UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-9008
ANDREWS GROUP INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 95-2683875
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3200 Windy Hill Road, Suite 1100-West, Atlanta, Georgia 30339
(Address of principal executive offices) (Zip Code)
770-955-0045
(Registrant's telephone number, including area code)
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 the number of shares outstanding of each of the
issuer's classes of common stock as of
the latest practicable date.
Class Outstanding at August 11, 1995
Common Stock, $1.00 par 1,000
As of August 11, 1995, all of the Registrant's outstanding common
stock was indirectly held by Mafco Holdings Inc.
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Millions, except share data)
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
-------- ------------
<S> <C> <C>
ASSETS
Cash $ 109.7 $ 175.7
Trade receivables, net 388.2 302.8
Inventories 79.1 51.0
Television program contract rights 11.6 23.9
Film costs, net 56.5 62.4
Prepaid expenses and other 90.2 62.1
------- ---------
Total current assets 735.3 677.9
Property, plant and equipment, net 278.4 232.0
Intangible assets and excess
reorganization value, net 2,397.8 1,648.4
Loans to affiliate 266.4 224.6
Other assets 260.9 446.3
-------- ---------
$3,938.8 $3,229.2
======== =========
LIABILITIES AND STOCKHOLDER'S DEFICIT
Current liabilities:
Current portion of long-term debt
and notes payable $ 57.4 $ 100.8
Accounts payable and accrued expenses 349.8 286.9
Television program contracts payable 14.0 26.8
Deferred income 24.2 28.2
Participations and residuals payable 32.9 23.9
------- ---------
Total current liabilities 478.3 466.6
Long-term debt 2,794.5 2,148.9
Indebtedness to affiliates 236.3 154.2
Other liabilities 150.0 142.1
Minority interest 465.7 414.7
Redeemable preferred stock of subsidiaries 247.2 246.9
Stockholder's deficit:
Common stock, $1.00 par value; 1,000 shares
authorized, issued and outstanding
Additional paid-in-capital 36.5 32.6
Accumulated deficit (470.0) (375.6)
Cumulative translation adjustment 0.3 (1.2)
-------- ---------
Total stockholder's deficit (433.2) (344.2)
-------- ---------
$3,938.8 $3,229.2
======== =========
</TABLE>
See notes to consolidated financial statements.
2
ANDREWS GROUP INCORPORATED AND SUBSIDIARES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Millions)
(Unaudited)
<TABLE>
<CAPTION> Six Months Ended Three Months Ended
June 30, June 30,
---------------- ------------------
1995 1994 1995 1994
------- ------- -------- --------
<S> <C> <C> <C> <C>
Net revenues $610.3 $377.6 $335.9 $195.6
Operating expenses:
Direct costs 381.0 200.6 209.0 103.3
Selling, general and administrative expenses 175.3 104.5 95.0 56.2
Amortization of goodwill and intangibles 31.0 21.8 18.4 10.9
------- ------- -------- --------
Operating income 23.0 50.7 13.5 25.2
------- ------- -------- --------
Other (expense) income:
Interest expense (139.3) (88.7) (74.0) (44.7)
Interest and net investment income 19.5 4.3 9.6 2.8
Gain (loss) on sale of interest in businesses 54.7 83.2 (0.2) 52.2
Amortization of debt issuance costs and other (14.1) (3.3) (9.7) (1.2)
------- ------- -------- --------
(79.2) (4.5) (74.3) 9.1
------- ------- -------- --------
(Loss) income before income taxes, minority
interest in net income of investees and
extraordinary item (56.2) 46.2 (60.8) 34.3
(Provision) benefit for income taxes (40.5) (1.7) 2.8 (1.1)
Minority interest in loss of subsidiaries 5.1 2.4 3.2 1.4
Equity in net income of investees 0.5 2.3 0.4 1.4
------- ------- -------- --------
(Loss) income before extraordinary item (91.1) 49.2 (54.4) 36.0
Extraordinary item, net of tax (3.3) (3.3)
------- ------- -------- --------
Net (loss) income ($94.4) $49.2 ($57.7) $36.0
======= ======= ======== ========
</TABLE>
See notes to consolidated financial statements.
3
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Millions)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------
1995 1994
------ ------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income ($ 94.4) $ 49.2
-------- --------
Adjustments to reconcile net (loss)
income to net cash flows
from operating activities:
Depreciation and amortization 56.5 34.6
Noncash interest expense 48.8 28.6
Equity in earnings of investees,
net of distributions 2.5 (2.3)
Minority interest in loss of subsidiaries (5.1) (2.4)
Extraordinary item, net 3.3
Gain on sale of interest in businesses (54.7) (83.2)
Excess of television program contract
rights amortization over payments 2.9 2.5
Film cost amortization (under) over additions 13.6 (4.8)
Changes in assets and liabilities,
net of effects of acquisitions and
dispositions of businesses:
Increase in assets (50.9) (23.0)
Increase (decrease) in liabilities 24.7 (11.2)
-------- --------
41.6 (61.2)
-------- --------
Net cash flows from operating activities (52.8) (12.0)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Broadcast station acquisitions, net
of cash acquired (360.5) (117.1)
Proceeds from sale of broadcast stations
and certain fixed assets 211.9
Acquisition of SkyBox, net of cash and
cash equivalents acquired (152.6)
Other acquisitions, investments and advances (28.2) (5.4)
Loans to affiliates, net (41.8)
Capital expenditures (35.5) (16.1)
-------- --------
Net cash flows from investing activities (406.7) (138.6)
-------- --------
</TABLE>
(Continued)
See notes to consolidated financial statements.
4
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS--(Continued)
(Dollars in Millions)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------
1995 1994
------ ------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long term debt $918.9 $345.0
Repayment and repurchases of debt (653.2) (74.2)
Issuance of preferred and common stock
by subsidiaries 52.1 457.6
Loans from affiliates, net 82.1 (247.9)
Debt issuance costs and other, net (13.9) (21.6)
-------- --------
Net cash flows from financing activities 386.0 458.9
-------- --------
Cash balance from previously
unconsolidated subsidiary 7.5
-------- --------
Net (decrease) increase in cash (66.0) 308.3
Cash at beginning of the period 175.7 40.1
-------- --------
Cash at end of the period $109.7 $348.4
======== ========
Supplemental disclosures of cash flow information:
Interest paid during the period $82.3 $41.8
Taxes paid (refunded) during the period 8.6 (2.1)
Supplemental schedule of non-cash investing
and financing activities:
Purchase of television program contract rights $2.1 $1.4
Additions to film costs 27.7 19.2
Argyle stations purchase:
Fair value of acquired $776.4
Purchase option applied to purchase price (100.0)
Cash paid, net of cash received (360.5)
--------
Liabilities assumed $315.9
========
</TABLE>
See notes to consolidated financial statements.
5
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts
of Andrews Group Incorporated ("Andrews" or the "Company") and its majority-
owned subsidiaries after elimination of all material intercompany accounts and
transactions. The Company is a wholly owned subsidiary of MacAndrews & Forbes
Holdings Inc. ("MacAndrews Holdings") which is a wholly owned subsidiary of
Mafco Holdings Inc. ("Mafco Holdings"). The unaudited consolidated financial
statements should be read in conjunction with the consolidated financial
statements and related notes contained in the Company's 1994 Form 10-K. In the
opinion of management, all adjustments (which include only normal recurring
accruals) necessary for a fair statement of the financial position, results of
operations and cash flows have been made.
All terms used but not defined elsewhere herein have the meanings
ascribed to them in the Company's Form 10-K.
Certain reclassifications have been made to conform to the current
period's presentation.
2. ACQUISITIONS AND DISPOSITIONS
Genesis
On March 17, 1994, NWCG purchased the remaining 50% interest not
previously owned by NWCG of Genesis and a note issued by a subsidiary of NWCG
in exchange for 2,035,486 shares of Class B Common Stock of NWCG and certain
other consideration. The acquisition was accounted for using the purchase
method of accounting. NWCG amortizes the excess of the purchase price over the
historical book value over a 40-year period.
Moving Target
Concurrently with hiring a chairman of NW Entertainment in June 1994,
NWCG acquired Moving Target Productions, Inc. ("Moving Target"). The
consideration for such acquisition consisted of 652,174 shares of Class A
Common Stock of NWCG and a warrant to purchase one million shares of Class A
Common Stock of NWCG at a price of $11.50 per share.
CitiCasters' Stations
On September 9, 1994, NWCG consummated the acquisition of three
broadcast television stations, KSAZ-TV (Phoenix), WDAF-TV (Kansas City) and
WGHP-TV (Greensboro-High Point), from CitiCasters for consideration of $262.3
in cash and a warrant to purchase 5,000,000 shares of NWCG's Class A Common
Stock for an initial exercise price of $15.00 per share. Further, on October
12, 1994, NWCG completed the acquisition of a fourth broadcast television
station, WBRC-TV (Birmingham), from CitiCasters for cash consideration of
approximately $94.1. In connection with these acquisitions, NWCG assumed
certain liabilities. The financial statements reflect a preliminary allocation
of the purchase price for these broadcast stations which is subject to
adjustment. On March 31, 1995, NWCG granted to Fox Television Stations, Inc.
("Fox") an option to acquire both WGHP-TV and WBRC-TV in consideration of a
non-refundable payment by Fox of $100.0, subject to certain adjustments. The
$100.0 may be
6
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(Unaudited)
credited against the purchase price of $135.0. NWCG contributed the stock of
the subsidiaries which own and operate WGHP-TV and WBRC-TV to a trust of which
NWCG is the beneficiary (the "Trust"). NWCG will have no role in the
management or operation of the stations contributed to the Trust. Further,
NWCG borrowed approximately $40.0 from Fox, secured by the beneficial interest
in the Trust and non-recourse to any other assets of NWCG. Assets held for
sale included in other assets in the accompanying balance sheet reflect the
estimated sales proceeds of WGHP-TV and WBRC-TV; therefore, NWCG's future
operations will not be affected by these stations' results except to the extent
of income remitted by the Trust to service the Fox debt. Subsequent to June
30, 1995, Fox purchased WBRC-TV under the terms of the purchase option.
WSBK-TV
In March 1995 NWCG sold its investment in WSBK-TV (the "Boston
Station") for gross proceeds of $107.5. NWCG recorded an estimated gain on the
sale of approximately $40.4 in the first quarter. NWCG repaid $19.5 of the
Bank Credit Agreement Loans in March 1995 and $77.3 of the Step-Up Notes in
April 1995 from the estimated net proceeds of the WSBK sale.
Argyle Stations
NWCG purchased certain debt and equity securities of Argyle Television
Holding Inc. ("Argyle") for total consideration of approximately $750.4,
including the $100.0 in cash paid for an option in 1994 and assumption of debt
of approximately $283.6. Argyle controlled four VHF television stations, KDFW-
TV (Dallas, Texas), KTBC-TV (Austin, Texas), KTVI-TV (St. Louis, Missouri) and
WVTM-TV (Birmingham, Alabama). For financial reporting purposes, the
acquisition occurred on March 31, 1995. FCC approval for change in control of
the television stations occurred on April 14, 1995. The acquisition has been
accounted for as a purchase; the purchase price allocation is preliminary.
SkyBox
On April 26, 1995, pursuant to an Agreement and Plan of Merger dated as
of March 8, 1995 (the "SkyBox Merger Agreement"), among SkyBox ("SkyBox"),
Marvel and a wholly owned subsidiary of Marvel, Marvel acquired all of the
issued and outstanding shares of SkyBox common stock for $16 per share, and
including other estimated acquisition costs, for an amount totaling
approximately $165.5. The transaction was accomplished through a tender offer
(the "Tender Offer") and subsequent merger (the "Merger" and collectively with
the Tender Offer, the "SkyBox Acquisition"). The purchase price also includes
an obligation to former SkyBox stockholders who did not tender their shares.
The SkyBox Acquisition was accounted for using the purchase method of
accounting. The allocation of the purchase price to assets and liabilities
based on their estimated respective fair values at April 27, 1995 is subject to
finalization. The total estimated purchase price exceeded the fair value of
the net assets of SkyBox by $170.0 and has been assigned to goodwill, which is
being amortized over forty years on the straight-line basis.
7
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(Unaudited)
Pro Forma Financial Information
The following condensed pro forma financial information gives effect,
as of the beginning of the respective periods, to the acquisition of SkyBox and
Panini, the purchase of the four CitiCasters' stations, the purchase of the
four Argyle stations, the disposal of WGHP-TV and WBRC-TV, the exchange of
shares of NWCG for 100% of the stock of NW Entertainment, Four Star and
Genesis, the sale of WSBK-TV, borrowings necessary to fund the acquisitions,
repayment of a portion of NWTV's debt, issuance of the NWCG Holdings Notes and
the issuance of preferred stock. The pro forma financial information does not
necessarily reflect the future results or the results that would have occurred
had these transactions actually occurred as of the beginning of the respective
periods.
<TABLE>
<CAPTION>
Pro Forma
Six Months Six Months
Ended Ended
June 30, June 30,
1995 1994
<S> <C> <C>
Net revenues................................... $ 661.9 $ 588.5
Net loss before extraordinary item............. $ (93.0) $ (41.6)
Net loss....................................... $ (96.3) $ (41.6)
</TABLE>
3. TOY BIZ IPO
On March 2, 1995, Toy Biz completed an initial public offering (the "Toy
Biz IPO") in which it issued and sold 2,750,000 shares of class A common stock
at $18 per share. Avi Arad, a principal stockholder of Toy Biz also sold in the
Toy Biz IPO 700,000 shares of class A common stock owned by him. The net
proceeds to Toy Biz, after deducting commissions and estimated offering
expenses, of approximately $44.1 were used to pay outstanding amounts due under
subordinated notes held by Marvel and the sole stockholder of the predecessor to
Toy Biz and for working capital and general corporate purposes. The Company
recorded a gain of approximately $14.3 in connection with the Toy Biz IPO in
recognition of the net increase in value of Marvel's investment in Toy Biz. In
conjunction with the Toy Biz IPO, Marvel's equity ownership was reduced to
approximately 36.6% and its voting control increased to approximately 85.3%.
The consolidated financial statement of the Company include the results of
operations, financial position and cash flow of Toy Biz on a consolidated basis
since the Toy Biz IPO as a result of Marvel's increased voting control. For
periods prior to the Toy Biz IPO, Toy Biz was accounted for under the equity
method.
In connection with the Toy Biz IPO, Toy Biz entered into a three year
$30.0 revolving line of credit with a syndicate of banks for which Chemical Bank
serves as administrative agent. Substantially all of the assets of Toy Biz have
been pledged to secure borrowings under the Toy Biz credit facility. Borrowings
under the credit facility bear interest at either Chemical Bank's alternate base
rate or at the Eurodollar rate plus the applicable margin. The applicable
margin is 1% unless Toy Biz meets specific financial operating levels, in which
case the applicable margin decreases to 3/4 of 1%. The credit facility requires
Toy Biz to pay a commitment fee of 3/8 of 1% per annum on the average daily
unused portion of the credit facility.
8
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(Unaudited)
The Toy Biz credit facility contains various financial covenants, as
well as restrictions, on the incurrence of new indebtedness, prepaying or
amending subordinated debt, acquisitions and similar investments, the sale or
transfer of assets, capital expenditures, limitations on restricted payments,
dividends, issuing guarantees and creating liens. The credit facility also
requires that (a) Marvel continue to control a majority of the voting control
of Toy Biz and have the power to elect a majority of Toy Biz's Board of
Directors and (b) the exclusive royalty free perpetual worldwide license
agreement between Toy Biz and Marvel remain in effect. The Toy Biz credit
facility is not guaranteed by Marvel.
4. INVENTORIES
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
<S> <C> <C>
Raw materials $24.1 $17.6
Work-in-process 16.6 13.2
Finished goods 55.4 21.9
Less: reserve for obsolescence (17.0) (1.7)
------ ------
$79.1 $51.0
====== =======
</TABLE>
9
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(Unaudited)
5. LONG-TERM DEBT
In April 1995, Marvel entered into a $350.0 term loan agreement with a
syndicate of banks, the Co-Agents and Chemical Bank, as administrative agent
(the "U.S. Term Loan Agreement"). Marvel borrowed $350.0 under the U.S. Term
Loan Agreement to finance the SkyBox Acquisition, refinance the term loan
portion of its existing Amended and Restated Credit Agreement and for general
corporate purposes. Borrowings under the U.S. Term Loan Agreement are
repayable in six semi-annual installments beginning August 31, 1999.
As a result of the refinancing of the term loan portion of the Amended
and Restated Credit Agreement, Marvel recorded a $3.3 extraordinary charge, net
of taxes of $2.1, during the second quarter of 1995, which represents the
write-off of related deferred financing costs.
Loans under the U.S. Term Loan Agreement bear interest at a rate per
annum equal to the Eurodollar Rate (as defined in the U.S. Term Loan
Agreement), plus the Applicable Margin (as defined in this paragraph), or the
Alternate Base Rate (as defined in the U.S. Term Loan Agreement). Eurodollar
Rate loans will, at the option of Fleer Corp. ("Fleer"), have interest periods
of one, two, three or six months. Applicable Margin means (a) with respect to
Eurodollar Rate loans, 2% through the first Anniversary Date (as defined in the
U.S. Term Loan Agreement) and 1 1/8% to 2 1/2% thereafter, to be determined
based on Marvel's financial performance and (b) with respect to Alternate Base
Rate loans, 1% through the first Anniversary Date and 1/8 of 1% to 1 1/2%
thereafter, to be determined based on Marvel's financial performance.
The U.S. Term Loan Agreement includes various restrictive covenants
incorporated by reference to the existing Amended and Restated Credit Agreement
prohibiting Marvel from, among other things, incurring additional indebtedness,
with certain limited exceptions, and making dividend, redemption and certain
other payments on its capital stock. The U.S. Term Loan Agreement also
contains certain customary financial convenants and events of default for a
financing of this type.
In connection with the U.S. Term Loan Agreement, Marvel also amended
the existing Amended and Restated Credit Agreement which, among other things,
permitted Marvel to incur the indebtedness under the U.S. Term Loan Agreement
to finance the SkyBox Acquisition. Pursuant to this amendment, the Applicable
Margin under the existing Amended and Restated Credit Agreement for Alternate
Base Rate loans will range from 0% to 1% and for Eurodollar Rate loans will
range from 0.625% to 2%, in each case depending on Marvel's financial
performance.
On June 29, 1995, Marvel IV Holdings Inc. ("Marvel IV") entered into an
amended and restated credit agreement (the "Amended Marvel IV Credit
Agreement") which provides for a $225.0 term loan facility and $125.0 revolving
credit facility. The revolving credit facility matures on September 1, 1997.
The term loan facility matures on September 1, 1997 with scheduled quarterly
payments of $10.0 from September 1, 1995 through and including June 1, 1997 and
a final payment of $145.0 on September 1, 1997. Borrowings outstanding under
the Amended Marvel IV Credit Agreement bear interest, as appropriate for the
type of advance, at either (i) the Base Rate (as defined) plus a margin of
2.25-3.00% or (ii) the Eurodollar Rate (as defined) plus a margin of 4.00-
5.50%. The margin varies based upon the sum of the aggregate amount of
outstanding borrowings plus the aggregate unused commitments. Marvel IV's
obligations are guaranteed by certain affiliates of the Company and the Amended
Marvel IV Credit
10
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(Unaudited)
Agreement contains customary affirmative and negative covenants and events of
default. As of June 30, 1995, Marvel IV borrowed $250.0 under the Marvel IV
Credit Agreement which was used to repay borrowings under Marvel IV's prior
credit agreement with the balance advanced to a subsidiary of Mafco Holdings.
Borrowings outstanding as of June 30, 1995 bore interest at a rate of 11.6%.
In March 1995, NWCG entered into a $100.0 credit agreement secured by
the capital stock of NW Entertainment and various subsidiaries ("Entertainment
Line of Credit"). The availability of credit is determined based on the amount
of eligible accounts receivable of NW Entertainment and various other factors.
The Entertainment Line of Credit bears interest at a Eurodollar rate plus 1
1/2% or a prime rate plus 1/2%. On June 30, 1995, the Entertainment Line of
Credit had an outstanding balance of $57.0.
With the net proceeds from the sale of the Boston Station, NWCG repaid
$19.5 of Bank Credit Agreement and $77.3 of the Step-Up Notes.
As discussed above, NWCG has non-recourse debt to Fox of approximately
$40.0; interest, which accrues at a rate of 18% per year, will be paid with
monies remitted by the Trust.
6. INCOME TAXES
Income tax expense in the six months ended June 30, 1995 reflects the
recognition of income taxes on the sale of the Boston Station by NWCG due to
the lower historical tax basis of the station's net assets. The liability
associated with these taxes will be offset by utilization of pre-bankruptcy
plan effective date net operating losses of NWTV. The utilization has been
reflected as a reduction of excess reorganization value. Income tax expense in
the six months ended June 30, 1995 also reflects an increase in foreign source
pre-tax income of Marvel compared to the 1994 period which is taxed at higher
rates. In addition, the Company has not recorded a benefit in 1995 for its
separate company loss since Andrews Group's ownership of Marvel was reduced
below 80% during the second quarter of 1994 resulting in a deconsolidation for
tax purposes at Andrews Group. However, Mafco Holdings' ownership of Marvel
through its indirect subsidiaries is greater than 80%.
7. RELATED PARTY TRANSACTIONS
At June 30, 1995 and December 31, 1994, the Company and its
subsidiaries had advances from Mafco Holdings and its affiliates of $236.3 and
$154.2, respectively.
At June 30, 1995 and December 31, 1994, Holdings III had advances of
$4.9 and $8.2, respectively, to Mafco Holdings represented by a non-interest
bearing demand note of Mafco Holdings. In addition, at June 30, 1995 and
December 31, 1994, Marvel IV had advances of $261.5 and $216.4, respectively,
to Mafco Holdings and subsidiaries.
At August 1, 1995, an aggregate of 77.6 million shares of common stock
of Marvel owned by the Company were pledged to secure the indebtedness and
letters of credit of Marvel Holdings, Parent Holdings, Holdings III and Four
Star Holdings and 2.8 million shares of common stock of Marvel are subject to a
negative pledge under the terms of the Marvel Holdings Notes. At August 1,
1995, an aggregate of 34.5 million shares of NWCG owned by the Company were
pledged to secure the NWCG Holdings Notes.
11
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in million, except per share data)
Results of Operations
General
The Company operates in the youth entertainment segment through its
approximately 80% ownership in Marvel. Marvel is a leading creator, publisher
and distributor of youth entertainment products for domestic and international
markets based on action adventure characters owned by Marvel and on
professional athletes, sports teams and leagues and popular entertainment
characters and properties owned by others. Marvel also licenses its characters
and properties for consumer products, television and film and advertising
promotions. Marvel's operations include Marvel and Malibu comics, Marvel
Family Publishing children's magazines, Fleer and SkyBox sports and
entertainment picture cards, Panini children's activity stickers and adhesives,
Toy Biz toys and Fleer confectionery products.
On April 26, 1995 pursuant to an Agreement and Plan of Merger dated as
of March 8, 1995 (the "SkyBox Merger Agreement"), among SkyBox International
Inc.("SkyBox"), Marvel and a wholly owned subsidiary of Marvel, Marvel acquired
all of the issued and outstanding shares of SkyBox common stock for $16 per
share, and including other estimated acquisition costs, for an amount totaling
approximately $165.5. The transaction was accomplished through a tender offer
(the "Tender Offer") and subsequent merger (the "Merger" and collectively with
the Offer, the "SkyBox Acquisition"). The purchase price includes an
obligation to former SkyBox stockholders who did not tender their shares.
The Company operates in the broadcasting and production and
distribution segments through its approximately 42% ownership interest (82%
voting interest) in NWCG, assuming conversion of NWCG Series B Preferred Stock.
NWCG operates broadcast television stations, a television production company,
and filmed entertainment distribution businesses. NWCG owns non-controlling
equity interests in a producer of long-form television advertisements and an
entertainment magazine. Subsequent to June 30, 1995, NWCG purchased Cannell
Entertainment Inc. for convertible securities valued at approximately $30.0 and
certain other consideration.
Results of Marvel
Over the past five years, Marvel has diversified into a broadly based
youth entertainment company. As a result, an increasing portion of Marvel net
revenues and net income has been derived from businesses other than comic book
publishing. For example, in 1990, net revenues from comic book publishing were
approximately 87% of Marvel's total net revenues as compared to approximately
25% in 1994. Marvel's business has been augmented by the manufacture,
marketing and distribution of sports and entertainment trading cards and
children's activity stickers and the licensing of Marvel's characters for
consumer products, television and film, advertising promotions and toys.
Marvel believes that, in 1993, Marvel and the overall comic book direct
market (i.e. comic book specialty stores) experienced an unusual increase in
revenues due in large part to speculative purchases of comic books. Lower
speculative purchases resulted in a decline in overall direct market comic book
publishing revenues, including those of Marvel, for 1994 as compared to 1993,
as well as
12
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in million, except per share data)
for the first half of 1995 as compared to the first half of 1994, and may
result in a decline for the second half of 1995 as compared to the second half
of 1994. As a result of the changes in the direct market, Marvel has
undertaken several strategic actions to bolster its comic book publishing
business, including the acquisition in late 1994 of Heroes World, the third
largest direct market distributor, and a reduction in the number of comic book
titles published each month.
In 1994, Marvel's sales to the direct market, which represented
approximately 63% of Marvel's net publishing revenues and 16% of Marvel's
consolidated net revenues, were derived from sales to 10 unaffiliated
distributors. On July 1, 1995, Marvel discontinued sales through the 9
unaffiliated distributors and began to distribute its publications directly to
approximately 5,000 comic book specialty stores on an exclusive basis. Marvel
believes that the transition to exclusive distribution has been smoother than
previously anticipated by Marvel and the comic book industry. As a result,
Marvel continues to believe that controlling distribution to comic book
specialty stores and focusing its distributor's efforts exclusively on Marvel's
products will improve future operating results of its publishing business.
In 1995, Marvel implemented a plan which has reduced the number of
comic book titles published to approximately 75 to 80 per month from more than
100 per month in 1994. Marvel believes that the reduction in titles is
consistent with changing levels of consumer demand, and will result in improved
overall quality of its publications by allowing the most talented artists and
writers to focus their efforts on Marvel's remaining titles. Marvel expects
that the reduction in revenues resulting from a lower number of titles will not
materially affect profitability as the reduction in revenues will be offset by
lower personnel and production costs. Although Marvel expects that exclusive
distribution through Heroes World and the reduction in titles will ultimately
have a positive impact upon future publishing results, net revenues and net
income from publishing were adversely affected in the first half of 1995 as
compared to 1994 due to the Company's strategic actions and the aforementioned
general decline in direct market revenues. Moreover, there can be no assurance
that any or all of the changes above will succeed in accomplishing all of the
results anticipated.
For 1994 and the first quarter of 1995, Marvel believes that there was
a general contraction in the sports trading card market. This contraction was
compounded by the baseball and hockey labor situations, which adversely
affected baseball and hockey trading card sales and returns for those periods.
Although Major League Baseball resumed in April 1995, there is no collective
bargaining agreement in effect between the owners and players and the level of
fan interest has not returned to the levels experienced prior to the 1994
strike. Consistent with decreased fan interest, Marvel believes that the labor
situations in professional sports have resulted in decreased trading card
consumer interest and therefore generally decreased consumer purchases of all
trading cards. Decreased consumer purchases have resulted in a reduction in
the level of purchases by trading card retailers, as well as a reduction in
the number of retailers who specialize in trading cards. Accordingly, Marvel
believes that the overall trading card industry has been negatively affected,
causing Marvel to now expect lower net revenues in 1995 than previously
anticipated for its trading cards business due to currently forecasted lower
sales and higher returns of Marvel's trading cards. As a result, Marvel has
increased its reserve for trading card returns and inventory obsolescence by
$40.0 as of June 30, 1995. This increase, coupled with lower sales than
previously anticipated by Marvel for the second quarter, has resulted in a loss
for Marvel's trading card business in the second quarter of 1995.
13
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in million, except per share data)
During the 1994-95 NBA basketball season, there was no agreement in
place between the NBA Players Association and the NBA team owners. Following
the end of the season, the NBA owners instituted a "lock-out" of the players
resulting in a suspension of league activities. If a new collective bargaining
agreement is not reached by the start of training camp, there will be a
disruption of the 1995-96 NBA season which will adversely affect the sale of
basketball trading cards. In such event it is also possible that the overall
trading card industry may be further adversely impacted, resulting in an
additional negative impact on Marvel's net revenues and profitability from
trading cards.
Due to the effects of the labor situations discussed above, the
profitability of Marvel's trading card business in 1995 will be lower than
1994. Although there can be no assurance, Marvel believes that once labor
stability is re-established in professional sports, net revenues from trading
cards will improve. Marvel also believes that growth opportunities exist in
the entertainment trading card category. With the acquisition of SkyBox,
Marvel believes that it is well positioned to increase net revenues and
profitability from sports and entertainment trading cards in the future.
Marvel expects that there will continue to be year to year fluctuations
in the net revenues and profitability of its individual businesses. However,
Marvel believes that its continued diversification into a broad based youth
entertainment company will help to mitigate the effects of such fluctuations on
overall net revenues and profitability.
Three Months Ended June 30, 1995 Compared With Three Months Ended June 30, 1994
The Company's net revenues in 1995 were $335.9 compared with $195.6 in
1994. Revenues in 1995 include $168.4 from the Company's youth entertainment
segment and $167.5 from the Company's broadcasting and production and
distribution segment. Revenues in 1994 include $100.6 from the Company's youth
entertainment segment and $95.0 from the Company's broadcasting and production
and distribution segment.
The increase in net revenues from the youth entertainment segment
reflects a $21.8 increase in trading cards and sticker revenues, a $2.0
increase in net publishing revenues, an increase of $14.3 in other product
revenues and $30.2 in toy revenues as a result of the consolidation of Toy
Biz's results since the Toy Biz IPO, partially offset by a decrease of $.5 in
licensing revenues. The increase in trading cards and sticker net revenues was
attributable to the addition of children's sports and entertainment activity
sticker collections commencing with the Panini Acquisition on September 1,
1994, partially offset by a significant decrease in trading card net revenues.
The decrease in trading card net revenues principally reflects lower sales and
higher return provisions, partially offset by the addition of SkyBox sports and
entertainment trading cards on April 27, 1995. The increase in publishing
revenues principally reflects the addition of Heroes World and, to a lesser
extent, the addition of Malibu comics and Marvel Family Publishing in the
fourth quarter of 1994. Until July 1, 1995, the date that Heroes World
commenced exclusive distribution of Marvel's comic book publications to the
direct market comic book retailers, Heroes World continued to generate sales
from the distribution of comic books of other publishers. The increase in
other product revenues is due to the addition of adhesives revenues commencing
with the Panini Acquisition.
14
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in million, except per share data)
Net revenues from the broadcasting and production and distribution
segment increased $72.5 or 76.3% in 1995 over 1994. The increase in
broadcasting revenue of $33.0 reflects an increase of $49.1 for the two
stations acquired in September of 1994 from CitiCasters and the four stations
acquired on March 31, 1995 from Argyle offset by a decrease of $0.6 for the six
original stations owned for both periods and a decrease of $15.5 reflecting the
sale of the Boston Station in March of 1995. The Company had expected the
conversion to Fox to result in an initial decline in revenues. The decrease in
revenue for the six original stations reflects a temporary reduction of revenue
due to the conversion. Production and distribution revenue increased $39.5 or
greater than 100% primarily due to increases in foreign syndication and network
revenues.
Direct costs for 1995 and 1994 relates to the youth entertainment
segment ($118.0 and $52.0, respectively) and to the broadcasting and production
and distribution segment ($91.0 and $51.3, respectively). The youth
entertainment segment's direct costs as a percentage of sales was 70% in 1995
and 52% in 1994, reflecting higher direct costs as a percentage of net revenues
for trading cards and publishing, partially offset by lower direct costs as a
percentage of net revenue from toys and children's activity sticker
collections. Sports trading cards and publishing direct costs as a percentage
of sales increased due to decreased sales and higher return and inventory
obsolescence provisions and reduced gross profit from publishing due in large
part to the strategic actions described above.
Broadcasting direct costs increased due to the acquisition of the
Argyle and CitiCasters stations, increased direct costs for the original six
stations due to higher staffing levels to support the increase in locally
produced programming and non-recurring costs associated with the Company's
conversion of certain broadcast stations to the Fox Network partially offset by
a decrease in direct costs reflecting the sale of the Boston Station in March
1995. Production and distribution direct costs increased due to substantially
greater production activity in the latter half of 1994 and 1995 and higher
overhead to support the production activity.
Selling, general and administrative ("SG&A") expenses in 1995 increased
by $38.8 to $95.0. The youth entertainment segment's SG&A expenses increased
from $24.7 to $52.0. The increase of $27.3 was mainly attributable to the
addition of children's sports and entertainment activity sticker collections
and adhesives and SkyBox sports and entertainment trading cards, the
consolidation of Toy Biz's results, increased corporate overhead to support the
expansion of Marvel and the effect of the strategic actions taken in the
publishing business described above. As a percentage of net revenues, the
youth entertainment segment's SG&A expenses were approximately 31% in 1995 and
25% in 1994. The broadcasting and production and distribution segment's SG&A
expenses were $37.1 and $25.7 in 1995 and 1994, respectively. Broadcasting
SG&A expenses increased due to the acquisition of the Argyle and CitiCasters
stations, increased expenses for the original six stations due to higher
staffing levels to support the increase in locally produced programming and the
increased promotional and advertising activities, and non-recurring costs
associated with the Company's conversion of certain broadcast stations to the
Fox Network partially offset by a decrease in expenses reflecting the sale of
the Boston Station in March 1995. Production and distribution SG&A expenses
increased due to substantially greater production activity in the latter half
of 1994 and 1995 and higher overhead to support the production activity. Also
included in SG&A expenses are $5.9 and $5.8 of corporate overhead expenses in
1995 and 1994, respectively.
15
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in million, except per share data)
Amortization of goodwill and intangibles increased to $18.4 in 1995
from $10.9 in 1994 primarily due to the acquisition of broadcast television
stations, Panini and SkyBox and the consolidation of Toy Biz.
Interest expense increased to $74.0 in 1995 from $44.7 in 1994
primarily due to the issuance in 1994 of the NWCG Holdings Notes, borrowings
under the bank credit agreement of Marvel IV Holdings, borrowings used for the
acquisitions of Panini, SkyBox, broadcast television stations and to fund
increased production activity partially offset by a reduction in interest
expense on indebtedness to affiliates.
Interest and net investment income increased to $9.6 in 1995 from $2.8
in 1994 primarily due to an increase in interest income on loans to affiliates.
The Company recorded a gain of $52.2 in 1994 in connection with the
sale by NWCG of 16,318,811 shares of common stock in a rights offering and the
sale of the NWCG Series B Preferred Stock to Fox.
Amortization of debt issuance costs and other increased from 1994 to
1995 primarily due to amortization of deferred financing costs related to
increased borrowing in 1994 and 1995.
Marvel recorded an extraordinary loss, net of taxes of $2.1, which
represents a write-off of the related deferred financing costs associated with
the term loan portion of its amended and Restated Credit Agreement.
Six Months Ended June 30, 1995 Compared With Six Months Ended June 30, 1994
The Company's net revenues in 1995 were $610.3 compared with $377.6 in
1994. Revenues in 1995 include $327.9 from the Company's youth entertainment
segment and $282.4 from the Company's broadcasting and production and
distribution segment. Revenues in 1994 include $198.8 from the Company's youth
entertainment segment and $178.8 from the Company's broadcasting and production
and distribution segment.
The increase in revenues from the youth entertainment segment reflects
a $48.8 increase in trading card and sticker revenues, a $9.9 increase in net
publishing revenues, an increase of $.5 in licensing revenues, an increase of
$26.5 in other product revenues and $43.4 in toy revenues as a result of the
consolidation of Toy Biz's results since the Toy Biz IPO. The increase in
trading card and sticker net revenues was attributable to the addition of
children's sports and entertainment activity sticker collections commencing
with the Panini Acquisition on September 1, 1994, partially offset by a
significant decrease in trading card net revenues. The decrease in trading
card net revenues principally reflects lower sales and higher return
provisions, partially offset by the addition of SkyBox sports and entertainment
trading cards on April 27, 1995. The increase in publishing revenues
principally reflects the addition of Heroes World and, to a lesser extent, the
addition of Malibu comic and Marvel Family Publishing in the fourth quarter of
1994. Until July 1, 1995, the date that Heroes World commenced exclusive
distribution of Marvel's comic book publications to the direct market comic
book retailers, Heroes World continued to generate sales from the distribution
of comic books of other publishers.
16
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in million, except per share data)
The increase in other product revenues is due to the addition of adhesives
revenues commencing with the Panini Acquisition.
Net revenues from the broadcasting and production and distribution
segment increased $103.6 or 57.9% in 1995 over 1994. The increase in
broadcasting revenue of $38.4 reflects an increase of $61.1 for the two
stations acquired in September of 1994 from CitiCasters and the four stations
acquired on March 31, 1995 from Argyle, a decrease of $3.8 for the six original
stations owned for both periods and a decrease of $18.9 reflecting the sale of
the Boston Station in March of 1995. The Company had expected the conversion
to Fox to result in an initial decline in revenues. The decrease in revenue
for the six original stations reflects a temporary reduction of revenue due to
the conversion and higher revenues in 1994 when the majority of these stations
broadcast the 1994 Winter Olympics. Production and distribution revenue
increased $65.2 or greater than 100% primarily due to increases in foreign
syndication, network and domestic syndication revenues.
Direct costs for 1995 and 1994 relates to the youth entertainment
segment ($214.9 and $101.0, respectively) and to the broadcasting and
production and distribution segment ($166.1 and $99.6, respectively). The
youth entertainment segment's direct costs as a percentage of sales was 66% in
1995 and 51% in 1994, reflecting higher direct costs as a percentage of net
revenues for trading cards and publishing, partially offset by lower direct
costs as a percentage of net revenue from toys and children's activity sticker
collections. Sports trading cards and publishing direct costs as a percentage
of sales increased due to decreased sales and higher return and inventory
obsolescence provisions and reduced gross profit from publishing due in large
part to the strategic actions described above.
Broadcasting direct costs increased due to the acquisition of the
Argyle and CitiCasters stations and increased direct costs for the original six
stations due to higher staffing levels to support the increase in locally
produced programming partially offset by a decrease in direct costs reflecting
the sale of the Boston Station in March 1995. Production and distribution
direct costs increased due to substantially greater production activity in the
latter half of 1994 and 1995 and higher overhead to support the production
activity. Both of NWCG's business segments incurred direct costs associated
with NWCG's conversion of certain broadcast stations to the Fox Network, which
allows the broadcast stations to provide more locally-produced programming.
Selling, general and administrative ("SG&A") expenses in 1995 increased
by $70.8 to $175.3. The youth entertainment segment's SG&A expenses increased
from $49.3 to $97.3. The increase of $48.0 was mainly attributable to the
addition of children's sports and entertainment activity sticker collections
and adhesives and SkyBox sports and entertainment trading cards, the
consolidation of Toy Biz's results, increased corporate overhead to support the
expansion of Marvel and the effect of the strategic actions taken in the
publishing business described above. As a percentage of net revenues, the
youth entertainment segment's SG&A expenses were approximately 30% in 1995 and
25% in 1994. The broadcasting and production and distribution segments SG&A
expenses were $67.2 and $46.0 in 1995 and 1994, respectively. Broadcasting
SG&A expenses increased due to the acquisition of the Argyle and CitiCasters
stations and increased expenses for the original six stations due to higher
staffing levels to support the increase in locally produced programming and the
increased promotional and advertising activities partially offset by a decrease
in expenses reflecting the sale of the Boston Station in March 1995.
Production and distribution SG&A expenses increased due to substantially
17
CAPITAL PRINTING SYSTEMS]
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in million, except per share data)
greater production activity in the latter half of 1994 and 1995, the start-up
of the sales and marketing firm in May of 1994 and higher overhead to support
the production activity. Both of NWCG's business segments incurred SG&A
expenses associated with NWCG's conversion of certain broadcast stations to the
Fox Network, which allows the broadcast stations to provide more locally-
produced programming. Also included in SG&A expenses are $10.8 and $9.2 of
corporate overhead expenses in 1995 and 1994, respectively.
Amortization of goodwill and intangibles increased to $31.0 in 1995
from $21.8 in 1994 primarily due to the acquisition of Panini, SkyBox and
broadcast television stations and the consolidation of Toy Biz.
The Company recorded a gain of $54.7 in 1995 in connection with the
sale of the Boston Station and the Toy Biz IPO. The Company recorded a gain of
$83.2 in 1994 in connection with the sale by NWCG of 16,318,811 shares of
common stock in a rights offering and the sale of the NWCG Series B Preferred
Stock to Fox.
Interest expense increased to $139.3 in 1995 from $88.7 in 1994
primarily due to the issuance in 1994 of the Holdings III Notes and NWCG
Holdings Notes, borrowings under the bank credit agreement of Marvel IV
Holdings, borrowings used for the acquisitions of Panini, SkyBox, broadcast
television stations and to fund increased production activity partially offset
by a reduction in interest expense on indebtedness to affiliates.
Interest and net investment income increased to $19.5 in 1995 from $4.3
in 1994 primarily due to an increase in interest income on loans to affiliates.
Amortization of debt issuance costs and other increased from 1994 to
1995 primarily due to amortization of financing costs related to increased
borrowings in 1994 and 1995.
The provision for income taxes was $40.5 and $1.7 in 1995 and 1994,
respectively. The increase in income tax expense results primarily from the
recognition of income taxes on the sale of WSBK by NWCG and an increase in
foreign source pre-tax income of Marvel which is taxed at higher rates. The
tax liability associated with the sale of WSBK will be offset by the
utilization of NWCG pre-bankruptcy plan effective date net operating losses.
The utilization has been reflected as a reduction of excess reorganization
value. In addition, the Company has not recorded a benefit in 1995 for its
separate company loss since Andrews Group's ownership of Marvel was reduced
below 80% during the second quarter of 1994 resulting in a deconsolidation for
tax purposes.
Equity in net income of investees represents Marvel's equity interest
in Toy Biz prior to the Toy Biz IPO, NWCG's 37.5% interest in Guthy-Renker and
NWCG's portion of Genesis' net loss prior to the acquisition of the remaining
50% of Genesis.
Marvel recorded an extraordinary loss, net of taxes of $2.1, which
represents a write-off of the related deferred financing costs associated with
the term loan portion of its amended and Restated Credit Agreement.
18
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in million, except per share data)
Inflation
In general, costs to operate in the Company's business segments are
affected by inflation, and the effects of inflation may be experienced by the
Company in future periods. Management believes, however, that such effect has
not been material to the Company in 1995 or 1994.
Financial Condition, Liquidity and Capital Resources
(a) Marvel
Marvel's net cash provided by operations was $4.5 and $7.2 for the six
months ended June 30, 1995 and 1994 respectively. The decrease in cash
provided by operations was mainly attributable to a reduction in net income.
Cash as shown on the Consolidated Balance Sheets includes $22.6 and 34.6 from
Toy Biz and from foreign sources, respectively. In addition, the increase in
working capital as shown on the Consolidated Balance Sheets includes $48.1
attributable to Toy Biz.
Capital expenditures were $15.0 and $1.3 for the six months ended June
30, 1995 and 1994, respectively. The significant increase in the 1995 period
as compared to the 1994 period is primarily attributable to the expansion of
Panini's adhesives paper facility and, to a lesser extent, the consolidation of
Toy Biz.
In April 1995, Marvel entered into a $350.0 term loan agreement with a
syndicate of banks, the Co-Agents and Chemical Bank, as administrative agent
(the "U.S. Term Loan Agreement"). Marvel borrowed $350.0 under the U.S. Term
Loan Agreement to finance the SkyBox Acquisition, refinance the term loan
portion of the existing Amended and Restated Credit Agreement and for general
corporate purposes. Borrowings under the U.S. Term Loan Agreement are repayable
in six semi-annual installments beginning August 31, 1999.
Loans under the U.S. Term Loan Agreement bear interest at a rate per
annum equal to the Eurodollar Rate (as defined in the U.S. Term Loan Agreement)
plus the Applicable Margin (as defined in this paragraph), or the Alternate
Base Rate (as defined in the U.S. Term Loan Agreement). Eurodollar Rate Loans
will, at the option of Fleer, have interest periods of one, two, three or six
months. Applicable Margin means (a) with respect to Eurodollar Rate Loans, 2%
through the first Anniversary Date (as defined in the U.S. Term Loan Agreement)
and 1 1/8% to 2 1/2% thereafter, to be determined based on Marvel's financial
performance and (b) with respect to Alternate Base Rate Loans, 1% through the
first Anniversary Date and 1/8 of 1% to 1 1/2% thereafter, to be determined
based on Marvel's financial performance. The interest rate on Eurodollar Rate
Loans at August 4, 1995, was approximately 5 7/8% to 5 15/16%, depending upon
the length of the relevant interest period, and the interest rate on Alternate
Base Rate Loans, at August 4, 1995, was approximately 8 3/4% per annum.
Interest on Alternate Base Rate Loans is payable quarterly in arrears and
interest on Eurodollar Rate Loans is payable at the end of the applicable
interest period, except that if the interest period is six months, interest is
payable ninety days after the commencement of the interest period and at the
end of the interest period.
19
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in million, except per share data)
The obligations of Fleer under the U.S. Term Loan Agreement are not
secured, but Marvel has guaranteed Fleer's obligations thereunder.
The U.S. Term Loan Agreement includes various restrictive covenants
incorporated by reference to the existing Amended and Restated Credit Agreement
prohibiting Marvel from, among other things, incurring additional indebtedness,
with certain limited exceptions, and making dividend, redemption and certain
other payments on its capital stock. The U.S. Term Loan Agreement also
contains certain customary financial covenants and events of default for a
financing of this type.
In connection with the U.S. Term Loan Agreement, Marvel also entered
into an amendment to the existing Amended and Restated Credit Agreement which,
among other things, permitted Marvel to incur the indebtedness under the U.S.
Term Loan Agreement. Pursuant to this amendment, the Applicable Margin under
the existing Amended and Restated Credit Agreement for Alternate Base Rate
loans will range from 0% to 1% and for Eurodollar Rate loans will range from
0.625% to 2%, in each case depending on Marvel's financial performance.
At August 4, 1995, 78,049,626 shares, or 76.9% of Marvel's outstanding
shares of common stock were pledged to secure indebtedness of subsidiaries of
Mafco. The indentures governing this indebtedness contain various covenants
relating to Marvel, including certain limitations on Marvel's indebtedness.
At August 4, 1995, Marvel's outstanding bank indebtedness was $572.3,
and Marvel had $39.5 available under its revolving credit facility.
On March 2, 1995, Toy Biz completed an initial public offering (the
"Toy Biz IPO") in which it issued and sold 2,750,000 shares of its class A
common stock at $18.00 per share. Avi Arad, a principal shareholder of Toy
Biz, also sold 700,000 shares of class A common stock owned by him in the Toy
Biz IPO. The net proceeds of approximately $44.1 to Toy Biz, after deducting
commissions and estimated offering expenses, were used to pay outstanding
amounts due under subordinated notes held by Marvel and the sole stockholder of
the predecessor to Toy Biz and for working capital and general corporate
purposes. Marvel recorded other income of approximately $14.3 on the Toy Biz
IPO in recognition of the net increase in value of Marvel's investment in Toy
Biz. In conjunction with the Toy Biz IPO, Marvel's equity ownership was
reduced to 36.6%, and its voting control increased to approximately 85.3%.
In conjunction with the Toy Biz IPO, Toy Biz entered into a three year
$30 revolving line of credit with a syndicate of banks for which Chemical Bank
serves as administrative agent. Substantially all of the assets of Toy Biz
have been pledged to secure borrowings under the Toy Biz credit facility.
Borrowings under the credit facility bear interest at either Chemical Bank's
alternate base rate or at the Eurodollar rate plus the applicable margin. The
applicable margin is 1% unless Toy Biz meets specific financial operating
levels, in which case the applicable margin decreases to 3/4 of 1%. The credit
facility requires Toy Biz to pay a commitment fee of 3/8 of 1% per annum on the
average daily unused portion of the credit facility.
20
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in million, except per share data)
The Toy Biz credit facility contains various financial covenants, as
well as restrictions, on the incurrence of new indebtedness, prepaying or
amending subordinated debt, acquisitions and similar investments, the sale or
transfer of assets, capital expenditures, limitations on restricted payments,
dividends, issuing guarantees and creating liens. The credit facility also
requires that (a) Marvel continue to control a majority of the voting control
of Toy Biz and have the power to elect a majority of Toy Biz's Board of
Directors and (b) the exclusive, royalty free perpetual worldwide license
agreement between Toy Biz and Marvel remain in effect. The Toy Biz credit
facility is not guaranteed by Marvel.
There was no outstanding indebtedness under the Toy Biz line of credit
at August 4, 1995.
Marvel anticipates that borrowings under its various credit agreements
will be paid from internally generated funds of Marvel or from other sources,
which may include the sale of debt securities of Marvel. Marvel also
anticipates that internally generated funds, as well as proceeds from
borrowings under the revolving credit portion of the existing Amended and
Restated Credit Agreement or any amendment thereto, will be sufficient to meet
working capital, capital expenditure and investment requirements.
(b) NWCG
At June 30, 1995, NWCG has total outstanding debt of $1,016.1 The
increase in debt from December 31, 1994 includes the drawdown of the
Acquisition Credit Agreement of $375.0, the incurrence of approximately $40.4
of non-recourse debt to Fox and a drawdown of the Entertainment Line of Credit
of $57.0. Further, NWCG repaid $19.5 of the Bank Credit Agreement Loans and
$77.3 of the Step-up Notes with the net proceeds from the sale of the Boston
Station and paid $8.0 of the Step-up Notes as a scheduled payment. In July and
August, NWCG received an additional $62.8 when three of the Argyle stations
affiliated with the Fox Network.
In order to service the currently outstanding broadcast debt, the
primary source of funds will be broadcasting operating cash flow. Broadcasting
operating cash flow from stations recently acquired will provide NWCG with the
ability to service additional debt incurred in connection with broadcast
station acquisitions. NWCG believes that broadcasting operating cash flow and
financing activities permitted under existing debt agreements will be
sufficient to enable NWCG to satisfy current requirements for operating,
investing and financing activities of NWCG and its subsidiaries, including debt
service prior to final maturity.
NW Entertainment obtained a $100.0 credit facility collateralized by
certain assets of the production and distribution segment. At June 30, 1995,
$57.0 is outstanding under this facility. NWCG believes production and
distribution segment cash flow will be sufficient to service this debt.
In order to meet principal payments upon the final maturity of its
various debt facilities outstanding, the earliest of which occurs in 1998, NWCG
will be required to adopt one or more alternatives, such as refinancing or
restructuring its indebtedness, selling material assets or operations or
seeking additional capital contributions. There can be no assurance that any
of such actions could be
21
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in million, except per share data)
effected on satisfactory terms, that they would enable NWCG to continue to
satisfy NWCG's capital requirements or that they would be permitted by the
terms of existing or future debt agreements.
NWCG's capital budget for 1995 is approximately $25.0, primarily for
the broadcasting segment. In connection with the broadcast stations' change in
affiliation to the Fox Network, the broadcasting segment provides more locally-
produced programming which requires additional capital expenditures and
operating expenses.
In August 1995, the Company acquired Cannell Entertainment Inc., for
convertible securities valued at $30.0 and certain other consideration.
(c) Corporate and other subsidiaries
The Company's corporate cash requirements consist primarily of debt
service and administrative expenses. The Company's principal source of
liquidity at the corporate level is expected to consist of advances from Mafco
Holdings and affiliates. At August 1, 1995, an aggregate of 77.6 million
shares of common stock of Marvel owned by the Company were pledged to secure
the indebtedness and letters of credit of Marvel Holdings, Parent Holdings,
Holdings III and Four Star Holdings and 2.8 million shares of common stock of
Marvel are subject to a negative pledge under the terms of the Marvel Holdings
Notes. At August 1, 1995, an aggregate of 34.5 million shares of NWCG owned by
the Company were pledged to secure the NWCG Holdings Notes.
22
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On March 26, 1993, Parent Holdings commenced a tender offer for up to
22,000,000 shares of common stock at $12.50 per share. On or about April 19,
1993 and April 23, 1993, three lawsuits, Joseph H. Weiss v. Ronald O. Perelman,
et al. (C.A. No. 12945), John Mortensen v. Ronald O. Perelman, et al. (C.A. No.
12952), and Nicholas D. Gravina v. Ronald O. Perelman, et al. (C.A. No. 12954),
were filed in the Court of Chancery of the State of Delaware in and for New
Castle County against Parent Holdings, Marvel and certain of Marvel's
directors. These lawsuits were consolidated under the caption Joseph H. Weiss
v. Ronald O. Perelman, et al. (C.A. No. 12945), and on June 23, 1993, the
plaintiffs filed a consolidated amended complaint. The consolidated action
purported to be a class action on behalf of all of Marvel's public
stockholders, and, in the consolidated amended complaint, alleged that the
original $12.50 per share offer was grossly inadequate and coercive; the
offering statement, the amended offering statement and Marvel's 14d-9 filings
were false and misleading; and Marvel's Board of Directors and its special
committee failed adequately to protect the interest of Marvel's stockholders.
The consolidated amended complaint sought damages, an accounting and fees for
the plaintiffs' attorneys for purportedly causing an increase in the tender
offer price from $12.50 to $15 per share. On February 20, 1994, the plaintiffs
voluntarily dismissed each of these actions and filed a single new action in
the United States District Court for the Southern District of New York. The
new action names as defendants the same defendants as the prior actions, as
well as MacAndrews Holdings and Mafco Holdings; makes essentially the same
allegations and further alleges that the revised tender offer price was also
grossly inadequate; purports to state claims under Sections 10(b), 14(e) and
20(a) of the Securities Exchange Act of 1934, as amended; and seeks
supplemental disclosure, rescission of the tender and/or rescissory damages,
commencement of a new and "improved" tender offer and other, related equitable
and legal relief. The Company believes that the new action is without merit
and, on May 2, 1994, moved to dismiss the complaint because, among other
reasons, it fails to state a claim. Legal briefs have been submitted to the
court, and the parties are awaiting the court's ruling on such motion.
On March 9, 1995, a complaint, purporting to be a class action, was
filed against SkyBox, certain of SkyBox's officers and directors and Marvel in
the Court of Chancery in the State of Delaware in and for New Castle County,
entitled Strougo v. Lorber, et al., C.A. No. 14107 ("Strougo"). The complaint
generally alleges that SkyBox and certain of its officers and directors
breached their fiduciary duties by accepting the cash tender offer and the
merger at an unfair and inadequate price by failing to consider other potential
purchasers in a manner designed to obtain the highest possible price for
SkyBox's stockholders and by not acting in the best interest of stockholders.
The complaint also alleges that Marvel aided and abetted the breaches of
fiduciary duty committed by the other defendants named in the complaint. The
complaint seeks preliminary and permanent injunctions against consummation of
the merger, damages, costs and experts' fees and expenses.
On March 16, 1995, a complaint, purporting to be a class action, was
filed against SkyBox and certain of SkyBox's officers and directors in the
Court of Chancery in the State of Delaware in and for New Castle County,
entitled Krim and Gerber v. SkyBox International Inc., et al., C.A. No. 14127.
The complaint generally makes allegations similar to those contained in the
Strougo complaint and seeks similar injunctive and other relief.
In connection with the appeal to the United States Court of Appeals for
the Seventh Circuit by the plaintiff in the Eckstein and Majeski Actions (see
Andrews Group 1994 10-K), oral argument was
23
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
held on April 17, 1995.On June 26, 1995, the Court of Appeals affirmed the
judgments of the District Court in favor of the defendants. On July 10, 1995,
the Eckstein plaintiffs filed a petition for rehearing and suggestion of
rehearing en banc. The petition was denied by the Court of Appeals on July 21,
1995. On or about July 6, 1995, the Majeski plaintiffs filed a purported class
action lawsuit in the Circuit Court for Milwaukee County, Wisconsin, entitled
Ralph Majeski, et al. v. Balcor Entertainment Company Ltd., et al., Case No.
95CV006579 (the "Majeski State Court Action"). The Majeski State Court Action
is based on allegations similar to those in the Federal Court Majeski Action,
and seeks similar relief. The complaint alleges claims based on state law
asserting, among other things, breach of fiduciary duties, negligent and
intentional misrepresentation and deceit, breach of contract, and a derivative
claim on behalf of another defendant, Balcor Film Investors, and its successor.
On March 10, 1994, Steven Cooperman commenced an action, on behalf of
himself and purportedly derivatively on behalf of SCI Television, Inc. (or its
purported successor corporation, NWCG) and as a class action, against certain
of the officers and directors of NWCG, certain of their respective affiliates
and certain of their advisors, asserting, among other things, breaches of
fiduciary duty, unjust enrichment, constructive fraud and abuse of control in
connection with the transactions contemplated by the Agreement (the "Action").
The Action is entitled Steven Cooperman, On Behalf of Himself and Derivatively
on Behalf of SCI Television, Inc., a Delaware corporation (or its successor
corporation, SCI Parent Corporation to be re-named New World Communications
Group, Inc.) v. Ronald O. Perelman, et al., and SCI Television, Inc., a
Delaware corporation (or its successor corporation, SCI Parent Corporation to
be re-named New World Communications Group, Inc.), Case No. BC100359 (Superior
Court of the State of California, County of Los Angeles). The Action seeks
equitable relief and damages. Preliminary agreement has been reached on a
settlement of this litigation. Under the terms of the settlement, NWCG will
issue 2 million warrants for the purchase of NWCG stock at the market price on
the day of issue. The warrants will be exercisable over a 90-day period, 5
years from the date of issue. There will also be a payment of cash
consideration. In addition, Andrews Group will contribute the stock of L.C.
Holdings, a company with an educational film library, to NWCG. The settlement
is subject to final documentation and court approval. It is anticipated that
submission for court approval will take place prior to September 30, 1995.
When the securities are issued, the fair value of the securities will be
reflected in NWCG's common stockholders' equity with a corresponding reduction
to additional paid-in-capital.
The Company and its subsidiaries are also parties to various other
litigation, which have arisen in the ordinary course of business. The Company
believes that it is unlikely that the outcome of all pending litigation in the
aggregate will have a material adverse effect on the consolidated financial
condition of the Company and its subsidiaries taken as a whole.
24
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
ITEM 5. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
4.38 First Amendment dated as of March 10, 1995 to Credit Agreement dated as of
July 20, 1994 among Marvel IV Holdings Inc., the banks named therein and
Citibank N.A. as agent and related agreements
4.39 Amended and Restated Agreement dated as of June 29, 1995 among Marvel IV
Holdings Inc., the banks named therein and Citibank N.A. as agent and related
agreements
27 - Financial Data Schedule
(b) Report on Form 8-K
April 26, 1995 (Items 2 and 7)
25
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ANDREWS GROUP INCORPORATED
(Registrant)
By: /s/ Joseph P. Page
August 11, 1995 Joseph P. Page
Executive Vice President and
Chief Financial Officer
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ANDREWS GROUP INCORPORATED
(Registrant)
By: /s/ Laurence Winoker
August 11, 1995 Laurence Winoker
Vice President and Controller
(Principal Accounting Officer)
EXECUTION COPY
FIRST AMENDMENT
Dated as of March 10, 1995
This FIRST AMENDMENT among Marvel IV Holdings Inc., a Delaware
corporation (the "Borrower"), Mafco Holdings Inc., a Delaware corporation
("Mafco"), the lenders parties to the Credit Agreement referred to below (the
"Lenders"), and Citibank, N.A., as agent (the "Agent") for the Lenders
thereunder.
PRELIMINARY STATEMENTS:
(1) The Borrower, the Lenders and the Agent have entered
into a Credit Agreement dated as of July 20, 1994 (the "Credit Agreement"; the
terms defined therein being used herein as therein defined unless otherwise
defined herein).
(2) Mafco, the indirect owner of 100% of the outstanding
capital stock of Borrower, has entered into an Agreement and Plan of Merger
(said Agreement, as amended or otherwise modified from time to time, being the
"Merger Agreement") with Abex Inc., a Delaware corporation ("Abex").
(3) Prior to the consummation of the Merger (as defined
below), Cigar Guarantor shall contribute 100% of the outstanding stock of
Consolidated Cigar (Parent) Holdings Inc. and Flavors Guarantor shall
contribute 100% of the outstanding stock of Flavors Holdings Inc. to C&F
(Parent) Holdings Inc., a newly formed Delaware corporation ("C&F Guarantor"),
the outstanding stock of which shall be owned 50% by Cigar Guarantor and 50% by
Flavors Guarantor. C&F Guarantor will in turn contribute the stock so received
by it to C&F Holdings Inc., a Delaware corporation ("C&F Holdings"), all of the
outstanding stock of which shall be owned by C&F Guarantor.
(4) Pursuant to the Merger Agreement, (a) C&F Holdings will
be merged (the "Merger") with and into Abex, with Abex as the surviving
corporation in the Merger and (b) Abex's Restated Certificate of Incorporation
and by-laws shall be amended (the "Amendment") in various respects, including
the change of Abex's name to Mafco Consolidated Group Inc. ("MCG").
(5) The Borrower has requested that the Lenders agree to
amend the Credit Agreement and the Mafco Security Agreement and to amend and
restate the Cigar Guaranty, the Flavors Guaranty, the Cigar Pledge Agreement
and the Flavors Pledge Agreement to permit such Merger and the related
transactions.
(6) The Lenders are, on the terms and conditions stated
below, willing to grant the request of the Borrower and the Borrower and the
Lenders have agreed to amend the Credit Agreement and the Mafco Security
Agreement as hereinafter set forth.
SECTION 1. Amendments to Credit Agreement. The Credit
Agreement is, effective as of the date on which all of the conditions precedent
set forth in Section 3 hereof have been satisfied or waived, hereby amended as
follows:
(a) The Table of Contents shall be amended by adding "EXHIBIT K -
Form of C&F Pledge Agreement" and "EXHIBIT L - Form of C&F Guaranty" to the
list of exhibits and inserting the same in the appropriate alphabetical
locations in such list of exhibits.
(b) Section 1.01 shall be amended by adding the following new
definitions and inserting the same in the appropriate alphabetical locations as
follows:
"Abex" means Abex Inc., a Delaware corporation.
"C&F Guarantor" means C&F (Parent) Holdings Inc., a Delaware
corporation.
"C&F Guaranty" means the guaranty duly executed by C&F Guarantor
guaranteeing the obligations of Mafco under the Loan Documents.
"C&F Pledge Agreement" means the pledge agreement duly executed by C&F
Guarantor whereby 100% of the capital stock of MCG owned by C&F Guarantor is
pledged as security for the Obligations of C&F Guarantor under the C&F
Guaranty.
"Cigar Non-Operating Subsidiaries" means C&F Guarantor.
"C&F Loan Documents" means the C&F Guaranty and the C&F Pledge
Agreement.
"Deposit Certificate" has the meaning specified in Section 5.01(l).
"First Amendment" means the First Amendment dated as of March 10, 1995
to this Agreement.
"First Amendment Effective Date" has the meaning specified in Section 3
of the First Amendment.
"Flavors Non-Operating Subsidiaries" means C&F Guarantor.
"Merger" means the merger of C&F Holdings Inc. with and into Abex, with
Abex as the surviving corporation.
"Merger Agreement" means the Agreement and Plan of Merger dated as of
January 6, 1995 by and between Mafco and Abex, as such agreement may be
amended, modified or supplemented from time to time.
"MCG" means Mafco Consolidated Group Inc., the corporate name which
Abex will adopt upon consummation of the Merger.
"MCG Tax Agreement" means the Tax Sharing Agreement by and among Mafco
and MCG.
"Special Dividend" means (i) the dividend in an amount not exceeding
$9,600,000 made immediately prior to the consummation of the Merger by Flavors
to Flavors Holdings Inc. and then by Flavors Holdings Inc. to Flavors Guarantor
and (ii) the dividend in an amount not exceeding $5,300,000 made immediately
prior to the consummation of the Merger by Cigar to Consolidated Cigar (Parent)
Holdings Inc. and then to Cigar Guarantor.
(c) Section 1.01 shall be amended by amending the following
definitions in their entirety as follows:
"A Company" means each Loan Party, FN Parent, FN Holdings, Coleman
Holdings Inc., Coleman Worldwide Inc., Marvel III, Marvel Parent, Marvel
Holdings and NWCG Holdings.
"Collateral Documents" means (i) each Security Agreement, (ii) each
Initial Pledge Agreement, (iii) upon and after the second Borrowing, each
Subsequent Pledge Agreement and (iv) upon and after the First Amendment
Effective Date, the C&F Pledge Agreement.
"Designated Operating Company" means Coleman, New World, Marvel and
MCG.
"Designated Persons" means (i) the Borrower, (ii) Coleman Guarantor,
(iii) upon the execution and delivery of the New World Pledge Agreement, the
Second Andrews Pledge Agreement and the New World Guaranty (together, in each
case, with the other certificates, instruments and documents required to be
delivered therewith pursuant to the terms of Section 3.02(i)(viii) and (ix)),
New World Guarantor, (iv) upon the execution and delivery of the C&F Pledge
Agreement and the C&F Guaranty (together, in each case, with the other
certificates, instruments and
documents required to be delivered therewith), C&F Guarantor, and (v) on and
after the date of the second Borrowing, FN Parent (for as long as, and only as
long as, the Bank is regulated as a federal savings bank).
"Loan Documents" means (i) the Initial Loan Documents, (ii) upon and
after the second Borrowing, the Subsequent Loan Documents, and (iii), upon and
after the First Amendment Effective Date, the C&F Loan Documents.
"Loan Party" means (i) each Initial Loan Party, (ii) upon and after the
second Borrowing, each Subsequent Loan Party, and (iii) upon and after the
First Amendment Effective Date, C&F Guarantor.
"Net Equity Value" means for any day of determination for any
Designated Person:
(i) with respect to the Borrower, an amount equal to the
excess of (A) the product of the number of shares of common stock of Marvel
owned directly or indirectly by the Borrower times the average closing price
during the Calculation Period relating to such day of determination of such
common stock on the New York Stock Exchange over (B) the Defeased Debt Amount
of the Borrower;
(ii) with respect to Coleman Guarantor, an amount equal to
the excess of (A) the product of the number of shares of common stock of
Coleman owned directly or indirectly by Coleman Guarantor times the average
closing price during the Calculation Period relating to such day of
determination of such common stock on the New York Stock Exchange over (B) the
Defeased Debt Amount of Coleman Guarantor;
(iii) with respect to New World Guarantor, an amount equal to
the excess of (A) the product of the number of shares of Class B common stock
of New World owned directly or indirectly by New World Guarantor times the
average closing price of the Class A common stock during the Calculation Period
relating to such day of determination for such Class A Common Stock on either
the New York Stock Exchange or the NASDAQ national market system over (B) the
Defeased Debt Amount of New World Guarantor;
(iv) with respect to C&F Guarantor, an amount equal to the
product of the number of shares of common stock of MCG owned directly or
indirectly by C&F Guarantor times the average closing price during the
Calculation Period relating to such day of determination of such common stock
on the New York Stock Exchange; and
(v) with respect to FN Parent, an amount equal to $288,000,000, less
the aggregate amount of net losses of the Bank since the date of the second
Borrowing, less the aggregate amount of distributions of capital of the Bank
existing on the date of the second Borrowing, less any reductions in the equity
accounts of the Bank determined in accordance with generally accepted
accounting principles in effect from time to time.
(d) Section 1.01 shall be amended by deleting the definition of
"Designated Cigar Subsidiaries", the definition of "Designated Flavors
Subsidiaries" and the definition of "Non-Designated Operating Company".
(e) Section 2.05(b) shall be amended in full to read as follows:
"(b) Mandatory. (i) The Borrower shall prepay in whole the
outstanding principal amounts of the Advances outstanding on (i) if the
Purchase Agreement is terminated, the ninetieth day following such termination
and (ii) March 31, 1995, if the second Borrowing has not occurred on or prior
to December 31, 1994.
(ii) The Borrower shall, on the date of deposit of each cash equity
contribution in the Borrower Collateral Account as a result of a loan made by
FN Parent to the Borrower Parent pursuant to the terms of the FN Parent Loan
Agreement that relates solely to net income of the Bank (excluding, to the
extent included in net income, any gains (net of taxes) from the sale of
deposits and property, plant and equipment related to such deposits, and
further excluding, to the extent included in net income, any income tax benefit
that is attributable to the recognition of the deferred tax asset-net operating
loss carry forwards of the Bank), apply:
(A) up to 75% of the amount of such cash equity contribution to the
making of a prepayment in an amount equal to the amount of the next scheduled
principal payment pursuant to Section 2.03 (plus accrued interest thereon), and
the portion of such prepayment to be applied to principal in accordance with
Section 2.05(b)(viii) below shall be applied to such scheduled principal
payment; provided, however, that, if the next scheduled principal payment has
been prepaid in full prior to the date of such cash equity contribution (other
than as a result of a prepayment during the calendar quarter in which such cash
equity contribution occurs pursuant to the provisions of Section 2.05(b)(iii)),
the Borrower shall have no obligation to prepay the Advances; provided further
that, if the next scheduled principal payment has been prepaid in full prior to
the date of such cash equity contribution as a result of a prepayment during
the calendar quarter in which such cash equity
contribution occurs pursuant to the provisions of Section 2.05(b)(ii)(B) or
Section 2.05(b)(iii), such cash equity contribution shall be applied to the
next scheduled principal payment pursuant to the terms of this Section
2.05(b)(ii)(A) and the prepayment pursuant to Section 2.05(b)(ii)(B) or Section
2.05(b)(iii), as the case may be, shall be reapplied pursuant to the terms of
such Section; and provided further that any amount not required to be prepaid
pursuant to the terms of this Section 2.05(b)(ii)(A) shall, subject to the
provisions of Section 2.05(b)(iv) below, be released to the Borrower pursuant
to the provisions of Section 7(b) of the Borrower Security Agreement; and
(B) 25% of the amount of such cash equity contribution to the
making of a prepayment in such amount; provided, however, that the portion of
each such prepayment to be applied to principal in accordance with Section
2.05(b)(viii) below shall be applied first to the next scheduled principal
payment and second to the remaining installments of the Facility pursuant to
Section 2.03 in inverse order of maturity; provided further that if the next
scheduled principal payment has been prepaid in full prior to the date of such
cash equity contribution, such portion of such prepayment shall be applied
solely to the remaining installments of the Facility in inverse order of
maturity; and provided further that if a prepayment pursuant to the terms of
this Section 2.05(b)(ii)(B) is applied to the next scheduled principal payment
and, subsequent to such application, a prepayment pursuant to the terms of
Section 2.05(b)(ii)(A) is applied to such next scheduled principal payment, the
amount applied to such next scheduled principal payment pursuant to the terms
of this Section 2.05(b)(ii)(B) shall be reapplied to the remaining installments
of the Facility in inverse order of maturity.
(iii) The Borrower shall, on the date of deposit of each cash equity
contribution in the Borrower Collateral Account relating to (A) any loan made
by FN Holdings to the Borrower Parent pursuant to the terms of the certificate
of incorporation of FN Holdings (other than any such loan that relates to net
income of the Bank attributable to gains (net of taxes) from the sale of
deposits and property, plant and equipment related to such deposits), (B) to
the extent not included within clause (A), any loans made by FN Holdings to the
Borrower Parent pursuant to the terms of the certificate of incorporation of FN
Holdings that relate to dividends, other distributions or any loans or advances
from the Bank arising out of excess capital of the Bank and (C) any loans made
by FN Parent pursuant to the terms of the FN Parent Loan Agreement that relate
to dividends, other distributions or any loans or advances from the Bank
arising out of any income tax benefit that is attributable to the recognition
of the deferred tax asset-net operating loss carry forwards of the Bank, make a
prepayment in an amount equal to the amount of such cash equity contribution.
The portion of each such prepayment to be applied to principal in
accordance with Section 2.05(b)(viii) below shall be applied first to the next
scheduled principal payment and second to the remaining installments of the
Facility pursuant to Section 2.03 in inverse order of maturity; provided
however, that if the next scheduled principal payment has been prepaid in full
prior to the date of such cash equity contribution, such portion of such
prepayment shall be applied solely to the remaining installments of the
Facility in inverse order of maturity; provided further that if a prepayment
pursuant to the terms of this Section 2.05(b)(iii) is applied to the next
scheduled principal payment and, subsequent to such application, a prepayment
pursuant to the terms of Section 2.05(b)(ii)(A) is applied to such next
scheduled principal payment, the amount applied to such next scheduled
principal payment pursuant to the terms of this Section 2.05(b)(iii) shall be
reapplied to the remaining installments of the Facility in inverse order of
maturity.
(iv) The Borrower shall, on any date (A) on which a cash equity
contribution referred to in clause (ii) above is deposited in the Borrower
Collateral Account, on which a deposit of amounts paid under or in connection
with any Related Documents is made to the Mafco Collateral Account or on which
the proceeds of the Special Dividend is deposited in the Mafco Collateral
Account in accordance with the terms of Section 2.05(b)(v) and (B) either (I) a
Default has occurred and is continuing, (II) on and after the date of the
second Borrowing, the Borrower fails to deliver a Look-Forward Certificate or a
Deposit Certificate with respect to such deposit in accordance with the terms
of Section 5.01(l) or (III) on and after the date of the second Borrowing, the
Required Look-Forward Lenders determine in their reasonable discretion, within
15 Business Days following the date of the receipt of the Look-Forward
Certificate or within two Business Days following the date of the receipt of
the Deposit Certificate, as the case may be, referred to in clause (B)(II),
that (x) the equity contributions receivable by the Borrower (to the extent
they relate to net income of the Bank but excluding any gains (net of taxes)
from the sale of deposits and property, plant and equipment related to such
deposits) will be insufficient to service the scheduled amortization payments
(other than the payment due on September 1, 1996) or (y) the equity
contributions receivable by the Borrower (to the extent they relate to net
income of the Bank attributable to gains (net of taxes) from the sale of
deposits and property, plant and equipment related to such deposits) will be
insufficient to make the principal payment due on September 1, 1996 (in each
case taking into account, among other things, the Bank's performance to date,
the quality of the Bank's assets and the presence of any agreement with the
Bank's regulators including, but not limited to, an agreement relating to
capital, asset quality, dividends or management) make a prepayment in an amount
equal to the amount of such cash equity contribution, the amount of the deposit
in the Mafco Collateral Account or the amount of the proceeds of the Special
Dividend, as the case may be, plus any interest on Collateral Investments made
with such contribution or deposit. The portion of each such prepayment to be
applied to principal in accordance with
Section 2.05(b)(viii) below shall be applied to prepay the installments of the
Facility in order of maturity; provided, however, that, in the case of
prepayments to be made from the proceeds of the Special Dividend, the portion
of such prepayments to be applied to principal in accordance with Section
2.05(b)(viii) below shall be applied to prepay the installments of the Facility
in inverse order of maturity.
(v) The Borrower shall:
(A) on the date of receipt by any A Company of the Net Cash Proceeds of
issuances, sales or liquidations of any capital stock (including any securities
convertible into or exchangeable for capital stock or any warrants, rights or
options to acquire capital stock) of any A Company,
(B) on the date of receipt by any A Company of any dividends, other
distributions or any loans or advances made in respect of the capital stock of
any other A Company,
(C) on the date of receipt by any A Company of the Net Cash Proceeds of
any sales of any assets of any A Company,
(D) on the date of deposit of each cash equity contribution in the
Borrower Collateral Account relating to the proceeds of dividends, other
distributions or any loans or advances made by the Bank (other than any
dividends, other distributions or loans or advances referred to in clauses
(ii), (iii) and (iv) above, but including, without limitation, to the extent
that such dividends, distributions, loans or advances result from gains (net of
taxes) realized on any sale by the Bank of deposits and property, plant and
equipment related to such deposits),
(E) on the date of receipt by any A Company of the proceeds of
distributions, dividends or any loans or advances made on account of or as a
result of the issuance, sale or liquidation of any capital stock (including any
securities convertible into or exchangeable for capital stock or any warrants,
rights or options to acquire capital stock) of, or the sale, issuance or
incurrence of any Debt by, any Designated Operating Company or the Bank,
(F) on the date of receipt by any A Company of the Net Cash Proceeds
from the sale, issuance or incurrence by any A Company of any Debt, and
(G) on the date of receipt by any A Company of the proceeds of
dividends, other distributions or any loans or advances made on account of or
as a result of any sale of any assets of any Designated Operating Company,
make a prepayment in an amount equal to the amount of any such amount so
received or deposited, as the case may be, except, in each case, to the extent
(x) required pursuant to the terms of any agreement or instrument relating to
Debt existing on the date hereof of any A Company or Designated Operating
Company to prepay or redeem or purchase such Debt or (y) prohibited to be so
applied by the terms of any agreement or instrument relating to Debt existing
on the date hereof of any A Company or Designated Operating Company; provided,
however, that in the case of the Special Dividend, such Special Dividend shall
be deposited in the Mafco Collateral Account and such Special Dividend shall be
released to the Borrower subject to the terms of Section 2.04(b)(iv) on the
fifteenth Business Day following the date of the receipt of the Look-Forward
Certificate referred to in Section 5.01(l). The portion of each such prepayment
to be applied to principal in accordance with Section 2.05(b)(viii) below shall
be applied to prepay the installments of the Facility in inverse order of
maturity.
(vi) If the Purchase Agreement is terminated, the Borrower shall, on
each date following the date of such termination, make a prepayment in an
amount equal to the amount, if any, on deposit on such date in the Mafco
Collateral Account and the Second Mafco Collateral Account. The portion of
each such prepayment to be applied to principal in accordance with Section
2.05(b)(viii) below shall be applied to prepay the Facility.
(vii) The Borrower shall, on each date that an Event of Default set
forth in Section 6.01(a) of the Credit Agreement shall have occurred and be
continuing, make a prepayment in an amount equal to the amount on deposit in
the Second Mafco Collateral Account. The portion of each such prepayment to
be applied to principal in accordance with Section 2.05(b)(viii) below shall be
applied to prepay the installments of the Facility in inverse order of
maturity.
(viii) All prepayments under this subsection (b) shall be applied
first, to the payment of interest and fees payable in respect of the Facility
and to the payment of expenses of the Agent (including the reasonable fees and
expenses of counsel to the Agent) and second, to the prepayment of the Advances
comprising part of the same Borrowing as specified."
(f) Section 5.01(l) shall be amended by adding at the end thereof
the following proviso:
"; provided, however, that, notwithstanding the foregoing, if a Look-Forward
Certificate has been delivered to the Agent within 90 days of a deposit in the
Mafco Collateral Account of amounts paid under or in connection with any
Related Document, the Borrower may, instead of delivering a Look-Forward
Certificate to the
Agent, deliver a certificate (a "Deposit Certificate") to the Agent, within 15
Business Days prior to the date of such deposit or within five Business Days
after the date of such deposit, stating that (x) there has been no adverse
change in (1) the financial condition of the Bank since the date of the last
Look-Forward Certificate that was delivered to the Agent or (2) the projections
contained in such Look-Forward Certificate and (y) no event has occurred and is
continuing which constitutes an Event of Default or would constitute an Event
of Default but for the requirement that notice be given or time elapse or both;
and provided further that, with respect to the deposit of the Special Dividend
into the Mafco Collateral Account, the Borrower shall deliver a Look-Forward
Certificate to the Agent no less than 15 Business Days prior to June 1, 1995."
(g) Annex E hereto is added as Exhibit K to the Credit Agreement.
(h) Annex F hereto is added as Exhibit L to the Credit Agreement.
SECTION 2. Amendment to the Mafco Security Agreement. Section
7(a) of the Mafco Security is, effective as of the date on which all of the
conditions precedent set forth in Section 3 hereof have been satisfied or
waived, hereby amended by deleting the period in the last sentence thereof and
inserting the following in place thereof:
"; provided, however, that, in the case of the proceeds of the Special
Dividend deposited in the Mafco Collateral Account pursuant to Section 2.05(b)
of the Credit Agreement, release of such proceeds shall be permitted only if
the Borrower shall have delivered to the Lenders the Look-Forward Certificate
referred to in Section 5.01(l) of the Credit Agreement and the Required Look-
Forward Lenders shall, in accordance with the terms of Section 2.05(b)(iv) of
the Credit Agreement, have not required the Borrower to make a prepayment out
of such proceeds."
SECTION 3. Conditions of Effectiveness. This First Amendment
shall become effective on the first date (the "First Amendment Effective Date")
upon which the Agent shall have received evidence satisfactory to it that the
following conditions precedent have been satisfied:
(a) The consummation of the Merger shall have occurred in
compliance with all applicable laws and substantially as described in the Proxy
Statement on Schedule 14A of Abex filed with the Securities and Exchange
Commission in connection with the Merger; and the MCG Tax Agreement shall be in
form and substance reasonably satisfactory to the Lenders.
(b) The Borrower shall have paid all accrued fees of the Agent and
the Lenders and all accrued expenses of the Agent (including the reasonable
fees and expenses of counsel to the Agent).
(c) The Agent shall have received on or before the First Amendment
Effective Date the following, each dated on or before the First Amendment
Effective Date, in form and substance satisfactory to the Agent (unless
otherwise specified) and sufficient copies for each Lender:
(i) counterparts to this First Amendment duly executed by
the Borrower, the Lenders and the Agent;
(ii) counterparts to the Consent attached hereto duly
executed by each Loan Party other than the Borrower.
(iii) certified copies of (a) the resolutions of the Board of
Directors of (1) the Borrower approving this First Amendment and the matters
contemplated hereby and thereby, (2) Cigar Guarantor approving the amended and
restated Cigar Guaranty, the amended and restated Cigar Pledge Agreement and
the matters contemplated hereby and thereby, (3) Flavors Guarantor approving
the amended and restated Flavors Guaranty, the amended and restated Flavors
Pledge Agreement and the matters contemplated hereby and thereby and (4) C&F
Guarantor approving of the C&F Guaranty, the C&F Pledge Agreement and the
matters contemplated hereby and thereby and (b) all documents evidencing other
necessary corporate action and governmental approvals, if any, with respect to
this First Amendment, the Consent, the C&F Loan Documents and the matters
contemplated hereby and thereby;
(iv) a certificate of the Secretary or an Assistant Secretary of
each of the Borrower, Cigar Guarantor, Flavors Guarantor and C&F Guarantor
certifying the names and true signatures of its officers authorized to sign
this First Amendment or the Consent and the C&F Loan Documents which are
required hereby to which it is a party and the other documents to be delivered
hereunder.
(v) a copy of the charter of each of C&F Guarantor and MCG
and each amendment thereto and certified (as of a date reasonably near the
First Amendment Effective Date) by the Secretary of State of the state of
incorporation or organization of such Person as being a true and correct copy
thereof;
(vi) (A) a copy of a certificate of the Secretary of State
of the state of incorporation of C&F Guarantor and MCG, dated reasonably near
the First Amendment Effective Date, listing the charter of each such Person and
each amendment thereto on file in his office and certifying that (1) such
amendments are the only amendments to such Person's charter on file in his
office, (2) such Person has paid all franchise taxes to the date of such
certificate and (3) such Person is duly incorporated or organized and in good
standing under the laws of such state, and (B) a copy of a Certificate of
Merger dated reasonably near the First Amendment Effective Date, from the
Secretary of State of the State of Delaware;
(vii) from each of C&F Guarantor and MCG, a certificate
signed on behalf of such Person by its President or a Vice President and its
Secretary or any Assistant Secretary, dated as of the First Amendment Effective
Date (the statements made in such certificate shall be true on and as of the
First Amendment Effective Date), certifying as to (1) the absence of any
amendments to the charter of such Person since the date of the Secretary of
State's certificate referred to in subclause (vii) above, (2) a true and
correct copy of the bylaws of such Person as in effect on the First Amendment
Effective Date and (3) the due incorporation and good standing of such Person,
as a corporation organized under the laws of the State of Delaware, and the
absence of any proceeding for the dissolution or liquidation of such Person;
(viii) (A) a pledge agreement in substantially the form of Exhibit K
to the Credit Agreement (the "C&F Pledge Agreement"), duly executed by C&F
Guarantor whereby 100% of the capital stock of MCG owned by C&F Guarantor is
pledged as security for the Obligations of C&F Guarantor under the C&F
Guaranty, (B) an amended and restated Cigar Pledge Agreement in substantially
the form of Annex A hereto (the "Cigar Pledge Agreement") duly executed by
Cigar Guarantor whereby 100% of the capital stock of C&F Guarantor owned by
Cigar Guarantor is pledged as security for the Obligations of Cigar Guarantor
under the Cigar Guaranty and (C) an amended and restated Flavors Pledge
Agreement in substantially the form of Annex B hereto (the "Flavors Pledge
Agreement") duly executed by Flavors Guarantor whereby 100% of the capital
stock of C&F Guarantor owned by Flavors Guarantor is pledged as security for
the Obligations of Flavors Guarantor under the Flavors Guaranty, in each case
together with (A) certificates representing such capital stock accompanied by
undated stock powers executed in blank, (B) acknowledgement copies or stamped
copies of proper financing statements, duly filed on or before the First
Amendment Effective Date under the Uniform Commercial Code of all jurisdictions
that the Agent may deem necessary or
desirable in order to perfect and protect the Liens created by the above-
referenced pledge agreements, covering the Collateral described in such pledge
agreements, and (C) completed requests for information, dated on or before the
First Amendment Effective Date, listing the financing statements referred to in
clause (B) above and all other effective financing statements filed in the
jurisdictions referred to in clause (B) above that name C&F Guarantor, Cigar
Guarantor or Flavors Guarantor as debtor, together with copies of such other
financing statements;
(ix) (A) a guaranty in substantially the form of Exhibit L
to the Credit Agreement (the "C&F Guaranty"), duly executed by C&F Guarantor,
(B) an amended and restated guaranty in substantially the form of Annex C
hereto (the "Cigar Guaranty"), duly executed by Cigar Guarantor, and (C) an
amended and restated guaranty in substantially the form of Annex D hereto (the
"Flavors Guaranty"), duly executed by Flavors Guarantor, in each case
guaranteeing the obligations of the Borrower under the Loan Documents and in
form and substance reasonably satisfactory to the Lenders;
(x) certified copies of the Merger Agreement, the MCG Tax Agreement
and the solvency opinion delivered to Abex and Mafco pursuant to Section 5.1(i)
of the Merger Agreement, duly executed by the parties thereto and in form and
substance satisfactory to the Lenders;
(xi) (A) a voting trust agreement, duly executed by C&F
Guarantor, Cigar Guarantor, the Agent and NationsBank of Georgia, National
Association, as voting trustee, and (B) a voting trust agreement, duly executed
by C&F Guarantor, Flavors Guarantor, the Agent and NationsBank of Georgia,
National Association, as voting trustee, each in form and substance
satisfactory to the Agent;
(xii) a letter, in form and substance satisfactory to the
Agent, from Murray Devine to the Agent, stating that the Agent and the Lenders
may rely upon the solvency opinion delivered by it to Abex and Mafco pursuant
to Section 5.1(i) of the Merger Agreement;
(xiii) a favorable opinion of Paul, Weiss, Rifkind, Wharton &
Garrison, special New York counsel for the Borrower, in form and substance
reasonably satisfactory to the Lenders;
(xiv) a favorable opinion of Barry F. Schwartz, Executive Vice
President and General Counsel of the Borrower, in form and substance reasonably
satisfactory to the Lenders;
(xv) a favorable opinion of Shearman & Sterling, counsel for the
Agent, in form and substance reasonably satisfactory to the Agent; and
(xvi) a certificate signed by a duly authorized officer of the
Borrower stating that:
(A) After giving effect to this First Amendment, the
representations and warranties contained in each of the Cigar Guaranty and
Flavors Guaranty are correct on and as of the First Amendment Effective Date,
except to the extent such representations and warranties specifically relate to
an earlier date, and
(B) After giving effect to this First Amendment, no event
has occurred and is continuing which constitutes an Event of Default or would
constitute an Event of Default but for the requirement that notice be given or
time elapse or both.
SECTION 4. Release of Liens. The Lenders hereby agree that,
on the First Amendment Effective Date, all of the Liens in favor of the Lenders
and the Agent on the outstanding capital stock of Flavors Holdings Inc. and
Consolidated Cigar (Parent) Holdings Inc. shall be deemed to be released,
terminated and no longer in effect and hereby authorize the Agent to take all
actions necessary to effectuate such release.
SECTION 5. Reference to and Effect on the Loan Documents. (a)
Upon the effectiveness of Sections 1 and 2 hereof: (i) each reference in the
Credit Agreement to "this Agreement", "hereunder", "hereof" or words of like
import referring to the Credit Agreement, and each reference in the other Loan
Documents to "the Credit Agreement", "thereunder", "thereof" or words of like
import referring to the Credit Agreement, shall mean and be a reference to the
Credit Agreement as amended hereby; (ii) each reference in the Mafco Security
Agreement to "this Agreement", "hereunder", "hereof" or words of like import
referring to the Mafco Security Agreement, and each reference in the other Loan
Documents to "the Mafco Security Agreement", "thereunder", "thereof" or words
of like import referring to the Mafco Security Agreement, shall mean and be a
reference to the Mafco Security Agreement as amended hereby; (iii) each
reference in the other Loan Documents to "the Cigar Pledge Agreement",
"thereunder", "thereof" or words of like import referring to the Cigar Pledge
Agreement, shall mean and be a reference to the Cigar Pledge Agreement as
amended and restated pursuant to this First Amendment; (iv) each reference in
the other Loan Documents to "the Flavors Pledge Agreement", "thereunder",
"thereof" or words of like import referring to the Flavors Pledge Agreement,
shall mean and be a reference to the Flavors Pledge Agreement as amended and
restated pursuant to this First Amendment; (v) each reference in the other Loan
Documents to "the Cigar Guaranty", "thereunder", "thereof" or words of like
import referring to the Cigar Guaranty, shall mean
and be a reference to the Cigar Guaranty as amended and restated pursuant to
this First Amendment; and (vi) each reference in the other Loan Documents to
"the Flavors Guaranty", "thereunder", "thereof" or words of like import
referring to the Flavors Guaranty, shall mean and be a reference to the Flavors
Guaranty as amended and restated pursuant to this First Amendment.
(b) Except as specifically amended above, the Credit
Agreement and the Notes, and all other Loan Documents, are and shall continue
to be in full force and effect and are hereby in all respects ratified and
confirmed.
(c) The execution, delivery and effectiveness of this First
Amendment shall not, except as expressly provided herein, operate as a waiver
of any right, power or remedy of any Lender or the Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.
SECTION 6. Costs, Expenses and Taxes. The Borrower agrees to
pay on demand all costs and expenses of the Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
this First Amendment and the other instruments and documents to be delivered
hereunder, including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for the Agent with respect thereto and with respect to
advising the Agent as to its rights and responsibilities hereunder and
thereunder. The Borrower further agrees to pay on demand all costs and
expenses, if any (including, without limitation, reasonable counsel fees an
expenses), in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this First Amendment and the other
instruments and documents to be delivered hereunder, including, without
limitation, reasonable counsel fees and expenses in connection with the
enforcement of rights under this Section 6. In addition, the Borrower shall
pay any and all stamp and other taxes payable or determined to be payable in
connection with the execution and delivery of this First Amendment and the
other instruments and documents to be delivered hereunder, and agrees to save
the Agent and each Lender harmless from and against any and all liabilities
with respect to or resulting from any delay in paying or omission to pay such
taxes.
SECTION 7. Execution in Counterparts. This First Amendment
may be executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same agreement.
SECTION 8. Governing Law. This First Amendment shall be
governed by, and construed in accordance with, the laws of the State of New
York.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be executed by their respective officers thereunto duly authorized, as of
the date first above written.
MARVEL IV HOLDINGS INC.
By
Name:
Title:
MAFCO HOLDINGS INC.
By
Name:
Title:
CITIBANK, N.A., as
Agent
By
Name:
Title:
Lenders
BANK OF AMERICA
ILLINOIS
By
Name:
Title:
BANKERS TRUST COMPANY
By
Name:
Title:
THE CHASE MANHATTAN
BANK, N.A.
By
Name:
Title:
CHEMICAL BANK
By
Name:
Title:
CITIBANK, N.A.
By
Name:
Title:
CREDIT LYONNAIS
By
Name:
Title:
CREDIT SUISSE
By
Name:
Title:
THE FIRST NATIONAL BANK
OF BOSTON
By
Name:
Title:
THE LONG-TERM CREDIT
BANK OF JAPAN, LTD.,
LOS ANGELES AGENCY
By
Name:
Title:
NATIONSBANK OF NORTH
CAROLINA, N.A.
By
Name:
Title:
CONSENT
Reference is made to (a) the Credit Agreement dated as of July
20, 1994 (the "Credit Agreement"; the terms defined therein being used herein
as therein defined unless otherwise defined herein) among Marvel IV Holdings
Inc., a Delaware corporation (the "Borrower"), the lenders parties to the
Credit Agreement (the "Lenders"), and Citibank, N.A., as agent (the "Agent")
for the Lenders, and (b) the First Amendment dated as of March 10, 1995 (the
"First Amendment") among the Borrower, Mafco Holdings Inc., a Delaware
corporation ("Mafco"), the Lenders and the Agent.
Each of the undersigned, as a Loan Party under the Credit
Agreement, hereby consents to the First Amendment and hereby confirms and
agrees that (i) each Collateral Document to which such Loan Party is a party
and the Collateral described in each such Collateral Document does, and shall
continue to, secure the payment of all of the Secured Obligations and
Guaranteed Obligations, as the case may be, described in such Collateral
Document and (ii) each Loan Document to which such Loan Party is, and shall
continue to be, in full force and effect and is hereby ratified and confirmed
in all respects except that, on and after the effective date of the said letter
amendment, (A) each reference in the Credit Agreement to "this Agreement",
"hereunder", "hereof" or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to "the Credit
Agreement", "thereunder", "thereof" or words of like import referring to the
Credit Agreement, shall mean and be a reference to the Credit Agreement as
amended thereby, (B) each reference in the Mafco Security Agreement to "this
Agreement", "hereunder", "hereof" or words of like import referring to the
Mafco Security Agreement, and each reference in the other Loan Documents to
"the Mafco Security Agreement", "thereunder", "thereof" or words of like import
referring to the Mafco Security Agreement, shall mean and be a reference to the
Mafco Security Agreement as amended thereby, (C) each reference in the other
Loan Documents to "the Cigar Pledge Agreement", "thereunder", "thereof" or
words of like import referring to the Cigar Pledge Agreement, shall mean and be
a reference to the Cigar Pledge Agreement as amended and restated pursuant to
the First Amendment, (D) each reference in the other Loan Documents to "the
Flavors Pledge Agreement", "thereunder", "thereof" or words of like import
referring to the Flavors Pledge Agreement, shall mean and be a reference to the
Flavors Pledge Agreement as amended and restated pursuant to the First
Amendment, (E) each reference in the other Loan Documents to "the Cigar
Guaranty", "thereunder", "thereof" or words of like import referring to the
Cigar Guaranty, shall mean and be a reference to the Cigar Guaranty as amended
and restated pursuant to the First Amendment and (F) each reference in the
other Loan Documents to "the Flavors Guaranty", "thereunder", "thereof" or
words of like import referring to the Flavors Guaranty, shall mean and be a
reference to the Flavors Guaranty as amended and restated pursuant to the First
Amendment.
This Consent may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same consent.
ANDREWS GROUP INCORPORATED
By______________________
Name:
Title:
CONSOLIDATED CIGAR II
HOLDINGS INC.
By______________________
Name:
Title:
COLEMAN (PARENT) HOLDINGS INC.
By______________________
Name:
Title:
FLAVORS (PARENT) HOLDINGS INC.
By______________________
Name:
Title:
FOUR STAR HOLDINGS CORP.
By______________________
Name:
Title:
MACANDREWS & FORBES
HOLDINGS INC.
By______________________
Name:
Title:
MAFCO HOLDINGS INC.
By______________________
Name:
Title:
MARVEL V HOLDINGS INC.
By______________________
Name:
Title:
NEW COLEMAN HOLDINGS, INC.
By______________________
Name:
Title:
NWCG (PARENT) HOLDINGS
CORPORATION
By______________________
Name:
Title:
EXECUTION COPY
$350,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of June 29, 1995
Among
MARVEL IV HOLDINGS INC.,
as Borrower,
THE BANKS NAMED HEREIN,
as Banks,
and
CITIBANK, N.A.,
as Agent
APITAL PRINTING SYSTEMS]
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms . . . . . . . . . . 2
SECTION 1.02. Computation of Time Periods . . . . . . . 26
SECTION 1.03. Accounting Terms. . . . . . . . . . . . . 26
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. . . . . . . . . . . . . . . 27
SECTION 2.02. Making the Advances . . . . . . . . . . . 27
SECTION 2.03. Repayment . . . . . . . . . . . . . . . . 29
SECTION 2.04. Termination or Reduction of
the Commitments . . . . . . . . . . . . 29
SECTION 2.05. Prepayments . . . . . . . . . . . . . . . 30
SECTION 2.06. Interest. . . . . . . . . . . . . . . . . 35
SECTION 2.07. Interest Rate Determination . . . . . . . 36
SECTION 2.08. Fees. . . . . . . . . . . . . . . . . . . 37
SECTION 2.09. Increased Costs; Illegality . . . . . . . 37
SECTION 2.10. Conversion of Advances. . . . . . . . . . 39
SECTION 2.11. Payments and Computations . . . . . . . . 40
SECTION 2.12. Taxes . . . . . . . . . . . . . . . . . . 41
SECTION 2.13. Sharing of Payments, Etc. . . . . . . . . 44
SECTION 2.14. Removal of Lender . . . . . . . . . . . . 44
SECTION 2.15. Defaulting Lender . . . . . . . . . . . . 44
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Effective Date. . 47
SECTION 3.02. Conditions Precedent to Each Borrowing. . 54
SECTION 3.03. Determinations Under Section 3.01 . . . . 55
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Borrower . . . . . . . . . . . . . . . . 55
ARTICLE V
COVENANTS OF THE BORROWER
Page
SECTION 5.01. Affirmative Covenants . . . . . . . . . . . . . 60
(a)Compliance with Laws, Etc.. . . . . . . . . . . 60
(b)Compliance with Environmental Laws. . . . . . . 60
(c)Maintenance of Insurance. . . . . . . . . . . . 61
(d)Preservation of Corporate Existence, Etc. . . . 61
(e)Visitation Rights . . . . . . . . . . . . . . . 61
(f)Keeping of Books. . . . . . . . . . . . . . . . 61
(g)Maintenance of Properties, Etc. . . . . . . . . 62
(h)Termination of Financing Statements . . . . . . 62
(i)Performance of Related Documents. . . . . . . . 62
(j)Collateral Account. . . . . . . . . . . . . . . 62
(k)Reporting Requirements. . . . . . . . . . . . . 62
(l)Look-Forward Certificate. . . . . . . . . . . . 66
(m)Transactions with Affiliates. . . . . . . . . . 67
(n)Use of Proceeds . . . . . . . . . . . . . . . . 67
(o)Mafco Tax Group . . . . . . . . . . . . . . . . 67
(p)Marvel Tax Agreements . . . . . . . . . . . . . 67
SECTION 5.02. Negative Covenants . . . . . . . . . . . . . . 67
(a)Liens, Etc. . . . . . . . . . . . . . . . . . . 67
(b)Lease Obligations . . . . . . . . . . . . . . . 68
(c)Mergers, Etc. . . . . . . . . . . . . . . . . . 68
(d)Sales, Etc. of Assets . . . . . . . . . . . . . 68
(e)Dividends, Repurchases, Etc.. . . . . . . . . . 68
(f)Investments . . . . . . . . . . . . . . . . . . 69
(g)Change in Nature of Business. . . . . . . . . . 69
(h)Accounting Changes. . . . . . . . . . . . . . . 69
(i)Debt. . . . . . . . . . . . . . . . . . . . . . 69
(j)Charter Amendments. . . . . . . . . . . . . . . 70
(k)Prepayments, Etc. of Debt . . . . . . . . . . . 70
(l)Amendment, Etc. of Related Documents. . . . . . 70
(m)Negative Pledge . . . . . . . . . . . . . . . . 70
(n)Partnerships. . . . . . . . . . . . . . . . . . 70
(o)Capital Expenditures. . . . . . . . . . . . . . 70
(p)Issuance of Capital Stock . . . . . . . . . . . 71
(q)Payment Restrictions. . . . . . . . . . . . . . 71
ARTICLE VI
EVENTS OF DEFAULT
Page
SECTION 6.01. Events of Default . . . . . . . . . . . . 71
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. . . . . . . . . 76
SECTION 7.02. Agent's Reliance, Etc.. . . . . . . . . . 76
SECTION 7.03. Citibank and Affiliates . . . . . . . . . 77
SECTION 7.04. Lender Credit Decision. . . . . . . . . . 77
SECTION 7.05. Indemnification . . . . . . . . . . . . . 77
SECTION 7.06. Successor Agent . . . . . . . . . . . . . 78
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc.. . . . . . . . . . . . . 78
SECTION 8.02. Notices, Etc. . . . . . . . . . . . . . . 79
SECTION 8.03. No Waiver; Remedies . . . . . . . . . . . 79
SECTION 8.04. Costs; Expenses . . . . . . . . . . . . . 79
SECTION 8.05. Right of Set-off. . . . . . . . . . . . . 81
SECTION 8.06. Binding Effect. . . . . . . . . . . . . . 81
SECTION 8.07. Assignments and Participations. . . . . . 81
SECTION 8.08. Governing Law; Submission to Jurisdiction 84
SECTION 8.09. Execution in Counterparts . . . . . . . . 85
SECTION 8.10. WAIVER OF JURY TRIAL. . . . . . . . . . . 85
Schedule I-List of Existing Advances, Advances, Commitments and Lending Offices
Schedule II-List of Subsidiaries
Schedule III-List of Existing Debt
Schedule IV-List of Investments
Schedule V-List of Existing Liens
Schedule VI-Calculation of Defeased Debt Amount
Exhibit A-1-Form of Term Note
Exhibit A-2-Form of Revolving Credit Note
Exhibit B-Form of Assignment and Acceptance
Exhibit C-Form of Notice of Borrowing
Exhibit D-1-Form of Borrower Security Agreement
Exhibit D-2-Form of Mafco Security Agreement
Exhibit E-1-Form of Mafco Pledge Agreement
Exhibit E-2-Form of New World Pledge Agreement
Exhibit E-3-Form of Second Andrews Pledge Agreement
Exhibit F-1-Form of Mafco Guaranty
Exhibit F-2-Form of Coleman Guaranty
Exhibit F-3-Form of New World Guaranty
Exhibit G-Form of Confidentiality Letter
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT dated as of June __, 1995
among MARVEL IV HOLDINGS INC., a Delaware corporation (the "Borrower"), the
banks, financial institutions and other institutional lenders (the "Financial
Institutions") listed on the signature pages hereof and CITIBANK, N.A.
("Citibank"), as agent (the "Agent") for the Lenders (as hereinafter defined)
hereunder.
PRELIMINARY STATEMENTS
(1) In connection with the purchase of certain assets and
the assumption of certain liabilities (the "Transaction") of First Nationwide
Bank, a federal savings bank (the "Bank"), by First Madison Bank, F.S.B. (now
known as First Nationwide Bank), an indirect Subsidiary (as hereinafter
defined) of Mafco Holdings Inc., a Delaware corporation ("Mafco"), the Borrower
entered into a Credit Agreement dated as of July 20, 1994, as amended by the
First Amendment dated as of March 10, 1995 (said agreement, as so amended,
being the "Existing Credit Agreement"), with the financial institutions and
other institutional lenders (the "Existing Lenders") party thereto and
Citibank, as agent for the Existing Lenders.
(2) Pursuant to the Existing Credit Agreement, the Borrower
requested that the Existing Lenders make advances to it, in an aggregate
principal amount of up to $240,000,000, on the terms and conditions set forth
therein.
(3) The Borrower has requested that the Financial
Institutions hereunder enter into this Agreement to amend and restate the
Existing Credit Agreement and to lend to the Borrower from time to time an
aggregate principal amount of up to $350,000,000. The Lenders hereunder have
indicated their willingness to amend and restate the Existing Credit Agreement
and to provide such additional financing on the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties hereto hereby agree
that, subject to the satisfaction of the conditions set forth in Section 3.01,
the Existing Credit Agreement is amended and restated in its entirety to read
as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"A Company" means each Loan Party, FN Parent, FN Holdings,
Coleman Holdings Inc., Coleman Worldwide, Marvel III, Marvel Parent, Marvel
Holdings and NWCG Holdings.
"Advance" means a Revolving Credit Advance or a Term Advance.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 5% or more of the Voting
Stock of such Person or to direct or cause direction of the management and
policies of such Person, whether through the ownership of Voting Stock, by
contract or otherwise.
"Agent" has the meaning specified in the recital of parties to
this Agreement.
"Agent's Account" means the account of the Agent maintained by
the Agent with Citibank at 399 Park Avenue, New York, New York 10043, Account
No. [3685-2248].
"Amended and Restated Security Agreements" means the Borrower
Security Agreement and the Mafco Security Agreement.
"Andrews" means Andrews Group Incorporated, a Delaware
corporation.
"Andrews Pledge Agreement" means the Non-Recourse Guaranty and
Pledge Agreement dated July 27, 1994 made by Andrews to the Agent, as such
agreement may be amended or otherwise modified from time to time in accordance
with its terms.
"Applicable Lending Office" means, with respect to each Lender,
such Lender's Domestic Lending Office in the case of a Base Rate Advance and
such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance.
"Applicable Margin" means, at any time, (i) if the sum of the
aggregate amount of Advances outstanding at such time plus the aggregate unused
Commitments is greater than or equal to $301,000,000, 3.0% per annum for Base
Rate Advances and 5.5% per annum for Eurodollar Rate Advances, (ii) if the sum
of the aggregate amount of Advances outstanding at such time plus the aggregate
unused Commitments is less than $301,000,000 and greater than or equal to
$251,000,000, 2.75% per annum for Base Rate Advances and 5.0% per annum for
Eurodollar Rate Advances, (iii) if the sum of the aggregate amount of Advances
outstanding at such time plus the aggregate unused Commitments is less than
$251,000,000 and greater than or equal to $201,000,000, 2.5% per annum for Base
Rate Advances and 4.5% per annum for Eurodollar Rate Advances and (iv) if the
sum of the aggregate amount of Advances outstanding at such time plus the
aggregate unused Commitments is less than $201,000,000, 2.25% per annum for
Base Rate Advances and 4% per annum for Eurodollar Rate Advances.
"Appropriate Lender" means, at any time, with respect to any of
the Term or Revolving Credit Facilities, a Lender that has a Commitment with
respect to such Facility at such time.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee of such Lender, and accepted by the
Agent, in substantially the form of Exhibit B hereto.
"Bank" has the meaning specified in the Preliminary Statements.
"Bank Preferred Stock Document" means the Federal Stock Charter
of First Madison Bank, FSB, as supplemented by the First Supplementary Section
to Section 5 of the Charter of First Gibraltar Bank, FSB and the Second
Supplemental Section to Section 5 of the Charter of First Madison Bank, FSB.
"Base Rate" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be equal to
the highest of:
(a) the rate of interest announced publicly by Citibank in
New York, New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 1/4 of 1% or, if there
is no nearest 1/4 of 1%, to the next higher 1/4 of 1%) of (i) 1/2 of 1% per
annum, plus (ii) the rate obtained by dividing (A) the latest three-week moving
average of secondary market morning offering rates in the United States for
three-month certificates of deposit of major United States money market banks,
such three-week moving average (adjusted to the basis of a year of 360 days)
being determined weekly on each Monday (or, if such day is not a Business Day,
on the next succeeding Business Day) for the three-week period ending on the
previous Friday by Citibank on the basis of such rates reported by certificate
of deposit dealers to and published by the Federal Reserve Bank of New York or,
if such publication shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank from three New York certificate
of deposit dealers of recognized standing selected by Citibank, by (B) a
percentage equal to 100% minus the average of the daily percentages specified
during such three-week period by the Board of Governors of the Federal Reserve
System (or any successor thereto) for determining the maximum reserve
requirement (including, but not limited to, any emergency, supplemental or
other marginal reserve requirement) for Citibank with respect to liabilities
consisting of or including (among other liabilities) three-month U.S. dollar
non-personal time deposits in the United States, plus (iii) the average during
such three-week period of the annual assessment rates estimated by Citibank for
determining the then current annual assessment payable by Citibank to the
Federal Deposit Insurance Corporation (or any successor thereto) for insuring
U.S. dollar deposits of Citibank in the United States; and
(c) 1/2 of 1% per annum above the Federal Funds Rate.
"Base Rate Advance" means an Advance that bears interest as
provided in Section 2.06(a)(i).
"Borrower" has the meaning specified in the recital of parties
to this Agreement.
"Borrower Collateral Account" has the meaning specified in the
Borrower Security Agreement.
"Borrower Parent" means Marvel V Holdings Inc., a Delaware
corporation.
"Borrower Parent Guaranty" means the Guaranty dated July 27,
1994 made by the Borrower Parent in favor of the Lenders and the Agent, as such
guaranty may be amended or otherwise modified from time to time in accordance
with its terms.
"Borrower Parent Security Agreement" means the Security
Agreement dated July 27, 1994 made by the Borrower Parent and NationsBank of
Georgia, National Association, in its capacity as voting trustee, to the Agent,
as such agreement may be amended or otherwise modified from time to time in
accordance with its terms.
"Borrower Security Agreement" means the Amended and Restated
Borrower Security Agreement dated as of June __, 1995 made by the Borrower to
the Agent, as such agreement may be amended or otherwise modified from time to
time in accordance with its terms.
"Borrower's Account" means the account of the Borrower
maintained by the Borrower with Citibank, N.A., at its office at 399 Park
Avenue, New York, New York 10043, Account No. 40650489.
"Borrowing" means a Revolving Credit Borrowing or the Term
Borrowing.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings are
carried on in the London interbank market and banks are open for business in
London.
"Calculation Period" means, for any date in respect of any
common stock, the immediately preceding five Business Days during which such
common stock traded on the relevant national stock exchange or the Nasdaq
national market system.
"Capital Expenditures" means, for any period, the sum of (a)
all expenditures during such period for equipment, fixed assets, real property
or improvements, or for replacements or substitutions therefor or additions
thereto, that have a useful life of more than one year plus (b) the aggregate
principal amount of all Debt (including obligations under Capitalized Leases)
assumed or incurred in connection with any such expenditures.
"Capitalized Leases" has the meaning specified in clause (e) of
the definition of Debt.
"Cash Equivalents" means any of the following, to the extent
owned by the Borrower or its Subsidiaries free and clear of all Liens and
having a maturity not greater than 180 days from the date of issuance thereof:
(a) direct obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States, (b) insured
certificates of deposit of or time deposits with any commercial bank that is a
Lender or a member of the Federal Reserve System, issues (or the parent of
which issues) commercial paper rated as described in clause (c), is organized
under the laws of the United States or any State thereof and has combined
capital and surplus of at least $1,000,000,000, (c) commercial paper in an
aggregate amount of not more than $10,000,000 per issuer outstanding at any
time, issued by any corporation organized under the laws of any State of the
United States and rated at least "Prime-1" (or the then equivalent grade) by
Moody's Investors Services, Inc. or "A-1" (or the then equivalent grade) by
Standard & Poor's Ratings Group or (d) shares of money market mutual or similar
funds having assets in excess of $100,000,000 and which invest exclusively in
assets satisfying the requirements of clauses (a) through (c) of this
definition.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980.
"C&F Guarantor" means C&F (Parent) Holdings Inc., a Delaware
corporation.
"C&F Guaranty" means the Guaranty dated June 15, 1995 made by
C&F Guarantor in favor of the Lenders and the Agent, as such guaranty may be
amended or otherwise modified from time to time in accordance with its terms.
"C&F Pledge Agreement" means the Pledge Agreement dated June
15, 1995 made by C&F Guarantor to the Agent, as such agreement may be amended
or otherwise modified from time to time in accordance with its terms.
"Cigar" means Consolidated Cigar Corporation, a Delaware
corporation.
"Cigar Guarantor" means Consolidated Cigar II Holdings Inc., a
Delaware corporation.
"Cigar Guaranty" means the Amended and Restated Cigar Guaranty
dated as of June 15, 1995 made by Cigar Guarantor in favor of the Lenders and
the Agent, as such guaranty may be amended or otherwise modified from time to
time in accordance with its terms.
"Cigar Non-Operating Subsidiary" means C&F Guarantor.
"Cigar Pledge Agreement" means the Amended and Restated Cigar
Pledge Agreement dated as of June 15, 1995 made by Cigar Guarantor to the
Agent, as such agreement may be amended or otherwise modified from time to time
in accordance with its terms.
"Citibank" has the meaning specified in the recital of parties
to this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and the rulings issued
thereunder.
"Coleman" means The Coleman Company, Inc., a Delaware
corporation.
"Coleman Guarantor" means Coleman (Parent) Holdings Inc., a
Delaware corporation.
"Coleman Guaranty" means the Amended and Restated Coleman
Guaranty dated as of June __, 1995 made by Coleman Guarantor in favor of the
Lenders and the Agent, as such guaranty may be amended or otherwise modified
from time to time in accordance with its terms.
"Coleman Holdings" means Coleman Holdings Inc., a Delaware
corporation.
"Coleman Non-Operating Subsidiaries" means Coleman Holdings and
Coleman Worldwide.
"Coleman Pledge Agreement" means the Pledge Agreement dated
July 27, 1994 made by Coleman Guarantor to the Agent, as such agreement may be
amended or otherwise modified from time to time in accordance with its terms.
"Coleman Tax Agreements" means (i) the Tax Allocation Agreement
dated as of August 24, 1990, as amended through the date hereof, between Mafco
and New Coleman, (ii) the Tax Sharing Agreement dated as of February 26, 1992,
as amended through the date hereof, among Mafco, Coleman Finance Holdings Inc.,
Coleman and the Subsidiaries of Coleman party thereto, (iii) the Tax Sharing
Agreement dated as of February 26, 1992, as amended through the date hereof,
among Mafco, New Coleman, Coleman Finance Holdings Inc. and the Subsidiaries of
Coleman Finance Holdings Inc. party thereto, (iv) the Tax Equivalent Payment
Agreement dated as of March 4, 1992, as amended through the date hereof,
between Mafco and Coleman Finance Holdings Inc., (v) the Supplemental Tax
Sharing Agreement dated as of February 26, 1992, as amended through the date
hereof, between Coleman and M&F, (vi) the Tax Sharing Agreement dated as of May
27, 1993 among Mafco, Coleman Worldwide, Coleman and its Subsidiaries party
thereto, (vii) the Tax Sharing Agreement dated as of May 27, 1993 among Mafco,
Coleman Worldwide and the other Persons party thereto, (viii) the Tax Sharing
Agreement dated as of July 22, 1993 between Mafco and Coleman Holdings, and
(ix) the Tax Sharing Termination Agreement dated as of May 27, 1993 among
Mafco, New Coleman, Coleman and the other Persons party thereto.
"Coleman Worldwide" means Coleman Worldwide Corporation, a
Delaware corporation.
"Coleman Worldwide Indenture" has the meaning specified in
Schedule VI.
"Collateral" means all "Collateral" referred to in the
Collateral Documents and all other property that is or is intended to be
subject to any Lien in favor of the Agent and the Lenders.
"Collateral Accounts" means the Borrower Collateral Account,
the Mafco Collateral Account and the Second Mafco Collateral Account.
"Collateral Documents" means each Security Agreement and each
Pledge Agreement.
"Commitment" means a Revolving Credit Commitment or a Term
Commitment.
"Consolidated" for any Person refers to the consolidation of
the financial statements of such Person and its Subsidiaries in accordance with
GAAP.
"Consolidated Cigar Parent" means Consolidated Cigar (Parent)
Holdings Inc., a Delaware corporation.
"Conversion", "Convert" and "Converted" each refer to a
conversion of Advances of one Type into Advances of the other Type pursuant to
Section 2.10.
"Debt" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money; (b) all Obligations of such
Person for the deferred purchase price of property or services (other than
trade payables not overdue by more than 60 days incurred in the ordinary course
of such Person's business); (c) all Obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments; (d) all indebtedness
created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the event
of default are limited to repossession or sale of such property); (e) all
Obligations of such Person as lessee under leases that have been or should be,
in accordance with GAAP, recorded as capital leases ("Capitalized Leases"); (f)
all Obligations, contingent or otherwise, of such Person under acceptance,
letter of credit or similar facilities; (g) all Obligations of such Person to
purchase, redeem, retire, defease or otherwise acquire for value any capital
stock of such Person or any warrants, rights or options to acquire such capital
stock; (h) all Debt of others referred to in clauses (a) through (g) above
guaranteed directly or indirectly in any manner by such Person, or in effect
guaranteed directly or indirectly by such Person through an agreement (i) to
pay or purchase such Debt or to advance or supply funds for the payment or
purchase of such Debt, (ii) to purchase, sell or lease (as lessee or lessor)
property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Debt or to assure the holder of
such Debt against loss, (iii) to supply funds to or in any other manner invest
in the debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such services are
rendered) or (iv) otherwise to assure a creditor against loss; and (i) all Debt
referred to in clauses (a) through (h) above secured by (or for which the
holder of such Debt has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including, without limitation, accounts and
contract rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such Debt.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given or
time elapse or both.
"Defaulted Advance" means, with respect to any Lender at any
time, the amount of any Advance required to be made by such Lender to the
Borrower pursuant to Section 2.01 at or prior to such time which has not been
so made as of such time; provided, however, that any Advance made by the Agent
for the account of such Lender pursuant to Section 2.02(c) shall not be
considered a Defaulted Advance even if, at such time, such Lender shall not
have reimbursed the Agent therefor as provided in Section 2.02(c). In the
event that a portion of a Defaulted Advance shall be deemed made pursuant to
Section 2.15(a), the remaining portion of such Defaulted Advance shall be
considered a Defaulted Advance originally required to be made pursuant to
Section 2.01 on the same date as the Defaulted Advance so deemed made in part.
"Defaulted Amount" means, with respect to any Lender at any
time, any amount required to be paid by such Lender to the Agent or any other
Lender hereunder or under any other Loan Document at or prior to such time
which has not been so paid as of such time, including, without limitation, any
amount required to be paid by such Lender to (a) the Agent pursuant to
Section 2.02(c) to reimburse the Agent for the amount of any Advance made by
the Agent for the account of such Lender, (b) any other Lender pursuant to
Section 2.13 to purchase any participation in Advances owing to such other
Lender and (c) the Agent pursuant to Section 7.05 to reimburse the Agent for
such Lender's ratable share of any amount required to be paid by the Lenders to
the Agent as provided therein. In the event that a portion of a Defaulted
Amount shall be deemed paid pursuant to Section 2.15(b), the remaining portion
of such Defaulted Amount shall be considered a Defaulted Amount originally
required to be made hereunder or under any other Loan Document on the same date
as the Defaulted Amount so deemed paid in part.
"Defaulting Lender" means, at any time, any Lender that, at
such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall take
or be the subject of any action or proceeding of a type described in Section
6.01(e).
"Defeased Debt Amount" means for any date of determination for
any Designated Person listed on Schedule VI an amount calculated in the manner
set forth on Schedule VI for such Designated Person or such other amount as may
be agreed by the Agent and the Borrower.
"Deposit Certificate" has the meaning specified in Section
5.01(l).
"Designated Coleman Subsidiaries" means Coleman Holdings,
Coleman Worldwide and Coleman.
"Designated Marvel Subsidiaries" means Marvel III, Marvel
Parent, Marvel Holdings and Marvel.
"Designated New World Subsidiaries" means New World Guarantor,
NWCG Holdings and New World.
"Designated Operating Companies" means Coleman, New World,
Marvel and MCG.
"Designated Persons" means the Borrower, Coleman Guarantor, New
World Guarantor, C&F Guarantor, and FN Parent (in the case of FN Parent, for as
long as, and only as long as, the Bank is regulated as a federal savings bank).
"Dollars" and the sign "$" each means lawful money of the
United States.
"Domestic Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant to
which it became a Lender, as the case may be, or such other office of such
Lender as such Lender may from time to time specify to the Borrower and the
Agent.
"Effective Date" has the meaning specified in Section 3.01.
"Eligible Assignee" means (a) any commercial bank organized
under the laws of the United States, or any State thereof, and having total
assets in excess of $1,000,000,000; (b) any savings and loan association or
savings bank organized under the laws of the United States, or any State
thereof, and having a net worth determined in accordance with GAAP in excess of
$250,000,000; (c) any commercial bank organized under the laws of any other
country that is a member of the Organization for Economic Cooperation and
Development ("OECD") or has concluded special lending arrangements with the
International Monetary Fund Associated with its General Arrangements to Borrow,
or a political subdivision of any such country, and having total assets in
excess of $1,000,000,000, so long as such bank is acting through a branch or
agency located in the United States, in the Cayman Islands or in the country in
which it is organized or another country that is described in this clause (c);
(d) the central bank of any country that is a member of the OECD; (e) any
finance company, insurance company or other financial institution or fund
(whether a corporation, partnership, trust or other entity) that (i) is not
affiliated with the Borrower, (ii) is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its business
and (iii) has total assets in excess of $250,000,000; and (f) any other Person
(other than an Affiliate of the Borrower) approved by the Agent and the
Borrower, such approval not to be unreasonably withheld.
"Environmental Action" means any administrative, regulatory or
judicial action, suit, demand, demand letter, claim, notice of non-compliance
or violation, investigation, proceeding, consent order or consent agreement
based upon or arising out of any Environmental Law or any Environmental Permit,
including without limitation (a) any claim by any governmental or regulatory
authority for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any Environmental Law and (b) any claim by any
third party seeking damages, contribution, or injunctive relief arising from
alleged injury or threat of injury to health, safety or the environment.
"Environmental Law" means any federal, state or local law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award relating to the environment, health or safety including, without
limitation, CERCLA, the Resource Conservation and Recovery Act, the Hazardous
Materials Transportation Act, the Clean Water Act, the Toxic Substances Control
Act, the Clean Air Act, the Safe Drinking Water Act, the Atomic Energy Act, the
Federal Insecticide, Fungicide and Rodenticide Act and the Occupational Safety
and Health Act.
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required under any
Environmental Law.
"Equity Contribution Agreement" means the Equity Contribution
Agreement dated as of June 27, 1994 between the Borrower and the Borrower
Parent, as such agreement may be amended or otherwise modified from time to
time in accordance with its terms.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" of any Person means any other Person that for
purposes of Title IV of ERISA is a member of such Person's controlled group, or
under common control with such Person, within the meaning of Section 414 of the
Code.
"ERISA Event" with respect to any Person means (a) the
occurrence of a reportable event, within the meaning of Section 4043 of ERISA,
with respect to any Plan of such Person or any of its ERISA Affiliates unless
the 30-day notice requirement with respect to such event has been waived by the
PBGC; (b) the provision by the administrator of any Plan of such Person or any
of its ERISA Affiliates of a notice of intent to terminate such Plan, pursuant
to Section 4041(a)(2) of ERISA (including any such notice with respect to a
plan amendment referred to in Section 4041(e) of ERISA); (c) the cessation of
operations at a facility of such Person or any of its ERISA Affiliates in the
circumstances described in Section 4062(e) of ERISA; (d) the withdrawal by such
Person or any of its ERISA Affiliates from a Multiple Employer Plan during a
plan year for which it was a substantial employer, as defined in Section
4001(a)(2) of ERISA; (e) the failure by such Person or any of its ERISA
Affiliates to make a payment to a Plan described in Section 302(f)(1) of ERISA;
(f) the adoption of an amendment to a Plan of such Person or any of its ERISA
Affiliates requiring the provision of security to such Plan, pursuant to
Section 307 of ERISA; or (g) the institution by the PBGC of proceedings to
terminate a Plan of such Person or any of its ERISA Affiliates, pursuant to
Section 4042 of ERISA, or the occurrence of any event or condition described in
Section 4042 of ERISA that would constitute grounds for the termination of, or
the appointment of a trustee to administer, such Plan; provided, however, that
an event described in clause (a), (c) or (d) of this definition, or in clause
(b) of this definition solely with respect to a standard termination under
Section 4041(b) of ERISA, shall be an ERISA Event only if such event is
reasonably likely to result in a material liability of such Person or any of
its ERISA Affiliates.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant to
which it became a Lender (or, if no such office is specified, its Domestic
Lending Office), or such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing, an interest rate
per annum equal to the rate per annum obtained by dividing (a) the average
(rounded upward to the nearest whole multiple of 1/100 of 1% per annum, if such
average is not such a multiple) of the rate per annum at which deposits in U.S.
dollars are offered by the principal office of Citibank in London, England to
prime banks in the London interbank market at 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period for a period equal
to such Interest Period by (b) a percentage equal to 100% minus the Eurodollar
Rate Reserve Percentage for such Interest Period. The Eurodollar Rate for each
Interest Period shall be determined by the Agent on the basis of applicable
rates furnished to and received by the Agent from Citibank two Business Days
before the first day of such Interest Period, subject, however, to the
provisions of Section 2.07.
