted by any governmental authority with respect to
the ownership of the Premises, or with respect to the ownership,
construction or operation of the Premises, and all "general intangibles"
(as defined in the Uniform Commercial Code of the State in which the
Premises are located) relating in any way to the Premises or the use or
operation thereof, together with and any renewals or extensions of any of
the foregoing, provided that the lien of this Mortgage shall not apply to,
and there shall be excluded from the ambit of this Granting Clause Fourth,
any of the foregoing permits, licenses, franchises, privileges, grants,
consents, exemptions, concession agreements, development rights, building
variances, certificates of occupancy or operation, and other
authorizations or approvals and any other "general intangibles", which, by
their express terms or by reason of applicable law would become void or
voidable if mortgaged, pledged or assigned by the Mortgagor hereunder.
GRANTING CLAUSE FIFTH
Leasehold and Other Contractual Interests
All the leases, lettings and licenses of, and all other contracts
and agreements affecting, the Land, the Improvements, the Fixtures and
Equipment and/or any other property or rights mortgaged or otherwise
conveyed or encumbered hereby, or any part thereof, now or hereafter
entered into, and all amendments, modifications, supplements, additions,
extensions and renewals thereof, and all right, title and interest of the
Mortgagor thereunder, including cash and securities deposited thereunder,
the right to receive
3
<PAGE>
and collect the rents, income, proceeds, issues and profits payable
thereunder and the rights to enforce, whether at law or in equity or by
any other means, all provisions and options thereof.
GRANTING CLAUSE SIXTH
Assignment of Rents, Income and Profits
All rents, income, profits, proceeds and any and all cash collateral
to be derived from the Premises, or the use and occupation thereof, or
under any contract or bond relating to the construction or reconstruction
of the Premises, including all rents, royalties, revenue, rights, deposits
(including security deposits) and benefits accruing to the Mortgagor under
all leases now or hereafter covering the Premises, whether before or after
foreclosure or during the full period of redemption, if any, and the right
to receive the same and apply them against the Secured Obligations or
against the Mortgagor's other obligations hereunder, together with all
contracts, bonds, leases and other documents evidencing the same now or
hereafter in effect and all rights of the Mortgagor thereunder. Nothing
contained in the preceding sentence shall be construed to bind the
Collateral Agent to the performance of any of the provisions of any such
contract, bond, lease or other document or otherwise impose any obligation
upon the Collateral Agent (including any liability under a covenant of
quiet enjoyment contained in any lease or under applicable law in the
event that any tenant shall have been joined as a party defendant in any
action to foreclose this Mortgage and shall have been foreclosed of all
right, title and interest and all equity of redemption in the Premises),
except that the Collateral Agent shall be accountable for any money
actually received pursuant to such assignment. The assignment of said
rents, income, profits, proceeds and cash collateral, and of the aforesaid
rights with respect thereto and to the contracts, bonds, leases and other
documents evidencing the same is intended to be and is an absolute present
assignment from the Mortgagor to the Collateral Agent and not merely the
passing of a security interest.
GRANTING CLAUSE SEVENTH
Other and After Acquired Property
Any and all moneys and other property, of every kind and nature,
which may from time to time be subjected to the lien hereof by the
Mortgagor, through a supplement to this Mortgage or otherwise, or by any
other person or entity, or which may come into the possession of or be
subject to the control of the Collateral Agent, it being the intention and
agreement of the Mortgagor that all property hereafter acquired or
constructed by the Mortgagor shall forthwith upon acquisition or
construction thereof by the Mortgagor and without any act or deed by the
Mortgagor be subject to the lien and security interest of this Mortgage as
if such property were now owned by the Mortgagor and were specifically
described in this Mortgage and conveyed or encumbered hereby or pursuant
hereto, and the Collateral Agent is hereby authorized to receive any and
all such property as and for additional security hereunder.
GRANTING CLAUSE EIGHTH
Proceeds and Awards
All unearned premiums, accrued, accruing or to accrue under
insurance policies now or hereafter obtained by the Mortgagor, all
proceeds of the conversion, voluntary or involuntary, of any of the
property described in these Granting Clauses into cash or other liquidated
claims, including proceeds of hazard, title and other insurance, and all
claims, entitlements, judgments, damages, awards, settlements and
compensation (including interest thereon) heretofore or hereafter accruing
or made to or for the benefit of the present and all subsequent owners of
the Land, the Improvements, the Fixtures and Equipment and/or any other
property or rights encumbered or conveyed hereby for any injury to or
decrease in the value thereof for any reason, or by any governmental or
other lawful authority for the taking by eminent domain, condemnation or
otherwise of all or any part thereof, including awards for any change of
grade of streets.
TO HAVE AND TO HOLD the Premises unto the Collateral Agent, its successors
and assigns, forever, for the purposes and uses herein set forth, until such
time as all of the Secured Obligations which are secured hereby shall have been
paid in full.
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The property, interests and rights hereinabove mentioned, whether owned in
fee or held under lease, is hereinafter referred to as the "Real Property
Collateral" to the extent that the same is realty, and as the "Personal Property
Collateral" to the extent that the same is personalty. The Real Property and the
Personal Property Collateral collectively constitute the Premises.
It is also agreed that if any of the property herein mortgaged is of a
nature so that a security interest therein can be perfected under the Uniform
Commercial Code, this Mortgage shall constitute a security agreement and the
Mortgagor agrees to execute, deliver and file or refile any financing statement,
continuation statement, or other instruments the Collateral Agent may require
from time to time to perfect or renew such security interest under the Uniform
Commercial Code. This Mortgage shall be effective as a financing statement filed
as a fixture filing with respect to all fixtures included within the Premises
and is to be filed for record in the Office of the County Recorder or County
Clerk where the Premises (including such fixtures) are situated. The mailing
address of the Mortgagor is set forth at the beginning of this Mortgage and the
address of the Collateral Agent from which information concerning the security
interest may be obtained is the address of the Collateral Agent set forth at the
beginning of this Mortgage.
If the Mortgagor hereafter acquires any real property, or any interest in
real property, in addition to the Real Property Collateral, which is adjacent
to, or contiguous with, the Land, or otherwise is intended or required to be
subjected to the lien of this Mortgage, the Mortgagor will subject the same to
the lien of this Mortgage by instrument supplemental hereto, satisfactory in
form and substance to the Collateral Agent.
The conditions of this Mortgage are such that the Mortgagor has executed
and delivered this Mortgage for the purpose of securing the performance of its
covenants and agreements contained herein and in any agreement or instrument
made with respect to any Secured Obligations secured hereby and to secure the
payment when due (whether at the stated maturity, by acceleration or otherwise)
of the following indebtedness, liabilities and obligations (including
obligations which, but for the automatic stay under section 362(a) of the
Bankruptcy Code, would become due), now existing or hereafter arising
(collectively, the "Secured Obligations"), for the benefit of the Secured
Creditors, although not necessarily in the order of priority set forth below:
(a) $100,000,000 aggregate principal amount of Revolving Loans made or
to be made to the Mortgagor under the Credit Agreement, maturing on
or before December 31, 2003, with interest thereon as provided in
the Credit Agreement;
(b) $150,000,000 aggregate principal amount of Term A Loans made or to
be made to the Mortgagor under the Credit Agreement, maturing on or
before December 31, 2003, with interest thereon as provided in the
Credit Agreement;
(c) $175,000,000 aggregate principal amount of Term B Loans made or to
be made to the Mortgagor under the Credit Agreement, maturing on or
before December 31, 2005, with interest thereon as provided in the
Credit Agreement;
(d) all reimbursement obligations in respect of Letters of Credit issued
under the Credit Agreement in an aggregate amount not exceeding
$10,000,000;
(e) all obligations and liabilities of the Mortgagor or any Subsidiary
of the Mortgagor under or in connection with any Designated Hedge
Agreement, now or hereafter entered into with or assigned to any of
the Secured Creditors (all such obligations and liabilities
described in this clause (e) being herein collectively called the
"Designated Hedge Obligations");
(f) all advances or disbursements of the Collateral Agent or any Secured
Creditor with respect to the Premises for the payment of taxes,
levies, assessments, insurance, insurance premiums or costs incurred
in the protection of the Premises, as provided in section 5301.233
of the Ohio Revised Code, and without limitation of the preceding
provisions of this clause (f), all other sums expended or advanced
by or on behalf of the Collateral Agent pursuant to any term or
provision of this Mortgage or any other agreement or instrument
relating to or securing any of the foregoing for the purpose of
protecting or preserving the Premises or the priority of the Lien of
this Mortgage, including, all advances or disbursements of the
Collateral Agent for the payment of taxes, levies, assessments,
insurance, insurance premiums or costs incurred in the protection of
the Premises; and
(g) all other liabilities, obligations and indebtedness of the
Mortgagor, its Subsidiaries and Affiliates, and/or any other Credit
Party, incurred under or arising out of or in connection with the
Credit Agreement, the Notes, the other Credit Documents and the
Designated Hedge Agreements, and the due performance and compliance
by the Mortgagor, its Subsidiaries and Affiliates, and any other
Credit Party with all of the terms, conditions, covenants and
agreements contained in the Credit Agreement, the Notes, such other
Credit Documents and the Designated Hedge Agreements;
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but only to the extent that the total unpaid Secured Obligations, exclusive of
liabilities and obligations referred to in the preceding clause (f), in the
aggregate and exclusive of the interest on the Secured Obligations, does not
exceed the maximum amount specified in this Mortgage, which is $500,000,000, and
as security for the payment of the Secured Obligations, the Mortgagor has
granted to the Collateral Agent hereunder a lien against the Premises. In
accordance with the provisions of the Notes, the whole of the principal sum of
the Loans which are then unpaid may be declared and become due and payable upon
the occurrence of an Event of Default under the Credit Agreement. This Mortgage
is given for the purpose of creating a lien on the Premises and expressly is to
secure the Secured Obligations, for the benefit of the Secured Creditors,
including but not limited to future advances and other extensions of credit,
whether such advances or other extensions of credit are obligatory or to be made
at the option of the Secured Creditors (or any of them) or otherwise, to the
same extent as if such future advances or other extensions of credit were made
on the date of the execution of this Mortgage. The total amount of the Secured
Obligations may decrease or increase from time to time and the Lenders or other
Secured Creditors may hereafter, as described in this Mortgage, at any time
after this Mortgage is delivered to the county recorder or county clerk for
record, make additional loans, advances or other extensions of credit to or for
the benefit of the Mortgagor or any of its Subsidiaries or Affiliates; provided,
however, that the total unpaid balance of the Secured Obligations which are
secured at any one time by this Mortgage, shall not exceed $500,000,000, plus
interest thereon and any advances or disbursements made for the payment of
taxes, levies or insurance on the Premises with interest on such disbursements.
Any such further loans or advances or other extensions of credit, with interest,
shall be secured by this Mortgage.
PROVIDED, NEVERTHELESS, that if the Secured Obligations which are secured
hereby shall be paid in full when due, and if all of the provisions of the
Credit Agreement, the Notes, the other Credit Documents and the Designated Hedge
Agreements shall be timely performed and observed, then the lien of this
Mortgage and the interest of the Collateral Agent in the Premises shall be
released at the cost of the Mortgagor, but this Mortgage shall otherwise, except
as specifically provided herein, remain in full force and effect.
The Mortgagor, intending to bind its successors and assigns, hereby
covenants and agrees with the Collateral Agent, its successors and assigns, for
its benefit and for the benefit of the Secured Creditors, as follows:
SECTION 1. PAYMENT OF SECURED OBLIGATIONS, PERFORMANCE OF OBLIGATIONS,
ETC.
(a) Payment of Secured Obligations. The Mortgagor shall pay or cause to be
paid the principal of and interest on the Loans and all other amounts included
in the Secured Obligations in accordance with the terms and provisions of the
Credit Agreement, the Notes, the other Credit Documents and the Designated Hedge
Agreements.
(b) Performance of Other Obligations. The Mortgagor will keep and perform
or cause to be kept and performed all covenants, agreements, conditions and
stipulations contained in the other Credit Documents or the Designated Hedge
Agreements which are binding on or otherwise applicable to the Mortgagor.
(c) Waiver of Acceptance, etc. The Mortgagor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Secured Obligations and this Mortgage and any requirement that the Collateral
Agent or any Secured Creditor protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any right or take
any action against any other person, or any collateral, or pursue any other
remedy in the power of the Collateral Agent or any other Secured Creditor.
SECTION 2. TITLE TO PREMISES, PROTECTION OF LIEN OF MORTGAGE, ETC.
(a) Title to Premises, etc. The Mortgagor represents to and covenants with
the Collateral Agent, its successors and assigns, that (i) the Mortgagor has and
will have good, marketable and insurable fee simple title to the Land, free and
clear of all liens, charges and encumbrances of every kind and character,
subject only to Permitted Encumbrances; (ii) the Mortgagor has and will have
full corporate power and lawful authority to encumber and convey the Premises as
provided herein; (iii) the Mortgagor owns and will own all of the Fixtures and
Equipment, free and clear of all liens, charges and encumbrances of every kind
and character, subject only to Permitted Encumbrances; (iv) this Mortgage is and
will remain a valid and enforceable first priority lien on, and first priority
security interest in, the Premises, subject only to Permitted Encumbrances; and
(v) the Mortgagor hereby warrants and will forever warrant and defend such title
and the validity, enforceability and priority of the lien and security interest
hereof against the claims of all persons and parties whomsoever.
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(b) Protection of Lien; Defense of Action. If the lien, security interest,
validity or priority of this Mortgage, or if title or any of the rights of the
Mortgagor or the Collateral Agent in or to the Premises, shall be endangered or
questioned, or shall be attacked directly or indirectly, or if any action or
proceeding is commenced, to which action or proceeding the Collateral Agent is
made a party by reason of the execution of this Mortgage, or in which it becomes
necessary to defend or uphold the lien of this Mortgage, or the priority thereof
or possession of the Premises, or otherwise to perfect the security hereunder,
or if any suit, action, legal proceeding or dispute of any kind is commenced in
which the Collateral Agent is made a party or appears as party plaintiff or
defendant, affecting the interest created herein, or the Premises, including,
but not limited to, bankruptcy, probate and administration proceedings, other
foreclosure proceedings or any condemnation action involving the Premises, then
the Mortgagor will promptly notify the Collateral Agent thereof (unless the
Collateral Agent has initiated or been served with process in respect thereof)
and the Mortgagor will diligently endeavor to cure any defect which may be
developed or claimed, and will take all necessary and proper steps for the
defense of such action or proceeding, including the employment of counsel, the
prosecution or defense of litigation and, subject to the Collateral Agent's
approval, the compromise, release or discharge of any and all adverse claims.
The Collateral Agent (whether or not named as a party to such actions or
proceedings), is hereby authorized and empowered (but shall not be obligated) to
take such additional steps as it may deem necessary or proper for the
prosecution, defense and control of any such action or proceeding or the
protection of the lien, security interest, validity or priority of this Mortgage
or of such title or rights, including the employment of counsel, the prosecution
or defense of litigation, the compromise, release or discharge of such adverse
claims, the purchase of any tax title and the removal of prior liens and
security interests. The Mortgagor shall, on demand, reimburse the Collateral
Agent for all expenses (including attorneys' fees and disbursements) incurred by
it in connection with the foregoing matters, and the person incurring such
expenses shall be subrogated to all rights of the person receiving such payment.
All such costs and expenses of the Collateral Agent, until reimbursed by the
Mortgagor, shall be part of the Secured Obligations and shall be deemed to be
secured by this Mortgage.
SECTION 3. TAXES AND IMPOSITIONS.
(a) Taxes on the Premises. The Mortgagor will pay when due, and before any
penalty, interest or cost for non-payment thereof may be added thereto, all
taxes, assessments, vault, water and sewer rents, rates, charges and
assessments, levies, permits, inspection and license fees and other governmental
and quasi-governmental charges, general and special, ordinary and extraordinary,
foreseen and unforeseen, heretofore or hereafter assessed, levied or otherwise
imposed against or upon, or which may become a Lien upon, the Premises or any
part thereof or any appurtenance thereto, or the revenues, rents, issues, income
and profits of the Premises or arising in respect of the occupancy, use or
possession thereof (collectively, "Impositions"). The Mortgagor will also pay
any penalty, interest or cost for non-payment of Impositions which may become
due and payable, and such penalties, interest or cost shall be included within
the term Impositions.
(b) Receipts. Unless the Mortgagor is making monthly deposits with the
Collateral Agent pursuant to section 4, or unless the Collateral Agent otherwise
directs, the Mortgagor will furnish to the Collateral Agent, upon its request,
proof of payment at the time same is made, and thereafter, upon receipt,
validated receipts showing payment in full of all Impositions.
(c) Income and Other Taxes. The Mortgagor will promptly pay all income,
franchise and other taxes owing by the Mortgagor, and any stamp taxes which may
be required to be paid in connection with the Secured Obligations, this Mortgage
or any other Credit Document or Designated Hedge Agreement, together with any
interest or penalties thereon, and the Mortgagor will pay any and all taxes,
charges, filing, registration and recording fees, excises and levies imposed
upon the Collateral Agent, the Administrative Agent or the Secured Creditors by
reason of execution of the Credit Agreement, the Notes, this Mortgage, the other
Credit Documents or any Designated Hedge Agreement, or ownership of this
Mortgage or any mortgage supplemental hereto, any security instrument with
respect to any Fixtures and Equipment or any instrument of further assurance.
(d) Brundage Clause. In the event of the enactment after the date hereof
of any law in the State in which the Premises are located or any other
governmental entity deducting from the value of the Premises for the purpose of
taxation any lien or security interest thereon, or changing in any way the laws
for the taxation of mortgages, deeds of trust or other liens or debts secured
thereby, or the manner of collection of such taxes, so as to affect this
Mortgage, the Secured Obligations, the Collateral Agent, the Administrative
Agent or any of the Secured Creditors, then, and in such event, the Mortgagor
shall, on demand, pay to (or reimburse) the Collateral Agent, the Administrative
Agent or such Secured Creditors, the amount of all taxes, assessments, charges
or liens for which the Collateral Agent, the Administrative Agent or any of the
Secured Creditors is or may be liable as a result thereof, provided that if any
such payment or reimbursement shall be unlawful or would constitute usury or
render the Secured Obligations wholly or partially usurious under applicable
law, then the Collateral Agent may, at its option, declare the Secured
Obligations immediately due and payable or require the Mortgagor to pay or
reimburse the Collateral Agent, the Administrative Agent or any of the Secured
Creditors for payment of the lawful and non-usurious portion thereof.
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(e) Right to Contest Impositions. Notwithstanding anything to the contrary
contained in this section 3, the Mortgagor shall have the right to protest
and/or contest any Imposition imposed upon the Premises or any part thereof,
provided that and so long as (1) the same is done by the Mortgagor upon prior
written notice to the Collateral Agent and at the Mortgagor's sole cost and
expense and with due diligence and continuity so as to resolve such protest
and/or contest as promptly as possible; (2) neither the Premises nor any part
thereof is or will be in immediate danger of being forfeited or lost by reason
of such protest or contest; (3) if required by the Collateral Agent, the
Mortgagor shall establish a reserve or other security with the Collateral Agent
in an amount and in form and substance satisfactory to the Collateral Agent for
application to the cost of curing or removing the same from record pursuant to
clause (4) below; (4) in any event, each such contest shall be concluded and the
tax assessment, penalties, interest and costs shall be paid prior to the date
such judgment becomes final or any writ or order is issued under which the
Premises may be sold pursuant to such judgment; and (5) the Mortgagor agrees in
writing to indemnify and hold harmless the Collateral Agent and the Secured
Creditors from and against any and all expenses, claims, demands, obligations,
liabilities, suits, actions and penalties upon or arising out of such protest
and/or contest. Pending the determination of any such protest or contest, the
Mortgagor shall not be obligated to pay any such Imposition unless nonpayment of
such Imposition will subject the Premises or any part thereof to sale or other
liability or forfeit by reason of non-payment. In addition, to the extent that
the same may be permitted by law, the Mortgagor shall have the right to apply
for the conversion of any Imposition to make the same payable in annual
installments over a period of years, and upon such conversion the Mortgagor
shall be obligated only to pay and discharge said periodic installments as
required by this section 3.
SECTION 4. TAX AND INSURANCE DEPOSITS.
(a) Amount of Deposits. To further secure the Mortgagor's obligations
under sections 3 and 10, but not in lieu thereof, the Collateral Agent, at its
option, following the occurrence and during the continuance of an Event of
Default, may require that the Mortgagor deposit with the Collateral Agent,
monthly on the first day of each month, a sum equal to one-twelfth (1/12) of the
estimated annual cost of all Impositions levied on the Premises, and a sum equal
to one-twelfth (1/12) of the estimated annual insurance premiums required to
keep the Improvements and the Fixtures and Equipment insured as required by
section 10 hereof, and the Mortgagor shall, accordingly, make such deposits. In
addition, if required by the Collateral Agent, the Mortgagor shall also deposit
with the Collateral Agent a sum of money which, together with the aforesaid
monthly installments, will be sufficient to make each of said payments of
Impositions and premiums, at least 10 days before such payments are due. If the
amount of any such payments is not ascertainable at the time any such deposit is
required to be made, the deposit shall be made on the basis of the Collateral
Agent's estimate thereof, and, when such amount is fixed for the then-current
year, the Mortgagor shall promptly deposit any deficiency with the Collateral
Agent.
(b) Use of Deposits. All funds so deposited shall, until so applied,
constitute additional security for the Secured Obligations, shall be held by the
Collateral Agent in a separate account, without interest (except to the extent
required under applicable law), may be commingled with other funds of the
Collateral Agent and, provided that no Event of Default shall have occurred and
be continuing hereunder, shall be applied in payment of the aforesaid amounts
prior to their becoming delinquent, to the extent that Collateral Agent shall
have such funds on hand, and provided, further, that the Collateral Agent shall
have no obligation to use said funds to pay any installment of Impositions prior
to the last day on which payment thereof may be made without penalty or interest
or to pay an insurance premium prior to the due date thereof. It shall be the
Mortgagor's responsibility to furnish the Collateral Agent with bills or
invoices therefor in sufficient time to pay the same before any penalty or
interest attaches and before said policies of insurance lapse, and the
Collateral Agent shall have no responsibility for payment of the same in the
absence of such bills or invoices. If an Event of Default hereunder shall have
occurred and be continuing, or if any of the Secured Obligations shall have been
accelerated as provided in the Credit Agreement or any Designated Hedge
Agreement, all funds so deposited may, at the Collateral Agent's option, be
applied to the Secured Obligations in the order determined by the Collateral
Agent or to cure said Event of Default or as provided in this section.
(c) Transfer of Mortgage. Upon an assignment or other transfer of this
Mortgage, the Collateral Agent shall have the right to pay over the balance of
such deposits in its possession to the assignee or other successor, and the
Collateral Agent shall thereupon be completely released from all liability with
respect to such deposits and the Mortgagor or the owner of the Premises shall
look solely to the assignee or transferee with respect thereto. This provision
shall apply to every transfer of such deposits to a new assignee or transferee.
(d) Transfer of Premises. A permissible transfer of record title to the
Premises shall automatically transfer to the new owner the beneficial interest
in any deposits under this section. Upon full payment and satisfaction of this
Mortgage or, at the Collateral Agent's option, at any prior time, the balance of
amounts deposited in the Collateral Agent's possession shall be paid over to the
record owner of the Premises, and no other person shall have any right or claim
thereto in any event.
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(e) Depository. The Mortgagor agrees, at the Collateral Agent's request
and at the Mortgagor's expense, to make the aforesaid deposits with the
Collateral Agent or such service or financial institution as the Collateral
Agent may from time to time designate in lieu of the Collateral Agent.
SECTION 5. LIENS AND LIABILITIES.
(a) Discharge of Mechanic's Liens, etc. The Mortgagor will pay, bond or
otherwise discharge, from time to time when the same shall become due, all
lawful claims and demands of mechanics, materialmen, laborers and others which,
if unpaid, might result in, or permit the creation of, a lien on the Premises,
or on the revenues, rents, issues, income or profits arising therefrom and, in
general, the Mortgagor shall do, or cause to be done, at the Mortgagor's sole
cost and expense, everything necessary to fully preserve the lien, security
interest and priority of this Mortgage.
(b) Creation of Liens. The Mortgagor will not, without the Collateral
Agent's consent, create, place or permit to be created or placed, or through any
act or failure to act acquiesce in the placing of, or allow to remain, any deed
of trust, mortgage, voluntary or involuntary lien, whether statutory,
constitutional or contractual, security interest, encumbrance or charge, or
conditional sale or other title retention document, against or covering the
Premises, prior to, on a parity with or subordinate to the lien of this
Mortgage, other than the following ("Permitted Encumbrances"): (i) the lien of
this Mortgage; (ii) the Permitted Liens (as defined in the Credit Agreement);
and (iii) such other matters of record as may be described in Exhibit 2 or as to
which the Collateral Agent has otherwise specifically consented in writing. If
any of the foregoing, other than Permitted Encumbrances, becomes attached to the
Premises without such consent, the Mortgagor will promptly cause the same to be
discharged and released.
(c) No Consent of Collateral Agent to Liens to be Implied. Nothing in the
Credit Agreement, the Notes, this Mortgage, the other Credit Documents or any
Designated Hedge Agreement shall be deemed or construed in any way as
constituting the consent or request by the Collateral Agent, express or implied,
to any contractor, subcontractor, laborer, mechanic or materialman for the
performance of any labor or the furnishing of any material for any improvement,
construction, alteration or repair of the Premises.
(d) Right to Contest. Notwithstanding anything to the contrary contained
in this section 5, the Mortgagor shall have the right to contest in good faith
the validity of any such lien, encumbrance, charge or security interests,
provided that and so long as (1) the same is done by the Mortgagor upon prior
written notice to the Collateral Agent and at the Mortgagor's sole cost and
expense and with due diligence and continuity so as to resolve as promptly as
possible such question of validity; (2) neither the Premises nor any part
thereof will be in immediate danger of being forfeited or lost by reason of such
contest; (3) such contest shall not subject the Collateral Agent to prosecution
for a criminal offense or a claim for civil liability; (4) if required by the
Collateral Agent, the Mortgagor shall either bond such lien, encumbrance, charge
or security interest or establish a reserve or other security with the
Collateral Agent in an amount and in form and substance satisfactory to the
Collateral Agent for application towards the cost of curing or removing the same
from record pursuant to clause (5) below; (5) the Mortgagor shall thereafter
diligently proceed to cause such lien, encumbrance or charge to be removed and
discharged prior to the date the Premises is listed for an in rem action with
respect to such lien, encumbrance or charge or any writ or order is issued under
which the Premises may be sold pursuant to a final judgment; (6) the Mortgagor
agrees in writing to indemnify and hold harmless the Collateral Agent and the
Secured Creditors from and against any and all expenses, claims, demands,
obligations, liabilities, suits, actions and penalties upon or arising out of
such contest and (7) no Event of Default hereunder shall have occurred and be
continuing.
SECTION 6. TRANSFERS AND MERGERS; LEASES, ETC.
The Mortgagor shall not (i) sell, assign, transfer or otherwise dispose of
the Premises or any part thereof or interest therein, or (ii) merge or
consolidate with any other person, or (iii) lease all or any portion of the
Premises to any other person, except pursuant to a lease which is subject and
subordinate in all respects to this Mortgage, or (iv) enter into any contract or
agreement to do any of the foregoing, expressly including, without limitation,
any land contract, lease/purchase, lease/option or option agreement, except to
the extent permitted by, and in compliance with the requirements of, section 9.2
of the Credit Agreement.
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SECTION 7. MAINTENANCE; ALTERATIONS; REPAIR OR RESTORATION OF LOSS OR
DAMAGE CAUSED BY CASUALTY; PREPAYMENT UPON EVENT OF LOSS.
(a) Repair and Maintenance. The Mortgagor will operate and maintain the
Premises in good order, repair and operating condition, ordinary wear and tear
excepted, and will promptly make all necessary repairs, renewals, replacements,
additions and improvements to the Premises, interior and exterior, structural
and nonstructural, foreseen and unforeseen, required by law or any restrictive
covenant affecting the Premises or otherwise necessary so that the Premises will
at all times be in good operating condition, ordinary wear and tear excepted,
and fit and proper for the purposes for which it is used and operated at the
date hereof. The Mortgagor shall not in any event commit waste upon the Premises
or suffer waste to be committed thereon.
(b) Replacement of Fixtures and Equipment. The Mortgagor will keep the
Premises fully equipped and will replace all worn-out or obsolete Fixtures and
Equipment with Fixtures and Equipment comparable thereto when new, and will not,
without the Collateral Agent's consent, remove from the Premises any item of the
Fixtures and Equipment covered by this Mortgage unless (i) the same is replaced
by the Mortgagor with an item of equal suitability and value when new, owned by
the Mortgagor and subject to the lien and security interest of this Mortgage,
free and clear of any lien or security interest (other than Permitted
Encumbrances), or (ii) in the case of any such Fixtures and Equipment which is
obsolete and surplus to its needs, the same is disposed of in the ordinary
course of business and in compliance with section 9.2 of the Credit Agreement.
(c) Alterations of Improvements, etc. No buildings, structures or other
substantial Improvements on the Premises shall be altered in any material
respect or demolished or removed by the Mortgagor, provided that the Mortgagor
may make alterations and additions (including structural alterations) to the
Improvements if (i) such alterations do not materially reduce the value or
marketability of the Premises or the uses or utility of the Premises; or (ii)
such alterations are required by applicable law, rule or regulation.
(d) Event of Loss, etc. If the Improvements or the Fixtures and Equipment
suffer any damage or loss or are destroyed by fire, rain, storm, flood,
earthquake, or any other casualty, whether or not covered by insurance, the
Mortgagor will (i) if the same constitutes an Event of Loss requiring prepayment
of any of the Loans pursuant to section 5.2 of the Credit Agreement, so prepay
such Loans as provided in the Credit Agreement, or (ii) otherwise repair,
replace or restore the Improvements and/or Fixtures and Equipment to the
condition in which they are required to be maintained hereunder immediately
prior to such damage, loss or destruction
SECTION 8. COMPLIANCE WITH LAWS AND INSURANCE REQUIREMENTS, ETC.
(a) Compliance with Laws, etc. The Mortgagor covenants that the Premises
will at all times be constructed, installed, maintained and operated in
compliance with all applicable requirements of:
(i) all laws, rules, regulations, orders, authorizations, permits
and licenses of all governmental authorities, federal, state and local,
having jurisdiction over the Mortgagor, the Premises or any part thereof,
including, without limitation, (w) all Environmental Laws, (x) the
Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq., (y) the
Americans with Disabilities Act of 1990, and (z) all state and local laws
and ordinances related to handicapped access and all rules, regulations,
and orders issued pursuant thereto including, without limitation, the
Americans with Disabilities Act Accessibility Guidelines for Buildings and
Facilities (collectively as referred to in clause (y) and this clause (z),
"Access Laws"); and
(ii) all restrictive covenants affecting any portion or all of the
Real Property Collateral; . other than those requirements (A) being
contested in good faith by appropriate proceedings, as to which adequate
reserves are established to the extent required under GAAP, and (B) the
noncompliance with which would not have, and which would not be reasonably
expected to have, a Material Adverse Effect.
(b) Alterations Affecting Compliance with Access Laws. Notwithstanding any
provisions set forth herein or in any other document regarding the Collateral
Agent's approval of alterations of the Real Property
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Collateral, the Mortgagor shall not alter the Real Property Collateral in any
manner which would increase in any material respect the responsibilities of the
Mortgagor for compliance with the applicable Access Laws without the prior
written approval of the Collateral Agent. The foregoing shall apply to tenant
improvements constructed by the Mortgagor or by any of its tenants. The
Collateral Agent may condition any such approval upon receipt of a certificate
of Access Law compliance from an architect, engineer, or other person acceptable
to the Collateral Agent.
(c) Notice of Violation of Access Laws. The Mortgagor does hereby agree to
give prompt notice to the Collateral Agent of the receipt by the Mortgagor of
any complaints related to violation of any Access Laws and of the commencement
of any proceedings or investigations which relate to compliance with applicable
Access Laws.
(d) Licenses and Permits, etc. The Mortgagor shall (i) observe and comply
with all conditions and requirements necessary to preserve and extend any and
all rights, licenses, permits (including but not limited to zoning variances,
special exceptions and non-conforming uses), privileges, franchises and
concessions which are applicable to the Premises or any part thereof or which
have been granted to or contracted for by the Mortgagor in connection with any
existing or presently contemplated use of the Premises, and (ii) obtain and keep
in full force and effect all necessary governmental and municipal approvals as
may be necessary from time to time to comply in all material respects with all
Environmental Laws, all Access Laws and other statutory or regulatory
requirements; except in any such case referred to in clause (i) or (ii) above
where the noncompliance would not have, and would not be reasonably expected to
have, a Material Adverse Effect.
(e) Flood Hazards; Utilities; Streets. The Mortgagor represents and
warrants that (i) the Premises are not located in an area identified by the
Secretary of Housing and Urban Development or a successor thereto as an area
having special flood hazards pursuant to the terms of the National Flood
Disaster Protection Act of 1973, as amended; (ii) the Premises are served by all
utilities required for the present use thereof; and (iii) all streets necessary
to serve the Premises for the use thereof as herein contemplated have been
completed and are serviceable and have been dedicated or accepted by the
appropriate governmental entities.
(f) Zoning; Title Matters. The Mortgagor will not (i) initiate or support
any zoning reclassification of the Premises, seek any variance under existing
zoning ordinances applicable to the Premises or use or permit the use of the
Premises in a manner which would result in such use becoming a non-conforming
use under applicable zoning ordinances, (ii) modify, amend or supplement any
Permitted Encumbrances, (iii) impose any restrictive covenants or encumbrances
upon the Premises, execute or file any subdivision plat affecting the Premises
or consent to the annexation of the Premises to any municipality or (iv) permit
or suffer the Premises to be used by the public or any person in such manner as
might make possible a claim of adverse usage or possession or of any implied
dedication or easement.
(g) Insurance Requirements. The Mortgagor shall observe and comply with
any and all conditions and requirements attached to or made a part of the
insurance relating to the Premises which is maintained in accordance with
section 10.
SECTION 9. ENVIRONMENTAL MATTERS.
(a) Without limitation of the provisions of section 8 hereof, the
Mortgagor hereby (i) reaffirms its representations contained in section 7.13 of
the Credit Agreement, (ii) covenants to perform and observe all of the terms and
provisions of the Credit Agreement relating to compliance by it with
Environmental Laws and notice by it and indemnification by it of Environmental
Claims, including, without limitation, the covenants contained in section 8.8 of
the Credit Agreement and the indemnification obligations contained in section
12.1 of the Credit Agreement; and (iii) agrees that all of the Secured Creditors
shall be considered Indemnitees as defined in section 12.1(g) of the Credit
Agreement.
(b) Any costs or expenses reasonably incurred by a person to be
indemnified hereunder for which the Mortgagor is responsible shall be paid to
the person to be indemnified on demand, and failing prompt reimbursement, shall
be added to the Secured Obligations and earn interest at the interest rate
provided in the last sentence of section 2.7(c) of the Credit Agreement, or such
lesser rate as is the maximum legally permissible rate of interest (the "Default
Rate"), until paid in full.
(c) The Mortgagor's representations, warranties, and obligations under
this section shall not be terminated, released, discharged, extinguished, or
otherwise affected by any foreclosure of any lien, indebtedness or obligation,
any satisfaction of the Secured Obligations or the release or discharge of the
Premises or any part thereof or any other action or thing, except and unless
such representations, warranties, and obligations are expressly released in
writing by the Collateral Agent, which writing shall refer particularly to this
section. The provisions of this section may be enforced at any time by any of
the Secured Creditors, the Collateral Agent or any other person entitled to be
indemnified hereunder and, without limiting the foregoing, shall
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survive the payment or other satisfaction by any means of the obligations
evidenced by the Notes and the release and discharge of this Mortgage, except in
the case of a specific written release by the Collateral Agent as to this
section, as referred to above.
SECTION 10. INSURANCE.
(a) Required Insurance. The Mortgagor will maintain insurance with
responsible companies in such amounts and against such risks as is usually
carried by owners of similar businesses and properties (and with such
deductibles and levels of self-insurance as are usually maintained by owners of
similar businesses and properties and as are consistent with the Mortgagor's
practices as of the date of the execution and delivery hereof), provided that in
any event the Mortgagor will maintain:
(i) All Risk Extended Coverage Insurance: insurance against loss or
damage covering the Improvements, the Fixtures and Equipment and all other
tangible personal property of the Mortgagor located on the Premises by
reason of any loss or damage by fire, storms, and other hazards, perils,
casualties and risks, including without limitation risks usually covered
by extended coverage policies issued in the jurisdiction in which the
Improvements are located, which insurance shall:
(A) name National City Bank, as Collateral Agent as an
additional insured and as loss payee,
(B) provide coverage in an amount not less than the greater of
(x) 100% of the replacement costs of the Improvements and the
Fixtures and Equipment, (y) the full insurable value of the
Improvements and the Fixtures and Equipment, and (z) the amount
applicable to the Improvements and the Fixtures and Equipment
necessary so that neither the Mortgagor (or any of its Affiliates)
or the Collateral Agent shall be considered or shall become a
co-insurer of any loss under such policy, and
(C) provide for a deductible or self-insurance retention in an
amount consistent with the Mortgagor's current practices or such
greater amount as is reasonably acceptable to the Collateral Agent;
(ii) Flood Insurance: if the area in which the Real Property
Collateral is located has been designated as flood prone or a flood risk
area, as defined by the Flood Disaster Protection Act of 1973, as amended,
flood insurance, which insurance shall:
(A) name National City Bank, as Collateral Agent as an
additional insured and as loss payee,
(B) provide coverage in an amount not less than the greater of
(x) 100% of the replacement costs of the Improvements and the
Fixtures and Equipment, (y) the full insurable value of the
Improvements and the Fixtures and Equipment, and (z) the amount
applicable to the Improvements and the Fixtures and Equipment
necessary so that neither the Mortgagor (or any of its Affiliates)
or the Collateral Agent shall be considered or shall become a
co-insurer of any loss under such policy; provided that if flood
insurance in the required amount is not available, flood insurance
shall be maintained in the maximum amount available;
(C) provide for a deductible or self-insurance retention of an
amount reasonably acceptable to the Collateral Agent; and
(D) comply with any additional requirements of the National
Flood Insurance Program as set forth in such Act;
(iii) Commercial General Liability Insurance: insurance against
claims for bodily injury, death or property damage occurring on, in or
about the Premises and any other facilities owned, leased or used by the
Mortgagor (including adjoining streets, sidewalks and waterways), which
insurance shall:
(A) name National City Bank, as Collateral Agent as an
additional insured,
(B) provide coverage in an amount not less than $1,000,000 per
occurrence and $2,000,000 in the aggregate, plus umbrella coverage
of not less than $3,000,000; and
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(C) provide for a deductible or self-insurance retention in an
amount consistent with the Mortgagor's current practices or such
greater amount as is reasonably acceptable to the Collateral Agent;
(iv) Workers' Compensation Insurance: insurance against claims for
injuries to or death of employees (including Employers' Liability
Insurance) to the extent required by applicable law;
(v) Business Interruption Insurance: insurance against loss of
operating income for a period of at least six months, occasioned by reason
of any peril affecting the operations of the Mortgagor; and
(vi) Other Insurance: such other and additional insurance, in such
amounts and with such coverages as are then customary for property similar
in use and located in the same state in which the Premises is located.
Such insurance shall be written by financially responsible companies selected by
the Mortgagor and having an A.M. Best rating of "A-" or better and being in a
financial size category of "VII" or larger, or by other companies acceptable to
the Collateral Agent, and (other than workers' compensation insurance) shall
name the Collateral Agent, as loss payee (in the case of insurance described in
items (i) and (ii)) or as an additional named insured (in the case of the
insurance described in items (iii), (v) and (vi) above), in each case as its
interests may appear. Each policy referred to in this section shall provide that
it will not be canceled or reduced or expire except after not less than 30 days'
written notice to the Collateral Agent and shall also provide that the interests
of the Collateral Agent shall not be invalidated by an act or negligence of the
Mortgagor or any person having an interest in any facility owned, leased or used
by the Mortgagor nor by occupancy or use of any facility owned, leased or used
by the Mortgagor for purposes more hazardous than permitted by such policy nor
by any foreclosure or other proceedings relating to any facility owned, leased
or used by the Mortgagor. The Mortgagor will advise the Collateral Agent
promptly of any policy cancellation, reduction or amendment. All of such
insurance shall be primary and non-contributing with any insurance which may be
carried by the Collateral Agent. All insurance policies, to the extent of its
interest, are to be for the benefit of and first payable in case of loss to the
Collateral Agent as first mortgagee without contribution. At or prior to the
time of the initial Borrowing by the Mortgagor, it will provide to the
Collateral Agent (x) certificates or endorsements naming the Collateral Agent as
an additional insured or loss payee with respect to the casualty and liability
insurance maintained as required hereby with respect to the Premises, and (y) if
requested to do so, copies of all insurance policies maintained by it as
required hereby. The Mortgagor shall deliver to the Collateral Agent
contemporaneously with the expiration or replacement of any policy of insurance
required to be maintained hereunder a certificate as to the new or renewal
policy.
(b) Proceeds of Insurance. All amounts recoverable under any policy of
casualty insurance are hereby assigned to the Collateral Agent. In the event of
a loss, and if an Event of Default has occurred and is continuing or if any
required prepayment of any of the Secured Obligations is required to be made at
such time or as a result thereof, the Collateral Agent is authorized and
empowered, at its option, to adjust or compromise any loss covered by any
insurance policies on the Premises, to collect and receive the proceeds
therefrom and, after deducting from such proceeds any expenses incurred by it in
the collection or handling thereof, to apply the net proceeds to the Secured
Obligations in accordance with the provisions of the Credit Agreement. If any
such net proceeds are not to be so applied, the Collateral Agent is authorized
to apply the net proceeds in any one or more of the following ways, subject to
the applicable provisions of the Credit Agreement: (i) use the same or any part
thereof to fulfill any of the covenants contained herein as the Collateral Agent
may determine; (ii) use the same or any part thereof to replace and restore the
Premises to a condition satisfactory to the Collateral Agent; or (iii) release
the same or any part thereof to the Mortgagor to cover the cost of repair or
restoration of the Improvements.
(c) Power of Attorney. The Collateral Agent is hereby irrevocably
appointed by the Mortgagor as attorney for the Mortgagor to assign any policy to
itself or its nominees in the event of the foreclosure of this Mortgage. In the
event of foreclosure of this Mortgage, or other transfer of title of the
Premises in lieu of foreclosure, all right, title and interest of the Mortgagor
in and to any insurance policies then in force shall pass to the purchaser or
grantee thereof.
SECTION 11. CONDEMNATION.
(a) Condemnation. The Mortgagor will give the Collateral Agent immediate
notice of the actual or threatened commencement of any proceedings under eminent
domain affecting all or any part of the Premises or any easement therein or
appurtenance thereof, including severance and consequential damage and change in
grade of streets, and will deliver to the Collateral Agent copies of any and all
papers served in connection with any such proceedings. The Mortgagor agrees that
all awards heretofore or hereafter made by any public or quasi-public authority
to the present and all subsequent owners of the Premises by virtue of an
exercise of the right of eminent domain by such authority, including any award
for taking of title, possession or right of access to a public way, or for any
change of grade or streets affecting the Premises, are hereby assigned to the
Collateral Agent. If case of any such
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proceedings, and if an Event of Default has occurred and is continuing or if any
required prepayment of any of the Secured Obligations is required to be made at
such time or as a result thereof, the Collateral Agent is authorized and
empowered, at its option, to collect and receive the proceeds of any such awards
from the authorities making the same and to give proper receipts therefor, and
after deducting from such proceeds any expenses incurred by the Collateral Agent
in the collection or handling thereof, to apply the net proceeds to the Secured
Obligations in accordance with the provisions of the Credit Agreement. If any
such net proceeds are not to be so applied, the Collateral Agent is authorized,
at its option, to apply the net proceeds in any one or more of the following
ways, subject to the applicable provisions of the Credit Agreement: (A) use the
same or any part thereof to fulfill any of the covenants contained herein as the
Collateral Agent may determine; (B) use the same or any part thereof to replace
and restore the Premises to a condition satisfactory to the Collateral Agent; or
(C) release the same or any part thereof to the Mortgagor to cover the cost of
repair or restoration of the Improvements.
(b) Further Assurances. The Mortgagor hereby covenants and agrees to and
with the Collateral Agent, upon the request of the Collateral Agent to make,
execute and deliver any and all assignments and other instruments sufficient for
the purpose of assigning all such awards to the Collateral Agent, free and clear
and discharged of any and all encumbrances of any kind or nature whatsoever
except as above stated.
(c) Installment Payment of Secured Obligations Not Impaired.
Notwithstanding any taking under the power of eminent domain, alteration of the
grade of any street, or other injury to or decrease in value of the Premises by
any public or quasi-public authority or corporation, the Mortgagor shall
continue to pay installments on the Secured Obligations owed by it and any
reduction in the principal sum resulting from the application by the Collateral
Agent of such award or payment as hereinafter set forth shall be deemed to take
effect only on the date of such receipt.
SECTION 12. RIGHT OF COLLATERAL AGENT TO MAKE PAYMENTS ON BEHALF OF
MORTGAGOR, ETC.
(a) Right of Collateral Agent to Make Payments, etc. In the event the
Mortgagor shall fail to comply with any or all of its covenants, agreements,
conditions and stipulations herein set forth, then the Collateral Agent shall
after notice to the Mortgagor be and hereby is authorized and empowered at its
option, but without legal obligation to do so, to pay or perform the same
without waiver of any other remedy. In addition, the Collateral Agent is
authorized and empowered at its option, but without legal obligation to do so,
upon not less than two business Days' prior notice to the Chief Financial
Officer of the Mortgagor, to enter, or have its agents enter, the Premises
whenever necessary for the purpose of inspecting the Premises and curing any
default hereunder. The Mortgagor agrees that the Collateral Agent shall
thereupon have a claim against the Mortgagor for all sums paid by the Collateral
Agent for such defaults so cured, together with a lien upon the Premises for the
sum so paid plus interest at the Default Rate.
(b) Collateral Agent Protected; Further Rights, etc. The Collateral Agent,
in making any payment herein and hereby authorized in the place and stead of the
Mortgagor (i) relating to taxes, assessments, water rates, sewer rentals and
other governmental or municipal charges, fines, impositions or liens asserted
against the Premises, may do so according to any bill, statement or estimate
procured from the appropriate public authority without inquiry into the validity
thereof; or (ii) relating to any adverse title, lien, statement of lien,
encumbrance, claim or charge, shall be the sole judge of the validity of same;
or (iii) otherwise relating to any purpose herein and hereby authorized, but not
enumerated in this section, may do so whenever, in its good faith judgment and
discretion, such payment shall seem necessary or desirable to protect the full
security intended to be created by this Mortgage. In connection with any such
payment, the Collateral Agent, at its option, may and is hereby authorized to
obtain a continuation report of title prepared by a title insurance company, the
cost and expenses of which shall be repayable by the Mortgagor upon demand and
shall be secured hereby.
SECTION 13. SECURITY AGREEMENT PROVISIONS.
This Mortgage is hereby deemed to be as well a security agreement for the
purpose of creating hereby a security interest securing the Secured Obligations
in and to the Personal Property Collateral. Without derogating any of the
provisions of this Mortgage, the Mortgagor by this Mortgage:
(a) grants to the Collateral Agent a security interest in all of the
Mortgagor's right, title and interest in and to all Personal
Property Collateral, including, but not limited to, the items
referred to above, together with all additions, accessions and
substitutions and all similar property hereafter acquired and used
or obtained for use on, or in connection with, the Real Property
Collateral; the proceeds of the Personal Property Collateral are
intended to be secured hereby; provided, however, that such intent
shall never constitute an expressed or implied consent on the part
of the Collateral Agent to the sale of any or all Personal Property
Collateral except as specifically permitted under any of the
applicable provisions of this Mortgage or any of the other Credit
Documents;
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(b) agrees that the security interest hereby granted by this Mortgage
shall secure the payment of the Secured Obligations;
(c) agrees not to sell, convey, mortgage or grant a security interest
in, or otherwise dispose of or encumber, any of the Personal
Property Collateral or any of the Mortgagor's right, title or
interest therein, except in compliance with the requirements of
section 9.2 of the Credit Agreement;
(d) agrees that if any of the Mortgagor's rights in the Personal
Property Collateral are voluntarily or involuntarily transferred,
whether by sale, creation of a security interest, attachment, levy,
garnishment or other judicial process, without the written consent
of the Collateral Agent, such transfer shall constitute a default by
the Mortgagor under the terms of this Mortgage;
(e) authorizes the Collateral Agent to file, in the jurisdiction where
this Mortgage will be given effect, financing statements covering
the Personal Property Collateral and at the request of the
Collateral Agent, the Mortgagor shall join the Collateral Agent in
executing one or more of such financing statements pursuant to the
Uniform Commercial Code in a form satisfactory to the Collateral
Agent and the Mortgagor shall pay the cost of filing the same in all
public offices at any time and from time to time wherever the
Collateral Agent deems filing or recording of any financing
statements or of this Mortgage to be desirable or necessary; and
(f) acknowledges that the Mortgagor, as of the date hereof, has joined
the Collateral Agent in the execution of one or more Uniform
Commercial Code financing statements to be filed to perfect the
security interest in the Personal Property created by this Mortgage.
SECTION 14. FILINGS AND RECORDINGS.
The Mortgagor agrees at all time to cause this Mortgage, and each
amendment or modification hereof or supplement hereto, and financing statements
covering personal property (and continuation statements in respect thereof), if
necessary or appropriate under the Uniform Commercial Code, as in effect in the
jurisdiction in which the Real Property Collateral is located, and all
assignments of leases, to be recorded, registered and filed, and kept recorded,
registered and filed, in such manner and in such places as appropriate, and
shall comply with all applicable statutes and regulations in order to establish,
preserve and protect the security and priority of this Mortgage, and such
assignments and the rights of the Collateral Agent thereunder. The Mortgagor
shall pay, or cause to be paid, all taxes, fees and other charges incurred in
connection with such recording, registration, filing and compliance.
SECTION 15. RIGHT OF SETOFF.
In addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
and during the continuance of an Event of Default, each Secured Creditor is
hereby authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Mortgagor or to any other person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by such Secured Creditor (including, without limitation,
by branches and agencies of such Secured Creditor wherever located) to or for
the credit or the account of the Mortgagor against and on account of the
obligations and liabilities of the Mortgagor to such Secured Creditor under the
Notes, any other Credit Documents or any Designated Hedge Agreement, including,
without limitation, all interests in Loans purchased by such Secured Creditor
pursuant to section 12.4(c) of the Credit Agreement, and all other claims of any
nature or description arising out of or connected with the Notes or any other
Credit Document or any Designated Hedge Agreement, irrespective of whether or
not such Secured Creditor shall have made any demand hereunder and although said
Loans, liabilities or claims, or any of them, shall be contingent or unmatured.
SECTION 16. EVENTS OF DEFAULT.
Any Event of Default under the Credit Agreement, any payment default by
the Borrower or any of its Subsidiaries under any Designated Hedge Agreement,
and/or any Event of Default relating to the Borrower or any of its Subsidiaries
under any Designated Hedge Agreement, shall constitute an Event of Default
("Event of Default") under this Mortgage.
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SECTION 17. REMEDIES.
If an Event of Default, under and as defined in section 16 of this
Mortgage, has occurred and is continuing:
(a) The Collateral Agent, the Administrative Agent and the Secured
Creditors may exercise any one or more of the remedies specified in
section 10.2 of the Credit Agreement or otherwise available at law or in
equity.
(b) To the extent permitted by applicable law, the Collateral Agent
may enter upon the Premises or any portion thereof and may exclude the
Mortgagor therefrom; and having and holding the same, may use, operate,
manage, and control the Premises and conduct business in connection
therewith, including, without limitation the continuation of the
construction of the Improvements if not previously completed, either
personally or by its superintendents, managers, agents, servants,
attorneys or receivers; and upon every such entry, the Collateral Agent,
at the expense of the Mortgagor and from time to time, may maintain the
Premises and may insure and reinsure the same, as may seem to the
Collateral Agent to be necessary or advisable; and, at the expense of the
Mortgagor and from time to time, the Collateral Agent may make all
repairs, renewals, replacements, alterations, additions, betterments and
improvements thereto and thereon, as to the Collateral Agent may seem
necessary or advisable, and if the construction of the Improvements has
not been completed, may cause such construction to be continued to
completion or to such stage of completion as the Collateral Agent
considers necessary or advisable; and in every such case the Collateral
Agent shall have the right to carry on the construction thereof, enter
into, terminate, cancel and/or enforce contracts or leases related
thereto, manage and operate the Premises and carry on the business
thereof, and otherwise exercise all rights which the Mortgagor might
otherwise have with respect thereto, in the name of the Mortgagor or
otherwise, as the Collateral Agent shall deem best or advisable; and the
Collateral Agent shall be entitled to collect all rents, earnings,
revenues, issues, profits and income of the Premises, awards made for the
taking of or injury to the Premises through eminent domain or otherwise,
including awards or damages for change of grade, and also return premiums
or other payments upon insurance, and said rents, earnings, revenues,
issues, profits and income, awards, damages, premiums and payments are
hereby assigned to the Collateral Agent, and after deducting the expenses
and costs of conducting the business thereof and of all betterments,
additions, alterations, replacements, repairs and for taxes, assessments,
insurance and prior or other charges upon or with respect to the Premises
or any portion thereof, as well as just and reasonable compensations for
the services of all counsel, agents, employees, receivers and other
persons properly engaged or employed, the Collateral Agent shall apply the
proceeds as provided in section 18.
(c) To the extent permitted by applicable law, the Collateral Agent
is hereby authorized and empowered by the Mortgagor to sell the Premises
in such manner as may be prescribed by law, by advertisement and public
sale as provided by the laws of the jurisdiction in which the Real
Property Collateral is located, or to foreclose this Mortgage by judicial
proceedings and sell the Premises pursuant to such proceedings as
permitted by applicable law. The Mortgagor does hereby authorize the
Collateral Agent to sell the Premises together or in lots or parcels, as
to the Collateral Agent shall seem expedient, and to execute and deliver
to the purchaser or purchasers of such property good and sufficient deeds
thereof with covenants of general, special or limited warranty or such
other instruments of conveyance, assignment or transfer as the Collateral
Agent may deem appropriate. Payment of the purchase price to the
Collateral Agent shall satisfy the obligation of the purchaser at any such
sale therefor, and he shall not be bound to look after the application
thereof. The Collateral Agent shall cause notice of any such sale to be
mailed to the Mortgagor; but, except as otherwise provided by any
applicable provision of law, failure so to mail any such notice shall not
affect the validity of any such sale. If the Collateral Agent, acting on
behalf of any or all of the holders of the Notes or other Secured
Obligations, or any or all such holders acting on their own behalf, is the
highest bidder, the Collateral Agent or such holders, as the case may be,
may purchase at any sale or sales (whether statutory foreclosure or public
sale or sales conducted as hereinabove authorized) and may, in paying the
purchase price, turn in any of the Notes or other Secured Obligations held
by them, in lieu of cash, up to the entire amount owing thereunder,
whether for principal, interest or other amounts, which amount as so
designated as being turned over shall be considered distribution of the
proceeds of such sale. The provisions set forth above as to public sale or
sales in lieu of statutory foreclosure are not intended as an exclusive
method of foreclosure hereunder or to deprive the Collateral Agent of any
other legal or equitable remedy available under applicable law.
Accordingly, it is specifically agreed that the remedy of foreclosure by
the Collateral Agent's sale as hereinabove provided for shall be
cumulative and shall not in any wise be construed as an exclusive remedy,
and the Collateral Agent shall be fully entitled to a statutory court
foreclosure and to avail itself of any and all other legal or equitable
remedies available under the laws of the jurisdiction in which the Real
Property Collateral is located.
