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, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-9008
ANDREWS GROUP INCORPORATED
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(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.)
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3200 WINDY HILL ROAD, SUITE 1100-WEST, ATLANTA, GEORGIA 30339
(Address of principal executive offices) (Zip Code)
770-955-0045
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(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 5, 1996
----------------------- -----------------------------
Common Stock, $1.00 par 1,000
As of August 5, 1996, all of the Registrant's outstanding
common stock was indirectly held by Mafco Holdings Inc.
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLIONS, EXCEPT SHARE DATA)
(UNAUDITED)
JUNE 30, DECEMBER 31,
1996 1995
-------- -----------
ASSETS
Cash $ 84.0 $ 114.5
Trade receivables, net 386.8 408.8
Inventories 95.9 82.4
Television program contract rights 11.6 23.7
Film costs, net 81.4 83.8
Deferred taxes 56.8 55.2
Prepaid expenses and other 91.4 95.8
--------- ---------
Total current assets 807.9 864.2
Property, plant and equipment, net 304.3 290.7
Intangible assets, net 2,408.4 2,440.0
Loans to affiliates, net 278.8 441.0
Other assets 218.4 228.8
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$4.017.8 $4,264.7
========= =========
LIABILITIES AND STOCKHOLDER'S DEFICIT
Current liabilities:
Current portion of long-term debt and
notes payable $ 53.8 $ 91.6
Short-term borrowings 11.0 -
Accounts payable and accrued expenses 329.2 394.5
Television program contracts payable 14.4 26.9
Deferred income 30.4 46.8
Participations and residuals payable 54.2 43.4
--------- ---------
Total current liabilities 493.0 603.2
Long-term debt 2,693.1 2,951.0
Indebtedness to affiliates 542.7 307.1
Other liabilities 170.7 187.2
Minority interest 445.7 449.7
Redeemable preferred stock of subsidiaries 340.8 340.4
Commitments and contingencies
Stockholder's deficit:
Common stock, $1.00 par value; 1,000 shares
authorized, issued and outstanding
Additional paid-in-capital 40.6 40.2
Accumulated deficit (708.6) (614.5)
Cumulative translation adjustment (0.2) (0.4)
--------- --------
Total stockholder's deficit (668.2) (573.9)
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$4,017.8 $4,264.7
========= =========
See notes to consolidated financial statements.
2
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
--------------------------- ---------------------------
1996 1995 1996 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net revenues $ 707.3 $ 609.5 $ 355.9 $ 336.7
Operating expenses:
Direct costs 421.5 379.9 205.6 207.9
Selling, general and administrative expenses 211.2 179.4 107.4 98.4
Amortization of goodwill and intangibles 37.8 28.0 18.1 16.1
------------- ------------- ------------- -------------
Operating income 36.8 22.2 24.8 14.3
------------- ------------- ------------- -------------
Other (expense) income:
Interest expense (164.3) (139.3) (79.2) (74.0)
Interest and net investment income 34.4 19.5 18.8 9.6
Gain (loss) on sale of business interests, net 0.3 54.7 0.3 (0.2)
Amortization of debt issuance costs and other (14.9) (13.3) (8.4) (10.5)
------------- ------------- ------------- -------------
(144.5) (78.4) (68.5) (75.1)
------------- ------------- ------------- -------------
Loss before income taxes, minority interest
and equity in net income of investees (107.7) (56.2) (43.7) (60.8)
Benefit (provision) for income taxes 4.9 (40.5) 1.8 2.8
Minority interest in loss (earnings) of subsidiaries 6.8 5.1 (1.4) 3.2
Equity in net income of investees 1.9 0.5 1.9 0.4
------------- ------------- ------------- -------------
Loss before extraordinary item (94.1) (91.1) (41.4) (54.4)
Extraordinary item, net of tax (3.3) (3.3)
------------- ------------- ------------- -------------
Net loss $ (94.1) $ (94.4) $ (41.4) $ (57.7)
============= ============= ============= =============
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-------------------------
1996 1995
----------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (94.1) $ (94.4)
----------- ------------
Adjustments to reconcile net loss to net cash flows from operating
activities:
Depreciation and amortization 69.4 56.5
Noncash interest expense 55.1 48.8
Equity in net income of investees, net of distributions (1.9) 2.5
Minority interest in loss of subsidiaries (6.8) (5.1)
Extraordinary item, net of tax 3.3
Gain on sale of business interests and fixed assets (0.3) (54.7)
Excess of television program contract rights amortization
over payments (0.9) 2.9
Film cost amortization over additions 1.7 11.4
Changes in assets and liabilities, net of effects of acquisitions and