"Eurodollar Rate Advance" means an Advance that bears interest
as provided in Section 2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" of any Lender for any
Interest Period for any Advance means the reserve percentage applicable during
such Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or
other marginal reserve requirement) for such Lender with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities having a term
equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Agreement" means the Exchange Agreement dated as of
October 3, 1994 among FN Parent, FN Holdings and Gerald J. Ford.
"Existing Advance" has the meaning set forth in Section
2.01(a).
"Existing Credit Agreement" has the meaning specified in the
Preliminary Statements.
"Existing Lenders" has the meaning specified in the Preliminary
Statements.
"Facility" means the Revolving Credit Facility or the Term
Facility.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum 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 received by the Agent from three Federal
funds brokers of recognized standing selected by it.
"Financial Institutions" has the meaning specified in the
recital of parties to this Agreement.
"First Amendment" means the First Amendment dated as of March
10, 1995 to the Existing Credit Agreement.
"First Nationwide Companies" means First Gibraltar (Parent)
Holdings Inc., a Delaware corporation, First Gibraltar Holdings Inc., a
Delaware corporation, FN Parent, FN Holdings and the Bank.
"Flavors Guarantor" means Flavors (Parent) Holdings Inc., a
Delaware corporation.
"Flavors Guaranty" means the Amended and Restated Flavors
Guaranty dated as of June 15, 1995 made by Flavors Guarantor in favor of the
Lenders and the Agent, as such guaranty may be amended or otherwise modified
from time to time in accordance with its terms.
"Flavors Non-Operating Subsidiary" means C&F Guarantor.
"Flavors Pledge Agreement" means the Amended and Restated
Flavors Pledge Agreement dated as of June 15, 1995 made by Flavors Guarantor to
the Agent, as such agreement may be amended or otherwise modified from time to
time in accordance with its terms.
"FN Documents" means the FN Holdings Debt Documents, the
Exchange Agreement and the Stockholders Agreement.
"FN Holdings" means First Nationwide Holdings, Inc., a Delaware
corporation.
"FN Holdings Debt" means the 12-1/4% Senior Notes due 2001 in
an aggregate principal amount equal to $200,000,000.
"FN Holdings Debt Document" means the Indenture dated as of
July 15, 1994 made by FN Holdings in favor of The First National Bank of
Boston, as trustee, in connection with the FN Holdings Debt.
"FN Parent" means First Nationwide (Parent) Holdings Inc., a
Delaware corporation.
"FN Parent Loan Agreement" means the Loan Agreement dated as of
September 30, 1994 between the Borrower Parent and FN Parent, as amended from
time to time in accordance with its terms.
"FN Parties" means the Bank, FN Holdings and FN Parent.
"FN Party Charter Documents" means the certificate of
incorporation of FN Parent, the certificate of incorporation of FN Holdings and
the Bank Preferred Stock Document.
"FN Tax Agreement" means the Tax Sharing Agreement dated as of
January 1, 1994 among Mafco, FN Holdings, the Bank and certain Subsidiaries of
FN Holdings and the Bank.
"Four Star" means Four Star Holdings Corp., a Delaware
corporation.
"Four Star Pledge Agreement" means the Non-Recourse Guaranty
and Pledge Agreement dated July 27, 1994 made by Four Star and NationsBank of
Georgia, National Association, in its capacity as voting trustee, to the Agent,
as such agreement may be amended or otherwise modified from time to time in
accordance with its terms.
"Fully Satisfied" shall mean, with respect to the Payment
Obligations as of any date, that, on or before such date, (a) the principal of
and interest accrued to such date on all outstanding Advances shall have been
paid in full in cash and (b) all fees, expenses and other amounts then due and
payable which constitute Payment Obligations shall have been paid in cash;
provided, however, that on such date none of the Agent and the Lenders shall
have made any claims in respect of Payment Obligations against the Borrower or
any other Loan Party under any provision of any of the Loan Documents that has
not been cash collateralized by an amount sufficient in the reasonable judgment
of the Agent, the Required Lenders and any such Lender (if such Lender is not
one of the Lenders constituting the Required Lenders) to secure such claim.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the date of, and used in, the
preparation of the audited consolidated financial statements referred to in
Section 4.01(f), except that with respect to (x) the preparation of any
financial statement required to be furnished pursuant to clause (i), (ii) or
(iii) of Section 5.01(k) and (y) changes to financial statement presentation
and accounting policies contemplated by Section 5.02(h), "GAAP" shall mean such
principles as in effect from time to time in the United States of America.
"Guarantor" means each of Mafco, Borrower Parent, Coleman
Guarantor, New World Guarantor, Flavors Guarantor, Cigar Guarantor and C&F
Guarantor.
"Guaranty" means each of the Borrower Parent Guaranty, the C&F
Guaranty, the Cigar Guaranty, the Coleman Guaranty, the Flavors Guaranty, the
Mafco Guaranty and the New World Guaranty.
"Hazardous Materials" means (a) petroleum or petroleum
products, natural or synthetic gas, asbestos in any form that is or could
become friable, urea formaldehyde foam insulation and radon gas, (b) any
substances defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous wastes",
"restricted hazardous wastes", "toxic substances", "toxic pollutants",
"contaminants" or "pollutants", or words of similar import, under any
Environmental Law and (c) any other substance exposure to which is regulated
under any Environmental Law.
"Indemnified Party" has the meaning specified in Section
8.04(c).
"Initial Date" means, for purposes of Section 2.12, in the case
of the Agent and each Financial Institution, the date of its execution and
delivery of this Agreement and, in the case of each Lender other than a
Financial Institution, the date of the Assignment and Acceptance pursuant to
which it becomes a Lender.
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the date of
such Eurodollar Rate Advance or the date of the Conversion of any Base Rate
Advance into such Eurodollar Rate Advance, and ending on the last day of the
period selected by the Borrower pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the period
selected by the Borrower pursuant to the provisions below. The duration of
each such Interest Period shall be one, two, three or six months, as the
Borrower may, upon notice received by the Agent not later than 11:00 A.M. (New
York City time) on the third Business Day prior to the first day of such
Interest Period, select; provided, however, that
(i) the Borrower may not select any Interest Period which
ends after any principal repayment installment date unless, after giving effect
to such selection, the aggregate principal amount of Base Rate Advances and of
Eurodollar Rate Advances having Interest Periods that end on or prior to such
principal repayment installment date shall be at least equal to the aggregate
principal amount of such Advances due and payable on or prior to such dates;
(ii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding Business Day,
provided that, if such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day; and
(iii) whenever the first day of any Interest Period occurs on
a day in a calendar month for which there is no numerically corresponding day
in the calendar month that succeeds such initial calendar month by the number
of months equal to the number of months in such Interest Period, such Interest
Period shall end on the last Business Day of such succeeding calendar month.
"Investment" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any capital stock, warrants,
rights, options, debt obligations or other securities of such Person, any
capital contribution to such Person or any other investment in such Person,
including, without limitation, any arrangement pursuant to which the investor
incurs Debt of the types referred to in clauses (h) and (i) of the definition
of "Debt" in respect of such Person.
"Lenders" means the Financial Institutions listed on the
signature pages hereof and each Eligible Assignee that shall become a party
hereto pursuant to Section 8.07 and each assignee that shall become a party
hereto pursuant to Section 2.14.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on title
to real property.
"Loan Documents" means this Agreement, the Notes, each
Guaranty, each Collateral Document, the Equity Contribution Agreement and the
FN Parent Loan Agreement.
"Loan Party" means each of the Borrower, each Guarantor, M&F,
Andrews, Four Star and New Coleman.
"Look-Forward Certificate" has the meaning specified in Section
5.01(l).
"Mafco" has the meaning specified in the Preliminary
Statements.
"Mafco Collateral Account" has the meaning specified in the
Mafco Security Agreement.
"Mafco Guaranty" means the Amended and Restated Mafco Guaranty
dated as of June __, 1995 made by Mafco in favor of the Lenders and the Agent,
as such guaranty may be amended or otherwise modified from time to time in
accordance with its terms.
"Mafco Pledge Agreement" means the Amended and Restated Pledge
Agreement dated as of June __, 1995 made by Mafco and NationsBank of Georgia,
National Association, in its capacity as voting trustee, to the Agent, as such
agreement may be amended or otherwise modified from time to time in accordance
with its terms.
"Mafco Security Agreement" means the Amended and Restated Mafco
Security Agreement dated as of June __, 1995 made by Mafco to the Agent, as
such agreement may be amended or otherwise modified from time to time in
accordance with its terms.
"Mandatory Distribution Period" means the period from the
Effective Date until the date on which the aggregate principal amount of the
prepayments made pursuant to Sections 2.05(b)(iv) and (b)(v) shall equal
$110,000,000.
"Margin Stock" has the meaning specified in Regulation U of the
Board of Governors of the Federal Reserve System and any successor regulations
thereto, as in effect from time to time.
"Marvel" means Marvel Entertainment Group, Inc., a Delaware
corporation.
"Marvel Holdings" means Marvel Holdings Inc., a Delaware
corporation.
"Marvel Holdings Debt" means the Debt described on Schedule III
under the caption "Marvel Holdings Debt", including the accretion of such Debt
pursuant to the Marvel Holdings Indenture.
"Marvel Holdings Indenture" means the Indenture, dated as of
April 15, 1993, made by Marvel Holdings in favor of NationsBank of Georgia,
National Association as Trustee pursuant to which Marvel Holdings issued its
Senior Secured Discount Notes due 1998 and Series B Senior Secured Discount
Notes due 1998.
"Marvel III" means Marvel III Holdings Inc., a Delaware
corporation.
"Marvel III Debt" means the Debt described on Schedule III
under the caption "Marvel III Debt", as such Debt may be reduced through
scheduled or required amortization.
"Marvel III Indenture" means the Indenture, dated as of
February 15, 1994, made by Marvel III in favor of NationsBank of Georgia,
National Association as Trustee pursuant to which Marvel III issued its 9-1/8%
Senior Secured Notes due 1998 and its 9-1/8% Series B Senior Secured Notes due
1998.
"Marvel Parent" means Marvel (Parent) Holdings Inc., a Delaware
corporation.
"Marvel Parent Debt" means the Debt, described on Schedule III
under the caption "Marvel Parent Debt", including the accretion of such Debt
pursuant to the Marvel Parent Indenture.
"Marvel Parent Indenture" means the Indenture, dated as of
October 1, 1993, made by Marvel Parent in favor of NationsBank of Georgia,
National Association as Trustee pursuant to which Marvel Parent issued its
Senior Secured Discount Notes due 1998.
"Marvel Tax Agreements" means (i) the Tax Sharing Agreement
dated as of April 22, 1993 between Mafco and Marvel Holdings, (ii) the Tax
Sharing Agreement dated as of October 20, 1993 between Mafco and Marvel Parent
and (iii) the Amended and Restated Tax Sharing Agreement dated as of January 1,
1994 among Mafco, Marvel III, Marvel and the Subsidiaries of Marvel party
thereto.
"Material Adverse Change" means, with respect to any Person, a
material adverse change in the condition (financial or otherwise), operations,
assets, business or prospects of such Person and its Subsidiaries, taken as a
whole.
"Material Adverse Effect" means, with respect to any Person, a
material adverse effect upon (a) the condition (financial or otherwise),
operations, assets, business or prospects of such Person and its Subsidiaries,
taken as a whole, or (b) the ability of a Loan Party to perform its obligations
under any Loan Document, or (c) the rights and remedies of the Agent or any
Lender under any Loan Document.
"MCG" means Mafco Consolidated Group Inc., a Delaware
corporation.
"MCG Tax Agreement" means the Tax Sharing Agreement dated as of
June 15, 1995 among Mafco, MCG and Subsidiaries of MCG party thereto.
"M&F" means MacAndrews & Forbes Holdings Inc., a Delaware
corporation.
"M&F Pledge Agreement" means the Non-Recourse Guaranty and
Pledge Agreement dated July 27, 1994 made by M&F to the Agent, as such
agreement may be amended or otherwise modified from time to time in accordance
with its terms.
"Multiemployer Plan" of any Person means a multiemployer plan,
as defined in Section 4001(a)(3) of ERISA, which is subject to Title IV of
ERISA, and to which such Person or any of its ERISA Affiliates is making or
accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" of any Person means a single employer
plan, as defined in Section 4001(a)(15) of ERISA, which is subject to Title IV
of ERISA, and (a) that is maintained for employees of such Person or any of its
ERISA Affiliates and at least one Person other than such Person and its ERISA
Affiliates or (b) that was so maintained and in respect of which such Person or
any of its ERISA Affiliates could have liability under Section 4064 or 4069 of
ERISA in the event such plan has been or were to be terminated.
"Net Cash Proceeds" means, with respect to any sale, lease,
transfer or other disposition of any asset or the sale or issuance by any
Person of any Debt or capital stock, any securities convertible into or
exchangeable for capital stock or any warrants, rights or options to acquire
capital stock, the aggregate amount of cash received from time to time by or on
behalf of such Person in connection with such transaction after deducting
therefrom only (a) reasonable and customary brokerage commissions, underwriting
fees and discounts, legal fees and expenses, finder's fees, accountants' fees
and expenses and other similar fees, expenses and commissions, (b) the amount
of taxes payable or estimated in good faith to be payable within 12 months
following the date of the consummation of such transaction in connection with
or as a result of such transaction and (c) the amount of any Debt that, by the
terms of such Debt, is required to be repaid upon such disposition, in each
case to the extent, but only to the extent, that the amounts so deducted are
payable to a Person that is not an Affiliate (other than such amounts that are
payable by the Borrower and its Subsidiaries to an Affiliate pursuant to a
Related Document) and are properly attributable to such transaction or to the
asset that is the subject thereof.
"Net Equity Value" means for any day of determination for any
Designated Person:
(i) with respect to the Borrower, an amount equal to the
excess of (A) the product of the number of shares of common stock of Marvel
owned directly or indirectly by the Borrower times the average closing price
during the Calculation Period relating to such day of determination of such
common stock on the New York Stock Exchange over (B) the Defeased Debt Amount
of the Borrower;
(ii) with respect to Coleman Guarantor, an amount equal to
the excess of (A) the product of the number of shares of common stock of
Coleman owned directly or indirectly by Coleman Guarantor times the average
closing price during the Calculation Period relating to such day of
determination of such common stock on the New York Stock Exchange over (B) the
Defeased Debt Amount of Coleman Guarantor;
(iii) with respect to New World Guarantor, an amount equal to
the excess of (A) the product of the number of shares of Class B common stock
of New World owned directly or indirectly by New World Guarantor times the
average closing price of the Class A common stock during the Calculation Period
relating to such day of determination for such Class A Common Stock on either
the New York Stock Exchange or the Nasdaq National Market System over (B) the
Defeased Debt Amount of New World Guarantor;
(iv) with respect to C&F Guarantor, an amount equal to the
product of the number of shares of common stock of MCG owned directly or
indirectly by C&F Guarantor times the average closing price during the
Calculation Period relating to such day of determination of such common stock
on the New York Stock Exchange; and
(v) with respect to FN Parent, an amount equal to
$288,000,000, less the aggregate amount of net losses of the Bank since
September 30, 1994, less the aggregate amount of distributions of capital of
the Bank existing on September 30, 1994, less any reductions in the equity
accounts of the Bank determined in accordance with generally accepted
accounting principles in effect from time to time.
"Net Residual Value" means for any day of determination an
amount equal to the aggregate Net Equity Value of the Designated Persons on
such day.
"New Coleman" means New Coleman Holdings Inc., a Kansas
corporation.
"New Coleman Pledge Agreement" means the Non-Recourse Guaranty
and Pledge Agreement dated July 27, 1994 made by New Coleman and NationsBank of
Georgia, National Association, in its capacity as voting trustee, to the Agent,
as such agreement may be amended or otherwise modified from time to time in
accordance with its terms.
"New World" means New World Communications Group Incorporated,
a Delaware corporation.
"New World Guarantor" means NWCG (Parent) Holdings Corporation,
a Delaware corporation.
"New World Guaranty" means the Amended and Restated New World
Guaranty dated as of June __, 1995 made by New World Guarantor in favor of the
Lenders and the Agent, as such guaranty may be amended or otherwise modified
from time to time in accordance with its terms.
"New World Pledge Agreement" means the Amended and Restated
Pledge Agreement dated as of June __, 1995 made by New World Guarantor to the
Agent, as such agreement may be amended or otherwise modified from time to time
in accordance with its terms.
"Non-Operating Subsidiary" means each of Marvel III, Marvel
Parent and Marvel Holdings.
"Note" means a Revolving Credit Note or a Term Note.
"Notice of Borrowing" has the meaning specified in Section
2.02(a).
"NWCG Holdings" means NWCG Holdings Corporation, a Delaware
corporation.
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 6.01(e). Without limiting the generality of the foregoing, the
Obligations of the Loan Parties under the Loan Documents include (a) the
obligation to pay principal, interest, charges, expenses, fees, attorneys' fees
and disbursements, indemnities and other amounts payable by any Loan Party
under any Loan Document and (b) the obligation to reimburse any amount in
respect of any of the foregoing that any Lender, in its sole discretion, may
elect to pay or advance on behalf of such Loan Party.
"Other Taxes" has the meaning specified in Section 2.12(b).
"Payment Obligations" shall mean all principal, interest, fees,
charges, expenses, attorneys' fees and expenses, indemnities and any other
amounts payable by the Loan Parties under the Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor agency or entity performing substantially the same functions.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer
Plan.
"Pledge Agreements" means the Andrews Pledge Agreement, the C&F
Pledge Agreement, the Cigar Pledge Agreement, the Coleman Pledge Agreement, the
Flavors Pledge Agreement, the Four Star Pledge Agreement, the Mafco Pledge
Agreement, the M&F Pledge Agreement, the New Coleman Pledge Agreement, the New
World Pledge Agreement and the Second Andrews Pledge Agreement.
"Register" has the meaning specified in Section 8.07(c).
"Related Documents" means the Marvel Tax Agreements, the
Coleman Tax Agreements, the FN Tax Agreement and the MCG Tax Agreement.
"Required Lenders" means at any time Lenders owed or holding at
least a majority in interest of the sum of (a) the aggregate principal amount
of the Advances outstanding at such time and (b) the aggregate unused
Commitments (provided that, for purposes hereof, neither the Borrower, nor any
of its Affiliates, if a Lender, shall be included in (a) the Lenders holding
such amount of the Advances or having such amount of the Commitments or (b)
determining the aggregate unpaid principal amount of the Advances or the total
Commitments); provided, however, that if any Lender shall be a Defaulting
Lender at such time, there shall be excluded from the determination of Required
Lenders at such time (i) the aggregate principal amount of the Advances made by
such Lender and outstanding at such time and (ii) the aggregate Commitments of
such Lender at such time.
"Revolving Credit Advance" has the meaning specified in Section
2.01(c).
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by the Revolving
Credit Lenders.
"Revolving Credit Commitment" means, with respect to any
Revolving Credit Lender at any time, the amount set forth opposite such
Lender's name on Schedule I hereto under the caption "Revolving Credit
Commitment" or, if such Lender has entered into one or more Assignments and
Acceptances, set forth for such Lender in the Register maintained by the Agent
pursuant to Section 8.07(c) as such Lender's "Revolving Credit Commitment", as
such amount may be reduced at or prior to such time pursuant to Section 2.04.
"Revolving Credit Facility" means, at any time, the aggregate
amount of the Revolving Credit Lenders' Revolving Credit Commitments at such
time.
"Revolving Credit Lender" means any Lender that has a Revolving
Credit Commitment.
"Revolving Credit Note" means a promissory note of the Borrower
payable to the order of any Revolving Credit Lender, in substantially the form
of Exhibit A-2 hereto, evidencing the aggregate indebtedness of the Borrower to
such Lender resulting from the Revolving Credit Advances made by such Lender.
"Second Andrews Pledge Agreement" means the Amended and
Restated Non-Recourse Guaranty and Pledge Agreement dated as of June __, 1995
made by Andrews and NationsBank of Georgia, National Association, in its
capacity as voting trustee, to the Agent, as such agreement may be amended or
otherwise modified from time to time in accordance with its terms.
"Second Mafco Collateral Account" has the meaning specified in
the Mafco Security Agreement.
"Security Agreements" means each Amended and Restated Security
Agreement and the Borrower Parent Security Agreement.
"Single Employer Plan" of any Person means a single employer
plan, as defined in Section 4001(a)(15) of ERISA, which is subject to Title IV
of ERISA, and (a) that is maintained for employees of such Person or any of its
ERISA Affiliates and no Person other than such Person and its ERISA Affiliates
or (b) in respect of which such Person or any of its ERISA Affiliates could
have liability under Section 4069 of ERISA in the event such plan has been or
were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair
salable value of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts as
they become absolute and matured, (c) such Person does not intend to, and does
not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature and (d) such Person is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which such Person's property would constitute an
unreasonably small capital. The amount of contingent liabilities at any time
shall be computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
"Stockholders Agreement" means the Stockholders Agreement dated
as of October 3, 1994, among FN Parent, FN Holdings and Gerald J. Ford.
"Subsidiary" of any Person means any corporation, partnership,
joint venture, trust or estate of which (or in which) more than 50% of (a) the
Voting Stock of such corporation, (b) the interest in the capital or profits of
such partnership or joint venture or (c) the beneficial interest in such trust
or estate is at the time directly or indirectly owned or controlled by such
Person, by such Person and one or more of its other Subsidiaries or by one or
more of such Person's other Subsidiaries; provided, however, that for all
purposes of the Loan Documents, Toy Biz, Inc. shall not be a Subsidiary of any
of the Loan Parties.
"Supermajority Lenders" means at any time Lenders owed or
holding at least 67% of the sum of (a) the aggregate principal amount of the
Advances outstanding at such time and (b) the aggregate unused Commitments
(provided that, for purposes hereof, neither the Borrower nor any of its
Affiliates, if a Lender, shall be included in (a) the Lenders holding such
amount of the Advances or having such amount of the Commitments or (b)
determining the aggregate unpaid principal amount of the Advances or the total
Commitments); provided, however, that if any Lender shall be a Defaulting
Lender at such time, there shall be excluded from the determination of
Supermajority Lenders at such time (i) the aggregate principal amount of the
Advances made by such Lender and outstanding at such time and (ii) the
aggregate Commitments of such Lender at such time.
"Tax Certificate" has the meaning specified in Section
5.01(k)(xiv).
"Taxes" has the meaning specified in Section 2.12(a).
"Term Advance" has the meaning specified in Section 2.01(b).
"Term Borrowing" means a borrowing consisting of simultaneous
Term Advances of the same Type made by the Lenders.
"Term Commitment" means, with respect to any Term Lender at any
time, the amount set forth opposite such Lender's name on Schedule I hereto
under the caption "Term Commitment" or, if such Lender has entered into one or
more Assignments and Acceptances, set forth for such Lender in the Register
maintained by the Agent pursuant to Section 8.07(c) as such Lender's "Term
Commitment", as such amount may be reduced at or prior to such time pursuant to
Section 2.04.
"Term Facility" means, at any time, the aggregate amount of the
Term Lenders' Term Commitments at such time.
"Term Lender" means any Lender that has a Term Commitment.
"Term Note" means a promissory note of the Borrower payable to
the order of any Term Lender, in substantially the form of Exhibit A-1 hereto,
evidencing the indebtedness of the Borrower to such Lender resulting from the
Term Advance made by such Lender.
"Termination Date" means the earlier of (a) September 1, 1997
or (b) the date of termination in whole of the Revolving Credit Commitments and
Term Commitments pursuant to Section 2.04 or 6.01.
"Transaction" has the meaning specified in the Preliminary
Statements.
"Treasury Regulations" means the temporary and final
regulations promulgated under the Internal Revenue Code of 1986, as amended
from time to time.
"Type" refers to the distinction between Advances bearing
interest at the Base Rate and Advances bearing interest at the Eurodollar Rate.
"Unfunded Pension Liabilities" with respect to any Plan means
the excess, if any, of its accumulated benefit obligation ("ABO"), as
determined in accordance with Statement of Financial Accounting Standards No.
87 or any successor thereto ("FAS 87") over the fair market value of its assets
(as of such date) (provided that in determining the ABO for this purpose, the
interest, mortality and other relevant actuarial assumptions used to fund such
Plan as of its most recent actuarial valuation) shall be used instead of the
interest, mortality and other relevant actuarial assumptions that would
otherwise be prescribed by FAS 87.
"Unused Revolving Credit Commitment" means, with respect to any
Lender at any time, (a) such Lender's Revolving Credit Commitment at such time,
minus (b) the aggregate principal amount of all Revolving Credit Advances made
by such Lender and outstanding at such time.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even though the right
so to vote has been suspended by the happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1)
of ERISA.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Part IV of ERISA.
SECTION 1.02. 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".
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. (a) Purchase of Assignments.
Effective as of the Effective Date, the Existing Lenders will sell and assign
an interest in and to all of the Existing Lenders' respective rights and
obligations under the advances set forth opposite their names under the caption
"Existing Advances" on Schedule I (the "Existing Advances") to the Financial
Institutions and the Financial Institutions will purchase and assume the
Existing Advances set forth opposite their names under the caption "Advances"
on Schedule I.
(b) The Term Advances. Each Term Lender severally agrees,
on the terms and conditions hereinafter set forth, to make an advance (a "Term
Advance") on the Effective Date in an aggregate amount not to exceed the
excess, if any, of such Lender's Term Commitment on the Effective Date over the
aggregate principal amount of the Existing Advances purchased and assumed by
such Lender on the Effective Date. The Existing Advances pursuant to Section
2.01(a) shall be deemed to be Term Advances for all purposes hereunder.
Amounts borrowed under this Section 2.01(b) and repaid or prepaid may not be
reborrowed.
(c) The Revolving Credit Advances. Each Revolving Credit
Lender severally agrees, on the terms and conditions hereinafter set forth, to
make advances (each a "Revolving Credit Advance") to the Borrower from time to
time on any Business Day during the period from the date hereof until the
Termination Date in an aggregate amount not to exceed at any time outstanding
such Lender's Revolving Credit Commitment on such Business Day. Each Revolving
Credit Borrowing shall be in an aggregate amount not less than $5,000,000 or an
integral multiple of $1,000,000 in excess thereof and shall consist of
Revolving Credit Advances made on the same day by the Revolving Credit Lenders
ratably according to their Revolving Credit Commitments. Within the limits of
each Revolving Credit Lender's Unused Revolving Credit Commitment in effect
from time to time, the Borrower may borrow, prepay pursuant to Section 2.05(a)
and reborrow under this Section 2.01(c).
SECTION 2.02. Making the Advances. (a) Except as otherwise
provided in Section 2.15, each Borrowing shall be made on notice given not
later than 11:00 A.M. (New York City time) on the first Business Day prior to
the date of a proposed Borrowing consisting of Base Rate Advances or the third
Business Day prior to the date of a proposed Borrowing consisting of Eurodollar
Rate Advances, by the Borrower to the Agent, which shall give to each
Appropriate Lender prompt notice thereof by telecopier, telex or cable. Each
such notice of a Borrowing (a "Notice of Borrowing") shall be by telecopier,
telex or cable, and, with respect to a Notice of Borrowing by telex or cable,
confirmed immediately thereafter in writing, in substantially the form of
Exhibit C hereto, specifying therein the requested (i) date of such Borrowing,
(ii) Facility under which such Borrowing is to be made, (iii) Type of Advances
comprising such Borrowing, (iv) aggregate amount of such Borrowing and (v)
Interest Period for each Eurodollar Rate Advance included in such Borrowing.
In the case of a proposed Borrowing comprised of Eurodollar Rate Advances, the
Administrative Agent shall promptly notify the Borrower and each Appropriate
Lender of the applicable interest rate under Section 2.06(a)(ii). Each
Appropriate Lender shall, before 12:00 noon (New York City time) on the date of
such Borrowing, make available for the account of its Applicable Lending Office
to the Agent at the Agent's Account, in same day funds, such Lender's ratable
portion of such Borrowing. After the Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the Agent
will make such funds available by crediting the Borrower's Account.
(b) Each Notice of Borrowing shall be irrevocable and
binding on the Borrower. The Borrower shall indemnify each Appropriate Lender
against any loss, cost or expense incurred by such Lender as a result of any
failure to fulfill on or before the date specified in such Notice of Borrowing
for such Borrowing the applicable conditions set forth in Article III,
including, without limitation, any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Advance to be made by such Lender as part of such Borrowing
when such Advance, as a result of such failure, is not made on such date.
(c) Unless the Agent shall have received notice from an
Appropriate Lender prior to the date of any Borrowing under a Facility under
which such Lender has a Commitment that such Lender will not make available to
the Agent such Lender's ratable portion of such Borrowing, the Agent may
assume, or at its option request confirmation from such Lender, that such
Lender has made such portion available to the Agent on the date of such
Borrowing in accordance with subsection (a) of this Section 2.02 and the Agent
may, in reliance upon such assumption or confirmation (as the case may be),
make available to the Borrower on such date a corresponding amount. If and to
the extent that such Lender shall not have so made such ratable portion
available to the Agent, such Lender and the Borrower severally agree to repay
to the Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Agent, at (i) in the
case of the Borrower, the interest rate applicable at such time under Section
2.06 to Advances comprising such Borrowing and (ii) in the case of such Lender,
the cost (expressed as a rate per annum) to the Agent of funding such Lender's
ratable portion; provided that, upon the request of such Lender, the Agent
shall provide such Lender with a certificate as to the calculation of such
amount. If such Lender shall repay to the Agent such corresponding amount,
such amount so repaid shall constitute such Lender's Advance as part of such
Borrowing for purposes of this Agreement.
(d) The failure of any Lender to make the Advance to be
made by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such
Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make the Advance to be made by such other Lender on the date of any
Borrowing.
(e) The Borrower may not request a Borrowing comprised of
Eurodollar Rate Advances or, pursuant to Section 2.10, Convert Base Rate
Advances into Eurodollar Rate Advances or select a new Interest Period for
existing Eurodollar Rate Advances if, after the making or Conversion of such
Advances or the selection of such Interest Period, the number of outstanding
Borrowings comprised of Eurodollar Rate Advances having different Interest
Periods (whether of different duration or commencing on different dates) would
exceed 6.
SECTION 2.03. Repayment. (a) Term Advances. The Borrower
shall repay to the Agent for the ratable account of the Term Lenders the
aggregate outstanding principal amount of the Term Advances on the following
dates in the amounts indicated:
<TABLE>
<CAPTION>
Date Amount
---- ------
<S> <C>
September 1, 1995 $ 10.0 million
December 1, 1995 $ 10.0 million
March 1, 1996 $ 10.0 million
June 1, 1996 $ 10.0 million
September 1, 1996 $ 10.0 million
December 1, 1996 $ 10.0 million
March 1, 1997 $ 10.0 million
June 1, 1997 $ 10.0 million
September 1, 1997 $ 145.0 million
</TABLE>
(b) Revolving Credit Advances. The Borrower shall repay to
the Agent for the ratable account of the Revolving Credit Lenders on the
Termination Date the aggregate principal amount of the Revolving Credit Advances
then outstanding.
SECTION 2.04. Termination or Reduction of the Commitments. (a)
Optional. The Borrower shall have the right, upon at least three Business Days'
prior notice to the Agent, to terminate in whole or reduce ratably in part the
unused portions of the Term Commitments and the Unused Revolving Credit
Commitments; provided that each partial reduction of a Facility (i) shall be in
an aggregate amount of $10,000,000 or an integral multiple of $1,000,000 in
excess thereof and (ii) shall be made ratably among the Appropriate Lenders in
accordance with their Commitments with respect to such Facility.
(b) Mandatory. The Revolving Credit Facility shall be
automatically and permanently reduced on each date on which such reduction is
required to be made pursuant to Section 2.05(b)(i), (ii), (iii), (iv), (v),
(vi), (vii) or (viii), provided that each such reduction of the Revolving Credit
Facility shall be made ratably among the Revolving Credit Lenders in accordance
with their Revolving Credit Commitments.
SECTION 2.05. Prepayments. (a) Optional. The Borrower may,
upon at least one Business Day's notice to the Agent, in the case of Base Rate
Advances, and three Business Days' notice to the Agent, in the case of
Eurodollar Rate Advances, stating the proposed date, the applicable Facility and
aggregate principal amount of the prepayment, and if such notice is given, the
Borrower shall, prepay the outstanding principal amounts of the Advances
comprising part of the same Borrowing in whole or ratably in part, together with
accrued interest to the date of such prepayment on the principal amount so
prepaid; provided, however, that, with respect to any prepayment made in
connection with the provisions of Section 6(o) of the Mafco Guaranty, no such
notice shall be required; provided further that (x) each partial prepayment
(other than a prepayment made in connection with the provisions of Section 6(o)
of the Mafco Guaranty) shall be in an aggregate principal amount not less than
$10,000,000 or an integral multiple of $1,000,000 in excess thereof (or, if the
aggregate principal amount of all Advances that constitute part of such
Borrowing is less, such aggregate principal amount) and (y) in the event any
such prepayment of Eurodollar Rate Advances is not made on the last day of an
Interest Period, the Borrower shall be obligated to reimburse the Lenders in
respect thereof pursuant to Section 8.04(b). Each such prepayment of any
Advances shall be applied to the installments thereof in inverse order of
maturity.
(b) Mandatory. (i) The Borrower shall, on the date of
deposit of each cash equity contribution in the Borrower Collateral Account as a
result of a loan made by FN Parent to the Borrower Parent pursuant to the terms
of the FN Parent Loan Agreement that relates solely to net income of the Bank
(excluding, to the extent included in net income, (A) any gains (net of taxes)
from the sale of deposits and property, plant and equipment related to such
deposits, and (B) any net income that is attributable to the recognition of the
deferred tax asset-net operating loss carry forwards of the Bank), apply:
(A) up to 75% of the amount of such cash equity contribution
to the making of a prepayment in an amount equal to the amount of the next
scheduled principal payment in respect of the Term Facility pursuant to Section
2.03 (plus accrued interest thereon), and the portion of such prepayment to be
applied to principal in accordance with Section 2.05(b)(x) below shall be
applied to such scheduled principal payment in respect of the Term Facility;
provided, however, that, if the next scheduled principal payment in respect of
the Term Facility has been prepaid in full prior to the date of such cash equity
contribution (other than as a result of a prepayment during the calendar quarter
in which such cash equity contribution occurs pursuant to the provisions of
Section 2.05(b)(i)(B) or 2.05(b)(ii)), the Borrower shall have no obligation to
prepay the Advances; provided further that, if the next scheduled principal
payment in respect of the Term Facility has been prepaid in full prior to the
date of such cash equity contribution as a result of a prepayment during the
calendar quarter in which such cash equity contribution occurs pursuant to the
provisions of Section 2.05(b)(i)(B) or Section 2.05(b)(ii), such cash equity
contribution shall be applied to the next scheduled principal payment in respect
of the Term Facility pursuant to the terms of this Section 2.05(b)(i)(A) and the
prepayment pursuant to Section 2.05(b)(i)(B) or Section 2.05(b)(ii), as the case
may be, shall be reapplied pursuant to the terms of such Section; provided
further that, on and after the payment in full of the Term Advances, such amount
shall be applied to the Revolving Credit Facility as set forth in Section
2.05(b)(ix) below; and provided further that any amount not required to be
prepaid pursuant to the terms of this Section 2.05(b)(i)(A) shall, subject to
the provisions of Section 2.05(b)(vi) below, be released to the Borrower
pursuant to the provisions of Section 7(b) of the Borrower Security Agreement;
and
(B) 25% of the amount of such cash equity contribution to
the making of a prepayment in such amount; provided, however, that the portion
of each such prepayment to be applied to principal in accordance with Section
2.05(b)(x) below shall be applied first, to the next scheduled principal payment
in respect of the Term Facility, second, to the remaining installments of the
Term Facility pursuant to Section 2.03 in inverse order of maturity and third,
to the Revolving Credit Facility as set forth in clause (ix) below; provided
further that if the next scheduled principal payment in respect of the Term
Facility has been prepaid in full prior to the date of such cash equity
contribution, such portion of such prepayment shall be applied first, to the
remaining installments of the Term Facility in inverse order of maturity and
second, to the Revolving Credit Facility as set forth in Section 2.05(b)(ix)
below; provided further that if a prepayment pursuant to the terms of this
Section 2.05(b)(i)(B) is applied to the next scheduled principal payment in
respect of the Term Facility and, subsequent to such application, a prepayment
pursuant to the terms of Section 2.05(b)(i)(A) is applied to such next scheduled
principal payment in respect of the Term Facility, the amount applied to such
next scheduled principal payment in respect of the Term Facility pursuant to the
terms of this Section 2.05(b)(i)(B) shall be reapplied first, to the remaining
installments of the Term Facility in inverse order of maturity and second, to
the Revolving Credit Facility as set forth in Section 2.05(b)(ix) below.
(ii) The Borrower shall, on the date of deposit of each cash
equity contribution in the Borrower Collateral Account relating to any loan made
by FN Holdings to the Borrower Parent pursuant to the terms of the certificate
of incorporation of FN Holdings that relates solely to net income of the Bank
(excluding, to the extent included in net income, (A) any gains (net of taxes)
from the sale of deposits and property, plant and equipment related to such
deposits, and (B) any net income that is attributable to the recognition of the
deferred tax asset-net operating loss carry forwards of the Bank), make a
prepayment in an amount equal to the amount of such cash equity contribution.
The portion of each such prepayment to be applied to principal in accordance
with Section 2.05(b)(x) below shall be applied first, to the next scheduled
principal payment, second, to the remaining installments of the Term Facility
pursuant to Section 2.03 in inverse order of maturity and third, to the
Revolving Credit Facility as set forth in Section 2.05(b)(ix) below; provided,
however, that if a prepayment pursuant to the terms of this Section 2.05(b)(ii)
is applied to the next scheduled principal payment and, subsequent to such
application, a prepayment pursuant to the terms of Section 2.05(b)(i)(A) is
applied to such next scheduled principal payment, the amount applied to such
next scheduled principal payment pursuant to the terms of this Section
2.05(b)(ii) shall be reapplied first, to the remaining installments of the Term
Facility in inverse order of maturity and second, to the Revolving Credit
Facility as set forth in Section 2.05(b)(ix) below.
(iii) The Borrower shall, on the date of deposit of each cash
equity contribution in the Borrower Collateral Account relating to any loans
made by FN Holdings to the Borrower Parent pursuant to the terms of the
certificate of incorporation of FN Holdings that relate to dividends, other
distributions or any loans or advances from the Bank arising out of excess
capital of the Bank, make a prepayment in an amount equal to the amount of such
cash equity contribution. The portion of each such prepayment to be applied to
principal in accordance with Section 2.05(b)(x) below shall be applied first, to
the remaining installments of the Term Facility pursuant to Section 2.03 in
inverse order of maturity and second, to the Revolving Credit Facility as set
forth in Section 2.05(b)(ix) below.
(iv) The Borrower shall, on the date of each dividend,
distribution, loan or advance from the Bank to FN Holdings arising solely out of
any gains (net of taxes) from the sale of deposits in California and property,
plant and equipment related to such deposits, make a prepayment in an amount
equal to the amount of such cash equity contribution. The portion of each such
prepayment to be applied to principal in accordance with Section 2.05(b)(x)
below shall be applied first, to the remaining installments of the Term Facility
pursuant to Section 2.03 in inverse order of maturity and second, to the
Revolving Credit Facility as set forth in clause (ix) below.
(v) The Borrower shall, on the date of each dividend,
distribution, loan or advance from the Bank to FN Holdings arising solely out of
(A) any gains (net of taxes) from the sale of deposits (other than the sale of
deposits in California) and property, plant and equipment related to such
deposits or (B) any net income that is attributable to the recognition of the
deferred tax asset-net operating loss carry forwards of the Bank, apply:
(A) 75% of the first $100,000,000 of such dividends,
distributions, loans or advances to the making of a prepayment in such amount;
(B) 50% of the next $70,000,000 of such dividends,
distributions, loans or advances to the making of a prepayment in such amount;
(C) 0% of the next $60,000,000 of such dividends,
distributions, loans or advances the making of a prepayment in such amount; and
(D) 50% of the remainder of such dividends, distributions,
loans or advances to the making of a prepayment in such amount;
provided, however, that the portion of each such prepayment to be applied to
principal in accordance with Section 2.05(b)(x) below shall be applied first, to
the remaining installments of the Term Facility pursuant to Section 2.03 in
inverse order of maturity and second, to the Revolving Credit Facility as set
forth in clause (ix) below; provided further that any amount not required to be
prepaid pursuant to the terms of this Section 2.05(b)(v) shall, subject to the
provisions of Section 2.05(b)(vi), be released to the Borrower pursuant to the
provisions of Section 7(b) of the Borrower Security Agreement.
(vi) The Borrower shall, on any date (A) on which a cash
equity contribution referred to in Section 2.05(b)(i) or Section 2.05(b)(v)
above is deposited in the Borrower Collateral Account or on which a deposit of
amounts paid under or in connection with any Related Documents is made to the
Mafco Collateral Account and (B) either (I) a Default has occurred and is
continuing, (II) the Borrower fails to deliver a Look-Forward Certificate or a
Deposit Certificate with respect to such deposit in accordance with the terms of
Section 5.01(l) or (III) the Required Lenders determine, in their reasonable
discretion, within 15 Business Days following the date of the receipt of the
Look-Forward Certificate or within two Business Days following the date of the
receipt of the Deposit Certificate, as the case may be, referred to in clause
(B)(II), that (x) the equity contributions receivable by the Borrower (to the
extent they relate to net income of the Bank and any gains (net of taxes) from
the sale of deposits and property, plant and equipment related to such deposits)
will be insufficient to service the scheduled amortization payments other than
the payments due on September 1, 1997 (taking into account, among other things,
the Bank's performance to date, the quality of the Bank's assets and the
presence of any agreement with the Bank's regulators including, but not limited
to, an agreement relating to capital, asset quality, dividends or management) or
(y) the Net Cash Proceeds which Mafco and its Subsidiaries expect to receive
from the contemplated sale of assets or issuance of Debt will be insufficient to
make the principal payment in respect of the Facilities due on September 1,
1997, make a prepayment in an amount equal to the amount of such cash equity
contribution or the amount of the deposit in the Mafco Collateral Account, as
the case may be, plus any interest on Collateral Investments made with such
contribution or deposit. The portion of each such prepayment to be applied to
principal in accordance with Section 2.05(b)(x) below shall be applied first, to
prepay the installments of the Term Facility in order of maturity and second, to
the Revolving Credit Facility as set forth in Section 2.05(b)(ix) below.
(vii) The Borrower shall:
(A) on the date of receipt by any A Company of the Net Cash
Proceeds of issuances, sales or liquidations of any capital stock (including any
securities convertible into or exchangeable for capital stock or any warrants,
rights or options to acquire capital stock) of any A Company,
(B) on the date of receipt by any A Company of any
dividends, other distributions or any loans or advances made in respect of the
capital stock of any other A Company,
(C) on the date of receipt by any A Company of the Net Cash
Proceeds of any sales of any assets of any A Company,
(D) on the date of deposit of each cash equity contribution
in the Borrower Collateral Account relating to the proceeds of dividends, other
distributions or any loans or advances made by the Bank (other than any
dividends, other distributions or loans or advances referred to in Section
2.05(b)(i), (ii), (iii), (iv) and (v) above),
(E) on the date of receipt by any A Company of the proceeds
of distributions, dividends or any loans or advances made on account of or as a
result of the issuance, sale or liquidation of any capital stock (including any
securities convertible into or exchangeable for capital stock or any warrants,
rights or options to acquire capital stock) of, or the sale, issuance or
incurrence of any Debt by, any Designated Operating Company or the Bank,
(F) on the date of receipt by any A Company of the Net Cash
Proceeds from the sale, issuance or incurrence by any A Company of any Debt, and
(G) on the date of receipt by any A Company of the proceeds
of dividends, other distributions or any loans or advances made on account of or
as a result of any sale of any assets of any Designated Operating Company,
make a prepayment in an amount equal to the amount of any such amount so
received or deposited, as the case may be, except, in each case, to the extent
(x) required pursuant to the terms of any agreement or instrument relating to
Debt existing on the date hereof of any A Company or Designated Operating
Company to prepay or redeem or purchase such Debt or (y) prohibited to be so
applied by the terms of any agreement or instrument relating to Debt existing on
the date hereof of any A Company or Designated Operating Company. The portion
of each such prepayment to be applied to principal in accordance with Section
2.05(b)(x) below shall be applied first, to prepay the installments of the Term
Facility in inverse order of maturity and second, to the Revolving Credit
Facility as set forth in Section 2.05(b)(ix) below.
(viii) The Borrower shall, on each date that an Event of
Default set forth in Section 6.01(a) of the Credit Agreement shall have occurred
and be continuing, make a prepayment in an amount equal to the amount on deposit
in the Second Mafco Collateral Account. The portion of each such prepayment to
be applied to principal in accordance with Section 2.05(b)(x) below shall be
applied first, to prepay the installments of the Term Facility in inverse order
of maturity and second, to the Revolving Credit Facility as set forth in Section
2.05(b)(ix) below.
(ix) Prepayments of the Revolving Credit Facility made
pursuant to Sections 2.05(b)(i) through (viii) above shall be applied to
permanently reduce the Revolving Credit Facility as set forth in Section
2.04(b). The Borrower shall, on each Business Day, prepay an aggregate
principal amount of the Revolving Credit Advances comprising part of the same
Borrowings equal to the amount by which the aggregate principal amount of the
Revolving Credit Advances then outstanding exceeds the Revolving Credit Facility
on such Business Day.
(x) All prepayments under this Section 2.05(b) shall be
applied first, to the payment of interest and fees payable in respect of the
Facilities and to the payment of expenses of the Agent (including the reasonable
fees and expenses of counsel to the Agent) and second, to the prepayment of the
Advances comprising part of the same Borrowing as specified or to the permanent
reduction of the Revolving Credit Facility as specified.
(xi) If, as a result of the making of any prepayment required
to be made pursuant to this Section 2.05, the Borrower would incur costs
pursuant to Section 8.04(b), the Borrower may deposit the amount of such
prepayment with the Agent, for the benefit of the Appropriate Lenders, in a cash
collateral account, until the end of the applicable Interest Period at which
time such payment shall be made. The Borrower hereby grants to the Agent, for
the benefit of the Lenders, a security interest in all amounts in which the
Borrower has any right, title or interest which are from time to time on deposit
in such cash collateral account and expressly waives all rights (which rights
the Borrower hereby acknowledges and agrees are vested exclusively in the Agent)
to exercise domnion or control over any such amounts.
SECTION 2.06. Interest. (a) Ordinary Interest. The Borrower
shall pay interest on the unpaid principal amount of each Advance owing to each
Lender from the date of such Advance until such principal amount shall be paid
in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Advance
is a Base Rate Advance, a rate per annum equal at all times to the sum of the
Base Rate in effect from time to time plus the Applicable Margin in effect from
time to time, payable in arrears quarterly on the first Business Day of each
March, June, September and December during such periods, commencing September 1,
1995, and on the date such Base Rate Advance shall be Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of the Eurodollar Rate for such
Interest Period plus the Applicable Margin in effect from time to time, payable
in arrears on the last day of such Interest Period and, if such Interest Period
has a duration of more than three months, on each day that occurs during such
Interest Period every three months from the first day of such Interest Period.
(b) Default Interest. The Borrower shall pay on demand
interest on the unpaid principal amount of each Advance that is not paid when
due and on the unpaid amount of all interest, fees and other amounts then due
and payable hereunder that is not paid when due from the due date thereof to the
date paid, at a rate per annum equal at such time to (i) in the case of any
amount of principal, 2% per annum above the rate of interest per annum required
to be paid on such Advance immediately prior to the date on which such amount
became due and payable and (ii) in the case of all other amounts, 2% per annum
above the rate per annum required to be paid on Base Rate Advances pursuant to
Section 2.06(a)(i) above.
SECTION 2.07. Interest Rate Determination. (a) The Agent
shall give prompt notice to the Borrower and each Lender of the applicable
interest rate determined by the Agent for purposes of Section 2.06(a)(i) or
(ii), and the applicable rate, if any, furnished by Citibank for the purpose of
determining the applicable interest rate under Section 2.06(a)(i) or (ii).
(b) If Citibank cannot furnish timely information to the
Agent for determining the Eurodollar Rate, the Agent shall forthwith notify the
Borrower and each Lender that the interest rate cannot be determined for such
Eurodollar Rate Advances, whereupon (i) each such Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make,
or to Convert Advances into, Eurodollar Rate Advances shall be suspended until
the Agent shall notify the Borrower that Citibank has determined that the
circumstances causing such suspension no longer exist.
(c) If the Required Lenders notify the Agent that the
Eurodollar Rate for any Interest Period for such Eurodollar Rate Advances will
not adequately reflect the cost to such Required Lenders of making, funding or
maintaining their pro rata shares of such Eurodollar Rate Advances for such
Interest Period, the Agent shall forthwith so notify the Borrower and the
Lenders, whereupon (i) each such Eurodollar Rate Advance will automatically, on
the last day of the then existing Interest Period therefor, Convert into a Base
Rate Advance and (ii) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended until the Agent shall
notify the Borrower that such Required Lenders have determined that the
circumstances causing such suspension no longer exist.
(d) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Agent will forthwith notify the Borrower and the Lenders and the Interest Period
for such Eurodollar Rate Advances will be one month.
SECTION 2.08. Fees. (a) Commitment Fee. The Borrower agrees
to pay to the Agent for the account of the Revolving Credit Lenders a commitment
fee on the average daily Unused Revolving Credit Commitment of such Revolving
Credit Lender from the date hereof, in the case of each Financial Institution,
and from the effective date specified in the Assignment and Acceptance pursuant
to which it became a Revolving Credit Lender, in the case of each other
Revolving Credit Lender, until the Termination Date at a rate equal to 1-1/4%
per annum, payable in arrears on the date of the initial Borrowing, thereafter
quarterly on the first Business Day of each March, June, September and December
commencing September 1, 1995, and on the Termination Date.
(b) Other Fees. The Borrower shall pay to the Agent for its
own account such fees as are set forth in the fee letter dated June 9, 1995
between Mafco and Citibank, as the same may be amended or otherwise modified
from time to time.
SECTION 2.09. Increased Costs; Illegality. (a) Except as to
taxes, levies, imposts, deductions, charges, withholdings or liabilities with
respect thereto (it being understood that the Borrower shall not have any
liability for any taxes, levies, imposts, deductions, charges, withholdings or
liabilities with respect thereto, except as provided in Section 2.12), if, due
to either (i) the introduction of or any change (other than any change by way of
imposition or increase of reserve requirements included in the Eurodollar Rate
Reserve Percentage) in or in the interpretation of any law or regulation or (ii)
the compliance by any Lender with any guideline or request from any central bank
or other governmental authority in any case introduced, changed, interpreted or
requested after the date hereof (whether or not having the force of law), there
shall be (x) imposed, modified or deemed applicable any reserve, special deposit
or similar requirement against assets held by, or letters of credit or
guarantees issued by, or deposits in or for the account of, any Lender or (y)
imposed on any Lender any other condition relating to this Agreement or the
Advances made by it, and the result of any event referred to in clause (x) or
(y) shall be to increase the cost to such Lender of agreeing to make or making,
funding or maintaining Eurodollar Rate Advances, then the Borrower shall from
time to time, upon demand by such Lender (with a copy of such demand to the
Agent) made within 60 days after the first date on which such Lender has actual
knowledge that it is entitled to make demand for payment under this Section
2.09(a), pay to the Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost; provided, however,
that if such Lender fails to so notify the Borrower within such 60-day period,
such increased cost shall commence accruing on such later date on which the
Lender notifies the Borrower; provided further that, before making any such
demand, such Lender agrees to use its best efforts (consistent with its internal
policy and legal and regulatory restrictions) to designate a different
Applicable Lending Office if the making of such a designation would avoid the
need for, or reduce the amount of, such increased cost and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.
A certificate as to the amount of such increased cost, submitted to the Borrower
and the Agent by such Lender, shall be conclusive and binding for all purposes,
absent manifest error.
(b) If any Lender determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental or monetary authority in regard to capital adequacy (whether or not
having the force of law) including, without limitation, any guideline
contemplated by the report dated July 1988 entitled "International Convergence
of Capital Management and Capital Standards" issued by the Bank Committee on
Banking Regulations and Supervisory Practices, in any case in which such law,
regulation, guideline or request became effective or was made after the date
hereof, has or would have the effect of reducing the rate of return on the
capital of, or maintained by, such Lender or any corporation controlling such
Lender as a consequence of such Lender's Advances or Commitments hereunder and
other commitments of this type, by increasing the amount of capital required or
expected to be maintained by such Lender or any corporation controlling such
Lender, to a level below that which such Lender or any corporation controlling
such Lender could have achieved but for such adoption, effectiveness, change or
compliance (taking into account such Lender's or such corporation's policies
with respect to capital adequacy), then the Borrower shall, from time to time,
pay such Lender, upon demand by such Lender (with a copy of such demand to the
Agent) made within 60 days after the first date on which such Lender has actual
knowledge that it is entitled to make demand for payment under this Section
2.09(b) of such reduction in return, such additional amount as may be specified
by such Lender as being sufficient to compensate such Lender for such reduction
in return, to the extent that such Lender reasonably determines such reduction
to be attributable to the existence of such Lender's commitment to lend
hereunder; provided, however, that if such Lender fails to so notify the
Borrower within such 60-day period, such amounts shall commence accruing on such
later date on which the Lender notifies the Borrower. A certificate as to such
amounts submitted to the Borrower and the Agent by such Lender shall be
conclusive and binding for all purposes, absent manifest error.
(c) Notwithstanding any other provision of this Agreement,
if the introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for any Lender or its Eurodollar Lending
Office to perform its obligations hereunder to make Eurodollar Rate Advances or
to fund or maintain Eurodollar Rate Advances hereunder, then, upon written
notice by such Lender to the Borrower (with a copy to the Agent), (i) each
Eurodollar Rate Advance of such Lender will automatically Convert into a Base
Rate Advance and (ii) the obligation under each Facility under which such Lender
has a Commitment to make, or to Convert Base Rate Advances into, Eurodollar Rate
Advances shall be suspended until the Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer exist;
provided, however, that, before making any such demand, such Lender shall
designate a different Eurodollar Lending Office if the making of such a
designation would avoid the need for giving such notice and demand, and would
not, in the judgment of such Lender, be otherwise disadvantageous to such
Lender. For purposes of this Section 2.09(c), a notice to the Borrower by a
Lender shall be effective with respect to any Eurodollar Rate Advance on the
last day of the then current Interest Period for such Advance; provided,
however, that, if it is not lawful for such Lender to maintain such Advance
until the end of the Interest Period applicable thereto, then the notice to the
Borrower shall be effective upon receipt by the Borrower.
SECTION 2.10. Conversion of Advances. (a) Optional. The
Borrower may on any Business Day, upon notice given to the Agent not later than
noon (New York City time) on the third Business Day prior to the date of the
proposed Conversion and subject to the provisions of Section 2.07 and 2.09,
Convert all or any portion of the Advances of one Type comprising the same
Borrowing into Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made on,
and only on, the last day of an Interest Period for such Eurodollar Rate
Advances, and any Conversion of Base Rate Advances into Eurodollar Rate Advances
shall be subject to the limitation set forth in Section 2.02(e) and in an amount
not less than $25,000,000. Each such notice of Conversion shall, within the
restrictions specified above, specify (i) the date of such Conversion, (ii) the
Advances to be Converted and (iii) if such Conversion is into Eurodollar Rate
Advances, the duration of the initial Interest Period for such Advances.
(b) Mandatory. (i) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than $25,000,000, such
Advances shall automatically Convert into Base Rate Advances.
(ii) Upon the occurrence and during the continuance of any
Event of Default (or, in the case of any involuntary proceeding described in
Section 6.01(e), a Default), (A) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (B) the obligation of the Lenders to make,
or to Convert Advances into, Eurodollar Rate Advances shall be suspended.
SECTION 2.11. Payments and Computations. (a) The Borrower
shall make each payment hereunder and under the Notes not later than 11:00 A.M.
(New York City time) on the day when due in U.S. Dollars to the Agent at the
Agent's Account in same day funds. The Agent will promptly thereafter cause to
be distributed like funds relating to the payment of principal or interest or
commitment fees ratably (other than amounts payable pursuant to Section 2.09 or
2.12) to the Lenders for the account of their respective Applicable Lending
Offices, and like funds relating to the payment of any other amount payable to
any Lender to such Lender for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this Agreement. Upon
its acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 8.07(d), from and after
the effective date specified in such Assignment and Acceptance, the Agent shall
make all payments hereunder and under the Notes in respect of the interest
assigned thereby to the Lender assignee thereunder, and the parties to such
Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) The Borrower hereby authorizes each Lender, if and to
the extent payment of principal, interest or fees owed to such Lender is not
made when due hereunder or under the Note or Notes held by such Lender, to
charge from time to time against any or all of the Borrower's accounts with such
Lender any amount so due.
(c) All computations of interest based on the Eurodollar
Rate, the Base Rate or the Federal Funds Rate and of commitment fees shall be
made by the Agent, on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or commitment fees are payable.
Each determination by the Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under any Note shall
be stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest or commitment
fee, as the case may be; provided, however, that, if such extension would cause
payment of interest on or principal of Eurodollar Rate Advances to be made in
the next following calendar month, such payment shall be made on the next
preceding Business Day.
(e) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Lenders hereunder
or under any Note that the Borrower will not make such payment in full, the
Agent may assume, or at its option request confirmation from the Borrower, that
the Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due such Lender. If
and to the extent the Borrower shall not have so made such payment in full to
the Agent, each Lender shall repay to the Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Agent, at the Federal Funds Rate.
(f) If the Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances or the Facility to which, or the manner in
which, such funds are to be applied, the Agent may, but shall not be obligated
to, elect to distribute such funds in respect of a Facility to each Lender
ratably in accordance with such Lender's proportionate share of the principal
amount of all outstanding Advances under such Facility, in repayment or
prepayment of such of the outstanding Advances under such Facility or other
Obligations owed to such Lender, and for application to such principal
installments, as the Agent shall direct.
SECTION 2.12. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.11,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and the Agent, (i) taxes
imposed on its income, and franchise taxes and backup withholding taxes imposed
on it, by the United States or the jurisdiction under the laws of which such
Lender or the Agent (as the case may be) is organized or any political
subdivision or taxing authority thereof or therein, (ii) taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction of such Lender's
or, in either such case, the Agent's principal office or Applicable Lending
Office or any political subdivision or taxing authority thereof or therein and
(iii) United States withholding tax payable with respect to payments hereunder
under laws (including, without limitation any statute, treaty, ruling,
determination or regulation) in effect on the Initial Date with respect to such
Lender or the Agent, but not excluding any United States withholding tax payable
as a result of any change in such laws occurring after the Initial Date (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Lender or the Agent, (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions of Taxes (including deductions of Taxes applicable to additional sums
payable under this Section 2.12) such Lender or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions of Taxes been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law; provided,
however, that any such Lender shall designate a different Applicable Lending
Office if, in the judgment of such Lender, such designation would avoid the need
for, or reduce the amount of, any Taxes required to be deducted from or in
respect of any sum payable hereunder to such Lender or the Agent and would not,
in the judgment of such Lender, be otherwise disadvantageous to such Lender.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies that arise from any payment made hereunder or under the Notes
or from the execution, delivery or registration of, or otherwise with respect
to, this Agreement or the Notes (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender and the Agent
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.12) paid by such Lender or the Agent (as the case may be) and any
liability (including penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto; provided that, in the event such Lender or
the Agent, as the case may be, successfully contests the assessment of such
Taxes or Other Taxes or any liability arising therefrom or with respect thereto,
such Lender or the Agent shall refund, to the extent of any refund thereof made
to such Lender or the Agent, any amounts paid by the Borrower under this Section
2.12(c) in respect of such Taxes, Other Taxes or liabilities arising therefrom
or with respect thereto. Each Lender and the Agent agree that it will contest
such Taxes, Other Taxes or liabilities if (i) the Borrower furnishes to it an
opinion of reputable tax counsel acceptable to such Lender or the Agent to the
effect that such Taxes or Other Taxes were wrongfully or illegally imposed and
(ii) such Lender or the Agent determines, in its sole discretion, that it would
not be disadvantaged or prejudiced in any manner whatsoever as a result of such
contest. This indemnification shall be made within 30 days from the date such
Lender or the Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes,
the Borrower will furnish to the Agent, at its address referred to in Section
8.02, appropriate evidence of payment thereof. If no Taxes are payable in
respect of any payment hereunder or under the Notes by the Borrower from an
account or branch outside the United States or on behalf of the Borrower by a
payor that is not a United States person, the Borrower will furnish to the
Agent, at such address, a certificate from each appropriate taxing authority, or
an opinion of counsel acceptable to the Agent, in either case stating that such
payment is exempt from or not subject to Taxes. For purposes of this Section
2.12, the terms "United States" and "United States person" shall have the
meanings specified in Section 7701 of the Code.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States and the Agent, if organized under the laws of a
jurisdiction outside the United States, shall, on or prior to the Initial Date
and from time to time thereafter if requested in writing by the Borrower or the
Agent (but only so long thereafter as such Lender or the Agent remains lawfully
able to do so), provide the Borrower and (in the case of any such Lender other
than the Agent) the Agent with two duly completed copies of Internal Revenue
Service form 1001 or 4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Lender or the Agent is
entitled to benefits under an income tax treaty to which the United States is a
party that reduces the rate of withholding tax on payments under this Agreement
or the Notes or certifying that the income receivable pursuant to this Agreement
or the Notes is effectively connected with the conduct of a trade or business in
the United States.
(f) For any period with respect to which the Agent or a
Lender has failed to provide the Borrower with the appropriate forms described
in subsection (e) above (other than if such failure is due to a change in law
occurring after the date on which such person was originally required to provide
such forms, or if such forms are otherwise not required under subsection (e)
above), the Agent or such Lender shall not be entitled to increased payments or
indemnification under subsection (a) or (c) above with respect to Taxes imposed
by the United States; provided, however, that should the Agent or a Lender
become subject to Taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps as the Agent or such Lender shall
reasonably request to assist the Lender to recover such Taxes if, in the
judgment of the Borrower such steps would avoid the need for, or reduce the
amount of, any Taxes required to be deducted from or in respect of any sum
payable hereunder to the Agent or such Lender and would not, in the judgment of
the Borrower, be disadvantageous to the Borrower.
(g) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 2.12 shall survive the payment in full of principal
and interest hereunder and under the Notes.
(h) If a Lender shall change its Applicable Lending Office
other than (i) at the request of the Borrower or (ii) at a time when such change
would not result in this Section 2.12 requiring the Borrower to make a greater
payment than if such change had not been made, such Lender shall not be entitled
to receive any greater payment under this Section 2.12 than such Lender would
have been entitled to receive had it not changed its Applicable Lending Office.
SECTION 2.13. Sharing of Payments, Etc. If any Lender shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) on account of the Advances owing to it (other
than pursuant to Section 2.09 or 2.12) in excess of its ratable share of
payments on account of the Advances obtained by all the Lenders, such Lender
shall forthwith purchase from the other Lenders such participations in the
Advances owing to them as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each of them; provided, however, that, if
all or any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each Lender shall be rescinded and such
Lender shall repay to the purchasing Lender the purchase price to the extent of
such recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 2.13
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.
SECTION 2.14. Removal of Lender. In the event that any Lender
demands payment of costs or additional amounts pursuant to Section 2.09 or
Section 2.12 or asserts pursuant to Section 2.09(c) that it is unlawful for such
Lender to make Eurodollar Rate Advances, then (subject to such Lender's right to
rescind such demand or assertion within 10 days after the notice from the
Borrower referred to below) the Borrower may, upon 20 days' prior written notice
to such Lender and the Agent, elect to cause such Lender to assign its Advances
and Commitments in full to an assignee institution selected by the Borrower that
meets the criteria of an Eligible Assignee and is reasonably satisfactory to the
Agent, so long as such Lender receives payment in full of the outstanding
principal amount of all Advances made by it and all accrued and unpaid interest
thereon and all other amounts due and payable to such Lender as of the date of
such assignment (including without limitation amounts owing pursuant to Section
2.09 or 2.12), and in such case such Lender agrees to make such assignment, and
such assignee shall agree to accept such assignment and assume all obligations
of such Lender hereunder, in accordance with Section 8.07.
SECTION 2.15. Defaulting Lender. (a) In the event that, at
any one time, (i) any Lender shall be a Defaulting Lender, (ii) such Defaulting
Lender shall owe a Defaulted Advance to the Borrower and (iii) the Borrower
shall be required to make any payment hereunder or under any other Loan Document
to or for the account of such Defaulting Lender, then the Borrower may, so long
as no Default shall occur or be continuing at such time and to the fullest
extent permitted by applicable law, set-off and otherwise apply the Obligation
of the Borrower to make such payment to or for the account of such Defaulting
Lender against the Obligation of such Defaulting Lender to make such Defaulted
Advance. In the event that the Borrower shall so set-off and otherwise apply
the Obligation of the Borrower to make any such payment against the Obligation
of such Defaulting Lender to make any such Defaulted Advance on any date, the
amount so set-off and otherwise applied by the Borrower shall constitute for all
purposes of this Agreement and the other Loan Documents an Advance by such
Defaulting Lender made on such date under the Facility pursuant to which such
Defaulted Advance was originally required to have been made pursuant to Section
2.01. Such Advance shall be considered, for all purposes of this Agreement, to
comprise part of the Borrowing in connection with which such Defaulted Advance
was originally required to have been made pursuant to Section 2.01. The
Borrower shall notify the Agent at any time the Borrower reduces the amount of
the Obligation of the Borrower to make any payment otherwise required to be made
by it hereunder or under any other Loan Document as a result of the exercise by
the Borrower of its right set forth in this subsection (a) and shall set forth
in such notice (A) the name of the Defaulting Lender and the Defaulted Advance
required to be made by such Defaulting Lender and (B) the amount set-off and
otherwise applied in respect of such Defaulted Advance pursuant to this
subsection (a). Any portion of such payment otherwise required to be made by
the Borrower to or for the account of such Defaulting Lender which is paid by
the Borrower, after giving effect to the amount set-off and otherwise applied by
the Borrower pursuant to this subsection (a), shall be applied by the Agent as
specified in subsection (b) or (c) of this Section 2.15.
(b) In the event that, at any one time, (i) any Lender shall
be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount
to the Agent or any of the other Lenders and (iii) the Borrower shall make any
payment hereunder or under any other Loan Document to the Agent for the account
of such Defaulting Lender, then the Agent may, on its behalf or on behalf of
such other Lenders and to the fullest extent permitted by applicable law, apply
at such time the amount so paid by the Borrower to or for the account of such
Defaulting Lender to the payment of each such Defaulted Amount to the extent
required to pay such Defaulted Amount. In the event that the Agent shall so
apply any such amount to the payment of any such Defaulted Amount on any date,
the amount so applied by the Agent shall constitute for all purposes of this
Agreement and the other Loan Documents payment, to such extent, of such
Defaulted Amount on such date. Any such amount so applied by the Agent shall be
retained by the Agent or distributed by the Agent to such other Lenders, ratably
in accordance with the respective portions of such Defaulted Amounts payable at
such time to the Agent and such other Lenders and, if the amount of such payment
made by the Borrower shall at such time be insufficient to pay all Defaulted
Amounts owing at such time to the Agent and the other Lenders, in the following
order of priority:
(i) first, to the Agent for any Defaulted Amount then owing
to the Agent; and
(ii) second, to any other Lenders for any Defaulted Amounts
then owing to such other Lenders, ratably in accordance with such respective
Defaulted Amounts then owing to such other Lenders.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Agent pursuant to this subsection (b), shall be applied by the Agent as
specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender shall
be Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted
Advance or a Defaulted Amount and (iii) the Borrower, the Agent or any other
Lender shall be required to pay or distribute any amount hereunder or under any
other Loan Document to or for the account of such Defaulting Lender, then the
Borrower or such other Lender shall pay such amount to the Agent to be held by
the Agent, to the fullest extent permitted by applicable law, in escrow or the
Agent shall, to the fullest extent permitted by applicable law, hold in escrow
such amount otherwise held by it. Any funds held by the Agent in escrow under
this subsection (c) shall be deposited by the Agent in an account with Citibank,
in the name and under the control of the Agent, but subject to the provisions of
this subsection (c). The terms applicable to such account, including the rate
of interest payable with respect to the credit balance of such account from time
to time, shall be Citibank's standard terms applicable to escrow accounts
maintained with it. Any interest credited to such account from time to time
shall be held by the Agent in escrow under, and applied by the Agent from time
to time in accordance with the provisions of, this subsection (c). The Agent
shall, to the fullest extent permitted by applicable law, apply all funds so
held in escrow from time to time to the extent necessary to make any Advances
required to be made by such Defaulting Lender and to pay any amount payable by
such Defaulting Lender hereunder and under the other Loan Documents to the Agent
or any other Lender, as and when such Advances or amounts are required to be
made or paid and, if the amount so held in escrow shall at any time be
insufficient to make and pay all such Advances and amounts required to be made
or paid at such time, in the following order of priority:
(i) first, to the Agent for any amount then due and payable
by such Defaulting Lender to the Agent hereunder;
(ii) second, to any other Lenders for any amount then due and
payable by such Defaulting Lender to such other Lenders hereunder, ratably in
accordance with such respective amounts then due and payable to such other
Lenders; and
(iii) third, to the Borrower for any Advance then required to
be made by such Defaulting Lender pursuant to the Commitment of such Defaulting
Lender.
In the event that such Defaulting Lender shall, at any time, cease to be a
Defaulting Lender, any funds held by the Agent in escrow at such time with
respect to such Defaulting Lender shall be distributed by the Agent to such
Defaulting Lender and applied by such Defaulting Lender to the Obligations owing
to such Lender at such time under this Agreement and the other Loan Documents
ratably in accordance with the respective amounts of such Obligations
outstanding at such time.
(d) The rights and remedies against a Defaulting Lender
under this Section 2.15 are in addition to other rights and remedies which the
Borrower may have against such Defaulting Lender with respect to any Defaulted
Advance and which the Agent or any Lender may have against such Defaulting
Lender with respect to any Defaulted Amount.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Effective Date. Article
II hereof shall be effective on and as of the date (the "Effective Date"), on
which each of the following conditions precedent shall have been satisfied or
duly waived:
(a) Except as permitted by the Existing Credit Agreement,
there shall have been no adverse change since September 30, 1994 (or, in the
case of C&F Guarantor and MCG, since June 15, 1995) in the corporate and legal
structure and capitalization of each A Company, each Designated Operating
Company and the Bank, including the terms and conditions of the charter, bylaws
and each class of capital stock of each such Person and of each agreement or
instrument relating to such structure or capitalization.
(b) Before giving effect to the transactions contemplated by
this Agreement, there shall have occurred no Material Adverse Change since
December 31, 1994 relating to any of the Loan Parties, the FN Parties and the
Designated Operating Companies.
(c) There shall exist no action, suit, investigation,
litigation or proceeding affecting any of the Loan Parties, the FN Parties and
the Designated Operating Companies pending or threatened before any court,
governmental agency or arbitrator that (i) would be reasonably likely to have a
Material Adverse Effect (in the case of clause (a) of the definition thereof,
the term "Person" shall refer to such Loan Party, such FN Party or such
Designated Operating Company, as the case may be) or (ii) purports to affect the
legality, validity or enforceability of this Agreement, any Note, any other Loan
Document, any Related Document, any FN Document or the consummation of the
transactions contemplated hereby and thereby.
(d) Nothing shall have come to the attention of the Lenders
in respect of any of the A Companies, the Designated Operating Companies or the
Bank that is inconsistent with or different from in any adverse respect any of
the results of the due diligence investigations of such Persons conducted in
connection with the Existing Credit Agreement or the First Amendment and the
Lenders shall have been given such access to the management, records, books of
account, contracts and properties of each A Company, each Designated Operating
Company or the Bank as they shall have requested.
(e) The Borrower shall have paid all accrued fees of the
Agent and the Lenders and all accrued expenses of the Agent (including the
reasonable fees and expenses of counsel to the Agent).
(f) The Agent shall have received on or before the Effective
Date the following, each dated as of the Effective Date (unless otherwise
specified), in form and substance satisfactory to the Agent (unless otherwise
specified) and (except for the Notes) in sufficient copies for each Lender:
(i) the Notes to the order of the Lenders, in
exchange, where applicable, for Notes under the Existing Credit Agreement;
(ii) certified copies of the resolutions of the board
of directors of the Borrower and each other Loan Party approving this Agreement,
the Notes and each other Loan Document to which it is or is to be a party, and
of all documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Agreement, the Notes and each other Loan
Document;
(iii) a certificate of the Secretary or an Assistant
Secretary of the Borrower and each other Loan Party certifying the names and
true signatures of the officers of the Borrower and such other Loan Party
authorized to sign this Agreement, the Notes and each other Loan Document to
which they are or are to be parties and the other documents to be delivered
hereunder and thereunder;
(iv) a copy of a certificate of the Secretary of
State of the state of incorporation of the Borrower, each other Loan Party, each
Designated Operating Company and each other A Company, dated reasonably near the
Effective Date, listing the charter of such Person and each amendment thereto on
file in his office and certifying that (A) such amendments are the only
amendments to such Person's charter on file in his office, (B) such Person has
paid all franchise taxes to the date of such certificate and (C) such Person is
duly incorporated or organized and in good standing under the laws of such
state, and a copy of a certificate of corporate existence of the Bank, dated
reasonably near the Effective Date from the Office of Thrift Supervision;
(v) (A) a certificate of each A Company signed on
behalf of such Person by its President or a Vice President and its Secretary or
any Assistant Secretary, dated as of the Effective Date (the statements made in
such certificate shall be true on and as of the Effective Date), certifying as
to (1) the absence of any amendments to the charter of such Person since the
date of the Secretary of State's certificate referred to in clause (iv) above,
(2) the absence of any amendments to the bylaws of such Person since the date of
the certificate in respect of such bylaws that was delivered to the Agent
pursuant to the terms of Section 3.01 or 3.02, as the case may be, of the
Existing Credit Agreement, (3) the due incorporation and good standing of such
Person as a corporation under the laws of the relevant state of incorporation,
and the absence of any proceeding for the dissolution or liquidation of such
Person, (4) the truth in all material respects of the representations and
warranties made by such Person contained in the Loan Documents as though made on
and as of the Effective Date and (5) the absence of any event occurring and
continuing, or resulting from the Effective Date, that constitutes a Default,
(B) a certificate of Coleman Guarantor signed on behalf of Coleman Guarantor by
its President or a Vice President and its Secretary or any Assistant Secretary,
dated as of the Effective Date (the statements made in such certificate shall be
true on and as of the Effective Date), certifying as to (1) the absence of any
amendments to the charter of Coleman since the date of the Secretary of State's
certificate referred to in clause (iv) above, (2) the absence of any amendments
to the bylaws of Coleman since the date of the certificate in respect of such
bylaws that was delivered to the Agent pursuant to the terms of Sections 3.01
and 3.02 of the Existing Credit Agreement and (3) the due incorporation and good
standing of Coleman as a corporation organized under the laws of the State of
Delaware, and the absence of any proceeding for the dissolution or liquidation
of Coleman, (C) a certificate of the Borrower signed on behalf of the Borrower
by its President or a Vice President and its Secretary or any Assistant
Secretary, dated as of the Effective Date (the statements made in such
certificate shall be true on and as of the Effective Date), certifying as to (1)
the absence of any amendments to the charter of Marvel since the date of the
Secretary of State's certificate referred to in clause (iv) above, (2) the
absence of any amendments to the bylaws of Marvel since the date of the
certificate in respect of such bylaws that was delivered to the Agent pursuant
to the terms of Sections 3.01 and 3.02 of the Existing Credit Agreement, and (3)
the due incorporation and good standing of Marvel as a corporation organized
under the laws of the State of Delaware, and the absence of any proceeding for
the dissolution or liquidation of Marvel, (D) a certificate of New World
Guarantor signed on behalf of New World Guarantor by its President or a Vice
President and its Secretary or any Assistant Secretary, dated as of the
Effective Date (the statements made in such certificate shall be true on and as
of the Effective Date), certifying as to (1) the absence of any amendments to
the charter of New World since the date of the Secretary of State's certificate
referred to in clause (iv) above, (2) the absence of any amendments to the
bylaws of New World since the date of the certificate in respect of such bylaws
that was delivered to the Agent pursuant to the terms of Section 3.02 of the
Existing Credit Agreement and (3) the due incorporation and good standing of New
World as a corporation organized under the laws of the State of Delaware, and
the absence of any proceeding for the dissolution or liquidation of New World
and (E) a certificate of C&F Guarantor signed on behalf of MCG by its President
or a Vice President and its Secretary or any Assistant Secretary, dated as of
the Effective Date (the statements made in such certificate shall be true on and
as of the Effective Date), certifying as to (1) the absence of any amendments to
the charter of MCG since the date of the Secretary of State's certificate
referred to in clause (iv) above, (2) a copy of the by-laws of MCG as in effect
on the Effective Date and (3) the due incorporation and good standing of MCG as
a corporation organized under the laws of the State of Delaware, and the absence
of any proceeding for the dissolution or liquidation of MCG;
(vi) a certificate of Mafco to the effect (A) that no
information provided by Mafco or any Subsidiary of Mafco to the Agent or any
Lender in connection with the Existing Credit Agreement or this Agreement, as
such information has been amended, supplemented or superseded by any other
information delivered to the same parties receiving such information contained
or contains any material misstatement of fact or omitted or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading except that, as to any
financial model included therein, such certificate shall be limited to a
statement that such model was prepared in good faith by Mafco's or such
Subsidiary's management based on assumptions believed to be reasonable when made
and may be further qualified by a statement to the effect that because
assumptions as to future results are inherently subject to uncertainty and
contingencies beyond Mafco's or such Subsidiary's control, actual results of
Mafco or such Subsidiary may be higher or lower, (B) the Mafco Guaranty is in
full force and effect on the Effective Date, (C) that other than the agreements
referenced in Section 3.01(f)(x) and the charter documents of each A Company and
each FN Party, there is no other agreement, contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting any A
Company or any FN Party that imposes any material Obligation or any material
restriction on any A Company or any FN Party, (D) that the agreements referenced
in Section 3.01(f)(x) are the only agreements, contracts, loan agreements,
indentures, mortgages, deeds of trust, leases or other instruments (1)
evidencing Debt of any Designated Operating Company or any of their Subsidiaries
outstanding on the Effective Date, (2) governing the terms of Debt of any
Designated Operating Company or any of their Subsidiaries outstanding on the
Effective Date, or (3) containing any commitment or other agreement by any
Person to extend credit that would constitute Debt to any Designated Operating
Company or any of their Subsidiaries, in each case that imposes or will impose
material Obligations or material restrictions on any Designated Operating
Company and its Subsidiaries taken as a whole and (E) that there is no other
agreement or contract binding on or affecting any Designated Operating Company
or any of their Subsidiaries that contains provisions that would restrict any
Loan Party from performing or impair the ability of any Loan Party to perform,
any of the obligations of such Loan Party under the Loan Documents;
(vii) (A) the Borrower Security Agreement
substantially the form of Exhibit D-1 duly executed by the Borrower, and (B) the
Mafco Security Agreement in substantially the form of Exhibit D-2 duly executed
by Mafco, in each case together with:
(1) certificates representing the Pledged
Shares referred to therein accompanied by undated stock powers executed in blank
and instruments evidencing the Pledged Debt referred to therein indorsed in
blank,
(2) acknowledgment copies or stamped receipt
copies of proper financing statements, duly filed on or before the Effective
Date under the Uniform Commercial Code of all jurisdictions that the Agent may
deem necessary or desirable in order to perfect and protect the Liens created by
each Amended and Restated Security Agreement, covering the Collateral described
in such Amended and Restated Security Agreement,
(3) completed requests for information,
dated on or before the Effective Date, listing the financing statements referred
to in clause (2) above and all other effective financing statements filed in the
jurisdictions referred to in clause (2) above that name the Borrower or Mafco,
as the case may be, as debtor, together with copies of such other financing
statements,
(4) evidence of the completion of all other
recordings and filings of or with respect to each Amended and Restated Security
Agreement that the Agent may deem necessary or desirable in order to perfect and
protect the Liens created thereby,
(5) copies of the Assigned Agreements
referred to in each Amended and Restated Security Agreement (other than any
Assigned Agreement delivered in connection with the Existing Credit Agreement),
together with a consent to such assignment, in substantially the form of Exhibit
A thereto, duly executed by each party to such Assigned Agreements other than
the Borrower (in the case of Assigned Agreements under the Borrower Security
Agreement) or Mafco (in the case of Assigned Agreements under the Mafco Security
Agreement), and
(6) evidence that all other action that the
Agent may deem necessary or desirable in order to perfect and protect the Liens
created by each Amended and Restated Security Agreement has been taken;
(viii) (A) the Mafco Pledge Agreement in substantially
the form of Exhibit E-1, duly executed by Mafco, (B) the New World Pledge
Agreement in substantially the form of Exhibit E-2 and (C) the Second Andrews
Pledge Agreement in substantially the form of Exhibit E-3, in each case together
with (1) certificates representing the Pledged Shares referred to therein
accompanied by undated stock powers executed in blank, (2) acknowledgement
copies or stamped copies of proper financing statements, duly filed on or before
the Effective Date under the Uniform Commercial Code of all jurisdictions that
the Agent may deem necessary or desirable in order to perfect and protect the
Liens created by each of the above-referenced Pledge Agreements, covering the
Collateral described in such Pledge Agreement and (3) completed requests for
information, dated on or before the Effective Date, listing the financing
statements referred to in clause (2) above and all other effective financing
statements filed in the jurisdictions referred to in clause (2) above that name
any of the above-referenced Loan Parties as debtor, together with copies of such
other financing statements;
(ix) (A) the Mafco Guaranty in substantially the form
of Exhibit F-1, duly executed by Mafco, (B) the Coleman Guaranty in
substantially the form of Exhibit F-2, duly executed by Coleman Guarantor and
(C) the New World Guaranty in substantially the form of Exhibit F-3, duly
executed by New World Guarantor;
(x) a certificate of Mafco to the effect that, other
than the agreements delivered to the Agent pursuant to Section 3.01(g)(xii)(B)
and Section 3.02(i)(xi)(B) of the Existing Credit Agreement and other than as
specified in such certificate, there is no other contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument (i) evidencing
Debt of any A Company, (2) governing the terms of Debt of any A Company, or (3)
containing any commitment or other agreement by any Person to extend credit that
would constitute Debt to any A Company or any Designated Operating Company or
any of its Subsidiaries, in each case that imposes any material obligation or
any material restriction on any A Company or any Designated Operating Company
and its Subsidiaries, taken as a whole;
(xi) such financial, business and other information
regarding each Loan Party and their Subsidiaries as the Lenders shall have
reasonably requested, including, without limitation, information as to possible
contingent liabilities, tax matters, environmental matters, obligations under
ERISA and Welfare Plans, collective bargaining agreements and other arrangements
with employees, annual financial statements of the Bank dated December 31, 1994,
interim financial statements of the Bank dated the end of the most recent fiscal
quarter for which financial statements are available, pro forma financial
statements as to the Borrower, and forecasts prepared by management of the Bank,
in form and substance satisfactory to the Lenders, of balance sheets, income
statements and cash flow statements of the Bank on a quarterly basis for the
term of the Facility;
(xii) a letter, in form and substance satisfactory to
the Agent, from Mafco to Ernst & Young, independent certified public
accountants, advising such accountants that the Agent and the Lenders have
relied upon the financial statements of Marvel, Coleman, New World, Flavors and
Cigar in determining whether to enter into the Loan Documents and have been
authorized to exercise all rights of Mafco to require such accountants to
disclose any and all financial statements and any other information of any kind
that they may have with respect to such Persons and their Subsidiaries and
directing such accountants to comply with any reasonable request of the Agent or
any Lender for such information;
(xiii) a letter, in form and substance satisfactory to
the Agent, from the Bank to KPMG Peat Marwick, independent certified public
accountants, advising such accountants that the Agent and the Lenders have
relied upon the financial statements of the Bank in determining whether to enter
into the Loan Documents and have been authorized to exercise all rights of the
Bank to require such accountants to disclose any and all financial statements
and any other information of any kind that they may have with respect to the
Bank and its Subsidiaries and directing such accountants to comply with any
reasonable request of the Agent or any Lender for such information;
(xiv) favorable opinions of counsel to Mafco
reasonably satisfactory to the Lenders, in form and substance reasonably
satisfactory to the Lenders;
(xv) a favorable opinion of Shearman & Sterling,
counsel for the Agent, in form and substance reasonably satisfactory to the
Agent; and
(xvi) such other information, approvals, opinions or
other documents as the Agent may reasonably request.
SECTION 3.02. Conditions Precedent to Each Borrowing. The
obligation of each Appropriate Lender to make an Advance on the occasion of each
Borrowing (including the initial Borrowing) resulting in an increase in the
aggregate amount of outstanding Advances shall be subject to the further
conditions precedent that on the date of such Borrowing (a) the following
statements shall be true (and each of the giving of the applicable Notice of
Borrowing and the acceptance by the Borrower of the proceeds of such Borrowing
shall constitute a representation and warranty by the Borrower that on the date
of such Borrowing such statements are true):
(i) The representations and warranties contained in the Loan
Documents are correct in all material respects on and as of the date of such
Borrowing, before and after giving effect to such Borrowing and to the
application of the proceeds therefrom, as though made on and as of such date,
except to the extent such representations and warranties specifically relate to
an earlier date, in which case such representations and warranties were true,
correct and complete in all material respects on and as of such earlier date;
and
(ii) No event has occurred and is continuing, or would result
from such Borrowing or from the application of the proceeds therefrom, which
constitutes a Default,
(b) the Borrower shall, within 7 Business Days prior to the date of such
Borrowing, deliver to the Agent either (1) a Look-Forward Certificate or (2) a
Deposit Certificate if a Look-Forward Certificate has been delivered to the
Agent within 90 days prior to the date of such Borrowing, and the Required
Lenders shall not have determined, within 4 Business Days following the date of
receipt of such Look-Forward Certificate or Deposit Certificate, as the case may
be, in their reasonable discretion, that (x) the equity contributions receivable
by the Borrower (to the extent they relate to net income of the Bank and any
gains (net of taxes) from the sale of deposits and property, plant and equipment
related to such deposits) will be insufficient to service the scheduled
amortization payments (other than the payment due on September 1, 1997) (taking
into account, among other things, the Bank's performance to date, the quality of
the Bank's assets and the presence of any agreement with the Bank's regulators
including, but not limited to, an agreement relating to capital, asset quality,
dividends or management) or (y) the Net Cash Proceeds which Mafco and its
Subsidiaries expect to receive from the contemplated sale of assets or issuance
of Debt is insufficient to make the payments due in respect of the Facilities
pursuant to the provisions of Section 2.03 on September 1, 1997, and (c) the
Agent shall have received such other certificates, opinions and other documents
as any Lender through the Agent may reasonably request in order to confirm (i)
the accuracy of the Borrower's representations and warranties, (ii) the
Borrower's timely compliance with the terms, covenants and agreements set forth
in this Agreement, and (iii) the absence of any Default.
SECTION 3.03. Determinations Under Section 3.01. For purposes
of determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Agent responsible for the transactions contemplated by this Agreement
shall have received notice from such Lender prior to the initial Borrowing
specifying its objection thereto and such Lender shall not have made available
to the Agent such Lender's ratable portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower.
The Borrower represents and warrants as follows:
(a) The Borrower (i) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed would not have a Material
Adverse Effect (with respect to clause (a) of the definition thereof, the term
"Person" shall refer to the Borrower) and (iii) has all requisite corporate
power and authority to own or lease and operate its properties and to carry on
its business as now conducted and as proposed to be conducted. All of the
outstanding capital stock of the Borrower has been validly issued, is fully paid
and non-assessable and is owned by the Borrower Parent free and clear of all
Liens except for the Liens created by the Collateral Documents.
(b) Set forth on Schedule II hereto is a complete and
accurate list of the Borrower and the Designated Marvel Subsidiaries of the
Borrower, showing as of the date hereof (as to each such Person) the
jurisdiction of its incorporation, the number of shares of each class of capital
stock authorized, and the number outstanding, on the date hereof and the
percentage of the outstanding shares of each such class owned (directly or
indirectly) in the case of the Borrower, by Borrower Parent, and in the case of
the Designated Marvel Subsidiaries, by the Borrower and the number of shares
covered by all outstanding options, warrants, rights of conversion or purchase
and similar rights at the date hereof. All of the outstanding capital stock of
all of such Designated Marvel Subsidiaries has been validly issued, is fully
paid and non-assessable and, except as set forth on Schedule II, is owned by the
Borrower or one or more of its Subsidiaries free and clear of all Liens, except
those created by the Collateral Documents and those set forth on Schedule V.
Each such Subsidiary (i) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation, (ii)
is duly qualified and in good standing as a foreign corporation in each other
jurisdiction in which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed except where the failure to so
qualify or be licensed would not have a Material Adverse Effect (with respect to
clause (a) of the definition thereof, the term "Person" shall refer to the
applicable Designated Marvel Subsidiary) and (iii) has all requisite corporate
power and authority to own or lease and operate its properties and to carry on
its business as now conducted and as proposed to be conducted.
(c) The execution, delivery and performance by the Borrower
of this Agreement, the Notes, each Loan Document and each Related Document to
which it is or is to be a party and the consummation by the Borrower of the
transactions contemplated hereby, are within the Borrower's corporate powers,
have been duly authorized by all necessary corporate action, and do not (i)
contravene the Borrower's charter or by-laws, (ii) violate any law (including,
without limitation, the Exchange Act), rule, regulation (including, without
limitation, Regulation X of the Board of Governors of the Federal Reserve
System), order, writ, judgment, injunction, decree, determination or award,
(iii) conflict with or result in the breach of, or constitute a default under,
any loan agreement, contract, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting any Loan Party, any of its Subsidiaries or
any of its or their properties, the effect of which conflict, breach or default
is reasonably likely to have a Material Adverse Effect (with respect to clause
(a) of the definition thereof, the term "Person" shall refer to the Borrower) or
(iv) except for the liens created by the Collateral Documents, the voting trust
agreements referred to in Sections 3.01(g)(xvi) and 3.02(i)(xv) of the Existing
Credit Agreement, the Voting Trust Agreement dated as of June 15, 1995 among
NationsBank of Georgia, National Association, the Cigar Guarantor, C&F Guarantor
and the Agent and the Voting Trust Agreement dated as of June 15, 1995 among
NationsBank of Georgia, National Association, the Flavors Guarantor, C&F
Guarantor and the Agent, result in or require the creation or imposition of any
Lien upon or with respect to any of the properties of any Loan Party or any of
its Subsidiaries. Neither the Borrower nor any of its Subsidiaries is in
violation of any such law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award or in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument, the
violation or breach of which would be reasonably likely to have a Material
Adverse Effect (with respect to clause (a) of the definition thereof, the term
"Person" shall refer to the Borrower).
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for (i) the due execution, delivery and performance by the Borrower of
this Agreement or the Notes or any other Loan Document or any Related Document
to which it is or is to be a party or for the consummation of the transactions
contemplated hereby, (ii) the grant by the Borrower of the Liens granted by it
pursuant to the Collateral Documents, (iii) the perfection or maintenance of the
Liens created by the Collateral Documents (including the first priority nature
thereof) or (iv) the exercise by the Agent or any Lender of its rights under the
Loan Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents, except for the filing of financing statements in
accordance with Sections 3.01 and 3.02 of the Existing Credit Agreement and
Section 3.01(f)(vii) and (viii) hereof and except as may be required in
connection with the disposition of any portion of the Collateral by laws
affecting the offering and sale of securities generally; provided, however, that
no representation or warranty is made as to any consent of, authorization,
approval or other action by, or notice to or filing with, any banking agency or
regulatory body applicable to the Agent.
(e) This Agreement has been, and each of the Notes, each
other Loan Document to which the Borrower is a party when delivered hereunder
will have been, duly executed and delivered by the Borrower. This Agreement is,
and each of the Notes and each other Loan Document to which the Borrower is a
party when delivered hereunder will be, the legal, valid and binding obligations
of the Borrower, enforceable against the Borrower in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforceability of creditor's rights generally.
(f) The Consolidated and consolidating balance sheets of
Marvel III and its Subsidiaries as at December 31, 1994, and the related
Consolidated and consolidating statements of income and cash flows of Marvel III
and its Subsidiaries for the fiscal year then ended, accompanied, in the case of
the aforementioned Consolidated balance sheets and related Consolidated
statements of income and cash flows, by an opinion of Ernst & Young, independent
public accountants, and the Consolidated and consolidating balance sheets of
Marvel III and its Subsidiaries as at March 31, 1995, and the related
Consolidated and consolidating statements of income and cash flows of Marvel III
and its Subsidiaries for the three months then ended, duly certified by the
chief financial officer of Marvel III, copies of which have been furnished to
each Lender, fairly present, subject, in the case of said balance sheets as at
March 31, 1995, and said statements of income and cash flows for the three
months then ended, to year-end audit adjustments, the Consolidated and
consolidating financial condition of Marvel III and its Subsidiaries as at such
dates and the Consolidated and consolidating results of the operations of Marvel
III and its Subsidiaries for the periods ended on such dates, all in accordance
with generally accepted accounting principles applied on a consistent basis, and
since December 31, 1994, there has been no Material Adverse Change relating to
Marvel III.
(g) There is no pending or threatened action, proceeding,
governmental investigation or arbitration affecting any Loan Party, the Bank or
any of their Subsidiaries before any court, governmental agency or arbitrator,
which is reasonably likely to have a Material Adverse Effect (with respect to
clause (a) of the definition thereof, the term "Person" shall refer to such Loan
Party or the Bank, as the case may be) or that purports to affect the legality,
validity or enforceability of the Transaction, this Agreement, any Note, any
other Loan Document or any Related Document or the consummation of the
transactions contemplated hereby or thereby.
(h) The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock and no proceeds of
any Advance will be used to purchase or carry any Margin Stock, or to extend
credit to others for the purpose of purchasing or carrying any Margin Stock.
(i) No proceeds of any Advance will be used to acquire any
equity security of a class that is registered pursuant to Section 12 of the
Exchange Act.
(j) The Borrower and its ERISA Affiliates are in compliance
in all material respects with the applicable provisions of ERISA and the Code
with respect to each Plan thereof. No ERISA Event has occurred or is reasonably
expected to occur with respect to any Plan of the Borrower or any of its ERISA
Affiliates. The amount of all Unfunded Pension Liabilities under all Plans of
the Borrower and its ERISA Affiliates does not exceed $60,000,000. None of the
Borrower or any of its ERISA Affiliates has made contributions or incurred any
Withdrawal Liability to any Multiemployer Plan within the past five years, and
it is not reasonably expected that such contributions shall be made or required
or that such liability shall be incurred in any such case in amounts or under
circumstances that would be reasonably likely to result in a material liability
to the Borrower or any of its ERISA Affiliates. Schedule B (Actuarial
Information) to the 1992 annual report (Form 5500 Series) for each Plan of the
Borrower and each of its ERISA Affiliates, copies of which have been filed with
the Internal Revenue Service and furnished to the Lenders, is complete and
accurate in all material respects and fairly presents the funding status of such
Plan, and since the date of such Schedule B there has been no material adverse
change in such funding status. The obligations of the Borrower and its
Subsidiaries for post-retirement benefits to be provided under Plans which are
welfare benefit plans (as defined in Section 3(l) of ERISA) are not reasonably
likely to have a Material Adverse Effect (in the case of clause (a) of the
definition thereof, the term "Person" shall refer to the Borrower).
(k) The operations and properties of the Borrower and each
of its Subsidiaries are in substantial compliance with all Environmental Laws,
all necessary Environmental Permits have been obtained and are in effect for the
operations and properties of the Borrower and its Subsidiaries and the Borrower
and its Subsidiaries are in compliance with all such Environmental Permits,
except, as to all of the above, where the failure to do so would not be
reasonably likely to have a Material Adverse Effect (in the case of clause (a)
of the definition thereof, the term "Person" shall refer to the Borrower); and
no circumstances exist that are reasonably likely to (i) form the basis of an
Environmental Action against the Borrower or any of its Subsidiaries or any of
their respective properties or (ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law that would, in the case of either (i) or (ii) above, be
reasonably likely to have a Material Adverse Effect (in the case of clause (a)
of the definition thereof, the term "Person" shall refer to the Borrower).
(l) The Borrower and each of its Subsidiaries has filed, has
caused to be filed or has been included in all tax returns (Federal, state,
local and foreign) required to be filed and has paid all taxes shown thereon to
be due, together with applicable interest and penalties.
(m) Neither the Borrower nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended. Neither the making of any Advances,
nor the application of the proceeds or repayment thereof by the Borrower, nor
the consummation of the other transactions contemplated hereby, will violate any
provision of such Act or any rule, regulation or order of the Securities and
Exchange Commission thereunder.
(n) The Borrower is, individually and together with its
Subsidiaries, Solvent.
(o) Set forth on Schedule III hereto is a complete and
accurate list of all Debt of the Borrower and its Subsidiaries, showing as of
the date hereof the principal amount outstanding thereunder; and there is (i) no
other agreement, contract, loan agreement, indenture, mortgage, deed of trust,
lease or other instrument binding on or affecting the Borrower or any of its
Non-Operating Subsidiaries that imposes any material Obligation or material
restriction on the Borrower or any of its Subsidiaries (other than the Related
Documents), (ii) no other agreement, contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument (A) evidencing Debt of Marvel
or any of its Subsidiaries, (B) governing the terms of Debt of Marvel or any of
its Subsidiaries, or (C) containing any commitment or other agreement by any
Person to extend credit that would constitute Debt to Marvel or its
Subsidiaries, in each case that imposes or will impose material Obligations or
material restrictions on Marvel and its Subsidiaries taken as a whole, and (iii)
no other agreement or contract binding on or affecting Marvel or any of its
Subsidiaries that contains provisions that would restrict any Loan Party from
performing or impair the ability of any Loan Party to perform any of the
obligations of such Loan Party under the Loan Documents.
(p) Set forth on Schedule IV hereto is a complete and
accurate list of all Investments held by the Borrower or any of its Non-
Operating Subsidiaries, showing as of the date hereof the amount, obligor or
issuer and maturity, if any, thereof.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance
shall remain unpaid or any Lender shall have any Commitment hereunder, the
Borrower will:
(a) Compliance with Laws, Etc. Comply, and cause each of
its Subsidiaries to comply, in all material respects with all applicable laws,
rules, regulations and orders (such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property except to the extent contested in
good faith), the failure to comply with which would, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect (with respect
to clause (a) of the definition thereof, the term "Person" shall refer to the
Borrower).
(b) Compliance with Environmental Laws. Comply and cause
each of its Subsidiaries and all lessees and all other Persons occupying its
properties to comply, in all material respects, with all Environmental Laws and
Environmental Permits applicable to its operations and properties; obtain and
renew all Environmental Permits necessary for its operations and properties; and
conduct, and cause each of its Subsidiaries to conduct, any investigation,
study, sampling and testing, and undertake any cleanup, removal, remedial or
other action necessary to remove and clean up all Hazardous Materials from any
of its properties, in accordance with the requirements of all Environmental
Laws; provided, however, that neither the Borrower nor any of its Subsidiaries
shall be required to undertake any such cleanup, removal, remedial or other
action to the extent that its obligation to do so is being contested in good
faith and by proper proceedings and appropriate reserves are being maintained
with respect to such circumstances.
(c) Maintenance of Insurance. Maintain, and cause each of
its Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Borrower or such Subsidiary operates.
(d) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries (other than any Subsidiaries of
Marvel) to preserve and maintain, its corporate existence, rights (charter and
statutory) and franchises; provided, however, that neither the Borrower nor any
of its Subsidiaries shall be required to preserve any of its rights or
franchises if the Board of Directors of the Borrower or such Subsidiary (or, in
the case of Marvel, the executive committee of the Board of Directors of Marvel)
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Borrower or such Subsidiary, as the case may be,
and that the loss thereof is not disadvantageous in any material respect to the
Borrower, such Subsidiary or the Lenders.
(e) Visitation Rights. At any reasonable time and from time
to time, upon reasonable prior notice permit the Agent or any of the Lenders or
any agents or representatives thereof, to the extent reasonably requested to
examine and make copies of and abstracts from the records and books of account
of, and visit the properties of, the Borrower and any of its Subsidiaries, and
to discuss the affairs, finances and accounts of the Borrower and any of its
Subsidiaries with any of their officers or directors and with their independent
certified public accountants.
(f) Keeping of Books. Keep, and cause each of its
Subsidiaries to 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 and each such Subsidiary to the extent necessary to
permit the preparation of the financial statements required to be delivered
hereunder.
(g) Maintenance of Properties, Etc. Maintain and preserve,
and cause each of its Subsidiaries to maintain and preserve, all of its
properties that are used or useful in the conduct of its business in good
working order and condition, ordinary wear and tear excepted.
(h) Termination of Financing Statements. Upon the request
of the Agent, and at the expense of the Borrower, within 10 days after such
request, furnish to the Agent proper termination statements on Form UCC-3
covering such financing statements as the Agent may reasonably request that were
listed in the completed requests for information referred to in Sections
3.01(f)(vii)(3) and 3.01(f)(viii)(3).
(i) Performance of Related Documents. Perform and observe,
and cause each of its Subsidiaries to perform and observe, all of the terms and
provisions of each Related Document to which such Person is a party to be
performed or observed by it, maintain each such Related Document in full force
and effect, enforce such Related Document in accordance with its terms, take all
such action to such end as may be from time to time requested by the Agent and,
upon request of the Agent, make to each other party to each such Related
Document such demands and requests for information and reports or for action as
the Borrower is entitled to make under such Related Document and cause its
Subsidiaries to do all of the foregoing with respect to any Related Document it
is party to.
(j) Collateral Account. Maintain the Borrower Collateral
Account with Citibank pursuant to the terms of the Borrower Security Agreement.
(k) Reporting Requirements. Furnish to the Lenders through
the Agent:
(i) as soon as available and in any event within 50
days after the end of each of the first three quarters of each fiscal year of
the Borrower, Consolidated balance sheets of the Borrower and its Subsidiaries
as of the end of such quarter and Consolidated statements of earnings, cash
flows and stockholders' equity of the Borrower and its Subsidiaries for the
period commencing at the end of the previous fiscal year and ending with the end
of such quarter, certified (subject to normal year-end audit adjustment and the
absence of footnotes) on behalf of the Borrower by the chief financial officer
of the Borrower;
(ii) as soon as available and in any event within 105
days after the end of each fiscal year of the Borrower, a copy of the annual
audit report for such year for the Borrower and its Subsidiaries, containing
financial statements for such year certified in a manner reasonably acceptable
to the Required Lenders by Ernst & Young or other independent public accountants
reasonably acceptable to the Required Lenders;
(iii) together with each delivery of financial
statements pursuant to clauses (i) and (ii) above, a certificate executed on
behalf of the Borrower by a senior officer of the Borrower stating that no
Default has occurred and is continuing or, if a Default has occurred and is
continuing, a statement as to the nature thereof and the action that the
Borrower has taken and proposes to take with respect thereto;
(iv) as soon as possible and in any event within five
days after knowledge of the occurrence of each Default continuing on the date of
such statement, a statement executed on behalf of the Borrower by the chief
financial officer of the Borrower setting forth details of such Default and the
action which the Borrower has taken and proposes to take with respect thereto;
(v) as soon as available and in any event no later
than February 1 of each fiscal year of the Bank, forecasts prepared by
management of the Bank, in form satisfactory to the Agent, of balance sheets and
income statements on a quarterly basis for the term of the Facility;
(vi) promptly after the sending or filing thereof,
copies of any filings and statements that the Borrower or any Subsidiary of the
Borrower files with the Securities and Exchange Commission or any national
securities exchange;
(vii) promptly and in any event within (A) thirty days
after the Borrower knows or has reason to know that any ERISA Event with respect
to the Borrower or any of its ERISA Affiliates has occurred, a statement
describing such ERISA Event and the action, if any, that the Borrower or such
ERISA Affiliate proposes to take with respect thereto, (B) thirty days either
after receipt thereof by the Borrower or after the Borrower knows or has reason
to know of the receipt thereof by any of its ERISA Affiliates from the sponsor
of a Multiemployer Plan of the Borrower or any of its ERISA Affiliates, a copy
of each notice received by any such Person concerning the imposition of
Withdrawal Liability upon such Person, the reorganization or termination of such
Multiemployer Plan, or the amount of the liability incurred, or that may be
incurred, by the Borrower or any of its ERISA Affiliates in connection with any
such event and (C) ten Business Days either after receipt thereof by the
Borrower or after the Borrower knows or has reason to know of the receipt
thereof by any of its ERISA Affiliates, copies of each notice from the PBGC
stating its intention to terminate any Plan of the Borrower or any of its ERISA
Affiliates or to have a trustee appointed to administer any such Plan, provided
that in the case of any event described in clauses (A), (B) or (C) hereof, such
event shall have a Material Adverse Effect (with respect to clause (a) of the
definition thereof, the term "Person" shall refer to the Borrower);
(viii) in the event of any change in GAAP from the date
of the financial statements referred to in Section 4.01(f) and upon delivery of
any financial statement required to be furnished under clauses (i) or (ii) of
this Section 5.01(k), a statement of reconciliation conforming any information
contained in such financial statement with GAAP as in effect on the date of the
financial statements referred to in Section 4.01(f);
(ix) promptly upon any officer of the Borrower
obtaining knowledge thereof, written notice of (A) the institution or non-
frivolous threat of any action, suit, proceeding, governmental investigation or
arbitration against or affecting the Borrower or any of its Subsidiaries or any
property of the Borrower or any of its Subsidiaries (any such action, suit,
proceeding, investigation or arbitration being a "Proceeding") or (B) any
material development in any Proceeding that is already pending, where such
Proceeding or development has not previously been disclosed by the Borrower
hereunder and would be reasonably likely to have a Material Adverse Effect (in
the case of clause (a) of the definition of Material Adverse Effect, the term
"Person" shall refer to the Borrower); together in each case with such other
information as any Lender through the Agent may reasonably request to enable the
Lenders and their counsel to evaluate such matters;
(x) promptly after the furnishing thereof, copies
of any statement or report furnished to any other holder of the securities of
the Borrower or of any Subsidiary of the Borrower pursuant to the terms of any
indenture, loan or credit or similar agreement and not otherwise required to be
furnished to the Lenders pursuant to any other clause of this Section 5.01(k);
(xi) promptly upon receipt thereof, copies of all
notices, requests and other documents received by any Loan Party or any
Subsidiary of any Loan Party under or pursuant to any Related Document and, from
time to time upon request by the Agent, such information and reports regarding
the Related Documents as the Agent may reasonably request;
(xii) within 10 days after receipt, copies of all
Revenue Agent Reports (Internal Revenue Service Form 886), or other written
proposals of the Internal Revenue Service, that propose, determine or otherwise
set forth positive adjustments to the Federal income tax liability of the
affiliated group (within the meaning of Section 1504(a)(1) of the Internal
Revenue Code) of which the Borrower is a member aggregating $5,000,000 or more;
(xiii) promptly, and in any event within five Business
Days after the due date (with extensions) for filing the final Federal income
tax return in respect of each taxable year, a certificate of the Borrower (a
"Tax Certificate"), signed on behalf of the Borrower by the President or the
chief financial officer of the Borrower, stating that the common parent of the
affiliated group (within the meaning of Section 1504(a)(1) of the Internal
Revenue Code) of which the Borrower is a member has paid to the Internal Revenue
Service or other taxing authority the full amount that such affiliated group is
required to pay in respect of Federal income tax for such year and that the
Borrower and its Subsidiaries have received any amounts payable to them, and
have not paid amounts in respect of taxes (Federal, state, local or foreign) in
excess of the amount they are required to pay, under the Marvel Tax Agreements
in respect of such taxable year;
(xiv) promptly after the occurrence thereof, notice of
any condition or occurrence on any property of the Borrower or any Subsidiary of
the Borrower that results in a material noncompliance by the Borrower or any of
its Subsidiaries with any Environmental Law or Environmental Permit or would be
reasonably likely to (i) form the basis of an Environmental Action against the
Borrower or any of its Subsidiaries or any such property that would be
reasonably likely to have a Material Adverse Effect (in the case of clause (a)
of the definition of Material Adverse Effect, the term "Person" shall refer to
the Borrower) or (ii) cause any such property to be subject to any restrictions
on ownership, occupancy, use or transferability under any Environmental Law or
Environmental Permit or would be reasonably likely to (i) form the basis of an
Environmental Action against the Borrower or any of its Subsidiaries or such
property that could have a Material Adverse Effect (in the case of clause (a) of
the definition of Material Adverse Effect, the term "Person" shall refer to the
Borrower);
(xv) (A) promptly after the making of any payment to
Mafco by any Person under any Marvel Tax Agreement, a certificate signed on
behalf of the Borrower by the president or chief financial officer of the
Borrower, stating the amount of such payment, together with a schedule in form
and substance reasonably satisfactory to the Agent setting forth in reasonable
detail the computations and other information on which the amount of such
payment was calculated, and (B) promptly after any deposit in the Borrower
Collateral Account, a certificate signed on behalf of the Borrower by the
president or chief financial officer of the Borrower, stating the amount of such
deposit and the source of the funds of such deposit, together with a schedule in
form and substance reasonably satisfactory to the Agent setting forth in
reasonable detail the computations and other information on which the amount and
source of such deposit were determined; and
(xvi) such other information respecting the condition
(financial or otherwise), operations, assets or business of the Borrower or any
of its Subsidiaries as any Lender through the Agent may from time to time
reasonably request.
(l) Look-Forward Certificate. With respect to each deposit
(other than of income or proceeds of Collateral Investments) to the Collateral
Accounts (other than the Second Mafco Collateral Account), the Borrower shall,
within 15 Business Days prior to the date of such deposit or within five
Business Days after the date of such deposit, deliver a certificate (the "Look-
Forward Certificate") to the Agent stating that (i) the projected equity
contributions receivable by the Borrower from the Borrower Parent pursuant to
the Equity Contribution Agreement arising out of net income of the Bank
(including any gains (net of taxes) from the sale by the Bank of deposits and
property, plant and equipment related to such deposits), will be sufficient to
pay scheduled principal and accrued interest on the Advances during the
remaining term of the Facilities (other than the payment due on September 1,
1997), together with a schedule in form reasonably satisfactory to the Agent
setting forth in reasonable detail the computations and other information on
which such certification is based) (taking into account, among other things, the
Bank's performance to date, the quality of the Bank's assets and the presence of
any agreement with the Bank's regulators including, but not limited to, an
agreement relating to capital, asset quality, dividends or management) and (ii)
the Net Cash Proceeds which Mafco and its Subsidiaries expect to receive from
the contemplated sale of assets or the contemplated issuance of Debt will be
sufficient to make the payments due on September 1, 1997, together with, on and
after December 1, 1996, the identity of the assets to be sold or of the issuer
of such Debt and such other details as the Agent shall request; provided,
however, that, notwithstanding the foregoing, if a Look-Forward Certificate has
been delivered to the Agent within 90 days prior to a deposit in the Mafco
Collateral Account of amounts paid under or in connection with any Related
Document, the Borrower may, instead of delivering a Look-Forward Certificate to
the Agent, deliver a certificate (a "Deposit Certificate") to the Agent, within
15 Business Days prior to the date of such deposit or within five Business Days
after the date of such deposit, stating that (x) there has been no adverse
change in (1) the financial condition of each of the Bank and Mafco and its
Subsidiaries, taken as a whole, since the date of the last Look-Forward
Certificate that was delivered to the Agent or (2) the projections contained in
such Look-Forward Certificate and (y) no event has occurred and is continuing
which constitutes an Event of Default or would constitute an Event of Default
but for the requirement that notice be given or time elapse or both.
(m) Transactions with Affiliates. Conduct, and cause each
of its Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of their Affiliates (other than the Borrower or any of
its Subsidiaries) on terms that are fair and reasonable and no less favorable to
the Borrower or such Subsidiary than it would obtain in a comparable arm's-
length transaction with a Person that is not an Affiliate; provided, however,
that for purposes of this Section 5.01(m), the term "Affiliate" shall not
include any officer or director of the Borrower or such Subsidiary, as the case
may be, who does not possess directly or indirectly the power to vote 5% or more
of the Voting Stock of the Borrower or its Subsidiaries; provided further that
nothing in this Section 5.01(m) shall restrict the performance by the parties to
the Marvel Tax Agreements of their respective obligations thereunder.
(n) Use of Proceeds. Use the proceeds of the Advances for
general corporate purposes of the Borrower and its Subsidiaries or for making
advances or distributions to Mafco.
(o) Mafco Tax Group. Maintain, and cause each of its
domestic Subsidiaries (other than the Subsidiaries of Marvel) to maintain, its
status as a member of the affiliated group (within the meaning of Section
1504(a)(1) of the Code) of which Mafco is the common parent.
(p) Marvel Tax Agreements. If Marvel III shall receive any
paymentunder the Marvel Tax Agreements, the Borrower shall cause Marvel III to
loan, advance or otherwise distribute such payment to Mafco to the extent such
loan, advance or distribution is permitted under the Marvel III Indenture and in
accordance with the terms thereof.
SECTION 5.02. Negative Covenants. So long as any Advance
shall remain unpaid or any Lender shall have any Commitment hereunder, the
Borrower will not:
(a) Liens, Etc. Create or suffer to exist, or permit any of
its Non-Operating Subsidiaries to create or suffer to exist, any Lien, upon or
with respect to any of its properties, whether now owned or hereafter acquired,
or sign or file, or permit its Non-Operating Subsidiaries to sign or file, under
the Uniform Commercial Code of any jurisdiction, a financing statement that
names the Borrower or any of its Non-Operating Subsidiaries as debtor, or sign,
or permit any of its Non-Operating Subsidiaries to sign, any security agreement
authorizing any secured party thereunder to file such financing statement, or
assign, or permit any of its Non-Operating Subsidiaries to assign, any right to
receive income, other than the following Liens: (i) Liens created by the Loan
Documents; (ii) the Liens described on Schedule V provided that in the event any
property subject to any such Lien is released from such Lien, such released
property may not thereafter be subjected to any Lien other than Liens created by
the Loan Documents; (iii) mechanics', materialmen's, carriers' and similar Liens
arising in the ordinary course of business securing obligations that are not
overdue for a period of more than 30 days or which are being contested in good
faith and by proper proceedings and as to which appropriate reserves are being
maintained; (iv) Liens for taxes, assessments and governmental charges or levies
not yet due and payable or which are being contested in good faith and by proper
proceedings and as to which appropriate reserves are being maintained; and (v)
judgment or other similar Liens, provided that there shall be no period of more
than 10 consecutive days during which a stay of enforcement of the related
judgment shall not be in effect.
(b) Lease Obligations. Create, incur, assume or suffer to
exist, or permit any of its Non-Operating Subsidiaries to create, incur, assume
or suffer to exist, any obligations as lessee (i) for the rental or hire of real
or personal property in connection with any sale and leaseback transaction, or
(ii) for the rental or hire of other real or personal property of any kind under
leases or agreements to lease having an original term of one year or more.
(c) Mergers, Etc. Merge into or consolidate with any Person
or permit any Person to merge into it, or permit any of its Non-Operating
Subsidiaries to do so.
(d) Sales, Etc. of Assets. Sell, lease, transfer or
otherwise dispose of, or permit any of its Non-Operating Subsidiaries to sell,
lease, transfer or otherwise dispose of, any assets or grant, or permit any of
its Non-Operating Subsidiaries to grant, any option or other right to purchase,
lease or otherwise acquire any assets except (i) dispositions of obsolete, worn
out or surplus property disposed of in the ordinary course of business, (ii)
sales, leases, transfers or other dispositions of assets by a wholly-owned Non-
Operating Subsidiary of the Borrower to any other wholly owned Non-Operating
Subsidiary of the Borrower and (iii) sales, leases, transfers or other
dispositions of assets (other than the capital stock of any Non-Operating
Subsidiary that the Borrower or any other Non-Operating Subsidiary owns
directly) for cash and for no less than fair market value.
(e) Dividends, Repurchases, Etc. Declare or pay any
dividends, purchase, redeem, retire, defease or otherwise acquire for value any
of its capital stock or any warrants, rights or options to acquire such capital
stock, now or hereafter outstanding, return any capital to its stockholders as
such, make any distribution of assets, capital stock, warrants, rights, options,
obligations or securities to its stockholders as such, or permit any of its Non-
Operating Subsidiaries to purchase, redeem, retire, defease or otherwise acquire
for value any capital stock of the Borrower or any warrants, rights or options
to acquire such capital stock, except that the Borrower may (i) declare and
deliver dividends and distributions payable only in common stock or warrants,
rights or options to acquire common stock and (ii) declare and pay cash
dividends to its stockholders in an amount not to exceed the amount released by
the Agent from the Borrower Collateral Account pursuant to the provisions of
Section 7 of the Borrower Security Agreement or the proceeds of the Advances.
(f) Investments. Make or hold, or permit any of its Non-
Operating Subsidiaries to make or hold, any Investment in any Person, other than
(i) Investments by the Borrower and its Subsidiaries in Cash Equivalents, (ii) a
loan by the Borrower to Mafco of up to $350,000,000 out of the proceeds of the
Advances, (iii) Investments by the Borrower in Mafco or any of its Subsidiaries
in an amount not to exceed the sum of the amount released by the Agent from the
Borrower Collateral Account pursuant to the provisions of Section 7 of the
Borrower Security Agreement plus the aggregate amount of any Investments in the
Borrower made by Mafco or any of its Subsidiaries out of the proceeds from the
amount released by the Agent from the Mafco Collateral Accounts pursuant to
Section 7 of the Mafco Security Agreement, (iv) loans or advances by Marvel III
to Mafco in connection with payments to be made pursuant to the terms of the
Marvel Tax Agreements, (v) Investments existing on the date hereof, and (vi)
contributions by the Borrower or any of its Non-Operating Subsidiaries of common
stock of Marvel to any Non-Operating Subsidiary.
(g) Change in Nature of Business. (i) Engage in any
business other than the ownership of the capital stock of Marvel III or (ii)
permit any of its Non-Operating Subsidiaries to make any change in the nature of
the business carried on at the date hereof by such Non-Operating Subsidiaries.
(h) Accounting Changes. Make or permit, or permit any of
its Non-Operating Subsidiaries to make or permit, any change in accounting
policies affecting (i) the presentation of financial statements or (ii)
reporting practices, except in either case as required or permitted by GAAP.
(i) Debt. Create, incur, assume or suffer to exist, or
permit any of its Non-Operating Subsidiaries to create, incur, assume or suffer
to exist, any Debt other than: (i) in the case of the Borrower, Debt under the
Loan Documents; (ii) in the case of any of its Non-Operating Subsidiaries, (A)
in the case of Marvel III, the Marvel III Debt; (B) in the case of Marvel
Parent, the guaranty of the Marvel III Debt and the Marvel Parent Debt; and (C)
in the case of Marvel Holdings, the Marvel Holdings Debt, and (iii), in the case
of the Borrower and any of its Non-Operating Subsidiaries, endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business.
(j) Charter Amendments. Amend, or permit any of its Non-
Operating Subsidiaries to amend, its certificate of incorporation or bylaws.
(k) Prepayments, Etc. of Debt. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any
Debt, other than the prepayment of the Advances in accordance with the terms of
this Agreement, or amend, modify or change in any manner any term or condition
of any Debt or any agreement relating to such Debt, or permit any of its Non-
Operating Subsidiaries to do any of the foregoing other than in the case of
Marvel III, Marvel Parent and Marvel Holdings, to make regularly scheduled or
required repayments or redemptions of the Marvel III Debt, the Marvel Parent
Debt and the Marvel Holdings Debt, respectively.
(l) Amendment, Etc. of Related Documents. Cancel or
terminate any Related Document to which it is a party or consent to or accept
any cancellation or termination thereof, amend, modify or change in any manner
any term or condition thereof or give any consent, waiver or approval
thereunder, waive any default under or any breach of any term or condition of
any such Related Document, agree in any manner to any other amendment,
modification or change of any term or condition of any Related Document, or take
any other action in connection with any such Related Document that would impair
the value of the interest or rights of the Borrower thereunder or that would
impair the interest or rights of the Agent or any Lender or permit any of its
Subsidiaries to do any of the foregoing.
(m) Negative Pledge. Enter into or suffer to exist, or
permit any of its Non-Operating Subsidiaries to enter into or suffer to exist,
any agreement prohibiting or conditioning the creation or assumption of any Lien
upon any of its property or assets other than (i) in favor of the Agent and the
Lenders or (ii) any prohibition or condition existing on the date hereof.
(n) Partnerships. Become a general partner in any general
or limited partnership, or permit any of its Non-Operating Subsidiaries to do
so.
(o) Capital Expenditures. Make, or permit any Non-Operating
Subsidiary to make, any Capital Expenditures.
(p) Issuance of Capital Stock. Issue, or permit any Non-
Operating Subsidiary to issue, any capital stock or warrants, rights or options
to acquire such capital stock.