(d) The Mortgagor hereby authorizes the Collateral Agent to demand
and receive, in the place and stead of the Mortgagor, all amounts that may
become due under any and each lease, rental, contract, easement and other
right of the Mortgagor pertaining or in any way relating to the Premises
or any part thereof, and, when received, to apply the same to the costs
and expenses incurred by the Collateral Agent incurred hereunder and to
the Secured Obligations. No demand for, and no receipt or application of
any such amount shall be deemed to minimize, subordinate or affect in any
way the lien hereof and rights hereunder of the Collateral Agent or any
rights of a purchaser of any portion
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of the Premises at any foreclosure or other sale hereunder, as against the
person from whom the amount was demanded or received, or his executors,
administrators, successors or assigns, or anyone claiming under such
Tenant Lease, rental, contract or other right.
(e) The Collateral Agent may exercise all rights and remedies
granted by law and more particularly the Uniform Commercial Code,
including, but not limited to, the right to take possession of the
Personal Property Collateral, and for this purpose may peaceably enter
upon any premises on which any or all of the Personal Property Collateral
is situated, without being deemed guilty of trespass and without liability
for damages thereby occasioned, and take possession of and operate the
Personal Property Collateral or remove it therefrom; the Collateral Agent
shall have the further right to take any action it deems necessary,
appropriate or desirable, at its option and in its discretion, to repair,
refurbish or otherwise prepare the Personal Property Collateral for sale,
lease or other use or disposition and to sell at public or private sales
or otherwise dispose of, lease or utilize the Personal Property Collateral
and any part thereof in any manner authorized or permitted by law and to
apply the proceeds thereof toward payment of any costs and expenses,
including reasonable attorneys' fees and legal expenses, to the extent
permitted by law, thereby incurred by the Collateral Agent and toward
payment of the Secured Obligations and all other indebtedness described in
this Mortgage, in such order and manner as may be provided in the Credit
Agreement or this Mortgage or in the event such provisions are not
applicable in such order and manner as the Collateral Agent may elect.
SECTION 18. COSTS OF ENFORCEMENT; APPLICATION OF PROCEEDS; MORTGAGOR
LIABLE FOR DEFICIENCY, ETC.
(a) Costs of Enforcement; Application of Proceeds. In case of (i)
foreclosure of this Mortgage in any court of law or equity, whether or not any
order or decree shall have been entered therein, and to the extent permitted by
law, a reasonable sum shall be allowed for attorney's fees of the Collateral
Agent in such proceedings, for stenographer's fees and for all moneys expended
for documentary evidence and the cost of a complete abstract of title and title
report for the purpose of such foreclosure, such sums to be secured by the lien
hereunder, and, to the extent permitted by law, there shall be included in any
judgment or decree foreclosing this Mortgage and be paid out of such rents,
issues and profits or out of the proceeds of any sale made in pursuance of any
such judgment or decree, or (ii) any other realization by the Collateral Agent
upon or with respect to the Premises or any part or portion thereof, the
proceeds thereof shall be applied as follows:
(1) first, to the payment or reimbursement of the Collateral Agent
for all costs and expenses of such suit or suits or other enforcement
activities of the Collateral Agent, including, but not limited to, the
costs of advertising, sale and conveyance, including attorneys',
solicitors' and stenographers' fees, if permitted by law, outlays for
documentary evidence and the cost of such abstract, examination of title
and title report;
(2) second, to the extent proceeds remain after the application
pursuant to preceding clause (1), to reimburse the Collateral Agent for
all moneys advanced by the Collateral Agent, if any, for any purpose
authorized in this Mortgage with interest at the Default Rate;
(3) third, to the extent proceeds remain after the application
pursuant to preceding clause (2), an amount equal to the outstanding
Secured Obligations shall be applied by the Collateral Agent to the
Secured Obligations in such amount and order of priority as may be
provided in section 10.3 of the Credit Agreement; and
(4) fourth, to the extent remaining after the application pursuant
to the preceding clauses (1), (2) and (3) and payment in full of the
Secured Obligations which are secured hereby, to the Mortgagor or to
whomever may be lawfully entitled to receive such payment.
(b) Mortgagor Liable for Deficiency. It is understood that the Mortgagor
shall remain liable to the extent of any deficiency between (x) the amount of
the proceeds of the Premises and the amount of the sum referred to in the
foregoing clauses (1) and (2) and (y) the aggregate outstanding amount of the
Secured Obligations.
SECTION 19. RECEIVER.
In the event an action shall be instituted to foreclose this Mortgage, or
prior to foreclosure but after default, the Collateral Agent shall be entitled
to the appointment of a receiver of the rents, issues and profits of the
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<PAGE>
Premises as a matter of right, with power to collect the rents, issues and
profits of the Premises due and becoming due during the period of default and/or
the pendency of such foreclosure suit to and including the date of confirmation
of the sale under such foreclosure and during the redemption period, if any,
after such confirmation, such rents, issues and profits being hereby expressly
assigned and pledged as security for the payment of the Secured Obligations
secured by this Mortgage without regard to the value of the Premises or the
solvency of any person or persons liable for the payment of the Secured
Obligations and regardless of whether the Collateral Agent has an adequate
remedy at law. The Mortgagor for itself and for any subsequent owner hereby
waives any and all defenses to the application for a receiver as above provided
and hereby specifically consents to such appointment, but nothing herein
contained is to be construed to deprive the holder of this Mortgage of any other
right or remedy or privilege it may now have under the law to have a receiver
appointed. The provision for the appointment of a receiver and the assignment of
such rents, issues and profits is made an express condition upon which the Loans
hereby secured are made. In such event, the court shall at once on application
of the Collateral Agent or its attorney in such action, appoint a receiver to
take immediate possession of, manage and control the Premises, for the benefit
of the holder or holders of the Secured Obligations and of any other parties in
interest, with power to collect the rents, issues and profits of the Premises
during the pendency of such action, and to apply the same toward the payment of
the several obligations herein mentioned and described, notwithstanding that the
same or any part thereof is occupied by the Mortgagor or any other person. The
rights and remedies herein provided for shall be deemed to be cumulative and in
addition to and not in limitation of those provided by law and if there be no
receiver so appointed, the Collateral Agent itself may proceed to collect the
rents, issues and profits from the Premises. From any such rents, issues, and
profits collected by the receiver or by the Collateral Agent prior to a
foreclosure sale, there shall be deducted the cost of collection thereof and the
expenses of operation of the Premises, including but not limited to real estate
commissions, receiver's fee and the reasonable fees of its attorney, if any, and
the Collateral Agent's attorney's fees, if permitted by law, and court costs,
the remainder to be applied against the Secured Obligations. In the event the
rents, issues and profits are not adequate to pay all tax and other expenses of
operation, the Collateral Agent may, but is not obligated to, advance to any
receiver the amounts necessary to operate, maintain and repair, if necessary,
the Premises and any such amounts so advanced, together with interest thereon at
the Default Rate from and after the date of advancement, shall be secured by
this Mortgage and have the same priority of collection as the principal of the
Secured Obligations.
SECTION 20. LIABILITY OF MORTGAGOR NOT AFFECTED.
No sale of the Premises, no forbearance on the part of the Collateral
Agent, no extension of the time for the payment of the Secured Obligations and
no change in the terms of the payment thereof consented to by the Collateral
Agent shall in any way whatsoever operate to release, discharge, modify, change
or affect the original liability of the Mortgagor hereunder or the original
liability of the Mortgagor or any other obligor under any of the Secured
Obligations, either in whole or in part. No waiver by the Collateral Agent of
any breach of any covenant of the Mortgagor herein contained shall be construed
as a waiver of any subsequent breach of the same or any other covenant herein
contained. The failure of the Collateral Agent and/or the Secured Creditors to
exercise the option for acceleration of maturity and/or foreclosure (including
sale under power of sale hereunder) following any default as aforesaid or to
exercise any other option granted to the Collateral Agent hereunder in any one
or more instances, or the acceptance by the Collateral Agent and/or the Secured
Creditors of partial payments hereunder shall not constitute a waiver of any
such default, nor extend or affect the grace period, if any, but such option
shall remain continuously in force with respect to any unremedied or uncured
default. Acceleration of maturity once claimed hereunder by the Collateral Agent
may, at the option of the Collateral Agent, be rescinded by written
acknowledgment to that effect by the Collateral Agent, but the tender and
acceptance of partial payments alone shall not in any way affect or rescind such
acceleration of maturity, or extend or affect the grace period, if any. the
Collateral Agent may pursue any of its rights without first exhausting its
rights hereunder and all rights, powers and remedies conferred upon the
Collateral Agent herein are in addition to each and every right which the
Collateral Agent may have hereunder at law or equity and may be enforced
concurrently therewith.
SECTION 21. REMEDIES CUMULATIVE.
Each remedy or right of the Collateral Agent shall not be exclusive of but
shall be in addition to every other remedy or right now or hereafter existing at
law or in equity. No delay in the exercise or omission to exercise any remedy or
right accruing on any default shall impair any such remedy or right or be
construed to be a waiver of any such default or acquiescence therein, nor shall
it affect any subsequent default of the same or of a different nature. Every
such remedy or right may be exercised concurrently or independently and when and
as often as may be deemed expedient by the Collateral Agent.
SECTION 22. COLLATERAL AGENT SUBROGATED TO PRIOR LIENS PAID OUT OF LOAN
PROCEEDS.
Should the proceeds of any Loans made by any Lender to the Mortgagor, the
repayment of which is hereby secured, or any part thereof, or any amount paid
out or advanced by the Collateral Agent or any Lender, be used directly or
indirectly to pay off, discharge or satisfy, in whole or in part, any
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<PAGE>
prior lien or encumbrance upon the Premises or any part thereof, then the
Collateral Agent shall be subrogated to such other liens or encumbrances and
upon any additional security held by the holder thereof and shall have the
benefit of the priority of all of the same.
SECTION 23. FURTHER ASSURANCES.
The Mortgagor shall execute, acknowledge and deliver any and all such
further acts, conveyances, documents, mortgages and assurances as the Collateral
Agent may reasonably require for accomplishing the purpose hereof forthwith upon
the request of the Collateral Agent, whether in writing or otherwise. The
Mortgagor, within 10 days upon request by mail, shall furnish a written
statement duly acknowledged of the amount due upon this Mortgage and the Secured
Obligations (both unpaid principal and accrued interest and all other items
included in the Secured Obligations) and whether any offset or defenses exist
against the Secured Obligations, and any other information which might
reasonably be requested in connection with the sale of the Secured Obligations,
or any portion thereof or interest therein, to any third party, or an audit of
the Collateral Agent, and which may be relied on for such purposes.
SECTION 24. MORTGAGOR'S OBLIGATIONS ABSOLUTE.
The lien of this Mortgage and the obligations of the Mortgagor hereunder
shall be absolute and unconditional and shall remain in full force and effect
without regard to, and shall not be released, suspended, discharged, terminated
or otherwise affected by, any circumstance or occurrence whatsoever, including,
without limitation:
(a) any lack of validity or enforceability of the Credit Agreement,
the Notes, any other Credit Document, any Designated Hedge Agreement, or
any other agreement or instrument relating thereto;
(b) any renewal, extension, amendment or modification of, or
addition or supplement to, or any waiver, consent, extension, indulgence
or other action or inaction under or in respect of, the Credit Agreement,
the Notes, any other Credit Document, or any Designated Hedge Agreement,
or any other agreement or instrument relating thereto, including, without
limitation, any increase in the Secured Obligations resulting from the
extension of additional credit to the Mortgagor or any of its Subsidiaries
or otherwise;
(c) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Secured
Obligations;
(d) any manner of application of collateral, or proceeds thereof, to
all or any of the Secured Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Secured Obligations or
any other assets of the Mortgagor or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of the Mortgagor or any of its Subsidiaries;
(f) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to
the Mortgagor or any of its Subsidiaries or Affiliates, or any action
taken with respect to this Mortgage by any trustee or receiver, or by any
court, in any such proceeding, whether or not the Mortgagor shall have
notice or knowledge of any of the foregoing; or
(i) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Mortgagor as a guarantor or
surety for the Secured Obligations.
This Mortgage shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by the Collateral Agent or any Secured Creditor upon
the insolvency, bankruptcy or reorganization of the Mortgagor or any of its
Subsidiaries or Affiliates or otherwise, all as though such payment had not been
made.
SECTION 25. NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telex, facsimile transmission or cable communication) and mailed,
telegraphed, telexed, transmitted, cabled or delivered, if to the Mortgagor,
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at 9400 East Market Street, Warren, Ohio 44484, attention: Vice President &
Chief Financial Officer (facsimile: (330) 856-3618); if to the Collateral Agent,
at 1900 East Ninth Street, Cleveland, Ohio 44114, attention Agent Services
(facsimile: (216) 575-2481; or at such other address as shall be designated by
any such person in a written notice to the other person. All such notices and
communications shall be mailed, telegraphed, telexed, telecopied, or cabled or
sent by overnight courier, and shall be effective when received.
SECTION 26. DISCHARGE OF MORTGAGE; RELEASE OF PROPERTY.
(a) Discharge of Mortgage. After the termination of the Total Commitment
and all Designated Hedge Agreements and when all Loans and other Secured
Obligations have been paid in full, this Mortgage shall terminate, and the
Collateral Agent, at the request and expense of the Mortgagor, will execute and
deliver to the Mortgagor a proper instrument or instruments (including Uniform
Commercial Code termination statements on form UCC-3) acknowledging the
satisfaction and termination of this Mortgage, and will duly assign, transfer
and deliver to the Mortgagor (without recourse and without any representation or
warranty) such of the Personal Property Collateral as may be in the possession
of the Collateral Agent and as has not theretofore been sold or otherwise
applied or released pursuant to this Mortgage. In case of failure of the
Collateral Agent to promptly so release this Mortgage, all claims for statutory
penalties and damages are hereby waived.
(b) Release of Collateral. So long as no payment default on any of the
Secured Obligations is in existence or would exist after the application of
proceeds as provided below, the Collateral Agent shall, at the request of the
Mortgagor, release any or all of the Real Property Collateral and/or Personal
Property Collateral, provided that (x) such release is permitted by the terms of
section 9.2 of the Credit Agreement) or otherwise has been approved in writing
by the Required Lenders (or all of the Lenders, if required by section 12.12 of
the Credit Agreement) and (y) if required pursuant to the provisions of section
5.2 of the Credit Agreement, the proceeds of such Collateral are applied to the
prepayment of the Loans.
(c) Request for Release; Effect of Release. At any time that the Mortgagor
desires that the Collateral Agent take any action to give effect to any release
of any or all of the Premises pursuant to the foregoing paragraph (a) or (b), it
shall deliver to the Collateral Agent a certificate signed by a principal
executive officer stating that the release of the respective portion of or all
of the Real Property Collateral and/or Personal Property Collateral is permitted
pursuant to paragraph (a) or (b). In the event that any part of the Premises is
released as provided in paragraph (a), the Collateral Agent, at the request and
expense of the Mortgagor, will duly release such part of the Premises and
assign, transfer and deliver to the Mortgagor (without recourse and without any
representation or warranty) such of the part of the Premises as is then being
(or has been) so sold and as may be in the possession of the Collateral Agent
and has not theretofore been released pursuant to this Mortgage. The Collateral
Agent shall have no liability whatsoever to any Secured Creditor as the result
of any release of all or any part of the Premises by it as permitted by this
section. Upon any release of all or any part of the Premises pursuant to
paragraph (a) or (b), none of the Collateral Agent or any of the Secured
Creditors shall have any continuing right or interest in the same, or the
proceeds thereof.
SECTION 27. MISCELLANEOUS.
(a) Acknowledgment of Receipt of Copies of Credit Documents. The Mortgagor
acknowledges that it has received from the Collateral Agent without charge a
true and correct copy of this Mortgage and each other Credit Document executed
and delivered on or prior to the date hereof.
(b) Indemnification. The Collateral Agent and its successors and assigns
shall be entitled to all of the benefits of the indemnification provisions of
the Credit Agreement and the other Credit Documents. All of the terms and
provisions of section 12.1 of the Credit Agreement (including any defined terms
used therein) are by this reference thereto hereby incorporated into this
Mortgage for the benefit of the Collateral Agent and its successors and assigns
as fully as if written out at length herein, and any references in such section
of the Credit Agreement to the "Borrower" shall be deemed to refer to, and
constitute obligations of, the Mortgagor.
(c) Subsequent Services of Counsel to Collateral Agent. To the extent
services are required of the Collateral Agent's counsel and/or special counsel
after the date hereof, which are normally incident to the closing, amendment,
alteration, and enforcement of this Mortgage, and all provisions herein
contained, the Mortgagor shall, to the extent permitted by law, pay the
reasonable fees therefor, promptly upon the rendering of such a bill and
delivery thereof to the Mortgagor.
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<PAGE>
(d) No Partnership or Joint Venture. Neither this Mortgage, the Credit
Agreement, the Notes, any other Secured Obligations, any of the other Credit
Documents, or any of the Designated Hedge Agreements, are intended or shall be
construed as creating a partnership or joint venture between the Mortgagor, on
the one hand, and the Collateral Agent or any other holder of any of the Secured
Obligations, on the other hand; and the relationship of the Mortgagor and the
Collateral Agent hereunder shall solely be that of Mortgagor and collateral
agent for the holders of the Secured Obligations.
(e) Election of Collateral Agent to Subordinate. At the option of the
Collateral Agent (acting on instructions from all of the Lenders), this Mortgage
shall become subject and subordinate in whole or in part (but not in respect to
the priority of entitlement to insurance proceeds or any award in condemnation)
to any or all leases and/or subleases of all or any part of the Premises upon
the execution by the Collateral Agent and recording thereof, at any time
hereafter, in the appropriate recorder's office, a unilateral declaration to
that effect.
(f) Waiver of Homestead and Exemption Rights, etc. To the extent permitted
by law with respect to the Secured Obligations or any renewals or extensions
thereof, the Mortgagor waives and renounces any and all homestead and exemption
rights, as well as the benefit of all valuation and appraisement privileges, and
also moratoriums under or by virtue of the constitution and laws of the
jurisdiction in which the Real Property Collateral is located or any other state
or of the United States, now existing or hereafter enacted.
(g) Covenants Run with the Land. All the covenants of the Mortgagor
contained in this Mortgage shall run with the Land.
(h) Usury Savings Clause. All agreements in the Credit Agreement, in the
Notes, in this Mortgage, in any other Credit Document or in any Designated Hedge
Agreement are expressly limited so that in no contingency or event whatsoever,
whether by reason of advancement or acceleration of maturity of any of the
Secured Obligations, or otherwise, shall the amount paid or agreed to be paid
hereunder or thereunder for interest or for the use, forbearance or detention of
money exceed the highest lawful rate permitted under applicable usury laws. If,
from any circumstance whatsoever, fulfillment of any provision of the Credit
Agreement, of the Notes, of this Mortgage, of any other Credit Document or of
any Designated Hedge Agreement, at the time performance of such provision shall
be due, shall involve transcending the limit of validity prescribed by
applicable usury laws which a court of competent jurisdiction may deem
applicable hereto, then, ipso facto, the obligation to be fulfilled shall be
reduced to the limit of such validity and if, from any circumstance whatsoever,
the Collateral Agent or any Secured Creditor shall ever receive hereunder or
under the other Credit Documents or any Designated Hedge Agreement as interest,
or for the use, forbearance or detention of money, an amount which would exceed
the highest lawful rate, the receipt of such excess shall be deemed a mistake
and shall be canceled automatically or, if theretofore paid, such excess shall
be credited against the principal amount of the Secured Obligations or any fees
or other amounts included in the Secured Obligations to which the same may
lawfully be credited, and any portion of such excess not capable of being so
credited shall be rebated to the Mortgagor.
(i) Governing Law; Successors and Assigns; Severability, etc. This
Mortgage shall be construed and enforced according to the laws of the
jurisdiction in which the Real Property Collateral is located, and shall be
binding upon the Mortgagor, its successors and assigns, any subsequent owners of
the Premises, and shall inure to the benefit of the Collateral Agent, its
successors and assigns. Any provision of this Mortgage 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.
(j) No Modification. None of the terms and conditions of this Mortgage may
be changed, waived, modified or varied in any manner whatsoever unless in
writing duly signed by the Mortgagor and the Collateral Agent (with the consent
of the Required Lenders or, to the extent required by section 12.12 of the
Credit Agreement, all of the Lenders), provided, however, that no such change,
waiver, modification or variance shall be made to this section 27(j) without the
consent of each Secured Creditor adversely affected thereby, provided further
that any change, waiver, modification or variance affecting the rights and
benefits of a single Class of Secured Creditors (and not all Secured Creditors
in a like or similar manner) shall require the written consent of the Requisite
Creditors of such Class of Secured Creditors. For the purpose of this Mortgage,
the term "Class" shall mean each class of Secured Creditors, i.e., whether (x)
the Lenders as holders of the Credit Document Obligations or (y) the Designated
Hedge Creditors as holders of the Designated Hedge Obligations. For the purpose
of this Mortgage, the term "Requisite Creditors" of any Class shall mean each of
(x) with respect to the Credit Document Obligations, the Required Lenders and
(y) with respect to the Designated Hedge Obligations, the holders of at least
51% of all obligations outstanding from time to time under the Designated Hedge
Agreements.
(k) Agency Provisions. By accepting the benefits of this Mortgage, each
Lender acknowledges and agrees that the rights and obligations of the Collateral
Agent shall be as set forth in section 11 of the Credit Agreement.
Notwithstanding anything to the contrary contained in of this
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<PAGE>
Mortgage, the duties and obligations of the Collateral Agent set forth or
incorporated into the provisions of this Mortgage may not be amended or modified
without the consent of the Collateral Agent.
(l) Collateral Agent to Act on Behalf of Secured Creditors. The Secured
Creditors agree by their acceptance of the benefits hereof that this Mortgage
may be enforced on their behalf only by the action of the Collateral Agent,
acting upon the instructions of the Required Lenders (or, after all Credit
Document Obligations have been paid in full, instructions of the holders of at
least the majority of the outstanding Designated Hedge Obligations) and that no
other Secured Creditor shall have any right individually to seek to enforce or
to enforce this Mortgage or to realize upon the security to be granted hereby,
it being understood and agreed that such rights and remedies may be exercised by
the Collateral Agent, for the benefit of the Secured Creditors, upon the terms
of this Mortgage.
(m) Waiver of Trial By Jury. THE MORTGAGOR AND THE COLLATERAL AGENT EACH
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS MORTGAGE OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
(n) Time of Essence. It is specifically agreed that time is of the essence
with respect to this Mortgage and that the waiver of the rights or options, or
obligations secured hereby, shall not at any time thereafter be held to be
abandonment of such rights. Notice of the exercise of any right or option
granted to the Collateral Agent herein, or in the Secured Obligations, is not
required to be given.
(o) Counterparts. This Mortgage may be executed by the Mortgagor in
counterparts, each of which shall be an original and all of which collectively
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage to be duly
executed and delivered as of the date first set forth above.
Signed and acknowledged STONERIDGE, INC.
in the presence of:
By:
- -------------------- ----------------------------
Print Name: Kevin P. Bagby
Vice President--Finance
and Chief Financial Officer
- --------------------
Print Name:
22
<PAGE>
STATE OF OHIO )
) SS.:
COUNTY OF CUYAHOGA )
BEFORE ME, a Notary Public in and for said County and State, personally
appeared the above named STONERIDGE, INC., an Ohio corporation, by Kevin P.
Bagby, its Vice President--Finance and Chief Financial Officer, who acknowledged
that he did sign the foregoing instrument and that the same is his free act and
deed personally and as such officer.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at
Cleveland, Ohio, this ____ day of December, 1998.
---------------------------
Notary Public
[Notarial Seal]
This Instrument Prepared By:
John W. Sager, Esq.
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
23
<PAGE>
EXHIBIT 1
TO
OPEN-END FIRST MORTGAGE, ASSIGNMENT OF LEASES
AND SECURITY AGREEMENT
The following described real estate, to-wit:
LEGAL DESCRIPTION
KENT, OHIO
The following described premises, situated in the City of Kent, County of
Portage, and State of Ohio:
Situated in Lot 7 of Franklin Township, City of Kent, County of Portage, State
of Ohio and being part of Block C of the Davey Industrial Park as recorded in
Volume 18, Page 54 of the Portage County Records of Plats and further described
as follows:
Beginning at the intersection of the centerlines of Franklin Avenue and Martinel
Drive in the City of Kent;
Thence North 89(degree) 37' 00(degree) West along the centerline of Martinel
Drive to a distance of 1121.10 feet to the intersection with the centerline of
St. Clair Avenue;
Thence North 0(degree) 43' 00" East along the centerline of St. Clair Avenue a
distance of 25.00 feet to a point.
Thence North 89(degree) 37' 00" West a distance of 25.00 feet to a point which
is the true place of beginning;
Thence continuing North 89(degree) 37' 00" West a distance of 800.87 feet to a
point on the east line of the Wheeling and Lake Erie Railroad Property;
Thence North 0(degree) 25' 45" East along the east line of the W. & L.E.
Railroad Property a distance of 358.93 feet to an iron pipe;
Thence South 89(degree) 35' 00" East a distance of 802.87 feet to an iron pipe
on the west line of St. Clair Avenue;
Thence South 0(degree) 43' 00" West along the west line of St. Clair Avenue a
distance of 358.47 feet to the place of beginning and containing 6.603 acres of
land as surveyed by LeRoy M. Satrom, Registered Surveyor No. 4226.
Be the same more or less but subject to all legal highways.
Subject to: an Easement from Davey Investment Co. to Ohio Edison Company, dated
October 17, 1966, filed October 25, 1966 and recorded in Volume 799, Page 99 of
the Portage County Deed Records; a Grant from Fred Hunsicker, et ux to Ohio
Edison Co., dated April 23, 1931, filed June 9, 1931 and recorded in Volume 327,
Page 576 of the Portage County Deed Records; a Grant from Fred Hunsicker, et ux
to Ohio Telephone and Telegraph Co., dated June 16, 1930, filed August 5, 1930
and recorded in Volume 324, Page 468 of the Portage County Deed Records; a Grant
from Sadie S. Hunsicker and Fred Hunsicker to the Ohio Telephone and Telegraph
Company, dated October 25, 1921, filed August 26, 1922 and recorded in Volume
277, Page 432 of the Portage
<PAGE>
County Deed Records; a Right of Way from F. B. Longcoy to The East Ohio Gas
Company, dated August 29, 1908, filed January 18, 1909 and recorded in Volume 5,
Page 441 of the Portage County Lease Records; and Davey Industrial Park recorded
regulations.
[End of Exhibit 1]
2
<PAGE>
EXHIBIT 2
TO
OPEN-END FIRST MORTGAGE, ASSIGNMENT OF LEASES
AND SECURITY AGREEMENT
Permitted Encumbrances
1. Any liens thereon for taxes, assessments, charges, excises, levies and
other governmental charges which are not due and payable.
2. Any matters of record affecting the premises on the date this Mortgage is
recorded.
3. Zoning ordinances, if any.
[End of Exhibit 2]
<PAGE>
EXHIBIT C-9
------------------------
FORM OF
CLOSING DATE MORTGAGE
(Orwell, Ohio)
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STONERIDGE, INC.
as the Mortgagor
To
NATIONAL CITY BANK
as the Collateral Agent
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OPEN-END FIRST MORTGAGE,
ASSIGNMENT OF LEASES
AND
SECURITY AGREEMENT
(Total Indebtedness Not to Exceed $500,000,000)
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Relating to Property Located in Orwell, Ohio
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OPEN-END FIRST MORTGAGE, ASSIGNMENT OF LEASES AND
SECURITY AGREEMENT
(Total Indebtedness Not to Exceed $500,000,000)
THIS OPEN-END FIRST MORTGAGE, ASSIGNMENT OF LEASES AND SECURITY AGREEMENT,
dated as of December 30, 1998 (as amended, modified, or supplemented from time
to time, "this Mortgage"), by (i) STONERIDGE, INC., an Ohio corporation
(hereinafter, together with its successors and assigns, called the "Borrower" or
the "Mortgagor") which is duly qualified to transact business in the
jurisdiction in which the real property referred to below is located, whose
address is 9400 East Market Street, Warren, Ohio 44484, in favor of (ii)
NATIONAL CITY BANK, a national banking association, as collateral agent under
the Credit Agreement referred to below (herein, together with its successors and
assigns in such capacity, the "Collateral Agent"), whose address is 1900 East
Ninth Street, Cleveland, Ohio 44114, for the benefit of the Secured Creditors
(as defined below):
PRELIMINARY STATEMENTS:
(A) Except as otherwise defined herein, terms used herein and defined in
the Credit Agreement (as defined below) shall be used herein as therein defined.
(B) This Mortgage is made pursuant to the Credit Agreement, dated as of
the date hereof (herein, as amended or otherwise modified, restated or replaced
from time to time, the "Credit Agreement"), among the Borrower, the financial
institutions named as lenders therein (herein, together with their successors
and assigns, the "Lenders"), the other Agents named therein, and National City
Bank, as the Administrative Agent for the Lenders under the Credit Agreement,
providing, among other things, for loans or advances or other extensions of
credit to or for the benefit of the Borrower of up to $425,000,000, with such
loans or advances being evidenced by promissory notes (the "Notes", such term to
include all notes and other securities issued in exchange therefor or in
replacement thereof).
(C) The Borrower or any of its Subsidiaries may from time to time be party
to one or more Designated Hedge Agreements (as defined in the Credit Agreement).
Any institution that participates, and in each case their subsequent assigns, as
a counterparty to any Designated Hedge Agreement (collectively, the "Designated
Hedge Creditors"; and the Designated Hedge Creditors together with the Agents
and the Lenders, collectively the "Secured Creditors"), shall benefit hereunder
as herein provided.
(D) Pursuant to the Subsidiary Guaranty, each Subsidiary Guarantor has
jointly and severally guaranteed to the Secured Creditors the payment when due
of the Guaranteed Obligations (as defined in the Subsidiary Guaranty).
(E) It is a condition precedent to the making of Loans and the issuance
of, and participation in, Letters of Credit under the Credit Agreement that the
Mortgagor shall have executed and delivered to the Collateral Agent this
Mortgage.
(F) The Mortgagor desires to execute this Mortgage to satisfy the
condition described in the preceding paragraph.
(G) The execution and delivery of this Mortgage has been duly authorized
by the Mortgagor, and all things necessary to make this Mortgage a valid,
binding and legal instrument according to its terms, have been done and
performed.
NOW, THEREFORE, in consideration of the sum of $1.00, and other good and
valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, received to the Mortgagor's full satisfaction from the
Collateral Agent, and in consideration of the payments or loans or advances or
other credit facilities made or to be made hereafter to or for the benefit of
the Borrower by the Lenders, the Mortgagor DOES HEREBY grant, bargain, sell,
mortgage, warrant, convey, alien, remise, release, assign, transfer, grant a
security interest in, set over, deliver, confirm and convey unto the Collateral
Agent, upon the terms and conditions of this Mortgage, with power of sale, each
and all of the real properties and interests in real properties, and further
grants to the Collateral Agent a security interest in and to all other property
and interests, described in the following Granting Clauses (all of such property
and interests hereinafter collectively called the "Premises").
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GRANTING CLAUSES
All the estate, right, title and interest of the Mortgagor in, to
and under, or derived from:
GRANTING CLAUSE FIRST
Land
All those certain lot(s), piece(s) or parcel(s) of land more
particularly described in Exhibit 1 attached hereto and made a part
hereof, as the description of the same may be amended or supplemented from
time to time and all and the reversions or remainders in and to said land
and the tenements, hereditaments, easements, rights-of-way or use, rights
(including alley, drainage, crop, timber and cutting, agricultural,
horticultural, mineral, water, oil and gas rights), privileges, royalties
and appurtenances to said land, now or hereafter belonging or in anywise
appertaining thereto, including any such right, title, interest in, to or
under any agreement or right granting, conveying or creating, for the
benefit of said land, any easement, right or license in any way affecting
other property and in, to or under any streets, ways, alleys, vaults,
gores or strips of land adjoining said land or any parcel thereof, or in
or to the air space over said land, all rights of ingress and egress by
motor vehicles to parking facilities on or within said land, and all
claims or demands of the Mortgagor, either at law or in equity, in
possession or expectancy, of, in or to the same (all of the foregoing
hereinafter collectively called the "Land").
GRANTING CLAUSE SECOND
Improvements
All buildings, structures and other improvements now or hereafter
located on the Land, and all appurtenances and additions thereto and
betterments, renewals, substitutions and replacements thereof, owned by
the Mortgagor or in which the Mortgagor has or shall acquire an interest
(all of the foregoing hereinafter collectively called the "Improvements").
GRANTING CLAUSE THIRD
Fixtures and Equipment
Without limitation of the foregoing Granting Clauses, (i) all
"fixtures" (as defined in the Uniform Commercial Code of the State in
which the Premises are located), (ii) all "equipment" (as defined in the
Uniform Commercial Code of the State in which the Premises are located),
(iii) all other fixtures, chattels and articles of personal property
(other than "inventory", as defined in the Uniform Commercial Code of the
State in which the Premises are located), and (iv) all additions,
betterments, improvements, modifications, renewals, alterations, repairs,
attachments, parts, accessories, appurtenances, substitutions and
replacements of or to any of the foregoing, in each case now or hereafter
owned or otherwise acquired by the Mortgagor or in which the Mortgagor now
has or shall hereafter acquire an interest, wherever situated, and now or
hereafter located on, attached or affixed to, contained in or used in
connection with, the properties referred to in Granting Clause First or
Granting Clause Second, or placed on any part thereof, though not attached
or affixed thereto, including, without limitation, all of the following:
(1) all automobiles, trucks and trailers, and all other automotive or
transportation vehicles and equipment; (2) all machines and machinery and
other apparatus; (3) all engines and motors; (4) all lathes; (5) all drill
presses, punch presses and other presses; (6) all sorting, assembly,
installation and production line equipment; (7) all robotic equipment,
devices and systems; (8) all boilers, turbines, stokers, smelters,
electric arc furnaces, ladle arc furnaces, reheat furnaces and/or other
furnaces and related equipment; (9) all rolling mills, coilers and cooling
beds; (10) all stamping, cutting, drilling, jigging, bending, shaping,
fitting, molding, milling, injection, sizing, patterning, fastening,
connecting, heat treating, galvanizing, painting, embossing, coloring,
identification, measuring, monitoring, quality assurance, finishing and/or
processing machines, equipment and systems; (11) all fabrication equipment
and systems; (12) all packaging, receiving and shipping equipment and
systems; (13) all scales; (14) all counting, measurement, testing,
monitoring, calibration and analytical devices, equipment and systems;
(15) all design and quality assurance or control equipment (including
robotics); (16) all welding equipment and systems; (17) all soldering
equipment and systems; (18) all hydraulic equipment and hydraulics; (19)
all tooling, dies, jigs, casts, molds, patterns, models, stencils and
drawings; (20) all generators, transformers, switches, substations, pumps,
compressors, dynamos and batteries; (21) all cranes and hoists; (22) all
conveyors; (23) all computers; (24) all computer monitors, drives,
servers, and other
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hardware and software (whether owned, leased or licensed); (25) all
computing equipment; (26) all electronic data processing equipment; (27)
all operating and maintenance manuals, as well as all plans,
specifications and operating instructions, for all equipment and fixtures;
(28) all gas, oil kerosene and other fuels; (29) all industrial gases and
containers therefor; (30) all consumable supplies; (31) all spare parts,
replacement parts, appliances, utensils, tools, implements and fittings;
(32) all repair and maintenance equipment; (33) all tanks (whether free
standing, anchored or otherwise installed in place, readily movable, above
or below ground, or otherwise), drums, vessels, containers, racks,
pallets, skids, bins and shelves or shelving; (34) all forklifts,
liftrucks, pallet movers, dollies, carts, and other materials handling
equipment; (35) all shipping containers; (36) all rail cars; (37) all
pipelines, pipes, ducts and conduits; (38) all wiring and all electric or
other power surge or interruption protection equipment; (39) all water and
other towers; (40) all call systems, dispatch systems, public address
systems, switchboards, telephones, mobile phones, beepers, two-way (or
more) radios, aerials, antennas and other telecommunication,
teleconferencing (including video) and other communication equipment; (41)
all desks, tables, cabinets, bureaus, credenzas, chairs, benches, couches,
coat racks, safes and vaults, photocopy machines, facsimile, telex and
cable machines, postage meters, televisions, video machines, radios,
coffee, soft drink, beverage and fast food machines, lockers, bulletin
boards, photographs, works of art and other decorations, lawn ornaments,
signs, plants and shrubbery (both indoor and outdoor), sinks, basins,
stoves, ranges, microwaves, ovens, dishwashers, refrigerators, ice makers,
cafeteria equipment and supplies, wash tubs, showers, partitions, screens,
awnings, shades, blinds, curtains, draperies, carpets, rugs, furniture and
furnishings; (42) all heating, lighting, power, plumbing, water,
ventilating, cooling, air conditioning, refrigerating, gas, oil, steam,
electrical, solar, waste, incinerating and/or compacting plants, systems,
fixtures and equipment; (43) all elevators and escalators; (44) all vacuum
and other cleaning systems including window washing equipment; (45) all
lawn, parking and sidewalk maintenance equipment, including lawn mowers,
leaf blowers, snow blowers, plows and vacuums; (46) all dust and noise
suppression systems and equipment; (47) all air, water and other pollution
control systems and equipment; (48) all safety systems and equipment; (49)
all office supplies; (50) all industrial hygiene equipment and supplies;
(51) all security alarms and cameras, and all identification, timekeeping,
access and surveillance systems and equipment; and (52) all sprinkler
systems and other fire detection, prevention and extinguishing apparatus.
If the Lien of this Mortgage in any item of Fixtures and Equipment is
subject to a purchase money or other security interest therein which is
permitted under this Mortgage, then all of the right, title and interest
of the Mortgagor in and to such item is hereby assigned to the Collateral
Agent, together with the benefits of all deposits and payments now or
hereafter made thereon by or on behalf of the Mortgagor (all of the
foregoing property, rights and interests described in this Granting Clause
Third, collectively the "Fixtures and Equipment").
GRANTING CLAUSE FOURTH
Permits, Licenses and Franchises and General Intangibles
Without limitation of the foregoing Granting Clauses, all permits,
licenses, franchises, privileges, grants, consents, exemptions, concession
agreements, development rights, building variances, certificates of
occupancy or operation, and other authorizations or approvals, now or
hereafter issued or granted by any governmental authority with respect to
the ownership of the Premises, or with respect to the ownership,
construction or operation of the Premises, and all "general intangibles"
(as defined in the Uniform Commercial Code of the State in which the
Premises are located) relating in any way to the Premises or the use or
operation thereof, together with and any renewals or extensions of any of
the foregoing, provided that the lien of this Mortgage shall not apply to,
and there shall be excluded from the ambit of this Granting Clause Fourth,
any of the foregoing permits, licenses, franchises, privileges, grants,
consents, exemptions, concession agreements, development rights, building
variances, certificates of occupancy or operation, and other
authorizations or approvals and any other "general intangibles", which, by
their express terms or by reason of applicable law would become void or
voidable if mortgaged, pledged or assigned by the Mortgagor hereunder.
GRANTING CLAUSE FIFTH
Leasehold and Other Contractual Interests
All the leases, lettings and licenses of, and all other contracts
and agreements affecting, the Land, the Improvements, the Fixtures and
Equipment and/or any other property or rights mortgaged or otherwise
conveyed or encumbered hereby, or any part thereof, now or hereafter
entered into, and all amendments, modifications, supplements, additions,
extensions and renewals thereof, and all right, title and interest of the
Mortgagor thereunder, including cash and securities deposited thereunder,
the right to receive
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and collect the rents, income, proceeds, issues and profits payable
thereunder and the rights to enforce, whether at law or in equity or by
any other means, all provisions and options thereof.
GRANTING CLAUSE SIXTH
Assignment of Rents, Income and Profits
All rents, income, profits, proceeds and any and all cash collateral
to be derived from the Premises, or the use and occupation thereof, or
under any contract or bond relating to the construction or reconstruction
of the Premises, including all rents, royalties, revenue, rights, deposits
(including security deposits) and benefits accruing to the Mortgagor under
all leases now or hereafter covering the Premises, whether before or after
foreclosure or during the full period of redemption, if any, and the right
to receive the same and apply them against the Secured Obligations or
against the Mortgagor's other obligations hereunder, together with all
contracts, bonds, leases and other documents evidencing the same now or
hereafter in effect and all rights of the Mortgagor thereunder. Nothing
contained in the preceding sentence shall be construed to bind the
Collateral Agent to the performance of any of the provisions of any such
contract, bond, lease or other document or otherwise impose any obligation
upon the Collateral Agent (including any liability under a covenant of
quiet enjoyment contained in any lease or under applicable law in the
event that any tenant shall have been joined as a party defendant in any
action to foreclose this Mortgage and shall have been foreclosed of all
right, title and interest and all equity of redemption in the Premises),
except that the Collateral Agent shall be accountable for any money
actually received pursuant to such assignment. The assignment of said
rents, income, profits, proceeds and cash collateral, and of the aforesaid
rights with respect thereto and to the contracts, bonds, leases and other
documents evidencing the same is intended to be and is an absolute present
assignment from the Mortgagor to the Collateral Agent and not merely the
passing of a security interest.
GRANTING CLAUSE SEVENTH
Other and After Acquired Property
Any and all moneys and other property, of every kind and nature,
which may from time to time be subjected to the lien hereof by the
Mortgagor, through a supplement to this Mortgage or otherwise, or by any
other person or entity, or which may come into the possession of or be
subject to the control of the Collateral Agent, it being the intention and
agreement of the Mortgagor that all property hereafter acquired or
constructed by the Mortgagor shall forthwith upon acquisition or
construction thereof by the Mortgagor and without any act or deed by the
Mortgagor be subject to the lien and security interest of this Mortgage as
if such property were now owned by the Mortgagor and were specifically
described in this Mortgage and conveyed or encumbered hereby or pursuant
hereto, and the Collateral Agent is hereby authorized to receive any and
all such property as and for additional security hereunder.
GRANTING CLAUSE EIGHTH
Proceeds and Awards
All unearned premiums, accrued, accruing or to accrue under
insurance policies now or hereafter obtained by the Mortgagor, all
proceeds of the conversion, voluntary or involuntary, of any of the
property described in these Granting Clauses into cash or other liquidated
claims, including proceeds of hazard, title and other insurance, and all
claims, entitlements, judgments, damages, awards, settlements and
compensation (including interest thereon) heretofore or hereafter accruing
or made to or for the benefit of the present and all subsequent owners of
the Land, the Improvements, the Fixtures and Equipment and/or any other
property or rights encumbered or conveyed hereby for any injury to or
decrease in the value thereof for any reason, or by any governmental or
other lawful authority for the taking by eminent domain, condemnation or
otherwise of all or any part thereof, including awards for any change of
grade of streets.
TO HAVE AND TO HOLD the Premises unto the Collateral Agent, its successors
and assigns, forever, for the purposes and uses herein set forth, until such
time as all of the Secured Obligations which are secured hereby shall have been
paid in full.
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The property, interests and rights hereinabove mentioned, whether owned in
fee or held under lease, is hereinafter referred to as the "Real Property
Collateral" to the extent that the same is realty, and as the "Personal Property
Collateral" to the extent that the same is personalty. The Real Property and the
Personal Property Collateral collectively constitute the Premises.
It is also agreed that if any of the property herein mortgaged is of a
nature so that a security interest therein can be perfected under the Uniform
Commercial Code, this Mortgage shall constitute a security agreement and the
Mortgagor agrees to execute, deliver and file or refile any financing statement,
continuation statement, or other instruments the Collateral Agent may require
from time to time to perfect or renew such security interest under the Uniform
Commercial Code. This Mortgage shall be effective as a financing statement filed
as a fixture filing with respect to all fixtures included within the Premises
and is to be filed for record in the Office of the County Recorder or County
Clerk where the Premises (including such fixtures) are situated. The mailing
address of the Mortgagor is set forth at the beginning of this Mortgage and the
address of the Collateral Agent from which information concerning the security
interest may be obtained is the address of the Collateral Agent set forth at the
beginning of this Mortgage.
If the Mortgagor hereafter acquires any real property, or any interest in
real property, in addition to the Real Property Collateral, which is adjacent
to, or contiguous with, the Land, or otherwise is intended or required to be
subjected to the lien of this Mortgage, the Mortgagor will subject the same to
the lien of this Mortgage by instrument supplemental hereto, satisfactory in
form and substance to the Collateral Agent.
The conditions of this Mortgage are such that the Mortgagor has executed
and delivered this Mortgage for the purpose of securing the performance of its
covenants and agreements contained herein and in any agreement or instrument
made with respect to any Secured Obligations secured hereby and to secure the
payment when due (whether at the stated maturity, by acceleration or otherwise)
of the following indebtedness, liabilities and obligations (including
obligations which, but for the automatic stay under section 362(a) of the
Bankruptcy Code, would become due), now existing or hereafter arising
(collectively, the "Secured Obligations"), for the benefit of the Secured
Creditors, although not necessarily in the order of priority set forth below:
(a) $100,000,000 aggregate principal amount of Revolving Loans made or
to be made to the Mortgagor under the Credit Agreement, maturing on
or before December 31, 2003, with interest thereon as provided in
the Credit Agreement;
(b) $150,000,000 aggregate principal amount of Term A Loans made or to
be made to the Mortgagor under the Credit Agreement, maturing on or
before December 31, 2003, with interest thereon as provided in the
Credit Agreement;
(c) $175,000,000 aggregate principal amount of Term B Loans made or to
be made to the Mortgagor under the Credit Agreement, maturing on or
before December 31, 2005, with interest thereon as provided in the
Credit Agreement;
(d) all reimbursement obligations in respect of Letters of Credit issued
under the Credit Agreement in an aggregate amount not exceeding
$10,000,000;
(e) all obligations and liabilities of the Mortgagor or any Subsidiary
of the Mortgagor under or in connection with any Designated Hedge
Agreement, now or hereafter entered into with or assigned to any of
the Secured Creditors (all such obligations and liabilities
described in this clause (e) being herein collectively called the
"Designated Hedge Obligations");
(f) all advances or disbursements of the Collateral Agent or any Secured
Creditor with respect to the Premises for the payment of taxes,
levies, assessments, insurance, insurance premiums or costs incurred
in the protection of the Premises, as provided in section 5301.233
of the Ohio Revised Code, and without limitation of the preceding
provisions of this clause (f), all other sums expended or advanced
by or on behalf of the Collateral Agent pursuant to any term or
provision of this Mortgage or any other agreement or instrument
relating to or securing any of the foregoing for the purpose of
protecting or preserving the Premises or the priority of the Lien of
this Mortgage, including, all advances or disbursements of the
Collateral Agent for the payment of taxes, levies, assessments,
insurance, insurance premiums or costs incurred in the protection of
the Premises; and
(g) all other liabilities, obligations and indebtedness of the
Mortgagor, its Subsidiaries and Affiliates, and/or any other Credit
Party, incurred under or arising out of or in connection with the
Credit Agreement, the Notes, the other Credit Documents and the
Designated Hedge Agreements, and the due performance and compliance
by the Mortgagor, its Subsidiaries and Affiliates, and any other
Credit Party with all of the terms, conditions, covenants and
agreements contained in the Credit Agreement, the Notes, such other
Credit Documents and the Designated Hedge Agreements;
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but only to the extent that the total unpaid Secured Obligations, exclusive of
liabilities and obligations referred to in the preceding clause (f), in the
aggregate and exclusive of the interest on the Secured Obligations, does not
exceed the maximum amount specified in this Mortgage, which is $500,000,000, and
as security for the payment of the Secured Obligations, the Mortgagor has
granted to the Collateral Agent hereunder a lien against the Premises. In
accordance with the provisions of the Notes, the whole of the principal sum of
the Loans which are then unpaid may be declared and become due and payable upon
the occurrence of an Event of Default under the Credit Agreement. This Mortgage
is given for the purpose of creating a lien on the Premises and expressly is to
secure the Secured Obligations, for the benefit of the Secured Creditors,
including but not limited to future advances and other extensions of credit,
whether such advances or other extensions of credit are obligatory or to be made
at the option of the Secured Creditors (or any of them) or otherwise, to the
same extent as if such future advances or other extensions of credit were made
on the date of the execution of this Mortgage. The total amount of the Secured
Obligations may decrease or increase from time to time and the Lenders or other
Secured Creditors may hereafter, as described in this Mortgage, at any time
after this Mortgage is delivered to the county recorder or county clerk for
record, make additional loans, advances or other extensions of credit to or for
the benefit of the Mortgagor or any of its Subsidiaries or Affiliates; provided,
however, that the total unpaid balance of the Secured Obligations which are
secured at any one time by this Mortgage, shall not exceed $500,000,000, plus
interest thereon and any advances or disbursements made for the payment of
taxes, levies or insurance on the Premises with interest on such disbursements.
Any such further loans or advances or other extensions of credit, with interest,
shall be secured by this Mortgage.
PROVIDED, NEVERTHELESS, that if the Secured Obligations which are secured
hereby shall be paid in full when due, and if all of the provisions of the
Credit Agreement, the Notes, the other Credit Documents and the Designated Hedge
Agreements shall be timely performed and observed, then the lien of this
Mortgage and the interest of the Collateral Agent in the Premises shall be
released at the cost of the Mortgagor, but this Mortgage shall otherwise, except
as specifically provided herein, remain in full force and effect.
The Mortgagor, intending to bind its successors and assigns, hereby
covenants and agrees with the Collateral Agent, its successors and assigns, for
its benefit and for the benefit of the Secured Creditors, as follows:
SECTION 1. PAYMENT OF SECURED OBLIGATIONS, PERFORMANCE OF OBLIGATIONS,
ETC.
(a) Payment of Secured Obligations. The Mortgagor shall pay or cause to be
paid the principal of and interest on the Loans and all other amounts included
in the Secured Obligations in accordance with the terms and provisions of the
Credit Agreement, the Notes, the other Credit Documents and the Designated Hedge
Agreements.
(b) Performance of Other Obligations. The Mortgagor will keep and perform
or cause to be kept and performed all covenants, agreements, conditions and
stipulations contained in the other Credit Documents or the Designated Hedge
Agreements which are binding on or otherwise applicable to the Mortgagor.
(c) Waiver of Acceptance, etc. The Mortgagor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Secured Obligations and this Mortgage and any requirement that the Collateral
Agent or any Secured Creditor protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any right or take
any action against any other person, or any collateral, or pursue any other
remedy in the power of the Collateral Agent or any other Secured Creditor.
SECTION 2. TITLE TO PREMISES, PROTECTION OF LIEN OF MORTGAGE, ETC.
(a) Title to Premises, etc. The Mortgagor represents to and covenants with
the Collateral Agent, its successors and assigns, that (i) the Mortgagor has and
will have good, marketable and insurable fee simple title to the Land, free and
clear of all liens, charges and encumbrances of every kind and character,
subject only to Permitted Encumbrances; (ii) the Mortgagor has and will have
full corporate power and lawful authority to encumber and convey the Premises as
provided herein; (iii) the Mortgagor owns and will own all of the Fixtures and
Equipment, free and clear of all liens, charges and encumbrances of every kind
and character, subject only to Permitted Encumbrances; (iv) this Mortgage is and
will remain a valid and enforceable first priority lien on, and first priority
security interest in, the Premises, subject only to Permitted Encumbrances; and
(v) the Mortgagor hereby warrants and will forever warrant and defend such title
and the validity, enforceability and priority of the lien and security interest
hereof against the claims of all persons and parties whomsoever.
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(b) Protection of Lien; Defense of Action. If the lien, security interest,
validity or priority of this Mortgage, or if title or any of the rights of the
Mortgagor or the Collateral Agent in or to the Premises, shall be endangered or
questioned, or shall be attacked directly or indirectly, or if any action or
proceeding is commenced, to which action or proceeding the Collateral Agent is
made a party by reason of the execution of this Mortgage, or in which it becomes
necessary to defend or uphold the lien of this Mortgage, or the priority thereof
or possession of the Premises, or otherwise to perfect the security hereunder,
or if any suit, action, legal proceeding or dispute of any kind is commenced in
which the Collateral Agent is made a party or appears as party plaintiff or
defendant, affecting the interest created herein, or the Premises, including,
but not limited to, bankruptcy, probate and administration proceedings, other
foreclosure proceedings or any condemnation action involving the Premises, then
the Mortgagor will promptly notify the Collateral Agent thereof (unless the
Collateral Agent has initiated or been served with process in respect thereof)
and the Mortgagor will diligently endeavor to cure any defect which may be
developed or claimed, and will take all necessary and proper steps for the
defense of such action or proceeding, including the employment of counsel, the
prosecution or defense of litigation and, subject to the Collateral Agent's
approval, the compromise, release or discharge of any and all adverse claims.
The Collateral Agent (whether or not named as a party to such actions or
proceedings), is hereby authorized and empowered (but shall not be obligated) to
take such additional steps as it may deem necessary or proper for the
prosecution, defense and control of any such action or proceeding or the
protection of the lien, security interest, validity or priority of this Mortgage
or of such title or rights, including the employment of counsel, the prosecution
or defense of litigation, the compromise, release or discharge of such adverse
claims, the purchase of any tax title and the removal of prior liens and
security interests. The Mortgagor shall, on demand, reimburse the Collateral
Agent for all expenses (including attorneys' fees and disbursements) incurred by
it in connection with the foregoing matters, and the person incurring such
expenses shall be subrogated to all rights of the person receiving such payment.
All such costs and expenses of the Collateral Agent, until reimbursed by the
Mortgagor, shall be part of the Secured Obligations and shall be deemed to be
secured by this Mortgage.
SECTION 3. TAXES AND IMPOSITIONS.
(a) Taxes on the Premises. The Mortgagor will pay when due, and before any
penalty, interest or cost for non-payment thereof may be added thereto, all
taxes, assessments, vault, water and sewer rents, rates, charges and
assessments, levies, permits, inspection and license fees and other governmental
and quasi-governmental charges, general and special, ordinary and extraordinary,
foreseen and unforeseen, heretofore or hereafter assessed, levied or otherwise
imposed against or upon, or which may become a Lien upon, the Premises or any
part thereof or any appurtenance thereto, or the revenues, rents, issues, income
and profits of the Premises or arising in respect of the occupancy, use or
possession thereof (collectively, "Impositions"). The Mortgagor will also pay
any penalty, interest or cost for non-payment of Impositions which may become
due and payable, and such penalties, interest or cost shall be included within
the term Impositions.
(b) Receipts. Unless the Mortgagor is making monthly deposits with the
Collateral Agent pursuant to section 4, or unless the Collateral Agent otherwise
directs, the Mortgagor will furnish to the Collateral Agent, upon its request,
proof of payment at the time same is made, and thereafter, upon receipt,
validated receipts showing payment in full of all Impositions.
(c) Income and Other Taxes. The Mortgagor will promptly pay all income,
franchise and other taxes owing by the Mortgagor, and any stamp taxes which may
be required to be paid in connection with the Secured Obligations, this Mortgage
or any other Credit Document or Designated Hedge Agreement, together with any
interest or penalties thereon, and the Mortgagor will pay any and all taxes,
charges, filing, registration and recording fees, excises and levies imposed
upon the Collateral Agent, the Administrative Agent or the Secured Creditors by
reason of execution of the Credit Agreement, the Notes, this Mortgage, the other
Credit Documents or any Designated Hedge Agreement, or ownership of this
Mortgage or any mortgage supplemental hereto, any security instrument with
respect to any Fixtures and Equipment or any instrument of further assurance.
(d) Brundage Clause. In the event of the enactment after the date hereof
of any law in the State in which the Premises are located or any other
governmental entity deducting from the value of the Premises for the purpose of
taxation any lien or security interest thereon, or changing in any way the laws
for the taxation of mortgages, deeds of trust or other liens or debts secured
thereby, or the manner of collection of such taxes, so as to affect this
Mortgage, the Secured Obligations, the Collateral Agent, the Administrative
Agent or any of the Secured Creditors, then, and in such event, the Mortgagor
shall, on demand, pay to (or reimburse) the Collateral Agent, the Administrative
Agent or such Secured Creditors, the amount of all taxes, assessments, charges
or liens for which the Collateral Agent, the Administrative Agent or any of the
Secured Creditors is or may be liable as a result thereof, provided that if any
such payment or reimbursement shall be unlawful or would constitute usury or
render the Secured Obligations wholly or partially usurious under applicable
law, then the Collateral Agent may, at its option, declare the Secured
Obligations immediately due and payable or require the Mortgagor to pay or
reimburse the Collateral Agent, the Administrative Agent or any of the Secured
Creditors for payment of the lawful and non-usurious portion thereof.