(q) Payment Restrictions. Create or otherwise cause or
suffer to exist or become effective, or permit any of its Non-Operating
Subsidiaries to create or otherwise cause or suffer to exist or become
effective, any consensual encumbrance or restriction of any kind on the ability
of the Borrower or such Non-Operating Subsidiary to (i) pay dividends or make
any other distributions on any of the Borrower's or such Non-Operating
Subsidiary's capital stock, (ii) make loans or advances to Mafco or any
subsidiary of Mafco or (iii) repay or prepay any Debt owed by the Borrower or a
Non-Operating Subsidiary other than any (x) consensual encumbrances or
restrictions existing on the date hereof and (y) other consensual encumbrances
or restrictions that are no more onerous than those encumbrances and
restrictions in existence on the date hereof with respect to the Borrower or
such Non-Operating Subsidiary, as the case may be.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of, or
interest on, any Advance or any fees payable to the Agent or any Lender
hereunder, in each case when the same becomes due and payable, or any Loan Party
shall fail to make any other payment hereunder within five Business Days after
the same becomes due and payable; or
(b) Any representation or warranty made by any Loan Party or
any FN Party or under or in connection with any Loan Document or FN Document
shall prove to have been incorrect in any material respect when made or
confirmed; or
(c) (i) The Borrower shall fail to perform or observe any
term, covenant or agreement contained in Sections 5.01(h), 5.01(j), 5.01(k),
5.01(l), 5.01(n), 5.01(o) or 5.02, (ii) Mafco shall fail to perform or observe
any term, covenant or agreement contained in Sections 6(i), 6(j), 6(l), 6(o),
6(p) or 7 of the Mafco Guaranty, (iii) Coleman Guarantor shall fail to perform
or observe any term, covenant or agreement contained in Sections 6(i), 6(k) or 7
of the Coleman Guaranty, (iv) Borrower Parent shall fail to perform or observe
any term, covenant or agreement contained in Sections 6(j) or 7 of the Borrower
Parent Guaranty, (v) New World Guarantor shall fail to perform or observe any
term, covenant or agreement contained in Sections 6(h), 6(j) or 7 of the New
World Guaranty, (vi) C&F Guarantor shall fail to perform or observe any term,
covenant or agreement contained in Section 6(h), 6(j) or 7 of the C&F Guaranty,
(vi) Cigar Guarantor shall fail to perform or observe any term, covenant or
agreement contained in Sections 6(h), 6(j) or 7 of the Cigar Guaranty, (vii)
Flavors Guaranty shall fail to perform or observe any term, covenant or
agreement contained in Sections 6(h), 6(j) or 7 of the Flavors Guaranty or
(viii) any Loan Party shall fail to perform or observe any other term, covenant
or agreement contained in any Loan Document on its part to be performed or
observed if such failure shall remain unremedied for 30 days after written
notice thereof shall have been given to the Borrower by the Agent or any Lender;
or
(d) Any A Company or any Designated Operating Company or the
Bank shall fail to pay any principal of or premium or interest on any Debt which
is outstanding in a principal amount of at least $10,000,000 in the aggregate
(but excluding Debt outstanding hereunder) of such A Company, such Designated
Operating Company or the Bank (as the case may be), when the same becomes due
and payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such Debt;
or any other event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect
of such event or condition is to accelerate, or to permit the acceleration of,
the maturity of such Debt; or any such Debt shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), redeemed, purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in each case prior
to the stated maturity thereof; or
(e) Any A Company, any Designated Operating Company or the
Bank shall generally not pay its debts as such debts become due, or shall admit
in writing its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be instituted
by or against any A Company, any Designated Operating Company or any FN Party
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property and, in the case of
any such proceeding instituted against it (but not instituted by it), either
such proceeding shall remain undismissed or unstayed for a period of 45 days, or
any of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part of its
property) shall occur; or any A Company, any Designated Operating Company or the
Bank shall take any corporate action to authorize any of the actions set forth
above in this Section 6.01(e); or
(f) Any judgment or order for the payment of money in excess
of $10,000,000 shall be rendered against any A Company, any Designated Operating
Company or the Bank and there shall be any period of 10 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect unless such judgment or order shall
have been vacated, satisfied or dismissed or bonded pending appeal; provided,
however, that any such judgment or order shall not be an Event of Default under
this Section 6.01(f) if and for so long as (i) the entire amount of such
judgment or order is covered by a valid and binding policy of insurance between
the defendant and the insurer covering payment thereof and (ii) such insurer,
which shall be rated at least "A" by A.M. Best Company, has been notified of,
and has not disputed the claim made for payment of the amount of such judgment
or order; or
(g) Any non-monetary judgment or order shall be rendered
against any A Company, any Designated Operating Company or the Bank that is
reasonably likely to have a Material Adverse Effect (in the case of clause (a)
of the definition thereof, the term "Person" shall refer to the Borrower) and
there shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect unless such judgment or order shall have been
vacated, satisfied, discharged or bonded pending appeal; or
(h) Ronald O. Perelman (or in the event of his incompetence
or death, his estate, heirs, executor, administrator, committee or other
personal representative) shall cease to beneficially own (i) at least 80% of the
Voting Stock of any A Company, any Designated Operating Company (other than New
World) or the Bank or (ii) at least 51% of the voting power of the Voting Stock
of New World; or
(i) Any ERISA Event shall have occurred with respect to
Mafco or any of its ERISA Affiliates and such ERISA Event, together with any and
all other ERISA Events that shall have occurred with respect to Mafco or any of
its ERISA Affiliates, is reasonably likely to have a Material Adverse Effect
(with respect to clause (a) of the definition thereof, the term "Person" shall
refer to Mafco); or
(j) Mafco or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of the Borrower or any of its
ERISA Affiliates that it has incurred Withdrawal Liability to such Multiemployer
Plan in an amount that, when aggregated with all other amounts required to be
paid to Multiemployer Plans by Mafco and its ERISA Affiliates as Withdrawal
Liability (determined as of the date of such notification), exceeds $10,000,000
or requires payments exceeding $10,000,000 per annum; or
(k) Mafco or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of the Borrower or any of its
ERISA Affiliates that such Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, and as a result of such
reorganization or termination the aggregate annual contributions of Mafco and
its ERISA Affiliates to all Multiemployer Plans that are then in reorganization
or being terminated have been or will be increased over the amounts contributed
to such Multiemployer Plans for the plan years of such Multiemployer Plans
immediately preceding the plan year in which such reorganization or termination
occurs by an amount exceeding $10,000,000; or
(l) Any provision of any Loan Document, Related Document or
FN Document after delivery thereof pursuant to the Existing Credit Agreement or
Section 3.01 shall for any reason cease to be valid and binding on or
enforceable against any party to it, or any party to any such document shall so
state in writing; or
(m) Any Collateral Document after delivery thereof pursuant
to the Existing Credit Agreement or Section 3.01 shall for any reason (other
than pursuant to the terms thereof) cease to create a valid and perfected first
priority Lien on the Collateral purported to be covered thereby; or
(n) Any provision of the FN Holdings Debt Document shall be
terminated, amended, waived or otherwise modified without the consent of the
Required Lenders or any provision of the certificate of incorporation of FN
Parent or the certificate of incorporation of FN Holdings shall be amended or
modified without the consent of the Required Lenders; or
(o) The Bank fails to maintain the minimum capital and
leverage ratios required as of the Effective Date for the Bank to be considered
as a "well capitalized" "savings association" pursuant to 12 U.S.C. Section
1831o and 12 C.F.R. Section 565, as such Sections may be amended, reenacted or
redesignated from time to time; or
(p) At any time prior to October 3, 1995, the Bank shall not
operate branches in each of the geographical regions of the United States or any
state in which the Bank operated such a branch on March 31, 1994 (other than the
state of Illinois and the state of Michigan) in substantially the same manner
and with substantially the same aggregate number of branches as it operated on
March 31, 1994; or
(q) The common stock of any Designated Operating Company
trading on the date hereof shall cease to be publicly traded, in the case of
Coleman, Marvel and MCG, on the New York Stock Exchange and, in the case of New
World, the New York Stock Exchange or the Nasdaq National Market System; or
(r) Gerald J. Ford shall beneficially or legally own shares
of the common stock of FN Holdings other than shares of the Class B Common
Stock; or
(s) Any Person party to the Related Documents shall fail to
directly deposit in the Mafco Collateral Account (i) a payment to Mafco under
any Related Document (which payment is required to be made and is permitted
under each indenture and credit agreement to which such Person is a party) or
(ii) a loan to Mafco of the proceeds of any payment received by such Person
under any Related Document (which loan is required to be made and is permitted
under each indenture and credit agreement to which such Person is a party) and
such failure shall remain unremedied for three Business Days; or
(t) (i) The Bank shall fail to distribute or dividend to FN
Holdings any net income that is attributable to the recognition of the deferred
tax asset-net operating loss carry forwards of the Bank or (ii) during the
Mandatory Distribution Period, the Bank shall fail to distribute or dividend to
FN Holdings an amount equal to the lesser of (x) any net after tax gain
recognized by the Bank from the sale or transfer of deposits and property, plant
and equipment related to such deposits and (y) an amount equal to the product of
(A) the aggregate amount of deposits sold or transferred (after giving effect to
any adjustments contractually agreed upon with respect thereto) (any such
transaction, a "Deposit Sale") multiplied by (B) 3.5% or (iii) during the
Mandatory Distribution Period, the Bank shall fail to distribute or dividend to
FN Holdings any net after tax gain recognized by the Bank from a Deposit Sale in
excess of the amount calculated pursuant to clause (ii) (such excess amount
shall hereinafter be referred to as the "Excess Amount") unless the Bank
reinvests, within 12 months of its receipt of such Excess Amount, such Excess
Amount in the business of the Bank and its Subsidiaries as it is currently
operated and other related activities in which the Bank and its Subsidiaries may
lawfully engage;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the Notes,
all interest thereon and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Notes, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided, however, that, in the event of an actual or
deemed entry of an order for relief with respect to the Borrower under the
Federal Bankruptcy Code, (A) the obligation of each Lender to make Advances
shall automatically be terminated and (B) the Notes, all such interest and all
such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender hereby
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the other Loan Documents as are
delegated to the Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto. As to any matters not expressly
provided for by the Loan Documents (including, without limitation, enforcement
or collection of the Notes), the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions shall be
binding upon all Lenders and all holders of Notes; provided, however, that the
Agent shall not be required to take any action which exposes the Agent to
personal liability or which is contrary to this Agreement or applicable law.
The Agent agrees to give to each Lender prompt notice of each notice and other
report given to it by the Borrower pursuant to the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the Agent nor any
of its directors, officers, agents or employees, shall be liable for any action
taken or omitted to be taken by it or them under or in connection with the Loan
Documents, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (i) may treat
the payee of any Note as the holder thereof until the Agent receives and accepts
an Assignment and Acceptance entered into by the Lender that is the payee of
such Note, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 8.07; (ii) may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (iii)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations (whether written
or oral) made in or in connection with the Loan Documents; (iv) shall not have
any duty to ascertain or to inquire as to the performance or observance of any
of the terms, covenants or conditions of the Loan Documents on the part of the
Borrower or to inspect the property (including the books and records) of the
Borrower; (v) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to
be created under or in connection with the Loan Documents or any other
instrument or document furnished pursuant hereto; and (vi) shall incur no
liability under or in respect of the Loan Documents by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopier,
telegram, cable or telex) believed by it to be genuine and signed or sent by the
proper party or parties.
SECTION 7.03. Citibank and Affiliates. With respect to its
Commitments, the Advances made by it and the Note issued to it, Citibank shall
have the same rights and powers under the Loan Documents as any other Lender and
may exercise the same as though it were not the Agent and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include Citibank
hereunder in its individual capacity. Citibank and its affiliates may accept
deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any kind of business
with, the Borrower, any of its Subsidiaries and any Person who may do business
with or own securities of the Borrower or any such Subsidiary, all as if
Citibank were not the Agent and without any duty to account therefor to the
Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon the Agent or any other
Lender and based on the financial statements referred to in Section 4.01(f) and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent 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 this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to indemnify
the Agent (to the extent not reimbursed by the Borrower), ratably according to
the respective principal amounts of the Advances then owing to each of them (or
if no Advances are at the time outstanding or if any Advances are then owing to
Persons which are not Lenders, ratably according to the respective amounts of
their Commitments), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against the Agent in any way relating to or arising out of the
Loan Documents or any action taken or omitted by the Agent under the Loan
Documents, provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Agent promptly upon demand for its ratable share of unpaid fees
owing to the Agent, and any out-of-pocket expenses (including counsel fees)
incurred by the Agent, in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, any Loan Document, to the extent that the
Agent is not paid such fees, or the Agent is not reimbursed for such expenses,
by the Borrower.
SECTION 7.06. Successor Agent. The Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower and may be
removed at any time with or without cause by the Required Lenders. Upon any
such resignation or removal, the Required Lenders shall have the right to
appoint, with the consent of the Borrower, a successor Agent which shall be a
Lender, or if no Lender consents to act as Agent hereunder, an institution that
would be permitted to be an Eligible Assignee hereunder. If no successor Agent
shall have been so appointed by the Required Lenders, and shall have accepted
such appointment, within 30 days after the retiring Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which
shall be a commercial bank that is acceptable to the Borrower (which shall not
unreasonably withhold its approval). Upon the acceptance of any appointment as
Agent thereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under the Loan Documents. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article VII
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Required Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by each of the Lenders (other than any Lender which
is, at such time, a Defaulting Lender), do any of the following: (i) waive any
of the conditions specified in Section 3.01 or 3.02, (ii) change the definition
of the term "Required Lenders," (iii) release any material portion of the
Collateral or permit the creation, incurrence, assumption or existence of any
Lien on any material portion of the Collateral other than the Liens created by
the Collateral Documents and the Liens permitted by Section 5.02(a), Section
7(a) of the Borrower Parent Guaranty, Section 7(a) of the Coleman Guaranty,
Section 7(a) of the Mafco Guaranty, Section 7(a) of the C&F Guaranty and Section
7(a) of the New World Guaranty, (iv) amend this Section 8.01, (v) increase the
Commitments of the Lenders or subject the Lenders to any additional obligations,
(vi) reduce the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder or (vii) postpone any date fixed for any mandatory
reduction in the Commitments or for any payment of principal of, or interest on,
the Notes or any fees or other amounts payable hereunder or amend Section 2.04
or 2.05; provided further that no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Lenders required above to
take such action, affect the rights or duties of the Agent under this Agreement
or any Note.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and mailed, telecopied, telegraphed,
telexed, cabled or delivered, if to the Borrower, at its address at c/o
MacAndrews and Forbes Holdings Inc., 38 East 63rd Street, New York, New York
10021, Attention: Secretary, if to any Financial Institution at its Domestic
Lending Office on Schedule I-A hereto; if to any other Lender, at the address
specified in the Assignment and Acceptance pursuant to which it became a Lender;
and if to the Agent, at its address at 399 Park Avenue, New York, New York
10043, Attention: Jolie Eisner, or, as to the Borrower or the Agent, at such
other address as shall be designated by such party in a written notice to the
other parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the Agent. All
such notices and communications shall be effective (i) when received, if mailed
or delivered or telecopied (including machine acknowledgment), or (ii) when
delivered to the telegraph company, confirmed by telex answerback or delivered
to the cable company, respectively, except that notices and communications to
the Agent pursuant to Article II or VII shall not be effective until received by
the Agent.
SECTION 8.03. No Waiver; Remedies. No failure on the part of
any Lender, or the Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs; Expenses. (a) The Borrower agrees to pay
on demand all reasonable out-of-pocket costs and expenses of the Agent in
connection with the preparation, execution, delivery, administration,
modification and amendment of the Loan Documents and the other documents to be
delivered hereunder (including, without limitation, (A) all due diligence,
transportation, computer, duplication, appraisal, audit and insurance expenses
and fees and expenses of consultants engaged with the prior consent of the
Borrower (which consent shall not be unreasonably withheld) and (B) the
reasonable fees and out-of-pocket expenses of counsel for the Agent with respect
thereto, with respect to advising the Agent as to its rights and
responsibilities, or the protection or preservation of rights or interests,
under the Loan Documents, with respect to negotiations with the Borrower or with
other creditors of the Borrower arising out of any Default or any events or
circumstances that may give rise to a Default and with respect to presenting
claims in, monitoring or otherwise participating in any bankruptcy, insolvency
or other similar proceeding affecting creditors' rights generally and any
proceeding ancillary thereto). The Borrower further agrees to pay on demand all
reasonable out-of-pocket costs and expenses of the Agent and the Lenders in
connection with the enforcement of the Loan Documents and the other documents to
be delivered hereunder, whether in action, suit, litigation, any bankruptcy,
insolvency or other similar proceeding affecting creditors' rights generally or
otherwise (including, without limitation, the reasonable fees and reasonable
expenses of counsel for the Agent and each Lender with respect thereto) and
expenses in connection with the enforcement of rights under this Section
8.04(a).
(b) If any payment of principal of any Eurodollar Rate
Advance is made by the Borrower to or for the account of a Lender other than on
the last day of the Interest Period for such Advance, as a result of a payment
or Conversion pursuant to Section 2.09(c) or 2.10, acceleration of the maturity
of the Notes pursuant to Section 6.01 or for any other reason, the Borrower
shall, upon demand by such Lender (with a copy of such demand to the Agent), pay
to the Agent for the account of such Lender any amounts required to compensate
such Lender for any additional losses, costs or expenses which it may reasonably
incur as a result of such payment, including, without limitation, any loss, cost
or expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender to fund or maintain such Advance.
(c) The Borrower agrees to indemnify and hold harmless the
Agent and each Lender and each of their affiliates and their officers,
directors, employees, agents and advisors (each, an "Indemnified Party") from
and against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of (or in connection with
the preparation for a defense of) any investigation, litigation or proceeding
arising out of, related to or in connection with this Agreement and the
transactions contemplated hereby, whether or not an Indemnified Party is a party
thereto, whether or not the transactions contemplated hereby are consummated and
whether or not any such claim, investigation, litigation or proceeding is
brought by the Borrower or any other person, except (i) to the extent such
claim, damage, loss, liability or expense (x) is found in a final, non-
appealable judgment by a court of competent jurisdiction (a "Final Judgment") to
have resulted from such Indemnified Party's gross negligence or willful
misconduct or (y) arises from any legal proceedings commenced against any Lender
by any other Lender (in its capacity as such and not as Agent), and (ii) in the
case of any litigation brought by the Borrower (A) seeking a judgment against
any Indemnified Party for any wrongful act or omission of such Indemnified Party
and (B) in which a Final Judgment is rendered in the Borrower's favor against
such Indemnified Party, the provisions of this paragraph will not be available
to provide indemnification for any damage, loss, liability or expense incurred
by such Indemnified Party in connection with such litigation described in clause
(i) or (ii) of this Section 8.04(c).
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and
during the continuance of any Event of Default and (ii) the making of the
request or the granting of the consent specified by Section 6.01 to authorize
the Agent to declare the Notes due and payable pursuant to the provisions of
Section 6.01, each Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set-off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any and all of the obligations of
the Borrower to such Lender now or hereafter existing under this Agreement and
the Note or Notes held by such Lender, whether or not such Lender shall have
made any demand under this Agreement or such Note or Notes and although such
obligations may be unmatured. Each Lender agrees promptly to notify the
Borrower after any such set-off and application shall be made by such Lender,
provided that the failure to give such notice shall not affect the validity of
such set-off and application; provided further that no Lender shall exercise any
such right of set-off or any other right of set-off without the prior consent of
the Agent. The rights of each Lender under this Section 8.05 are in addition to
other rights and remedies (including, without limitation, other rights of set-
off) which such Lender may have.
SECTION 8.06. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower and the Agent and
when the Agent shall have been notified by each Financial Institution that such
Financial Institution has executed it and thereafter shall be binding upon and
inure to the benefit of the Borrower, the Agent and each Lender and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Agent and the Required Lenders.
SECTION 8.07. Assignments and Participations. (a) Each
Lender may and, if demanded by the Borrower pursuant to Section 2.14, will
assign to one or more banks or other entities all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment, the Advances owing to it and the Note or Notes held
by it); provided, however, that (i) each such assignment shall be of a uniform,
and not a varying, percentage of all rights and obligations under and in respect
of one or more of the Facilities; (ii) the amount of the Commitment of the
assigning Lender being assigned pursuant to each such assignment (determined as
of the date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than $5,000,000 and shall be an integral multiple of
$1,000,000 in excess thereof, or shall be an assignment to another Lender or an
assignment of all of the assigning Lender's rights and obligations hereunder and
under the Notes, (iii) each such assignment shall be to another Lender, an
Affiliate of the assigning Lender or to an Eligible Assignee, (iv) each such
assignment made as a result of a demand by the Borrower pursuant to Section 2.14
shall be arranged by the Borrower after consultation with the Agent and shall be
either an assignment of all of the rights and obligations of the assigning
Lender under this Agreement or an assignment of a portion of such rights and
obligations made concurrently with another such assignment or other such
assignments that together cover all of the rights and obligations of the
assigning Lender under this Agreement, (v) no Lender shall be obligated to make
any such assignment as a result of a demand by the Borrower pursuant to Section
2.14 unless and until such Lender shall have received one or more payments from
either the Borrower or one or more Eligible Assignees in an aggregate amount at
least equal to the aggregate outstanding principal amount of the Advances owing
to such Lender, together with accrued interest thereon to the date of payment of
such principal amount and all other amounts payable to such Lender under this
Agreement and (vi) the parties to each such assignment shall execute and deliver
to the Agent, for its acceptance and recording in the Register, an Assignment
and Acceptance, together with any Note or Notes subject to such assignment and a
processing and recordation fee of $3,000 from the assignee. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, (x) the assignee thereunder shall
be a party hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder and (y) the Lender assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01(f) and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Lender 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
this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi)
such assignee appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement as are delegated to
the Agent by the terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(c) The Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Advances owing under
each Facility to, each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Agent, and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee representing that it is an
Eligible Assignee, together with any Note or Notes subject to such assignment,
the Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower. Within five Business Days
after its receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Agent in exchange for the surrendered Note or Notes a
new Note or Notes to the order of such Eligible Assignee in an amount equal to
the Commitment assumed by it under a Facility pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Commitment hereunder
under such Facility, a new Note to the order of the assigning Lender in an
amount equal to such Commitment retained by it hereunder. Such new Note or
Notes shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit A-1 or Exhibit A-2, as the case may be.
(e) Each Lender may sell participations to one or more banks
or other entities in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment, the Advances owing to it and the Note or Notes held by it);
provided, however, that (i) such Lender's obligations under this Agreement
(including, without limitation, its Commitment to the Borrower hereunder) shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such Lender shall
remain the holder of any such Note for all purposes of this Agreement, (iv) the
Borrower, the Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by the Borrower
therefrom, except to the extent that such amendment, waiver or consent would
reduce or postpone any date fixed for payment of principal of, or interest on,
the Notes or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure,
the assignee or participant or proposed assignee or participant shall agree
pursuant to an agreement substantially in the form of Exhibit F to preserve the
confidentiality of any confidential information relating to the Borrower
received by it from such Lender.
(g) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
SECTION 8.08. Governing Law; Submission to Jurisdiction. (a)
This Agreement and the Notes shall be governed by, and construed in accordance
with, the laws of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or Federal court of the United States of America sitting in
New York City, and any appellate court thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Subject to the foregoing and to paragraph (c) below, nothing
in this Agreement shall affect any right that any party hereto may otherwise
have to bring any action or proceeding relating to this Agreement against any
other party hereto in the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any New
York State or Federal court and the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(d) The Borrower agrees that service of process may be made
on the Borrower by personal service of a copy of the summons and complaint or
other legal process in any such suit, action or proceeding, or by registered or
certified mail (postage prepaid) to the address of the Borrower specified in
Section 8.02, or by any other method of service provided for under the
applicable laws in effect in the State of New York.
SECTION 8.09. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
AGENT AND THE LENDERS IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE ADVANCES
OR THE ACTIONS OF THE AGENT, OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
MARVEL IV HOLDINGS INC.
By
---------------------------
Name:
Title:
CITIBANK, N.A.,
as Agent
By
---------------------------
Name:
Title:
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
MARVEL IV HOLDINGS INC.
By
---------------------------
Name:
Title:
CITIBANK, N.A.,
as Agent
By
---------------------------
Name:
Title:
FINANCIAL INSTITUTIONS
BANK OF AMERICA ILLINOIS
By
---------------------------
Name:
Title:
THE BANK OF NEW YORK
By
---------------------------
Name:
Title:
BANKERS TRUST COMPANY
By
---------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, N.A.
By
---------------------------
Name:
Title:
CHEMICAL BANK
By
---------------------------
Name:
Title:
CITIBANK, N.A.
By
---------------------------
Name:
Title:
CREDIT LYONNAIS
By
---------------------------
Name:
Title:
CREDIT SUISSE
By
---------------------------
Name:
Title:
By
---------------------------
Name:
Title:
THE FIRST NATIONAL BANK
OF BOSTON
By
---------------------------
Name:
Title:
THE FUJI BANK, LIMITED
By
---------------------------
Name:
Title:
THE LONG-TERM CREDIT
BANK OF JAPAN, LTD.,
LOS ANGELES AGENCY
By
---------------------------
Name:
Title:
NATIONSBANK, NATIONAL ASSOCIATION
(CAROLINAS)
By
---------------------------
Name:
Title:
SCHEDULE I
EXISTING ADVANCES, ADVANCES, COMMITMENTS AND APPLICABLE LENDING OFFICES
<TABLE>
<CAPTION>
Existing
Advances Advances Revolving Credit
Name of Bank (being assigned) (being assumed) Term Commitment Commitment Applicable Lending Office
------------ ---------------- --------------- --------------- ---------------- --------------------------
<S> <C> <C> <C> <C> <C>
Citibank, N.A. $7,489,523.68 -0- $28,928,571.43 $16,071,428.57 Domestic:
399 Park Avenue
New York, New York 10043
Attention: Ed Vowinkel
Tel: No. 718-248-4523
Fax No.: 718-248-4844
ABA No.: 021000089
Via Fed Transfer
Account No.: 3685-2248
Account Name: Medium Term Fin.
Attention: Ed Vowinkel
Reference: Marvel IV Holdings
Eurodollar:
Same
</TABLE>
<TABLE>
<CAPTION>
Existing
Advances Advances Revolving Credit
Name of Bank (being assigned) (being assumed) Term Commitment Commitment Applicable Lending Office
------------ ---------------- --------------- --------------- ---------------- --------------------------
<S> <C> <C> <C> <C> <C>
Bankers Trust $11,702,380.98 -0- $12,857,142.86 $7,142,857.14 Domestic:
Company 1 Bankers Trust Plaza
130 Liberty Street
New York, NY 10006
Attention: John Jeffcoat
Tel. No.: 212-250-8195
Fax No.: 212-250-6029/7351
ABA No.: 021-001033
Via Fed Transfer
Account No.: 99-401-268
Account Name: Commercial Loan Div.
Attention: Mary Rodwell
Reference: Marvel IV Hldgs.
Eurodollar:
Same
The Bank of -0- $11,234,285.69 $12,857,142.86 $7,142,857.14 Domestic:
New York One Wall Street
New York, NY 10286
Attention: Zoraida Dougherty
Tel. No.: 212-635-8730
Fax No.: 212-635-8679/34
ABA No.: 021000018
Via Fed Transfer
Account No.: GLA/ 111556
Account Name: Commercial Loan Dept.
Attention: Zoraida Dougherty
Reference: Marvel IV Holdings
Eurodollar:
Same
</TABLE>
<TABLE>
<CAPTION>
Existing
Advances Advances Revolving Credit
Name of Bank (being assigned) (being assumed) Term Commitment Commitment Applicable Lending Office
------------ ---------------- --------------- --------------- ---------------- --------------------------
<S> <C> <C> <C> <C> <C>
Bank of America $3,276,666.67 -0- $22,500,000.00 $12,500,000.00 Domestic:
Illinois 231 South LaSalle
Chicago, IL 60697
Attention: Lily Reyes
Tel. No.: 312-828-3873
Fax No.: 312-974-9626
ABA No.: 071-000-039
Via Fed Transfer
Account No.: 47-03421
Attention: Account
Administration-L.Reyes
Reference: Marvel IV Holdings
Eurdollar:
Same
The Chase $1,053,214.31 -0- $12,857,142.86 $7,142,857.14 Domestic:
Manhattan Bank, N.A. 2 Chase Manhattan Plaza
New York, N.Y. 10081
Attention: Rocky Chan
Tel. No.: 212-552-2920
Fax No.: 212-552-7325
ABA No.: 021-0000-21
Via Fed Transfer
Account No.: 900-9-0000-36
Account Name: Commercial Loan Dept.
Attention: Rocky Chan
Reference: Mafco Holding
Eurodollar:
Same
</TABLE>
<TABLE>
<CAPTION>
Existing
Advances Advances Revolving Credit
Name of Bank (being assigned) (being assumed) Term Commitment Commitment Applicable Lending Office
------------ ---------------- --------------- --------------- ---------------- --------------------------
<S> <C> <C> <C> <C> <C>
Chemical Bank -0- $10,181,071.43 $25,714,285.71 $14,285,714.29 Domestic:
270 Park Avenue
New York, New York 10017
Attention: Abigail L. Garcia
Tel. No.: 212-270-5425
Fax No.: 212-818-1456
ABA No.: 021-0001-28
Via Fed Transfer
Account No.:_____________
Account Name: Credit Commercial
Loan
Operations
Attention: John Gallagher
Reference: Mafco Holdings Inc.
Eurodollar:
Same
Credit Lyonnais $3,276,666.67 -0- $22,500,000.00 $12,500,000.00 Domestic:
1301 Avenue of the Americas
New York, NY 10019
Attention: Lucie Mercado
Tel. No.: 212-261-7271
Fax No.: 212-261-3401
ABA No.: 026008073
Via Fed Transfer
Account No.: 01-008820-001-00
Account Name: Loan Servicing
Attention: Lucy Mercado
Reference: Mafco
Eurodollar:
Same
</TABLE>
<TABLE>
<CAPTION>
Existing
Advances Advances Revolving Credit
Name of Bank (being assigned) (being assumed) Term Commitment Commitment Applicable Lending Office
------------ ---------------- --------------- --------------- ---------------- --------------------------
<S> <C> <C> <C> <C> <C>
Credit Suisse $468,095.24 -0- $25,714,285.71 $14,285,714.29 Domestic:
12 East 49th Street
New York, NY 10017
Attention: Ed Siddons
Tel. No.: 212-238-5407
Fax No.: 212-238-5439
ABA No.: 026009179
Via Fed Transfer
Account No.: 904996-02
Account Name: Loan Dept.
Attention: Ed Siddons
Reference: Marvel IV Holdings
Eurodollar:
Same
The First $3,861,785.71 -0- $9,642,857.14 $5,357,142.86 Domestic:
National Bank 100 Rustcraft Road
of Boston Dedham, MA 02026
Attention: Angela Moore
Tel. No.: 617-467-2292
Fax No.: 617-467-2276
ABA No.: 01000390
Account No.: 0411214
Via Fed Transfer
Attention: Angela Moore
Reference: Marvel IV Holdings
</TABLE>
<TABLE>
<CAPTION>
Existing
Advances Advances Revolving Credit
Name of Bank (being assigned) (being assumed) Term Commitment Commitment Applicable Lending Office
------------ ---------------- --------------- --------------- ---------------- --------------------------
<S> <C> <C> <C> <C> <C>
The Fuji Bank, -0- $11,234,285.69 $12,857,142.86 $7,142,857.14 Domestic:
Limited 2 World Trade Center
New York, NY 10048
Attention: Gemma Dizon
Tel. No.: 212-898-2069
Fax No.: 212-488-8216
ABA No.: 026009700
Via Fed Transfer
Account No.: 515011U3
Account Name: USCF III
Attention: Gemma Dizon
Reference: Mafco Holdings
Eurodollar:
Same
The Long-Term $1,053,214.31 -0- $12,857,142.86 $7,142,857.14 Domestic:
Credit Bank of 444 South Flower Street
Japan, Ltd. Los Angeles, CA 90071
Attention: Diane Huynh
Tel. No.: 213-689-6245
Fax No.: 213-626-1067
ABA No.: 122000218
Via Fed Transfer
Account No.: 220234834
Account Name: Long-Term
Credit Bank of Japan
Attention: Ken Nakagana
Reference: Mafco Holdings Inc.
Eurodollar:
Same
</TABLE>
<TABLE>
<CAPTION>
Existing
Advances Advances Revolving Credit
Name of Bank (being assigned) (being assumed) Term Commitment Commitment Applicable Lending Office
------------ ---------------- --------------- --------------- ---------------- --------------------------
<S> <C> <C> <C> <C> <C>
NationsBank, $468,095.24 -0- $25,714,285.71 $14,285,714.29 Eurodollar:
National Same
Association
(Carolinas)
Domestic:
101 No. Tryon Street
Charlotte, NC 28255
Attention: Charlie Franklin
Tel. No.: 704-386-4199
Fax No.: 704-386-8694
ABA No.: 053000196
Via Fed Transfer
Account No.: 13662122506
Account Name: Corporate Credit
Services Support
Attention: Charlie Franklin
Reference: Marvel IV Holdings
</TABLE>
EXHIBIT A-1
TO THE AMENDED
AND RESTATED
CREDIT AGREEMENT
FORM OF TERM NOTE
$____________ Dated: June __, 1995
FOR VALUE RECEIVED, the undersigned, MARVEL IV HOLDINGS INC., a
Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
___________ (the "Lender") for the account of its Applicable Lending Office (as
defined in the Amended and Restated Credit Agreement referred to below) the
aggregate principal amount of the Term Advances (as defined below) owing to the
Lender by the Borrower pursuant to the Amended and Restated Credit Agreement (as
defined below) on the dates and in the amounts specified in the Amended and
Restated Credit Agreement, but in no event later than September 1, 1997.
The Borrower promises to pay interest on the unpaid principal
amount of each Term Advance from the date of each Term Advance until such
principal amount is paid in full, at such interest rates, and payable at such
times, as are specified in the Amended and Restated Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Citibank, N.A., as Agent, at its offices at 399 Park
Avenue, New York, New York 10043, Account No. 3685-2248, in same day funds.
Each Advance owing to the Lender by the Borrower and the maturity thereof, and
all payments made on account of principal thereof, shall be recorded by the
Lender and, prior to any transfer hereof, endorsed on the grid attached hereto,
which is part of this Promissory Note.
This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Amended and Restated Credit Agreement dated as
of June 29, 1995 (such agreement, as it may hereafter be amended or modified,
being the "Amended and Restated Credit Agreement") among the Borrower, the
Lender and certain other lenders parties thereto and Citibank, N.A., as Agent
for the Lender and such other lenders. The Amended and Restated Credit
Agreement, among other things, (i) provides for the making of term advances (the
"Term Advances") by the Lender to the Borrower from time to time in an
aggregate amount not to exceed at any time outstanding the U.S. dollar amount
first above mentioned, the indebtedness of the Borrower resulting from such Term
Advances being evidenced by this Promissory Note, and (ii) contains provisions
for acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York.
MARVEL IV HOLDINGS INC.
By:
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
-------------------------------------------------------------------------------
Amount of
Amount of Principal Paid Unpaid Principal Notation
Date Advance or Prepaid Balance Made by
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
EXHIBIT A-2
TO THE AMENDED
AND RESTATED
CREDIT AGREEMENT
FORM OF REVOLVING CREDIT NOTE
$____________ Dated: June __, 1995
FOR VALUE RECEIVED, the undersigned, MARVEL IV HOLDINGS INC., a
Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
___________ (the "Lender") for the account of its Applicable Lending Office (as
defined in the Amended and Restated Credit Agreement referred to below) the
aggregate principal amount of the Revolving Credit Advances (as defined below)
owing to the Lender by the Borrower pursuant to the Amended and Restated Credit
Agreement (as defined below) on the dates and in the amounts specified in the
Amended and Restated Credit Agreement, but in no event later than September 1,
1997.
The Borrower promises to pay interest on the unpaid principal
amount of each Revolving Credit Advance from the date of each Revolving Credit
Advance until such principal amount is paid in full, at such interest rates, and
payable at such times, as are specified in the Amended and Restated Credit
Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Citibank, N.A., as Agent, at its offices at 399 Park
Avenue, New York, New York 10043, Account No. 3685-2248, in same day funds.
Each Advance owing to the Lender by the Borrower and the maturity thereof, and
all payments made on account of principal thereof, shall be recorded by the
Lender and, prior to any transfer hereof, endorsed on the grid attached hereto,
which is part of this Promissory Note.
This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Amended and Restated Credit Agreement dated as
of June 29, 1995 (such agreement, as it may hereafter be amended or modified,
being the "Amended and Restated Credit Agreement") among the Borrower, the
Lender and certain other lenders parties thereto and Citibank, N.A., as Agent
for the Lender and such other lenders. The Amended and Restated Credit
Agreement, among other things, (i) provides for the making of revolving credit
advances (the "Revolving Credit Advances") by the Lender to the Borrower from
time to time in an aggregate amount not to exceed at any time outstanding the
U.S. dollar amount first above mentioned, the indebtedness of the Borrower
resulting from such Revolving Credit Advances being evidenced by this Promissory
Note, and (ii) contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York.
MARVEL IV HOLDINGS INC.
By:
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
-------------------------------------------------------------------------------
Amount of
Amount of Principal Paid Unpaid Principal Notation
Date Advance or Prepaid Balance Made by
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
EXHIBIT B
TO THE AMENDED
AND RESTATED
CREDIT AGREEMENT
FORM OF
ASSIGNMENT AND ACCEPTANCE
Dated _________, 199_
Reference is made to the Amended and Restated Credit Agreement
dated as of June __, 1995 (as amended or otherwise modified from time to time,
the "Amended and Restated Credit Agreement") among MARVEL IV HOLDINGS INC., a
Delaware corporation (the "Borrower"), the Lenders (as defined in the Amended
and Restated Credit Agreement) and CITIBANK, N.A., as Agent for the Lenders (the
"Agent"). Terms defined in the Amended and Restated Credit Agreement are used
herein with the same meaning.
____________ (the "Assignor") and ___________ (the "Assignee")
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee,
and the Assignee hereby purchases and assumes from the Assignor, an interest in
and to the Assignor's rights and obligations under the Amended and Restated
Credit Agreement as of the date hereof equal to the percentage interest
specified on Annex 1 of all outstanding rights and obligations under the
Facility or Facilities specified on Annex 1. After giving effect to such sale
and assignment, the Assignee's Commitment and the amount of the Advances owing
to the Assignee will be as set forth in Annex 1.
2. The Assignor (i) represents and warrants 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 adverse claim; (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 Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any Loan
Party or the performance or observance by any Loan Party of any of its
obligations under the Loan Documents or any other instrument or document
furnished pursuant thereto; and (iv) attaches the Note or Notes held by the
Assignor and requests that the Agent exchange such Note or Notes for a new Note
or Notes payable to the order of the Assignee in an amount equal to the
Commitment assumed by the Assignee pursuant hereto or new Notes payable to the
order of the Assignee in an amount equal to the Commitment assumed by the
Assignee pursuant hereto and the Assignor in an amount equal to the Commitment
retained by the Assignor under the Amended and Restated Credit Agreement,
respectively, as specified on Annex 1.
3. The Assignee (i) confirms that it has received a copy of
the Amended and Restated Credit Agreement, together with copies of the financial
statements referred to in Section 4.01 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon the 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 Amended and Restated Credit Agreement; (iii) confirms that it
is an Eligible Assignee; (iv) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under the Amended and
Restated Credit Agreement as are delegated to the Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; (v) agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of the Amended and Restated Credit Agreement are required to be
performed by it as a Lender; [and] (vi) specifies as its Lending Office (and
address for notices) the office set forth beneath its name on the signature
pages hereof [and (vii) attaches the forms prescribed by the Internal Revenue
Service of the United States certifying as to the Assignee's status for purposes
of determining exemption from United States withholding taxes with respect to
all payments to be made to the Assignee under the Amended and Restated Credit
Agreement or such other documents as are necessary to indicate that all such
payments are subject to such rates at a rate reduced by an applicable tax
treaty].(1)
4. Following the execution of this Assignment and
Acceptance by the Assignor and the Assignee, it will be delivered to the Agent
for acceptance and recording by the Agent. The effective date of this
Assignment and Acceptance shall be the date of acceptance thereof by the Agent,
unless otherwise specified on Annex 1 hereto (the "Effective Date").
5. Upon such acceptance and recording by the Agent, as of
the Effective Date, (i) the Assignee shall be a party to the Amended and
Restated Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and (ii) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Amended and
Restated Credit Agreement.
---------------
1 Include clause (vii) if the Assignee is organized under the laws of a
jurisdiction outside the United States.
6. Upon such acceptance and recording by the Agent, from
and after the Effective Date, the Agent shall make all payments under the
Amended and Restated Credit Agreement and the Notes in respect of the interest
assigned hereby (including, without limitation, all payments of principal,
interest and commitment fees with respect thereto) to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments in payments under
the Amended and Restated Credit Agreement and the Notes for periods prior to the
Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery of
an executed counterpart of Annex 1 to this Assignment and Acceptance by
telecopier shall be as effective as delivery of a manually executed counterpart
of this Assignment and Acceptance.
IN WITNESS WHEREOF, the parties hereto have caused Annex 1 to
this Assignment and Acceptance to be executed by their respective officers
thereunto duly authorized, as of the date first above written, such execution
being made on Annex 1 hereto.
EXHIBIT C
TO THE AMENDED
AND RESTATED
CREDIT AGREEMENT
FORM OF
NOTICE OF BORROWING
CITIBANK, N.A.
as Agent for the Lenders parties
to the Amended and Restated Credit Agreement [Date]
referred to below
399 Park Avenue
New York, New York 10043
Attention: _____________
Ladies and Gentlemen:
The undersigned, MARVEL IV HOLDINGS INC., refers to the Amended
and Restated Credit Agreement dated as of June __, 1995 (as amended or otherwise
modified form time to time, the "Amended and Restated Credit Agreement"; the
terms defined therein being used herein as therein defined), among the
undersigned, certain Lenders parties thereto and CITIBANK, N.A., as Agent for
said Lenders, and hereby gives you notice, irrevocably, pursuant to Section 2.02
of the Amended and Restated Credit Agreement that the undersigned hereby
requests a Borrowing under the Amended and Restated Credit Agreement, and in
that connection sets forth below the information relating to such Borrowing (the
"Proposed Borrowing") as required by Section 2.02(a) of the Amended and Restated
Credit Agreement:
(i) The Business Day of the Proposed Borrowing is ____________,
[199_];
(ii) The Facility under which the Proposed Borrowing is requested is
the ______ Facility.
(iii) The Type of Advances comprising the Proposed Borrowing is [Base
Rate Advances] [Eurodollar Rate Advances];
(iv) The aggregate amount of the Proposed Borrowing is $__________.
(v) The initial Interest Period for each Eurodollar Rate Advance
made as part of the Proposed Borrowing is _____ month[s].]
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 contained in the Loan
Documents are correct in all material respects on and as of the date of such
Proposed Borrowing, before and after giving effect to the Proposed Borrowing and
to the application of the proceeds therefrom, as though made on and as of such
date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case such representations and warranties
were true, correct and complete in all material respects on and as of such
earlier date; and
(B) no Default has occurred and is continuing, or would result
from suchProposed Borrowing or from the application of the proceeds therefrom.
Very truly yours,
MARVEL IV HOLDINGS INC.
By:
Title:
EXHIBIT G
TO THE AMENDED
AND RESTATED
CREDIT AGREEMENT
FORM OF CONFIDENTIALITY LETTER
[BANK LETTERHEAD]
[Date]
Citibank, N.A.
as Agent
399 Park Avenue
New York, NY 10043
[Name and address of Bank
selling a participation or
making an assignment under
the Amended and Restated Credit Agreement
referred to below]
Dear Sirs:
We understand that Citibank, N.A. ("Citibank") is acting as
Agent under the Amended and Restated Credit Agreement dated as of June __, 1995
(as amended or otherwise modified from time to time, the "Amended and Restated
Credit Agreement"; terms used herein and not otherwise defined are used as
defined therein) among Marvel IV Holdings Inc. (the "Borrower"), Citibank, as
Agent for the Lenders thereunder, the banks and financial institutions and other
institutional lenders party thereto (the "Lenders"). In connection with our
evaluation of a proposed purchase of a participation in, or acceptance of an
assignment of, a portion of the Advances and Commitments, Citibank and/or a
Lender or an affiliate of Citibank or a Lender have furnished, and will furnish,
us with a copy of the Amended and Restated Credit Agreement and non-public
information concerning the Borrower and the Bank (all such non-public
information, whether furnished before or after the date of this letter, and
including, without limitation, the financial model referred to below,
collectively the "Transaction Information").
We agree to keep confidential (and to cause our officers,
directors, employees, agents and representatives to keep confidential) all
Transaction Information and, in the event we do not participate or accept an
assignment under the Amended and Restated Credit Agreement, at Citibank's, such
Lender's or the Borrower's request, to return (and to cause such other person to
return) to Citibank, such Lender or the Borrower, as the case may be, all
written Transaction Information and all copies thereof, extracts therefrom and
analyses and other materials based thereon, except that we shall be permitted to
disclose details of the Transaction Information (i) to such of our officers,
directors, employees, agents and representatives (which agents and
representatives shall not include any financial institutions) and legal or other
advisors who need to know such information in connection with our evaluation of
a possible participation in, or possible acceptance of an assignment of,
Advances and Commitment thereunder and who agree to be bound by the restrictions
set forth herein; (ii) to the extent required by applicable laws and regulations
or by any subpoena or similar legal process (provided that we will promptly
notify the Borrower of such requirement as far in advance of its disclosure as
is practicable to enable the Borrower to seek a protective order and, to the
extent practicable, we will cooperate with the Borrower in seeking any such
order), or requested by any governmental agency or authority having jurisdiction
over us (provided that we will first inform the Borrower of any such request
other than those from bank regulatory authorities or examiners and, in either
case, we will inform any such agency or authority that such information is
subject to this letter agreement); (iii) to the extent Citibank and the Borrower
shall have consented to such disclosure in writing; and (iv) to the extent that
a public announcement or dissemination of such Transaction Information shall
have been made other than as a result of a breach of this Confidentiality
Letter.
We further agree that we will use the Transaction Information
only in connection with our evaluation of becoming a possible participant or
Eligible Assignee under the Amended and Restated Credit Agreement.
The undertakings contained herein are for your benefit and the
benefit of the Borrower.
Upon its receipt of this confidentiality letter signed by us, we
understand that Citibank or a Lender may forward to us a financial model for the
periods through 1997 pertaining to the Borrower and the Bank. Such information
will subsequently form part of the Transaction Information for all purposes
hereunder.
We understand that the financial model was prepared in good
faith by Mafco's management based on assumptions believed to be reasonable when
made. However, because assumptions as to future results are inherently subject
to uncertainty and contingencies beyond Mafco's control, actual results of the
Borrower and the Bank may be higher or lower.
[Name of Lender]
By:
Title:
EXECUTION COPY
AMENDED AND RESTATED BORROWER SECURITY AGREEMENT
Dated as of June 29, 1995
from
MARVEL IV HOLDINGS INC.,
to
CITIBANK, N.A.,
as Agent
T A B L E O F C O N T E N T S
Section Page
1. Grant of Security. . . . . . . . . . . . . . . . . . . . . 2
2. Security for Obligations . . . . . . . . . . . . . . . . . 3
3. Borrower Remains Liable. . . . . . . . . . . . . . . . . . 3
4. Delivery of Security Collateral and Account Collateral . . 4
5. Maintaining the Borrower Collateral Account. . . . . . . . 4
6. Investing of Amounts in the Borrower Collateral Account. . 4
7. Release of Amounts. . . . . . . . . . . . . . . . . . . . 5
8. Representations and Warranties. . . . . . . . . . . . . . 6
9. Further Assurances. . . . . . . . . . . . . . . . . . . . 8
10. Place of Perfection; Records. . . . . . . . . . . . . . . 8
11. Voting Rights; Dividends; Etc.. . . . . . . . . . . . . . 8
12. As to the Assigned Agreement. . . . . . . . . . . . . . . 10
13. Payments Under the Assigned Agreements. . . . . . . . . . 11
14. Transfers and Other Liens; Additional Shares. . . . . . . 11
15. Agent Appointed Attorney-in-Fact. . . . . . . . . . . . . 11
16. Agent May Perform . . . . . . . . . . . . . . . . . . . . 12
17. The Agent's Duties. . . . . . . . . . . . . . . . . . . . 12
18. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 12
19. Indemnity and Expenses. . . . . . . . . . . . . . . . . . 14
20. Amendments; Waivers; Etc. . . . . . . . . . . . . . . . . 14
21. Addresses for Notices . . . . . . . . . . . . . . . . . . 14
22. Continuing Security Interest; Assignments Under the Amended
and Restated Credit Agreement . . . . . . . . . . . . . . 14
23. Release and Termination . . . . . . . . . . . . . . . . . 15
24. Governing Law; Terms. . . . . . . . . . . . . . . . . . . 15
25. Execution in Counterparts; Delivery by Telecopier . . . . 15
Schedule I - Pledged Shares
AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT dated as of June 29,
1995 made by MARVEL IV HOLDINGS INC., a Delaware corporation (the "Borrower"),
to CITIBANK, N.A. ("Citibank") as agent (the "Agent") for the lenders (the
"Lenders") party to the Amended and Restated Credit Agreement (as hereinafter
defined).
PRELIMINARY STATEMENTS.
(1) Marvel IV Holdings Inc., a Delaware corporation (the
"Borrower"), entered into a Credit Agreement dated as of July 20, 1994, as
heretofore amended (as so amended, "Existing Credit Agreement"), with financial
institutions and other institutional lenders party thereto ( the "Existing
Lenders") and Citibank, as agent for the Existing Lenders. In consideration of
the premises and in order to induce the Existing Lenders to make advances under
the Existing Credit Agreement, the Borrower entered into a Security Agreement
dated July 27, 1994 (the "Existing Security Agreement") in favor of Citibank, as
agent for the Existing Lenders.
(2) The Borrower has entered into an Amended and Restated
Credit Agreement dated as of June 29, 1995 (said Agreement, as it may hereafter
be amended or otherwise modified from time to time, being the "Amended and
Restated Credit Agreement; the terms defined therein and not otherwise defined
herein being used as therein defined) with the Lenders and the Agent which
amends and restates the Existing Credit Agreement in its entirety.
(3) The Borrower is the owner of the shares (the "Pledged
Shares") of stock set forth on Schedule I hereto and issued by the corporation
named therein (the "Issuer").
(4) The Borrower has opened a non-interest bearing cash
collateral account (the "Borrower Collateral Account") with Citibank at its
office at 399 Park Avenue, New York, New York 10043, Account No. 40650462, in
the name of the Borrower but under the sole control and dominion of the Agent
and subject to the terms of this Agreement.
(5) It is a condition precedent to the effectiveness of the
Amended and Restated Credit Agreement that the Borrower shall have granted the
assignment and security interest and made the pledge and assignment contemplated
by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to enter into the Amended and Restated Credit Agreement, the
Borrower hereby agrees with the Agent for its benefit and the ratable benefit of
the Lenders as follows:
Section 1. Grant of Security. The Borrower hereby assigns and
pledges to the Agent for its benefit and the ratable benefit of the Lenders, and
hereby grants to the Agent for its benefit and the ratable benefit of the
Lenders a security interest in, all of the Borrower's right, title and interest,
whether now owned or hereafter acquired, in and to the following (collectively,
the "Collateral"):
(a) all of the following (the "Security Collateral"):
(i) the Pledged Shares and the certificates
representing the Pledged Shares, and all dividends, cash instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares;
(ii) all additional shares of stock of the Issuer
from time to time acquired by the Borrower in any manner, and the certificates
representing such additional shares, and all dividends, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such shares;
(b) the Equity Contribution Agreement, as such agreement may
be amended or otherwise modified from time to time (the "Assigned Agreement"),
including, without limitation, (i) all rights of the Borrower to receive moneys
due and to become due under or pursuant to the Assigned Agreement, (ii) all
rights of the Borrower to receive proceeds of any indemnity, warranty or
guaranty with respect to the Assigned Agreement, (iii) claims of the Borrower
for damages arising out of or for breach of or default under the Assigned
Agreement and (iv) the right of the Borrower to terminate the Assigned
Agreement, to perform thereunder and to compel performance and otherwise
exercise all remedies thereunder (all such Collateral being the "Agreement
Collateral");
(c) all of the following (collectively, the "Account
Collateral"):
(i) the Borrower Collateral Account, all funds held
therein and all certificates and instruments, if any, from time to time
representing or evidencing the Borrower Collateral Account;
(ii) all Collateral Investments (as hereinafter
defined) from time to time and all certificates and instruments, if any, from
time to time representing or evidencing the Collateral Investments;
(iii) all notes, certificates of deposit, deposit
accounts, checks and other instruments from time to time hereafter delivered to
or otherwise possessed by the Agent for or on behalf of the Borrower in
substitution for or in addition to any or all of the then existing Account
Collateral; and
(iv) all interest, dividends, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the then existing Account
Collateral; and
(d) all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of the types
described in clauses (a) - (c) of this Section 1) and, to the extent not
otherwise included, all (i) payments under any indemnity, warranty or guaranty,
payable with respect to any of the foregoing Collateral and (ii) cash.
Section 2. Security for Obligations. This Agreement secures
the payment of all Obligations now or hereafter existing of the Borrower under
this Agreement and each other Loan Document to which the Borrower is or becomes
a party, whether for principal, interest (including, without limitation,
interest after the filing of a petition initiating a proceeding referred to in
Section 6.01(e) of the Amended and Restated Credit Agreement, whether or not
such interest constitutes an allowed claim for purposes of such proceeding),
fees, expenses or otherwise (all such Obligations being the "Secured
Obligations"). Without limiting the generality of the foregoing, this Agreement
secures the payment of all amounts that constitute part of the Secured
Obligations and would be owed by the Borrower to the Agent or the Lenders under
the Loan Documents but for the fact that they are unenforceable or not allowable
due to the existence of a bankruptcy, reorganization or similar proceeding
involving the Borrower.
Section 3. Borrower Remains Liable. Anything herein to the
contrary notwithstanding, (a) the Borrower shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the Agent
of any of the rights hereunder shall not release the Borrower from any of its
duties or obligations under the contracts and agreements included in the
Collateral and (c) none of the Agent or any Lender shall have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Agreement, nor shall the Agent or any Lender be obligated to
perform any of the obligations or duties of the Borrower thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.
Section 4. Delivery of Security Collateral and Account
Collateral. All certificates or instruments representing or evidencing Security
Collateral or Account Collateral shall be delivered to and held by or on behalf
of the Agent pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Agent. The
Agent shall have the right, at any time upon the occurrence and during the
continuance of an Event of Default in its discretion and without notice to the
Borrower, to transfer to or to register in the name of the Agent or any of its
nominees any or all of the Security Collateral and Account Collateral. In
addition, the Agent shall have the right at any time to exchange certificates or
instruments representing or evidencing Security Collateral or Account Collateral
for certificates or instruments of smaller or larger denominations.
Section 5. Maintaining the Borrower Collateral Account. At any
time prior to the termination pursuant to Section 23(b) of the pledge,
assignment and security interest granted hereby:
(a) The Borrower will maintain the Borrower Collateral
Account.
(b) It shall be a term and condition of the Borrower
Collateral Account, notwithstanding any term or condition to the contrary in any
other agreement relating to the Borrower Collateral Account, and except as
otherwise provided by the provisions of Section 7 and Section 18, that no amount
(including interest on Collateral Investments) shall be paid or released to or
for the account of, or withdrawn by or for the account of, the Borrower or any
other Person from the Borrower Collateral Account.
The Borrower Collateral Account shall be subject to such applicable laws, and
such applicable regulations of the Board of Governors of the Federal Reserve
System and of any other appropriate banking or governmental authority, as may
now or hereafter be in effect.
Section 6. Investing of Amounts in the Borrower Collateral
Account. If requested by the Borrower, the Agent will, subject to the
provisions of Section 7 and Section 18, from time to time (a) invest amounts on
deposit in the Borrower Collateral Account in such Cash Equivalents, in the name
of the Agent, as the Borrower may select and (b) invest interest paid on the
Cash Equivalents referred to in clause (a) above, and reinvest other proceeds of
any such Cash Equivalents that may mature or be sold, in each case in such Cash
Equivalents in the name of the Agent as the Borrower may select (the Cash
Equivalents referred to in clauses (a) and (b) above being collectively
"Collateral Investments"). Interest and proceeds that are not invested or
reinvested in Collateral Investments as provided above shall be deposited and
held in the Borrower Collateral Account.
Section 7. Release of Amounts. (a) So long as no Default shall
have occurred and be continuing, and subject to the provisions of Section 7(b)
through (h) below, the Agent shall pay and release, free of the Lien created
hereunder, to the Borrower or at its order and at the request of the Borrower,
the amount, if any, on deposit (including interest on Collateral Investments) in
the Borrower Collateral Account.
(b) All amounts deposited into the Borrower Collateral
Account resulting from loans made by FN Parent to Borrower Parent pursuant to
the terms of the FN Parent Loan Agreement that relate solely to net income of
the Bank (excluding, to the extent included in net income, (A) any gains (net of
taxes) from the sale of deposits and property, plant and equipment related to
such deposits, and (B) any net income that is attributable to the recognition of
the deferred tax asset-net operating loss carry forwards of the Bank) shall be
applied to make any prepayment required pursuant to the terms of Section
2.05(b)(i) of the Amended and Restated Credit Agreement. The excess of such
amount deposited into the Borrower Collateral Account over the amount of such
prepayment shall be released in accordance with Section 7(a), subject to the
provisions of Section 7(g) below.
(c) All amounts deposited into the Borrower Collateral
Account resulting from loans made by FN Holdings to Borrower Parent pursuant to
the terms of the certificate of incorporation of FN Holdings that relate solely
to net income of the Bank (excluding, to the extent included in net income, (A)
any gains (net of taxes) from the sale of deposits and property, plant and
equipment related to such deposits, and (B) any net income that is attributable
to the recognition of the deferred tax asset-net operating loss carry forwards
of the Bank) shall be applied to make the prepayment required pursuant to the
terms of Section 2.05(b)(ii) of the Amended and Restated Credit Agreement.
(d) All amounts deposited into the Borrower Collateral
Account resulting from loans made by FN Holdings to Borrower Parent pursuant to
the terms of the certificate of incorporation of FN Holdings that relate to
dividends, other distributions or any loans or advances from the Bank arising
out of excess capital of the Bank shall be applied to make the prepayment
required pursuant to the terms of Section 2.05(b)(iii) of the Amended and
Restated Credit Agreement.
(e) All amounts deposited into the Borrower Collateral
Account resulting from dividends, distributions, loans or advances from the Bank
to FN Holdings arising solely from gains (net of taxes) from the sale of
deposits in California and property, plant and equipment related to such
deposits shall be applied to make the prepayment required pursuant to the terms
of Section 2.05(b)(iv) of the Amended and Restated Credit Agreement.
(f) All amounts deposited into the Borrower Collateral
Account resulting from dividends, distributions, loans or advances from the Bank
to FN Holdings arising solely from (A) gains (net of taxes) from the sale of
deposits (other than the sale of deposits in California) and property, plant and
equipment related to such deposits and (B) any net income that is attributable
to the recognition of the deferred tax asset-net operating loss carry forwards
of the Bank shall be applied to make the prepayment required pursuant to the
terms of Section 2.05(b)(v) of the Amended and Restated Credit Agreement. The
excess of such amount deposited into the Borrower Collateral Account over the
amount of such prepayment shall be released in accordance with Section 7(a),
subject to the provisions of Section 7(g) below; provided, however, that if no
such prepayment is required to be made, the full amount shall be released in
accordance with Section 7(a), subject to the provisions of Section 7(g) below,
to the Borrower.
(g) At any time that a prepayment of the Advances is
required pursuant to Section 2.05(b)(vi) of the Amended and Restated Credit
Agreement out of amounts deposited in the Borrower Collateral Account, the Agent
shall retain in the Borrower Collateral Account any amount otherwise permitted
to be released to the Borrower pursuant to the provisions of Section 7(b) or
7(f) above (including interest on Collateral Investments) and shall apply such
amounts to make the prepayment required pursuant to the provisions of Section
2.05(b)(vi) of the Amended and Restated Credit Agreement.
(h) All amounts deposited into the Borrower Collateral
Account resulting from the proceeds of dividends, other distributions and any
loans or advances made by the Bank (other than such amounts referred to in
Section 7(b) through (g) above) shall be applied to make the prepayment required
pursuant to the provisions of Section 2.05(b)(vii) of the Amended and Restated
Credit Agreement.
Section 8. Representations and Warranties. The Borrower
represents and warrants as follows:
(a) The chief place of business and chief executive office
of the Borrower and the office where the Borrower keeps the original copies of
the Assigned Agreement are located at the address specified opposite the name of
the Borrower on the signature page hereof. An original copy of the Assigned
Agreement has been delivered to the Agent. None of the Agreement Collateral is
evidenced by a promissory note or other instrument.
(b) The Borrower is the legal and beneficial owner of the
Collateral free and clear of any Lien, except for the security interest created
by this Agreement and Liens permitted by Section 5.02(a) of the Amended and
Restated Credit Agreement and Section 7(a) of the Borrower Parent Guaranty. No
effective financing statement or other instrument similar in effect covering all
or any part of the Collateral is on file in any recording office, except such as
may have been filed in favor of the Agent relating to this Agreement and such as
may have been filed in connection with Liens permitted by Section 5.02(a) of the
Amended and Restated Credit Agreement and Section 7(a) of the Borrower Parent
Guaranty. The Borrower has no trade names.
(c) The Pledged Shares have been duly authorized and validly
issued and are fully paid and non-assessable. As of the date hereof, the
Pledged Shares constitute the percentage of the issued and outstanding shares of
stock of the issuers thereof indicated on Schedule I.
(d) The Assigned Agreement, a true and complete copy of
which has been furnished to each Lender, has been duly authorized, executed and
delivered by all parties thereto, has not been amended or otherwise modified, is
in full force and effect and is binding upon and enforceable against all parties
thereto in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforceability of creditors' rights generally. There exists no default under
the Assigned Agreement by any party thereto. Each party to the Assigned
Agreement other than the Borrower has executed and delivered to the Borrower a
Consent dated July 27, 1994 to the assignment of the Agreement Collateral to the
Agent pursuant to this Agreement.
(e) This Agreement, the pledge of the Security Collateral
pursuant hereto, the pledge and assignment of the certificates representing the
Account Collateral pursuant hereto and the making of the filings contemplated by
Section 3.01(g)(viii) of the Existing Credit Agreement create a valid and
perfected first priority security interest in the Collateral (subject, however,
to the Liens permitted by Section 5.02(a) of the Amended and Restated Credit
Agreement and Section 7(a) of the Borrower Parent Guaranty), securing the
payment of the Secured Obligations, and all filings and other actions necessary
or desirable to perfect and protect such security interest have been duly taken.
(f) No consent of any other Person and no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other third party is required either (i) for the
grant by the Borrower of the assignment and security interest granted hereby,
for the pledge by the Borrower of the Security Collateral pursuant hereto or for
the execution, delivery or performance of this Agreement by the Borrower, (ii)
for the perfection or maintenance of the pledge, assignment and security
interest created hereby (including the first priority nature of such pledge,
assignment or security interest), except for the filing of financing and
continuation statements under the Uniform Commercial Code, which financing
statements have been duly filed, or (iii) for the exercise by the Agent of its
voting or other rights provided for in this Agreement or the remedies in respect
of the Collateral pursuant to this Agreement, except as may be required in
connection with the disposition of any portion of the Security Collateral by
laws affecting the offering and sale of securities generally; provided, however,
that no representation or warranty is made as to any consent of, authorization,
approval or other action by, or notice to or filing with, any banking agency or
regulatory body applicable to the Agent.
Section 9. Further Assurances. (a) The Borrower agrees that
from time to time, at its own expense it will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Agent may request, in order to perfect and
protect any pledge, assignment or security interest granted or purported to be
granted hereby or to enable the Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, the Borrower will: (i) mark conspicuously the
Assigned Agreement and each of its records pertaining to the Collateral with a
legend, in form and substance satisfactory to the Agent, indicating that such
Assigned Agreement or Collateral is subject to the security interest granted
hereby; (ii) if any Collateral shall be evidenced by a promissory note or other
instrument or chattel paper, deliver and pledge to the Agent hereunder such note
or instrument or chattel paper duly indorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
the Agent; and (iii) execute and file such financing or continuation statements,
or amendments thereto, and such other instruments or notices, as may be
necessary or desirable, or as the Agent may request, in order to perfect and
preserve the pledge, assignment and security interest granted or purported to be
granted hereby.
(b) The Borrower hereby authorizes the Agent to file one or
more financing or continuation statements, and amendments thereto, relating to
all or any part of the Collateral without the signature of the Borrower where
permitted by law. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(c) The Borrower will furnish to the Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail.
Section 10. Place of Perfection; Records. The Borrower shall
keep its chief place of business and chief executive office and the office where
it keeps its records concerning the Collateral and the original copies of the
Assigned Agreement at the location therefor specified in Section 8(a) or, upon
30 days' prior written notice to the Agent, at such other locations in a
jurisdiction where all actions required by Section 9 shall have been taken with
respect to the Collateral. The Borrower will hold and preserve such records and
the Assigned Agreement and will permit representatives of the Agent at any time
during normal business hours to inspect and make abstracts from such records.
Section 11. Voting Rights; Dividends; Etc. (a) So long as no
Event of Default shall have occurred and be continuing:
(i) The Borrower shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Security Collateral or any
part thereof for any purpose not inconsistent with the terms of this Agreement
or the other Loan Documents; provided, however, that the Borrower shall not
exercise or refrain from exercising any such right if, in the Agent's reasonable
judgment, such action would have a material adverse effect on the value of the
Security Collateral or any part thereof; provided, further, that the Borrower
shall give the Agent at least five days' written notice of the manner in which
it intends to exercise, or the reasons for refraining from exercising, any such
right.
(ii) The Borrower shall be entitled to receive and retain any
and all dividends paid in respect of the Security Collateral; provided, however,
that any and all
(A) dividends paid or payable other than in cash in
respect of, and instruments and other property received, receivable or otherwise
distributed in respect of, or in exchange for, any Security Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Security Collateral in connection with a
partial or total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange for, any Security
Collateral received as consideration for sales or other dispositions of assets
of the Borrower
shall be, and shall be forthwith delivered to the Agent to hold as,
Security Collateral and shall, if received by the Borrower, be received in trust
for the benefit of the Agent, be segregated from the other property or funds of
the Borrower and be forthwith delivered to the Agent as Security Collateral in
the same form as so received (with any necessary indorsement).
(iii) The Agent shall execute and deliver (or cause to be
executed and delivered) to the Borrower all such proxies and other instruments
as the Borrower may reasonably request for the purpose of enabling the Borrower
to exercise the voting and other rights that it is entitled to exercise pursuant
to paragraph (i) above and to receive the dividends that it is authorized to
receive and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an
Event of Default:
(i) All rights of the Borrower (x) to exercise or refrain
from exercising the voting and other consensual rights that it would otherwise
be entitled to exercise pursuant to Section 11(a)(i) shall, upon notice to the
Borrower by the Agent, cease and (y) to receive the dividends that it would
otherwise be authorized to receive and retain pursuant to Section 11(a)(ii)
shall automatically cease, and all such rights shall thereupon become vested in
the Agent, which shall thereupon have the sole right to exercise or refrain from
exercising such voting and other consensual rights and to receive and hold as
Security Collateral such dividends and interest payments.
(ii) All dividends that are received by the Borrower contrary
to the provisions of paragraph (i) of this Section 11(b) shall be received in
trust for the benefit of the Agent, shall be segregated from other funds of the
Borrower and shall be forthwith paid over to the Agent as Security Collateral in
the same form as so received (with any necessary indorsement).
Section 12. As to the Assigned Agreement. (a) The Borrower
shall at its expense:
(i) perform and observe all the terms and provisions of the
Assigned Agreement to be performed or observed by it, maintain the Assigned
Agreement in full force and effect, enforce the Assigned Agreement in accordance
with its terms and take all such action to such end as may be from time to time
requested by the Agent; and
(ii) furnish to the Agent promptly upon receipt thereof
copies of all notices, requests and other documents received by the Borrower
under or pursuant to the Assigned Agreement, and from time to time (A) furnish
to the Agent such information and reports regarding the Collateral as the Agent
may reasonably request and (B) upon request of the Agent make to each other
party to the Assigned Agreement such demands and requests for information and
reports or for action as the Borrower is entitled to make thereunder.
(b) the Borrower shall not, without the Required Lenders'
prior written consent:
(i) cancel or terminate the Assigned Agreement or consent to
or accept any cancellation or termination thereof except pursuant to the terms
thereof;
(ii) amend or otherwise modify the Assigned Agreement or give
any consent, waiver or approval thereunder;
(iii) waive any default under or breach of the Assigned
Agreement;
(iv) consent to or permit or accept any prepayment of amounts
to become due under or in connection with the Assigned Agreement, except as
expressly provided therein; or
(v) take any other action in connection with the Assigned
Agreement that would impair the value of the interest or rights of the Borrower
thereunder or that would impair the interest or rights of the Agent.
Section 13. Payments Under the Assigned Agreements. (a) The
Borrower agrees, and has effectively so instructed each other party to the
Assigned Agreement, that all payments due or to become due under or in
connection with such Assigned Agreement shall be made directly to the Borrower
Collateral Account.
(b) Except as set forth in Section 18, all moneys received
or collected pursuant to subsection (a) above shall be applied as set forth in
Section 7.
Section 14. Transfers and Other Liens; Additional Shares. (a)
Except to the extent permitted by the Amended and Restated Credit Agreement and
the Borrower Parent Guaranty, the Borrower shall not (i) sell, assign (by
operation of law or otherwise) or otherwise dispose of, or grant any option with
respect to, any of the Collateral or (ii) create or suffer to exist any Lien
upon or with respect to any of the Collateral except for the pledge, assignment
and security interest created by this Agreement or any Lien permitted by Section
5.02(a) of the Amended and Restated Credit Agreement and Section 7(a) of the
Borrower Parent Guaranty.
(b) The Borrower shall (i) cause each issuer of the Pledged
Shares not to issue any stock or other securities in addition to or in
substitution for the Pledged Shares issued by such issuer, except to the
Borrower, and (ii) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all additional shares of stock or other
securities of each issuer of the Pledged Shares.
Section 15. Agent Appointed Attorney-in-Fact. The Borrower
hereby irrevocably appoints the Agent the Borrower's attorney-in-fact, with full
authority in the place and stead of the Borrower and in the name of the Borrower
or otherwise, from time to time in the Agent's discretion, at any time upon the
occurrence and during the continuance of an Event of Default to take any action
and to execute any instrument that the Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:
(a) to ask for, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a) above,
and
(c) to file any claims or take any action or institute any
proceedings that the Agent may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce compliance with the terms and
conditions of the Assigned Agreement or the rights of the Agent with respect to
any of the Collateral.
Section 16. Agent May Perform. If the Borrower fails to
perform any agreement contained herein, the Agent may itself perform, or cause
performance of, such agreement, and the reasonable expenses of the Agent
incurred in connection therewith shall be payable by the Borrower under Section
19(b).
Section 17. The Agent's Duties. The powers conferred on the
Agent hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the duty to
exercise reasonable care in respect of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Agent shall have no
duty as to any Collateral, as to ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Security Collateral, whether or not the Agent or any Lender has or is deemed
to have knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Collateral. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Citibank accords its own
property.
Section 18. Remedies. If any Event of Default shall have
occurred and be continuing, the Agent shall have the following rights and
remedies in addition to the rights of the Agent with respect to the Borrower
Collateral Account under Section 7(d):
(a) The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the
Uniform Commercial Code in effect in the State of New York at such time (the
"N.Y. Uniform Commercial Code") (whether or not the N.Y. Uniform Commercial Code
applies to the affected Collateral) and also may (i) require the Borrower to,
and the Borrower hereby agrees that it will at its expense and upon the
reasonable request of the Agent forthwith, assemble all or part of the
Collateral as directed by the Agent and make it available to the Agent at a
place to be designated by the Agent that is reasonably convenient to both
parties and (ii) without notice except as specified below, sell the Collateral
or any part thereof in one or more parcels at public or private sale, at any of
the Agent's offices or elsewhere, for cash, on credit or for future delivery,
and upon such other terms as the Agent may deem commercially reasonable. The
Borrower agrees that, to the extent notice of sale shall be required by law, at
least ten days' notice to the Borrower of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification. The Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Agent may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
(b) All cash proceeds received by the Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Agent, be held by the Agent as
collateral for, and/or then or at any time thereafter applied (after payment of
any amounts payable to the Agent pursuant to Section 19) in whole or in part by
the Agent for the ratable benefit of the Lenders against, all or any part of the
Secured Obligations in such order as the Agent shall elect. Any surplus of such
cash or cash proceeds held by the Agent and remaining after payment in full of
all the Secured Obligations shall be paid over to the Borrower or to whomsoever
may be lawfully entitled to receive such surplus.
(c) The Agent may exercise any and all rights and remedies
of the Borrower under or in connection with the Assigned Agreement or otherwise
in respect of the Collateral, including, without limitation, any and all rights
of the Borrower to demand or otherwise require payment of any amount under, or
performance of the provision of, the Assigned Agreement.
(d) All payments received by the Borrower under or in
connection with the Assigned Agreement or otherwise in respect of the Collateral
shall be received in trust for the benefit of the Agent, shall be segregated
from other funds of the Borrower and shall be forthwith paid over to the Agent
in the same form as so received (with any necessary indorsement).
(e) The Agent may, without notice to the Borrower except as
required by law and at any time or from time to time, charge, set-off and
otherwise apply all or any part of the Secured Obligations against the Borrower
Collateral Account.
Section 19. Indemnity and Expenses. (a) The Borrower agrees
to indemnify the Agent from and against any and all claims, losses and
liabilities growing out of or resulting from this Agreement (including, without
limitation, enforcement of this Agreement), except claims, losses or liabilities
resulting from the Agent's gross negligence or willful misconduct as determined
by a final judgment of a court of competent jurisdiction.
(b) The Borrower will upon demand pay to the Agent the
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that the Agent may incur
in connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Agent or the Lenders hereunder or (iv) the failure by
the Borrower to perform or observe any of the provisions hereof.
Section 20. Amendments; Waivers; Etc. No amendment or waiver
of any provision of this Agreement, and no consent to any departure by the
Borrower herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No failure on the part of the Agent to exercise, and no delay in
exercising any right hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.
Section 21. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and mailed, telegraphed, telecopied,
telexed, cabled or delivered to the Borrower or to the Agent, as the case may
be, in each case addressed to it at its address specified in the Amended and
Restated Credit Agreement or, as to either party, at such other address as shall
be designated by such party in a written notice to each other party complying as
to delivery with the terms of this Section. All such notices and other
communications shall, when mailed, telecopied, telegraphed, telexed or cabled,
respectively, be effective when deposited in the mails, telecopied, delivered to
the telegraph company, confirmed by telex answerback or delivered to the cable
company, respectively, addressed as aforesaid.
Section 22. Continuing Security Interest; Assignments Under the
Amended and Restated Credit Agreement. This Agreement shall create a continuing
security interest in the Collateral and shall (a) remain in full force and
effect until the termination pursuant to Section 23(b) of the pledge, assignment
and security interest granted hereby, (b) be binding upon the Borrower, its
successors and assigns and (c) inure, together with the rights and remedies of
the Agent hereunder, to the benefit of the Agent, the Lenders and their
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (c), any Lender may assign or otherwise transfer all or
any portion of its rights and obligations under the Amended and Restated Credit
Agreement (including, without limitation, all or any portion of its Commitment,
the Advances owing to it and the Note or Notes held by it) to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to such Lender herein or otherwise, in each case as
provided in Section 8.07 of the Amended and Restated Credit Agreement.
Section 23. Release and Termination. (a) Upon any sale,
lease, transfer or other disposition of any item of Collateral in accordance
with the terms of the Loan Documents, the Agent will, at the Borrower's expense,
execute and deliver to the Borrower such documents as the Borrower shall
reasonably request to evidence the release of such item of Collateral from the
assignment and security interest granted hereby; provided, however, that (i) at
the time of such request and such release no Default shall have occurred and be
continuing, (ii) the Borrower shall have delivered to the Agent, at least ten
Business Days prior to the date of the proposed release, a written request for
release describing the item of Collateral and the terms of the sale, lease,
transfer or other disposition in reasonable detail, including the price thereof
and any expenses in connection therewith, together with a form of release for
execution by the Agent and a certification by the Borrower to the effect that
the transaction is in compliance with the Loan Documents and as to such other
matters as the Agent may request, (iii) the proceeds of any such sale, lease,
transfer or other disposition required to be applied in accordance with Section
2.05 of the Amended and Restated Credit Agreement shall be paid to, or in
accordance with the instructions of, the Agent at the closing and (iv) the Agent
shall have approved such sale, lease, transfer or other disposition in writing.
(b) At such time as the Payment Obligations have been Fully
Satisfied, the pledge, assignment and security interest granted hereby shall
terminate and all rights to the Collateral shall revert to the Borrower. Upon
any such termination, the Agent will, at the Borrower's expense, execute and
deliver to the Borrower such documents as the Borrower shall reasonably request
to evidence such termination.
Section 24. Governing Law; Terms. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
except to the extent that the validity or perfection of the security interest
hereunder, or remedies hereunder, in respect of any particular Collateral are
governed by the laws of a jurisdiction other than the State of New York. Unless
otherwise defined herein or in the Amended and Restated Credit Agreement, terms
used in Article 9 of the N.Y. Uniform Commercial Code are used herein as therein
defined.
Section 25. Execution in Counterparts; Delivery by Telecopier.
This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
c/o MacAndrews & Forbes Holdings Inc. MARVEL IV HOLDINGS INC.
38 East 63rd Street
New York, New York 10021
By
Title:
Schedule I
PLEDGED SHARES
<TABLE>
<CAPTION>
Percentage
of
Stock Certificate Number Outstanding
Stock Issuer Class of Stock Par Value No(s) of Shares Shares
------------ -------------- --------- ----------------- --------- ------------
<S> <C> <C> <C> <C> <C>
Marvel III
Holdings Inc. Common $1.00 3 1,000 100%
</TABLE>
EXECUTION COPY
BORROWER PARENT SECURITY AGREEMENT
Dated July 27, 1994
from
MARVEL V HOLDINGS INC.
and
NATIONSBANK OF GEORGIA, NATIONAL ASSOCIATION
as Voting Trustee
to
CITIBANK, N.A.,
as Agent
T A B L E O F C O N T E N T S
Section Page
1. Grant of Security. . . . . . . . . . . . . . . . . . . . . 1
2. Security for Obligations . . . . . . . . . . . . . . . . . 2
3. Borrower Parent Remains Liable . . . . . . . . . . . . . . 3
4. Delivery of Security Collateral. . . . . . . . . . . . . . 3
5. Representations and Warranties. . . . . . . . . . . . . . 3
6. Further Assurances. . . . . . . . . . . . . . . . . . . . 5
7. Place of Perfection; Records . . . . . . . . . . . . . . . 5
8. Voting Rights; Dividends; Etc. . . . . . . . . . . . . . . 6
9. As to the Assigned Agreement . . . . . . . . . . . . . . . 7
11. Transfers and Other Liens; Additional Shares. . . . . . . 8
12. Agent Appointed Attorney-in-Fact. . . . . . . . . . . . . 9
13. Agent May Perform . . . . . . . . . . . . . . . . . . . . 9
14. The Agent's Duties. . . . . . . . . . . . . . . . . . . . 9
15. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 10
16. Indemnity and Expenses. . . . . . . . . . . . . . . . . . 11
18. Amendments; Waivers; Etc. . . . . . . . . . . . . . . . . 12
19. Addresses for Notices . . . . . . . . . . . . . . . . . . 12
20. Continuing Security Interest; Assignments Under
the Credit Agreement. . . . . . . . . . . . . . . . . . . 12
21. Release and Termination . . . . . . . . . . . . . . . . . 13
22. Voting Trustee. . . . . . . . . . . . . . . . . . . . . . 13
23. Governing Law; Terms. . . . . . . . . . . . . . . . . . . 13
24. Execution in Counterparts . . . . . . . . . . . . . . . . 14
Schedule I - Pledged Shares
Exhibit A - Form of Consent and Agreement
SECURITY AGREEMENT
SECURITY AGREEMENT dated July 27, 1994 made by MARVEL V HOLDINGS
INC., a Delaware corporation ("Borrower Parent"), and NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION, only with respect to Sections 1 and 4 hereof, not in its
individual capacity but solely in its capacity as Voting Trustee (in such
capacity, the "Voting Trustee") under the Voting Trust Agreement dated as of the
date hereof (said agreement as it may hereafter be amended or otherwise modified
from time to time, being the "Voting Trust Agreement") among the Borrower (as
hereinafter defined), the Voting Trustee, Borrower Parent and the Agent referred
to below, to CITIBANK, N.A. ("Citibank") as agent (the "Agent") for the lenders
(the "Lenders") party to the Credit Agreement (as hereinafter defined).
PRELIMINARY STATEMENTS.
(1) The Lenders and the Agent have entered into a Credit
Agreement dated as of July 20, 1994 (said Agreement, as it may hereafter be
amended or otherwise modified from time to time, being the "Credit Agreement",
the terms defined therein and not otherwise defined herein being used herein as
therein defined) with Marvel IV Holdings Inc. (the "Borrower").
(2) Borrower Parent and the Voting Trustee are the owners of
the shares (the "Pledged Shares") of stock listed under their respective names
in Schedule I hereto and issued by the corporation named therein (the "Issuer").
(3) It is a condition precedent to the making of Advances by
the Lenders under the Credit Agreement that Borrower Parent and the Voting
Trustee shall have granted the assignment and security interest and made the
pledge and assignment contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make Advances under the Credit Agreement, Borrower Parent
and, with respect to Sections 1 and 4 hereof, the Voting Trustee hereby agree
with the Agent for its benefit and the ratable benefit of the Lenders as
follows:
Section 1. Grant of Security. Each of Borrower Parent and the
Voting Trustee hereby assigns and pledges to the Agent for its benefit and the
ratable benefit of the Lenders, and hereby grants to the Agent for its benefit
and the ratable benefit of the Lenders a security interest in, all of its right,
title and interest, whether now owned or hereafter acquired, in and to the
following (collectively, the "Collateral"):
(a) all of the following (the "Security Collateral"):
(i) the Pledged Shares and the certificates
representing the Pledged Shares, and all dividends, cash instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares;
(ii) all additional shares of stock of the Issuer
from time to time acquired by Borrower Parent or the Voting Trustee in any
manner, and the certificates representing such additional shares, and all
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such shares;
(b) the FN Parent Loan Agreement, as such agreement may be
amended or otherwise modified from time to time (the "Assigned Agreement"),
including, without limitation, (i) all rights of Borrower Parent to receive
moneys due and to become due under or pursuant to the Assigned Agreement, (ii)
all rights of Borrower Parent to receive proceeds of any indemnity, warranty or
guaranty with respect to the Assigned Agreement, (iii) claims of Borrower Parent
for damages arising out of or for breach of or default under the Assigned
Agreement and (iv) the right of Borrower Parent to terminate the Assigned
Agreement, to perform thereunder and to compel performance and otherwise
exercise all remedies thereunder (all such Collateral being the "Agreement
Collateral");
(c) all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of the types
described in clauses (a) - (b) of this Section 1) and, to the extent not
otherwise included, all (i) payments under any indemnity, warranty or guaranty,
payable with respect to any of the foregoing Collateral and (ii) cash.
Section 2. Security for Obligations. This Agreement secures
the payment of all Obligations now or hereafter existing of Borrower Parent
under this Agreement and each other Loan Document to which Borrower Parent is or
becomes a party, whether for principal, interest (including, without limitation,
interest after the filing of a petition initiating a proceeding referred to in
Section 6.01(e) of the Credit Agreement, whether or not such interest
constitutes an allowed claim for purposes of such proceeding), fees, expenses or
otherwise (all such Obligations being the "Secured Obligations"). Without
limiting the generality of the foregoing, this Agreement secures the payment of
all amounts that constitute part of the Secured Obligations and would be owed by
Borrower Parent to the Agent or the Lenders under the Loan Documents but for the
fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving Borrower Parent.
Section 3. Borrower Parent Remains Liable. Anything herein to
the contrary notwithstanding, (a) Borrower Parent shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the Agent
of any of the rights hereunder shall not release Borrower Parent from any of its
duties or obligations under the contracts and agreements included in the
Collateral and (c) none of the Agent or any Lender shall have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Agreement, nor shall the Agent or any Lender be obligated to
perform any of the obligations or duties of Borrower Parent thereunder or to
take any action to collect or enforce any claim for payment assigned hereunder.
Section 4. Delivery of Security Collateral. All certificates
or instruments representing or evidencing Security Collateral shall be delivered
to and held by or on behalf of the Agent pursuant hereto and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Agent. The Agent shall have the right, at any time upon the
occurrence and during the continuance of an Event of Default in its discretion
and without notice to Borrower Parent, to transfer to or to register in the name
of the Agent or any of its nominees any or all of the Security Collateral. In
addition, the Agent shall have the right at any time to exchange certificates or
instruments representing or evidencing Security Collateral for certificates or
instruments of smaller or larger denominations.
Section 5. Representations and Warranties. Borrower Parent
represents and warrants as follows:
(a) The chief place of business and chief executive office
of Borrower Parent and the office where Borrower Parent keeps the original
copies of the Assigned Agreement are located at the address specified below the
name of Borrower Parent on the signature page hereof. An original copy of the
Assigned Agreement has been delivered to the Agent. None of the Agreement
Collateral is evidenced by a promissory note or other instrument.
(b) Borrower Parent is the legal and beneficial owner of the
Collateral (other than the shares issued in the name of the Voting Trustee (the
"Voting Trust Stock")) and is the beneficial owner of the Voting Trust Stock, in
each case free and clear of any Lien, except for the security interest created
by this Agreement, Liens permitted by Section 5.02(a) of the Credit Agreement
and Section 7(a) of the Borrower Parent Guaranty and the Lien created by the
Voting Trust Agreement. The Voting Trustee is the legal owner of the Voting
Trust Stock free and clear of any Lien, except for the security interest created
by this Agreement and the Lien created by the Voting Trust Agreement. No
effective financing statement or other instrument similar in effect covering all
or any part of the Collateral is on file in any recording office, except such as
may have been filed in favor of the Agent relating to this Agreement and such as
may have been filed in connection with Liens permitted by Section 5.02(a) of the
Credit Agreement and Section 7(a) of the Borrower Parent Guaranty. Borrower
Parent has no trade names.
(c) The Pledged Shares have been duly authorized and validly
issued and are fully paid and non-assessable. As of the date hereof, the
Pledged Shares constitute the percentage of the issued and outstanding shares of
stock of the issuers thereof indicated on Schedule I.
(d) The Assigned Agreement, a true and complete copy of
which has been furnished to each Lender, has been duly authorized, executed and
delivered by all parties thereto, has not been amended or otherwise modified, is
in full force and effect and is binding upon and enforceable against all parties
thereto in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforceability of creditors' rights generally. There exists no default under
the Assigned Agreement by any party thereto. Each party to the Assigned
Agreement other than Borrower Parent has executed and delivered to Borrower
Parent a consent, in substantially the form of Exhibit A, to the assignment of
the Agreement Collateral to the Agent pursuant to this Agreement.
(e) This Agreement, the pledge of the Security Collateral
pursuant hereto, the pledge and assignment of the certificates representing the
Account Collateral pursuant hereto and the making of the filings contemplated by
Section 3.01(g)(viii) of the Credit Agreement create a valid and perfected first
priority security interest in the Collateral (subject, however, to the Liens
permitted by Section 5.02(a) of the Credit Agreement and Section 7(a) of the
Borrower Parent Guaranty), securing the payment of the Secured Obligations, and
all filings and other actions necessary or desirable to perfect and protect such
security interest have been duly taken.
(f) No consent of any other Person and no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other third party is required either (i) for the
grant by Borrower Parent or the Voting Trustee of the assignment and security
interest granted hereby, for the pledge by Borrower Parent or the Voting Trustee
of the Security Collateral pursuant hereto or for the execution, delivery or
performance of this Agreement by Borrower Parent or the Voting Trustee, (ii) for
the perfection or maintenance of the pledge, assignment and security interest
created hereby (including the first priority nature of such pledge, assignment
or security interest), except for the filing of financing and continuation
statements under the Uniform Commercial Code, which financing statements have
been duly filed, or (iii) for the exercise by the Agent of its voting or other
rights provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement, except as may be required in connection
with the disposition of any portion of the Security Collateral by laws affecting
the offering and sale of securities generally; provided, however, that no
representation or warranty is made as to any consent of, authorization, approval
or other action by, or notice to or filing with, any banking agency or
regulatory body applicable to the Agent.
Section 6. Further Assurances. (a) Borrower Parent agrees
that from time to time, at its own expense it will promptly execute and deliver
all further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Agent may request, in order to perfect and
protect any pledge, assignment or security interest granted or purported to be
granted hereby or to enable the Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, Borrower Parent will or will cause the Voting
Trustee to, as the case may be: (i) mark conspicuously the Assigned Agreement
and each of its records pertaining to the Collateral with a legend, in form and
substance satisfactory to the Agent, indicating that such Assigned Agreement or
Collateral is subject to the security interest granted hereby; (ii) if any
Collateral shall be evidenced by a promissory note or other instrument or
chattel paper, deliver and pledge to the Agent hereunder such note or instrument
or chattel paper duly indorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to the Agent; and
(iii) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as the Agent may request, in order to perfect and preserve the
pledge, assignment and security interest granted or purported to be granted
hereby.
(b) Borrower Parent hereby authorizes the Agent to file one
or more financing or continuation statements, and amendments thereto, relating
to all or any part of the Collateral without the signature of Borrower Parent
where permitted by law. A photocopy or other reproduction of this Agreement or
any financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(c) Borrower Parent will furnish to the Agent from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as the Agent may
reasonably request, all in reasonable detail.
Section 7. Place of Perfection; Records. Borrower Parent shall
keep its chief place of business and chief executive office and the office where
it keeps its records concerning the Collateral and the original copies of the
Assigned Agreement at the location therefor specified in Section 5(a) or, upon
30 days' prior written notice to the Agent, at such other locations in a
jurisdiction where all actions required by Section 6 shall have been taken with
respect to the Collateral. Borrower Parent will hold and preserve such records
and the Assigned Agreement and will permit representatives of the Agent at any
time during normal business hours to inspect and make abstracts from such
records.
Section 8. Voting Rights; Dividends; Etc. (a) So long as no
Event of Default shall have occurred and be continuing:
(i) Subject to the terms of the Voting Trust Agreement, each
of Borrower Parent and the Voting Trustee shall be entitled to exercise any and
all voting and other consensual rights pertaining to the Security Collateral or
any part thereof for any purpose not inconsistent with the terms of this
Agreement or the other Loan Documents; provided, however, that Borrower Parent
shall not exercise or refrain from exercising any such right if, in the Agent's
reasonable judgment, such action would have a material adverse effect on the
value of the Security Collateral or any part thereof; and, provided, further,
that Borrower Parent shall give the Agent at least five days' written notice of
the manner in which it intends to exercise, or the reasons for refraining from
exercising, any such right.
(ii) Borrower Parent shall be entitled to receive and retain
any and all dividends paid in respect of the Security Collateral; provided,
however, that any and all
(A) dividends paid or payable other than in cash in
respect of, and instruments and other property received, receivable or otherwise
distributed in respect of, or in exchange for, any Security Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Security Collateral in connection with a
partial or total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange for, any Security
Collateral received as consideration for sales or other dispositions of assets
of Borrower Parent
shall be, and shall be forthwith delivered to the Agent to hold as,
Security Collateral and shall, if received by Borrower Parent, be received in
trust for the benefit of the Agent, be segregated from the other property or
funds of Borrower Parent and be forthwith delivered to the Agent as Security
Collateral in the same form as so received (with any necessary indorsement).
(iii) The Agent shall execute and deliver (or cause to be
executed and delivered) to Borrower Parent and the Voting Trustee all such
proxies and other instruments as Borrower Parent and the Voting Trustee may
reasonably request for the purpose of enabling Borrower Parent and the Voting
Trustee to exercise the voting and other rights that each is entitled to
exercise pursuant to paragraph (i) above and to receive the dividends that
Borrower Parent is authorized to receive and retain pursuant to paragraph (ii)
above.
(b) Upon the occurrence and during the continuance of an
Event of Default:
(i) All rights of Borrower Parent or the Voting Trustee (x)
to exercise or refrain from exercising the voting and other consensual rights
that it would otherwise be entitled to exercise pursuant to Section 8(a)(i)
shall, upon notice to Borrower Parent or the Voting Trustee by the Agent, cease
and (y) to receive the dividends that it would otherwise be authorized to
receive and retain pursuant to Section 8(a)(ii) shall automatically cease, and
all such rights shall thereupon become vested in the Agent, which shall
thereupon have the sole right to exercise or refrain from exercising such voting
and other consensual rights and to receive and hold as Security Collateral such
dividends and interest payments.
(ii) All dividends that are received by Borrower Parent
contrary to the provisions of paragraph (i) of this Section 8(b) shall be
received in trust for the benefit of the Agent, shall be segregated from other
funds of Borrower Parent and shall be forthwith paid over to the Agent as
Security Collateral in the same form as so received (with any necessary
indorsement).
Section 9. As to the Assigned Agreement. (a) Borrower Parent
shall at its expense:
(i) perform and observe all the terms and provisions of the
Assigned Agreement to be performed or observed by it, maintain the Assigned
Agreement in full force and effect, enforce the Assigned Agreement in accordance
with its terms and take all such action to such end as may be from time to time
requested by the Agent; and
(ii) furnish to the Agent promptly upon receipt thereof
copies of all notices, requests and other documents received by Borrower Parent
under or pursuant to the Assigned Agreement, and from time to time (A) furnish
to the Agent such information and reports regarding the Collateral as the Agent
may reasonably request and (B) upon request of the Agent make to each other
party to the Assigned Agreement such demands and requests for information and
reports or for action as Borrower Parent is entitled to make thereunder.
(b) Borrower Parent shall not, without the Required Lenders'
prior written consent:
(i) cancel or terminate the Assigned Agreement or consent to
or accept any cancellation or termination thereof except pursuant to the terms
thereof;
(ii) amend or otherwise modify the Assigned Agreement or give
any consent, waiver or approval thereunder;
(iii) waive any default under or breach of the Assigned
Agreement;
(iv) consent to or permit or accept any prepayment of amounts
to become due under or in connection with the Assigned Agreement, except as
expressly provided therein; or
(v) take any other action in connection with the Assigned
Agreement that would impair the value of the interest or rights of Borrower
Parent thereunder or that would impair the interest or rights of the Agent.
Section 10. Payments Under the Assigned Agreement. (a)
Borrower Parent agrees, and has effectively so instructed each other party to
the Assigned Agreement, that all payments due or to become due under or in
connection with such Assigned Agreement shall be made directly to the Borrower
Collateral Account.
(b) Except as set forth in Section 15, all moneys received
or collected pursuant to subsection (a) above shall be applied as set forth in
Section 7 of the Borrower Security Agreement.
Section 11. Transfers and Other Liens; Additional Shares. (a)
Except to the extent permitted by the Credit Agreement and the Borrower Parent
Guaranty, Borrower Parent shall not (i) sell, assign (by operation of law or
otherwise) or otherwise dispose of, or grant any option with respect to, any of
the Collateral or (ii) create or suffer to exist any Lien upon or with respect
to any of the Collateral except for the pledge, assignment and security interest
created by this Agreement, any Lien permitted by Section 5.02(a) of the Credit
Agreement and Section 7(a) of the Borrower Parent Guaranty and the Lien created
by the Voting Trust Agreement.
(b) Borrower Parent shall (i) cause each issuer of the
Pledged Shares not to issue any stock or other securities in addition to or in
substitution for the Pledged Shares issued by such issuer, except to Borrower
Parent, and (ii) pledge hereunder, immediately upon its acquisition (directly or
indirectly) thereof, any and all additional shares of stock or other securities
of each issuer of the Pledged Shares.
Section 12. Agent Appointed Attorney-in-Fact. Borrower Parent
hereby irrevocably appoints the Agent Borrower Parent's attorney-in-fact, with
full authority in the place and stead of Borrower Parent and in the name of
Borrower Parent or otherwise, from time to time in the Agent's discretion, at
any time upon the occurrence and during the continuance of an Event of Default
to take any action and to execute any instrument that the Agent may deem
necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation:
(a) to ask for, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a) above,
and
(c) to file any claims or take any action or institute any
proceedings that the Agent may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce compliance with the terms and
conditions of the Assigned Agreement or the rights of the Agent with respect to
any of the Collateral.
Section 13. Agent May Perform. If either Borrower Parent or
the Voting Trustee fails to perform any agreement contained herein applicable to
it, the Agent may itself perform, or cause performance of, such agreement, and
the reasonable expenses of the Agent incurred in connection therewith shall be
payable by Borrower Parent under Section 16(b).
Section 14. The Agent's Duties. The powers conferred on the
Agent hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the duty to
exercise reasonable care in respect of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Agent shall have no
duty as to any Collateral, as to ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Security Collateral, whether or not the Agent or any Lender has or is deemed
to have knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Collateral. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Citibank accords its own
property.
Section 15. Remedies. If any Event of Default shall have
occurred and be continuing, the Agent shall have the following rights and
remedies:
(a) The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the
Uniform Commercial Code in effect in the State of New York at such time (the
"N.Y. Uniform Commercial Code") (whether or not the N.Y. Uniform Commercial Code
applies to the affected Collateral) and also may (i) require Borrower Parent to,
and Borrower Parent hereby agrees that it will at its expense and upon the
reasonable request of the Agent forthwith, assemble all or part of the
Collateral as directed by the Agent and make it available to the Agent at a
place to be designated by the Agent that is reasonably convenient to both
parties and (ii) without notice except as specified below, sell the Collateral
or any part thereof in one or more parcels at public or private sale, at any of
the Agent's offices or elsewhere, for cash, on credit or for future delivery,
and upon such other terms as the Agent may deem commercially reasonable.
Borrower Parent agrees that, to the extent notice of sale shall be required by
law, at least ten days' notice to Borrower Parent of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Agent shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given. The
Agent may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Agent, be held by the Agent as
collateral for, and/or then or at any time thereafter applied (after payment of
any amounts payable to the Agent pursuant to Section 16) in whole or in part by
the Agent for the ratable benefit of the Lenders against, all or any part of the
Secured Obligations in such order as the Agent shall elect. Any surplus of such
cash or cash proceeds held by the Agent and remaining after payment in full of
all the Secured Obligations shall be paid over to Borrower Parent or to
whomsoever may be lawfully entitled to receive such surplus.
(c) The Agent may exercise any and all rights and remedies
of Borrower Parent under or in connection with the Assigned Agreement or
otherwise in respect of the Collateral, including, without limitation, any and
all rights of Borrower Parent to demand or otherwise require payment of any
amount under, or performance of the provision of, the Assigned Agreement.
(d) All payments received by Borrower Parent under or in
connection with the Assigned Agreement or otherwise in respect of the Collateral
shall be received in trust for the benefit of the Agent, shall be segregated
from other funds of Borrower Parent and shall be forthwith paid over to the
Agent in the same form as so received (with any necessary indorsement).
(e) The Agent may, without notice to Borrower Parent except
as required by law and at any time or from time to time, charge, set-off and
otherwise apply all or any part of the Secured Obligations against Borrower
Parent Collateral Account.
Section 16. Indemnity and Expenses. (a) Borrower Parent
agrees to indemnify the Agent and the Voting Trustee from and against any and
all claims, losses and liabilities growing out of or resulting from this
Agreement (including, without limitation, enforcement of this Agreement), except
claims, losses or liabilities resulting from the Agent's or the Voting Trustee's
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction.
(b) Borrower Parent will upon demand pay to the Agent the
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that the Agent may incur
in connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Agent or the Lenders hereunder or (iv) the failure by
Borrower Parent to perform or observe any of the provisions hereof.
Section 17. Security Interest Absolute. The obligations of
Borrower Parent under this Agreement are independent of the Secured Obligations,
and a separate action or actions may be brought and prosecuted against Borrower
Parent to enforce this Agreement, irrespective of whether any action is brought
against the Borrower or whether the Borrower is joined in any such action or
actions. All rights of the Agent and the pledge, assignment and security
interest hereunder, and all obligations of each of Borrower Parent and the
Voting Trustee hereunder applicable to it shall be absolute and unconditional,
irrespective of:
(a) any lack of validity or enforceability of any Loan
Document or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Secured Obligations or any other
amendment or waiver of or any consent to any departure from any Loan Document,
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
other collateral, or any taking, release or amendment or waiver of or consent to
departure from any 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; or
(f) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, Borrower Parent or a third party
grantor of a security interest.
Section 18. Amendments; Waivers; Etc. No amendment or waiver
of any provision of this Agreement, and no consent to any departure by Borrower
Parent herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No failure on the part of the Agent to exercise, and no delay in
exercising any right hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.
Section 19. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and mailed, telegraphed, telecopied,
telexed, cabled or delivered to Borrower Parent, the Voting Trustee or to the
Agent, as the case may be, in each case addressed to it at its address set forth
on the signature pages hereof or as specified in the Credit Agreement, as the
case may be, or, as to either party, at such other address as shall be
designated by such party in a written notice to each other party complying as to
delivery with the terms of this Section. All such notices and other
communications shall, when mailed, telecopied, telegraphed, telexed or cabled,
respectively, be effective when deposited in the mails, telecopied, delivered to
the telegraph company, confirmed by telex answerback or delivered to the cable
company, respectively, addressed as aforesaid.
Section 20. Continuing Security Interest; Assignments Under the
Credit Agreement. This Agreement shall create a continuing security interest in
the Collateral and shall (a) remain in full force and effect until the
termination pursuant to Section 21(b) of the pledge, assignment and security
interest granted hereby, (b) be binding upon Borrower Parent, the Voting Trustee
and their respective successors and assigns and (c) inure, together with the
rights and remedies of the Agent hereunder, to the benefit of the Agent, the
Lenders and their respective successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), any Lender may assign or
otherwise transfer all or any portion of its rights and obligations under the
Credit Agreement (including, without limitation, all or any portion of its
Commitment, the Advances owing to it and the Note or Notes held by it) to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise, in each
case as provided in Section 8.07 of the Credit Agreement.
Section 21. Release and Termination. (a) Upon any sale,
lease, transfer or other disposition of any item of Collateral in accordance
with the terms of the Loan Documents, the Agent will, at Borrower Parent's
expense, execute and deliver to Borrower Parent such documents as Borrower
Parent shall reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted hereby; provided,
however, that (i) at the time of such request and such release no Default shall
have occurred and be continuing, (ii) Borrower Parent shall have delivered to
the Agent, at least ten Business Days prior to the date of the proposed release,
a written request for release describing the item of Collateral and the terms of
the sale, lease, transfer or other disposition in reasonable detail, including
the price thereof and any expenses in connection therewith, together with a form
of release for execution by the Agent and a certification by Borrower Parent to
the effect that the transaction is in compliance with the Loan Documents and as
to such other matters as the Agent may request, (iii) the proceeds of any such
sale, lease, transfer or other disposition required to be applied in accordance
with Section 2.05 of the Credit Agreement shall be paid to, or in accordance
with the instructions of, the Agent at the closing and (iv) the Agent shall have
approved such sale, lease, transfer or other disposition in writing.
(b) At such time as the Payment Obligations have been Fully
Satisfied, the pledge, assignment and security interest granted hereby shall
terminate and all rights to the Collateral shall revert to Borrower Parent.
Upon any such termination, the Agent will, at Borrower Parent's expense, execute
and deliver to Borrower Parent such documents as Borrower Parent shall
reasonably request to evidence such termination.
Section 22. Voting Trustee. Borrower Parent and the Agent
hereby acknowledge and agree that the sole obligation of the Voting Trustee
hereunder is the delivery to the Agent of the stock certificate of Marvel IV
Holdings Inc. evidencing the Voting Trust Stock issued in the name of the Voting
Trustee in accordance with Sections 1 and 4 hereof.
Section 23. Governing Law; Terms. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
except to the extent that the validity or perfection of the security interest
hereunder, or remedies hereunder, in respect of any particular Collateral are
governed by the laws of a jurisdiction other than the State of New York. Unless
otherwise defined herein or in the Credit Agreement, terms used in Article 9 of
the N.Y. Uniform Commercial Code are used herein as therein defined.
Section 24. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
Agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
IN WITNESS WHEREOF, each of Borrower Parent and the Voting Trustee has caused
this Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
MARVEL V HOLDINGS INC.
By
Title:
Address:
----------------------------
----------------------------
NATIONSBANK OF GEORGIA, NATIONAL
ASSOCIATION, not in its
individual capacity but solely
in its capacity as Voting
Trustee under the Voting Trust
Agreement referred to herein and
only with respect to Sections 1
and 4 hereof
By
Title:
Address:
----------------------------
----------------------------
Schedule I
PLEDGED SHARES
A. PLEDGED BY BORROWER PARENT:
<TABLE>
<CAPTION>
Percentage
of
Stock Certificate Number Outstanding
Stock Issuer Class of Stock Par Value No(s) of Shares Shares
------------ -------------- --------- ----------------- --------- ----------
<S> <C> <C> <C> <C> <C>
Marvel IV
Holdings Inc. Common $1.00 2 995 99.5%
</TABLE>
Voting Trust Certificate, dated July 27, 1994, issued to Marvel V Holdings Inc.,
under the Voting Trust Agreement (as defined below) in respect of the beneficial
ownership of the 5 shares of Common Stock of Marvel IV Holdings Inc. represented
by stock certificate No. 3 listed below.
B. PLEDGED BY THE VOTING TRUSTEE:
<TABLE>
<CAPTION>
Percentage
of
Stock Certificate Number Outstanding
Stock Issuer Class of Stock Par Value No(s) of Shares Shares
------------ -------------- --------- ----------------- --------- ----------
<S> <C> <C> <C> <C> <C>
Marvel IV
Holdings Inc. Common $1.00 3(1) 5 .5%
</TABLE>
----------
(1) Stock Certificate No. 3 issued to NationsBank of Georgia, National
Association, as voting trustee (the "Voting Trustee") under the Voting Trust
Agreement dated as of July 27, 1994 (the "Voting Trust Agreement"), among Marvel
V Holdings Inc., Marvel IV Holdings Inc, Citibank, N.A. and the Voting Trustee.
Exhibit A
FORM OF CONSENT AND AGREEMENT
The undersigned hereby acknowledges notice of, and consents to
the terms and provisions of, the Security Agreement dated July 27, 1994 (the
"Security Agreement", the terms defined or referenced therein being used herein
as therein defined or referenced) from Marvel V Holdings Inc. ("Borrower
Parent") and NationsBank of Georgia, National Association, only with respect to
Sections 1 and 4 thereof, not in its individual capacity but solely in its
capacity as Voting Trustee (in such capacity, the "Voting Trustee") under the
Voting Trust Agreement dated as of July 27, 1994 among Marvel IV Holdings Inc.,
the Voting Trustee, Borrower Parent and the Agent referred to below, to
Citibank, N.A., as agent (the "Agent") for the Lenders referred to therein, and
hereby agrees with the Agent that:
(a) The undersigned will make all payments to be made by it
under or in connection with the FN Parent Loan Agreement dated July __, 19__
(the "Assigned Agreement") between the undersigned and Borrower Parent directly
to the Borrower Collateral Account or otherwise in accordance with the
instructions of the Agent.
(b) All payments referred to in paragraph (a) above shall be
made by the undersigned irrespective of, and without deduction for, any
counterclaim, defense, recoupment or set-off and shall be final, and the
undersigned will not seek to recover from the Agent or any Lender for any reason
any such payment once made.
(c) Following the occurrence and during the continuance of
an Event of Default, the Agent shall be entitled to exercise any and all rights
and remedies of Borrower Parent under the Assigned Agreement in accordance with
the terms of the Security Agreement, and the undersigned shall comply in all
respects with such exercise.
(d) The undersigned will not, without the prior written
consent of the Agent, (i) cancel or terminate the Assigned Agreement or consent
to or accept any cancellation or termination thereof except pursuant to the
terms thereof, (ii) amend or otherwise modify the Assigned Agreement, or (iii)
make any prepayment of amounts to become due under or in connection with the
Assigned Agreement, except as expressly provided therein.
This Consent and Agreement shall be binding upon the undersigned
and its successors and assigns, and shall inure, together with the rights and
remedies of the Agent hereunder, to the benefit of the Agent and the Lenders and
their successors, transferees and assigns. This Consent and Agreement shall be
governed by and construed in accordance with the laws of the State of New York.
EXECUTION COPY
AMENDED AND RESTATED MAFCO SECURITY AGREEMENT
Dated as of June 29, 1995
from
MAFCO HOLDINGS INC.
to
CITIBANK, N.A.
as Agent
T A B L E O F C O N T E N T S
Section Page
1. Grant of Security. . . . . . . . . . . . . . . . . . . . . 2
2. Security for Obligations . . . . . . . . . . . . . . . . . 3
3. Mafco Remains Liable . . . . . . . . . . . . . . . . . . . 4
4. Delivery of Security Collateral and Account Collateral . . 4
5. Maintaining the Mafco Collateral Account . . . . . . . . . 4
6. Investing of Amounts in the Mafco Collateral Account . . . 5
7. Release of Amounts. . . . . . . . . . . . . . . . . . . . 5
8. Representations and Warranties. . . . . . . . . . . . . . 6
9. Further Assurances. . . . . . . . . . . . . . . . . . . . 8
10. Place of Perfection; Records. . . . . . . . . . . . . . . 8
11. Voting Rights; Dividends; Etc.. . . . . . . . . . . . . . 9
12. As to the Assigned Agreements . . . . . . . . . . . . . . 10
13. Payments Under the Assigned Agreements. . . . . . . . . . 11
14. Transfers and Other Liens; Additional Shares. . . . . . . 11
15. Agent Appointed Attorney-in-Fact. . . . . . . . . . . . . 11
16. Agent May Perform . . . . . . . . . . . . . . . . . . . . 12
17. The Agent's Duties. . . . . . . . . . . . . . . . . . . . 12
18. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 12
19. Indemnity and Expenses. . . . . . . . . . . . . . . . . . 14
20. Security Interest Absolute. . . . . . . . . . . . . . . . 14
21. Amendments; Waivers; Etc. . . . . . . . . . . . . . . . . 15
22. Addresses for Notices . . . . . . . . . . . . . . . . . . 15
23. Continuing Security Interest; Assignments Under the Amended
and Restated Credit Agreement . . . . . . . . . . . . . . 15
24. Release and Termination . . . . . . . . . . . . . . . . . 15
25. Governing Law; Terms. . . . . . . . . . . . . . . . . . . 16
26. Execution in Counterparts; Delivery by Telecopier . . . . 16
Schedule I - Pledged Shares
Schedule II - Assigned Agreements
Exhibit A-Form of Consent and Agreement
AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT dated as of June 29,
1995 made by MAFCO HOLDINGS INC., a Delaware corporation ("Mafco"), to CITIBANK,
N.A. ("Citibank"), as agent (the "Agent") for the lenders (the "Lenders") party
to the Amended and Restated Credit Agreement (as hereinafter defined).
PRELIMINARY STATEMENTS.
(1) Marvel IV Holdings Inc., a Delaware corporation (the
"Borrower"), entered into a Credit Agreement dated as of July 20, 1994, as
heretofore amended (as so amended, the "Existing Credit Agreement"), with the
financial institutions and other institutional lenders party thereto (the
"Existing Lenders") and Citibank, as agent for the Existing Lenders. In
consideration of the premises and in order to induce the Existing Lenders to
make advances under the Existing Credit Agreement, Mafco entered into a Guaranty
dated July 27, 1994 (the "Existing Mafco Guaranty") in favor of the Existing
Lenders and Citibank, as agent for the Existing Lenders, and a Security
Agreement dated July 27, 1994 in favor of Citibank, as agent for the Existing
Lenders.
(2) The Borrower has entered into an Amended and Restated
Credit Agreement dated as of June 29, 1995 (said Agreement, as it may hereafter
be amended or otherwise modified from time to time, being the "Amended and
Restated Credit Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined) with the Lenders and the Agent
which amends and restates the Existing Credit Agreement in its entirety.
(3) Mafco has entered into an Amended and Restated Guaranty
dated as of June 29, 1995 (said Guaranty, as it may hereafter be amended or
otherwise modified from time to time, being the "Mafco Guaranty") in favor of
the Lenders and Citibank, as Agent for the Lenders, which amends and restates
the existing Mafco Guaranty in its entirety.
(4) Mafco is the owner of the shares (the "Pledged Shares")
of stock set forth on Schedule I hereto and issued by the corporations named
therein (the "Issuers").
(5) Mafco has opened a non-interest bearing cash collateral
account (the "Mafco Collateral Account") with Citibank at its office at 399 Park
Avenue, New York, New York 10043, Account No. 40650497, in the name of Mafco
but under the sole control and dominion of the Agent and subject to the terms of
this Agreement.
(6) Mafco has opened a second non-interesting bearing cash
collateral account (the "Second Mafco Collateral Account"; together with the
Mafco Collateral Account, the "Mafco Collateral Accounts") with Citibank at its
office at 399 Park Avenue, New York, New York 10043, Account No. 40650518, in
the name of Mafco but under the sole control and dominion of the Agent and
subject to the terms of this Agreement.
(7) It is a condition precedent to the effectiveness of the
Amended and Restated Credit Agreement that Mafco shall have granted the
assignment and security interest and made the pledge and assignment contemplated
by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to enter into the Amended and Restated Credit Agreement,
Mafco hereby agrees with the Agent for its benefit and the ratable benefit of
the Lenders as follows:
Section 1. Grant of Security. Mafco hereby assigns and pledges
to the Agent for its benefit and the ratable benefit of the Lenders, and hereby
grants to the Agent for its benefit and the ratable benefit of the Lenders a
security interest in, all of Mafco's right, title and interest, whether now
owned or hereafter acquired, in and to the following (collectively, the
"Collateral"):
(a) all of the following (the "Security Collateral"):
(i) the Pledged Shares and the certificates
representing the Pledged Shares, and all dividends, cash instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares;
(ii) all additional shares of stock of the Issuers
from time to time acquired by Mafco in any manner, and the certificates
representing such additional shares, and all dividends, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such shares;
(b) the Related Documents, as such agreements may be amended
or otherwise modified from time to time (the "Assigned Agreements"), including,
without limitation, (i) all rights of Mafco to receive moneys due and to become
due under or pursuant to the Assigned Agreements, (ii) all rights of Mafco to
receive proceeds of any indemnity, warranty or guaranty with respect to the
Assigned Agreements, (iii) claims of Mafco for damages arising out of or for
breach of or default under the Assigned Agreements and (iv) the right of Mafco
to terminate the Assigned Agreements, to perform thereunder and to compel
performance and otherwise exercise all remedies thereunder, in any case only to
the extent that such assignment and pledge is permitted under the relevant
Assigned Agreement and, to the extent applicable, under the Marvel III
Indenture, the Marvel Holdings Indenture, the Coleman Worldwide Indenture and
the FN Holdings Debt Document (all such Collateral being the "Agreement
Collateral");
(c) all of the following (collectively, the "Account
Collateral"):
(i) the Mafco Collateral Account and the Second
Mafco Collateral Account, all funds held therein and all certificates and
instruments, if any, from time to time representing or evidencing the Mafco
Collateral Account;
(ii) all Collateral Investments (as hereinafter
defined) from time to time and all certificates and instruments, if any, from
time to time representing or evidencing the Collateral Investments;
(iii) all notes, certificates of deposit, deposit
accounts, checks and other instruments from time to time hereafter delivered to
or otherwise possessed by the Agent for or on behalf of Mafco in substitution
for or in addition to any or all of the then existing Account Collateral; and
(iv) all interest, dividends, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the then existing Account
Collateral; and
(d) all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of the types
described in clauses (a) - (c) of this Section 1) and, to the extent not
otherwise included, all (i) payments under any indemnity, warranty or guaranty,
payable with respect to any of the foregoing Collateral and (ii) cash.
Section 2. Security for Obligations. This Agreement secures
the payment of all Obligations now or hereafter existing of Mafco under the
Mafco Guaranty, whether for principal, interest (including, without limitation,
interest after the filing of a petition initiating a proceeding referred to in
Section 6.01(e) of the Amended and Restated Credit Agreement, whether or not
such interest constitutes an allowed claim for purposes of such proceeding),
fees, expenses or otherwise (all such Obligations being the "Secured
Obligations"). Without limiting the generality of the foregoing, this Agreement
secures the payment of all amounts that constitute part of the Secured
Obligations and would be owed by Mafco to the Agent or the Lenders under the
Loan Documents but for the fact that they are unenforceable or not allowable due
to the existence of a bankruptcy, reorganization or similar proceeding involving
Mafco.
Section 3. Mafco Remains Liable. Anything herein to the
contrary notwithstanding, (a) Mafco shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by the Agent of any of the
rights hereunder shall not release Mafco from any of its duties or obligations
under the contracts and agreements included in the Collateral and (c) none of
the Agent or any Lender shall have any obligation or liability under the
contracts and agreements included in the Collateral by reason of this Agreement,
nor shall the Agent or any Lender be obligated to perform any of the obligations
or duties of Mafco thereunder or to take any action to collect or enforce any
claim for payment assigned hereunder.
Section 4. Delivery of Security Collateral and Account
Collateral. All certificates or instruments representing or evidencing Security
Collateral or Account Collateral shall be delivered to and held by or on behalf
of the Agent pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Agent. The
Agent shall have the right, at any time upon the occurrence and during the
continuance of an Event of Default in its discretion and without notice to
Mafco, to transfer to or to register in the name of the Agent or any of its
nominees any or all of the Security Collateral and Account Collateral. In
addition, the Agent shall have the right at any time to exchange certificates or
instruments representing or evidencing Security Collateral or Account Collateral
for certificates or instruments of smaller or larger denominations.
Section 5. Maintaining the Mafco Collateral Accounts. At any
time prior to the termination pursuant to Section 24(b) of the pledge,
assignment and security interest granted hereby:
(a) Mafco will maintain the Mafco Collateral Accounts.
(b) It shall be a term and condition of each of the Mafco
Collateral Accounts, notwithstanding any term or condition to the contrary in
any other agreement relating to either of the Mafco Collateral Accounts, and
except as otherwise provided by the provisions of Section 7 and Section 18, that
no amount (including interest on Collateral Investments) shall be paid or
released to or for the account of, or withdrawn by or for the account of, Mafco
or any other Person from either of the Mafco Collateral Accounts.
The Mafco Collateral Accounts shall be subject to such applicable laws, and such
applicable regulations of the Board of Governors of the Federal Reserve System
and of any other appropriate banking or governmental authority, as may now or
hereafter be in effect.
Section 6. Investing of Amounts in the Mafco Collateral
Accounts. If requested by Mafco, the Agent will, subject to the provisions of
Section 7 and Section 18, from time to time (a) invest amounts on deposit in
each Mafco Collateral Account in such Cash Equivalents, in the name of the
Agent, as Mafco may select and (b) invest interest paid on the Cash Equivalents
referred to in clause (a) above, and reinvest other proceeds of any such Cash
Equivalents that may mature or be sold, in each case in such Cash Equivalents in
the name of the Agent as Mafco may select (Cash Equivalents referred to in
clauses (a) and (b) above being collectively "Collateral Investments").
Interest and proceeds that are not invested or reinvested in Collateral
Investments as provided above shall be deposited and held in the appropriate
Mafco Collateral Account.
Section 7. Release of Amounts. (a) So long as no Default shall
have occurred and be continuing, and subject to the provisions of Section 7(b)
below, the Agent shall pay and release, free of the Lien created hereunder, to
Mafco or at its order and at the request of Mafco, the amount, if any, on
deposit (including interest on Collateral Investments) in the Mafco Collateral
Account.
(b) At any time that a prepayment of the Advances is
required pursuant to Section 2.05(b)(vi) of the Amended and Restated Credit
Agreement out of amounts deposited in the Mafco Collateral Account, the Agent
shall retain in the Mafco Collateral Account any amount otherwise permitted to
be released to Mafco pursuant to the provisions of Section 7(a) above (including
interest on Collateral Investments) and shall apply such amounts to the
prepayment of the Advances in accordance with the provisions of Section
2.05(b)(vi) of the Amended and Restated Credit Agreement.
(c) At any time that (i) no Default shall have occurred and
be continuing, (ii) amounts on deposit in the Mafco Collateral Account are not
being applied pursuant to Section 7(b) above to prepay the Advances, and (iii)
one of the following shall occur:
(x) the Supermajority Lenders and Mafco shall have agreed to accept
the substitution, pursuant to the provisions of Section 6(o)(i) of the Mafco
Guaranty, of other identified collateral for the cash collateral in the Second
Mafco Collateral Account,
(y) the ratio of the sum of the Net Residual Value at such time plus
the amount on deposit in the Second Mafco Collateral Account plus the value at
such time (as shall be determined in a manner agreed upon by Mafco and the
Supermajority Lenders at the time of the pledge of such collateral) of the
collateral, if any, previously pledged pursuant to the proviso to Section
6(o)(i) of the Mafco Guaranty to the sum of the aggregate principal amount of
all Advances then outstanding plus the aggregate unused Commitments is equal to
or exceeds 3 to 1, or
(z) the sum of (A) the amount on deposit in the Second Mafco
Collateral Account, (B) 50% of the value on such date of the common stock (based
on the average of the closing prices of such shares on a national stock exchange
or the Nasdaq national market system during the Calculation Period with respect
to such date), if any, pledged prior to such date pursuant to Section
6(o)(ii)(y) of the Mafco Guaranty and (C) the sum of the three highest Net
Equity Values on such date of Coleman, Marvel, MCG and New World is equal to or
exceeds $400,000,000,
then the Agent shall promptly pay and release (in the case of clause (x),
promptly after delivery of the substitute collateral), free of the Lien created
hereunder, to Mafco or at its order and at the request of Mafco, an amount on
deposit (including interest on the Collateral Investments) in the Second Mafco
Collateral Account equal to
(1) in the case of clause (x), the amount on deposit,
(2) in the case of clause (y), an amount such that after the release
and payment of such amount, the ratio referred to in such clause (y) is equal to
3 to 1, and
(3) in the case of clause (z), the excess amount referred to in such
clause (z).
(d) At any time that an Event of Default set forth in
Section 6.01(a) of the Amended and Restated Credit Agreement shall have occurred
and be continuing, the Agent shall apply any amounts on deposit in the Second
Mafco Collateral Account to the prepayment of the Advances in accordance with
the provisions of Section 2.05(b)(viii) of the Amended and Restated Credit
Agreement.
(e) Upon the written request of Mafco stating that Mafco
will cause the Borrower to prepay the Advances in full pursuant to the terms of
Section 2.05(a) of the Amended and Restated Credit Agreement, the Agent shall
apply, on the date of such prepayment, any amounts on deposit in the Mafco
Collateral Accounts to such prepayment of the Advances.
Section 8. Representations and Warranties. Mafco represents
and warrants as follows:
(a) The chief place of business and chief executive office
of Mafco and the office where Mafco keeps the original copies of the Assigned
Agreements are located at the address specified below the name of Mafco on the
signature page hereof. Original copies of the Assigned Agreements have been
delivered to the Agent. None of the Agreement Collateral is evidenced by a
promissory note or other instrument.
(b) Mafco is the legal and beneficial owner of the
Collateral free and clear of any Lien, except for the security interest created
by this Agreement and Liens permitted by the Mafco Guaranty. No effective
financing statement or other instrument similar in effect covering all or any
part of the Collateral is on file in any recording office, except such as may
have been filed in favor of the Agent relating to this Agreement and such as may
have been filed in connection with Liens permitted by the Mafco Guaranty. Mafco
has no trade names.
(c) The Pledged Shares have been duly authorized and validly
issued and are fully paid and non-assessable. As of the date hereof, the
Pledged Shares constitute the percentage of the issued and outstanding shares of
stock of the issuers thereof indicated on Schedule I.
(d) The Assigned Agreements, true and complete copies of
which have been furnished to each Lender, have been duly authorized, executed
and delivered by all parties thereto, have not been amended or otherwise
modified, are in full force and effect and are binding upon and enforceable
against all parties thereto in accordance with their terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforceability of creditors' rights generally. There exists no
default under the Assigned Agreements by any party thereto. Each party to the
Assigned Agreements other than Mafco has acknowledged the instruction letter of
Mafco, in substantially the form of Exhibit A, concerning payments under the
Assigned Agreements.
(e) This Agreement, the pledge of the Security Collateral
pursuant hereto, the pledge and assignment of the certificates representing the
Account Collateral pursuant hereto and the making of the filings contemplated by
Section 3.01(g)(viii) of the Existing Credit Agreement create a valid and
perfected first priority security interest in the Collateral (subject, however,
to the Liens permitted by the Mafco Guaranty), securing the payment of the
Secured Obligations, and all filings and other actions necessary or desirable to
perfect and protect such security interest have been duly taken.
(f) No consent of any other Person and no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other third party is required either (i) for the
grant by Mafco of the assignment and security interest granted hereby, for the
pledge by Mafco of the Security Collateral pursuant hereto or for the execution,
delivery or performance of this Agreement by Mafco, (ii) for the perfection or
maintenance of the pledge, assignment and security interest created hereby
(including the first priority nature of such pledge, assignment or security
interest), except for the filing of financing and continuation statements under
the Uniform Commercial Code, which financing statements have been duly filed, or
(iii) for the exercise by the Agent of its voting or other rights provided for
in this Agreement or the remedies in respect of the Collateral pursuant to this
Agreement, except as may be required in connection with the disposition of any
portion of the Security Collateral by laws affecting the offering and sale of
securities generally; provided, however, that no representation or warranty is
made as to any consent of, authorization, approval or other action by, or notice
to or filing with, any banking agency or regulatory body applicable to the
Agent.
Section 9. Further Assurances. (a) Mafco agrees that from
time to time, at its own expense it will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Agent may request, in order to perfect and
protect any pledge, assignment or security interest granted or purported to be
granted hereby or to enable the Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, Mafco will: (i) mark conspicuously the Assigned
Agreements and each of its records pertaining to the Collateral with a legend,
in form and substance satisfactory to the Agent, indicating that such Assigned
Agreements or Collateral is subject to the security interest granted hereby;
(ii) if any Collateral shall be evidenced by a promissory note or other
instrument or chattel paper, deliver and pledge to the Agent hereunder such note
or instrument or chattel paper duly indorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
the Agent; and (iii) execute and file such financing or continuation statements,
or amendments thereto, and such other instruments or notices, as may be
necessary or desirable, or as the Agent may request, in order to perfect and
preserve the pledge, assignment and security interest granted or purported to be
granted hereby.
(b) Mafco hereby authorizes the Agent to file one or more
financing or continuation statements, and amendments thereto, relating to all or
any part of the Collateral without the signature of Mafco where permitted by
law. A photocopy or other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law.
(c) Mafco will furnish to the Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail.
Section 10. Place of Perfection; Records. Mafco shall keep its
chief place of business and chief executive office and the office where it keeps
its records concerning the Collateral and the original copies of the Assigned
Agreements at the location therefor specified in Section 8(a) or, upon 30 days'
prior written notice to the Agent, at such other locations in a jurisdiction
where all actions required by Section 9 shall have been taken with respect to
the Collateral. Mafco will hold and preserve such records and the Assigned
Agreements and will permit representatives of the Agent at any time during
normal business hours to inspect and make abstracts from such records.
Section 11. Voting Rights; Dividends; Etc. (a) So long as no
Event of Default shall have occurred and be continuing:
(i) Mafco shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Security Collateral or any part
thereof for any purpose not inconsistent with the terms of this Agreement or the
other Loan Documents; provided, however, that Mafco shall not exercise or
refrain from exercising any such right if, in the Agent's reasonable judgment,
such action would have a material adverse effect on the value of the Security
Collateral or any part thereof; and, provided, further, that Mafco shall give
the Agent at least five days' written notice of the manner in which it intends
to exercise, or the reasons for refraining from exercising, any such right.
(ii) Mafco shall be entitled to receive and retain any and
all dividends paid in respect of the Security Collateral; provided, however,
that any and all
(A) dividends paid or payable other than in cash in
respect of, and instruments and other property received, receivable or otherwise
distributed in respect of, or in exchange for, any Security Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Security Collateral in connection with a
partial or total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange for, any Security
Collateral received as consideration for sales or other dispositions of assets
of Mafco
shall be, and shall be forthwith delivered to the Agent to hold as,
Security Collateral and shall, if received by Mafco, be received in trust for
the benefit of the Agent, be segregated from the other property or funds of
Mafco and be forthwith delivered to the Agent as Security Collateral in the same
form as so received (with any necessary indorsement).
(iii) The Agent shall execute and deliver (or cause to be
executed and delivered) to Mafco all such proxies and other instruments as Mafco
may reasonably request for the purpose of enabling Mafco to exercise the voting
and other rights that it is entitled to exercise pursuant to paragraph (i) above
and to receive the dividends that it is authorized to receive and retain
pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an
Event of Default:
(i) All rights of Mafco (x) to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise be
entitled to exercise pursuant to Section 11(a)(i) shall, upon notice to Mafco by
the Agent, cease and (y) to receive the dividends that it would otherwise be
authorized to receive and retain pursuant to Section 11(a)(ii) shall
automatically cease, and all such rights shall thereupon become vested in the
Agent, which shall thereupon have the sole right to exercise or refrain from
exercising such voting and other consensual rights and to receive and hold as
Security Collateral such dividends and interest payments.
(ii) All dividends that are received by Mafco contrary to the
provisions of paragraph (i) of this Section 11(b) shall be received in trust for
the benefit of the Agent, shall be segregated from other funds of Mafco and
shall be forthwith paid over to the Agent as Security Collateral in the same
form as so received (with any necessary indorsement).
Section 12. As to the Assigned Agreements. (a) Mafco shall at
its expense:
(i) perform and observe all the terms and provisions of the
Assigned Agreements to be performed or observed by it, maintain the Assigned
Agreements in full force and effect, enforce the Assigned Agreements in
accordance with their terms and take all such action to such end as may be from
time to time requested by the Agent; and
(ii) furnish to the Agent promptly upon receipt thereof
copies of all notices, requests and other documents received by Mafco under or
pursuant to the Assigned Agreements, and from time to time (A) furnish to the
Agent such information and reports regarding the Collateral as the Agent may
reasonably request and (B) upon request of the Agent make to each other party to
the Assigned Agreements such demands and requests for information and reports or
for action as Mafco is entitled to make thereunder.
(b) Mafco shall not, without the Required Lenders' prior
written consent:
(i) cancel or terminate the Assigned Agreements or consent
to or accept any cancellation or termination thereof except pursuant to the
terms thereof;
(ii) amend or otherwise modify the Assigned Agreements or
give any consent, waiver or approval thereunder;
(iii) waive any default under or breach of the Assigned
Agreements;
(iv) consent to or permit or accept any prepayment of amounts
to become due under or in connection with the Assigned Agreements, except as
expressly provided therein; or
(v) take any other action in connection with the Assigned
Agreements that would impair the value of the interest or rights of Mafco
thereunder or that would impair the interest or rights of the Agent.
Section 13. Payments Under the Assigned Agreements. (a) Mafco
agrees, and has effectively so instructed each other party to the Assigned
Agreements, that all payments due or to become due to Mafco under or in
connection with such Assigned Agreements shall be made directly to the Mafco
Collateral Account.
(b) Except as set forth in Section 18, all moneys received
or collected pursuant to subsection (a) above shall be applied as set forth in
Section 7.
Section 14. Transfers and Other Liens; Additional Shares. (a)
Except to the extent permitted by the Mafco Guaranty, Mafco shall not (i) sell,
assign (by operation of law or otherwise) or otherwise dispose of, or grant any
option with respect to, any of the Collateral or (ii) create or suffer to exist
any Lien upon or with respect to any of the Collateral except for the pledge,
assignment and security interest created by this Agreement or any Lien permitted
by the Mafco Guaranty.
(b) Mafco shall (i) cause each issuer of the Pledged Shares
not to issue any stock or other securities in addition to or in substitution for
the Pledged Shares issued by such issuer, except to Mafco, and (ii) pledge
hereunder, immediately upon its acquisition (directly or indirectly) thereof,
any and all additional shares of stock or other securities of each issuer of the
Pledged Shares.
Section 15. Agent Appointed Attorney-in-Fact. Mafco hereby
irrevocably appoints the Agent Mafco's attorney-in-fact, with full authority in
the place and stead of Mafco and in the name of Mafco or otherwise, from time to
time in the Agent's discretion, at any time upon the occurrence and during the
continuance of an Event of Default to take any action and to execute any
instrument that the Agent may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation:
(a) to ask for, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a) above,
and
(c) to file any claims or take any action or institute any
proceedings that the Agent may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce compliance with the terms and
conditions of the Assigned Agreements or the rights of the Agent with respect to
any of the Collateral.
Section 16. Agent May Perform. If Mafco fails to perform any
agreement contained herein, the Agent may itself perform, or cause performance
of, such agreement, and the reasonable expenses of the Agent incurred in
connection therewith shall be payable by Mafco under Section 19(b).
Section 17. The Agent's Duties. The powers conferred on the
Agent hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the duty to
exercise reasonable care in respect of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Agent shall have no
duty as to any Collateral, as to ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Security Collateral, whether or not the Agent or any Lender has or is deemed
to have knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Collateral. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Citibank accords its own
property.
Section 18. Remedies. If any Event of Default shall have
occurred and be continuing, the Agent shall have the following rights and
remedies in addition to the rights of the Agent with respect to Mafco Collateral
Account under Section 7(b) and Section 7(d):
(a) The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the
Uniform Commercial Code in effect in the State of New York at such time (the
"N.Y. Uniform Commercial Code") (whether or not the N.Y. Uniform Commercial Code
applies to the affected Collateral) and also may (i) require Mafco to, and Mafco
hereby agrees that it will at its expense and upon the reasonable request of the
Agent forthwith, assemble all or part of the Collateral as directed by the Agent
and make it available to the Agent at a place to be designated by the Agent that
is reasonably convenient to both parties and (ii) without notice except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Agent's offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the Agent may
deem commercially reasonable. Mafco agrees that, to the extent notice of sale
shall be required by law, at least ten days' notice to Mafco of the time and
place of any public sale or the time after which any private sale is to be made
shall constitute reasonable notification. The Agent shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given. The
Agent may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Agent, be held by the Agent as
collateral for, and/or then or at any time thereafter applied (after payment of
any amounts payable to the Agent pursuant to Section 19) in whole or in part by
the Agent for the ratable benefit of the Lenders against, all or any part of the
Secured Obligations in such order as the Agent shall elect. Any surplus of such
cash or cash proceeds held by the Agent and remaining after payment in full of
all the Secured Obligations shall be paid over to Mafco or to whomsoever may be
lawfully entitled to receive such surplus.
(c) The Agent may, to the extent permitted under the
relevant Assigned Agreement and to the extent applicable, the Marvel III
Indenture, the Marvel Holdings Indenture, the Coleman Worldwide Indenture and
the FN Holdings Debt Document, exercise any and all rights and remedies of Mafco
under or in connection with the Assigned Agreements or otherwise in respect of
the Collateral, including, without limitation, any and all rights of Mafco to
demand or otherwise require payment of any amount under, or performance of the
provision of, the Assigned Agreements.
(d) All payments received by Mafco under or in connection
with the Assigned Agreements or otherwise in respect of the Collateral shall be
received in trust for the benefit of the Agent, shall be segregated from other
funds of Mafco and shall be forthwith paid over to the Agent in the same form as
so received (with any necessary indorsement).
(e) The Agent may, without notice to Mafco except as
required by law and at any time or from time to time, charge, set-off and
otherwise apply all or any part of the Secured Obligations against Mafco
Collateral Account.
Section 19. Indemnity and Expenses. (a) Mafco agrees to
indemnify the Agent from and against any and all claims, losses and liabilities
growing out of or resulting from this Agreement (including, without limitation,
enforcement of this Agreement), except claims, losses or liabilities resulting
from the Agent's gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction.
(b) Mafco will upon demand pay to the Agent the amount of
any and all reasonable expenses, including the reasonable fees and expenses of
its counsel and of any experts and agents, that the Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Agent or the Lenders hereunder or (iv) the failure by
Mafco to perform or observe any of the provisions hereof.
Section 20. Security Interest Absolute. The obligations of
Mafco under this Agreement are independent of the Secured Obligations, and a
separate action or actions may be brought and prosecuted against Mafco to
enforce this Agreement, irrespective of whether any action is brought against
the Borrower or whether the Borrower is joined in any such action or actions.
All rights of the Agent and the pledge, assignment and security interest
hereunder, and all obligations of Mafco hereunder, shall be absolute and
unconditional, irrespective of:
(a) any lack of validity or enforceability of any Loan
Document or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Secured Obligations or any other
amendment or waiver of or any consent to any departure from any Loan Document,
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
other collateral, or any taking, release or amendment or waiver of or consent to
departure from any 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; or
(f) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, Mafco or a third party grantor of a
security interest.
Section 21. Amendments; Waivers; Etc. No amendment or waiver
of any provision of this Agreement, and no consent to any departure by Mafco
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Agent, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given. No
failure on the part of the Agent to exercise, and no delay in exercising any
right hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right.
Section 22. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and mailed, telegraphed, telecopied,
telexed, cabled or delivered to Mafco or to the Agent, in each case addressed to
it at its address set forth on the signature pages hereof or as specified in the
Amended and Restated Credit Agreement, as the case may be, or, as to either
party, at such other address as shall be designated by such party in a written
notice to each other party complying as to delivery with the terms of this
Section. All such notices and other communications shall, when mailed,
telecopied, telegraphed, telexed or cabled, respectively, be effective when
deposited in the mails, telecopied, delivered to the telegraph company,
confirmed by telex answerback or delivered to the cable company, respectively,
addressed as aforesaid.
Section 23. Continuing Security Interest; Assignments Under the
Amended and Restated Credit Agreement. This Agreement shall create a continuing
security interest in the Collateral and shall (a) remain in full force and
effect until the termination pursuant to Section 24(b) of the pledge, assignment
and security interest granted hereby, (b) be binding upon Mafco, its successors
and assigns and (c) inure, together with the rights and remedies of the Agent
hereunder, to the benefit of the Agent, the Lenders and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), any Lender may assign or otherwise transfer all or any
portion of its rights and obligations under the Amended and Restated Credit
Agreement (including, without limitation, all or any portion of its Commitment,
the Advances owing to it and the Note or Notes held by it) to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to such Lender herein or otherwise, in each case as
provided in Section 8.07 of the Amended and Restated Credit Agreement.
Section 24. Release and Termination. (a) Upon any sale,
lease, transfer or other disposition of any item of Collateral in accordance
with the terms of the Loan Documents, the Agent will, at Mafco's expense,
execute and deliver to Mafco such documents as Mafco shall reasonably request to
evidence the release of such item of Collateral from the assignment and security
interest granted hereby; provided, however, that (i) at the time of such request
and such release no Default shall have occurred and be continuing, (ii) Mafco
shall have delivered to the Agent, at least ten Business Days prior to the date
of the proposed release, a written request for release describing the item of
Collateral and the terms of the sale, lease, transfer or other disposition in
reasonable detail, including the price thereof and any expenses in connection
therewith, together with a form of release for execution by the Agent and a
certification by Mafco to the effect that the transaction is in compliance with
the Loan Documents and as to such other matters as the Agent may request, (iii)
the proceeds of any such sale, lease, transfer or other disposition required to
be applied in accordance with Section 2.05 of the Amended and Restated Credit
Agreement shall be paid to, or in accordance with the instructions of, the Agent
at the closing and (iv) the Agent shall have approved such sale, lease, transfer
or other disposition in writing.
(b) At such time as the Payment Obligations have been Fully
Satisfied, the pledge, assignment and security interest granted hereby shall
terminate and all rights to the Collateral shall revert to Mafco. Upon any such
termination, the Agent will, at Mafco's expense, execute and deliver to Mafco
such documents as Mafco shall reasonably request to evidence such termination.
Section 25. Governing Law; Terms. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
except to the extent that the validity or perfection of the security interest
hereunder, or remedies hereunder, in respect of any particular Collateral are
governed by the laws of a jurisdiction other than the State of New York. Unless
otherwise defined herein or in the Amended and Restated Credit Agreement, terms
used in Article 9 of the N.Y. Uniform Commercial Code are used herein as therein
defined.
Section 26. Execution in Counterparts; Delivery by Telecopier.
This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Agreement.
IN WITNESS WHEREOF, Mafco has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
MAFCO HOLDINGS INC.
By
Title:
Address: 38 East 63rd Street
New York, New York 10021
Schedule I
PLEDGED SHARES
<TABLE>
<CAPTION>
Percentage
of
Stock Certificate Number Outstanding
Stock Issuer Class of Stock Par Value No(s) of Shares Shares
------------ -------------- --------- ----------------- --------- ----------
<S> <C> <C> <C> <C> <C>
MacAndrews & Forbes
Holdings Inc. Common $1.00 2 1,000 100%
</TABLE>
Schedule II
ASSIGNED AGREEMENTS
1. Tax Allocation Agreement dated as of August 24, 1990, as amended
through July 20, 1994, between the Debtor and New Coleman.
2. Tax Sharing Agreement dated as of February 26, 1992, as amended
through July 20, 1994, among the Debtor, Coleman Finance Holdings Inc. ("Coleman
Finance"), Coleman and certain subsidiaries of Coleman party thereto.
3. Tax Sharing Agreement dated as of February 26, 1992, as amended
through the date hereof, among the Debtor, New Coleman, Coleman Finance and
certain subsidiaries of Coleman Finance party thereto.
4. Tax Equivalent Payment Agreement dated as of March 4, 1992, as
amended through July 20, 1994, between the Debtor and Coleman Finance.
5. Tax Sharing Agreement dated as of May 27, 1993 among Mafco,
Coleman Worldwide, Coleman and certain subsidiaries party thereto.
6. Tax Sharing Agreement dated as of May 27, 1993 among the Debtor,
Coleman Worldwide and the other parties thereto.
7. Tax Sharing Agreement dated as of July 22, 1993 between the
Debtor and Coleman Holdings.
8. Tax Sharing Agreement dated as of January 1, 1994 among the
Debtor, FN Holdings, the Bank and certain subsidiaries of FN Holdings and the
Bank.
9. Tax Sharing Agreement dated as of April 22, 1993 between the
Debtor and Marvel Holdings.
10. Tax Sharing Agreement dated as of October 20, 1993 between the
Debtor and Marvel Parent.
11. Amended and Restated Tax Sharing Agreement dated as of January
1, 1994 among the Debtor, Marvel III, Marvel and certain subsidiaries of Marvel
party thereto.
12. Tax Sharing Agreement dated as of June 15, 1995 among Mafco, MCG
and subsidiaries of MCG party thereto.
Exhibit A
FORM OF CONSENT AND AGREEMENT
The undersigned hereby acknowledges notice of, and consents to
the terms and provisions of, the Amended and Restated Security Agreement dated
as of June __, 1995 (the "Amended and Restated Security Agreement"; the terms
defined or referenced therein being used herein as therein defined or
referenced) from Mafco Holdings Inc. ("Mafco") to Citibank, N.A., as agent (the
"Agent") for the Lenders referred to therein, and hereby agrees with the Agent
that:
(a) The undersigned will make all payments to be made by it
to Mafco under or in connection with the __________ Agreement dated
_______________, 19__ (the "Assigned Agreement") between the undersigned and
Mafco (including, without limitation, the proceeds of any loans or advances made
by the undersigned to Mafco in connection with the Assigned Agreement) directly
to the Mafco Collateral Account or otherwise in accordance with the instructions
of the Agent.
(b) All payments referred to in paragraph (a) above shall be
made by the undersigned irrespective of, and without deduction for, any
counterclaim, defense, recoupment or set-off and shall be final, and the
undersigned will not seek to recover from the Agent or any Lender for any reason
any such payment once made.
(c) Following the occurrence and during the continuance of
an Event of Default, the Agent shall be entitled to exercise any and all rights
and remedies of Mafco under the Assigned Agreement in accordance with the terms
of the Security Agreement, and the undersigned shall comply in all respects with
such exercise.
(d) The undersigned will not, without the prior written
consent of the Agent, (i) cancel or terminate the Assigned Agreement or consent
to or accept any cancellation or termination thereof except pursuant to the
terms thereof, (ii) amend or otherwise modify the Assigned Agreement, or (iii)
make any prepayment of amounts to become due under or in connection with the
Assigned Agreement, except as expressly provided therein.
This Consent and Agreement shall be binding upon the undersigned
and its successors and assigns, and shall inure, together with the rights and
remedies of the Agent hereunder, to the benefit of the Agent and the Lenders and
their successors, transferees and assigns. This Consent and Agreement shall be
governed by and construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned has duly executed this
Consent and Agreement as of the date set opposite its name below.
Dated: _______________, 19__ [NAME OF OBLIGOR]
By:
Title:
EXECUTION COPY
FOUR STAR NON-RECOURSE GUARANTY AND PLEDGE AGREEMENT
Dated July 27, 1994
From
FOUR STAR HOLDINGS CORP.
as Pledgor
and
NATIONSBANK OF GEORGIA, NATIONAL ASSOCIATION
as Voting Trustee
to
CITIBANK, N.A.
as Agent
T A B L E O F C O N T E N T S
Section Page
1. Grant of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Non-Recourse Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. Delivery of Collateral . . . . . . . . . . . . . . . . . . . . . . . . 2
4. Representations and Warranties. . . . . . . . . . . . . . . . . . . . . 3
5. Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6. Place of Perfection; Records. . . . . . . . . . . . . . . . . . . . . . 4
7. Voting Rights; Dividends; Etc . . . . . . . . . . . . . . . . . . . . . 5
8. Transfers and Other Liens; Additional Shares. . . . . . . . . . . . . . 6
9. Agent Appointed Attorney-in-Fact. . . . . . . . . . . . . . . . . . . . 6
10. Agent May Perform . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
11. The Agent's Duties. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
12. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
13. Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 8
14. Indemnity and Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 9
15. Security Interest Absolute. . . . . . . . . . . . . . . . . . . . . . . 9
16. Amendments; Waivers; Etc. . . . . . . . . . . . . . . . . . . . . . . . 10
17. Addresses for Notices . . . . . . . . . . . . . . . . . . . . . . . . . 11
18. Continuing Security Interest; Assignments Under the Credit Agreement. . 11
19. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
20. Voting Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
21. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial . . . . 11
22. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . 13
Schedule I - Pledged Shares
NON-RECOURSE GUARANTY AND PLEDGE AGREEMENT
NON-RECOURSE GUARANTY AND PLEDGE AGREEMENT dated
July 27, 1994 made by FOUR STAR HOLDINGS CORP., a Delaware corporation ("Four
Star" or the "Pledgor"), and, only with respect to Sections 1 and 3 hereof,
NATIONSBANK OF GEORGIA, NATIONAL ASSOCIATION, not in its individual capacity but
solely in its capacity as Voting Trustee (in such capacity, the "Voting
Trustee") under the Voting Trust Agreement dated as of the date hereof (said
agreement as it may hereafter be amended or otherwise modified from time to
time, being the "Voting Trust Agreement") among the Pledgor, the Voting Trustee,
the Borrower Parent (as defined in the Credit Agreement referred to below) and
the Agent referred to below, to CITIBANK, N.A. ("Citibank"), as agent (the
"Agent") for the lenders (the "Lenders") party to the Credit Agreement (as
hereinafter defined).
PRELIMINARY STATEMENTS.
(1) The Lenders and the Agent have entered into a Credit
Agreement dated as of July 20, 1994 (said Agreement, as it may hereafter be
amended or otherwise modified from time to time, being the "Credit Agreement",
the terms defined therein and not otherwise defined herein being used herein as
therein defined) with Marvel IV Holdings Inc., a Delaware corporation (the
"Borrower").
(2) The Pledgor and the Voting Trustee are the owners of the
shares (the "Pledged Shares") of stock listed under their respective names in
Schedule I hereto and issued by the corporation named therein.
(3) It is a condition precedent to the making of Advances by
the Lenders under the Credit Agreement that the Pledgor and the Voting Trustee,
as the indirect owners of 100% of the outstanding shares of stock of the
Borrower, shall have made the pledge, assignment and security interest
contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make Advances under the Credit Agreement, the Pledgor and,
with respect to Sections 1 and 3 hereof, the Voting Trustee hereby agree with
the Agent for its benefit and the ratable benefit of the Lenders as follows:
Section 1. Grant of Security. To secure the full and punctual
performance of the Guaranteed Obligations, each of the Pledgor and the Voting
Trustee hereby pledges to the Agent for its benefit and the ratable benefit of
the Lenders, and hereby grants to the Agent for its benefit and the ratable
benefit of the Lenders a pledge, assignment and security interest in, all of
its right, title and interest, whether now owned or hereafter acquired, in and
to, the following (collectively, the "Collateral"):
(a) the Pledged Shares and the certificates and instruments
representing the Pledged Shares, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares;
(b) all additional shares of stock of any issuer of the
Pledged Shares from time to time acquired by the Pledgor or the Voting Trustee
in any manner, and the certificates representing such additional shares, and all
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such shares; and
(c) all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of the types
described in clauses (a) and (b) of this Section 1).
Section 2. Non-Recourse Guaranty. Four Star, as primary
obligor and not merely as surety, hereby irrevocably and unconditionally
guarantees the payment of all Obligations of the Borrower now or hereafter
existing under the Credit Agreement and the other Loan Documents, whether for
principal, interest (including, without limitation, interest after the filing of
a petition initiating a proceeding referred to in Section 6.01(e) of the Credit
Agreement, whether or not such interest constitutes an allowed claim for
purposes of such proceeding), fees, expenses or otherwise (all such Obligations
being the "Guaranteed Obligations"), and agrees to pay any and all expenses
(including counsel fees and expenses) incurred by the Agent or the Lenders in
enforcing any rights under this Agreement; provided, however, that Four Star's
liability under this Section 2 with respect to the Guaranteed Obligations shall
be limited to the Collateral, it being understood that it is the intention of
the foregoing that the guaranty set forth in this Section 2 otherwise is a non-
recourse obligation of Four Star and that the Agent's right to recover against
Four Star hereunder in respect of such guaranty shall be limited solely to the
Collateral. Without limiting the generality of the foregoing, the non-recourse
guaranty set forth in this Section 2 guarantees the payment of all amounts that
constitute part of the Guaranteed Obligations and would be owed by the Borrower
to the Agent or the Lenders under the Loan Documents but for the fact that they
are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrower.
Section 3. Delivery of Collateral. All certificates or
instruments representing or evidencing Collateral shall be delivered to and held
by or on behalf of the Agent pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Agent. The Agent shall have the right, at any time upon the occurrence and
during the continuance of an Event of Default in its discretion and without
notice to the Pledgor, to transfer to or to register in the name of the Agent or
any of its nominees any or all of the Collateral. In addition, the Agent shall
have the right at any time to exchange certificates or instruments representing
or evidencing Collateral for certificates or instruments of smaller or larger
denominations.
Section 4. Representations and Warranties. The Pledgor
represents and warrants as follows:
(a) The chief place of business and chief executive office
of the Pledgor and the office where the Pledgor keeps its records concerning the
Collateral are located at the address specified opposite the name of the Pledgor
on the signature page hereof.
(b) The Pledgor is the legal and beneficial owner of the
Collateral (other than the shares issued in the name of the Voting Trustee (the
"Voting Trust Stock")) and is the beneficial owner of the Voting Trust Stock, in
each case free and clear of any Lien, except for the security interest created
by this Agreement and the Lien created by the Voting Trust Agreement. The Voting
Trustee is the legal owner of the Voting Trust Stock free and clear of any Lien,
except for the security interest created by this Agreement and the Lien created
by the Voting Trust Agreement. No effective financing statement or other
instrument similar in effect covering all or any part of the Collateral is on
file in any recording office, except such as may have been filed in favor of the
Agent relating to this Agreement. The Pledgor has no trade names.
(c) The Pledged Shares have been duly authorized and validly
issued and are fully paid and non-assessable.
(d) The Pledged Shares constitute the percentage of the
issued and outstanding shares of stock of the issuers thereof indicated on
Schedule I.
(e) This Agreement and the pledge of the Collateral pursuant
hereto create a valid and perfected first priority security interest in the
Collateral, securing the payment of the Guaranteed Obligations, and all filings
and other actions necessary or desirable to perfect and protect such security
interest have been duly taken.
(f) No consent of any other Person and no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other third party is required either (i) for the
grant by the Pledgor or the Voting Trustee of the assignment and security
interest granted hereby, for the pledge by the Pledgor or the Voting Trustee of
the Collateral pursuant hereto or for the execution, delivery or performance of
this Agreement by the Pledgor or the Voting Trustee, (ii) for the perfection or
maintenance of the pledge, assignment and security interest created hereby
(including the first priority nature of such pledge, assignment or security
interest), except for the filing of financing and continuation statements under
the Uniform Commercial Code, which financing statements have been duly filed, or
(iii) for the exercise by the Agent of its voting or other rights provided for
in this Agreement or the remedies in respect of the Collateral pursuant to this
Agreement, except as may be required in connection with the disposition of any
portion of the Collateral by laws affecting the offering and sale of securities
generally; provided, however, that no representation or warranty is made as to
any consent of, authorization, approval or other action by, or notice to or
filing with, any banking agency or regulatory body applicable to the Agent.
Section 5. Further Assurances. (a) The Pledgor agrees that
from time to time, at the expense of the Pledgor, the Pledgor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Agent may request, in
order to perfect and protect any pledge, assignment or security interest granted
or purported to be granted hereby or to enable the Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, the Pledgor will or will cause the
Voting Trustee to, as the case may be: (i) if any Collateral shall be evidenced
by a promissory note or other instrument or chattel paper, deliver and pledge to
the Agent hereunder such note or instrument or chattel paper duly indorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Agent; and (ii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Agent may
request, in order to perfect and preserve the pledge, assignment and security
interest granted or purported to be granted hereby.
(b) The Pledgor hereby authorizes the Agent to file one or
more financing or continuation statements, and amendments thereto, relating to
all or any part of the Collateral without the signature of the Pledgor where
permitted by law. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(c) The Pledgor will furnish to the Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail.
Section 6. Place of Perfection; Records. The Pledgor shall
keep its chief place of business and chief executive office and the office where
it keeps its records concerning the Collateral at the location therefor
specified in Section 4(a) or, upon 30 days' prior written notice to the Agent,
at such other locations in a jurisdiction where all actions required by Section
5 shall have been taken with respect to the Collateral. The Pledgor will hold
and preserve such records and will permit representatives of the Agent at any
time during normal business hours to inspect and make abstracts from such
records.
Section 7. Voting Rights; Dividends; Etc. (a) So long as no
Event of Default shall have occurred and be continuing:
(i) Subject to the terms of the Voting Trust Agreement, each
of the Pledgor and the Voting Trustee shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral or any part
thereof for any purpose not inconsistent with the terms of this Agreement or the
other Loan Documents; provided, however, that the Pledgor shall not exercise or
refrain from exercising any such right if, in the Agent's reasonable judgment,
such action would have a material adverse effect on the value of the Collateral
or any part thereof; and, provided, further, that the Pledgor shall give the
Agent at least five days' written notice of the manner in which it intends to
exercise, or the reasons for refraining from exercising, any such right.
(ii) The Agent shall execute and deliver (or cause to be
executed and delivered) to each of the Pledgor and the Voting Trustee all such
proxies and other instruments as each of the Pledgor and the Voting Trustee may
reasonably request for the purpose of enabling each of the Pledgor and the
Voting Trustee to exercise the voting and other rights that it is entitled to
exercise pursuant to paragraph (i) above.
(iii) The Pledgor shall be entitled to receive and retain any
and all dividends and interest paid in respect of the Collateral; provided,
however, that any and all
(A) dividends and interest paid or payable other
than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange for, any Collateral
received as consideration for sales or other dispositions of assets of the
Pledgor
shall be, and shall be forthwith delivered to the Agent to hold as,
Collateral and shall, if received by the Pledgor, be received in trust for the
benefit of the Agent, be segregated from the other property or funds of the
Pledgor and be forthwith delivered to the Agent as Collateral in the same form
as so received (with any necessary indorsement).
(b) Upon the occurrence and during the continuance of an
Event of Default, all rights of the Pledgor (i) to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise be
entitled to exercise pursuant to Section 7(a)(i) shall, upon notice to the
Pledgor by the Agent, cease and (ii) to receive the dividends and interest
payments that it would otherwise be authorized to receive and retain pursuant to
Section 7(a)(iii) shall automatically cease, and all such rights shall thereupon
become vested in the Agent, which shall thereupon have the sole right to
exercise or refrain from exercising such voting and other consensual rights and
to receive and hold as Collateral such dividends and interest payments.
Section 8. Transfers and Other Liens; Additional Shares. (a)
The Pledgor shall not except as provided in the Mafco Guaranty (i) sell, assign
(by operation of law or otherwise) or otherwise dispose of, or grant any option
with respect to, any of the Collateral or (ii) create or suffer to exist any
Lien upon or with respect to any of the Collateral except for the pledge,
assignment and security interest created by this Agreement and the Lien created
by the Voting Trust Agreement.
(b) The Pledgor shall (i) cause each issuer of the Pledged
Shares not to issue any stock or other securities in addition to or in
substitution for the Pledged Shares issued by such issuer, except to the
Pledgor, and (ii) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all additional shares of stock or other
securities of each issuer of the Pledged Shares.
Section 9. Agent Appointed Attorney-in-Fact. The Pledgor
hereby irrevocably appoints the Agent the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time in the Agent's discretion, upon the occurrence
and during the continuance of any Event of Default to take any action and to
execute any instrument that the Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:
(a) to ask for, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other
instruments and documents in connection with clause (a) above, and
(c) to file any claims or take any action or institute any
proceedings that the Agent may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce the rights of the Agent with
respect to any of the Collateral.
Section 10. Agent May Perform. If either the Pledgor or the
Voting Trustee fails to perform any agreement contained herein applicable to it,
the Agent may itself perform, or cause performance of, such agreement, and the
reasonable expenses of the Agent incurred in connection therewith shall be
payable by the Pledgor under Section 14(b).
Section 11. The Agent's Duties. The powers conferred on the
Agent hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for a duty to
exercise reasonable care in respect of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Agent shall have no
duty as to any Collateral, as to ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Collateral, whether or not the Agent or any Lender has or is deemed to have
knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Collateral. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Citibank accords its own
property.
Section 12. Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the
Uniform Commercial Code in effect in the State of New York at such time (the
"N.Y. Uniform Commercial Code") (whether or not the N.Y. Uniform Commercial Code
applies to the affected Collateral) and also may (i) require the Pledgor to, and
the Pledgor hereby agrees that it will at its expense and upon request of the
Agent forthwith, assemble all or part of the Collateral as directed by the Agent
and make it available to the Agent at a place to be designated by the Agent that
is reasonably convenient to both parties and (ii) without notice except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Agent's offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the Agent may
deem commercially reasonable. The Pledgor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to the Pledgor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Agent, be held by the Agent as
collateral for, and/or then or at any time thereafter applied (after payment of
any amounts payable to the Agent pursuant to Section 14) in whole or in part by
the Agent for the ratable benefit of the Lenders against all or any part of the
Guaranteed Obligations in such order as the Agent shall elect. Any surplus of
such cash or cash proceeds held by the Agent and remaining after payment in full
of all the Guaranteed Obligations shall be paid over to the Pledgor or to
whomsoever may be lawfully entitled to receive such surplus.
(c) The Agent may exercise any and all rights and remedies
of the Pledgor in respect of the Collateral.
(d) All payments received by the Pledgor in respect of the
Collateral shall be received in trust for the benefit of the Agent, shall be
segregated from other funds of the Pledgor and shall be forthwith paid over to
the Agent in the same form as so received (with any necessary indorsement).
Section 13. Registration Rights. If the Agent shall determine
to exercise its right to sell all or any of the Collateral pursuant to Section
12, the Pledgor agrees that, upon request of the Agent, the Pledgor will, at its
own expense:
(a) execute and deliver, and cause each issuer of the
Collateral contemplated to be sold and use its best efforts to cause the
directors and officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as may be
necessary or, in the opinion of the Agent, advisable to register such Collateral
under the provisions of the Securities Act of 1933, as amended from time to time
(the "Securities Act"), to cause the registration statement relating thereto to
become effective and to remain effective for such period as prospectuses are
required by law to be furnished and to make all amendments and supplements
thereto and to the related prospectus that, in the opinion of the Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto;
(b) use its best efforts to qualify the Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the Agent;
(c) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will satisfy the
provisions of Section 11(a) of the Securities Act;
(d) provide the Agent with such other information as may be
necessary or, in the opinion of the Agent, advisable to enable the Agent to
effect the sale of such Collateral; and
(e) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part thereof valid
and binding and in compliance with applicable law.
The Agent is authorized, in connection with any sale of the Collateral pursuant
to Section 12, to deliver or otherwise disclose to any prospective purchaser of
the Collateral (i) any registration statement or prospectus, and all supplements
and amendments thereto, prepared pursuant to clause (a) above, (ii) any
information provided to it pursuant to clause (d) above and (iii) any other
information in its possession relating to the Collateral.
The Pledgor acknowledges the impossibility of ascertaining the amount of damages
that would be suffered by the Agent or the Lenders by reason of the failure by
the Pledgor to perform any of the covenants contained in this Section and,
consequently, agrees that, if the Pledgor shall fail to perform any of such
covenants, it shall pay, as liquidated damages and not as a penalty, an amount
equal to the value of the Collateral on the date the Agent shall demand
compliance with this Section.
Section 14. Indemnity and Expenses. (a) The Pledgor agrees
to indemnify the Agent and the Voting Trustee from and against any and all
claims, losses and liabilities growing out of or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except claims,
losses or liabilities resulting from the Agent's or the Voting Trustee's gross
negligence or willful misconduct as determined by a final judgment of a court of
competent jurisdiction.
(b) The Pledgor will upon demand pay to the Agent the amount
of any and all reasonable expenses, including the reasonable fees and expenses
of its counsel and of any experts and agents, that the Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Agent or the Lenders hereunder or (iv) the failure by
the Pledgor to perform or observe any of the provisions hereof.
Section 15. Security Interest Absolute. The obligations of the
Pledgor under this Agreement are independent of the Guaranteed Obligations, and
a separate action or actions may be brought and prosecuted against the Pledgor
to enforce this Agreement, irrespective of whether any action is brought against
the Borrower or whether the Borrower is joined in any such action or actions.
All rights of the Agent and the pledge, assignment and security interest
hereunder, and all obligations of each of the Pledgor and the Voting Trustee
hereunder applicable to it, shall be absolute and unconditional, irrespective
of:
(a) any lack of validity or enforceability of any Loan
Document or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Guaranteed Obligations or any other
amendment or waiver of or any consent to any departure from any Loan Document,
including, without limitation, any increase in the Guaranteed 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
other collateral, or any taking, release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Guaranteed Obligations;
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale or
other disposition of any collateral for all or any of the Guaranteed 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; or
(f) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Pledgor or a third party grantor of
a security interest.
Section 16. Amendments; Waivers; Etc. No amendment or waiver
of any provision of this Agreement, and no consent to any departure by the
Pledgor herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Agent and, in the event such amendment or waiver
affects the Voting Trustee, the Voting Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given. No failure on the part of the Agent to exercise, and no delay
in exercising any right hereunder, shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.
Section 17. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and, mailed, telegraphed, telecopied,
telexed, cabled or delivered to each of the Pledgor and the Voting Trustee,
addressed to it at the address set forth opposite its name on the signature
pages hereof, and to the Agent, as the case may be, in each case addressed to it
at its address specified in the Credit Agreement or, as to either party, at such
other address as shall be designated by such party in a written notice to each
other party complying as to delivery with the terms of this Section 17. All
such notices and other communications shall, when mailed, telecopied,
telegraphed, telexed or cabled, respectively, be effective when deposited in the
mails, telecopied, delivered to the telegraph company, confirmed by telex
answerback or delivered to the cable company, respectively, addressed as
aforesaid.
Section 18. Continuing Security Interest; Assignments Under the
Credit Agreement. This Agreement shall create a continuing security interest in
the Collateral and a continuing guaranty and shall (a) remain in full force and
effect until the earlier of (i) the termination of the non-recourse guaranty,
pledge, assignment and security interest created hereby pursuant to Section 19
below and (ii) the sale or other disposition of all the Collateral in accordance
with the Loan Documents and the application of the proceeds thereof in
accordance with the Loan Documents, (b) be binding upon the Pledgor, the Voting
Trustee and their respective successors and assigns and (c) inure, together with
the rights and remedies of the Agent hereunder, to the benefit of the Agent and
the Lenders and their respective successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), any Lender may assign or
otherwise transfer all or any portion of its rights and obligations under the
Credit Agreement (including, without limitation, all or any portion of its
Commitment, the Advances owing to it and the Note or Notes held by it) to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise, in each
case as provided in Section 8.07 of the Credit Agreement.
Section 19. Termination. At such time as the Payment
Obligations have been Fully Satisfied, the non-recourse guaranty, pledge,
assignment and security interest created hereby shall terminate and all rights
to the Collateral shall revert to the Pledgor. Upon any such termination, the
Agent will, at the Pledgor's expense, execute and deliver to the Pledgor such
documents as the Pledgor shall reasonably request to evidence such termination.
Section 20. Voting Trustee. The Pledgor and the Agent hereby
acknowledge and agree that the sole obligation of the Voting Trustee hereunder
is the delivery to the Agent of the stock certificate of Marvel V Holdings Inc.
evidencing the Voting Trust Stock issued in the name of the Voting Trustee in
accordance with Sections 1 and 3 hereof.
Section 21. Governing Law; Submission to Jurisdiction; Waiver
of Jury Trial. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, except to the extent that the
validity or perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the State of New York. Unless otherwise defined herein
or in the Credit Agreement, terms used in Article 9 of the N.Y. Uniform
Commercial Code are used herein as therein defined.
(b) The Pledgor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party, or for recognition or enforcement
of any judgment, and the Pledgor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State or, to the extent permitted by law, in
such federal court. The Pledgor agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in the courts of any jurisdiction.
(c) The Pledgor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal
court. The Pledgor hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(d) THE PLEDGOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT OR ANY LENDER IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
Section 22. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
Agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
IN WITNESS WHEREOF, each of the Pledgor and the Voting Trustee
has caused this Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first above written.
c/o MacAndrews & Forbes Holdings Inc. FOUR STAR HOLDINGS CORP.
38 East 63rd Street
New York, New York 10021
By_________________________
Title:
600 Peachtree Street, Suite 900 NATIONSBANK OF GEORGIA,
Atlanta, Georgia 30308 NATIONAL ASSOCIATION
Telecopy: not in its individual capacity but
Attention: solely in its capacity as Voting Trustee
under the Voting Trust Agreement
referred to herein and only with respect
to Sections 1 and 3
By
Title:
Schedule I
PLEDGED SHARES
A. PLEDGED BY FOUR STAR:
<TABLE>
<CAPTION>
Percentage
of
Stock Certificate Number Outstanding
Stock Issuer Class of Stock Par Value No(s) of Shares Shares
------------ -------------- --------- ----------------- --------- ----------
<S> <C> <C> <C> <C> <C>
Marvel V Holdings Inc. Common $1.00 2 995 99.5%
</TABLE>
Voting Trust Certificate, dated July 27, 1994, issued to Four Star
Holdings Corp. under the Voting Trust Agreement (as defined below) in respect
of the beneficial ownership of the 5 shares of Common Stock of Marvel V
Holdings Inc. represented by stock certificate no. 3 below.
B. PLEDGED BY THE VOTING TRUSTEE:
<TABLE>
<CAPTION>
Percentage
of
Stock Certificate Number Outstanding
Stock Issuer Class of Stock Par Value No(s) of Shares Shares
------------ -------------- --------- ----------------- --------- ----------
<S> <C> <C> <C> <C> <C>
Marvel V Holdings Inc. Common $1.00 3(1) 5 .5%
</TABLE>
-------------------
(1) Stock certificate no. 3 issued to NationsBank of Georgia, National
Association, as voting trustee (the "Voting Trustee") under the Voting
Trust Agreement, dated as of July 27, 1994 (the "Voting Trust Agreement"),
among Four Star Holdings Corp., Marvel V. Holdings Inc., Citibank, N.A. and
the Voting Trustee, and such Pledged Shares are pledged hereunder by the
Voting Trustee.
EXECUTION COPY
ANDREWS NON-RECOURSE GUARANTY AND PLEDGE AGREEMENT
Dated July 27, 1994
From
ANDREWS GROUP INCORPORATED
as Pledgor
to
CITIBANK, N.A.
as Agent
T A B L E O F C O N T E N T S
Section Page
1. Grant of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Non-Recourse Guaranty; Limitation of Liability. . . . . . . . . . . . . 2
3. Delivery of Collateral. . . . . . . . . . . . . . . . . . . . . . . . . 2
4. Representations and Warranties. . . . . . . . . . . . . . . . . . . . . 3
5. Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6. Place of Perfection; Records. . . . . . . . . . . . . . . . . . . . . . 4
7. Voting Rights; Dividends; Etc . . . . . . . . . . . . . . . . . . . . . 5
8. Transfers and Other Liens; Additional Shares. . . . . . . . . . . . . . 6
9. Agent Appointed Attorney-in-Fact. . . . . . . . . . . . . . . . . . . . 6
10. Agent May Perform . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
11. The Agent's Duties. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
12. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
13. Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 8
14. Indemnity and Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 9
15. Security Interest Absolute. . . . . . . . . . . . . . . . . . . . . . . 9
16. Amendments; Waivers; Etc. . . . . . . . . . . . . . . . . . . . . . . . 10
17. Addresses for Notices . . . . . . . . . . . . . . . . . . . . . . . . . 10
18. Continuing Security Interest; Assignments Under the Credit Agreement. . 11
19. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
20. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial . . . . 11
21. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . 12
Schedule I - Pledged Shares
NON-RECOURSE GUARANTY AND PLEDGE AGREEMENT
NON-RECOURSE GUARANTY AND PLEDGE AGREEMENT dated July 27, 1994
made by ANDREWS GROUP INCORPORATED, a Delaware corporation ("Andrews" or the
"Pledgor"), to CITIBANK, N.A. ("Citibank"), as agent (the "Agent") for the
lenders (the "Lenders") party to the Credit Agreement (as hereinafter defined).
PRELIMINARY STATEMENTS.
(1) The Lenders and the Agent have entered into a Credit
Agreement dated as of July 20, 1994 (said Agreement, as it may hereafter be
amended or otherwise modified from time to time, being the "Credit Agreement",
the terms defined therein and not otherwise defined herein being used herein as
therein defined) with Marvel IV Holdings Inc., a Delaware corporation (the
"Borrower").
(2) The Pledgor is the owner of the shares (the "Pledged
Shares") of stock listed in Schedule I hereto and issued by the corporation
named therein.
(3) It is a condition precedent to the making of Advances by
the Lenders under the Credit Agreement that the Pledgor, as the indirect owner
of 100% of the outstanding shares of stock of the Borrower, shall have made the
pledge, assignment and security interest contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make Advances under the Credit Agreement, the Pledgor
hereby agrees with the Agent for its benefit and the ratable benefit of the
Lenders as follows:
Section 1. Grant of Security. To secure the full and punctual
performance of the Guaranteed Obligations, the Pledgor hereby pledges to the
Agent for its benefit and the ratable benefit of the Lenders, and hereby grants
to the Agent for its benefit and the ratable benefit of the Lenders a pledge,
assignment and security interest in, all of its right, title and interest,
whether now owned or hereafter acquired, in and to, the following (collectively,
the "Collateral"):
(a) the Pledged Shares and the certificates and instruments
representing the Pledged Shares, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares;
(b) all additional shares of stock of any issuer of the
Pledged Shares from time to time acquired by the Pledgor in any manner, and the
certificates representing such additional shares, and all dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
shares; and
(c) all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of the types
described in clauses (a) and (b) of this Section 1).
Section 2. Non-Recourse Guaranty; Limitation of Liability. (a)
Andrews, as primary obligor and not merely as surety, hereby irrevocably and
unconditionally guarantees the payment of all Obligations of Mafco now or
hereafter existing under the Mafco Guaranty and the other Loan Documents to
which Mafco is a party, whether for principal, interest (including, without
limitation, interest after the filing of a petition initiating a proceeding
referred to in Section 6.01(e) of the Credit Agreement, whether or not such
interest constitutes an allowed claim for purposes of such proceeding), fees,
expenses or otherwise (all such Obligations being the "Guaranteed Obligations"),
and agrees to pay any and all expenses (including reasonable counsel fees and
expenses) incurred by the Agent or the Lenders in enforcing any rights under
this Agreement; provided, however, that Andrews' liability under this Section
2(a) with respect to the Guaranteed Obligations shall be limited to the
Collateral, it being understood that it is the intention of the foregoing that
the guaranty set forth in this Section 2(a) otherwise is a non-recourse
obligation of Andrews and that the Agent's right to recover against Andrews
hereunder shall be limited solely to the Collateral. Without limiting the
generality of the foregoing, the non-recourse guaranty set forth in this Section
2(a) guarantees the payment of all amounts that constitute part of the
Guaranteed Obligations and would be owed by Mafco to the Agent or the Lenders
under the Loan Documents to which Mafco is a party but for the fact that they
are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving Mafco.
(b) The liability of Andrews under this Agreement in respect
of the Guaranteed Obligations shall not exceed the greater of (i) 95% of the
Adjusted Net Assets of Andrews on the date of delivery hereof and (ii) 95% of
the Adjusted Net Assets of Andrews on the date of any exercise of remedies by
the Agent hereunder. "Adjusted Net Assets" of Andrews at any date means the
lesser of (x) the amount by which the fair value of the property of Andrews
exceeds the total amount of liabilities, including, without limitation,
contingent liabilities, but excluding any liabilities or obligations under this
Agreement, of Andrews at such date and (y) the amount by which the present fair
salable value of the assets of Andrews at such date exceeds the amount that will
be required to pay the probable liability of Andrews on its debts, excluding
debt in respect of this Agreement, as they become absolute and matured.
Section 3. Delivery of Collateral. All certificates or
instruments representing or evidencing Collateral shall be delivered to and held
by or on behalf of the Agent pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Agent. The Agent shall have the right, at any time upon the occurrence and
during the continuance of an Event of Default in its discretion and without
notice to the Pledgor, to transfer to or to register in the name of the Agent or
any of its nominees any or all of the Collateral. In addition, the Agent shall
have the right at any time to exchange certificates or instruments representing
or evidencing Collateral for certificates or instruments of smaller or larger
denominations.
Section 4. Representations and Warranties. The Pledgor
represents and warrants as follows:
(a) The chief place of business and chief executive office
of the Pledgor and the office where the Pledgor keeps its records concerning the
Collateral are located at the address specified opposite the name of the Pledgor
on the signature page hereof.
(b) The Pledgor is the legal and beneficial owner of the
Collateral, free and clear of any Lien, except for the security interest created
by this Agreement. No effective financing statement or other instrument
similar in effect covering all or any part of the Collateral is on file in any
recording office, except such as may have been filed in favor of the Agent
relating to this Agreement. The Pledgor has no trade names.
(c) The Pledged Shares have been duly authorized and validly
issued and are fully paid and non-assessable.
(d) The Pledged Shares constitute the percentage of the
issued and outstanding shares of common stock of the issuer thereof indicated on
Schedule I.
(e) This Agreement and the pledge of the Collateral pursuant
hereto create a valid and perfected first priority security interest in the
Collateral, securing the payment of the Guaranteed Obligations, and all filings
and other actions necessary or desirable to perfect and protect such security
interest have been duly taken.
(f) No consent of any other Person and no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other third party is required either (i) for the
grant by the Pledgor of the assignment and security interest granted hereby, for
the pledge by the Pledgor of the Collateral pursuant hereto or for the
execution, delivery or performance of this Agreement by the Pledgor, (ii) for
the perfection or maintenance of the pledge, assignment and security interest
created hereby (including the first priority nature of such pledge, assignment
or security interest), except for the filing of financing and continuation
statements under the Uniform Commercial Code, which financing statements have
been duly filed, or (iii) for the exercise by the Agent of its voting or other
rights provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement, except as may be required in connection
with the disposition of any portion of the Collateral by laws affecting the
offering and sale of securities generally; provided, however, that no
representation or warranty is made as to any consent of, authorization, approval
or other action by, or notice to or filing with, any banking agency or
regulatory body applicable to the Agent.
Section 5. Further Assurances. (a) The Pledgor agrees that
from time to time, at the expense of the Pledgor, the Pledgor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Agent may request, in
order to perfect and protect any pledge, assignment or security interest granted
or purported to be granted hereby or to enable the Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, the Pledgor will (i) if any Collateral
shall be evidenced by a promissory note or other instrument or chattel paper,
deliver and pledge to the Agent hereunder such note or instrument or chattel
paper duly indorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to the Agent; and (ii)
execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as the Agent may request, in order to perfect and preserve the
pledge, assignment and security interest granted or purported to be granted
hereby.
(b) The Pledgor hereby authorizes the Agent to file one or
more financing or continuation statements, and amendments thereto, relating to
all or any part of the Collateral without the signature of the Pledgor where
permitted by law. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(c) The Pledgor will furnish to the Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail.
Section 6. Place of Perfection; Records. The Pledgor shall
keep its chief place of business and chief executive office and the office where
it keeps its records concerning the Collateral at the location therefor
specified in Section 4(a) or, upon 30 days' prior written notice to the Agent,
at such other locations in a jurisdiction where all actions required by Section
5 shall have been taken with respect to the Collateral. The Pledgor will hold
and preserve such records and will permit representatives of the Agent at any
time during normal business hours to inspect and make abstracts from such
records.
Section 7. Voting Rights; Dividends; Etc. (a) So long as no
Event of Default shall have occurred and be continuing:
(i) The Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral or any part
thereof for any purpose not inconsistent with the terms of this Agreement or the
other Loan Documents; provided, however, that the Pledgor shall not exercise or
refrain from exercising any such right if, in the Agent's reasonable judgment,
such action would have a material adverse effect on the value of the Collateral
or any part thereof; and, provided, further, that the Pledgor shall give the
Agent at least five days' written notice of the manner in which it intends to
exercise, or the reasons for refraining from exercising, any such right.
(ii) The Agent shall execute and deliver (or cause to be
executed and delivered) to the Pledgor all such proxies and other instruments as
the Pledgor may reasonably request for the purpose of enabling the Pledgor to
exercise the voting and other rights that it is entitled to exercise pursuant to
paragraph (i) above.
(iii) The Pledgor shall be entitled to receive and retain any
and all dividends and interest paid in respect of the Collateral; provided,
however, that any and all
(A) dividends and interest paid or payable other
than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange for, any Collateral
received as consideration for sales or other dispositions of assets of the
Pledgor
shall be, and shall be forthwith delivered to the Agent to hold as,
Collateral and shall, if received by the Pledgor, be received in trust for the
benefit of the Agent, be segregated from the other property or funds of the
Pledgor and be forthwith delivered to the Agent as Collateral in the same form
as so received (with any necessary indorsement).
(b) Upon the occurrence and during the continuance of an
Event of Default, all rights of the Pledgor (i) to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise be
entitled to exercise pursuant to Section 7(a)(i) shall, upon notice to the
Pledgor by the Agent, cease and (ii) to receive the dividends and interest
payments that it would otherwise be authorized to receive and retain pursuant to
Section 7(a)(iii) shall automatically cease, and all such rights shall thereupon
become vested in the Agent, which shall thereupon have the sole right to
exercise or refrain from exercising such voting and other consensual rights and
to receive and hold as Collateral such dividends and interest payments.
Section 8. Transfers and Other Liens; Additional Shares. (a)
The Pledgor shall not except as provided in the Mafco Guaranty (i) sell, assign
(by operation of law or otherwise) or otherwise dispose of, or grant any option
with respect to, any of the Collateral or (ii) create or suffer to exist any
Lien upon or with respect to any of the Collateral except for the pledge,
assignment and security interest created by this Agreement.
(b) The Pledgor shall (i) cause each issuer of the Pledged
Shares not to issue any stock or other securities in addition to or in
substitution for the Pledged Shares issued by such issuer, except to the
Pledgor, and (ii) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all additional shares of stock or other
securities of each issuer of the Pledged Shares.
Section 9. Agent Appointed Attorney-in-Fact. The Pledgor
hereby irrevocably appoints the Agent the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time in the Agent's discretion, upon the occurrence
and during the continuance of any Event of Default to take any action and to
execute any instrument that the Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:
(a) to ask for, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other
instruments and documents in connection with clause (a) above, and
(c) to file any claims or take any action or institute any
proceedings that the Agent may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce the rights of the Agent with
respect to any of the Collateral.
Section 10. Agent May Perform. If the Pledgor fails to perform
any agreement contained herein applicable to it, the Agent may itself perform,
or cause performance of, such agreement, and the reasonable expenses of the
Agent incurred in connection therewith shall be payable by the Pledgor under
Section 14(b).
Section 11. The Agent's Duties. The powers conferred on the
Agent hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for a duty to
exercise reasonable care in respect of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Agent shall have no
duty as to any Collateral, as to ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Collateral, whether or not the Agent or any Lender has or is deemed to have
knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Collateral. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Citibank accords its own
property.
Section 12. Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the
Uniform Commercial Code in effect in the State of New York at such time (the
"N.Y. Uniform Commercial Code") (whether or not the N.Y. Uniform Commercial Code
applies to the affected Collateral) and also may (i) require the Pledgor to, and
the Pledgor hereby agrees that it will at its expense and upon request of the
Agent forthwith, assemble all or part of the Collateral as directed by the Agent
and make it available to the Agent at a place to be designated by the Agent that
is reasonably convenient to both parties and (ii) without notice except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Agent's offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the Agent may
deem commercially reasonable. The Pledgor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to the Pledgor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Agent, be held by the Agent as
collateral for, and/or then or at any time thereafter applied (after payment of
any amounts payable to the Agent pursuant to Section 14) in whole or in part by
the Agent for the ratable benefit of the Lenders against all or any part of the
Guaranteed Obligations in such order as the Agent shall elect. Any surplus of
such cash or cash proceeds held by the Agent and remaining after payment in full
of all the Guaranteed Obligations shall be paid over to the Pledgor or to
whomsoever may be lawfully entitled to receive such surplus.
(c) The Agent may exercise any and all rights and remedies
of the Pledgor in respect of the Collateral.
(d) All payments received by the Pledgor in respect of the
Collateral shall be received in trust for the benefit of the Agent, shall be
segregated from other funds of the Pledgor and shall be forthwith paid over to
the Agent in the same form as so received (with any necessary indorsement).
Section 13. Registration Rights. If the Agent shall determine
to exercise its right to sell all or any of the Collateral pursuant to Section
12, the Pledgor agrees that, upon request of the Agent, the Pledgor will, at its
own expense:
(a) execute and deliver, and cause each issuer of the
Collateral contemplated to be sold and use its best efforts to cause the
directors and officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as may be
necessary or, in the opinion of the Agent, advisable to register such Collateral
under the provisions of the Securities Act of 1933, as amended from time to time
(the "Securities Act"), to cause the registration statement relating thereto to
become effective and to remain effective for such period as prospectuses are
required by law to be furnished and to make all amendments and supplements
thereto and to the related prospectus that, in the opinion of the Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto;
(b) use its best efforts to qualify the Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the Agent;
(c) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will satisfy the
provisions of Section 11(a) of the Securities Act;
(d) provide the Agent with such other information as may be
necessary or, in the opinion of the Agent, advisable to enable the Agent to
effect the sale of such Collateral; and
(e) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part thereof valid
and binding and in compliance with applicable law.
The Agent is authorized, in connection with any sale of the Collateral pursuant
to Section 12, to deliver or otherwise disclose to any prospective purchaser of
the Collateral (i) any registration statement or prospectus, and all supplements
and amendments thereto, prepared pursuant to clause (a) above, (ii) any
information provided to it pursuant to clause (d) above and (iii) any other
information in its possession relating to the Collateral.
The Pledgor acknowledges the impossibility of ascertaining the amount of damages
that would be suffered by the Agent or the Lenders by reason of the failure by
the Pledgor to perform any of the covenants contained in this Section and,
consequently, agrees that, if the Pledgor shall fail to perform any of such
covenants, it shall pay, as liquidated damages and not as a penalty, an amount
equal to the value of the Collateral on the date the Agent shall demand
compliance with this Section.
Section 14. Indemnity and Expenses. (a) The Pledgor agrees
to indemnify the Agent from and against any and all claims, losses and
liabilities growing out of or resulting from this Agreement (including, without
limitation, enforcement of this Agreement), except claims, losses or liabilities
resulting from the Agent's gross negligence or willful misconduct as determined
by a final judgment of a court of competent jurisdiction.
(b) The Pledgor will upon demand pay to the Agent the amount
of any and all reasonable expenses, including the reasonable fees and expenses
of its counsel and of any experts and agents, that the Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Agent or the Lenders hereunder or (iv) the failure by
the Pledgor to perform or observe any of the provisions hereof.
Section 15. Security Interest Absolute. The obligations of the
Pledgor under this Agreement are independent of the Guaranteed Obligations, and
a separate action or actions may be brought and prosecuted against the Pledgor
to enforce this Agreement, irrespective of whether any action is brought against
the Borrower or Mafco or whether the Borrower or Mafco is joined in any such
action or actions. All rights of the Agent and the pledge, assignment and
security interest hereunder, and all obligations of the Pledgor, shall be
absolute and unconditional, irrespective of:
(a) any lack of validity or enforceability of any Loan
Document or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Guaranteed Obligations or any other
amendment or waiver of or any consent to any departure from any Loan Document,
including, without limitation, any increase in the Guaranteed 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
other collateral, or any taking, release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Guaranteed Obligations;
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale or
other disposition of any collateral for all or any of the Guaranteed Obligations
or any other assets of the Borrower, Mafco or any of their subsidiaries;
(e) any change, restructuring or termination of the
corporate structure or existence of the Borrower, Mafco or any of their
subsidiaries; or
(f) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Pledgor or a third party grantor of
a security interest.
Section 16. Amendments; Waivers; Etc. No amendment or waiver
of any provision of this Agreement, and no consent to any departure by the
Pledgor herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No failure on the part of the Agent to exercise, and no delay in
exercising any right hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.
Section 17. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and, mailed, telegraphed, telecopied,
telexed, cabled or delivered to the Pledgor, addressed to it at the address set
forth opposite its name on the signature pages hereof, and to the Agent,
addressed to it at its address specified in the Credit Agreement or, as to
either party, at such other address as shall be designated by such party in a
written notice to each other party complying as to delivery with the terms of
this Section 17. All such notices and other communications shall, when mailed,
telecopied, telegraphed, telexed or cabled, respectively, be effective when
deposited in the mails, telecopied, delivered to the telegraph company,
confirmed by telex answerback or delivered to the cable company, respectively,
addressed as aforesaid.
Section 18. Continuing Security Interest; Assignments Under the
Credit Agreement. This Agreement shall create a continuing security interest in
the Collateral and a continuing guaranty and shall (a) remain in full force and
effect until the earlier of (i) the termination of the non-recourse guaranty,
pledge, assignment and security interest created hereby pursuant to Section 19
below and (ii) the sale or other disposition of all the Collateral in accordance
with the Loan Documents and the application of the proceeds thereof in
accordance with the Loan Documents, (b) be binding upon the Pledgor and its
successors and assigns and (c) inure, together with the rights and remedies of
the Agent hereunder, to the benefit of the Agent and the Lenders and their
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (c), any Lender may assign or otherwise transfer all or
any portion of its rights and obligations under the Credit Agreement (including,
without limitation, all or any portion of its Commitment, the Advances owing to
it and the Note or Notes held by it) to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Lender herein or otherwise, in each case as provided in Section 8.07 of
the Credit Agreement.
Section 19. Termination. At such time as the Payment
Obligations have been Fully Satisfied, the non-recourse guaranty, pledge,
assignment and security interest created hereby shall terminate and all rights
to the Collateral shall revert to the Pledgor. Upon any such termination, the
Agent will, at the Pledgor's expense, execute and deliver to the Pledgor such
documents as the Pledgor shall reasonably request to evidence such termination.
Section 20. Governing Law; Submission to Jurisdiction; Waiver
of Jury Trial. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, except to the extent that the
validity or perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the State of New York. Unless otherwise defined herein
or in the Credit Agreement, terms used in Article 9 of the N.Y. Uniform
Commercial Code are used herein as therein defined.
(b) The Pledgor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party, or for recognition or enforcement
of any judgment, and the Pledgor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State or, to the extent permitted by law, in
such federal court. The Pledgor agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in the courts of any jurisdiction.
(c) The Pledgor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal
court. The Pledgor hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(d) THE PLEDGOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT OR ANY LENDER IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
Section 21. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be
duly executed and delivered by its officers thereunto duly authorized as of the
date first above written.
c/o MacAndrews & Forbes Holdings Inc. ANDREWS GROUP INCORPORATED
38 East 63rd Street
New York, New York 10021
By
-----------------------------
Title:
Schedule I
PLEDGED SHARES
<TABLE>
<CAPTION>
Percentage
of
Stock Certificate Number Outstanding
Stock Issuer Class of Stock Par Value No(s) of Shares Shares
------------ -------------- --------- ----------------- --------- ------------
<S> <C> <C> <C> <C> <C>
Four Star
Holdings Corp.
Common $1.00 1 1000 100%
</TABLE>
EXECUTION COPY
M&F NON-RECOURSE GUARANTY AND PLEDGE AGREEMENT
Dated July 27, 1994
From
MACANDREWS & FORBES HOLDINGS INC.
as Pledgor
to
CITIBANK, N.A.
as Agent
T A B L E O F C O N T E N T S
Section Page
1. Grant of Security . . . . . . . . . . . . . . . . . . . . 1
2. Non-Recourse Guaranty; Limitation of Liability. . . . . . 2
3. Delivery of Collateral. . . . . . . . . . . . . . . . . . 3
4. Representations and Warranties. . . . . . . . . . . . . . 3
5. Further Assurances. . . . . . . . . . . . . . . . . . . . 4
6. Place of Perfection; Records. . . . . . . . . . . . . . . 4
7. Voting Rights; Dividends; Etc . . . . . . . . . . . . . . 5
8. Transfers and Other Liens; Additional Shares. . . . . . . 6
9. Agent Appointed Attorney-in-Fact. . . . . . . . . . . . . 6
10. Agent May Perform . . . . . . . . . . . . . . . . . . . . 6
11. The Agent's Duties. . . . . . . . . . . . . . . . . . . . 7
12. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 7
13. Registration Rights . . . . . . . . . . . . . . . . . . . 8
14. Indemnity and Expenses. . . . . . . . . . . . . . . . . . 9
15. Security Interest Absolute. . . . . . . . . . . . . . . . 9
16. Amendments; Waivers; Etc. . . . . . . . . . . . . . . . . 10
17. Addresses for Notices . . . . . . . . . . . . . . . . . . 10
18. Continuing Security Interest; Assignments Under the Credit
Agreement . . . . . . . . . . . . . . . . . . . . . . . . 11
19. Termination . . . . . . . . . . . . . . . . . . . . . . . 11
20. Subordination. . . . . . . . . . . . . . . . . . . . . . 11
21. Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial . . . . . . . . . . . . . . . . . . . . . . . . . . 12
22. Execution in Counterparts . . . . . . . . . . . . . . . . 13
Schedule I - Pledged Shares
NON-RECOURSE GUARANTY AND PLEDGE AGREEMENT
NON-RECOURSE GUARANTY AND PLEDGE AGREEMENT dated July 27, 1994
made by MACANDREWS & FORBES HOLDINGS INC., a Delaware corporation ("M&F" or the
"Pledgor"), to CITIBANK, N.A. ("Citibank"), as agent (the "Agent") for the
lenders (the "Lenders") party to the Credit Agreement (as hereinafter defined).
PRELIMINARY STATEMENTS.
(1) The Lenders and the Agent have entered into a Credit
Agreement dated as of July 20, 1994 (said Agreement, as it may hereafter be
amended or otherwise modified from time to time, being the "Credit Agreement",
the terms defined therein and not otherwise defined herein being used herein as
therein defined) with Marvel IV Holdings Inc., a Delaware corporation (the
"Borrower").
(2) Mafco Holdings Inc., a Delaware corporation ("Mafco"),
as indirect owner of 100% of the capital stock of the Borrower, has entered into
a Guaranty dated as of July 27, 1994 (said Guaranty, as it may hereafter be
amended or otherwise modified from time to time, being the "Mafco Guaranty") in
favor of the Lenders and Citibank, as Agent for the Lenders.
(3) The Pledgor is the owner of the shares (the "Pledged
Shares") of stock listed in Schedule I hereto and issued by the corporations
named therein.
(4) It is a condition precedent to the making of Advances by
the Lenders under the Credit Agreement that the Pledgor shall have made the
pledge, assignment and security interest contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make Advances under the Credit Agreement, the Pledgor
hereby agrees with the Agent for its benefit and the ratable benefit of the
Lenders as follows:
Section 1. Grant of Security. To secure the full and punctual
performance of the Guaranteed Obligations, the Pledgor hereby pledges to the
Agent for its benefit and the ratable benefit of the Lenders, and hereby grants
to the Agent for its benefit and the ratable benefit of the Lenders a pledge,
assignment and security interest in, all of its right, title and interest,
whether now owned or hereafter acquired, in and to, the following (collectively,
the "Collateral"):
(a) the Pledged Shares and the certificates and instruments
representing the Pledged Shares, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares;
(b) all additional shares of stock of any issuer of the
Pledged Shares from time to time acquired by the Pledgor in any manner, and the
certificates representing such additional shares, and all dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
shares; and
(c) all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of the types
described in clauses (a) and (b) of this Section 1).
Section 2. Non-Recourse Guaranty; Limitation of Liability. (a)
M&F, as primary obligor and not merely as surety, hereby irrevocably and
unconditionally guarantees the payment of all Obligations of Mafco now or
hereafter existing under the Mafco Guaranty and the other Loan Documents to
which Mafco is a party, whether for principal, interest (including, without
limitation, interest after the filing of a petition initiating a proceeding
referred to in Section 6.01(e) of the Credit Agreement, whether or not such
interest constitutes an allowed claim for purposes of such proceeding), fees,
expenses or otherwise (all such Obligations being the "Guaranteed Obligations"),
and agrees to pay any and all expenses (including reasonable counsel fees and
expenses) incurred by the Agent or the Lenders in enforcing any rights under
this Agreement; provided, however, that M&F's liability under this Section 2(a)
with respect to the Guaranteed Obligations shall be limited to the Collateral,
it being understood that it is the intention of the foregoing that the guaranty
set forth in this Section 2(a) otherwise is a non-recourse obligation of M&F and
that the Agent's right to recover against M&F hereunder in respect of such
guaranty shall be limited solely to the Collateral. Without limiting the
generality of the foregoing, the non-recourse guaranty set forth in this Section
2(a) guarantees the payment of all amounts that constitute part of the
Guaranteed Obligations and would be owed by Mafco to the Agent or the Lenders
under the Loan Documents to which Mafco is a party but for the fact that they
are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving Mafco.
(b) The liability of M&F under this Agreement in respect of
Guaranteed Obligations shall not exceed the greater of (i) 95% of the Adjusted
Net Assets of M&F on the date of delivery hereof and (ii) 95% of the Adjusted
Net Assets of M&F on the date of any exercise of remedies by the Agent
hereunder. "Adjusted Net Assets" of M&F at any date means the lesser of (x) the
amount by which the fair value of the property of M&F exceeds the total amount
of liabilities, including, without limitation, contingent liabilities, but
excluding any liabilities or obligations under this Agreement, of M&F at such
date and (y) the amount by which the present fair salable value of the assets of
M&F at such date exceeds the amount that will be required to pay the probable
liability of M&F on its debts, excluding debt in respect of this Agreement, as
they become absolute and matured.
Section 3. Delivery of Collateral. All certificates or
instruments representing or evidencing Collateral shall be delivered to and held
by or on behalf of the Agent pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Agent. The Agent shall have the right, at any time upon the occurrence and
during the continuance of an Event of Default in its discretion and without
notice to the Pledgor, to transfer to or to register in the name of the Agent or
any of its nominees any or all of the Collateral. In addition, the Agent shall
have the right at any time to exchange certificates or instruments representing
or evidencing Collateral for certificates or instruments of smaller or larger
denominations.
Section 4. Representations and Warranties. The Pledgor
represents and warrants as follows:
(a) The chief place of business and chief executive office
of the Pledgor and the office where the Pledgor keeps its records concerning the
Collateral are located at the address specified opposite the name of the Pledgor
on the signature page hereof.
(b) The Pledgor is the legal and beneficial owner of the
Collateral, free and clear of any Lien, except for the security interest created
by this Agreement. No effective financing statement or other instrument similar
in effect covering all or any part of the Collateral is on file in any recording
office, except such as may have been filed in favor of the Agent relating to
this Agreement. The Pledgor has no trade names.
(c) The Pledged Shares have been duly authorized and validly
issued and are fully paid and non-assessable.
(d) The Pledged Shares constitute the percentage of the
issued and outstanding shares of stock of the issuers thereof indicated on
Schedule I.
(e) This Agreement and the pledge of the Collateral pursuant
hereto create a valid and perfected first priority security interest in the
Collateral, securing the payment of the Guaranteed Obligations, and all filings
and other actions necessary or desirable to perfect and protect such security
interest have been duly taken.
(f) No consent of any other Person and no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other third party is required either (i) for the
grant by the Pledgor of the assignment and security interest granted hereby, for
the pledge by the Pledgor of the Collateral pursuant hereto or for the
execution, delivery or performance of this Agreement by the Pledgor, (ii) for
the perfection or maintenance of the pledge, assignment and security interest
created hereby (including the first priority nature of such pledge, assignment
or security interest), except for the filing of financing and continuation
statements under the Uniform Commercial Code, which financing statements have
been duly filed, or (iii) for the exercise by the Agent of its voting or other
rights provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement, except as may be required in connection
with the disposition of any portion of the Collateral by laws affecting the
offering and sale of securities generally; provided, however, that no
representation or warranty is made as to any consent of, authorization, approval
or other action by, or notice to or filing with, any banking agency or
regulatory body applicable to the Agent.
Section 5. Further Assurances. (a) The Pledgor agrees that
from time to time, at the expense of the Pledgor, the Pledgor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Agent may request, in
order to perfect and protect any pledge, assignment or security interest granted
or purported to be granted hereby or to enable the Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, the Pledgor will: (i) if any
Collateral shall be evidenced by a promissory note or other instrument or
chattel paper, deliver and pledge to the Agent hereunder such note or instrument
or chattel paper duly indorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to the Agent; and
(ii) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as the Agent may request, in order to perfect and preserve the
pledge, assignment and security interest granted or purported to be granted
hereby.
(b) The Pledgor hereby authorizes the Agent to file one or
more financing or continuation statements, and amendments thereto, relating to
all or any part of the Collateral without the signature of the Pledgor where
permitted by law. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(c) The Pledgor will furnish to the Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail.
Section 6. Place of Perfection; Records. The Pledgor shall
keep its chief place of business and chief executive office and the office where
it keeps its records concerning the Collateral at the location therefor
specified in Section 4(a) or, upon 30 days' prior written notice to the Agent,
at such other locations in a jurisdiction where all actions required by Section
5 shall have been taken with respect to the Collateral. The Pledgor will hold
and preserve such records and will permit representatives of the Agent at any
time during normal business hours to inspect and make abstracts from such
records.
Section 7. Voting Rights; Dividends; Etc. (a) So long as no
Event of Default shall have occurred and be continuing:
(i) The Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral or any part
thereof for any purpose not inconsistent with the terms of this Agreement or the
other Loan Documents; provided, however, that the Pledgor shall not exercise or
refrain from exercising any such right if, in the Agent's reasonable judgment,
such action would have a material adverse effect on the value of the Collateral
or any part thereof; and, provided, further, that the Pledgor shall give the
Agent at least five days' written notice of the manner in which it intends to
exercise, or the reasons for refraining from exercising, any such right.
(ii) The Agent shall execute and deliver (or cause to be
executed and delivered) to the Pledgor all such proxies and other instruments as
the Pledgor may reasonably request for the purpose of enabling the Pledgor to
exercise the voting and other rights that it is entitled to exercise pursuant to
paragraph (i) above.
(iii) The Pledgor shall be entitled to receive and retain any
and all dividends and interest paid in respect of the Collateral; provided,
however, that any and all
(A) dividends and interest paid or payable other
than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange for, any Collateral
received as consideration for sales or other dispositions of assets of the
Pledgor
shall be, and shall be forthwith delivered to the Agent to hold as,
Collateral and shall, if received by the Pledgor, be received in trust for the
benefit of the Agent, be segregated from the other property or funds of the
Pledgor and be forthwith delivered to the Agent as Collateral in the same form
as so received (with any necessary indorsement).
(b) Upon the occurrence and during the continuance of an
Event of Default, all rights of the Pledgor (i) to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise be
entitled to exercise pursuant to Section 7(a)(i) shall, upon notice to the
Pledgor by the Agent, cease and (ii) to receive the dividends and interest
payments that it would otherwise be authorized to receive and retain pursuant to
Section 7(a)(iii) shall automatically cease, and all such rights shall thereupon
become vested in the Agent, which shall thereupon have the sole right to
exercise or refrain from exercising such voting and other consensual rights and
to receive and hold as Collateral such dividends and interest payments.
Section 8. Transfers and Other Liens; Additional Shares. (a)
The Pledgor shall not except as provided in the Mafco Guaranty (i) sell, assign
(by operation of law or otherwise) or otherwise dispose of, or grant any option
with respect to, any of the Collateral or (ii) create or suffer to exist any
Lien upon or with respect to any of the Collateral except for the pledge,
assignment and security interest created by this Agreement.
(b) The Pledgor shall (i) cause each issuer of the Pledged
Shares not to issue any stock or other securities in addition to or in
substitution for the Pledged Shares issued by such issuer, except to the
Pledgor, and (ii) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all additional shares of stock or other
securities of each issuer of the Pledged Shares.
Section 9. Agent Appointed Attorney-in-Fact. The Pledgor
hereby irrevocably appoints the Agent the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time in the Agent's discretion, upon the occurrence
and during the continuance of any Event of Default to take any action and to
execute any instrument that the Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:
(a) to ask for, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other
instruments and documents in connection with clause (a) above, and
(c) to file any claims or take any action or institute any
proceedings that the Agent may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce the rights of the Agent with
respect to any of the Collateral.
Section 10. Agent May Perform. If the Pledgor fails to perform
any agreement contained herein, the Agent may itself perform, or cause
performance of, such agreement, and the reasonable expenses of the Agent
incurred in connection therewith shall be payable by the Pledgor under Section
14(b).
Section 11. The Agent's Duties. The powers conferred on the
Agent hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for a duty to
exercise reasonable care in respect of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Agent shall have no
duty as to any Collateral, as to ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Collateral, whether or not the Agent or any Lender has or is deemed to have
knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Collateral. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Citibank accords its own
property.
Section 12. Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the
Uniform Commercial Code in effect in the State of New York at such time (the
"N.Y. Uniform Commercial Code") (whether or not the N.Y. Uniform Commercial Code
applies to the affected Collateral) and also may (i) require the Pledgor to, and
the Pledgor hereby agrees that it will at its expense and upon request of the
Agent forthwith, assemble all or part of the Collateral as directed by the Agent
and make it available to the Agent at a place to be designated by the Agent that
is reasonably convenient to both parties and (ii) without notice except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Agent's offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the Agent may
deem commercially reasonable. The Pledgor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to the Pledgor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Agent, be held by the Agent as
collateral for, and/or then or at any time thereafter applied (after payment of
any amounts payable to the Agent pursuant to Section 14) in whole or in part by
the Agent for the ratable benefit of the Lenders against all or any part of the
Guaranteed Obligations in such order as the Agent shall elect. Any surplus of
such cash or cash proceeds held by the Agent and remaining after payment in full
of all the Guaranteed Obligations shall be paid over to the Pledgor or to
whomsoever may be lawfully entitled to receive such surplus.
(c) The Agent may exercise any and all rights and remedies
of the Pledgor in respect of the Collateral.
(d) All payments received by the Pledgor in respect of the
Collateral shall be received in trust for the benefit of the Agent, shall be
segregated from other funds of the Pledgor and shall be forthwith paid over to
the Agent in the same form as so received (with any necessary indorsement).
Section 13. Registration Rights. If the Agent shall determine
to exercise its right to sell all or any of the Collateral pursuant to Section
12, the Pledgor agrees that, upon request of the Agent, the Pledgor will, at its
own expense:
(a) execute and deliver, and cause each issuer of the
Collateral contemplated to be sold and use its best efforts to cause the
directors and officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as may be
necessary or, in the opinion of the Agent, advisable to register such Collateral
under the provisions of the Securities Act of 1933, as amended from time to time
(the "Securities Act"), to cause the registration statement relating thereto to
become effective and to remain effective for such period as prospectuses are
required by law to be furnished and to make all amendments and supplements
thereto and to the related prospectus that, in the opinion of the Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto;
(b) use its best efforts to qualify the Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the Agent;
(c) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will satisfy the
provisions of Section 11(a) of the Securities Act;
(d) provide the Agent with such other information as may be
necessary or, in the opinion of the Agent, advisable to enable the Agent to
effect the sale of such Collateral; and
(e) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part thereof valid
and binding and in compliance with applicable law.
The Agent is authorized, in connection with any sale of the Collateral pursuant
to Section 12, to deliver or otherwise disclose to any prospective purchaser of
the Collateral (i) any registration statement or prospectus, and all supplements
and amendments thereto, prepared pursuant to clause (a) above, (ii) any
information provided to it pursuant to clause (d) above and (iii) any other
information in its possession relating to the Collateral.
The Pledgor acknowledges the impossibility of ascertaining the amount of damages
that would be suffered by the Agent or the Lenders by reason of the failure by
the Pledgor to perform any of the covenants contained in this Section and,
consequently, agrees that, if the Pledgor shall fail to perform any of such
covenants, it shall pay, as liquidated damages and not as a penalty, an amount
equal to the value of the Collateral on the date the Agent shall demand
compliance with this Section.
Section 14. Indemnity and Expenses. (a) The Pledgor agrees
to indemnify the Agent from and against any and all claims, losses and
liabilities growing out of or resulting from this Agreement (including, without
limitation, enforcement of this Agreement), except claims, losses or liabilities
resulting from the Agent's gross negligence or willful misconduct as determined
by a final judgment of a court of competent jurisdiction.
(b) The Pledgor will upon demand pay to the Agent the amount
of any and all reasonable expenses, including the reasonable fees and expenses
of its counsel and of any experts and agents, that the Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Agent or the Lenders hereunder or (iv) the failure by
the Pledgor to perform or observe any of the provisions hereof.
Section 15. Security Interest Absolute. The obligations of the
Pledgor under this Agreement are independent of the Guaranteed Obligations, and
a separate action or actions may be brought and prosecuted against the Pledgor
to enforce this Agreement, irrespective of whether any action is brought against
the Borrower or whether the Borrower is joined in any such action or actions.
All rights of the Agent and the pledge, assignment and security interest
hereunder, and all obligations of the Pledgor hereunder, shall be absolute and
unconditional, irrespective of:
(a) any lack of validity or enforceability of any Loan
Document or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Guaranteed Obligations or any other
amendment or waiver of or any consent to any departure from any Loan Document,
including, without limitation, any increase in the Guaranteed 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
other collateral, or any taking, release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Guaranteed Obligations;
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale or
other disposition of any collateral for all or any of the Guaranteed 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; or
(f) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Pledgor or a third party grantor of
a security interest.
Section 16. Amendments; Waivers; Etc. No amendment or waiver
of any provision of this Agreement, and no consent to any departure by the
Pledgor herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No failure on the part of the Agent to exercise, and no delay in
exercising any right hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.
Section 17. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and, mailed, telegraphed, telecopied,
telexed, cabled or delivered to the Pledgor or to the Agent, as the case may
be, in the case of the Pledgor, addressed to it at its address set forth
opposite its name on the signature page hereto and in the case of the Agent,
addressed to it at its address specified in the Credit Agreement or, as to
either party, at such other address as shall be designated by such party in a
written notice to each other party complying as to delivery with the terms of
this Section 17. All such notices and other communications shall, when mailed,
telecopied, telegraphed, telexed or cabled, respectively, be effective when
deposited in the mails, telecopied, delivered to the telegraph company,
confirmed by telex answerback or delivered to the cable company, respectively,
addressed as aforesaid.
Section 18. Continuing Security Interest; Assignments Under the
Credit Agreement. This Agreement shall create a continuing security interest in
the Collateral and a continuing guaranty and shall (a) remain in full force and
effect until the earlier of (i) the termination of the non-recourse guaranty,
pledge, assignment and security interest created hereby pursuant to Section 19
below and (ii) the sale or other disposition of all the Collateral in accordance
with the Loan Documents and the application of the proceeds thereof in
accordance with the Loan Documents, (b) be binding upon the Pledgor, its
successors and assigns and (c) inure, together with the rights and remedies of
the Agent hereunder, to the benefit of the Agent and the Lenders and their
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (c), any Lender may assign or otherwise transfer all or
any portion of its rights and obligations under the Credit Agreement (including,
without limitation, all or any portion of its Commitment, the Advances owing to
it and the Note or Notes held by it) to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Lender herein or otherwise, in each case as provided in Section 8.07 of
the Credit Agreement.
Section 19. Termination. At such time as the Payment
Obligations have been Fully Satisfied, the non-recourse guaranty, pledge,
assignment and security interest created hereby shall terminate and all rights
to the Collateral shall revert to the Pledgor. Upon any such termination, the
Agent will, at the Pledgor's expense, execute and deliver to the Pledgor such
documents as the Pledgor shall reasonably request to evidence such termination.
Section 20. Subordination. (a) If and to the extent that
this Agreement or the obligations of the Pledgor hereunder constitute
"Indebtedness" as such term is defined in the Indenture dated as of March 1,
1984 (the "M&F Indenture") between the Pledgor and United States Trust Company
of New York relating to the 13% Subordinated Debentures due March 1, 1999, this
Agreement and the obligations of the Pledgor hereunder are not "superior in
right of payment to the Debentures" as such language is used in the definition
of "Senior Indebtedness" in the M&F Indenture and do not rank "pari passu with
the Debentures" as such language is used in Section 4.08 of the M&F Indenture.
In this connection, the Pledgor and the Agent and each Lender by its acceptance
hereof, explicitly agree and understand that this Agreement and the obligations
of the Pledgor hereunder are not intended to violate Section 4.08 of the M&F
Indenture and this Agreement and the obligations of the Pledgor hereunder shall
be interpreted and construed so as to prevent this Agreement from constituting a
violation of Section 4.08 of the M&F Indenture.
(b) This Pledgor and the Agent by its acceptance hereof
further agree that if the debentures (as defined in the M&F Indenture) shall be
paid in full and the Indenture shall be terminated and of no further force and
effect, then this Agreement and the obligations of the Pledgor hereunder shall
thereafter rank, if and to the extent that they did not theretofore rank, at
least pari passu with all other senior indebtedness of the Pledgor. The Pledgor
agrees to enter into any amendment to this Agreement which the Agent may deem
necessary to effect such senior ranking.
Section 21. Governing Law; Submission to Jurisdiction; Waiver
of Jury Trial. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, except to the extent that the
validity or perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the State of New York. Unless otherwise defined herein
or in the Credit Agreement, terms used in Article 9 of the N.Y. Uniform
Commercial Code are used herein as therein defined.
(b) The Pledgor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party, or for recognition or enforcement
of any judgment, and the Pledgor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State or, to the extent permitted by law, in
such federal court. The Pledgor agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in the courts of any jurisdiction.
(c) The Pledgor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal
court. The Pledgor hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(d) THE PLEDGOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT OR ANY LENDER IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
Section 22. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
38 East 63rd Street MACANDREWS & FORBES HOLDINGS INC.
New York, New York 10021
By
Title:
Schedule I
PLEDGED SHARES
<TABLE>
<CAPTION>
Percentage
of
Stock Certificate Number Outstanding
Stock Issuer Class of Stock Par Value No(s) of Shares Shares
------------ -------------- --------- ----------------- --------- ----------
<S> <C> <C> <C> <C> <C>
New Coleman
Holdings Inc. Common $1.00 3 1,000 100%
Preferred $1.00 3 10,000 100%
Andrews Group
Incorporated Common $1.00 1 1,000 100%
</TABLE>
EXECUTION COPY
PLEDGE AGREEMENT
Dated July 27, 1994
From
COLEMAN (PARENT) HOLDINGS INC.
as Pledgor
to
CITIBANK, N.A.
as Agent
T A B L E O F C O N T E N T S
Section Page
1. Grant of Security . . . . . . . . . . . . . . . . . . . . 1
2. Security for Obligations. . . . . . . . . . . . . . . . . 2
3. Delivery of Collateral. . . . . . . . . . . . . . . . . . 2
4. Representations and Warranties. . . . . . . . . . . . . . 2
5. Further Assurances. . . . . . . . . . . . . . . . . . . . 3
6. Place of Perfection; Records. . . . . . . . . . . . . . . 4
7. Voting Rights; Dividends; Etc . . . . . . . . . . . . . . 4
8. Transfers and Other Liens; Additional Shares. . . . . . . 5
9. Agent Appointed Attorney-in-Fact. . . . . . . . . . . . . 6
10. Agent May Perform . . . . . . . . . . . . . . . . . . . . 6
11. The Agent's Duties. . . . . . . . . . . . . . . . . . . . 6
12. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 6
13. Registration Rights . . . . . . . . . . . . . . . . . . . 7
14. Indemnity and Expenses. . . . . . . . . . . . . . . . . . 9
15. Security Interest Absolute. . . . . . . . . . . . . . . . 9
16. Amendments; Waivers; Etc. . . . . . . . . . . . . . . . . 10
17. Addresses for Notices . . . . . . . . . . . . . . . . . . 10
18. Continuing Security Interest; Assignments Under the Credit
Agreement . . . . . . . . . . . . . . . . . . . . . . . . 10
19. Termination . . . . . . . . . . . . . . . . . . . . . . . 11
20. Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial . . . . . . . . . . . . . . . . . . . . . . . . . . 11
21. Execution in Counterparts . . . . . . . . . . . . . . . . 12
Schedule I - Pledged Shares
PLEDGE AGREEMENT
PLEDGE AGREEMENT dated July 27, 1994 made by COLEMAN (PARENT)
HOLDINGS INC., a Delaware corporation (the "Pledgor"), to CITIBANK, N.A.
("Citibank"), as agent (the "Agent") for the lenders (the "Lenders") party to
the Credit Agreement (as hereinafter defined).
PRELIMINARY STATEMENTS.
(1) The Lenders and the Agent have entered into a Credit
Agreement dated as of July 20, 1994 (said Agreement, as it may hereafter be
amended or otherwise modified from time to time, being the "Credit Agreement",
the terms defined therein and not otherwise defined herein being used herein as
therein defined) with Marvel IV Holdings Inc., a Delaware corporation (the
"Borrower").
(2) The Pledgor has entered into a Guaranty dated as of July
__, 1994 (said Guaranty, as it may hereafter be amended or otherwise modified
from time to time, being the "Coleman Guaranty") in favor of the Lenders and
Citibank, as Agent for the Lenders.
(3) The Pledgor is the owner of the shares (the "Pledged
Shares") of stock listed in Schedule I hereto and issued by the corporation
named therein.
(4) It is a condition precedent to the making of Advances by
the Lenders under the Credit Agreement that the Pledgor shall have made the
pledge, assignment and security interest contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make Advances under the Credit Agreement, the Pledgor
hereby agrees with the Agent for its benefit and the ratable benefit of the
Lenders as follows:
Section 1. Grant of Security. The Pledgor hereby pledges to
the Agent for its benefit and the ratable benefit of the Lenders, and hereby
grants to the Agent for its benefit and the ratable benefit of the Lenders a
pledge, assignment and security interest in, all of its right, title and
interest, whether now owned or hereafter acquired, in and to, the following
(collectively, the "Collateral"):
(a) the Pledged Shares and the certificates and instruments
representing the Pledged Shares, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares;
(b) all additional shares of stock of any issuer of the
Pledged Shares from time to time acquired by the Pledgor in any manner, and the
certificates representing such additional shares, and all dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
shares; and
(c) all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of the types
described in clauses (a) and (b) of this Section 1).
Section 2. Security for Obligations. This Agreement secures the
payment of all Obligations of the Pledgor now or hereafter existing under the
Coleman Guaranty, whether for principal, interest (including, without
limitation, interest after the filing of a petition initiating a proceeding
referred to in Section 6.01(e) of the Credit Agreement, whether or not such
interest constitutes an allowed claim for purposes of such proceeding), fees,
expenses or otherwise (all such Obligations being the "Secured Obligations").
Without limiting the generality of the foregoing, this Agreement secures the
payment of all amounts that constitute part of the Secured Obligations and would
be owed by the Borrower or the Pledgor to the Agent or the Lenders under the
Loan Documents to which the Borrower or the Pledgor is a party but for the fact
that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Borrower or the
Pledgor.
Section 3. Delivery of Collateral. All certificates or
instruments representing or evidencing Collateral shall be delivered to and held
by or on behalf of the Agent pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Agent. The Agent shall have the right, at any time upon the occurrence and
during the continuance of an Event of Default in its discretion and without
notice to the Pledgor, to transfer to or to register in the name of the Agent or
any of its nominees any or all of the Collateral. In addition, the Agent shall
have the right at any time to exchange certificates or instruments representing
or evidencing Collateral for certificates or instruments of smaller or larger
denominations.
Section 4. Representations and Warranties. The Pledgor
represents and warrants as follows:
(a) The chief place of business and chief executive office
of the Pledgor and the office where the Pledgor keeps its records concerning the
Collateral are located at the address specified opposite the name of the Pledgor
on the signature page hereof.
(b) The Pledgor is the legal and beneficial owner of the
Collateral, free and clear of any Lien, except for the security interest created
by this Agreement. No effective financing statement or other instrument similar
in effect covering all or any part of the Collateral is on file in any recording
office, except such as may have been filed in favor of the Agent relating to
this Agreement. The Pledgor has no trade names.
(c) The Pledged Shares have been duly authorized and validly
issued and are fully paid and non-assessable.
(d) The Pledged Shares constitute the percentage of the
issued and outstanding shares of stock of the issuers thereof indicated on
Schedule I.
(e) This Agreement and the pledge of the Collateral pursuant
hereto create a valid and perfected first priority security interest in the
Collateral, securing the payment of the Secured Obligations, and all filings and
other actions necessary or desirable to perfect and protect such security
interest have been duly taken.
(f) No consent of any other Person and no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other third party is required either (i) for the
grant by the Pledgor of the assignment and security interest granted hereby, for
the pledge by the Pledgor of the Collateral pursuant hereto or for the
execution, delivery or performance of this Agreement by the Pledgor, (ii) for
the perfection or maintenance of the pledge, assignment and security interest
created hereby (including the first priority nature of such pledge, assignment
or security interest), except for the filing of financing and continuation
statements under the Uniform Commercial Code, which financing statements have
been duly filed, or (iii) for the exercise by the Agent of its voting or other
rights provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement, except as may be required in connection
with the disposition of any portion of the Collateral by laws affecting the
offering and sale of securities generally; provided, however, that no
representation or warranty is made as to any consent of, authorization, approval
or other action by, or notice to or filing with, any banking agency or
regulatory body applicable to the Agent.
Section 5. Further Assurances. (a) The Pledgor agrees that
from time to time, at the expense of the Pledgor, the Pledgor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Agent may request, in
order to perfect and protect any pledge, assignment or security interest granted
or purported to be granted hereby or to enable the Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, the Pledgor will: (i) if any
Collateral shall be evidenced by a promissory note or other instrument or
chattel paper, deliver and pledge to the Agent hereunder such note or instrument
or chattel paper duly indorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to the Agent; and
(ii) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as the Agent may request, in order to perfect and preserve the
pledge, assignment and security interest granted or purported to be granted
hereby.
(b) The Pledgor hereby authorizes the Agent to file one or
more financing or continuation statements, and amendments thereto, relating to
all or any part of the Collateral without the signature of the Pledgor where
permitted by law. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(c) The Pledgor will furnish to the Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail.
Section 6. Place of Perfection; Records. The Pledgor shall
keep its chief place of business and chief executive office and the office where
it keeps its records concerning the Collateral at the location therefor
specified in Section 4(a) or, upon 30 days' prior written notice to the Agent,
at such other locations in a jurisdiction where all actions required by Section
5 shall have been taken with respect to the Collateral. The Pledgor will hold
and preserve such records and will permit representatives of the Agent at any
time during normal business hours to inspect and make abstracts from such
records.
Section 7. Voting Rights; Dividends; Etc. (a) So long as no
Event of Default shall have occurred and be continuing:
(i) The Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral or any part
thereof for any purpose not inconsistent with the terms of this Agreement or the
other Loan Documents; provided, however, that the Pledgor shall not exercise or
refrain from exercising any such right if, in the Agent's reasonable judgment,
such action would have a material adverse effect on the value of the Collateral
or any part thereof; and, provided, further, that the Pledgor shall give the
Agent at least five days' written notice of the manner in which it intends to
exercise, or the reasons for refraining from exercising, any such right.
(ii) The Agent shall execute and deliver (or cause to be
executed and delivered) to the Pledgor all such proxies and other instruments as
the Pledgor may reasonably request for the purpose of enabling the Pledgor to
exercise the voting and other rights that it is entitled to exercise pursuant to
paragraph (i) above.
(iii) The Pledgor shall be entitled to receive and retain any
and all dividends and interest paid in respect of the Collateral; provided,
however, that any and all
(A) dividends and interest paid or payable other
than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange for, any Collateral
received as consideration for sales or other dispositions of assets of the
Pledgor
shall be, and shall be forthwith delivered to the Agent to hold as,
Collateral and shall, if received by the Pledgor, be received in trust for the
benefit of the Agent, be segregated from the other property or funds of the
Pledgor and be forthwith delivered to the Agent as Collateral in the same form
as so received (with any necessary indorsement).
(b) Upon the occurrence and during the continuance of an
Event of Default, all rights of the Pledgor (i) to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise be
entitled to exercise pursuant to Section 7(a)(i) shall, upon notice to the
Pledgor by the Agent, cease and (ii) to receive the dividends and interest
payments that it would otherwise be authorized to receive and retain pursuant to
Section 7(a)(iii) shall automatically cease, and all such rights shall thereupon
become vested in the Agent, which shall thereupon have the sole right to
exercise or refrain from exercising such voting and other consensual rights and
to receive and hold as Collateral such dividends and interest payments.
Section 8. Transfers and Other Liens; Additional Shares. (a)
The Pledgor shall not except as provided in the Coleman Guaranty (i) sell,
assign (by operation of law or otherwise) or otherwise dispose of, or grant any
option with respect to, any of the Collateral or (ii) create or suffer to exist
any Lien upon or with respect to any of the Collateral except for the pledge,
assignment and security interest created by this Agreement.
(b) The Pledgor shall (i) cause each issuer of the Pledged
Shares not to issue any stock or other securities in addition to or in
substitution for the Pledged Shares issued by such issuer, except to the
Pledgor, and (ii) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all additional shares of stock or other
securities of each issuer of the Pledged Shares.
Section 9. Agent Appointed Attorney-in-Fact. The Pledgor
hereby irrevocably appoints the Agent the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time in the Agent's discretion, upon the occurrence
and during the continuance of any Event of Default to take any action and to
execute any instrument that the Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:
(a) to ask for, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other
instruments and documents in connection with clause (a) above, and
(c) to file any claims or take any action or institute any
proceedings that the Agent may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce the rights of the Agent with
respect to any of the Collateral.
Section 10. Agent May Perform. If the Pledgor fails to perform
any agreement contained herein, the Agent may itself perform, or cause
performance of, such agreement, and the reasonable expenses of the Agent
incurred in connection therewith shall be payable by the Pledgor under Section
14(b).
Section 11. The Agent's Duties. The powers conferred on the
Agent hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for a duty to
exercise reasonable care in respect of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Agent shall have no
duty as to any Collateral, as to ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Collateral, whether or not the Agent or any Lender has or is deemed to have
knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Collateral. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Citibank accords its own
property.
Section 12. Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the
Uniform Commercial Code in effect in the State of New York at such time (the
"N.Y. Uniform Commercial Code") (whether or not the N.Y. Uniform Commercial Code
applies to the affected Collateral) and also may (i) require the Pledgor to, and
the Pledgor hereby agrees that it will at its expense and upon request of the
Agent forthwith, assemble all or part of the Collateral as directed by the Agent
and make it available to the Agent at a place to be designated by the Agent that
is reasonably convenient to both parties and (ii) without notice except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Agent's offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the Agent may
deem commercially reasonable. The Pledgor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to the Pledgor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Agent, be held by the Agent as
collateral for, and/or then or at any time thereafter applied (after payment of
any amounts payable to the Agent pursuant to Section 14) in whole or in part by
the Agent for the ratable benefit of the Lenders against all or any part of the
Secured Obligations in such order as the Agent shall elect. Any surplus of such
cash or cash proceeds held by the Agent and remaining after payment in full of
all the Secured Obligations shall be paid over to the Pledgor or to whomsoever
may be lawfully entitled to receive such surplus.
(c) The Agent may exercise any and all rights and remedies
of the Pledgor in respect of the Collateral.
(d) All payments received by the Pledgor in respect of the
Collateral shall be received in trust for the benefit of the Agent, shall be
segregated from other funds of the Pledgor and shall be forthwith paid over to
the Agent in the same form as so received (with any necessary indorsement).
Section 13. Registration Rights. If the Agent shall determine
to exercise its right to sell all or any of the Collateral pursuant to Section
12, the Pledgor agrees that, upon request of the Agent, the Pledgor will, at its
own expense:
(a) execute and deliver, and cause each issuer of the
Collateral contemplated to be sold and use its best efforts to cause the
directors and officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as may be
necessary or, in the opinion of the Agent, advisable to register such Collateral
under the provisions of the Securities Act of 1933, as amended from time to time
(the "Securities Act"), to cause the registration statement relating thereto to
become effective and to remain effective for such period as prospectuses are
required by law to be furnished and to make all amendments and supplements
thereto and to the related prospectus that, in the opinion of the Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto;
(b) use its best efforts to qualify the Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the Agent;
(c) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will satisfy the
provisions of Section 11(a) of the Securities Act;
(d) provide the Agent with such other information as may be
necessary or, in the opinion of the Agent, advisable to enable the Agent to
effect the sale of such Collateral; and
(e) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part thereof valid
and binding and in compliance with applicable law.
The Agent is authorized, in connection with any sale of the Collateral pursuant
to Section 12, to deliver or otherwise disclose to any prospective purchaser of
the Collateral (i) any registration statement or prospectus, and all supplements
and amendments thereto, prepared pursuant to clause (a) above, (ii) any
information provided to it pursuant to clause (d) above and (iii) any other
information in its possession relating to the Collateral.
The Pledgor acknowledges the impossibility of ascertaining the amount of damages
that would be suffered by the Agent or the Lenders by reason of the failure by
the Pledgor to perform any of the covenants contained in this Section and,
consequently, agrees that, if the Pledgor shall fail to perform any of such
covenants, it shall pay, as liquidated damages and not as a penalty, an amount
equal to the value of the Collateral on the date the Agent shall demand
compliance with this Section.
Section 14. Indemnity and Expenses. (a) The Pledgor agrees
to indemnify the Agent from and against any and all claims, losses and
liabilities growing out of or resulting from this Agreement (including, without
limitation, enforcement of this Agreement), except claims, losses or liabilities
resulting from the Agent's gross negligence or willful misconduct as determined
by a final judgment of a court of competent jurisdiction.
(b) The Pledgor will upon demand pay to the Agent the amount
of any and all reasonable expenses, including the reasonable fees and expenses
of its counsel and of any experts and agents, that the Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Agent or the Lenders hereunder or (iv) the failure by
the Pledgor to perform or observe any of the provisions hereof.
Section 15. Security Interest Absolute. The obligations of the
Pledgor under this Agreement are independent of the Secured Obligations, and a
separate action or actions may be brought and prosecuted against the Pledgor to
enforce this Agreement, irrespective of whether any action is brought against
the Borrower or whether the Borrower is joined in any such action or actions.
All rights of the Agent and the pledge, assignment and security interest
hereunder, and all obligations of the Pledgor hereunder, shall be absolute and
unconditional, irrespective of:
(a) any lack of validity or enforceability of any Loan
Document or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Secured Obligations or any other
amendment or waiver of or any consent to any departure from any Loan Document,
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
other collateral, or any taking, release or amendment or waiver of or consent to
departure from any 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, the Pledgor or any of their subsidiaries;
(e) any change, restructuring or termination of the
corporate structure or existence of the Borrower, the Pledgor or any of their
subsidiaries; or
(f) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Pledgor or a third party grantor of
a security interest.
Section 16. Amendments; Waivers; Etc. No amendment or waiver
of any provision of this Agreement, and no consent to any departure by the
Pledgor herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No failure on the part of the Agent to exercise, and no delay in
exercising any right hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.
Section 17. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and, mailed, telegraphed, telecopied,
telexed, cabled or delivered to the Pledgor or to the Agent, as the case may
be, in the case of the Pledgor, addressed to it at its address set forth
opposite its name on the signature page hereto and in the case of the Agent
addressed to it at its address specified in the Credit Agreement or, as to
either party, at such other address as shall be designated by such party in a
written notice to each other party complying as to delivery with the terms of
this Section 17. All such notices and other communications shall, when mailed,
telecopied, telegraphed, telexed or cabled, respectively, be effective when
deposited in the mails, telecopied, delivered to the telegraph company,
confirmed by telex answerback or delivered to the cable company, respectively,
addressed as aforesaid.
Section 18. Continuing Security Interest; Assignments Under the
Credit Agreement. This Agreement shall create a continuing security interest in
the Collateral and shall (a) remain in full force and effect until the earlier
of (i) the termination of the pledge, assignment and security interest granted
hereby pursuant to Section 19 below and (ii) the sale or other disposition of
all the Collateral in accordance with the Loan Documents and the application of
the proceeds thereof in accordance with the Loan Documents, (b) be binding upon
the Pledgor, its successors and assigns and (c) inure, together with the rights
and remedies of the Agent hereunder, to the benefit of the Agent and the Lenders
and their respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender may assign or otherwise
transfer all or any portion of its rights and obligations under the Credit
Agreement (including, without limitation, all or any portion of its Commitment,
the Advances owing to it and the Note or Notes held by it) to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to such Lender herein or otherwise, in each case as
provided in Section 8.07 of the Credit Agreement.
Section 19. Termination. At such time as the Payment
Obligations have been Fully Satisfied, the pledge, assignment and security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the Pledgor. Upon any such termination, the Agent will, at the
Pledgor's expense, execute and deliver to the Pledgor such documents as the
Pledgor shall reasonably request to evidence such termination.
Section 20. Governing Law; Submission to Jurisdiction; Waiver
of Jury Trial. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, except to the extent that the
validity or perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the State of New York. Unless otherwise defined herein
or in the Credit Agreement, terms used in Article 9 of the N.Y. Uniform
Commercial Code are used herein as therein defined.
(b) The Pledgor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party, or for recognition or enforcement
of any judgment, and the Pledgor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State or, to the extent permitted by law, in
such federal court. The Pledgor agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in the courts of any jurisdiction.
(c) The Pledgor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal
court. The Pledgor hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(d) THE PLEDGOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT OR ANY LENDER IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
Section 21. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
c/o MacAndrews & Forbes Holdings Inc. COLEMAN (PARENT) HOLDINGS INC.
38 East 63rd Street
New York, New York 10021
By
Title:
Schedule I
PLEDGED SHARES
<TABLE>
<CAPTION>
Percentage
of
Stock Certificate Number Outstanding
Stock Issuer Class of Stock Par Value No(s) of Shares Shares
------------ -------------- --------- ----------------- --------- ----------
<S> <C> <C> <C> <C> <C>
Coleman Holdings Inc. Common $1.00 2 1,000 100%
</TABLE>
EXECUTION COPY
NEW COLEMAN NON-RECOURSE GUARANTY
AND PLEDGE AGREEMENT
Dated July 27, 1994
From
NEW COLEMAN HOLDINGS, INC.
as Pledgor
and
NATIONSBANK OF GEORGIA, NATIONAL ASSOCIATION
as Voting Trustee
to
CITIBANK, N.A.
as Agent
T A B L E O F C O N T E N T S
Section Page
1. Grant of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Non-Recourse Guaranty; Limitation of Liability. . . . . . . . . . . . . 2
3. Delivery of Collateral. . . . . . . . . . . . . . . . . . . . . . . . . 3
4. Representations and Warranties. . . . . . . . . . . . . . . . . . . . . 3
5. Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6. Place of Perfection; Records. . . . . . . . . . . . . . . . . . . . . . 5
7. Voting Rights; Dividends; Etc . . . . . . . . . . . . . . . . . . . . . 5
8. Transfers and Other Liens; Additional Shares. . . . . . . . . . . . . . 6
9. Agent Appointed Attorney-in-Fact. . . . . . . . . . . . . . . . . . . . 6
10. Agent May Perform . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
11. The Agent's Duties. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
12. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
13. Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 8
14. Indemnity and Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 9
15. Security Interest Absolute. . . . . . . . . . . . . . . . . . . . . . . 10
16. Amendments; Waivers; Etc. . . . . . . . . . . . . . . . . . . . . . . . 11
17. Addresses for Notices . . . . . . . . . . . . . . . . . . . . . . . . . 11
18. Continuing Security Interest; Assignments Under the Credit Agreement. . 11
19. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
20. Voting Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
21. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.. . . . 12
22. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . 13
Schedule I - Pledged Shares
NON-RECOURSE GUARANTY AND PLEDGE AGREEMENT
NON-RECOURSE GUARANTY AND PLEDGE AGREEMENT dated July 27, 1994
made by NEW COLEMAN HOLDINGS, INC., a Delaware corporation ("NCH" or the
"Pledgor"), and only with respect to Sections 1 and 3 hereof, NATIONSBANK OF
GEORGIA, NATIONAL ASSOCIATION, not in its individual capacity but solely in its
capacity as Voting Trustee (in such capacity, the "Voting Trustee") under the
Voting Trust Agreement dated as of the date hereof (said agreement as it may
hereafter be amended or otherwise modified from time to time, being the "Voting
Trust Agreement") among the Pledgor, the Voting Trustee, Coleman Guarantor (as
defined in the Credit Agreement referred to below) and the Agent referred to
below, to CITIBANK, N.A. ("Citibank"), as agent (the "Agent") for the lenders
(the "Lenders") party to the Credit Agreement (as hereinafter defined).
PRELIMINARY STATEMENTS.
(1) The Lenders and the Agent have entered into a Credit
Agreement dated as of July 20, 1994 (said Agreement, as it may hereafter be
amended or otherwise modified from time to time, being the "Credit Agreement",
the terms defined therein and not otherwise defined herein being used herein as
therein defined) with Marvel IV Holdings Inc., a Delaware corporation (the
"Borrower").
(2) The Pledgor and the Voting Trustee are the owners of the
shares (the "Pledged Shares") of stock listed under their respective names in
Schedule I hereto and issued by the corporations named therein.
(3) It is a condition precedent to the making of Advances by
the Lenders under the Credit Agreement that the Pledgor and the Voting Trustee,
as the indirect owners of 100% of the outstanding shares of stock of the
Borrower, shall have made the pledge, assignment and security interest
contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make Advances under the Credit Agreement, the Pledgor and
the Voting Trustee hereby agree with the Agent for its benefit and the ratable
benefit of the Lenders as follows:
Section 1. Grant of Security. To secure the full and punctual
performance of the Guaranteed Obligations, each of the Pledgor and the Voting
Trustee hereby pledges to the Agent for its benefit and the ratable benefit of
the Lenders, and hereby grants to the Agent for its benefit and the ratable
benefit of the Lenders a pledge, assignment and security interest in, all of
its right, title and interest, whether now owned or hereafter acquired, in and
to, the following (collectively, the "Collateral"):
(a) the Pledged Shares and the certificates and instruments
representing the Pledged Shares, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares;
(b) all additional shares of stock of any issuer of the
Pledged Shares from time to time acquired by the Pledgor or the Voting Trustee
in any manner, and the certificates representing such additional shares, and all
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such shares; and
(c) all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of the types
described in clauses (a) and (b) of this Section 1).
Section 2. Non-Recourse Guaranty; Limitation of Liability. (a)
NCH, as primary obligor and not merely as surety, hereby irrevocably and
unconditionally guarantees the payment of all Obligations of Mafco now or
hereafter existing under the Mafco Guaranty and the other Loan Documents to
which Mafco is a party, whether for principal, interest (including, without
limitation, interest after the filing of a petition initiating a proceeding
referred to in Section 6.01(e) of the Credit Agreement, whether or not such
interest constitutes an allowed claim for purposes of such proceeding), fees,
expenses or otherwise (all such Obligations being the "Guaranteed Obligations"),
and agrees to pay any and all expenses (including reasonable counsel fees and
expenses) incurred by the Agent or the Lenders in enforcing any rights under
this Agreement; provided, however, that NCH's liability under this Section 2(a)
with respect to the Guaranteed Obligations shall be limited to the Collateral,
it being understood that it is the intention of the foregoing that the guaranty
set forth in this Section 2(a) otherwise is a non-recourse obligation of NCH and
that the Agent's right to recover against NCH hereunder in respect of such
guaranty shall be limited solely to the Collateral. Without limiting the
generality of the foregoing, the non-recourse guaranty set forth in this Section
2(a) guarantees the payment of all amounts that constitute part of the
Guaranteed Obligations and would be owed by Mafco to the Agent or the Lenders
under the Loan Documents to which Mafco is a party but for the fact that they
are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving Mafco.
(b) The liability of NCH under this Agreement in respect of
the Guaranteed Obligations shall not exceed the greater of (i) 95% of the
Adjusted Net Assets of NCH on the date of delivery hereof and (ii) 95% of the
Adjusted Net Assets of NCH on the date of any exercise of remedies by the Agent
hereunder. "Adjusted Net Assets" of NCH at any date means the lesser of (x) the
amount by which the fair value of the property of NCH exceeds the total amount
of liabilities, including, without limitation, contingent liabilities, but
excluding any liabilities or obligations under this Agreement, of NCH at such
date and (y) the amount by which the present fair salable value of the assets of
NCH at such date exceeds the amount that will be required to pay the probable
liability of NCH on its debts, excluding debt in respect of this Agreement, as
they become absolute and matured.
Section 3. Delivery of Collateral. All certificates or
instruments representing or evidencing Collateral shall be delivered to and held
by or on behalf of the Agent pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Agent. The Agent shall have the right, at any time upon the occurrence and
during the continuance of an Event of Default in its discretion and without
notice to the Pledgor, to transfer to or to register in the name of the Agent or
any of its nominees any or all of the Collateral. In addition, the Agent shall
have the right at any time to exchange certificates or instruments representing
or evidencing Collateral for certificates or instruments of smaller or larger
denominations.
Section 4. Representations and Warranties. The Pledgor
represents and warrants as follows:
(a) The chief place of business and chief executive office
of the Pledgor and the office where the Pledgor keeps its records concerning the
Collateral are located at the address specified opposite the name of the Pledgor
on the signature page hereof.
(b) The Pledgor is the legal and beneficial owner of the
Collateral (other than the shares issued in the name of the Voting Trustee (the
"Voting Trust Stock")) and is the beneficial owner of the Voting Trust Stock, in
each case free and clear of any Lien, except for the security interest created
by this Agreement and the Lien created by the Voting Trust Agreement. The Voting
Trustee is the legal owner of the Voting Trust Stock free and clear of any Lien,
except for the security interest created by this Agreement and the Lien created
by the Voting Trust Agreement. No effective financing statement or other
instrument similar in effect covering all or any part of the Collateral is on
file in any recording office, except such as may have been filed in favor of the
Agent relating to this Agreement. The Pledgor has no trade names.
(c) The Pledged Shares have been duly authorized and validly
issued and are fully paid and non-assessable.
(d) The Pledged Shares constitute the percentage of the
issued and outstanding shares of stock of the issuers thereof indicated on
Schedule I.
(e) This Agreement and the pledge of the Collateral pursuant
hereto create a valid and perfected first priority security interest in the
Collateral, securing the payment of the Guaranteed Obligations, and all filings
and other actions necessary or desirable to perfect and protect such security
interest have been duly taken.
(f) No consent of any other Person and no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other third party is required either (i) for the
grant by the Pledgor or the Voting Trustee of the assignment and security
interest granted hereby, for the pledge by the Pledgor or the Voting Trustee of
the Collateral pursuant hereto or for the execution, delivery or performance of
this Agreement by the Pledgor or the Voting Trustee, (ii) for the perfection or
maintenance of the pledge, assignment and security interest created hereby
(including the first priority nature of such pledge, assignment or security
interest), except for the filing of financing and continuation statements under
the Uniform Commercial Code, which financing statements have been duly filed, or
(iii) for the exercise by the Agent of its voting or other rights provided for
in this Agreement or the remedies in respect of the Collateral pursuant to this
Agreement, except as may be required in connection with the disposition of any
portion of the Collateral by laws affecting the offering and sale of securities
generally; provided, however, that no representation or warranty is made as to
any consent of, authorization, approval or other action by, or notice to or
filing with, any banking agency or regulatory body applicable to the Agent.
Section 5. Further Assurances. (a) The Pledgor agrees that
from time to time, at the expense of the Pledgor, the Pledgor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Agent may request, in
order to perfect and protect any pledge, assignment or security interest granted
or purported to be granted hereby or to enable the Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, the Pledgor will or will cause the
Voting Trustee to, as the case may be: (i) if any Collateral shall be evidenced
by a promissory note or other instrument or chattel paper, deliver and pledge to
the Agent hereunder such note or instrument or chattel paper duly indorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Agent; and (ii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Agent may
request, in order to perfect and preserve the pledge, assignment and security
interest granted or purported to be granted hereby.
(b) The Pledgor hereby authorizes the Agent to file one or
more financing or continuation statements, and amendments thereto, relating to
all or any part of the Collateral without the signature of the Pledgor where
permitted by law. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(c) The Pledgor will furnish to the Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail.
Section 6. Place of Perfection; Records. The Pledgor shall
keep its chief place of business and chief executive office and the office where
it keeps its records concerning the Collateral at the location therefor
specified in Section 4(a) or, upon 30 days' prior written notice to the Agent,
at such other locations in a jurisdiction where all actions required by Section
5 shall have been taken with respect to the Collateral. The Pledgor will hold
and preserve such records and will permit representatives of the Agent at any
time during normal business hours to inspect and make abstracts from such
records.
Section 7. Voting Rights; Dividends; Etc. (a) So long as no
Event of Default shall have occurred and be continuing:
(i) Subject to the terms of the Voting Trust Agreement, each
of the Pledgor and the Voting Trustee shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral or any part
thereof for any purpose not inconsistent with the terms of this Agreement or the
other Loan Documents; provided, however, that the Pledgor shall not exercise or
refrain from exercising any such right if, in the Agent's reasonable judgment,
such action would have a material adverse effect on the value of the Collateral
or any part thereof; and, provided, further, that the Pledgor shall give the
Agent at least five days' written notice of the manner in which it intends to
exercise, or the reasons for refraining from exercising, any such right.
(ii) The Agent shall execute and deliver (or cause to be
executed and delivered) to each of the Pledgor and the Voting Trustee all such
proxies and other instruments as each of the Pledgor and the Voting Trustee may
reasonably request for the purpose of enabling each of the Pledgor and the
Voting Trustee to exercise the voting and other rights that it is entitled to
exercise pursuant to paragraph (i) above.
(iii) The Pledgor shall be entitled to receive and retain any
and all dividends and interest paid in respect of the Collateral; provided,
however, that any and all
(A) dividends and interest paid or payable other
than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange for, any Collateral
received as consideration for sales or other dispositions of assets of the
Pledgor
shall be, and shall be forthwith delivered to the Agent to hold as,
Collateral and shall, if received by the Pledgor, be received in trust for the
benefit of the Agent, be segregated from the other property or funds of the
Pledgor and be forthwith delivered to the Agent as Collateral in the same form
as so received (with any necessary indorsement).
(b) Upon the occurrence and during the continuance of an
Event of Default, all rights of the Pledgor (i) to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise be
entitled to exercise pursuant to Section 7(a)(i) shall, upon notice to the
Pledgor by the Agent, cease and (ii) to receive the dividends and interest
payments that it would otherwise be authorized to receive and retain pursuant to
Section 7(a)(iii) shall automatically cease, and all such rights shall thereupon
become vested in the Agent, which shall thereupon have the sole right to
exercise or refrain from exercising such voting and other consensual rights and
to receive and hold as Collateral such dividends and interest payments.
Section 8. Transfers and Other Liens; Additional Shares. (a)
The Pledgor shall not except as provided in the Mafco Guaranty (i) sell, assign
(by operation of law or otherwise) or otherwise dispose of, or grant any option
with respect to, any of the Collateral or (ii) create or suffer to exist any
Lien upon or with respect to any of the Collateral except for the pledge,
assignment and security interest created by this Agreement and the Lien created
by the Voting Trust Agreement.
(b) The Pledgor shall (i) cause each issuer of the Pledged
Shares not to issue any stock or other securities in addition to or in
substitution for the Pledged Shares issued by such issuer, except to the
Pledgor, and (ii) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all additional shares of stock or other
securities of each issuer of the Pledged Shares.
Section 9. Agent Appointed Attorney-in-Fact. The Pledgor
hereby irrevocably appoints the Agent the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time in the Agent's discretion, upon the occurrence
and during the continuance of any Event of Default to take any action and to
execute any instrument that the Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:
(a) to ask for, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other
instruments and documents in connection with clause (a) above, and
(c) to file any claims or take any action or institute any
proceedings that the Agent may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce the rights of the Agent with
respect to any of the Collateral.
Section 10. Agent May Perform. If either the Pledgor or the
Voting Trustee fails to perform any agreement contained herein applicable to it,
the Agent may itself perform, or cause performance of, such agreement, and the
reasonable expenses of the Agent incurred in connection therewith shall be
payable by the Pledgor under Section 14(b).
Section 11. The Agent's Duties. The powers conferred on the
Agent hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for a duty to
exercise reasonable care in respect of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Agent shall have no
duty as to any Collateral, as to ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Collateral, whether or not the Agent or any Lender has or is deemed to have
knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Collateral. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Citibank accords its own
property.
Section 12. Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the
Uniform Commercial Code in effect in the State of New York at such time (the
"N.Y. Uniform Commercial Code") (whether or not the N.Y. Uniform Commercial Code
applies to the affected Collateral) and also may (i) require the Pledgor to, and
the Pledgor hereby agrees that it will at its expense and upon request of the
Agent forthwith, assemble all or part of the Collateral as directed by the Agent
and make it available to the Agent at a place to be designated by the Agent that
is reasonably convenient to both parties and (ii) without notice except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Agent's offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the Agent may
deem commercially reasonable. The Pledgor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to the Pledgor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Agent, be held by the Agent as
collateral for, and/or then or at any time thereafter applied (after payment of
any amounts payable to the Agent pursuant to Section 14) in whole or in part by
the Agent for the ratable benefit of the Lenders against all or any part of the
Guaranteed Obligations in such order as the Agent shall elect. Any surplus of
such cash or cash proceeds held by the Agent and remaining after payment in full
of all the Guaranteed Obligations shall be paid over to the Pledgor or to
whomsoever may be lawfully entitled to receive such surplus.
(c) The Agent may exercise any and all rights and remedies
of the Pledgor in respect of the Collateral.
(d) All payments received by the Pledgor in respect of the
Collateral shall be received in trust for the benefit of the Agent, shall be
segregated from other funds of the Pledgor and shall be forthwith paid over to
the Agent in the same form as so received (with any necessary indorsement).
Section 13. Registration Rights. If the Agent shall determine
to exercise its right to sell all or any of the Collateral pursuant to Section
12, the Pledgor agrees that, upon request of the Agent, the Pledgor will, at its
own expense:
(a) execute and deliver, and cause each issuer of the
Collateral contemplated to be sold and use its best efforts to cause the
directors and officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as may be
necessary or, in the opinion of the Agent, advisable to register such Collateral
under the provisions of the Securities Act of 1933, as amended from time to time
(the "Securities Act"), to cause the registration statement relating thereto to
become effective and to remain effective for such period as prospectuses are
required by law to be furnished and to make all amendments and supplements
thereto and to the related prospectus that, in the opinion of the Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto;
(b) use its best efforts to qualify the Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the Agent;
(c) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will satisfy the
provisions of Section 11(a) of the Securities Act;
(d) provide the Agent with such other information as may be
necessary or, in the opinion of the Agent, advisable to enable the Agent to
effect the sale of such Collateral; and
(e) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part thereof valid
and binding and in compliance with applicable law.
The Agent is authorized, in connection with any sale of the Collateral pursuant
to Section 12, to deliver or otherwise disclose to any prospective purchaser of
the Collateral (i) any registration statement or prospectus, and all supplements
and amendments thereto, prepared pursuant to clause (a) above, (ii) any
information provided to it pursuant to clause (d) above and (iii) any other
information in its possession relating to the Collateral.
The Pledgor acknowledges the impossibility of ascertaining the amount of damages
that would be suffered by the Agent or the Lenders by reason of the failure by
the Pledgor to perform any of the covenants contained in this Section and,
consequently, agrees that, if the Pledgor shall fail to perform any of such
covenants, it shall pay, as liquidated damages and not as a penalty, an amount
equal to the value of the Collateral on the date the Agent shall demand
compliance with this Section.
Section 14. Indemnity and Expenses. (a) The Pledgor agrees
to indemnify the Agent and the Voting Trustee from and against any and all
claims, losses and liabilities growing out of or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except claims,
losses or liabilities resulting from the Agent's or the Voting Trustee's gross
negligence or willful misconduct as determined by a final judgment of a court of
competent jurisdiction.
(b) The Pledgor will upon demand pay to the Agent the amount
of any and all reasonable expenses, including the reasonable fees and expenses
of its counsel and of any experts and agents, that the Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Agent or the Lenders hereunder or (iv) the failure by
the Pledgor to perform or observe any of the provisions hereof.
Section 15. Security Interest Absolute. The obligations of the
Pledgor under this Agreement are independent of the Guaranteed Obligations, and
a separate action or actions may be brought and prosecuted against the Pledgor
to enforce this Agreement, irrespective of whether any action is brought against
the Borrower or Mafco or whether the Borrower or Mafco is joined in any such
action or actions. All rights of the Agent and the pledge, assignment and
security interest hereunder, and all obligations of each of the Pledgor and the
Voting Trustee hereunder applicable to it, shall be absolute and unconditional,
irrespective of:
(a) any lack of validity or enforceability of any Loan
Document or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Guaranteed Obligations or any other
amendment or waiver of or any consent to any departure from any Loan Document,
including, without limitation, any increase in the Guaranteed 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
other collateral, or any taking, release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Guaranteed Obligations;
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale or
other disposition of any collateral for all or any of the Guaranteed Obligations
or any other assets of the Borrower, Mafco or any of their subsidiaries;
(e) any change, restructuring or termination of the
corporate structure or existence of the Borrower, Mafco or any of their
subsidiaries; or
(f) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Pledgor or a third party grantor of
a security interest.