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(e) Right to Contest Impositions. Notwithstanding anything to the contrary
contained in this section 3, the Mortgagor shall have the right to protest
and/or contest any Imposition imposed upon the Premises or any part thereof,
provided that and so long as (1) the same is done by the Mortgagor upon prior
written notice to the Collateral Agent and at the Mortgagor's sole cost and
expense and with due diligence and continuity so as to resolve such protest
and/or contest as promptly as possible; (2) neither the Premises nor any part
thereof is or will be in immediate danger of being forfeited or lost by reason
of such protest or contest; (3) if required by the Collateral Agent, the
Mortgagor shall establish a reserve or other security with the Collateral Agent
in an amount and in form and substance satisfactory to the Collateral Agent for
application to the cost of curing or removing the same from record pursuant to
clause (4) below; (4) in any event, each such contest shall be concluded and the
tax assessment, penalties, interest and costs shall be paid prior to the date
such judgment becomes final or any writ or order is issued under which the
Premises may be sold pursuant to such judgment; and (5) the Mortgagor agrees in
writing to indemnify and hold harmless the Collateral Agent and the Secured
Creditors from and against any and all expenses, claims, demands, obligations,
liabilities, suits, actions and penalties upon or arising out of such protest
and/or contest. Pending the determination of any such protest or contest, the
Mortgagor shall not be obligated to pay any such Imposition unless nonpayment of
such Imposition will subject the Premises or any part thereof to sale or other
liability or forfeit by reason of non-payment. In addition, to the extent that
the same may be permitted by law, the Mortgagor shall have the right to apply
for the conversion of any Imposition to make the same payable in annual
installments over a period of years, and upon such conversion the Mortgagor
shall be obligated only to pay and discharge said periodic installments as
required by this section 3.
SECTION 4. TAX AND INSURANCE DEPOSITS.
(a) Amount of Deposits. To further secure the Mortgagor's obligations
under sections 3 and 10, but not in lieu thereof, the Collateral Agent, at its
option, following the occurrence and during the continuance of an Event of
Default, may require that the Mortgagor deposit with the Collateral Agent,
monthly on the first day of each month, a sum equal to one-twelfth (1/12) of the
estimated annual cost of all Impositions levied on the Premises, and a sum equal
to one-twelfth (1/12) of the estimated annual insurance premiums required to
keep the Improvements and the Fixtures and Equipment insured as required by
section 10 hereof, and the Mortgagor shall, accordingly, make such deposits. In
addition, if required by the Collateral Agent, the Mortgagor shall also deposit
with the Collateral Agent a sum of money which, together with the aforesaid
monthly installments, will be sufficient to make each of said payments of
Impositions and premiums, at least 10 days before such payments are due. If the
amount of any such payments is not ascertainable at the time any such deposit is
required to be made, the deposit shall be made on the basis of the Collateral
Agent's estimate thereof, and, when such amount is fixed for the then-current
year, the Mortgagor shall promptly deposit any deficiency with the Collateral
Agent.
(b) Use of Deposits. All funds so deposited shall, until so applied,
constitute additional security for the Secured Obligations, shall be held by the
Collateral Agent in a separate account, without interest (except to the extent
required under applicable law), may be commingled with other funds of the
Collateral Agent and, provided that no Event of Default shall have occurred and
be continuing hereunder, shall be applied in payment of the aforesaid amounts
prior to their becoming delinquent, to the extent that Collateral Agent shall
have such funds on hand, and provided, further, that the Collateral Agent shall
have no obligation to use said funds to pay any installment of Impositions prior
to the last day on which payment thereof may be made without penalty or interest
or to pay an insurance premium prior to the due date thereof. It shall be the
Mortgagor's responsibility to furnish the Collateral Agent with bills or
invoices therefor in sufficient time to pay the same before any penalty or
interest attaches and before said policies of insurance lapse, and the
Collateral Agent shall have no responsibility for payment of the same in the
absence of such bills or invoices. If an Event of Default hereunder shall have
occurred and be continuing, or if any of the Secured Obligations shall have been
accelerated as provided in the Credit Agreement or any Designated Hedge
Agreement, all funds so deposited may, at the Collateral Agent's option, be
applied to the Secured Obligations in the order determined by the Collateral
Agent or to cure said Event of Default or as provided in this section.
(c) Transfer of Mortgage. Upon an assignment or other transfer of this
Mortgage, the Collateral Agent shall have the right to pay over the balance of
such deposits in its possession to the assignee or other successor, and the
Collateral Agent shall thereupon be completely released from all liability with
respect to such deposits and the Mortgagor or the owner of the Premises shall
look solely to the assignee or transferee with respect thereto. This provision
shall apply to every transfer of such deposits to a new assignee or transferee.
(d) Transfer of Premises. A permissible transfer of record title to the
Premises shall automatically transfer to the new owner the beneficial interest
in any deposits under this section. Upon full payment and satisfaction of this
Mortgage or, at the Collateral Agent's option, at any prior time, the balance of
amounts deposited in the Collateral Agent's possession shall be paid over to the
record owner of the Premises, and no other person shall have any right or claim
thereto in any event.
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(e) Depository. The Mortgagor agrees, at the Collateral Agent's request
and at the Mortgagor's expense, to make the aforesaid deposits with the
Collateral Agent or such service or financial institution as the Collateral
Agent may from time to time designate in lieu of the Collateral Agent.
SECTION 5. LIENS AND LIABILITIES.
(a) Discharge of Mechanic's Liens, etc. The Mortgagor will pay, bond or
otherwise discharge, from time to time when the same shall become due, all
lawful claims and demands of mechanics, materialmen, laborers and others which,
if unpaid, might result in, or permit the creation of, a lien on the Premises,
or on the revenues, rents, issues, income or profits arising therefrom and, in
general, the Mortgagor shall do, or cause to be done, at the Mortgagor's sole
cost and expense, everything necessary to fully preserve the lien, security
interest and priority of this Mortgage.
(b) Creation of Liens. The Mortgagor will not, without the Collateral
Agent's consent, create, place or permit to be created or placed, or through any
act or failure to act acquiesce in the placing of, or allow to remain, any deed
of trust, mortgage, voluntary or involuntary lien, whether statutory,
constitutional or contractual, security interest, encumbrance or charge, or
conditional sale or other title retention document, against or covering the
Premises, prior to, on a parity with or subordinate to the lien of this
Mortgage, other than the following ("Permitted Encumbrances"): (i) the lien of
this Mortgage; (ii) the Permitted Liens (as defined in the Credit Agreement);
and (iii) such other matters of record as may be described in Exhibit 2 or as to
which the Collateral Agent has otherwise specifically consented in writing. If
any of the foregoing, other than Permitted Encumbrances, becomes attached to the
Premises without such consent, the Mortgagor will promptly cause the same to be
discharged and released.
(c) No Consent of Collateral Agent to Liens to be Implied. Nothing in the
Credit Agreement, the Notes, this Mortgage, the other Credit Documents or any
Designated Hedge Agreement shall be deemed or construed in any way as
constituting the consent or request by the Collateral Agent, express or implied,
to any contractor, subcontractor, laborer, mechanic or materialman for the
performance of any labor or the furnishing of any material for any improvement,
construction, alteration or repair of the Premises.
(d) Right to Contest. Notwithstanding anything to the contrary contained
in this section 5, the Mortgagor shall have the right to contest in good faith
the validity of any such lien, encumbrance, charge or security interests,
provided that and so long as (1) the same is done by the Mortgagor upon prior
written notice to the Collateral Agent and at the Mortgagor's sole cost and
expense and with due diligence and continuity so as to resolve as promptly as
possible such question of validity; (2) neither the Premises nor any part
thereof will be in immediate danger of being forfeited or lost by reason of such
contest; (3) such contest shall not subject the Collateral Agent to prosecution
for a criminal offense or a claim for civil liability; (4) if required by the
Collateral Agent, the Mortgagor shall either bond such lien, encumbrance, charge
or security interest or establish a reserve or other security with the
Collateral Agent in an amount and in form and substance satisfactory to the
Collateral Agent for application towards the cost of curing or removing the same
from record pursuant to clause (5) below; (5) the Mortgagor shall thereafter
diligently proceed to cause such lien, encumbrance or charge to be removed and
discharged prior to the date the Premises is listed for an in rem action with
respect to such lien, encumbrance or charge or any writ or order is issued under
which the Premises may be sold pursuant to a final judgment; (6) the Mortgagor
agrees in writing to indemnify and hold harmless the Collateral Agent and the
Secured Creditors from and against any and all expenses, claims, demands,
obligations, liabilities, suits, actions and penalties upon or arising out of
such contest and (7) no Event of Default hereunder shall have occurred and be
continuing.
SECTION 6. TRANSFERS AND MERGERS; LEASES, ETC.
The Mortgagor shall not (i) sell, assign, transfer or otherwise dispose of
the Premises or any part thereof or interest therein, or (ii) merge or
consolidate with any other person, or (iii) lease all or any portion of the
Premises to any other person, except pursuant to a lease which is subject and
subordinate in all respects to this Mortgage, or (iv) enter into any contract or
agreement to do any of the foregoing, expressly including, without limitation,
any land contract, lease/purchase, lease/option or option agreement, except to
the extent permitted by, and in compliance with the requirements of, section 9.2
of the Credit Agreement.
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SECTION 7. MAINTENANCE; ALTERATIONS; REPAIR OR RESTORATION OF LOSS OR
DAMAGE CAUSED BY CASUALTY; PREPAYMENT UPON EVENT OF LOSS.
(a) Repair and Maintenance. The Mortgagor will operate and maintain the
Premises in good order, repair and operating condition, ordinary wear and tear
excepted, and will promptly make all necessary repairs, renewals, replacements,
additions and improvements to the Premises, interior and exterior, structural
and nonstructural, foreseen and unforeseen, required by law or any restrictive
covenant affecting the Premises or otherwise necessary so that the Premises will
at all times be in good operating condition, ordinary wear and tear excepted,
and fit and proper for the purposes for which it is used and operated at the
date hereof. The Mortgagor shall not in any event commit waste upon the Premises
or suffer waste to be committed thereon.
(b) Replacement of Fixtures and Equipment. The Mortgagor will keep the
Premises fully equipped and will replace all worn-out or obsolete Fixtures and
Equipment with Fixtures and Equipment comparable thereto when new, and will not,
without the Collateral Agent's consent, remove from the Premises any item of the
Fixtures and Equipment covered by this Mortgage unless (i) the same is replaced
by the Mortgagor with an item of equal suitability and value when new, owned by
the Mortgagor and subject to the lien and security interest of this Mortgage,
free and clear of any lien or security interest (other than Permitted
Encumbrances), or (ii) in the case of any such Fixtures and Equipment which is
obsolete and surplus to its needs, the same is disposed of in the ordinary
course of business and in compliance with section 9.2 of the Credit Agreement.
(c) Alterations of Improvements, etc. No buildings, structures or other
substantial Improvements on the Premises shall be altered in any material
respect or demolished or removed by the Mortgagor, provided that the Mortgagor
may make alterations and additions (including structural alterations) to the
Improvements if (i) such alterations do not materially reduce the value or
marketability of the Premises or the uses or utility of the Premises; or (ii)
such alterations are required by applicable law, rule or regulation.
(d) Event of Loss, etc. If the Improvements or the Fixtures and Equipment
suffer any damage or loss or are destroyed by fire, rain, storm, flood,
earthquake, or any other casualty, whether or not covered by insurance, the
Mortgagor will (i) if the same constitutes an Event of Loss requiring prepayment
of any of the Loans pursuant to section 5.2 of the Credit Agreement, so prepay
such Loans as provided in the Credit Agreement, or (ii) otherwise repair,
replace or restore the Improvements and/or Fixtures and Equipment to the
condition in which they are required to be maintained hereunder immediately
prior to such damage, loss or destruction
SECTION 8. COMPLIANCE WITH LAWS AND INSURANCE REQUIREMENTS, ETC.
(a) Compliance with Laws, etc. The Mortgagor covenants that the Premises
will at all times be constructed, installed, maintained and operated in
compliance with all applicable requirements of:
(i) all laws, rules, regulations, orders, authorizations, permits
and licenses of all governmental authorities, federal, state and local,
having jurisdiction over the Mortgagor, the Premises or any part thereof,
including, without limitation, (w) all Environmental Laws, (x) the
Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq., (y) the
Americans with Disabilities Act of 1990, and (z) all state and local laws
and ordinances related to handicapped access and all rules, regulations,
and orders issued pursuant thereto including, without limitation, the
Americans with Disabilities Act Accessibility Guidelines for Buildings and
Facilities (collectively as referred to in clause (y) and this clause (z),
"Access Laws"); and
(ii) all restrictive covenants affecting any portion or all of the
Real Property Collateral; .
other than those requirements (A) being contested in good faith by appropriate
proceedings, as to which adequate reserves are established to the extent
required under GAAP, and (B) the noncompliance with which would not have, and
which would not be reasonably expected to have, a Material Adverse Effect.
(b) Alterations Affecting Compliance with Access Laws. Notwithstanding
any provisions set forth herein or in any other document regarding the
Collateral Agent's approval of alterations of the Real Property
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Collateral, the Mortgagor shall not alter the Real Property Collateral in any
manner which would increase in any material respect the responsibilities of the
Mortgagor for compliance with the applicable Access Laws without the prior
written approval of the Collateral Agent. The foregoing shall apply to tenant
improvements constructed by the Mortgagor or by any of its tenants. The
Collateral Agent may condition any such approval upon receipt of a certificate
of Access Law compliance from an architect, engineer, or other person acceptable
to the Collateral Agent.
(c) Notice of Violation of Access Laws. The Mortgagor does hereby agree to
give prompt notice to the Collateral Agent of the receipt by the Mortgagor of
any complaints related to violation of any Access Laws and of the commencement
of any proceedings or investigations which relate to compliance with applicable
Access Laws.
(d) Licenses and Permits, etc. The Mortgagor shall (i) observe and comply
with all conditions and requirements necessary to preserve and extend any and
all rights, licenses, permits (including but not limited to zoning variances,
special exceptions and non-conforming uses), privileges, franchises and
concessions which are applicable to the Premises or any part thereof or which
have been granted to or contracted for by the Mortgagor in connection with any
existing or presently contemplated use of the Premises, and (ii) obtain and keep
in full force and effect all necessary governmental and municipal approvals as
may be necessary from time to time to comply in all material respects with all
Environmental Laws, all Access Laws and other statutory or regulatory
requirements; except in any such case referred to in clause (i) or (ii) above
where the noncompliance would not have, and would not be reasonably expected to
have, a Material Adverse Effect.
(e) Flood Hazards; Utilities; Streets. The Mortgagor represents and
warrants that (i) the Premises are not located in an area identified by the
Secretary of Housing and Urban Development or a successor thereto as an area
having special flood hazards pursuant to the terms of the National Flood
Disaster Protection Act of 1973, as amended; (ii) the Premises are served by all
utilities required for the present use thereof; and (iii) all streets necessary
to serve the Premises for the use thereof as herein contemplated have been
completed and are serviceable and have been dedicated or accepted by the
appropriate governmental entities.
(f) Zoning; Title Matters. The Mortgagor will not (i) initiate or support
any zoning reclassification of the Premises, seek any variance under existing
zoning ordinances applicable to the Premises or use or permit the use of the
Premises in a manner which would result in such use becoming a non-conforming
use under applicable zoning ordinances, (ii) modify, amend or supplement any
Permitted Encumbrances, (iii) impose any restrictive covenants or encumbrances
upon the Premises, execute or file any subdivision plat affecting the Premises
or consent to the annexation of the Premises to any municipality or (iv) permit
or suffer the Premises to be used by the public or any person in such manner as
might make possible a claim of adverse usage or possession or of any implied
dedication or easement.
(g) Insurance Requirements. The Mortgagor shall observe and comply with
any and all conditions and requirements attached to or made a part of the
insurance relating to the Premises which is maintained in accordance with
section 10.
SECTION 9. ENVIRONMENTAL MATTERS.
(a) Without limitation of the provisions of section 8 hereof, the
Mortgagor hereby (i) reaffirms its representations contained in section 7.13 of
the Credit Agreement, (ii) covenants to perform and observe all of the terms and
provisions of the Credit Agreement relating to compliance by it with
Environmental Laws and notice by it and indemnification by it of Environmental
Claims, including, without limitation, the covenants contained in section 8.8 of
the Credit Agreement and the indemnification obligations contained in section
12.1 of the Credit Agreement; and (iii) agrees that all of the Secured Creditors
shall be considered Indemnitees as defined in section 12.1(g) of the Credit
Agreement.
(b) Any costs or expenses reasonably incurred by a person to be
indemnified hereunder for which the Mortgagor is responsible shall be paid to
the person to be indemnified on demand, and failing prompt reimbursement, shall
be added to the Secured Obligations and earn interest at the interest rate
provided in the last sentence of section 2.7(c) of the Credit Agreement, or such
lesser rate as is the maximum legally permissible rate of interest (the "Default
Rate"), until paid in full.
(c) The Mortgagor's representations, warranties, and obligations under
this section shall not be terminated, released, discharged, extinguished, or
otherwise affected by any foreclosure of any lien, indebtedness or obligation,
any satisfaction of the Secured Obligations or the release or discharge of the
Premises or any part thereof or any other action or thing, except and unless
such representations, warranties, and obligations are expressly released in
writing by the Collateral Agent, which writing shall refer particularly to this
section. The provisions of this section may be enforced at any time by any of
the Secured Creditors, the Collateral Agent or any other person entitled to be
indemnified hereunder and, without limiting the foregoing, shall
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survive the payment or other satisfaction by any means of the obligations
evidenced by the Notes and the release and discharge of this Mortgage, except in
the case of a specific written release by the Collateral Agent as to this
section, as referred to above.
SECTION 10. INSURANCE.
(a) Required Insurance. The Mortgagor will maintain insurance with
responsible companies in such amounts and against such risks as is usually
carried by owners of similar businesses and properties (and with such
deductibles and levels of self-insurance as are usually maintained by owners of
similar businesses and properties and as are consistent with the Mortgagor's
practices as of the date of the execution and delivery hereof), provided that in
any event the Mortgagor will maintain:
(i) All Risk Extended Coverage Insurance: insurance against loss or
damage covering the Improvements, the Fixtures and Equipment and all other
tangible personal property of the Mortgagor located on the Premises by
reason of any loss or damage by fire, storms, and other hazards, perils,
casualties and risks, including without limitation risks usually covered
by extended coverage policies issued in the jurisdiction in which the
Improvements are located, which insurance shall:
(A) name National City Bank, as Collateral Agent as an
additional insured and as loss payee,
(B) provide coverage in an amount not less than the greater of
(x) 100% of the replacement costs of the Improvements and the
Fixtures and Equipment, (y) the full insurable value of the
Improvements and the Fixtures and Equipment, and (z) the amount
applicable to the Improvements and the Fixtures and Equipment
necessary so that neither the Mortgagor (or any of its Affiliates)
or the Collateral Agent shall be considered or shall become a
co-insurer of any loss under such policy, and
(C) provide for a deductible or self-insurance retention in an
amount consistent with the Mortgagor's current practices or such
greater amount as is reasonably acceptable to the Collateral Agent;
(ii) Flood Insurance: if the area in which the Real Property
Collateral is located has been designated as flood prone or a flood risk
area, as defined by the Flood Disaster Protection Act of 1973, as amended,
flood insurance, which insurance shall:
(A) name National City Bank, as Collateral Agent as an
additional insured and as loss payee,
(B) provide coverage in an amount not less than the greater of
(x) 100% of the replacement costs of the Improvements and the
Fixtures and Equipment, (y) the full insurable value of the
Improvements and the Fixtures and Equipment, and (z) the amount
applicable to the Improvements and the Fixtures and Equipment
necessary so that neither the Mortgagor (or any of its Affiliates)
or the Collateral Agent shall be considered or shall become a
co-insurer of any loss under such policy; provided that if flood
insurance in the required amount is not available, flood insurance
shall be maintained in the maximum amount available;
(C) provide for a deductible or self-insurance retention of an
amount reasonably acceptable to the Collateral Agent; and
(D) comply with any additional requirements of the National
Flood Insurance Program as set forth in such Act;
(iii) Commercial General Liability Insurance: insurance against
claims for bodily injury, death or property damage occurring on, in or
about the Premises and any other facilities owned, leased or used by the
Mortgagor (including adjoining streets, sidewalks and waterways), which
insurance shall:
(A) name National City Bank, as Collateral Agent as an
additional insured,
(B) provide coverage in an amount not less than $1,000,000 per
occurrence and $2,000,000 in the aggregate, plus umbrella coverage
of not less than $3,000,000; and
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(C) provide for a deductible or self-insurance retention in an
amount consistent with the Mortgagor's current practices or such
greater amount as is reasonably acceptable to the Collateral Agent;
(iv) Workers' Compensation Insurance: insurance against claims for
injuries to or death of employees (including Employers' Liability
Insurance) to the extent required by applicable law;
(v) Business Interruption Insurance: insurance against loss of
operating income for a period of at least six months, occasioned by reason
of any peril affecting the operations of the Mortgagor; and
(vi) Other Insurance: such other and additional insurance, in such
amounts and with such coverages as are then customary for property similar
in use and located in the same state in which the Premises is located.
Such insurance shall be written by financially responsible companies selected by
the Mortgagor and having an A.M. Best rating of "A-" or better and being in a
financial size category of "VII" or larger, or by other companies acceptable to
the Collateral Agent, and (other than workers' compensation insurance) shall
name the Collateral Agent, as loss payee (in the case of insurance described in
items (i) and (ii)) or as an additional named insured (in the case of the
insurance described in items (iii), (v) and (vi) above), in each case as its
interests may appear. Each policy referred to in this section shall provide that
it will not be canceled or reduced or expire except after not less than 30 days'
written notice to the Collateral Agent and shall also provide that the interests
of the Collateral Agent shall not be invalidated by an act or negligence of the
Mortgagor or any person having an interest in any facility owned, leased or used
by the Mortgagor nor by occupancy or use of any facility owned, leased or used
by the Mortgagor for purposes more hazardous than permitted by such policy nor
by any foreclosure or other proceedings relating to any facility owned, leased
or used by the Mortgagor. The Mortgagor will advise the Collateral Agent
promptly of any policy cancellation, reduction or amendment. All of such
insurance shall be primary and non-contributing with any insurance which may be
carried by the Collateral Agent. All insurance policies, to the extent of its
interest, are to be for the benefit of and first payable in case of loss to the
Collateral Agent as first mortgagee without contribution. At or prior to the
time of the initial Borrowing by the Mortgagor, it will provide to the
Collateral Agent (x) certificates or endorsements naming the Collateral Agent as
an additional insured or loss payee with respect to the casualty and liability
insurance maintained as required hereby with respect to the Premises, and (y) if
requested to do so, copies of all insurance policies maintained by it as
required hereby. The Mortgagor shall deliver to the Collateral Agent
contemporaneously with the expiration or replacement of any policy of insurance
required to be maintained hereunder a certificate as to the new or renewal
policy.
(b) Proceeds of Insurance. All amounts recoverable under any policy of
casualty insurance are hereby assigned to the Collateral Agent. In the event of
a loss, and if an Event of Default has occurred and is continuing or if any
required prepayment of any of the Secured Obligations is required to be made at
such time or as a result thereof, the Collateral Agent is authorized and
empowered, at its option, to adjust or compromise any loss covered by any
insurance policies on the Premises, to collect and receive the proceeds
therefrom and, after deducting from such proceeds any expenses incurred by it in
the collection or handling thereof, to apply the net proceeds to the Secured
Obligations in accordance with the provisions of the Credit Agreement. If any
such net proceeds are not to be so applied, the Collateral Agent is authorized
to apply the net proceeds in any one or more of the following ways, subject to
the applicable provisions of the Credit Agreement: (i) use the same or any part
thereof to fulfill any of the covenants contained herein as the Collateral Agent
may determine; (ii) use the same or any part thereof to replace and restore the
Premises to a condition satisfactory to the Collateral Agent; or (iii) release
the same or any part thereof to the Mortgagor to cover the cost of repair or
restoration of the Improvements.
(c) Power of Attorney. The Collateral Agent is hereby irrevocably
appointed by the Mortgagor as attorney for the Mortgagor to assign any policy to
itself or its nominees in the event of the foreclosure of this Mortgage. In the
event of foreclosure of this Mortgage, or other transfer of title of the
Premises in lieu of foreclosure, all right, title and interest of the Mortgagor
in and to any insurance policies then in force shall pass to the purchaser or
grantee thereof.
SECTION 11. CONDEMNATION.
(a) Condemnation. The Mortgagor will give the Collateral Agent immediate
notice of the actual or threatened commencement of any proceedings under eminent
domain affecting all or any part of the Premises or any easement therein or
appurtenance thereof, including severance and consequential damage and change in
grade of streets, and will deliver to the Collateral Agent copies of any and all
papers served in connection with any such proceedings. The Mortgagor agrees that
all awards heretofore or hereafter made by any public or quasi-public authority
to the present and all subsequent owners of the Premises by virtue of an
exercise of the right of eminent domain by such authority, including any award
for taking of title, possession or right of access to a public way, or for any
change of grade or streets affecting the Premises, are hereby assigned to the
Collateral Agent. If case of any such
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proceedings, and if an Event of Default has occurred and is continuing or if any
required prepayment of any of the Secured Obligations is required to be made at
such time or as a result thereof, the Collateral Agent is authorized and
empowered, at its option, to collect and receive the proceeds of any such awards
from the authorities making the same and to give proper receipts therefor, and
after deducting from such proceeds any expenses incurred by the Collateral Agent
in the collection or handling thereof, to apply the net proceeds to the Secured
Obligations in accordance with the provisions of the Credit Agreement. If any
such net proceeds are not to be so applied, the Collateral Agent is authorized,
at its option, to apply the net proceeds in any one or more of the following
ways, subject to the applicable provisions of the Credit Agreement: (A) use the
same or any part thereof to fulfill any of the covenants contained herein as the
Collateral Agent may determine; (B) use the same or any part thereof to replace
and restore the Premises to a condition satisfactory to the Collateral Agent; or
(C) release the same or any part thereof to the Mortgagor to cover the cost of
repair or restoration of the Improvements.
(b) Further Assurances. The Mortgagor hereby covenants and agrees to and
with the Collateral Agent, upon the request of the Collateral Agent to make,
execute and deliver any and all assignments and other instruments sufficient for
the purpose of assigning all such awards to the Collateral Agent, free and clear
and discharged of any and all encumbrances of any kind or nature whatsoever
except as above stated.
(c) Installment Payment of Secured Obligations Not Impaired.
Notwithstanding any taking under the power of eminent domain, alteration of the
grade of any street, or other injury to or decrease in value of the Premises by
any public or quasi-public authority or corporation, the Mortgagor shall
continue to pay installments on the Secured Obligations owed by it and any
reduction in the principal sum resulting from the application by the Collateral
Agent of such award or payment as hereinafter set forth shall be deemed to take
effect only on the date of such receipt.
SECTION 12. RIGHT OF COLLATERAL AGENT TO MAKE PAYMENTS ON BEHALF OF
MORTGAGOR, ETC.
(a) Right of Collateral Agent to Make Payments, etc. In the event the
Mortgagor shall fail to comply with any or all of its covenants, agreements,
conditions and stipulations herein set forth, then the Collateral Agent shall
after notice to the Mortgagor be and hereby is authorized and empowered at its
option, but without legal obligation to do so, to pay or perform the same
without waiver of any other remedy. In addition, the Collateral Agent is
authorized and empowered at its option, but without legal obligation to do so,
upon not less than two Business Days' prior notice to the Chief Financial
Officer of the Mortgagor, to enter, or have its agents enter, the Premises
whenever necessary for the purpose of inspecting the Premises and curing any
default hereunder. The Mortgagor agrees that the Collateral Agent shall
thereupon have a claim against the Mortgagor for all sums paid by the Collateral
Agent for such defaults so cured, together with a lien upon the Premises for the
sum so paid plus interest at the Default Rate.
(b) Collateral Agent Protected; Further Rights, etc. The Collateral Agent,
in making any payment herein and hereby authorized in the place and stead of the
Mortgagor (i) relating to taxes, assessments, water rates, sewer rentals and
other governmental or municipal charges, fines, impositions or liens asserted
against the Premises, may do so according to any bill, statement or estimate
procured from the appropriate public authority without inquiry into the validity
thereof; or (ii) relating to any adverse title, lien, statement of lien,
encumbrance, claim or charge, shall be the sole judge of the validity of same;
or (iii) otherwise relating to any purpose herein and hereby authorized, but not
enumerated in this section, may do so whenever, in its good faith judgment and
discretion, such payment shall seem necessary or desirable to protect the full
security intended to be created by this Mortgage. In connection with any such
payment, the Collateral Agent, at its option, may and is hereby authorized to
obtain a continuation report of title prepared by a title insurance company, the
cost and expenses of which shall be repayable by the Mortgagor upon demand and
shall be secured hereby.
SECTION 13. SECURITY AGREEMENT PROVISIONS.
This Mortgage is hereby deemed to be as well a security agreement for the
purpose of creating hereby a security interest securing the Secured Obligations
in and to the Personal Property Collateral. Without derogating any of the
provisions of this Mortgage, the Mortgagor by this Mortgage:
(a) grants to the Collateral Agent a security interest in all of the
Mortgagor's right, title and interest in and to all Personal
Property Collateral, including, but not limited to, the items
referred to above, together with all additions, accessions and
substitutions and all similar property hereafter acquired and used
or obtained for use on, or in connection with, the Real Property
Collateral; the proceeds of the Personal Property Collateral are
intended to be secured hereby; provided, however, that such intent
shall never constitute an expressed or implied consent on the part
of the Collateral Agent to the sale of any or all Personal Property
Collateral except as specifically permitted under any of the
applicable provisions of this Mortgage or any of the other Credit
Documents;
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(b) agrees that the security interest hereby granted by this Mortgage
shall secure the payment of the Secured Obligations;
(c) agrees not to sell, convey, mortgage or grant a security interest
in, or otherwise dispose of or encumber, any of the Personal
Property Collateral or any of the Mortgagor's right, title or
interest therein, except in compliance with the requirements of
section 9.2 of the Credit Agreement;
(d) agrees that if any of the Mortgagor's rights in the Personal
Property Collateral are voluntarily or involuntarily transferred,
whether by sale, creation of a security interest, attachment, levy,
garnishment or other judicial process, without the written consent
of the Collateral Agent, such transfer shall constitute a default by
the Mortgagor under the terms of this Mortgage;
(e) authorizes the Collateral Agent to file, in the jurisdiction where
this Mortgage will be given effect, financing statements covering
the Personal Property Collateral and at the request of the
Collateral Agent, the Mortgagor shall join the Collateral Agent in
executing one or more of such financing statements pursuant to the
Uniform Commercial Code in a form satisfactory to the Collateral
Agent and the Mortgagor shall pay the cost of filing the same in all
public offices at any time and from time to time wherever the
Collateral Agent deems filing or recording of any financing
statements or of this Mortgage to be desirable or necessary; and
(f) acknowledges that the Mortgagor, as of the date hereof, has joined
the Collateral Agent in the execution of one or more Uniform
Commercial Code financing statements to be filed to perfect the
security interest in the Personal Property created by this Mortgage.
SECTION 14. FILINGS AND RECORDINGS.
The Mortgagor agrees at all time to cause this Mortgage, and each
amendment or modification hereof or supplement hereto, and financing statements
covering personal property (and continuation statements in respect thereof), if
necessary or appropriate under the Uniform Commercial Code, as in effect in the
jurisdiction in which the Real Property Collateral is located, and all
assignments of leases, to be recorded, registered and filed, and kept recorded,
registered and filed, in such manner and in such places as appropriate, and
shall comply with all applicable statutes and regulations in order to establish,
preserve and protect the security and priority of this Mortgage, and such
assignments and the rights of the Collateral Agent thereunder. The Mortgagor
shall pay, or cause to be paid, all taxes, fees and other charges incurred in
connection with such recording, registration, filing and compliance.
SECTION 15. RIGHT OF SETOFF.
In addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
and during the continuance of an Event of Default, each Secured Creditor is
hereby authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Mortgagor or to any other person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by such Secured Creditor (including, without limitation,
by branches and agencies of such Secured Creditor wherever located) to or for
the credit or the account of the Mortgagor against and on account of the
obligations and liabilities of the Mortgagor to such Secured Creditor under the
Notes, any other Credit Documents or any Designated Hedge Agreement, including,
without limitation, all interests in Loans purchased by such Secured Creditor
pursuant to section 12.4(c) of the Credit Agreement, and all other claims of any
nature or description arising out of or connected with the Notes or any other
Credit Document or any Designated Hedge Agreement, irrespective of whether or
not such Secured Creditor shall have made any demand hereunder and although said
Loans, liabilities or claims, or any of them, shall be contingent or unmatured.
SECTION 16. EVENTS OF DEFAULT.
Any Event of Default under the Credit Agreement, any payment default by
the Borrower or any of its Subsidiaries under any Designated Hedge Agreement,
and/or any Event of Default relating to the Borrower or any of its Subsidiaries
under any Designated Hedge Agreement, shall constitute an Event of Default
("Event of Default") under this Mortgage.
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SECTION 17. REMEDIES.
If an Event of Default, under and as defined in section 16 of this
Mortgage, has occurred and is continuing:
(a) The Collateral Agent, the Administrative Agent and the Secured
Creditors may exercise any one or more of the remedies specified in
section 10.2 of the Credit Agreement or otherwise available at law or in
equity.
(b) To the extent permitted by applicable law, the Collateral Agent
may enter upon the Premises or any portion thereof and may exclude the
Mortgagor therefrom; and having and holding the same, may use, operate,
manage, and control the Premises and conduct business in connection
therewith, including, without limitation the continuation of the
construction of the Improvements if not previously completed, either
personally or by its superintendents, managers, agents, servants,
attorneys or receivers; and upon every such entry, the Collateral Agent,
at the expense of the Mortgagor and from time to time, may maintain the
Premises and may insure and reinsure the same, as may seem to the
Collateral Agent to be necessary or advisable; and, at the expense of the
Mortgagor and from time to time, the Collateral Agent may make all
repairs, renewals, replacements, alterations, additions, betterments and
improvements thereto and thereon, as to the Collateral Agent may seem
necessary or advisable, and if the construction of the Improvements has
not been completed, may cause such construction to be continued to
completion or to such stage of completion as the Collateral Agent
considers necessary or advisable; and in every such case the Collateral
Agent shall have the right to carry on the construction thereof, enter
into, terminate, cancel and/or enforce contracts or leases related
thereto, manage and operate the Premises and carry on the business
thereof, and otherwise exercise all rights which the Mortgagor might
otherwise have with respect thereto, in the name of the Mortgagor or
otherwise, as the Collateral Agent shall deem best or advisable; and the
Collateral Agent shall be entitled to collect all rents, earnings,
revenues, issues, profits and income of the Premises, awards made for the
taking of or injury to the Premises through eminent domain or otherwise,
including awards or damages for change of grade, and also return premiums
or other payments upon insurance, and said rents, earnings, revenues,
issues, profits and income, awards, damages, premiums and payments are
hereby assigned to the Collateral Agent, and after deducting the expenses
and costs of conducting the business thereof and of all betterments,
additions, alterations, replacements, repairs and for taxes, assessments,
insurance and prior or other charges upon or with respect to the Premises
or any portion thereof, as well as just and reasonable compensations for
the services of all counsel, agents, employees, receivers and other
persons properly engaged or employed, the Collateral Agent shall apply the
proceeds as provided in section 18.
(c) To the extent permitted by applicable law, the Collateral Agent
is hereby authorized and empowered by the Mortgagor to sell the Premises
in such manner as may be prescribed by law, by advertisement and public
sale as provided by the laws of the jurisdiction in which the Real
Property Collateral is located, or to foreclose this Mortgage by judicial
proceedings and sell the Premises pursuant to such proceedings as
permitted by applicable law. The Mortgagor does hereby authorize the
Collateral Agent to sell the Premises together or in lots or parcels, as
to the Collateral Agent shall seem expedient, and to execute and deliver
to the purchaser or purchasers of such property good and sufficient deeds
thereof with covenants of general, special or limited warranty or such
other instruments of conveyance, assignment or transfer as the Collateral
Agent may deem appropriate. Payment of the purchase price to the
Collateral Agent shall satisfy the obligation of the purchaser at any such
sale therefor, and he shall not be bound to look after the application
thereof. The Collateral Agent shall cause notice of any such sale to be
mailed to the Mortgagor; but, except as otherwise provided by any
applicable provision of law, failure so to mail any such notice shall not
affect the validity of any such sale. If the Collateral Agent, acting on
behalf of any or all of the holders of the Notes or other Secured
Obligations, or any or all such holders acting on their own behalf, is the
highest bidder, the Collateral Agent or such holders, as the case may be,
may purchase at any sale or sales (whether statutory foreclosure or public
sale or sales conducted as hereinabove authorized) and may, in paying the
purchase price, turn in any of the Notes or other Secured Obligations held
by them, in lieu of cash, up to the entire amount owing thereunder,
whether for principal, interest or other amounts, which amount as so
designated as being turned over shall be considered distribution of the
proceeds of such sale. The provisions set forth above as to public sale or
sales in lieu of statutory foreclosure are not intended as an exclusive
method of foreclosure hereunder or to deprive the Collateral Agent of any
other legal or equitable remedy available under applicable law.
Accordingly, it is specifically agreed that the remedy of foreclosure by
the Collateral Agent's sale as hereinabove provided for shall be
cumulative and shall not in any wise be construed as an exclusive remedy,
and the Collateral Agent shall be fully entitled to a statutory court
foreclosure and to avail itself of any and all other legal or equitable
remedies available under the laws of the jurisdiction in which the Real
Property Collateral is located.
(d) The Mortgagor hereby authorizes the Collateral Agent to demand
and receive, in the place and stead of the Mortgagor, all amounts that may
become due under any and each lease, rental, contract, easement and other
right of the Mortgagor pertaining or in any way relating to the Premises
or any part thereof, and, when received, to apply the same to the costs
and expenses incurred by the Collateral Agent incurred hereunder and to
the Secured Obligations. No demand for, and no receipt or application of
any such amount shall be deemed to minimize, subordinate or affect in any
way the lien hereof and rights hereunder of the Collateral Agent or any
rights of a purchaser of any portion
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of the Premises at any foreclosure or other sale hereunder, as against the
person from whom the amount was demanded or received, or his executors,
administrators, successors or assigns, or anyone claiming under such
Tenant Lease, rental, contract or other right.
(e) The Collateral Agent may exercise all rights and remedies
granted by law and more particularly the Uniform Commercial Code,
including, but not limited to, the right to take possession of the
Personal Property Collateral, and for this purpose may peaceably enter
upon any premises on which any or all of the Personal Property Collateral
is situated, without being deemed guilty of trespass and without liability
for damages thereby occasioned, and take possession of and operate the
Personal Property Collateral or remove it therefrom; the Collateral Agent
shall have the further right to take any action it deems necessary,
appropriate or desirable, at its option and in its discretion, to repair,
refurbish or otherwise prepare the Personal Property Collateral for sale,
lease or other use or disposition and to sell at public or private sales
or otherwise dispose of, lease or utilize the Personal Property Collateral
and any part thereof in any manner authorized or permitted by law and to
apply the proceeds thereof toward payment of any costs and expenses,
including reasonable attorneys' fees and legal expenses, to the extent
permitted by law, thereby incurred by the Collateral Agent and toward
payment of the Secured Obligations and all other indebtedness described in
this Mortgage, in such order and manner as may be provided in the Credit
Agreement or this Mortgage or in the event such provisions are not
applicable in such order and manner as the Collateral Agent may elect.
SECTION 18. COSTS OF ENFORCEMENT; APPLICATION OF PROCEEDS; MORTGAGOR
LIABLE FOR DEFICIENCY, ETC.
(a) Costs of Enforcement; Application of Proceeds. In case of (i)
foreclosure of this Mortgage in any court of law or equity, whether or not any
order or decree shall have been entered therein, and to the extent permitted by
law, a reasonable sum shall be allowed for attorney's fees of the Collateral
Agent in such proceedings, for stenographer's fees and for all moneys expended
for documentary evidence and the cost of a complete abstract of title and title
report for the purpose of such foreclosure, such sums to be secured by the lien
hereunder, and, to the extent permitted by law, there shall be included in any
judgment or decree foreclosing this Mortgage and be paid out of such rents,
issues and profits or out of the proceeds of any sale made in pursuance of any
such judgment or decree, or (ii) any other realization by the Collateral Agent
upon or with respect to the Premises or any part or portion thereof, the
proceeds thereof shall be applied as follows:
(1) first, to the payment or reimbursement of the Collateral Agent
for all costs and expenses of such suit or suits or other enforcement
activities of the Collateral Agent, including, but not limited to, the
costs of advertising, sale and conveyance, including attorneys',
solicitors' and stenographers' fees, if permitted by law, outlays for
documentary evidence and the cost of such abstract, examination of title
and title report;
(2) second, to the extent proceeds remain after the application
pursuant to preceding clause (1), to reimburse the Collateral Agent for
all moneys advanced by the Collateral Agent, if any, for any purpose
authorized in this Mortgage with interest at the Default Rate;
(3) third, to the extent proceeds remain after the application
pursuant to preceding clause (2), an amount equal to the outstanding
Secured Obligations shall be applied by the Collateral Agent to the
Secured Obligations in such amount and order of priority as may be
provided in section 10.3 of the Credit Agreement; and
(4) fourth, to the extent remaining after the application pursuant
to the preceding clauses (1), (2) and (3) and payment in full of the
Secured Obligations which are secured hereby, to the Mortgagor or to
whomever may be lawfully entitled to receive such payment.
(b) Mortgagor Liable for Deficiency. It is understood that the Mortgagor
shall remain liable to the extent of any deficiency between (x) the amount of
the proceeds of the Premises and the amount of the sum referred to in the
foregoing clauses (1) and (2) and (y) the aggregate outstanding amount of the
Secured Obligations.
SECTION 19. RECEIVER.
In the event an action shall be instituted to foreclose this Mortgage, or
prior to foreclosure but after default, the Collateral Agent shall be entitled
to the appointment of a receiver of the rents, issues and profits of the
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Premises as a matter of right, with power to collect the rents, issues and
profits of the Premises due and becoming due during the period of default and/or
the pendency of such foreclosure suit to and including the date of confirmation
of the sale under such foreclosure and during the redemption period, if any,
after such confirmation, such rents, issues and profits being hereby expressly
assigned and pledged as security for the payment of the Secured Obligations
secured by this Mortgage without regard to the value of the Premises or the
solvency of any person or persons liable for the payment of the Secured
Obligations and regardless of whether the Collateral Agent has an adequate
remedy at law. The Mortgagor for itself and for any subsequent owner hereby
waives any and all defenses to the application for a receiver as above provided
and hereby specifically consents to such appointment, but nothing herein
contained is to be construed to deprive the holder of this Mortgage of any other
right or remedy or privilege it may now have under the law to have a receiver
appointed. The provision for the appointment of a receiver and the assignment of
such rents, issues and profits is made an express condition upon which the Loans
hereby secured are made. In such event, the court shall at once on application
of the Collateral Agent or its attorney in such action, appoint a receiver to
take immediate possession of, manage and control the Premises, for the benefit
of the holder or holders of the Secured Obligations and of any other parties in
interest, with power to collect the rents, issues and profits of the Premises
during the pendency of such action, and to apply the same toward the payment of
the several obligations herein mentioned and described, notwithstanding that the
same or any part thereof is occupied by the Mortgagor or any other person. The
rights and remedies herein provided for shall be deemed to be cumulative and in
addition to and not in limitation of those provided by law and if there be no
receiver so appointed, the Collateral Agent itself may proceed to collect the
rents, issues and profits from the Premises. From any such rents, issues, and
profits collected by the receiver or by the Collateral Agent prior to a
foreclosure sale, there shall be deducted the cost of collection thereof and the
expenses of operation of the Premises, including but not limited to real estate
commissions, receiver's fee and the reasonable fees of its attorney, if any, and
the Collateral Agent's attorney's fees, if permitted by law, and court costs,
the remainder to be applied against the Secured Obligations. In the event the
rents, issues and profits are not adequate to pay all tax and other expenses of
operation, the Collateral Agent may, but is not obligated to, advance to any
receiver the amounts necessary to operate, maintain and repair, if necessary,
the Premises and any such amounts so advanced, together with interest thereon at
the Default Rate from and after the date of advancement, shall be secured by
this Mortgage and have the same priority of collection as the principal of the
Secured Obligations.
SECTION 20. LIABILITY OF MORTGAGOR NOT AFFECTED.
No sale of the Premises, no forbearance on the part of the Collateral
Agent, no extension of the time for the payment of the Secured Obligations and
no change in the terms of the payment thereof consented to by the Collateral
Agent shall in any way whatsoever operate to release, discharge, modify, change
or affect the original liability of the Mortgagor hereunder or the original
liability of the Mortgagor or any other obligor under any of the Secured
Obligations, either in whole or in part. No waiver by the Collateral Agent of
any breach of any covenant of the Mortgagor herein contained shall be construed
as a waiver of any subsequent breach of the same or any other covenant herein
contained. The failure of the Collateral Agent and/or the Secured Creditors to
exercise the option for acceleration of maturity and/or foreclosure (including
sale under power of sale hereunder) following any default as aforesaid or to
exercise any other option granted to the Collateral Agent hereunder in any one
or more instances, or the acceptance by the Collateral Agent and/or the Secured
Creditors of partial payments hereunder shall not constitute a waiver of any
such default, nor extend or affect the grace period, if any, but such option
shall remain continuously in force with respect to any unremedied or uncured
default. Acceleration of maturity once claimed hereunder by the Collateral Agent
may, at the option of the Collateral Agent, be rescinded by written
acknowledgment to that effect by the Collateral Agent, but the tender and
acceptance of partial payments alone shall not in any way affect or rescind such
acceleration of maturity, or extend or affect the grace period, if any. the
Collateral Agent may pursue any of its rights without first exhausting its
rights hereunder and all rights, powers and remedies conferred upon the
Collateral Agent herein are in addition to each and every right which the
Collateral Agent may have hereunder at law or equity and may be enforced
concurrently therewith.
SECTION 21. REMEDIES CUMULATIVE.
Each remedy or right of the Collateral Agent shall not be exclusive of but
shall be in addition to every other remedy or right now or hereafter existing at
law or in equity. No delay in the exercise or omission to exercise any remedy or
right accruing on any default shall impair any such remedy or right or be
construed to be a waiver of any such default or acquiescence therein, nor shall
it affect any subsequent default of the same or of a different nature. Every
such remedy or right may be exercised concurrently or independently and when and
as often as may be deemed expedient by the Collateral Agent.
SECTION 22. COLLATERAL AGENT SUBROGATED TO PRIOR LIENS PAID OUT OF LOAN
PROCEEDS.
Should the proceeds of any Loans made by any Lender to the Mortgagor, the
repayment of which is hereby secured, or any part thereof, or any amount paid
out or advanced by the Collateral Agent or any Lender, be used directly or
indirectly to pay off, discharge or satisfy, in whole or in part, any
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prior lien or encumbrance upon the Premises or any part thereof, then the
Collateral Agent shall be subrogated to such other liens or encumbrances and
upon any additional security held by the holder thereof and shall have the
benefit of the priority of all of the same.
SECTION 23. FURTHER ASSURANCES.
The Mortgagor shall execute, acknowledge and deliver any and all such
further acts, conveyances, documents, mortgages and assurances as the Collateral
Agent may reasonably require for accomplishing the purpose hereof forthwith upon
the request of the Collateral Agent, whether in writing or otherwise. The
Mortgagor, within 10 days upon request by mail, shall furnish a written
statement duly acknowledged of the amount due upon this Mortgage and the Secured
Obligations (both unpaid principal and accrued interest and all other items
included in the Secured Obligations) and whether any offset or defenses exist
against the Secured Obligations, and any other information which might
reasonably be requested in connection with the sale of the Secured Obligations,
or any portion thereof or interest therein, to any third party, or an audit of
the Collateral Agent, and which may be relied on for such purposes.
SECTION 24. MORTGAGOR'S OBLIGATIONS ABSOLUTE.
The lien of this Mortgage and the obligations of the Mortgagor hereunder
shall be absolute and unconditional and shall remain in full force and effect
without regard to, and shall not be released, suspended, discharged, terminated
or otherwise affected by, any circumstance or occurrence whatsoever, including,
without limitation:
(a) any lack of validity or enforceability of the Credit Agreement,
the Notes, any other Credit Document, any Designated Hedge Agreement, or
any other agreement or instrument relating thereto;
(b) any renewal, extension, amendment or modification of, or
addition or supplement to, or any waiver, consent, extension, indulgence
or other action or inaction under or in respect of, the Credit Agreement,
the Notes, any other Credit Document, or any Designated Hedge Agreement,
or any other agreement or instrument relating thereto, including, without
limitation, any increase in the Secured Obligations resulting from the
extension of additional credit to the Mortgagor or any of its Subsidiaries
or otherwise;
(c) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Secured
Obligations;
(d) any manner of application of collateral, or proceeds thereof, to
all or any of the Secured Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Secured Obligations or
any other assets of the Mortgagor or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of the Mortgagor or any of its Subsidiaries;
(f) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to
the Mortgagor or any of its Subsidiaries or Affiliates, or any action
taken with respect to this Mortgage by any trustee or receiver, or by any
court, in any such proceeding, whether or not the Mortgagor shall have
notice or knowledge of any of the foregoing; or
(i) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Mortgagor as a guarantor or
surety for the Secured Obligations.
This Mortgage shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by the Collateral Agent or any Secured Creditor upon
the insolvency, bankruptcy or reorganization of the Mortgagor or any of its
Subsidiaries or Affiliates or otherwise, all as though such payment had not been
made.
SECTION 25. NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telex, facsimile transmission or cable communication) and mailed,
telegraphed, telexed, transmitted, cabled or delivered, if to the Mortgagor,
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at 9400 East Market Street, Warren, Ohio 44484, attention: Vice President &
Chief Financial Officer (facsimile: (330) 856-3618); if to the Collateral Agent,
at 1900 East Ninth Street, Cleveland, Ohio 44114, attention Agent Services
(facsimile: (216) 575-2481; or at such other address as shall be designated by
any such person in a written notice to the other person. All such notices and
communications shall be mailed, telegraphed, telexed, telecopied, or cabled or
sent by overnight courier, and shall be effective when received.
SECTION 26. DISCHARGE OF MORTGAGE; RELEASE OF PROPERTY.
(a) Discharge of Mortgage. After the termination of the Total Commitment
and all Designated Hedge Agreements and when all Loans and other Secured
Obligations have been paid in full, this Mortgage shall terminate, and the
Collateral Agent, at the request and expense of the Mortgagor, will execute and
deliver to the Mortgagor a proper instrument or instruments (including Uniform
Commercial Code termination statements on form UCC-3) acknowledging the
satisfaction and termination of this Mortgage, and will duly assign, transfer
and deliver to the Mortgagor (without recourse and without any representation or
warranty) such of the Personal Property Collateral as may be in the possession
of the Collateral Agent and as has not theretofore been sold or otherwise
applied or released pursuant to this Mortgage. In case of failure of the
Collateral Agent to promptly so release this Mortgage, all claims for statutory
penalties and damages are hereby waived.
(b) Release of Collateral. So long as no payment default on any of the
Secured Obligations is in existence or would exist after the application of
proceeds as provided below, the Collateral Agent shall, at the request of the
Mortgagor, release any or all of the Real Property Collateral and/or Personal
Property Collateral, provided that (x) such release is permitted by the terms of
section 9.2 of the Credit Agreement) or otherwise has been approved in writing
by the Required Lenders (or all of the Lenders, if required by section 12.12 of
the Credit Agreement) and (y) if required pursuant to the provisions of section
5.2 of the Credit Agreement, the proceeds of such Collateral are applied to the
prepayment of the Loans.
(c) Request for Release; Effect of Release. At any time that the Mortgagor
desires that the Collateral Agent take any action to give effect to any release
of any or all of the Premises pursuant to the foregoing paragraph (a) or (b), it
shall deliver to the Collateral Agent a certificate signed by a principal
executive officer stating that the release of the respective portion of or all
of the Real Property Collateral and/or Personal Property Collateral is permitted
pursuant to paragraph (a) or (b). In the event that any part of the Premises is
released as provided in paragraph (a), the Collateral Agent, at the request and
expense of the Mortgagor, will duly release such part of the Premises and
assign, transfer and deliver to the Mortgagor (without recourse and without any
representation or warranty) such of the part of the Premises as is then being
(or has been) so sold and as may be in the possession of the Collateral Agent
and has not theretofore been released pursuant to this Mortgage. The Collateral
Agent shall have no liability whatsoever to any Secured Creditor as the result
of any release of all or any part of the Premises by it as permitted by this
section. Upon any release of all or any part of the Premises pursuant to
paragraph (a) or (b), none of the Collateral Agent or any of the Secured
Creditors shall have any continuing right or interest in the same, or the
proceeds thereof.
SECTION 27. MISCELLANEOUS.
(a) Acknowledgment of Receipt of Copies of Credit Documents. The Mortgagor
acknowledges that it has received from the Collateral Agent without charge a
true and correct copy of this Mortgage and each other Credit Document executed
and delivered on or prior to the date hereof.
(b) Indemnification. The Collateral Agent and its successors and assigns
shall be entitled to all of the benefits of the indemnification provisions of
the Credit Agreement and the other Credit Documents. All of the terms and
provisions of section 12.1 of the Credit Agreement (including any defined terms
used therein) are by this reference thereto hereby incorporated into this
Mortgage for the benefit of the Collateral Agent and its successors and assigns
as fully as if written out at length herein, and any references in such section
of the Credit Agreement to the "Borrower" shall be deemed to refer to, and
constitute obligations of, the Mortgagor.
(c) Subsequent Services of Counsel to Collateral Agent. To the extent
services are required of the Collateral Agent's counsel and/or special counsel
after the date hereof, which are normally incident to the closing, amendment,
alteration, and enforcement of this Mortgage, and all provisions herein
contained, the Mortgagor shall, to the extent permitted by law, pay the
reasonable fees therefor, promptly upon the rendering of such a bill and
delivery thereof to the Mortgagor.
20
<PAGE>
(d) No Partnership or Joint Venture. Neither this Mortgage, the Credit
Agreement, the Notes, any other Secured Obligations, any of the other Credit
Documents, or any of the Designated Hedge Agreements, are intended or shall be
construed as creating a partnership or joint venture between the Mortgagor, on
the one hand, and the Collateral Agent or any other holder of any of the Secured
Obligations, on the other hand; and the relationship of the Mortgagor and the
Collateral Agent hereunder shall solely be that of Mortgagor and collateral
agent for the holders of the Secured Obligations.
(e) Election of Collateral Agent to Subordinate. At the option of the
Collateral Agent (acting on instructions from all of the Lenders), this Mortgage
shall become subject and subordinate in whole or in part (but not in respect to
the priority of entitlement to insurance proceeds or any award in condemnation)
to any or all leases and/or subleases of all or any part of the Premises upon
the execution by the Collateral Agent and recording thereof, at any time
hereafter, in the appropriate recorder's office, a unilateral declaration to
that effect.
(f) Waiver of Homestead and Exemption Rights, etc. To the extent permitted
by law with respect to the Secured Obligations or any renewals or extensions
thereof, the Mortgagor waives and renounces any and all homestead and exemption
rights, as well as the benefit of all valuation and appraisement privileges, and
also moratoriums under or by virtue of the constitution and laws of the
jurisdiction in which the Real Property Collateral is located or any other state
or of the United States, now existing or hereafter enacted.
(g) Covenants Run with the Land. All the covenants of the Mortgagor
contained in this Mortgage shall run with the Land.