Section 16. Amendments; Waivers; Etc. No amendment or waiver
of any provision of this Agreement, and no consent to any departure by the
Pledgor herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Agent and, in the event such amendment or waiver
affects the Voting Trustee, the Voting Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given. No failure on the part of the Agent to exercise, and no delay
in exercising any right hereunder, shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.
Section 17. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and, mailed, telegraphed, telecopied,
telexed, cabled or delivered to each of the Pledgor and the Voting Trustee,
addressed to it at the address set forth opposite its name on the signature page
hereof, and to the Agent addressed to it at its address specified in the Credit
Agreement or, as to either party, at such other address as shall be designated
by such party in a written notice to each other party complying as to delivery
with the terms of this Section 17. All such notices and other communications
shall, when mailed, telecopied, telegraphed, telexed or cabled, respectively, be
effective when deposited in the mails, telecopied, delivered to the telegraph
company, confirmed by telex answerback or delivered to the cable company,
respectively, addressed as aforesaid.
Section 18. Continuing Security Interest; Assignments Under the
Credit Agreement. This Agreement shall create a continuing security interest in
the Collateral and a continuing guaranty and shall (a) remain in full force and
effect until the earlier of (i) the termination of the non-recourse guaranty,
pledge, assignment and security interest created hereby pursuant to Section 19
below and (ii) the sale or other disposition of all the Collateral in accordance
with the Loan Documents and the application of the proceeds thereof in
accordance with the Loan Documents, (b) be binding upon the Pledgor, the Voting
Trustee and their respective successors and assigns and (c) inure, together with
the rights and remedies of the Agent hereunder, to the benefit of the Agent and
the Lenders and their respective successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), any Lender may assign or
otherwise transfer all or any portion of its rights and obligations under the
Credit Agreement (including, without limitation, all or any portion of its
Commitment, the Advances owing to it and the Note or Notes held by it) to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise, in each
case as provided in Section 8.07 of the Credit Agreement.
Section 19. Termination. At such time as the Payment
Obligations have been Fully Satisfied, the non-recourse guaranty, pledge,
assignment and security interest created hereby shall terminate and all rights
to the Collateral shall revert to the Pledgor. Upon any such termination, the
Agent will, at the Pledgor's expense, execute and deliver to the Pledgor such
documents as the Pledgor shall reasonably request to evidence such termination.
Section 20. Voting Trustee. The Pledgor and the Agent hereby
acknowledge and agree that the sole obligation of the Voting Trustee hereunder
is the delivery to the Agent of the stock certificate of Coleman (Parent)
Holdings Inc. evidencing the Voting Trust Stock issued in the name of the Voting
Trustee in accordance with Sections 1 and 3 hereof.
Section 21. Governing Law; Submission to Jurisdiction; Waiver
of Jury Trial. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, except to the extent that the
validity or perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the State of New York. Unless otherwise defined herein
or in the Credit Agreement, terms used in Article 9 of the N.Y. Uniform
Commercial Code are used herein as therein defined.
(b) The Pledgor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party, or for recognition or enforcement
of any judgment, and the Pledgor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State or, to the extent permitted by law, in
such federal court. The Pledgor agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in the courts of any jurisdiction.
(c) The Pledgor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal
court. The Pledgor hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
(d) THE PLEDGOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT OR ANY LENDER IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
Section 22. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
IN WITNESS WHEREOF, each of the Pledgor and the Voting Trustee
has caused this Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first above written.
c/o MacAndrews & Forbes NEW COLEMAN HOLDINGS, INC.
Holdings Inc.
38 East 63rd Street
New York, New York 10021 By
---------------------------
Title:
600 Peachtree Street, Suite 900 NATIONSBANK OF GEORGIA,
Atlanta, Georgia 30308 NATIONAL ASSOCIATION, not in its
Telecopy: individual capacity but solely in its
Attention: capacity as Voting Trustee under
the Voting Trust Agreement
referred to herein and only with
respect to Sections 1 and 3
By
---------------------------
Title:
Schedule I
PLEDGED SHARES
A. PLEDGED BY NCH:
<TABLE>
<CAPTION>
Percentage
of
Stock Certificate Number Outstanding
Stock Issuer Class of Stock Par Value No(s) of Shares Shares
------------ -------------- --------- ----------------- --------- ----------
<S> <C> <C> <C> <C> <C>
Coleman (Parent)
Holdings Inc. Common $1.00 2 995 99.5%
</TABLE>
Voting Trust Certificate, dated July 27, 1994, issued to New Coleman Holdings,
Inc. under the Voting Trust Agreement (as defined below) in respect of the
beneficial ownership of the 5 shares of Common Stock of Coleman (Parent)
Holdings Inc. represented by stock certificate no. 3 below.
B. PLEDGED BY THE VOTING TRUSTEE:
<TABLE>
<CAPTION>
Percentage
of
Stock Certificate Number Outstanding
Stock Issuer Class of Stock Par Value No(s) of Shares Shares
------------ -------------- --------- ----------------- --------- ----------
<S> <C> <C> <C> <C> <C>
Coleman (Parent)
Holdings Inc. Common $1.00 3(1) 5 .5%
</TABLE>
---------------
(1) Stock Certificate No. 3 issued to NationsBank of Georgia, National
Association, as voting trustee (the "Voting Trustee") under the Voting
Trust Agreement dated as of July 27, 1994 (the "Voting Trust
Agreement"), among New Coleman Holdings, Inc., Coleman (Parent) Holdings
Inc., Citibank, N.A. and the Voting Trustee, and such Pledged Shares are
pledged hereunder by the Voting Trustee.
EXECUTION COPY
AMENDED AND RESTATED MAFCO PLEDGE AGREEMENT
Dated as of June 29, 1995
From
MAFCO HOLDINGS INC.
as Pledgor
and
NATIONSBANK OF GEORGIA, NATIONAL ASSOCIATION
as Voting Trustee
to
CITIBANK, N.A.
as Agent
TABLE OF CONTENTS
Section Page
1. Grant of Security . . . . . . . . . . . . . . . . . . . . 2
2. Security for Obligations. . . . . . . . . . . . . . . . . 2
3. Delivery of Collateral. . . . . . . . . . . . . . . . . . 3
4. Representations and Warranties. . . . . . . . . . . . . . 3
5. Further Assurances. . . . . . . . . . . . . . . . . . . . 4
6. Place of Perfection; Records. . . . . . . . . . . . . . . 5
7. Voting Rights; Dividends; Etc.. . . . . . . . . . . . . . 5
8. Transfers and Other Liens; Additional Shares. . . . . . . 6
9. Agent Appointed Attorney-in-Fact. . . . . . . . . . . . . 6
10. Agent May Perform . . . . . . . . . . . . . . . . . . . . 7
11. The Agent's Duties. . . . . . . . . . . . . . . . . . . . 7
12. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 7
13. Registration Rights . . . . . . . . . . . . . . . . . . . 8
14. Indemnity and Expenses. . . . . . . . . . . . . . . . . . 9
15. Security Interest Absolute. . . . . . . . . . . . . . . . 10
16. Amendments; Waivers; Etc. . . . . . . . . . . . . . . . . 11
17. Addresses for Notices . . . . . . . . . . . . . . . . . . 11
18. Continuing Security Interest; Assignments Under the
Amended and Restated Credit Agreement . . . . . . . . . . 11
19. Termination . . . . . . . . . . . . . . . . . . . . . . . 11
20. Voting Trustee. . . . . . . . . . . . . . . . . . . . . . 12
21. Governing Law; Submission to Jurisdiction;
Waiver of Jury Trial . . . . . . . . . . . . . . . . . . 12
22. Execution in Counterparts . . . . . . . . . . . . . . . . 13
Schedule I - Pledged Shares
AMENDED AND RESTATED MAFCO PLEDGE AGREEMENT
AMENDED AND RESTATED MAFCO PLEDGE AGREEMENT dated as of June 29,
1995 made by MAFCO HOLDINGS INC., a Delaware corporation ("Mafco" or the
"Pledgor"), and, only with respect to Sections 1 and 3 hereof, NATIONSBANK OF
GEORGIA, NATIONAL ASSOCIATION, not in its individual capacity but solely in its
capacity as Voting Trustee (in such capacity, the "Voting Trustee") under (x)
the Voting Trust Agreement dated as of September 30, 1994 (said agreement as it
may hereafter be amended or otherwise modified from time to time, being the
"Cigar Voting Trust Agreement") among the Pledgor, the Voting Trustee, the Cigar
Guarantor (as defined in the Amended and Restated Credit Agreement referred to
below) and the Agent referred to below and (y) the Voting Trust Agreement dated
as of September 30, 1994 (said agreement as it may hereafter be amended or
otherwise modified from time to time, being the "Flavors Voting Trust
Agreement"; and together with the Cigar Voting Trust Agreement, the "Voting
Trust Agreements") among the Pledgor, the Voting Trustee, Flavors Guarantor (as
defined in the Amended and Restated Credit Agreement referred to below) and the
Agent, to CITIBANK, N.A. ("Citibank"), as agent (the "Agent") for the lenders
(the "Lenders") party to the Amended and Restated Credit Agreement (as
hereinafter defined).
PRELIMINARY STATEMENTS.
(1) Marvel IV Holdings Inc., a Delaware corporation (the
"Borrower"), entered into a Credit Agreement dated as of July 20, 1994, as
heretofore amended (as so amended, the "Existing Credit Agreement"), with the
financial institutions and other institutional lenders party thereto (the
"Existing Lenders") and Citibank, as agent for the Existing Lenders. In
consideration of the premises and in order to induce the Existing Lenders to
make advances under the Existing Credit Agreement, Mafco entered into a Guaranty
dated July 27, 1994 (the "Existing Mafco Guaranty") in favor of the Existing
Lenders and Citibank, as agent for the Existing Lenders, and Mafco and the
Voting Trustee entered into a Mafco Pledge Agreement dated September 30, 1994 in
favor of Citibank, as agent for the Existing Lenders.
(2) The Borrower has entered into an Amended and Restated
Credit Agreement dated as of June 29, 1995 (said Agreement, as it may hereafter
be amended or otherwise modified from time to time, being the "Amended and
Restated Credit Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined) with the Lenders and the Agent,
which amends and restates the Existing Credit Agreement in its entirety.
(3) The Pledgor has entered into an Amended and Restated
Guaranty dated as of June 29, 1995 (said Guaranty, as it may hereafter be
amended or otherwise modified from time to time, being the "Mafco Guaranty") in
favor of the Lenders and Citibank, as Agent for the Lenders, which amends and
restates the Existing Mafco Guaranty in its entirety.
(4) The Pledgor and the Voting Trustee are the owners of the
shares (the "Pledged Shares") of stock listed under their respective names in
Schedule I hereto and issued by the corporations named therein.
(5) It is a condition precedent to the effectiveness of the
Amended and Restated Credit Agreement that the Pledgor and the Voting Trustee,
as the owners of 100% of the outstanding shares of stock of Cigar Guarantor and
Flavors Guarantor, shall have made the pledge, assignment and security interest
contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to enter into the Amended and Restated Credit Agreement, the
Pledgor and, with respect to Sections 1 and 3 hereof, the Voting Trustee hereby
agree with the Agent for its benefit and the ratable benefit of the Lenders as
follows:
Section 1. Grant of Security. Each of the Pledgor and the
Voting Trustee hereby pledges to the Agent for its benefit and the ratable
benefit of the Lenders, and hereby grants to the Agent for its benefit and the
ratable benefit of the Lenders a pledge, assignment and security interest in,
all of its right, title and interest, whether now owned or hereafter acquired,
in and to, the following (collectively, the "Collateral"):
(a) the Pledged Shares and the certificates and instruments
representing the Pledged Shares, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares;
(b) all additional shares of stock of any issuer of the
Pledged Shares from time to time acquired by the Pledgor or the Voting Trustee
in any manner, and the certificates representing such additional shares, and all
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such shares; and
(c) all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of the types
described in clauses (a) and (b) of this Section 1).
Section 2. Security for Obligations. This Agreement secures
the payment of all Obligations of the Pledgor now or hereafter existing under
the Mafco Guaranty, whether for principal, interest (including, without
limitation, interest after the filing of a petition initiating a proceeding
referred to in Section 6.01(e) of the Amended and Restated Credit Agreement,
whether or not such interest constitutes an allowed claim for purposes of such
proceeding), fees, expenses or otherwise (all such Obligations being the
"Secured Obligations"). Without limiting the generality of the foregoing, this
Agreement secures the payment of all amounts that constitute part of the Secured
Obligations and would be owed by the Borrower or the Pledgor to the Agent or the
Lenders under the Loan Documents to which the Borrower or the Pledgor is a party
but for the fact that they are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding involving the
Borrower or the Pledgor.
Section 3. Delivery of Collateral. All certificates or
instruments representing or evidencing Collateral shall be delivered to and held
by or on behalf of the Agent pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Agent. The Agent shall have the right, at any time upon the occurrence and
during the continuance of an Event of Default in its discretion and without
notice to the Pledgor, to transfer to or to register in the name of the Agent or
any of its nominees any or all of the Collateral. In addition, the Agent shall
have the right at any time to exchange certificates or instruments representing
or evidencing Collateral for certificates or instruments of smaller or larger
denominations.
Section 4. Representations and Warranties. The Pledgor
represents and warrants as follows:
(a) The chief place of business and chief executive office
of the Pledgor and the office where the Pledgor keeps its records concerning the
Collateral are located at the address specified opposite the name of the Pledgor
on the signature page hereof.
(b) The Pledgor is the legal and beneficial owner of the
Collateral (other than the shares issued in the name of the Voting Trustee (the
"Voting Trust Stock")) and is the beneficial owner of the Voting Trust Stock, in
each case free and clear of any Lien, except for the security interest created
by this Agreement and the Lien created by the Voting Trust Agreements. The
Voting Trustee is the legal owner of the Voting Trust Stock free and clear of
any Lien, except for the security interest created by this Agreement and the
Lien created by the Voting Trust Agreements. No effective financing statement
or other instrument similar in effect covering all or any part of the Collateral
is on file in any recording office, except such as may have been filed in favor
of the Agent relating to this Agreement. The Pledgor has no trade names.
(c) The Pledged Shares have been duly authorized and validly
issued and are fully paid and non-assessable.
(d) The Pledged Shares constitute the percentage of the
issued and outstanding shares of stock of the issuers thereof indicated on
Schedule I.
(e) This Agreement and the pledge of the Collateral pursuant
hereto create a valid and perfected first priority security interest in the
Collateral, securing the payment of the Secured Obligations, and all filings and
other actions necessary or desirable to perfect and protect such security
interest have been duly taken.
(f) No consent of any other Person and no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other third party is required either (i) for the
grant by the Pledgor or the Voting Trustee of the assignment and security
interest granted hereby, for the pledge by the Pledgor or the Voting Trustee of
the Collateral pursuant hereto or for the execution, delivery or performance of
this Agreement by the Pledgor or the Voting Trustee, (ii) for the perfection or
maintenance of the pledge, assignment and security interest created hereby
(including the first priority nature of such pledge, assignment or security
interest), except for the filing of financing and continuation statements under
the Uniform Commercial Code, which financing statements have been duly filed, or
(iii) for the exercise by the Agent of its voting or other rights provided for
in this Agreement or the remedies in respect of the Collateral pursuant to this
Agreement, except as may be required in connection with the disposition of any
portion of the Collateral by laws affecting the offering and sale of securities
generally; provided, however, that no representation or warranty is made as to
any consent of, authorization, approval or other action by, or notice to or
filing with, any banking agency or regulatory body applicable to the Agent.
Section 5. Further Assurances. (a) The Pledgor agrees that
from time to time, at the expense of the Pledgor, the Pledgor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Agent may request, in
order to perfect and protect any pledge, assignment or security interest granted
or purported to be granted hereby or to enable the Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, the Pledgor will or will cause the
Voting Trustee to, as the case may be: (i) if any Collateral shall be evidenced
by a promissory note or other instrument or chattel paper, deliver and pledge to
the Agent hereunder such note or instrument or chattel paper duly indorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Agent; and (ii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Agent may
request, in order to perfect and preserve the pledge, assignment and security
interest granted or purported to be granted hereby.
(b) The Pledgor hereby authorizes the Agent to file one or
more financing or continuation statements, and amendments thereto, relating to
all or any part of the Collateral without the signature of the Pledgor where
permitted by law. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(c) The Pledgor will furnish to the Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail.
Section 6. Place of Perfection; Records. The Pledgor shall
keep its chief place of business and chief executive office and the office where
it keeps its records concerning the Collateral at the location therefor
specified in Section 4(a) or, upon 30 days' prior written notice to the Agent,
at such other locations in a jurisdiction where all actions required by Section
5 shall have been taken with respect to the Collateral. The Pledgor will hold
and preserve such records and will permit representatives of the Agent at any
time during normal business hours to inspect and make abstracts from such
records.
Section 7. Voting Rights; Dividends; Etc. (a) So long as no
Event of Default shall have occurred and be continuing:
(i) Subject to the terms of the Voting Trust Agreements,
each of the Pledgor and the Voting Trustee shall be entitled to exercise any and
all voting and other consensual rights pertaining to the Collateral or any part
thereof for any purpose not inconsistent with the terms of this Agreement or the
other Loan Documents; provided, however, that the Pledgor shall not exercise or
refrain from exercising any such right if, in the Agent's reasonable judgment,
such action would have a material adverse effect on the value of the Collateral
or any part thereof; and provided further that the Pledgor shall give the Agent
at least five days' written notice of the manner in which it intends to
exercise, or the reasons for refraining from exercising, any such right.
(ii) The Agent shall execute and deliver (or cause to be
executed and delivered) to each of the Pledgor and the Voting Trustee all such
proxies and other instruments as each of the Pledgor and the Voting Trustee may
reasonably request for the purpose of enabling each of the Pledgor and the
Voting Trustee to exercise the voting and other rights that it is entitled to
exercise pursuant to paragraph (i) above.
(iii) The Pledgor shall be entitled to receive and retain any
and all dividends and interest paid in respect of the Collateral; provided,
however, that any and all
(A) dividends and interest paid or payable other
than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange for, any Collateral
received as consideration for sales or other dispositions of assets of the
Pledgor
shall be, and shall be forthwith delivered to the Agent to hold as,
Collateral and shall, if received by the Pledgor, be received in trust for the
benefit of the Agent, be segregated from the other property or funds of the
Pledgor and be forthwith delivered to the Agent as Collateral in the same form
as so received (with any necessary indorsement).
(b) Upon the occurrence and during the continuance of an
Event of Default, all rights of the Pledgor (i) to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise be
entitled to exercise pursuant to Section 7(a)(i) shall, upon notice to the
Pledgor by the Agent, cease and (ii) to receive the dividends and interest
payments that it would otherwise be authorized to receive and retain pursuant to
Section 7(a)(iii) shall automatically cease, and all such rights shall thereupon
become vested in the Agent, which shall thereupon have the sole right to
exercise or refrain from exercising such voting and other consensual rights and
to receive and hold as Collateral such dividends and interest payments.
Section 8. Transfers and Other Liens; Additional Shares. (a)
The Pledgor shall not except as provided in the Mafco Guaranty (i) sell, assign
(by operation of law or otherwise) or otherwise dispose of, or grant any option
with respect to, any of the Collateral or (ii) create or suffer to exist any
Lien upon or with respect to any of the Collateral except for the pledge,
assignment and security interest created by this Agreement and the Lien created
by the Voting Trust Agreements.
(b) The Pledgor shall (i) cause each issuer of the Pledged
Shares not to issue any stock or other securities in addition to or in
substitution for the Pledged Shares issued by such issuer, except to the
Pledgor, and (ii) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all additional shares of stock or other
securities of each issuer of the Pledged Shares.
Section 9. Agent Appointed Attorney-in-Fact. The Pledgor
hereby irrevocably appoints the Agent the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time in the Agent's discretion, upon the occurrence
and during the continuance of any Event of Default to take any action and to
execute any instrument that the Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:
(a) to ask for, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other
instruments and documents in connection with clause (a) above, and
(c) to file any claims or take any action or institute any
proceedings that the Agent may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce the rights of the Agent with
respect to any of the Collateral.
Section 10. Agent May Perform. If either the Pledgor or the
Voting Trustee fails to perform any agreement contained herein applicable to it,
the Agent may itself perform, or cause performance of, such agreement, and the
reasonable expenses of the Agent incurred in connection therewith shall be
payable by the Pledgor under Section 14(b).
Section 11. The Agent's Duties. The powers conferred on the
Agent hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for a duty to
exercise reasonable care in respect of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Agent shall have no
duty as to any Collateral, as to ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Collateral, whether or not the Agent or any Lender has or is deemed to have
knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Collateral. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Citibank accords its own
property.
Section 12. Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the
Uniform Commercial Code in effect in the State of New York at such time (the
"N.Y. Uniform Commercial Code") (whether or not the N.Y. Uniform Commercial Code
applies to the affected Collateral) and also may (i) require the Pledgor to, and
the Pledgor hereby agrees that it will at its expense and upon request of the
Agent forthwith, assemble all or part of the Collateral as directed by the Agent
and make it available to the Agent at a place to be designated by the Agent that
is reasonably convenient to both parties and (ii) without notice except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Agent's offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the Agent may
deem commercially reasonable. The Pledgor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to the Pledgor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Agent, be held by the Agent as
collateral for, and/or then or at any time thereafter applied (after payment of
any amounts payable to the Agent pursuant to Section 14) in whole or in part by
the Agent for the ratable benefit of the Lenders against all or any part of the
Secured Obligations in such order as the Agent shall elect. Any surplus of such
cash or cash proceeds held by the Agent and remaining after payment in full of
all the Secured Obligations shall be paid over to the Pledgor or to whomsoever
may be lawfully entitled to receive such surplus.
(c) The Agent may exercise any and all rights and remedies
of the Pledgor in respect of the Collateral.
(d) All payments received by the Pledgor in respect of the
Collateral shall be received in trust for the benefit of the Agent, shall be
segregated from other funds of the Pledgor and shall be forthwith paid over to
the Agent in the same form as so received (with any necessary indorsement).
Section 13. Registration Rights. If the Agent shall determine
to exercise its right to sell all or any of the Collateral pursuant to Section
12, the Pledgor agrees that, upon request of the Agent, the Pledgor will, at its
own expense:
(a) execute and deliver, and cause each issuer of the
Collateral contemplated to be sold and use its best efforts to cause the
directors and officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as may be
necessary or, in the opinion of the Agent, advisable to register such Collateral
under the provisions of the Securities Act of 1933, as amended from time to time
(the "Securities Act"), to cause the registration statement relating thereto to
become effective and to remain effective for such period as prospectuses are
required by law to be furnished and to make all amendments and supplements
thereto and to the related prospectus that, in the opinion of the Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto;
(b) use its best efforts to qualify the Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the Agent;
(c) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will satisfy the
provisions of Section 11(a) of the Securities Act;
(d) provide the Agent with such other information as may be
necessary or, in the opinion of the Agent, advisable to enable the Agent to
effect the sale of such Collateral; and
(e) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part thereof valid
and binding and in compliance with applicable law.
The Agent is authorized, in connection with any sale of the Collateral pursuant
to Section 12, to deliver or otherwise disclose to any prospective purchaser of
the Collateral (i) any registration statement or prospectus, and all supplements
and amendments thereto, prepared pursuant to clause (a) above, (ii) any
information provided to it pursuant to clause (d) above and (iii) any other
information in its possession relating to the Collateral.
The Pledgor acknowledges the impossibility of ascertaining the amount of damages
that would be suffered by the Agent or the Lenders by reason of the failure by
the Pledgor to perform any of the covenants contained in this Section and,
consequently, agrees that, if the Pledgor shall fail to perform any of such
covenants, it shall pay, as liquidated damages and not as a penalty, an amount
equal to the value of the Collateral on the date the Agent shall demand
compliance with this Section.
Section 14. Indemnity and Expenses. (a) The Pledgor agrees to
indemnify the Agent and the Voting Trustee from and against any and all claims,
losses and liabilities growing out of or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except claims,
losses or liabilities resulting from the Agent's or the Voting Trustee's gross
negligence or willful misconduct as determined by a final judgment of a court of
competent jurisdiction.
(b) The Pledgor will upon demand pay to the Agent the amount
of any and all reasonable expenses, including the reasonable fees and expenses
of its counsel and of any experts and agents, that the Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Agent or the Lenders hereunder or (iv) the failure by
the Pledgor to perform or observe any of the provisions hereof.
Section 15. Security Interest Absolute. The obligations of the
Pledgor under this Agreement are independent of the Secured Obligations, and a
separate action or actions may be brought and prosecuted against the Pledgor to
enforce this Agreement, irrespective of whether any action is brought against
the Borrower or whether the Borrower is joined in any such action or actions.
All rights of the Agent and the pledge, assignment and security interest
hereunder, and all obligations of each of the Pledgor and the Voting Trustee
hereunder applicable to it, shall be absolute and unconditional, irrespective
of:
(a) any lack of validity or enforceability of any Loan
Document or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Secured Obligations or any other
amendment or waiver of or any consent to any departure from any Loan Document,
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
other collateral, or any taking, release or amendment or waiver of or consent to
departure from any 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; or
(f) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Pledgor or a third party grantor of
a security interest.
Section 16. Amendments; Waivers; Etc. No amendment or waiver
of any provision of this Agreement, and no consent to any departure by the
Pledgor herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Agent and, in the event such amendment or waiver
affects the Voting Trustee, the Voting Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given. No failure on the part of the Agent to exercise, and no delay
in exercising any right hereunder, shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.
Section 17. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and, mailed, telegraphed, telecopied,
telexed, cabled or delivered to each of the Pledgor and the Voting Trustee,
addressed to it at the address set forth opposite its name on the signature
pages hereof, and to the Agent, as the case may be, in each case addressed to it
at its address specified in the Amended and Restated Credit Agreement or, as to
either party, at such other address as shall be designated by such party in a
written notice to each other party complying as to delivery with the terms of
this Section 17. All such notices and other communications shall, when mailed,
telecopied, telegraphed, telexed or cabled, respectively, be effective when
deposited in the mails, telecopied, delivered to the telegraph company,
confirmed by telex answerback or delivered to the cable company, respectively,
addressed as aforesaid.
Section 18. Continuing Security Interest; Assignments Under the
Amended and Restated Credit Agreement. This Agreement shall create a continuing
security interest in the Collateral and a continuing guaranty and shall (a)
remain in full force and effect until the earlier of (i) the termination of the
pledge, assignment and security interest created hereby pursuant to Section 19
below and (ii) the sale or other disposition of all the Collateral in accordance
with the Loan Documents and the application of the proceeds thereof in
accordance with the Loan Documents, (b) be binding upon the Pledgor, the Voting
Trustee and their respective successors and assigns and (c) inure, together with
the rights and remedies of the Agent hereunder, to the benefit of the Agent and
the Lenders and their respective successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), any Lender may assign or
otherwise transfer all or any portion of its rights and obligations under the
Amended and Restated Credit Agreement (including, without limitation, all or any
portion of its Commitment, the Advances owing to it and the Note or Notes held
by it) to any other Person, and such other Person shall thereupon become vested
with all the benefits in respect thereof granted to such Lender herein or
otherwise, in each case as provided in Section 8.07 of the Amended and Restated
Credit Agreement.
Section 19. Termination. Upon the date on which the Payment
Obligations have been Fully Satisfied, the pledge, assignment and security
interest created hereby shall terminate and all rights to the Collateral shall
revert to the Pledgor. Upon any such termination, the Agent will, at the
Pledgor's expense, execute and deliver to the Pledgor such documents as the
Pledgor shall reasonably request to evidence such termination.
Section 20. Voting Trustee. The Pledgor and the Agent hereby
acknowledge and agree that the sole obligation of the Voting Trustee hereunder
is the delivery to the Agent of the stock certificate of Consolidated Cigar II
Holdings Inc. evidencing the Voting Trust Stock relating to such corporation and
the stock certificate of Flavors (Parent) Holdings Inc. evidencing the Voting
Trust Stock relating to such corporation, in each case issued in the name of the
Voting Trustee in accordance with Sections 1 and 3 hereof.
Section 21. Governing Law; Submission to Jurisdiction; Waiver
of Jury Trial. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, except to the extent that the
validity or perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the State of New York. Unless otherwise defined herein
or in the Amended and Restated Credit Agreement, terms used in Article 9 of the
N.Y. Uniform Commercial Code are used herein as therein defined.
(b) The Pledgor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party, or for recognition or enforcement
of any judgment, and the Pledgor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State or, to the extent permitted by law, in
such federal court. The Pledgor agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in the courts of any jurisdiction.
(c) The Pledgor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal
court. The Pledgor hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(d) THE PLEDGOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT OR ANY LENDER IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
Section 22. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
Agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
IN WITNESS WHEREOF, each of the Pledgor and the Voting Trustee
has caused this Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first above written.
c/o MacAndrews & Forbes Holdings Inc. MAFCO HOLDINGS INC.
38 East 63rd Street
New York, New York 10021
By
-----------------------------
Title:
600 Peachtree Street, Suite 900 NATIONSBANK OF GEORGIA,
Atlanta, Georgia 30308 NATIONAL ASSOCIATION
Telecopy: (404) 607-6534 not in its individual capacity but
Attention: Peggy T. McWhorter solely in its capacity as Voting
Trustee under the Voting Trust
Agreements referred to herein and only
with respect to Sections 1 and 3
By
-------------------------------
Title:
Schedule I
PLEDGED SHARES
A. PLEDGED BY MAFCO HOLDINGS INC.:
<TABLE>
<CAPTION>
Percentage
of
Stock Certificate Number Outstanding
Stock Issuer Class of Stock Par Value No(s) of Shares Shares
------------ -------------- --------- ----------------- --------- ------------
<S> <C> <C> <C> <C> <C>
MacAndrews & Forbes
Holdings Inc. Common $1.00 2 1000 100%
Consolidated Cigar II
Holdings Inc. Common $1.00 2 995 99.5%
Flavors (Parent)
Holdings Inc. Common $1.00 2 995 99.5%
</TABLE>
Voting Trust Certificate, dated September 30, 1994, issued to Mafco Holdings
Inc. under the Cigar Voting Trust Agreement (as defined below) in respect of the
beneficial ownership of the 5 shares of Common Stock of Consolidated Cigar II
Holdings Inc. represented by stock certificate no. 3 below.
Voting Trust Certificate, dated September 30, 1994, issued to Mafco Holdings
Inc. under the Flavors Voting Trust Agreement (as defined below) in respect of
the beneficial ownership of the 5 shares of Common Stock of Flavors (Parent)
Holdings Inc. represented by stock certificate no. 3 below.
B. PLEDGED BY THE VOTING TRUSTEE:
<TABLE>
<CAPTION>
Percentage
of
Stock Certificate Number Outstanding
Stock Issuer Class of Stock Par Value No(s) of Shares Shares
------------ -------------- --------- ----------------- --------- ------------
<S> <C> <C> <C> <C> <C>
Consolidated Cigar II
Holdings Inc. Common $1.00 3(1) 5 .5%
Flavors (Parent)
Holdings Inc. Common $1.00 3(2) 5 .5%
</TABLE>
---------------
(1) Stock certificate no. 3 issued to NationsBank of Georgia, National
Association, as voting trustee (the "Voting Trustee") under the Voting
Trust Agreement, dated as of September 30, 1994 (the "Cigar Voting Trust
Agreement"), among Mafco Holdings Inc., Consolidated Cigar II Holdings
Inc., Citibank, N.A. and the Voting Trustee, and such Pledged Shares are
pledged hereunder by the Voting Trustee.
(2) Stock Certificate no. 3 issued to NationsBank of Georgia, National
Association, as voting trustee (the "Voting Trustee") under the Voting
Trust Agreement, dated as of September 30, 1994 (the "Flavors Voting
Trust Agreement"), among Mafco Holdings Inc., Flavors (Parent) Holdings
Inc., Citibank, N.A. and the Voting Trustee, and such Pledged Shares are
pledged hereunder by the Voting Trustee.
EXECUTION COPY
AMENDED AND RESTATED
FLAVORS PLEDGE AGREEMENT
Dated September 30, 1994, and
amended and restated
as of June 15, 1995
From
FLAVORS (PARENT) HOLDINGS INC.
as Pledgor
and
NATIONSBANK OF GEORGIA, NATIONAL ASSOCIATION
as Voting Trustee
to
CITIBANK, N.A.
as Agent
T A B L E O F C O N T E N T S
Section Page
1. Grant of Security. . . . . . . . . . . . . . . . . . . . . . . 2
2. Security for Obligations . . . . . . . . . . . . . . . . . . . 2
3. Delivery of Collateral . . . . . . . . . . . . . . . . . . . . 2
4. Representations and Warranties . . . . . . . . . . . . . . . . 3
5. Further Assurances . . . . . . . . . . . . . . . . . . . . . . 4
6. Place of Perfection; Records . . . . . . . . . . . . . . . . . 4
7. Voting Rights; Dividends; Etc. . . . . . . . . . . . . . . . . 5
8. Transfers and Other Liens; Additional Shares . . . . . . . . . 6
9. Agent Appointed Attorney-in-Fact . . . . . . . . . . . . . . . 6
10. Agent May Perform. . . . . . . . . . . . . . . . . . . . . . . 7
11. The Agent's Duties . . . . . . . . . . . . . . . . . . . . . . 7
12. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
13. Registration Rights. . . . . . . . . . . . . . . . . . . . . . 8
14. Indemnity and Expenses . . . . . . . . . . . . . . . . . . . . 9
15. Security Interest Absolute . . . . . . . . . . . . . . . . . . 9
16. Amendments; Waivers; Etc . . . . . . . . . . . . . . . . . . . 10
17. Addresses for Notices. . . . . . . . . . . . . . . . . . . . . 11
18. Continuing Security Interest; Assignments Under the Credit
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 11
19. Termination. . . . . . . . . . . . . . . . . . . . . . . . . . 11
20. Voting Trustee. . . . . . . . . . . . . . . . . . . . . . . . 11
21. Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
22. Execution in Counterparts . . . . . . . . . . . . . . . . . . 13
Schedule I-Pledged Shares
AMENDED AND RESTATED PLEDGE AGREEMENT
AMENDED AND RESTATED PLEDGE AGREEMENT dated September 30, 1994,
and amended and restated as of June 15, 1995 made by FLAVORS (PARENT) HOLDINGS
INC., a Delaware corporation ("Flavors Guarantor" or the "Pledgor"), and only
with respect to Sections 1 and 3 hereof, NATIONSBANK OF GEORGIA, NATIONAL
ASSOCIATION, not in its individual capacity but solely in its capacity as Voting
Trustee (in such capacity, the "Voting Trustee") under the Voting Trust
Agreement dated as of the date hereof (said agreement as it may hereafter be
amended or otherwise modified from time to time, being the "Voting Trust
Agreement") among the Pledgor, the Voting Trustee, C&F (Parent) Holdings Inc.
and the Agent referred to below, to CITIBANK, N.A. ("Citibank"), as agent (the
"Agent") for the lenders (the "Lenders") party to the Credit Agreement (as
hereinafter defined).
PRELIMINARY STATEMENTS.
(1) The Lenders and the Agent are parties to (a) a Credit
Agreement dated as of July 20, 1994 (said Agreement, as it may hereafter be
amended or otherwise modified from time to time, being the "Credit Agreement";
the terms defined therein and not otherwise defined herein being used herein as
therein defined) with Marvel IV Holdings Inc., a Delaware corporation (the
"Borrower"), and (b) an amendment dated as of March 10, 1995 (the "First
Amendment") with the Borrower and Mafco Holdings Inc., a Delaware corporation
("Mafco"), and the Agent is party to a Pledge Agreement dated September 30, 1994
with the Pledgor (the "Existing Pledge Agreement"). It is a condition precedent
to the effectiveness of the First Amendment that the Pledgor shall have executed
and delivered this Amended and Restated Pledge Agreement which amends and
restates the Existing Pledge Agreement.
(2) The Pledgor has entered into an amended and restated
Guaranty dated September 30, 1994, and amended and restated as of the date
hereof (said Guaranty, as it may hereafter be amended or otherwise modified from
time to time, being the "Flavors Guaranty") in favor of the Lenders and
Citibank, as Agent for the Lenders.
(3) The Pledgor and the Voting Trustee are the owners of the
shares (the "Pledged Shares") of stock listed in Schedule I hereto and issued by
the corporation named therein.
(4) It is a condition precedent to the effectiveness of the
First Amendment that the Pledgor and the Voting Trustee, as owners of 50% of the
outstanding shares of stock of C&F Guarantor, shall have made the pledge,
assignment and security interest contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to amend the Credit Agreement, the Pledgor and the Voting
Trustee hereby agree with the Agent for its benefit and the ratable benefit of
the Lenders to amend and restate the Existing Pledge Agreement as follows:
Section 1. Grant of Security. Each of the Pledgor and the
Voting Trustee hereby pledges to the Agent for its benefit and the ratable
benefit of the Lenders, and hereby grants to the Agent for its benefit and the
ratable benefit of the Lenders a pledge, assignment and security interest in,
all of its right, title and interest, whether now owned or hereafter acquired,
in and to, the following (collectively, the "Collateral"):
(a) the Pledged Shares and the certificates and instruments
representing the Pledged Shares, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares;
(b) all additional shares of stock of any issuer of the
Pledged Shares from time to time acquired by the Pledgor or the Voting Trustee
in any manner, and the certificates representing such additional shares, and all
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such shares; and
(c) all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of the types
described in clauses (a) and (b) of this Section 1).
Section 2. Security for Obligations. This Agreement secures the
payment of all Obligations of the Pledgor now or hereafter existing under the
Flavors Guaranty, whether for principal, interest (including, without
limitation, interest after the filing of a petition initiating a proceeding
referred to in Section 6.01(e) of the Credit Agreement, whether or not such
interest constitutes an allowed claim for purposes of such proceeding), fees,
expenses or otherwise (all such Obligations being the "Secured Obligations").
Without limiting the generality of the foregoing, this Agreement secures the
payment of all amounts that constitute part of the Secured Obligations and would
be owed by the Borrower or the Pledgor to the Agent or the Lenders under the
Loan Documents to which the Borrower or the Pledgor is a party but for the fact
that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Borrower or the
Pledgor.
Section 3. Delivery of Collateral. All certificates or
instruments representing or evidencing Collateral shall be delivered to and held
by or on behalf of the Agent pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Agent. The Agent shall have the right, at any time upon the occurrence and
during the continuance of an Event of Default in its discretion and without
notice to the Pledgor, to transfer to or to register in the name of the Agent or
any of its nominees any or all of the Collateral. In addition, the Agent shall
have the right at any time to exchange certificates or instruments representing
or evidencing Collateral for certificates or instruments of smaller or larger
denominations.
Section 4. Representations and Warranties. The Pledgor
represents and warrants as follows:
(a) The chief place of business and chief executive office
of the Pledgor and the office where the Pledgor keeps its records concerning the
Collateral are located at the address specified opposite the name of the Pledgor
on the signature page hereof.
(b) The Pledgor is the legal and beneficial owner of the
Collateral (other than the shares issued in the name of the Voting Trustee (the
"Voting Trust Stock")) and is the beneficial owner of the Voting Trust Stock, in
each case free and clear of any Lien, except for the security interest created
by this Agreement and the Lien created by the Voting Trust Agreement. The Voting
Trustee is the legal owner of the Voting Trust Stock free and clear of any Lien,
except for the security interest created by this Agreement and the Lien created
by the Voting Trust Agreement. No effective financing statement or other
instrument similar in effect covering all or any part of the Collateral is on
file in any recording office, except such as may have been filed in favor of the
Agent relating to this Agreement. The Pledgor has no trade names.
(c) The Pledged Shares have been duly authorized and validly
issued and are fully paid and non-assessable.
(d) The Pledged Shares constitute the percentage of the
issued and outstanding shares of stock of the issuers thereof indicated on
Schedule I.
(e) This Agreement and the pledge of the Collateral pursuant
hereto create a valid and perfected first priority security interest in the
Collateral, securing the payment of the Secured Obligations, and all filings and
other actions necessary or desirable to perfect and protect such security
interest have been duly taken.
(f) No consent of any other Person and no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other third party is required either (i) for the
grant by the Pledgor or the Voting Trustee of the assignment and security
interest granted hereby, for the pledge by the Pledgor or the Voting Trustee of
the Collateral pursuant hereto or for the execution, delivery or performance of
this Agreement by the Pledgor or the Voting Trustee, (ii) for the perfection or
maintenance of the pledge, assignment and security interest created hereby
(including the first priority nature of such pledge, assignment or security
interest), except for the filing of financing and continuation statements under
the Uniform Commercial Code, which financing statements have been duly filed, or
(iii) for the exercise by the Agent of its voting or other rights provided for
in this Agreement or the remedies in respect of the Collateral pursuant to this
Agreement, except as may be required in connection with the disposition of any
portion of the Collateral by laws affecting the offering and sale of securities
generally; provided, however, that no representation or warranty is made as to
any consent of, authorization, approval or other action by, or notice to or
filing with, any banking agency or regulatory body applicable to the Agent.
Section 5. Further Assurances. (a) The Pledgor agrees that
from time to time, at the expense of the Pledgor, the Pledgor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Agent may request, in
order to perfect and protect any pledge, assignment or security interest granted
or purported to be granted hereby or to enable the Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, the Pledgor will, or will cause the
Voting Trustee to, as the case may be: (i) if any Collateral shall be evidenced
by a promissory note or other instrument or chattel paper, deliver and pledge to
the Agent hereunder such note or instrument or chattel paper duly indorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Agent; and (ii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Agent may
request, in order to perfect and preserve the pledge, assignment and security
interest granted or purported to be granted hereby.
(b) The Pledgor hereby authorizes the Agent to file one or
more financing or continuation statements, and amendments thereto, relating to
all or any part of the Collateral without the signature of the Pledgor where
permitted by law. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(c) The Pledgor will furnish to the Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail.
Section 6. Place of Perfection; Records. The Pledgor shall
keep its chief place of business and chief executive office and the office where
it keeps its records concerning the Collateral at the location therefor
specified in Section 4(a) or, upon 30 days' prior written notice to the Agent,
at such other locations in a jurisdiction where all actions required by Section
5 shall have been taken with respect to the Collateral. The Pledgor will hold
and preserve such records and will permit representatives of the Agent at any
time during normal business hours to inspect and make abstracts from such
records.
Section 7. Voting Rights; Dividends; Etc. (a) So long as no
Event of Default shall have occurred and be continuing:
(i) Subject to the terms of the Voting Trust Agreement, each
of the Pledgor and the Voting Trustee shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral or any part
thereof for any purpose not inconsistent with the terms of this Agreement or the
other Loan Documents; provided, however, that the Pledgor shall not exercise or
refrain from exercising any such right if, in the Agent's reasonable judgment,
such action would have a material adverse effect on the value of the Collateral
or any part thereof; and, provided, further, that the Pledgor shall give the
Agent at least five days' written notice of the manner in which it intends to
exercise, or the reasons for refraining from exercising, any such right.
(ii) The Agent shall execute and deliver (or cause to be
executed and delivered) to each of the Pledgor and the Voting Trustee all such
proxies and other instruments as each of the Pledgor and the Voting Trustee may
reasonably request for the purpose of enabling each of the Pledgor and the
Voting Trustee to exercise the voting and other rights that it is entitled to
exercise pursuant to paragraph (i) above.
(iii) The Pledgor shall be entitled to receive and retain any
and all dividends and interest paid in respect of the Collateral; provided,
however, that any and all
(A) dividends and interest paid or payable other
than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange for, any Collateral
received as consideration for sales or other dispositions of assets of the
Pledgor
shall be, and shall be forthwith delivered to the Agent to hold as,
Collateral and shall, if received by the Pledgor, be received in trust for the
benefit of the Agent, be segregated from the other property or funds of the
Pledgor and be forthwith delivered to the Agent as Collateral in the same form
as so received (with any necessary indorsement).
(b) Upon the occurrence and during the continuance of an
Event of Default, all rights of the Pledgor (i) to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise be
entitled to exercise pursuant to Section 7(a)(i) shall, upon notice to the
Pledgor by the Agent, cease and (ii) to receive the dividends and interest
payments that it would otherwise be authorized to receive and retain pursuant to
Section 7(a)(iii) shall automatically cease, and all such rights shall thereupon
become vested in the Agent, which shall thereupon have the sole right to
exercise or refrain from exercising such voting and other consensual rights and
to receive and hold as Collateral such dividends and interest payments.
Section 8. Transfers and Other Liens; Additional Shares. (a)
The Pledgor shall not except as provided in the Flavors Guaranty (i) sell,
assign (by operation of law or otherwise) or otherwise dispose of, or grant any
option with respect to, any of the Collateral or (ii) create or suffer to exist
any Lien upon or with respect to any of the Collateral except for the pledge,
assignment and security interest created by this Agreement and the Lien created
by the Voting Trust Agreement.
(b) The Pledgor shall (i) cause each issuer of the Pledged
Shares not to issue any stock or other securities in addition to or in
substitution for the Pledged Shares issued by such issuer, except to the
Pledgor, and (ii) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all additional shares of stock or other
securities of each issuer of the Pledged Shares.
Section 9. Agent Appointed Attorney-in-Fact. The Pledgor
hereby irrevocably appoints the Agent the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time in the Agent's discretion, upon the occurrence
and during the continuance of any Event of Default to take any action and to
execute any instrument that the Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:
(a) to ask for, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other
instruments and documents in connection with clause (a) above, and
(c) to file any claims or take any action or institute any
proceedings that the Agent may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce the rights of the Agent with
respect to any of the Collateral.
Section 10. Agent May Perform. If either the Pledgor or the
Voting Trustee fails to perform any agreement contained herein applicable to it,
the Agent may itself perform, or cause performance of, such agreement, and the
reasonable expenses of the Agent incurred in connection therewith shall be
payable by the Pledgor under Section 14(b).
Section 11. The Agent's Duties. The powers conferred on the
Agent hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for a duty to
exercise reasonable care in respect of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Agent shall have no
duty as to any Collateral, as to ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Collateral, whether or not the Agent or any Lender has or is deemed to have
knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Collateral. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Citibank accords its own
property.
Section 12. Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the
Uniform Commercial Code in effect in the State of New York at such time (the
"N.Y. Uniform Commercial Code") (whether or not the N.Y. Uniform Commercial Code
applies to the affected Collateral) and also may (i) require the Pledgor to, and
the Pledgor hereby agrees that it will at its expense and upon request of the
Agent forthwith, assemble all or part of the Collateral as directed by the Agent
and make it available to the Agent at a place to be designated by the Agent that
is reasonably convenient to both parties and (ii) without notice except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Agent's offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the Agent may
deem commercially reasonable. The Pledgor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to the Pledgor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Agent, be held by the Agent as
collateral for, and/or then or at any time thereafter applied (after payment of
any amounts payable to the Agent pursuant to Section 14) in whole or in part by
the Agent for the ratable benefit of the Lenders against all or any part of the
Secured Obligations in such order as the Agent shall elect. Any surplus of such
cash or cash proceeds held by the Agent and remaining after payment in full of
all the Secured Obligations shall be paid over to the Pledgor or to whomsoever
may be lawfully entitled to receive such surplus.
(c) The Agent may exercise any and all rights and remedies
of the Pledgor in respect of the Collateral.
(d) All payments received by the Pledgor in respect of the
Collateral shall be received in trust for the benefit of the Agent, shall be
segregated from other funds of the Pledgor and shall be forthwith paid over to
the Agent in the same form as so received (with any necessary indorsement).
Section 13. Registration Rights. If the Agent shall determine
to exercise its right to sell all or any of the Collateral pursuant to Section
12, the Pledgor agrees that, upon request of the Agent, the Pledgor will, at its
own expense:
(a) execute and deliver, and cause each issuer of the
Collateral contemplated to be sold and use its best efforts to cause the
directors and officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as may be
necessary or, in the opinion of the Agent, advisable to register such Collateral
under the provisions of the Securities Act of 1933, as amended from time to time
(the "Securities Act"), to cause the registration statement relating thereto to
become effective and to remain effective for such period as prospectuses are
required by law to be furnished and to make all amendments and supplements
thereto and to the related prospectus that, in the opinion of the Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto;
(b) use its best efforts to qualify the Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the Agent;
(c) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will satisfy the
provisions of Section 11(a) of the Securities Act;
(d) provide the Agent with such other information as may be
necessary or, in the opinion of the Agent, advisable to enable the Agent to
effect the sale of such Collateral; and
(e) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part thereof valid
and binding and in compliance with applicable law.
The Agent is authorized, in connection with any sale of the Collateral pursuant
to Section 12, to deliver or otherwise disclose to any prospective purchaser of
the Collateral (i) any registration statement or prospectus, and all supplements
and amendments thereto, prepared pursuant to clause (a) above, (ii) any
information provided to it pursuant to clause (d) above and (iii) any other
information in its possession relating to the Collateral.
The Pledgor acknowledges the impossibility of ascertaining the amount of damages
that would be suffered by the Agent or the Lenders by reason of the failure by
the Pledgor to perform any of the covenants contained in this Section and,
consequently, agrees that, if the Pledgor shall fail to perform any of such
covenants, it shall pay, as liquidated damages and not as a penalty, an amount
equal to the value of the Collateral on the date the Agent shall demand
compliance with this Section.
Section 14. Indemnity and Expenses. (a) The Pledgor agrees
to indemnify the Agent and the Voting Trustee from and against any and all
claims, losses and liabilities growing out of or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except claims,
losses or liabilities resulting from the Agent's or the Voting Trustee's gross
negligence or willful misconduct as determined by a final judgment of a court of
competent jurisdiction.
(b) The Pledgor will upon demand pay to the Agent the amount
of any and all reasonable expenses, including the reasonable fees and expenses
of its counsel and of any experts and agents, that the Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Agent or the Lenders hereunder or (iv) the failure by
the Pledgor to perform or observe any of the provisions hereof.
Section 15. Security Interest Absolute. The obligations of the
Pledgor under this Agreement are independent of the Secured Obligations, and a
separate action or actions may be brought and prosecuted against the Pledgor to
enforce this Agreement, irrespective of whether any action is brought against
the Borrower or whether the Borrower is joined in any such action or actions.
All rights of the Agent and the pledge, assignment and security interest
hereunder, and all obligations of each of the Pledgor and the Voting Trustee
hereunder applicable to it, shall be absolute and unconditional, irrespective
of:
(a) any lack of validity or enforceability of any Loan
Document or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Secured Obligations or any other
amendment or waiver of or any consent to any departure from any Loan Document,
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
other collateral, or any taking, release or amendment or waiver of or consent to
departure from any 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, the Pledgor or any of their subsidiaries;
(e) any change, restructuring or termination of the
corporate structure or existence of the Borrower, the Pledgor or any of their
subsidiaries; or
(f) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Pledgor or a third party grantor of
a security interest.
Section 16. Amendments; Waivers; Etc. No amendment or waiver
of any provision of this Agreement, and no consent to any departure by the
Pledgor herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Agent and, in the event such amendment or waiver
affects the Voting Trustee, the Voting Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given. No failure on the part of the Agent to exercise, and no delay
in exercising any right hereunder, shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.
Section 17. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and, mailed, telegraphed, telecopied,
telexed, cabled or delivered to each of the Pledgor and the Voting Trustee,
addressed to it at its address set forth opposite its name on the signature page
hereof and to the Agent addressed to it at its address specified in the Credit
Agreement or, as to either party, at such other address as shall be designated
by such party in a written notice to each other party complying as to delivery
with the terms of this Section 17. All such notices and other communications
shall, when mailed, telecopied, telegraphed, telexed or cabled, respectively, be
effective when deposited in the mails, telecopied, delivered to the telegraph
company, confirmed by telex answerback or delivered to the cable company,
respectively, addressed as aforesaid.
Section 18. Continuing Security Interest; Assignments Under the
Credit Agreement. This Agreement shall create a continuing security interest in
the Collateral and shall (a) remain in full force and effect until the earlier
of (i) the termination of the pledge, assignment and security interest granted
hereby pursuant to Section 19 below and (ii) the sale or other disposition of
all the Collateral in accordance with the Loan Documents and the application of
the proceeds thereof in accordance with the Loan Documents, (b) be binding upon
the Pledgor, the Voting Trustee and their respective successors and assigns and
(c) inure, together with the rights and remedies of the Agent hereunder, to the
benefit of the Agent and the Lenders and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing
clause (c), any Lender may assign or otherwise transfer all or any portion of
its rights and obligations under the Credit Agreement (including, without
limitation, all or any portion of its Commitment, the Advances owing to it and
the Note or Notes held by it) to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to such
Lender herein or otherwise, in each case as provided in Section 8.07 of the
Credit Agreement.
Section 19. Termination. Upon the date on which the Payment
Obligations have been Fully Satisfied, the pledge, assignment and security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the Pledgor. Upon any such termination, the Agent will, at the
Pledgor's expense, execute and deliver to the Pledgor such documents as the
Pledgor shall reasonably request to evidence such termination.
Section 20. Voting Trustee. The Pledgor and the Agent hereby
acknowledge and agree that the sole obligation of the Voting Trustee hereunder
is the delivery to the Agent of the stock certificate of C&F Guarantor
evidencing the Voting Trust Stock issued in the name of the Voting Trustee in
accordance with Sections 1 and 3 hereof.
Section 21. Governing Law; Submission to Jurisdiction; Waiver
of Jury Trial. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, except to the extent that the
validity or perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the State of New York. Unless otherwise defined herein
or in the Credit Agreement, terms used in Article 9 of the N.Y. Uniform
Commercial Code are used herein as therein defined.
(b) The Pledgor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party, or for recognition or enforcement
of any judgment, and the Pledgor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State or, to the extent permitted by law, in
such federal court. The Pledgor agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in the courts of any jurisdiction.
(c) The Pledgor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal
court. The Pledgor hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(d) THE PLEDGOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT OR ANY LENDER IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
Section 22. Execution in Counterparts; Amendment and Restatement of
Existing Pledge Agreement. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement by telecopier shall be
effective as delivery of a manually executed counterpart of this Agreement. The
Existing Pledge Agreement is hereby amended and restated as set forth herein.
IN WITNESS WHEREOF, each of the Pledgor and the Voting Trustee
has caused this Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first above written.
c/o MacAndrews & Forbes Holdings Inc. FLAVORS (PARENT) HOLDINGS INC.
38 East 63rd Street
New York, New York 10021
By_________________________________
Name:
Title:
600 Peachtree Street, Suite 900 NATIONSBANK OF GEORGIA,
Atlanta, Georgia 30308 NATIONAL ASSOCIATION, not in its
Telecopy: (404) 607-6534 individual capacity but solely in its
Attention: Peggy T. McWhorter capacity as Voting Trustee under
the Voting Trust Agreement
referred to herein and only with
respect to Sections 1 and 3
By_________________________________
Name:
Title:
Schedule I
PLEDGED SHARES
A. PLEDGED BY FLAVORS GUARANTOR:
<TABLE>
<CAPTION>
Percentage
of
Stock Certificate Number Outstanding
Stock Issuer Class of Stock Par Value No(s) of Shares Shares
------------ -------------- -------- ----------------- --------- --------------
<S> <C> <C> <C> <C> <C>
C&F (Parent) Holdings Inc. Common $1.00 4 497 49.7%
</TABLE>
Voting Trust Certificate, dated June 15, 1995, issued to NationsBank of
Georgia, National Association under the Voting Trust Agreement (as defined
below) in respect of the beneficial ownership of the 3 shares of Common Stock of
C&F (Parent) Holdings Inc. represented by stock certificate no. 6 below.
B. PLEDGED BY THE VOTING TRUSTEE:
<TABLE>
<CAPTION>
Percentage
of
Stock Certificate Number Outstanding
Stock Issuer Class of Stock Par Value No(s) of Shares Shares
------------ -------------- -------- ----------------- --------- --------------
<S> <C> <C> <C> <C> <C>
C&F (Parent) Holdings Inc. Common $1.00 3(1) 3 0.3%
</TABLE>
--------------
(1) Stock Certificate No. 3 issued to NationsBank of Georgia, National
Association, as voting trustee (the "Voting Trustee") under the Voting
Trust Agreement dated as of June 15, 1995 (the "Voting Trust Agreement"),
among Flavors (Parent) Holdings Inc., C&F (Parent) Holdings Inc., Citibank,
N.A., as agent, and the Voting Trustee, and such Pledged Shares are pledged
hereunder by the Voting Trustee.
EXECUTION COPY
AMENDED AND RESTATED
CIGAR PLEDGE AGREEMENT
Dated September 30, 1994, and
amended and restated
as of June 15, 1995
From
CONSOLIDATED CIGAR II HOLDINGS INC.
as Pledgor
and
NATIONSBANK OF GEORGIA, NATIONAL ASSOCIATION
as Voting Trustee
to
CITIBANK, N.A.
as Agent
T A B L E O F C O N T E N T S
Section Page
1. Grant of Security. . . . . . . . . . . . . . . . . . . . . . 2
2. Security for Obligations . . . . . . . . . . . . . . . . . . 2
3. Delivery of Collateral . . . . . . . . . . . . . . . . . . . 2
4. Representations and Warranties . . . . . . . . . . . . . . . 3
5. Further Assurances . . . . . . . . . . . . . . . . . . . . . 4
6. Place of Perfection; Records . . . . . . . . . . . . . . . . 4
7. Voting Rights; Dividends; Etc. . . . . . . . . . . . . . . . 5
8. Transfers and Other Liens; Additional Shares . . . . . . . . 6
9. Agent Appointed Attorney-in-Fact . . . . . . . . . . . . . . 6
10. Agent May Perform. . . . . . . . . . . . . . . . . . . . . . 7
11. The Agent's Duties . . . . . . . . . . . . . . . . . . . . . 7
12. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . 7
13. Registration Rights. . . . . . . . . . . . . . . . . . . . . 8
14. Indemnity and Expenses . . . . . . . . . . . . . . . . . . . 9
15. Security Interest Absolute . . . . . . . . . . . . . . . . . 9
16. Amendments; Waivers; Etc . . . . . . . . . . . . . . . . . . 10
17. Addresses for Notices. . . . . . . . . . . . . . . . . . . . 11
18. Continuing Security Interest; Assignments Under the
Credit Agreement . . . . . . . . . . . . . . . . . . . . . . 11
19. Termination. . . . . . . . . . . . . . . . . . . . . . . . . 11
20. Voting Trustee.. . . . . . . . . . . . . . . . . . . . . . . 11
21. Governing Law; Submission to Jurisdiction;
Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . 12
22. Execution in Counterparts. . . . . . . . . . . . . . . . . . 13
Schedule I - Pledged Shares
AMENDED AND RESTATED PLEDGE AGREEMENT
AMENDED AND RESTATED PLEDGE AGREEMENT dated September 30, 1994,
and amended and restated as of June 15, 1995 made by CONSOLIDATED CIGAR II
HOLDINGS INC., a Delaware corporation ("Cigar Guarantor" or the "Pledgor"), and
only with respect to Sections 1 and 3 hereof, NATIONSBANK OF GEORGIA, NATIONAL
ASSOCIATION, not in its individual capacity but solely in its capacity as Voting
Trustee (in such capacity, the "Voting Trustee") under the Voting Trust
Agreement dated as of the date hereof (said agreement as it may hereafter be
amended or otherwise modified from time to time, being the "Voting Trust
Agreement") among the Pledgor, the Voting Trustee, C&F (Parent) Holdings Inc.
and the Agent referred to below, to CITIBANK, N.A. ("Citibank"), as agent (the
"Agent") for the lenders (the "Lenders") party to the Credit Agreement (as
hereinafter defined).
PRELIMINARY STATEMENTS.
(1) The Lenders and the Agent are parties to (a) a Credit
Agreement dated as of July 20, 1994 (said Agreement, as it may hereafter be
amended or otherwise modified from time to time, being the "Credit Agreement";
the terms defined therein and not otherwise defined herein being used herein as
therein defined) with Marvel IV Holdings Inc., a Delaware corporation (the
"Borrower"), and (b) an amendment dated as of March 10, 1995 (the "First
Amendment") with the Borrower and Mafco Holdings Inc., a Delaware corporation
("Mafco"), and the Agent is party to a Pledge Agreement dated September 30, 1994
with the Pledgor (the "Existing Pledge Agreement"). It is a condition precedent
to the effectiveness of the First Amendment that the Pledgor shall have executed
and delivered this Amended and Restated Pledge Agreement which amends and
restates the Existing Pledge Agreement.
(2) The Pledgor has entered into an amended and restated
Guaranty dated September 30, 1994, and amended and restated as of the date
hereof (said Guaranty, as it may hereafter be amended or otherwise modified from
time to time, being the "Cigar Guaranty") in favor of the Lenders and Citibank,
as Agent for the Lenders.
(3) The Pledgor and the Voting Trustee are the owners of the
shares (the "Pledged Shares") of stock listed in Schedule I hereto and issued by
the corporation named therein.
(4) It is a condition precedent to the effectiveness of the
First Amendment that the Pledgor and the Voting Trustee, as owners of 50% of the
outstanding shares of stock of C&F Guarantor, shall have made the pledge,
assignment and security interest contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to amend the Credit Agreement, the Pledgor and the Voting
Trustee hereby agree with the Agent for its benefit and the ratable benefit of
the Lenders to amend and restate the Existing Pledge Agreement as follows:
Section 1. Grant of Security. Each of the Pledgor and the
Voting Trustee hereby pledges to the Agent for its benefit and the ratable
benefit of the Lenders, and hereby grants to the Agent for its benefit and the
ratable benefit of the Lenders a pledge, assignment and security interest in,
all of its right, title and interest, whether now owned or hereafter acquired,
in and to, the following (collectively, the "Collateral"):
(a) the Pledged Shares and the certificates and instruments
representing the Pledged Shares, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares;
(b) all additional shares of stock of any issuer of the
Pledged Shares from time to time acquired by the Pledgor or the Voting Trustee
in any manner, and the certificates representing such additional shares, and all
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such shares; and
(c) all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of the types
described in clauses (a) and (b) of this Section 1).
Section 2. Security for Obligations. This Agreement secures the
payment of all Obligations of the Pledgor now or hereafter existing under the
Cigar Guaranty, whether for principal, interest (including, without limitation,
interest after the filing of a petition initiating a proceeding referred to in
Section 6.01(e) of the Credit Agreement, whether or not such interest
constitutes an allowed claim for purposes of such proceeding), fees, expenses or
otherwise (all such Obligations being the "Secured Obligations"). Without
limiting the generality of the foregoing, this Agreement secures the payment of
all amounts that constitute part of the Secured Obligations and would be owed by
the Borrower or the Pledgor to the Agent or the Lenders under the Loan Documents
to which the Borrower or the Pledgor is a party but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrower or the Pledgor.
Section 3. Delivery of Collateral. All certificates or
instruments representing or evidencing Collateral shall be delivered to and held
by or on behalf of the Agent pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Agent. The Agent shall have the right, at any time upon the occurrence and
during the continuance of an Event of Default in its discretion and without
notice to the Pledgor, to transfer to or to register in the name of the Agent or
any of its nominees any or all of the Collateral. In addition, the Agent shall
have the right at any time to exchange certificates or instruments representing
or evidencing Collateral for certificates or instruments of smaller or larger
denominations.
Section 4. Representations and Warranties. The Pledgor
represents and warrants as follows:
(a) The chief place of business and chief executive office
of the Pledgor and the office where the Pledgor keeps its records concerning the
Collateral are located at the address specified opposite the name of the Pledgor
on the signature page hereof.
(b) The Pledgor is the legal and beneficial owner of the
Collateral (other than the shares issued in the name of the Voting Trustee (the
"Voting Trust Stock")) and is the beneficial owner of the Voting Trust Stock, in
each case free and clear of any Lien, except for the security interest created
by this Agreement and the Lien created by the Voting Trust Agreement. The Voting
Trustee is the legal owner of the Voting Trust Stock free and clear of any Lien,
except for the security interest created by this Agreement and the Lien created
by the Voting Trust Agreement. No effective financing statement or other
instrument similar in effect covering all or any part of the Collateral is on
file in any recording office, except such as may have been filed in favor of the
Agent relating to this Agreement. The Pledgor has no trade names.
(c) The Pledged Shares have been duly authorized and validly
issued and are fully paid and non-assessable.
(d) The Pledged Shares constitute the percentage of the
issued and outstanding shares of stock of the issuers thereof indicated on
Schedule I.
(e) This Agreement and the pledge of the Collateral pursuant
hereto create a valid and perfected first priority security interest in the
Collateral, securing the payment of the Secured Obligations, and all filings and
other actions necessary or desirable to perfect and protect such security
interest have been duly taken.
(f) No consent of any other Person and no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other third party is required either (i) for the
grant by the Pledgor or the Voting Trustee of the assignment and security
interest granted hereby, for the pledge by the Pledgor or the Voting Trustee of
the Collateral pursuant hereto or for the execution, delivery or performance of
this Agreement by the Pledgor or the Voting Trustee, (ii) for the perfection or
maintenance of the pledge, assignment and security interest created hereby
(including the first priority nature of such pledge, assignment or security
interest), except for the filing of financing and continuation statements under
the Uniform Commercial Code, which financing statements have been duly filed, or
(iii) for the exercise by the Agent of its voting or other rights provided for
in this Agreement or the remedies in respect of the Collateral pursuant to this
Agreement, except as may be required in connection with the disposition of any
portion of the Collateral by laws affecting the offering and sale of securities
generally; provided, however, that no representation or warranty is made as to
any consent of, authorization, approval or other action by, or notice to or
filing with, any banking agency or regulatory body applicable to the Agent.
Section 5. Further Assurances. (a) The Pledgor agrees that
from time to time, at the expense of the Pledgor, the Pledgor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Agent may request, in
order to perfect and protect any pledge, assignment or security interest granted
or purported to be granted hereby or to enable the Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, the Pledgor will, or will cause the
Voting Trustee to, as the case may be: (i) if any Collateral shall be evidenced
by a promissory note or other instrument or chattel paper, deliver and pledge to
the Agent hereunder such note or instrument or chattel paper duly indorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Agent; and (ii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Agent may
request, in order to perfect and preserve the pledge, assignment and security
interest granted or purported to be granted hereby.
(b) The Pledgor hereby authorizes the Agent to file one or
more financing or continuation statements, and amendments thereto, relating to
all or any part of the Collateral without the signature of the Pledgor where
permitted by law. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(c) The Pledgor will furnish to the Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail.
Section 6. Place of Perfection; Records. The Pledgor shall
keep its chief place of business and chief executive office and the office where
it keeps its records concerning the Collateral at the location therefor
specified in Section 4(a) or, upon 30 days' prior written notice to the Agent,
at such other locations in a jurisdiction where all actions required by Section
5 shall have been taken with respect to the Collateral. The Pledgor will hold
and preserve such records and will permit representatives of the Agent at any
time during normal business hours to inspect and make abstracts from such
records.
Section 7. Voting Rights; Dividends; Etc. (a) So long as no
Event of Default shall have occurred and be continuing:
(i) Subject to the terms of the Voting Trust Agreement, each
of the Pledgor and the Voting Trustee shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral or any part
thereof for any purpose not inconsistent with the terms of this Agreement or the
other Loan Documents; provided, however, that the Pledgor shall not exercise or
refrain from exercising any such right if, in the Agent's reasonable judgment,
such action would have a material adverse effect on the value of the Collateral
or any part thereof; and, provided, further, that the Pledgor shall give the
Agent at least five days' written notice of the manner in which it intends to
exercise, or the reasons for refraining from exercising, any such right.
(ii) The Agent shall execute and deliver (or cause to be
executed and delivered) to each of the Pledgor and the Voting Trustee all such
proxies and other instruments as each of the Pledgor and the Voting Trustee may
reasonably request for the purpose of enabling each of the Pledgor and the
Voting Trustee to exercise the voting and other rights that it is entitled to
exercise pursuant to paragraph (i) above.
(iii) The Pledgor shall be entitled to receive and retain any
and all dividends and interest paid in respect of the Collateral; provided,
however, that any and all
(A) dividends and interest paid or payable other
than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange for, any Collateral
received as consideration for sales or other dispositions of assets of the
Pledgor shall be, and shall be forthwith delivered to the Agent to hold as,
Collateral and shall, if received by the Pledgor, be received in trust for the
benefit of the Agent, be segregated from the other property or funds of the
Pledgor and be forthwith delivered to the Agent as Collateral in the same form
as so received (with any necessary indorsement).
(b) Upon the occurrence and during the continuance of an
Event of Default, all rights of the Pledgor (i) to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise be
entitled to exercise pursuant to Section 7(a)(i) shall, upon notice to the
Pledgor by the Agent, cease and (ii) to receive the dividends and interest
payments that it would otherwise be authorized to receive and retain pursuant to
Section 7(a)(iii) shall automatically cease, and all such rights shall thereupon
become vested in the Agent, which shall thereupon have the sole right to
exercise or refrain from exercising such voting and other consensual rights and
to receive and hold as Collateral such dividends and interest payments.
Section 8. Transfers and Other Liens; Additional Shares. (a)
The Pledgor shall not except as provided in the Cigar Guaranty (i) sell, assign
(by operation of law or otherwise) or otherwise dispose of, or grant any option
with respect to, any of the Collateral or (ii) create or suffer to exist any
Lien upon or with respect to any of the Collateral except for the pledge,
assignment and security interest created by this Agreement and the Lien created
by the Voting Trust Agreement.
(b) The Pledgor shall (i) cause each issuer of the Pledged
Shares not to issue any stock or other securities in addition to or in
substitution for the Pledged Shares issued by such issuer, except to the
Pledgor, and (ii) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all additional shares of stock or other
securities of each issuer of the Pledged Shares.
Section 9. Agent Appointed Attorney-in-Fact. The Pledgor
hereby irrevocably appoints the Agent the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time in the Agent's discretion, upon the occurrence
and during the continuance of any Event of Default to take any action and to
execute any instrument that the Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:
(a) to ask for, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other
instruments and documents in connection with clause (a) above, and
(c) to file any claims or take any action or institute any
proceedings that the Agent may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce the rights of the Agent with
respect to any of the Collateral.
Section 10. Agent May Perform. If either the Pledgor or the
Voting Trustee fails to perform any agreement contained herein applicable to it,
the Agent may itself perform, or cause performance of, such agreement, and the
reasonable expenses of the Agent incurred in connection therewith shall be
payable by the Pledgor under Section 14(b).
Section 11. The Agent's Duties. The powers conferred on the
Agent hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for a duty to
exercise reasonable care in respect of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Agent shall have no
duty as to any Collateral, as to ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Collateral, whether or not the Agent or any Lender has or is deemed to have
knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Collateral. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Citibank accords its own
property.
Section 12. Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the
Uniform Commercial Code in effect in the State of New York at such time (the
"N.Y. Uniform Commercial Code") (whether or not the N.Y. Uniform Commercial Code
applies to the affected Collateral) and also may (i) require the Pledgor to, and
the Pledgor hereby agrees that it will at its expense and upon request of the
Agent forthwith, assemble all or part of the Collateral as directed by the Agent
and make it available to the Agent at a place to be designated by the Agent that
is reasonably convenient to both parties and (ii) without notice except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Agent's offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the Agent may
deem commercially reasonable. The Pledgor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to the Pledgor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Agent, be held by the Agent as
collateral for, and/or then or at any time thereafter applied (after payment of
any amounts payable to the Agent pursuant to Section 14) in whole or in part by
the Agent for the ratable benefit of the Lenders against all or any part of the
Secured Obligations in such order as the Agent shall elect. Any surplus of such
cash or cash proceeds held by the Agent and remaining after payment in full of
all the Secured Obligations shall be paid over to the Pledgor or to whomsoever
may be lawfully entitled to receive such surplus.
(c) The Agent may exercise any and all rights and remedies
of the Pledgor in respect of the Collateral.
(d) All payments received by the Pledgor in respect of the
Collateral shall be received in trust for the benefit of the Agent, shall be
segregated from other funds of the Pledgor and shall be forthwith paid over to
the Agent in the same form as so received (with any necessary indorsement).
Section 13. Registration Rights. If the Agent shall determine
to exercise its right to sell all or any of the Collateral pursuant to Section
12, the Pledgor agrees that, upon request of the Agent, the Pledgor will, at its
own expense:
(a) execute and deliver, and cause each issuer of the
Collateral contemplated to be sold and use its best efforts to cause the
directors and officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as may be
necessary or, in the opinion of the Agent, advisable to register such Collateral
under the provisions of the Securities Act of 1933, as amended from time to time
(the "Securities Act"), to cause the registration statement relating thereto to
become effective and to remain effective for such period as prospectuses are
required by law to be furnished and to make all amendments and supplements
thereto and to the related prospectus that, in the opinion of the Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto;
(b) use its best efforts to qualify the Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the Agent;
(c) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will satisfy the
provisions of Section 11(a) of the Securities Act;
(d) provide the Agent with such other information as may be
necessary or, in the opinion of the Agent, advisable to enable the Agent to
effect the sale of such Collateral; and
(e) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part thereof valid
and binding and in compliance with applicable law.
The Agent is authorized, in connection with any sale of the Collateral pursuant
to Section 12, to deliver or otherwise disclose to any prospective purchaser of
the Collateral (i) any registration statement or prospectus, and all supplements
and amendments thereto, prepared pursuant to clause (a) above, (ii) any
information provided to it pursuant to clause (d) above and (iii) any other
information in its possession relating to the Collateral.
The Pledgor acknowledges the impossibility of ascertaining the amount of damages
that would be suffered by the Agent or the Lenders by reason of the failure by
the Pledgor to perform any of the covenants contained in this Section and,
consequently, agrees that, if the Pledgor shall fail to perform any of such
covenants, it shall pay, as liquidated damages and not as a penalty, an amount
equal to the value of the Collateral on the date the Agent shall demand
compliance with this Section.
Section 14. Indemnity and Expenses. (a) The Pledgor agrees
to indemnify the Agent and the Voting Trustee from and against any and all
claims, losses and liabilities growing out of or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except claims,
losses or liabilities resulting from the Agent's or the Voting Trustee's gross
negligence or willful misconduct as determined by a final judgment of a court of
competent jurisdiction.
(b) The Pledgor will upon demand pay to the Agent the amount
of any and all reasonable expenses, including the reasonable fees and expenses
of its counsel and of any experts and agents, that the Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Agent or the Lenders hereunder or (iv) the failure by
the Pledgor to perform or observe any of the provisions hereof.
Section 15. Security Interest Absolute. The obligations of the
Pledgor under this Agreement are independent of the Secured Obligations, and a
separate action or actions may be brought and prosecuted against the Pledgor to
enforce this Agreement, irrespective of whether any action is brought against
the Borrower or whether the Borrower is joined in any such action or actions.
All rights of the Agent and the pledge, assignment and security interest
hereunder, and all obligations of each of the Pledgor and the Voting Trustee
hereunder applicable to it, shall be absolute and unconditional, irrespective
of:
(a) any lack of validity or enforceability of any Loan
Document or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Secured Obligations or any other
amendment or waiver of or any consent to any departure from any Loan Document,
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
other collateral, or any taking, release or amendment or waiver of or consent to
departure from any 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, the Pledgor or any of their subsidiaries;
(e) any change, restructuring or termination of the
corporate structure or existence of the Borrower, the Pledgor or any of their
subsidiaries; or
(f) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Pledgor or a third party grantor of
a security interest.
Section 16. Amendments; Waivers; Etc. No amendment or waiver
of any provision of this Agreement, and no consent to any departure by the
Pledgor herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Agent and, in the event such amendment or waiver
affects the Voting Trustee, the Voting Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given. No failure on the part of the Agent to exercise, and no delay
in exercising any right hereunder, shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.
Section 17. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and, mailed, telegraphed, telecopied,
telexed, cabled or delivered to each of the Pledgor and the Voting Trustee,
addressed to it at its address set forth opposite its name on the signature page
hereof and to the Agent addressed to it at its address specified in the Credit
Agreement or, as to either party, at such other address as shall be designated
by such party in a written notice to each other party complying as to delivery
with the terms of this Section 17. All such notices and other communications
shall, when mailed, telecopied, telegraphed, telexed or cabled, respectively, be
effective when deposited in the mails, telecopied, delivered to the telegraph
company, confirmed by telex answerback or delivered to the cable company,
respectively, addressed as aforesaid.
Section 18. Continuing Security Interest; Assignments Under the
Credit Agreement. This Agreement shall create a continuing security interest in
the Collateral and shall (a) remain in full force and effect until the earlier
of (i) the termination of the pledge, assignment and security interest granted
hereby pursuant to Section 19 below and (ii) the sale or other disposition of
all the Collateral in accordance with the Loan Documents and the application of
the proceeds thereof in accordance with the Loan Documents, (b) be binding upon
the Pledgor, the Voting Trustee and their respective successors and assigns and
(c) inure, together with the rights and remedies of the Agent hereunder, to the
benefit of the Agent and the Lenders and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing
clause (c), any Lender may assign or otherwise transfer all or any portion of
its rights and obligations under the Credit Agreement (including, without
limitation, all or any portion of its Commitment, the Advances owing to it and
the Note or Notes held by it) to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to such
Lender herein or otherwise, in each case as provided in Section 8.07 of the
Credit Agreement.
Section 19. Termination. Upon the date on which the Payment
Obligations have been Fully Satisfied, the pledge, assignment and security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the Pledgor. Upon any such termination, the Agent will, at the
Pledgor's expense, execute and deliver to the Pledgor such documents as the
Pledgor shall reasonably request to evidence such termination.
Section 20. Voting Trustee. The Pledgor and the Agent hereby
acknowledge and agree that the sole obligation of the Voting Trustee hereunder
is the delivery to the Agent of the stock certificate of C&F Guarantor
evidencing the Voting Trust Stock issued in the name of the Voting Trustee in
accordance with Sections 1 and 3 hereof.
Section 21. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.
(a) This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, except to the extent that the validity or
perfection of the security interest hereunder, or remedies hereunder, in respect
of any particular Collateral are governed by the laws of a jurisdiction other
than the State of New York. Unless otherwise defined herein or in the Credit
Agreement, terms used in Article 9 of the N.Y. Uniform Commercial Code are used
herein as therein defined.
(b) The Pledgor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party, or for recognition or enforcement
of any judgment, and the Pledgor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State or, to the extent permitted by law, in
such federal court. The Pledgor agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in the courts of any jurisdiction.
(c) The Pledgor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal
court. The Pledgor hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(d) THE PLEDGOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT OR ANY LENDER IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
Section 22. Execution in Counterparts; Amendment and
Restatement of Existing Pledge Agreement. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement. The Existing Pledge Agreement is hereby amended and restated as
set forth herein.
IN WITNESS WHEREOF, each of the Pledgor and the Voting Trustee
has caused this Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first above written.
c/o MacAndrews & Forbes Holdings Inc. CONSOLIDATED CIGAR II HOLDINGS INC.
38 East 63rd Street
New York, New York 10021
By
------------------------------------
Name:
Title:
600 Peachtree Street, Suite 900 NATIONSBANK OF GEORGIA,
Atlanta, Georgia 30308 NATIONAL ASSOCIATION, not in its
Telecopy: (404) 607-6534 individual capacity but solely in its
Attention: Peggy T. McWhorter capacity as Voting Trustee under
the Voting Trust Agreement
referred to herein and only with
respect to Sections 1 and 3
By
------------------------------------
Name:
Title:
Schedule I
PLEDGED SHARES
A. PLEDGED BY CIGAR GUARANTOR:
<TABLE>
<CAPTION>
Percentage
of
Stock Certificate Number Outstanding
Stock Issuer Class of Stock Par Value No(s) of Shares Shares
------------ -------------- --------- ----------------- --------- ------------
<S> <C> <C> <C> <C> <C>
C&F (Parent)
Holdings Inc. Common $1.00 6 497 49.7%
</TABLE>
Voting Trust Certificate, dated June 15, 1995, issued by NationsBank of
Georgia, National Association under the Voting Trust Agreement (as defined
below) in respect of the beneficial ownership of the 3 shares of Common Stock of
C&F (Parent) Holdings Inc. represented by stock certificate no. 5 below.
B. PLEDGED BY THE VOTING TRUSTEE:
<TABLE>
<CAPTION>
Percentage
of
Stock Certificate Number Outstanding
Stock Issuer Class of Stock Par Value No(s) of Shares Shares
------------ -------------- --------- ----------------- --------- ------------
<S> <C> <C> <C> <C> <C>
C&F (Parent)
Holdings Inc. Common $1.00 5(1) 3 .3%
</TABLE>
---------------
(1) Stock Certificate No. 5 issued to NationsBank of Georgia, National
Association, as voting trustee (the "Voting Trustee") under the Voting
Trust Agreement dated as of June 15, 1995 (the "Voting Trust
Agreement"), among Consolidated Cigar II Holdings Inc., C&F (Parent)
Holdings Inc., Citibank, N.A., as Agent, and the Voting Trustee, and
such Pledged Shares are pledged hereunder by the Voting Trustee.
EXECUTION COPY
AMENDED AND RESTATED NEW WORLD PLEDGE AGREEMENT
Dated as of June 29, 1995
From
NWCG (PARENT) HOLDINGS CORPORATION
as Pledgor
to
CITIBANK, N.A.
as Agent
T A B L E O F C O N T E N T S
Section Page
1. Grant of Security . . . . . . . . . . . . . . . . . . . . 2
2. Security for Obligations. . . . . . . . . . . . . . . . . 2
3. Delivery of Collateral. . . . . . . . . . . . . . . . . . 2
4. Representations and Warranties. . . . . . . . . . . . . . 3
5. Further Assurances. . . . . . . . . . . . . . . . . . . . 4
6. Place of Perfection; Records. . . . . . . . . . . . . . . 4
7. Voting Rights; Dividends; Etc . . . . . . . . . . . . . . 4
8. Transfers and Other Liens; Additional Shares. . . . . . . 6
9. Agent Appointed Attorney-in-Fact. . . . . . . . . . . . . 6
10. Agent May Perform . . . . . . . . . . . . . . . . . . . . 6
11. The Agent's Duties. . . . . . . . . . . . . . . . . . . . 6
12. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 7
13. Registration Rights . . . . . . . . . . . . . . . . . . . 8
14. Indemnity and Expenses. . . . . . . . . . . . . . . . . . 9
15. Security Interest Absolute. . . . . . . . . . . . . . . . 9
16. Amendments; Waivers; Etc. . . . . . . . . . . . . . . . . 10
17. Addresses for Notices . . . . . . . . . . . . . . . . . . 10
18. Continuing Security Interest; Assignments Under the
Amended and Restated Credit Agreement . . . . . . . . . . 11
19. Termination . . . . . . . . . . . . . . . . . . . . . . . 11
20. Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial . . . . . . . . . . . . . . . . . . . . . . . . . . 11
21. Execution in Counterparts . . . . . . . . . . . . . . . . 12
Schedule I- Pledged Shares
AMENDED AND RESTATED PLEDGE AGREEMENT
AMENDED AND RESTATED PLEDGE AGREEMENT dated as of June 29, 1995
made by NWCG (PARENT) HOLDINGS CORPORATION, a Delaware corporation (the
"Pledgor"), to CITIBANK, N.A. ("Citibank"), as agent (the "Agent") for the
lenders (the "Lenders") party to the Amended and Restated Credit Agreement (as
hereinafter defined).
PRELIMINARY STATEMENTS.
(1) Marvel IV Holdings Inc., a Delaware corporation (the
"Borrower"), entered into a Credit Agreement dated as of July 20, 1994, as
heretofore amended (as so amended, the "Existing Credit Agreement"), with the
financial institutions and other institutional lenders party thereto (the
"Existing Lenders") and Citibank, as agent for the Existing Lenders. In
consideration of the premises and in order to induce the Existing Lenders to
make advances under the Existing Credit Agreement, the Pledgor entered into a
Guaranty dated as of September 30, 1994 (the "Existing New World Guaranty") in
favor of the Existing Lenders and Citibank, as agent for the Existing Lenders,
and a Pledge Agreement dated September 30, 1994 in favor of Citibank, as agent
for the Existing Lenders.
(2) The Borrower has entered into an Amended and Restated
Credit Agreement dated as of June 29, 1995 (said Agreement, as it may hereafter
be amended or otherwise modified from time to time, being the "Amended and
Restated Credit Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined) with the Lenders and the Agent
which amends and restates the Existing Credit Agreement in its entirety.
(3) The Pledgor has entered into an Amended and Restated
Guaranty dated as of June 29, 1995 (said Guaranty, as it may hereafter be
amended or otherwise modified from time to time, being the "New World Guaranty")
in favor of the Lenders and Citibank, as Agent for the Lenders, which amends and
restates the Existing New World Guaranty in its entirety.
(4) The Pledgor is the owner of the shares (the "Pledged
Shares") of stock listed in Schedule I hereto and issued by the corporation
named therein.
(5) It is a condition precedent to the effectiveness of the
Amended and Restated Credit Agreement that the Pledgor shall have made the
pledge, assignment and security interest contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to enter into the Amended and Restated Credit Agreement, the
Pledgor hereby agrees with the Agent for its benefit and the ratable benefit of
the Lenders as follows:
Section 1. Grant of Security. The Pledgor hereby pledges to
the Agent for its benefit and the ratable benefit of the Lenders, and hereby
grants to the Agent for its benefit and the ratable benefit of the Lenders a
pledge, assignment and security interest in, all of its right, title and
interest, whether now owned or hereafter acquired, in and to, the following
(collectively, the "Collateral"):
(a) the Pledged Shares and the certificates and instruments
representing the Pledged Shares, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares;
(b) all additional shares of stock of any issuer of the
Pledged Shares from time to time acquired by the Pledgor in any manner, and the
certificates representing such additional shares, and all dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
shares; and
(c) all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of the types
described in clauses (a) and (b) of this Section 1).
Section 2. Security for Obligations. This Agreement secures the
payment of all Obligations of the Pledgor now or hereafter existing under the
New World Guaranty, whether for principal, interest (including, without
limitation, interest after the filing of a petition initiating a proceeding
referred to in Section 6.01(e) of the Amended and Restated Credit Agreement,
whether or not such interest constitutes an allowed claim for purposes of such
proceeding), fees, expenses or otherwise (all such Obligations being the
"Secured Obligations"). Without limiting the generality of the foregoing, this
Agreement secures the payment of all amounts that constitute part of the Secured
Obligations and would be owed by the Borrower or the Pledgor to the Agent or the
Lenders under the Loan Documents to which the Borrower or the Pledgor is a party
but for the fact that they are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding involving the
Borrower or the Pledgor.
Section 3. Delivery of Collateral. All certificates or
instruments representing or evidencing Collateral shall be delivered to and held
by or on behalf of the Agent pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Agent. The Agent shall have the right, at any time upon the occurrence and
during the continuance of an Event of Default in its discretion and without
notice to the Pledgor, to transfer to or to register in the name of the Agent or
any of its nominees any or all of the Collateral. In addition, the Agent shall
have the right at any time to exchange certificates or instruments representing
or evidencing Collateral for certificates or instruments of smaller or larger
denominations.
Section 4. Representations and Warranties. The Pledgor
represents and warrants as follows:
(a) The chief place of business and chief executive office
of the Pledgor and the office where the Pledgor keeps its records concerning the
Collateral are located at the address specified opposite the name of the Pledgor
on the signature page hereof.
(b) The Pledgor is the legal and beneficial owner of the
Collateral, free and clear of any Lien, except for the security interest created
by this Agreement. No effective financing statement or other instrument similar
in effect covering all or any part of the Collateral is on file in any recording
office, except such as may have been filed in favor of the Agent relating to
this Agreement. The Pledgor has no trade names.
(c) The Pledged Shares have been duly authorized and validly
issued and are fully paid and non-assessable.
(d) The Pledged Shares constitute the percentage of the
issued and outstanding shares of stock of the issuers thereof indicated on
Schedule I.
(e) This Agreement and the pledge of the Collateral pursuant
hereto create a valid and perfected first priority security interest in the
Collateral, securing the payment of the Secured Obligations, and all filings and
other actions necessary or desirable to perfect and protect such security
interest have been duly taken.
(f) No consent of any other Person and no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other third party is required either (i) for the
grant by the Pledgor of the assignment and security interest granted hereby, for
the pledge by the Pledgor of the Collateral pursuant hereto or for the
execution, delivery or performance of this Agreement by the Pledgor, (ii) for
the perfection or maintenance of the pledge, assignment and security interest
created hereby (including the first priority nature of such pledge, assignment
or security interest), except for the filing of financing and continuation
statements under the Uniform Commercial Code, which financing statements have
been duly filed, or (iii) for the exercise by the Agent of its voting or other
rights provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement, except as may be required in connection
with the disposition of any portion of the Collateral by laws affecting the
offering and sale of securities generally; provided, however, that no
representation or warranty is made as to any consent of, authorization, approval
or other action by, or notice to or filing with, any banking agency or
regulatory body applicable to the Agent.
Section 5. Further Assurances. (a) The Pledgor agrees that
from time to time, at the expense of the Pledgor, the Pledgor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Agent may request, in
order to perfect and protect any pledge, assignment or security interest granted
or purported to be granted hereby or to enable the Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, the Pledgor will: (i) if any
Collateral shall be evidenced by a promissory note or other instrument or
chattel paper, deliver and pledge to the Agent hereunder such note or instrument
or chattel paper duly indorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to the Agent; and
(ii) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as the Agent may request, in order to perfect and preserve the
pledge, assignment and security interest granted or purported to be granted
hereby.
(b) The Pledgor hereby authorizes the Agent to file one or
more financing or continuation statements, and amendments thereto, relating to
all or any part of the Collateral without the signature of the Pledgor where
permitted by law. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(c) The Pledgor will furnish to the Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail.
Section 6. Place of Perfection; Records. The Pledgor shall
keep its chief place of business and chief executive office and the office where
it keeps its records concerning the Collateral at the location therefor
specified in Section 4(a) or, upon 30 days' prior written notice to the Agent,
at such other locations in a jurisdiction where all actions required by Section
5 shall have been taken with respect to the Collateral. The Pledgor will hold
and preserve such records and will permit representatives of the Agent at any
time during normal business hours to inspect and make abstracts from such
records.
Section 7. Voting Rights; Dividends; Etc. (a) So long as no
Event of Default shall have occurred and be continuing:
(i) The Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral or any part
thereof for any purpose not inconsistent with the terms of this Agreement or the
other Loan Documents; provided, however, that the Pledgor shall not exercise or
refrain from exercising any such right if, in the Agent's reasonable judgment,
such action would have a material adverse effect on the value of the Collateral
or any part thereof; and, provided, further, that the Pledgor shall give the
Agent at least five days' written notice of the manner in which it intends to
exercise, or the reasons for refraining from exercising, any such right.
(ii) The Agent shall execute and deliver (or cause to be
executed and delivered) to the Pledgor all such proxies and other instruments as
the Pledgor may reasonably request for the purpose of enabling the Pledgor to
exercise the voting and other rights that it is entitled to exercise pursuant to
paragraph (i) above.
(iii) The Pledgor shall be entitled to receive and retain any
and all dividends and interest paid in respect of the Collateral; provided,
however, that any and all
(A) dividends and interest paid or payable other
than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange for, any Collateral
received as consideration for sales or other dispositions of assets of the
Pledgor
shall be, and shall be forthwith delivered to the Agent to hold as,
Collateral and shall, if received by the Pledgor, be received in trust for the
benefit of the Agent, be segregated from the other property or funds of the
Pledgor and be forthwith delivered to the Agent as Collateral in the same form
as so received (with any necessary indorsement).
(b) Upon the occurrence and during the continuance of an
Event of Default, all rights of the Pledgor (i) to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise be
entitled to exercise pursuant to Section 7(a)(i) shall, upon notice to the
Pledgor by the Agent, cease and (ii) to receive the dividends and interest
payments that it would otherwise be authorized to receive and retain pursuant to
Section 7(a)(iii) shall automatically cease, and all such rights shall thereupon
become vested in the Agent, which shall thereupon have the sole right to
exercise or refrain from exercising such voting and other consensual rights and
to receive and hold as Collateral such dividends and interest payments.
Section 8. Transfers and Other Liens; Additional Shares. (a)
The Pledgor shall not except as provided in the New World Guaranty (i) sell,
assign (by operation of law or otherwise) or otherwise dispose of, or grant any
option with respect to, any of the Collateral or (ii) create or suffer to exist
any Lien upon or with respect to any of the Collateral except for the pledge,
assignment and security interest created by this Agreement.
(b) The Pledgor shall (i) cause each issuer of the Pledged
Shares not to issue any stock or other securities in addition to or in
substitution for the Pledged Shares issued by such issuer, except to the
Pledgor, and (ii) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all additional shares of stock or other
securities of each issuer of the Pledged Shares.
Section 9. Agent Appointed Attorney-in-Fact. The Pledgor
hereby irrevocably appoints the Agent the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time in the Agent's discretion, upon the occurrence
and during the continuance of any Event of Default to take any action and to
execute any instrument that the Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:
(a) to ask for, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other
instruments and documents in connection with clause (a) above, and
(c) to file any claims or take any action or institute any
proceedings that the Agent may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce the rights of the Agent with
respect to any of the Collateral.
Section 10. Agent May Perform. If the Pledgor fails to perform
any agreement contained herein, the Agent may itself perform, or cause
performance of, such agreement, and the reasonable expenses of the Agent
incurred in connection therewith shall be payable by the Pledgor under Section
14(b).
Section 11. The Agent's Duties. The powers conferred on the
Agent hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for a duty to
exercise reasonable care in respect of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Agent shall have no
duty as to any Collateral, as to ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Collateral, whether or not the Agent or any Lender has or is deemed to have
knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Collateral. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Citibank accords its own
property.
Section 12. Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the
Uniform Commercial Code in effect in the State of New York at such time (the
"N.Y. Uniform Commercial Code") (whether or not the N.Y. Uniform Commercial Code
applies to the affected Collateral) and also may (i) require the Pledgor to, and
the Pledgor hereby agrees that it will at its expense and upon request of the
Agent forthwith, assemble all or part of the Collateral as directed by the Agent
and make it available to the Agent at a place to be designated by the Agent that
is reasonably convenient to both parties and (ii) without notice except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Agent's offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the Agent may
deem commercially reasonable. The Pledgor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to the Pledgor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Agent, be held by the Agent as
collateral for, and/or then or at any time thereafter applied (after payment of
any amounts payable to the Agent pursuant to Section 14) in whole or in part by
the Agent for the ratable benefit of the Lenders against all or any part of the
Secured Obligations in such order as the Agent shall elect. Any surplus of such
cash or cash proceeds held by the Agent and remaining after payment in full of
all the Secured Obligations shall be paid over to the Pledgor or to whomsoever
may be lawfully entitled to receive such surplus.
(c) The Agent may exercise any and all rights and remedies
of the Pledgor in respect of the Collateral.
(d) All payments received by the Pledgor in respect of the
Collateral shall be received in trust for the benefit of the Agent, shall be
segregated from other funds of the Pledgor and shall be forthwith paid over to
the Agent in the same form as so received (with any necessary indorsement).
Section 13. Registration Rights. If the Agent shall determine
to exercise its right to sell all or any of the Collateral pursuant to Section
12, the Pledgor agrees that, upon request of the Agent, the Pledgor will, at its
own expense:
(a) execute and deliver, and cause each issuer of the
Collateral contemplated to be sold and use its best efforts to cause the
directors and officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as may be
necessary or, in the opinion of the Agent, advisable to register such Collateral
under the provisions of the Securities Act of 1933, as amended from time to time
(the "Securities Act"), to cause the registration statement relating thereto to
become effective and to remain effective for such period as prospectuses are
required by law to be furnished and to make all amendments and supplements
thereto and to the related prospectus that, in the opinion of the Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto;
(b) use its best efforts to qualify the Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the Agent;
(c) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will satisfy the
provisions of Section 11(a) of the Securities Act;
(d) provide the Agent with such other information as may be
necessary or, in the opinion of the Agent, advisable to enable the Agent to
effect the sale of such Collateral; and
(e) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part thereof valid
and binding and in compliance with applicable law.
The Agent is authorized, in connection with any sale of the Collateral pursuant
to Section 12, to deliver or otherwise disclose to any prospective purchaser of
the Collateral (i) any registration statement or prospectus, and all supplements
and amendments thereto, prepared pursuant to clause (a) above, (ii) any
information provided to it pursuant to clause (d) above and (iii) any other
information in its possession relating to the Collateral.
The Pledgor acknowledges the impossibility of ascertaining the amount of damages
that would be suffered by the Agent or the Lenders by reason of the failure by
the Pledgor to perform any of the covenants contained in this Section and,
consequently, agrees that, if the Pledgor shall fail to perform any of such
covenants, it shall pay, as liquidated damages and not as a penalty, an amount
equal to the value of the Collateral on the date the Agent shall demand
compliance with this Section.
Section 14. Indemnity and Expenses. (a) The Pledgor agrees
to indemnify the Agent from and against any and all claims, losses and
liabilities growing out of or resulting from this Agreement (including, without
limitation, enforcement of this Agreement), except claims, losses or liabilities
resulting from the Agent's gross negligence or willful misconduct as determined
by a final judgment of a court of competent jurisdiction.
(b) The Pledgor will upon demand pay to the Agent the amount
of any and all reasonable expenses, including the reasonable fees and expenses
of its counsel and of any experts and agents, that the Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Agent or the Lenders hereunder or (iv) the failure by
the Pledgor to perform or observe any of the provisions hereof.
Section 15. Security Interest Absolute. The obligations of the
Pledgor under this Agreement are independent of the Secured Obligations, and a
separate action or actions may be brought and prosecuted against the Pledgor to
enforce this Agreement, irrespective of whether any action is brought against
the Borrower or whether the Borrower is joined in any such action or actions.
All rights of the Agent and the pledge, assignment and security interest
hereunder, and all obligations of the Pledgor hereunder, shall be absolute and
unconditional, irrespective of:
(a) any lack of validity or enforceability of any Loan
Document or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Secured Obligations or any other
amendment or waiver of or any consent to any departure from any Loan Document,
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
other collateral, or any taking, release or amendment or waiver of or consent to
departure from any 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, the Pledgor or any of their subsidiaries;
(e) any change, restructuring or termination of the
corporate structure or existence of the Borrower, the Pledgor or any of their
subsidiaries; or
(f) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Pledgor or a third party grantor of
a security interest.
Section 16. Amendments; Waivers; Etc. No amendment or waiver
of any provision of this Agreement, and no consent to any departure by the
Pledgor herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No failure on the part of the Agent to exercise, and no delay in
exercising any right hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.
Section 17. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and, mailed, telegraphed, telecopied,
telexed, cabled or delivered to the Pledgor or to the Agent, as the case may
be, in the case of the Pledgor, addressed to it at its address set forth
opposite its name on the signature page hereto and in the case of the Agent
addressed to it at its address specified in the Amended and Restated Credit
Agreement or, as to either party, at such other address as shall be designated
by such party in a written notice to each other party complying as to delivery
with the terms of this Section 17. All such notices and other communications
shall, when mailed, telecopied, telegraphed, telexed or cabled, respectively, be
effective when deposited in the mails, telecopied, delivered to the telegraph
company, confirmed by telex answerback or delivered to the cable company,
respectively, addressed as aforesaid.
Section 18. Continuing Security Interest; Assignments Under the
Amended and Restated Credit Agreement. This Agreement shall create a continuing
security interest in the Collateral and shall (a) remain in full force and
effect until the earlier of (i) the termination of the pledge, assignment and
security interest granted hereby pursuant to Section 19 below and (ii) the sale
or other disposition of all the Collateral in accordance with the Loan Documents
and the application of the proceeds thereof in accordance with the Loan
Documents, (b) be binding upon the Pledgor, its successors and assigns and (c)
inure, together with the rights and remedies of the Agent hereunder, to the
benefit of the Agent and the Lenders and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing
clause (c), any Lender may assign or otherwise transfer all or any portion of
its rights and obligations under the Amended and Restated Credit Agreement
(including, without limitation, all or any portion of its Commitment, the
Advances owing to it and the Note or Notes held by it) to any other Person, and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to such Lender herein or otherwise, in each case as provided in
Section 8.07 of the Amended and Restated Credit Agreement.
Section 19. Termination. Upon the date on which the Payment
Obligations have been Fully Satisfied, the pledge, assignment and security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the Pledgor. Upon any such termination, the Agent will, at the
Pledgor's expense, execute and deliver to the Pledgor such documents as the
Pledgor shall reasonably request to evidence such termination.
Section 20. Governing Law; Submission to Jurisdiction; Waiver
of Jury Trial. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, except to the extent that the
validity or perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the State of New York. Unless otherwise defined herein
or in the Amended and Restated Credit Agreement, terms used in Article 9 of the
N.Y. Uniform Commercial Code are used herein as therein defined.
(b) The Pledgor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party, or for recognition or enforcement
of any judgment, and the Pledgor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State or, to the extent permitted by law, in
such federal court. The Pledgor agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in the courts of any jurisdiction.
(c) The Pledgor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal
court. The Pledgor hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(d) THE PLEDGOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT OR ANY LENDER IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
Section 21. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
c/o MacAndrews & Forbes Holdings Inc. NWCG (PARENT) HOLDINGS CORPORATION
38 East 63rd Street
New York, New York 10021
By__________________________________
Title:
Schedule I
PLEDGED SHARES
<TABLE>
<CAPTION>
Percentage
of
Stock Certificate Number Outstanding
Stock Issuer Class of Stock Par Value No(s) of Shares Shares
------------ -------------- --------- ----------------- --------- ----------
<S> <C> <C> <C> <C> <C>
NWCG Holdings
Corporation Common $0.01 1 100 100%
</TABLE>
EXECUTION COPY
AMENDED AND RESTATED ANDREWS NON-RECOURSE GUARANTY
AND PLEDGE AGREEMENT
Dated as of June 29, 1995
From
ANDREWS GROUP INCORPORATED
as Pledgor
and
NATIONSBANK OF GEORGIA, NATIONAL ASSOCIATION
as Voting Trustee
to
CITIBANK, N.A.
as Agent
T A B L E O F C O N T E N T S
Section Page
1. Grant of Security . . . . . . . . . . . . . . . . . . . . 2
2. Non-Recourse Guaranty; Limitation of Liability. . . . . . 2
3. Delivery of Collateral. . . . . . . . . . . . . . . . . . 3
4. Representations and Warranties. . . . . . . . . . . . . . 3
5. Further Assurances. . . . . . . . . . . . . . . . . . . . 4
6. Place of Perfection; Records. . . . . . . . . . . . . . . 5
7. Voting Rights; Dividends; Etc . . . . . . . . . . . . . . 5
8. Transfers and Other Liens; Additional Shares. . . . . . . 6
9. Agent Appointed Attorney-in-Fact. . . . . . . . . . . . . 7
10. Agent May Perform . . . . . . . . . . . . . . . . . . . . 7
11. The Agent's Duties. . . . . . . . . . . . . . . . . . . . 7
12. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 8
13. Registration Rights . . . . . . . . . . . . . . . . . . . 9
14. Indemnity and Expenses. . . . . . . . . . . . . . . . . . 10
15. Security Interest Absolute. . . . . . . . . . . . . . . . 10
16. Amendments; Waivers; Etc. . . . . . . . . . . . . . . . . 11
17. Addresses for Notices . . . . . . . . . . . . . . . . . . 11
18. Continuing Security Interest; Assignments Under
the Amended and Restated Credit Agreement . . . . . . . . 11
19. Termination . . . . . . . . . . . . . . . . . . . . . . . 12
20. Voting Trustee. . . . . . . . . . . . . . . . . . . . . . 12
21. Governing Law; Submission to Jurisdiction;
Waiver of Jury Trial . . . . . . . . . . . . . . . . . . 12
22. Execution in Counterparts . . . . . . . . . . . . . . . . 14
Schedule I - Pledged Shares
AMENDED AND RESTATED NON-RECOURSE GUARANTY
AND PLEDGE AGREEMENT
AMENDED AND RESTATED NON-RECOURSE GUARANTY AND PLEDGE AGREEMENT
dated as of June 29, 1995 made by ANDREWS GROUP INCORPORATED, a Delaware
corporation ("Andrews" or the "Pledgor"), and, only with respect to Sections 1
and 3 hereof, NATIONSBANK OF GEORGIA, NATIONAL ASSOCIATION, not in its
individual capacity but solely in its capacity as Voting Trustee (in such
capacity, the "Voting Trustee") under the Voting Trust Agreement dated as of
September 30, 1994 (said agreement as it may hereafter be amended or otherwise
modified from time to time, being the "Voting Trust Agreement") among the
Pledgor, the Voting Trustee, the New World Guarantor (as defined in the Amended
and Restated Credit Agreement referred to below) and the Agent referred to
below, to CITIBANK, N.A. ("Citibank"), as agent (the "Agent") for the lenders
(the "Lenders") party to the Amended and Restated Credit Agreement (as
hereinafter defined).
PRELIMINARY STATEMENTS.
(1) Marvel IV Holdings Inc., a Delaware corporation (the
"Borrower"), entered into a Credit Agreement dated as of July 20, 1994, as
heretofore amended (as so amended, the "Existing Credit Agreement"), with the
financial institutions and other institutional lenders party thereto (the
"Existing Lenders") and Citibank, as agent for the Existing Lenders. In
consideration of the premises and in order to induce the Existing Lenders to
make advances under the Existing Credit Agreement, the Pledgor and the Voting
Trustee entered into a Non-Recourse Guaranty and Pledge Agreement dated
September 30, 1994 in favor of Citibank, as agent for the Existing Lenders.
(2) The Borrower has entered into an Amended and Restated
Credit Agreement dated as of June 29, 1995 (said Agreement, as it may hereafter
be amended or otherwise modified from time to time, being the "Amended and
Restated Credit Agreement"; the terms defined therein and not otherwise defined
herein being used as therein defined) with the Lenders and the Agent, which
amends and restates the Existing Credit Agreement in its entirety.
(3) The Pledgor and the Voting Trustee are the owners of the
shares (the "Pledged Shares") of stock listed under their respective names in
Schedule I hereto and issued by the corporation named therein.
(4) It is a condition precedent to the effectiveness of the
Amended and Restated Credit Agreement that the Pledgor and the Voting Trustee
shall have made the pledge, assignment and security interest contemplated by
this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to enter into the Amended and Restated Credit Agreement, the
Pledgor and, with respect to Sections 1 and 3 hereof, the Voting Trustee hereby
agree with the Agent for its benefit and the ratable benefit of the Lenders as
follows:
Section 1. Grant of Security. To secure the full and punctual
performance of the Guaranteed Obligations, each of the Pledgor and the Voting
Trustee hereby pledges to the Agent for its benefit and the ratable benefit of
the Lenders, and hereby grants to the Agent for its benefit and the ratable
benefit of the Lenders a pledge, assignment and security interest in, all of its
right, title and interest, whether now owned or hereafter acquired, in and to,
the following (collectively, the "Collateral"):
(a) the Pledged Shares and the certificates and instruments
representing the Pledged Shares, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares;
(b) all additional shares of stock of any issuer of the
Pledged Shares from time to time acquired by the Pledgor or the Voting Trustee
in any manner, and the certificates representing such additional shares, and all
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such shares; and
(c) all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of the types
described in clauses (a) and (b) of this Section 1).
Section 2. Non-Recourse Guaranty; Limitation of Liability. (a)
Andrews, as primary obligor and not merely as surety, hereby irrevocably and
unconditionally guarantees the payment of all Obligations of Mafco now or
hereafter existing under the Mafco Guaranty and the other Loan Documents to
which Mafco is a party, whether for principal, interest (including, without
limitation, interest after the filing of a petition initiating a proceeding
referred to in Section 6.01(e) of the Amended and Restated Credit Agreement,
whether or not such interest constitutes an allowed claim for purposes of such
proceeding), fees, expenses or otherwise (all such Obligations being the
"Guaranteed Obligations"), and agrees to pay any and all expenses (including
reasonable counsel fees and expenses) incurred by the Agent or the Lenders in
enforcing any rights under this Agreement; provided, however, that Andrews'
liability under this Section 2 with respect to the Guaranteed Obligations shall
be limited to the Collateral, it being understood that it is the intention of
the foregoing that the guaranty set forth in this Section 2 otherwise is a non-
recourse obligation of Andrews and that the Agent's right to recover against
Andrews hereunder in respect of such guaranty shall be limited solely to the
Collateral. Without limiting the generality of the foregoing, the non-recourse
guaranty set forth in this Section 2 guarantees the payment of all amounts that
constitute part of the Guaranteed Obligations and would be owed by Mafco to the
Agent or the Lenders under the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving Mafco.
(b) The liability of Andrews under this Agreement in respect
of the Guaranteed Obligations shall not exceed the greater of (i) 95% of the
Adjusted Net Assets of Andrews on the date hereof and (ii) 95% of the Adjusted
Net Assets of Andrews on the date of any exercise of remedies by the Agent
hereunder. "Adjusted Net Assets" of Andrews at any date means the lesser of (x)
the amount by which the fair value of the property of Andrews exceeds the total
amount of liabilities, including, without limitation, contingent liabilities,
but excluding any liabilities or obligations under this Agreement and the
Andrews Pledge Agreement, of Andrews at such date and (y) the amount by which
the present fair salable value of the assets of Andrews at such date exceeds the
amount that will be required to pay the probable liability of Andrews on its
debts, excluding debt in respect of this Agreement, as they become absolute and
matured.
Section 3. Delivery of Collateral. All certificates or
instruments representing or evidencing Collateral shall be delivered to and held
by or on behalf of the Agent pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Agent. The Agent shall have the right, at any time upon the occurrence and
during the continuance of an Event of Default in its discretion and without
notice to the Pledgor, to transfer to or to register in the name of the Agent or
any of its nominees any or all of the Collateral. In addition, the Agent shall
have the right at any time to exchange certificates or instruments representing
or evidencing Collateral for certificates or instruments of smaller or larger
denominations.
Section 4. Representations and Warranties. The Pledgor
represents and warrants as follows:
(a) The chief place of business and chief executive office
of the Pledgor and the office where the Pledgor keeps its records concerning the
Collateral are located at the address specified opposite the name of the Pledgor
on the signature page hereof.
(b) The Pledgor is the legal and beneficial owner of the
Collateral (other than the shares issued in the name of the Voting Trustee (the
"Voting Trust Stock")) and is the beneficial owner of the Voting Trust Stock, in
each case free and clear of any Lien, except for the security interest created
by this Agreement and the Lien created by the Voting Trust Agreement. The Voting
Trustee is the legal owner of the Voting Trust Stock free and clear of any Lien,
except for the security interest created by this Agreement and the Lien created
by the Voting Trust Agreement. No effective financing statement or other
instrument similar in effect covering all or any part of the Collateral is on
file in any recording office, except such as may have been filed in favor of the
Agent relating to this Agreement. The Pledgor has no trade names.
(c) The Pledged Shares have been duly authorized and validly
issued and are fully paid and non-assessable.
(d) The Pledged Shares constitute the percentage of the
issued and outstanding shares of stock of the issuers thereof indicated on
Schedule I.
(e) This Agreement and the pledge of the Collateral pursuant
hereto create a valid and perfected first priority security interest in the
Collateral, securing the payment of the Guaranteed Obligations, and all filings
and other actions necessary or desirable to perfect and protect such security
interest have been duly taken.
(f) No consent of any other Person and no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other third party is required either (i) for the
grant by the Pledgor or the Voting Trustee of the assignment and security
interest granted hereby, for the pledge by the Pledgor or the Voting Trustee of
the Collateral pursuant hereto or for the execution, delivery or performance of
this Agreement by the Pledgor or the Voting Trustee, (ii) for the perfection or
maintenance of the pledge, assignment and security interest created hereby
(including the first priority nature of such pledge, assignment or security
interest), except for the filing of financing and continuation statements under
the Uniform Commercial Code, which financing statements have been duly filed, or
(iii) for the exercise by the Agent of its voting or other rights provided for
in this Agreement or the remedies in respect of the Collateral pursuant to this
Agreement, except as may be required in connection with the disposition of any
portion of the Collateral by laws affecting the offering and sale of securities
generally; provided, however, that no representation or warranty is made as to
any consent of, authorization, approval or other action by, or notice to or
filing with, any banking agency or regulatory body applicable to the Agent.
Section 5. Further Assurances. (a) The Pledgor agrees that
from time to time, at the expense of the Pledgor, the Pledgor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Agent may request, in
order to perfect and protect any pledge, assignment or security interest granted
or purported to be granted hereby or to enable the Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, the Pledgor will or will cause the
Voting Trustee to, as the case may be: (i) if any Collateral shall be evidenced
by a promissory note or other instrument or chattel paper, deliver and pledge to
the Agent hereunder such note or instrument or chattel paper duly indorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Agent; and (ii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Agent may
request, in order to perfect and preserve the pledge, assignment and security
interest granted or purported to be granted hereby.
(b) The Pledgor hereby authorizes the Agent to file one or
more financing or continuation statements, and amendments thereto, relating to
all or any part of the Collateral without the signature of the Pledgor where
permitted by law. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(c) The Pledgor will furnish to the Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail.
Section 6. Place of Perfection; Records. The Pledgor shall
keep its chief place of business and chief executive office and the office where
it keeps its records concerning the Collateral at the location therefor
specified in Section 4(a) or, upon 30 days' prior written notice to the Agent,
at such other locations in a jurisdiction where all actions required by Section
5 shall have been taken with respect to the Collateral. The Pledgor will hold
and preserve such records and will permit representatives of the Agent at any
time during normal business hours to inspect and make abstracts from such
records.
Section 7. Voting Rights; Dividends; Etc. (a) So long as no
Event of Default shall have occurred and be continuing:
(i) Subject to the terms of the Voting Trust Agreement, each
of the Pledgor and the Voting Trustee shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral or any part
thereof for any purpose not inconsistent with the terms of this Agreement or the
other Loan Documents; provided, however, that the Pledgor shall not exercise or
refrain from exercising any such right if, in the Agent's reasonable judgment,
such action would have a material adverse effect on the value of the Collateral
or any part thereof; and, provided, further, that the Pledgor shall give the
Agent at least five days' written notice of the manner in which it intends to
exercise, or the reasons for refraining from exercising, any such right.
(ii) The Agent shall execute and deliver (or cause to be
executed and delivered) to each of the Pledgor and the Voting Trustee all such
proxies and other instruments as each of the Pledgor and the Voting Trustee may
reasonably request for the purpose of enabling each of the Pledgor and the
Voting Trustee to exercise the voting and other rights that it is entitled to
exercise pursuant to paragraph (i) above.
(iii) The Pledgor shall be entitled to receive and retain any
and all dividends and interest paid in respect of the Collateral; provided,
however, that any and all
(A) dividends and interest paid or payable other
than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange for, any Collateral
received as consideration for sales or other dispositions of assets of the
Pledgor
shall be, and shall be forthwith delivered to the Agent to hold as,
Collateral and shall, if received by the Pledgor, be received in trust for the
benefit of the Agent, be segregated from the other property or funds of the
Pledgor and be forthwith delivered to the Agent as Collateral in the same form
as so received (with any necessary indorsement).
(b) Upon the occurrence and during the continuance of an
Event of Default, all rights of the Pledgor (i) to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise be
entitled to exercise pursuant to Section 7(a)(i) shall, upon notice to the
Pledgor by the Agent, cease and (ii) to receive the dividends and interest
payments that it would otherwise be authorized to receive and retain pursuant to
Section 7(a)(iii) shall automatically cease, and all such rights shall thereupon
become vested in the Agent, which shall thereupon have the sole right to
exercise or refrain from exercising such voting and other consensual rights and
to receive and hold as Collateral such dividends and interest payments.
Section 8. Transfers and Other Liens; Additional Shares. (a)
The Pledgor shall not except as provided in the Mafco Guaranty (i) sell, assign
(by operation of law or otherwise) or otherwise dispose of, or grant any option
with respect to, any of the Collateral or (ii) create or suffer to exist any
Lien upon or with respect to any of the Collateral except for the pledge,
assignment and security interest created by this Agreement and the Lien created
by the Voting Trust Agreement.
(b) The Pledgor shall (i) cause each issuer of the Pledged
Shares not to issue any stock or other securities in addition to or in
substitution for the Pledged Shares issued by such issuer, except to the
Pledgor, and (ii) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all additional shares of stock or other
securities of each issuer of the Pledged Shares.
Section 9. Agent Appointed Attorney-in-Fact. The Pledgor
hereby irrevocably appoints the Agent the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time in the Agent's discretion, upon the occurrence
and during the continuance of any Event of Default to take any action and to
execute any instrument that the Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:
(a) to ask for, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other
instruments and documents in connection with clause (a) above, and
(c) to file any claims or take any action or institute any
proceedings that the Agent may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce the rights of the Agent with
respect to any of the Collateral.
Section 10. Agent May Perform. If either the Pledgor or the
Voting Trustee fails to perform any agreement contained herein applicable to it,
the Agent may itself perform, or cause performance of, such agreement, and the
reasonable expenses of the Agent incurred in connection therewith shall be
payable by the Pledgor under Section 14(b).
Section 11. The Agent's Duties. The powers conferred on the
Agent hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for a duty to
exercise reasonable care in respect of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Agent shall have no
duty as to any Collateral, as to ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Collateral, whether or not the Agent or any Lender has or is deemed to have
knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Collateral. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Citibank accords its own
property.
Section 12. Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the
Uniform Commercial Code in effect in the State of New York at such time (the
"N.Y. Uniform Commercial Code") (whether or not the N.Y. Uniform Commercial Code
applies to the affected Collateral) and also may (i) require the Pledgor to, and
the Pledgor hereby agrees that it will at its expense and upon request of the
Agent forthwith, assemble all or part of the Collateral as directed by the Agent
and make it available to the Agent at a place to be designated by the Agent that
is reasonably convenient to both parties and (ii) without notice except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Agent's offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the Agent may
deem commercially reasonable. The Pledgor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to the Pledgor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Agent, be held by the Agent as
collateral for, and/or then or at any time thereafter applied (after payment of
any amounts payable to the Agent pursuant to Section 14) in whole or in part by
the Agent for the ratable benefit of the Lenders against all or any part of the
Guaranteed Obligations in such order as the Agent shall elect. Any surplus of
such cash or cash proceeds held by the Agent and remaining after payment in full
of all the Guaranteed Obligations shall be paid over to the Pledgor or to
whomsoever may be lawfully entitled to receive such surplus.
(c) The Agent may exercise any and all rights and remedies
of the Pledgor in respect of the Collateral.
(d) All payments received by the Pledgor in respect of the
Collateral shall be received in trust for the benefit of the Agent, shall be
segregated from other funds of the Pledgor and shall be forthwith paid over to
the Agent in the same form as so received (with any necessary indorsement).
Section 13. Registration Rights. If the Agent shall determine
to exercise its right to sell all or any of the Collateral pursuant to Section
12, the Pledgor agrees that, upon request of the Agent, the Pledgor will, at its
own expense:
(a) execute and deliver, and cause each issuer of the
Collateral contemplated to be sold and use its best efforts to cause the
directors and officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as may be
necessary or, in the opinion of the Agent, advisable to register such Collateral
under the provisions of the Securities Act of 1933, as amended from time to time
(the "Securities Act"), to cause the registration statement relating thereto to
become effective and to remain effective for such period as prospectuses are
required by law to be furnished and to make all amendments and supplements
thereto and to the related prospectus that, in the opinion of the Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto;
(b) use its best efforts to qualify the Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the Agent;
(c) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will satisfy the
provisions of Section 11(a) of the Securities Act;
(d) provide the Agent with such other information as may be
necessary or, in the opinion of the Agent, advisable to enable the Agent to
effect the sale of such Collateral; and
(e) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part thereof valid
and binding and in compliance with applicable law.
The Agent is authorized, in connection with any sale of the Collateral pursuant
to Section 12, to deliver or otherwise disclose to any prospective purchaser of
the Collateral (i) any registration statement or prospectus, and all supplements
and amendments thereto, prepared pursuant to clause (a) above, (ii) any
information provided to it pursuant to clause (d) above and (iii) any other
information in its possession relating to the Collateral.
The Pledgor acknowledges the impossibility of ascertaining the amount of damages
that would be suffered by the Agent or the Lenders by reason of the failure by
the Pledgor to perform any of the covenants contained in this Section and,
consequently, agrees that, if the Pledgor shall fail to perform any of such
covenants, it shall pay, as liquidated damages and not as a penalty, an amount
equal to the value of the Collateral on the date the Agent shall demand
compliance with this Section.
Section 14. Indemnity and Expenses. (a) The Pledgor agrees
to indemnify the Agent and the Voting Trustee from and against any and all
claims, losses and liabilities growing out of or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except claims,
losses or liabilities resulting from the Agent's or the Voting Trustee's gross
negligence or willful misconduct as determined by a final judgment of a court of
competent jurisdiction.
(b) The Pledgor will upon demand pay to the Agent the amount
of any and all reasonable expenses, including the reasonable fees and expenses
of its counsel and of any experts and agents, that the Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Agent or the Lenders hereunder or (iv) the failure by
the Pledgor to perform or observe any of the provisions hereof.
Section 15. Security Interest Absolute. The obligations of the
Pledgor under this Agreement are independent of the Guaranteed Obligations, and
a separate action or actions may be brought and prosecuted against the Pledgor
to enforce this Agreement, irrespective of whether any action is brought against
the Borrower or Mafco or whether the Borrower or Mafco is joined in any such
action or actions. All rights of the Agent and the pledge, assignment and
security interest hereunder, and all obligations of each of the Pledgor and the
Voting Trustee hereunder applicable to it, shall be absolute and unconditional,
irrespective of:
(a) any lack of validity or enforceability of any Loan
Document or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Guaranteed Obligations or any other
amendment or waiver of or any consent to any departure from any Loan Document,
including, without limitation, any increase in the Guaranteed 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
other collateral, or any taking, release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Guaranteed Obligations;
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale or
other disposition of any collateral for all or any of the Guaranteed Obligations
or any other assets of the Borrower, Mafco or any of their subsidiaries;
(e) any change, restructuring or termination of the
corporate structure or existence of the Borrower, Mafco or any of their
subsidiaries; or
(f) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Pledgor or a third party grantor of
a security interest.
Section 16. Amendments; Waivers; Etc. No amendment or waiver
of any provision of this Agreement, and no consent to any departure by the
Pledgor herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Agent and, in the event such amendment or waiver
affects the Voting Trustee, the Voting Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given. No failure on the part of the Agent to exercise, and no delay
in exercising any right hereunder, shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.
Section 17. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and, mailed, telegraphed, telecopied,
telexed, cabled or delivered to each of the Pledgor and the Voting Trustee,
addressed to it at the address set forth opposite its name on the signature
pages hereof, and to the Agent, as the case may be, in each case addressed to it
at its address specified in the Amended and Restated Credit Agreement or, as to
either party, at such other address as shall be designated by such party in a
written notice to each other party complying as to delivery with the terms of
this Section 17. All such notices and other communications shall, when mailed,
telecopied, telegraphed, telexed or cabled, respectively, be effective when
deposited in the mails, telecopied, delivered to the telegraph company,
confirmed by telex answerback or delivered to the cable company, respectively,
addressed as aforesaid.
Section 18. Continuing Security Interest; Assignments Under the
Amended and Restated Credit Agreement. This Agreement shall create a continuing
security interest in the Collateral and a continuing guaranty and shall (a)
remain in full force and effect until the earlier of (i) the termination of the
non-recourse guaranty, pledge, assignment and security interest created hereby
pursuant to Section 19 below and (ii) the sale or other disposition of all the
Collateral in accordance with the Loan Documents and the application of the
proceeds thereof in accordance with the Loan Documents, (b) be binding upon the
Pledgor, the Voting Trustee and their respective successors and assigns and (c)
inure, together with the rights and remedies of the Agent hereunder, to the
benefit of the Agent and the Lenders and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing
clause (c), any Lender may assign or otherwise transfer all or any portion of
its rights and obligations under the Amended and Restated Credit Agreement
(including, without limitation, all or any portion of its Commitment, the
Advances owing to it and the Note or Notes held by it) to any other Person, and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to such Lender herein or otherwise, in each case as provided in
Section 8.07 of the Amended and Restated Credit Agreement.
Section 19. Termination. Upon the date on which the Payment
Obligations have been Fully Satisfied, the non-recourse guaranty, pledge,
assignment and security interest created hereby shall terminate and all rights
to the Collateral shall revert to the Pledgor. Upon any such termination, the
Agent will, at the Pledgor's expense, execute and deliver to the Pledgor such
documents as the Pledgor shall reasonably request to evidence such termination.
Section 20. Voting Trustee. The Pledgor and the Agent hereby
acknowledge and agree that the sole obligation of the Voting Trustee hereunder
is the delivery to the Agent of the stock certificate of NWCG (Parent) Holdings
Corporation evidencing the Voting Trust Stock issued in the name of the Voting
Trustee in accordance with Sections 1 and 3 hereof.
Section 21. Governing Law; Submission to Jurisdiction; Waiver
of Jury Trial. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, except to the extent that the
validity or perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the State of New York. Unless otherwise defined herein
or in the Amended and Restated Credit Agreement, terms used in Article 9 of the
N.Y. Uniform Commercial Code are used herein as therein defined.
(b) The Pledgor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party, or for recognition or enforcement
of any judgment, and the Pledgor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State or, to the extent permitted by law, in
such federal court. The Pledgor agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in the courts of any jurisdiction.
(c) The Pledgor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal
court. The Pledgor hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(d) THE PLEDGOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT OR ANY LENDER IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
Section 22. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
Agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
IN WITNESS WHEREOF, each of the Pledgor and the Voting Trustee
has caused this Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first above written.
c/o MacAndrews & Forbes Holdings Inc. ANDREWS GROUP INCORPORATED
38 East 63rd Street
New York, New York 10021
By
--------------------------
Title:
600 Peachtree Street, Suite 900 NATIONSBANK OF GEORGIA,
Atlanta, Georgia 30308 NATIONAL ASSOCIATION
Telecopy: (404) 607-6534 not in its individual capacity but
Attention: Peggy T. McWhorter solely in its capacity as Voting
Trustee under the Voting Trust Agreement
referred to herein and only with respect
to Sections 1 and 3
By
--------------------------
Title:
Schedule I
PLEDGED SHARES
A. PLEDGED BY ANDREWS:
<TABLE>
<CAPTION>
Percentage
of
Stock Certificate Number Outstanding
Stock Issuer Class of Stock Par Value No(s) of Shares Shares
------------ -------------- --------- ----------------- --------- ------------
<S> <C> <C> <C> <C> <C>
Four Star
Holdings Corp. Common $.100 1 1000 100%
NWCG (Parent)
Holdings Corporation Common $0.01 2 99 99.0%
</TABLE>
Voting Trust Certificate, dated September 30, 1994, issued to Andrews Group
Incorporated under the Voting Trust Agreement (as defined below) in respect of
the beneficial ownership of the 1 share of Common Stock of NWCG (Parent)
Holdings Corporation represented by stock certificate no. 3 below.
B. PLEDGED BY THE VOTING TRUSTEE:
<TABLE>
<CAPTION>
Percentage
of
Stock Certificate Number Outstanding
Stock Issuer Class of Stock Par Value No(s) of Shares Shares
------------ -------------- --------- ----------------- --------- ------------
<S> <C> <C> <C> <C> <C>
NWCG (Parent)
Holdings Corporation Common $0.01 3(1) 1 1.0%
</TABLE>
---------------
(1) Stock certificate no. 3 issued to Nationsbank of Georgia, National
Association, as voting trustee (the "Voting Trustee") under the Voting
Trust Agreement, dated as of September 30, 1994 (the "Voting Trust
Agreement"), among Andrews Group Incorporated, NWCG (Parent) Holdings
Corporation, Citibank, N.A. and the Voting Trustee, and such Pledged
Shares are pledged hereunder by the Voting Trustee.
EXECUTION COPY
C&F PLEDGE AGREEMENT
Dated June 15, 1995
From
C&F (PARENT) HOLDINGS INC.
as Pledgor
to
CITIBANK, N.A.
as Agent
T A B L E O F C O N T E N T S
Section Page
1. Grant of Security . . . . . . . . . . . . . . . . . . . . 1
2. Security for Obligations. . . . . . . . . . . . . . . . . 2
3. Delivery of Collateral. . . . . . . . . . . . . . . . . . 2
4. Representations and Warranties. . . . . . . . . . . . . . 2
5. Further Assurances. . . . . . . . . . . . . . . . . . . . 3
6. Place of Perfection; Records. . . . . . . . . . . . . . . 4
7. Voting Rights; Dividends; Etc . . . . . . . . . . . . . . 4
8. Transfers and Other Liens; Additional Shares. . . . . . . 5
9. Agent Appointed Attorney-in-Fact. . . . . . . . . . . . . 6
10. Agent May Perform . . . . . . . . . . . . . . . . . . . . 6
11. The Agent's Duties. . . . . . . . . . . . . . . . . . . . 6
12. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 6
13. Registration Rights . . . . . . . . . . . . . . . . . . . 7
14. Indemnity and Expenses. . . . . . . . . . . . . . . . . . 9
15. Security Interest Absolute. . . . . . . . . . . . . . . . 9
16. Amendments; Waivers; Etc. . . . . . . . . . . . . . . . . 10
17. Addresses for Notices . . . . . . . . . . . . . . . . . . 10
18. Continuing Security Interest; Assignments Under
the Credit Agreement . . . . . . . . . . . . . . . . . . 10
19. Termination . . . . . . . . . . . . . . . . . . . . . . . 11
20. Governing Law; Submission to Jurisdiction;
Waiver of Jury Trial . . . . . . . . . . . . . . . . . . 11
21. Execution in Counterparts . . . . . . . . . . . . . . . . 12
Schedule I - Pledged Shares
PLEDGE AGREEMENT
PLEDGE AGREEMENT dated June 15, 1995 made by C&F (PARENT)
HOLDINGS INC., a Delaware corporation (the "Pledgor"), to CITIBANK, N.A.
("Citibank"), as agent (the "Agent") for the lenders (the "Lenders") party to
the Credit Agreement (as hereinafter defined).
PRELIMINARY STATEMENTS.
(1) The Lenders and the Agent are parties to (a) a Credit
Agreement dated as of July 20, 1994 (said Agreement, as it may hereafter be
amended or otherwise modified from time to time, being the "Credit Agreement";
the terms defined therein and not otherwise defined herein being used herein as
therein defined) with Marvel IV Holdings Inc., a Delaware corporation (the
"Borrower"), and (b) an amendment dated as of March 10, 1995 (the "First
Amendment") with the Borrower and Mafco Holdings Inc., a Delaware corporation
("Mafco"). It is a condition precedent to the effectiveness of the First
Amendment that the Guarantor shall have executed and delivered this Pledge
Agreement.
(2) The Pledgor has entered into a Guaranty dated as of June
15, 1995 (said Guaranty, as it may hereafter be amended or otherwise modified
from time to time, being the "C&F Guaranty") in favor of the Lenders and
Citibank, as Agent for the Lenders.
(3) The Pledgor is the owner of the shares (the "Pledged
Shares") of stock listed in Schedule I hereto and issued by the corporation
named therein.
(4) It is a condition precedent to the effectiveness of the
First Amendment that the Pledgor shall have made the pledge, assignment and
security interest contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to amend the Credit Agreement, the Pledgor hereby agrees with
the Agent for its benefit and the ratable benefit of the Lenders as follows:
Section 1. Grant of Security. The Pledgor hereby pledges to
the Agent for its benefit and the ratable benefit of the Lenders, and hereby
grants to the Agent for its benefit and the ratable benefit of the Lenders a
pledge, assignment and security interest in, all of its right, title and
interest, whether now owned or hereafter acquired, in and to, the following
(collectively, the "Collateral"):
(a) the Pledged Shares and the certificates and instruments
representing the Pledged Shares, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares;
(b) all additional shares of stock of the issuer of the
Pledged Shares from time to time acquired by the Pledgor in any manner, and the
certificates representing such additional shares, and all dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
shares; and
(c) all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of the types
described in clauses (a) and (b) of this Section 1).
Section 2. Security for Obligations. This Agreement secures the
payment of all Obligations of the Pledgor now or hereafter existing under the
C&F Guaranty, whether for principal, interest (including, without limitation,
interest after the filing of a petition initiating a proceeding referred to in
Section 6.01(e) of the Credit Agreement, whether or not such interest
constitutes an allowed claim for purposes of such proceeding), fees, expenses or
otherwise (all such Obligations being the "Secured Obligations"). Without
limiting the generality of the foregoing, this Agreement secures the payment of
all amounts that constitute part of the Secured Obligations and would be owed by
the Borrower or the Pledgor to the Agent or the Lenders under the Loan Documents
to which the Borrower or the Pledgor is a party but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrower or the Pledgor.
Section 3. Delivery of Collateral. All certificates or
instruments representing or evidencing Collateral shall be delivered to and held
by or on behalf of the Agent pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Agent. The Agent shall have the right, at any time upon the occurrence and
during the continuance of an Event of Default in its discretion and without
notice to the Pledgor, to transfer to or to register in the name of the Agent or
any of its nominees any or all of the Collateral. In addition, the Agent shall
have the right at any time to exchange certificates or instruments representing
or evidencing Collateral for certificates or instruments of smaller or larger
denominations.
Section 4. Representations and Warranties. The Pledgor
represents and warrants as follows:
(a) The chief place of business and chief executive office
of the Pledgor and the office where the Pledgor keeps its records concerning the
Collateral are located at the address specified opposite the name of the Pledgor
on the signature page hereof.
(b) The Pledgor is the legal and beneficial owner of the
Collateral, free and clear of any Lien, except for the security interest created
by this Agreement. No effective financing statement or other instrument similar
in effect covering all or any part of the Collateral is on file in any recording
office, except such as may have been filed in favor of the Agent relating to
this Agreement. The Pledgor has no trade names.
(c) The Pledged Shares have been duly authorized and validly
issued and are fully paid and non-assessable.
(d) The Pledged Shares constitute the percentage of the
issued and outstanding shares of stock of the issuers thereof indicated on
Schedule I.
(e) This Agreement and the pledge of the Collateral pursuant
hereto create a valid and perfected first priority security interest in the
Collateral, securing the payment of the Secured Obligations, and all filings and
other actions necessary or desirable to perfect and protect such security
interest have been duly taken.
(f) No consent of any other Person and no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other third party is required either (i) for the
grant by the Pledgor of the assignment and security interest granted hereby, for
the pledge by the Pledgor of the Collateral pursuant hereto or for the
execution, delivery or performance of this Agreement by the Pledgor, (ii) for
the perfection or maintenance of the pledge, assignment and security interest
created hereby (including the first priority nature of such pledge, assignment
or security interest), except for the filing of financing and continuation
statements under the Uniform Commercial Code, which financing statements have
been duly filed, or (iii) for the exercise by the Agent of its voting or other
rights provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement, except as may be required in connection
with the disposition of any portion of the Collateral by laws affecting the
offering and sale of securities generally; provided, however, that no
representation or warranty is made as to any consent of, authorization, approval
or other action by, or notice to or filing with, any banking agency or
regulatory body applicable to the Agent.
Section 5. Further Assurances. (a) The Pledgor agrees that
from time to time, at the expense of the Pledgor, the Pledgor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Agent may request, in
order to perfect and protect any pledge, assignment or security interest granted
or purported to be granted hereby or to enable the Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, the Pledgor will: (i) if any
Collateral shall be evidenced by a promissory note or other instrument or
chattel paper, deliver and pledge to the Agent hereunder such note or instrument
or chattel paper duly indorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to the Agent; and
(ii) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as the Agent may request, in order to perfect and preserve the
pledge, assignment and security interest granted or purported to be granted
hereby.
(b) The Pledgor hereby authorizes the Agent to file one or
more financing or continuation statements, and amendments thereto, relating to
all or any part of the Collateral without the signature of the Pledgor where
permitted by law. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(c) The Pledgor will furnish to the Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail.
Section 6. Place of Perfection; Records. The Pledgor shall
keep its chief place of business and chief executive office and the office where
it keeps its records concerning the Collateral at the location therefor
specified in Section 4(a) or, upon 30 days' prior written notice to the Agent,
at such other locations in a jurisdiction where all actions required by Section
5 shall have been taken with respect to the Collateral. The Pledgor will hold
and preserve such records and will permit representatives of the Agent at any
time during normal business hours to inspect and make abstracts from such
records.
Section 7. Voting Rights; Dividends; Etc. (a) So long as no
Event of Default shall have occurred and be continuing:
(i) The Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral or any part
thereof for any purpose not inconsistent with the terms of this Agreement or the
other Loan Documents; provided, however, that the Pledgor shall not exercise or
refrain from exercising any such right if, in the Agent's reasonable judgment,
such action would have a material adverse effect on the value of the Collateral
or any part thereof; and, provided, further, that the Pledgor shall give the
Agent at least five days' written notice of the manner in which it intends to
exercise, or the reasons for refraining from exercising, any such right.
(ii) The Agent shall execute and deliver (or cause to be
executed and delivered) to the Pledgor all such proxies and other instruments as
the Pledgor may reasonably request for the purpose of enabling the Pledgor to
exercise the voting and other rights that it is entitled to exercise pursuant to
paragraph (i) above.
(iii) The Pledgor shall be entitled to receive and retain any
and all dividends and interest paid in respect of the Collateral; provided,
however, that any and all
(A) dividends and interest paid or payable other
than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange for, any Collateral
received as consideration for sales or other dispositions of assets of the
Pledgor
shall be, and shall be forthwith delivered to the Agent to hold as,
Collateral and shall, if received by the Pledgor, be received in trust for the
benefit of the Agent, be segregated from the other property or funds of the
Pledgor and be forthwith delivered to the Agent as Collateral in the same form
as so received (with any necessary indorsement).
(b) Upon the occurrence and during the continuance of an
Event of Default, all rights of the Pledgor (i) to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise be
entitled to exercise pursuant to Section 7(a)(i) shall, upon notice to the
Pledgor by the Agent, cease and (ii) to receive the dividends and interest
payments that it would otherwise be authorized to receive and retain pursuant to
Section 7(a)(iii) shall automatically cease, and all such rights shall thereupon
become vested in the Agent, which shall thereupon have the sole right to
exercise or refrain from exercising such voting and other consensual rights and
to receive and hold as Collateral such dividends and interest payments.
Section 8. Transfers and Other Liens; Additional Shares. (a)
The Pledgor shall not except as provided in the C&F Guaranty (i) sell, assign
(by operation of law or otherwise) or otherwise dispose of, or grant any option
with respect to, any of the Collateral or (ii) create or suffer to exist any
Lien upon or with respect to any of the Collateral except for the pledge,
assignment and security interest created by this Agreement.
(b) The Pledgor shall pledge hereunder, immediately upon its
acquisition thereof, any and all additional shares of stock or other securities
of each issuer of the Pledged Shares.
Section 9. Agent Appointed Attorney-in-Fact. The Pledgor
hereby irrevocably appoints the Agent the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time in the Agent's discretion, upon the occurrence
and during the continuance of any Event of Default to take any action and to
execute any instrument that the Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:
(a) to ask for, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other
instruments and documents in connection with clause (a) above, and
(c) to file any claims or take any action or institute any
proceedings that the Agent may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce the rights of the Agent with
respect to any of the Collateral.
Section 10. Agent May Perform. If the Pledgor fails to perform
any agreement contained herein, the Agent may itself perform, or cause
performance of, such agreement, and the reasonable expenses of the Agent
incurred in connection therewith shall be payable by the Pledgor under Section
14(b).
Section 11. The Agent's Duties. The powers conferred on the
Agent hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for a duty to
exercise reasonable care in respect of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Agent shall have no
duty as to any Collateral, as to ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Collateral, whether or not the Agent or any Lender has or is deemed to have
knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any
Collateral. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Citibank accords its own
property.
Section 12. Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the
Uniform Commercial Code in effect in the State of New York at such time (the
"N.Y. Uniform Commercial Code") (whether or not the N.Y. Uniform Commercial Code
applies to the affected Collateral) and also may (i) require the Pledgor to, and
the Pledgor hereby agrees that it will at its expense and upon request of the
Agent forthwith, assemble all or part of the Collateral as directed by the Agent
and make it available to the Agent at a place to be designated by the Agent that
is reasonably convenient to both parties and (ii) without notice except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Agent's offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the Agent may
deem commercially reasonable. The Pledgor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to the Pledgor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Agent, be held by the Agent as
collateral for, and/or then or at any time thereafter applied (after payment of
any amounts payable to the Agent pursuant to Section 14) in whole or in part by
the Agent for the ratable benefit of the Lenders against all or any part of the
Secured Obligations in such order as the Agent shall elect. Any surplus of such
cash or cash proceeds held by the Agent and remaining after payment in full of
all the Secured Obligations shall be paid over to the Pledgor or to whomsoever
may be lawfully entitled to receive such surplus.
(c) The Agent may exercise any and all rights and remedies
of the Pledgor in respect of the Collateral.
(d) All payments received by the Pledgor in respect of the
Collateral shall be received in trust for the benefit of the Agent, shall be
segregated from other funds of the Pledgor and shall be forthwith paid over to
the Agent in the same form as so received (with any necessary indorsement).
Section 13. Registration Rights. If the Agent shall determine
to exercise its right to sell all or any of the Collateral pursuant to Section
12, the Pledgor agrees that, upon request of the Agent, the Pledgor will, at its
own expense:
(a) execute and deliver, and cause the issuer of the
Collateral contemplated to be sold and use its best efforts to cause the
directors and officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as may be
necessary or, in the opinion of the Agent, advisable to register such Collateral
under the provisions of the Securities Act of 1933, as amended from time to time
(the "Securities Act"), to cause the registration statement relating thereto to
become effective and to remain effective for such period as prospectuses are
required by law to be furnished and to make all amendments and supplements
thereto and to the related prospectus that, in the opinion of the Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto;
(b) use its best efforts to qualify the Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the Agent;
(c) the issuer to make available to its security holders, as
soon as practicable, an earnings statement that will satisfy the provisions of
Section 11(a) of the Securities Act;
(d) provide the Agent with such other information as may be
necessary or, in the opinion of the Agent, advisable to enable the Agent to
effect the sale of such Collateral; and
(e) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part thereof valid
and binding and in compliance with applicable law.
The Agent is authorized, in connection with any sale of the Collateral pursuant
to Section 12, to deliver or otherwise disclose to any prospective purchaser of
the Collateral (i) any registration statement or prospectus, and all supplements
and amendments thereto, prepared pursuant to clause (a) above, (ii) any
information provided to it pursuant to clause (d) above and (iii) any other
information in its possession relating to the Collateral.
The Pledgor acknowledges the impossibility of ascertaining the amount of damages
that would be suffered by the Agent or the Lenders by reason of the failure by
the Pledgor to perform any of the covenants contained in this Section and,
consequently, agrees that, if the Pledgor shall fail to perform any of such
covenants, it shall pay, as liquidated damages and not as a penalty, an amount
equal to the value of the Collateral on the date the Agent shall demand
compliance with this Section.
Section 14. Indemnity and Expenses. (a) The Pledgor agrees
to indemnify the Agent from and against any and all claims, losses and
liabilities growing out of or resulting from this Agreement (including, without
limitation, enforcement of this Agreement), except claims, losses or liabilities
resulting from the Agent's gross negligence or willful misconduct as determined
by a final judgment of a court of competent jurisdiction.
(b) The Pledgor will upon demand pay to the Agent the amount
of any and all reasonable expenses, including the reasonable fees and expenses
of its counsel and of any experts and agents, that the Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Agent or the Lenders hereunder or (iv) the failure by
the Pledgor to perform or observe any of the provisions hereof.
Section 15. Security Interest Absolute. The obligations of the
Pledgor under this Agreement are independent of the Secured Obligations, and a
separate action or actions may be brought and prosecuted against the Pledgor to
enforce this Agreement, irrespective of whether any action is brought against
the Borrower or whether the Borrower is joined in any such action or actions.
All rights of the Agent and the pledge, assignment and security interest
hereunder, and all obligations of the Pledgor hereunder, shall be absolute and
unconditional, irrespective of:
(a) any lack of validity or enforceability of any Loan
Document or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Secured Obligations or any other
amendment or waiver of or any consent to any departure from any Loan Document,
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
other collateral, or any taking, release or amendment or waiver of or consent to
departure from any 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, the Pledgor or any of their Subsidiaries;
(e) any change, restructuring or termination of the
corporate structure or existence of the Borrower, the Pledgor or any of their
Subsidiaries; or
(f) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Pledgor or a third party grantor of
a security interest.
Section 16. Amendments; Waivers; Etc. No amendment or waiver
of any provision of this Agreement, and no consent to any departure by the
Pledgor herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No failure on the part of the Agent to exercise, and no delay in
exercising any right hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.
Section 17. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and, mailed, telegraphed, telecopied,
telexed, cabled or delivered to the Pledgor or to the Agent, as the case may
be, in the case of the Pledgor, addressed to it at its address set forth
opposite its name on the signature page hereto and in the case of the Agent
addressed to it at its address specified in the Credit Agreement or, as to
either party, at such other address as shall be designated by such party in a
written notice to each other party complying as to delivery with the terms of
this Section 17. All such notices and other communications shall, when mailed,
telecopied, telegraphed, telexed or cabled, respectively, be effective when
deposited in the mails, telecopied, delivered to the telegraph company,
confirmed by telex answerback or delivered to the cable company, respectively,
addressed as aforesaid.
Section 18. Continuing Security Interest; Assignments Under the
Credit Agreement. This Agreement shall create a continuing security interest in
the Collateral and shall (a) remain in full force and effect until the earlier
of (i) the termination of the pledge, assignment and security interest granted
hereby pursuant to Section 19 below and (ii) the sale or other disposition of
all the Collateral in accordance with the Loan Documents and the application of
the proceeds thereof in accordance with the Loan Documents, (b) be binding upon
the Pledgor, its successors and assigns and (c) inure, together with the rights
and remedies of the Agent hereunder, to the benefit of the Agent and the Lenders
and their respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender may assign or otherwise
transfer all or any portion of its rights and obligations under the Credit
Agreement (including, without limitation, all or any portion of its Commitment,
the Advances owing to it and the Note or Notes held by it) to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to such Lender herein or otherwise, in each case as
provided in Section 8.07 of the Credit Agreement.
Section 19. Termination. Upon the date on which the Payment
Obligations have been Fully Satisfied, the pledge, assignment and security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the Pledgor. Upon any such termination, the Agent will, at the
Pledgor's expense, execute and deliver to the Pledgor such documents as the
Pledgor shall reasonably request to evidence such termination.
Section 20. Governing Law; Submission to Jurisdiction; Waiver
of Jury Trial. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, except to the extent that the
validity or perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Collateral are governed by the laws of a
jurisdiction other than the State of New York. Unless otherwise defined herein
or in the Credit Agreement, terms used in Article 9 of the N.Y. Uniform
Commercial Code are used herein as therein defined.
(b) The Pledgor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party, or for recognition or enforcement
of any judgment, and the Pledgor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State or, to the extent permitted by law, in
such federal court. The Pledgor agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in the courts of any jurisdiction.
(c) The Pledgor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal
court. The Pledgor hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(d) THE PLEDGOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT OR ANY LENDER IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
Section 21. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
c/o MacAndrews & Forbes Holdings Inc. C&F (PARENT) HOLDINGS INC.
38 East 63rd Street
New York, New York 10021
By
--------------------------
Title:
Schedule I
PLEDGED SHARES
<TABLE>
<CAPTION>
Percentage
of
Stock Certificate Number Outstanding
Stock Issuer Class of Stock Par Value No(s) of Shares Shares
------------ -------------- --------- ----------------- --------- ------------
<S> <C> <C> <C> <C> <C>
Mafco Consolidated
Group Inc. Common $0.01 -- -- 80%
</TABLE>
EXECUTION COPY
BORROWER PARENT GUARANTY
Dated July 27, 1994
From
MARVEL V HOLDINGS INC.
as Guarantor
in favor of
THE LENDERS PARTY TO THE CREDIT AGREEMENT
REFERRED TO HEREIN
and
CITIBANK, N.A.
as Agent
T A B L E O F C O N T E N T S
Section Page
1. Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Guaranty Absolute. . . . . . . . . . . . . . . . . . . . . . . . 2
3. Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. Payments Free and Clear of Taxes, Etc. . . . . . . . . . . . . . 3
5. Representations and Warranties . . . . . . . . . . . . . . . . . 5
6. Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . . 9
(a) Compliance with Laws, Etc. . . . . . . . . . . . . . 9
(b) Compliance with Environmental Laws . . . . . . . . . 9
(c) Maintenance of Insurance . . . . . . . . . . . . . . 9
(d) Preservation of Corporate Existence, Etc . . . . . . 9
(e) Visitation Rights. . . . . . . . . . . . . . . . . . 10
(f) Keeping of Books . . . . . . . . . . . . . . . . . . 10
(g) Maintenance of Properties, Etc . . . . . . . . . . . 10
(h) Performance of Related Documents . . . . . . . . . . 10
(i) Transactions with Affiliates . . . . . . . . . . . . 10
(j) Mafco Tax Group . . . . . . . . . . . . . . . . . . 11
7. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . 11
(a) Liens, Etc . . . . . . . . . . . . . . . . . . . . . 11
(b) Lease Obligations. . . . . . . . . . . . . . . . . . 11
(c) Mergers, Etc . . . . . . . . . . . . . . . . . . . . 12
(d) Sales, Etc. of Assets. . . . . . . . . . . . . . . . 12
(e) Dividends, Repurchases, Etc. . . . . . . . . . . . . 12
(f) Investments. . . . . . . . . . . . . . . . . . . . . 12
(g) Change in Nature of Business . . . . . . . . . . . . 13
(h) Accounting Changes . . . . . . . . . . . . . . . . . 13
(i) Debt . . . . . . . . . . . . . . . . . . . . . . . . 13
(j) Charter Amendments . . . . . . . . . . . . . . . . . 13
(k) Prepayments, Etc. of Debt. . . . . . . . . . . . . . 13
(l) Amendment, Etc. of Related Documents . . . . . . . . 13
(m) Negative Pledge. . . . . . . . . . . . . . . . . . . 14
(n) Partnerships . . . . . . . . . . . . . . . . . . . . 14
(o) Capital Expenditures . . . . . . . . . . . . . . . . 14
(p) Issuance of Capital Stock. . . . . . . . . . . . . . 14
(q) Payment Restrictions . . . . . . . . . . . . . . . . 14
8. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 15
9. Notices, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . 15
10. No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . . . 15
11. Right of Set-off. . . . . . . . . . . . . . . . . . . . . . . . 15
12. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 16
13. Continuing Guaranty; Assignments under the Credit
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 16
14. Governing Law; Submission to Jurisdiction; Waiver of
Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . 16
15. Execution in Counterparts; Delivery by Telecopier . . . . . . . 17
Schedule I - Debt
Schedule II - Investments
GUARANTY
GUARANTY dated July 27, 1994 made by Marvel V Holdings Inc., a
Delaware corporation (the "Guarantor"), in favor of the Lenders (the "Lenders")
party to the Credit Agreement (as defined below) and Citibank, N.A.
("Citibank"), as agent (the "Agent") for the Lenders.
PRELIMINARY STATEMENT. The Lenders and the Agent are parties to
a Credit Agreement dated as of July 20, 1994 (said Agreement, as it may
hereafter be amended or otherwise modified from time to time, being the "Credit
Agreement", the terms defined therein and not otherwise defined herein being
used herein as therein defined) with Marvel IV Holdings Inc., a Delaware
corporation (the "Borrower"). It is a condition precedent to the making of
Advances by the Lenders under the Credit Agreement that the Guarantor, as direct
owner of 100 percent of the outstanding shares of stock of the Borrower, shall
have executed and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make Advances under the Credit Agreement, the Guarantor
hereby agrees as follows:
Section 1. Guaranty. The Guarantor hereby unconditionally
guarantees (a) the punctual payment when due, whether at stated maturity, by
acceleration or otherwise, of all Obligations of the Borrower now or hereafter
existing under the Loan Documents to which it is a party, whether for principal,
interest (including, without limitation, interest after the filing of a petition
initiating a proceeding of the type referred to in Section 6.01(e) of the Credit
Agreement, whether or not such interest constitutes an allowed claim for
purposes of such proceeding), fees, expenses or otherwise (such Obligations
being the "Guaranteed Payment Obligations") and (b) the performance when due of
all other Obligations of the Borrower now or hereafter existing under the Loan
Documents, whether affirmative or negative (such Obligations being the
"Guaranteed Performance Obligations" and together with the Guaranteed Payment
Obligations, the "Guaranteed Obligations"), and agrees to pay any and all
reasonable expenses (including reasonable counsel fees and expenses) incurred by
the Agent or the Lenders in enforcing any rights under this Guaranty. Without
limiting the generality of the foregoing, the Guarantor's liability shall extend
to all amounts that constitute part of the Guaranteed Payment Obligations and
would be owed by the Borrower to the Agent or the Lenders under the Loan
Documents but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving
the Borrower.
Section 2. Guaranty Absolute. The Guarantor guarantees that
the Guaranteed Payment Obligations will be paid, and the Guaranteed Performance
Obligations will be performed, strictly in accordance with the terms of the Loan
Documents, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of the Agent or
the Lenders with respect thereto. The Obligations of the Guarantor under this
Guaranty are independent of the Guaranteed Obligations, and a separate action or
actions may be brought and prosecuted against the Guarantor to enforce this
Guaranty, irrespective of whether any action is brought against the Borrower or
whether the Borrower is joined in any such action or actions. The liability of
the Guarantor under this Guaranty shall be absolute and unconditional
irrespective of, and the Guarantor hereby irrevocably waives any defenses it may
now or hereafter have in any way relating to, any and all of the following:
(a) any lack of validity or enforceability of any Loan
Document or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Guaranteed Obligations, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in the Guaranteed 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 Guaranteed Obligations;
(d) any manner of application of Collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale or
other disposition of any Collateral for all or any of the Guaranteed 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; or
(f) any other circumstance (including, without limitation,
any statute of limitations or any existence of or reliance on any representation
by the Agent or any Lender) that might otherwise constitute a defense available
to, or a discharge of, the Borrower, the Guarantor or any other guarantor or
surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Agent or any Lender upon the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, all as though such
payment had not been made.
Section 3. Waivers. (a) The Guarantor hereby waives, to the
extent permitted by applicable law, promptness, diligence, notice of acceptance
and any other notice with respect to any of the Guaranteed Obligations and this
Guaranty and any requirement that the Agent or any Lender protect, secure,
perfect or insure any Lien or any property subject thereto or exhaust any right
or take any action against the Borrower or any other Person or any Collateral.
(b) The Guarantor hereby irrevocably waives any claim or
other rights that it may now or hereafter acquire against the Borrower or any
other insider guarantor that arise from the existence, payment, performance or
enforcement of the Guarantor's Obligations under this Guaranty or any other Loan
Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Agent or any Lender against the
Borrower or any other insider guarantor or any Collateral, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Borrower or any other insider guarantor, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right. If any amount shall be paid to the
Guarantor in violation of the preceding sentence at any time prior to the later
of the cash payment in full of the Guaranteed Payment Obligations and all other
amounts payable under this Guaranty and the Termination Date, such amount shall
be held in trust for the benefit of the Agent and the Lenders and shall
forthwith be paid to the Agent to be credited and applied to the Guaranteed
Payment Obligations and all other amounts payable under this Guaranty, whether
matured or unmatured, in accordance with the terms of the Loan Documents, or to
be held as Collateral for any Guaranteed Obligations or other amounts payable
under this Guaranty thereafter arising. The Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents and that the waiver set forth in this
subsection is knowingly made in contemplation of such benefits.
(c) The Guarantor hereby waives any right to revoke this
Guaranty, and acknowledges that this Guaranty is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in the future.
Section 4. Payments Free and Clear of Taxes, Etc. (a) Any and
all payments made by the Guarantor hereunder shall be made, in accordance with
Section 2.10 of the Credit Agreement, free and clear of and without deduction
for any and all present or future Taxes. If the Guarantor shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section) such Lender or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Guarantor shall make such deductions and
(iii) the Guarantor shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law; provided,
however, that any such Lender shall designate a different Lending Office if, in
the judgment of such Lender, such designation would avoid the need for, or
reduce the amount of, any Taxes required to be deducted from or in respect of
any sum payable hereunder to such Lender or the Agent and would not, in the
judgment of such Lender, be otherwise disadvantageous to such Lender.
(b) In addition, the Guarantor agrees to pay any present or
future Other Taxes.
(c) The Guarantor will indemnify each Lender and the Agent
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section) paid by such Lender or the Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto; provided that, in the event such Lender or the Agent, as the case may
be, successfully contests the assessment of such Taxes or Other Taxes or any
liability arising therefrom or with respect thereto, such Lender or the Agent
shall refund, to the extent of any refund thereof made to such Lender or the
Agent, any amounts paid by the Guarantor under this Section in respect of such
Taxes, Other Taxes or liabilities arising therefrom or with respect thereto.
Each Lender and the Agent agree that it will contest such Taxes, Other Taxes or
liabilities if (i) the Guarantor furnishes to it an opinion of reputable tax
counsel acceptable to such Lender or the Agent to the effect that such Taxes or
Other Taxes were wrongfully or illegally imposed and (ii) such Lender or the
Agent determines, in its sole discretion, that it would not be disadvantaged or
prejudiced in any manner whatsoever as a result of such contest. This
indemnification shall be made within 30 days from the date such Lender or the
Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes,
the Guarantor will furnish to the Agent, at its address referred to in the
Credit Agreement, appropriate evidence of payment thereof. If no Taxes are
payable in respect of any payment hereunder by the Guarantor through an account
or branch outside the United States or on behalf of the Guarantor by a payor
that is not a United States person, the Guarantor will furnish, or will cause
such payor to furnish, to the Agent a certificate from each appropriate taxing
authority or authorities, or an opinion of counsel acceptable to the Agent, in
either case stating that such payment is exempt from or not subject to Taxes.
For purposes of this Section, the terms "United States" and "United States
person" shall have the meanings specified in Section 7701 of the Code.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States and the Agent, if organized under the laws of a
jurisdiction outside the United States, shall, if requested in writing by the
Guarantor or the Agent (but only so long as such Lender or the Agent remains
lawfully able to do so and only so long as Guarantor is making payments under
this Guaranty), provide the Guarantor and (in the case of any such Lender other
than the Agent) the Agent with two duly completed copies of Internal Revenue
Service form 1001 or 4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Lender or the Agent is
entitled to benefits under an income tax treaty to which the United States is a
party that reduces the rate of withholding tax on payments under this Agreement
or the Notes or certifying that the income receivable pursuant to this Agreement
or the Notes is effectively connected with the conduct of a trade or business in
the United States.
(f) For any period with respect to which the Agent or a
Lender has failed to provide the Guarantor with the appropriate forms described
in subsection (e) above (other than if such failure is due to a change in law
occurring after the date on which such person was originally required to provide
such forms, or if such forms are otherwise not required under subsection (e)
above), the Agent or such Lender shall not be entitled to increased payments or
indemnification under subsection (a) or (c) above with respect to Taxes imposed
by the United States; provided, however, that should the Agent or a Lender
become subject to Taxes because of its failure to deliver a form required
hereunder, the Guarantor shall take such steps as the Agent or such Lender shall
reasonably request to assist the Lender to recover such Taxes if, in the
judgment of the Guarantor such steps would avoid the need for, or reduce the
amount of, any Taxes required to be deducted from or in respect of any sum
payable hereunder to the Agent or such Lender and would not, in the judgment of
the Guarantor, be disadvantageous to the Guarantor.
(g) Without prejudice to the survival of any other agreement
of the Guarantor hereunder, the agreements and obligations of the Guarantor
contained in this Section 4 shall survive the payment in full of the Guaranteed
Obligations and all other amounts payable under this Guaranty.
(h) If a Lender shall change its Lending Office other than
(i) at the request of the Guarantor or (ii) at a time when such change would not
result in this Section requiring the Guarantor to make a greater payment than if
such change had not been made, such Lender shall not be entitled to receive any
greater payment under this Section than such Lender would have been entitled to
receive had it not changed its Lending Office.
Section 5. Representations and Warranties. The Guarantor
hereby represents and warrants as follows:
(a) The Guarantor (i) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed would not have a Material
Adverse Effect (with respect to clause (a) of the definition thereof, the term
"Person" shall refer to the Guarantor) and (iii) has all requisite corporate
power and authority to own or lease and operate its properties and to carry on
its business as now conducted and as proposed to be conducted. All of the
outstanding capital stock of the Guarantor has been validly issued, is fully
paid and non-assessable. Four Star is the legal and beneficial owner of all of
the outstanding capital stock of the Guarantor (other than the shares issued in
the name of the voting trustee (the "Voting Trustee") under the voting trust
agreement described in Section 3.01(g)(xvii)(B) of the Credit Agreement (the
"Voting Trust Agreement") and the Voting Trustee is the legal owner of the
Voting Trust Stock, in each case free and clear of all Liens except for the
Liens created by the Collateral Documents and the Voting Trust Agreement.
(b) The execution, delivery and performance by the Guarantor
of this Guaranty, each Loan Document and each Related Document to which it is or
is to be a party and the consummation by the Guarantor of the transactions
contemplated hereby, are within the Guarantor's corporate powers, have been duly
authorized by all necessary corporate action, and do not (i) contravene the
Guarantor's charter or by-laws, (ii) violate any law (including, without
limitation, the Exchange Act), rule, regulation (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve System), order,
writ, judgment, injunction, decree, determination or award, (iii) conflict with
or result in the breach of, or constitute a default under, any loan agreement,
contract, indenture, mortgage, deed of trust, lease or other instrument binding
on or affecting the Guarantor, any of its Subsidiaries or any of its or their
properties, the effect of which conflict, breach or default is reasonably likely
to have a Material Adverse Effect (with respect to clause (a) of the definition
thereof, the term "Person" shall refer to the Guarantor) or (iv) except for the
liens created by the Collateral Documents and the Voting Trust Agreement, result
in or require the creation or imposition of any Lien upon or with respect to any
of the properties of the Guarantor or any of its Subsidiaries. Neither the
Guarantor nor any of its Subsidiaries is in violation of any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award or
in breach of any such contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument, the violation or breach of which would be
reasonably likely to have a Material Adverse Effect (with respect to clause (a)
of the definition thereof, the term "Person" shall refer to such the Guarantor).
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for (i) the due execution, delivery and performance by the Guarantor of
this Guaranty or any other Loan Document or any Related Document to which it is
or is to be a party or for the consummation by the Guarantor of the transactions
contemplated hereby, (ii) the grant by the Guarantor of the Liens granted by it
pursuant to the Collateral Documents, (iii) the perfection or maintenance of the
Liens created by the Collateral Documents (including the first priority nature
thereof) or (iv) the exercise by the Agent or any Lender of its rights under the
Loan Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents, except for the filing of financing statements in
accordance with Section 3.01(g)(viii) of the Credit Agreement and except as may
be required in connection with the disposition of any portion of the Collateral
by laws affecting the offering and sale of securities generally; provided,
however, that no representation or warranty is made as to any consent of,
authorization, approval or other action by, or notice to or filing with, any
banking agency or regulatory body applicable to the Agent. As of the date of
the Consummation of the Transaction, all applicable waiting periods in
connection with the Transaction and the other transactions contemplated hereby
will have expired without any action having been taken by any competent
authority restraining, preventing or imposing materially adverse conditions upon
the Transaction or the rights of the Loan Parties or their Subsidiaries freely
to transfer or otherwise dispose of, or to create any Lien on, any properties
now owned or hereafter acquired by any of them.
(d) This Guaranty has been, and each other Loan Document to
which the Guarantor is a party when delivered hereunder will have been, duly
executed and delivered by the Guarantor. This Guaranty is, and each other Loan
Document to which the Guarantor is a party when delivered hereunder will be, the
legal, valid and binding obligations of the Guarantor, enforceable against the
Guarantor in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforceability of creditor's rights generally.
(e) There is no pending or threatened action, proceeding,
governmental investigation or arbitration affecting the Guarantor or any of its
Subsidiaries before any court, governmental agency or arbitrator, which is
reasonably likely to have a Material Adverse Effect (with respect to clause (a)
of the definition thereof, the term "Person" shall refer to the Guarantor) or
that purports to affect the legality, validity or enforceability of this
Guaranty, any other Loan Document or any Related Document or the consummation of
the transactions contemplated hereby or thereby.
(f) The Guarantor and its ERISA Affiliates are in compliance
in all material respects with the applicable provisions of ERISA and the Code
with respect to each Plan thereof. No ERISA Event has occurred or is reasonably
expected to occur with respect to any Plan of the Guarantor or any of its ERISA
Affiliates. The amount of all Unfunded Pension Liabilities under all Plans of
the Guarantor and its ERISA Affiliates does not exceed $60,000,000. None of the
Guarantor or any of its ERISA Affiliates has made contributions or incurred any
Withdrawal Liability to any Multiemployer Plan within the past five years, and
it is not reasonably expected that such contributions shall be made or required
or that such liability shall be incurred in any such case in amounts or under
circumstances that would be reasonably likely to result in a material liability
to the Guarantor or any of its ERISA Affiliates. Schedule B (Actuarial
Information) to the 1992 annual report (Form 5500 Series) for each Plan of the
Guarantor and each of its ERISA Affiliates, copies of which have been filed with
the Internal Revenue Service and furnished to the Lenders, is complete and
accurate in all material respects and fairly presents the funding status of such
Plan, and since the date of such Schedule B there has been no material adverse
change in such funding status. The Guarantor and its Subsidiaries have no
material liability with respect to "expected postretirement benefit obligations"
within the meaning of Statement of Financial Accounting Standards No. 106.
(g) The operations and properties of the Guarantor and each
of its Subsidiaries are in substantial compliance with all Environmental Laws,
all necessary Environmental Permits have been obtained and are in effect for the
operations and properties of the Guarantor and its Subsidiaries and the
Guarantor and its Subsidiaries are in compliance with all such Environmental
Permits, except, as to all of the above, where the failure to do so would not be
reasonably likely to have a Material Adverse Effect (in the case of clause (a)
of the definition thereof, the term "Person" shall mean the Guarantor); and no
circumstances exist that are reasonably likely to (i) form the basis of an
Environmental Action against the Guarantor or any of its Subsidiaries or any of
their respective properties or (ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law that would, in the case of either (i) or (ii) above, be
reasonably likely to have a Material Adverse Effect (in the case of clause (a)
of the definition thereof, the term "Person" shall be the Guarantor).
(h) The Guarantor and each of its Subsidiaries has filed,
has caused to be filed or has been included in all tax returns (Federal, state,
local and foreign) required to be filed and has paid all taxes shown thereon to
be due, together with applicable interest and penalties.
(i) Neither the Guarantor nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(j) The Guarantor is, individually and together with its
Subsidiaries, Solvent.
(k) Set forth on Schedule I hereto is a complete and
accurate list of all Debt of the Guarantor, showing as of the date hereof the
principal amount outstanding thereunder and there is no other agreement,
contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting the Guarantor that imposes any material
Obligation or material restriction on the Guarantor.
(l) Set forth on Schedule II is a complete and accurate list
of all Investments held by the Guarantor, showing as of the date hereof the
amount, obligor or issuer and maturity, if any, thereof.
Section 6. Affirmative Covenants. The Guarantor covenants and
agrees that, so long as any part of the Advances shall remain unpaid or any
Lender shall have any Commitment, the Guarantor will:
(a) Compliance with Laws, Etc. Comply, and cause each of
its Subsidiaries to comply, in all material respects with all applicable laws,
rules, regulations and orders (such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property except to the extent contested in
good faith), the failure to comply with which would, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect (with respect
to clause (a) of the definition thereof, the term Person shall refer to the
Guarantor).
(b) Compliance with Environmental Laws. Comply and cause
each of its Subsidiaries and all lessees and all other Persons occupying its
properties to comply, in all material respects, with all Environmental Laws and
Environmental Permits applicable to its operations and properties; obtain and
renew all Environmental Permits necessary for its operations and properties; and
conduct, and cause each of its Subsidiaries to conduct, any investigation,
study, sampling and testing, and undertake any cleanup, removal, remedial or
other action necessary to remove and clean up all Hazardous Materials from any
of its properties, in accordance with the requirements of all Environmental
Laws; provided, however, that neither the Guarantor nor any of its Subsidiaries
shall be required to undertake any such cleanup, removal, remedial or other
action to the extent that its obligation to do so is being contested in good
faith and by proper proceedings and appropriate reserves are being maintained
with respect to such circumstances.
(c) Maintenance of Insurance. Maintain, and cause each of
its Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Guarantor or such Subsidiary operates.
(d) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries (other than any Subsidiaries of
Marvel) to preserve and maintain, its corporate existence, rights (charter and
statutory) and franchises; provided, however, that neither the Guarantor nor any
of its Subsidiaries shall be required to preserve any of its rights or franchise
if the Board of Directors of the Guarantor or such Subsidiary (or, in the case
of Marvel, the executive committee of the Board of Directors of Marvel) shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Guarantor or such Subsidiary, as the case may be, and that
the loss thereof is not disadvantageous in any material respect to the
Guarantor, such Subsidiary or the Lenders.
(e) Visitation Rights. At any reasonable time and from time
to time, upon reasonable prior notice permit the Agent or any of the Lenders or
any agents or representatives thereof, to the extent reasonably requested to
examine and make copies of and abstracts from the records and books of account
of, and visit the properties of, the Guarantor and any of its Subsidiaries, and
to discuss the affairs, finances and accounts of the Guarantor and any of its
Subsidiaries with any of their officers or directors and with their independent
certified public accountants.
(f) Keeping of Books. Keep, and cause each of its
Subsidiaries to 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 Guarantor and each such Subsidiary to the extent necessary to
permit the preparation of the financial statements required to be delivered
hereunder.
(g) Maintenance of Properties, Etc. Maintain and preserve,
and cause each of its Subsidiaries to maintain and preserve, all of its
properties that are used or useful in the conduct of its business in good
working order and condition, ordinary wear and tear excepted.
(h) Performance of Related Documents. Perform and observe,
and cause each of its Subsidiaries to perform and observe, all of the terms and
provisions of each Related Document to which such Person is a party to be
performed or observed by it, maintain each such Related Document in full force
and effect, enforce such Related Document in accordance with its terms, take all
such action to such end as may be from time to time requested by the Agent and,
upon request of the Agent, make to each other party to each such Related
Document such demands and requests for information and reports or for action as
the Guarantor is entitled to make under such Related Document and cause its
Subsidiaries to do all of the foregoing with respect to any Related Document it
is party to.
(i) Transactions with Affiliates. Conduct, and cause each
of its Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of their Affiliates (other than the Guarantor or any of
its Subsidiaries) on terms that are fair and reasonable and no less favorable to
the Guarantor or such Subsidiary than it would obtain in a comparable arm's-
length transaction with a Person that is not an Affiliate; provided, however,
that for purposes of this Section 6(i), the term "Affiliate" shall not include
any officer or director of the Guarantor or such Subsidiary, as the case may be,
who does not possess directly or indirectly the power to vote 5% or more of the
Voting Stock of the Guarantor or its Subsidiaries; provided further that nothing
in this Section 6(i) shall restrict the performance by the parties to the Marvel
Tax Agreements of their respective obligations thereunder.
(j) Mafco Tax Group. Maintain, and cause each of its
domestic Subsidiaries (other than the subsidiaries of Marvel) to maintain, its
status as a member of the affiliated group (within the meaning of Section
1504(a)(1) of the Internal Revenue Code) of which Mafco is the common parent.
Section 7. Negative Covenants. The Guarantor covenants and
agrees that, so long as any part of the Advances shall remain unpaid or any
Lender shall have any Commitment, the Guarantor will not:
(a) Liens, Etc. Create or suffer to exist, or permit the
Borrower or any of its Non-Operating Subsidiaries to create or suffer to exist,
any Lien, upon or with respect to any of its properties, whether now owned or
hereafter acquired, or sign or file, or permit the Borrower or its Non-Operating
Subsidiaries to sign or file, under the Uniform Commercial Code of any
jurisdiction, a financing statement that names the Guarantor, the Borrower or
any of its Non-Operating Subsidiaries as debtor, or sign, or permit the Borrower
or any of its Non-Operating Subsidiaries to sign, any security agreement
authorizing any secured party thereunder to file such financing statement, or
assign, or permit any of its Non-Operating Subsidiaries to assign, any right to
receive income, other than the following Liens: (i) Liens created by the Loan
Documents; (ii) the Liens described on Schedule V to the Credit Agreement
provided, that in the event any property subject to any such Lien is released
from such Lien, such released property may not thereafter be subjected to any
Lien other than Liens created by the Loan Documents; (iii) mechanics',
materialmen's, carriers' and similar Liens arising in the ordinary course of
business securing obligations that are not overdue for a period of more than 30
days or which are being contested in good faith and by proper proceedings and as
to which appropriate reserves are being maintained; (iv) Liens for taxes,
assessments and governmental charges or levies not yet due and payable or which
are being contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained; and (v) judgment or other similar
Liens, provided that there shall be no period of more than 10 consecutive days
during which a stay of enforcement of the related judgment shall not be in
effect.
(b) Lease Obligations. Create, incur, assume or suffer to
exist, or permit the Borrower or any of its Non-Operating Subsidiaries to
create, incur, assume or suffer to exist, any obligations as lessee (i) for the
rental or hire of real or personal property in connection with any sale and
leaseback transaction, or (ii) for the rental or hire of other real or personal
property of any kind under leases or agreements to lease having an original term
of one year or more.
(c) Mergers, Etc. Merge into or consolidate with any Person
or permit any Person to merge into it, or permit the Borrower or any of its Non-
Operating Subsidiaries to do so.
(d) Sales, Etc. of Assets. Sell, lease, transfer or
otherwise dispose of, or permit the Borrower or any of its Non-Operating
Subsidiaries to sell, lease, transfer or otherwise dispose of, any assets or
grant, or permit the Borrower or any of its Non-Operating Subsidiaries to grant,
any option or other right to purchase, lease or otherwise acquire any assets
except (i) dispositions of obsolete, worn out or surplus property disposed of in
the ordinary course of business, (ii) sales, leases, transfers or other
dispositions of assets by the Borrower or a wholly-owned Non-Operating
Subsidiary of the Guarantor to the Borrower or any other wholly owned Non-
Operating Subsidiary of the Guarantor and (iii) sales, leases, transfers or
other dispositions of assets (other than the capital stock of the Borrower or
any Non-Operating Subsidiary that the Guarantor, the Borrower or any other Non-
Operating Subsidiary owns directly) for cash and for no less than fair market
value.
(e) Dividends, Repurchases, Etc. Declare or pay any
dividends, purchase, redeem, retire, defease or otherwise acquire for value any
of its capital stock or any warrants, rights or options to acquire such capital
stock, now or hereafter outstanding, return any capital to its stockholders as
such, make any distribution of assets, capital stock, warrants, rights, options,
obligations or securities to its stockholders as such, or permit the Borrower or
any of its Non-Operating Subsidiaries to purchase, redeem, retire, defease or
otherwise acquire for value any capital stock of the Guarantor or any warrants,
rights or options to acquire such capital stock, except that the Guarantor may
(i) declare and deliver dividends and distributions payable only in common stock
or warrants, rights or options to acquire common stock and (ii) declare and pay
cash dividends to its stockholders in an amount not to exceed the amount of cash
dividends received by the Guarantor from the Borrower in accordance with the
terms of the Credit Agreement.
(f) Investments. Make or hold, or permit the Borrower or
any of its Non-Operating Subsidiaries to make or hold, any Investment in any
Person, other than (i) Investments by the Guarantor and its Subsidiaries in Cash
Equivalents, (ii) a loan by the Borrower to Mafco of up to $240,000,000 out of
the proceeds of the Advances, (iii) Investments by the Borrower or the Guarantor
in Mafco or any of its Subsidiaries in an amount not to exceed the amount
released by the Agent from the Borrower Collateral Account pursuant to the
provisions of Section 7 of the Borrower Security Agreement or the amount
released by the Agent from the Mafco Collateral Accounts pursuant to Section 7
of the Mafco Security Agreement, (iv) loans or advances by Marvel III to Mafco
in connection with payments to be made pursuant to the terms of the Marvel Tax
Agreements, (v) Investments existing on the date hereof and (vi) contributions
by the Guarantor, the Borrower or any of its Non-Operating Subsidiaries of
common stock of Marvel to any Non-Operating Subsidiary.
(g) Change in Nature of Business. (i) Engage in any
business other than the ownership of the capital stock of the Borrower or (ii)
permit the Borrower or a Non-Operating Subsidiary to make any change in the
nature of the business carried on at the date hereof by the Borrower or such
Non-Operating Subsidiary, as the case may be.
(h) Accounting Changes. Make or permit, or permit any of
its Non-Operating Subsidiaries to make or permit, any change in accounting
policies affecting (i) the presentation of financial statements or (ii)
reporting practices, except in either case as required or permitted by GAAP.
(i) Debt. Create, incur, assume or suffer to exist, or
permit the Borrower or any of its Non-Operating Subsidiaries to create, incur,
assume or suffer to exist, any Debt other than: (i) in the case of the
Guarantor, Debt under loans made to the Guarantor by FN Holdings and FN Parent;
(ii) in the case of the Guarantor and the Borrower, Debt under the Loan
Documents; (iii) in the case of any of its Non-Operating Subsidiaries, (A) in
the case of Marvel III, the Marvel III Debt existing on the date hereof, (B) in
the case of Marvel Parent, the guaranty of the Marvel III Debt and the Marvel
Parent Debt and (C) in the case of Marvel Holdings, the Marvel Holdings Debt;
and (iv) in the case of the Guarantor, the Borrower and any of its Non-Operating
Subsidiaries, endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business.
(j) Charter Amendments. Amend, or permit the Borrower or
any of its Non-Operating Subsidiaries to amend, its certificate of incorporation
or bylaws.
(k) Prepayments, Etc. of Debt. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any
Debt, or amend, modify or change in any manner any term or condition of any Debt
or any agreement relating to such Debt, or permit the Borrower or any of its
Non-Operating Subsidiaries to do any of the foregoing other than (i) in the case
of the Borrower, the prepayment of the Advances in accordance with the terms of
the Credit Agreement, (ii) in the case of Marvel III, Marvel Parent and Marvel
Holdings, to make regularly scheduled or required repayments or redemptions of
the Marvel III Debt, the Marvel Parent Debt and the Marvel Holdings Debt,
respectively and (iii) in the case of the Guarantor, the prepayment of Debt
owing to FN Parent and FN Holdings from the proceeds of dividends received by
the Guarantor from the Borrower or from capital contributions from Four Star in
an amount not to exceed the amount released by the Agent from the Mafco
Collateral Accounts pursuant to the provisions of Section 7 of the Mafco
Security Agreement.
(l) Amendment, Etc. of Related Documents. Cancel or
terminate any Related Document to which it is a party or consent to or accept
any cancellation or termination thereof, amend, modify or change in any manner
any term or condition of or give any consent, waiver or approval thereunder,
waive any default under or any breach of any term or condition of any such
Related Document, agree in any manner to any other amendment, modification or
change of any term or condition of any Related Document, or take any other
action in connection with any such Related Document that would impair the value
of the interest or rights of the Guarantor thereunder or that would impair the
interest or rights of the Agent or any Lender or permit any of its Subsidiaries
to do any of the foregoing.
(m) Negative Pledge. Enter into or suffer to exist, or
permit the Borrower or any of its Non-Operating Subsidiaries to enter into or
suffer to exist, any agreement prohibiting or conditioning the creation or
assumption of any Lien upon any of its property or assets other than (i) in
favor of the Agent and the Lenders or (ii) any prohibition or condition existing
on the date hereof.
(n) Partnerships. Become a general partner in any general
or limited partnership, or permit the Borrower or any of its Non-Operating
Subsidiaries to do so.
(o) Capital Expenditures. Make, or permit the Borrower or
any Non-Operating Subsidiary to make, any Capital Expenditures.
(p) Issuance of Capital Stock. Issue, or permit the
Borrower or any Non-Operating Subsidiary to issue, any capital stock or
warrants, rights or options to acquire such capital stock.
(q) Payment Restrictions. Create or otherwise cause or
suffer to exist or become effective, or permit the Borrower or any of its Non-
Operating Subsidiaries to create or otherwise cause or suffer to exist or become
effective, any consensual encumbrance or restriction of any kind on the ability
of the Guarantor, the Borrower or such Non-Operating Subsidiary to (i) pay
dividends or make any other distributions on any of the Guarantor's, the
Borrowers or such Non-Operating Subsidiary's capital stock, (ii) make loans or
advances to Mafco or any subsidiary of Mafco or (iii) repay or prepay Debt owed
by the Guarantor, the Borrower or a Non-Operating Subsidiary other than any (x)
consensual encumbrances or restrictions existing on the date hereof and (y)
other consensual encumbrances or restrictions that are no more onerous than
those encumbrances and restrictions in existence on the date hereof with respect
to the Guarantor, the Borrower or such Non-Operating Subsidiary, as the case may
be.
Section 8. Amendments, Etc. No amendment or waiver of any
provision of this Guaranty and no consent to any departure by the Guarantor
therefrom shall in any event be effective unless the same shall be in writing
and signed by the Agent and the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or consent
shall, unless in writing and signed by all the Lenders (other than any Lender
that is, at such time, a Defaulting Lender), (a) release or limit the liability
of the Guarantor hereunder, (b) postpone any date fixed for payment hereunder or
(c) change the number of Lenders required to take any action hereunder.
Section 9. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy,
telex or cable communication) and mailed, telegraphed, telecopied, telexed,
cabled or delivered to it, if to the Guarantor, addressed to it at 38 East 63rd
Street, New York, New York 10021 Attention: Secretary, if to the Agent or any
Lender, at its address specified in the Credit Agreement, or as to any party at
such other address as shall be designated by such party in a written notice to
each other party. All such notices and other communications shall, when mailed,
telegraphed, telecopied, telexed or cabled, be effective when deposited in the
mails, delivered to the telegraph company, transmitted by telecopier, confirmed
by telex answerback or delivered to the cable company, respectively.
Section 10. No Waiver; Remedies. No failure on the part of the
Agent or any Lender to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
Section 11. Right of Set-off. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the granting of the consent specified by Section 6.01 of the Credit Agreement
to authorize the Agent to declare the Notes due and payable pursuant to the
provisions of said Section 6.01, each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of the Guarantor against any and all of the
Obligations of the Guarantor now or hereafter existing under this Guaranty,
whether or not such Lender shall have made any demand under this Guaranty and
although such Obligations may be unmatured. Each Lender agrees promptly to
notify the Guarantor after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Lender may have.
Section 12. Indemnification. Without limitation on any other
Obligations of the Guarantor or remedies of the Lenders under this Guaranty, the
Guarantor shall, to the fullest extent permitted by law, indemnify, defend and
save and hold harmless the Lenders from and against, and shall pay on demand,
any and all losses, liabilities, damages, costs, expenses and charges (including
the reasonable and documented fees and disbursements of the legal counsel of the
Lenders and the reasonable and documented charges of the internal legal counsel
of the Lenders) suffered or incurred by the Lenders as a result of (a) any
failure of any Guaranteed Obligations to be the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency or
other similar laws affecting the rights of creditors generally, or (b) any
failure of the Borrower to pay and perform any Guaranteed Obligations in
accordance with the terms of such Guaranteed Obligations.
Section 13. Continuing Guaranty; Assignments under the Credit
Agreement. This Guaranty is a continuing guaranty and shall (a) remain in full
force and effect until the later of the cash payment in full of the Guaranteed
Obligations and all other amounts payable under this Guaranty and the
Termination Date, (b) be binding upon the Guarantor, its successors and assigns
and (c) inure to the benefit of and be enforceable by the Lenders, the Agent and
their successors, transferees and assigns. Without limiting the generality of
the foregoing clause (c), any Lender may assign or otherwise transfer all or any
portion of its rights and obligations under the Credit Agreement (including,
without limitation, all or any portion of its Commitment, the Advances owing to
it and the Note or Notes held by it) to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Lender herein or otherwise, in each case as provided in Section 8.07 of
the Credit Agreement.
Section 14. Governing Law; Submission to Jurisdiction; Waiver
of Jury Trial. (a) This Guaranty shall be governed by, and construed in
accordance with, the laws of the State of New York.
(b) The Guarantor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Guaranty or any of the other Loan
Documents to which it is or is to be a party, or for recognition or enforcement
of any judgment, and the Guarantor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State or, to the extent permitted by law, in
such federal court. The Guarantor agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Guaranty shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Guaranty or any of the
other Loan Documents to which it is or is to be a party in the courts of any
jurisdiction.
(c) The Guarantor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Guaranty or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal
court. The Guarantor hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(d) THE GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS, THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT OR
ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.
Section 15. Execution in Counterparts; Delivery by Telecopier.
This Guaranty may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Guaranty by telecopier shall be effective as delivery of a manually
executed counterpart of this Guaranty.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
MARVEL V HOLDINGS INC.
By ---------------------
Title:
EXECUTION COPY
AMENDED AND RESTATED MAFCO GUARANTY
Dated as of June 24, 1995
From
MAFCO HOLDINGS INC.
as Guarantor
in favor of
THE LENDERS PARTY TO THE AMENDED AND RESTATED CREDIT AGREEMENT
REFERRED TO HEREIN
and
CITIBANK, N.A.
as Agent
T A B L E O F C O N T E N T S
Section Page
1. Guaranty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Guaranty Absolute . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. Payments Free and Clear of Taxes, Etc . . . . . . . . . . . . . . . 4
5. Representations and Warranties. . . . . . . . . . . . . . . . . . . 6
6. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . 12
(a) Compliance with Laws, Etc. . . . . . . . . . . . 12
(b) Compliance with Environmental Laws . . . . . . . 12
(c) Maintenance of Insurance . . . . . . . . . . . . 13
(d) Preservation of Corporate Existence, Etc . . . . 13
(e) Visitation Rights. . . . . . . . . . . . . . . . 13
(f) Keeping of Books . . . . . . . . . . . . . . . . 13
(g) Maintenance of Properties, Etc . . . . . . . . . 13
(h) Performance of Related Documents and FN
Documents . . . . . . . . . . . . . . . . . . . 14
(i) Collateral Account . . . . . . . . . . . . . . . 14
(j) Reporting Requirements . . . . . . . . . . . . . 14
(k) Transactions with Affiliates . . . . . . . . . . 17
(l) Mafco Tax Group. . . . . . . . . . . . . . . . . 18
(m) Notices. . . . . . . . . . . . . . . . . . . . . 18
(n) Certain Payments . . . . . . . . . . . . . . . . 18
(o) Prepayment of Advances and Additional Collateral 18
(p) Termination of Financing Statements. . . . . . . 19
7. Negative Covenants. . . . . . . . . . . . . . . . . . . . . . . . . 20
(a) Liens, Etc . . . . . . . . . . . . . . . . . . . 20
(b) Lease Obligations. . . . . . . . . . . . . . . . 20
(c) Mergers, Etc . . . . . . . . . . . . . . . . . . 20
(d) Sales, Etc. of Assets. . . . . . . . . . . . . . 20
(e) Dividends, Repurchases, Etc. . . . . . . . . . . 21
(f) Investments. . . . . . . . . . . . . . . . . . . 21
(g) Change in Nature of Business . . . . . . . . . . 22
(h) Accounting Changes . . . . . . . . . . . . . . . 22
(i) Debt . . . . . . . . . . . . . . . . . . . . . . 22
(j) Charter Amendments . . . . . . . . . . . . . . . 22
(k) Prepayments, Etc. of Debt. . . . . . . . . . . . 23
(l) Amendment, Etc. of Related Documents . . . . . . 23
(m) Negative Pledge. . . . . . . . . . . . . . . . . 23
(n) Partnerships . . . . . . . . . . . . . . . . . . 23
(o) Capital Expenditures . . . . . . . . . . . . . . 23
(p) Issuance of Capital Stock. . . . . . . . . . . . 23
(q) Payment Restrictions . . . . . . . . . . . . . . 23
8. Amendments, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9. Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10. No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . . . . . 24
11. Right of Set-off. . . . . . . . . . . . . . . . . . . . . . . . . . 24
12. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 25
13. Continuing Guaranty; Assignments Under the Amended and Restated
Credit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 25
14. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial . . 25
15. Execution in Counterparts; Delivery by Telecopier . . . . . . . . . 26
Schedule I - Subsidiaries
Schedule II - Liens
Schedule III - Authorizations, etc.
Schedule IV - Open Years
Schedule V - Debt
Schedule VI - Investments
AMENDED AND RESTATED GUARANTY
AMENDED AND RESTATED GUARANTY dated as of June 29, 1995 made by
Mafco Holdings Inc., a Delaware corporation (the "Guarantor"), in favor of the
Lenders (the "Lenders") party to the Amended and Restated Credit Agreement (as
defined below) and Citibank, N.A. ("Citibank"), as agent (the "Agent") for the
Lenders.
PRELIMINARY STATEMENTS. (1) Marvel IV Holdings Inc., a Delaware
corporation (the "Borrower"), entered into a Credit Agreement dated as of July
20, 1994, as heretofore amended (as so amended, the "Existing Credit
Agreement"), with financial institutions and other institutional lenders party
thereto (the "Existing Lenders") and Citibank, as agent for the Existing
Lenders. In consideration of the premises and in order to induce the Existing
Lenders to make advances under the Existing Credit Agreement, the Guarantor
entered into a Guaranty dated July 27, 1994 in favor of the Existing Lenders and
Citibank, as agent for the Existing Lenders.
(2) The Borrower has entered into an Amended and Restated
Credit Agreement dated as of June 29, 1995 (said Agreement, as it may hereafter
be amended or otherwise modified from time to time, being the "Amended and
Restated Credit Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined) with the Lenders and the Agent
which amends and restates the Existing Credit Agreement in its entirety.
(3) It is a condition precedent to the effectiveness of the
Amended and Restated Credit Agreement that the Guarantor, as indirect owner of
100 percent of the outstanding shares of stock of the Borrower, shall have
executed and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to enter into the Amended and Restated Credit Agreement, the
Guarantor hereby agrees as follows:
Section 1. Guaranty. The Guarantor hereby unconditionally
guarantees (a) the punctual payment when due, whether at stated maturity, by
acceleration or otherwise, of all Obligations of each Loan Party now or
hereafter existing under the Loan Documents, whether for principal, interest
(including, without limitation, interest after the filing of a petition
initiating a proceeding of the type referred to in Section 6.01(e) of the
Amended and Restated Credit Agreement, whether or not such interest constitutes
an allowed claim for purposes of such proceeding), fees, expenses or otherwise
(such Obligations being the "Guaranteed Payment Obligations") and (b) the
performance when due of all other Obligations of each Loan Party now or
hereafter existing under the Loan Documents, whether affirmative or negative
(such Obligations being the "Guaranteed Performance Obligations" and together
with the Guaranteed Payment Obligations, the "Guaranteed Obligations"), and
agrees to pay any and all reasonable expenses (including reasonable counsel fees
and expenses) incurred by the Agent or the Lenders in enforcing any rights under
this Guaranty. Without limiting the generality of the foregoing, the
Guarantor's liability shall extend to all amounts that constitute part of the
Guaranteed Payment Obligations and would be owed by each Loan Party to the Agent
or the Lenders under the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such Loan Party.
Section 2. Guaranty Absolute. The Guarantor guarantees that
the Guaranteed Payment Obligations will be paid, and the Guaranteed Performance
Obligations will be performed, strictly in accordance with the terms of the Loan
Documents, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of the Agent or
the Lenders with respect thereto. The Obligations of the Guarantor under this
Guaranty are independent of the Guaranteed Obligations, and a separate action or
actions may be brought and prosecuted against the Guarantor to enforce this
Guaranty, irrespective of whether any action is brought against any Loan Party
or whether the Loan Parties are joined in any such action or actions. The
liability of the Guarantor under this Guaranty shall be absolute and
unconditional irrespective of, and the Guarantor hereby irrevocably waives any
defenses it may now or hereafter have in any way relating to, any and all of the
following:
(a) any lack of validity or enforceability of any Loan
Document or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Guaranteed Obligations, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in the Guaranteed 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 Guaranteed Obligations;
(d) any manner of application of Collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale or
other disposition of any Collateral for all or any of the Guaranteed 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, any other Loan Party or any of
their respective Subsidiaries; or
(f) any other circumstance (including, without limitation,
any statute of limitations or any existence of or reliance on any representation
by the Agent or any Lender) that might otherwise constitute a defense available
to, or a discharge of, the Borrower, the Guarantor, any other Loan Party or any
other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Agent or any Lender upon the insolvency,
bankruptcy or reorganization of the Borrower or any other Loan Party or
otherwise, all as though such payment had not been made.
Section 3. Waivers. (a) The Guarantor hereby waives, to the
extent permitted by applicable law, promptness, diligence, notice of acceptance
and any other notice with respect to any of the Guaranteed Obligations and this
Guaranty and any requirement that the Agent or any Lender protect, secure,
perfect or insure any Lien or any property subject thereto or exhaust any right
or take any action against the Borrower, any other Loan Party or any other
Person or any Collateral.
(b) The Guarantor hereby irrevocably waives any claim or
other rights that it may now or hereafter acquire against the Borrower or any
other insider guarantor that arise from the existence, payment, performance or
enforcement of the Guarantor's Obligations under this Guaranty or any other Loan
Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Agent or any Lender against the
Borrower or any other insider guarantor or any Collateral, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Borrower or any other insider guarantor, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right. If any amount shall be paid to the
Guarantor in violation of the preceding sentence at any time prior to the later
of the cash payment in full of the Guaranteed Payment Obligations and all other
amounts payable under this Guaranty and the Termination Date, such amount shall
be held in trust for the benefit of the Agent and the Lenders and shall
forthwith be paid to the Agent to be credited and applied to the Guaranteed
Payment Obligations and all other amounts payable under this Guaranty, whether
matured or unmatured, in accordance with the terms of the Loan Documents, or to
be held as Collateral for any Guaranteed Obligations or other amounts payable
under this Guaranty thereafter arising. The Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents and that the waiver set forth in this
subsection is knowingly made in contemplation of such benefits.
(c) The Guarantor hereby waives any right to revoke this
Guaranty, and acknowledges that this Guaranty is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in the future.
Section 4. Payments Free and Clear of Taxes, Etc. (a) Any and
all payments made by the Guarantor hereunder shall be made, in accordance with
Section 2.12 of the Amended and Restated Credit Agreement, free and clear of and
without deduction for any and all present or future Taxes. If the Guarantor
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder to any Lender or the Agent, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
such Lender or the Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Guarantor
shall make such deductions and (iii) the Guarantor shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law; provided, however, that any such Lender shall designate a
different Applicable Lending Office if, in the judgment of such Lender, such
designation would avoid the need for, or reduce the amount of, any Taxes
required to be deducted from or in respect of any sum payable hereunder to such
Lender or the Agent and would not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender.
(b) In addition, the Guarantor agrees to pay any present or
future Other Taxes.
(c) The Guarantor will indemnify each Lender and the Agent
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section) paid by such Lender or the Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto; provided that, in the event such Lender or the Agent, as the case may
be, successfully contests the assessment of such Taxes or Other Taxes or any
liability arising therefrom or with respect thereto, such Lender or the Agent
shall refund, to the extent of any refund thereof made to such Lender or the
Agent, any amounts paid by the Guarantor under this Section in respect of such
Taxes, Other Taxes or liabilities arising therefrom or with respect thereto.
Each Lender and the Agent agree that it will contest such Taxes, Other Taxes or
liabilities if (i) the Guarantor furnishes to it an opinion of reputable tax
counsel acceptable to such Lender or the Agent to the effect that such Taxes or
Other Taxes were wrongfully or illegally imposed and (ii) such Lender or the
Agent determines, in its sole discretion, that it would not be disadvantaged or
prejudiced in any manner whatsoever as a result of such contest. This
indemnification shall be made within 30 days from the date such Lender or the
Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes,
the Guarantor will furnish to the Agent, at its address referred to in the
Amended and Restated Credit Agreement, appropriate evidence of payment thereof.
If no Taxes are payable in respect of any payment hereunder by the Guarantor
through an account or branch outside the United States or on behalf of the
Guarantor by a payor that is not a United States person, the Guarantor will
furnish, or will cause such payor to furnish, to the Agent a certificate from
each appropriate taxing authority or authorities, or an opinion of counsel
acceptable to the Agent, in either case stating that such payment is exempt from
or not subject to Taxes. For purposes of this Section, the terms "United
States" and "United States person" shall have the meanings specified in Section
7701 of the Code.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States and the Agent, if organized under the laws of a
jurisdiction outside the United States, shall, if requested in writing by the
Guarantor or the Agent (but only so long as such Lender or the Agent remains
lawfully able to do so and only so long as Guarantor is making payments under
this Guaranty), provide the Guarantor and (in the case of any such Lender other
than the Agent) the Agent with two duly completed copies of Internal Revenue
Service form 1001 or 4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Lender or the Agent is
entitled to benefits under an income tax treaty to which the United States is a
party that reduces the rate of withholding tax on payments under this Agreement
or the Notes or certifying that the income receivable pursuant to this Agreement
or the Notes is effectively connected with the conduct of a trade or business in
the United States.
(f) For any period with respect to which the Agent or a
Lender has failed to provide the Guarantor with the appropriate forms described
in subsection (e) above (other than if such failure is due to a change in law
occurring after the date on which such person was originally required to provide
such forms, or if such forms are otherwise not required under subsection (e)
above), the Agent or such Lender shall not be entitled to increased payments or
indemnification under subsection (a) or (c) above with respect to Taxes imposed
by the United States; provided, however, that should the Agent or a Lender
become subject to Taxes because of its failure to deliver a form required
hereunder, the Guarantor shall take such steps as the Agent or such Lender shall
reasonably request to assist the Lender to recover such Taxes if, in the
judgment of the Guarantor such steps would avoid the need for, or reduce the
amount of, any Taxes required to be deducted from or in respect of any sum
payable hereunder to the Agent or such Lender and would not, in the judgment of
the Guarantor, be disadvantageous to the Guarantor.
(g) Without prejudice to the survival of any other agreement
of the Guarantor hereunder, the agreements and obligations of the Guarantor
contained in this Section 4 shall survive the payment in full of the Guaranteed
Obligations and all other amounts payable under this Guaranty.
(h) If a Lender shall change its Applicable Lending Office
other than (i) at the request of the Guarantor or (ii) at a time when such
change would not result in this Section 4 requiring the Guarantor to make a
greater payment than if such change had not been made, such Lender shall not be
entitled to receive any greater payment under this Section 4 than such Lender
would have been entitled to receive had it not changed its Applicable Lending
Office.
Section 5. Representations and Warranties. The Guarantor
hereby represents and warrants as follows:
(a) Each of the Relevant Parties (as defined below) (i) is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, (ii) is duly qualified and in good
standing as a foreign corporation in each other jurisdiction in which it owns or
leases property or in which the conduct of its business requires it to so
qualify or be licensed except where the failure to so qualify or be licensed
would not have a Material Adverse Effect (with respect to clause (a) of the
definition thereof, the term "Person" shall refer to such Relevant Party) and
(iii) has all requisite corporate power and authority to own or lease and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted. The Bank is duly and validly organized and is an
existing federal savings bank in good standing under the laws of the United
States of America with full power and authority to own, lease and operate its
properties and conduct its business as now conducted and as proposed to be
conducted. For purposes of this Guaranty, the term "Relevant Party" shall mean
the Guarantor, M&F, Andrews, Four Star, New Coleman, FN Holdings and FN Parent
(FN Holdings and FN Parent shall collectively be referred to as the "Designated
Relevant Parties").
(b) Set forth on Schedule I hereto is a complete and
accurate list of each Designated New World Subsidiary, the Bank, the Borrower
Parent, C&F Guarantor (collectively, the "Relevant Subsidiaries"), and each
Relevant Party, showing as of the date hereof (as to each such Relevant Party
and Relevant Subsidiary) the jurisdiction of its incorporation or organization,
the number of shares of each class of capital stock authorized, and the number
outstanding, on the date hereof and the percentage of the outstanding shares of
each such class owned (directly or indirectly) in the case of the Guarantor, as
set forth on Schedule I, and in the case of the other Relevant Parties and the
Relevant Subsidiaries, by the Guarantor, and the number of shares covered by all
outstanding options, warrants, rights of conversion or purchase and similar
rights at the date hereof. All of the outstanding capital stock of all of such
Relevant Parties and such Relevant Subsidiaries has been validly issued, is
fully paid and non-assessable and is owned, in the case of the Guarantor, as set
forth on Schedule I, and in the case of the other Relevant Parties and the
Relevant Subsidiaries, by the Guarantor or one or more of its Subsidiaries
(except as set forth in Schedule I) free and clear of all Liens, except those
created by the Collateral Documents and those set forth on Schedule II hereto.
Each such Relevant Subsidiary (other than the Bank) (i) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified and in good standing
as a foreign corporation in each other jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed would not have a
Material Adverse Effect (with respect to clause (a) of the definition thereof,
the term "Person" shall refer to the Guarantor) and (iii) has all requisite
corporate power and authority to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be conducted.
(c) The execution, delivery and performance by each Relevant
Party of this Guaranty, each other Loan Document and each Related Document to
which it is or is to be a party, the execution, delivery and performance by each
Relevant Party and the Bank of each FN Document to which it is or is to be a
party and the consummation by each Relevant Party and the Bank of the
transactions contemplated hereby and thereby, are within such Person's corporate
powers, have been duly authorized by all necessary corporate action, and do not
(i) contravene such Person's charter or by-laws, (ii) violate any law
(including, without limitation, the Exchange Act), rule, regulation (including,
without limitation, Regulation X of the Board of Governors of the Federal
Reserve System), order, writ, judgment, injunction, decree, determination or
award, (iii) conflict with or result in the breach of, or constitute a default
under, any loan agreement, contract, indenture, mortgage, deed of trust, lease
or other instrument binding on or affecting such Person, any of its Subsidiaries
or any of its or their properties, the effect of which conflict, breach or
default is reasonably likely to have a Material Adverse Effect (with respect to
clause (a) of the definition thereof, the term "Person" shall refer to such
Relevant Party or the Bank, as the case may be) or (iv) except for the liens
created by the Collateral Documents and the voting trust agreements referred to
in Sections 3.01(g)(xvi)(B), 3.01(g)(xvi)(C), 3.02(i)(xv)(B), 3.02(i)(xv)(C) and
3.02(i)(xv)(D) of the Existing Credit Agreement, result in or require the
creation or imposition of any Lien upon or with respect to any of the properties
of such Relevant Party or the Bank, as the case may be. Neither any Relevant
Party nor the Bank is in violation of any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award or in breach of any
such contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument, the violation or breach of which would be reasonably likely to
have a Material Adverse Effect (with respect to clause (a) of the definition
thereof, the term "Person" shall refer to such Relevant Party or the Bank, as
the case may be).
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for (i) the due execution, delivery and performance by any Relevant
Party of this Guaranty, each other Loan Document and each Related Document to
which it is or is to be a party, the due execution, delivery and performance by
any Relevant Party or the Bank of each FN Document to which it is or is to be a
party or for the consummation by such Relevant Party or the Bank of the
transactions contemplated hereby and thereby, (ii) the grant by any Relevant
Party of the Liens granted by it pursuant to the Collateral Documents, (iii) the
perfection or maintenance of the Liens created by the Collateral Documents
(including the first priority nature thereof) or (iv) the exercise by the Agent
or any Lender of its rights under the Loan Documents or the remedies in respect
of the Collateral pursuant to the Collateral Documents, except for the
authorizations, approvals, actions, notices and filings listed on Schedule III
hereto pertaining to each Relevant Party or the Bank, as the case may be, all of
which (other than as described in such Schedule) have been duly obtained, taken,
given or made and are in full force and effect and except as may be required in
connection with the disposition of any portion of the Collateral by laws
affecting the offering and sale of securities generally; provided, however, that
no representation or warranty is made as to any consent of, authorization,
approval or other action by, or notice to or filing with, any banking agency or
regulatory body applicable to the Agent. All applicable waiting periods in
connection with the transactions contemplated hereby will have expired without
any action having been taken by any competent authority restraining, preventing
or imposing materially adverse conditions upon the rights of the Relevant
Parties freely to transfer or otherwise dispose of, or to create any Lien on,
any properties now owned or hereafter acquired by any of them.
(e) (i) This Guaranty has been, and each other Loan
Document and each Related Document to which any Relevant Party is a party when
delivered under the Existing Credit Agreement or the Amended and Restated Credit
Agreement has been or will have been, as the case may be, duly executed and
delivered by each Relevant Party thereto. This Guaranty is, and each other Loan
Document and each Related Document to which any Relevant Party is a party when
delivered under the Existing Credit Agreement or the Amended and Restated Credit
Agreement is or will be, as the case may be, the legal, valid and binding
obligations of such Relevant Party, enforceable against such Relevant Party in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforceability of
creditor's rights generally.
(ii) Each FN Document and each Related Document to which each
FN Party is a party will be the legal, valid and binding obligation of such FN
Party, enforceable against such FN Party in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforceability of creditor's rights generally.
(f) The Consolidated balance sheets of the Bank and its
Subsidiaries as at December 31, 1994, and the related Consolidated and
consolidating statements of income and cash flows of the Bank and its
Subsidiaries for the fiscal year then ended, accompanied in the case of the
aforementioned Consolidated balance sheets and related Consolidated statements
of income and cash flows by an opinion of KPMG Peat Marwick, independent public
accountants, and the Consolidated balance sheets of the Bank and its
Subsidiaries as at March 31, 1995, and the related Consolidated statements of
income and cash flows of the Bank and its Subsidiaries for the three months then
ended, duly certified by the chief financial officer of the Bank, copies of
which have been furnished to each Lender, fairly present, subject, in the case
of said balance sheets as at March 31, 1995, and said statements of income and
cash flows for the three months then ended, to year-end audit adjustments, the
Consolidated financial condition of the Bank and its Subsidiaries as at such
dates and the Consolidated results of the operations of the Bank and its
Subsidiaries for the periods ended on such dates, all in accordance with
generally accepted accounting principles applied on a consistent basis, and
since December 31, 1994, there has been no Material Adverse Change relating to
the Bank.
(g) There is no pending or threatened action, proceeding,
governmental investigation or arbitration affecting any Relevant Party or the
Bank before any court, governmental agency or arbitrator, which is reasonably
likely to have a Material Adverse Effect (with respect to clause (a) of the
definition thereof, the term "Person" shall refer to such Relevant Party or the
Bank, as the case may be) or that purports to affect the legality, validity or
enforceability of this Guaranty, any other Loan Document, any Related Document
or any Transaction Document or the consummation of the Transaction and the other
transactions contemplated hereby or thereby.
(h) The Guarantor and its ERISA Affiliates are in compliance
in all material respects with the applicable provisions of ERISA and the Code
with respect to each Plan thereof. No ERISA Event has occurred or is reasonably
expected to occur with respect to any Plan of the Guarantor or any of its ERISA
Affiliates. The amount of all Unfunded Pension Liabilities under all Plans of
the Guarantor and its ERISA Affiliates does not exceed $60,000,000. Neither the
Guarantor nor any of its ERISA Affiliates has made contributions or incurred any
Withdrawal Liability to any Multiemployer Plan within the past five years, and
it is not reasonably expected that such contributions shall be made or required
or that such liability shall be incurred in any such case in amounts or under
circumstances that would be reasonably likely to result in a material liability
to such Relevant Party or any of its ERISA Affiliates. Schedule B (Actuarial
Information) to the 1992 annual report (Form 5500 Series) for each Plan of each
Relevant Party and each of its ERISA Affiliates, copies of which have been filed
with the Internal Revenue Service and furnished to the Lenders, is complete and
accurate in all material respects and fairly presents the funding status of such
Plan, and since the date of such Schedule B there has been no material adverse
change in such funding status. The obligations of each Relevant Party and its
Subsidiaries for post-retirement benefits to be provided under Plans which are
welfare benefit plans (as defined in Section 3(l) of ERISA) are not reasonably
likely to have a Material Adverse Effect (in the case of the clause (a) of the
definition thereof, the term "Person" shall refer to such Relevant Party).
(i) The operations and properties of the Guarantor, each
Relevant Party and the Bank are in substantial compliance with all Environmental
Laws, all necessary Environmental Permits have been obtained and are in effect
for the operations and properties of each such Person and each such Person is in
compliance with all such Environmental Permits, except, as to all of the above,
where the failure to do so would not be reasonably likely to have a Material
Adverse Effect (in the case of clause (a) of the definition thereof, the term
"Person" shall mean such Person); and no circumstances exist that are reasonably
likely to (i) form the basis of an Environmental Action against such Person or
any of its properties or (ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law that would, in the case of either (i) or (ii) above, be
reasonably likely to have a Material Adverse Effect (in the case of clause (a)
of the definition thereof, the term "Person" shall mean such Person).
(j) Each A Company, each Designated Operating Company, the
Bank and each of the Subsidiaries of the foregoing (i) except with respect to
MacAndrews & Forbes Group, Incorporated and its Subsidiaries, has filed all tax
returns (Federal, state, local or foreign) required to be filed, (ii) except
with respect to MacAndrews & Forbes Group, Incorporated and its Subsidiaries,
has caused to be filed all tax returns (Federal, state, local or foreign)
required to be filed or (iii) has been included in all tax returns (Federal,
state, local or foreign) required to be filed by each A Company, each Designated
Operating Company, the Bank and each of the Subsidiaries of the foregoing (other
than state, local and foreign tax returns required to be filed by MacAndrews &
Forbes Group, Incorporated and its Subsidiaries) in which it is required to be
included and has paid all taxes shown to be due on all of the returns referred
to in this Section 5(j), together with applicable interest and penalties.
(k) Set forth on Schedule IV hereto is a complete and
accurate list, as of the date hereof, of each taxable year of the Guarantor for
which Federal income tax returns have been filed and for which the expiration of
the applicable statute of limitations for assessment or collection has not
occurred by reason of extension or otherwise (an "Open Year").
(l) The aggregate unpaid amount, as of the date hereof, of
adjustments to the Federal income tax liability of the Guarantor and its
Subsidiaries proposed by the Internal Revenue Service with respect to Open Years
does not exceed $0. No issues have been raised by the Internal Revenue Service
in respect of Open Years that, in the aggregate, would be reasonably likely to
have a Material Adverse Effect (with respect to clause (a) of the definition
thereof, the term "Person" shall refer to the Guarantor).
(m) The aggregate unpaid amount, as of the date hereof, of
adjustments to the state, local and foreign tax liability of each A Company,
each Designated Operating Company and the Bank and each of the Subsidiaries of
the foregoing required to be or actually included with such A Company or
Designated Operating Company for any taxable year in any consolidated, combined
or unitary state, local and foreign tax return proposed by all state, local and
foreign taxing authorities (other than amounts arising from adjustments to
Federal income tax returns) does not exceed $12,000,000. No issues have been
raised by such taxing authorities that, in the aggregate, would be reasonably
likely to have a Material Adverse Effect (with respect to clause (a) of the
definition thereof, the term "Person" shall refer to the Guarantor).
(n) As of the date hereof, based upon currently available
information pertaining to the consolidated federal income tax return for the
year ended December 31, 1994 to be filed by the affiliated group of corporations
with respect to which Mafco files a consolidated federal income tax return (the
"Group"), as of December 31, 1994 the consolidated net operating loss (including
carryforwards) of the Group for federal income tax purposes, free of the
limitations under Sections 382 and 383 of the Code and the separate return
limitation year rules and the consolidated return change of ownership rules
under section 1502 of the Code and the regulations thereunder, is not less than
$2,200,000,000 for regular tax purposes and is not less than $1,000,000,000 for
alternative minimum tax purposes.
(o) Neither the Guarantor nor any Relevant Party nor the
Bank is an "investment company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are defined
in the Investment Company Act of 1940, as amended. Neither the making of any
Advances, nor the application of the proceeds or repayment thereof by the
Borrower, nor the consummation of the other transactions contemplated hereby,
will violate any provision of such Act or any rule, regulation or order of the
Securities and Exchange Commission thereunder.
(p) Each Relevant Party is, individually and together with
its Subsidiaries, Solvent, and the Bank is, individually and together with its
Subsidiaries, Solvent.
(q) Set forth on Schedule V hereto is a complete and
accurate list of all Debt (other than intercompany Debt and Debt under the Loan
Documents) of each Relevant Party that imposes any material obligation or
material restriction on such Relevant Party, showing as of the date hereof the
principal amount outstanding thereunder, and there is no other agreement,
contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument evidencing Debt that imposes any material Obligation or material
restriction on any Relevant Party.
(r) Set forth on Schedule VI hereto is a complete and
accurate list of all Investments (other than intercompany Debt) held by each
Relevant Party, showing as of the date hereof the amount, obligor or issuer and
maturity, if any, thereof.
(s) There are no conditions precedent to the effectiveness
of this Guaranty that have not been satisfied or waived.
(t) The Guarantor has, independently and without reliance
upon the Agent or any Lender and based on such documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter into
this Guaranty.
(u) Marvel is entitled to be included in the consolidated
return of Mafco pursuant to Section 1504(a)(3) of the Code and has been so
included since March 26, 1993.
Section 6. Affirmative Covenants. The Guarantor covenants and
agrees that, so long as any part of the Advances shall remain unpaid or any
Lender shall have any Commitment, the Guarantor will:
(a) Compliance with Laws, Etc. Comply, and cause each
other Relevant Party to comply, in all material respects with all applicable
laws, rules, regulations and orders (such compliance to include, without
limitation, paying before the same become delinquent all taxes, assessments and
governmental charges imposed upon it or upon its property except to the extent
contested in good faith), the failure to comply with which would, individually
or in the aggregate, be reasonably likely to have a Material Adverse Effect
(with respect to clause (a) of the definition thereof, the term "Person" shall
refer to the Guarantor).
(b) Compliance with Environmental Laws. Comply and cause
each other Relevant Party and all lessees and all other Persons occupying its
properties to comply, in all material respects, with all Environmental Laws and
Environmental Permits applicable to its operations and properties; obtain and
renew all Environmental Permits necessary for its operations and properties; and
conduct, and cause each other Relevant Party to conduct, any investigation,
study, sampling and testing, and undertake any cleanup, removal, remedial or
other action necessary to remove and clean up all Hazardous Materials from any
of its properties, in accordance with the requirements of all Environmental
Laws; provided, however, that neither the Guarantor nor any Relevant Party shall
be required to undertake any such cleanup, removal, remedial or other action to
the extent that its obligation to do so is being contested in good faith and by
proper proceedings and appropriate reserves are being maintained with respect to
such circumstances.
(c) Maintenance of Insurance. Maintain, and cause each
other Relevant Party to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks as
is usually carried by companies engaged in similar businesses and owning similar
properties in the same general areas in which the Guarantor or such other
Relevant Party operates.
(d) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each Relevant Party to preserve and maintain, its corporate
existence, rights (charter and statutory) and franchises; provided, however,
that neither the Guarantor nor any other Relevant Party shall be required to
preserve any right or franchise if the Board of Directors of the Guarantor or
such other Relevant Party shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Guarantor or such other
Relevant Party, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to the Guarantor, such other Relevant
Party or the Lenders.
(e) Visitation Rights. At any reasonable time and from time
to time, upon reasonable prior notice, permit the Agent or any of the Lenders or
any agents or representatives thereof, to the extent reasonably requested to
examine and make copies of and abstracts from the records and books of account
of, and visit the properties of, the Guarantor and any other Relevant Party, and
to discuss the affairs, finances and accounts of the Guarantor and any of the
Relevant Parties with any of their officers or directors and with their
independent certified public accountants.
(f) Keeping of Books. Keep, and cause each other Relevant
Party to 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 Guarantor and each such other Relevant Party to the extent necessary to
permit the preparation of the financial statements required to be delivered
hereunder.
(g) Maintenance of Properties, Etc. Maintain and preserve,
and cause each other Relevant Party to maintain and preserve, all of its
properties that are used or useful in the conduct of its business in good
working order and condition, ordinary wear and tear excepted.
(h) Performance of Related Documents and FN Documents.
Perform and observe, and cause each other Relevant Party to perform and observe,
all of the terms and provisions of each Related Document to which it is a party
and each FN Document to which it is a party to be performed or observed by it,
maintain, and cause each other Relevant Party to maintain, each such Related
Document and each such FN Document in full force and effect, enforce, and cause
each other Relevant Party to enforce, each such Related Document and each such
FN Document in accordance with its terms, take, and cause each other Relevant
Party to take, all such action to such end as may be from time to time requested
by the Agent and, upon request of the Agent, make, and cause each other Relevant
Party to make, to each other party to each such Related Document and each such
FN Document such demands and requests for information and reports or for action
as such Relevant Party is entitled to make under such Related Document or such
FN Document, as the case may be.
(i) Collateral Accounts. Maintain the Mafco Collateral
Accounts with Citibank pursuant to the terms of the Mafco Security Agreement.
(j) Reporting Requirements. Furnish to the Lenders through
the Agent:
(i) as soon as available and in any event within 50 days
after the end of each of the first three quarters of each fiscal year of the
Bank, Consolidated balance sheets of the Bank and its Subsidiaries as of the end
of such quarter and Consolidated statements of earnings, cash flows and
stockholders' equity of the Bank and its Subsidiaries for the period commencing
at the end of the previous fiscal year and ending with the end of such quarter,
certified (subject to normal year-end audit adjustment and the absence of
footnotes) on behalf of the Bank by the chief financial officer of the Bank;
(ii) as soon as available and in any event within 105 days
after the end of each fiscal year of the Bank, a copy of the annual audit report
for such year for the Bank and its Subsidiaries, containing financial statements
for such year certified in a manner reasonably acceptable to the Required
Lenders by KPMG Peat Marwick or other independent public accountants reasonably
acceptable to the Required Lenders;
(iii) as soon as available and in any event no later than
February 1 of each fiscal year of the Bank, forecasts prepared by management of
the Bank for such fiscal year, in form satisfactory to the Agent, of balance
sheets, income statements and cash flow statements of the Bank on a quarterly
basis for the term of the Facility;
(iv) promptly after the sending or filing thereof, copies of
any filings and statements that any Relevant Party files with the Securities and
Exchange Commission or any national securities exchange;
(v) promptly and in any event within (A) thirty days after
the Guarantor knows or has reason to know that any ERISA Event with respect to
the Guarantor or any of its ERISA Affiliates has occurred, a statement
describing such ERISA Event and the action, if any, that the Guarantor or such
ERISA Affiliate proposes to take with respect thereto, (B) thirty days either
after receipt thereof by the Guarantor or after the Guarantor knows or has
reason to know of the receipt thereof by any of its ERISA Affiliates from the
sponsor of a Multiemployer Plan of the Guarantor or any of its ERISA Affiliates,
a copy of each notice received by any such Person concerning the imposition of
Withdrawal Liability upon such Person, the reorganization or termination of such
Multiemployer Plan, or the amount of the liability incurred, or that may be
incurred, by the Guarantor or any of its ERISA Affiliates in connection with any
such event and (C) ten Business Days after either receipt thereof by the
Guarantor or after the Guarantor knows or has reason to know of the receipt
thereof by any of its ERISA Affiliates, copies of each notice from the PBGC
stating its intention to terminate any Plan of the Guarantor or any of its ERISA
Affiliates or to have a trustee appointed to administer any such Plan; provided,
that in the case of any event that occurs in clause (A), (B) or (C) hereof, such
event has a Material Adverse Effect (in the case of clause (a) of the definition
thereof, "Person" shall refer to the Guarantor);
(vi) in the event of any change in GAAP from the date of the
financial statements referred to in Section 5(f) and upon delivery of any
financial statement required to be furnished under clauses (i) or (ii) of this
Section 6(j), a statement of reconciliation conforming any information contained
in such financial statement with GAAP as in effect on the date of the financial
statements referred to in Section 5(f);
(vii) promptly upon any officer of any Relevant Party or the
Bank obtaining knowledge thereof, written notice of (A) the institution or non-
frivolous threat of any action, suit, proceeding, governmental investigation or
arbitration against or affecting such Relevant Party or the Bank or any property
of such Relevant Party or the Bank (any such action, suit, proceeding,
investigation or arbitration being a "Proceeding") or (B) any material
development in any proceeding that is already pending, where such Proceeding or
development has not previously been disclosed by any Relevant Party or the Bank
to the Lenders and would be reasonably likely to have a Material Adverse Effect
(in the case of clause (a) of the definition of Material Adverse Effect, the
term "Person" shall refer to such Relevant Party or the Bank, as the case may
be); together in each case with such other information as any Lender through the
Agent may reasonably request to enable the Lenders and their counsel to evaluate
such matters;
(viii) promptly after the furnishing thereof, copies of any
statement or report furnished to any other holder of the securities of any
Relevant Party pursuant to the terms of any indenture, loan or credit or similar
agreement and not otherwise required to be furnished to the Lenders pursuant to
any other clause of this Section 6(j);
(ix) promptly upon receipt thereof, copies of all notices,
requests and other documents received by the Guarantor or any Relevant Party
under or pursuant to any Related Document and, from time to time upon request by
the Agent, such information and reports regarding the Related Documents as the
Agent may reasonably request;
(x) within 10 days after receipt, copies of all Revenue
Agent Reports (Internal Revenue Service Form 886), or other written proposals of
the Internal Revenue Service, that propose, determine or otherwise set forth
positive adjustments to the Federal income tax liability of the affiliated group
(within the meaning of Section 1504(a)(1) of the Internal Revenue Code) of which
the Guarantor is a member aggregating $10,00,000 or more;
(xi) promptly, and in any event within five Business Days
after the due date (with extensions) for filing the final Federal income tax
return in respect of each taxable year, a certificate of the Guarantor (a "Tax
Certificate"), signed on behalf of the Guarantor by the President or the chief
financial officer of the Guarantor, stating that the Guarantor, as the common
parent of the affiliated group (within the meaning of Section 1504(a)(1) of the
Internal Revenue Code) of which the Guarantor is a member, has paid to the
Internal Revenue Service the full amount shown as due on such final Federal
income tax return;
(xii) promptly after the occurrence thereof, notice of any
condition or occurrence on any property of the Guarantor or any other Relevant
Party or the Bank that results in a material noncompliance by the Guarantor or
such other Relevant Party or the Bank with any Environmental Law or
Environmental Permit or would be reasonably likely to (i) form the basis of an
Environmental Action against the Guarantor or any other Relevant Party or the
Bank or any such property that would be reasonably likely to have a Material
Adverse Effect (in the case of clause (a) of the definition of Material Adverse
Effect, the term "Person" shall refer to the Guarantor and the Bank) or (ii)
cause any such property to be subject to any restrictions on ownership,
occupancy, use or transferability under any Environmental Law or Environmental
Permit or would be reasonably likely to (i) form the basis of an Environmental
Action against the Guarantor or any Relevant Party or the Bank or such property
that could have a Material Adverse Effect (in the case of clause (a) of the
definition of Material Adverse Effect, the term "Person" shall refer to the
Guarantor and the Bank) or (ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law;
(xiii) promptly after the execution thereof, copies of any
regulatory agreement entered into by the Bank;
(xiv) promptly upon any officer of the Bank or the Guarantor
obtaining knowledge thereof, written notice of any regulatory action or any
proposed regulatory actions that relates specifically to the Bank or any of its
Subsidiaries and promptly upon receipt thereof, copies of any notices made by
any regulatory agency having supervisory authority over the Bank that relates
specifically to the Bank or any of its Subsidiaries;
(xv) promptly, and in any event within 30 days after the end
of each fiscal quarter of the Guarantor, a certificate of the chief financial
officer of the Guarantor stating that as of the end of such fiscal quarter the
Guarantor is not required to take any of the actions described in Section 6(o)
hereof, together with a schedule in form and substance reasonably satisfactory
to the Agent setting forth in reasonable detail the computations and other
information upon which such certification is based (including, without
limitation, computations of the Defeased Debt Amount and Net Equity Value with
respect to each Designated Person);
(xvi) promptly after the making of any payment to Mafco by any
Person under any FN Tax Agreement, a certificate signed on behalf of the
Guarantor by the president or chief financial officer of the Guarantor, stating
the amount of such payment, together with a schedule in form and substance
reasonably satisfactory to the Agent setting forth in reasonable detail the
computations and other information on which the amount of such payment was
calculated; and
(xvii) such other information respecting the condition
(financial or otherwise), operations, assets or business of the Guarantor or any
other Relevant Party or the Bank as any Lender through the Agent may from time
to time reasonably request.
(k) Transactions with Affiliates. Conduct, and cause each
of the Relevant Parties to conduct, all transactions otherwise permitted under
the Loan Documents with any of their Affiliates (other than between any Relevant
Party and any Subsidiary of such Relevant Party) on terms that are fair and
reasonable and no less favorable to the Guarantor or such other Relevant Party
than it would obtain in a comparable arm's-length transaction with a Person that
is not an Affiliate; provided, however, that for purposes of this Section 6(i),
the term "Affiliate" shall not include any officer or director of the Guarantor
or such Subsidiary, as the case may be, who does not possess directly or
indirectly the power to vote 5% or more of the Voting Stock of the Guarantor or
its Subsidiaries; provided further that nothing in this Section 6(k) shall
restrict the performance by the parties to the Related Documents of their
respective obligations thereunder.
(l) Mafco Tax Group. Cause each A Company and each of the
domestic Subsidiaries of Borrower Parent (other than the Subsidiaries of
Marvel), Coleman Guarantor (other than the Subsidiaries of Coleman) and First
Gibraltar (Parent) Holdings Inc. (other than the Subsidiaries of the Bank) to
maintain, its status as a member of the affiliated group (within the meaning of
Section 1504(a)(1) of the Internal Revenue Code) of which the Guarantor is the
common parent.
(m) Notices. Furnish to the Borrower each of the notices
required to be delivered by the Borrower pursuant to Section 5.01(k) of the
Amended and Restated Credit Agreement relating to the Guarantor or any of its
Subsidiaries (other than the Borrower and its Subsidiaries) within the time
periods specified for the delivery of such notices in such Section 5.01(k).
(n) Certain Payments. Cause any advance made by FN Holdings
or FN Parent to Borrower Parent to be subordinated to all Obligations of the
Borrower Parent under the Loan Documents upon the terms and conditions set forth
in Exhibit A hereto.
(o) Prepayment of Advances and Additional Collateral. (i)
At any time that the ratio of (A) Net Residual Value plus the amount, if any, on
deposit in the Second Mafco Collateral Account plus the value (as shall be
determined in a manner agreed upon by the Guarantor and the Supermajority
Lenders at the time of the pledge of such collateral) of the collateral, if any,
previously pledged pursuant to the proviso in this Section 6(o)(i), in each case
at such time to (B) the sum of the aggregate principal amount of all Advances
then outstanding plus the aggregate unused Commitments is less than 3 to 1, the
Guarantor shall, on the Business Day immediately following the date of such
event, either (x) cause the Borrower to prepay the Advances, (y) deposit cash in
the Second Mafco Collateral Account, or (z) take any combination of the actions
specified in clauses (x) and (y), in any such case in an amount such that the
ratio of the sum of Net Residual Value at such time plus the amount, if any, on
deposit in the Second Mafco Collateral Account plus the value (as shall be
determined in a manner agreed upon by the Guarantor and the Supermajority
Lenders at the time of the pledge of such collateral) of the collateral, if any,
previously pledged pursuant to the proviso in this Section 6(o)(i), in each case
at such time, to the sum of the aggregate principal amount of all Advances then
outstanding plus the aggregate unused Commitments shall be 3 to 1 or greater;
provided, however, that notwithstanding the foregoing, if, following the date of
any such deposit, the Guarantor and the Supermajority Lenders shall have agreed
to substitute for the cash collateral on deposit in the Second Mafco Collateral
Account, other real and/or personal property of the Guarantor and its
Subsidiaries to secure the Obligations of the Borrower and the other Loan
Parties under the Loan Documents, the Guarantor shall, or shall cause the
appropriate Subsidiary to, take all action necessary to pledge, assign or grant
a security interest in such other collateral as the Supermajority Lenders may
reasonably request. Upon the pledge, assignment and granting of a security
interest in such other collateral, the Agent shall pay and release, free of the
Lien created under the Mafco Security Agreement to Mafco or at its order and at
the request of Mafco, the amount on deposit in the Second Mafco Collateral
Account.
(ii) At any time that (1) the Net Equity Value of at least two of
Coleman, Marvel, MCG or New World, on an individual basis, is not greater than
or equal to $150,000,000 and (2) the Net Equity Value of at least one of
Coleman, Marvel, MCG and New World (other than the two Persons satisfying the
requirements specified in clause (1) on an individual basis, is not greater than
or equal to $100,000,000, the Guarantor shall on the Business Day immediately
following the date of such event, either (x) deposit cash in the Second Mafco
Collateral Account, (y) pledge, or cause one of its Subsidiaries to pledge, upon
terms and conditions reasonably satisfactory to the Supermajority Lenders,
shares of common stock of a corporation that is publicly traded on a national
stock exchange or on the Nasdaq National Market System or (z) take any
combination of the actions specified in clauses (x) and (y), in any such case in
an aggregate amount such that the sum of the aggregate amount of all deposits
made pursuant to clause (x), plus 50% of the aggregate value (based on the
average of the closing prices of such shares on a national stock exchange or on
the Nasdaq National Market System during the relevant Calculation Period) of the
common stock pledged pursuant to clause (y), plus the aggregate amount of all
previous deposits, if any, and the aggregate value (based on the average of the
closing prices of such shares on a national stock exchange or the Nasdaq
National Market System during the relevant Calculation Period) of all prior
pledges of common stock, if any, made pursuant to clause (x) or (y),
respectively, equals the difference of (A) $400,000,000 and (B) the sum of the
three highest Net Equity Values on such date of Coleman, Marvel, MCG and New
World. Such cash collateral or pledged shares shall secure the obligations of
the Loan Parties under the Loan Documents.
(p) Termination of Financing Statements. Upon the request
of the Agent, and at the expense of the Guarantor, within 10 days after such
request, furnish to the Agent proper termination statements on Form UCC-3
covering such financing statements as the Agent may reasonably request that were
listed in the completed requests for information referred to in Sections
3.01(g)(viii)(3), 3.01(g)(ix), 3.02(j)(viii) of the Existing Credit Agreement
and Sections 3.01(f)(vii) and 3.01(f)(viii) of the Amended and Restated Credit
Agreement.
Section 7. Negative Covenants. The Guarantor covenants and
agrees that, so long as any of the Advances shall remain unpaid or any Lender
shall have any Commitment, the Guarantor will not:
(a) Liens, Etc. Create or suffer to exist, or permit any
Relevant Party to create or suffer to exist, any Lien, upon or with respect to
any of its properties, whether now owned or hereafter acquired, or sign or file,
or permit any Relevant Party to sign or file, under the Uniform Commercial Code
of any jurisdiction, a financing statement that names the Guarantor or any other
Relevant Party as debtor, or sign, or permit any Relevant Party to sign, any
security agreement authorizing any secured party thereunder to file such
financing statement, or assign, or permit any other Relevant Party to assign,
any right to receive income, other than the following Liens: (i) Liens created
by the Loan Documents; (ii) the Liens described on Schedule II hereto, provided,
that in the event any property of subject to any such Lien is released from such
Lien, such released property may not thereafter be subjected to any Lien other
than Liens created by the Loan Documents; (iii) mechanics', materialmen's,
carriers' and similar Liens arising in the ordinary course of business securing
obligations that are not overdue for a period of more than 30 days or which are
being contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained; (iv) Liens for taxes, assessments and
governmental charges or levies not yet due and payable or which are being
contested in good faith and by proper proceedings and as to which appropriate
reserves are being maintained; (v) judgment or other similar Liens, provided
that there shall be no period of more than 10 consecutive days during which a
stay of enforcement of the related judgment shall not be in effect and (vi)
Liens on shares of common stock of Marvel required to be pledged by Four Star
pursuant to the terms of the Letter of Credit and Reimbursement Agreement listed
on Schedule V hereto.
(b) Lease Obligations. Permit the Designated Relevant
Parties to create, incur, assume or suffer to exist, any obligations as lessee
(i) for the rental or hire of real or personal property in connection with any
sale and leaseback transaction, or (ii) for the rental or hire of other real or
personal property of any kind under leases or agreements to lease having an
original term of one year or more.
(c) Mergers, Etc. Merge into or consolidate with any Person
or permit any Person to merge into it, or permit any other Relevant Party to do
so.
(d) Sales, Etc. of Assets. (i) Sell, lease, transfer or
otherwise dispose of, or permit any other Relevant Party (other than a
Designated Relevant Party) to sell, lease, transfer or otherwise dispose of, any
assets or grant any option or other right to purchase, lease or otherwise
acquire any assets except (x) for dispositions of obsolete, worn out or surplus
property disposed of in the ordinary course of business and (y) for sales,
leases, transfers or other dispositions of assets (other than the capital stock
of any of the A Companies that such Relevant Party owns directly) by such
Relevant Party for cash and for no less than fair market value.
(ii) Permit any Designated Relevant Party to sell, lease,
transfer or otherwise dispose of any assets or grant any option or other right
to purchase, lease or otherwise acquire any assets except for dispositions of
obsolete, worn out or surplus property disposed of in the ordinary course of
business.
(e) Dividends, Repurchases, Etc. Declare or pay any
dividends, purchase, redeem, retire, defease or otherwise acquire for value any
of its capital stock or any warrants, rights or options to acquire such capital
stock, now or hereafter outstanding, return any capital to its stockholders as
such, make any distribution of assets, capital stock, warrants, rights, options,
obligations or securities to its stockholders as such except that the Guarantor
may (i) declare and deliver dividends and distributions payable only in common
stock or warrants, rights or options to acquire common stock and (ii) declare
and pay cash dividends to its stockholders unless, at the time of such payment
and after giving effect to such payment, (x) a Default set forth in Section
6.01(a) of the Amended and Restated Credit Agreement shall have occurred and be
continuing, (y) a Default set forth in Section 6(o) hereof shall have occurred
and be continuing or (z) no amount on deposit at such time in the Borrower
Collateral Account or the Mafco Collateral Account (including, without
limitation, (A) equity contributions arising from any dividend, distribution,
loan or advance made by the Bank, (B) amounts paid under or in connection with
any Related Document and (C) other amounts required to be applied to a
prepayment of the Advances pursuant to the terms of the Amended and Restated
Credit Agreement) is being released solely as a result of the application of the
provisions of Section 2.05(b)(vi) of the Amended and Restated Credit Agreement
(it being understood and agreed that Section 2.05(b)(vi) shall be deemed
inapplicable to any amounts released from the Borrower Collateral Account or the
Mafco Collateral Account pursuant to a consent of the Lenders or Required
Lenders, as applicable, delivered in accordance with the Amended and Restated
Credit Agreement).
(f) Investments. (i) Make, or permit any other Relevant
Party (other than a Designated Relevant Party) to make, any Investment in any
holder of capital stock of the Guarantor except that the Guarantor or any
Relevant Party may make such an Investment unless, at the time of such
Investment and after giving effect to such Investment, (x) a Default set forth
in Section 6.01(a) of the Amended and Restated Credit Agreement shall have
occurred and be continuing, (y) a Default set forth in Section 6(o) hereof shall
have occurred and be continuing or (z) no amount on deposit at such time in the
Borrower Collateral Account or the Mafco Collateral Account (including, without
limitation, (A) equity contributions arising from any dividend, distribution,
loan or advance made by the Bank, (B) amounts paid under or in connection with
any Related Document and (C) other amounts required to be applied to a
prepayment of the Advances pursuant to the terms of the Amended and Restated
Credit Agreement) is being released solely as a result of the application of
the provisions of Section 2.05(b)(vi) of the Amended and Restated Credit
Agreement (it being understood and agreed that Section 2.05(b)(vi) shall be
deemed inapplicable to any amounts released from the Borrower Collateral Account
or the Mafco Collateral Account pursuant to a consent of the Lenders or Required
Lenders, as applicable, delivered in accordance with the Amended and Restated
Credit Agreement).
(ii) Permit any Designated Relevant Party to make or hold any
Investment in any Person other than (x) Investments in Cash Equivalents, (y)
Investments existing on the date of the second Borrowing as set forth on
Schedule VI hereto and (z) Investments by FN Holdings in the Bank in an amount
up to $15,000,000 at any time outstanding as permitted by the certificate of
incorporation of FN Holdings.
(g) Change in Nature of Business. Permit any Designated
Relevant Party to engage in any business or activities other than (i) the
ownership of the capital stock of its Subsidiaries owned as of the date hereof
as set forth on Schedule I hereof and (ii) the execution of any Loan Documents,
Related Documents or FN Documents to which it is a party.
(h) Accounting Changes. Make or permit, or permit any other
Relevant Party to make or permit, any change in accounting policies affecting
(i) the presentation of financial statements or (ii) reporting practices, except
in either case as required or permitted by GAAP.
(i) Debt. Create, incur, assume or suffer to exist, or
permit any other Relevant Party to create, incur, assume or suffer to exist, any
Debt other than (i) in the case of the Guarantor, loans pursuant to the terms of
the Related Documents, Debt under this Guaranty and the Debt set forth on
Schedule V hereto, (ii) in the case of the other Relevant Parties, Debt existing
as of the date hereof as set forth on Schedule V hereto and Debt under the Loan
Documents, (iii) in the case of all of the Relevant Parties, (x) intercompany
Debt and (y) endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business and (iv) in the case of
FN Holdings, the issuance of Debt pursuant to the FN Holdings Debt Document.
(j) Charter Amendments. Amend, or permit any other Relevant
Party to amend, its certificate of incorporation or bylaws other than the
amendment dated the date hereof to the certificate of incorporation of FN
Holdings in form and substance reasonably satisfactory to the Required Lenders.
(k) Prepayments, Etc. of Debt. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any
Debt, or amend, modify or change in any manner any term or condition of any Debt
or any agreement relating to such Debt, or permit any other Relevant Party to do
any of the foregoing other than to make regularly scheduled or required
repayments or redemptions of the Debt existing on the date hereof set forth on
Schedule V hereto.
(l) Amendment, Etc. of Related Documents. Cancel or
terminate any Related Document to which it is a party or consent to or accept
any cancellation or termination thereof, amend, modify or change in any manner
any term or condition of or give any consent, waiver or approval thereunder,
waive any default under or any breach of any term or condition of any such
Related Document, agree in any manner to any other amendment, modification or
change of any term or condition of any Related Document, or take any other
action in connection with any such Related Document that would impair the value
of the interest or rights of the Guarantor thereunder or that would impair the
interest or rights of the Agent or any Lender or permit any of its Subsidiaries
to do any of the foregoing.
(m) Negative Pledge. Enter into or suffer to exist, or
permit any other Relevant Party to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption of any Lien upon any of
its property or assets other than (i) in favor of the Agent and the Lenders or
(ii) any prohibition or condition existing on the date hereof.
(n) Partnerships. Permit any other Relevant Party to become
a general partner in any general or limited partnership.
(o) Capital Expenditures. Permit any Designated Relevant
Party to make any Capital Expenditures.
(p) Issuance of Capital Stock. Issue any capital stock if
(i) such issuance would cause a Default under the Loan Documents or (ii) such
issuance would cause any adverse change in the tax position of the Guarantor,
any A Company, any Designated Operating Party or the Bank, (including without
limitation the inability of any such Person to maintain its status as a member
of the affiliated group (within the meaning of Section 1504(a)(1) of the
Internal Revenue Code) of which the Guarantor is the common parent).
(q) Payment Restrictions. Permit any other Relevant Party
to create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of any such
Relevant Party to (i) pay dividends or make any other distributions on any of
such Relevant Party's capital stock, (ii) make loans or advances to the
Guarantor or any Subsidiary of the Guarantor or (iii) repay or prepay any Debt
owed by such Relevant Party other than any (x) consensual encumbrances or
restrictions existing on the date hereof and (y) in the case of any Relevant
Party other consensual encumbrances or restrictions that are no more onerous
than those encumbrances and restrictions in existence on the date hereof with
respect to such Relevant Party.
Section 8. Amendments, Etc. No amendment or waiver of any
provision of this Guaranty and no consent to any departure by the Guarantor
therefrom shall in any event be effective unless the same shall be in writing
and signed by the Agent and the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or consent
shall, unless in writing and signed by all the Lenders (other than any Lender
that is, at such time, a Defaulting Lender), (a) release or limit the liability
of the Guarantor hereunder, (b) postpone any date fixed for payment hereunder or
(c) change the number of Lenders required to take any action hereunder.
Section 9. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy,
telex or cable communication) and mailed, telegraphed, telecopied, telexed,
cabled or delivered to it, if to the Guarantor, addressed to it at 38 East 63rd
Street, New York, New York 10021, Attention: Secretary if to the Agent or any
Lender, at its address specified in the Amended and Restated Credit Agreement,
or as to any party at such other address as shall be designated by such party in
a written notice to each other party. All such notices and other communications
shall, when mailed, telegraphed, telecopied, telexed or cabled, be effective
when deposited in the mails, delivered to the telegraph company, transmitted by
telecopier, confirmed by telex answerback or delivered to the cable company,
respectively.
Section 10. No Waiver; Remedies. No failure on the part of the
Agent or any Lender to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
Section 11. Right of Set-off. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the granting of the consent specified by Section 6.01 of the Amended and
Restated Credit Agreement to authorize the Agent to declare the Notes due and
payable pursuant to the provisions of said Section 6.01, each Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender to or for the credit or the account of the Guarantor
against any and all of the Obligations of the Guarantor now or hereafter
existing under this Guaranty, whether or not such Lender shall have made any
demand under this Guaranty and although such Obligations may be unmatured. Each
Lender agrees promptly to notify the Guarantor after any such set-off and
application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Lender under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that such
Lender may have.
Section 12. Indemnification. Without limitation on any other
Obligations of the Guarantor or remedies of the Lenders under this Guaranty, the
Guarantor shall, to the fullest extent permitted by law, indemnify, defend and
save and hold harmless the Lenders from and against, and shall pay on demand,
any and all losses, liabilities, damages, costs, expenses and charges (including
the reasonable and documented fees and disbursements of the legal counsel of the
Lenders and the reasonable and documented charges of the internal legal counsel
of the Lenders) suffered or incurred by the Lenders as a result of (a) any
failure of any Guaranteed Obligations to be the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency or
other similar laws affecting the rights of creditors generally, or (b) any
failure of the Borrower to pay and perform any Guaranteed Obligations in
accordance with the terms of such Guaranteed Obligations.
Section 13. Continuing Guaranty; Assignments Under the Amended
and Restated Credit Agreement. This Guaranty is a continuing guaranty and shall
(a) remain in full force and effect until the date on which the Payment
Obligations in respect of the Guaranteed Obligations and this Guaranty have been
Fully Satisfied, (b) be binding upon the Guarantor, its successors and assigns
and (c) inure to the benefit of and be enforceable by the Lenders, the Agent and
their successors, transferees and assigns. Without limiting the generality of
the foregoing clause (c), any Lender may assign or otherwise transfer all or any
portion of its rights and obligations under the Amended and Restated Credit
Agreement (including, without limitation, all or any portion of its Commitment,
the Advances owing to it and the Note or Notes held by it to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to such Lender herein or otherwise, in each case as
provided in Section 8.07 of the Amended and Restated Credit Agreement.
Section 14. Governing Law; Submission to Jurisdiction; Waiver
of Jury Trial. (a) This Guaranty shall be governed by, and construed in
accordance with, the laws of the State of New York.
(b) The Guarantor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Guaranty or any of the other Loan
Documents to which it is or is to be a party, or for recognition or enforcement
of any judgment, and the Guarantor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State or, to the extent permitted by law, in
such federal court. The Guarantor agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Guaranty shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Guaranty or any of the
other Loan Documents to which it is or is to be a party in the courts of any
jurisdiction.
(c) The Guarantor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Guaranty or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal
court. The Guarantor hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(d) THE GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS, THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT OR
ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.
Section 15. Execution in Counterparts; Delivery by Telecopier.
This Guaranty may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Guaranty by telecopier shall be effective as delivery of a manually
executed counterpart of this Guaranty.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
MAFCO HOLDINGS INC.
By
----------------------------
Title:
EXHIBIT A
to
MAFCO GUARANTY
TERMS OF SUBORDINATION
1. Reference is made to (i) the Credit Agreement dated as
of July 20, 1994 (the "Credit Agreement"; terms defined therein are used herein
as therein defined) among Marvel IV Holdings Inc., the Lenders party thereto
and Citibank, N.A. as agent (the "Agent") for such Lenders, and (ii) [the loans
and advances made by FN Parent to the Borrower Parent pursuant to the terms of
the FN Parent Loan Agreement] [the loans and advances made by FN Holdings to the
Borrower Parent].* Such loans and advances are referred to herein as the
"Subordinated Debt", and [FN Parent] [FN Holdings]* is referred to herein as the
"Subordinated Creditor".
2. The Subordinated Debt is, and shall be, subordinate to
the extent and in the manner hereinafter set forth, to the prior payment in full
of all obligations of the Borrower now or hereafter existing under the Credit
Agreement and the other Loan Documents, whether for principal, interest
(including, without limitation, interest accruing after the filing of a petition
initiating any proceeding referred to in paragraph 5, whether or not such
interest accrues after the filing of such petition for purposes of the
Bankruptcy Code or is an allowed claim in such proceeding), fees, expenses or
otherwise (such obligations being the "Obligations"). For the purposes of these
provisions, the Obligations shall not be deemed to have been paid in full until
the date of payment in full in cash of the outstanding Advance and all interest
accrued thereon, all fees and expenses then due and payable and all other
Obligations then due and payable; provided, however, that on such date none of
the Agent and the Lenders shall have made any claim against the Subordinated
Creditor or any Loan Party under any provision of any of the Loan Documents that
has not been cash collateralized by an amount sufficient in the reasonable
judgment of the Agent, the Required Lenders and any such Lender (if such Lender
is not one of the Lenders constituting the Required Lenders) to secure such
claim.
3. So long as the Obligations shall not have been paid in
full, the Subordinated Creditor shall not (i) ask, demand, sue for, take or
receive from the Borrower Parent, directly or indirectly, in cash or other
property or by set-off or in any other manner (including, without limitation,
from or by way of collateral), payment of all or any of the Subordinated Debt,
or (ii) commence, or join with an creditor other than the Agent or any Lender in
commencing, directly or indirectly cause the Borrower Parent to commence, or
assist the Borrower Parent in commencing, any proceeding referred to in
paragraph 5.
4. No payment (including any payment that may be payable by
reason of any other Debt of the Borrower Parent being subordinated to payment of
the Subordinated Debt) shall be made by or on behalf of the Borrower Parent for
or on account of any Subordinated Debt, and the Subordinated Creditor shall not
take or receive from the Borrower Parent, directly or indirectly, in cash or
other property or by set-off or in any other manner, including, without
limitation, from or by way of collateral, payment of all or any of the
Subordinated Debt, unless and until the Obligations shall have been paid in
full.
5. In the event of any dissolution, winding up,
liquidation, arrangement, reorganization, adjustment, protection, relief or
composition of the Borrower Parent or its debts, whether voluntary or
involuntary, in any bankruptcy, insolvency, arrangement, reorganization,
receivership, relief or other similar case or proceeding under any Federal or
State bankruptcy or similar law or upon an assignment for the benefit of
creditors or any other marshalling of the assets and liabilities of the Borrower
Parent or otherwise, the Agent, for its benefit and for the ratable benefit of
the Lenders, shall be entitled to receive payment in full of the Obligations
before the Subordinated Creditor is entitled to receive any payment of all or
any of the Subordinated Debt, and any payment or distribution of any kind
(whether in cash, property or securities) that otherwise would be payable or
deliverable upon or with respect to the Subordinated Debt in any such case,
proceeding, assignment, marshalling or otherwise (including any payment that may
be payable by reason of any other indebtedness of the Borrower Parent being
subordinated to payment of the Subordinated Debt) shall be paid or delivered
directly to the Agent, for its benefit and for the ratable benefit of the
Lenders, for application (in the case of cash) to, or as collateral (in the case
of non-cash property or securities) for, the payment or prepayment of the
Obligations until the Obligations shall have been paid in full.
6. In the event that any Subordinated Debt is declared due
and payable before its stated maturity, the Agent, for its benefit and for the
ratable benefit of the Lenders, shall be entitled to receive payment in full of
all amounts due or to become due on or in respect of all Obligations before the
Subordinated Creditor is entitled to receive any payment (including any payment
which may be payable by reason of the payment of any other indebtedness of the
Borrower Parent being subordinated to the payment of the Subordinated Debt) by
the Borrower Parent on account of the Subordinated Debt.