(h) Usury Savings Clause. All agreements in the Credit Agreement, in the
Notes, in this Mortgage, in any other Credit Document or in any Designated Hedge
Agreement are expressly limited so that in no contingency or event whatsoever,
whether by reason of advancement or acceleration of maturity of any of the
Secured Obligations, or otherwise, shall the amount paid or agreed to be paid
hereunder or thereunder for interest or for the use, forbearance or detention of
money exceed the highest lawful rate permitted under applicable usury laws. If,
from any circumstance whatsoever, fulfillment of any provision of the Credit
Agreement, of the Notes, of this Mortgage, of any other Credit Document or of
any Designated Hedge Agreement, at the time performance of such provision shall
be due, shall involve transcending the limit of validity prescribed by
applicable usury laws which a court of competent jurisdiction may deem
applicable hereto, then, ipso facto, the obligation to be fulfilled shall be
reduced to the limit of such validity and if, from any circumstance whatsoever,
the Collateral Agent or any Secured Creditor shall ever receive hereunder or
under the other Credit Documents or any Designated Hedge Agreement as interest,
or for the use, forbearance or detention of money, an amount which would exceed
the highest lawful rate, the receipt of such excess shall be deemed a mistake
and shall be canceled automatically or, if theretofore paid, such excess shall
be credited against the principal amount of the Secured Obligations or any fees
or other amounts included in the Secured Obligations to which the same may
lawfully be credited, and any portion of such excess not capable of being so
credited shall be rebated to the Mortgagor.
(i) Governing Law; Successors and Assigns; Severability, etc. This
Mortgage shall be construed and enforced according to the laws of the
jurisdiction in which the Real Property Collateral is located, and shall be
binding upon the Mortgagor, its successors and assigns, any subsequent owners of
the Premises, and shall inure to the benefit of the Collateral Agent, its
successors and assigns. Any provision of this Mortgage 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.
(j) No Modification. None of the terms and conditions of this Mortgage may
be changed, waived, modified or varied in any manner whatsoever unless in
writing duly signed by the Mortgagor and the Collateral Agent (with the consent
of the Required Lenders or, to the extent required by section 12.12 of the
Credit Agreement, all of the Lenders), provided, however, that no such change,
waiver, modification or variance shall be made to this section 27(j) without the
consent of each Secured Creditor adversely affected thereby, provided further
that any change, waiver, modification or variance affecting the rights and
benefits of a single Class of Secured Creditors (and not all Secured Creditors
in a like or similar manner) shall require the written consent of the Requisite
Creditors of such Class of Secured Creditors. For the purpose of this Mortgage,
the term "Class" shall mean each class of Secured Creditors, i.e., whether (x)
the Lenders as holders of the Credit Document Obligations or (y) the Designated
Hedge Creditors as holders of the Designated Hedge Obligations. For the purpose
of this Mortgage, the term "Requisite Creditors" of any Class shall mean each of
(x) with respect to the Credit Document Obligations, the Required Lenders and
(y) with respect to the Designated Hedge Obligations, the holders of at least
51% of all obligations outstanding from time to time under the Designated Hedge
Agreements.
(k) Agency Provisions. By accepting the benefits of this Mortgage, each
Lender acknowledges and agrees that the rights and obligations of the Collateral
Agent shall be as set forth in section 11 of the Credit Agreement.
Notwithstanding anything to the contrary contained in of this
21
<PAGE>
Mortgage, the duties an obligations of the Collateral Agent set forth or
incorporated into the provisions of this Mortgage may not be amended or modified
without the consent of the Collateral Agent.
(l) Collateral Agent to Act on Behalf of Secured Creditors. The Secured
Creditors agree by their acceptance of the benefits hereof that this Mortgage
may be enforced on their behalf only by the action of the Collateral Agent,
acting upon the instructions of the Required Lenders (or, after all Credit
Document Obligations have been paid in full, instructions of the holders of at
least the majority of the outstanding Designated Hedge Obligations) and that no
other Secured Creditor shall have any right individually to seek to enforce or
to enforce this Mortgage or to realize upon the security to be granted hereby,
it being understood and agreed that such rights and remedies may be exercised by
the Collateral Agent, for the benefit of the Secured Creditors, upon the terms
of this Mortgage.
(m) Waiver of Trial By Jury. THE MORTGAGOR AND THE COLLATERAL AGENT EACH
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS MORTGAGE OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
(n) Time of Essence. It is specifically agreed that time is of the essence
with respect to this Mortgage and that the waiver of the rights or options, or
obligations secured hereby, shall not at any time thereafter be held to be
abandonment of such rights. Notice of the exercise of any right or option
granted to the Collateral Agent herein, or in the Secured Obligations, is not
required to be given.
(o) Counterparts. This Mortgage may be executed by the Mortgagor in
counterparts, each of which shall be an original and all of which collectively
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage to be duly
executed and delivered as of the date first set forth above.
Signed and acknowledged STONERIDGE, INC.
in the presence of:
By:
- -------------------- ----------------------------
Print Name: Kevin P. Bagby
Vice President--Finance
and Chief Financial Officer
- -------------------
Print Name:
22
<PAGE>
STATE OF OHIO )
) SS.:
COUNTY OF CUYAHOGA )
BEFORE ME, a Notary Public in and for said County and State, personally
appeared the above named STONERIDGE, INC., an Ohio corporation, by Kevin P.
Bagby, its Vice President--Finance and Chief Financial Officer, who acknowledged
that he did sign the foregoing instrument and that the same is his free act and
deed personally and as such officer.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at
Cleveland, Ohio, this 30th day of December, 1998.
---------------------------
Notary Public
[Notarial Seal]
This Instrument Prepared By:
John W. Sager, Esq.
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
23
<PAGE>
EXHIBIT 1
TO
OPEN-END FIRST MORTGAGE, ASSIGNMENT OF LEASES
AND SECURITY AGREEMENT
The following described real estate, to-wit:
LEGAL DESCRIPTION--ORWELL, OHIO
Situated in the Township of Orwell, County of Ashtabula and State of Ohio and
known as being a part of the West Division of Lot No. 1 in Section 14 therein
and bounded and described as follows:
Commencing at a point at the northwest corner of lands conveyed to the
above named grantee by warranty deed recorded in Volume 660, Page 1023 and
Volume 664, Page 809 of the Ashtabula County Record of Deeds said point being in
the north line of Lot No. 1, eight hundred thirty-five and twenty-five one
hundredths (835.25) feet from the centerline of Staley Road; thence south along
the west line of said grantee's lands, seven hundred eighty-two and twenty-eight
one hundredths (782.28) feet to a point; thence west along a line parallel to
the north line of Lot No. 1, approximately three hundred forty-two and
seventy-two one hundredths (342.72) feet to a point in the east line of the
Penn-Central Railroad right-of-way; thence north along the Penn Central Railroad
right-of-way, seven hundred eighty-two and twenty-eight one hundredths (782.28)
feet to a point in the north line of Lot No. 1; thence east along the north line
of Lot No. 1, three hundred forty-two and seventy-two one hundredths (342.72)
feet to the place of beginning and containing within said bounds approximately
six and fifteen one hundredths (6.15) acres of land, be the same more or less,
but subject to all legal highways.
Known as being a part of the West Division of Lot No. 1, in Section 14
therein and bounded and described as follows:
Commencing at a point on the east line of the West Division of Lot No. 1,
521.52 feet south of the north line of Lot No. 1; thence south along said east
line 260.76 feet to a point; thence west 835.25 feet along a line parallel with
the north line of Lot No. 1 to a point; thence north 260.76 feet along a line
parallel with the east line of Lot No. 1 to a point; thence east 835.25 feet
along a line to the place of beginning and containing within said bounds (5)
five acres of land, be the same more or less, but subject to all legal highways.
Known as being part of the West Division of Lot No. 1 in Section No. 14
therein and bounded and described as follows: Commencing at a post at the
Northeast corner of the West Division of Lot No. 1 and Staley road; thence South
along Staley road 521.52 feet to a point; thence West 835.25' along a line
parallel with the North line of Lot No. 1; thence North 521.52 feet along a line
parallel with the east line of said Lot No. 1 to the North line thereof and the
North line of said section; thence East along the lot and section line 835.25'
to the place of beginning and containing 10 acres of land, be the same more or
less, but subject to all legal highways.
[End of Exhibit 1]
<PAGE>
2
<PAGE>
EXHIBIT 2
TO
OPEN-END FIRST MORTGAGE, ASSIGNMENT OF LEASES
AND SECURITY AGREEMENT
Permitted Encumbrances
1. Any liens thereon for taxes, assessments, charges, excises, levies and
other governmental charges which are not due and payable.
2. Any matters of record affecting the premises on the date this Mortgage is
recorded.
3. Zoning ordinances, if any.
[End of Exhibit 2]
<PAGE>
EXHIBIT C-10
---------------------------
FORM OF
CLOSING DATE MORTGAGE
(Portland, Indiana)
---------------------------
<PAGE>
================================================================================
================================================================================
STONERIDGE, INC.
as the Mortgagor
To
NATIONAL CITY BANK
as the Collateral Agent
----------------------------
FUTURE ADVANCE FIRST MORTGAGE,
ASSIGNMENT OF LEASES
AND
SECURITY AGREEMENT
(Total Indebtedness Not to Exceed $500,000,000)
---------------------------
Relating to Property Located at Portland, Indiana
================================================================================
================================================================================
<PAGE>
FUTURE ADVANCE FIRST MORTGAGE, ASSIGNMENT OF LEASES AND
SECURITY AGREEMENT
(Total Indebtedness Not to Exceed $500,000,000)
THIS FUTURE ADVANCE FIRST MORTGAGE, ASSIGNMENT OF LEASES AND SECURITY
AGREEMENT, dated as of December 30, 1998 (as amended, modified, or supplemented
from time to time, "this Mortgage"), by (i) STONERIDGE, INC., an Ohio
corporation (hereinafter, together with its successors and assigns, called the
"Borrower" or the "Mortgagor") which is duly qualified to transact business in
the jurisdiction in which the real property referred to below is located, whose
address is 9400 East Market Street, Warren, Ohio 44484, in favor of (ii)
NATIONAL CITY BANK, a national banking association, as collateral agent under
the Credit Agreement referred to below (herein, together with its successors and
assigns in such capacity, the "Collateral Agent"), whose address is 1900 East
Ninth Street, Cleveland, Ohio 44114, for the benefit of the Secured Creditors
(as defined below):
PRELIMINARY STATEMENTS:
(A) Except as otherwise defined herein, terms used herein and defined in
the Credit Agreement (as defined below) shall be used herein as therein defined.
(B) This Mortgage is made pursuant to the Credit Agreement, dated as of
the date hereof (herein, as amended or otherwise modified, restated or replaced
from time to time, the "Credit Agreement"), among the Borrower, the financial
institutions named as lenders therein (herein, together with their successors
and assigns, the "Lenders"), the other Agents named therein, and National City
Bank, as the Administrative Agent for the Lenders under the Credit Agreement,
providing, among other things, for loans or advances or other extensions of
credit to or for the benefit of the Borrower of up to $425,000,000, with such
loans or advances being evidenced by promissory notes (the "Notes", such term to
include all notes and other securities issued in exchange therefor or in
replacement thereof).
(C) The Borrower or any of its Subsidiaries may from time to time be party
to one or more Designated Hedge Agreements (as defined in the Credit Agreement).
Any institution that participates, and in each case their subsequent assigns, as
a counterparty to any Designated Hedge Agreement (collectively, the "Designated
Hedge Creditors"; and the Designated Hedge Creditors together with the Agents
and the Lenders, collectively the "Secured Creditors"), shall benefit hereunder
as herein provided.
(D) Pursuant to the Subsidiary Guaranty, each Subsidiary Guarantor has
jointly and severally guaranteed to the Secured Creditors the payment when due
of the Guaranteed Obligations (as defined in the Subsidiary Guaranty).
(E) It is a condition precedent to the making of Loans and the issuance
of, and participation in, Letters of Credit under the Credit Agreement that the
Mortgagor shall have executed and delivered to the Collateral Agent this
Mortgage.
(F) The Mortgagor desires to execute this Mortgage to satisfy the
condition described in the preceding paragraph.
(G) The execution and delivery of this Mortgage has been duly authorized
by the Mortgagor, and all things necessary to make this Mortgage a valid,
binding and legal instrument according to its terms, have been done and
performed.
NOW, THEREFORE, in consideration of the sum of $1.00, and other good and
valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, received to the Mortgagor's full satisfaction
<PAGE>
FUTURE ADVANCE FIRST MORTGAGE, ASSIGNMENT OF LEASES AND
SECURITY AGREEMENT
(Total Indebtedness Not to Exceed $500,000,000)
THIS FUTURE ADVANCE FIRST MORTGAGE, ASSIGNMENT OF LEASES AND SECURITY
AGREEMENT, dated as of December 30, 1998 (as amended, modified, or supplemented
from time to time, "this Mortgage"), by (i) STONERIDGE, INC., an Ohio
corporation (hereinafter, together with its successors and assigns, called the
"Borrower" or the "Mortgagor") which is duly qualified to transact business in
the jurisdiction in which the real property referred to below is located, whose
address is 9400 East Market Street, Warren, Ohio 44484, in favor of (ii)
NATIONAL CITY BANK, a national banking association, as collateral agent under
the Credit Agreement referred to below (herein, together with its successors and
assigns in such capacity, the "Collateral Agent"), whose address is 1900 East
Ninth Street, Cleveland, Ohio 44114, for the benefit of the Secured Creditors
(as defined below):
PRELIMINARY STATEMENTS:
(A) Except as otherwise defined herein, terms used herein and defined in
the Credit Agreement (as defined below) shall be used herein as therein defined.
(B) This Mortgage is made pursuant to the Credit Agreement, dated as of
the date hereof (herein, as amended or otherwise modified, restated or replaced
from time to time, the "Credit Agreement"), among the Borrower, the financial
institutions named as lenders therein (herein, together with their successors
and assigns, the "Lenders"), the other Agents named therein, and National City
Bank, as the Administrative Agent for the Lenders under the Credit Agreement,
providing, among other things, for loans or advances or other extensions of
credit to or for the benefit of the Borrower of up to $425,000,000, with such
loans or advances being evidenced by promissory notes (the "Notes", such term to
include all notes and other securities issued in exchange therefor or in
replacement thereof).
(C) The Borrower or any of its Subsidiaries may from time to time be party
to one or more Designated Hedge Agreements (as defined in the Credit Agreement).
Any institution that participates, and in each case their subsequent assigns, as
a counterparty to any Designated Hedge Agreement (collectively, the "Designated
Hedge Creditors"; and the Designated Hedge Creditors together with the Agents
and the Lenders, collectively the "Secured Creditors"), shall benefit hereunder
as herein provided.
(D) Pursuant to the Subsidiary Guaranty, each Subsidiary Guarantor has
jointly and severally guaranteed to the Secured Creditors the payment when due
of the Guaranteed Obligations (as defined in the Subsidiary Guaranty).
(E) It is a condition precedent to the making of Loans and the issuance
of, and participation in, Letters of Credit under the Credit Agreement that the
Mortgagor shall have executed and delivered to the Collateral Agent this
Mortgage.
(F) The Mortgagor desires to execute this Mortgage to satisfy the
condition described in the preceding paragraph.
(G) The execution and delivery of this Mortgage has been duly authorized
by the Mortgagor, and all things necessary to make this Mortgage a valid,
binding and legal instrument according to its terms, have been done and
performed.
NOW, THEREFORE, in consideration of the sum of $1.00, and other good and
valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, received to the Mortgagor's full satisfaction
<PAGE>
from the Collateral Agent, and in consideration of the payments or loans or
advances or other credit facilities made or to be made hereafter to or for the
benefit of the Borrower by the Lenders, the Mortgagor DOES HEREBY grant,
bargain, sell, mortgage, warrant, convey, alien, remise, release, assign,
transfer, grant a security interest in, set over, deliver, confirm and convey
unto the Collateral Agent, upon the terms and conditions of this Mortgage, with
power of sale, each and all of the real properties and interests in real
properties, and further grants to the Collateral Agent a security interest in
and to all other property and interests, described in the following Granting
Clauses (all of such property and interests hereinafter collectively called the
"Premises").
GRANTING CLAUSES
All the estate, right, title and interest of the Mortgagor in, to
and under, or derived from:
GRANTING CLAUSE FIRST
Land
All those certain lot(s), piece(s) or parcel(s) of land more
particularly described in Exhibit 1 attached hereto and made a part
hereof, as the description of the same may be amended or supplemented from
time to time and all and the reversions or remainders in and to said land
and the tenements, hereditaments, easements, rights-of-way or use, rights
(including alley, drainage, crop, timber and cutting, agricultural,
horticultural, mineral, water, oil and gas rights), privileges, royalties
and appurtenances to said land, now or hereafter belonging or in anywise
appertaining thereto, including any such right, title, interest in, to or
under any agreement or right granting, conveying or creating, for the
benefit of said land, any easement, right or license in any way affecting
other property and in, to or under any streets, ways, alleys, vaults,
gores or strips of land adjoining said land or any parcel thereof, or in
or to the air space over said land, all rights of ingress and egress by
motor vehicles to parking facilities on or within said land, and all
claims or demands of the Mortgagor, either at law or in equity, in
possession or expectancy, of, in or to the same (all of the foregoing
hereinafter collectively called the "Land").
GRANTING CLAUSE SECOND
Improvements
All buildings, structures and other improvements now or hereafter
located on the Land, and all appurtenances and additions thereto and
betterments, renewals, substitutions and replacements thereof, owned by
the Mortgagor or in which the Mortgagor has or shall acquire an interest
(all of the foregoing hereinafter collectively called the "Improvements").
GRANTING CLAUSE THIRD
Fixtures and Equipment
Without limitation of the foregoing Granting Clauses, (i) all
"fixtures" (as defined in the Uniform Commercial Code of the State in
which the Premises are located), (ii) all "equipment" (as defined in the
Uniform Commercial Code of the State in which the Premises are located),
(iii) all other fixtures, chattels and articles of personal property
(other than "inventory", as defined in the Uniform Commercial Code of the
State in which the Premises are located), and (iv) all additions,
betterments, improvements, modifications, renewals, alterations, repairs,
attachments,
2
<PAGE>
parts, accessories, appurtenances, substitutions and replacements of or to
any of the foregoing, in each case now or hereafter owned or otherwise
acquired by the Mortgagor or in which the Mortgagor now has or shall
hereafter acquire an interest, wherever situated, and now or hereafter
located on, attached or affixed to, contained in or used in connection
with, the properties referred to in Granting Clause First or Granting
Clause Second, or placed on any part thereof, though not attached or
affixed thereto, including, without limitation, all of the following: (1)
all automobiles, trucks and trailers, and all other automotive or
transportation vehicles and equipment; (2) all machines and machinery and
other apparatus; (3) all engines and motors; (4) all lathes; (5) all drill
presses, punch presses and other presses; (6) all sorting, assembly,
installation and production line equipment; (7) all robotic equipment,
devices and systems; (8) all boilers, turbines, stokers, smelters,
electric arc furnaces, ladle arc furnaces, reheat furnaces and/or other
furnaces and related equipment; (9) all rolling mills, coilers and cooling
beds; (10) all stamping, cutting, drilling, jigging, bending, shaping,
fitting, molding, milling, injection, sizing, patterning, fastening,
connecting, heat treating, galvanizing, painting, embossing, coloring,
identification, measuring, monitoring, quality assurance, finishing and/or
processing machines, equipment and systems; (11) all fabrication equipment
and systems; (12) all packaging, receiving and shipping equipment and
systems; (13) all scales; (14) all counting, measurement, testing,
monitoring, calibration and analytical devices, equipment and systems;
(15) all design and quality assurance or control equipment (including
robotics); (16) all welding equipment and systems; (17) all soldering
equipment and systems; (18) all hydraulic equipment and hydraulics; (19)
all tooling, dies, jigs, casts, molds, patterns, models, stencils and
drawings; (20) all generators, transformers, switches, substations, pumps,
compressors, dynamos and batteries; (21) all cranes and hoists; (22) all
conveyors; (23) all computers; (24) all computer monitors, drives,
servers, and other hardware and software (whether owned, leased or
licensed); (25) all computing equipment; (26) all electronic data
processing equipment; (27) all operating and maintenance manuals, as well
as all plans, specifications and operating instructions, for all equipment
and fixtures; (28) all gas, oil kerosene and other fuels; (29) all
industrial gases and containers therefor; (30) all consumable supplies;
(31) all spare parts, replacement parts, appliances, utensils, tools,
implements and fittings; (32) all repair and maintenance equipment; (33)
all tanks (whether free standing, anchored or otherwise installed in
place, readily movable, above or below ground, or otherwise), drums,
vessels, containers, racks, pallets, skids, bins and shelves or shelving;
(34) all forklifts, liftrucks, pallet movers, dollies, carts, and other
materials handling equipment; (35) all shipping containers; (36) all rail
cars; (37) all pipelines, pipes, ducts and conduits; (38) all wiring and
all electric or other power surge or interruption protection equipment;
(39) all water and other towers; (40) all call systems, dispatch systems,
public address systems, switchboards, telephones, mobile phones, beepers,
two-way (or more) radios, aerials, antennas and other telecommunication,
teleconferencing (including video) and other communication equipment; (41)
all desks, tables, cabinets, bureaus, credenzas, chairs, benches, couches,
coat racks, safes and vaults, photocopy machines, facsimile, telex and
cable machines, postage meters, televisions, video machines, radios,
coffee, soft drink, beverage and fast food machines, lockers, bulletin
boards, photographs, works of art and other decorations, lawn ornaments,
signs, plants and shrubbery (both indoor and outdoor), sinks, basins,
stoves, ranges, microwaves, ovens, dishwashers, refrigerators, ice makers,
cafeteria equipment and supplies, wash tubs, showers, partitions, screens,
awnings, shades, blinds, curtains, draperies, carpets, rugs, furniture and
furnishings; (42) all heating, lighting, power, plumbing, water,
ventilating, cooling, air conditioning, refrigerating, gas, oil, steam,
electrical, solar, waste, incinerating and/or compacting plants, systems,
fixtures and equipment; (43) all elevators and escalators; (44) all vacuum
and other cleaning systems including window washing equipment; (45) all
lawn, parking and sidewalk maintenance equipment, including lawn mowers,
leaf blowers, snow blowers, plows and vacuums; (46) all dust and noise
suppression systems and equipment; (47) all air, water and other pollution
control systems and equipment; (48) all safety
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systems and equipment; (49) all office supplies; (50) all industrial
hygiene equipment and supplies; (51) all security alarms and cameras, and
all identification, timekeeping, access and surveillance systems and
equipment; and (52) all sprinkler systems and other fire detection,
prevention and extinguishing apparatus. If the Lien of this Mortgage in
any item of Fixtures and Equipment is subject to a purchase money or other
security interest therein which is permitted under this Mortgage, then all
of the right, title and interest of the Mortgagor in and to such item is
hereby assigned to the Collateral Agent, together with the benefits of all
deposits and payments now or hereafter made thereon by or on behalf of the
Mortgagor (all of the foregoing property, rights and interests described
in this Granting Clause Third, collectively the "Fixtures and Equipment").
GRANTING CLAUSE FOURTH
Permits, Licenses and Franchises and General Intangibles
Without limitation of the foregoing Granting Clauses, all permits,
licenses, franchises, privileges, grants, consents, exemptions, concession
agreements, development rights, building variances, certificates of
occupancy or operation, and other authorizations or approvals, now or
hereafter issued or granted by any governmental authority with respect to
the ownership of the Premises, or with respect to the ownership,
construction or operation of the Premises, and all "general intangibles"
(as defined in the Uniform Commercial Code of the State in which the
Premises are located) relating in any way to the Premises or the use or
operation thereof, together with and any renewals or extensions of any of
the foregoing, provided that the lien of this Mortgage shall not apply to,
and there shall be excluded from the ambit of this Granting Clause Fourth,
any of the foregoing permits, licenses, franchises, privileges, grants,
consents, exemptions, concession agreements, development rights, building
variances, certificates of occupancy or operation, and other
authorizations or approvals and any other "general intangibles", which, by
their express terms or by reason of applicable law would become void or
voidable if mortgaged, pledged or assigned by the Mortgagor hereunder.
GRANTING CLAUSE FIFTH
Leasehold and Other Contractual Interests
All the leases, lettings and licenses of, and all other contracts
and agreements affecting, the Land, the Improvements, the Fixtures and
Equipment and/or any other property or rights mortgaged or otherwise
conveyed or encumbered hereby, or any part thereof, now or hereafter
entered into, and all amendments, modifications, supplements, additions,
extensions and renewals thereof, and all right, title and interest of the
Mortgagor thereunder, including cash and securities deposited thereunder,
the right to receive and collect the rents, income, proceeds, issues and
profits payable thereunder and the rights to enforce, whether at law or in
equity or by any other means, all provisions and options thereof.
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GRANTING CLAUSE SIXTH
Assignment of Rents, Income and Profits
All rents, income, profits, proceeds and any and all cash collateral
to be derived from the Premises, or the use and occupation thereof, or
under any contract or bond relating to the construction or reconstruction
of the Premises, including all rents, royalties, revenue, rights, deposits
(including security deposits) and benefits accruing to the Mortgagor under
all leases now or hereafter covering the Premises, whether before or after
foreclosure or during the full period of redemption, if any, and the right
to receive the same and apply them against the Secured Obligations or
against the Mortgagor's other obligations hereunder, together with all
contracts, bonds, leases and other documents evidencing the same now or
hereafter in effect and all rights of the Mortgagor thereunder. Nothing
contained in the preceding sentence shall be construed to bind the
Collateral Agent to the performance of any of the provisions of any such
contract, bond, lease or other document or otherwise impose any obligation
upon the Collateral Agent (including any liability under a covenant of
quiet enjoyment contained in any lease or under applicable law in the
event that any tenant shall have been joined as a party defendant in any
action to foreclose this Mortgage and shall have been foreclosed of all
right, title and interest and all equity of redemption in the Premises),
except that the Collateral Agent shall be accountable for any money
actually received pursuant to such assignment. The assignment of said
rents, income, profits, proceeds and cash collateral, and of the aforesaid
rights with respect thereto and to the contracts, bonds, leases and other
documents evidencing the same is intended to be and is an absolute present
assignment from the Mortgagor to the Collateral Agent and not merely the
passing of a security interest.
GRANTING CLAUSE SEVENTH
Other and After Acquired Property
Any and all moneys and other property, of every kind and nature,
which may from time to time be subjected to the lien hereof by the
Mortgagor, through a supplement to this Mortgage or otherwise, or by any
other person or entity, or which may come into the possession of or be
subject to the control of the Collateral Agent, it being the intention and
agreement of the Mortgagor that all property hereafter acquired or
constructed by the Mortgagor shall forthwith upon acquisition or
construction thereof by the Mortgagor and without any act or deed by the
Mortgagor be subject to the lien and security interest of this Mortgage as
if such property were now owned by the Mortgagor and were specifically
described in this Mortgage and conveyed or encumbered hereby or pursuant
hereto, and the Collateral Agent is hereby authorized to receive any and
all such property as and for additional security hereunder.
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GRANTING CLAUSE EIGHTH
Proceeds and Awards
All unearned premiums, accrued, accruing or to accrue under
insurance policies now or hereafter obtained by the Mortgagor, all
proceeds of the conversion, voluntary or involuntary, of any of the
property described in these Granting Clauses into cash or other liquidated
claims, including proceeds of hazard, title and other insurance, and all
claims, entitlements, judgments, damages, awards, settlements and
compensation (including interest thereon) heretofore or hereafter accruing
or made to or for the benefit of the present and all subsequent owners of
the Land, the Improvements, the Fixtures and Equipment and/or any other
property or rights encumbered or conveyed hereby for any injury to or
decrease in the value thereof for any reason, or by any governmental or
other lawful authority for the taking by eminent domain, condemnation or
otherwise of all or any part thereof, including awards for any change of
grade of streets.
TO HAVE AND TO HOLD the Premises unto the Collateral Agent, its successors
and assigns, forever, for the purposes and uses herein set forth, until such
time as all of the Secured Obligations which are secured hereby shall have been
paid in full.
The property, interests and rights hereinabove mentioned, whether owned in
fee or held under lease, is hereinafter referred to as the "Real Property
Collateral" to the extent that the same is realty, and as the "Personal Property
Collateral" to the extent that the same is personalty. The Real Property and the
Personal Property Collateral collectively constitute the Premises.
It is also agreed that if any of the property herein mortgaged is of a
nature so that a security interest therein can be perfected under the Uniform
Commercial Code, this Mortgage shall constitute a security agreement and the
Mortgagor agrees to execute, deliver and file or refile any financing statement,
continuation statement, or other instruments the Collateral Agent may require
from time to time to perfect or renew such security interest under the Uniform
Commercial Code. This Mortgage shall be effective as a financing statement filed
as a fixture filing with respect to all fixtures included within the Premises
and is to be filed for record in the Office of the County Recorder or County
Clerk where the Premises (including such fixtures) are situated. The mailing
address of the Mortgagor is set forth at the beginning of this Mortgage and the
address of the Collateral Agent from which information concerning the security
interest may be obtained is the address of the Collateral Agent set forth at the
beginning of this Mortgage.
If the Mortgagor hereafter acquires any real property, or any interest in
real property, in addition to the Real Property Collateral, which is adjacent
to, or contiguous with, the Land, or otherwise is intended or required to be
subjected to the lien of this Mortgage, the Mortgagor will subject the same to
the lien of this Mortgage by instrument supplemental hereto, satisfactory in
form and substance to the Collateral Agent.
The conditions of this Mortgage are such that the Mortgagor has executed
and delivered this Mortgage for the purpose of securing the performance of its
covenants and agreements contained herein and in any agreement or instrument
made with respect to any Secured Obligations secured hereby and to secure the
payment when due (whether at the stated maturity, by acceleration or otherwise)
of the following indebtedness, liabilities and obligations (including
obligations which, but for the automatic stay under section 362(a) of the
Bankruptcy Code, would become due), now existing or hereafter arising
(collectively, the "Secured Obligations"), for the benefit of the Secured
Creditors, although not necessarily in the order of priority set forth below:
(a) $100,000,000 aggregate principal amount of Revolving Loans made or
to be made to the Mortgagor under the Credit Agreement, maturing on
or before December 31, 2003, with interest thereon as provided in
the Credit Agreement;
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(b) $150,000,000 aggregate principal amount of Term A Loans made or to
be made to the Mortgagor under the Credit Agreement, maturing on or
before December 31, 2003, with interest thereon as provided in the
Credit Agreement;
(c) $175,000,000 aggregate principal amount of Term B Loans made or to
be made to the Mortgagor under the Credit Agreement, maturing on or
before December 31, 2005, with interest thereon as provided in the
Credit Agreement;
(d) all reimbursement obligations in respect of Letters of Credit issued
under the Credit Agreement in an aggregate amount not exceeding
$10,000,000;
(e) all obligations and liabilities of the Mortgagor or any Subsidiary
of the Mortgagor under or in connection with any Designated Hedge
Agreement, now or hereafter entered into with or assigned to any of
the Secured Creditors (all such obligations and liabilities
described in this clause (e) being herein collectively called the
"Designated Hedge Obligations");
(f) all other sums expended or advanced by or on behalf of the
Collateral Agent pursuant to any term or provision of this Mortgage
or any other agreement or instrument relating to or securing any of
the foregoing for the purpose of protecting or preserving the
Premises or the priority of the Lien of this Mortgage, including,
all advances or disbursements of the Collateral Agent for the
payment of taxes, levies, assessments, insurance, insurance premiums
or costs incurred in the protection of the Premises; and
(g) all other liabilities, obligations and indebtedness of the
Mortgagor, its Subsidiaries and Affiliates, and/or any other Credit
Party, incurred under or arising out of or in connection with the
Credit Agreement, the Notes, the other Credit Documents and the
Designated Hedge Agreements, and the due performance and compliance
by the Mortgagor, its Subsidiaries and Affiliates, and any other
Credit Party with all of the terms, conditions, covenants and
agreements contained in the Credit Agreement, the Notes, such other
Credit Documents and the Designated Hedge Agreements;
but only to the extent that the total unpaid Secured Obligations, exclusive of
liabilities and obligations referred to in the preceding clause (f), in the
aggregate and exclusive of the interest on the Secured Obligations, does not
exceed the maximum amount specified in this Mortgage, which is $500,000,000, and
as security for the payment of the Secured Obligations, the Mortgagor has
granted to the Collateral Agent hereunder a lien against the Premises. In
accordance with the provisions of the Notes, the whole of the principal sum of
the Loans which are then unpaid may be declared and become due and payable upon
the occurrence of an Event of Default under the Credit Agreement. This Mortgage
is given for the purpose of creating a lien on the Premises and expressly is to
secure the Secured Obligations, for the benefit of the Secured Creditors,
including but not limited to future advances and other extensions of credit,
whether such advances or other extensions of credit are obligatory or to be made
at the option of the Secured Creditors (or any of them) or otherwise, to the
same extent as if such future advances or other extensions of credit were made
on the date of the execution of this Mortgage. The total amount of the Secured
Obligations may decrease or increase from time to time and the Lenders or other
Secured Creditors may hereafter, as described in this Mortgage, at any time
after this Mortgage is delivered to the county recorder or county clerk for
record, make additional loans, advances or other extensions of credit to or for
the benefit of the Mortgagor or any of its Subsidiaries or Affiliates; provided,
however, that the total unpaid balance of the Secured Obligations which are
secured at any one time by this Mortgage, shall not exceed $500,000,000, plus
interest thereon and any advances or disbursements made for the payment of
taxes, levies or insurance on the Premises with interest on such disbursements.
Any such further loans or advances or other extensions of credit, with interest,
shall be secured by this Mortgage.
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All advances and extensions of credit made hereunder or under the Credit
Agreement, any of the other Credit Documents or any Designated Hedge Agreement,
and any modifications, extensions or renewals of any of the Secured Obligations,
are and shall be made in accordance with the provisions of Indiana Code
32-8-11-9.
PROVIDED, NEVERTHELESS, that if the Secured Obligations which are secured
hereby shall be paid in full when due, and if all of the provisions of the
Credit Agreement, the Notes, the other Credit Documents and the Designated Hedge
Agreements shall be timely performed and observed, then the lien of this
Mortgage and the interest of the Collateral Agent in the Premises shall be
released at the cost of the Mortgagor, but this Mortgage shall otherwise, except
as specifically provided herein, remain in full force and effect.
The Mortgagor, intending to bind its successors and assigns, hereby
covenants and agrees with the Collateral Agent, its successors and assigns, for
its benefit and for the benefit of the Secured Creditors, as follows:
SECTION 1. PAYMENT OF SECURED OBLIGATIONS, PERFORMANCE OF OBLIGATIONS,
ETC.
(a) Payment of Secured Obligations. The Mortgagor shall pay or cause to be
paid the principal of and interest on the Loans and all other amounts included
in the Secured Obligations in accordance with the terms and provisions of the
Credit Agreement, the Notes, the other Credit Documents and the Designated Hedge
Agreements.
(b) Performance of Other Obligations. The Mortgagor will keep and perform
or cause to be kept and performed all covenants, agreements, conditions and
stipulations contained in the other Credit Documents or the Designated Hedge
Agreements which are binding on or otherwise applicable to the Mortgagor.
(c) Waiver of Acceptance, etc. The Mortgagor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Secured Obligations and this Mortgage and any requirement that the Collateral
Agent or any Secured Creditor protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any right or take
any action against any other person, or any collateral, or pursue any other
remedy in the power of the Collateral Agent or any other Secured Creditor.
SECTION 2. TITLE TO PREMISES, PROTECTION OF LIEN OF MORTGAGE, ETC.
(a) Title to Premises, etc. The Mortgagor represents to and covenants with
the Collateral Agent, its successors and assigns, that (i) the Mortgagor has and
will have good, marketable and insurable fee simple title to the Land, free and
clear of all liens, charges and encumbrances of every kind and character,
subject only to Permitted Encumbrances; (ii) the Mortgagor has and will have
full corporate power and lawful authority to encumber and convey the Premises as
provided herein; (iii) the Mortgagor owns and will own all of the Fixtures and
Equipment, free and clear of all liens, charges and encumbrances of every kind
and character, subject only to Permitted Encumbrances; (iv) this Mortgage is and
will remain a valid and enforceable first priority lien on, and first priority
security interest in, the Premises, subject only to Permitted Encumbrances; and
(v) the Mortgagor hereby warrants and will forever warrant and defend such title
and the validity, enforceability and priority of the lien and security interest
hereof against the claims of all persons and parties whomsoever.
(b) Protection of Lien; Defense of Action. If the lien, security interest,
validity or priority of this Mortgage, or if title or any of the rights of the
Mortgagor or the Collateral Agent in or to the Premises, shall be endangered or
questioned, or shall be attacked directly or indirectly, or if any action or
proceeding is commenced,
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to which action or proceeding the Collateral Agent is made a party by reason of
the execution of this Mortgage, or in which it becomes necessary to defend or
uphold the lien of this Mortgage, or the priority thereof or possession of the
Premises, or otherwise to perfect the security hereunder, or if any suit,
action, legal proceeding or dispute of any kind is commenced in which the
Collateral Agent is made a party or appears as party plaintiff or defendant,
affecting the interest created herein, or the Premises, including, but not
limited to, bankruptcy, probate and administration proceedings, other
foreclosure proceedings or any condemnation action involving the Premises, then
the Mortgagor will promptly notify the Collateral Agent thereof (unless the
Collateral Agent has initiated or been served with process in respect thereof)
and the Mortgagor will diligently endeavor to cure any defect which may be
developed or claimed, and will take all necessary and proper steps for the
defense of such action or proceeding, including the employment of counsel, the
prosecution or defense of litigation and, subject to the Collateral Agent's
approval, the compromise, release or discharge of any and all adverse claims.
The Collateral Agent (whether or not named as a party to such actions or
proceedings), is hereby authorized and empowered (but shall not be obligated) to
take such additional steps as it may deem necessary or proper for the
prosecution, defense and control of any such action or proceeding or the
protection of the lien, security interest, validity or priority of this Mortgage
or of such title or rights, including the employment of counsel, the prosecution
or defense of litigation, the compromise, release or discharge of such adverse
claims, the purchase of any tax title and the removal of prior liens and
security interests. The Mortgagor shall, on demand, reimburse the Collateral
Agent for all expenses (including attorneys' fees and disbursements) incurred by
it in connection with the foregoing matters, and the person incurring such
expenses shall be subrogated to all rights of the person receiving such payment.
All such costs and expenses of the Collateral Agent, until reimbursed by the
Mortgagor, shall be part of the Secured Obligations and shall be deemed to be
secured by this Mortgage.
SECTION 3. TAXES AND IMPOSITIONS.
(a) Taxes on the Premises. The Mortgagor will pay when due, and before any
penalty, interest or cost for non-payment thereof may be added thereto, all
taxes, assessments, vault, water and sewer rents, rates, charges and
assessments, levies, permits, inspection and license fees and other governmental
and quasi-governmental charges, general and special, ordinary and extraordinary,
foreseen and unforeseen, heretofore or hereafter assessed, levied or otherwise
imposed against or upon, or which may become a Lien upon, the Premises or any
part thereof or any appurtenance thereto, or the revenues, rents, issues, income
and profits of the Premises or arising in respect of the occupancy, use or
possession thereof (collectively, "Impositions"). The Mortgagor will also pay
any penalty, interest or cost for non-payment of Impositions which may become
due and payable, and such penalties, interest or cost shall be included within
the term Impositions.
(b) Receipts. Unless the Mortgagor is making monthly deposits with the
Collateral Agent pursuant to section 4, or unless the Collateral Agent otherwise
directs, the Mortgagor will furnish to the Collateral Agent, upon its request,
proof of payment at the time same is made, and thereafter, upon receipt,
validated receipts showing payment in full of all Impositions.
(c) Income and Other Taxes. The Mortgagor will promptly pay all income,
franchise and other taxes owing by the Mortgagor, and any stamp taxes which may
be required to be paid in connection with the Secured Obligations, this Mortgage
or any other Credit Document or Designated Hedge Agreement, together with any
interest or penalties thereon, and the Mortgagor will pay any and all taxes,
charges, filing, registration and recording fees, excises and levies imposed
upon the Collateral Agent, the Administrative Agent or the Secured Creditors by
reason of execution of the Credit Agreement, the Notes, this Mortgage, the other
Credit Documents or any Designated Hedge Agreement, or ownership of this
Mortgage or any mortgage supplemental hereto, any security instrument with
respect to any Fixtures and Equipment or any instrument of further assurance.
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(d) Brundage Clause. In the event of the enactment after the date hereof
of any law in the State in which the Premises are located or any other
governmental entity deducting from the value of the Premises for the purpose of
taxation any lien or security interest thereon, or changing in any way the laws
for the taxation of mortgages, deeds of trust or other liens or debts secured
thereby, or the manner of collection of such taxes, so as to affect this
Mortgage, the Secured Obligations, the Collateral Agent, the Administrative
Agent or any of the Secured Creditors, then, and in such event, the Mortgagor
shall, on demand, pay to (or reimburse) the Collateral Agent, the Administrative
Agent or such Secured Creditors, the amount of all taxes, assessments, charges
or liens for which the Collateral Agent, the Administrative Agent or any of the
Secured Creditors is or may be liable as a result thereof, provided that if any
such payment or reimbursement shall be unlawful or would constitute usury or
render the Secured Obligations wholly or partially usurious under applicable
law, then the Collateral Agent may, at its option, declare the Secured
Obligations immediately due and payable or require the Mortgagor to pay or
reimburse the Collateral Agent, the Administrative Agent or any of the Secured
Creditors for payment of the lawful and non-usurious portion thereof.
(e) Right to Contest Impositions. Notwithstanding anything to the contrary
contained in this section 3, the Mortgagor shall have the right to protest
and/or contest any Imposition imposed upon the Premises or any part thereof,
provided that and so long as (1) the same is done by the Mortgagor upon prior
written notice to the Collateral Agent and at the Mortgagor's sole cost and
expense and with due diligence and continuity so as to resolve such protest
and/or contest as promptly as possible; (2) neither the Premises nor any part
thereof is or will be in immediate danger of being forfeited or lost by reason
of such protest or contest; (3) if required by the Collateral Agent, the
Mortgagor shall establish a reserve or other security with the Collateral Agent
in an amount and in form and substance satisfactory to the Collateral Agent for
application to the cost of curing or removing the same from record pursuant to
clause (4) below; (4) in any event, each such contest shall be concluded and the
tax assessment, penalties, interest and costs shall be paid prior to the date
such judgment becomes final or any writ or order is issued under which the
Premises may be sold pursuant to such judgment; and (5) the Mortgagor agrees in
writing to indemnify and hold harmless the Collateral Agent and the Secured
Creditors from and against any and all expenses, claims, demands, obligations,
liabilities, suits, actions and penalties upon or arising out of such protest
and/or contest. Pending the determination of any such protest or contest, the
Mortgagor shall not be obligated to pay any such Imposition unless nonpayment of
such Imposition will subject the Premises or any part thereof to sale or other
liability or forfeit by reason of non-payment. In addition, to the extent that
the same may be permitted by law, the Mortgagor shall have the right to apply
for the conversion of any Imposition to make the same payable in annual
installments over a period of years, and upon such conversion the Mortgagor
shall be obligated only to pay and discharge said periodic installments as
required by this section 3.
SECTION 4. TAX AND INSURANCE DEPOSITS.
(a) Amount of Deposits. To further secure the Mortgagor's obligations
under sections 3 and 10, but not in lieu thereof, the Collateral Agent, at its
option, following the occurrence and during the continuance of an Event of
Default, may require that the Mortgagor deposit with the Collateral Agent,
monthly on the first day of each month, a sum equal to one-twelfth (1/12) of the
estimated annual cost of all Impositions levied on the Premises, and a sum equal
to one-twelfth (1/12) of the estimated annual insurance premiums required to
keep the Improvements and the Fixtures and Equipment insured as required by
section 10 hereof, and the Mortgagor shall, accordingly, make such deposits. In
addition, if required by the Collateral Agent, the Mortgagor shall also deposit
with the Collateral Agent a sum of money which, together with the aforesaid
monthly installments, will be sufficient to make each of said payments of
Impositions and premiums, at least 10 days before such payments are due. If the
amount of any such payments is not ascertainable at the time any such deposit is
required to be made, the deposit shall be made on the basis of the Collateral
Agent's estimate thereof, and, when such amount is fixed for the then-current
year, the Mortgagor shall promptly deposit any deficiency with the Collateral
Agent.
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(b) Use of Deposits. All funds so deposited shall, until so applied,
constitute additional security for the Secured Obligations, shall be held by the
Collateral Agent in a separate account, without interest (except to the extent
required under applicable law), may be commingled with other funds of the
Collateral Agent and, provided that no Event of Default shall have occurred and
be continuing hereunder, shall be applied in payment of the aforesaid amounts
prior to their becoming delinquent, to the extent that Collateral Agent shall
have such funds on hand, and provided, further, that the Collateral Agent shall
have no obligation to use said funds to pay any installment of Impositions prior
to the last day on which payment thereof may be made without penalty or interest
or to pay an insurance premium prior to the due date thereof. It shall be the
Mortgagor's responsibility to furnish the Collateral Agent with bills or
invoices therefor in sufficient time to pay the same before any penalty or
interest attaches and before said policies of insurance lapse, and the
Collateral Agent shall have no responsibility for payment of the same in the
absence of such bills or invoices. If an Event of Default hereunder shall have
occurred and be continuing, or if any of the Secured Obligations shall have been
accelerated as provided in the Credit Agreement or any Designated Hedge
Agreement, all funds so deposited may, at the Collateral Agent's option, be
applied to the Secured Obligations in the order determined by the Collateral
Agent or to cure said Event of Default or as provided in this section.
(c) Transfer of Mortgage. Upon an assignment or other transfer of this
Mortgage, the Collateral Agent shall have the right to pay over the balance of
such deposits in its possession to the assignee or other successor, and the
Collateral Agent shall thereupon be completely released from all liability with
respect to such deposits and the Mortgagor or the owner of the Premises shall
look solely to the assignee or transferee with respect thereto. This provision
shall apply to every transfer of such deposits to a new assignee or transferee.
(d) Transfer of Premises. A permissible transfer of record title to the
Premises shall automatically transfer to the new owner the beneficial interest
in any deposits under this section. Upon full payment and satisfaction of this
Mortgage or, at the Collateral Agent's option, at any prior time, the balance of
amounts deposited in the Collateral Agent's possession shall be paid over to the
record owner of the Premises, and no other person shall have any right or claim
thereto in any event.
(e) Depository. The Mortgagor agrees, at the Collateral Agent's request
and at the Mortgagor's expense, to make the aforesaid deposits with the
Collateral Agent or such service or financial institution as the Collateral
Agent may from time to time designate in lieu of the Collateral Agent.
SECTION 5. LIENS AND LIABILITIES.
(a) Discharge of Mechanic's Liens, etc. The Mortgagor will pay, bond or
otherwise discharge, from time to time when the same shall become due, all
lawful claims and demands of mechanics, materialmen, laborers and others which,
if unpaid, might result in, or permit the creation of, a lien on the Premises,
or on the revenues, rents, issues, income or profits arising therefrom and, in
general, the Mortgagor shall do, or cause to be done, at the Mortgagor's sole
cost and expense, everything necessary to fully preserve the lien, security
interest and priority of this Mortgage.
(b) Creation of Liens. The Mortgagor will not, without the Collateral
Agent's consent, create, place or permit to be created or placed, or through any
act or failure to act acquiesce in the placing of, or allow to remain, any deed
of trust, mortgage, voluntary or involuntary lien, whether statutory,
constitutional or contractual, security interest, encumbrance or charge, or
conditional sale or other title retention document, against or covering the
Premises, prior to, on a parity with or subordinate to the lien of this
Mortgage, other than the following ("Permitted Encumbrances"): (i) the lien of
this Mortgage; (ii) the Permitted Liens (as defined in the Credit Agreement);
and (iii) such other matters of record as may be described in Exhibit 2 or as to
which the Collateral Agent has otherwise
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specifically consented in writing. If any of the foregoing, other than Permitted
Encumbrances, becomes attached to the Premises without such consent, the
Mortgagor will promptly cause the same to be discharged and released.
(c) No Consent of Collateral Agent to Liens to be Implied. Nothing in the
Credit Agreement, the Notes, this Mortgage, the other Credit Documents or any
Designated Hedge Agreement shall be deemed or construed in any way as
constituting the consent or request by the Collateral Agent, express or implied,
to any contractor, subcontractor, laborer, mechanic or materialman for the
performance of any labor or the furnishing of any material for any improvement,
construction, alteration or repair of the Premises.
(d) Right to Contest. Notwithstanding anything to the contrary contained
in this section 5, the Mortgagor shall have the right to contest in good faith
the validity of any such lien, encumbrance, charge or security interests,
provided that and so long as (1) the same is done by the Mortgagor upon prior
written notice to the Collateral Agent and at the Mortgagor's sole cost and
expense and with due diligence and continuity so as to resolve as promptly as
possible such question of validity; (2) neither the Premises nor any part
thereof will be in immediate danger of being forfeited or lost by reason of such
contest; (3) such contest shall not subject the Collateral Agent to prosecution
for a criminal offense or a claim for civil liability; (4) if required by the
Collateral Agent, the Mortgagor shall either bond such lien, encumbrance, charge
or security interest or establish a reserve or other security with the
Collateral Agent in an amount and in form and substance satisfactory to the
Collateral Agent for application towards the cost of curing or removing the same
from record pursuant to clause (5) below; (5) the Mortgagor shall thereafter
diligently proceed to cause such lien, encumbrance or charge to be removed and
discharged prior to the date the Premises is listed for an in rem action with
respect to such lien, encumbrance or charge or any writ or order is issued under
which the Premises may be sold pursuant to a final judgment; (6) the Mortgagor
agrees in writing to indemnify and hold harmless the Collateral Agent and the
Secured Creditors from and against any and all expenses, claims, demands,
obligations, liabilities, suits, actions and penalties upon or arising out of
such contest and (7) no Event of Default hereunder shall have occurred and be
continuing.
SECTION 6. TRANSFERS AND MERGERS; LEASES, ETC.
The Mortgagor shall not (i) sell, assign, transfer or otherwise dispose of
the Premises or any part thereof or interest therein, or (ii) merge or
consolidate with any other person, or (iii) lease all or any portion of the
Premises to any other person, except pursuant to a lease which is subject and
subordinate in all respects to this Mortgage, or (iv) enter into any contract or
agreement to do any of the foregoing, expressly including, without limitation,
any land contract, lease/purchase, lease/option or option agreement, except to
the extent permitted by, and in compliance with the requirements of, section 9.2
of the Credit Agreement.
SECTION 7. MAINTENANCE; ALTERATIONS; REPAIR OR RESTORATION OF LOSS OR
DAMAGE CAUSED BY CASUALTY; PREPAYMENT UPON EVENT OF LOSS.
(a) Repair and Maintenance. The Mortgagor will operate and maintain the
Premises in good order, repair and operating condition, ordinary wear and tear
excepted, and will promptly make all necessary repairs, renewals, replacements,
additions and improvements to the Premises, interior and exterior, structural
and nonstructural, foreseen and unforeseen, required by law or any restrictive
covenant affecting the Premises or otherwise necessary so that the Premises will
at all times be in good operating condition, ordinary wear and tear excepted,
and fit and proper for the purposes for which it is used and operated at the
date hereof. The Mortgagor shall not in any event commit waste upon the Premises
or suffer waste to be committed thereon.
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(b) Replacement of Fixtures and Equipment. The Mortgagor will keep the
Premises fully equipped and will replace all worn-out or obsolete Fixtures and
Equipment with Fixtures and Equipment comparable thereto when new, and will not,
without the Collateral Agent's consent, remove from the Premises any item of the
Fixtures and Equipment covered by this Mortgage unless (i) the same is replaced
by the Mortgagor with an item of equal suitability and value when new, owned by
the Mortgagor and subject to the lien and security interest of this Mortgage,
free and clear of any lien or security interest (other than Permitted
Encumbrances), or (ii) in the case of any such Fixtures and Equipment which is
obsolete and surplus to its needs, the same is disposed of in the ordinary
course of business and in compliance with section 9.2 of the Credit Agreement.
(c) Alterations of Improvements, etc. No buildings, structures or other
substantial Improvements on the Premises shall be altered in any material
respect or demolished or removed by the Mortgagor, provided that the Mortgagor
may make alterations and additions (including structural alterations) to the
Improvements if (i) such alterations do not materially reduce the value or
marketability of the Premises or the uses or utility of the Premises; or (ii)
such alterations are required by applicable law, rule or regulation.
(d) Event of Loss, etc. If the Improvements or the Fixtures and Equipment
suffer any damage or loss or are destroyed by fire, rain, storm, flood,
earthquake, or any other casualty, whether or not covered by insurance, the
Mortgagor will (i) if the same constitutes an Event of Loss requiring prepayment
of any of the Loans pursuant to section 5.2 of the Credit Agreement, so prepay
such Loans as provided in the Credit Agreement, or (ii) otherwise repair,
replace or restore the Improvements and/or Fixtures and Equipment to the
condition in which they are required to be maintained hereunder immediately
prior to such damage, loss or destruction
SECTION 8. COMPLIANCE WITH LAWS AND INSURANCE REQUIREMENTS, ETC.
(a) Compliance with Laws, etc. The Mortgagor covenants that the Premises
will at all times be constructed, installed, maintained and operated in
compliance with all applicable requirements of:
(i) all laws, rules, regulations, orders, authorizations, permits
and licenses of all governmental authorities, federal, state and local,
having jurisdiction over the Mortgagor, the Premises or any part thereof,
including, without limitation, (w) all Environmental Laws, (x) the
Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq., (y) the
Americans with Disabilities Act of 1990, and (z) all state and local laws
and ordinances related to handicapped access and all rules, regulations,
and orders issued pursuant thereto including, without limitation, the
Americans with Disabilities Act Accessibility Guidelines for Buildings and
Facilities (collectively as referred to in clause (y) and this clause (z),
"Access Laws"); and
(ii) all restrictive covenants affecting any portion or all of the
Real Property Collateral; .
other than those requirements (A) being contested in good faith by appropriate
proceedings, as to which adequate reserves are established to the extent
required under GAAP, and (B) the noncompliance with which would not have, and
which would not be reasonably expected to have, a Material Adverse Effect.
(b) Alterations Affecting Compliance with Access Laws. Notwithstanding any
provisions set forth herein or in any other document regarding the Collateral
Agent's approval of alterations of the Real Property Collateral, the Mortgagor
shall not alter the Real Property Collateral in any manner which would increase
in any material respect the responsibilities of the Mortgagor for compliance
with the applicable Access Laws without the prior written approval of the
Collateral Agent. The foregoing shall apply to tenant improvements constructed
by the Mortgagor or by
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any of its tenants. The Collateral Agent may condition any such approval upon
receipt of a certificate of Access Law compliance from an architect, engineer,
or other person acceptable to the Collateral Agent.
(c) Notice of Violation of Access Laws. The Mortgagor does hereby agree to
give prompt notice to the Collateral Agent of the receipt by the Mortgagor of
any complaints related to violation of any Access Laws and of the commencement
of any proceedings or investigations which relate to compliance with applicable
Access Laws.
(d) Licenses and Permits, etc. The Mortgagor shall (i) observe and comply
with all conditions and requirements necessary to preserve and extend any and
all rights, licenses, permits (including but not limited to zoning variances,
special exceptions and non-conforming uses), privileges, franchises and
concessions which are applicable to the Premises or any part thereof or which
have been granted to or contracted for by the Mortgagor in connection with any
existing or presently contemplated use of the Premises, and (ii) obtain and keep
in full force and effect all necessary governmental and municipal approvals as
may be necessary from time to time to comply in all material respects with all
Environmental Laws, all Access Laws and other statutory or regulatory
requirements; except in any such case referred to in clause (i) or (ii) above
where the noncompliance would not have, and would not be reasonably expected to
have, a Material Adverse Effect.
(e) Flood Hazards; Utilities; Streets. The Mortgagor represents and
warrants that (i) the Premises are not located in an area identified by the
Secretary of Housing and Urban Development or a successor thereto as an area
having special flood hazards pursuant to the terms of the National Flood
Disaster Protection Act of 1973, as amended; (ii) the Premises are served by all
utilities required for the present use thereof; and (iii) all streets necessary
to serve the Premises for the use thereof as herein contemplated have been
completed and are serviceable and have been dedicated or accepted by the
appropriate governmental entities.
(f) Zoning; Title Matters. The Mortgagor will not (i) initiate or support
any zoning reclassification of the Premises, seek any variance under existing
zoning ordinances applicable to the Premises or use or permit the use of the
Premises in a manner which would result in such use becoming a non-conforming
use under applicable zoning ordinances, (ii) modify, amend or supplement any
Permitted Encumbrances, (iii) impose any restrictive covenants or encumbrances
upon the Premises, execute or file any subdivision plat affecting the Premises
or consent to the annexation of the Premises to any municipality or (iv) permit
or suffer the Premises to be used by the public or any person in such manner as
might make possible a claim of adverse usage or possession or of any implied
dedication or easement.
(g) Insurance Requirements. The Mortgagor shall observe and comply with
any and all conditions and requirements attached to or made a part of the
insurance relating to the Premises which is maintained in accordance with
section 10.
SECTION 9. ENVIRONMENTAL MATTERS.
(a) Without limitation of the provisions of section 8 hereof, the
Mortgagor hereby (i) reaffirms its representations contained in section 7.13 of
the Credit Agreement, (ii) covenants to perform and observe all of the terms and
provisions of the Credit Agreement relating to compliance by it with
Environmental Laws and notice by it and indemnification by it of Environmental
Claims, including, without limitation, the covenants contained in section 8.8 of
the Credit Agreement.and the indemnification obligations contained in section
12.1 of the Credit Agreement; and (iii) agrees that all of the Secured Creditors
shall be considered Indemnitees as defined in section 12.1(g) of the Credit
Agreement.
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(b) Any costs or expenses reasonably incurred by a person to be
indemnified hereunder for which the Mortgagor is responsible shall be paid to
the person to be indemnified on demand, and failing prompt reimbursement, shall
be added to the Secured Obligations and earn interest at the interest rate
provided in the last sentence of section 2.7(c) of the Credit Agreement, or such
lesser rate as is the maximum legally permissible rate of interest (the "Default
Rate"), until paid in full.
(c) The Mortgagor's representations, warranties, and obligations under
this section shall not be terminated, released, discharged, extinguished, or
otherwise affected by any foreclosure of any lien, indebtedness or obligation,
any satisfaction of the Secured Obligations or the release or discharge of the
Premises or any part thereof or any other action or thing, except and unless
such representations, warranties, and obligations are expressly released in
writing by the Collateral Agent, which writing shall refer particularly to this
section. The provisions of this section may be enforced at any time by any of
the Secured Creditors, the Collateral Agent or any other person entitled to be
indemnified hereunder and, without limiting the foregoing, shall survive the
payment or other satisfaction by any means of the obligations evidenced by the
Notes and the release and discharge of this Mortgage, except in the case of a
specific written release by the Collateral Agent as to this section, as referred
to above.
SECTION 10. INSURANCE.
(a) Required Insurance. The Mortgagor will maintain insurance with
responsible companies in such amounts and against such risks as is usually
carried by owners of similar businesses and properties (and with such
deductibles and levels of self-insurance as are usually maintained by owners of
similar businesses and properties and as are consistent with the Mortgagor's
practices as of the date of the execution and delivery hereof), provided that in
any event the Mortgagor will maintain:
(i) All Risk Extended Coverage Insurance: insurance against loss or
damage covering the Improvements, the Fixtures and Equipment and all other
tangible personal property of the Mortgagor located on the Premises by
reason of any loss or damage by fire, storms, and other hazards, perils,
casualties and risks, including without limitation risks usually covered
by extended coverage policies issued in the jurisdiction in which the
Improvements are located, which insurance shall:
(A) name National City Bank, as Collateral Agent as an
additional insured and as loss payee,
(B) provide coverage in an amount not less than the greater of
(x) 100% of the replacement costs of the Improvements and the
Fixtures and Equipment, (y) the full insurable value of the
Improvements and the Fixtures and Equipment, and (z) the amount
applicable to the Improvements and the Fixtures and Equipment
necessary so that neither the Mortgagor (or any of its Affiliates)
or the Collateral Agent shall be considered or shall become a
co-insurer of any loss under such policy, and
(C) provide for a deductible or self-insurance retention in an
amount consistent with the Mortgagor's current practices or such
greater amount as is reasonably acceptable to the Collateral Agent;
(ii) Flood Insurance: if the area in which the Real Property
Collateral is located has been designated as flood prone or a flood risk
area, as defined by the Flood Disaster Protection Act of 1973, as amended,
flood insurance, which insurance shall:
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(A) name National City Bank, as Collateral Agent as an
additional insured and as loss payee,
(B) provide coverage in an amount not less than the greater of
(x) 100% of the replacement costs of the Improvements and the
Fixtures and Equipment, (y) the full insurable value of the
Improvements and the Fixtures and Equipment, and (z) the amount
applicable to the Improvements and the Fixtures and Equipment
necessary so that neither the Mortgagor (or any of its Affiliates)
or the Collateral Agent shall be considered or shall become a
co-insurer of any loss under such policy; provided that if flood
insurance in the required amount is not available, flood insurance
shall be maintained in the maximum amount available;
(C) provide for a deductible or self-insurance retention of an
amount reasonably acceptable to the Collateral Agent; and
(D) comply with any additional requirements of the National
Flood Insurance Program as set forth in such Act;
(iii) Commercial General Liability Insurance: insurance against
claims for bodily injury, death or property damage occurring on, in or
about the Premises and any other facilities owned, leased or used by the
Mortgagor (including adjoining streets, sidewalks and waterways), which
insurance shall:
(A) name National City Bank, as Collateral Agent as an
additional insured,
(B) provide coverage in an amount not less than $1,000,000 per
occurrence and $2,000,000 in the aggregate, plus umbrella coverage
of not less than $3,000,000; and
(C) provide for a deductible or self-insurance retention in an
amount consistent with the Mortgagor's current practices or such
greater amount as is reasonably acceptable to the Collateral Agent;
(iv Workers' Compensation Insurance: insurance against claims for
injuries to or death of employees (including Employers' Liability
Insurance) to the extent required by applicable law;
(v Business Interruption Insurance: insurance against loss of
operating income for a period of at least six months, occasioned by reason
of any peril affecting the operations of the Mortgagor; and
(vi Other Insurance: such other and additional insurance, in such
amounts and with such coverages as are then customary for property similar
in use and located in the same state in which the Premises is located.
Such insurance shall be written by financially responsible companies selected by
the Mortgagor and having an A.M. Best rating of "A-" or better and being in a
financial size category of "VII" or larger, or by other companies acceptable to
the Collateral Agent, and (other than workers' compensation insurance) shall
name the Collateral Agent, as loss payee (in the case of insurance described in
items (i) and (ii)) or as an additional named insured (in the case of the
insurance described in items (iii), (v) and (vi) above), in each case as its
interests may appear. Each policy referred to in this section shall provide that
it will not be canceled or reduced or expire except after not less than 30 days'
written notice to the Collateral Agent and shall also provide that the interests
of the Collateral Agent shall not be invalidated by an act or negligence of the
Mortgagor or any person having an interest in any facility owned, leased or used
by the Mortgagor nor by occupancy or use of any facility owned, leased or used
by the
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Mortgagor for purposes more hazardous than permitted by such policy nor by any
foreclosure or other proceedings relating to any facility owned, leased or used
by the Mortgagor. The Mortgagor will advise the Collateral Agent promptly of any
policy cancellation, reduction or amendment. All of such insurance shall be
primary and non-contributing with any insurance which may be carried by the
Collateral Agent. All insurance policies, to the extent of its interest, are to
be for the benefit of and first payable in case of loss to the Collateral Agent
as first mortgagee without contribution. At or prior to the time of the initial
Borrowing by the Mortgagor, it will provide to the Collateral Agent (x)
certificates or endorsements naming the Collateral Agent as an additional
insured or loss payee with respect to the casualty and liability insurance
maintained as required hereby with respect to the Premises, and (y) if requested
to do so, copies of all insurance policies maintained by it as required hereby.
The Mortgagor shall deliver to the Collateral Agent contemporaneously with the
expiration or replacement of any policy of insurance required to be maintained
hereunder a certificate as to the new or renewal policy.
(b Proceeds of Insurance. All amounts recoverable under any policy of
casualty insurance are hereby assigned to the Collateral Agent. In the event of
a loss, and if an Event of Default has occurred and is continuing or if any
required prepayment of any of the Secured Obligations is required to be made at
such time or as a result thereof, the Collateral Agent is authorized and
empowered, at its option, to adjust or compromise any loss covered by any
insurance policies on the Premises, to collect and receive the proceeds
therefrom and, after deducting from such proceeds any expenses incurred by it in
the collection or handling thereof, to apply the net proceeds to the Secured
Obligations in accordance with the provisions of the Credit Agreement. If any
such net proceeds are not to be so applied, the Collateral Agent is authorized
to apply the net proceeds in any one or more of the following ways, subject to
the applicable provisions of the Credit Agreement: (i) use the same or any part
thereof to fulfill any of the covenants contained herein as the Collateral Agent
may determine; (ii) use the same or any part thereof to replace and restore the
Premises to a condition satisfactory to the Collateral Agent; or (iii) release
the same or any part thereof to the Mortgagor to cover the cost of repair or
restoration of the Improvements.
(c Power of Attorney. The Collateral Agent is hereby irrevocably appointed
by the Mortgagor as attorney for the Mortgagor to assign any policy to itself or
its nominees in the event of the foreclosure of this Mortgage. In the event of
foreclosure of this Mortgage, or other transfer of title of the Premises in lieu
of foreclosure, all right, title and interest of the Mortgagor in and to any
insurance policies then in force shall pass to the purchaser or grantee thereof.
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SECTION 11. CONDEMNATION.
(a Condemnation. The Mortgagor will give the Collateral Agent immediate
notice of the actual or threatened commencement of any proceedings under eminent
domain affecting all or any part of the Premises or any easement therein or
appurtenance thereof, including severance and consequential damage and change in
grade of streets, and will deliver to the Collateral Agent copies of any and all
papers served in connection with any such proceedings. The Mortgagor agrees that
all awards heretofore or hereafter made by any public or quasi-public authority
to the present and all subsequent owners of the Premises by virtue of an
exercise of the right of eminent domain by such authority, including any award
for taking of title, possession or right of access to a public way, or for any
change of grade or streets affecting the Premises, are hereby assigned to the
Collateral Agent. If case of any such proceedings, and if an Event of Default
has occurred and is continuing or if any required prepayment of any of the
Secured Obligations is required to be made at such time or as a result thereof,
the Collateral Agent is authorized and empowered, at its option, to collect and
receive the proceeds of any such awards from the authorities making the same and
to give proper receipts therefor, and after deducting from such proceeds any
expenses incurred by the Collateral Agent in the collection or handling thereof,
to apply the net proceeds to the Secured Obligations in accordance with the
provisions of the Credit Agreement. If any such net proceeds are not to be so
applied, the Collateral Agent is authorized, at its option, to apply the net
proceeds in any one or more of the following ways, subject to the applicable
provisions of the Credit Agreement: (A) use the same or any part thereof to
fulfill any of the covenants contained herein as the Collateral Agent may
determine; (B) use the same or any part thereof to replace and restore the
Premises to a condition satisfactory to the Collateral Agent; or (C) release the
same or any part thereof to the Mortgagor to cover the cost of repair or
restoration of the Improvements.
(b Further Assurances. The Mortgagor hereby covenants and agrees to and
with the Collateral Agent, upon the request of the Collateral Agent to make,
execute and deliver any and all assignments and other instruments sufficient for
the purpose of assigning all such awards to the Collateral Agent, free and clear
and discharged of any and all encumbrances of any kind or nature whatsoever
except as above stated.
(c Installment Payment of Secured Obligations Not Impaired.
Notwithstanding any taking under the power of eminent domain, alteration of the
grade of any street, or other injury to or decrease in value of the Premises by
any public or quasi-public authority or corporation, the Mortgagor shall
continue to pay installments on the Secured Obligations owed by it and any
reduction in the principal sum resulting from the application by the Collateral
Agent of such award or payment as hereinafter set forth shall be deemed to take
effect only on the date of such receipt.
SECTION 12. RIGHT OF COLLATERAL AGENT TO MAKE PAYMENTS ON BEHALF OF
MORTGAGOR, ETC.
(a Right of Collateral Agent to Make Payments, etc. In the event the
Mortgagor shall fail to comply with any or all of its covenants, agreements,
conditions and stipulations herein set forth, then the Collateral Agent shall
after notice to the Mortgagor be and hereby is authorized and empowered at its
option, but without legal obligation to do so, to pay or perform the same
without waiver of any other remedy. In addition, the Collateral Agent is
authorized and empowered at its option, but without legal obligation to do so,
upon not less than two business Days' prior notice to the Chief Financial
Officer of the Mortgagor, to enter, or have its agents enter, the Premises
whenever necessary for the purpose of inspecting the Premises and curing any
default hereunder. The Mortgagor agrees that the Collateral Agent shall
thereupon have a claim against the Mortgagor for all sums paid by the Collateral
Agent for such defaults so cured, together with a lien upon the Premises for the
sum so paid plus interest at the Default Rate.
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(b Collateral Agent Protected; Further Rights, etc. The Collateral Agent,
in making any payment herein and hereby authorized in the place and stead of the
Mortgagor (i) relating to taxes, assessments, water rates, sewer rentals and
other governmental or municipal charges, fines, impositions or liens asserted
against the Premises, may do so according to any bill, statement or estimate
procured from the appropriate public authority without inquiry into the validity
thereof; or (ii) relating to any adverse title, lien, statement of lien,
encumbrance, claim or charge, shall be the sole judge of the validity of same;
or (iii) otherwise relating to any purpose herein and hereby authorized, but not
enumerated in this section, may do so whenever, in its good faith judgment and
discretion, such payment shall seem necessary or desirable to protect the full
security intended to be created by this Mortgage. In connection with any such
payment, the Collateral Agent, at its option, may and is hereby authorized to
obtain a continuation report of title prepared by a title insurance company, the
cost and expenses of which shall be repayable by the Mortgagor upon demand and
shall be secured hereby.
SECTION 13. SECURITY AGREEMENT PROVISIONS.
This Mortgage is hereby deemed to be as well a security agreement for the
purpose of creating hereby a security interest securing the Secured Obligations
in and to the Personal Property Collateral. Without derogating any of the
provisions of this Mortgage, the Mortgagor by this Mortgage:
(a grants to the Collateral Agent a security interest in all of the
Mortgagor's right, title and interest in and to all Personal
Property Collateral, including, but not limited to, the items
referred to above, together with all additions, accessions and
substitutions and all similar property hereafter acquired and used
or obtained for use on, or in connection with, the Real Property
Collateral; the proceeds of the Personal Property Collateral are
intended to be secured hereby; provided, however, that such intent
shall never constitute an expressed or implied consent on the part
of the Collateral Agent to the sale of any or all Personal Property
Collateral except as specifically permitted under any of the
applicable provisions of this Mortgage or any of the other Credit
Documents;
(b agrees that the security interest hereby granted by this Mortgage
shall secure the payment of the Secured Obligations;
(c agrees not to sell, convey, mortgage or grant a security interest
in, or otherwise dispose of or encumber, any of the Personal
Property Collateral or any of the Mortgagor's right, title or
interest therein, except in compliance with the requirements of
section 9.2 of the Credit Agreement;
(d agrees that if any of the Mortgagor's rights in the Personal
Property Collateral are voluntarily or involuntarily transferred,
whether by sale, creation of a security interest, attachment, levy,
garnishment or other judicial process, without the written consent
of the Collateral Agent, such transfer shall constitute a default by
the Mortgagor under the terms of this Mortgage;
(e authorizes the Collateral Agent to file, in the jurisdiction where
this Mortgage will be given effect, financing statements covering
the Personal Property Collateral and at the request of the
Collateral Agent, the Mortgagor shall join the Collateral Agent in
executing one or more of such financing statements pursuant to the
Uniform Commercial Code in a form satisfactory to the Collateral
Agent and the Mortgagor shall pay the cost of filing the same in all
public offices at any time and from time to time wherever the
Collateral Agent deems filing or recording of any financing
statements or of this Mortgage to be desirable or necessary; and
(f acknowledges that the Mortgagor, as of the date hereof, has joined
the Collateral Agent in the execution of one or more Uniform
Commercial Code financing statements to be filed to perfect the
security interest in the Personal Property created by this Mortgage.
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SECTION 14. FILINGS AND RECORDINGS.
The Mortgagor agrees at all time to cause this Mortgage, and each
amendment or modification hereof or supplement hereto, and financing statements
covering personal property (and continuation statements in respect thereof), if
necessary or appropriate under the Uniform Commercial Code, as in effect in the
jurisdiction in which the Real Property Collateral is located, and all
assignments of leases, to be recorded, registered and filed, and kept recorded,
registered and filed, in such manner and in such places as appropriate, and
shall comply with all applicable statutes and regulations in order to establish,
preserve and protect the security and priority of this Mortgage, and such
assignments and the rights of the Collateral Agent thereunder. The Mortgagor
shall pay, or cause to be paid, all taxes, fees and other charges incurred in
connection with such recording, registration, filing and compliance.
SECTION 15. RIGHT OF SETOFF.
In addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
and during the continuance of an Event of Default, each Secured Creditor is
hereby authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Mortgagor or to any other person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by such Secured Creditor (including, without limitation,
by branches and agencies of such Secured Creditor wherever located) to or for
the credit or the account of the Mortgagor against and on account of the
obligations and liabilities of the Mortgagor to such Secured Creditor under the
Notes, any other Credit Documents or any Designated Hedge Agreement, including,
without limitation, all interests in Loans purchased by such Secured Creditor
pursuant to section 12.4(c) of the Credit Agreement, and all other claims of any
nature or description arising out of or connected with the Notes or any other
Credit Document or any Designated Hedge Agreement, irrespective of whether or
not such Secured Creditor shall have made any demand hereunder and although said
Loans, liabilities or claims, or any of them, shall be contingent or unmatured.
SECTION 16. EVENTS OF DEFAULT.
Any Event of Default under the Credit Agreement, any payment default by
the Borrower or any of its Subsidiaries under any Designated Hedge Agreement,
and/or any Event of Default relating to the Borrower or any of its Subsidiaries
under any Designated Hedge Agreement, shall constitute an Event of Default
("Event of Default") under this Mortgage.
SECTION 17. REMEDIES.
If an Event of Default, under and as defined in section 16 of this
Mortgage, has occurred and is continuing:
(a The Collateral Agent, the Administrative Agent and the Secured
Creditors may exercise any one or more of the remedies specified in
section 10.2 of the Credit Agreement or otherwise available at law or in
equity.
(b To the extent permitted by applicable law, the Collateral Agent
may enter upon the Premises or any portion thereof and may exclude the
Mortgagor therefrom; and having and holding the same, may use, operate,
manage, and control the Premises and conduct business in connection
therewith, including, without limitation the continuation of the
construction of the Improvements if not previously
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completed, either personally or by its superintendents, managers, agents,
servants, attorneys or receivers; and upon every such entry, the
Collateral Agent, at the expense of the Mortgagor and from time to time,
may maintain the Premises and may insure and reinsure the same, as may
seem to the Collateral Agent to be necessary or advisable; and, at the
expense of the Mortgagor and from time to time, the Collateral Agent may
make all repairs, renewals, replacements, alterations, additions,
betterments and improvements thereto and thereon, as to the Collateral
Agent may seem necessary or advisable, and if the construction of the
Improvements has not been completed, may cause such construction to be
continued to completion or to such stage of completion as the Collateral
Agent considers necessary or advisable; and in every such case the
Collateral Agent shall have the right to carry on the construction
thereof, enter into, terminate, cancel and/or enforce contracts or leases
related thereto, manage and operate the Premises and carry on the business
thereof, and otherwise exercise all rights which the Mortgagor might
otherwise have with respect thereto, in the name of the Mortgagor or
otherwise, as the Collateral Agent shall deem best or advisable; and the
Collateral Agent shall be entitled to collect all rents, earnings,
revenues, issues, profits and income of the Premises, awards made for the
taking of or injury to the Premises through eminent domain or otherwise,
including awards or damages for change of grade, and also return premiums
or other payments upon insurance, and said rents, earnings, revenues,
issues, profits and income, awards, damages, premiums and payments are
hereby assigned to the Collateral Agent, and after deducting the expenses
and costs of conducting the business thereof and of all betterments,
additions, alterations, replacements, repairs and for taxes, assessments,
insurance and prior or other charges upon or with respect to the Premises
or any portion thereof, as well as just and reasonable compensations for
the services of all counsel, agents, employees, receivers and other
persons properly engaged or employed, the Collateral Agent shall apply the
proceeds as provided in section 18.
(c To the extent permitted by applicable law, the Collateral Agent
is hereby authorized and empowered by the Mortgagor to sell the Premises
in such manner as may be prescribed by law, by advertisement and public
sale as provided by the laws of the jurisdiction in which the Real
Property Collateral is located, or to foreclose this Mortgage by judicial
proceedings and sell the Premises pursuant to such proceedings as
permitted by applicable law. The Mortgagor does hereby authorize the
Collateral Agent to sell the Premises together or in lots or parcels, as
to the Collateral Agent shall seem expedient, and to execute and deliver
to the purchaser or purchasers of such property good and sufficient deeds
thereof with covenants of general, special or limited warranty or such
other instruments of conveyance, assignment or transfer as the Collateral
Agent may deem appropriate. Payment of the purchase price to the
Collateral Agent shall satisfy the obligation of the purchaser at any such
sale therefor, and he shall not be bound to look after the application
thereof. The Collateral Agent shall cause notice of any such sale to be
mailed to the Mortgagor; but, except as otherwise provided by any
applicable provision of law, failure so to mail any such notice shall not
affect the validity of any such sale. If the Collateral Agent, acting on
behalf of any or all of the holders of the Notes or other Secured
Obligations, or any or all such holders acting on their own behalf, is the
highest bidder, the Collateral Agent or such holders, as the case may be,
may purchase at any sale or sales (whether statutory foreclosure or public
sale or sales conducted as hereinabove authorized) and may, in paying the
purchase price, turn in any of the Notes or other Secured Obligations held
by them, in lieu of cash, up to the entire amount owing thereunder,
whether for principal, interest or other amounts, which amount as so
designated as being turned over shall be considered distribution of the
proceeds of such sale. The provisions set forth above as to public sale or
sales in lieu of statutory foreclosure are not intended as an exclusive
method of foreclosure hereunder or to deprive the Collateral Agent of any
other legal or equitable remedy available under applicable law.
Accordingly, it is specifically agreed that the remedy of foreclosure by
the Collateral Agent's sale as hereinabove provided for shall be
cumulative and shall not in any wise be construed as an exclusive remedy,
and the Collateral Agent shall be fully entitled to a statutory court
foreclosure and to avail itself of any and all other legal or equitable
remedies available under the laws of the jurisdiction in which the Real
Property Collateral is located.
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(d The Mortgagor hereby authorizes the Collateral Agent to demand
and receive, in the place and stead of the Mortgagor, all amounts that may
become due under any and each lease, rental, contract, easement and other
right of the Mortgagor pertaining or in any way relating to the Premises
or any part thereof, and, when received, to apply the same to the costs
and expenses incurred by the Collateral Agent incurred hereunder and to
the Secured Obligations. No demand for, and no receipt or application of
any such amount shall be deemed to minimize, subordinate or affect in any
way the lien hereof and rights hereunder of the Collateral Agent or any
rights of a purchaser of any portion of the Premises at any foreclosure or
other sale hereunder, as against the person from whom the amount was
demanded or received, or his executors, administrators, successors or
assigns, or anyone claiming under such Tenant Lease, rental, contract or
other right.
(e The Collateral Agent may exercise all rights and remedies granted
by law and more particularly the Uniform Commercial Code, including, but
not limited to, the right to take possession of the Personal Property
Collateral, and for this purpose may peaceably enter upon any premises on
which any or all of the Personal Property Collateral is situated, without
being deemed guilty of trespass and without liability for damages thereby
occasioned, and take possession of and operate the Personal Property
Collateral or remove it therefrom; the Collateral Agent shall have the
further right to take any action it deems necessary, appropriate or
desirable, at its option and in its discretion, to repair, refurbish or
otherwise prepare the Personal Property Collateral for sale, lease or
other use or disposition and to sell at public or private sales or
otherwise dispose of, lease or utilize the Personal Property Collateral
and any part thereof in any manner authorized or permitted by law and to
apply the proceeds thereof toward payment of any costs and expenses,
including reasonable attorneys' fees and legal expenses, to the extent
permitted by law, thereby incurred by the Collateral Agent and toward
payment of the Secured Obligations and all other indebtedness described in
this Mortgage, in such order and manner as may be provided in the Credit
Agreement or this Mortgage or in the event such provisions are not
applicable in such order and manner as the Collateral Agent may elect.
SECTION 18. COSTS OF ENFORCEMENT; APPLICATION OF PROCEEDS; MORTGAGOR
LIABLE FOR DEFICIENCY, ETC.
(a Costs of Enforcement; Application of Proceeds. In case of (i)
foreclosure of this Mortgage in any court of law or equity, whether or not any
order or decree shall have been entered therein, and to the extent permitted by
law, a reasonable sum shall be allowed for attorney's fees of the Collateral
Agent in such proceedings, for stenographer's fees and for all moneys expended
for documentary evidence and the cost of a complete abstract of title and title
report for the purpose of such foreclosure, such sums to be secured by the lien
hereunder, and, to the extent permitted by law, there shall be included in any
judgment or decree foreclosing this Mortgage and be paid out of such rents,
issues and profits or out of the proceeds of any sale made in pursuance of any
such judgment or decree, or (ii) any other realization by the Collateral Agent
upon or with respect to the Premises or any part or portion thereof, the
proceeds thereof shall be applied as follows:
(10 first, to the payment or reimbursement of the Collateral Agent
for all costs and expenses of such suit or suits or other enforcement
activities of the Collateral Agent, including, but not limited to, the
costs of advertising, sale and conveyance, including attorneys',
solicitors' and stenographers' fees, if permitted by law, outlays for
documentary evidence and the cost of such abstract, examination of title
and title report;
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(20 second, to the extent proceeds remain after the application
pursuant to preceding clause (1), to reimburse the Collateral Agent for
all moneys advanced by the Collateral Agent, if any, for any purpose
authorized in this Mortgage with interest at the Default Rate;
(30 third, to the extent proceeds remain after the application
pursuant to preceding clause (2), an amount equal to the outstanding
Secured Obligations shall be applied by the Collateral Agent to the
Secured Obligations in such amount and order of priority as may be
provided in section 10.3 of the Credit Agreement; and
(40 fourth, to the extent remaining after the application pursuant
to the preceding clauses (1), (2) and (3) and payment in full of the
Secured Obligations which are secured hereby, to the Mortgagor or to
whomever may be lawfully entitled to receive such payment.
(b Mortgagor Liable for Deficiency. It is understood that the Mortgagor
shall remain liable to the extent of any deficiency between (x) the amount of
the proceeds of the Premises and the amount of the sum referred to in the
foregoing clauses (1) and (2) and (y) the aggregate outstanding amount of the
Secured Obligations.
SECTION 19. RECEIVER.
In the event an action shall be instituted to foreclose this Mortgage, or
prior to foreclosure but after default, the Collateral Agent shall be entitled
to the appointment of a receiver of the rents, issues and profits of the
Premises as a matter of right, with power to collect the rents, issues and
profits of the Premises due and becoming due during the period of default and/or
the pendency of such foreclosure suit to and including the date of confirmation
of the sale under such foreclosure and during the redemption period, if any,
after such confirmation, such rents, issues and profits being hereby expressly
assigned and pledged as security for the payment of the Secured Obligations
secured by this Mortgage without regard to the value of the Premises or the
solvency of any person or persons liable for the payment of the Secured
Obligations and regardless of whether the Collateral Agent has an adequate
remedy at law. The Mortgagor for itself and for any subsequent owner hereby
waives any and all defenses to the application for a receiver as above provided
and hereby specifically consents to such appointment, but nothing herein
contained is to be construed to deprive the holder of this Mortgage of any other
right or remedy or privilege it may now have under the law to have a receiver
appointed. The provision for the appointment of a receiver and the assignment of
such rents, issues and profits is made an express condition upon which the Loans
hereby secured are made. In such event, the court shall at once on application
of the Collateral Agent or its attorney in such action, appoint a receiver to
take immediate possession of, manage and control the Premises, for the benefit
of the holder or holders of the Secured Obligations and of any other parties in
interest, with power to collect the rents, issues and profits of the Premises
during the pendency of such action, and to apply the same toward the payment of
the several obligations herein mentioned and described, notwithstanding that the
same or any part thereof is occupied by the Mortgagor or any other person. The
rights and remedies herein provided for shall be deemed to be cumulative and in
addition to and not in limitation of those provided by law and if there be no
receiver so appointed, the Collateral Agent itself may proceed to collect the
rents, issues and profits from the Premises. From any such rents, issues, and
profits collected by the receiver or by the Collateral Agent prior to a
foreclosure sale, there shall be deducted the cost of collection thereof and the
expenses of operation of the Premises, including but not limited to real estate
commissions, receiver's fee and the reasonable fees of its attorney, if any, and
the Collateral Agent's attorney's fees, if permitted by law, and court costs,
the remainder to be applied against the Secured Obligations. In the event the
rents, issues and profits are not adequate to pay all tax and other expenses of
operation, the Collateral Agent may, but is not obligated to, advance to any
receiver the amounts necessary to operate, maintain and repair, if necessary,
the Premises and any such amounts so advanced, together with interest thereon at
the Default Rate from and after the date of advancement, shall be secured by
this Mortgage and have the same priority of collection as the principal of the
Secured Obligations.
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SECTION 20. LIABILITY OF MORTGAGOR NOT AFFECTED.
No sale of the Premises, no forbearance on the part of the Collateral
Agent, no extension of the time for the payment of the Secured Obligations and
no change in the terms of the payment thereof consented to by the Collateral
Agent shall in any way whatsoever operate to release, discharge, modify, change
or affect the original liability of the Mortgagor hereunder or the original
liability of the Mortgagor or any other obligor under any of the Secured
Obligations, either in whole or in part. No waiver by the Collateral Agent of
any breach of any covenant of the Mortgagor herein contained shall be construed
as a waiver of any subsequent breach of the same or any other covenant herein
contained. The failure of the Collateral Agent and/or the Secured Creditors to
exercise the option for acceleration of maturity and/or foreclosure (including
sale under power of sale hereunder) following any default as aforesaid or to
exercise any other option granted to the Collateral Agent hereunder in any one
or more instances, or the acceptance by the Collateral Agent and/or the Secured
Creditors of partial payments hereunder shall not constitute a waiver of any
such default, nor extend or affect the grace period, if any, but such option
shall remain continuously in force with respect to any unremedied or uncured
default. Acceleration of maturity once claimed hereunder by the Collateral Agent
may, at the option of the Collateral Agent, be rescinded by written
acknowledgment to that effect by the Collateral Agent, but the tender and
acceptance of partial payments alone shall not in any way affect or rescind such
acceleration of maturity, or extend or affect the grace period, if any. the
Collateral Agent may pursue any of its rights without first exhausting its
rights hereunder and all rights, powers and remedies conferred upon the
Collateral Agent herein are in addition to each and every right which the
Collateral Agent may have hereunder at law or equity and may be enforced
concurrently therewith.
SECTION 21. REMEDIES CUMULATIVE.
Each remedy or right of the Collateral Agent shall not be exclusive of but
shall be in addition to every other remedy or right now or hereafter existing at
law or in equity. No delay in the exercise or omission to exercise any remedy or
right accruing on any default shall impair any such remedy or right or be
construed to be a waiver of any such default or acquiescence therein, nor shall
it affect any subsequent default of the same or of a different nature. Every
such remedy or right may be exercised concurrently or independently and when and
as often as may be deemed expedient by the Collateral Agent.
SECTION 22. COLLATERAL AGENT SUBROGATED TO PRIOR LIENS PAID OUT OF LOAN
PROCEEDS.
Should the proceeds of any Loans made by any Lender to the Mortgagor, the
repayment of which is hereby secured, or any part thereof, or any amount paid
out or advanced by the Collateral Agent or any Lender, be used directly or
indirectly to pay off, discharge or satisfy, in whole or in part, any prior lien
or encumbrance upon the Premises or any part thereof, then the Collateral Agent
shall be subrogated to such other liens or encumbrances and upon any additional
security held by the holder thereof and shall have the benefit of the priority
of all of the same.
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SECTION 23. FURTHER ASSURANCES.
The Mortgagor shall execute, acknowledge and deliver any and all such
further acts, conveyances, documents, mortgages and assurances as the Collateral
Agent may reasonably require for accomplishing the purpose hereof forthwith upon
the request of the Collateral Agent, whether in writing or otherwise. The
Mortgagor, within 10 days upon request by mail, shall furnish a written
statement duly acknowledged of the amount due upon this Mortgage and the Secured
Obligations (both unpaid principal and accrued interest and all other items
included in the Secured Obligations) and whether any offset or defenses exist
against the Secured Obligations, and any other information which might
reasonably be requested in connection with the sale of the Secured Obligations,
or any portion thereof or interest therein, to any third party, or an audit of
the Collateral Agent, and which may be relied on for such purposes.
SECTION 24. MORTGAGOR'S OBLIGATIONS ABSOLUTE.
The lien of this Mortgage and the obligations of the Mortgagor hereunder
shall be absolute and unconditional and shall remain in full force and effect
without regard to, and shall not be released, suspended, discharged, terminated
or otherwise affected by, any circumstance or occurrence whatsoever, including,
without limitation:
(a any lack of validity or enforceability of the Credit Agreement,
the Notes, any other Credit Document, any Designated Hedge Agreement, or
any other agreement or instrument relating thereto;
(b any renewal, extension, amendment or modification of, or addition
or supplement to, or any waiver, consent, extension, indulgence or other
action or inaction under or in respect of, the Credit Agreement, the
Notes, any other Credit Document, or any Designated Hedge Agreement, or
any other agreement or instrument relating thereto, including, without
limitation, any increase in the Secured Obligations resulting from the
extension of additional credit to the Mortgagor or any of its Subsidiaries
or otherwise;
(c any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Secured
Obligations;
(d any manner of application of collateral, or proceeds thereof, to
all or any of the Secured Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Secured Obligations or
any other assets of the Mortgagor or any of its Subsidiaries;
(e any change, restructuring or termination of the corporate
structure or existence of the Mortgagor or any of its Subsidiaries;
(f any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to
the Mortgagor or any of its Subsidiaries or Affiliates, or any action
taken with respect to this Mortgage by any trustee or receiver, or by any
court, in any such proceeding, whether or not the Mortgagor shall have
notice or knowledge of any of the foregoing; or
(i any other circumstance which might otherwise constitute a defense
available to, or a discharge of, the Mortgagor as a guarantor or surety
for the Secured Obligations.
This Mortgage shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by the Collateral Agent or any Secured
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Creditor upon the insolvency, bankruptcy or reorganization of the Mortgagor or
any of its Subsidiaries or Affiliates or otherwise, all as though such payment
had not been made.
SECTION 25. NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telex, facsimile transmission or cable communication) and mailed,
telegraphed, telexed, transmitted, cabled or delivered, if to the Mortgagor, at
9400 East Market Street, Warren, Ohio 44484, attention: Vice President & Chief
Financial Officer (facsimile: (330) 856-3618); if to the Collateral Agent, at
1900 East Ninth Street, Cleveland, Ohio 44114, attention Agent Services
(facsimile: (216) 575-2481; or at such other address as shall be designated by
any such person in a written notice to the other person. All such notices and
communications shall be mailed, telegraphed, telexed, telecopied, or cabled or
sent by overnight courier, and shall be effective when received.
SECTION 26. DISCHARGE OF MORTGAGE; RELEASE OF PROPERTY.
(a Discharge of Mortgage. After the termination of the Total Commitment
and all Designated Hedge Agreements and when all Loans and other Secured
Obligations have been paid in full, this Mortgage shall terminate, and the
Collateral Agent, at the request and expense of the Mortgagor, will execute and
deliver to the Mortgagor a proper instrument or instruments (including Uniform
Commercial Code termination statements on form UCC-3) acknowledging the
satisfaction and termination of this Mortgage, and will duly assign, transfer
and deliver to the Mortgagor (without recourse and without any representation or
warranty) such of the Personal Property Collateral as may be in the possession
of the Collateral Agent and as has not theretofore been sold or otherwise
applied or released pursuant to this Mortgage. In case of failure of the
Collateral Agent to promptly so release this Mortgage, all claims for statutory
penalties and damages are hereby waived.
(b Release of Collateral. So long as no payment default on any of the
Secured Obligations is in existence or would exist after the application of
proceeds as provided below, the Collateral Agent shall, at the request of the
Mortgagor, release any or all of the Real Property Collateral and/or Personal
Property Collateral, provided that (x) such release is permitted by the terms of
section 9.2 of the Credit Agreement) or otherwise has been approved in writing
by the Required Lenders (or all of the Lenders, if required by section 12.12 of
the Credit Agreement) and (y) if required pursuant to the provisions of section
5.2 of the Credit Agreement, the proceeds of such Collateral are applied to the
prepayment of the Loans.
(c Request for Release; Effect of Release. At any time that the Mortgagor
desires that the Collateral Agent take any action to give effect to any release
of any or all of the Premises pursuant to the foregoing paragraph (a) or (b), it
shall deliver to the Collateral Agent a certificate signed by a principal
executive officer stating that the release of the respective portion of or all
of the Real Property Collateral and/or Personal Property Collateral is permitted
pursuant to paragraph (a) or (b). In the event that any part of the Premises is
released as provided in paragraph (a), the Collateral Agent, at the request and
expense of the Mortgagor, will duly release such part of the Premises and
assign, transfer and deliver to the Mortgagor (without recourse and without any
representation or warranty) such of the part of the Premises as is then being
(or has been) so sold and as may be in the possession of the Collateral Agent
and has not theretofore been released pursuant to this Mortgage. The Collateral
Agent shall have no liability whatsoever to any Secured Creditor as the result
of any release of all or any part of the Premises by it as permitted by this
section. Upon any release of all or any part of the Premises pursuant to
paragraph (a) or (b), none of the Collateral Agent or any of the Secured
Creditors shall have any continuing right or interest in the same, or the
proceeds thereof.
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SECTION 27. MISCELLANEOUS.
(a Acknowledgment of Receipt of Copies of Credit Documents. The Mortgagor
acknowledges that it has received from the Collateral Agent without charge a
true and correct copy of this Mortgage and each other Credit Document executed
and delivered on or prior to the date hereof.
(b Indemnification. The Collateral Agent and its successors and assigns
shall be entitled to all of the benefits of the indemnification provisions of
the Credit Agreement and the other Credit Documents. All of the terms and
provisions of section 12.1 of the Credit Agreement (including any defined terms
used therein) are by this reference thereto hereby incorporated into this
Mortgage for the benefit of the Collateral Agent and its successors and assigns
as fully as if written out at length herein, and any references in such section
of the Credit Agreement to the "Borrower" shall be deemed to refer to, and
constitute obligations of, the Mortgagor.
(c Subsequent Services of Counsel to Collateral Agent. To the extent
services are required of the Collateral Agent's counsel and/or special counsel
after the date hereof, which are normally incident to the closing, amendment,
alteration, and enforcement of this Mortgage, and all provisions herein
contained, the Mortgagor shall, to the extent permitted by law, pay the
reasonable fees therefor, promptly upon the rendering of such a bill and
delivery thereof to the Mortgagor.
(d No Partnership or Joint Venture. Neither this Mortgage, the Credit
Agreement, the Notes, any other Secured Obligations, any of the other Credit
Documents, or any of the Designated Hedge Agreements, are intended or shall be
construed as creating a partnership or joint venture between the Mortgagor, on
the one hand, and the Collateral Agent or any other holder of any of the Secured
Obligations, on the other hand; and the relationship of the Mortgagor and the
Collateral Agent hereunder shall solely be that of Mortgagor and collateral
agent for the holders of the Secured Obligations.
(e Election of Collateral Agent to Subordinate. At the option of the
Collateral Agent (acting on instructions from all of the Lenders), this Mortgage
shall become subject and subordinate in whole or in part (but not in respect to
the priority of entitlement to insurance proceeds or any award in condemnation)
to any or all leases and/or subleases of all or any part of the Premises upon
the execution by the Collateral Agent and recording thereof, at any time
hereafter, in the appropriate recorder's office, a unilateral declaration to
that effect.
(f Waiver of Homestead and Exemption Rights, etc. To the extent permitted
by law with respect to the Secured Obligations or any renewals or extensions
thereof, the Mortgagor waives and renounces any and all homestead and exemption
rights, as well as the benefit of all valuation and appraisement privileges, and
also moratoriums under or by virtue of the constitution and laws of the
jurisdiction in which the Real Property Collateral is located or any other state
or of the United States, now existing or hereafter enacted.
(g Covenants Run with the Land. All the covenants of the Mortgagor
contained in this Mortgage shall run with the Land.
(h Usury Savings Clause. All agreements in the Credit Agreement, in the
Notes, in this Mortgage, in any other Credit Document or in any Designated Hedge
Agreement are expressly limited so that in no contingency or event whatsoever,
whether by reason of advancement or acceleration of maturity of any of the
Secured Obligations, or otherwise, shall the amount paid or agreed to be paid
hereunder or thereunder for interest or for the use, forbearance or detention of
money exceed the highest lawful rate permitted under applicable usury laws. If,
from any circumstance whatsoever, fulfillment of any provision of the Credit
Agreement, of the Notes, of this Mortgage, of any other Credit Document or of
any Designated Hedge Agreement, at the time performance of such provision shall
be due, shall involve transcending the limit of validity prescribed by
applicable usury laws which a
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court of competent jurisdiction may deem applicable hereto, then, ipso facto,
the obligation to be fulfilled shall be reduced to the limit of such validity
and if, from any circumstance whatsoever, the Collateral Agent or any Secured
Creditor shall ever receive hereunder or under the other Credit Documents or any
Designated Hedge Agreement as interest, or for the use, forbearance or detention
of money, an amount which would exceed the highest lawful rate, the receipt of
such excess shall be deemed a mistake and shall be canceled automatically or, if
theretofore paid, such excess shall be credited against the principal amount of
the Secured Obligations or any fees or other amounts included in the Secured
Obligations to which the same may lawfully be credited, and any portion of such
excess not capable of being so credited shall be rebated to the Mortgagor.
(i Governing Law; Successors and Assigns; Severability, etc. This Mortgage
shall be construed and enforced according to the laws of the jurisdiction in
which the Real Property Collateral is located, and shall be binding upon the
Mortgagor, its successors and assigns, any subsequent owners of the Premises,
and shall inure to the benefit of the Collateral Agent, its successors and
assigns. Any provision of this Mortgage 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.
(j No Modification. None of the terms and conditions of this Mortgage may
be changed, waived, modified or varied in any manner whatsoever unless in
writing duly signed by the Mortgagor and the Collateral Agent (with the consent
of the Required Lenders or, to the extent required by section 12.12 of the
Credit Agreement, all of the Lenders), provided, however, that no such change,
waiver, modification or variance shall be made to this section 27(j) without the
consent of each Secured Creditor adversely affected thereby, provided further
that any change, waiver, modification or variance affecting the rights and
benefits of a single Class of Secured Creditors (and not all Secured Creditors
in a like or similar manner) shall require the written consent of the Requisite
Creditors of such Class of Secured Creditors. For the purpose of this Mortgage,
the term "Class" shall mean each class of Secured Creditors, i.e., whether (x)
the Lenders as holders of the Credit Document Obligations or (y) the Designated
Hedge Creditors as holders of the Designated Hedge Obligations. For the purpose
of this Mortgage, the term "Requisite Creditors" of any Class shall mean each of
(x) with respect to the Credit Document Obligations, the Required Lenders and
(y) with respect to the Designated Hedge Obligations, the holders of at least
51% of all obligations outstanding from time to time under the Designated Hedge
Agreements.
(k Agency Provisions. By accepting the benefits of this Mortgage, each
Lender acknowledges and agrees that the rights and obligations of the Collateral
Agent shall be as set forth in section 11 of the Credit Agreement.
Notwithstanding anything to the contrary contained in of this Mortgage, the
duties and obligations of the Collateral Agent set forth or incorporated into
the provisions of this Mortgage may not be amended or modified without the
consent of the Collateral Agent.
(l Collateral Agent to Act on Behalf of Secured Creditors. The Secured
Creditors agree by their acceptance of the benefits hereof that this Mortgage
may be enforced on their behalf only by the action of the Collateral Agent,
acting upon the instructions of the Required Lenders (or, after all Credit
Document Obligations have been paid in full, instructions of the holders of at
least the majority of the outstanding Designated Hedge Obligations) and that no
other Secured Creditor shall have any right individually to seek to enforce or
to enforce this Mortgage or to realize upon the security to be granted hereby,
it being understood and agreed that such rights and remedies may be exercised by
the Collateral Agent, for the benefit of the Secured Creditors, upon the terms
of this Mortgage.
(m Waiver of Trial By Jury. THE MORTGAGOR AND THE COLLATERAL AGENT EACH
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS MORTGAGE OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
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(n) Time of Essence. It is specifically agreed that time is of the essence
with respect to this Mortgage and that the waiver of the rights or options, or
obligations secured hereby, shall not at any time thereafter be held to be
abandonment of such rights. Notice of the exercise of any right or option
granted to the Collateral Agent herein, or in the Secured Obligations, is not
required to be given.
(o) Counterparts. This Mortgage may be executed by the Mortgagor in
counterparts, each of which shall be an original and all of which collectively
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage to be duly
executed and delivered as of the date first set forth above.
Signed and acknowledged STONERIDGE, INC.
in the presence of:
By:
- -------------------- ----------------------------
Print Name: Kevin P. Bagby
Vice President--Finance
and Chief Financial Officer
- -------------------
Print Name:
29
<PAGE>
STATE OF OHIO )
) SS.:
COUNTY OF CUYAHOGA )
BEFORE ME, a Notary Public in and for said County and State, personally
appeared the above named STONERIDGE, INC., an Ohio corporation, by Kevin P.
Bagby, its Vice President--Finance and Chief Financial Officer, who acknowledged
that he did sign the foregoing instrument and that the same is his free act and
deed personally and as such officer.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at
Cleveland, Ohio, this ____ day of December, 1998.
---------------------------
Notary Public
[Notarial Seal]
This Instrument Prepared By:
John W. Sager, Esq.
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
30
<PAGE>
EXHIBIT 1
TO
FUTURE ADVANCE FIRST MORTGAGE, ASSIGNMENT OF LEASES
AND SECURITY AGREEMENT
The following described real estate, to-wit:
LEGAL DESCRIPTION
PORTLAND, INDIANA
Commencing at the cornerstone at the northwest corner of the NW 1/4 of
Section 17, T23N, R14E; thence east along the north line of said section a
distance of one thousand five hundred eighty three and thirty one hundredths
(1583.31) feet to an iron pin; thence S 01(Degree) 14' 38" West a distance of
one thousand ninety five and fifty five hundredths (1095.55) feet to an iron pin
for the point of beginning; thence S 89(Degree) 10' 02" East parallel to the
south line of the north half of Section 17 a distance of one thousand five
hundred (1500) feet to an iron pin; thence S 01(Degree) 14' 38" West a distance
of four hundred fifty five an thirty eight hundredths (455.38) feet to an iron
pin on the north bank of the Griffis open ditch; thence S 62(Degree) 41' 18"
West along the bank of said open ditch a distance of four hundred eighty seven
and six hundredths (487.06) feet to an iron pin; thence S 56(Degree) 52' 10"
West along the north bank of said open ditch a distance of one hundred thirty
three and seventy three hundredths (133.73) feet to an iron pin on the north
line of Industrial Drive; thence S 45(Degree) 25' 08" West a distance of two
hundred fifty eight and forty five hundredths (258.45) feet to an iron pin;
thence S 50(Degree) 32' 02" West a distance of seven hundred thirty one and
eighty two hundredths (731.82) feet to an iron pin; thence S 44(Degree) 22' 49"
West a distance of one hundred fifty six and six hundredths (156.06) feet to an
iron pin on the south line of the north half of Section 17; thence N 88(Degree)
59' 24" West along the south line of the north half of Section 17 a distance of
three hundred eighty four and sixty seven hundredths (384.67) feet to an iron
pin; thence N 01(Degree) 14' 38" East a distance of thirty (30) feet to an iron
pin; thence S 88(Degree) 59' 24" East a distance of two hundred sixty four and
forty four hundredths (264.44) feet to an iron pin; thence N 01(Degree) 14' 38"
East a distance of one thousand five hundred (1500) feet to the point of
beginning. Containing 34.004 acres more or less.
EXCEPT: Beginning at the southwest corner of the East Half of the
Northwest Quarter of said Section 17; thence North 0 degrees, 53 minutes, 44
seconds East, a distance of 30.00 feet; thence South 89 degrees, 09 minutes, 57
seconds East, a distance of 264.37 feet--measured (264.00) feet recorded);
thence south 01 degrees, 15 minutes, 19 seconds West, a distance of 8.75 feet to
the point of curvature of a curve with a radius of 1,094.92 feet; thence
northeasterly an arc distance of 218.72 feet along said curve (chord bearing
North 44 degrees, 49 minutes, 14 seconds East; chord distance--218.36 feet) to
the point of tangency of said curve; thence North 50 degrees, 32 minutes, 36
seconds East, a distance of 719.56 feet to the point of curvature of a curve
with
<PAGE>
radius of 530.00 feet; thence northeasterly and easterly an arc distance of
308.02 feet along said curve (chord bearing North 67 degrees, 11 minutes, 34
seconds East; chord distance--303.70 feet) to the point of tangency of said
curve; said point being on the north right-of-way linen of Industrial Drive as
recorded in Deed Record 147, Page 300, in the Office of the Recorder of Jay
County; thence South 58 degrees, 50 minutes, 26 seconds West, a distance of
40.06 feet along said right-of-way thence South 44 degrees, 58 minutes, 02
seconds West, a distance of 48.54 feet along said right-of-way; thence South 47
degrees, 47 minutes 17 seconds West, a distance of 43.20 feet to the point of
curvature of a curve with a radius of 470.00 feet; thence westerly and
southwesterly an arc distance of 163.13 feet along said curve (chord bearing
South 60 degrees, 29 minutes, 12 seconds West; chord distance--162.32 feet) to
the point of tangency of said curve; thence South 50 degrees, 32 minutes, 36
seconds West, a distance of 719.56 feet to the point of curvature of a curve
with a radius of 1.034.92 feet; thence southwesterly an arc distance of 186.31
feet along said curve (chord bearing South 45 degrees, 23 minutes, 09 seconds
West; chord distance--186-06 feet) to the point of tangency of said curve, said
point being on the south line of the Northwest Quarter of said Section 17;
thence North 89 degrees, 09 minutes, 57 seconds West, a distance of 60.07 feet
along said south line; thence continuing North 89 degrees, 09 minutes, 57
seconds West, a distance of 264.37 feet-measured (264.00) feet recorded) to the
point of beginning; containing 1.79 acres, more or less.
EXCEPT: Beginning at the southwest corner of the East Half of the
Northwest Quarter of said Section 17; thence South 89 degrees, 09 minutes, 57
seconds East, a distance of 324.44 feet, to the Point of Beginning, said point
being the point o curvature of a curve with a radius of 1,034.92 feet; thence
northeasterly an arc distance of 186.31 feet along said curve (chord bearing
North 45 degrees, 23 minutes, 09 seconds East; chord distance--186.06 feet) to
the point of tangency of said curve; thence North 50 degrees, 32 minutes, 36
seconds East, a distance of 719.56 feet, said point being the point of curvature
of a curve with a radium of 470.00 feet; thence northeasterly an arc distance of
163.13 feet along said curve (chord bearing North 60 degrees, 29 minutes, 12
seconds East; chord distance--162.32 feet); thence South 45 degrees, 22 minutes,
44 seconds West, a distance of 132.69 feet to a pipe; thence South 50 degrees,
29 minutes, 08 seconds West, a distance of 731.62 feet to a pipe; thence South
44 degrees, 19 minutes, 47 seconds West, a distance of 113.49 feet to a pipe;
thence South 44 degrees, 13 minutes 22 seconds West, a distance of 40.56 feet to
a pipe on the south line of the said Northwest Quarter; thence North 88 degrees,
59 minutes, 14 seconds West, a distance of 62.77 feet along said south line to
the Point of Beginning containing 0.936 acres, more or less.
[End of Exhibit 1]
2
<PAGE>
EXHIBIT 2
TO
FUTURE ADVANCE FIRST MORTGAGE, ASSIGNMENT OF LEASES
AND SECURITY AGREEMENT
Permitted Encumbrances
1. Any liens thereon for taxes, assessments, charges, excises, levies and
other governmental charges which are not due and payable.
2. The following matters of affecting the Premises on the date this Mortgage
is recorded.
3. Zoning ordinances, if any.
[End of Exhibit 2]
<PAGE>
EXHIBIT C-11
---------------------------
FORM OF
CLOSING DATE MORTGAGE
(Warren, Ohio)
---------------------------
<PAGE>
================================================================================
================================================================================
STONERIDGE, INC.
as the Mortgagor
To
NATIONAL CITY BANK
as the Collateral Agent
----------------------------
OPEN-END FIRST MORTGAGE,
ASSIGNMENT OF LEASES
AND
SECURITY AGREEMENT
(Total Indebtedness Not to Exceed $500,000,000)
---------------------------
Relating to Property Located in Warren, Ohio
================================================================================
================================================================================
<PAGE>
blank page
<PAGE>
OPEN-END FIRST MORTGAGE, ASSIGNMENT OF LEASES AND
SECURITY AGREEMENT
(Total Indebtedness Not to Exceed $500,000,000)
THIS OPEN-END FIRST MORTGAGE, ASSIGNMENT OF LEASES AND SECURITY AGREEMENT,
dated as of December 30, 1998 (as amended, modified, or supplemented from time
to time, "this Mortgage"), by (i) STONERIDGE, INC., an Ohio corporation
(hereinafter, together with its successors and assigns, called the "Borrower" or
the "Mortgagor") which is duly qualified to transact business in the
jurisdiction in which the real property referred to below is located, whose
address is 9400 East Market Street, Warren, Ohio 44484, in favor of (ii)
NATIONAL CITY BANK, a national banking association, as collateral agent under
the Credit Agreement referred to below (herein, together with its successors and
assigns in such capacity, the "Collateral Agent"), whose address is 1900 East
Ninth Street, Cleveland, Ohio 44114, for the benefit of the Secured Creditors
(as defined below):
PRELIMINARY STATEMENTS:
(A) Except as otherwise defined herein, terms used herein and defined in
the Credit Agreement (as defined below) shall be used herein as therein defined.
(B) This Mortgage is made pursuant to the Credit Agreement, dated as of
the date hereof (herein, as amended or otherwise modified, restated or replaced
from time to time, the "Credit Agreement"), among the Borrower, the financial
institutions named as lenders therein (herein, together with their successors
and assigns, the "Lenders"), the other Agents named therein, and National City
Bank, as the Administrative Agent for the Lenders under the Credit Agreement,
providing, among other things, for loans or advances or other extensions of
credit to or for the benefit of the Borrower of up to $425,000,000, with such
loans or advances being evidenced by promissory notes (the "Notes", such term to
include all notes and other securities issued in exchange therefor or in
replacement thereof).
(C) The Borrower or any of its Subsidiaries may from time to time be party
to one or more Designated Hedge Agreements (as defined in the Credit Agreement).
Any institution that participates, and in each case their subsequent assigns, as
a counterparty to any Designated Hedge Agreement (collectively, the "Designated
Hedge Creditors"; and the Designated Hedge Creditors together with the Agents
and the Lenders, collectively the "Secured Creditors"), shall benefit hereunder
as herein provided.
(D) Pursuant to the Subsidiary Guaranty, each Subsidiary Guarantor has
jointly and severally guaranteed to the Secured Creditors the payment when due
of the Guaranteed Obligations (as defined in the Subsidiary Guaranty).
(E) It is a condition precedent to the making of Loans and the issuance
of, and participation in, Letters of Credit under the Credit Agreement that the
Mortgagor shall have executed and delivered to the Collateral Agent this
Mortgage.
(F) The Mortgagor desires to execute this Mortgage to satisfy the
condition described in the preceding paragraph.
(G) The execution and delivery of this Mortgage has been duly authorized
by the Mortgagor, and all things necessary to make this Mortgage a valid,
binding and legal instrument according to its terms, have been done and
performed.