7. Until such time as the Obligations have been paid in
full, if any proceeding referred to in paragraph 5 above is commenced by or
against the Borrower Parent,
(i) the Agent is hereby irrevocably authorized and empowered
(in its own name or in the name of the Subordinated Creditor or otherwise), but
shall have no obligation, to demand, sue for, collect and receive every payment
or distribution referred to in paragraph 5 above and give acquittance therefor
and to file claims and proofs of claim and take such other action (including,
without limitation, voting the Subordinated Debt or enforcing any security
interest or other lien securing payment of the Subordinated Debt) as it may deem
necessary or advisable for the exercise or enforcement of any of the rights or
interests of the Agent and the Lenders hereunder; and
(ii) the Subordinated Creditor shall duly and promptly take
such action as the Agent may request (A) to collect the Subordinated Debt for
the account of the Agent, for its benefit and for the ratable benefit of the
Lenders, and to file appropriate claims or proofs of claim in respect of the
Subordinated Debt, (B) to execute and deliver to the Agent such powers of
attorney, assignments, or other instruments as the Agent may request in order to
enable the Agent to enforce any and all claims with respect to, and any security
interests and other liens securing payment of, the Subordinated Debt, and (C) to
collect and receive any and all payments or distributions which may be payable
or deliverable upon or with respect to the Subordinated Debt.
8. All payments or distributions upon or with respect to
the Subordinated Debt which are received by the Subordinated Creditor contrary
to the provisions of this Agreement shall be received in trust for the benefit
of the Agent, for its benefit and for the ratable benefit of the Lenders, shall
be segregated from other funds and property held by the Subordinated Creditor
and shall be forthwith paid over to the Agent, for its benefit and for the
ratable benefit of the Lenders, in the same form as so received (with any
necessary indorsement) to be applied (in the case of cash) to, or held as
collateral (in the case of non-cash property or securities) for, the payment or
prepayment of the Obligations in accordance with the terms of the Loan
Documents.
9. The Agent is hereby authorized to demand specific
performance of these provisions, whether or not the Borrower Parent shall have
complied with any of the provisions hereof applicable to it, at any time when
the Subordinated Creditor shall have failed to comply with any of these
provisions. The Subordinated Creditor hereby irrevocably waives any defense
based on the adequacy of a remedy at law, which might be asserted as a bar to
such remedy of specific performance.
10. No payment or distribution to the Agent pursuant to
these provisions shall entitle the Subordinated Creditor to exercise any rights
of subrogation in respect thereof until the Obligations shall have been paid in
full.
11. The holders of the Obligations may, at any time and from
time to time, without any consent of or notice to the Subordinated Creditor or
any other holder of the Subordinated Debt and without impairing or releasing the
obligations of the Subordinated Creditor under these Terms of Subordination:
(i) change the manner, place or terms of payment or change or extend the time of
payment of, or renew payment or change or extend the time or payment of, or
renew or alter, the Obligations (including any change in the rate of interest
thereon), or amend in any manner any agreement under which any of the
Obligations is outstanding; (ii) sell, exchange, release, not perfect and
otherwise deal with any property at any time pledged, assigned or mortgaged to
secure the Obligations; (iii) release anyone liable in any manner under or in
respect of the Obligations; (iv) exercise or refrain from exercising any rights
against the Borrower Parent and others; and (v) apply any sums form time to time
received to the Obligations.
12. The Subordinated Creditor will not without the consent
of the Required Lenders:
(i) Cancel or otherwise discharge any of the
Subordinated Debt (except upon payment in full of the Obligations), convert or
exchange any of the Subordinated Debt into or for any other indebtedness or
equity interest or subordinate any of the Subordinated Debt to any indebtedness
of the Borrower Parent other than the Obligations;
(ii) Sell, assign, pledge, encumber or otherwise
dispose of any of the Subordinated Debt unless such sale, assignment, pledge,
encumbrance or disposition (i) is to a person or entity other than the Borrower
Parent or any of its affiliates and (ii) is made expressly subject to these
provisions; or
(iii) Permit the terms of any of the Subordinated Debt
to be changed in such a manner as to have an adverse effect upon the rights or
interests of the Agent or the Lenders hereunder.
13. The foregoing provisions regarding subordination are and
are intended solely for the purpose of defining the relative rights of the
holders of the Obligations on the one hand and the holders of any Subordinated
Debt on the other hand. Such provisions are for the benefit of the holders of
the Obligations and shall be enforceable by them directly against the holders of
any Subordinated Debt, and no holder of the Obligations shall be prejudiced in
its right to enforce subordination of any of the Subordinated Debt by any act or
failure to act by the Borrower Parent or anyone in custody of its assets or
property. Nothing contained in the foregoing provisions is intended to or shall
impair, as between the Borrower Parent and the holders of any Subordinated Debt,
the obligations of the Borrower Parent to such holders.
---------------
* Choose appropriate alternative.
EXECUTION COPY
AMENDED AND RESTATED COLEMAN GUARANTOR GUARANTY
Dated as of June __, 1995
From
COLEMAN (PARENT) HOLDINGS INC.
as Guarantor
in favor of
THE LENDERS PARTY TO THE AMENDED AND RESTATED CREDIT AGREEMENT
REFERRED TO HEREIN
and
CITIBANK, N.A.
as Agent
T A B L E O F C O N T E N T S
Section Page
1. Guaranty; Limitation of Liability 1
2. Guaranty Absolute 2
3. Waivers 3
4. Payments Free and Clear of Taxes, Etc 4
5. Representations and Warranties 6
6. Affirmative Covenants 11
(a) Compliance with Laws, Etc 11
(b) Compliance with Environmental Laws 11
(c) Maintenance of Insurance 11
(d) Preservation of Corporate Existence, Etc 12
(e) Visitation Rights 12
(f) Keeping of Books 12
(g) Maintenance of Properties, Etc 12
(h) Performance of Related Documents 12
(i) Reporting Requirements 13
(j) Transactions with Affiliates 15
(k) Mafco Tax Group 15
(l) Coleman Tax Agreements. 16
7. Negative Covenants 16
(a) Liens, Etc 16
(b) Lease Obligations 16
(c) Mergers, Etc 17
(d) Sales, Etc. of Assets 17
(e) Dividends, Repurchases, Etc 17
(f) Investments 17
(g) Change in Nature of Business 18
(h) Accounting Changes 18
(i) Debt. 18
(j) Charter Amendments 18
(k) Prepayments, Etc. of Debt 18
(l) Amendment, Etc. of Related Documents 18
(m) Negative Pledge 19
(n) Partnerships 19
(o) Capital Expenditures 19
(p) Issuance of Capital Stock 19
(q) Payment Restrictions 19
8. LYONS Refinancing 19
9. Amendments, Etc 20
11. No Waiver; Remedies 20
12. Right of Set-off 20
13. Indemnification 21
14. Continuing Guaranty; Assignments under the Amended and
Restated Credit Agreement 21
14. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial 21
15. 22
Schedule I - Subsidiaries
Schedule II - Liens
Schedule III - Debt
Schedule IV - Investments
AMENDED AND RESTATED GUARANTY
AMENDED AND RESTATED GUARANTY dated as of June __, 1995 made
by Coleman (Parent) Holdings Inc., a Delaware corporation (the "Guarantor"), in
favor of the Lenders (the "Lenders") party to the Amended and Restated Credit
Agreement (as defined below) and Citibank, N.A. ("Citibank"), as agent (the
"Agent") for the Lenders.
PRELIMINARY STATEMENTS. (1) Marvel IV Holdings Inc., a
Delaware corporation (the "Borrower"), entered into a Credit Agreement dated as
of July 20, 1994, as heretofore amended (as so amended, the "Existing Credit
Agreement"), with financial institutions and other institutional lenders party
thereto (the "Existing Lenders") and Citibank, as agent for the Existing
Lenders. In consideration of the premises and in order to induce the Existing
Lenders to make advances under the Existing Credit Agreement, the Guarantor
entered into a Guaranty dated July 27, 1994 in favor of the Existing Lenders
and Citibank, as agent for the Existing Lenders, and a Pledge Agreement dated
July 27, 1994 in favor of Citibank, as agent for the Existing Lenders.
(2) The Borrower has entered into an Amended and Restated
Credit Agreement dated as of June __, 1995 (said Agreement, as it may hereafter
be amended or otherwise modified from time to time, being the "Amended and
Restated Credit Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined) with the Lenders and the Agent,
which amends and restates the Existing Credit Agreement in its entirety.
(3) It is a condition precedent to the effectiveness of the
Amended and Restated Credit Agreement that the Guarantor shall have executed and
delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to enter into the Amended and Restated Credit Agreement, the
Guarantor hereby agrees as follows:
Section 1. Guaranty; Limitation of Liability. (a) The
Guarantor hereby unconditionally guarantees (a) the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all Obligations of
Mafco now or hereafter existing under the Loan Documents to which it is a party,
whether for principal, interest (including, without limitation, interest after
the filing of a petition initiating a proceeding of the type referred to
in Section 6.01(e) of the Amended and Restated Credit Agreement, whether or not
such interest constitutes an allowed claim for purposes of such proceeding),
fees, expenses or
otherwise (such Obligations being the "Guaranteed Payment Obligations") and (b)
the performance when due of all other Obligations of Mafco now or hereafter
existing under the Loan Documents, whether affirmative or negative (such
Obligations being the "Guaranteed Performance Obligations" and together with the
Guaranteed Payment Obligations, the "Guaranteed Obligations"), and agrees to pay
any and all reasonable expenses (including reasonable counsel fees and expenses)
incurred by the Agent or the Lenders in enforcing any rights under this
Guaranty. Without limiting the generality of the foregoing, the Guarantor's
liability shall extend to all amounts that constitute part of the Guaranteed
Payment Obligations and would be owed by Mafco to the Agent or the Lenders under
the Loan Documents but for the fact that they are unenforceable or not allowable
due to the existence of a bankruptcy, reorganization or similar proceeding
involving Mafco.
(b) The liability of the Guarantor under this Guaranty in
respect of the Guaranteed Obligations shall not exceed the greater of (i) 95% of
the Adjusted Net Assets of the Guarantor on the date hereof and (ii) 95% of the
Adjusted Net Assets of the Guarantor on the date of any payment hereunder.
"Adjusted Net Assets" of the Guarantor at any date means the lesser of (x) the
amount by which the fair value of the property of the Guarantor exceeds the
total amount of liabilities, including, without limitation, contingent
liabilities, but excluding any liabilities or obligations under this Guaranty,
of the Guarantor at such date and (y) the amount by which the present fair
salable value of the assets of the Guarantor at such date exceeds the amount
that will be required to pay the probable liability of the Guarantor
on its debts, excluding debt in respect of this Guaranty, as they become
absolute and matured.
Section 2. Guaranty Absolute. The Guarantor guarantees that
the Guaranteed Payment Obligations will be paid, and the Guaranteed Performance
Obligations will be performed, strictly in accordance with the terms of the Loan
Documents, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of the Agent or
the Lenders with respect thereto. The Obligations of the Guarantor under this
Guaranty are independent of the Guaranteed Obligations, and a separate
action or actions may be brought and prosecuted against the Guarantor to enforce
this Guaranty, irrespective of whether any action is brought against Mafco or
whether Mafco is joined in any such action or actions. The liability of the
Guarantor under this Guaranty shall be absolute and unconditional irrespective
of, and the Guarantor hereby irrevocably waives any defenses it may now or
hereafter have in any way relating to, any and all of the following:
(a) any lack of validity or enforceability of any Loan Document or
any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations, or any other amendment
or waiver
of or any consent to departure from any Loan Document, including, without
limitation, any increase in the Guaranteed 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 Guaranteed Obligations;
(d) any manner of application of Collateral, or proceeds thereof, to
all or any of the Guaranteed Obligations, or any manner of sale or other
disposition of any Collateral for all or any of the Guaranteed Obligations or
any other assets of Mafco, the Borrower or any of their Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of Mafco, the Borrower or any of their Subsidiaries; or
(f) any other circumstance (including, without limitation, any
statute of limitations or any existence of or reliance on any representation by
the Agent or any Lender) that might otherwise constitute a defense available to,
or a discharge of, the Borrower, the Guarantor or any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Agent or any Lender upon the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, all as though such
payment had not been made.
Section 3. Waivers. (a) The Guarantor hereby waives, to the
extent permitted by applicable law, promptness, diligence, notice of acceptance
and any other notice with respect to any of the Guaranteed Obligations and this
Guaranty and any requirement that the Agent or any Lender protect, secure,
perfect or insure any Lien or any property subject thereto or exhaust any right
or take any action against Mafco, the Borrower or any other Person or any
Collateral.
(b) The Guarantor hereby irrevocably waives any claim or
other rights that it may now or hereafter acquire against the Borrower or any
other insider guarantor that arise from the existence, payment, performance or
enforcement of the Guarantor's Obligations under this Guaranty or any other Loan
Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Agent or any Lender against the
Borrower or any other insider guarantor or any Collateral, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Borrower or any other insider guarantor,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim, remedy or right. If any
amount shall be paid to the Guarantor in violation of the preceding sentence at
any time prior to the later of the cash payment in full of the Guaranteed
Payment Obligations and all other amounts payable under this Guaranty and the
Termination Date, such amount shall be held in trust for the benefit of the
Agent and the Lenders and shall forthwith be paid to the Agent to be credited
and applied to the Guaranteed Payment Obligations and all other amounts payable
under this Guaranty, whether matured or unmatured, in accordance with the terms
of the Loan Documents, or to be held as Collateral for any Guaranteed
Obligations or other amounts payable under this Guaranty thereafter arising.
The Guarantor acknowledges that it will receive direct and indirect benefits
from the financing arrangements contemplated by the Loan Documents and that the
waiver set forth in this subsection is knowingly made in contemplation of such
benefits.
(c) The Guarantor hereby waives any right to revoke this
Guaranty, and acknowledges that this Guaranty is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in the future.
Section 4. Payments Free and Clear of Taxes, Etc. (a) Any and
all payments made by the Guarantor hereunder shall be made, in accordance with
Section 2.12 of the Amended and Restated Credit Agreement, free and clear of and
without deduction for any and all present or future Taxes. If the Guarantor
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder to any Lender or the Agent, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
such Lender or the Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Guarantor
shall make such deductions and (iii) the Guarantor shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law; provided, however, that any such Lender shall designate a
different Applicable Lending Office if, in the judgment of such Lender, such
designation would avoid the need for, or reduce the amount of, any Taxes
required to be deducted from or in respect of any sum payable hereunder to such
Lender or the Agent and would not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender.
(b) In addition, the Guarantor agrees to pay any present or
future Other Taxes.
(c) The Guarantor will indemnify each Lender and the Agent
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section) paid by such Lender or the Agent (as the case may be) and any liability
(including penalties, interest and expenses)
arising therefrom or with respect thereto; provided that, in the event such
Lender or the Agent, as the case may be, successfully contests the assessment of
such Taxes or Other Taxes or any liability arising therefrom or with respect
thereto, such Lender or the Agent shall refund, to the extent of any refund
thereof made to such Lender or the Agent, any amounts paid by the Guarantor
under this Section in respect of such Taxes, Other Taxes or liabilities arising
therefrom or with respect thereto. Each Lender and the Agent agree that it
will contest such Taxes, Other Taxes or liabilities if (i) the Guarantor
furnishes to it an opinion of reputable tax counsel acceptable to such Lender or
the Agent to the effect that such Taxes or Other Taxes were wrongfully or
illegally imposed and (ii) such Lender or the Agent determines, in its sole
discretion, that it would not be disadvantaged or prejudiced in any manner
whatsoever as a result of such contest. This indemnification shall be made
within 30 days from the date such Lender or the Agent (as the case may be) makes
written demand therefor.
(d) Within 30 days after the date of any payment of Taxes,
the Guarantor will furnish to the Agent, at its address referred to in the
Amended and Restated Credit Agreement, appropriate evidence of payment thereof.
If no Taxes are payable in respect of any payment hereunder by the Guarantor
through an account or branch outside the United States or on behalf of the
Guarantor by a payor that is not a United States person, the Guarantor will
furnish, or will cause such payor to furnish, to the Agent a certificate from
each appropriate taxing authority or authorities, or an opinion of counsel
acceptable to the Agent, in either case stating that such payment is exempt from
or not subject to Taxes. For purposes of this Section, the terms "United
States" and "United States person" shall have the meanings specified in Section
7701 of the Code.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States and the Agent, if organized under the laws of a
jurisdiction outside the United States, shall, if requested in writing by the
Guarantor or the Agent (but only so long as such Lender or the Agent remains
lawfully able to do so and only so long as Guarantor is making payments under
this Guaranty), provide the Guarantor and (in the case of any such Lender
other than the Agent) the Agent with two duly completed copies of Internal
Revenue Service form 1001 or 4224, as appropriate, or any successor form
prescribed by the Internal Revenue Service, certifying that such Lender or the
Agent is entitled to benefits under an income tax treaty to which the United
States is a party that reduces the rate of withholding tax on payments under
this Agreement or the Notes or certifying that the income receivable
pursuant to this Agreement or the Notes is effectively connected with the
conduct of a trade or business in the United States.
(f) For any period with respect to which the Agent or a
Lender has failed to provide the Guarantor with the appropriate forms described
in subsection (e) above (other than if such failure is due to a change in law
occurring after the date on which such person was originally required to provide
such forms, or if such forms are otherwise not required
under subsection (e) above), the Agent or such Lender shall not be entitled to
increased payments or indemnification under subsection (a) or (c) above with
respect to Taxes imposed by the United States; provided, however, that should
the Agent or a Lender become subject to Taxes because of its failure to deliver
a form required hereunder, the Guarantor shall take such steps as the Agent or
such Lender shall reasonably request to assist the Lender to recover such Taxes
if, in the judgment of the Guarantor such steps would avoid the need for,
or reduce the amount of, any Taxes required to be deducted from or in respect of
any sum payable hereunder to the Agent or such Lender and would not, in the
judgment of the Guarantor, be disadvantageous to the Guarantor.
(g) Without prejudice to the survival of any other agreement
of the Guarantor hereunder, the agreements and obligations of the Guarantor
contained in this Section 4 shall survive the payment in full of the Guaranteed
Obligations and all other amounts payable under this Guaranty.
(h) If a Lender shall change its Applicable Lending Office
other than (i) at the request of the Guarantor or (ii) at a time when such
change would not result in this Section 4 requiring the Guarantor to make a
greater payment than if such change had not been made, such Lender shall not be
entitled to receive any greater payment under this Section 4 than such Lender
would have been entitled to receive had it not changed its Applicable Lending
Office.
Section 5. Representations and Warranties. The Guarantor
hereby represents and warrants as follows:
(a) The Guarantor (i) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed would not have a Material
Adverse Effect (with respect to clause (a) of the definition thereof, the term
"Person" shall refer to the Guarantor) and (iii) has all requisite corporate
power and authority to own or lease and operate its properties and to carry
on its business as now conducted and as proposed to be conducted. All of the
outstanding capital stock of the Guarantor has been validly issued, is fully
paid and non-assessable. New Coleman is the legal and beneficial owner of all
of the outstanding capital stock of the Guarantor (other than the shares (the
"Voting Trust Stock") issued in the name of the voting trustee (the "Voting
Trustee") under the voting trust agreement described in Section 3.01(g)(xvii)(C)
of the Existing Credit Agreement (the "Voting Trust Agreement") and the Voting
Trustee is the legal owner of the Voting Trust Stock, in each case free and
clear of all Liens except for the Liens created by the Collateral Documents and
the Voting Trust Agreement.
(b) Set forth on Schedule I hereto is a complete and accurate list
of the Guarantor and the Coleman Non-Operating Subsidiaries, showing as of the
date hereof (as to each such Person) the jurisdiction of its incorporation, the
number of shares of each class of capital stock authorized, and the number
outstanding, on the date hereof and the percentage of the outstanding shares of
each such class owned (directly or indirectly), in the case of the Guarantor, by
New Coleman, and in the case of the Coleman Non-Operating Subsidiaries, by the
Guarantor and the number of shares covered by all outstanding options, warrants,
rights of conversion or purchase and similar rights at the date hereof. All of
the outstanding capital stock of the Guarantor and such Coleman Non-Operating
Subsidiaries has been validly issued, is fully paid and non-assessable and is
owned, in the case of the Guarantor, by New Coleman or in the case of such
Coleman Non-Operating Subsidiaries, by the Guarantor or one or more of the
Coleman Non-Operating Subsidiaries (except as set forth on Schedule I) free and
clear of all Liens, except those created by the Collateral Documents and those
set forth on Schedule II hereto. Each such Coleman Non-Operating Subsidiary (i)
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, (ii) is duly qualified
and in good standing as a foreign corporation in each other jurisdiction in
which it owns or leases property or in which the conduct of its business
requires it to so qualify or be licensed except where the failure to so qualify
or be licensed would not have a Material Adverse Effect (with respect to clause
(a) of the definition thereof, the term "Person" shall refer to the Guarantor)
and (iii) has all requisite corporate power and authority to own or lease and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted.
(c) The execution, delivery and performance by the Guarantor of this
Guaranty, each Loan Document and each Related Document to which it is or is to
be a party and the consummation by the Guarantor of the transactions
contemplated hereby, are within the Guarantor's corporate powers, have been duly
authorized by all necessary corporate action, and do not (i) contravene the
Guarantor's charter or by-laws, (ii) violate any law (including, without
limitation, the Exchange Act), rule, regulation (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve System), order,
writ, judgment, injunction, decree, determination or award, (iii) conflict with
or result in the breach of, or constitute a default under, any loan agreement,
contract, indenture, mortgage, deed of trust, lease or other instrument binding
on or affecting the Guarantor, any of its Subsidiaries or any of its or their
properties, the effect of which conflict, breach or default is reasonably likely
to have a Material Adverse Effect (with respect to clause (a) of the definition
thereof, the term "Person" shall refer to the Guarantor) or (iv) except for the
liens created by the Collateral Documents, result in or require the creation or
imposition of any Lien upon or with respect to any of the properties of the
Guarantor or any of its Subsidiaries. Neither the Guarantor nor any of its
Subsidiaries is in violation of any
such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument, the violation or
breach of which would be reasonably likely to have a Material Adverse Effect
(with respect to clause (a) of the definition thereof, the term "Person" shall
refer to the Guarantor).
(d) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body is required for
(i) the due execution, delivery and performance by the Guarantor of this
Guaranty or any other Loan Document or any Related Document to which it is or is
to be a party or for the consummation by the Guarantor of the transactions
contemplated hereby, (ii) the grant by the Guarantor of the Liens granted by it
pursuant to the Collateral Documents, (iii) the perfection or maintenance of the
Liens created by the Collateral Documents (including the first priority nature
thereof) or (iv) the exercise by the Agent or any Lender of its rights under the
Loan Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents, except for the filing of financing statements in
accordance with Section 3.01(g)(viii) of the Existing Credit Agreement
and except as may be required in connection with the disposition of any portion
of the Collateral by laws affecting the offering and sale of securities
generally; provided, however, that no representation or warranty is made as to
any consent of, authorization, approval or other action by, or notice to or
filing with, any banking agency or regulatory body applicable to the Agent. As
of September 30, 1994, all applicable waiting periods in connection with the
Transaction and the other transactions contemplated hereby will have expired
without any action having been taken by any competent authority restraining,
preventing or imposing materially adverse conditions upon the Transaction or the
rights of the Loan Parties or their Subsidiaries freely to transfer or otherwise
dispose of, or to create any Lien on, any properties now owned or hereafter
acquired by any of them.
(e) This Guaranty has been, and each other Loan Document to which
the Guarantor is a party when delivered under the Existing Credit Agreement or
the Amended and Restated Credit Agreement has been or will have been duly
executed and delivered by the Guarantor. This Guaranty is, and each other Loan
Document to which the Guarantor is a party when delivered under the Existing
Credit Agreement or the Amended and Restated Credit Agreement is or will be, the
legal, valid and binding obligations of the Guarantor, enforceable against the
Guarantor in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforceability of creditor's rights generally.
(f) The Consolidated and consolidating balance sheets of Coleman
Holdings and its Subsidiaries as at December 31, 1994, and the related
Consolidated and consolidating statements of income and cash flows of Coleman
Holdings and its
Subsidiaries for the fiscal year then ended, accompanied, in the case of the
aforementioned Consolidated balance sheets and Consolidated statements of income
and cash flows, by an opinion of Ernst & Young, independent public accountants,
and the Consolidated and consolidating balance sheets of Coleman Holdings and
its Subsidiaries as at March 31, 1995, and the related Consolidated and
consolidating statements of income and cash flows of Coleman Holdings and its
Subsidiaries for the three months then ended, duly certified by the chief
financial officer of Coleman Holdings, copies of which have been furnished to
each Lender, fairly present, subject, in the case of said balance sheets as at
March 31, 1995 and said statements of income and cash flows for the three months
then ended, to year-end audit adjustments, the Consolidated and consolidating
financial condition of Coleman Holdings and its Subsidiaries as at such dates
and the Consolidated and consolidating results of the operations of Coleman
Holdings and its Subsidiaries for the periods ended on such dates, all in
accordance with generally accepted accounting principles applied on a
consistent basis, and since December 31, 1994, there has been no Material
Adverse Change relating to Coleman Holdings.
(g) There is no pending or threatened action, proceeding,
governmental investigation or arbitration affecting the Guarantor or any of its
Subsidiaries before any court, governmental agency or arbitrator, which is
reasonably likely to have a Material Adverse Effect (with respect to clause (a)
of the definition thereof, the term "Person" shall refer to the Guarantor), or
that purports to affect the legality, validity or enforceability of this
Guaranty, any other Loan Document or any Related Document or the consummation of
the transactions contemplated hereby or thereby.
(h) The Guarantor and its ERISA Affiliates are in compliance in all
material respects with the applicable provisions of ERISA and the Code with
respect to each Plan thereof. No ERISA Event has occurred or is reasonably
expected to occur with respect to any Plan of the Guarantor or any of its ERISA
Affiliates. The amount of all Unfunded Pension Liabilities under all Plans of
the Guarantor and its ERISA Affiliates does not exceed $60,000,000. None of the
Guarantor or any of its ERISA Affiliates has made contributions or incurred any
Withdrawal Liability to any Multiemployer Plan within the past five years, and
it is not reasonably expected that such contributions shall be made or required
or that such liability shall be incurred in any such case in amounts or under
circumstances that would be reasonably likely to result in a material liability
to the Guarantor or any of its ERISA Affiliates. Schedule B (Actuarial
Information) to the 1992 annual report (Form 5500 Series) for each Plan of the
Guarantor and each of its ERISA Affiliates, copies of which have been filed with
the Internal Revenue Service and furnished to the Lenders, is complete
and accurate in all material respects and fairly presents the funding status of
such Plan, and since the date of such Schedule B there has been no material
adverse change in such funding status. The obligations of the Guarantor and its
Subsidiaries
for post-retirement benefits to be provided under Plans which are welfare
benefit plans (as defined in Section 3(l) of ERISA) are not reasonably likely to
have a Material Adverse Effect (in the case of Clause (a) of the definition
thereof, the term "Person" shall refer to the Guarantor).
(i) The operations and properties of the Guarantor and each of its
Subsidiaries are in substantial compliance with all Environmental Laws, all
necessary Environmental Permits have been obtained and are in effect for the
operations and properties of the Guarantor and its Subsidiaries and the Borrower
and its Subsidiaries are in compliance with all such Environmental Permits,
except, as to all of the above, where the failure to do so would not be
reasonably likely to have a Material Adverse Effect (in the case of clause (a)
of the definition thereof, the term "Person" shall refer to the Guarantor); and
no circumstances exist that are reasonably likely to (i) form the basis of an
Environmental Action against the Guarantor or any of its Subsidiaries or
any of their respective properties or (ii) cause any such property to be subject
to any restrictions on ownership, occupancy, use or transferability under any
Environmental Law that would, in the case of either (i) or (ii) above, be
reasonably likely to have a Material Adverse Effect (in the case of clause (a)
of the definition thereof, the term "Person" shall refer to the Guarantor).
(j) The Guarantor and each of its Subsidiaries has filed, has caused
to be filed or has been included in all tax returns (Federal, state, local and
foreign) required to be filed and has paid all taxes shown thereon to be due,
together with applicable interest and penalties.
(k) Neither the Guarantor nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(l) The Guarantor is, individually and together with its
Subsidiaries, Solvent.
(m) Set forth on Schedule III hereto is a complete and accurate list
of all Debt (other than intercompany Debt) of the Guarantor and its
Subsidiaries, showing as of the date hereof the principal amount outstanding
thereunder and there is (i) no other agreement, contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument binding on or
affecting the Guarantor or any of the Coleman Non-Operating Subsidiaries that
imposes any material Obligation or material restriction on the Guarantor or any
of its Subsidiaries (other than the Related Documents), (ii) no other agreement,
contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument (A) evidencing Debt of Coleman or any of its Subsidiaries, (B)
governing the terms of Debt of Coleman or any of its Subsidiaries or (C)
containing any commitment or other agreement by any Person to extend credit that
would constitute Debt to Coleman or any of its Subsidiaries, in each case that
imposes or will impose material Obligations or material restrictions on Coleman
and its Subsidiaries taken as a whole, and (iv) no other agreement or contract
binding on or affecting Coleman or any of its Subsidiaries that contains
provisions that would restrict any Loan Party from performing or impair the
ability of any Loan Party to perform any of the obligations of such Loan Party
under the Loan Documents.
(n) Set forth on Schedule IV is a complete and accurate list of all
Investments (other than intercompany Debt) held by the Guarantor or any of the
Coleman Non-Operating Subsidiaries, showing as of the date hereof the amount,
obligor or issuer and maturity, if any, thereof.
Section 6. Affirmative Covenants. The Guarantor covenants and
agrees that, so long as any part of the Advances shall remain unpaid or any
Lender shall have any Commitment, the Guarantor will:
(a) Compliance with Laws, Etc. Comply, and cause each of
its Subsidiaries to comply, in all material respects with all applicable laws,
rules, regulations and orders (such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property except to the extent contested in
good faith), the failure to comply with which would, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect (with respect
to clause (a) of the definition thereof, the term "Person" shall refer to the
Guarantor).
(b) Compliance with Environmental Laws. Comply and cause each of
its Subsidiaries and all lessees and all other Persons occupying its properties
to comply, in all material respects, with all Environmental Laws and
Environmental Permits applicable to its operations and properties; obtain and
renew all Environmental Permits necessary for its operations and properties; and
conduct, and cause each of its Subsidiaries to conduct, any investigation,
study, sampling and testing, and undertake any cleanup, removal, remedial or
other action necessary to remove and clean up all Hazardous Materials from any
of its properties, in accordance with the requirements of all Environmental
Laws; provided, however, that neither the Guarantor nor any of its Subsidiaries
shall be required to undertake any such cleanup, removal, remedial or
other action to the extent that its obligation to do so is being contested in
good faith and by proper proceedings and appropriate reserves are being
maintained with respect to such circumstances.
(c) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Guarantor or such Subsidiary operates.
(d) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries (other than any Subsidiaries of
Coleman) to preserve and maintain, its corporate existence, rights (charter and
statutory) and franchises; provided, however, that neither the Guarantor nor any
of its Subsidiaries shall be required to preserve any of its rights or franchise
if the Board of Directors of the Guarantor or such Subsidiary (or, in the case
of Coleman, the executive committee of the Board of Directors of Guarantor)
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Guarantor or such Subsidiary, as the case may be,
and that the loss thereof is not disadvantageous in any material respect to the
Guarantor, such Subsidiary or the Lenders.
(e) Visitation Rights. At any reasonable time and from time to
time, upon reasonable prior notice permit the Agent or any of the Lenders or any
agents or representatives thereof, to the extent reasonably requested to examine
and make copies of and abstracts from the records and books of account of, and
visit the properties of, the Guarantor and any of its Subsidiaries, and to
discuss the affairs, finances and accounts of the Guarantor and any of its
Subsidiaries with any of their officers or directors and with their independent
certified public accountants.
(f) Keeping of Books. Keep, and cause each of its Subsidiaries to
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
Guarantor and each such Subsidiary to the extent necessary to permit the
preparation of the financial statements required to be delivered hereunder.
(g) Maintenance of Properties, Etc. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its properties
that are used or useful in the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
(h) Performance of Related Documents. Perform and observe, and
cause each of its Subsidiaries to perform and observe, all of the terms and
provisions of each Related Document to be performed or observed by it, maintain
each such Related Document in full force and effect (other than any Coleman Tax
Agreement that has been terminated prior to the date hereof), enforce such
Related Document in accordance with its terms (other than any Coleman Tax
Agreement that has been
terminated prior to the date hereof), take all such action to such end as may be
from time to time requested by the Agent and, upon request of the Agent, make to
each other party to each such Related Document such demands and requests for
information and reports or for action as the Guarantor is entitled to make under
such Related Document and cause its Subsidiaries to do all of the foregoing with
respect to any Related Document it is party to.
(i) Reporting Requirements. Furnish to the Lenders through the
Agent:
(i) as soon as available and in any event within 50 days after the
end of each of the first three quarters of each fiscal year of the Guarantor,
Consolidated balance sheets of the Guarantor and its Subsidiaries as of the end
of such quarter and Consolidated statements of earnings, cash flows and
stockholders' equity of the Guarantor and its Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the end of
such quarter, certified (subject to normal year-end audit adjustment and the
absence of footnotes) on behalf of the Guarantor by the chief financial officer
of the Guarantor;
(ii) as soon as available and in any event within 105 days after the
end of each fiscal year of the Guarantor, a copy of the annual audit report for
such year for the Guarantor and its Subsidiaries, containing financial
statements for such year certified in a manner reasonably acceptable to the
Required Lenders by Ernst & Young or other independent public accountants
reasonably acceptable to the Required Lenders;
(iii) promptly after the sending or filing thereof, copies of any filings
and statements that the Guarantor or any Subsidiary files with the Securities
and Exchange Commission or any national securities exchange;
(iv) promptly and in any event within (A) thirty days after the
Guarantor knows or has reason to know that any ERISA Event with respect to
the Guarantor or any of its ERISA Affiliates has occurred, a statement
describing such ERISA Event and the action, if any, that the Guarantor or
such ERISA Affiliate proposes to take with respect thereto, (B) thirty days
either after receipt thereof by the Guarantor or after the Guarantor knows or
has reason to know of the receipt thereof by any of its ERISA Affiliates from
the sponsor of a Multiemployer Plan of the Guarantor or any of its ERISA
Affiliates, a copy of each notice received by any such Person concerning the
imposition of Withdrawal Liability upon such Person, the reorganization or
termination of such Multiemployer Plan, or the amount of the liability
incurred, or that may be incurred, by the Guarantor or any of its ERISA
Affiliates in connection with any such event and (C) ten Business Days either
after receipt thereof by the Guarantor or after the Guarantor knows or has
reason to know of the receipt thereof by any of its ERISA Affiliates, copies of
each notice from the PBGC stating its intention to terminate any Plan of the
Guarantor or any of its ERISA Affiliates or to have a trustee appointed to
administer any such Plan; provided, that in the case of any event that occurs in
(A), (B) or (C) hereof, such event has a Material Adverse Effect (in the case
of clause (a) of the definition thereof, "Person" shall refer to the Guarantor);
(v) in the event of any change in GAAP from the date of the
financial statements referred to in Section 5(f) and upon delivery of any
financial statement required to be furnished under clauses (ii) or (iii) of this
Section 6(i), a statement of reconciliation conforming any information
contained in such financial statement with GAAP as in effect on the date of the
financial statements referred to in Section 5(f);
(vi) promptly upon any officer of the Guarantor obtaining knowledge
thereof, written notice of (A) the institution or non-frivolous threat of any
action, suit, proceeding, governmental investigation or arbitration against or
affecting the Guarantor or any of its Subsidiaries or any property of the
Guarantor or any of its Subsidiaries (any such action, suit, proceeding,
investigation or arbitration being a "Proceeding") or (B) any material
development in any Proceeding that is already pending, where such Proceeding
or development has not previously been disclosed by the Guarantor hereunder
and would be reasonably likely to have a Material Adverse Effect (in the case
of clause (a) of the definition of Material Adverse Effect, the term "Person"
shall refer to the Guarantor); together in each case with such other information
as any Lender through the Agent may reasonably request to enable the Lenders
and their counsel to evaluate such matters;
(vii) promptly after the furnishing thereof, copies of any statement
or report furnished to any other holder of the securities of the Guarantor or of
any Subsidiary of the Guarantor pursuant to the terms of any indenture, loan
or credit or similar agreement and not otherwise required to be furnished to
the Lenders pursuant to any other clause of this Section 6(i);
(viii) promptly upon receipt thereof, copies of all notices, requests
and other documents received by the Guarantor or any Subsidiary of the
Guarantor under or pursuant to any Coleman Tax Agreement and, from time
to time upon request by the Agent, such information and reports regarding the
Coleman Tax Agreements as the Agent may reasonably request;
(ix) promptly after the occurrence thereof, notice of any condition or
occurrence on any property of the Guarantor or any Subsidiary of the
Guarantor that results in a material noncompliance by the Guarantor or any of
its Subsidiaries with any Environmental Law or Environmental Permit or
would be reasonably likely to (i) form the basis of an Environmental Action
against the Guarantor or any of its Subsidiaries or any such property that
would be reasonably likely to have a Material Adverse Effect (in the case of
clause (a) of the definition of Material Adverse Effect, the term "Person" shall
refer to the Guarantor) or (ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law or Environmental Permit or would be reasonably likely to
(i) form the basis of an Environmental Action against the Guarantor or any of
its Subsidiaries or such property that could have a Material Adverse Effect (in
the case of clause (a) of the definition of Material Adverse Effect, the term
"Person" shall refer to the Guarantor);
(x) promptly after the making of any payment to Mafco by any
Person under any Coleman Tax Agreement, a certificate signed on behalf of
the Guarantor by the president or chief financial officer of the Guarantor,
stating the amount of such payment together with a schedule in form and
substance reasonably satisfactory to the Agent setting forth in reasonable
detail the computations and other information on which the amount of such
payment was calculated; and
(xi) such other information respecting the condition (financial or
otherwise), operations, assets or business of the Guarantor or any of its
Subsidiaries as any Lender through the Agent may from time to time
reasonably request.
(j) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the Loan
Documents with any of their Affiliates (other than the Guarantor or any of its
Subsidiaries) on terms that are fair and reasonable and no less favorable to the
Guarantor or such Subsidiary than it would obtain in a comparable arm's-length
transaction with a Person that is not an Affiliate; provided, however, that for
purposes of this Section 6(j), the term "Affiliate" shall not include any
officer or director of the Guarantor or such Subsidiary, as the case may be, who
does not possess directly or indirectly the power to vote 5% or more of the
Voting Stock of the Guarantor or its Subsidiaries; provided further that nothing
in this Section 6(j) shall restrict the performance by the parties to the
Coleman Tax Agreements of their respective obligations thereunder.
(k) Mafco Tax Group. Maintain, and cause each of its domestic
Subsidiaries (other than the subsidiaries of Coleman) to maintain, its status as
a member of the affiliated group (within the meaning of Section 1504(a)(1) of
the Internal Revenue Code) of which Mafco is the common parent.
(l) Coleman Tax Agreements. If Coleman Worldwide shall receive any
payment under the Coleman Tax Agreements, the Guarantor shall cause Coleman
Worldwide to loan, dividend or otherwise distribute (subject to the provisions
of Section 7(e)) such payment to Mafco to the extent such loan, dividend or
distribution is permitted under the Coleman Worldwide Indenture and in
accordance with the terms thereof.
Section 7. Negative Covenants. The Guarantor covenants and
agrees that, so long as any part of the Advances shall remain unpaid or any
Lender shall have any Commitment, the Guarantor will not:
(a) Liens, Etc. Create or suffer to exist, or permit any of the
Coleman Non-Operating Subsidiaries to create or suffer to exist, any Lien, upon
or with respect to any of its properties, whether now owned or hereafter
acquired, or sign or file, or permit the Coleman Non-Operating Subsidiaries to
sign or file, under the Uniform Commercial Code of any jurisdiction, a financing
statement that names the Guarantor or any of the Coleman Non-Operating
Subsidiaries as debtor, or sign, or permit any of the Coleman Non-Operating
Subsidiaries to sign, any security agreement authorizing any secured party
thereunder to file such financing statement, or assign, or permit any of the
Coleman Non-Operating Subsidiaries to assign, any right to receive income, other
than the following Liens: (i) Liens created by the Loan Documents; (ii) the
Liens described on Schedule II hereto, provided, that in the event any property
subject to any such Lien is released from such Lien, such released property may
not thereafter be subjected to any Lien other than Liens created by the
Loan Documents; (iii) mechanics', materialmen's, carriers' and similar Liens
arising in the ordinary course of business securing obligations that are not
overdue for a period of more than 30 days or which are being contested in good
faith and by proper proceedings and as to which appropriate reserves are being
maintained; (iv) Liens for taxes, assessments and governmental charges or levies
not yet due and payable or which are being contested in good faith and by proper
proceedings and as to which appropriate reserves are being maintained; and (v)
judgment or other similar Liens, provided that there shall be no period of more
than 10 consecutive days during which a stay of enforcement of the related
judgment shall not be in effect.
(b) Lease Obligations. Create, incur, assume or suffer to exist, or
permit any of the Coleman Non-Operating Subsidiaries to create, incur, assume or
suffer to exist, any obligations as lessee (i) for the rental or hire of real or
personal property in
connection with any sale and leaseback transaction, or (ii) for the rental or
hire of other real or personal property of any kind under leases or agreements
to lease having an original term of one year or more.
(c) Mergers, Etc. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of the Coleman Non-Operating
Subsidiaries to do so.
(d) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any of the Coleman Non-Operating Subsidiaries to sell,
lease, transfer or otherwise dispose of, any assets or grant, or permit any of
the Coleman Non-Operating Subsidiaries to grant, any option or other right
(other than any option or other right granted by Coleman Worldwide pursuant to
the Coleman Worldwide Indenture) to purchase, lease or otherwise acquire any
assets except (i) dispositions of obsolete, worn out or surplus property
disposed of in the ordinary course of business, (ii) sales, leases, transfers or
other dispositions of assets by a wholly owned Coleman Non-Operating Subsidiary
to any other wholly owned Coleman Non-Operating Subsidiary, (iii) sales, leases,
transfers or other dispositions of assets (other than the capital stock of any
Coleman Non-Operating Subsidiary that the Guarantor or any other Non-Operating
Subsidiary owns directly) for cash and for no less than fair market value, (iv)
transfers or other dispositions by Coleman Worldwide of common stock of Coleman
pursuant to the Coleman Worldwide Indenture and (v) loans or other dispositions
by Coleman Worldwide of common stock of Coleman pursuant to the Securities Loan
Agreement entered into in connection with the Coleman Worldwide Indenture.
(e) Dividends, Repurchases, Etc. Declare or pay any dividends,
purchase, redeem, retire, defease or otherwise acquire for value any of its
capital stock or any warrants, rights or options to acquire such capital stock,
now or hereafter outstanding, return any capital to its stockholders as such,
make any distribution of assets, capital stock, warrants, rights, options,
obligations or securities to its stockholders as such, or permit any of its Non-
Operating Subsidiaries to purchase, redeem, retire, defease or otherwise acquire
for value any capital stock of the Guarantor or any warrants, rights or options
to acquire such capital stock, except that the Guarantor may declare and deliver
dividends and distributions payable only in common stock or warrants, rights or
options to acquire common stock.
(f) Investments. Make or hold, or permit any of the Coleman Non-
Operating Subsidiaries to make or hold, any Investment in any Person, other than
(i) Investments by the Guarantor and the Coleman Non-Operating Subsidiaries in
Cash Equivalents, (ii) Investments existing on the date hereof, (iii) loans by
Coleman Worldwide to Mafco in connection with payments to be made pursuant to
the terms of
the Coleman Tax Agreements and (iv) Investments by Coleman Worldwide consisting
of loans of common stock of Coleman pursuant to the Securities Loan Agreement
dated as of May 27, 1993 among Merrill, Lynch, Pierce, Fenner & Smith
Incorporated, Coleman Worldwide and Continental Trust Company as custodian.
(g) Change in Nature of Business. (i) Engage in any business other
than the ownership of the capital stock of Coleman Holdings or (ii) permit any
of the Coleman Non-Operating Subsidiaries to make any change in the nature of
the business carried on at the date hereof by such Coleman Non-Operating
Subsidiaries.
(h) Accounting Changes. Make or permit, or permit any of the
Coleman Non-Operating Subsidiaries to make or permit, any change in accounting
policies affecting (i) the presentation of financial statements or (ii)
reporting practices, except in either case as required or permitted by GAAP.
(i) Debt. Create, incur, assume or suffer to exist, or permit any
of the Coleman Non-Operating Subsidiaries to create, incur, assume or suffer to
exist, any Debt other than: (i) in the case of the Guarantor, Debt under the
Loan Documents; (ii) in the case of any of the Coleman Non-Operating
Subsidiaries, the Debt listed on Schedule III hereto, and (iii), in the case of
the Guarantor and any of the Coleman Non-Operating Subsidiaries, endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business.
(j) Charter Amendments. Amend, or permit any of the Coleman Non-
Operating Subsidiaries to amend, its certificate of incorporation or bylaws.
(k) Prepayments, Etc. of Debt. Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner, or make
any payment in violation of any subordination terms of, any Debt, or amend,
modify or change in any manner any term or condition of any Debt or any
agreement relating to such Debt, or permit any of the Coleman Non-Operating
Subsidiaries to do any of the foregoing other than in the case of the Coleman
Non-Operating Subsidiaries, to make regularly scheduled or required repayments
or redemptions of the Debt listed on Schedule III for such Coleman Non-Operating
Subsidiary.
(l) Amendment, Etc. of Related Documents. Cancel or terminate any
Related Document (other than any Coleman Tax Agreement that has been amended or
terminated prior to the date hereof) to which it is a party or consent to or
accept any cancellation or termination thereof, amend, modify or change in any
manner any term or condition of or give any consent, waiver or approval
thereunder, waive any default under or any breach of any term or condition of
any such Related Document, agree in any manner to any other amendment,
modification or change of any term or condition
of any Related Document, or take any other action in connection with any such
Related Document that would impair the value of the interest or rights of the
Guarantor thereunder or that would impair the interest or rights of the Agent or
any Lender or permit any of its Subsidiaries to do any of the foregoing.
(m) Negative Pledge. Enter into or suffer to exist, or permit any
of the Coleman Non-Operating Subsidiaries to enter into or suffer to exist, any
agreement prohibiting or conditioning the creation or assumption of any Lien
upon any of its property or assets other than (i) in favor of the Agent and the
Lenders or (ii) any prohibition or condition existing on the date hereof.
(n) Partnerships. Become a general partner in any general or
limited partnership, or permit any of the Coleman Non-Operating Subsidiaries to
do so.
(o) Capital Expenditures. Make, or permit any Coleman Non-Operating
Subsidiary to make, any Capital Expenditures.
(p) Issuance of Capital Stock. Issue, or permit any Coleman
Non-Operating Subsidiary to issue, any capital stock or warrants, rights or
options to acquire such capital stock.
(q) Payment Restrictions. Create or otherwise cause or suffer to
exist or become effective, or permit any of the Coleman Non-Operating
Subsidiaries to create or otherwise cause or suffer to exist or become
effective, any consensual encumbrance or restriction of any kind on the ability
of the Guarantor or such Coleman Non-Operating Subsidiary to (i) pay dividends
or make any other distributions on any of the Guarantor's or such Coleman Non-
Operating Subsidiary's capital stock, (ii) make loans or advances to Mafco or
any subsidiary of Mafco or (iii) repay or prepay Debt owed by the Guarantor or a
Coleman Non-Operating Subsidiary other than any (x) consensual encumbrances or
restrictions existing on the date hereof and (y) other consensual encumbrances
or restrictions that are no more onerous than those encumbrances and
restrictions in existence on the date hereof with respect to the Guarantor or
such Coleman Non-Operating Subsidiary, as the case may be.
Section 8. LYONS Refinancing. Notwithstanding anything to the
contrary contained in this Guaranty, the Guarantor and the Coleman Non-Operating
Subsidiaries may (i) refinance the existing Debt of Coleman Worldwide
Corporation (the "Refinancing") in an aggregate principal amount not to exceed
the accreted value of such Debt as of May 27, 1998 on terms and conditions
satisfactory to the Required Lenders, (ii) create, in connection with
the Refinancing, an additional wholly-owned Subsidiary which will hold all of
the stock of one of the Coleman Non-Operating Subsidiaries and which will issue
the new Debt and (iii)
apply no more than $7,000,000 per year of the amounts due under the Coleman Tax
Agreements to pay interest on the new Debt issued in the Refinancing; provided,
however, that (x) all of the common stock of such new Subsidiary shall be
pledged to the Agent for its benefit and the ratable benefit of the Lenders on
terms and conditions satisfactory to the Required Lenders and (y) Schedule VI to
the Amended and Restated Credit Agreement shall be modified in connnection with
the Refinancing in a manner acceptable to the Required Lenders.
Section 9. Amendments, Etc. No amendment or waiver of any
provision of this Guaranty and no consent to any departure by the Guarantor
therefrom shall in any event be effective unless the same shall be in writing
and signed by the Agent and the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or consent
shall, unless in writing and signed by all the Lenders (other than any Lender
that is, at such time, a Defaulting Lender), (a) release or limit the liability
of the Guarantor hereunder, (b) postpone any date fixed for payment hereunder or
(c) change the number of Lenders required to take any action hereunder.
Section 10. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy,
telex or cable communication) and mailed, telegraphed, telecopied, telexed,
cabled or delivered to it, if to the Guarantor, addressed to it at c/o
MacAndrews & Forbes Holdings Inc., 38 East 63rd Street, New York, New York
10021, Attention: Secretary if to the Agent or any Lender, at its address
specified in the Amended and Restated Credit Agreement, or as to any party at
such other address as shall be designated by such party in a written notice to
each other party. All such notices and other communications shall, when mailed,
telegraphed, telecopied, telexed or cabled, be effective when deposited in the
mails, delivered to the telegraph company, transmitted by telecopier, confirmed
by telex answerback or delivered to the cable company, respectively.
Section 11. No Waiver; Remedies. No failure on the part of the
Agent or any Lender to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
Section 12. Right of Set-off. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the granting of the consent specified by Section 6.01 of the Amended and
Restated Credit Agreement to authorize the Agent to declare the Notes due and
payable pursuant to the provisions of said Section 6.01, each Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time
owing by such Lender to or for the credit or the account of the Guarantor
against any and all of the Obligations of the Guarantor now or hereafter
existing under this Guaranty, whether or not such Lender shall have made any
demand under this Guaranty and although such Obligations may be unmatured. Each
Lender agrees promptly to notify the Guarantor after any such set-off and
application made by such Lender; provided, however, that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of each Lender under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that such
Lender may have.
Section 13. Indemnification. Without limitation on any other
Obligations of the Guarantor or remedies of the Lenders under this Guaranty, the
Guarantor shall, to the fullest extent permitted by law, indemnify, defend and
save and hold harmless the Lenders from and against, and shall pay on demand,
any and all losses, liabilities, damages, costs, expenses and charges (including
the reasonable and documented fees and disbursements of the legal counsel of the
Lenders and the reasonable and documented charges of the internal legal counsel
of the Lenders) suffered or incurred by the Lenders as a result of (a) any
failure of any Guaranteed Obligations to be the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency or
other similar laws affecting the rights of creditors generally, or (b) any
failure of the Borrower to pay and perform any Guaranteed Obligations in
accordance with the terms of such Guaranteed Obligations.
Section 14. Continuing Guaranty; Assignments under the Amended
and Restated Credit Agreement. This Guaranty is a continuing guaranty and shall
(a) remain in full force and effect until the date on which the Payment
Obligations in respect of the Guaranteed Obligations and this Guaranty have
been Fully Satisfied, (b) be binding upon the Guarantor, its successors and
assigns and (c) inure to the benefit of and be enforceable by the Lenders, the
Agent and their successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender may assign or otherwise
transfer all or any portion of its rights and obligations under the Amended and
Restated Credit Agreement (including, without limitation, all or any portion of
its Commitment, the Advances owing to it and the Note or Notes held by) it to
any other Person, and such other Person shall thereupon become vested with all
the benefits in respect thereof granted to such Lender herein or otherwise, in
each case as provided in Section 8.07 of the Amended and Restated Credit
Agreement.
Section 14. Governing Law; Submission to Jurisdiction; Waiver
of Jury Trial. (a) This Guaranty shall be governed by, and construed in
accordance with, the laws of the State of New York.
(b) The Guarantor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or
federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Guaranty or any of the other Loan Documents to which it is or
is to be a party, or for recognition or enforcement of any judgment, and the
Guarantor hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State or, to the extent permitted by law, in such federal court. The
Guarantor agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Guaranty shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Guaranty or any of the other Loan Documents to which it is or
is to be a party in the courts of any jurisdiction.
(c) The Guarantor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Guaranty or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal
court. The Guarantor hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(d) THE GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS, THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT OR
ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.
Section 15. Execution in Counterparts, Delivery by Telecopier.
This Guaranty may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of any executed counterpart of a signature
page to this Guaranty by telecopier shall be effective as delivery of a manually
executed counterpart of this Guaranty.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
COLEMAN (PARENT) HOLDINGS, INC.
By
Title:
EXECUTION COPY
AMENDED AND RESTATED FLAVORS GUARANTY
Dated September 30, 1994, and
amended and restated
as of June 15, 1995,
From
FLAVORS (PARENT) HOLDINGS INC.
as Guarantor
in favor of
THE LENDERS PARTY TO THE CREDIT AGREEMENT
REFERRED TO HEREIN
and
CITIBANK, N.A.
as Agent
T A B L E O F C O N T E N T S
Section Page
1. Guaranty; Limitation of Liability. . . . . . . . . . . . . 1
2. Guaranty Absolute. . . . . . . . . . . . . . . . . . . . . 2
3. Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. Payments Free and Clear of Taxes, Etc. . . . . . . . . . . 4
5. Representations and Warranties . . . . . . . . . . . . . . 6
6. Affirmative Covenants. . . . . . . . . . . . . . . . . . . 10
(a) Compliance with Laws, Etc. . . . . . . . . . . . 10
(b) Compliance with Environmental Laws . . . . . . . 10
(c) Maintenance of Insurance . . . . . . . . . . . . 10
(d) Preservation of Corporate Existence, Etc . . . . 11
(e) Visitation Rights. . . . . . . . . . . . . . . . 11
(f) Keeping of Books . . . . . . . . . . . . . . . . 11
(g) Maintenance of Properties, Etc . . . . . . . . . 11
(h) Reporting Requirements . . . . . . . . . . . . . 11
(i) Transactions with Affiliates . . . . . . . . . . 12
(j) Mafco Tax Group. . . . . . . . . . . . . . . . . 13
7. Negative Covenants . . . . . . . . . . . . . . . . . . . . 13
(a) Liens, Etc . . . . . . . . . . . . . . . . . . . 13
(b) Lease Obligations. . . . . . . . . . . . . . . . 13
(c) Mergers, Etc . . . . . . . . . . . . . . . . . . 14
(d) Sales, Etc. of Assets. . . . . . . . . . . . . . 14
(e) Dividends, Repurchases, Etc. . . . . . . . . . . 14
(f) Investments. . . . . . . . . . . . . . . . . . . 14
(g) Change in Nature of Business . . . . . . . . . . 14
(h) Accounting Changes . . . . . . . . . . . . . . . 14
(i) Debt.. . . . . . . . . . . . . . . . . . . . . . 14
(j) Charter Amendments . . . . . . . . . . . . . . . 15
(k) Prepayments, Etc. of Debt. . . . . . . . . . . . 15
(l) Negative Pledge. . . . . . . . . . . . . . . . . 15
(m) Partnerships . . . . . . . . . . . . . . . . . . 15
(n) Capital Expenditures . . . . . . . . . . . . . . 15
(o) Issuance of Capital Stock. . . . . . . . . . . . 15
(p) Payment Restrictions . . . . . . . . . . . . . . 15
Section Page
8. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . 16
9. Notices, Etc . . . . . . . . . . . . . . . . . . . . . . . 16
10. No Waiver; Remedies . . . . . . . . . . . . . . . . . . . 16
11. Right of Set-off. . . . . . . . . . . . . . . . . . . . . 16
12. Indemnification . . . . . . . . . . . . . . . . . . . . . 17
13. Continuing Guaranty; Assignments under the
Credit Agreement . . . . . . . . . . . . . . . . . . . . 17
14. Governing Law; Submission to Jurisdiction;
Waiver of Jury Trial . . . . . . . . . . . . . . . . . . 17
15. Execution in Counterparts, Delivery by Telecopier. . . . . 18
Schedule I- Subsidiaries
Schedule II- Liens
Schedule III- Debt
Schedule IV- Investments
AMENDED AND RESTATED GUARANTY
AMENDED AND RESTATED GUARANTY dated September 30, 1994, and
amended and restated as of June 15, 1995, made by Flavors (Parent) Holdings
Inc., a Delaware corporation (the "Guarantor"), in favor of the Lenders (the
"Lenders") party to the Credit Agreement (as defined below) and Citibank, N.A.
("Citibank"), as agent (the "Agent") for the Lenders.
PRELIMINARY STATEMENT. The Lenders and the Agent are parties to
(a) a Credit Agreement dated as of July 20, 1994 (said Agreement, as it may
hereafter be amended or otherwise modified from time to time, being the "Credit
Agreement"; the terms defined therein and not otherwise defined herein being
used herein as therein defined) with Marvel IV Holdings Inc., a Delaware
corporation (the "Borrower"), and (b) an amendment dated as of March 10, 1995
(the "First Amendment") with the Borrower and Mafco Holdings Inc., a Delaware
corporation ("Mafco"), and the Guarantor entered into a Guaranty dated September
30, 1994 (the "Existing Guaranty") in favor of the Agent. It is a condition
precedent to the effectiveness of the First Amendment that the Guarantor shall
have executed and delivered this Amended and Restated Guaranty which amends and
restates the Existing Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to amend the Credit Agreement, the Guarantor hereby agrees to
amend and restate the Existing Guaranty as follows:
Section 1. Guaranty; Limitation of Liability. (a) The
Guarantor hereby unconditionally guarantees (a) the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all Obligations of
Mafco now or hereafter existing under the Loan Documents to which it is a party,
whether for principal, interest (including, without limitation, interest after
the filing of a petition initiating a proceeding of the type referred to in
Section 6.01(e) of the Credit Agreement, whether or not such interest
constitutes an allowed claim for purposes of such proceeding), fees, expenses or
otherwise (such Obligations being the "Guaranteed Payment Obligations") and (b)
the performance when due of all other Obligations of Mafco now or hereafter
existing under the Loan Documents, whether affirmative or negative (such
Obligations being the "Guaranteed Performance Obligations" and together with the
Guaranteed Payment Obligations, the "Guaranteed Obligations"), and agrees to pay
any and all reasonable expenses (including reasonable counsel fees and expenses)
incurred by the Agent or the Lenders in enforcing any rights under this
Guaranty. Without limiting the generality of the foregoing, the Guarantor's
liability shall extend to all amounts that constitute part of the Guaranteed
Payment Obligations and would be owed by Mafco to the Agent or the Lenders under
the Loan Documents but for the fact that they are unenforceable or not allowable
due to the existence of a bankruptcy, reorganization or similar proceeding
involving Mafco.
(b) The liability of the Guarantor under this Guaranty in
respect of the Guaranteed Obligations shall not exceed the greater of (i) 95% of
the Adjusted Net Assets of the Guarantor on the date hereof and (ii) 95% of the
Adjusted Net Assets of the Guarantor on the date of any payment hereunder.
"Adjusted Net Assets" of the Guarantor at any date means the lesser of (x) the
amount by which the fair value of the property of the Guarantor exceeds the
total amount of liabilities, including, without limitation, contingent
liabilities, but excluding any liabilities or obligations under this Guaranty,
of the Guarantor at such date and (y) the amount by which the present fair
salable value of the assets of the Guarantor at such date exceeds the amount
that will be required to pay the probable liability of the Guarantor on its
debts, excluding debt in respect of this Guaranty, as they become absolute and
matured.
Section 2. Guaranty Absolute. The Guarantor guarantees that
the Guaranteed Payment Obligations will be paid, and the Guaranteed Performance
Obligations will be performed, strictly in accordance with the terms of the Loan
Documents, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of the Agent or
the Lenders with respect thereto. The Obligations of the Guarantor under this
Guaranty are independent of the Guaranteed Obligations, and a separate action or
actions may be brought and prosecuted against the Guarantor to enforce this
Guaranty, irrespective of whether any action is brought against Mafco or whether
Mafco is joined in any such action or actions. The liability of the Guarantor
under this Guaranty shall be absolute and unconditional irrespective of, and the
Guarantor hereby irrevocably waives any defenses it may now or hereafter have in
any way relating to, any and all of the following:
(a) any lack of validity or enforceability of any Loan
Document or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Guaranteed Obligations, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in the Guaranteed 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 Guaranteed Obligations;
(d) any manner of application of Collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale or
other disposition of any Collateral for all or any of the Guaranteed Obligations
or any other assets of Mafco, the Borrower or any of their Subsidiaries;
(e) any change, restructuring or termination of the
corporate structure or existence of Mafco, the Borrower or any of their
Subsidiaries; or
(f) any other circumstance (including, without limitation,
any statute of limitations or any existence of or reliance on any representation
by the Agent or any Lender) that might otherwise constitute a defense available
to, or a discharge of, the Borrower, the Guarantor or any other guarantor or
surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Agent or any Lender upon the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, all as though such
payment had not been made.
Section 3. Waivers. (a) The Guarantor hereby waives, to the
extent permitted by applicable law, promptness, diligence, notice of acceptance
and any other notice with respect to any of the Guaranteed Obligations and this
Guaranty and any requirement that the Agent or any Lender protect, secure,
perfect or insure any Lien or any property subject thereto or exhaust any right
or take any action against Mafco, the Borrower or any other Person or any
Collateral.
(b) The Guarantor hereby irrevocably waives any claim or
other rights that it may now or hereafter acquire against the Borrower or any
other insider guarantor that arise from the existence, payment, performance or
enforcement of the Guarantor's Obligations under this Guaranty or any other Loan
Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Agent or any Lender against the
Borrower or any other insider guarantor or any Collateral, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Borrower or any other insider guarantor, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right. If any amount shall be paid to the
Guarantor in violation of the preceding sentence at any time prior to the later
of the cash payment in full of the Guaranteed Payment Obligations and all other
amounts payable under this Guaranty and the Termination Date, such amount shall
be held in trust for the benefit of the Agent and the Lenders and shall
forthwith be paid to the Agent to be credited and applied to the Guaranteed
Payment Obligations and all other amounts payable under this Guaranty, whether
matured or unmatured, in accordance with the terms of the Loan Documents, or to
be held as Collateral for any Guaranteed Obligations or other amounts payable
under this Guaranty thereafter arising. The Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents and that the waiver set forth in this
subsection is knowingly made in contemplation of such benefits.
(c) The Guarantor hereby waives any right to revoke this
Guaranty, and acknowledges that this Guaranty is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in the future.
Section 4. Payments Free and Clear of Taxes, Etc. (a) Any and
all payments made by the Guarantor hereunder shall be made, in accordance with
Section 2.10 of the Credit Agreement, free and clear of and without deduction
for any and all present or future Taxes. If the Guarantor shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section) such Lender or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Guarantor shall make such deductions and
(iii) the Guarantor shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law; provided,
however, that any such Lender shall designate a different Lending Office if, in
the judgment of such Lender, such designation would avoid the need for, or
reduce the amount of, any Taxes required to be deducted from or in respect of
any sum payable hereunder to such Lender or the Agent and would not, in the
judgment of such Lender, be otherwise disadvantageous to such Lender.
(b) In addition, the Guarantor agrees to pay any present or
future Other Taxes.
(c) The Guarantor will indemnify each Lender and the Agent
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section) paid by such Lender or the Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto; provided that, in the event such Lender or the Agent, as the case may
be, successfully contests the assessment of such Taxes or Other Taxes or any
liability arising therefrom or with respect thereto, such Lender or the Agent
shall refund, to the extent of any refund thereof made to such Lender or the
Agent, any amounts paid by the Guarantor under this Section in respect of such
Taxes, Other Taxes or liabilities arising therefrom or with respect thereto.
Each Lender and the Agent agree that it will contest such Taxes, Other Taxes or
liabilities if (i) the Guarantor furnishes to it an opinion of reputable tax
counsel acceptable to such Lender or the Agent to the effect that such Taxes or
Other Taxes were wrongfully or illegally imposed and (ii) such Lender or the
Agent determines, in its sole discretion, that it would not be disadvantaged or
prejudiced in any manner whatsoever as a result of such contest. This
indemnification shall be made within 30 days from the date such Lender or the
Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes,
the Guarantor will furnish to the Agent, at its address referred to in the
Credit Agreement, appropriate evidence of payment thereof. If no Taxes are
payable in respect of any payment hereunder by the Guarantor through an account
or branch outside the United States or on behalf of the Guarantor by a payor
that is not a United States person, the Guarantor will furnish, or will cause
such payor to furnish, to the Agent a certificate from each appropriate taxing
authority or authorities, or an opinion of counsel acceptable to the Agent, in
either case stating that such payment is exempt from or not subject to Taxes.
For purposes of this Section, the terms "United States" and "United States
person" shall have the meanings specified in Section 7701 of the Code.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States and the Agent, if organized under the laws of a
jurisdiction outside the United States, shall, if requested in writing by the
Guarantor or the Agent (but only so long as such Lender or the Agent remains
lawfully able to do so and only so long as Guarantor is making payments under
this Guaranty), provide the Guarantor and (in the case of any such Lender other
than the Agent) the Agent with two duly completed copies of Internal Revenue
Service form 1001 or 4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Lender or the Agent is
entitled to benefits under an income tax treaty to which the United States is a
party that reduces the rate of withholding tax on payments under this Agreement
or the Notes or certifying that the income receivable pursuant to this Agreement
or the Notes is effectively connected with the conduct of a trade or business in
the United States.
(f) For any period with respect to which the Agent or a
Lender has failed to provide the Guarantor with the appropriate forms described
in subsection (e) above (other than if such failure is due to a change in law
occurring after the date on which such person was originally required to provide
such forms, or if such forms are otherwise not required under subsection (e)
above), the Agent or such Lender shall not be entitled to increased payments or
indemnification under subsection (a) or (c) above with respect to Taxes imposed
by the United States; provided, however, that should the Agent or a Lender
become subject to Taxes because of its failure to deliver a form required
hereunder, the Guarantor shall take such steps as the Agent or such Lender shall
reasonably request to assist the Lender to recover such Taxes if, in the
judgment of the Guarantor such steps would avoid the need for, or reduce the
amount of, any Taxes required to be deducted from or in respect of any sum
payable hereunder to the Agent or such Lender and would not, in the judgment of
the Guarantor, be disadvantageous to the Guarantor.
(g) Without prejudice to the survival of any other agreement
of the Guarantor hereunder, the agreements and obligations of the Guarantor
contained in this Section 4 shall survive the payment in full of the Guaranteed
Obligations and all other amounts payable under this Guaranty.
(h) If a Lender shall change its Lending Office other than
(i) at the request of the Guarantor or (ii) at a time when such change would not
result in this Section 4 requiring the Guarantor to make a greater payment than
if such change had not been made, such Lender shall not be entitled to receive
any greater payment under this Section 4 than such Lender would have been
entitled to receive had it not changed its Lending Office.
Section 5. Representations and Warranties. The Guarantor
hereby represents and warrants as follows:
(a) The Guarantor (i) is a corporation duly organized,
validly existing andin good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed would not have a Material
Adverse Effect (with respect to clause (a) of the definition thereof, the term
"Person" shall refer to the Guarantor) and (iii) has all requisite corporate
power and authority to own or lease and operate its properties and to carry on
its business as now conducted and as proposed to be conducted. All of the
outstanding capital stock of the Guarantor has been validly issued, is fully
paid and non-assessable. Mafco is the legal and beneficial owner of all of the
outstanding capital stock of the Guarantor (other than the shares (the "Voting
Trust Stock") issued in the name of the voting trustee (the "Voting Trustee")
under the voting trust agreement described in Section 3.02(i)(xv)(B) of the
Credit Agreement (the "Voting Trust Agreement") and the Voting Trustee is the
legal owner of the Voting Trust Stock, in each case free and clear of all Liens
except for the Liens created by the Collateral Documents and the Voting Trust
Agreement.
(b) Set forth on Schedule I hereto is a complete and
accurate list of the Flavors Non-Operating Subsidiaries, showing as of the date
hereof (as to each such Person) the jurisdiction of its incorporation, the
number of shares of each class of capital stock authorized, and the number
outstanding, on the date hereof and the percentage of the outstanding shares of
each such class owned (directly or indirectly), by the Guarantor, and the
number of shares covered by all outstanding options, warrants, rights of
conversion or purchase and similar rights at the date hereof. All of the
outstanding capital stock of the Flavors Non-Operating Subsidiaries has been
validly issued, is fully paid and non-assessable and is owned by the Guarantor
(except as set forth on Schedule I), free and clear of all Liens, except those
created by the Collateral Documents and those set forth on Schedule II hereto.
Each such Flavors Non-Operating Subsidiary (i) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed would not have a Material
Adverse Effect (with respect to clause (a) of the definition thereof, the term
"Person" shall refer to the Guarantor) and (iii) has all requisite corporate
power and authority to own or lease and operate its properties and to carry on
its business as now conducted and as proposed to be conducted.
(c) The execution, delivery and performance by the Guarantor
of this Guaranty, each Loan Document and each Related Document to which it is or
is to be a party and the consummation by the Guarantor of the transactions
contemplated hereby and by the Merger and the First Amendment, are within the
Guarantor's corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene the Guarantor's charter or by-laws,
(ii) violate any law (including, without limitation, the Exchange Act), rule,
regulation (including, without limitation, Regulation X of the Board of
Governors of the Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award, (iii) conflict with or result in the breach of,
or constitute a default under, any loan agreement, contract, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting the
Guarantor, any of the Flavors Non-Operating Subsidiaries or any of its or their
properties, the effect of which conflict, breach or default is reasonably likely
to have a Material Adverse Effect (with respect to clause (a) of the definition
thereof, the term "Person" shall refer to the Guarantor) or (iv) except for the
liens created by the Collateral Documents, result in or require the creation or
imposition of any Lien upon or with respect to any of the properties of the
Guarantor or any of the Flavors Non-Operating Subsidiaries. Neither the
Guarantor nor any of the Flavors Non-Operating Subsidiaries is in violation of
any such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument, the violation or
breach of which would be reasonably likely to have a Material Adverse Effect
(with respect to clause (a) of the definition thereof, the term "Person" shall
refer to the Guarantor).
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for (i) the due execution, delivery and performance by the Guarantor of
this Guaranty or any other Loan Document or any Related Document to which it is
or is to be a party or for the consummation by the Guarantor of the transactions
contemplated hereby, (ii) the grant by the Guarantor of the Liens granted by it
pursuant to the Collateral Documents, (iii) the perfection or maintenance of the
Liens created by the Collateral Documents (including the first priority nature
thereof) or (iv) the exercise by the Agent or any Lender of its rights under the
Loan Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents, except for the filing of financing statements in
accordance with Section 3.02(i)(viii) of the Credit Agreement and Section
3(c)(viii) of the First Amendment and except as may be required in connection
with the disposition of any portion of the Collateral by laws affecting the
offering and sale of securities generally; provided, however, that no
representation or warranty is made as to any consent of, authorization, approval
or other action by, or notice to or filing with, any banking agency or
regulatory body applicable to the Agent. As of the date of the Consummation of
the Transaction, all applicable waiting periods in connection with the
Transaction and the other transactions contemplated hereby will have expired
without any action having been taken by any competent authority restraining,
preventing or imposing materially adverse conditions upon the Transaction or the
rights of the Loan Parties or their Subsidiaries freely to transfer or otherwise
dispose of, or to create any Lien on, any properties now owned or hereafter
acquired by any of them.
(e) This Guaranty has been, and each other Loan Document to
which the Guarantor is a party when delivered hereunder will have been, duly
executed and delivered by the Guarantor. This Guaranty is, and each other Loan
Document to which the Guarantor is a party when delivered hereunder will be, the
legal, valid and binding obligations of the Guarantor, enforceable against the
Guarantor in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforceability of creditor's rights generally.
(f) There is no pending or threatened action, proceeding,
governmental investigation or arbitration affecting the Guarantor or any of the
Flavors Non-Operating Subsidiaries before any court, governmental agency or
arbitrator, which is reasonably likely to have a Material Adverse Effect (with
respect to clause (a) of the definition thereof, the term "Person" shall refer
to the Guarantor), or that purports to affect the legality, validity or
enforceability of this Guaranty, any other Loan Document or any Related Document
or the consummation of the transactions contemplated hereby or thereby.
(g) The Guarantor and its ERISA Affiliates are in compliance
in all material respects with the applicable provisions of ERISA and the Code
with respect to each Plan thereof. No ERISA Event has occurred or is reasonably
expected to occur with respect to any Plan of the Guarantor or any of its ERISA
Affiliates. The amount of all Unfunded Pension Liabilities under all Plans of
the Guarantor and its ERISA Affiliates does not exceed $60,000,000. None of the
Guarantor or any of its ERISA Affiliates has made contributions or incurred any
Withdrawal Liability to any Multiemployer Plan within the past five years, and
it is not reasonably expected that such contributions shall be made or required
or that such liability shall be incurred in any such case in amounts or under
circumstances that would be reasonably likely to result in a material liability
to the Guarantor or any of its ERISA Affiliates. Schedule B (Actuarial
Information) to the 1992 annual report (Form 5500 Series) for each Plan of the
Guarantor and each of its ERISA Affiliates, copies of which have been filed with
the Internal Revenue Service and furnished to the Lenders, is complete and
accurate in all material respects and fairly presents the funding status of such
Plan, and since the date of such Schedule B there has been no material adverse
change in such funding status. The obligations of the Guarantor and the Flavors
Non-Operating Subsidiaries for post-retirement benefits to be provided under
Plans which are welfare benefit plans (as defined in Section 3(l) of ERISA are
not reasonably likely to have a Material Adverse Effect (in the case of clause
(a) of the definition thereof, "Person" shall refer to the Guarantor).
(h) The operations and properties of the Guarantor and the
Flavors Non-Operating Subsidiaries are in substantial compliance with all
Environmental Laws, all necessary Environmental Permits have been obtained and
are in effect for the operations and properties of the Guarantor and the Flavors
Non-Operating Subsidiaries and the Guarantor and the Flavors Non-Operating
Subsidiaries are in compliance with all such Environmental Permits, except, as
to all of the above, where the failure to do so would not be reasonably likely
to have a Material Adverse Effect (in the case of clause (a) of the definition
thereof, the term "Person" shall refer to the Guarantor); and no circumstances
exist that are reasonably likely to (i) form the basis of an Environmental
Action against the Guarantor or any of the Flavors Non-Operating Subsidiaries or
any of their respective properties or (ii) cause any such property to be subject
to any restrictions on ownership, occupancy, use or transferability under any
Environmental Law that would, in the case of either (i) or (ii) above, be
reasonably likely to have a Material Adverse Effect (in the case of clause (a)
of the definition thereof, the term "Person" shall refer to the Guarantor).
(i) The Guarantor and the Flavors Non-Operating Subsidiaries
has filed, has caused to be filed or has been included in all tax returns
(Federal, state, local and foreign) required to be filed and has paid all taxes
shown thereon to be due, together with applicable interest and penalties.
(j) Neither the Guarantor nor the Flavors Non-Operating
Subsidiaries is an "investment company," or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended.
(k) The Guarantor is, individually and together with its
Subsidiaries, Solvent.
(l) Set forth on Schedule III hereto is a complete and
accurate list of all Debt (other than intercompany Debt) of the Guarantor and
the Flavors Non-Operating Subsidiaries, showing as of the date hereof the
principal amount outstanding thereunder and there is no other agreement,
contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting the Guarantor or any of the Flavors Non-
Operating Subsidiaries that imposes any material Obligation or material
restriction on the Guarantor or any of the Flavors Non-Operating Subsidiaries
(other than the Related Documents).
(m) Set forth on Schedule IV is a complete and accurate list
of all Investments (other than intercompany Debt) held by the Guarantor or any
of the Flavors Non-Operating Subsidiaries, showing as of the date hereof the
amount, obligor or issuer and maturity, if any, thereof.
Section 6. Affirmative Covenants. The Guarantor covenants and
agrees that, so long as any part of the Advances shall remain unpaid or any
Lender shall have any Commitment, the Guarantor will:
(a) Compliance with Laws, Etc. Comply, and cause each of
itsSubsidiaries to comply, in all material respects with all applicable laws,
rules, regulations and orders (such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property except to the extent contested in
good faith), the failure to comply with which would, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect (with respect
to clause (a) of the definition thereof, the term Person shall refer to the
Guarantor).
(b) Compliance with Environmental Laws. Comply and cause
each of its Subsidiaries and all lessees and all other Persons occupying its
properties to comply, in all material respects, with all Environmental Laws and
Environmental Permits applicable to its operations and properties; obtain and
renew all Environmental Permits necessary for its operations and properties; and
conduct, and cause each of its Subsidiaries to conduct, any investigation,
study, sampling and testing, and undertake any cleanup, removal, remedial or
other action necessary to remove and clean up all Hazardous Materials from any
of its properties, in accordance with the requirements of all Environmental
Laws; provided, however, that neither the Guarantor nor any of its Subsidiaries
shall be required to undertake any such cleanup, removal, remedial or other
action to the extent that its obligation to do so is being contested in good
faith and by proper proceedings and appropriate reserves are being maintained
with respect to such circumstances.
(c) Maintenance of Insurance. Maintain, and cause each of
its Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Guarantor or such Subsidiary operates.
(d) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries (other than any Subsidiaries of
MCG) to preserve and maintain, its corporate existence, rights (charter and
statutory) and franchises; provided, however, that neither the Guarantor nor any
of its Subsidiaries shall be required to preserve any of its rights or franchise
if the Board of Directors of the Guarantor or such Subsidiary (or the executive
committee of the Board of Directors thereof) shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Guarantor or such Subsidiary, as the case may be, and that the loss thereof
is not disadvantageous in any material respect to the Guarantor, such Subsidiary
or the Lenders.
(e) Visitation Rights. At any reasonable time and from time
to time, upon reasonable prior notice permit the Agent or any of the Lenders or
any agents or representatives thereof, to the extent reasonably requested to
examine and make copies of and abstracts from the records and books of account
of, and visit the properties of, the Guarantor and any of its Subsidiaries, and
to discuss the affairs, finances and accounts of the Guarantor and any of its
Subsidiaries with any of their officers or directors and with their independent
certified public accountants.
(f) Keeping of Books. Keep, and cause each of its
Subsidiaries to 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 Guarantor and each such Subsidiary to the extent necessary to
permit the preparation of the financial statements required to be delivered
hereunder.
(g) Maintenance of Properties, Etc. Maintain and preserve,
and cause each of its Subsidiaries to maintain and preserve, all of its
properties that are used or useful in the conduct of its business in good
working order and condition, ordinary wear and tear excepted.
(h) Reporting Requirements. Furnish to the Lenders through
the Agent:
(i) promptly upon any officer of the Guarantor
obtaining knowledge thereof, written notice of (A) the institution or non-
frivolous threat of any action, suit, proceeding, governmental investigation or
arbitration against or affecting the Guarantor or any of its Subsidiaries or any
property of the Guarantor or any of its Subsidiaries (any such action, suit,
proceeding, investigation or arbitration being a "Proceeding") or (B) any
material development in any Proceeding that is already pending, where such
Proceeding or development has not previously been disclosed by the Guarantor
hereunder and would be reasonably likely to have a Material Adverse Effect (in
the case of clause (a) of the definition of Material Adverse Effect, the term
"Person" shall refer to the Guarantor); together in each case with such other
information as any Lender through the Agent may reasonably request to enable the
Lenders and their counsel to evaluate such matters;
(ii) promptly after the furnishing thereof, copies
of any statement or report furnished to any other holder of the securities of
the Guarantor or of any Subsidiary of the Guarantor pursuant to the terms of any
indenture, loan or credit or similar agreement and not otherwise required to be
furnished to the Lenders pursuant to any other clause of this Section 6(h);
(iii) promptly after the occurrence thereof, notice of
any condition or occurrence on any property of the Guarantor or any Subsidiary
of the Guarantor that results in a material noncompliance by the Guarantor or
any of its Subsidiaries with any Environmental Law or Environmental Permit or
would be reasonably likely to (i) form the basis of an Environmental Action
against the Guarantor or any of its Subsidiaries or any such property that would
be reasonably likely to have a Material Adverse Effect (in the case of clause
(a) of the definition of Material Adverse Effect, the term "Person" shall refer
to the Guarantor) or (ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law or Environmental Permit or would be reasonably likely to (i)
form the basis of an Environmental Action against the Guarantor or any of its
Subsidiaries or such property that could have a Material Adverse Effect (in the
case of clause (a) of the definition of Material Adverse Effect, the term
"Person" shall refer to the Guarantor); and
(iv) such other information respecting the condition
(financial or otherwise), operations, assets or business of the Guarantor or any
of its Subsidiaries as any Lender through the Agent may from time to time
reasonably request.
(i) Transactions with Affiliates. Conduct, and cause each
of its Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of their Affiliates (other than the Guarantor or any of
its Subsidiaries) on terms that are fair and reasonable and no less favorable to
the Guarantor or such Subsidiary than it would obtain in a comparable arm's-
length transaction with a Person that is not an Affiliate; provided, however,
that for purposes of this Section 6(i), the term "Affiliate" shall not include
any officer or director of the Guarantor or such Subsidiary, as the case may be,
who does not possess directly or indirectly the power to vote 5% or more of the
Voting Stock of the Guarantor or its Subsidiaries.
(j) Mafco Tax Group. Maintain, and cause each of its
domestic Subsidiaries (other than the Subsidiaries of MCG) to maintain, its
status as a member of the affiliated group (within the meaning of Section
1504(a)(1) of the Internal Revenue Code) of which Mafco is the common parent.
Section 7. Negative Covenants. The Guarantor covenants and
agrees that, so long as any part of the Advances shall remain unpaid or any
Lender shall have any Commitment, the Guarantor will not:
(a) Liens, Etc. Create or suffer to exist, or permit any of
the Flavors Non-Operating Subsidiaries to create or suffer to exist, any Lien,
upon or with respect to any of its properties, whether now owned or hereafter
acquired, or sign or file, or permit the Flavors Non-Operating Subsidiaries to
sign or file, under the Uniform Commercial Code of any jurisdiction, a financing
statement that names the Guarantor or any other Flavors Non-Operating Subsidiary
as debtor, or sign, or permit any of the Flavors Non-Operating Subsidiaries to
sign, any security agreement authorizing any secured party thereunder to file
such financing statement, or assign, or permit any of the Flavors Non-Operating
Subsidiaries to assign, any right to receive income, other than the following
Liens: (i) Liens created by the Loan Documents; (ii) the Liens described on
Schedule II hereto, provided, that in the event any property subject to any such
Lien is released from such Lien, such released property may not thereafter be
subjected to any Lien other than Liens created by the Loan Documents; (iii)
mechanics', materialmen's, carriers' and similar Liens arising in the ordinary
course of business securing obligations that are not overdue for a period of
more than 30 days or which are being contested in good faith and by proper
proceedings and as to which appropriate reserves are being maintained; (iv)
Liens for taxes, assessments and governmental charges or levies not yet due and
payable or which are being contested in good faith and by proper proceedings and
as to which appropriate reserves are being maintained; and (v) judgment or other
similar Liens, provided that there shall be no period of more than 10
consecutive days during which a stay of enforcement of the related judgment
shall not be in effect.
(b) Lease Obligations. Create, incur, assume or suffer to
exist, or permit any of the Flavors Non-Operating Subsidiaries to create, incur,
assume or suffer to exist, any obligations as lessee (i) for the rental or hire
of real or personal property in connection with any sale and leaseback
transaction, or (ii) for the rental or hire of other real or personal property
of any kind under leases or agreements to lease having an original term of one
year or more.
(c) Mergers, Etc. Merge into or consolidate with any Person
or permit any Person to merge into it, or permit any of the Flavors Non-
Operating Subsidiaries to do so.
(d) Sales, Etc. of Assets. Sell, lease, transfer or
otherwise dispose of, or permit any of the Flavors Non-Operating Subsidiaries to
sell, lease, transfer or otherwise dispose of, any assets or grant, or permit
any of the Flavors Non-Operating Subsidiaries to grant, any option or other
right to purchase, lease or otherwise acquire any assets except (i) dispositions
of obsolete, worn out or surplus property disposed of in the ordinary course of
business and (ii) sales, leases, transfers or other dispositions of assets
(other than the capital stock of any of the Flavors Non-Operating Subsidiaries)
for cash and for no less than fair market value.
(e) Dividends, Repurchases, Etc. Declare or pay any
dividends, purchase, redeem, retire, defease or otherwise acquire for value any
of its capital stock or any warrants, rights or options to acquire such capital
stock, now or hereafter outstanding, return any capital to its stockholders as
such, make any distribution of assets, capital stock, warrants, rights, options,
obligations or securities to its stockholders as such, or permit any of the
Flavors Non-Operating Subsidiaries to purchase, redeem, retire, defease or
otherwise acquire for value any capital stock of the Guarantor or any warrants,
rights or options to acquire such capital stock, except that (i) the Guarantor
may declare and deliver dividends and distributions payable only in common stock
or warrants, rights or options to acquire common stock and (ii) may declare and
pay the dividend described in clause (i) of the definition of "Special
Dividend".
(f) Investments. Make or hold, or permit any of the Flavors
Non-Operating Subsidiaries to make or hold, any Investment in any Person, other
than (i) Investments by the Guarantor and the Flavors Non-Operating Subsidiaries
in Cash Equivalents and (ii) Investments existing on the date hereof.
(g) Change in Nature of Business. (i) Engage in any
business other than the ownership of the capital stock of the Flavors Non-
Operating Subsidiaries or (ii) permit any of the Flavors Non-Operating
Subsidiaries to make any change in the nature of its business carried on at the
date hereof.
(h) Accounting Changes. Make or permit, or permit any of
the Flavors Non-Operating Subsidiaries to make or permit, any change in
accounting policies affecting (i) the presentation of financial statements or
(ii) reporting practices, except in either case as required or permitted by
GAAP.
(i) Debt. Create, incur, assume or suffer to exist, or
permit any of the Flavors Non-Operating Subsidiaries to create, incur, assume or
suffer to exist, any Debt other than: (i) in the case of the Guarantor, Debt
under the Loan Documents; (ii) in the case of any of the Flavors Non-Operating
Subsidiaries, the Debt listed on Schedule III hereto; and (iii) in the case of
the Guarantor and the Flavors Non-Operating Subsidiaries, endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business.
(j) Charter Amendments. Amend, or permit any of the Flavors
Non-Operating Subsidiaries to amend, its certificate of incorporation or bylaws.
(k) Prepayments, Etc. of Debt. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any
Debt, or amend, modify or change in any manner any term or condition of any Debt
or any agreement relating to such Debt, or permit any of the Flavors Non-
Operating Subsidiaries to do any of the foregoing.
(l) Negative Pledge. Enter into or suffer to exist, or
permit any of the Flavors Non-Operating Subsidiaries to enter into or suffer to
exist, any agreement prohibiting or conditioning the creation or assumption of
any Lien upon any of its property or assets other than (i) in favor of the Agent
and the Lenders or (ii) any prohibition or condition existing on the date
hereof.
(m) Partnerships. Become a general partner in any general
or limited partnership, or permit any of the Flavors Non-Operating Subsidiaries
to do so.
(n) Capital Expenditures. Make, or permit any of the
Flavors Non-Operating Subsidiaries to make, any Capital Expenditures.
(o) Issuance of Capital Stock. Issue, or permit any of the
Flavors Non-Operating Subsidiaries to issue, any capital stock or warrants,
rights or options to acquire such capital stock.
(p) Payment Restrictions. Create or otherwise cause or
suffer to exist or become effective, or permit any of the Flavors Non-Operating
Subsidiaries to create or otherwise cause or suffer to exist or become
effective, any consensual encumbrance or restriction of any kind on the ability
of the Guarantor or any of the Flavors Non-Operating Subsidiaries to (i) pay
dividends or make any other distributions on any of the Guarantor's or any of
the Flavors Non-Operating Subsidiaries' capital stock, (ii) make loans or
advances to Mafco or any Subsidiary of Mafco or (iii) repay or prepay Debt owed
by the Guarantor or any of the Flavors Non-Operating Subsidiaries other than any
(x) consensual encumbrances or restrictions existing on the date hereof and (y)
other consensual encumbrances or restrictions that are no more onerous than
those encumbrances and restrictions in existence on the date hereof with respect
to the Guarantor or such Flavors Non-Operating Subsidiary, as the case may be.
Section 8. Amendments, Etc. No amendment or waiver of any
provision of this Guaranty and no consent to any departure by the Guarantor
therefrom shall in any event be effective unless the same shall be in writing
and signed by the Agent and the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or consent
shall, unless in writing and signed by all the Lenders (other than any Lender
that is, at such time, a Defaulting Lender), (a) release or limit the liability
of the Guarantor hereunder, (b) postpone any date fixed for payment hereunder or
(c) change the number of Lenders required to take any action hereunder.
Section 9. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy,
telex or cable communication) and mailed, telegraphed, telecopied, telexed,
cabled or delivered to it, if to the Guarantor, addressed to it at c/o
MacAndrews & Forbes Holdings Inc., 38 East 63rd Street, New York, New York
10021, Attention: Secretary, if to the Agent or any Lender, at its address
specified in the Credit Agreement, or as to any party at such other address as
shall be designated by such party in a written notice to each other party. All
such notices and other communications shall, when mailed, telegraphed,
telecopied, telexed or cabled, be effective when deposited in the mails,
delivered to the telegraph company, transmitted by telecopier, confirmed by
telex answerback or delivered to the cable company, respectively.
Section 10. No Waiver; Remedies. No failure on the part of the
Agent or any Lender to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
Section 11. Right of Set-off. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the granting of the consent specified by Section 6.01 of the Credit Agreement
to authorize the Agent to declare the Notes due and payable pursuant to the
provisions of said Section 6.01, each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of the Guarantor against any and all of the
Obligations of the Guarantor now or hereafter existing under this Guaranty,
whether or not such Lender shall have made any demand under this Guaranty and
although such Obligations may be unmatured. Each Lender agrees promptly to
notify the Guarantor after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Lender may have.
Section 12. Indemnification. Without limitation on any other
Obligations of the Guarantor or remedies of the Lenders under this Guaranty, the
Guarantor shall, to the fullest extent permitted by law, indemnify, defend and
save and hold harmless the Lenders from and against, and shall pay on demand,
any and all losses, liabilities, damages, costs, expenses and charges (including
the reasonable and documented fees and disbursements of the legal counsel of the
Lenders and the reasonable and documented charges of the internal legal counsel
of the Lenders) suffered or incurred by the Lenders as a result of (a) any
failure of any Guaranteed Obligations to be the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency or
other similar laws affecting the rights of creditors generally, or (b) any
failure of the Borrower to pay and perform any Guaranteed Obligations in
accordance with the terms of such Guaranteed Obligations.
Section 13. Continuing Guaranty; Assignments under the Credit
Agreement. This Guaranty is a continuing guaranty and shall (a) remain in full
force and effect until the date on which the Payment Obligations in respect of
the Guaranteed Obligations and this Guaranty have been Fully Satisfied, (b) be
binding upon the Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Lenders, the Agent and their successors,
transferees and assigns. Without limiting the generality of the foregoing
clause (c), any Lender may assign or otherwise transfer all or any portion of
its rights and obligations under the Credit Agreement (including, without
limitation, all or any portion of its Commitment, the Advances owing to it and
the Note or Notes held by) it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to such
Lender herein or otherwise, in each case as provided in Section 8.07 of the
Credit Agreement.
Section 14. Governing Law; Submission to Jurisdiction; Waiver
of Jury Trial. (a) This Guaranty shall be governed by, and construed in
accordance with, the laws of the State of New York.
(b) The Guarantor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Guaranty or any of the other Loan
Documents to which it is or is to be a party, or for recognition or enforcement
of any judgment, and the Guarantor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State or, to the extent permitted by law, in
such federal court. The Guarantor agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Guaranty shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Guaranty or any of the
other Loan Documents to which it is or is to be a party in the courts of any
jurisdiction.
(c) The Guarantor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Guaranty or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal
court. The Guarantor hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(d) THE GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS, THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT OR
ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.
Section 15. Execution in Counterparts, Delivery by Telecopier.
This Guaranty may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of any executed counterpart of a signature
page to this Guaranty by telecopier shall be effective as delivery of a manually
executed counterpart of this Guaranty.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
FLAVORS (PARENT) HOLDINGS INC.
By
--------------------------
Name:
Title:
EXECUTION COPY
AMENDED AND RESTATED CIGAR GUARANTY
Dated September 30, 1994, and
amended and restated
as of June 15, 1995,
From
Cigar (PARENT) HOLDINGS INC.
as Guarantor
in favor of
THE LENDERS PARTY TO THE CREDIT AGREEMENT
REFERRED TO HEREIN
and
CITIBANK, N.A.
as Agent
T A B L E O F C O N T E N T S
Section Page
1. Guaranty; Limitation of Liability. . . . . . . . . . . . . 1
2. Guaranty Absolute. . . . . . . . . . . . . . . . . . . . . 2
3. Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. Payments Free and Clear of Taxes, Etc. . . . . . . . . . . 4
5. Representations and Warranties . . . . . . . . . . . . . . 6
6. Affirmative Covenants. . . . . . . . . . . . . . . . . . . 10
(a) Compliance with Laws, Etc. . . . . . . . . . . . 10
(b) Compliance with Environmental Laws . . . . . . . 10
(c) Maintenance of Insurance . . . . . . . . . . . . 10
(d) Preservation of Corporate Existence, Etc . . . . 11
(e) Visitation Rights. . . . . . . . . . . . . . . . 11
(f) Keeping of Books . . . . . . . . . . . . . . . . 11
(g) Maintenance of Properties, Etc . . . . . . . . . 11
(h) Reporting Requirements . . . . . . . . . . . . . 11
(i) Transactions with Affiliates . . . . . . . . . . 12
(j) Mafco Tax Group. . . . . . . . . . . . . . . . . 13
7. Negative Covenants . . . . . . . . . . . . . . . . . . . . 13
(a) Liens, Etc . . . . . . . . . . . . . . . . . . . 13
(b) Lease Obligations. . . . . . . . . . . . . . . . 13
(c) Mergers, Etc . . . . . . . . . . . . . . . . . . 14
(d) Sales, Etc. of Assets. . . . . . . . . . . . . . 14
(e) Dividends, Repurchases, Etc. . . . . . . . . . . 14
(f) Investments. . . . . . . . . . . . . . . . . . . 14
(g) Change in Nature of Business . . . . . . . . . . 14
(h) Accounting Changes . . . . . . . . . . . . . . . 14
(i) Debt.. . . . . . . . . . . . . . . . . . . . . . 14
(j) Charter Amendments . . . . . . . . . . . . . . . 15
(k) Prepayments, Etc. of Debt. . . . . . . . . . . . 15
(l) Negative Pledge. . . . . . . . . . . . . . . . . 15
(m) Partnerships . . . . . . . . . . . . . . . . . . 15
(n) Capital Expenditures . . . . . . . . . . . . . . 15
(o) Issuance of Capital Stock. . . . . . . . . . . . 15
(p) Payment Restrictions . . . . . . . . . . . . . . 15
Section Page
8. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . 16
9. Notices, Etc . . . . . . . . . . . . . . . . . . . . . . . 16
10. No Waiver; Remedies . . . . . . . . . . . . . . . . . . . 16
11. Right of Set-off. . . . . . . . . . . . . . . . . . . . . 16
12. Indemnification . . . . . . . . . . . . . . . . . . . . . 17
13. Continuing Guaranty; Assignments under the
Credit Agreement . . . . . . . . . . . . . . . . . . . . 17
14. Governing Law; Submission to Jurisdiction;
Waiver of Jury Trial . . . . . . . . . . . . . . . . . . 17
15. Execution in Counterparts, Delivery by Telecopier . . . . 18
Schedule I- Subsidiaries
Schedule II- Liens
Schedule III- Debt
Schedule IV- Investments
AMENDED AND RESTATED GUARANTY
AMENDED AND RESTATED GUARANTY dated September 30, 1994, and
amended and restated as of June 15, 1995, made by Consolidated Cigar II Holdings
Inc., a Delaware corporation (the "Guarantor"), in favor of the Lenders (the
"Lenders") party to the Credit Agreement (as defined below) and Citibank, N.A.
("Citibank"), as agent (the "Agent") for the Lenders.
PRELIMINARY STATEMENT. The Lenders and the Agent are parties to
(a) a Credit Agreement dated as of July 20, 1994 (said Agreement, as it may
hereafter be amended or otherwise modified from time to time, being the "Credit
Agreement"; the terms defined therein and not otherwise defined herein being
used herein as therein defined) with Marvel IV Holdings Inc., a Delaware
corporation (the "Borrower"), and (b) an amendment dated as of March 10, 1995
(the "First Amendment") with the Borrower and Mafco Holdings Inc., a Delaware
corporation ("Mafco"), and the Guarantor entered into a Guaranty dated September
30, 1994 (the "Existing Guaranty") in favor of the Agent. It is a condition
precedent to the effectiveness of the First Amendment that the Guarantor shall
have executed and delivered this Amended and Restated Guaranty which amends and
restates the Existing Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to amend the Credit Agreement, the Guarantor hereby agrees to
amend and restate the Existing Guaranty as follows:
Section 1. Guaranty; Limitation of Liability. (a) The
Guarantor hereby unconditionally guarantees (a) the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all Obligations of
Mafco now or hereafter existing under the Loan Documents to which it is a party,
whether for principal, interest (including, without limitation, interest after
the filing of a petition initiating a proceeding of the type referred to in
Section 6.01(e) of the Credit Agreement, whether or not such interest
constitutes an allowed claim for purposes of such proceeding), fees, expenses or
otherwise (such Obligations being the "Guaranteed Payment Obligations") and (b)
the performance when due of all other Obligations of Mafco now or hereafter
existing under the Loan Documents, whether affirmative or negative (such
Obligations being the "Guaranteed Performance Obligations" and together with the
Guaranteed Payment Obligations, the "Guaranteed Obligations"), and agrees to pay
any and all reasonable expenses (including reasonable counsel fees and expenses)
incurred by the Agent or the Lenders in enforcing any rights under this
Guaranty. Without limiting the generality of the foregoing, the Guarantor's
liability shall extend to all amounts that constitute part of the Guaranteed
Payment Obligations and would be owed by Mafco to the Agent or the Lenders under
the Loan Documents but for the fact that they are unenforceable or not allowable
due to the existence of a bankruptcy, reorganization or similar proceeding
involving Mafco.
(b) The liability of the Guarantor under this Guaranty in
respect of the Guaranteed Obligations shall not exceed the greater of (i) 95% of
the Adjusted Net Assets of the Guarantor on the date hereof and (ii) 95% of the
Adjusted Net Assets of the Guarantor on the date of any payment hereunder.
"Adjusted Net Assets" of the Guarantor at any date means the lesser of (x) the
amount by which the fair value of the property of the Guarantor exceeds the
total amount of liabilities, including, without limitation, contingent
liabilities, but excluding any liabilities or obligations under this Guaranty,
of the Guarantor at such date and (y) the amount by which the present fair
salable value of the assets of the Guarantor at such date exceeds the amount
that will be required to pay the probable liability of the Guarantor on its
debts, excluding debt in respect of this Guaranty, as they become absolute and
matured.
Section 2. Guaranty Absolute. The Guarantor guarantees that
the Guaranteed Payment Obligations will be paid, and the Guaranteed Performance
Obligations will be performed, strictly in accordance with the terms of the Loan
Documents, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of the Agent or
the Lenders with respect thereto. The Obligations of the Guarantor under this
Guaranty are independent of the Guaranteed Obligations, and a separate action or
actions may be brought and prosecuted against the Guarantor to enforce this
Guaranty, irrespective of whether any action is brought against Mafco or whether
Mafco is joined in any such action or actions. The liability of the Guarantor
under this Guaranty shall be absolute and unconditional irrespective of, and the
Guarantor hereby irrevocably waives any defenses it may now or hereafter have in
any way relating to, any and all of the following:
(a) any lack of validity or enforceability of any Loan
Document or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Guaranteed Obligations, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in the Guaranteed 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 Guaranteed Obligations;
(d) any manner of application of Collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale or
other disposition of any Collateral for all or any of the Guaranteed Obligations
or any other assets of Mafco, the Borrower or any of their Subsidiaries;
(e) any change, restructuring or termination of the
corporate structure or existence of Mafco, the Borrower or any of their
Subsidiaries; or
(f) any other circumstance (including, without limitation,
any statute of limitations or any existence of or reliance on any representation
by the Agent or any Lender) that might otherwise constitute a defense available
to, or a discharge of, the Borrower, the Guarantor or any other guarantor or
surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Agent or any Lender upon the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, all as though such
payment had not been made.
Section 3. Waivers. (a) The Guarantor hereby waives, to the
extent permitted by applicable law, promptness, diligence, notice of acceptance
and any other notice with respect to any of the Guaranteed Obligations and this
Guaranty and any requirement that the Agent or any Lender protect, secure,
perfect or insure any Lien or any property subject thereto or exhaust any right
or take any action against Mafco, the Borrower or any other Person or any
Collateral.
(b) The Guarantor hereby irrevocably waives any claim or
other rights that it may now or hereafter acquire against the Borrower or any
other insider guarantor that arise from the existence, payment, performance or
enforcement of the Guarantor's Obligations under this Guaranty or any other Loan
Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Agent or any Lender against the
Borrower or any other insider guarantor or any Collateral, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Borrower or any other insider guarantor, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right. If any amount shall be paid to the
Guarantor in violation of the preceding sentence at any time prior to the later
of the cash payment in full of the Guaranteed Payment Obligations and all other
amounts payable under this Guaranty and the Termination Date, such amount shall
be held in trust for the benefit of the Agent and the Lenders and shall
forthwith be paid to the Agent to be credited and applied to the Guaranteed
Payment Obligations and all other amounts payable under this Guaranty, whether
matured or unmatured, in accordance with the terms of the Loan Documents, or to
be held as Collateral for any Guaranteed Obligations or other amounts payable
under this Guaranty thereafter arising. The Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents and that the waiver set forth in this
subsection is knowingly made in contemplation of such benefits.
(c) The Guarantor hereby waives any right to revoke this
Guaranty, and acknowledges that this Guaranty is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in the future.
Section 4. Payments Free and Clear of Taxes, Etc. (a) Any and
all payments made by the Guarantor hereunder shall be made, in accordance with
Section 2.10 of the Credit Agreement, free and clear of and without deduction
for any and all present or future Taxes. If the Guarantor shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section) such Lender or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Guarantor shall make such deductions and
(iii) the Guarantor shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law; provided,
however, that any such Lender shall designate a different Lending Office if, in
the judgment of such Lender, such designation would avoid the need for, or
reduce the amount of, any Taxes required to be deducted from or in respect of
any sum payable hereunder to such Lender or the Agent and would not, in the
judgment of such Lender, be otherwise disadvantageous to such Lender.
(b) In addition, the Guarantor agrees to pay any present or
future Other Taxes.
(c) The Guarantor will indemnify each Lender and the Agent
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section) paid by such Lender or the Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto; provided that, in the event such Lender or the Agent, as the case may
be, successfully contests the assessment of such Taxes or Other Taxes or any
liability arising therefrom or with respect thereto, such Lender or the Agent
shall refund, to the extent of any refund thereof made to such Lender or the
Agent, any amounts paid by the Guarantor under this Section in respect of such
Taxes, Other Taxes or liabilities arising therefrom or with respect thereto.
Each Lender and the Agent agree that it will contest such Taxes, Other Taxes or
liabilities if (i) the Guarantor furnishes to it an opinion of reputable tax
counsel acceptable to such Lender or the Agent to the effect that such Taxes or
Other Taxes were wrongfully or illegally imposed and (ii) such Lender or the
Agent determines, in its sole discretion, that it would not be disadvantaged or
prejudiced in any manner whatsoever as a result of such contest. This
indemnification shall be made within 30 days from the date such Lender or the
Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes,
the Guarantor will furnish to the Agent, at its address referred to in the
Credit Agreement, appropriate evidence of payment thereof. If no Taxes are
payable in respect of any payment hereunder by the Guarantor through an account
or branch outside the United States or on behalf of the Guarantor by a payor
that is not a United States person, the Guarantor will furnish, or will cause
such payor to furnish, to the Agent a certificate from each appropriate taxing
authority or authorities, or an opinion of counsel acceptable to the Agent, in
either case stating that such payment is exempt from or not subject to Taxes.
For purposes of this Section, the terms "United States" and "United States
person" shall have the meanings specified in Section 7701 of the Code.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States and the Agent, if organized under the laws of a
jurisdiction outside the United States, shall, if requested in writing by the
Guarantor or the Agent (but only so long as such Lender or the Agent remains
lawfully able to do so and only so long as Guarantor is making payments under
this Guaranty), provide the Guarantor and (in the case of any such Lender other
than the Agent) the Agent with two duly completed copies of Internal Revenue
Service form 1001 or 4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Lender or the Agent is
entitled to benefits under an income tax treaty to which the United States is a
party that reduces the rate of withholding tax on payments under this Agreement
or the Notes or certifying that the income receivable pursuant to this Agreement
or the Notes is effectively connected with the conduct of a trade or business in
the United States.
(f) For any period with respect to which the Agent or a
Lender has failed to provide the Guarantor with the appropriate forms described
in subsection (e) above (other than if such failure is due to a change in law
occurring after the date on which such person was originally required to provide
such forms, or if such forms are otherwise not required under subsection (e)
above), the Agent or such Lender shall not be entitled to increased payments or
indemnification under subsection (a) or (c) above with respect to Taxes imposed
by the United States; provided, however, that should the Agent or a Lender
become subject to Taxes because of its failure to deliver a form required
hereunder, the Guarantor shall take such steps as the Agent or such Lender shall
reasonably request to assist the Lender to recover such Taxes if, in the
judgment of the Guarantor such steps would avoid the need for, or reduce the
amount of, any Taxes required to be deducted from or in respect of any sum
payable hereunder to the Agent or such Lender and would not, in the judgment of
the Guarantor, be disadvantageous to the Guarantor.
(g) Without prejudice to the survival of any other agreement
of the Guarantor hereunder, the agreements and obligations of the Guarantor
contained in this Section 4 shall survive the payment in full of the Guaranteed
Obligations and all other amounts payable under this Guaranty.
(h) If a Lender shall change its Lending Office other than
(i) at the request of the Guarantor or (ii) at a time when such change would not
result in this Section 4 requiring the Guarantor to make a greater payment than
if such change had not been made, such Lender shall not be entitled to receive
any greater payment under this Section 4 than such Lender would have been
entitled to receive had it not changed its Lending Office.
Section 5. Representations and Warranties. The Guarantor
hereby represents and warrants as follows:
(a) The Guarantor (i) is a corporation duly organized,
validly existing andin good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed would not have a Material
Adverse Effect (with respect to clause (a) of the definition thereof, the term
"Person" shall refer to the Guarantor) and (iii) has all requisite corporate
power and authority to own or lease and operate its properties and to carry on
its business as now conducted and as proposed to be conducted. All of the
outstanding capital stock of the Guarantor has been validly issued, is fully
paid and non-assessable. Mafco is the legal and beneficial owner of all of the
outstanding capital stock of the Guarantor (other than the shares (the "Voting
Trust Stock") issued in the name of the voting trustee (the "Voting Trustee")
under the voting trust agreement described in Section 3.02(i)(xv)(C) of the
Credit Agreement (the "Voting Trust Agreement") and the Voting Trustee is the
legal owner of the Voting Trust Stock, in each case free and clear of all Liens
except for the Liens created by the Collateral Documents and the Voting Trust
Agreement.
(b) Set forth on Schedule I hereto is a complete and
accurate list of the Cigar Non-Operating Subsidiaries, showing as of the date
hereof (as to each such Person) the jurisdiction of its incorporation, the
number of shares of each class of capital stock authorized, and the number
outstanding, on the date hereof and the percentage of the outstanding shares of
each such class owned (directly or indirectly), by the Guarantor, and the
number of shares covered by all outstanding options, warrants, rights of
conversion or purchase and similar rights at the date hereof. All of the
outstanding capital stock of Cigar Non-Operating Subsidiaries has been validly
issued, is fully paid and non-assessable and is owned by the Guarantor (except
as set forth on Schedule I), free and clear of all Liens, except those created
by the Collateral Documents and those set forth on Schedule II hereto. Each
such Cigar Non-Operating Subsidiary (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed would not have a Material
Adverse Effect (with respect to clause (a) of the definition thereof, the term
"Person" shall refer to the Guarantor) and (iii) has all requisite corporate
power and authority to own or lease and operate its properties and to carry on
its business as now conducted and as proposed to be conducted.
(c) The execution, delivery and performance by the Guarantor
of this Guaranty, each Loan Document and each Related Document to which it is or
is to be a party and the consummation by the Guarantor of the transactions
contemplated hereby and by the Merger and the First Amendment, are within the
Guarantor's corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene the Guarantor's charter or by-laws,
(ii) violate any law (including, without limitation, the Exchange Act), rule,
regulation (including, without limitation, Regulation X of the Board of
Governors of the Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award, (iii) conflict with or result in the breach of,
or constitute a default under, any loan agreement, contract, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting the
Guarantor, any of the Cigar Non-Operating Subsidiaries or any of its or their
properties, the effect of which conflict, breach or default is reasonably likely
to have a Material Adverse Effect (with respect to clause (a) of the definition
thereof, the term "Person" shall refer to the Guarantor) or (iv) except for the
liens created by the Collateral Documents, result in or require the creation or
imposition of any Lien upon or with respect to any of the properties of the
Guarantor or any of the Cigar Non-Operating Subsidiaries. Neither the Guarantor
nor any of the Cigar Non-Operating Subsidiaries is in violation of any such law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award or in breach of any such contract, loan agreement, indenture, mortgage,
deed of trust, lease or other instrument, the violation or breach of which would
be reasonably likely to have a Material Adverse Effect (with respect to clause
(a) of the definition thereof, the term "Person" shall refer to the Guarantor).
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for (i) the due execution, delivery and performance by the Guarantor of
this Guaranty or any other Loan Document or any Related Document to which it is
or is to be a party or for the consummation by the Guarantor of the transactions
contemplated hereby, (ii) the grant by the Guarantor of the Liens granted by it
pursuant to the Collateral Documents, (iii) the perfection or maintenance of the
Liens created by the Collateral Documents (including the first priority nature
thereof) or (iv) the exercise by the Agent or any Lender of its rights under the
Loan Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents, except for the filing of financing statements in
accordance with Section 3.02(i)(viii) of the Credit Agreement and Section
3(c)(viii) of the First Amendment and except as may be required in connection
with the disposition of any portion of the Collateral by laws affecting the
offering and sale of securities generally; provided, however, that no
representation or warranty is made as to any consent of, authorization, approval
or other action by, or notice to or filing with, any banking agency or
regulatory body applicable to the Agent. As of the date of the Consummation of
the Transaction, all applicable waiting periods in connection with the
Transaction and the other transactions contemplated hereby will have expired
without any action having been taken by any competent authority restraining,
preventing or imposing materially adverse conditions upon the Transaction or the
rights of the Loan Parties or their Subsidiaries freely to transfer or otherwise
dispose of, or to create any Lien on, any properties now owned or hereafter
acquired by any of them.
(e) This Guaranty has been, and each other Loan Document to
which the Guarantor is a party when delivered hereunder will have been, duly
executed and delivered by the Guarantor. This Guaranty is, and each other Loan
Document to which the Guarantor is a party when delivered hereunder will be, the
legal, valid and binding obligations of the Guarantor, enforceable against the
Guarantor in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforceability of creditor's rights generally.
(f) There is no pending or threatened action, proceeding,
governmental investigation or arbitration affecting the Guarantor or any of the
Cigar Non-Operating Subsidiaries before any court, governmental agency or
arbitrator, which is reasonably likely to have a Material Adverse Effect (with
respect to clause (a) of the definition thereof, the term "Person" shall refer
to the Guarantor), or that purports to affect the legality, validity or
enforceability of this Guaranty, any other Loan Document or any Related Document
or the consummation of the transactions contemplated hereby or thereby.
(g) The Guarantor and its ERISA Affiliates are in compliance
in all material respects with the applicable provisions of ERISA and the Code
with respect to each Plan thereof. No ERISA Event has occurred or is reasonably
expected to occur with respect to any Plan of the Guarantor or any of its ERISA
Affiliates. The amount of all Unfunded Pension Liabilities under all Plans of
the Guarantor and its ERISA Affiliates does not exceed $60,000,000. None of the
Guarantor or any of its ERISA Affiliates has made contributions or incurred any
Withdrawal Liability to any Multiemployer Plan within the past five years, and
it is not reasonably expected that such contributions shall be made or required
or that such liability shall be incurred in any such case in amounts or under
circumstances that would be reasonably likely to result in a material liability
to the Guarantor or any of its ERISA Affiliates. Schedule B (Actuarial
Information) to the 1992 annual report (Form 5500 Series) for each Plan of the
Guarantor and each of its ERISA Affiliates, copies of which have been filed with
the Internal Revenue Service and furnished to the Lenders, is complete and
accurate in all material respects and fairly presents the funding status of such
Plan, and since the date of such Schedule B there has been no material adverse
change in such funding status. The obligations of the Guarantor and the Cigar
Non-Operating Subsidiaries for post-retirement benefits to be provided under
Plans which are welfare benefit plans (as defined in Section 3(l) of ERISA) are
not reasonably likely to have a Material Adverse Effect (in the case of clause
(a) of the definition thereof, "Person" shall refer to the Guarantor).
(h) The operations and properties of the Guarantor and the
Cigar Non-Operating Subsidiaries are in substantial compliance with all
Environmental Laws, all necessary Environmental Permits have been obtained and
are in effect for the operations and properties of the Guarantor and the Cigar
Non-Operating Subsidiaries and the Guarantor and the Cigar Non-Operating
Subsidiaries are in compliance with all such Environmental Permits, except, as
to all of the above, where the failure to do so would not be reasonably likely
to have a Material Adverse Effect (in the case of clause (a) of the definition
thereof, the term "Person" shall refer to the Guarantor); and no circumstances
exist that are reasonably likely to (i) form the basis of an Environmental
Action against the Guarantor or any of the Cigar Non-Operating Subsidiaries or
any of their respective properties or (ii) cause any such property to be subject
to any restrictions on ownership, occupancy, use or transferability under any
Environmental Law that would, in the case of either (i) or (ii) above, be
reasonably likely to have a Material Adverse Effect (in the case of clause (a)
of the definition thereof, the term "Person" shall refer to the Guarantor).
(i) The Guarantor and the Cigar Non-Operating Subsidiaries
has filed, has caused to be filed or has been included in all tax returns
(Federal, state, local and foreign) required to be filed and has paid all taxes
shown thereon to be due, together with applicable interest and penalties.
(j) Neither the Guarantor nor the Cigar Non-Operating
Subsidiaries is an "investment company," or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended.
(k) The Guarantor is, individually and together with its
Subsidiaries, Solvent.
(l) Set forth on Schedule III hereto is a complete and
accurate list of all Debt (other than intercompany Debt) of the Guarantor and
the Cigar Non-Operating Subsidiaries, showing as of the date hereof the
principal amount outstanding thereunder and there is no other agreement,
contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting the Guarantor or any of the Cigar Non-
Operating Subsidiaries that imposes any material Obligation or material
restriction on the Guarantor or any of the Cigar Non-Operating Subsidiaries
(other than the Related Documents).
(m) Set forth on Schedule IV is a complete and accurate list
of all Investments (other than intercompany Debt) held by the Guarantor or any
of the Cigar Non-Operating Subsidiaries, showing as of the date hereof the
amount, obligor or issuer and maturity, if any, thereof.
Section 6. Affirmative Covenants. The Guarantor covenants and
agrees that, so long as any part of the Advances shall remain unpaid or any
Lender shall have any Commitment, the Guarantor will:
(a) Compliance with Laws, Etc. Comply, and cause each of
itsSubsidiaries to comply, in all material respects with all applicable laws,
rules, regulations and orders (such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property except to the extent contested in
good faith), the failure to comply with which would, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect (with respect
to clause (a) of the definition thereof, the term Person shall refer to the
Guarantor).
(b) Compliance with Environmental Laws. Comply and cause
each of its Subsidiaries and all lessees and all other Persons occupying its
properties to comply, in all material respects, with all Environmental Laws and
Environmental Permits applicable to its operations and properties; obtain and
renew all Environmental Permits necessary for its operations and properties; and
conduct, and cause each of its Subsidiaries to conduct, any investigation,
study, sampling and testing, and undertake any cleanup, removal, remedial or
other action necessary to remove and clean up all Hazardous Materials from any
of its properties, in accordance with the requirements of all Environmental
Laws; provided, however, that neither the Guarantor nor any of its Subsidiaries
shall be required to undertake any such cleanup, removal, remedial or other
action to the extent that its obligation to do so is being contested in good
faith and by proper proceedings and appropriate reserves are being maintained
with respect to such circumstances.
(c) Maintenance of Insurance. Maintain, and cause each of
its Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Guarantor or such Subsidiary operates.
(d) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries (other than any Subsidiaries of
MCG) to preserve and maintain, its corporate existence, rights (charter and
statutory) and franchises; provided, however, that neither the Guarantor nor any
of its Subsidiaries shall be required to preserve any of its rights or franchise
if the Board of Directors of the Guarantor or such Subsidiary (or the executive
committee of the Board of Directors thereof) shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Guarantor or such Subsidiary, as the case may be, and that the loss thereof
is not disadvantageous in any material respect to the Guarantor, such Subsidiary
or the Lenders.
(e) Visitation Rights. At any reasonable time and from time
to time, upon reasonable prior notice permit the Agent or any of the Lenders or
any agents or representatives thereof, to the extent reasonably requested to
examine and make copies of and abstracts from the records and books of account
of, and visit the properties of, the Guarantor and any of its Subsidiaries, and
to discuss the affairs, finances and accounts of the Guarantor and any of its
Subsidiaries with any of their officers or directors and with their independent
certified public accountants.
(f) Keeping of Books. Keep, and cause each of its
Subsidiaries to 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 Guarantor and each such Subsidiary to the extent necessary to
permit the preparation of the financial statements required to be delivered
hereunder.
(g) Maintenance of Properties, Etc. Maintain and preserve,
and cause each of its Subsidiaries to maintain and preserve, all of its
properties that are used or useful in the conduct of its business in good
working order and condition, ordinary wear and tear excepted.
(h) Reporting Requirements. Furnish to the Lenders through
the Agent:
(i) promptly upon any officer of the Guarantor
obtaining knowledge thereof, written notice of (A) the institution or non-
frivolous threat of any action, suit, proceeding, governmental investigation or
arbitration against or affecting the Guarantor or any of its Subsidiaries or any
property of the Guarantor or any of its Subsidiaries (any such action, suit,
proceeding, investigation or arbitration being a "Proceeding") or (B) any
material development in any Proceeding that is already pending, where such
Proceeding or development has not previously been disclosed by the Guarantor
hereunder and would be reasonably likely to have a Material Adverse Effect (in
the case of clause (a) of the definition of Material Adverse Effect, the term
"Person" shall refer to the Guarantor); together in each case with such other
information as any Lender through the Agent may reasonably request to enable the
Lenders and their counsel to evaluate such matters;
(ii) promptly after the furnishing thereof, copies
of any statement or report furnished to any other holder of the securities of
the Guarantor or of any Subsidiary of the Guarantor pursuant to the terms of any
indenture, loan or credit or similar agreement and not otherwise required to be
furnished to the Lenders pursuant to any other clause of this Section 6(h);
(iii) promptly after the occurrence thereof, notice of
any condition or occurrence on any property of the Guarantor or any Subsidiary
of the Guarantor that results in a material noncompliance by the Guarantor or
any of its Subsidiaries with any Environmental Law or Environmental Permit or
would be reasonably likely to (i) form the basis of an Environmental Action
against the Guarantor or any of its Subsidiaries or any such property that would
be reasonably likely to have a Material Adverse Effect (in the case of clause
(a) of the definition of Material Adverse Effect, the term "Person" shall refer
to the Guarantor) or (ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law or Environmental Permit or would be reasonably likely to (i)
form the basis of an Environmental Action against the Guarantor or any of its
Subsidiaries or such property that could have a Material Adverse Effect (in the
case of clause (a) of the definition of Material Adverse Effect, the term
"Person" shall refer to the Guarantor); and
(iv) such other information respecting the condition
(financial or otherwise), operations, assets or business of the Guarantor or any
of its Subsidiaries as any Lender through the Agent may from time to time
reasonably request.
(i) Transactions with Affiliates. Conduct, and cause each
of its Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of their Affiliates (other than the Guarantor or any of
its Subsidiaries) on terms that are fair and reasonable and no less favorable to
the Guarantor or such Subsidiary than it would obtain in a comparable arm's-
length transaction with a Person that is not an Affiliate; provided, however,
that for purposes of this Section 6(i), the term "Affiliate" shall not include
any officer or director of the Guarantor or such Subsidiary, as the case may be,
who does not possess directly or indirectly the power to vote 5% or more of the
Voting Stock of the Guarantor or its Subsidiaries.
(j) Mafco Tax Group. Maintain, and cause each of its
domestic Subsidiaries (other than the Subsidiaries of MCG) to maintain, its
status as a member of the affiliated group (within the meaning of Section
1504(a)(1) of the Internal Revenue Code) of which Mafco is the common parent.
Section 7. Negative Covenants. The Guarantor covenants and
agrees that, so long as any part of the Advances shall remain unpaid or any
Lender shall have any Commitment, the Guarantor will not:
(a) Liens, Etc. Create or suffer to exist, or permit any of
the Cigar Non-Operating Subsidiaries to create or suffer to exist, any Lien,
upon or with respect to any of its properties, whether now owned or hereafter
acquired, or sign or file, or permit the Cigar Non-Operating Subsidiaries to
sign or file, under the Uniform Commercial Code of any jurisdiction, a financing
statement that names the Guarantor or any other Cigar Non-Operating Subsidiary
as debtor, or sign, or permit any of the Cigar Non-Operating Subsidiaries to
sign, any security agreement authorizing any secured party thereunder to file
such financing statement, or assign, or permit any of the Cigar Non-Operating
Subsidiaries to assign, any right to receive income, other than the following
Liens: (i) Liens created by the Loan Documents; (ii) the Liens described on
Schedule II hereto, provided, that in the event any property subject to any such
Lien is released from such Lien, such released property may not thereafter be
subjected to any Lien other than Liens created by the Loan Documents; (iii)
mechanics', materialmen's, carriers' and similar Liens arising in the ordinary
course of business securing obligations that are not overdue for a period of
more than 30 days or which are being contested in good faith and by proper
proceedings and as to which appropriate reserves are being maintained; (iv)
Liens for taxes, assessments and governmental charges or levies not yet due and
payable or which are being contested in good faith and by proper proceedings and
as to which appropriate reserves are being maintained; and (v) judgment or other
similar Liens, provided that there shall be no period of more than 10
consecutive days during which a stay of enforcement of the related judgment
shall not be in effect.
(b) Lease Obligations. Create, incur, assume or suffer to
exist, or permit any of the Cigar Non-Operating Subsidiaries to create, incur,
assume or suffer to exist, any obligations as lessee (i) for the rental or hire
of real or personal property in connection with any sale and leaseback
transaction, or (ii) for the rental or hire of other real or personal property
of any kind under leases or agreements to lease having an original term of one
year or more.
(c) Mergers, Etc. Merge into or consolidate with any Person
or permit any Person to merge into it, or permit any of the Cigar Non-Operating
Subsidiaries to do so.
(d) Sales, Etc. of Assets. Sell, lease, transfer or
otherwise dispose of, or permit any of the Cigar Non-Operating Subsidiaries to
sell, lease, transfer or otherwise dispose of, any assets or grant, or permit
any of the Cigar Non-Operating Subsidiaries to grant, any option or other right
to purchase, lease or otherwise acquire any assets except (i) dispositions of
obsolete, worn out or surplus property disposed of in the ordinary course of
business and (ii) sales, leases, transfers or other dispositions of assets
(other than the capital stock of any of the Cigar Non-Operating Subsidiaries)
for cash and for no less than fair market value.
(e) Dividends, Repurchases, Etc. Declare or pay any
dividends, purchase, redeem, retire, defease or otherwise acquire for value any
of its capital stock or any warrants, rights or options to acquire such capital
stock, now or hereafter outstanding, return any capital to its stockholders as
such, make any distribution of assets, capital stock, warrants, rights, options,
obligations or securities to its stockholders as such, or permit any of the
Cigar Non-Operating Subsidiaries to purchase, redeem, retire, defease or
otherwise acquire for value any capital stock of the Guarantor or any warrants,
rights or options to acquire such capital stock, except that (i) the Guarantor
may declare and deliver dividends and distributions payable only in common stock
or warrants, rights or options to acquire common stock and (ii) may declare and
pay the dividend described in clause (ii) of the definition of "Special
Dividend".
(f) Investments. Make or hold, or permit any of the Cigar
Non-Operating Subsidiaries to make or hold, any Investment in any Person, other
than (i) Investments by the Guarantor and the Cigar Non-Operating Subsidiaries
in Cash Equivalents and (ii) Investments existing on the date hereof.
(g) Change in Nature of Business. (i) Engage in any
business other than the ownership of the capital stock of the Cigar Non-
Operating Subsidiaries or (ii) permit any of the Cigar Non-Operating
Subsidiaries to make any change in the nature of its business carried on at the
date hereof.
(h) Accounting Changes. Make or permit, or permit any of
the Cigar Non-Operating Subsidiaries to make or permit, any change in accounting
policies affecting (i) the presentation of financial statements or (ii)
reporting practices, except in either case as required or permitted by GAAP.
(i) Debt. Create, incur, assume or suffer to exist, or
permit any of the Cigar Non-Operating Subsidiaries to create, incur, assume or
suffer to exist, any Debt other than: (i) in the case of the Guarantor, Debt
under the Loan Documents; (ii) in the case of any of the Cigar Non-Operating
Subsidiaries, the Debt listed on Schedule III hereto; and (iii) in the case of
the Guarantor and the Cigar Non-Operating Subsidiaries, endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business.
(j) Charter Amendments. Amend, or permit any of the Cigar
Non-Operating Subsidiaries to amend, its certificate of incorporation or bylaws.
(k) Prepayments, Etc. of Debt. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any
Debt, or amend, modify or change in any manner any term or condition of any Debt
or any agreement relating to such Debt, or permit any of the Cigar Non-Operating
Subsidiaries to do any of the foregoing.
(l) Negative Pledge. Enter into or suffer to exist, or
permit any of the Cigar Non-Operating Subsidiaries to enter into or suffer to
exist, any agreement prohibiting or conditioning the creation or assumption of
any Lien upon any of its property or assets other than (i) in favor of the Agent
and the Lenders or (ii) any prohibition or condition existing on the date
hereof.
(m) Partnerships. Become a general partner in any general
or limited partnership, or permit any of the Cigar Non-Operating Subsidiaries to
do so.
(n) Capital Expenditures. Make, or permit any of the Cigar
Non-Operating Subsidiaries to make, any Capital Expenditures.
(o) Issuance of Capital Stock. Issue, or permit any of the
Cigar Non-Operating Subsidiaries to issue, any capital stock or warrants, rights
or options to acquire such capital stock.
(p) Payment Restrictions. Create or otherwise cause or
suffer to exist or become effective, or permit any of the Cigar Non-Operating
Subsidiaries to create or otherwise cause or suffer to exist or become
effective, any consensual encumbrance or restriction of any kind on the ability
of the Guarantor or any of the Cigar Non-Operating Subsidiaries to (i) pay
dividends or make any other distributions on any of the Guarantor's or any of
the Cigar Non-Operating Subsidiaries' capital stock, (ii) make loans or advances
to Mafco or any Subsidiary of Mafco or (iii) repay or prepay Debt owed by the
Guarantor or any of the Cigar Non-Operating Subsidiaries other than any (x)
consensual encumbrances or restrictions existing on the date hereof and (y)
other consensual encumbrances or restrictions that are no more onerous than
those encumbrances and restrictions in existence on the date hereof with respect
to the Guarantor or such Cigar Non-Operating Subsidiary, as the case may be.
Section 8. Amendments, Etc. No amendment or waiver of any
provision of this Guaranty and no consent to any departure by the Guarantor
therefrom shall in any event be effective unless the same shall be in writing
and signed by the Agent and the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or consent
shall, unless in writing and signed by all the Lenders (other than any Lender
that is, at such time, a Defaulting Lender), (a) release or limit the liability
of the Guarantor hereunder, (b) postpone any date fixed for payment hereunder or
(c) change the number of Lenders required to take any action hereunder.
Section 9. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy,
telex or cable communication) and mailed, telegraphed, telecopied, telexed,
cabled or delivered to it, if to the Guarantor, addressed to it at c/o
MacAndrews & Forbes Holdings Inc., 38 East 63rd Street, New York, New York
10021, Attention: Secretary, if to the Agent or any Lender, at its address
specified in the Credit Agreement, or as to any party at such other address as
shall be designated by such party in a written notice to each other party. All
such notices and other communications shall, when mailed, telegraphed,
telecopied, telexed or cabled, be effective when deposited in the mails,
delivered to the telegraph company, transmitted by telecopier, confirmed by
telex answerback or delivered to the cable company, respectively.
Section 10. No Waiver; Remedies. No failure on the part of the
Agent or any Lender to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
Section 11. Right of Set-off. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the granting of the consent specified by Section 6.01 of the Credit Agreement
to authorize the Agent to declare the Notes due and payable pursuant to the
provisions of said Section 6.01, each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of the Guarantor against any and all of the
Obligations of the Guarantor now or hereafter existing under this Guaranty,
whether or not such Lender shall have made any demand under this Guaranty and
although such Obligations may be unmatured. Each Lender agrees promptly to
notify the Guarantor after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Lender may have.
Section 12. Indemnification. Without limitation on any other
Obligations of the Guarantor or remedies of the Lenders under this Guaranty, the
Guarantor shall, to the fullest extent permitted by law, indemnify, defend and
save and hold harmless the Lenders from and against, and shall pay on demand,
any and all losses, liabilities, damages, costs, expenses and charges (including
the reasonable and documented fees and disbursements of the legal counsel of the
Lenders and the reasonable and documented charges of the internal legal counsel
of the Lenders) suffered or incurred by the Lenders as a result of (a) any
failure of any Guaranteed Obligations to be the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency or
other similar laws affecting the rights of creditors generally, or (b) any
failure of the Borrower to pay and perform any Guaranteed Obligations in
accordance with the terms of such Guaranteed Obligations.
Section 13. Continuing Guaranty; Assignments under the Credit
Agreement. This Guaranty is a continuing guaranty and shall (a) remain in full
force and effect until the date on which the Payment Obligations in respect of
the Guaranteed Obligations and this Guaranty have been Fully Satisfied, (b) be
binding upon the Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Lenders, the Agent and their successors,
transferees and assigns. Without limiting the generality of the foregoing
clause (c), any Lender may assign or otherwise transfer all or any portion of
its rights and obligations under the Credit Agreement (including, without
limitation, all or any portion of its Commitment, the Advances owing to it and
the Note or Notes held by) it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to such
Lender herein or otherwise, in each case as provided in Section 8.07 of the
Credit Agreement.
Section 14. Governing Law; Submission to Jurisdiction; Waiver
of Jury Trial. (a) This Guaranty shall be governed by, and construed in
accordance with, the laws of the State of New York.
(b) The Guarantor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Guaranty or any of the other Loan
Documents to which it is or is to be a party, or for recognition or enforcement
of any judgment, and the Guarantor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State or, to the extent permitted by law, in
such federal court. The Guarantor agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Guaranty shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Guaranty or any of the
other Loan Documents to which it is or is to be a party in the courts of any
jurisdiction.
(c) The Guarantor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Guaranty or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal
court. The Guarantor hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(d) THE GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS, THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT OR
ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.
Section 15. Execution in Counterparts, Delivery by Telecopier.
This Guaranty may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of any executed counterpart of a signature
page to this Guaranty by telecopier shall be effective as delivery of a manually
executed counterpart of this Guaranty.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
CONSOLIDATED CIGAR II HOLDINGS INC.
By
--------------------------
Name:
Title:
EXECUTION COPY
AMENDED AND RESTATED NEW WORLD GUARANTY
Dated as of June 29, 1995
From
NWCG (PARENT) HOLDINGS CORPORATION
as Guarantor
in favor of
THE LENDERS PARTY TO THE AMENDED AND RESTATED CREDIT AGREEMENT
REFERRED TO HEREIN
and
CITIBANK, N.A.
as Agent
T A B L E O F C O N T E N T S
Section Page
1. Amended and Restated Guaranty; Limitation of Liability . . 1
2. Guaranty Absolute. . . . . . . . . . . . . . . . . . . . . 2
3. Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. Payments Free and Clear of Taxes, Etc. . . . . . . . . . . 4
5. Representations and Warranties . . . . . . . . . . . . . . 6
6. Affirmative Covenants. . . . . . . . . . . . . . . . . . . 11
(a) Compliance with Laws, Etc. . . . . . . . . . . . 11
(b) Compliance with Environmental Laws . . . . . . . 11
(c) Maintenance of Insurance . . . . . . . . . . . . 12
(d) Preservation of Corporate Existence, Etc.. . . . 12
(e) Visitation Rights. . . . . . . . . . . . . . . . 12
(f) Keeping of Books . . . . . . . . . . . . . . . . 12
(g) Maintenance of Properties, Etc.. . . . . . . . . 12
(h) Reporting Requirements . . . . . . . . . . . . . 12
(i) Transactions with Affiliates . . . . . . . . . . 15
(j) Mafco Tax Group. . . . . . . . . . . . . . . . . 15
7. Negative Covenants . . . . . . . . . . . . . . . . . . . . 15
(a) Liens, Etc.. . . . . . . . . . . . . . . . . . . 15
(b) Lease Obligations. . . . . . . . . . . . . . . . 16
(c) Mergers, Etc.. . . . . . . . . . . . . . . . . . 16
(d) Sales, Etc. of Assets. . . . . . . . . . . . . . 16
(e) Dividends, Repurchases, Etc. . . . . . . . . . . 16
(f) Investments. . . . . . . . . . . . . . . . . . . 16
(g) Change in Nature of Business . . . . . . . . . . 16
(h) Accounting Changes . . . . . . . . . . . . . . . 17
(i) Debt . . . . . . . . . . . . . . . . . . . . . . 17
(j) Charter Amendments . . . . . . . . . . . . . . . 17
(k) Prepayments, Etc. of Debt. . . . . . . . . . . . 17
(l) Negative Pledge. . . . . . . . . . . . . . . . . 17
(m) Partnerships . . . . . . . . . . . . . . . . . . 17
(n) Capital Expenditures . . . . . . . . . . . . . . 17
(o) Issuance of Capital Stock. . . . . . . . . . . . 17
(p) Payment Restrictions . . . . . . . . . . . . . . 17
Section Page
8. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . 18
9. Notices, Etc.. . . . . . . . . . . . . . . . . . . . . . . 18
10. No Waiver; Remedies . . . . . . . . . . . . . . . . . . . 18
11. Right of Set-off. . . . . . . . . . . . . . . . . . . . . 18
12. Indemnification . . . . . . . . . . . . . . . . . . . . . 19
13. Continuing Guaranty; Assignments under the Amended and Restated Credit
Agreement 19
14. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial 19
15. Execution in Counterparts, Delivery by Telecopier . . . . 20
Schedule I- Subsidiaries
Schedule II- Liens
Schedule III- Debt
Schedule IV- Investments
AMENDED AND RESTATED GUARANTY
AMENDED AND RESTATED GUARANTY dated as of June 29, 1995 made by
NWCG (Parent) Holdings Corporation, a Delaware corporation (the "Guarantor"), in
favor of the Lenders (the "Lenders") party to the Amended and Restated Credit
Agreement (as defined below) and Citibank, N.A. ("Citibank"), as agent (the
"Agent") for the Lenders.
PRELIMINARY STATEMENTS.
(1) Marvel IV Holdings Inc., a Delaware corporation (the
"Borrower"), entered into a Credit Agreement dated as of July 20, 1994, as
heretofore amended (as so amended, the "Existing Credit Agreement"), with the
financial institutions and other institutional lenders party thereto (the
"Existing Lenders") and Citibank, as agent for the Existing Lenders. In
consideration of the premises and in order to induce the Existing Lenders to
make advances under the Existing Credit Agreement, the Guarantor entered into a
Guaranty dated September 30, 1994 in favor of the Existing Lenders and Citibank,
as agent for the Existing Lenders.
(2) The Borrower has entered into an Amended and Restated
Credit Agreement dated as of June 29, 1995 (said Agreement, as it may hereafter
be amended or otherwise modified from time to time, being the "Amended and
Restated Credit Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined) with the Lenders and the Agent
which amends and restates the Existing Credit Agreement in its entirety.
(3) It is a condition precedent to the effectiveness of the
Amended and Restated Credit Agreement that the Guarantor shall have executed and
delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to enter into the Amended and Restated Credit Agreement, the
Guarantor hereby agrees as follows:
Section 1. Guaranty; Limitation of Liability. (a) The
Guarantor hereby unconditionally guarantees (x) the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all Obligations of
Mafco now or hereafter existing under the Loan Documents to which it is a party,
whether for principal, interest (including, without limitation, interest after
the filing of a petition initiating a proceeding of the type referred to in
Section 6.01(e) of the Amended and Restated Credit Agreement, whether or not
such interest constitutes an allowed claim for purposes of such proceeding),
fees, expenses or otherwise (such Obligations being the "Guaranteed Payment
Obligations") and (y) the performance when due of all other Obligations of Mafco
now or hereafter existing under the Loan Documents, whether affirmative or
negative (such Obligations being the "Guaranteed Performance Obligations" and
together with the Guaranteed Payment Obligations, the "Guaranteed Obligations"),
and agrees to pay any and all reasonable expenses (including reasonable counsel
fees and expenses) incurred by the Agent or the Lenders in enforcing any rights
under this Guaranty. Without limiting the generality of the foregoing, the
Guarantor's liability shall extend to all amounts that constitute part of the
Guaranteed Payment Obligations and would be owed by Mafco to the Agent or the
Lenders under the Loan Documents but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving Mafco.
(b) The liability of the Guarantor under this Guaranty in
respect of the Guaranteed Obligations shall not exceed the greater of (i) 95% of
the Adjusted Net Assets of the Guarantor on the date hereof and (ii) 95% of the
Adjusted Net Assets of the Guarantor on the date of any payment hereunder.
"Adjusted Net Assets" of the Guarantor at any date means the lesser of (x) the
amount by which the fair value of the property of the Guarantor exceeds the
total amount of liabilities, including, without limitation, contingent
liabilities, but excluding any liabilities or obligations under this Guaranty,
of the Guarantor at such date and (y) the amount by which the present fair
salable value of the assets of the Guarantor at such date exceeds the amount
that will be required to pay the probable liability of the Guarantor on its
debts, excluding debt in respect of this Guaranty, as they become absolute and
matured.
Section 2. Guaranty Absolute. The Guarantor guarantees that the
Guaranteed Payment Obligations will be paid, and the Guaranteed Performance
Obligations will be performed, strictly in accordance with the terms of the Loan
Documents, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of the Agent or
the Lenders with respect thereto. The Obligations of the Guarantor under this
Guaranty are independent of the Guaranteed Obligations, and a separate action or
actions may be brought and prosecuted against the Guarantor to enforce this
Guaranty, irrespective of whether any action is brought against Mafco or whether
Mafco is joined in any such action or actions. The liability of the Guarantor
under this Guaranty shall be absolute and unconditional irrespective of, and the
Guarantor hereby irrevocably waives any defenses it may now or hereafter have in
any way relating to, any and all of the following:
(a) any lack of validity or enforceability of any Loan
Document or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Guaranteed Obligations, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in the Guaranteed 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 Guaranteed Obligations;
(d) any manner of application of Collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale or
other disposition of any Collateral for all or any of the Guaranteed Obligations
or any other assets of Mafco, the Borrower or any of their Subsidiaries;
(e) any change, restructuring or termination of the
corporate structure or existence of Mafco, the Borrower or any of their
Subsidiaries; or
(f) any other circumstance (including, without limitation,
any statute of limitations or any existence of or reliance on any representation
by the Agent or any Lender) that might otherwise constitute a defense available
to, or a discharge of, the Borrower, the Guarantor or any other guarantor or
surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Agent or any Lender upon the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, all as though such
payment had not been made.
Section 3. Waivers. (a) The Guarantor hereby waives, to the
extent permitted by applicable law, promptness, diligence, notice of acceptance
and any other notice with respect to any of the Guaranteed Obligations and this
Guaranty and any requirement that the Agent or any Lender protect, secure,
perfect or insure any Lien or any property subject thereto or exhaust any right
or take any action against Mafco, the Borrower or any other Person or any
Collateral.
(b) The Guarantor hereby irrevocably waives any claim or
other rights that it may now or hereafter acquire against the Borrower or any
other insider guarantor that arise from the existence, payment, performance or
enforcement of the Guarantor's Obligations under this Guaranty or any other Loan
Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Agent or any Lender against the
Borrower or any other insider guarantor or any Collateral, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Borrower or any other insider guarantor, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right. If any amount shall be paid to the
Guarantor in violation of the preceding sentence at any time prior to the later
of the cash payment in full of the Guaranteed Payment Obligations and all other
amounts payable under this Guaranty and the Termination Date, such amount shall
be held in trust for the benefit of the Agent and the Lenders and shall
forthwith be paid to the Agent to be credited and applied to the Guaranteed
Payment Obligations and all other amounts payable under this Guaranty, whether
matured or unmatured, in accordance with the terms of the Loan Documents, or to
be held as Collateral for any Guaranteed Obligations or other amounts payable
under this Guaranty thereafter arising. The Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents and that the waiver set forth in this
subsection is knowingly made in contemplation of such benefits.
(c) The Guarantor hereby waives any right to revoke this
Guaranty, and acknowledges that this Guaranty is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in the future.
Section 4. Payments Free and Clear of Taxes, Etc. (a) Any and
all payments made by the Guarantor hereunder shall be made, in accordance with
Section 2.12 of the Amended and Restated Credit Agreement, free and clear of and
without deduction for any and all present or future Taxes. If the Guarantor
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder to any Lender or the Agent, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
such Lender or the Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Guarantor
shall make such deductions and (iii) the Guarantor shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law; provided, however, that any such Lender shall designate a
different Applicable Lending Office if, in the judgment of such Lender, such
designation would avoid the need for, or reduce the amount of, any Taxes
required to be deducted from or in respect of any sum payable hereunder to such
Lender or the Agent and would not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender.
(b) In addition, the Guarantor agrees to pay any present or
future Other Taxes.
(c) The Guarantor will indemnify each Lender and the Agent
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section) paid by such Lender or the Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto; provided that, in the event such Lender or the Agent, as the case may
be, successfully contests the assessment of such Taxes or Other Taxes or any
liability arising therefrom or with respect thereto, such Lender or the Agent
shall refund, to the extent of any refund thereof made to such Lender or the
Agent, any amounts paid by the Guarantor under this Section in respect of such
Taxes, Other Taxes or liabilities arising therefrom or with respect thereto.
Each Lender and the Agent agree that it will contest such Taxes, Other Taxes or
liabilities if (i) the Guarantor furnishes to it an opinion of reputable tax
counsel acceptable to such Lender or the Agent to the effect that such Taxes or
Other Taxes were wrongfully or illegally imposed and (ii) such Lender or the
Agent determines, in its sole discretion, that it would not be disadvantaged or
prejudiced in any manner whatsoever as a result of such contest. This
indemnification shall be made within 30 days from the date such Lender or the
Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes,
the Guarantor will furnish to the Agent, at its address referred to in the
Amended and Restated Credit Agreement, appropriate evidence of payment thereof.
If no Taxes are payable in respect of any payment hereunder by the Guarantor
through an account or branch outside the United States or on behalf of the
Guarantor by a payor that is not a United States person, the Guarantor will
furnish, or will cause such payor to furnish, to the Agent a certificate from
each appropriate taxing authority or authorities, or an opinion of counsel
acceptable to the Agent, in either case stating that such payment is exempt from
or not subject to Taxes. For purposes of this Section, the terms "United
States" and "United States person" shall have the meanings specified in Section
7701 of the Code.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States and the Agent, if organized under the laws of a
jurisdiction outside the United States, shall, if requested in writing by the
Guarantor or the Agent (but only so long as such Lender or the Agent remains
lawfully able to do so and only so long as Guarantor is making payments under
this Guaranty), provide the Guarantor and (in the case of any such Lender other
than the Agent) the Agent with two duly completed copies of Internal Revenue
Service form 1001 or 4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Lender or the Agent is
entitled to benefits under an income tax treaty to which the United States is a
party that reduces the rate of withholding tax on payments under this Agreement
or the Notes or certifying that the income receivable pursuant to this Agreement
or the Notes is effectively connected with the conduct of a trade or business in
the United States.
(f) For any period with respect to which the Agent or a
Lender has failed to provide the Guarantor with the appropriate forms described
in subsection (e) above (other than if such failure is due to a change in law
occurring after the date on which such person was originally required to provide
such forms, or if such forms are otherwise not required under subsection (e)
above), the Agent or such Lender shall not be entitled to increased payments or
indemnification under subsection (a) or (c) above with respect to Taxes imposed
by the United States; provided, however, that should the Agent or a Lender
become subject to Taxes because of its failure to deliver a form required
hereunder, the Guarantor shall take such steps as the Agent or such Lender shall
reasonably request to assist the Lender to recover such Taxes if, in the
judgment of the Guarantor such steps would avoid the need for, or reduce the
amount of, any Taxes required to be deducted from or in respect of any sum
payable hereunder to the Agent or such Lender and would not, in the judgment of
the Guarantor, be disadvantageous to the Guarantor.
(g) Without prejudice to the survival of any other agreement
of the Guarantor hereunder, the agreements and obligations of the Guarantor
contained in this Section 4 shall survive the payment in full of the Guaranteed
Obligations and all other amounts payable under this Guaranty.
(h) If a Lender shall change its Applicable Lending Office
other than (i) at the request of the Guarantor or (ii) at a time when such
change would not result in this Section 4 requiring the Guarantor to make a
greater payment than if such change had not been made, such Lender shall not be
entitled to receive any greater payment under this Section 4 than such Lender
would have been entitled to receive had it not changed its Applicable Lending
Office.
Section 5. Representations and Warranties. The Guarantor
hereby represents and warrants as follows:
(a) The Guarantor (i) is a corporation duly organized,
validly existing andin good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed would not have a Material
Adverse Effect (with respect to clause (a) of the definition thereof, the term
"Person" shall refer to the Guarantor) and (iii) has all requisite corporate
power and authority to own or lease and operate its properties and to carry on
its business as now conducted and as proposed to be conducted. All of the
outstanding capital stock of the Guarantor has been validly issued, is fully
paid and non-assessable. Andrews is the legal and beneficial owner of all of
the outstanding capital stock of the Guarantor (other than the shares (the
"Voting Trust Stock") issued in the name of the voting trustee (the "Voting
Trustee") under the voting trust agreement described in Section 3.02(i)(xv)(A)
of the Existing Credit Agreement (the "Voting Trust Agreement") and the Voting
Trustee is the legal owner of the Voting Trust Stock, in each case free and
clear of all Liens except for the Liens created by the Collateral Documents and
the Voting Trust Agreement.
(b) Set forth on Schedule I hereto is a complete and
accurate list of the Guarantor and NWCG Holdings, showing as of the date hereof
(as to each such Person) the jurisdiction of its incorporation, the number of
shares of each class of capital stock authorized, and the number outstanding, on
the date hereof and the percentage of the outstanding shares of each such class
owned (directly or indirectly), in the case of the Guarantor, by Andrews, and in
the case of NWCG Holdings, by the Guarantor, and the number of shares covered by
all outstanding options, warrants, rights of conversion or purchase and similar
rights at the date hereof. All of the outstanding capital stock of the
Guarantor and NWCG Holdings has been validly issued, is fully paid and non-
assessable and is owned, in the case of the Guarantor, by Andrews or in the case
of NWCG Holdings, by the Guarantor (except as set forth on Schedule I) free and
clear of all Liens, except those created by the Collateral Documents and those
set forth on Schedule II hereto. NWCG Holdings (i) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified and in good standing
as a foreign corporation in each other jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed would not have a
Material Adverse Effect (with respect to clause (a) of the definition thereof,
the term "Person" shall refer to the Guarantor) and (iii) has all requisite
corporate power and authority to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be conducted.
(c) The execution, delivery and performance by the Guarantor
of this Guaranty, each Loan Document and each Related Document to which it is or
is to be a party and the consummation by the Guarantor of the transactions
contemplated hereby, are within the Guarantor's corporate powers, have been duly
authorized by all necessary corporate action, and do not (i) contravene the
Guarantor's charter or by-laws, (ii) violate any law (including, without
limitation, the Exchange Act), rule, regulation (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve System), order,
writ, judgment, injunction, decree, determination or award, (iii) conflict with
or result in the breach of, or constitute a default under, any loan agreement,
contract, indenture, mortgage, deed of trust, lease or other instrument binding
on or affecting the Guarantor, any of its Subsidiaries or any of its or their
properties, the effect of which conflict, breach or default is reasonably likely
to have a Material Adverse Effect (with respect to clause (a) of the definition
thereof, the term "Person" shall refer to the Guarantor) or (iv) except for the
liens created by the Collateral Documents, result in or require the creation or
imposition of any Lien upon or with respect to any of the properties of the
Guarantor or any of its Subsidiaries. Neither the Guarantor nor any of its
Subsidiaries is in violation of any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or in breach of any such
contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument, the violation or breach of which would be reasonably likely to have
a Material Adverse Effect (with respect to clause (a) of the definition thereof,
the term "Person" shall refer to such the Guarantor).
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for (i) the due execution, delivery and performance by the Guarantor of
this Guaranty or any other Loan Document or any Related Document to which it is
or is to be a party or for the consummation by the Guarantor of the transactions
contemplated hereby, (ii) the grant by the Guarantor of the Liens granted by it
pursuant to the Collateral Documents, (iii) the perfection or maintenance of the
Liens created by the Collateral Documents (including the first priority nature
thereof) or (iv) the exercise by the Agent or any Lender of its rights under the
Loan Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents, except for the filing of financing statements in
accordance with Section 3.02(i)(viii) of the Existing Credit Agreement and
except as may be required in connection with the disposition of any portion of
the Collateral by laws affecting the offering and sale of securities generally;
provided, however, that no representation or warranty is made as to any consent
of, authorization, approval or other action by, or notice to or filing with, any
banking agency or regulatory body applicable to the Agent. As of the date of
the Consummation of the Transaction, all applicable waiting periods in
connection with the Transaction and the other transactions contemplated hereby
will have expired without any action having been taken by any competent
authority restraining, preventing or imposing materially adverse conditions upon
the Transaction or the rights of the Loan Parties or their Subsidiaries freely
to transfer or otherwise dispose of, or to create any Lien on, any properties
now owned or hereafter acquired by any of them.
(e) This Guaranty has been, and each other Loan Document to
which the Guarantor is a party when delivered hereunder will have been duly
executed and delivered by the Guarantor. This Guaranty is, and each other Loan
Document to which the Guarantor is a party when delivered hereunder will be, the
legal, valid and binding obligations of the Guarantor, enforceable against the
Guarantor in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforceability of creditor's rights generally.
(f) The Consolidated and consolidating balance sheets of the
Guarantor and its Subsidiaries as at December 31, 1994, and the related
Consolidated and consolidating statements of income and cash flows of the
Guarantor and its Subsidiaries for the fiscal year then ended, accompanied, in
the case of the aforementioned Consolidated balance sheets and Consolidated
statements of income and cash flows, by an opinion of Ernst & Young, independent
public accountants, and the Consolidated and consolidating balance sheets of the
Guarantor and its Subsidiaries as at March 31, 1995 and the related Consolidated
and consolidating statements of income and cash flows of the Guarantor and its
Subsidiaries for the three months then ended, duly certified by the chief
financial officer of the Guarantor, copies of which have been furnished to each
Lender, fairly present, subject, in the case of said balance sheets as at March
31, 1995, and said statements of income and cash flows for the three months then
ended, to year-end audit adjustments, the Consolidated and consolidating
financial condition of the Guarantor and its Subsidiaries as at such dates and
the Consolidated and consolidating results of the operations of the Guarantor
and its Subsidiaries for the periods ended on such dates, all in accordance with
generally accepted accounting principles applied on a consistent basis, and
since December 31, 1994, there has been no Material Adverse Change relating to
the Guarantor.
(g) There is no pending or threatened action, proceeding,
governmental investigation or arbitration affecting the Guarantor or any of its
Subsidiaries before any court, governmental agency or arbitrator, which is
reasonably likely to have a Material Adverse Effect (with respect to clause (a)
of the definition thereof, the term "Person" shall refer to the Guarantor), or
that purports to affect the legality, validity or enforceability of this
Guaranty, any other Loan Document or any Related Document or the consummation of
the transactions contemplated hereby or thereby.
(h) The Guarantor and its ERISA Affiliates are in compliance
in all material respects with the applicable provisions of ERISA and the Code
with respect to each Plan thereof. No ERISA Event has occurred or is reasonably
expected to occur with respect to any Plan of the Guarantor or any of its ERISA
Affiliates. The amount of all Unfunded Pension Liabilities under all Plans of
the Guarantor and its ERISA Affiliates does not exceed $60,000,000. None of the
Guarantor or any of its ERISA Affiliates has made contributions or incurred any
Withdrawal Liability to any Multiemployer Plan within the past five years, and
it is not reasonably expected that such contributions shall be made or required
or that such liability shall be incurred in any such case in amounts or under
circumstances that would be reasonably likely to result in a material liability
to the Guarantor or any of its ERISA Affiliates. Schedule B (Actuarial
Information) to the 1992 annual report (Form 5500 Series) for each Plan of the
Guarantor and each of its ERISA Affiliates, copies of which have been filed with
the Internal Revenue Service and furnished to the Lenders, is complete and
accurate in all material respects and fairly presents the funding status of such
Plan, and since the date of such Schedule B there has been no material adverse
change in such funding status. The obligations of the Guarantor and its
Subsidiaries for post-retirement benefits to be provided under Plans which are
welfare benefit plans (as defined in Section 3(l) of ERISA) are not reasonably
likely to have a Material Adverse Effect (in the case of clause (a) of the
definition thereof, the term "Person" shall refer to the Guarantor).
(i) The operations and properties of the Guarantor and each
of its Subsidiaries are in substantial compliance with all Environmental Laws,
all necessary Environmental Permits have been obtained and are in effect for the
operations and properties of the Guarantor and its Subsidiaries and the Borrower
and its Subsidiaries are in compliance with all such Environmental Permits,
except, as to all of the above, where the failure to do so would not be
reasonably likely to have a Material Adverse Effect (in the case of clause (a)
of the definition thereof, the term "Person" shall mean the Guarantor); and no
circumstances exist that are reasonably likely to (i) form the basis of an
Environmental Action against the Guarantor or any of its Subsidiaries or any of
their respective properties or (ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law that would, in the case of either (i) or (ii) above, be
reasonably likely to have a Material Adverse Effect (in the case of clause (a)
of the definition thereof, the term "Person" shall be the Guarantor).
(j) The Guarantor and each of its Subsidiaries has filed,
has caused to be filed or has been included in all tax returns (Federal, state,
local and foreign) required to be filed and has paid all taxes shown thereon to
be due, together with applicable interest and penalties.
(k) Neither the Guarantor nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(l) The Guarantor is, individually and together with its
Subsidiaries, Solvent.
(m) Set forth on Schedule III hereto is a complete and
accurate list of all Debt (other than intercompany Debt and Debt under the Loan
Documents) of the Guarantor and its Subsidiaries, showing as of the date hereof
the principal amount outstanding thereunder and there is (i) no other agreement,
contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting the Guarantor or NWCG Holdings that imposes
any material Obligation or material restriction on the Guarantor or any of its
Subsidiaries (other than the Related Documents), (ii) no other agreement,
contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument
(A) evidencing Debt of New World or any of its Subsidiaries, (B)
governing the terms of Debt of New World or any of its Subsidiaries or (C)
containing any commitment or other agreement by any Person to extend credit that
would constitute Debt to New World or any of its Subsidiaries, in each case that
imposes or will impose material Obligations or material restrictions on New
World and its Subsidiaries taken as a whole, and (iv) no other agreement or
contract binding on or affecting New World or any of its Subsidiaries that
contains provisions that would restrict any Loan Party from performing or impair
the ability of any Loan Party to perform any of the obligations of such Loan
Party under the Loan Documents.
(n) Set forth on Schedule IV is a complete and accurate list
of all Investments (other than intercompany Debt) held by the Guarantor or NWCG
Holdings, showing as of the date hereof the amount, obligor or issuer and
maturity, if any, thereof.
Section 6. Affirmative Covenants. The Guarantor covenants and
agrees that, so long as any part of the Advances shall remain unpaid or any
Lender shall have any Commitment, the Guarantor will:
(a) Compliance with Laws, Etc. Comply, and cause each of
itsSubsidiaries to comply, in all material respects with all applicable laws,
rules, regulations and orders (such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property except to the extent contested in
good faith), the failure to comply with which would, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect (with respect
to clause (a) of the definition thereof, the term "Person" shall refer to the
Guarantor).
(b) Compliance with Environmental Laws. Comply and cause
each of its Subsidiaries and all lessees and all other Persons occupying its
properties to comply, in all material respects, with all Environmental Laws and
Environmental Permits applicable to its operations and properties; obtain and
renew all Environmental Permits necessary for its operations and properties; and
conduct, and cause each of its Subsidiaries to conduct, any investigation,
study, sampling and testing, and undertake any cleanup, removal, remedial or
other action necessary to remove and clean up all Hazardous Materials from any
of its properties, in accordance with the requirements of all Environmental
Laws; provided, however, that neither the Guarantor nor any of its Subsidiaries
shall be required to undertake any such cleanup, removal, remedial or other
action to the extent that its obligation to do so is being contested in good
faith and by proper proceedings and appropriate reserves are being maintained
with respect to such circumstances.
(c) Maintenance of Insurance. Maintain, and cause each of
its Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Guarantor or such Subsidiary operates.
(d) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries (other than any Subsidiaries of New
World) to preserve and maintain, its corporate existence, rights (charter and
statutory) and franchises; provided, however, that neither the Guarantor nor any
of its Subsidiaries shall be required to preserve any of its rights or franchise
if the Board of Directors of the Guarantor or such Subsidiary (or, in the case
of New World, the executive committee of the Board of Directors of New World)
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Guarantor or such Subsidiary, as the case may be,
and that the loss thereof is not disadvantageous in any material respect to the
Guarantor, such Subsidiary or the Lenders.
(e) Visitation Rights. At any reasonable time and from time
to time, upon reasonable prior notice permit the Agent or any of the Lenders or
any agents or representatives thereof, to the extent reasonably requested to
examine and make copies of and abstracts from the records and books of account
of, and visit the properties of, the Guarantor and any of its Subsidiaries, and
to discuss the affairs, finances and accounts of the Guarantor and any of its
Subsidiaries with any of their officers or directors and with their independent
certified public accountants.
(f) Keeping of Books. Keep, and cause each of its
Subsidiaries to 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 Guarantor and each such Subsidiary to the extent necessary to
permit the preparation of the financial statements required to be delivered
hereunder.
(g) Maintenance of Properties, Etc. Maintain and preserve,
and cause each of its Subsidiaries to maintain and preserve, all of its
properties that are used or useful in the conduct of its business in good
working order and condition, ordinary wear and tear excepted.
(h) Reporting Requirements. Furnish to the Lenders through
the Agent:
(i) as soon as available and in any event within 50
days after the end of each of the first three quarters of each fiscal year of
the Guarantor, Consolidated balance sheets of the Guarantor and its Subsidiaries
as of the end of such quarter and Consolidated statements of earnings, cash
flows and stockholders' equity of the Guarantor and its Subsidiaries for the
period commencing at the end of the previous fiscal year and ending with the end
of such quarter, certified (subject to normal year-end audit adjustment and the
absence of footnotes) on behalf of the Guarantor by the chief financial officer
of the Guarantor;
(ii) as soon as available and in any event within 105
days after the end of each fiscal year of the Guarantor, a copy of the annual
audit report for such year for the Guarantor and its Subsidiaries, containing
financial statements for such year certified in a manner reasonably acceptable
to the Required Lenders by Ernst & Young or other independent public accountants
reasonably acceptable to the Required Lenders;
(iii) promptly after the sending or filing thereof,
copies of any filings and statements that the Guarantor or any Subsidiary files
with the Securities and Exchange Commission or any national securities exchange;
(iv) promptly and in any event within (A) thirty days
after the Guarantor knows or has reason to know that any ERISA Event with
respect to the Guarantor or any of its ERISA Affiliates has occurred, a
statement describing such ERISA Event and the action, if any, that the Guarantor
or such ERISA Affiliate proposes to take with respect thereto, (B) thirty days
either after receipt thereof by the Guarantor or after the Guarantor knows or
has reason to know of the receipt thereof by any of its ERISA Affiliates from
the sponsor of a Multiemployer Plan of the Guarantor or any of its ERISA
Affiliates, a copy of each notice received by any such Person concerning the
imposition of Withdrawal Liability upon such Person, the reorganization or
termination of such Multiemployer Plan, or the amount of the liability incurred,
or that may be incurred, by the Guarantor or any of its ERISA Affiliates in
connection with any such event and (C) ten Business Days either after receipt
thereof by the Guarantor or after the Guarantor knows or has reason to know of
the receipt thereof by any of its ERISA Affiliates, copies of each notice from
the PBGC stating its intention to terminate any Plan of the Guarantor or any of
its ERISA Affiliates or to have a trustee appointed to administer any such Plan;
provided that, in the case of any event that occurs in (A), (B) or (C) hereof,
such event has a Material Adverse Effect (in the case of clause (a) of the
definition thereof, "Person" shall refer to the Guarantor);
(v) in the event of any change in GAAP from the date
of the financial statements referred to in Section 5(f) and upon delivery of any
financial statement required to be furnished under clauses (i) or (ii) of this
Section 6(h), a statement of reconciliation conforming any information contained
in such financial statement with GAAP as in effect on the date of the financial
statements referred to in Section 5(f);
(vi) promptly upon any officer of the Guarantor
obtaining knowledge thereof, written notice of (A) the institution or non-
frivolous threat of any action, suit, proceeding, governmental investigation or
arbitration against or affecting the Guarantor or any of its Subsidiaries or any
property of the Guarantor or any of its Subsidiaries (any such action, suit,
proceeding, investigation or arbitration being a "Proceeding") or (B) any
material development in any Proceeding that is already pending, where such
Proceeding or development has not previously been disclosed by the Guarantor
hereunder and would be reasonably likely to have a Material Adverse Effect (in
the case of clause (a) of the definition of Material Adverse Effect, the term
"Person" shall refer to the Guarantor); together in each case with such other
information as any Lender through the Agent may reasonably request to enable the
Lenders and their counsel to evaluate such matters;
(vii) promptly after the furnishing thereof, copies
of any statement or report furnished to any other holder of the securities of
the Guarantor or of any Subsidiary of the Guarantor pursuant to the terms of any
indenture, loan or credit or similar agreement and not otherwise required to be
furnished to the Lenders pursuant to any other clause of this Section 6(h);
(viii) promptly after the occurrence thereof, notice of
any condition or occurrence on any property of the Guarantor or any Subsidiary
of the Guarantor that results in a material noncompliance by the Guarantor or
any of its Subsidiaries with any Environmental Law or Environmental Permit or
would be reasonably likely to (i) form the basis of an Environmental Action
against the Guarantor or any of its Subsidiaries or any such property that would
be reasonably likely to have a Material Adverse Effect (in the case of clause
(a) of the definition of Material Adverse Effect, the term "Person" shall refer
to the Guarantor) or (ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law or Environmental Permit or would be reasonably likely to (i)
form the basis of an Environmental Action against the Guarantor or any of its
Subsidiaries or such property that could have a Material Adverse Effect (in the
case of clause (a) of the definition of Material Adverse Effect, the term
"Person" shall refer to the Guarantor); and
(ix) such other information respecting the condition
(financial or otherwise), operations, assets or business of the Guarantor or any
of its Subsidiaries as any Lender through the Agent may from time to time
reasonably request.
(i) Transactions with Affiliates. Conduct, and cause each
of its Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of their Affiliates (other than the Guarantor or any of
its Subsidiaries) on terms that are fair and reasonable and no less favorable to
the Guarantor or such Subsidiary than it would obtain in a comparable arm's-
length transaction with a Person that is not an Affiliate; provided, however,
that for purposes of this Section 6(i), the term "Affiliate" shall not include
any officer or director of the Guarantor or such Subsidiary, as the case may be,
who does not possess directly or indirectly the power to vote 5% or more of the
Voting Stock of the Guarantor or its Subsidiaries.
(j) Mafco Tax Group. Maintain, and cause NWCG Holdings to
maintain, its status as a member of the affiliated group (within the meaning of
Section 1504(a)(1) of the Internal Revenue Code) of which Mafco is the common
parent.
Section 7. Negative Covenants. The Guarantor covenants and
agrees that, so long as any part of the Advances shall remain unpaid or any
Lender shall have any Commitment, the Guarantor will not:
(a) Liens, Etc. Create or suffer to exist, or permit NWCG
Holdings to create or suffer to exist, any Lien, upon or with respect to any of
its properties, whether now owned or hereafter acquired, or sign or file, or
permit NWCG Holdings to sign or file, under the Uniform Commercial Code of any
jurisdiction, a financing statement that names the Guarantor or NWCG Holdings as
debtor, or sign, or permit NWCG Holdings to sign, any security agreement
authorizing any secured party thereunder to file such financing statement, or
assign, or permit NWCG Holdings to assign, any right to receive income, other
than the following Liens: (i) Liens created by the Loan Documents; (ii) the
Liens described on Schedule II hereto, provided that, in the event any property
subject to any such Lien is released from such Lien, such released property may
not thereafter be subjected to any Lien other than Liens created by the Loan
Documents; (iii) mechanics', materialmen's, carriers' and similar Liens arising
in the ordinary course of business securing obligations that are not overdue for
a period of more than 30 days or which are being contested in good faith and by
proper proceedings and as to which appropriate reserves are being maintained;
(iv) Liens for taxes, assessments and governmental charges or levies not yet due
and payable or which are being contested in good faith and by proper proceedings
and as to which appropriate reserves are being maintained; and (v) judgment or
other similar Liens, provided that there shall be no period of more than 10
consecutive days during which a stay of enforcement of the related judgment
shall not be in effect.
(b) Lease Obligations. Create, incur, assume or suffer to
exist, or permit NWCG Holdings to create, incur, assume or suffer to exist, any
obligations as lessee (i) for the rental or hire of real or personal property in
connection with any sale and leaseback transaction, or (ii) for the rental or
hire of other real or personal property of any kind under leases or agreements
to lease having an original term of one year or more.
(c) Mergers, Etc. Merge into or consolidate with any Person
or permit any Person to merge into it, or permit NWCG Holdings to do so.
(d) Sales, Etc. of Assets. Sell, lease, transfer or
otherwise dispose of, or permit NWCG Holdings to sell, lease, transfer or
otherwise dispose of, any assets or grant, or permit NWCG Holdings to grant, any
option or other right to purchase, lease or otherwise acquire any assets except
(i) dispositions of obsolete, worn out or surplus property disposed of in the
ordinary course of business, (ii) sales, leases, transfers or other dispositions
of assets (other than the capital stock of NWCG Holdings) for cash and for no
less than fair market value and (iii) the transfer or other disposition to an
Affiliate of Mafco of up to 2.7 million shares of common stock of New World held
by the Guarantor.
(e) Dividends, Repurchases, Etc. Declare or pay any
dividends, purchase, redeem, retire, defease or otherwise acquire for value any
of its capital stock or any warrants, rights or options to acquire such capital
stock, now or hereafter outstanding, return any capital to its stockholders as
such, make any distribution of assets, capital stock, warrants, rights, options,
obligations or securities to its stockholders as such, or permit NWCG Holdings
to purchase, redeem, retire, defease or otherwise acquire for value any capital
stock of the Guarantor or any warrants, rights or options to acquire such
capital stock, except that the Guarantor may declare and deliver dividends and
distributions payable only in common stock or warrants, rights or options to
acquire common stock.
(f) Investments. Make or hold, or permit NWCG Holdings to
make or hold, any Investment in any Person, other than (i) Investments by the
Guarantor and NWCG Holdings in Cash Equivalents and (ii) Investments existing on
the date hereof.
(g) Change in Nature of Business. (i) Engage in any
business other than the ownership of the capital stock of NWCG Holdings or (ii)
permit NWCG Holdings to make any change in the nature of its business carried on
at the date hereof.
(h) Accounting Changes. Make or permit, or permit NWCG
Holdings to make or permit, any change in accounting policies affecting (i) the
presentation of financial statements or (ii) reporting practices, except in
either case as required or permitted by GAAP.
(i) Debt. Create, incur, assume or suffer to exist, or
permit NWCG Holdings to create, incur, assume or suffer to exist, any Debt other
than: (i) in the case of the Guarantor, Debt under the Loan Documents; (ii) in
the case of NWCG Holdings, the Debt listed on Schedule III hereto, and (iii), in
the case of the Guarantor and NWCG Holdings, endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business.
(j) Charter Amendments. Amend, or permit NWCG Holdings to
amend, its certificate of incorporation or bylaws.
(k) Prepayments, Etc. of Debt. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any
Debt, or amend, modify or change in any manner any term or condition of any Debt
or any agreement relating to such Debt, or permit NWCG Holdings to do any of the
foregoing.
(l) Negative Pledge. Enter into or suffer to exist, or
permit NWCG Holdings to enter into or suffer to exist, any agreement prohibiting
or conditioning the creation or assumption of any Lien upon any of its property
or assets other than (i) in favor of the Agent and the Lenders or (ii) any
prohibition or condition existing on the date hereof.
(m) Partnerships. Become a general partner in any general
or limited partnership, or permit NWCG Holdings to do so.
(n) Capital Expenditures. Make, or permit NWCG Holdings to
make, any Capital Expenditures.
(o) Issuance of Capital Stock. Issue, or permit NWCG
Holdings to issue, any capital stock or warrants, rights or options to acquire
such capital stock.
(p) Payment Restrictions. Create or otherwise cause or
suffer to exist or become effective, or permit NWCG Holdings to create or
otherwise cause or suffer to exist or become effective, any consensual
encumbrance or restriction of any kind on the ability of the Guarantor or NWCG
Holdings to (i) pay dividends or make any other distributions on any of the
Guarantor's or NWCG Holdings' capital stock, (ii) make loans or advances to
Mafco or any subsidiary of Mafco or (iii) repay or prepay Debt owed by the
Guarantor or NWCG Holdings other than any (x) consensual encumbrances or
restrictions existing on the date hereof and (y) other consensual encumbrances
or restrictions that are no more onerous than those encumbrances and
restrictions in existence on the date hereof with respect to the Guarantor or
NWCG Holdings, as the case may be.
Section 8. Amendments, Etc. No amendment or waiver of any
provision of this Guaranty and no consent to any departure by the Guarantor
therefrom shall in any event be effective unless the same shall be in writing
and signed by the Agent and the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or consent
shall, unless in writing and signed by all the Lenders (other than any Lender
that is, at such time, a Defaulting Lender), (a) release or limit the liability
of the Guarantor hereunder, (b) postpone any date fixed for payment hereunder or
(c) change the number of Lenders required to take any action hereunder.
Section 9. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy,
telex or cable communication) and mailed, telegraphed, telecopied, telexed,
cabled or delivered to it, if to the Guarantor, addressed to it at c/o
MacAndrews & Forbes Holdings Inc., 38 East 63rd Street, New York, New York
10021, Attention: Secretary, if to the Agent or any Lender, at its address
specified in the Amended and Restated Credit Agreement, or as to any party at
such other address as shall be designated by such party in a written notice to
each other party. All such notices and other communications shall, when mailed,
telegraphed, telecopied, telexed or cabled, be effective when deposited in the
mails, delivered to the telegraph company, transmitted by telecopier, confirmed
by telex answerback or delivered to the cable company, respectively.
Section 10. No Waiver; Remedies. No failure on the part of the
Agent or any Lender to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
Section 11. Right of Set-off. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the granting of the consent specified by Section 6.01 of the Amended and
Restated Credit Agreement to authorize the Agent to declare the Notes due and
payable pursuant to the provisions of said Section 6.01, each Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender to or for the credit or the account of the Guarantor
against any and all of the Obligations of the Guarantor now or hereafter
existing under this Guaranty, whether or not such Lender shall have made any
demand under this Guaranty and although such Obligations may be unmatured. Each
Lender agrees promptly to notify the Guarantor after any such set-off and
application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Lender under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that such
Lender may have.
Section 12. Indemnification. Without limitation on any other
Obligations of the Guarantor or remedies of the Lenders under this Guaranty, the
Guarantor shall, to the fullest extent permitted by law, indemnify, defend and
save and hold harmless the Lenders from and against, and shall pay on demand,
any and all losses, liabilities, damages, costs, expenses and charges (including
the reasonable and documented fees and disbursements of the legal counsel of the
Lenders and the reasonable and documented charges of the internal legal counsel
of the Lenders) suffered or incurred by the Lenders as a result of (a) any
failure of any Guaranteed Obligations to be the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency or
other similar laws affecting the rights of creditors generally, or (b) any
failure of the Borrower to pay and perform any Guaranteed Obligations in
accordance with the terms of such Guaranteed Obligations.
Section 13. Continuing Guaranty; Assignments under the Amended
and Restated Credit Agreement. This Guaranty is a continuing guaranty and shall
(a) remain in full force and effect until the date on which the Payment
Obligations in respect of the Guaranteed Obligations and this Guaranty have been
Fully Satisfied, (b) be binding upon the Guarantor, its successors and assigns
and (c) inure to the benefit of and be enforceable by the Lenders, the Agent and
their successors, transferees and assigns. Without limiting the generality of
the foregoing clause (c), any Lender may assign or otherwise transfer all or any
portion of its rights and obligations under the Amended and Restated Credit
Agreement (including, without limitation, all or any portion of its Commitment,
the Advances owing to it and the Note or Notes held by) it to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to such Lender herein or otherwise, in each case as
provided in Section 8.07 of the Amended and Restated Credit Agreement.
Section 14. Governing Law; Submission to Jurisdiction; Waiver
of Jury Trial. (a) This Guaranty shall be governed by, and construed in
accordance with, the laws of the State of New York.
(b) The Guarantor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Guaranty or any of the other Loan
Documents to which it is or is to be a party, or for recognition or enforcement
of any judgment, and the Guarantor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State or, to the extent permitted by law, in
such federal court. The Guarantor agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Guaranty shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Guaranty or any of the
other Loan Documents to which it is or is to be a party in the courts of any
jurisdiction.
(c) The Guarantor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Guaranty or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal
court. The Guarantor hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(d) THE GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS, THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT OR
ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.
Section 15. Execution in Counterparts, Delivery by Telecopier.
This Guaranty may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of any executed counterpart of a signature
page to this Guaranty by telecopier shall be effective as delivery of a manually
executed counterpart of this Guaranty.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
NWCG (PARENT) HOLDINGS CORPORATION
By
--------------------------
Title:
EXECUTION COPY
C&F GUARANTY
Dated June 15, 1995,
From
C&F (PARENT) HOLDINGS INC.
as Guarantor
in favor of
THE LENDERS PARTY TO THE CREDIT AGREEMENT
REFERRED TO HEREIN
and
CITIBANK, N.A.
as Agent
T A B L E O F C O N T E N T S
Section Page
1. Guaranty; Limitation of Liability. . . . . . . . . . . . . 1
2. Guaranty Absolute. . . . . . . . . . . . . . . . . . . . . 2
3. Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. Payments Free and Clear of Taxes, Etc. . . . . . . . . . . 4
5. Representations and Warranties . . . . . . . . . . . . . . 6
6. Affirmative Covenants. . . . . . . . . . . . . . . . . . . 10
(a) Compliance with Laws, Etc. . . . . . . . . . . . 10
(b) Compliance with Environmental Laws . . . . . . . 10
(c) Maintenance of Insurance . . . . . . . . . . . . 10
(d) Preservation of Corporate Existence, Etc . . . . 10
(e) Visitation Rights. . . . . . . . . . . . . . . . 11
(f) Keeping of Books . . . . . . . . . . . . . . . . 11
(g) Maintenance of Properties, Etc . . . . . . . . . 11
(h) Reporting Requirements . . . . . . . . . . . . . 11
(i) Transactions with Affiliates . . . . . . . . . . 13
(j) Mafco Tax Group. . . . . . . . . . . . . . . . . 13
7. Negative Covenants . . . . . . . . . . . . . . . . . . . . 14
(a) Liens, Etc . . . . . . . . . . . . . . . . . . . 14
(b) Lease Obligations. . . . . . . . . . . . . . . . 14
(c) Mergers, Etc . . . . . . . . . . . . . . . . . . 14
(d) Sales, Etc. of Assets. . . . . . . . . . . . . . 14
(e) Dividends, Repurchases, Etc. . . . . . . . . . . 14
(f) Investments. . . . . . . . . . . . . . . . . . . 15
(g) Change in Nature of Business . . . . . . . . . . 15
(h) Accounting Changes . . . . . . . . . . . . . . . 15
(i) Debt.. . . . . . . . . . . . . . . . . . . . . . 15
(j) Charter Amendments . . . . . . . . . . . . . . . 15
(k) Prepayments, Etc. of Debt. . . . . . . . . . . . 15
(l) Negative Pledge. . . . . . . . . . . . . . . . . 15
(m) Partnerships . . . . . . . . . . . . . . . . . . 15
(n) Capital Expenditures . . . . . . . . . . . . . . 15
(o) Issuance of Capital Stock. . . . . . . . . . . . 15
(p) Payment Restrictions . . . . . . . . . . . . . . 16
8. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . 16
9. Notices, Etc . . . . . . . . . . . . . . . . . . . . . . . 16
10. No Waiver; Remedies . . . . . . . . . . . . . . . . . . . 16
11. Right of Set-off . . . . . . . . . . . . . . . . . . . . . 16
12. Indemnification . . . . . . . . . . . . . . . . . . . . . 17
13. Continuing Guaranty; Assignments under the
Credit Agreement . . . . . . . . . . . . . . . . . . . . . 17
14. Governing Law; Submission to Jurisdiction;
Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . 17
15. Execution in Counterparts, Delivery by Telecopier. . . . . 18
Schedule I- Liens
Schedule II- Debt
Schedule III- Investments
GUARANTY
GUARANTY dated June 15, 1995 made by C&F (Parent) Holdings Inc.,
a Delaware corporation (the "Guarantor"), in favor of the Lenders (the
"Lenders") party to the Credit Agreement (as defined below) and Citibank, N.A.
("Citibank"), as agent (the "Agent") for the Lenders.
PRELIMINARY STATEMENT. The Lenders and the Agent are parties to
(a) a Credit Agreement dated as of July 20, 1994 (said Agreement, as it may
hereafter be amended or otherwise modified from time to time, being the "Credit
Agreement"; the terms defined therein and not otherwise defined herein being
used herein as therein defined) with Marvel IV Holdings Inc., a Delaware
corporation (the "Borrower"), and (b) an amendment dated as of March 10, 1995
(the "First Amendment") with the Borrower and Mafco Holdings Inc., a Delaware
corporation ("Mafco"). It is a condition precedent to the effectiveness of the
First Amendment that the Guarantor shall have executed and delivered this
Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to amend the Credit Agreement, the Guarantor hereby agrees as
follows:
Section 1. Guaranty; Limitation of Liability. (a) The
Guarantor hereby unconditionally guarantees (a) the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all Obligations of
Mafco now or hereafter existing under the Loan Documents to which it is a party,
whether for principal, interest (including, without limitation, interest after
the filing of a petition initiating a proceeding of the type referred to in
Section 6.01(e) of the Credit Agreement, whether or not such interest
constitutes an allowed claim for purposes of such proceeding), fees, expenses or
otherwise (such Obligations being the "Guaranteed Payment Obligations") and (b)
the performance when due of all other Obligations of Mafco now or hereafter
existing under the Loan Documents, whether affirmative or negative (such
Obligations being the "Guaranteed Performance Obligations" and together with the
Guaranteed Payment Obligations, the "Guaranteed Obligations"), and agrees to pay
any and all reasonable expenses (including reasonable counsel fees and expenses)
incurred by the Agent or the Lenders in enforcing any rights under this
Guaranty. Without limiting the generality of the foregoing, the Guarantor's
liability shall extend to all amounts that constitute part of the Guaranteed
Payment Obligations and would be owed by Mafco to the Agent or the Lenders under
the Loan Documents but for the fact that they are unenforceable or not allowable
due to the existence of a bankruptcy, reorganization or similar proceeding
involving Mafco.
(b) The liability of the Guarantor under this Guaranty in
respect of the Guaranteed Obligations shall not exceed the greater of (i) 95% of
the Adjusted Net Assets of the Guarantor on the date hereof and (ii) 95% of the
Adjusted Net Assets of the Guarantor on the date of any payment hereunder.
"Adjusted Net Assets" of the Guarantor at any date means the lesser of (x) the
amount by which the fair value of the property of the Guarantor exceeds the
total amount of liabilities, including, without limitation, contingent
liabilities, but excluding any liabilities or obligations under this Guaranty,
of the Guarantor at such date and (y) the amount by which the present fair
salable value of the assets of the Guarantor at such date exceeds the amount
that will be required to pay the probable liability of the Guarantor on its
debts, excluding debt in respect of this Guaranty, as they become absolute and
matured.
Section 2. Guaranty Absolute. The Guarantor guarantees that
the Guaranteed Payment Obligations will be paid, and the Guaranteed Performance
Obligations will be performed, strictly in accordance with the terms of the Loan
Documents, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of the Agent or
the Lenders with respect thereto. The Obligations of the Guarantor under this
Guaranty are independent of the Guaranteed Obligations, and a separate action or
actions may be brought and prosecuted against the Guarantor to enforce this
Guaranty, irrespective of whether any action is brought against Mafco or whether
Mafco is joined in any such action or actions. The liability of the Guarantor
under this Guaranty shall be absolute and unconditional irrespective of, and the
Guarantor hereby irrevocably waives any defenses it may now or hereafter have in
any way relating to, any and all of the following:
(a) any lack of validity or enforceability of any Loan
Document or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Guaranteed Obligations, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in the Guaranteed 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 Guaranteed Obligations;
(d) any manner of application of Collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale or
other disposition of any Collateral for all or any of the Guaranteed Obligations
or any other assets of Mafco, the Borrower or any of their Subsidiaries;
(e) any change, restructuring or termination of the
corporate structure or existence of Mafco, the Borrower or any of their
Subsidiaries; or
(f) any other circumstance (including, without limitation,
any statute of limitations or any existence of or reliance on any representation
by the Agent or any Lender) that might otherwise constitute a defense available
to, or a discharge of, the Borrower, the Guarantor or any other guarantor or
surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Agent or any Lender upon the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, all as though such
payment had not been made.
Section 3. Waivers. (a) The Guarantor hereby waives, to the
extent permitted by applicable law, promptness, diligence, notice of acceptance
and any other notice with respect to any of the Guaranteed Obligations and this
Guaranty and any requirement that the Agent or any Lender protect, secure,
perfect or insure any Lien or any property subject thereto or exhaust any right
or take any action against Mafco, the Borrower or any other Person or any
Collateral.
(b) The Guarantor hereby irrevocably waives any claim or
other rights that it may now or hereafter acquire against the Borrower or any
other insider guarantor that arise from the existence, payment, performance or
enforcement of the Guarantor's Obligations under this Guaranty or any other Loan
Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Agent or any Lender against the
Borrower or any other insider guarantor or any Collateral, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Borrower or any other insider guarantor, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right. If any amount shall be paid to the
Guarantor in violation of the preceding sentence at any time prior to the later
of the cash payment in full of the Guaranteed Payment Obligations and all other
amounts payable under this Guaranty and the Termination Date, such amount shall
be held in trust for the benefit of the Agent and the Lenders and shall
forthwith be paid to the Agent to be credited and applied to the Guaranteed
Payment Obligations and all other amounts payable under this Guaranty, whether
matured or unmatured, in accordance with the terms of the Loan Documents, or to
be held as Collateral for any Guaranteed Obligations or other amounts payable
under this Guaranty thereafter arising. The Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents and that the waiver set forth in this
subsection is knowingly made in contemplation of such benefits.
(c) The Guarantor hereby waives any right to revoke this
Guaranty, and acknowledges that this Guaranty is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in the future.
Section 4. Payments Free and Clear of Taxes, Etc. (a) Any and
all payments made by the Guarantor hereunder shall be made, in accordance with
Section 2.10 of the Credit Agreement, free and clear of and without deduction
for any and all present or future Taxes. If the Guarantor shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section) such Lender or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Guarantor shall make such deductions and
(iii) the Guarantor shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law; provided,
however, that any such Lender shall designate a different Lending Office if, in
the judgment of such Lender, such designation would avoid the need for, or
reduce the amount of, any Taxes required to be deducted from or in respect of
any sum payable hereunder to such Lender or the Agent and would not, in the
judgment of such Lender, be otherwise disadvantageous to such Lender.
(b) In addition, the Guarantor agrees to pay any present or
future Other Taxes.
(c) The Guarantor will indemnify each Lender and the Agent
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section) paid by such Lender or the Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto; provided that, in the event such Lender or the Agent, as the case may
be, successfully contests the assessment of such Taxes or Other Taxes or any
liability arising therefrom or with respect thereto, such Lender or the Agent
shall refund, to the extent of any refund thereof made to such Lender or the
Agent, any amounts paid by the Guarantor under this Section in respect of such
Taxes, Other Taxes or liabilities arising therefrom or with respect thereto.
Each Lender and the Agent agree that it will contest such Taxes, Other Taxes or
liabilities if (i) the Guarantor furnishes to it an opinion of reputable tax
counsel acceptable to such Lender or the Agent to the effect that such Taxes or
Other Taxes were wrongfully or illegally imposed and (ii) such Lender or the
Agent determines, in its sole discretion, that it would not be disadvantaged or
prejudiced in any manner whatsoever as a result of such contest. This
indemnification shall be made within 30 days from the date such Lender or the
Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes,
the Guarantor will furnish to the Agent, at its address referred to in the
Credit Agreement, appropriate evidence of payment thereof. If no Taxes are
payable in respect of any payment hereunder by the Guarantor through an account
or branch outside the United States or on behalf of the Guarantor by a payor
that is not a United States person, the Guarantor will furnish, or will cause
such payor to furnish, to the Agent a certificate from each appropriate taxing
authority or authorities, or an opinion of counsel acceptable to the Agent, in
either case stating that such payment is exempt from or not subject to Taxes.
For purposes of this Section, the terms "United States" and "United States
person" shall have the meanings specified in Section 7701 of the Code.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States and the Agent, if organized under the laws of a
jurisdiction outside the United States, shall, if requested in writing by the
Guarantor or the Agent (but only so long as such Lender or the Agent remains
lawfully able to do so and only so long as Guarantor is making payments under
this Guaranty), provide the Guarantor and (in the case of any such Lender other
than the Agent) the Agent with two duly completed copies of Internal Revenue
Service form 1001 or 4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Lender or the Agent is
entitled to benefits under an income tax treaty to which the United States is a
party that reduces the rate of withholding tax on payments under this Agreement
or the Notes or certifying that the income receivable pursuant to this Agreement
or the Notes is effectively connected with the conduct of a trade or business in
the United States.
(f) For any period with respect to which the Agent or a
Lender has failed to provide the Guarantor with the appropriate forms described
in subsection (e) above (other than if such failure is due to a change in law
occurring after the date on which such person was originally required to provide
such forms, or if such forms are otherwise not required under subsection (e)
above), the Agent or such Lender shall not be entitled to increased payments or
indemnification under subsection (a) or (c) above with respect to Taxes imposed
by the United States; provided, however, that should the Agent or a Lender
become subject to Taxes because of its failure to deliver a form required
hereunder, the Guarantor shall take such steps as the Agent or such Lender shall
reasonably request to assist the Lender to recover such Taxes if, in the
judgment of the Guarantor such steps would avoid the need for, or reduce the
amount of, any Taxes required to be deducted from or in respect of any sum
payable hereunder to the Agent or such Lender and would not, in the judgment of
the Guarantor, be disadvantageous to the Guarantor.
(g) Without prejudice to the survival of any other agreement
of the Guarantor hereunder, the agreements and obligations of the Guarantor
contained in this Section 4 shall survive the payment in full of the Guaranteed
Obligations and all other amounts payable under this Guaranty.
(h) If a Lender shall change its Lending Office other than
(i) at the request of the Guarantor or (ii) at a time when such change would not
result in this Section 4 requiring the Guarantor to make a greater payment than
if such change had not been made, such Lender shall not be entitled to receive
any greater payment under this Section 4 than such Lender would have been
entitled to receive had it not changed its Lending Office.
Section 5. Representations and Warranties. The Guarantor
hereby represents and warrants as follows:
(a) The Guarantor (i) is a corporation duly organized,
validly existing andin good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed would not have a Material
Adverse Effect (with respect to clause (a) of the definition thereof, the term
"Person" shall refer to the Guarantor) and (iii) has all requisite corporate
power and authority to own or lease and operate its properties and to carry on
its business as now conducted and as proposed to be conducted. All of the
outstanding capital stock of the Guarantor has been validly issued, is fully
paid and non-assessable. Each of Cigar Guarantor and Flavors Guarantor is the
legal and beneficial owner of 50% of the outstanding capital stock of the
Guarantor (other than (x) the shares (the "Flavors Voting Trust Stock") issued
in the name of the voting trustee (the "Flavors Voting Trustee") under the
voting trust agreement described in Section 3(c)(xi)(B) of the First Amendment
(the "Flavors Voting Trust Agreement") and (y) the shares (the "Cigar Voting
Trust Stock") issued in the name of the voting trustee (the "Cigar Voting
Trustee") under the voting trust agreement described in Secgiton 3(c)(xi)(A) of
the First Amendment (the "Cigar Voting Trust Agreement")), and the Flavors
Voting Trustee and the Cigar Voting Trustee are the legal owners of the Flavors
Voting Trust Stock and the Cigar Voting Trust Stock, respectively, in each case
free and clear of all Liens except for the Liens created by the Collateral
Documents, the Flavors Voting Trust Agreement and the Cigar Voting Trust
Agreement.
(b) The execution, delivery and performance by the Guarantor
of this Guaranty and each Loan Document to which it is or is to be a party and
the consummation by the Guarantor of the transactions contemplated hereby, are
within the Guarantor's corporate powers, have been duly authorized by all
necessary corporate action, and do not (i) contravene the Guarantor's charter or
by-laws, (ii) violate any law (including, without limitation, the Exchange Act),
rule, regulation (including, without limitation, Regulation X of the Board of
Governors of the Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award, (iii) conflict with or result in the breach of,
or constitute a default under, any loan agreement, contract, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting the
Guarantor, any of its Subsidiaries or any of its or their properties, the effect
of which conflict, breach or default is reasonably likely to have a Material
Adverse Effect (with respect to clause (a) of the definition thereof, the term
"Person" shall refer to the Guarantor) or (iv) except for the Liens created by
the Collateral Documents, result in or require the creation or imposition of any
Lien upon or with respect to any of the properties of the Guarantor or any of
its Subsidiaries. Neither the Guarantor nor any of its Subsidiaries is in
violation of any such law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award or in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument, the
violation or breach of which would be reasonably likely to have a Material
Adverse Effect (with respect to clause (a) of the definition thereof, the term
"Person" shall refer to such the Guarantor).
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for (i) the due execution, delivery and performance by the Guarantor of
this Guaranty or any other Loan Document or any Related Document to which it is
or is to be a party or for the consummation by the Guarantor of the transactions
contemplated hereby, (ii) the grant by the Guarantor of the Liens granted by it
pursuant to the Collateral Documents, (iii) the perfection or maintenance of the
Liens created by the Collateral Documents (including the first priority nature
thereof) or (iv) the exercise by the Agent or any Lender of its rights under the
Loan Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents, except for the filing of financing statements in
accordance with Section 2 of the First Amendment and except as may be required
in connection with the disposition of any portion of the Collateral by laws
affecting the offering and sale of securities generally; provided, however, that
no representation or warranty is made as to any consent of, authorization,
approval or other action by, or notice to or filing with, any banking agency or
regulatory body applicable to the Agent. As of the date of the consummation of
the Merger, all applicable waiting periods in connection with the Merger and the
other transactions contemplated hereby will have expired without any action
having been taken by any competent authority restraining, preventing or imposing
materially adverse conditions upon the Merger or the rights of the Loan Parties
or their Subsidiaries freely to transfer or otherwise dispose of, or to create
any Lien on, any properties now owned or hereafter acquired by any of them.
(d) This Guaranty has been, and each other Loan Document to
which the Guarantor is a party when delivered hereunder will have been, duly
executed and delivered by the Guarantor. This Guaranty is, and each other Loan
Document to which the Guarantor is a party when delivered hereunder will be, the
legal, valid and binding obligations of the Guarantor, enforceable against the
Guarantor in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforceability of creditor's rights generally.
(e) There is no pending or threatened action, proceeding,
governmental investigation or arbitration affecting the Guarantor or any of its
Subsidiaries before any court, governmental agency or arbitrator, which is
reasonably likely to have a Material Adverse Effect (with respect to clause (a)
of the definition thereof, the term "Person" shall refer to the Guarantor), or
that purports to affect the legality, validity or enforceability of this
Guaranty or any other Loan Document or the consummation of the transactions
contemplated hereby or thereby.
(f) The Guarantor and its ERISA Affiliates are in compliance
in all material respects with the applicable provisions of ERISA and the Code
with respect to each Plan thereof. No ERISA Event has occurred or is reasonably
expected to occur with respect to any Plan of the Guarantor or any of its ERISA
Affiliates. The amount of all Unfunded Pension Liabilities under all Plans of
the Guarantor and its ERISA Affiliates does not exceed $60,000,000. None of the
Guarantor or any of its ERISA Affiliates has made contributions or incurred any
Withdrawal Liability to any Multiemployer Plan within the past five years, and
it is not reasonably expected that such contributions shall be made or required
or that such liability shall be incurred in any such case in amounts or under
circumstances that would be reasonably likely to result in a material liability
to the Guarantor or any of its ERISA Affiliates. Schedule B (Actuarial
Information) to the 1992 annual report (Form 5500 Series) for each Plan of the
Guarantor and each of its ERISA Affiliates, copies of which have been filed with
the Internal Revenue Service and furnished to the Lenders, is complete and
accurate in all material respects and fairly presents the funding status of such
Plan, and since the date of such Schedule B there has been no material adverse
change in such funding status. The obligations of the Guarantor and its
Subsidiaries for post-retirement benefits to be provided under Plans which are
welfare benefit plans (as defined in Section 3(l) of ERISA) are not reasonably
likely to have a Material Adverse Effect (in the case of clause (a) of the
definition thereof, "Person" shall be the Guarantor).
(g) The operations and properties of the Guarantor and each
of its Subsidiaries are in substantial compliance with all Environmental Laws,
all necessary Environmental Permits have been obtained and are in effect for the
operations and properties of the Guarantor and its Subsidiaries and the Borrower
and its Subsidiaries are in compliance with all such Environmental Permits,
except, as to all of the above, where the failure to do so would not be
reasonably likely to have a Material Adverse Effect (in the case of clause (a)
of the definition thereof, the term "Person" shall mean the Guarantor); and no
circumstances exist that are reasonably likely to (i) form the basis of an
Environmental Action against the Guarantor or any of its Subsidiaries or any of
their respective properties or (ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law that would, in the case of either (i) or (ii) above, be
reasonably likely to have a Material Adverse Effect (in the case of clause (a)
of the definition thereof, the term "Person" shall be the Guarantor).
(h) The Guarantor and each of its Subsidiaries has filed,
has caused to be filed or has been included in all tax returns (Federal, state,
local and foreign) required to be filed and has paid all taxes shown thereon to
be due, together with applicable interest and penalties.
(i) Neither the Guarantor nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(j) The Guarantor is, individually and together with its
Subsidiaries, Solvent.
(k) Set forth on Schedule II hereto is a complete and
accurate list of all Debt (other than intercompany Debt) of the Guarantor and
its Subsidiaries, showing as of the date hereof the principal amount outstanding
thereunder and there is (i) no other agreement, contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument binding on or
affecting the Guarantor that imposes any material Obligation or material
restriction on the Guarantor or any of its Subsidiaries (other than the MCG Tax
Agreement), (ii) no other agreement, contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument (A) evidencing Debt of MCG or
any of its Subsidiaries, (B) governing the terms of Debt of MCG or any of its
Subsidiaries or (C) containing any commitment or other agreement by any Person
to extend credit that would constitute Debt to MCG or any of its Subsidiaries,
in each case that imposes or will impose material Obligations or material
restrictions on MCG and its Subsidiaries taken as a whole, and (iv) no other
agreement or contract binding on or affecting MCG or any of its Subsidiaries
that contains provisions that would restrict any Loan Party from performing or
impair the ability of any Loan Party to perform any of the obligations of such
Loan Party under the Loan Documents.
(l) Set forth on Schedule III is a complete and accurate
list of all Investments (other than intercompany Debt) held by the Guarantor,
showing as of the date hereof the amount, obligor or issuer and maturity, if
any, thereof.
Section 6. Affirmative Covenants. The Guarantor covenants and
agrees that, so long as any part of the Advances shall remain unpaid or any
Lender shall have any Commitment, the Guarantor will:
(a) Compliance with Laws, Etc. Comply, and cause each of
itsSubsidiaries to comply, in all material respects with all applicable laws,
rules, regulations and orders (such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property except to the extent contested in
good faith), the failure to comply with which would, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect (with respect
to clause (a) of the definition thereof, the term Person shall refer to the
Guarantor).
(b) Compliance with Environmental Laws. Comply and cause
each of its Subsidiaries and all lessees and all other Persons occupying its
properties to comply, in all material respects, with all Environmental Laws and
Environmental Permits applicable to its operations and properties; obtain and
renew all Environmental Permits necessary for its operations and properties; and
conduct, and cause each of its Subsidiaries to conduct, any investigation,
study, sampling and testing, and undertake any cleanup, removal, remedial or
other action necessary to remove and clean up all Hazardous Materials from any
of its properties, in accordance with the requirements of all Environmental
Laws; provided, however, that neither the Guarantor nor any of its Subsidiaries
shall be required to undertake any such cleanup, removal, remedial or other
action to the extent that its obligation to do so is being contested in good
faith and by proper proceedings and appropriate reserves are being maintained
with respect to such circumstances.
(c) Maintenance of Insurance. Maintain, and cause each of
its Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Guarantor or such Subsidiary operates.
(d) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries (other than any Subsidiaries of
MCG) to preserve and maintain, its corporate existence, rights (charter and
statutory) and franchises; provided, however, that neither the Guarantor nor any
of its Subsidiaries shall be required to preserve any of its rights or franchise
if the Board of Directors of the Guarantor or such Subsidiary (or the executive
committee of the Board of Directors thereof) shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Guarantor or such Subsidiary, as the case may be, and that the loss thereof
is not disadvantageous in any material respect to the Guarantor, such Subsidiary
or the Lenders.
(e) Visitation Rights. At any reasonable time and from time
to time, upon reasonable prior notice permit the Agent or any of the Lenders or
any agents or representatives thereof, to the extent reasonably requested to
examine and make copies of and abstracts from the records and books of account
of, and visit the properties of, the Guarantor and any of its Subsidiaries, and
to discuss the affairs, finances and accounts of the Guarantor and any of its
Subsidiaries with any of their officers or directors and with their independent
certified public accountants.
(f) Keeping of Books. Keep, and cause each of its
Subsidiaries to 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 Guarantor and each such Subsidiary to the extent necessary to
permit the preparation of the financial statements required to be delivered
hereunder.
(g) Maintenance of Properties, Etc. Maintain and preserve,
and cause each of its Subsidiaries to maintain and preserve, all of its
properties that are used or useful in the conduct of its business in good
working order and condition, ordinary wear and tear excepted.
(h) Reporting Requirements. Furnish to the Lenders through
the Agent:
(i) as soon as available and in any event within 50
days after the end of each of the first three quarters of each fiscal year of
the Guarantor, Consolidated balance sheets of the Guarantor and its Subsidiaries
as of the end of such quarter and Consolidated statements of earnings, cash
flows and stockholders' equity of the Guarantor and its Subsidiaries for the
period commencing at the end of the previous fiscal year and ending with the end
of such quarter, certified (subject to normal year-end audit adjustment and the
absence of footnotes) on behalf of the Guarantor by the chief financial officer
of the Guarantor;
(ii) as soon as available and in any event within 105
days after the end of each fiscal year of the Guarantor, a copy of the annual
audit report for such year for the Guarantor and its Subsidiaries, containing
financial statements for such year certified in a manner reasonably acceptable
to the Required Lenders by Ernst & Young or other independent public accountants
reasonably acceptable to the Required Lenders;
(iii) promptly after the sending or filing thereof,
copies of any filings and statements that the Guarantor or any Subsidiary files
with the Securities and Exchange Commission or any national securities exchange;
(iv) promptly and in any event within (A) thirty days
after the Guarantor knows or has reason to know that any ERISA Event with
respect to the Guarantor or any of its ERISA Affiliates has occurred, a
statement describing such ERISA Event and the action, if any, that the Guarantor
or such ERISA Affiliate proposes to take with respect thereto, (B) thirty days
either after receipt thereof by the Guarantor or after the Guarantor knows or
has reason to know of the receipt thereof by any of its ERISA Affiliates from
the sponsor of a Multiemployer Plan of the Guarantor or any of its ERISA
Affiliates, a copy of each notice received by any such Person concerning the
imposition of Withdrawal Liability upon such Person, the reorganization or
termination of such Multiemployer Plan, or the amount of the liability incurred,
or that may be incurred, by the Guarantor or any of its ERISA Affiliates in
connection with any such event and (C) ten Business Days either after receipt
thereof by the Guarantor or after the Guarantor knows or has reason to know of
the receipt thereof by any of its ERISA Affiliates, copies of each notice from
the PBGC stating its intention to terminate any Plan of the Guarantor or any of
its ERISA Affiliates or to have a trustee appointed to administer any such Plan;
provided, that in the case of any event that occurs in (A), (B) or (C) hereof,
such event has a Material Adverse Effect (in the case of clause (a) of the
definition thereof, "Person" shall refer to the Guarantor);
(v) promptly upon any officer of the Guarantor
obtaining knowledge thereof, written notice of (A) the institution or non-
frivolous threat of any action, suit, proceeding, governmental investigation or
arbitration against or affecting the Guarantor or any of its Subsidiaries or any
property of the Guarantor or any of its Subsidiaries (any such action, suit,
proceeding, investigation or arbitration being a "Proceeding") or (B) any
material development in any Proceeding that is already pending, where such
Proceeding or development has not previously been disclosed by the Guarantor
hereunder and would be reasonably likely to have a Material Adverse Effect (in
the case of clause (a) of the definition of Material Adverse Effect, the term
"Person" shall refer to the Guarantor); together in each case with such other
information as any Lender through the Agent may reasonably request to enable the
Lenders and their counsel to evaluate such matters;
(vi) promptly after the furnishing thereof, copies
of any statement or report furnished to any other holder of the securities of
the Guarantor or of any Subsidiary of the Guarantor pursuant to the terms of any
indenture, loan or credit or similar agreement and not otherwise required to be
furnished to the Lenders pursuant to any other clause of this Section 6(h);
(vii) promptly after the occurrence thereof, notice of
any condition or occurrence on any property of the Guarantor or any Subsidiary
of the Guarantor that results in a material noncompliance by the Guarantor or
any of its Subsidiaries with any Environmental Law or Environmental Permit or
would be reasonably likely to (i) form the basis of an Environmental Action
against the Guarantor or any of its Subsidiaries or any such property that would
be reasonably likely to have a Material Adverse Effect (in the case of clause
(a) of the definition of Material Adverse Effect, the term "Person" shall refer
to the Guarantor) or (ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law or Environmental Permit or would be reasonably likely to (i)
form the basis of an Environmental Action against the Guarantor or any of its
Subsidiaries or such property that could have a Material Adverse Effect (in the
case of clause (a) of the definition of Material Adverse Effect, the term
"Person" shall refer to the Guarantor); and
(viii) such other information respecting the condition
(financial or otherwise), operations, assets or business of the Guarantor or any
of its Subsidiaries as any Lender through the Agent may from time to time
reasonably request.
(i) Transactions with Affiliates. Conduct, and cause each
of its Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of their Affiliates (other than the Guarantor or any of
its Subsidiaries) on terms that are fair and reasonable and no less favorable to
the Guarantor or such Subsidiary than it would obtain in a comparable arm's-
length transaction with a Person that is not an Affiliate; provided, however,
that for purposes of this Section 6(i), the term "Affiliate" shall not include
any officer or director of the Guarantor or such Subsidiary, as the case may be,
who does not possess directly or indirectly the power to vote 5% or more of the
Voting Stock of the Guarantor or its Subsidiaries.
(j) Mafco Tax Group. Maintain, and cause each of its
domestic Subsidiaries (other than the Subsidiaries of MCG) to maintain, its
status as a member of the affiliated group (within the meaning of Section
1504(a)(1) of the Internal Revenue Code) of which Mafco is the common parent.
Section 7. Negative Covenants. The Guarantor covenants and
agrees that, so long as any part of the Advances shall remain unpaid or any
Lender shall have any Commitment, the Guarantor will not:
(a) Liens, Etc. Create or suffer to exist any Lien, upon or
with respect to any of its properties, whether now owned or hereafter acquired,
or sign or file under the Uniform Commercial Code of any jurisdiction, a
financing statement that names the Guarantor as debtor, or sign any security
agreement authorizing any secured party thereunder to file such financing
statement, or assign any right to receive income, other than the following
Liens: (i) Liens created by the Loan Documents; (ii) the Liens described on
Schedule I hereto, provided, that in the event any property subject to any such
Lien is released from such Lien, such released property may not thereafter be
subjected to any Lien other than Liens created by the Loan Documents; (iii)
mechanics', materialmen's, carriers' and similar Liens arising in the ordinary
course of business securing obligations that are not overdue for a period of
more than 30 days or which are being contested in good faith and by proper
proceedings and as to which appropriate reserves are being maintained; (iv)
Liens for taxes, assessments and governmental charges or levies not yet due and
payable or which are being contested in good faith and by proper proceedings and
as to which appropriate reserves are being maintained; and (v) judgment or other
similar Liens, provided that there shall be no period of more than 10
consecutive days during which a stay of enforcement of the related judgment
shall not be in effect.
(b) Lease Obligations. Create, incur, assume or suffer to
exist any obligations as lessee (i) for the rental or hire of real or personal
property in connection with any sale and leaseback transaction, or (ii) for the
rental or hire of other real or personal property of any kind under leases or
agreements to lease having an original term of one year or more.
(c) Mergers, Etc. Merge into or consolidate with any Person
or permit any Person to merge into it.
(d) Sales, Etc. of Assets. Sell, lease, transfer or
otherwise dispose of any assets or grant any option or other right to purchase,
lease or otherwise acquire any assets except (i) dispositions of obsolete, worn
out or surplus property disposed of in the ordinary course of business and (ii)
sales, leases, transfers or other dispositions of assets for cash and for no
less than fair market value.
(e) Dividends, Repurchases, Etc. Declare or pay any
dividends, purchase, redeem, retire, defease or otherwise acquire for value any
of its capital stock or any warrants, rights or options to acquire such capital
stock, now or hereafter outstanding, return any capital to its stockholders as
such, make any distribution of assets, capital stock, warrants, rights, options,
obligations or securities to its stockholders as such, except that the
Guarantor may declare and deliver dividends and distributions payable only in
common stock or warrants, rights or options to acquire common stock.
(f) Investments. Make or hold any Investment in any Person,
other than (i) Investments by the Guarantor in Cash Equivalents and (ii)
Investments existing on the date hereof.
(g) Change in Nature of Business. Engage in any business
other than the ownership of the capital stock of MCG.
(h) Accounting Changes. Make or permit any change in
accounting policies affecting (i) the presentation of financial statements or
(ii) reporting practices, except in either case as required or permitted by
GAAP.
(i) Debt. Create, incur, assume or suffer to exist any Debt
other than:
(i) Debt under the Loan Documents and (ii) endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business.
(j) Charter Amendments. Amend its certificate of
incorporation or bylaws.
(k) Prepayments, Etc. of Debt. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any
Debt, or amend, modify or change in any manner any term or condition of any Debt
or any agreement relating to such Debt.
(l) Negative Pledge. Enter into or suffer to exist any
agreement prohibiting or conditioning the creation or assumption of any Lien
upon any of its property or assets other than (i) in favor of the Agent and the
Lenders or (ii) any prohibition or condition existing on the date hereof.
(m) Partnerships. Become a general partner in any general
or limited partnership.
(n) Capital Expenditures. Make any Capital Expenditures.
(o) Issuance of Capital Stock. Issue any capital stock or
warrants, rights or options to acquire such capital stock.
(p) Payment Restrictions. Create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of the Guarantor to (i) pay dividends or make any other
distributions on any of the Guarantor's capital stock, (ii) make loans or
advances to Mafco or any subsidiary of Mafco or (iii) repay or prepay Debt owed
by the Guarantor other than any (x) consensual encumbrances or restrictions
existing on the date hereof and (y) other consensual encumbrances or
restrictions that are no more onerous than those encumbrances and restrictions
in existence on the date hereof with respect to the Guarantor.
Section 8. Amendments, Etc. No amendment or waiver of any
provision of this Guaranty and no consent to any departure by the Guarantor
therefrom shall in any event be effective unless the same shall be in writing
and signed by the Agent and the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or consent
shall, unless in writing and signed by all the Lenders (other than any Lender
that is, at such time, a Defaulting Lender), (a) release or limit the liability
of the Guarantor hereunder, (b) postpone any date fixed for payment hereunder or
(c) change the number of Lenders required to take any action hereunder.
Section 9. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy,
telex or cable communication) and mailed, telegraphed, telecopied, telexed,
cabled or delivered to it, if to the Guarantor, addressed to it at c/o
MacAndrews & Forbes Holdings Inc., 38 East 63rd Street, New York, New York
10021, Attention: Secretary, if to the Agent or any Lender, at its address
specified in the Credit Agreement, or as to any party at such other address as
shall be designated by such party in a written notice to each other party. All
such notices and other communications shall, when mailed, telegraphed,
telecopied, telexed or cabled, be effective when deposited in the mails,
delivered to the telegraph company, transmitted by telecopier, confirmed by
telex answerback or delivered to the cable company, respectively.
Section 10. No Waiver; Remedies. No failure on the part of the
Agent or any Lender to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
Section 11. Right of Set-off. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the granting of the consent specified by Section 6.01 of the Credit Agreement
to authorize the Agent to declare the Notes due and payable pursuant to the
provisions of said Section 6.01, each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of the Guarantor against any and all of the
Obligations of the Guarantor now or hereafter existing under this Guaranty,
whether or not such Lender shall have made any demand under this Guaranty and
although such Obligations may be unmatured. Each Lender agrees promptly to
notify the Guarantor after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Lender may have.
Section 12. Indemnification. Without limitation on any other
Obligations of the Guarantor or remedies of the Lenders under this Guaranty, the
Guarantor shall, to the fullest extent permitted by law, indemnify, defend and
save and hold harmless the Lenders from and against, and shall pay on demand,
any and all losses, liabilities, damages, costs, expenses and charges (including
the reasonable and documented fees and disbursements of the legal counsel of the
Lenders and the reasonable and documented charges of the internal legal counsel
of the Lenders) suffered or incurred by the Lenders as a result of (a) any
failure of any Guaranteed Obligations to be the legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency or
other similar laws affecting the rights of creditors generally, or (b) any
failure of the Borrower to pay and perform any Guaranteed Obligations in
accordance with the terms of such Guaranteed Obligations.
Section 13. Continuing Guaranty; Assignments under the Credit
Agreement. This Guaranty is a continuing guaranty and shall (a) remain in full
force and effect until the date on which the Payment Obligations in respect of
the Guaranteed Obligations and this Guaranty have been Fully Satisfied, (b) be
binding upon the Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Lenders, the Agent and their successors,
transferees and assigns. Without limiting the generality of the foregoing
clause (c), any Lender may assign or otherwise transfer all or any portion of
its rights and obligations under the Credit Agreement (including, without
limitation, all or any portion of its Commitment, the Advances owing to it and
the Note or Notes held by) it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to such
Lender herein or otherwise, in each case as provided in Section 8.07 of the
Credit Agreement.
Section 14. Governing Law; Submission to Jurisdiction; Waiver
of Jury Trial. (a) This Guaranty shall be governed by, and construed in
accordance with, the laws of the State of New York.
(b) The Guarantor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Guaranty or any of the other Loan
Documents to which it is or is to be a party, or for recognition or enforcement
of any judgment, and the Guarantor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State or, to the extent permitted by law, in
such federal court. The Guarantor agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Guaranty shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Guaranty or any of the
other Loan Documents to which it is or is to be a party in the courts of any
jurisdiction.
(c) The Guarantor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Guaranty or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal
court. The Guarantor hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(d) THE GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS, THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT OR
ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.
Section 15. Execution in Counterparts, Delivery by Telecopier.
This Guaranty may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of any executed counterpart of a signature
page to this Guaranty by telecopier shall be effective as delivery of a manually
executed counterpart of this Guaranty.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
C&F (PARENT) HOLDINGS INC.
By _________________________
Name:
Title:
EXECUTION COPY
EQUITY CONTRIBUTION AGREEMENT
Dated July 27, 1994
among
MARVEL IV HOLDINGS INC.
and
MARVEL V HOLDINGS INC.
TABLE OF CONTENTS
SECTION PAGE
1. Equity Contributions . . . . . . . . . . . . . . . . . . . . 1
2. Obligations of the Borrower Parent . . . . . . . . . . . . . 1
3. Amendments; Waivers; Etc.. . . . . . . . . . . . . . . . . . 2
4. Addresses for Notices. . . . . . . . . . . . . . . . . . . . 2
5. Continuing Agreement; Assignments under the Credit Agreement 2
6. Execution in Counterparts. . . . . . . . . . . . . . . . . . 3
7. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . 3
EQUITY CONTRIBUTION AGREEMENT
EQUITY CONTRIBUTION AGREEMENT (this "Agreement") dated as of
July 27, 1994 by and between Marvel IV Holdings Inc., a Delaware corporation
(the "Borrower") and Marvel V Holdings Inc., a Delaware corporation (the
"Borrower Parent") .
PRELIMINARY STATEMENTS.
(1) The Borrower, Citibank, N.A., a national banking
association, as agent and certain financial institutions (the "Lenders") are
parties to the Credit Agreement dated as of July 20, 1994 (said Agreement, as it
may hereafter be amended or otherwise modified from time to time, being the
"Credit Agreement"; all capitalized terms used in this Agreement and not defined
herein shall have the meanings set forth for such terms in the Credit Agreement)
pursuant to which the Lenders have agreed, upon the terms and conditions
specified therein, to make Advances to the Borrower in an aggregate amount of up
to $240,000,000.
(2) The Borrower Parent is the owner of 100% of the issued
and outstanding capital stock of the Borrower.
(3) It is a condition precedent to the making of the
Advances by the Lenders under the Credit Agreement that the Borrower and the
Borrower Parent shall have executed and delivered this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make Advances under the Credit Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1. Equity Contributions. On each day that the Borrower
Parent receives (a) the proceeds from each loan made by FN Holdings to Borrower
Parent pursuant to the certificate of incorporation of FN Holdings, (b) the
proceeds from each loan made by FN Parent to the Borrower Parent pursuant to the
FN Parent Loan Agreement or (c) any other cash or Cash Equivalents from any
source other than the Borrower, the Borrower Parent shall make a contribution to
the equity capital of the Borrower (each such contribution an "Equity
Contribution") in an amount (the "Equity Contribution Amount") equal to the
aggregate amount of such proceeds, cash or Cash Equivalents, as the case may be,
received on that day. The Borrower Parent shall make such Equity Contribution
to the equity capital of the Borrower by depositing, in immediately available
funds, the Equity Contribution Amount in the Borrower Collateral Account.
Section 2. Obligations of the Borrower Parent. The obligation
of the Borrower Parent to make the Equity Contributions required pursuant to
this Agreement is absolute and unconditional and shall not be affected by the
bankruptcy, insolvency or reorganization of the Borrower. The obligations of
the Borrower Parent hereunder shall not be subject to any abatement, reduction,
limitation, impairment, termination, setoff, defense, counterclaim or recoupment
whatsoever or any right to any thereof, and shall not be released, discharged or
in any way affected by any reorganization, arrangement, compromise, settlement,
release, modification, amendment (whether material or otherwise), waiver or
termination of any or all of the obligations, conditions, covenants or
agreements of the Borrower in respect of any obligations of the Borrower to any
other Person, whether or not the Borrower Parent shall have notice or knowledge
of any of the foregoing or, to the fullest extent permitted by applicable law,
by any other circumstance whatsoever which might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor.
Section 3. Amendments; Waivers; Etc. No amendment or waiver of
any provision of this Agreement, and no consent to any departure by the Borrower
or the Borrower Parent herefrom, shall in any event be effective unless the same
shall be in writing and signed by the Borrower and the Borrower Parent and
consented to by the Agent, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given. No
failure on the part of the either party hereto to exercise, and no delay in
exercising any right hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.
Section 4. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and, mailed, telegraphed, telecopied,
telexed, cabled or delivered to the Borrower addressed to it at its address
specified in the Credit Agreement or to the Borrower Parent, at its address
specified in the Borrower Parent Guaranty, or, as to either party, at such other
address as shall be designated by such party in a written notice to each other
party complying as to delivery with the terms of this Section. All such notices
and other communications shall, when mailed, telecopied, telegraphed, telexed or
cabled, respectively, be effective when deposited in the mails, telecopied,
delivered to the telegraph company, confirmed by telex answerback or delivered
to the cable company, respectively, addressed as aforesaid.
Section 5. Continuing Agreement; Assignments under the Credit
Agreement. This Agreement shall create a continuing agreement and shall (a)
remain in full force and effect until the date of payment in full in cash of the
outstanding Advances and all interest accrued thereon, all fees and expenses
then due and payable and all other Obligations of the Borrower then due and
payable under the Loan Documents (provided that on such date none of the Agent
and the Lenders shall have made any claim against the Borrower or any other Loan
Party under any provision of any of the Loan Documents that has not been cash
collateralized by an amount sufficient in the reasonable judgment of the Agent,
the Required
Lenders and any such Lender (if such Lender is not one of the Lenders
constituting the Required Lenders) to secure such claim), (b) be binding upon
the Borrower, the Borrower Parent, their respective successors and assigns and
(c) inure, together with the rights and remedies of the Agent hereunder, to the
benefit of the Agent, the Lenders and their respective successors, transferees
and assigns. Without limiting the generality of the foregoing clause (c), any
Lender may assign or otherwise transfer all or any portion of its rights and
obligations under the Credit Agreement (including, without limitation, all or
any portion of its Commitment, the Advances owing to it and the Note or Notes
held by it) to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to such Lender herein or
otherwise, in each case as provided in Section 8.07 of the Credit Agreement.
Neither the Borrower nor the Borrower Parent shall assign or delegate any of
their respective rights or obligations under this Agreement without the prior
written consent of the Agent.
Section 6. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
Section 7. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the Borrower and the Borrower Parent each
have caused this Agreement to be duly executed and delivered by its officer
thereunto duly authorized as of the date first above written.
MARVEL IV HOLDINGS INC.
By
--------------------------
Title:
MARVEL V HOLDINGS INC.
By
--------------------------
Title:
State of Delaware
Office of the Secretary of State
_______________________________
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
INCORPORATION OF "MARVEL IV HOLDINGS INC.", FILED IN THIS OFFICE ON THE
EIGHTEENTH DAY OF JULY, A.D. 1994, AT 10:50 O'CLOCK A.M.
--------------------------------------
Edward J. Freel, Secretary of State
State of Delaware
Office of the Secretary of State
_______________________________
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE RESTATED
CERTIFICATE OF "FIRST NATIIONWIDE HOLDINGS INC.", FILED IN THIS OFFICE ON THE
TWENTY-NINTH DAY OF JUNE, A.D. 1995, AT 1:10 0'CLOCK P.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE KENT
COUNT RECORDER OF DEEDS FOR RECORDING.
--------------------------------------
Edward J. Freel, Secretary of State
SECOND RESTATED CERTIFICATE OF INCORPORATION
OF
FIRST NATIONWIDE HOLDINGS INC.
__________________________________
Pursuant to Sections 242 and 245
of the General Corporation Law
of the State of Delaware
__________________________________
First Nationwide Holdings Inc., a corporation
organized and existing under the laws of the State of
Delaware (the "Corporation"), hereby certifies as follows:
1. The name of the Corporation is First Nationwide
Holdings Inc. The date of filing of the original
Certificate of Incorporation of the Corporation with the
Secretary of State of the State of Delaware was June 30,
1994. The original Certificate of Incorporation of the
Corporation was amended and restated pursuant to the
Restated Certificate of Incorporation of the Corporation
(the "Restated Certificate of Incorporation") which was
filed with the Secretary of State of the State of Delaware
on September 30, 1994.
2. This Second Restated Certificate of
Incorporation, which both restates and amends the provisions
of the Restated Certificate of Incorporation, was duly
adopted in accordance with the provisions of Sections 242
and 245 of the General Corporation Law of the State of
Delaware (the "GCL") and by the written consent of its
stockholders entitled to vote thereon in accordance with
Section 228 of the GCL and is as follows:
FIRST: The name of the Corporation is First
Nationwide Holdings Inc. (hereinafter the "Corporation").
SECOND: The address of the registered office of
the Corporation in the State of Delaware is 32 Loockerman
Square, Suite L-100, Dover, DE 19901, in the City of Dover,
County of Kent. The name of its registered agent at that
address is The Prentice-Hall Corporation System, Inc.
THIRD: (a) Subject to paragraph (b) below, the
purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the
General Corporation Law of the State of Delaware as set
forth in Title 8 of the Delaware Code (the "GCL").
(b) Notwithstanding paragraph (a) above, the pur-
pose of the Corporation is limited to the following pur-
poses, and activities incident to and necessary or
convenient to accomplish the following purposes: (i) to own
100% of the common stock of each of First Nationwide Bank, A
Federal Savings Bank (formerly known as First Madison Bank,
FSB) (the "Bank"), and Madison Financial, Inc., (ii) to
issue and take any action in connection with up to
$200,000,000 principal amount of Senior Notes due 2001 (the
"Notes") pursuant to the Indenture dated as of July 15, 1994
(the "Indenture"), between the Corporation and The First
National Bank of Boston, as trustee, as amended in
accordance with the terms thereof, (iii) to enter into and
take any action in connection with an Exchange Agreement and
Stockholders Agreement, each dated as of October 3, 1994
among the Corporation, First Nationwide (Parent) Holdings
Inc. ("First Nationwide (Parent)") and Gerald J. Ford, and
each as amended in accordance with the terms thereof,
(iv) to take any action in connection with the Asset
Purchase Agreement, dated April 14, 1994, between the Bank
and First Nationwide Bank, A Federal Savings Bank, as
amended in accordance with the terms thereof, (v) to take
any action in connection with (A) the Credit Agreement,
dated as of July 20, 1994, as amended prior to the date (the
"Filing Date") of filing of this Second Restated Certificate
of Incorporation with the Secretary of State of the State of
Delaware (the "Original Credit Agreement"), among Marvel IV
Holdings Inc. (the "Borrower"), the banks, financial
institutions and other institutional lenders named therein
(the "Original Lenders") and Citibank, N.A., as agent for
the Original Lenders, and (B) the Amended and Restated
Credit Agreement, dated as of June 29, 1995, among the Bor-
rower, the banks, financial institutions and other
institutional lenders named therein (the "Lenders") and
Citibank, N.A., as agent for the Lenders (the "Agent"), as
amended in accordance with the terms thereof (the "Amended
and Restated Credit Agreement"), and to engage in any
activity not prohibited by the Amended and Restated Credit
Agreement, or (vi) to engage in any lawful activity and to
exercise any powers related to and convenient or incidental
to the foregoing.
FOURTH: The total number of shares of stock which
the Corporation shall have the authority to issue is 1250
shares consisting of 800 shares of Class A Common Stock,
each having a par value of one dollar ($1.00), 200 shares of
Class B Common Stock, each having a par value of one dollar
($1.00) and 250 shares of Class C Common Stock, each having
a par value of one dollar ($1.00).
(1) Dividends.
(a) Dividend Rights. Dividends may be paid
in cash or otherwise upon the Class A Common Stock, Class B
Common Stock and the Class C Common Stock out of the assets
of the Corporation in the relationship and upon the terms
provided for below with respect to each such class:
(i) Class A Common Stock. The
holders of record of the Class A Common Stock
shall be entitled to receive dividends, when and
as declared by the Board of Directors of the
Corporation (the "Board of Directors") out of
funds legally available therefor, subject to the
rights of the Class B Common Stock and Class C
Common Stock described below.
(ii) Class B Common Stock. The
Board of Directors shall, to the extent of funds
legally available therefor, declare and pay
mandatory dividends in respect of the Class B
Common Stock at the time of the declaration and
payment, respectively, of dividends on and in the
amounts per share paid on the Class A Common
Stock; provided, however, that until the date (the
"Trigger Date") on which the aggregate principal
amount of the Term Advances under (and as defined
in) the Amended and Restated Credit Agreement
shall have been repaid in an aggregate amount
equal to or greater than $196,600,000, no cash
dividends (and any accrued interest thereon as
provided below) shall be paid on the Class B Com-
mon Stock, unless the Required Lenders under (and
as defined in) the Amended and Restated Credit
Agreement consent in writing to the payment of
such dividends and any accrued interest thereon,
but such dividends, which from and after the date
of declaration thereof to the date of payment
thereof shall be a liability of the Corporation,
shall accrue interest in accordance with the
following sentences. Interest shall accrue on any
dividends on the Class B Common Stock that are not
paid as a result of the application of the proviso
to the immediately preceding sentence from the
date such dividends would otherwise have been paid
until (but excluding) the date such dividends are
actually paid. Prior to the Filing Date, such
interest accrued at a rate (the "Original Interest
Rate") equal to the Interest Rate under (and as
defined in) the Original Credit Agreement,
computed on the basis of the actual number of days
elapsed in a 360-day year. From and after the
Filing Date, such interest shall accrue at a daily
rate (the "New Interest Rate") equal to the daily
weighted average interest cost of funds to the
Borrower under the Amended and Restated Credit
Agreement, computed on the basis of the actual
number of days elapsed in a 360-day year. From
and after the Trigger Date, the Corporation shall
be obligated to discharge its liabilities in
respect of any declared but unpaid dividends on
the Class B Common Stock and accrued and unpaid
interest on such dividends prior to declaring any
additional dividends on the Class A Common Stock
or the Class B Common Stock.
(iii) Class C Common Stock. The
holders of record of shares of Class C Common
Stock shall be entitled to receive, when and as
declared by the Board of Directors out of funds
legally available therefor, cash dividends at the
rate per share determined as follows. The amount
of dividends payable in respect of the Class C
Common Stock shall be computed assuming (x) a
stated value per share of $1,000,000 and
(y)(I) prior to the Filing Date, a dividend rate
equal to the Original Interest Rate and (II) from
and after the Filing Date, a dividend rate equal
to the New Interest Rate, in each case computed on
the basis of the actual number of days elapsed in
a 360-day year. Dividends on the Class C Common
Stock shall be cumulative from the date on which
such shares of Class C Common Stock were origi-
nally issued. Interest shall accrue on any
dividends on the Class C Common Stock that are not
paid on any dividend payment date (as determined
in the sole discretion of the Board of Directors)
from such date until (but excluding) the date such
dividends are actually paid. Prior to the Filing
Date, such interest, if any, accrued at a rate
equal to the Original Interest Rate and from and
after the Filing Date, such interest shall accrue
at a rate equal to the New Interest Rate, in each
case computed on the basis of the actual number of
days elapsed in a 360-day year.
(b) Priority as to Dividends. Unless all
outstanding shares of Class C Common Stock have been
redeemed, no dividends (other than in Class A Common Stock
or Class B Common Stock or in another stock ranking junior
to the Class C Common Stock as to dividends and liquidation
rights) shall be declared or paid or set aside for payment
or other distribution made upon the Class A Common Stock or
Class B Common Stock of the Corporation or on any other
stock of the Corporation ranking junior to or on a parity
with the Class C Common Stock as to dividends or liquidation
rights. No dividends on the Class A Common Stock may be
declared unless an equivalent per share dividend shall be
contemporaneously declared on the Class B Common Stock.
(c) Restriction on Purchase. The Corpo-
ration shall not purchase or otherwise acquire for value
shares of Class A Common Stock or Class B Common Stock or
any other class of stock or series thereof ranking junior to
or on a parity with the Class C Common Stock as to dividends
or liquidation rights if, at the time of making such
purchase or other acquisition, any shares of Class C Common
Stock remain outstanding.
(2) Redemption.
(a) Optional Redemption. The shares of
Class C Common Stock may be redeemed, in whole or in part,
at the election of the Corporation by resolution of its
Board of Directors, at any time or from time to time after
the date on which the shares of Class C Common Stock are
issued at the redemption price of $1,000,000 per share, plus
accrued and unpaid dividends to the date fixed for
redemption, plus interest accrued (I) prior to the Filing
Date, at a rate equal to the Original Interest Rate and (II)
from and after the Filing Date, at a rate equal to the New
Interest Rate, in each case computed on the basis of the
actual number of days elapsed in a 360-day year, on
dividends not paid on any dividend payment date (as
determined in the sole discretion of the Board of
Directors), on such notice to each holder of record of the
Class C Common Stock to be redeemed as may be specified by
the resolution of the Board of Directors authorizing the
redemption.
In the event that at any time less than all of the
Class C Common Stock outstanding is to be redeemed, the
shares to be redeemed will be selected pro rata or by lot.
(b) Shares of Class C Common Stock redeemed,
purchased or otherwise acquired for value by the Corporation
shall be retired and shall not be reissued.
(c) The shares of Class A Common Stock and
Class B Common Stock shall not be subject to redemption.
(3) Voting Rights. The Class A Common Stock and
the Class B Common Stock shall vote together as a single
class on all matters which are to be put to a vote of
shareholders. Each share of the Class A Common Stock shall
entitle the holder thereof to one vote. Each share of the
Class B Common Stock shall entitle the holder thereof to a
vote equal to the product of one and a fraction, the
numerator of which is 3 and the denominator of which is 4.
Except as otherwise required by law, the holders of shares
of Class C Common Stock shall not be entitled to vote.
(4) Liquidation Rights; Priority.
(a) In the event of any liquidation,
dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, after payment or provision
for payment of the debts and other liabilities of the
Corporation, the holders of shares of the Class C Common
Stock shall be entitled to receive, out of the assets of the
Corporation, whether such assets are capital or surplus and
whether or not dividends as such are declared, $1,000,000
per share plus an amount equal to all accrued and unpaid
dividends thereon to the date fixed for distribution, plus
interest accrued at a rate equal to the New Interest Rate,
computed on the basis of the actual number of days elapsed
in a 360-day year, on dividends not paid on any dividend
payment date (as determined in the sole discretion of the
Board of Directors), and no more, before any distribution
shall be made to the holders of the Class A Common Stock or
the holders of the Class B Common Stock. After such
distribution to the holders of the Class C Common Stock, the
holders of the Class B Common Stock shall then be entitled
to all distributions of assets until all accrued and unpaid
dividends thereon to the date fixed for distribution, plus
interest accrued on dividends not paid, have been paid in
full before any distribution shall be made to the holders of
Class A Common Stock. After such distribution to the
holders of the Class B Common Stock, the holders of the
Class A Common Stock and Class B Common Stock shall be enti-
tled to receive the assets of the Corporation remaining for
distribution pro rata.
(b) Neither the merger nor consolidation of
the Corporation into or with any other corporation or
entity, nor the merger or consolidation of any other
corporation or entity, into or with the Corporation, nor a
sale, transfer or lease of all or any part of the assets of
the Corporation, shall be deemed to be a liquidation,
dissolution or winding up of the Corporation within the
meaning hereof.
(c) Written notice of any voluntary or
involuntary liquidation, dissolution or winding up of the
affairs of the Corporation, stating a payment date and the
place where the distributable amounts shall be payable,
shall be given by mail, postage prepaid, not less than 30
days prior to the payment date stated therein, to the
holders of record of the Class C Common Stock at their re-
spective addresses as the same shall appear on the books of
the Corporation.
FIFTH: The following provisions are inserted for
the management of the business and the conduct of the
affairs of the Corporation, and for further definition,
limitation and regulation of the powers of the Corporation
and of its directors and stockholders:
(1) The business and affairs of the Corporation
shall be managed by or under the direction of the Board
of Directors.
(2) The directors shall have concurrent
power with the stockholders to make, alter, amend,
change, add to or repeal the By-Laws of the
Corporation.
(3) The number of directors of the Corpo-
ration shall be not less than three nor more than
five as from time to time fixed by, or in the man-
ner provided in, the By-Laws of the Corporation.
Election of directors need not be by written
ballot unless the By-Laws so provide.
(4) The Corporation shall at all times, except as
noted hereafter, have at least one director (an
"Independent Director"), who is not, nor at any time
within the last ten years has been, a director, officer
or employee of MacAndrews & Forbes Holdings Inc.
("MacAndrews & Forbes") or its affiliates (other than
the Corporation, Coleman (Parent) Holdings Inc.
("Coleman (Parent)"), Marvel V Holdings Inc. ("Marvel V
Holdings"), the Borrower, Consolidated Cigar II
Holdings Inc. ("Consolidated Cigar Holdings") Flavors
(Parent) Holdings Inc. ("Flavors (Parent)"), NWCG
(Parent) Holdings Corporation ("NWCG (Parent)") and
First Nationwide (Parent), or a direct or indirect
beneficial owner of 5% or more of the outstanding
common stock of MacAndrews & Forbes or its affiliates
(other than the Corporation, Coleman (Parent), Marvel V
Holdings, the Borrower, Consolidated Cigar, Flavors
(Parent), NWCG (Parent) and First Nationwide (Parent).
In the event of the death, incapacity, resignation or
removal of any Independent Director, the remaining
members of the Board of Directors shall promptly elect
an Independent Director for such Independent Director
whose death, incapacity, resignation or removal caused
the related vacancy on the Board of Directors;
provided, however, that, subject to the fiduciary
duties of the Board of Directors, the Board of
Directors shall not vote on or consent to any matter
(other than the appointment of an Independent Director
if there is not at least one Independent Director then
in office) unless and until at least one Independent
Director shall have been duly elected to serve on the
Board of Directors.
(5) No director shall be personally liable
to the Corporation or any of its stockholders for
monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach
of the director's duty of loyalty to the Corpo-
ration or its stockholders, (ii) for acts or
omissions not in good faith or which involve
intentional misconduct or a knowing violation of
law, (iii) pursuant to Section 174 of the GCL or
(iv) for any transaction from which the director
derived an improper personal benefit. Any repeal
or modification of this Article FIFTH by the
stockholders of the Corporation shall not
adversely affect any right or protection of a
director of the Corporation existing at the time
of such repeal or modification with respect to
acts or omissions occurring prior to such repeal
or modification.
(6) In addition to the powers and authority
hereinbefore or by statute expressly conferred
upon them, the directors are hereby empowered to
exercise all such powers and do all such acts and
things as may be exercised or done by the Corpo-
ration, subject, nevertheless, to the provisions
of the GCL, this Second Restated Certificate of
Incorporation, and any By-Laws adopted by the
stockholders; provided, however, that no By-Laws
hereafter adopted by the stockholders shall
invalidate any prior act of the directors which
would have been valid if such By-Laws had not been
adopted.
SIXTH: Meetings of stockholders may be held
within or without the State of Delaware, as the By-Laws may
provide. The books of the Corporation may be kept (subject
to any provision contained in the GCL) outside the State of
Delaware at such place or places as may be designated from
time to time by the Board of Directors or in the By-Laws of
the Corporation.
SEVENTH: Notwithstanding any other provision of
this Second Restated Certificate of Incorporation and any
provision of law, the Corporation shall not do any of the
following:
(a) engage in any business or activity
other than as set forth in Article THIRD hereof;
(b) without the unanimous vote of the
holders of 100% of the voting power of the
outstanding Class A Common Stock of the Corpora-
tion ("Unanimous Class A Stockholder Approval"),
dissolve or liquidate, in whole or in part, insti-
tute proceedings to be adjudicated bankrupt or
insolvent; or consent to the institution of bank-
ruptcy or insolvency proceedings against it; or
file a petition seeking, or consent to, liqui-
dation, reorganization or other relief under any
applicable federal or state law relating to
bankruptcy or insolvency; or consent to the
appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official)
of the Corporation or a substantial part of its
property; or make any assignment for the benefit
of creditors; or admit in writing its inability to
pay its debts generally as they become due; or
take any corporate action in furtherance of any
such action; or
(c) without Unanimous Class A Stockhold-
er Approval, merge or consolidate with any other
corporation, company or entity or sell, lease or
otherwise transfer all or substantially all its
assets to, or acquire all or substantially all the
assets or capital stock or other ownership
interest of, any other corporation, company or
entity; provided, however, that any such merger or
consolidation (if the Corporation is not the
survivor) and such sale, lease or transfer may
only be consummated if such other corporation,
company or entity expressly assumes the
Corporation's obligations and has a certificate of
incorporation or similar charter document
containing provisions identical to those in
Articles THIRD, SEVENTH, EIGHTH, NINTH and TENTH
hereof and Sections (3) and (4) of Article FIFTH
hereof (collectively, the "Restricted Articles").
EIGHTH: The Corporation reserves the right to
amend, alter, change or repeal any provision contained in
this Second Restated Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted
subject to this reservation; provided, however, that the
Corporation shall not amend, alter, change or repeal (x) any
provision of the Restricted Articles or Section (1)(a)(ii)
of Article FOURTH hereof without Unanimous Class A Stock-
holder Approval and the affirmative vote of the holders of
50% of the voting power of the outstanding Class B Common
Stock of the Corporation (the "Majority Class B Stockholder
Approval") and (y) any provision of Article FOURTH hereof
(other than Section (1)(a)(ii) thereof, as to which clause
(x) above shall apply) without Majority Class B Stockholder
Approval; and provided, further, that the Corporation shall
not adopt, amend or change any Article so as to be
inconsistent with the Restricted Articles or Article FOURTH
without complying with the foregoing provision.
NINTH:
(a) Until the Payment Obligations have been Fully Satisfied
(as each such term is defined below), or such earlier time
as the Required Lenders under the Amended and Restated
Credit Agreement may approve, on each date (each, a
"Measurement Date") on which the Corporation receives
dividends, distributions or other funds from the Bank, the
excess (the "Excess") of (x) the sum of (i) the aggregate
amount so received and (ii) the amount of cash and Temporary
Cash Investments (as defined in the Indenture), if any, held
by the Corporation on the Measurement Date over (y) the sum
of (I) $15,000,000 and (II) if the Measurement Date occurs
within ninety (90) days prior to the next scheduled payment
date in respect of the Notes under the terms of the
Indenture, the amount required to be paid by the Corporation
on such scheduled payment date, shall be treated as follows
and in the following order of priority:
(1) The Board of Directors shall
declare and the Corporation shall pay, out of funds
legally available therefor, mandatory dividends on its
Class C Common Stock in accordance with
Section 1(a)(iii) of Article FOURTH hereof up to the
amount of such Excess, but only to the extent that such
dividends are permitted under the terms of the
Indenture;
(2) if any portion of such Excess is
not payable in accordance with clause (1) above, the
Corporation shall mandatorily redeem, out of funds
legally available therefor, its Class C Common Stock in
accordance with Section 2(a) of Article FOURTH hereof
to the extent that such portion of such Excess is
sufficient to pay the redemption price therefor plus
all other amounts due in connection therewith as
provided in such Section (2)(a) of Article FOURTH, but
only to the extent that such redemption is permitted
under the terms of the Indenture;
(3) if any portion of such Excess is
not payable in accordance with clause (1) or (2) above,
the Board of Directors shall declare and the Corpora-
tion shall pay, out of funds legally available there-
for, up to the amount of such portion of such Excess,
(x) mandatory dividends on its Class A Common Stock in
accordance with Section (1)(a)(i) of Article FOURTH
hereof and (y) mandatory dividends on its Class B
Common Stock in accordance with Section (1)(a)(ii) of
Article FOURTH hereof, but only to the extent that such
dividends are permitted under the terms of the
Indenture;
(4) if any portion of such Excess is
not payable in accordance with clause (1), (2) or (3)
above, the Corporation shall lend such portion of such
Excess to Marvel V Holdings on a subordinated basis in
accordance with paragraph (b) below, but only to the
extent that such loan is permitted under the terms of
the Indenture; and
(5) if any portion of such Excess is
not payable in accordance with clause (1), (2), (3) or
(4) above, such portion of such Excess may be retained
by the Corporation and used in accordance with the
Indenture.
"Payment Obligations" shall mean all principal, interest,
fees, charges, expenses, attorneys' fees and disbursements,
indemnities and any other amounts payable by the Loan
Parties under the Loan Documents (as each such term is
defined in the Amended and Restated Credit Agreement).
"Fully Satisfied" shall mean, with respect to the Payment
Obligations as of any date, that, on or before such date,
(a) the principal of and interest accrued to such date on
all outstanding Advances (as defined in the Amended and
Restated Credit Agreement) shall have been paid in full in
cash and (b) all fees, expenses and other amounts then due
and payable which constitute Payment Obligations shall have
been paid in full in cash; provided, however, that on such
date none of the Agent and the Lenders shall have made any
claim in respect of Payment Obligations against the Borrower
or any other Loan Party under any provision of any of the
Loan Documents that has not been cash collateralized by an
amount sufficient in the reasonable judgment of the Agent,
the Required Lenders and any such Lender (if such Lender is
not one of the Lenders constituting the Required Lenders) to
secure such claim.
(b) Any loans made pursuant to paragraph (a)(4)
above shall be evidenced by documentation containing terms
that are permitted by the Indenture and as may be approved
by the Board of Directors and by the Required Lenders under
the Amended and Restated Credit Agreement.
TENTH: The Corporation shall ensure at all times
that it maintains corporate records and books of account
which are separate from those of any other corporation,
company or entity, including its affiliates.
ELEVENTH: The Corporation is to have perpetual
existence.
IN WITNESS WHEREOF, this Second Restated
Certificate of Incorporation has been executed by and on
behalf of First Nationwide Holdings Inc. by its Vice
President this __th day of June, 1995.
FIRST NATIONWIDE HOLDINGS INC.
By:
--------------------------
Name: Glenn P. Dickes
Title: Vice President
LOAN AGREEMENT
Dated as of September 30, 1994
among
MARVEL V HOLDINGS INC.
and
FIRST NATIONWIDE (PARENT) HOLDINGS INC.
TABLE OF CONTENTS
SECTION PAGE
1. Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Obligations of FN Parent . . . . . . . . . . . . . . . . . 1
3. Amendments; Waivers; Etc.. . . . . . . . . . . . . . . . . 2
4. Addresses for Notices. . . . . . . . . . . . . . . . . . . 2
5. Continuing Agreement; Assignments under the
Credit Agreement . . . . . . . . . . . . . . . . . . . . . 2
6. Execution in Counterparts. . . . . . . . . . . . . . . . . 3
7. Governing Law. . . . . . . . . . . . . . . . . . . . . . . 3
LOAN AGREEMENT
LOAN AGREEMENT (this "Agreement") dated as of September 30, 1994
by and between Marvel V Holdings Inc., a Delaware corporation (the "Borrower
Parent"), and First Nationwide (Parent) Holdings Inc., a Delaware corporation
("FN Parent") .
PRELIMINARY STATEMENTS.
(1) Marvel IV Holdings Inc., a Delaware corporation and a
wholly owned subsidiary of the Borrower Parent (the "Borrower"), Citibank, N.A.,
a national banking association, as agent, and certain financial institutions
(the "Lenders") are parties to the Credit Agreement dated as of July 20, 1994
(said Agreement, as it may hereafter be amended or otherwise modified from time
to time, being the "Credit Agreement"; all capitalized terms used in this
Agreement and not defined herein shall have the meanings set forth for such
terms in the Credit Agreement) pursuant to which the Lenders have agreed, upon
the terms and conditions specified therein, to make Advances to the Borrower in
an aggregate amount of up to $240,000,000.
(2) It is a condition precedent to the making of the
Advances by the Lenders comprising the second Borrowing under the Credit
Agreement that the Borrower Parent and FN Parent shall have executed and
delivered this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make Advances under the Credit Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1. Loans. On each date on which FN Parent receives
dividends, other distributions or any loans or advances from FN Holdings, FN
Parent shall make a loan to the Borrower Parent (each such loan, a "Loan") in an
amount equal to the aggregate amount of such dividend, distribution, loan or
advance, as the case may be, received on such date. Each such Loan shall be
evidenced by a promissory note containing the terms of subordination set forth
on Exhibit A to the Mafco Guaranty, or such other terms of subordination as may
be approved by the Board of Directors of FN Parent and the Required Lenders.
Section 2. Obligations of FN Parent. The obligation of FN
Parent to make the Loans required pursuant to this Agreement is absolute and
unconditional and shall not be affected by the bankruptcy, insolvency or
reorganization of the Borrower Parent. The obligations of FN Parent hereunder
shall not be subject to any abatement, reduction, limitation, impairment,
termination, setoff, defense, counterclaim or recoupment whatsoever or any right
to any thereof, and shall not be released, discharged or in any way affected by
any reorganization, arrangement, compromise, settlement, release, modification,
amendment (whether material or otherwise), waiver or termination of any or all
of the obligations, conditions, covenants or agreements of the Borrower Parent
in respect of any obligations of the Borrower Parent to any other Person,
whether or not FN Parent shall have notice or knowledge of any of the foregoing
or, to the fullest extent permitted by applicable law, by any other circumstance
whatsoever which might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor.
Section 3. Amendments; Waivers; Etc. No amendment or waiver of
any provision of this Agreement, and no consent to any departure by the Borrower
Parent or FN Parent herefrom, shall in any event be effective unless the same
shall be in writing and signed by the Borrower Parent and FN Parent and
consented to by the Agent, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given. No
failure on the part of either party hereto to exercise, and no delay in
exercising any right hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.
Section 4. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and, mailed, telegraphed, telecopied,
telexed, cabled or delivered to the Borrower Parent addressed to it at its
address specified in the Borrower Parent Guaranty or to FN Parent, c/o
MacAndrews & Forbes Holdings Inc., 38 East 63rd Street, New York, New York
10021, or, as to either party, at such other address as shall be designated by
such party in a written notice to each other party complying as to delivery with
the terms of this Section. All such notices and other communications shall,
when mailed, telecopied, telegraphed, telexed or cabled, respectively, be
effective when deposited in the mails, telecopied, delivered to the telegraph
company, confirmed by telex answerback or delivered to the cable company,
respectively, addressed as aforesaid.
Section 5. Continuing Agreement; Assignments under the Credit
Agreement. This Agreement shall create a continuing agreement and shall (a)
remain in full force and effect until such time as the Payment Obligations have
been Fully Satisfied, (b) be binding upon the Borrower Parent, FN Parent, their
respective successors and assigns and (c) inure, together with the rights and
remedies of the Agent hereunder, to the benefit of the Agent, the Lenders and
their respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender may assign or otherwise
transfer all or any portion of its rights and obligations under the Credit
Agreement (including, without limitation, all or any portion of its Commitment,
the Advances owing to it and the Note or Notes held by it) to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to such Lender herein or otherwise, in each case as
provided in Section 8.07 of the Credit Agreement. Neither the Borrower Parent
nor FN Parent shall assign or delegate any of their respective rights or
obligations under this Agreement without the prior written consent of the Agent.
Section 6. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
Section 7. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the Borrower Parent and FN Parent each have
caused this Agreement to be duly executed and delivered by its officer thereunto
duly authorized as of the date first above written.
MARVEL IV HOLDINGS INC.
By
--------------------------
Title:
MARVEL V HOLDINGS INC.
By
--------------------------
Title:
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