NOW, THEREFORE, in consideration of the sum of $1.00, and other good and
valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, received to the Mortgagor's full satisfaction
<PAGE>
from the Collateral Agent, and in consideration of the payments or loans or
advances or other credit facilities made or to be made hereafter to or for the
benefit of the Borrower by the Lenders, the Mortgagor DOES HEREBY grant,
bargain, sell, mortgage, warrant, convey, alien, remise, release, assign,
transfer, grant a security interest in, set over, deliver, confirm and convey
unto the Collateral Agent, upon the terms and conditions of this Mortgage, with
power of sale, each and all of the real properties and interests in real
properties, and further grants to the Collateral Agent a security interest in
and to all other property and interests, described in the following Granting
Clauses (all of such property and interests hereinafter collectively called the
"Premises").
GRANTING CLAUSES
All the estate, right, title and interest of the Mortgagor in, to
and under, or derived from:
GRANTING CLAUSE FIRST
Land
All those certain lot(s), piece(s) or parcel(s) of land more
particularly described in Exhibit 1 attached hereto and made a part
hereof, as the description of the same may be amended or supplemented from
time to time and all and the reversions or remainders in and to said land
and the tenements, hereditaments, easements, rights-of-way or use, rights
(including alley, drainage, crop, timber and cutting, agricultural,
horticultural, mineral, water, oil and gas rights), privileges, royalties
and appurtenances to said land, now or hereafter belonging or in anywise
appertaining thereto, including any such right, title, interest in, to or
under any agreement or right granting, conveying or creating, for the
benefit of said land, any easement, right or license in any way affecting
other property and in, to or under any streets, ways, alleys, vaults,
gores or strips of land adjoining said land or any parcel thereof, or in
or to the air space over said land, all rights of ingress and egress by
motor vehicles to parking facilities on or within said land, and all
claims or demands of the Mortgagor, either at law or in equity, in
possession or expectancy, of, in or to the same (all of the foregoing
hereinafter collectively called the "Land").
GRANTING CLAUSE SECOND
Improvements
All buildings, structures and other improvements now or hereafter
located on the Land, and all appurtenances and additions thereto and
betterments, renewals, substitutions and replacements thereof, owned by
the Mortgagor or in which the Mortgagor has or shall acquire an interest
(all of the foregoing hereinafter collectively called the "Improvements").
GRANTING CLAUSE THIRD
Fixtures and Equipment
Without limitation of the foregoing Granting Clauses, (i) all
"fixtures" (as defined in the Uniform Commercial Code of the State in
which the Premises are located), (ii) all "equipment" (as defined in the
Uniform Commercial Code of the State in which the Premises are located),
(iii) all other fixtures, chattels and articles of personal property
(other than "inventory", as defined in the Uniform Commercial Code of the
State in which the Premises are located), and (iv) all additions,
betterments, improvements, modifications, renewals, alterations, repairs,
attachments,
2
<PAGE>
parts, accessories, appurtenances, substitutions and replacements of or to
any of the foregoing, in each case now or hereafter owned or otherwise
acquired by the Mortgagor or in which the Mortgagor now has or shall
hereafter acquire an interest, wherever situated, and now or hereafter
located on, attached or affixed to, contained in or used in connection
with, the properties referred to in Granting Clause First or Granting
Clause Second, or placed on any part thereof, though not attached or
affixed thereto, including, without limitation, all of the following: (1)
all automobiles, trucks and trailers, and all other automotive or
transportation vehicles and equipment; (2) all machines and machinery and
other apparatus; (3) all engines and motors; (4) all lathes; (5) all drill
presses, punch presses and other presses; (6) all sorting, assembly,
installation and production line equipment; (7) all robotic equipment,
devices and systems; (8) all boilers, turbines, stokers, smelters,
electric arc furnaces, ladle arc furnaces, reheat furnaces and/or other
furnaces and related equipment; (9) all rolling mills, coilers and cooling
beds; (10) all stamping, cutting, drilling, jigging, bending, shaping,
fitting, molding, milling, injection, sizing, patterning, fastening,
connecting, heat treating, galvanizing, painting, embossing, coloring,
identification, measuring, monitoring, quality assurance, finishing and/or
processing machines, equipment and systems; (11) all fabrication equipment
and systems; (12) all packaging, receiving and shipping equipment and
systems; (13) all scales; (14) all counting, measurement, testing,
monitoring, calibration and analytical devices, equipment and systems;
(15) all design and quality assurance or control equipment (including
robotics); (16) all welding equipment and systems; (17) all soldering
equipment and systems; (18) all hydraulic equipment and hydraulics; (19)
all tooling, dies, jigs, casts, molds, patterns, models, stencils and
drawings; (20) all generators, transformers, switches, substations, pumps,
compressors, dynamos and batteries; (21) all cranes and hoists; (22) all
conveyors; (23) all computers; (24) all computer monitors, drives,
servers, and other hardware and software (whether owned, leased or
licensed); (25) all computing equipment; (26) all electronic data
processing equipment; (27) all operating and maintenance manuals, as well
as all plans, specifications and operating instructions, for all equipment
and fixtures; (28) all gas, oil kerosene and other fuels; (29) all
industrial gases and containers therefor; (30) all consumable supplies;
(31) all spare parts, replacement parts, appliances, utensils, tools,
implements and fittings; (32) all repair and maintenance equipment; (33)
all tanks (whether free standing, anchored or otherwise installed in
place, readily movable, above or below ground, or otherwise), drums,
vessels, containers, racks, pallets, skids, bins and shelves or shelving;
(34) all forklifts, liftrucks, pallet movers, dollies, carts, and other
materials handling equipment; (35) all shipping containers; (36) all rail
cars; (37) all pipelines, pipes, ducts and conduits; (38) all wiring and
all electric or other power surge or interruption protection equipment;
(39) all water and other towers; (40) all call systems, dispatch systems,
public address systems, switchboards, telephones, mobile phones, beepers,
two-way (or more) radios, aerials, antennas and other telecommunication,
teleconferencing (including video) and other communication equipment; (41)
all desks, tables, cabinets, bureaus, credenzas, chairs, benches, couches,
coat racks, safes and vaults, photocopy machines, facsimile, telex and
cable machines, postage meters, televisions, video machines, radios,
coffee, soft drink, beverage and fast food machines, lockers, bulletin
boards, photographs, works of art and other decorations, lawn ornaments,
signs, plants and shrubbery (both indoor and outdoor), sinks, basins,
stoves, ranges, microwaves, ovens, dishwashers, refrigerators, ice makers,
cafeteria equipment and supplies, wash tubs, showers, partitions, screens,
awnings, shades, blinds, curtains, draperies, carpets, rugs, furniture and
furnishings; (42) all heating, lighting, power, plumbing, water,
ventilating, cooling, air conditioning, refrigerating, gas, oil, steam,
electrical, solar, waste, incinerating and/or compacting plants, systems,
fixtures and equipment; (43) all elevators and escalators; (44) all vacuum
and other cleaning systems including window washing equipment; (45) all
lawn, parking and sidewalk maintenance equipment, including lawn mowers,
leaf blowers, snow blowers, plows and vacuums; (46) all dust and noise
suppression systems and equipment; (47) all air, water and other pollution
control systems and equipment; (48) all safety
3
<PAGE>
systems and equipment; (49) all office supplies; (50) all industrial
hygiene equipment and supplies; (51) all security alarms and cameras, and
all identification, timekeeping, access and surveillance systems and
equipment; and (52) all sprinkler systems and other fire detection,
prevention and extinguishing apparatus. If the Lien of this Mortgage in
any item of Fixtures and Equipment is subject to a purchase money or other
security interest therein which is permitted under this Mortgage, then all
of the right, title and interest of the Mortgagor in and to such item is
hereby assigned to the Collateral Agent, together with the benefits of all
deposits and payments now or hereafter made thereon by or on behalf of the
Mortgagor (all of the foregoing property, rights and interests described
in this Granting Clause Third, collectively the "Fixtures and Equipment").
GRANTING CLAUSE FOURTH
Permits, Licenses and Franchises and General Intangibles
Without limitation of the foregoing Granting Clauses, all permits,
licenses, franchises, privileges, grants, consents, exemptions, concession
agreements, development rights, building variances, certificates of
occupancy or operation, and other authorizations or approvals, now or
hereafter issued or granted by any governmental authority with respect to
the ownership of the Premises, or with respect to the ownership,
construction or operation of the Premises, and all "general intangibles"
(as defined in the Uniform Commercial Code of the State in which the
Premises are located) relating in any way to the Premises or the use or
operation thereof, together with and any renewals or extensions of any of
the foregoing, provided that the lien of this Mortgage shall not apply to,
and there shall be excluded from the ambit of this Granting Clause Fourth,
any of the foregoing permits, licenses, franchises, privileges, grants,
consents, exemptions, concession agreements, development rights, building
variances, certificates of occupancy or operation, and other
authorizations or approvals and any other "general intangibles", which, by
their express terms or by reason of applicable law would become void or
voidable if mortgaged, pledged or assigned by the Mortgagor hereunder.
GRANTING CLAUSE FIFTH
Leasehold and Other Contractual Interests
All the leases, lettings and licenses of, and all other contracts
and agreements affecting, the Land, the Improvements, the Fixtures and
Equipment and/or any other property or rights mortgaged or otherwise
conveyed or encumbered hereby, or any part thereof, now or hereafter
entered into, and all amendments, modifications, supplements, additions,
extensions and renewals thereof, and all right, title and interest of the
Mortgagor thereunder, including cash and securities deposited thereunder,
the right to receive and collect the rents, income, proceeds, issues and
profits payable thereunder and the rights to enforce, whether at law or in
equity or by any other means, all provisions and options thereof.
4
<PAGE>
GRANTING CLAUSE SIXTH
Assignment of Rents, Income and Profits
All rents, income, profits, proceeds and any and all cash collateral
to be derived from the Premises, or the use and occupation thereof, or
under any contract or bond relating to the construction or reconstruction
of the Premises, including all rents, royalties, revenue, rights, deposits
(including security deposits) and benefits accruing to the Mortgagor under
all leases now or hereafter covering the Premises, whether before or after
foreclosure or during the full period of redemption, if any, and the right
to receive the same and apply them against the Secured Obligations or
against the Mortgagor's other obligations hereunder, together with all
contracts, bonds, leases and other documents evidencing the same now or
hereafter in effect and all rights of the Mortgagor thereunder. Nothing
contained in the preceding sentence shall be construed to bind the
Collateral Agent to the performance of any of the provisions of any such
contract, bond, lease or other document or otherwise impose any obligation
upon the Collateral Agent (including any liability under a covenant of
quiet enjoyment contained in any lease or under applicable law in the
event that any tenant shall have been joined as a party defendant in any
action to foreclose this Mortgage and shall have been foreclosed of all
right, title and interest and all equity of redemption in the Premises),
except that the Collateral Agent shall be accountable for any money
actually received pursuant to such assignment. The assignment of said
rents, income, profits, proceeds and cash collateral, and of the aforesaid
rights with respect thereto and to the contracts, bonds, leases and other
documents evidencing the same is intended to be and is an absolute present
assignment from the Mortgagor to the Collateral Agent and not merely the
passing of a security interest.
GRANTING CLAUSE SEVENTH
Other and After Acquired Property
Any and all moneys and other property, of every kind and nature,
which may from time to time be subjected to the lien hereof by the
Mortgagor, through a supplement to this Mortgage or otherwise, or by any
other person or entity, or which may come into the possession of or be
subject to the control of the Collateral Agent, it being the intention and
agreement of the Mortgagor that all property hereafter acquired or
constructed by the Mortgagor shall forthwith upon acquisition or
construction thereof by the Mortgagor and without any act or deed by the
Mortgagor be subject to the lien and security interest of this Mortgage as
if such property were now owned by the Mortgagor and were specifically
described in this Mortgage and conveyed or encumbered hereby or pursuant
hereto, and the Collateral Agent is hereby authorized to receive any and
all such property as and for additional security hereunder.
5
<PAGE>
GRANTING CLAUSE EIGHTH
Proceeds and Awards
All unearned premiums, accrued, accruing or to accrue under
insurance policies now or hereafter obtained by the Mortgagor, all
proceeds of the conversion, voluntary or involuntary, of any of the
property described in these Granting Clauses into cash or other liquidated
claims, including proceeds of hazard, title and other insurance, and all
claims, entitlements, judgments, damages, awards, settlements and
compensation (including interest thereon) heretofore or hereafter accruing
or made to or for the benefit of the present and all subsequent owners of
the Land, the Improvements, the Fixtures and Equipment and/or any other
property or rights encumbered or conveyed hereby for any injury to or
decrease in the value thereof for any reason, or by any governmental or
other lawful authority for the taking by eminent domain, condemnation or
otherwise of all or any part thereof, including awards for any change of
grade of streets.
TO HAVE AND TO HOLD the Premises unto the Collateral Agent, its successors
and assigns, forever, for the purposes and uses herein set forth, until such
time as all of the Secured Obligations which are secured hereby shall have been
paid in full.
The property, interests and rights hereinabove mentioned, whether owned in
fee or held under lease, is hereinafter referred to as the "Real Property
Collateral" to the extent that the same is realty, and as the "Personal Property
Collateral" to the extent that the same is personalty. The Real Property and the
Personal Property Collateral collectively constitute the Premises.
It is also agreed that if any of the property herein mortgaged is of a
nature so that a security interest therein can be perfected under the Uniform
Commercial Code, this Mortgage shall constitute a security agreement and the
Mortgagor agrees to execute, deliver and file or refile any financing statement,
continuation statement, or other instruments the Collateral Agent may require
from time to time to perfect or renew such security interest under the Uniform
Commercial Code. This Mortgage shall be effective as a financing statement filed
as a fixture filing with respect to all fixtures included within the Premises
and is to be filed for record in the Office of the County Recorder or County
Clerk where the Premises (including such fixtures) are situated. The mailing
address of the Mortgagor is set forth at the beginning of this Mortgage and the
address of the Collateral Agent from which information concerning the security
interest may be obtained is the address of the Collateral Agent set forth at the
beginning of this Mortgage.
If the Mortgagor hereafter acquires any real property, or any interest in
real property, in addition to the Real Property Collateral, which is adjacent
to, or contiguous with, the Land, or otherwise is intended or required to be
subjected to the lien of this Mortgage, the Mortgagor will subject the same to
the lien of this Mortgage by instrument supplemental hereto, satisfactory in
form and substance to the Collateral Agent.
The conditions of this Mortgage are such that the Mortgagor has executed
and delivered this Mortgage for the purpose of securing the performance of its
covenants and agreements contained herein and in any agreement or instrument
made with respect to any Secured Obligations secured hereby and to secure the
payment when due (whether at the stated maturity, by acceleration or otherwise)
of the following indebtedness, liabilities and obligations (including
obligations which, but for the automatic stay under section 362(a) of the
Bankruptcy Code, would become due), now existing or hereafter arising
(collectively, the "Secured Obligations"), for the benefit of the Secured
Creditors, although not necessarily in the order of priority set forth below:
(a) $100,000,000 aggregate principal amount of Revolving Loans made or
to be made to the Mortgagor under the Credit Agreement, maturing on
or before December 31, 2003, with interest thereon as provided in
the Credit Agreement;
6
<PAGE>
(b) $150,000,000 aggregate principal amount of Term A Loans made or to
be made to the Mortgagor under the Credit Agreement, maturing on or
before December 31, 2003, with interest thereon as provided in the
Credit Agreement;
(c) $175,000,000 aggregate principal amount of Term B Loans made or to
be made to the Mortgagor under the Credit Agreement, maturing on or
before December 31, 2005, with interest thereon as provided in the
Credit Agreement;
(d) all reimbursement obligations in respect of Letters of Credit issued
under the Credit Agreement in an aggregate amount not exceeding
$10,000,000;
(e) all obligations and liabilities of the Mortgagor or any Subsidiary
of the Mortgagor under or in connection with any Designated Hedge
Agreement, now or hereafter entered into with or assigned to any of
the Secured Creditors (all such obligations and liabilities
described in this clause (e) being herein collectively called the
"Designated Hedge Obligations");
(f) all advances or disbursements of the Collateral Agent or any Secured
Creditor with respect to the Premises for the payment of taxes,
levies, assessments, insurance, insurance premiums or costs incurred
in the protection of the Premises, as provided in section 5301.233
of the Ohio Revised Code, and without limitation of the preceding
provisions of this clause (f), all other sums expended or advanced
by or on behalf of the Collateral Agent pursuant to any term or
provision of this Mortgage or any other agreement or instrument
relating to or securing any of the foregoing for the purpose of
protecting or preserving the Premises or the priority of the Lien of
this Mortgage, including, all advances or disbursements of the
Collateral Agent for the payment of taxes, levies, assessments,
insurance, insurance premiums or costs incurred in the protection of
the Premises; and
(g) all other liabilities, obligations and indebtedness of the
Mortgagor, its Subsidiaries and Affiliates, and/or any other Credit
Party, incurred under or arising out of or in connection with the
Credit Agreement, the Notes, the other Credit Documents and the
Designated Hedge Agreements, and the due performance and compliance
by the Mortgagor, its Subsidiaries and Affiliates, and any other
Credit Party with all of the terms, conditions, covenants and
agreements contained in the Credit Agreement, the Notes, such other
Credit Documents and the Designated Hedge Agreements;
but only to the extent that the total unpaid Secured Obligations, exclusive of
liabilities and obligations referred to in the preceding clause (f), in the
aggregate and exclusive of the interest on the Secured Obligations, does not
exceed the maximum amount specified in this Mortgage, which is $500,000,000, and
as security for the payment of the Secured Obligations, the Mortgagor has
granted to the Collateral Agent hereunder a lien against the Premises. In
accordance with the provisions of the Notes, the whole of the principal sum of
the Loans which are then unpaid may be declared and become due and payable upon
the occurrence of an Event of Default under the Credit Agreement. This Mortgage
is given for the purpose of creating a lien on the Premises and expressly is to
secure the Secured Obligations, for the benefit of the Secured Creditors,
including but not limited to future advances and other extensions of credit,
whether such advances or other extensions of credit are obligatory or to be made
at the option of the Secured Creditors (or any of them) or otherwise, to the
same extent as if such future advances or other extensions of credit were made
on the date of the execution of this Mortgage. The total amount of the Secured
Obligations may decrease or increase from time to time and the Lenders or other
Secured Creditors may hereafter, as described in this Mortgage, at any time
after this Mortgage is delivered to the county recorder or county clerk for
record, make additional loans, advances or other extensions of credit to or for
the benefit of the Mortgagor or any of its Subsidiaries or Affiliates; provided,
however, that the total unpaid balance of the Secured Obligations which are
secured at any one time by this Mortgage, shall not exceed $500,000,000, plus
interest thereon and any advances
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or disbursements made for the payment of taxes, levies or insurance on the
Premises with interest on such disbursements. Any such further loans or advances
or other extensions of credit, with interest, shall be secured by this Mortgage.
PROVIDED, NEVERTHELESS, that if the Secured Obligations which are secured
hereby shall be paid in full when due, and if all of the provisions of the
Credit Agreement, the Notes, the other Credit Documents and the Designated Hedge
Agreements shall be timely performed and observed, then the lien of this
Mortgage and the interest of the Collateral Agent in the Premises shall be
released at the cost of the Mortgagor, but this Mortgage shall otherwise, except
as specifically provided herein, remain in full force and effect.
The Mortgagor, intending to bind its successors and assigns, hereby
covenants and agrees with the Collateral Agent, its successors and assigns, for
its benefit and for the benefit of the Secured Creditors, as follows:
SECTION 1. PAYMENT OF SECURED OBLIGATIONS, PERFORMANCE OF OBLIGATIONS,
ETC.
(a) Payment of Secured Obligations. The Mortgagor shall pay or cause to be
paid the principal of and interest on the Loans and all other amounts included
in the Secured Obligations in accordance with the terms and provisions of the
Credit Agreement, the Notes, the other Credit Documents and the Designated Hedge
Agreements.
(b) Performance of Other Obligations. The Mortgagor will keep and perform
or cause to be kept and performed all covenants, agreements, conditions and
stipulations contained in the other Credit Documents or the Designated Hedge
Agreements which are binding on or otherwise applicable to the Mortgagor.
(c) Waiver of Acceptance, etc. The Mortgagor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Secured Obligations and this Mortgage and any requirement that the Collateral
Agent or any Secured Creditor protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any right or take
any action against any other person, or any collateral, or pursue any other
remedy in the power of the Collateral Agent or any other Secured Creditor.
SECTION 2. TITLE TO PREMISES, PROTECTION OF LIEN OF MORTGAGE, ETC.
(a) Title to Premises, etc. The Mortgagor represents to and covenants with
the Collateral Agent, its successors and assigns, that (i) the Mortgagor has and
will have good, marketable and insurable fee simple title to the Land, free and
clear of all liens, charges and encumbrances of every kind and character,
subject only to Permitted Encumbrances; (ii) the Mortgagor has and will have
full corporate power and lawful authority to encumber and convey the Premises as
provided herein; (iii) the Mortgagor owns and will own all of the Fixtures and
Equipment, free and clear of all liens, charges and encumbrances of every kind
and character, subject only to Permitted Encumbrances; (iv) this Mortgage is and
will remain a valid and enforceable first priority lien on, and first priority
security interest in, the Premises, subject only to Permitted Encumbrances; and
(v) the Mortgagor hereby warrants and will forever warrant and defend such title
and the validity, enforceability and priority of the lien and security interest
hereof against the claims of all persons and parties whomsoever.
(b) Protection of Lien; Defense of Action. If the lien, security interest,
validity or priority of this Mortgage, or if title or any of the rights of the
Mortgagor or the Collateral Agent in or to the Premises, shall be endangered or
questioned, or shall be attacked directly or indirectly, or if any action or
proceeding is commenced, to which action or proceeding the Collateral Agent is
made a party by reason of the execution of this Mortgage, or
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in which it becomes necessary to defend or uphold the lien of this Mortgage, or
the priority thereof or possession of the Premises, or otherwise to perfect the
security hereunder, or if any suit, action, legal proceeding or dispute of any
kind is commenced in which the Collateral Agent is made a party or appears as
party plaintiff or defendant, affecting the interest created herein, or the
Premises, including, but not limited to, bankruptcy, probate and administration
proceedings, other foreclosure proceedings or any condemnation action involving
the Premises, then the Mortgagor will promptly notify the Collateral Agent
thereof (unless the Collateral Agent has initiated or been served with process
in respect thereof) and the Mortgagor will diligently endeavor to cure any
defect which may be developed or claimed, and will take all necessary and proper
steps for the defense of such action or proceeding, including the employment of
counsel, the prosecution or defense of litigation and, subject to the Collateral
Agent's approval, the compromise, release or discharge of any and all adverse
claims. The Collateral Agent (whether or not named as a party to such actions or
proceedings), is hereby authorized and empowered (but shall not be obligated) to
take such additional steps as it may deem necessary or proper for the
prosecution, defense and control of any such action or proceeding or the
protection of the lien, security interest, validity or priority of this Mortgage
or of such title or rights, including the employment of counsel, the prosecution
or defense of litigation, the compromise, release or discharge of such adverse
claims, the purchase of any tax title and the removal of prior liens and
security interests. The Mortgagor shall, on demand, reimburse the Collateral
Agent for all expenses (including attorneys' fees and disbursements) incurred by
it in connection with the foregoing matters, and the person incurring such
expenses shall be subrogated to all rights of the person receiving such payment.
All such costs and expenses of the Collateral Agent, until reimbursed by the
Mortgagor, shall be part of the Secured Obligations and shall be deemed to be
secured by this Mortgage.
SECTION 3. TAXES AND IMPOSITIONS.
(a) Taxes on the Premises. The Mortgagor will pay when due, and before any
penalty, interest or cost for non-payment thereof may be added thereto, all
taxes, assessments, vault, water and sewer rents, rates, charges and
assessments, levies, permits, inspection and license fees and other governmental
and quasi-governmental charges, general and special, ordinary and extraordinary,
foreseen and unforeseen, heretofore or hereafter assessed, levied or otherwise
imposed against or upon, or which may become a Lien upon, the Premises or any
part thereof or any appurtenance thereto, or the revenues, rents, issues, income
and profits of the Premises or arising in respect of the occupancy, use or
possession thereof (collectively, "Impositions"). The Mortgagor will also pay
any penalty, interest or cost for non-payment of Impositions which may become
due and payable, and such penalties, interest or cost shall be included within
the term Impositions.
(b) Receipts. Unless the Mortgagor is making monthly deposits with the
Collateral Agent pursuant to section 4, or unless the Collateral Agent otherwise
directs, the Mortgagor will furnish to the Collateral Agent, upon its request,
proof of payment at the time same is made, and thereafter, upon receipt,
validated receipts showing payment in full of all Impositions.
(c) Income and Other Taxes. The Mortgagor will promptly pay all income,
franchise and other taxes owing by the Mortgagor, and any stamp taxes which may
be required to be paid in connection with the Secured Obligations, this Mortgage
or any other Credit Document or Designated Hedge Agreement, together with any
interest or penalties thereon, and the Mortgagor will pay any and all taxes,
charges, filing, registration and recording fees, excises and levies imposed
upon the Collateral Agent, the Administrative Agent or the Secured Creditors by
reason of execution of the Credit Agreement, the Notes, this Mortgage, the other
Credit Documents or any Designated Hedge Agreement, or ownership of this
Mortgage or any mortgage supplemental hereto, any security instrument with
respect to any Fixtures and Equipment or any instrument of further assurance.
(d) Brundage Clause. In the event of the enactment after the date hereof
of any law in the State in which the Premises are located or any other
governmental entity deducting from the value of the Premises for the
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purpose of taxation any lien or security interest thereon, or changing in any
way the laws for the taxation of mortgages, deeds of trust or other liens or
debts secured thereby, or the manner of collection of such taxes, so as to
affect this Mortgage, the Secured Obligations, the Collateral Agent, the
Administrative Agent or any of the Secured Creditors, then, and in such event,
the Mortgagor shall, on demand, pay to (or reimburse) the Collateral Agent, the
Administrative Agent or such Secured Creditors, the amount of all taxes,
assessments, charges or liens for which the Collateral Agent, the Administrative
Agent or any of the Secured Creditors is or may be liable as a result thereof,
provided that if any such payment or reimbursement shall be unlawful or would
constitute usury or render the Secured Obligations wholly or partially usurious
under applicable law, then the Collateral Agent may, at its option, declare the
Secured Obligations immediately due and payable or require the Mortgagor to pay
or reimburse the Collateral Agent, the Administrative Agent or any of the
Secured Creditors for payment of the lawful and non-usurious portion thereof.
(e) Right to Contest Impositions. Notwithstanding anything to the contrary
contained in this section 3, the Mortgagor shall have the right to protest
and/or contest any Imposition imposed upon the Premises or any part thereof,
provided that and so long as (1) the same is done by the Mortgagor upon prior
written notice to the Collateral Agent and at the Mortgagor's sole cost and
expense and with due diligence and continuity so as to resolve such protest
and/or contest as promptly as possible; (2) neither the Premises nor any part
thereof is or will be in immediate danger of being forfeited or lost by reason
of such protest or contest; (3) if required by the Collateral Agent, the
Mortgagor shall establish a reserve or other security with the Collateral Agent
in an amount and in form and substance satisfactory to the Collateral Agent for
application to the cost of curing or removing the same from record pursuant to
clause (4) below; (4) in any event, each such contest shall be concluded and the
tax assessment, penalties, interest and costs shall be paid prior to the date
such judgment becomes final or any writ or order is issued under which the
Premises may be sold pursuant to such judgment; and (5) the Mortgagor agrees in
writing to indemnify and hold harmless the Collateral Agent and the Secured
Creditors from and against any and all expenses, claims, demands, obligations,
liabilities, suits, actions and penalties upon or arising out of such protest
and/or contest. Pending the determination of any such protest or contest, the
Mortgagor shall not be obligated to pay any such Imposition unless nonpayment of
such Imposition will subject the Premises or any part thereof to sale or other
liability or forfeit by reason of non-payment. In addition, to the extent that
the same may be permitted by law, the Mortgagor shall have the right to apply
for the conversion of any Imposition to make the same payable in annual
installments over a period of years, and upon such conversion the Mortgagor
shall be obligated only to pay and discharge said periodic installments as
required by this section 3.
SECTION 4. TAX AND INSURANCE DEPOSITS.
(a) Amount of Deposits. To further secure the Mortgagor's obligations
under sections 3 and 10, but not in lieu thereof, the Collateral Agent, at its
option, following the occurrence and during the continuance of an Event of
Default, may require that the Mortgagor deposit with the Collateral Agent,
monthly on the first day of each month, a sum equal to one-twelfth (1/12) of the
estimated annual cost of all Impositions levied on the Premises, and a sum equal
to one-twelfth (1/12) of the estimated annual insurance premiums required to
keep the Improvements and the Fixtures and Equipment insured as required by
section 10 hereof, and the Mortgagor shall, accordingly, make such deposits. In
addition, if required by the Collateral Agent, the Mortgagor shall also deposit
with the Collateral Agent a sum of money which, together with the aforesaid
monthly installments, will be sufficient to make each of said payments of
Impositions and premiums, at least 10 days before such payments are due. If the
amount of any such payments is not ascertainable at the time any such deposit is
required to be made, the deposit shall be made on the basis of the Collateral
Agent's estimate thereof, and, when such amount is fixed for the then-current
year, the Mortgagor shall promptly deposit any deficiency with the Collateral
Agent.
(b) Use of Deposits. All funds so deposited shall, until so applied,
constitute additional security for the Secured Obligations, shall be held by the
Collateral Agent in a separate account, without interest (except to the
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extent required under applicable law), may be commingled with other funds of the
Collateral Agent and, provided that no Event of Default shall have occurred and
be continuing hereunder, shall be applied in payment of the aforesaid amounts
prior to their becoming delinquent, to the extent that Collateral Agent shall
have such funds on hand, and provided, further, that the Collateral Agent shall
have no obligation to use said funds to pay any installment of Impositions prior
to the last day on which payment thereof may be made without penalty or interest
or to pay an insurance premium prior to the due date thereof. It shall be the
Mortgagor's responsibility to furnish the Collateral Agent with bills or
invoices therefor in sufficient time to pay the same before any penalty or
interest attaches and before said policies of insurance lapse, and the
Collateral Agent shall have no responsibility for payment of the same in the
absence of such bills or invoices. If an Event of Default hereunder shall have
occurred and be continuing, or if any of the Secured Obligations shall have been
accelerated as provided in the Credit Agreement or any Designated Hedge
Agreement, all funds so deposited may, at the Collateral Agent's option, be
applied to the Secured Obligations in the order determined by the Collateral
Agent or to cure said Event of Default or as provided in this section.
(c) Transfer of Mortgage. Upon an assignment or other transfer of this
Mortgage, the Collateral Agent shall have the right to pay over the balance of
such deposits in its possession to the assignee or other successor, and the
Collateral Agent shall thereupon be completely released from all liability with
respect to such deposits and the Mortgagor or the owner of the Premises shall
look solely to the assignee or transferee with respect thereto. This provision
shall apply to every transfer of such deposits to a new assignee or transferee.
(d) Transfer of Premises. A permissible transfer of record title to the
Premises shall automatically transfer to the new owner the beneficial interest
in any deposits under this section. Upon full payment and satisfaction of this
Mortgage or, at the Collateral Agent's option, at any prior time, the balance of
amounts deposited in the Collateral Agent's possession shall be paid over to the
record owner of the Premises, and no other person shall have any right or claim
thereto in any event.
(e) Depository. The Mortgagor agrees, at the Collateral Agent's request
and at the Mortgagor's expense, to make the aforesaid deposits with the
Collateral Agent or such service or financial institution as the Collateral
Agent may from time to time designate in lieu of the Collateral Agent.
SECTION 5. LIENS AND LIABILITIES.
(a) Discharge of Mechanic's Liens, etc. The Mortgagor will pay, bond or
otherwise discharge, from time to time when the same shall become due, all
lawful claims and demands of mechanics, materialmen, laborers and others which,
if unpaid, might result in, or permit the creation of, a lien on the Premises,
or on the revenues, rents, issues, income or profits arising therefrom and, in
general, the Mortgagor shall do, or cause to be done, at the Mortgagor's sole
cost and expense, everything necessary to fully preserve the lien, security
interest and priority of this Mortgage.
(b) Creation of Liens. The Mortgagor will not, without the Collateral
Agent's consent, create, place or permit to be created or placed, or through any
act or failure to act acquiesce in the placing of, or allow to remain, any deed
of trust, mortgage, voluntary or involuntary lien, whether statutory,
constitutional or contractual, security interest, encumbrance or charge, or
conditional sale or other title retention document, against or covering the
Premises, prior to, on a parity with or subordinate to the lien of this
Mortgage, other than the following ("Permitted Encumbrances"): (i) the lien of
this Mortgage; (ii) the Permitted Liens (as defined in the Credit Agreement);
and (iii) such other matters of record as may be described in Exhibit 2 or as to
which the Collateral Agent has otherwise specifically consented in writing. If
any of the foregoing, other than Permitted Encumbrances, becomes attached to the
Premises without such consent, the Mortgagor will promptly cause the same to be
discharged and released.
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(c) No Consent of Collateral Agent to Liens to be Implied. Nothing in the
Credit Agreement, the Notes, this Mortgage, the other Credit Documents or any
Designated Hedge Agreement shall be deemed or construed in any way as
constituting the consent or request by the Collateral Agent, express or implied,
to any contractor, subcontractor, laborer, mechanic or materialman for the
performance of any labor or the furnishing of any material for any improvement,
construction, alteration or repair of the Premises.
(d) Right to Contest. Notwithstanding anything to the contrary contained
in this section 5, the Mortgagor shall have the right to contest in good faith
the validity of any such lien, encumbrance, charge or security interests,
provided that and so long as (1) the same is done by the Mortgagor upon prior
written notice to the Collateral Agent and at the Mortgagor's sole cost and
expense and with due diligence and continuity so as to resolve as promptly as
possible such question of validity; (2) neither the Premises nor any part
thereof will be in immediate danger of being forfeited or lost by reason of such
contest; (3) such contest shall not subject the Collateral Agent to prosecution
for a criminal offense or a claim for civil liability; (4) if required by the
Collateral Agent, the Mortgagor shall either bond such lien, encumbrance, charge
or security interest or establish a reserve or other security with the
Collateral Agent in an amount and in form and substance satisfactory to the
Collateral Agent for application towards the cost of curing or removing the same
from record pursuant to clause (5) below; (5) the Mortgagor shall thereafter
diligently proceed to cause such lien, encumbrance or charge to be removed and
discharged prior to the date the Premises is listed for an in rem action with
respect to such lien, encumbrance or charge or any writ or order is issued under
which the Premises may be sold pursuant to a final judgment; (6) the Mortgagor
agrees in writing to indemnify and hold harmless the Collateral Agent and the
Secured Creditors from and against any and all expenses, claims, demands,
obligations, liabilities, suits, actions and penalties upon or arising out of
such contest and (7) no Event of Default hereunder shall have occurred and be
continuing.
SECTION 6. TRANSFERS AND MERGERS; LEASES, ETC.
The Mortgagor shall not (i) sell, assign, transfer or otherwise dispose of
the Premises or any part thereof or interest therein, or (ii) merge or
consolidate with any other person, or (iii) lease all or any portion of the
Premises to any other person, except pursuant to a lease which is subject and
subordinate in all respects to this Mortgage, or (iv) enter into any contract or
agreement to do any of the foregoing, expressly including, without limitation,
any land contract, lease/purchase, lease/option or option agreement, except to
the extent permitted by, and in compliance with the requirements of, section 9.2
of the Credit Agreement.
SECTION 7. MAINTENANCE; ALTERATIONS; REPAIR OR RESTORATION OF LOSS OR
DAMAGE CAUSED BY CASUALTY; PREPAYMENT UPON EVENT OF LOSS.
(a) Repair and Maintenance. The Mortgagor will operate and maintain the
Premises in good order, repair and operating condition, ordinary wear and tear
excepted, and will promptly make all necessary repairs, renewals, replacements,
additions and improvements to the Premises, interior and exterior, structural
and nonstructural, foreseen and unforeseen, required by law or any restrictive
covenant affecting the Premises or otherwise necessary so that the Premises will
at all times be in good operating condition, ordinary wear and tear excepted,
and fit and proper for the purposes for which it is used and operated at the
date hereof. The Mortgagor shall not in any event commit waste upon the Premises
or suffer waste to be committed thereon.
(b) Replacement of Fixtures and Equipment. The Mortgagor will keep the
Premises fully equipped and will replace all worn-out or obsolete Fixtures and
Equipment with Fixtures and Equipment comparable thereto when new, and will not,
without the Collateral Agent's consent, remove from the Premises any item of the
Fixtures
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and Equipment covered by this Mortgage unless (i) the same is replaced by the
Mortgagor with an item of equal suitability and value when new, owned by the
Mortgagor and subject to the lien and security interest of this Mortgage, free
and clear of any lien or security interest (other than Permitted Encumbrances),
or (ii) in the case of any such Fixtures and Equipment which is obsolete and
surplus to its needs, the same is disposed of in the ordinary course of business
and in compliance with section 9.2 of the Credit Agreement.
(c) Alterations of Improvements, etc. No buildings, structures or other
substantial Improvements on the Premises shall be altered in any material
respect or demolished or removed by the Mortgagor, provided that the Mortgagor
may make alterations and additions (including structural alterations) to the
Improvements if (i) such alterations do not materially reduce the value or
marketability of the Premises or the uses or utility of the Premises; or (ii)
such alterations are required by applicable law, rule or regulation.
(d) Event of Loss, etc. If the Improvements or the Fixtures and Equipment
suffer any damage or loss or are destroyed by fire, rain, storm, flood,
earthquake, or any other casualty, whether or not covered by insurance, the
Mortgagor will (i) if the same constitutes an Event of Loss requiring prepayment
of any of the Loans pursuant to section 5.2 of the Credit Agreement, so prepay
such Loans as provided in the Credit Agreement, or (ii) otherwise repair,
replace or restore the Improvements and/or Fixtures and Equipment to the
condition in which they are required to be maintained hereunder immediately
prior to such damage, loss or destruction
SECTION 8. COMPLIANCE WITH LAWS AND INSURANCE REQUIREMENTS, ETC.
(a) Compliance with Laws, etc. The Mortgagor covenants that the Premises
will at all times be constructed, installed, maintained and operated in
compliance with all applicable requirements of:
(i) all laws, rules, regulations, orders, authorizations, permits
and licenses of all governmental authorities, federal, state and local,
having jurisdiction over the Mortgagor, the Premises or any part thereof,
including, without limitation, (w) all Environmental Laws, (x) the
Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq., (y) the
Americans with Disabilities Act of 1990, and (z) all state and local laws
and ordinances related to handicapped access and all rules, regulations,
and orders issued pursuant thereto including, without limitation, the
Americans with Disabilities Act Accessibility Guidelines for Buildings and
Facilities (collectively as referred to in clause (y) and this clause (z),
"Access Laws"); and
(ii) all restrictive covenants affecting any portion or all of the
Real Property Collateral; .
other than those requirements (A) being contested in good faith by appropriate
proceedings, as to which adequate reserves are established to the extent
required under GAAP, and (B) the noncompliance with which would not have, and
which would not be reasonably expected to have, a Material Adverse Effect.
(b) Alterations Affecting Compliance with Access Laws. Notwithstanding any
provisions set forth herein or in any other document regarding the Collateral
Agent's approval of alterations of the Real Property Collateral, the Mortgagor
shall not alter the Real Property Collateral in any manner which would increase
in any material respect the responsibilities of the Mortgagor for compliance
with the applicable Access Laws without the prior written approval of the
Collateral Agent. The foregoing shall apply to tenant improvements constructed
by the Mortgagor or by any of its tenants. The Collateral Agent may condition
any such approval upon receipt of a certificate of Access Law compliance from an
architect, engineer, or other person acceptable to the Collateral Agent.
(c) Notice of Violation of Access Laws. The Mortgagor does hereby agree to
give prompt notice to the Collateral Agent of the receipt by the Mortgagor of
any complaints related to violation of any Access Laws
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and of the commencement of any proceedings or investigations which relate to
compliance with applicable Access Laws.
(d) Licenses and Permits, etc. The Mortgagor shall (i) observe and comply
with all conditions and requirements necessary to preserve and extend any and
all rights, licenses, permits (including but not limited to zoning variances,
special exceptions and non-conforming uses), privileges, franchises and
concessions which are applicable to the Premises or any part thereof or which
have been granted to or contracted for by the Mortgagor in connection with any
existing or presently contemplated use of the Premises, and (ii) obtain and keep
in full force and effect all necessary governmental and municipal approvals as
may be necessary from time to time to comply in all material respects with all
Environmental Laws, all Access Laws and other statutory or regulatory
requirements; except in any such case referred to in clause (i) or (ii) above
where the noncompliance would not have, and would not be reasonably expected to
have, a Material Adverse Effect.
(e) Flood Hazards; Utilities; Streets. The Mortgagor represents and
warrants that (i) the Premises are not located in an area identified by the
Secretary of Housing and Urban Development or a successor thereto as an area
having special flood hazards pursuant to the terms of the National Flood
Disaster Protection Act of 1973, as amended; (ii) the Premises are served by all
utilities required for the present use thereof; and (iii) all streets necessary
to serve the Premises for the use thereof as herein contemplated have been
completed and are serviceable and have been dedicated or accepted by the
appropriate governmental entities.
(f) Zoning; Title Matters. The Mortgagor will not (i) initiate or support
any zoning reclassification of the Premises, seek any variance under existing
zoning ordinances applicable to the Premises or use or permit the use of the
Premises in a manner which would result in such use becoming a non-conforming
use under applicable zoning ordinances, (ii) modify, amend or supplement any
Permitted Encumbrances, (iii) impose any restrictive covenants or encumbrances
upon the Premises, execute or file any subdivision plat affecting the Premises
or consent to the annexation of the Premises to any municipality or (iv) permit
or suffer the Premises to be used by the public or any person in such manner as
might make possible a claim of adverse usage or possession or of any implied
dedication or easement.
(g) Insurance Requirements. The Mortgagor shall observe and comply with
any and all conditions and requirements attached to or made a part of the
insurance relating to the Premises which is maintained in accordance with
section 10.
SECTION 9. ENVIRONMENTAL MATTERS.
(a) Without limitation of the provisions of section 8 hereof, the
Mortgagor hereby (i) reaffirms its representations contained in section 7.13 of
the Credit Agreement, (ii) covenants to perform and observe all of the terms and
provisions of the Credit Agreement relating to compliance by it with
Environmental Laws and notice by it and indemnification by it of Environmental
Claims, including, without limitation, the covenants contained in section 8.8 of
the Credit Agreement and the indemnification obligations contained in section
12.1 of the Credit Agreement; and (iii) agrees that all of the Secured Creditors
shall be considered Indemnitees as defined in section 12.1(g) of the Credit
Agreement.
(b) Any costs or expenses reasonably incurred by a person to be
indemnified hereunder for which the Mortgagor is responsible shall be paid to
the person to be indemnified on demand, and failing prompt reimbursement, shall
be added to the Secured Obligations and earn interest at the interest rate
provided in the last sentence of section 2.7(c) of the Credit Agreement, or such
lesser rate as is the maximum legally permissible rate of interest (the "Default
Rate"), until paid in full.
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(c) The Mortgagor's representations, warranties, and obligations under
this section shall not be terminated, released, discharged, extinguished, or
otherwise affected by any foreclosure of any lien, indebtedness or obligation,
any satisfaction of the Secured Obligations or the release or discharge of the
Premises or any part thereof or any other action or thing, except and unless
such representations, warranties, and obligations are expressly released in
writing by the Collateral Agent, which writing shall refer particularly to this
section. The provisions of this section may be enforced at any time by any of
the Secured Creditors, the Collateral Agent or any other person entitled to be
indemnified hereunder and, without limiting the foregoing, shall survive the
payment or other satisfaction by any means of the obligations evidenced by the
Notes and the release and discharge of this Mortgage, except in the case of a
specific written release by the Collateral Agent as to this section, as referred
to above.
SECTION 10. INSURANCE.
(a) Required Insurance. The Mortgagor will maintain insurance with
responsible companies in such amounts and against such risks as is usually
carried by owners of similar businesses and properties (and with such
deductibles and levels of self-insurance as are usually maintained by owners of
similar businesses and properties and as are consistent with the Mortgagor's
practices as of the date of the execution and delivery hereof), provided that in
any event the Mortgagor will maintain:
(i) All Risk Extended Coverage Insurance: insurance against loss or
damage covering the Improvements, the Fixtures and Equipment and all other
tangible personal property of the Mortgagor located on the Premises by
reason of any loss or damage by fire, storms, and other hazards, perils,
casualties and risks, including without limitation risks usually covered
by extended coverage policies issued in the jurisdiction in which the
Improvements are located, which insurance shall:
(A) name National City Bank, as Collateral Agent as an
additional insured and as loss payee,
(B) provide coverage in an amount not less than the greater of
(x) 100% of the replacement costs of the Improvements and the
Fixtures and Equipment, (y) the full insurable value of the
Improvements and the Fixtures and Equipment, and (z) the amount
applicable to the Improvements and the Fixtures and Equipment
necessary so that neither the Mortgagor (or any of its Affiliates)
or the Collateral Agent shall be considered or shall become a
co-insurer of any loss under such policy, and
(C) provide for a deductible or self-insurance retention in an
amount consistent with the Mortgagor's current practices or such
greater amount as is reasonably acceptable to the Collateral Agent;
(ii) Flood Insurance: if the area in which the Real Property
Collateral is located has been designated as flood prone or a flood risk
area, as defined by the Flood Disaster Protection Act of 1973, as amended,
flood insurance, which insurance shall:
(A) name National City Bank, as Collateral Agent as an
additional insured and as loss payee,
(B) provide coverage in an amount not less than the greater of
(x) 100% of the replacement costs of the Improvements and the
Fixtures and Equipment, (y) the full insurable value of the
Improvements and the Fixtures and Equipment, and (z) the amount
applicable to the Improvements and the Fixtures and Equipment
necessary so that neither the Mortgagor (or any of
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its Affiliates) or the Collateral Agent shall be considered or shall
become a co-insurer of any loss under such policy; provided that if
flood insurance in the required amount is not available, flood
insurance shall be maintained in the maximum amount available;
(C) provide for a deductible or self-insurance retention of an
amount reasonably acceptable to the Collateral Agent; and
(D) comply with any additional requirements of the National
Flood Insurance Program as set forth in such Act;
(iii) Commercial General Liability Insurance: insurance against
claims for bodily injury, death or property damage occurring on, in or
about the Premises and any other facilities owned, leased or used by the
Mortgagor (including adjoining streets, sidewalks and waterways), which
insurance shall:
(A) name National City Bank, as Collateral Agent as an
additional insured,
(B) provide coverage in an amount not less than $1,000,000 per
occurrence and $2,000,000 in the aggregate, plus umbrella coverage
of not less than $3,000,000; and
(C) provide for a deductible or self-insurance retention in an
amount consistent with the Mortgagor's current practices or such
greater amount as is reasonably acceptable to the Collateral Agent;
(iv Workers' Compensation Insurance: insurance against claims for
injuries to or death of employees (including Employers' Liability
Insurance) to the extent required by applicable law;
(v Business Interruption Insurance: insurance against loss of
operating income for a period of at least six months, occasioned by reason
of any peril affecting the operations of the Mortgagor; and
(vi Other Insurance: such other and additional insurance, in such
amounts and with such coverages as are then customary for property similar
in use and located in the same state in which the Premises is located.
Such insurance shall be written by financially responsible companies selected by
the Mortgagor and having an A.M. Best rating of "A-" or better and being in a
financial size category of "VII" or larger, or by other companies acceptable to
the Collateral Agent, and (other than workers' compensation insurance) shall
name the Collateral Agent, as loss payee (in the case of insurance described in
items (i) and (ii)) or as an additional named insured (in the case of the
insurance described in items (iii), (v) and (vi) above), in each case as its
interests may appear. Each policy referred to in this section shall provide that
it will not be canceled or reduced or expire except after not less than 30 days'
written notice to the Collateral Agent and shall also provide that the interests
of the Collateral Agent shall not be invalidated by an act or negligence of the
Mortgagor or any person having an interest in any facility owned, leased or used
by the Mortgagor nor by occupancy or use of any facility owned, leased or used
by the Mortgagor for purposes more hazardous than permitted by such policy nor
by any foreclosure or other proceedings relating to any facility owned, leased
or used by the Mortgagor. The Mortgagor will advise the Collateral Agent
promptly of any policy cancellation, reduction or amendment. All of such
insurance shall be primary and non-contributing with any insurance which may be
carried by the Collateral Agent. All insurance policies, to the extent of its
interest, are to be for the benefit of and first payable in case of loss to the
Collateral Agent as first mortgagee without contribution. At or prior to the
time of the initial Borrowing by the Mortgagor, it will provide to the
Collateral Agent (x) certificates or endorsements naming the Collateral Agent as
an additional insured or loss
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payee with respect to the casualty and liability insurance maintained as
required hereby with respect to the Premises, and (y) if requested to do so,
copies of all insurance policies maintained by it as required hereby. The
Mortgagor shall deliver to the Collateral Agent contemporaneously with the
expiration or replacement of any policy of insurance required to be maintained
hereunder a certificate as to the new or renewal policy.
(b Proceeds of Insurance. All amounts recoverable under any policy of
casualty insurance are hereby assigned to the Collateral Agent. In the event of
a loss, and if an Event of Default has occurred and is continuing or if any
required prepayment of any of the Secured Obligations is required to be made at
such time or as a result thereof, the Collateral Agent is authorized and
empowered, at its option, to adjust or compromise any loss covered by any
insurance policies on the Premises, to collect and receive the proceeds
therefrom and, after deducting from such proceeds any expenses incurred by it in
the collection or handling thereof, to apply the net proceeds to the Secured
Obligations in accordance with the provisions of the Credit Agreement. If any
such net proceeds are not to be so applied, the Collateral Agent is authorized
to apply the net proceeds in any one or more of the following ways, subject to
the applicable provisions of the Credit Agreement: (i) use the same or any part
thereof to fulfill any of the covenants contained herein as the Collateral Agent
may determine; (ii) use the same or any part thereof to replace and restore the
Premises to a condition satisfactory to the Collateral Agent; or (iii) release
the same or any part thereof to the Mortgagor to cover the cost of repair or
restoration of the Improvements.
(c Power of Attorney. The Collateral Agent is hereby irrevocably appointed
by the Mortgagor as attorney for the Mortgagor to assign any policy to itself or
its nominees in the event of the foreclosure of this Mortgage. In the event of
foreclosure of this Mortgage, or other transfer of title of the Premises in lieu
of foreclosure, all right, title and interest of the Mortgagor in and to any
insurance policies then in force shall pass to the purchaser or grantee thereof.
SECTION 11. CONDEMNATION.
(a Condemnation. The Mortgagor will give the Collateral Agent immediate
notice of the actual or threatened commencement of any proceedings under eminent
domain affecting all or any part of the Premises or any easement therein or
appurtenance thereof, including severance and consequential damage and change in
grade of streets, and will deliver to the Collateral Agent copies of any and all
papers served in connection with any such proceedings. The Mortgagor agrees that
all awards heretofore or hereafter made by any public or quasi-public authority
to the present and all subsequent owners of the Premises by virtue of an
exercise of the right of eminent domain by such authority, including any award
for taking of title, possession or right of access to a public way, or for any
change of grade or streets affecting the Premises, are hereby assigned to the
Collateral Agent. If case of any such proceedings, and if an Event of Default
has occurred and is continuing or if any required prepayment of any of the
Secured Obligations is required to be made at such time or as a result thereof,
the Collateral Agent is authorized and empowered, at its option, to collect and
receive the proceeds of any such awards from the authorities making the same and
to give proper receipts therefor, and after deducting from such proceeds any
expenses incurred by the Collateral Agent in the collection or handling thereof,
to apply the net proceeds to the Secured Obligations in accordance with the
provisions of the Credit Agreement. If any such net proceeds are not to be so
applied, the Collateral Agent is authorized, at its option, to apply the net
proceeds in any one or more of the following ways, subject to the applicable
provisions of the Credit Agreement: (A) use the same or any part thereof to
fulfill any of the covenants contained herein as the Collateral Agent may
determine; (B) use the same or any part thereof to replace and restore the
Premises to a condition satisfactory to the Collateral Agent; or (C) release the
same or any part thereof to the Mortgagor to cover the cost of repair or
restoration of the Improvements.
(b Further Assurances. The Mortgagor hereby covenants and agrees to and
with the Collateral Agent, upon the request of the Collateral Agent to make,
execute and deliver any and all assignments and other
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instruments sufficient for the purpose of assigning all such awards to the
Collateral Agent, free and clear and discharged of any and all encumbrances of
any kind or nature whatsoever except as above stated.
(c Installment Payment of Secured Obligations Not Impaired.
Notwithstanding any taking under the power of eminent domain, alteration of the
grade of any street, or other injury to or decrease in value of the Premises by
any public or quasi-public authority or corporation, the Mortgagor shall
continue to pay installments on the Secured Obligations owed by it and any
reduction in the principal sum resulting from the application by the Collateral
Agent of such award or payment as hereinafter set forth shall be deemed to take
effect only on the date of such receipt.
SECTION 12. RIGHT OF COLLATERAL AGENT TO MAKE PAYMENTS ON BEHALF OF
MORTGAGOR, ETC.
(a Right of Collateral Agent to Make Payments, etc. In the event the
Mortgagor shall fail to comply with any or all of its covenants, agreements,
conditions and stipulations herein set forth, then the Collateral Agent shall
after notice to the Mortgagor be and hereby is authorized and empowered at its
option, but without legal obligation to do so, to pay or perform the same
without waiver of any other remedy. In addition, the Collateral Agent is
authorized and empowered at its option, but without legal obligation to do so,
upon not less than two business Days' prior notice to the Chief Financial
Officer of the Mortgagor, to enter, or have its agents enter, the Premises
whenever necessary for the purpose of inspecting the Premises and curing any
default hereunder. The Mortgagor agrees that the Collateral Agent shall
thereupon have a claim against the Mortgagor for all sums paid by the Collateral
Agent for such defaults so cured, together with a lien upon the Premises for the
sum so paid plus interest at the Default Rate.
(b Collateral Agent Protected; Further Rights, etc. The Collateral Agent,
in making any payment herein and hereby authorized in the place and stead of the
Mortgagor (i) relating to taxes, assessments, water rates, sewer rentals and
other governmental or municipal charges, fines, impositions or liens asserted
against the Premises, may do so according to any bill, statement or estimate
procured from the appropriate public authority without inquiry into the validity
thereof; or (ii) relating to any adverse title, lien, statement of lien,
encumbrance, claim or charge, shall be the sole judge of the validity of same;
or (iii) otherwise relating to any purpose herein and hereby authorized, but not
enumerated in this section, may do so whenever, in its good faith judgment and
discretion, such payment shall seem necessary or desirable to protect the full
security intended to be created by this Mortgage. In connection with any such
payment, the Collateral Agent, at its option, may and is hereby authorized to
obtain a continuation report of title prepared by a title insurance company, the
cost and expenses of which shall be repayable by the Mortgagor upon demand and
shall be secured hereby.
SECTION 13. SECURITY AGREEMENT PROVISIONS.
This Mortgage is hereby deemed to be as well a security agreement for the
purpose of creating hereby a security interest securing the Secured Obligations
in and to the Personal Property Collateral. Without derogating any of the
provisions of this Mortgage, the Mortgagor by this Mortgage:
(a grants to the Collateral Agent a security interest in all of the
Mortgagor's right, title and interest in and to all Personal
Property Collateral, including, but not limited to, the items
referred to above, together with all additions, accessions and
substitutions and all similar property hereafter acquired and used
or obtained for use on, or in connection with, the Real Property
Collateral; the proceeds of the Personal Property Collateral are
intended to be secured hereby; provided, however, that such
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intent shall never constitute an expressed or implied consent on the
part of the Collateral Agent to the sale of any or all Personal
Property Collateral except as specifically permitted under any of
the applicable provisions of this Mortgage or any of the other
Credit Documents;
(b agrees that the security interest hereby granted by this Mortgage
shall secure the payment of the Secured Obligations;
(c agrees not to sell, convey, mortgage or grant a security interest
in, or otherwise dispose of or encumber, any of the Personal
Property Collateral or any of the Mortgagor's right, title or
interest therein, except in compliance with the requirements of
section 9.2 of the Credit Agreement;
(d agrees that if any of the Mortgagor's rights in the Personal
Property Collateral are voluntarily or involuntarily transferred,
whether by sale, creation of a security interest, attachment, levy,
garnishment or other judicial process, without the written consent
of the Collateral Agent, such transfer shall constitute a default by
the Mortgagor under the terms of this Mortgage;
(e authorizes the Collateral Agent to file, in the jurisdiction where
this Mortgage will be given effect, financing statements covering
the Personal Property Collateral and at the request of the
Collateral Agent, the Mortgagor shall join the Collateral Agent in
executing one or more of such financing statements pursuant to the
Uniform Commercial Code in a form satisfactory to the Collateral
Agent and the Mortgagor shall pay the cost of filing the same in all
public offices at any time and from time to time wherever the
Collateral Agent deems filing or recording of any financing
statements or of this Mortgage to be desirable or necessary; and
(f acknowledges that the Mortgagor, as of the date hereof, has joined
the Collateral Agent in the execution of one or more Uniform
Commercial Code financing statements to be filed to perfect the
security interest in the Personal Property created by this Mortgage.
SECTION 14. FILINGS AND RECORDINGS.
The Mortgagor agrees at all time to cause this Mortgage, and each
amendment or modification hereof or supplement hereto, and financing statements
covering personal property (and continuation statements in respect thereof), if
necessary or appropriate under the Uniform Commercial Code, as in effect in the
jurisdiction in which the Real Property Collateral is located, and all
assignments of leases, to be recorded, registered and filed, and kept recorded,
registered and filed, in such manner and in such places as appropriate, and
shall comply with all applicable statutes and regulations in order to establish,
preserve and protect the security and priority of this Mortgage, and such
assignments and the rights of the Collateral Agent thereunder. The Mortgagor
shall pay, or cause to be paid, all taxes, fees and other charges incurred in
connection with such recording, registration, filing and compliance.
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SECTION 15. RIGHT OF SETOFF.
In addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
and during the continuance of an Event of Default, each Secured Creditor is
hereby authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Mortgagor or to any other person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by such Secured Creditor (including, without limitation,
by branches and agencies of such Secured Creditor wherever located) to or for
the credit or the account of the Mortgagor against and on account of the
obligations and liabilities of the Mortgagor to such Secured Creditor under the
Notes, any other Credit Documents or any Designated Hedge Agreement, including,
without limitation, all interests in Loans purchased by such Secured Creditor
pursuant to section 12.4(c) of the Credit Agreement, and all other claims of any
nature or description arising out of or connected with the Notes or any other
Credit Document or any Designated Hedge Agreement, irrespective of whether or
not such Secured Creditor shall have made any demand hereunder and although said
Loans, liabilities or claims, or any of them, shall be contingent or unmatured.
SECTION 16. EVENTS OF DEFAULT.
Any Event of Default under the Credit Agreement, any payment default by
the Borrower or any of its Subsidiaries under any Designated Hedge Agreement,
and/or any Event of Default relating to the Borrower or any of its Subsidiaries
under any Designated Hedge Agreement, shall constitute an Event of Default
("Event of Default") under this Mortgage.
SECTION 17. REMEDIES.
If an Event of Default, under and as defined in section 16 of this
Mortgage, has occurred and is continuing:
(a The Collateral Agent, the Administrative Agent and the Secured
Creditors may exercise any one or more of the remedies specified in
section 10.2 of the Credit Agreement or otherwise available at law or in
equity.
(b To the extent permitted by applicable law, the Collateral Agent
may enter upon the Premises or any portion thereof and may exclude the
Mortgagor therefrom; and having and holding the same, may use, operate,
manage, and control the Premises and conduct business in connection
therewith, including, without limitation the continuation of the
construction of the Improvements if not previously completed, either
personally or by its superintendents, managers, agents, servants,
attorneys or receivers; and upon every such entry, the Collateral Agent,
at the expense of the Mortgagor and from time to time, may maintain the
Premises and may insure and reinsure the same, as may seem to the
Collateral Agent to be necessary or advisable; and, at the expense of the
Mortgagor and from time to time, the Collateral Agent may make all
repairs, renewals, replacements, alterations, additions, betterments and
improvements thereto and thereon, as to the Collateral Agent may seem
necessary or advisable, and if the construction of the Improvements has
not been completed, may cause such construction to be continued to
completion or to such stage of completion as the Collateral Agent
considers necessary or advisable; and in every such case the Collateral
Agent shall have the right to carry on the construction thereof, enter
into, terminate, cancel and/or enforce contracts or leases related
thereto, manage and operate the Premises and carry on the business
thereof, and otherwise exercise all rights which the Mortgagor might
otherwise have with respect thereto, in the name of the Mortgagor or
otherwise, as the Collateral Agent shall deem best or advisable; and the
Collateral Agent shall be entitled to collect all rents, earnings,
revenues, issues, profits and income of the Premises, awards made for the
taking of or injury to the Premises through eminent domain or
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otherwise, including awards or damages for change of grade, and also
return premiums or other payments upon insurance, and said rents,
earnings, revenues, issues, profits and income, awards, damages, premiums
and payments are hereby assigned to the Collateral Agent, and after
deducting the expenses and costs of conducting the business thereof and of
all betterments, additions, alterations, replacements, repairs and for
taxes, assessments, insurance and prior or other charges upon or with
respect to the Premises or any portion thereof, as well as just and
reasonable compensations for the services of all counsel, agents,
employees, receivers and other persons properly engaged or employed, the
Collateral Agent shall apply the proceeds as provided in section 18.
(c To the extent permitted by applicable law, the Collateral Agent
is hereby authorized and empowered by the Mortgagor to sell the Premises
in such manner as may be prescribed by law, by advertisement and public
sale as provided by the laws of the jurisdiction in which the Real
Property Collateral is located, or to foreclose this Mortgage by judicial
proceedings and sell the Premises pursuant to such proceedings as
permitted by applicable law. The Mortgagor does hereby authorize the
Collateral Agent to sell the Premises together or in lots or parcels, as
to the Collateral Agent shall seem expedient, and to execute and deliver
to the purchaser or purchasers of such property good and sufficient deeds
thereof with covenants of general, special or limited warranty or such
other instruments of conveyance, assignment or transfer as the Collateral
Agent may deem appropriate. Payment of the purchase price to the
Collateral Agent shall satisfy the obligation of the purchaser at any such
sale therefor, and he shall not be bound to look after the application
thereof. The Collateral Agent shall cause notice of any such sale to be
mailed to the Mortgagor; but, except as otherwise provided by any
applicable provision of law, failure so to mail any such notice shall not
affect the validity of any such sale. If the Collateral Agent, acting on
behalf of any or all of the holders of the Notes or other Secured
Obligations, or any or all such holders acting on their own behalf, is the
highest bidder, the Collateral Agent or such holders, as the case may be,
may purchase at any sale or sales (whether statutory foreclosure or public
sale or sales conducted as hereinabove authorized) and may, in paying the
purchase price, turn in any of the Notes or other Secured Obligations held
by them, in lieu of cash, up to the entire amount owing thereunder,
whether for principal, interest or other amounts, which amount as so
designated as being turned over shall be considered distribution of the
proceeds of such sale. The provisions set forth above as to public sale or
sales in lieu of statutory foreclosure are not intended as an exclusive
method of foreclosure hereunder or to deprive the Collateral Agent of any
other legal or equitable remedy available under applicable law.
Accordingly, it is specifically agreed that the remedy of foreclosure by
the Collateral Agent's sale as hereinabove provided for shall be
cumulative and shall not in any wise be construed as an exclusive remedy,
and the Collateral Agent shall be fully entitled to a statutory court
foreclosure and to avail itself of any and all other legal or equitable
remedies available under the laws of the jurisdiction in which the Real
Property Collateral is located.
(d The Mortgagor hereby authorizes the Collateral Agent to demand
and receive, in the place and stead of the Mortgagor, all amounts that may
become due under any and each lease, rental, contract, easement and other
right of the Mortgagor pertaining or in any way relating to the Premises
or any part thereof, and, when received, to apply the same to the costs
and expenses incurred by the Collateral Agent incurred hereunder and to
the Secured Obligations. No demand for, and no receipt or application of
any such amount shall be deemed to minimize, subordinate or affect in any
way the lien hereof and rights hereunder of the Collateral Agent or any
rights of a purchaser of any portion of the Premises at any foreclosure or
other sale hereunder, as against the person from whom the amount was
demanded or received, or his executors, administrators, successors or
assigns, or anyone claiming under such Tenant Lease, rental, contract or
other right.
(e The Collateral Agent may exercise all rights and remedies granted
by law and more particularly the Uniform Commercial Code, including, but
not limited to, the right to take possession of the Personal Property
Collateral, and for this purpose may peaceably enter upon any premises on
which any
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or all of the Personal Property Collateral is situated, without being
deemed guilty of trespass and without liability for damages thereby
occasioned, and take possession of and operate the Personal Property
Collateral or remove it therefrom; the Collateral Agent shall have the
further right to take any action it deems necessary, appropriate or
desirable, at its option and in its discretion, to repair, refurbish or
otherwise prepare the Personal Property Collateral for sale, lease or
other use or disposition and to sell at public or private sales or
otherwise dispose of, lease or utilize the Personal Property Collateral
and any part thereof in any manner authorized or permitted by law and to
apply the proceeds thereof toward payment of any costs and expenses,
including reasonable attorneys' fees and legal expenses, to the extent
permitted by law, thereby incurred by the Collateral Agent and toward
payment of the Secured Obligations and all other indebtedness described in
this Mortgage, in such order and manner as may be provided in the Credit
Agreement or this Mortgage or in the event such provisions are not
applicable in such order and manner as the Collateral Agent may elect.
SECTION 18. COSTS OF ENFORCEMENT; APPLICATION OF PROCEEDS; MORTGAGOR
LIABLE FOR DEFICIENCY, ETC.
(a Costs of Enforcement; Application of Proceeds. In case of (i)
foreclosure of this Mortgage in any court of law or equity, whether or not any
order or decree shall have been entered therein, and to the extent permitted by
law, a reasonable sum shall be allowed for attorney's fees of the Collateral
Agent in such proceedings, for stenographer's fees and for all moneys expended
for documentary evidence and the cost of a complete abstract of title and title
report for the purpose of such foreclosure, such sums to be secured by the lien
hereunder, and, to the extent permitted by law, there shall be included in any
judgment or decree foreclosing this Mortgage and be paid out of such rents,
issues and profits or out of the proceeds of any sale made in pursuance of any
such judgment or decree, or (ii) any other realization by the Collateral Agent
upon or with respect to the Premises or any part or portion thereof, the
proceeds thereof shall be applied as follows:
(10 first, to the payment or reimbursement of the Collateral Agent
for all costs and expenses of such suit or suits or other enforcement
activities of the Collateral Agent, including, but not limited to, the
costs of advertising, sale and conveyance, including attorneys',
solicitors' and stenographers' fees, if permitted by law, outlays for
documentary evidence and the cost of such abstract, examination of title
and title report;
(20 second, to the extent proceeds remain after the application
pursuant to preceding clause (1), to reimburse the Collateral Agent for
all moneys advanced by the Collateral Agent, if any, for any purpose
authorized in this Mortgage with interest at the Default Rate;
(30 third, to the extent proceeds remain after the application
pursuant to preceding clause (2), an amount equal to the outstanding
Secured Obligations shall be applied by the Collateral Agent to the
Secured Obligations in such amount and order of priority as may be
provided in section 10.3 of the Credit Agreement; and
(40 fourth, to the extent remaining after the application pursuant
to the preceding clauses (1), (2) and (3) and payment in full of the
Secured Obligations which are secured hereby, to the Mortgagor or to
whomever may be lawfully entitled to receive such payment.
(b Mortgagor Liable for Deficiency. It is understood that the Mortgagor
shall remain liable to the extent of any deficiency between (x) the amount of
the proceeds of the Premises and the amount of the sum referred to in the
foregoing clauses (1) and (2) and (y) the aggregate outstanding amount of the
Secured Obligations.
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SECTION 19. RECEIVER.
In the event an action shall be instituted to foreclose this Mortgage, or
prior to foreclosure but after default, the Collateral Agent shall be entitled
to the appointment of a receiver of the rents, issues and profits of the
Premises as a matter of right, with power to collect the rents, issues and
profits of the Premises due and becoming due during the period of default and/or
the pendency of such foreclosure suit to and including the date of confirmation
of the sale under such foreclosure and during the redemption period, if any,
after such confirmation, such rents, issues and profits being hereby expressly
assigned and pledged as security for the payment of the Secured Obligations
secured by this Mortgage without regard to the value of the Premises or the
solvency of any person or persons liable for the payment of the Secured
Obligations and regardless of whether the Collateral Agent has an adequate
remedy at law. The Mortgagor for itself and for any subsequent owner hereby
waives any and all defenses to the application for a receiver as above provided
and hereby specifically consents to such appointment, but nothing herein
contained is to be construed to deprive the holder of this Mortgage of any other
right or remedy or privilege it may now have under the law to have a receiver
appointed. The provision for the appointment of a receiver and the assignment of
such rents, issues and profits is made an express condition upon which the Loans
hereby secured are made. In such event, the court shall at once on application
of the Collateral Agent or its attorney in such action, appoint a receiver to
take immediate possession of, manage and control the Premises, for the benefit
of the holder or holders of the Secured Obligations and of any other parties in
interest, with power to collect the rents, issues and profits of the Premises
during the pendency of such action, and to apply the same toward the payment of
the several obligations herein mentioned and described, notwithstanding that the
same or any part thereof is occupied by the Mortgagor or any other person. The
rights and remedies herein provided for shall be deemed to be cumulative and in
addition to and not in limitation of those provided by law and if there be no
receiver so appointed, the Collateral Agent itself may proceed to collect the
rents, issues and profits from the Premises. From any such rents, issues, and
profits collected by the receiver or by the Collateral Agent prior to a
foreclosure sale, there shall be deducted the cost of collection thereof and the
expenses of operation of the Premises, including but not limited to real estate
commissions, receiver's fee and the reasonable fees of its attorney, if any, and
the Collateral Agent's attorney's fees, if permitted by law, and court costs,
the remainder to be applied against the Secured Obligations. In the event the
rents, issues and profits are not adequate to pay all tax and other expenses of
operation, the Collateral Agent may, but is not obligated to, advance to any
receiver the amounts necessary to operate, maintain and repair, if necessary,
the Premises and any such amounts so advanced, together with interest thereon at
the Default Rate from and after the date of advancement, shall be secured by
this Mortgage and have the same priority of collection as the principal of the
Secured Obligations.
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<PAGE>
SECTION 20. LIABILITY OF MORTGAGOR NOT AFFECTED.
No sale of the Premises, no forbearance on the part of the Collateral
Agent, no extension of the time for the payment of the Secured Obligations and
no change in the terms of the payment thereof consented to by the Collateral
Agent shall in any way whatsoever operate to release, discharge, modify, change
or affect the original liability of the Mortgagor hereunder or the original
liability of the Mortgagor or any other obligor under any of the Secured
Obligations, either in whole or in part. No waiver by the Collateral Agent of
any breach of any covenant of the Mortgagor herein contained shall be construed
as a waiver of any subsequent breach of the same or any other covenant herein
contained. The failure of the Collateral Agent and/or the Secured Creditors to
exercise the option for acceleration of maturity and/or foreclosure (including
sale under power of sale hereunder) following any default as aforesaid or to
exercise any other option granted to the Collateral Agent hereunder in any one
or more instances, or the acceptance by the Collateral Agent and/or the Secured
Creditors of partial payments hereunder shall not constitute a waiver of any
such default, nor extend or affect the grace period, if any, but such option
shall remain continuously in force with respect to any unremedied or uncured
default. Acceleration of maturity once claimed hereunder by the Collateral Agent
may, at the option of the Collateral Agent, be rescinded by written
acknowledgment to that effect by the Collateral Agent, but the tender and
acceptance of partial payments alone shall not in any way affect or rescind such
acceleration of maturity, or extend or affect the grace period, if any. the
Collateral Agent may pursue any of its rights without first exhausting its
rights hereunder and all rights, powers and remedies conferred upon the
Collateral Agent herein are in addition to each and every right which the
Collateral Agent may have hereunder at law or equity and may be enforced
concurrently therewith.
SECTION 21. REMEDIES CUMULATIVE.
Each remedy or right of the Collateral Agent shall not be exclusive of but
shall be in addition to every other remedy or right now or hereafter existing at
law or in equity. No delay in the exercise or omission to exercise any remedy or
right accruing on any default shall impair any such remedy or right or be
construed to be a waiver of any such default or acquiescence therein, nor shall
it affect any subsequent default of the same or of a different nature. Every
such remedy or right may be exercised concurrently or independently and when and
as often as may be deemed expedient by the Collateral Agent.
SECTION 22. COLLATERAL AGENT SUBROGATED TO PRIOR LIENS PAID OUT OF LOAN
PROCEEDS.
Should the proceeds of any Loans made by any Lender to the Mortgagor, the
repayment of which is hereby secured, or any part thereof, or any amount paid
out or advanced by the Collateral Agent or any Lender, be used directly or
indirectly to pay off, discharge or satisfy, in whole or in part, any prior lien
or encumbrance upon the Premises or any part thereof, then the Collateral Agent
shall be subrogated to such other liens or encumbrances and upon any additional
security held by the holder thereof and shall have the benefit of the priority
of all of the same.
24
<PAGE>
SECTION 23. FURTHER ASSURANCES.
The Mortgagor shall execute, acknowledge and deliver any and all such
further acts, conveyances, documents, mortgages and assurances as the Collateral
Agent may reasonably require for accomplishing the purpose hereof forthwith upon
the request of the Collateral Agent, whether in writing or otherwise. The
Mortgagor, within 10 days upon request by mail, shall furnish a written
statement duly acknowledged of the amount due upon this Mortgage and the Secured
Obligations (both unpaid principal and accrued interest and all other items
included in the Secured Obligations) and whether any offset or defenses exist
against the Secured Obligations, and any other information which might
reasonably be requested in connection with the sale of the Secured Obligations,
or any portion thereof or interest therein, to any third party, or an audit of
the Collateral Agent, and which may be relied on for such purposes.
SECTION 24. MORTGAGOR'S OBLIGATIONS ABSOLUTE.
The lien of this Mortgage and the obligations of the Mortgagor hereunder
shall be absolute and unconditional and shall remain in full force and effect
without regard to, and shall not be released, suspended, discharged, terminated
or otherwise affected by, any circumstance or occurrence whatsoever, including,
without limitation:
(a any lack of validity or enforceability of the Credit Agreement,
the Notes, any other Credit Document, any Designated Hedge Agreement, or
any other agreement or instrument relating thereto;
(b any renewal, extension, amendment or modification of, or addition
or supplement to, or any waiver, consent, extension, indulgence or other
action or inaction under or in respect of, the Credit Agreement, the
Notes, any other Credit Document, or any Designated Hedge Agreement, or
any other agreement or instrument relating thereto, including, without
limitation, any increase in the Secured Obligations resulting from the
extension of additional credit to the Mortgagor or any of its Subsidiaries
or otherwise;
(c any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Secured
Obligations;
(d any manner of application of collateral, or proceeds thereof, to
all or any of the Secured Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Secured Obligations or
any other assets of the Mortgagor or any of its Subsidiaries;
(e any change, restructuring or termination of the corporate
structure or existence of the Mortgagor or any of its Subsidiaries;
(f any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to
the Mortgagor or any of its Subsidiaries or Affiliates, or any action
taken with respect to this Mortgage by any trustee or receiver, or by any
court, in any such proceeding, whether or not the Mortgagor shall have
notice or knowledge of any of the foregoing; or
(i any other circumstance which might otherwise constitute a defense
available to, or a discharge of, the Mortgagor as a guarantor or surety
for the Secured Obligations.
This Mortgage shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by the Collateral Agent or any Secured
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<PAGE>
Creditor upon the insolvency, bankruptcy or reorganization of the Mortgagor or
any of its Subsidiaries or Affiliates or otherwise, all as though such payment
had not been made.
SECTION 25. NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telex, facsimile transmission or cable communication) and mailed,
telegraphed, telexed, transmitted, cabled or delivered, if to the Mortgagor, at
9400 East Market Street, Warren, Ohio 44484, attention: Vice President & Chief
Financial Officer (facsimile: (330) 856-3618); if to the Collateral Agent, at
1900 East Ninth Street, Cleveland, Ohio 44114, attention Agent Services
(facsimile: (216) 575-2481; or at such other address as shall be designated by
any such person in a written notice to the other person. All such notices and
communications shall be mailed, telegraphed, telexed, telecopied, or cabled or
sent by overnight courier, and shall be effective when received.
SECTION 26. DISCHARGE OF MORTGAGE; RELEASE OF PROPERTY.
(a Discharge of Mortgage. After the termination of the Total Commitment
and all Designated Hedge Agreements and when all Loans and other Secured
Obligations have been paid in full, this Mortgage shall terminate, and the
Collateral Agent, at the request and expense of the Mortgagor, will execute and
deliver to the Mortgagor a proper instrument or instruments (including Uniform
Commercial Code termination statements on form UCC-3) acknowledging the
satisfaction and termination of this Mortgage, and will duly assign, transfer
and deliver to the Mortgagor (without recourse and without any representation or
warranty) such of the Personal Property Collateral as may be in the possession
of the Collateral Agent and as has not theretofore been sold or otherwise
applied or released pursuant to this Mortgage. In case of failure of the
Collateral Agent to promptly so release this Mortgage, all claims for statutory
penalties and damages are hereby waived.
(b Release of Collateral. So long as no payment default on any of the
Secured Obligations is in existence or would exist after the application of
proceeds as provided below, the Collateral Agent shall, at the request of the
Mortgagor, release any or all of the Real Property Collateral and/or Personal
Property Collateral, provided that (x) such release is permitted by the terms of
section 9.2 of the Credit Agreement) or otherwise has been approved in writing
by the Required Lenders (or all of the Lenders, if required by section 12.12 of
the Credit Agreement) and (y) if required pursuant to the provisions of section
5.2 of the Credit Agreement, the proceeds of such Collateral are applied to the
prepayment of the Loans.
(c Request for Release; Effect of Release. At any time that the Mortgagor
desires that the Collateral Agent take any action to give effect to any release
of any or all of the Premises pursuant to the foregoing paragraph (a) or (b), it
shall deliver to the Collateral Agent a certificate signed by a principal
executive officer stating that the release of the respective portion of or all
of the Real Property Collateral and/or Personal Property Collateral is permitted
pursuant to paragraph (a) or (b). In the event that any part of the Premises is
released as provided in paragraph (a), the Collateral Agent, at the request and
expense of the Mortgagor, will duly release such part of the Premises and
assign, transfer and deliver to the Mortgagor (without recourse and without any
representation or warranty) such of the part of the Premises as is then being
(or has been) so sold and as may be in the possession of the Collateral Agent
and has not theretofore been released pursuant to this Mortgage. The Collateral
Agent shall have no liability whatsoever to any Secured Creditor as the result
of any release of all or any part of the Premises by it as permitted by this
section. Upon any release of all or any part of the Premises pursuant to
paragraph (a) or (b), none of the Collateral Agent or any of the Secured
Creditors shall have any continuing right or interest in the same, or the
proceeds thereof.
26
<PAGE>
SECTION 27. MISCELLANEOUS.
(a Acknowledgment of Receipt of Copies of Credit Documents. The Mortgagor
acknowledges that it has received from the Collateral Agent without charge a
true and correct copy of this Mortgage and each other Credit Document executed
and delivered on or prior to the date hereof.
(b Indemnification. The Collateral Agent and its successors and assigns
shall be entitled to all of the benefits of the indemnification provisions of
the Credit Agreement and the other Credit Documents. All of the terms and
provisions of section 12.1 of the Credit Agreement (including any defined terms
used therein) are by this reference thereto hereby incorporated into this
Mortgage for the benefit of the Collateral Agent and its successors and assigns
as fully as if written out at length herein, and any references in such section
of the Credit Agreement to the "Borrower" shall be deemed to refer to, and
constitute obligations of, the Mortgagor.
(c Subsequent Services of Counsel to Collateral Agent. To the extent
services are required of the Collateral Agent's counsel and/or special counsel
after the date hereof, which are normally incident to the closing, amendment,
alteration, and enforcement of this Mortgage, and all provisions herein
contained, the Mortgagor shall, to the extent permitted by law, pay the
reasonable fees therefor, promptly upon the rendering of such a bill and
delivery thereof to the Mortgagor.
(d No Partnership or Joint Venture. Neither this Mortgage, the Credit
Agreement, the Notes, any other Secured Obligations, any of the other Credit
Documents, or any of the Designated Hedge Agreements, are intended or shall be
construed as creating a partnership or joint venture between the Mortgagor, on
the one hand, and the Collateral Agent or any other holder of any of the Secured
Obligations, on the other hand; and the relationship of the Mortgagor and the
Collateral Agent hereunder shall solely be that of Mortgagor and collateral
agent for the holders of the Secured Obligations.
(e Election of Collateral Agent to Subordinate. At the option of the
Collateral Agent (acting on instructions from all of the Lenders), this Mortgage
shall become subject and subordinate in whole or in part (but not in respect to
the priority of entitlement to insurance proceeds or any award in condemnation)
to any or all leases and/or subleases of all or any part of the Premises upon
the execution by the Collateral Agent and recording thereof, at any time
hereafter, in the appropriate recorder's office, a unilateral declaration to
that effect.
(f Waiver of Homestead and Exemption Rights, etc. To the extent permitted
by law with respect to the Secured Obligations or any renewals or extensions
thereof, the Mortgagor waives and renounces any and all homestead and exemption
rights, as well as the benefit of all valuation and appraisement privileges, and
also moratoriums under or by virtue of the constitution and laws of the
jurisdiction in which the Real Property Collateral is located or any other state
or of the United States, now existing or hereafter enacted.
(g Covenants Run with the Land. All the covenants of the Mortgagor
contained in this Mortgage shall run with the Land.
(h Usury Savings Clause. All agreements in the Credit Agreement, in the
Notes, in this Mortgage, in any other Credit Document or in any Designated Hedge
Agreement are expressly limited so that in no contingency or event whatsoever,
whether by reason of advancement or acceleration of maturity of any of the
Secured Obligations, or otherwise, shall the amount paid or agreed to be paid
hereunder or thereunder for interest or for the use, forbearance or detention of
money exceed the highest lawful rate permitted under applicable usury laws. If,
from any circumstance whatsoever, fulfillment of any provision of the Credit
Agreement, of the Notes, of this Mortgage, of any other Credit Document or of
any Designated Hedge Agreement, at the time performance of such provision shall
be due, shall involve transcending the limit of validity prescribed by
applicable usury laws which a
27
<PAGE>
court of competent jurisdiction may deem applicable hereto, then, ipso facto,
the obligation to be fulfilled shall be reduced to the limit of such validity
and if, from any circumstance whatsoever, the Collateral Agent or any Secured
Creditor shall ever receive hereunder or under the other Credit Documents or any
Designated Hedge Agreement as interest, or for the use, forbearance or detention
of money, an amount which would exceed the highest lawful rate, the receipt of
such excess shall be deemed a mistake and shall be canceled automatically or, if
theretofore paid, such excess shall be credited against the principal amount of
the Secured Obligations or any fees or other amounts included in the Secured
Obligations to which the same may lawfully be credited, and any portion of such
excess not capable of being so credited shall be rebated to the Mortgagor.
(i Governing Law; Successors and Assigns; Severability, etc. This Mortgage
shall be construed and enforced according to the laws of the jurisdiction in
which the Real Property Collateral is located, and shall be binding upon the
Mortgagor, its successors and assigns, any subsequent owners of the Premises,
and shall inure to the benefit of the Collateral Agent, its successors and
assigns. Any provision of this Mortgage 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.
(j No Modification. None of the terms and conditions of this Mortgage may
be changed, waived, modified or varied in any manner whatsoever unless in
writing duly signed by the Mortgagor and the Collateral Agent (with the consent
of the Required Lenders or, to the extent required by section 12.12 of the
Credit Agreement, all of the Lenders), provided, however, that no such change,
waiver, modification or variance shall be made to this section 27(j) without the
consent of each Secured Creditor adversely affected thereby, provided further
that any change, waiver, modification or variance affecting the rights and
benefits of a single Class of Secured Creditors (and not all Secured Creditors
in a like or similar manner) shall require the written consent of the Requisite
Creditors of such Class of Secured Creditors. For the purpose of this Mortgage,
the term "Class" shall mean each class of Secured Creditors, i.e., whether (x)
the Lenders as holders of the Credit Document Obligations or (y) the Designated
Hedge Creditors as holders of the Designated Hedge Obligations. For the purpose
of this Mortgage, the term "Requisite Creditors" of any Class shall mean each of
(x) with respect to the Credit Document Obligations, the Required Lenders and
(y) with respect to the Designated Hedge Obligations, the holders of at least
51% of all obligations outstanding from time to time under the Designated Hedge
Agreements.
(k Agency Provisions. By accepting the benefits of this Mortgage, each
Lender acknowledges and agrees that the rights and obligations of the Collateral
Agent shall be as set forth in section 11 of the Credit Agreement.
Notwithstanding anything to the contrary contained in of this Mortgage, the
duties and obligations of the Collateral Agent set forth or incorporated into
the provisions of this Mortgage may not be amended or modified without the
consent of the Collateral Agent.
(l Collateral Agent to Act on Behalf of Secured Creditors. The Secured
Creditors agree by their acceptance of the benefits hereof that this Mortgage
may be enforced on their behalf only by the action of the Collateral Agent,
acting upon the instructions of the Required Lenders (or, after all Credit
Document Obligations have been paid in full, instructions of the holders of at
least the majority of the outstanding Designated Hedge Obligations) and that no
other Secured Creditor shall have any right individually to seek to enforce or
to enforce this Mortgage or to realize upon the security to be granted hereby,
it being understood and agreed that such rights and remedies may be exercised by
the Collateral Agent, for the benefit of the Secured Creditors, upon the terms
of this Mortgage.
(m Waiver of Trial By Jury. THE MORTGAGOR AND THE COLLATERAL AGENT EACH
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS MORTGAGE OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
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<PAGE>
(n Time of Essence. It is specifically agreed that time is of the essence
with respect to this Mortgage and that the waiver of the rights or options, or
obligations secured hereby, shall not at any time thereafter be held to be
abandonment of such rights. Notice of the exercise of any right or option
granted to the Collateral Agent herein, or in the Secured Obligations, is not
required to be given.
(o Counterparts. This Mortgage may be executed by the Mortgagor in
counterparts, each of which shall be an original and all of which collectively
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage to be duly
executed and delivered as of the date first set forth above.
Signed and acknowledged STONERIDGE, INC.
in the presence of:
By:
- -------------------- ----------------------------
Print Name: Kevin P. Bagby
Vice President--Finance
and Chief Financial Officer
- -------------------
Print Name:
29
<PAGE>
STATE OF OHIO )
) SS.:
COUNTY OF CUYAHOGA )
BEFORE ME, a Notary Public in and for said County and State, personally
appeared the above named STONERIDGE, INC., an Ohio corporation, by Kevin P.
Bagby, its Vice President--Finance and Chief Financial Officer, who acknowledged
that he did sign the foregoing instrument and that the same is his free act and
deed personally and as such officer.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at
Cleveland, Ohio, this ____ day of December, 1998.
---------------------------
Notary Public
[Notarial Seal]
This Instrument Prepared By:
John W. Sager, Esq.
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
30
<PAGE>
EXHIBIT 1
TO
OPEN-END FIRST MORTGAGE, ASSIGNMENT OF LEASES
AND SECURITY AGREEMENT
The following described real estate, to-wit:
LEGAL DESCRIPTION
WARREN, OHIO
PARCEL A:
Beginning at a point in the center line of Warren-Sharon Road (60 feet wide) in
the northeast corner of a 2.746 acre parcel conveyed from Avalon Estates, Inc.,
to the City of Warren, said point also being the northeast corner of lands
formerly owned by Maria Mokodean, Deed Volume 313, Page 390;
Thence S 81E 19' 30" W along the corner line of Warren-Sharon Road, a distance
of 165 feet to a point and the true place of beginning for the parcel described
herein;
Thence S 9E 28' 24" E along the west line of lands of the City of Warren, a
distance of 400 feet to a set iron pin passing thru a set iron pin at 30 feet
from center line; thence S 81E 19' 30" W, a distance of 490.26 feet to a set
iron pin in the easterly line of proposed Westchester Drive (60 feet wide);
thence N 4E 35' 30" E along the easterly line of proposed Westchester Drive, a
distance of 27.98 feet to a set iron pin; thence continuing along the proposed
easterly line of Westchester Drive, a curve deflecting to the left having a
radius of 630 feet, an arc length of 170.80 feet and a chord length of 170.28
feet, bearing N 3E 10' 30" W to a set iron pin; thence continuing along the
proposed easterly line of Westchester Drive, N 10E 56' 30" W, a distance of
142.16 feet to a set iron pin; thence continuing along the proposed easterly
line of Westchester Drive, a curve deflecting to the right having a radius of 30
feet, an arc length of 48.31 feet and a chord length of 43.26 feet bearing N 35E
11' 30" E to a set iron pin in the south line of Warren-Sharon Road; thence N 8E
40' 30" W, a distance of 30 feet to a point in the center line of Warren-Sharon
Road; thence N 81E 19' 30" E along the center line of Warren-Sharon Road, a
distance of 437.64 feet to the true place of beginning and containing 4.288
acres of land, be the same more or less, but subject to all legal highways.
PARCEL B:
Situated in the State of Ohio, County of Trumbull, and being part of original
Howland Township, Section 30, and being more fully described as follows:
<PAGE>
Beginning at a point in the centerline of Warren-Sharon Road (60' Wide) in the
northeast corner of a 2.746 Acre Parcel conveyed from Avalon Estates, Inc. to
the City of Warren, said point also being the northeast corner of lands formerly
owned by Marie Mokodean, Deed Volume 313, Page 390;
Thence S. 81E : 19' 30" W., along the centerline of Warren-Sharon Road, a
distance of 165.00 feet to a point in the northwest corner of lands of the City
of Warren and the northeast corner of lands now or formerly owned by D. M.
Draime, Volume Official Record 203, page 295;
Thence S. 9E 28' 24" E., along the West line of lands of the City of Warren and
the east line of Draime, a distance of 400.00 feet to an iron pin passing thru
an iron pin at 30.00 feet from the centerline; and the True Place of Beginning
for the parcel described herein;
Thence S. 23E 40' 01" E., along the west line of lands of the City of Warren, a
distance of 170.00 feet to a set iron pin;
Thence S. 41E 48' 50" W., a distance of 199.19 feet to a set iron pin in the
easterly line of the proposed extension of Avalon Drive (60' wide);
Thence along the said right-of-way line, a curve to the left having a radius of
250.00 feet, an arc length of 220.30 feet and a chord length of 213.24 feet
bearing N. 73E 25' 50" W., to a set iron pin;
Thence S. 81E 19' 30" W., along the proposed northerly right-of-way line of
Avalon Drive, a distance of 196.94 feet to a set iron pin;
Thence along a curve to the right having a radius of 30.00 feet, an arc length
of 54.07 feet and a chord length of 47.04 feet bearing N. 47E 02' 30" W., to a
set iron pin in the easterly right-of-way line of the proposed extension of
Westchester Drive (60' wide);
Thence N. 4E 35' 30" E., along the proposed east line of Westchester Drive, a
distance of 167.59 feet to a found iron pin in the southwest corner of lands of
Draime;
Thence N. 81E 91' 30" E., along the south line of Draime, a distance of 490.26
feet to the True Place of Beginning containing 2.691 acres of land so surveyed
by Lynn Kittinger & Noble, Inc. in March 1985, be the same more or less but
subject to all legal highways.
[End of Exhibit 1]
<PAGE>
EXHIBIT 2
TO
OPEN-END FIRST MORTGAGE, ASSIGNMENT OF LEASES
AND SECURITY AGREEMENT
Permitted Encumbrances
1. Any liens thereon for taxes, assessments, charges, excises, levies and
other governmental charges which are not due and payable.
2. Any matters of record affecting the premises on the date this Mortgage is
recorded.
3. Zoning ordinances, if any.
[End of Exhibit 2]
<PAGE>
EXHIBIT C-12
---------------------------
FORM OF
LANDLORD WAIVER
---------------------------
<PAGE>
LANDLORD WAIVER
Dated as of _________, 1999
TO: National City Bank,
as Collateral Agent
National City Center
1900 East Ninth Street
Cleveland, Ohio 44114
Attention: Agency Services
Telephone: (216) 575-2560
Facsimile: (216) 575-2481
____________________________________________ (the "Tenant"), is the lessee
under a lease between the Tenant and the undersigned landlord (the "Landlord")
covering the premises located at:
(the "Premises") more fully described in the lease attached hereto as Exhibit
"A" and as modified by any amendments, if any, attached thereto (collectively,
the "Lease"). The Landlord is the sole owner of the Premises.
The Tenant has certain of its assets located on the Premises.
The Tenant has entered into a Security Agreement (the "Security
Agreement") with National City Bank, as Collateral Agent (the "Collateral
Agent") for itself and the other Secured Creditors ("Secured Creditors")
identified therein. As a condition to the Secured Creditors agreeing to make
loans and other financial accommodations and extensions of credit, the Secured
Creditors require, among other things, that the Tenant grant to the Collateral
Agent, for the benefit of the Secured Creditors, liens on all of the Tenant's
inventory, equipment, goods, furnishings and other tangible personal property
located on the Premises (the "Collateral"), and that, if required by the Secured
Creditors, the Tenant grant a mortgage in favor of the Collateral Agent, for the
benefit of the Secured Creditors, covering the Tenant's leasehold estate created
by and under the Lease.
In order to induce the Secured Creditors and the Collateral Agent
(together with their agents, successors and assigns) to enter into said
financing arrangements, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged:
A. The Landlord hereby consents to the execution, delivery and
performance by the Tenant of a leasehold mortgage as the same may be
amended, supplemented or otherwise modified from time to time (the
"Leasehold Mortgage"), covering the Tenant's leasehold interest in the
Premises, and the Landlord agrees that the execution, delivery and
performance of the Leasehold Mortgage will not constitute a breach or
default under the Lease; provided that the terms and provisions of the
Leasehold Mortgage shall not impair or otherwise affect the terms and
provisions of the Lease or the rights, remedies and entitlements of the
Landlord under the Lease and shall not create any obligation or duty on
the part of the Landlord except as herein expressly stated. In the event
of inconsistencies in the provisions of the Landlord's rights, remedies
and entitlements under the Lease and any such Leasehold Mortgage, it is
agreed that the provisions of the Lease shall control.
B. The Landlord hereby agrees not to modify or amend the Lease
without the prior written consent of the Collateral Agent, which consent
will not be unreasonably withheld or delayed.
C. The Landlord hereby certifies and agrees that:
1. The Lease is in full force and effect, all conditions to
the commencement of the term of the Lease have been
satisfied.
<PAGE>
2. The Tenant is not in default under the Lease, nor are
there any events or conditions which, by the passage of
time or giving of notice or both, would constitute a
default thereunder by the Tenant.
3. The Landlord is not aware of any disputes, action, suit,
condemnation proceeding, claim, or right of setoff
pending or threatened with respect to the Lease or the
Premises.
4. None of the Collateral shall be deemed to be fixtures
unless the same is so attached to the real property
covered by the Lease that it cannot be physically
removed from the Premises without causing damage to the
Premises which cannot be repaired or restored.
5. The Landlord will not assert against the Collateral any
statutory, contractual or possessory liens including,
without limitation, rights of levy or distraint for
rent, all of which it hereby waives. The Landlord will
not assert any claims or rights of surcharge against the
Collateral of whatever nature, including, but not
limited to, any claim or right under 11 U.S.C. section
506(c) or any similar statute, whether state or federal.
6. The Landlord will notify the Collateral Agent in writing
if the Tenant defaults on its Lease obligations to the
Landlord and allow the Collateral Agent fifteen (15)
days from notice in which to cure or cause the Tenant to
cure any such defaults as more specifically provided in
the Lease.
7. If there is an Event of Default under the Security
Agreement and the Collateral Agent undertakes to enforce
its security interest in the Collateral and/or to
foreclose on the Tenant's leasehold estate pursuant to
the Leasehold Mortgage, the Collateral Agent may, at its
option and by written notice to the Landlord, (a) lease
the Premises from the Landlord on the same terms and for
the same purposes only as set forth in the Lease and
exercise the other rights as lessee thereunder as
described therein and/or (b) assign the Lease and/or the
attornment rights hereunder to, or enter into sublease
with, a purchaser of all or any part of the Collateral,
only with the prior written consent of the Landlord,
which consent shall not be unreasonably withheld or
delayed.
D. If an Event of Default occurs under the Security Agreement and
the Collateral Agent undertakes to enforce its security in the Collateral,
but chooses not to exercise its attornment rights under paragraph C(7)
above, the Landlord will permit the Collateral Agent to (a) remain on the
Premises for forty-five (45) days after the Collateral Agent notifies the
Landlord of the Event of Default, provided the Collateral Agent pays the
rental payments due under the Lease for the period of time the Collateral
Agent uses the Premises, or (b) at the Collateral Agent's option, to
remove the Collateral from the Premises within a reasonable time, not to
exceed forty-five (45) days after the Collateral Agent notifies the
Landlord of the Event of Default under the Security Agreement, provided
the Collateral Agent pays the rental payments due under the Lease for the
period of time the Collateral Agent uses the Premises, and will not hinder
the Collateral Agent's actions in enforcing its liens on the Collateral.
In the event the Collateral Agent does not exercise its attornment rights,
the Landlord shall be entitled to show the Premises to prospective tenants
or purchasers after reasonable notice to the Collateral Agent.
E. If the Collateral Agent or its successors and assigns invokes the
provisions of paragraph C(7), the Collateral Agent agrees to pay the
Landlord all reasonable costs, including attorneys' fees, which may be
associated with the Collateral Agent's exercise of its rights under said
provisions.
F. If requested by the Collateral Agent, the Landlord will execute
an instrument, in recordable form, embodying the provisions of this
agreement.
Any notice(s) required or desired to be given hereunder shall be directed
to the party to be notified at the address stated herein by certified mail,
return receipt requested, and shall be deemed given when mailed.
The agreements contained herein shall continue in force until the earlier
of (1) the expiration or termination of the Lease (provided no provision is made
for the extension or renewal of the Lease) or (2) the date on which all of the
obligations and liabilities to the Secured Creditors are paid and satisfied in
full and all financing arrangements secured by the Security Agreement have been
terminated. Upon the termination of this agreement, the Collateral Agent shall
within fifteen (15) days thereafter execute and deliver a release or
satisfaction of the Leasehold Mortgage (if the same has been executed) in
recordable
-2-
<PAGE>
form and such other documents as are necessary to allow the Landlord to freely
use, transfer or encumber the property subject to this agreement. If the
Collateral Agent fails to comply with this release requirement, the Collateral
Agent agrees that the undersigned as Landlord shall be entitled to the remedy of
specific performance and agrees to pay reasonable attorneys' fees incident to
securing release of any such Leasehold Mortgage.
The Landlord will notify all successor owners, transferees, purchasers and
mortgagees of the existence of this agreement. This agreement may not be
modified or terminated orally and shall be binding upon the successors, assigns
and personal representatives of the Landlord, upon any successor owner or
transferee of the Premises, and upon any purchasers, including any mortgagee,
from the Landlord.
If the person signing this agreement on behalf of the Landlord is signing
as agent or in another representative capacity, such person represents that such
person is authorized to, and that this agreement does, bind the owner of the
Premises.
This agreement shall be construed and enforced under the laws of the State
in which the Premises are located.
This agreement shall be effective only when the acknowledgement
hereinafter set forth has been signed by a duly authorized representative of
National City Bank on behalf of itself and as Collateral Agent for the other
Secured Creditors.
THE LANDLORD AGREES THAT NOTHING CONTAINED IN THIS AGREEMENT SHALL BE
CONSTRUED AS AN ASSUMPTION BY THE COLLATERAL AGENT OR ANY OF THE OTHER SECURED
CREDITORS OF ANY OBLIGATIONS OF THE TENANT CONTAINED IN THE LEASE.
THIS AGREEMENT SHALL NOT IMPAIR OR OTHERWISE AFFECT THE TENANT'S
OBLIGATIONS TO PAY RENT AND ANY OTHER SUMS PAYABLE BY THE TENANT OR TO OTHERWISE
PERFORM ITS OBLIGATIONS TO THE LANDLORD PURSUANT TO THE TERMS OF THE LEASE NOR
SHALL ANY PROVISION OF THE LEASEHOLD MORTGAGE IMPAIR OR AFFECT THE TERMS AND
PROVISIONS OF THE LEASE EXCEPT AS SET FORTH HEREIN.
-3-
<PAGE>
IN WITNESS WHEREOF, this agreement has been executed and delivered this
_____ day of _____________, 1999.
Witnesses: _____________________________________________
[Name of Landlord]
_________________________
Print Name:
By:__________________________________________
_________________________ Name:
Print Name: Title:
LANDLORD'S ADDRESS:
CORPORATE ACKNOWLEDGMENT
STATE OF _______________)
) ss.:
COUNTY OF ______________)
On this ____ day of _______________, 1999, before me, the undersigned
Notary Public in and for the above State, personally appeared
___________________________________, to me personally known, who being by me
duly sworn, did say that he is the __________________________ of
_____________________________, a corporation, and that the instrument was signed
on behalf of the corporation by authority of its board of directors and by him
as an officer of the corporation and that the instrument is his free act and
deed and the free act and deed of the corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed my
official seal this ____ day of __________, 1999 at _______________,
_____________.
_________________________
Notary Public
My commission expires:_____
[Notarial Seal]
-4-
<PAGE>
ACKNOWLEDGMENT BY COLLATERAL AGENT
NATIONAL CITY BANK, as Collateral Agent for itself and for the other
Secured Creditors, hereby acknowledges that the consent by the above-named
Landlord to the placement of a Leasehold Mortgage on the Tenant's interest as
Lessee, shall not impair or otherwise affect the terms and provisions of the
Lease or the rights, remedies and entitlements of the Landlord under the Lease
and shall not create any obligation or duty on the part of the Landlord except
as expressly stated in this agreement. It is further acknowledged that in the
event of any inconsistency in the provisions of the Landlord's rights, remedies
and entitlements under the Lease and any such Leasehold Mortgage, the provisions
of the Lease shall be deemed to control.
NATIONAL CITY BANK,
as Collateral Agent
By:
----------------------------
Vice President
ACKNOWLEDGMENT AND CONSENT BY TENANT
The undersigned hereby acknowledges and consents to the foregoing
agreement. The undersigned further acknowledges and agrees that it will pay the
Landlord's reasonable legal fees incident to this Landlord Agreement.
THE UNDERSIGNED FURTHER ACKNOWLEDGES AND CONFIRMS THAT NOTHING CONTAINED
IN THE AGREEMENT RELIEVES THE UNDERSIGNED OF ANY OF ITS DUTIES OR OBLIGATIONS
UNDER OR PURSUANT TO THE LEASE.
-------------------------------------
[Tenant]
By:
----------------------------
Title:
-5-
<PAGE>
EXHIBIT "A"
to
Landlord Waiver
Lease
(attached hereto)
<PAGE>
EXHIBIT C-13
---------------------------
FORM OF
MORTGAGEE WAIVER
---------------------------
<PAGE>
MORTGAGEE WAIVER
Dated as of _________, 1999
TO: National City Bank,
as Collateral Agent
National City Center
1900 East Ninth Street
Cleveland, Ohio 44114
Attention: Agency Services
Telephone: (216) 575-2560
Facsimile: (216) 575-2481
______________________________________ (the "Company") is the mortgagor
under a first mortgage from the Company in favor of the undersigned (the
"Mortgage Holder") covering the premises (the "Premises") more fully described
in such first mortgage, which was recorded in the official mortgage records of
indicated below (such first mortgage, as from time to time amended, supplemented
or otherwise modified, including any first mortgage entered into in replacement
thereof or in substitution therefor in connection with any refinancing thereof,
the "First Mortgage"):
Location of Premises: ________________________________________________________.
First Mortgage recorded: _____________________________________________________.
The Company has certain of its assets located on the Premises.
The Company has entered into a Security Agreement (the "Security
Agreement") with National City Bank, as Collateral Agent (the "Collateral
Agent") for itself and the other Secured Creditors ("Secured Creditors")
identified therein. As a condition to the Secured Creditors agreeing to make
loans and other financial accommodations and extensions of credit, the Secured
Creditors require, among other things, that the Company grant to the Collateral
Agent, for the benefit of the Secured Creditors, liens on all of the Company's:
(i) inventory, and
(ii) goods, manufacturing, office and similar equipment and other
items of tangible personal property, all of which can be physically
removed from the Premises without undue difficulty or damage which is not
fully repaired,
located on the Premises (collectively, the "Collateral").
In order to induce the Secured Creditors and the Collateral Agent
(together with their agents, successors and assigns) to enter into said
financing arrangements, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Mortgage Holder
hereby certifies and agrees that:
1. If requested by the Collateral Agent, the Mortgagor Holder
will promptly furnish to the Collateral Agent a copy of any
amendment to or other modification of the First Mortgage or
any of the other documents referred to therein relating to the
indebtedness secured thereby.
<PAGE>
2. The Mortgagor Holder will use reasonable efforts to notify the
Collateral Agent of the commencement of any foreclosure or
similar proceedings under the First Mortgage.
3. The First Mortgage Holder is not aware of any default by the
Company under the First Mortgage, nor is the Mortgage Holder
aware of any events or conditions which, by the passage of
time or giving of notice or both, would constitute a default
thereunder by the Company.
4. None of the Collateral shall be deemed to be fixtures or other
property subjected to the lien of the First Mortgage. Any such
lien of the First Mortgage on any of the Collateral is hereby
waived and released.
5. The Mortgage Holder will not assert against the Collateral any
statutory, contractual or possessory liens, all of which it
hereby waives. The Mortgage Holder will not assert any claims
or rights of surcharge against the Collateral of whatever
nature, including, but not limited to, any claim or right
under 11 U.S.C. section 506(c) or any similar statute, whether
state or federal.
6. The Mortgage Holder will notify the Collateral Agent in
writing if the Company defaults on its payment or other
material obligations to the Mortgage Holder under the First
Mortgage as a consequence of which the Mortgage Holder intends
to exercise any remedies under the First Mortgage, and allow
the Collateral Agent fifteen (15) days from notice in which to
cure or cause the Company to cure any such defaults as more
specifically provided in the First Mortgage.
7. If (i) an Event of Default under the Security Agreement occurs
and is continuing and the Collateral Agent undertakes to
enforce its security in the Collateral through foreclosure
proceedings or otherwise, and (ii) the Mortgage Holder is a
"mortgagee in possession" or has through foreclosure, deed in
lieu of foreclosure or otherwise obtained possession of the
Premises, then the Mortgage Holder will permit the Collateral
Agent to enter onto and remain on the Premises for forty-five
(45) days after the Collateral Agent so notifies the Mortgagor
that it intends to enter the Premises for the purpose of
realizing upon the Collateral, without interference from the
Mortgage Holder, provided (1) the Collateral Agent removes the
Collateral from the Premises within such forty-five (45) day
period, (2) the Collateral Agent repairs any damage to the
Premises and improvements located thereon caused by such
removal, and (3) the Collateral Agent pays to the Mortgage
Holder a fair market rental for the period of time the
Collateral Agent is in possession of the Premises for such
removal purposes.
8. If the Collateral Agent or its successors and assigns invokes
the provisions of paragraph 7, the Collateral Agent agrees to
pay the Mortgage Holder all reasonable costs, including
attorneys' fees, which may be associated with the Collateral
Agent's exercise of its rights under said provisions.
Any notice(s) required or desired to be given hereunder shall be directed
to the party to be notified at the address stated herein by certified mail,
return receipt requested, and shall be deemed given when mailed.
The agreements contained herein shall continue in force until the earliest
of (1) the satisfaction and discharge of the First Mortgage (provided no
provision is made for the extension, renewal or replacement of the First
Mortgage by a mortgage held by the Mortgage Holder), (2) sixty (60) days after
the Mortgage Holder notifies the Collateral Agent that the Mortgage Holder is a
"mortgagee in possession" or has taken title to the Premises through a deed in
lieu of foreclosure, and (3) the date on which all of the obligations and
liabilities secured by the Security Agreement are paid and satisfied in full and
all financing arrangements secured by the Security Agreement have been
terminated. Upon the termination of this agreement as provided in clause (3)
above, or notice from the Mortgage Holder to the Collateral Agent of termination
of this agreement as provided in clause (1) or (2) above, the Collateral Agent
shall within fifteen (15) days thereafter execute and deliver to the Mortgage
Holder a release or satisfaction of this agreement. If the Collateral Agent
fails to comply with this release requirement, the Collateral Agent agrees that
the undersigned as Mortgage Holder shall be entitled to the remedy of specific
performance and agrees to pay reasonable attorneys' fees incident to securing
such release.
The undersigned Mortgage Holder will notify all transferees and purchasers
of its rights under the First Mortgage of the existence of this agreement. This
agreement may not be modified or terminated orally and shall be binding upon the
successors, assigns and personal representatives of the undersigned, and upon
any transferee of the rights of the Mortgage Holder under the First Mortgage.
-2-
<PAGE>
This agreement shall be construed and enforced under the laws of the State
in which the Premises are located.
This agreement shall be effective only when the acknowledgements
hereinafter set forth have been signed by (i) a duly authorized representative
of National City Bank on behalf of itself and as Collateral Agent for the other
Secured Creditors, and (ii) a duly authorized representative of the Company.
THE MORTGAGE HOLDER AGREES THAT NOTHING CONTAINED IN THIS AGREEMENT SHALL
BE CONSTRUED AS AN ASSUMPTION BY THE COLLATERAL AGENT OR ANY OF THE OTHER
SECURED CREDITORS OF ANY OBLIGATIONS OF THE COMPANY CONTAINED IN THE FIRST
MORTGAGE OR ANY OTHER NOTE OR OTHER DOCUMENT REFERRED TO THEREIN EVIDENCING THE
INDEBTEDNESS SECURED THEREBY.
THIS AGREEMENT SHALL NOT IMPAIR OR OTHERWISE AFFECT THE COMPANY'S
OBLIGATIONS TO PAY PRINCIPAL OR INTEREST OR ANY OTHER SUMS PAYABLE BY THE
COMPANY OR TO OTHERWISE PERFORM ITS OBLIGATIONS TO THE MORTGAGE HOLDER PURSUANT
TO THE TERMS OF THE FIRST MORTGAGE.
[The balance of this page is intentionally blank.]
-3-
<PAGE>
IN WITNESS WHEREOF, this agreement has been executed and delivered this
_____ day of _____________, 1999.
Witnesses: _____________________________________________
[Name of Landlord]
_________________________
Print Name:
By:__________________________________________
_________________________ Name:
Print Name: Title:
ADDRESS:
CORPORATE ACKNOWLEDGMENT
STATE OF _____________ )
) ss.:
COUNTY OF ____________ )
On this ____ day of _______________, 1999, before me, the undersigned
Notary Public in and for the above State, personally appeared ______________, to
me personally known, who being by me duly sworn, did say that he is the
__________________________ of _____________________________, a corporation, and
that the instrument was signed on behalf of the corporation by authority of its
board of directors and by him as an officer of the corporation and that the
instrument is his free act and deed and the free act and deed of the
corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed my
official seal this ____ day of __________, 1999 at _______________,
_____________.
_________________________
Notary Public
My commission expires:_____
[Notarial Seal]
-4-
<PAGE>
ACKNOWLEDGMENT BY COLLATERAL AGENT
NATIONAL CITY BANK, as Collateral Agent for itself and for the other
Secured Creditors hereby acknow ledges and agrees to the provisions of the
foregoing Mortgagee Waiver intended to be binding on the Collateral Agent.
NATIONAL CITY BANK,
as Collateral Agent
By:
----------------------------------
Vice President
ACKNOWLEDGMENT AND CONSENT
The undersigned hereby acknowledges and consents to the foregoing
Mortgagee Waiver.
THE UNDERSIGNED FURTHER ACKNOWLEDGES AND CONFIRMS THAT NOTHING CONTAINED
IN THE FOREGOING MORTGAGEE WAIVER RELIEVES THE UNDERSIGNED OF ANY OF ITS DUTIES
OR OBLIGATIONS UNDER OR PURSUANT TO THE FIRST MORTGAGE OR ANY NOTE, LOAN
AGREEMENT OR OTHER DOCUMENT EXECUTED IN CONNECTION THEREWITH.
------------------------------------------
[Name of Company]
By:
---------------------------------------
Vice President
-5-
<PAGE>
EXHIBIT C-14
---------------------------
FORM OF
BAILEE WAIVER
---------------------------
<PAGE>
BAILEE LETTER
Dated as of _________, 1999
TO: National City Bank,
as Collateral Agent
National City Center
1900 East Ninth Street
Cleveland, Ohio 44114
Attention: Agency Services
Telephone: (216) 575-2560
Facsimile: (216) 575-2481
__________________________________________________ (the "Company"), stores
goods at the undersigned's premises located at the following address (the
"Premises"):
_________________________________________________________
[Address]
The Company has entered into a Security Agreement (the "Security
Agreement") with National City Bank, as Collateral Agent (the "Collateral
Agent") for itself and the other Secured Creditors ("Secured Creditors")
identified therein. As a condition to the Secured Creditors agreeing to make
loans and other financial accommodations and extensions of credit, the Secured
Creditors require, among other things, that the Company grant to the Collateral
Agent, for the benefit of the Secured Creditors, liens on all of the Company's
inventory, equipment, goods, furnishings and other tangible personal property
located on the Premises (the "Collateral").
In order to induce the Secured Creditors and the Collateral Agent
(together with their agents, successors and assigns) to enter into said
financing arrangements, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the undersigned hereby
agrees as follows:
I. The undersigned will notify the Collateral Agent in writing if
(i) the storage of the Company's goods at the Premises has
been terminated by the Company; (ii) the Company is more than
60 days in arrears in any storage or other charges payable to
the undersigned; or (iii) the Company defaults on its storage
or other obligations to the undersigned and, in such event,
allow the Collateral Agent fifteen (15) days from notice in
which to cure or cause the Company to cure any such defaults.
II. If an Event of Default under the Security Agreement shall have
occurred and be continuing and the Collateral Agent undertakes
to enforce its security interest in the Collateral, the
Collateral Agent may, at its option and by written notice to
the undersigned with reference to this paragraph II, store the
items of the Collateral located at the Premises for the
account of the Collateral Agent (and not the Company), on the
same terms and for the same purposes only as the Company could
have done, with any charges to accrue for the account of the
Collateral Agent from the last date paid by the Company.
III. If an Event of Default under the Security Agreement shall have
occurred and be continuing and the Collateral Agent notifies
the undersigned thereof in writing with reference to this
paragraph III, the undersigned will hold the items of
Collateral located at the Premises for the benefit of the
Collateral Agent and will act only on the written instructions
<PAGE>
of the Collateral Agent with respect thereto, to the exclusion
of any instructions from the Company, until the Collateral
Agent notifies the undersigned in writing to the contrary.
IV. If the Collateral Agent or its successors and assigns invokes
the provisions of paragraph II or III, the Collateral Agent
agrees to pay the undersigned all reasonable costs, including
attorneys' fees, which may be associated with the Collateral
Agent's exercise of its rights under said provisions.
Any notice(s) required or desired to be given hereunder shall be directed
to the party to be notified at the address stated herein by certified mail,
return receipt requested, and shall be deemed given when mailed.
The agreements contained herein shall continue in force until the earlier
of (1) the expiration or termination of the storage of the Company's goods at
the Premises or (2) the date on which all of the obligations and liabilities to
the Secured Creditors are paid and satisfied in full and all financing
arrangements secured by the Security Agreement have been terminated. Upon the
termination of this agreement as provided in clause (2) above, the Collateral
Agent shall so notify the undersigned.
This agreement may not be modified or terminated orally and shall be
binding upon the successors, assigns and personal representatives of the
undersigned.
This agreement shall be construed and enforced under the laws of the
jurisdiction in which the Premises are located.
This agreement shall be effective only when the acknowledgements
hereinafter set forth have been signed by (i) a duly authorized representative
of National City Bank on behalf of itself and as Collateral Agent for the other
Secured Creditors, and (ii) the Company.
Very truly yours,
--------------------------------------
[Name of Bailee]
By:
-----------------------------------
Name:
Title:
-2-
<PAGE>
ACKNOWLEDGMENT BY COLLATERAL AGENT
NATIONAL CITY BANK, as Collateral Agent for itself and for the other
Secured Creditors, hereby accepts and agrees to the foregoing.
NATIONAL CITY BANK,
as Collateral Agent
By:
----------------------------------
Vice President
ACKNOWLEDGMENT BY COMPANY
The undersigned hereby accepts and agrees to the foregoing.
-----------------------------------
By:
----------------------------------
Title
-3-
<PAGE>
EXHIBIT D-1
---------------------------
FORM OF
OPINION OF COUNSEL
TO THE BORROWER
---------------------------
<PAGE>
December 31, 1998
To the Administrative Agent,
the Collateral Agent,
the Documentation Agent, the Syndication Agent,
and each of the Lenders party
to the Credit Agreement referred to below
c/o National City Bank,
as Administrative Agent
1900 East Ninth Street
Cleveland, Ohio 44114
Re: $425,000,000 Credit Agreement,
dated as of December 30, 1998,
with Stoneridge, Inc.
Ladies and Gentlemen:
We have acted as special counsel to Stoneridge, Inc., an Ohio corporation
(the "Borrower"), in connection with the execution and delivery of the Credit
Agreement, dated as of December 30, 1998 (the "Credit Agreement"), among the
Borrower, the financial institutions that are a party thereto as lenders (the
"Lenders"), PNC Bank, National Association, as Documentation Agent (the
"Documentation Agent"), DLJ Capital Funding, Inc., as Syndication Agent (the
"Syndication Agent"), and National City Bank, as Administrative Agent (the
"Administrative Agent") and as the Collateral Agent (the "Collateral Agent"),
and the transactions contemplated thereby. We have also acted as special counsel
to the Borrower in connection with the execution and delivery of the Stock
Purchase Agreement, dated as of December 7, 1998 (the "Stock Purchase
Agreement"), among the Borrower and the shareholders of Hi-Stat Manufacturing
Co., Inc., a Florida corporation ("Hi-Stat"), relating to the acquisition by the
Borrower of all of the capital stock of Hi-Stat, and the transactions
contemplated thereby.
Unless otherwise indicated, capitalized terms used herein, but not
otherwise defined herein, shall have the respective meanings set forth in the
Credit Agreement. This opinion letter is being furnished at the request of the
Borrower pursuant to section 6.1(f) of the Credit Agreement.
In rendering this opinion, we have examined only the following: (a)
executed counterparts, originals or copies, as the case may be, of the documents
identified on Exhibit A attached hereto; (b) the certificate of the Vice
President - Finance and Chief Financial Officer of the Borrower attached hereto
as Exhibit B, certifying as to certain factual matters (the "Officer's
Certificate"); and (c) such matters of law as we deemed necessary for purposes
of this opinion. Except as referred to in Exhibit A, we have neither examined
nor requested an examination of the indices or records of any governmental or
other agency, authority, instrumentality or entity for purposes of this opinion.
We have, with your consent, relied as to matters of fact upon the
representations and warranties contained in the Credit Documents (as defined in
Exhibit A attached hereto) and upon the Officer's Certificate. In all instances
where any opinion herein is qualified "to our knowledge" or "known to us," we
have, with your consent, relied as to matters of fact solely on the Officer's
Certificate and on the absence of contrary knowledge by the attorneys of
<PAGE>
our firm who have given substantive attention to the transactions contemplated
by the Credit Agreement, and we have not made (nor do we acknowledge any duty to
make) any independent or other investigation with respect thereto.
In rendering the opinions set forth herein, we have assumed (there being
no facts known to us to the contrary), with your approval, that (i) the
signatures of all parties (other than the Borrower with respect to the Credit
Documents and the Stock Purchase Agreement) on all documents examined by us are
genuine, (ii) all documents submitted to us as originals are authentic, (iii)
all documents submitted to us as copies conform with the originals, (iv) natural
persons signing the documents examined by us at the time of such signing were
fully competent and had full legal capacity to sign, deliver and perform their
obligations under such documents, (v) the portions of the Collateral (as defined
in the Security Agreement (as defined in Exhibit A)) that consist of equipment
and inventory (as those terms are used or defined in Article Nine of the Uniform
Commercial Code as in effect in the State of Ohio (the "Ohio UCC")) that are
located in the State of Ohio (the "Ohio Collateral") are located only in the
Counties of Ashtabula, Portage, and Trumbull, (vi) the Borrower has places of
business in more than one county in the State of Ohio, and (vii) the chief
executive office, within the meaning of sections 1309.03 and 1309.38 of the Ohio
UCC (section 9-103(3)(d) and section 9-401(b) of the Uniform Commercial Code),
of the Borrower is located in the County of Trumbull, Ohio. We have also
assumed, with your approval, the due authorization, execution and delivery of
the Stock Purchase Agreement on the part of the parties thereto other than the
Borrower and of the Credit Documents on the part of the Lenders, the
Documentation Agent, the Syndication Agent, the Administrative Agent and the
Collateral Agent and the legality, validity, binding effect on, and
enforceability of the Stock Purchase Agreement and the Credit Documents against
those persons.
In connection with these opinions, we do not purport to be qualified to
express legal conclusions based on the laws of any state or jurisdiction other
than the laws of the State of Ohio and the United States of America, and
accordingly, we express no opinion as to the laws of any other state or
jurisdiction.
Based upon the foregoing and subject to the qualifications, assumptions
and limitations contained in this opinion letter, we are of the opinion that:
1. The Borrower is a corporation validly existing and in good standing
under the laws of the State of Ohio.
2. To our knowledge, except with respect to Hi-Stat, Annex II to the
Credit Agreement correctly sets forth each Subsidiary of the Borrower and the
direct and indirect ownership interest of the Borrower therein.
3. The Borrower has all requisite corporate power and authority to execute
and deliver the Credit Documents, the Financing Statements (as defined in
Exhibit A) and the Stock Purchase Agreement and to perform its obligations under
the Credit Documents and the Stock Purchase Agreement. The execution and
delivery of, and performance by the Borrower of its obligations under, the
Credit Documents and the Stock Purchase Agreement and the execution and delivery
by the Borrower of the Financing Statements, have been duly and validly
authorized by all necessary corporate action on the part of the Borrower. Each
of the Credit Documents, the Financing Statements and the Stock Purchase
Agreement has been duly executed and delivered on behalf of the Borrower, and
the Ohio Documents (as defined in Exhibit A) and the Stock Purchase Agreement
constitute the legal, valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with their respective terms.
4. The execution and delivery by the Borrower of the Credit Documents, the
Financing Statements and the Stock Purchase Agreement, and the performance by
the Borrower of its obligations under the Credit Documents and the Stock
Purchase Agreement, do not contravene (a) any existing law or regulation of
general applicability of the State of Ohio or the United States of America, or
(b) assuming that the proceeds of the Loans are utilized by the Borrower for the
purposes permitted under section 7.7 of the Credit Agreement, Regulations T, U
and X of the Board of Governors of the Federal Reserve System; and do not
violate any provision of (i) the Articles of Incorporation, or Code of
Regulations, of the Borrower, or (ii) to our knowledge, (A) any order, writ,
injunction, decree or demand of any court or governmental authority binding upon
the Borrower or any of its Subsidiaries or (B) any provision of any agreement or
instrument binding on the Borrower or any of its Subsidiaries
2
<PAGE>
identified in the Officer's Certificate as material to the business of the
Borrower or any of its Subsidiaries or filed by the Borrower with the Securities
and Exchange Commission pursuant to Item 601 of Regulation S-K.
5. Other than with respect to any filings contemplated by the Credit
Documents, no consent, approval or authorization of, or registration or
declaration with, any governmental authority of the State of Ohio or any
governmental authority of the United States of America is required in connection
with the Borrower's execution and delivery of the Credit Documents.
6. Based upon the FTC Letter, the applicable waiting period provided by
section 7A(b)(1) of the Clayton Act and section 803.10(b) of the Premerger
Notification Requirements under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 with the respect to the sale of the capital stock of Hi-Stat to the
Borrower contemplated by the Stock Purchase Agreement has been terminated by the
Federal Trade Commission.
7. To our knowledge, there are no actions, suits or proceedings pending or
threatened against the Borrower or any of its Subsidiaries which, if determined
adversely to the Borrower, would have a material adverse effect on, or which
contests, the validity or enforceability of any of the Credit Documents or of
any action to be taken by the Borrower pursuant to any of the Credit Documents.
8. Neither the Borrower nor any of its Subsidiaries is subject to
regulation with respect to the creation or incurrence of Indebtedness under the
Investment Company Act of 1940, as amended, the Interstate Commerce Act, as
amended, the Federal Power Act, as amended, the Public Utility Holding Company
Act of 1935, as amended, or any applicable State of Ohio public utility law.
9. The Ohio Financing Statements (as defined in Exhibit A) are in proper
form for filing in the offices specified in Exhibit A. When the Ohio Financing
Statements are filed in the offices specified in Exhibit A, the Ohio Financing
Statements will be sufficient to perfect a security interest in the right, title
and interest of the Borrower in and to the accounts, chattel paper and general
intangibles (as those terms are used or defined in Article Nine of the Ohio UCC)
and the Ohio Collateral that constitute a portion of the Collateral described in
the Security Agreement and in the Ohio Financing Statements in which a security
interest may be perfected under the Ohio UCC by filing financing statements in
the State of Ohio.
Despite any other express or implied statement in this letter, each of the
opinions expressed in this letter is subject to the following further
qualifications, whether or not such opinions refer to such qualifications:
(i) The opinions expressed herein may be limited by: (a) bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or similar federal
or state laws or judicial decisions of general application relating to the
rights of creditors; (b) as to rights of acceleration, the appointment of a
receiver, specific performance and other remedies, by general principles of
equity, including the defenses of unconscionability, ambiguity, and economic
duress, whether asserted in equitable or in legal actions; and (c) general
principles of interpretation and rules of construction of contracts.
(ii) Certain of the remedial provisions contained in the Credit Documents
and the Stock Purchase Agreement may be limited or rendered unenforceable under
Ohio law in whole or in part. For example: (a) certain indemnification
provisions and provisions for the recovery of legal fees and expenses in
connection with the enforcement of such remedies may not be enforceable; (b)
provisions resulting in a waiver of certain rights by the Borrower may be
limited by legal and equitable principles and public policy at the time in
effect; (c) the availability of specific performance, injunctive relief or other
equitable remedies and the appointment of a receiver are subject to the
discretion of the court before which any proceeding therefor may be brought; and
(d) every aspect of the disposition of any collateral subject to the Credit
Documents and every aspect of the disposition of the Pledged Stock, including,
without limitation, the method, manner, time, place and terms, must be
commercially reasonable as provided in section 1309.47(C) of the Ohio UCC
(section 9-504 of the Uniform Commercial Code).
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<PAGE>
(iii) We express no opinion as to whether a court would limit the exercise
or enforcement of rights or remedies under the Credit Documents (a) in the event
of any default by any person under the Credit Documents or any related agreement
or instrument if it is determined that such default is not material or if such
exercise or enforcement is not reasonably necessary for a creditor's protection,
and (b) if the exercise or enforcement thereof under the circumstances would
violate an implied covenant of good faith and fair dealing.
(iv) We wish to advise you that we do not express any opinion with respect
to (a) the power or authority of any of the Lenders to make the Loans and/or
issue (or participate in the issuance of) Letters of Credit pursuant to the
Credit Agreement, (b) compliance by the Documentation Agent, the Syndication
Agent, the Administrative Agent, the Collateral Agent or any of the Lenders with
any federal or state banking law, rule, regulation or restriction or (c)
compliance by the Documentation Agent, the Syndication Agent, the Administrative
Agent, the Collateral Agent or any of the Lenders with any federal or state law,
rule, regulation or restriction which is or was required to be complied with by
the Documentation Agent, the Syndication Agent, the Administrative Agent, the
Collateral Agent or any of the Lenders (as opposed to compliance therewith by
the Borrower) in order to enforce any rights of the Documentation Agent, the
Syndication Agent, the Administrative Agent, the Collateral Agent or any of the
Lenders under any of the Credit Documents.
(v) We express no opinion with respect to: (a) the right, title or
interest of any person to any property, real or personal, or the existence of or
freedom from any security interest, lien, charge or encumbrance thereon; (b) the
creation or perfection (except as set forth in paragraph 9 above) or priority of
any lien on or security interest in any real or personal property or the
accuracy or sufficiency of the description thereof in any of the Credit
Documents or the Financing Statements; (c) whether any financing statement,
mortgage or other instrument or document has been duly filed or recorded; and
(d) any transaction purporting to grant a security interest or lien on personal
property to which the Ohio UCC does not apply by the terms of section 1309.04 of
the Ohio UCC (section 9-104 of the Uniform Commercial Code).
(vi) Any security interest created under the Credit Documents with respect
to any property will not be effective until the Borrower has acquired rights
therein, and with respect to personal property that is acquired by the Borrower
after the date hereof, section 552 of the United States Bankruptcy Code will
limit the extent to which property acquired by a debtor after the commencement
of a case under the United States Bankruptcy Code may be subject to a security
interest arising from a security agreement entered into by the debtor before the
commencement of such case.
(vii) The perfection of any security interest arising from the filing of
the Financing Statements will expire or be ineffective (a) as to any property
acquired by the debtor identified therein, more than four months after such
debtor changes its name, identity or structure so as to make the Financing
Statements misleading, unless new appropriate financing statements indicating
the new name, identity or structure of such debtor are properly filed before the
expiration of such four-month period; (b) as to any property with respect to
which a continuation statement is not filed within the period of six months
prior to the expiration of five years from the dates of the original filing of
the respective Financing Statements; (c) in accordance with the provisions of
section 1309.25 of the Ohio UCC (section 9-306 of the Uniform Commercial Code)
relating to proceeds of personal property subject to a perfected interest; (d)
as to any item of property consisting of goods acquired from the debtor
identified therein, to the extent provided in section 1309.26 of the Ohio UCC
(section 9-307 of the Uniform Commercial Code) as to the rights of certain
buyers of goods; (e) as to any item of tangible personal property that is moved
to another jurisdiction, four months after such item was so moved; and (f) as to
accounts, general intangibles and chattel paper, four months after the debtor
identified therein changes its place of business, if it has only one, or changes
its chief executive office, if it has more than one place of business, to a
jurisdiction other than the jurisdiction in which it is located on the date
hereof. The perfection of the security interest in the Pledged Stock will expire
if the Collateral Agent surrenders possession thereof.
This opinion letter is being furnished only to the addressees and is
solely for their benefit and the benefit of their participants and assigns in
connection with the transactions contemplated by the Credit Documents. This
opinion letter may not otherwise be disclosed or be relied upon for any other
purpose, or relied upon by any other
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<PAGE>
person, firm or corporation for any purpose, without our prior written consent.
The opinions expressed in this letter are made only as of the date hereof and
cannot be relied upon with respect to events which occur subsequent to the
issuance of this letter. We assume no obligation to advise you of any changes in
the foregoing subsequent to the delivery of this letter. The opinions in this
letter are limited to the matters set forth in this letter, and no other opinion
should be inferred beyond the matters expressly stated. The opinion is not to be
quoted in whole or in part or otherwise referred to, nor is it to be filed with
any governmental agencies or any person without our prior written consent,
except as may be required by applicable law or by order of any governmental
authority.
Very truly yours,
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EXHIBIT A
1. An executed counterpart of the Stock Purchase Agreement.
2. An executed counterpart of the Credit Agreement.
3. Revolving Note, dated as of December 30, 1998, executed by the Borrower to
PNC Bank, National Association in the original principal amount of
$40,000,000.
4. Term A Note, dated as of December 30, 1998, executed by the Borrower to
PNC Bank, National Association in the original principal amount of
$60,000,000.
5. Revolving Note, dated as of December 30, 1998, executed by the Borrower to
DLJ Capital Funding, Inc. in the original principal amount of $30,000,000.
6. Term A Note, dated as of December 30, 1998, executed by the Borrower to
DLJ Capital Funding, Inc. in the original principal amount of $45,000,000.
7. Term B Note, dated as of December 30, 1998, executed by the Borrower to
DLJ Capital Funding, Inc. in the original principal amount of $87,500,000.
8. Revolving Note, dated as of December 30, 1998, executed by the Borrower to
National City Bank in the original principal amount of $30,000,000.
9. Term A Note, dated as of December 30, 1998, executed by the Borrower to
National City Bank in the original principal amount of $45,000,000.
10. Term B Note, dated as of December 30, 1998, executed by the Borrower to
National City Bank in the original principal amount of $87,500,000.
11. An executed counterpart of the Security Agreement, dated as of December
30, 1998, among the Borrower, the other Assignors named therein, and the
Collateral Agent (the "Security Agreement").
12. An executed counterpart of the Pledge Agreement, dated as of December 30,
1998, made by the Borrower in favor of the Collateral Agent (the "Pledge
Agreement").
13. An executed counterpart of the Collateral Assignment of Trademarks and
Security Agreement, dated as of December 30, 1998, between the Borrower
and the Collateral Agent, for the benefit of the Secured Creditors.
14. An executed counterpart of the Collateral Assignment of Patents and
Security Agreement, dated as of December 30, 1998, between the Borrower
and the Collateral Agent, for the benefit of the Secured Creditors.
15. Open-End Mortgage, Assignment of Leases and Security Agreement, dated as
of December 30, 1998, by the Borrower in favor of the Collateral Agent for
the benefit of the Secured Creditors, relating to the real property
located in Kent, Ohio.
16. Open-End Mortgage, Assignment of Leases and Security Agreement, dated as
of December 30, 1998, by the Borrower in favor of the Collateral Agent for
the benefit of the Secured Creditors, relating to the real property
located in Orwell, Ohio.
<PAGE>
17. Open-End Mortgage, Assignment of Leases and Security Agreement, dated as
of December 30, 1998, by the Borrower in favor of the Collateral Agent for
the benefit of the Secured Creditors, relating to the real property
located in Warren, Ohio.
18. Deed of First Mortgage, Assignment of Leases and Security Agreement, dated
as of December 30, 1998, by the Borrower in favor of the Collateral Agent
for the benefit of the Secured Creditors, relating to the real property
located in Boston, Massachusetts.
19. Deed of First Mortgage, Assignment of Leases and Security Agreement, dated
as of December 30, 1998, by the Borrower in favor of the Collateral Agent
for the benefit of the Secured Creditors, relating to the real property
located in Canton, Massachusetts.
20. Future Advance Mortgage, Assignment of Leases and Security Agreement,
dated as of December 30, 1998, by the Borrower in favor of the Collateral
Agent for the benefit of the Secured Creditors, relating to the real
property located in Portland, Indiana.
21. Originals of the following financing statements (collectively, the "Ohio
Financing Statements"):
(a) Three financing statements executed by the Borrower under the
Uniform Commercial Code as in effect in the State of Ohio naming the
Borrower as debtor and the Collateral Agent as secured party, one to
be filed or indexed in the real estate records in the Office of the
Trumbull County Recorder, one to be filed or indexed in the real
estate records in the Office of the Ashtabula County Recorder, and
to be filed or indexed in the real estate records in the Office of
the Portage County Recorder; and
(b) Five financing statements executed by the Borrower under the Uniform
Commercial Code as in effect in the State of Ohio naming the
Borrower as debtor and the Collateral Agent as secured party, to be
filed or indexed in the Uniform Commercial Code records in the
Office of the Secretary of State of the State of Ohio.
22. Originals of the following financing statements (collectively, together
with the Ohio Financing Statement, the "Financing Statements"):
(a) One financing statement executed by the Borrower under the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts
naming the Borrower as debtor and the Collateral Agent as secured
party, to be filed or indexed in the Uniform Commercial Code records
in the Office of the Suffolk County Recorder;
(b) One financing statement executed by the Borrower under the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts
naming the Borrower as debtor and the Collateral Agent as secured
party, to be filed or indexed in the Uniform Commercial Code records
in the Office of the Norfolk County Recorder;
(c) One financing statement executed by the Borrower under the Uniform
Commercial Code as in effect in the State of Indiana naming the
Borrower as debtor and the Collateral Agent as secured party, to be
filed or indexed in the Uniform Commercial Code records in the
Office of the Jay County Recorder;
(d) Three financing statements executed by the Borrower under the
Uniform Commercial Code as in effect in the Commonwealth of
Massachusetts naming the Borrower as debtor and the Collateral Agent
as secured party, to be filed or indexed in the Uniform Commercial
Code records in the Office of the Secretary of State of the
Commonwealth of Massachusetts;
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<PAGE>
(e) One financing statement executed by the Borrower under the Uniform
Commercial Code as in effect in the State of Illinois naming the
Borrower as debtor and the Collateral Agent as secured party, to be
filed or indexed in the Uniform Commercial Code records in the
Office of the Secretary of State of the State of Illinois;
(f) One financing statement executed by the Borrower under the Uniform
Commercial Code as in effect in the State of South Carolina naming
the Borrower as debtor and the Collateral Agent as secured party, to
be filed or indexed in the Uniform Commercial Code records in the
Office of the Secretary of State of the State of South Carolina;
(g) One financing statement executed by the Borrower under the Uniform
Commercial Code as in effect in the State of North Carolina naming
the Borrower as debtor and the Collateral Agent as secured party, to
be filed or indexed in the Uniform Commercial Code records in the
Office of the Secretary of State of the State of North Carolina;
(h) One financing statement executed by the Borrower under the Uniform
Commercial Code as in effect in the State of Indiana naming the
Borrower as debtor and the Collateral Agent as secured party, to be
filed or indexed in the Uniform Commercial Code records in the
Office of the Secretary of State of the State of Indiana;
(i) One financing statement executed by the Borrower under the Uniform
Commercial Code as in effect in the State of Michigan naming the
Borrower as debtor and the Collateral Agent as secured party, to be
filed or indexed in the Uniform Commercial Code records in the
Office of the Secretary of State of the State of Michigan; and
(j) One financing statement executed by the Borrower under the Uniform
Commercial Code as in effect in the State of Texas naming the
Borrower as debtor and the Collateral Agent as secured party, to be
filed or indexed in the Uniform Commercial Code records in the
Office of the Secretary of State of the State of Texas.
23. Letter to the Borrower from the Federal Trade Commission, confirming early
termination of the waiting period under Section 7A(b)(1) of the Clayton
Act and Section 803.10(b) of the Premerger Notification Requirements under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "FTC
Letter").
24. Articles of Incorporation of the Borrower, certified by the Secretary of
State of the State of Ohio on December 24, 1998.
25. Code of Regulations of the Borrower, certified by the Vice President -
Finance of the Borrower.
26. Certificate of Good Standing of the Borrower, dated December 23, 1998,
certified by the Secretary of State of the State of Ohio.
27. Resolutions of the Board of Directors of the Borrower, approving the
execution and delivery by the Borrower of the Credit Agreement and the
instruments and agreements related thereto, and as certified by the
Secretary of the Borrower.
28. Resolutions of the Board of Directors of the Borrower, approving the
execution and delivery by the Borrower of the Stock Purchase Agreement and
the instruments and agreements related thereto, and as certified by the
Secretary of the Borrower.
Items 2 through 20, inclusive, are collectively referred to as the "Credit
Documents." Items 1 through 17, inclusive, are sometimes collectively referred
to as the "Ohio Documents."
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EXHIBIT B
Certificate of Officer
----------------------
to
Baker & Hostetler LLP
---------------------
This Certificate is delivered to Baker & Hostetler LLP by the undersigned,
Kevin P. Bagby, the Vice President--Finance and Chief Financial Officer of
Stoneridge, Inc., an Ohio corporation (the "Company"). This Certificate will be
relied upon by Baker & Hostetler LLP for the accuracy and completeness of the
facts set forth herein, in rendering legal opinions to be delivered in
connection with the Credit Agreement, dated as of December 30, 1998 (the "Credit
Agreement"), among the Borrower, the financial institutions that are a party
thereto as lenders (the "Lenders"), PNC Bank, National Association, as
Documentation Agent (the "Documentation Agent"), DLJ Capital Funding, Inc., as
Syndication Agent (the "Syndication Agent"), and National City Bank, as
Administrative Agent (the "Administrative Agent") and as the Collateral Agent
(the "Collateral Agent").
Terms not otherwise defined herein shall have the respective meanings
ascribed thereto in the Credit Agreement.
The undersigned hereby certify to Baker & Hostetler LLP that as of the
date hereof:
1. All certificates being delivered by or on behalf of the Company to the
Administrative Agent pursuant to the Credit Documents (as defined on Schedule I
hereto) at the closing under the Credit Documents are true and accurate in all
respects.
2. The representations and warranties of the Company set forth in the
Credit Documents and the Stock Purchase Agreement (as defined on Schedule I
hereto) are true and accurate in all respects.
3. Accurate copies of all proceedings of the Board of Directors of the
Company have been made available to Baker & Hostetler LLP.
4. Annex II to the Credit Agreement correctly sets forth each Subsidiary
of the Borrower and the direct and indirect ownership interest of the Borrower
therein.
5. The execution and delivery by the Borrower of the Credit Documents, the
Financing Statements (as defined on Schedule I) and the Stock Purchase
Agreement, and the performance by the Borrower of its obligations under the
Credit Documents and the Stock Purchase Agreement, do not violate any provision
of any order, writ, injunction, decree or demand of any court or governmental
authority binding upon the Borrower or any of its Subsidiaries or any provision
of any agreement or instrument binding upon the Borrower or any of its
Subsidiaries material to the business of the Borrower or any of its
Subsidiaries.
6. The Company has no knowledge, notice or belief that the execution and
delivery by the Company of the Credit Documents, the Financing Statements and
the Stock Purchase Agreement, and the performance by the Borrower of its
obligations under the Credit Documents and the Stock Purchase Agreement, will
violate, or with or without the giving of notice or the passage of time, or
both, conflict with or result in a default of right to accelerate or loss of
rights under (a) any material mortgage, deed of trust, lease, license or
agreement material to the Company=s business or filed by the Company with the
Securities and Exchange Commission pursuant to Item 601 of Regulation S-K; or
(b) any order, judgment or decree to which the Company is a party or by which
the Company is bound.
<PAGE>
7. Other than the mortgages, deed or trusts, leases, licenses or
agreements that have been filed with the Securities and Exchange Commission
pursuant to Item 601 of Regulation S-K there are no mortgages, deed of trusts,
leases, licenses or agreements material to the Company=s business.
8. There are no actions, suits or proceedings pending or threatened
against the Borrower or any of its Subsidiaries which, if determined adversely
to the Borrower, would have a material adverse effect on, or which contests, the
validity or enforceability of any of the Credit Documents or of any action to be
taken by the Borrower pursuant to any of the Credit Documents.
9. The portions of the Collateral that consist of equipment and inventory
that are located in the State of Ohio are located only in the Counties of
Ashtabula, Portage, and Trumbull and the chief executive office, within the
meaning of Sections 1309.03 and 1309.38 of the Ohio Revised Code, of the
Borrower is located in the County of Trumbull, Ohio.
10. The Borrower has received no notice that the Borrower is not in
compliance with applicable statutes, laws, orders, permits, authorizations and
the like.
Executed and delivered to Baker & Hostetler LLP as of December 30th, 1998.
---------------------------------------
Kevin P. Bagby, Vice President- Finance
and Chief Financial Officer
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<PAGE>
SCHEDULE I
1. An executed counterpart of the Stock Purchase Agreement.
2. An executed counterpart of the Credit Agreement.
3. Revolving Note, dated as of December 30, 1998, executed by the Borrower to
PNC Bank, National Association in the original principal amount of
$40,000,000.
4. Term A Note, dated as of December 30, 1998, executed by the Borrower to
PNC Bank, National Association in the original principal amount of
$60,000,000.
5. Revolving Note, dated as of December 30, 1998, executed by the Borrower to
DLJ Capital Funding, Inc. in the original principal amount of $30,000,000.
6. Term A Note, dated as of December 30, 1998, executed by the Borrower to
DLJ Capital Funding, Inc. in the original principal amount of $45,000,000.
7. Term B Note, dated as of December 30, 1998, executed by the Borrower to
DLJ Capital Funding, Inc. in the original principal amount of $87,500,000.
8. Revolving Note, dated as of December 30, 1998, executed by the Borrower to
National City Bank in the original principal amount of $30,000,000.
9. Term A Note, dated as of December 30, 1998, executed by the Borrower to
National City Bank in the original principal amount of $45,000,000.
10. Term B Note, dated as of December 30, 1998, executed by the Borrower to
National City Bank in the original principal amount of $87,500,000.
11. An executed counterpart of the Security Agreement, dated as of December
30, 1998, among the Borrower, the other Assignors named therein, and the
Collateral Agent (the "Security Agreement").
12. An executed counterpart of the Pledge Agreement, dated as of December 30,
1998, made by the Borrower in favor of the Collateral Agent (the "Pledge
Agreement").
13. An executed counterpart of the Collateral Assignment of Trademarks and
Security Agreement, dated as of December 30, 1998, between the Borrower
and the Collateral Agent, for the benefit of the Secured Creditors.
14. An executed counterpart of the Collateral Assignment of Patents and
Security Agreement, dated as of December 30, 1998, between the Borrower
and the Collateral Agent, for the benefit of the Secured Creditors.
15. Open-End Mortgage, Assignment of Leases and Security Agreement, dated as
of December 30, 1998, by the Borrower in favor of the Collateral Agent for
the benefit of the Secured Creditors, relating to the real property
located in Kent, Ohio.
16. Open-End Mortgage, Assignment of Leases and Security Agreement, dated as
of December 30, 1998, by the Borrower in favor of the Collateral Agent for
the benefit of the Secured Creditors, relating to the real property
located in Orwell, Ohio.
<PAGE>
17. Open-End Mortgage, Assignment of Leases and Security Agreement, dated as
of December 30, 1998, by the Borrower in favor of the Collateral Agent for
the benefit of the Secured Creditors, relating to the real property
located in Warren, Ohio.
18. Deed of First Mortgage, Assignment of Leases and Security Agreement, dated
as of December 30, 1998, by the Borrower in favor of the Collateral Agent
for the benefit of the Secured Creditors, relating to the real property
located in Boston, Massachusetts.
19. Deed of First Mortgage, Assignment of Leases and Security Agreement, dated
as of December 30, 1998, by the Borrower in favor of the Collateral Agent
for the benefit of the Secured Creditors, relating to the real property
located in Canton, Massachusetts.
20. Future Advance Mortgage, Assignment of Leases and Security Agreement,
dated as of December 30, 1998, by the Borrower in favor of the Collateral
Agent for the benefit of the Secured Creditors, relating to the real
property located in Portland, Indiana.
21. Originals of the following financing statements (collectively, the "Ohio
Financing Statements"):
(a) Three financing statements executed by the Borrower under the
Uniform Commercial Code as in effect in the State of Ohio naming the
Borrower as debtor and the Collateral Agent as secured party, one to
be filed or indexed in the real estate records in the Office of the
Trumbull County Recorder, one to be filed or indexed in the real
estate records in the Office of the Ashtabula County Recorder, and
to be filed or indexed in the real estate records in the Office of
the Portage County Recorder; and
(b) Five financing statements executed by the Borrower under the Uniform
Commercial Code as in effect in the State of Ohio naming the
Borrower as debtor and the Collateral Agent as secured party, to be
filed or indexed in the Uniform Commercial Code records in the
Office of the Secretary of State of the State of Ohio.
22. Originals of the following financing statements (collectively, together
with the Ohio Financing Statement, the "Financing Statements"):
(a) One financing statement executed by the Borrower under the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts
naming the Borrower as debtor and the Collateral Agent as secured
party, to be filed or indexed in the Uniform Commercial Code records
in the Office of the Suffolk County Recorder;
(b) One financing statement executed by the Borrower under the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts
naming the Borrower as debtor and the Collateral Agent as secured
party, to be filed or indexed in the Uniform Commercial Code records
in the Office of the Norfolk County Recorder;
(c) One financing statement executed by the Borrower under the Uniform
Commercial Code as in effect in the State of Indiana naming the
Borrower as debtor and the Collateral Agent as secured party, to be
filed or indexed in the Uniform Commercial Code records in the
Office of the Jay County Recorder;
(d) Three financing statements executed by the Borrower under the
Uniform Commercial Code as in effect in the Commonwealth of
Massachusetts naming the Borrower as debtor and the Collateral Agent
as secured party, to be filed or indexed in the Uniform Commercial
Code records in the Office of the Secretary of State of the
Commonwealth of Massachusetts;
2
<PAGE>
(e) One financing statement executed by the Borrower under the Uniform
Commercial Code as in effect in the State of Illinois naming the
Borrower as debtor and the Collateral Agent as secured party, to be
filed or indexed in the Uniform Commercial Code records in the
Office of the Secretary of State of the State of Illinois;
(f) One financing statement executed by the Borrower under the Uniform
Commercial Code as in effect in the State of South Carolina naming
the Borrower as debtor and the Collateral Agent as secured party, to
be filed or indexed in the Uniform Commercial Code records in the
Office of the Secretary of State of the State of South Carolina;
(g) One financing statement executed by the Borrower under the Uniform
Commercial Code as in effect in the State of North Carolina naming
the Borrower as debtor and the Collateral Agent as secured party, to
be filed or indexed in the Uniform Commercial Code records in the
Office of the Secretary of State of the State of North Carolina;
(h) One financing statement executed by the Borrower under the Uniform
Commercial Code as in effect in the State of Indiana naming the
Borrower as debtor and the Collateral Agent as secured party, to be
filed or indexed in the Uniform Commercial Code records in the
Office of the Secretary of State of the State of Indiana;
(i) One financing statement executed by the Borrower under the Uniform
Commercial Code as in effect in the State of Michigan naming the
Borrower as debtor and the Collateral Agent as secured party, to be
filed or indexed in the Uniform Commercial Code records in the
Office of the Secretary of State of the State of Michigan; and
(j) One financing statement executed by the Borrower under the Uniform
Commercial Code as in effect in the State of Texas naming the
Borrower as debtor and the Collateral Agent as secured party, to be
filed or indexed in the Uniform Commercial Code records in the
Office of the Secretary of State of the State of Texas.
23. Letter to the Borrower from the Federal Trade Commission, confirming early
termination of the waiting period under Section 7A(b)(1) of the Clayton
Act and Section 803.10(b) of the Premerger Notification Requirements under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "FTC
Letter").
24. Articles of Incorporation of the Borrower, certified by the Secretary of
State of the State of Ohio on December 24, 1998.
25. Code of Regulations of the Borrower, certified by the Vice President -
Finance of the Borrower.
26. Certificate of Good Standing of the Borrower, dated December 23, 1998,
certified by the Secretary of State of the State of Ohio.
27. Resolutions of the Board of Directors of the Borrower, approving the
execution and delivery by the Borrower of the Credit Agreement and the
instruments and agreements related thereto, and as certified by the
Secretary of the Borrower.
28. Resolutions of the Board of Directors of the Borrower, approving the
execution and delivery by the Borrower of the Stock Purchase Agreement and
the instruments and agreements related thereto, and as certified by the
Secretary of the Borrower.
Items 2 through 20, inclusive, are collectively referred to as the "Credit
Documents." Items 1 through 17, inclusive, are sometimes collectively referred
to as the "Ohio Documents."
3
<PAGE>
EXHIBIT D-2
---------------------------
FORM OF
SOLVENCY CERTIFICATE
---------------------------
<PAGE>
SOLVENCY CERTIFICATE OF
STONERIDGE, INC.
STONERIDGE, INC., an Ohio corporation (the "Borrower"), hereby certifies
that the officer executing this Solvency Certificate is the Chief Financial
Officer and Treasurer of the Borrower and that such officer is duly authorized
to execute this Solvency Certificate, which is hereby delivered on behalf of the
Borrower pursuant to section 6.1(o) of the Credit Agreement, dated as of
December 30, 1998 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"; terms defined or referenced therein and not
otherwise defined or referenced herein being used herein as therein defined or
referenced), among the Borrower, the Lenders named therein, and National City
Bank, as Administrative Agent.
The Borrower further certifies that such officer is generally familiar
with the properties, businesses and assets of the Borrower and has carefully
reviewed the Credit Documents, the documents relating to the Hi-Stat Acquisition
and the other Contemplated Transactions (as defined below) and the contents of
this Solvency Certificate and, in connection herewith, has reviewed such other
documentation and information and has made such investigations and inquiries as
the Borrower and such officer deem necessary and prudent therefor. The Borrower
further certifies that the financial information and assumptions that underlie
and form the basis for the representations made in this Solvency Certificate
were reasonable when made and were made in good faith and continue to be
reasonable as of the date hereof.
The Borrower will apply a portion of the proceeds from the Loans under the
Credit Agreement, together with internally generated funds, to finance the
Hi-Stat Acquisition and to pay fees and expenses incurred in connection with the
consummation of the Hi-Stat Acquisition, including fees and expenses incident to
such transactions. All of the transactions referred to in this paragraph are
herein sometimes called the "Contemplated Transactions".
The Borrower understands that the Lenders are relying on the truth and
accuracy of this Solvency Certificate in connection with the Credit Documents.
The Borrower hereby further certifies that:
1. The Borrower has reviewed the Financial Projections which were prepared
on the basis of the estimates and assumptions stated therein, a copy of which
Financial Projections were furnished to the Lenders. The Financial Projections
were prepared in good faith and represent reasonable estimates of future
financial performance and are reasonable in light of the business conditions
existing on the date hereof. However, the Borrower can provide no assurances as
to the outcome of any such projections. On the date hereof, immediately before
and immediately after giving effect to the Contemplated Transactions, to the
best of the Borrower's knowledge, the fair value of the property and assets of
the Borrower is greater than the total amount of liabilities (including
contingent, subordinated, absolute, fixed, matured or unmatured and liquidated
or unliquidated liabilities) of the Borrower.
2. In reaching the conclusions set forth in this Solvency Certificate, the
Borrower has considered, among other things:
(a) as they related to the business and operations of Hi-Stat (the
"Hi-Stat Business and Operations"), the audited financial statements of
Hi-Stat for the fiscal year ended December 31, 1997, and the unaudited
financial statements for its fiscal quarter ended September 30, 1998;
(b) the Financial Projections;.
(c) historical and anticipated growth in the sales volume of the
Hi-Stat Business and Operations and in the income stream generated by the
Hi-Stat Business and Operations as reflected in,
<PAGE>
among other things, the consolidated cash flow statements of the Borrower
and its Subsidiaries contained in the Financial Projections;
(d) the customary sales terms and trade payables of the Hi-Stat
Business and Operations;
(e) the amount of the credit extended by and to suppliers and
customers of the Hi-Stat Business and Operations;
(f) the customer base, the mix and volume of products, and the
sources of supply of the Hi-Stat Business and Operations;
(g) the existing management and employees of the Hi-Stat Business
and Operations, and Hi-Stat's labor relations generally;
(h) Hi-Stat's liabilities (including any actual or potential
Environmental Claims), as disclosed in the financial
statements and disclosure documents furnished to the Borrower
in connection with its acquisition of Hi-Stat; and
(i) the Borrower's ability to integrate the Hi-Stat Business and
Operations with its own business and operations, including
potential cost savings and growth opportunities incident
thereto.
3. On the date hereof, immediately before and immediately after giving
effect to the Contemplated Transactions, to the best of the Borrower's
knowledge, the present fair salable value of the property and assets of the
Borrower exceeds the amount that will be required to pay the probable
liabilities of the Borrower on its debts as they become absolute and matured.
4. The Borrower does not currently intend or believe that it will incur
debts and liabilities that will be beyond its ability to pay as such debts and
liabilities mature.
5. On the date hereof, immediately before and immediately after giving
effect to the Contemplated Transactions, the Borrower is not engaged in business
or in a transaction, and is not about to engage in business or in a transaction,
for which its property and assets would constitute unreasonably small capital.
6. The Borrower does not intend, in consummating the Contemplated
Transactions, to hinder, delay or defraud either present or future creditors or
any other person to which the Borrower is or, on or after the date hereof, will
become indebted.
IN WITNESS WHEREOF, the Borrower has caused this Solvency Certificate to
be executed by its Chief Financial Officer and Treasurer thereunto duly
authorized, on and as of this _____ day of _________, 19___.
STONERIDGE, INC.
By:
----------------------------------
Kevin P. Bagby
Chief Financial Officer
& Treasurer
2
<PAGE>
EXHIBIT E
---------------------------
FORM OF
ASSIGNMENT AGREEMENT
---------------------------
<PAGE>
ASSIGNMENT AGREEMENT
DATE:_____________
Reference is made to the Credit Agreement described in Item 2 of Annex I
annexed hereto (as such Credit Agreement may hereafter be amended, modified or
supplemented from time to time, the "Credit Agreement"). Unless defined in Annex
I attached hereto, terms defined in the Credit Agreement are used herein as
therein defined.
_____________ (the "Assignor") and ______________ (the "Assignee") hereby
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without recourse
and without representation or warranty (other than as expressly provided
herein), and the Assignee hereby purchases and assumes from the Assignor, that
interest in and to all of the Assignor's rights and obligations under the Credit
Agreement as of the date hereof which represents the percentage interest
specified in Item 4 of Annex I (the "Assigned Share") of all of Assignor's
outstanding rights and obligations under the Credit Agreement indicated in Item
4 of Annex I, including, without limitation, all rights and obligations with
respect to the Assigned Share of the Assignor's Commitment and of the Loans,
Unpaid Drawings and the Notes held by the Assignor. After giving effect to such
sale and assignment, the Assignee's Commitment will be as set forth in Item 4 of
Annex I.
2. The Assignor (i) represents and warrants that it is duly authorized to
enter into and perform the terms of this Assignment Agreement, that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any liens or security interests; (ii)
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
the Credit Agreement or the other Credit Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any of its Subsidiaries or the performance or observance by the
Borrower or any of the other Credit Parties of any of its obligations under the
Credit Agreement or the other Credit Documents or any other instrument or
document furnished pursuant thereto.
3. The Assignee (i) represents and warrants that it is duly authorized to
enter into and perform the terms of this Assignment Agreement; (ii) confirms
that it has received a copy of the Credit Agreement and the other Credit
Documents, together with copies of the financial statements referred to therein
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment Agreement;
(iii) agrees that it will, independently and without reliance upon the
Administrative Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iv) appoints and authorizes each Agent to take such action as agent
on its behalf and to exercise such powers under the Credit Agreement and the
other Credit Documents as are delegated to such Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; [and] (v) agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of the Credit Agreement are required to be performed by it as a
Lender[; and (vi) to the extent legally entitled to do so, attaches the forms
described in section 5.4(b)(ii) of the Credit Agreement(6).
4. Following the execution of this Assignment Agreement by the Assignor
and the Assignee, an executed original hereof (together with all attachments)
will be delivered to the Administrative Agent. The effective date of this
Assignment Agreement shall be the date of execution hereof by the Assignor, the
Assignee and the consent hereof by the Administrative Agent and the receipt by
the Administrative Agent of the administrative fee
- --------
6 If the Assignee is organized under the laws of a jurisdiction outside the
United States.
<PAGE>
referred to in section 12.4(c) of the Credit Agreement, unless otherwise
specified in Item 5 of Annex I hereto (the "Settlement Date").
5. Upon the delivery of a fully executed original hereof to the
Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment
Agreement, have the rights and obligations of a Lender thereunder and under the
other Credit Documents and (ii) the Assignor shall, to the extent provided in
this Assignment Agreement, relinquish its rights and be released from its
obligations under the Credit Agreement and the other Credit Documents.
6. It is agreed that upon the effectiveness hereof, the Assignee shall be
entitled to (x) all interest on the Assigned Share of the Loans at the rates
specified in Item 6 of Annex I, (y) all Commitment Fee (if applicable) on the
Assigned Share of the Commitment at the rate specified in Item 7 of Annex I, and
(z) all Letter of Credit Fees (if applicable) on the Assignee's participation in
all Letters of Credit at the rate specified in Item 8 of Annex I hereto, which,
in each case, accrue on and after the Settlement Date, such interest and, if
applicable, Commitment Fee and Letter of Credit Fees, to be paid by the
Administrative Agent, upon receipt thereof from the Borrower, directly to the
Assignee. It is further agreed that all payments of principal made by the
Borrower on the Assigned Share of the Loans which occur on and after the
Settlement Date will be paid directly by the Administrative Agent to the
Assignee. Upon the Settlement Date, the Assignee shall pay to the Assignor an
amount specified by the Assignor in writing which represents the Assigned Share
of the principal amount of the respective Loans made by the Assignor pursuant to
the Credit Agreement which are outstanding on the Settlement Date, net of any
closing costs, and which are being assigned hereunder. The Assignor and the
Assignee shall make all appropriate adjustments in payments under the Credit
Agreement for periods prior to the Settlement Date directly between themselves
on the Settlement Date.
7. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF OHIO.
* * *
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
[NAME OF ASSIGNOR], [NAME OF ASSIGNEE],
as Assignor as Assignee
By: By:
---------------------------- -------------------------------
Title: Title:
Acknowledged and Agreed:
NATIONAL CITY BANK,
as Administrative Agent
By:
----------------------------
Vice President
2
<PAGE>
ANNEX I
TO
ASSIGNMENT AND ASSUMPTION AGREEMENT
1. The Borrower:
STONERIDGE, INC.
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of December 30, 1998, among Stoneridge,
Inc., the Lenders from time to time party thereto, the other Agents
from time to time party thereto, and National City Bank, as
Administrative Agent.
3. Date of Assignment Agreement:
--------- ---, -----
4. Amounts (as of date of item #3 above):
<TABLE>
<CAPTION>
====================================================================================================================================
Revolving Revolving Term A Term A Term B Term B
Commitment Loans Commitment Loans Commitment Loans
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Aggregate Amount $_____ $_____ $_____ $_____ $_____ $_____
for all Lenders
- ------------------------------------------------------------------------------------------------------------------------------------
Assigned Share _____% _____% _____% _____% _____% _____%
- ------------------------------------------------------------------------------------------------------------------------------------
Amount of Assigned $_____ $_____ $_____ $_____ $_____ $_____
Share
- ------------------------------------------------------------------------------------------------------------------------------------
Amount Retained by
Assignor $_____ $_____ $_____ $_____ $_____ $_____
====================================================================================================================================
</TABLE>
5. Settlement Date:
--------- ---, ---
6. Rate of Interest
to the Assignee: As set forth in section 2.7 of the Credit Agreement
(unless otherwise agreed to by the Assignor and the
Assignee).(7)
- --------
7 The Borrower and the Administrative Agent shall direct the entire amount
of the interest to the Assignee at the rate set forth in section 2.7 of
the Credit Agreement, with the Assignor and Assignee effecting any agreed
upon sharing of interest through payments by the Assignee to the Assignor.
<PAGE>
7. Commitment
Fee: As set forth in section 4.1(a) of the Credit Agreement
(unless otherwise agreed to by the Assignor and the
Assignee).(8)
8. Letter of
Credit Fees: As set forth in section 4.1(b) of the Credit Agreement
(unless otherwise agreed to by the Assignor and the
Assignee).(9)
9. Notices:
ASSIGNOR: ASSIGNEE:
- ----------------------- -----------------------
- ----------------------- -----------------------
- ----------------------- -----------------------
Attention: Attention:
Telephone No.: Telephone No.:
Facsimile No.: Facsimile No.:
10. Payment Instructions:
ASSIGNOR: ASSIGNEE:
- ----------------------- -----------------------
- ----------------------- -----------------------
- ----------------------- -----------------------
ABA No.: ABA No.:
Account No.: Account No.:
Reference: Reference:
Attention: Attention:
- --------
8 The Borrower and the Administrative Agent shall direct the entire amount
of the Commitment Fee to the Assignee at the rate set forth in section
4.1(a) of the Credit Agreement, with the Assignor and the Assignee
effecting any agreed upon sharing of Commitment Fee through payment by the
Assignee to the Assignor.
9 The Borrower and the Administrative Agent shall direct the entire amount
of the Letter of Credit Fees to the Assignee at the rate set forth in
section 4.1(b) of the Credit Agreement, with the Assignor and the Assignee
effecting any agreed upon sharing of the Letter of Credit Fees through
payment by the Assignee to the Assignor.
2
<PAGE>
EXHIBIT F
SECTION 5.4(b)(ii) CERTIFICATE
Reference is hereby made to the Credit Agreement, dated as of December 30,
1998, among Stoneridge, Inc., the financial institutions party thereto from time
to time, the other Agents from time to time party thereto, and National City
Bank, as Administrative Agent (the "Credit Agreement"). Pursuant to the
provisions of section 5.4(b)(ii) of the Credit Agreement, the undersigned hereby
certifies that it is not a "bank" as such term is used in section 881(c)(3)(A)
of the Internal Revenue Code of 1986, as amended.
[NAME OF BANK]
By:
------------------------------
Title:
Dated:
-------------
<PAGE>
Exhibit 10.14
Form of Change in Control Agreement
The Company has a Form of Change in Control Agreement with the following
executive officers:
Cloyd J. Abruzzo
Kevin P. Bagby
Sten Forseke
Gerald V. Pisani
David L. Thomas
<PAGE>
STONERIDGE, INC.
9400 East Market Street
Warren, Ohio 44484
February 12, 1999
Stoneridge Executive Officer
9400 East Market Street
Warren, OH 44484
Dear Officer:
On May 4, 1998, the Board of Directors of Stoneridge, Inc. (the "Company")
decided that certain of the key employees of the Company should be provided
assurances of continued employment and/or compensation in the event of a change
of control of Stoneridge, Inc. There is no contemplation at this time that such
a change will take place. However, as a protection to you and the Company, the
Board has adopted the following:
1. In the event that a shareholder or a group of shareholders own more
shares of the Company than the total number of shares owned by me, my direct
descendants and trusts for the Draime family, a change of control will be deemed
to have taken place.
2. If such an event takes place while you are an employee of the Company,
the Company shall be obligated for two years of continued compensation and
benefits for you beginning on the date at which the change of control has
occurred. Such compensation shall be the same compensation, including any
bonus, which you earned in the fiscal year prior to the change of control, and
benefits will either be the equivalent benefits or cash compensation in lieu of
benefits based upon the prior fiscal year.
3. The two-year continued compensation period expires exactly two years
from the date that the change of control occurred. It runs whether or not you
continue in the employ of the Company. Benefits do not include stock options
(vested or unvested).
<PAGE>
February 12, 1999
Page 2
4. Your continued employment at the Company (or any successor in interest)
is not guaranteed. However, you are to receive compensation and benefits even
if you leave the Company at your option.
Please acknowledge receipt and understanding of this agreement.
STONERIDGE, INC.
By:
------------------------------------
D.M. Draime, Chairman of the Board
Received and agreed to:
- ---------------------------------
Stoneridge Executive Officer
<PAGE>
EXHIBIT 21.1
PRINCIPAL SUBSIDIARIES
Name of Subsidiary Jurisdiction in Which Organized or Incorporated
------------------ -----------------------------------------------
Consolidated Subsidiaries of
Stoneridge, Inc.:
Hi-Stat Manufacturing Co., Inc. Florida, United States
Berifors AB Sweden
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM STONERIDGE,
INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 1998
AND FOR THE YEAR THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 1,876
<SECURITIES> 0
<RECEIVABLES> 85,661
<ALLOWANCES> (1,006)
<INVENTORY> 53,273
<CURRENT-ASSETS> 157,466
<PP&E> 151,114
<DEPRECIATION> (56,344)
<TOTAL-ASSETS> 638,116
<CURRENT-LIABILITIES> 115,282
<BONDS> 322,724
0
0
<COMMON> 0
<OTHER-SE> 190,542
<TOTAL-LIABILITY-AND-EQUITY> 638,116
<SALES> 503,821
<TOTAL-REVENUES> 503,821
<CGS> 379,582
<TOTAL-COSTS> 379,582
<OTHER-EXPENSES> 67,263
<LOSS-PROVISION> 254
<INTEREST-EXPENSE> 686
<INCOME-PRETAX> 56,036
<INCOME-TAX> 22,636
<INCOME-CONTINUING> 33,400
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 33,400
<EPS-PRIMARY> 1.49
<EPS-DILUTED> 1.49
</TABLE>