dispositions
Decrease (increase) in assets 8.2 (51.2)
(Increase) decrease in liabilities (81.4) 24.7
----------- ------------
43.1 39.1
----------- ------------
Net cash flows from operating activities (51.0) (55.3)
----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of broadcast stations, net of cash acquired - (360.1)
Acquisition of SkyBox, net of cash and cash equivalents acquired - (152.6)
Proceeds from sale of business interests - 211.9
Other acquisitions, investments and advances (6.2) (20.7)
Loans to affiliates, net 162.2 (41.8)
Capital expenditures (38.9) (35.5)
----------- ------------
Net cash flows from investing activities 117.1 (398.8)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long term debt 20.4 918.9
Repayment and repurchases of debt (348.0) (653.2)
Issuance of preferred stock, common stock, stock options and warrants 3.5 52.1
Loans from affiliates, net 235.6 82.1
Debt issuance costs and other, net (9.0) (13.9)
----------- ------------
Net cash flows from financing activities (97.5) 386.0
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Effect of exchange rate changes on cash 0.9 2.1
Net decrease in cash (30.5) (66.0)
Cash at beginning of the period 114.5 175.7
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Cash at end of the period $ 84.0 $ 109.7
=========== ============
See notes to consolidated financial statements.
4
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN MILLIONS)
(UNAUDITED)
SIX MONTHS ENDED
JUNE 30,
-------------------------
1996 1995
----------- ------------
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:
Interest paid during the period $ 102.4 $ 82.3
Taxes paid during the period 9.9 8.6
Purchase of television program contract rights 5.5 2.1
Additions to film costs 62.1 27.7
Argyle stations purchase:
Fair value of assets acquired $ 778.5
Purchase option applied to purchase price (100.0)
Cash paid, net of cash received (360.1)
------------
Liabilities assumed $ 318.4
============
See notes to consolidated financial statements.
5
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
(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
1995 Form 10-K. All terms used but not defined elsewhere herein have the
meanings ascribed to them in the Company's 1995 Form 10-K. In the opinion of
management, all adjustments (which include only normal recurring accruals)
necessary for a fair presentation have been made.
Certain reclassifications have been made to conform to the current
period's presentation.
2. PENDING DISPOSITIONS
In May 1996, NWCG entered into an agreement to sell substantially all
of the assets of KNSD-TV (the "San Diego Station") and WVTM-TV (the
"Birmingham Station") to National Broadcasting Company, Inc. ("NBC") for
$425.0 subject to certain adjustments. The transaction is subject to various
closing conditions, including regulatory approval.
3. INVENTORIES, NET
June 30, December 31,
1996 1995
-------- ------------
Raw materials $23.0 $23.7
Work-in progress 21.8 22.3
Finished goods 74.1 58.8
Less: Reserve for obsolescence (23.0) (22.4)
-------- --------
$95.9 $82.4
======== ========
4. LONG-TERM DEBT
On April 9, 1996, Marvel IV Holdings Inc. ("Marvel IV Holdings")
amended the Marvel IV Credit Agreement. In connection with such amendment (i)
the term loan was paid down to $5.2 and the revolver was repaid in full with
the proceeds from the collection of loans to an affiliate and (ii) the
aggregate commitment under the term loan and revolving credit facilities was
reduced to $150.0. On June 6, 1996, the Marvel IV Credit Agreement was
further amended to provide for a revolving credit and
6
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)
letter of credit commitment in an aggregate of $250.0. No borrowings were
outstanding under this facility at June 30, 1996.
During March 1996 and August 1996, Marvel amended its credit
agreements to, among other things; (i) provide for an additional $25.0
revolving credit facility which will expire on December 31, 1996; (ii) secure
the borrowings with substantially all of Marvel's domestic assets and all of
the capital stock of Marvel's domestic subsidiaries and 65% of the capital
stock of Marvel's first tier foreign subsidiaries; and (iii) amend certain
financial covenants. The additional revolving credit facility is pari passu
with the loans extended by the banks pursuant to Marvel's existing loan
agreements.
In July 1996, Andrews' 12 3/4% Subordinated Debentures were redeemed
at maturity.
5. RESTRUCTURING OF OPERATIONS
In the fourth quarter of 1995, Marvel recorded restructuring charges
of $25.0 related primarily to publishing and confections operations. As part
of the restructuring, Marvel has terminated approximately 275 employees,
covering editorial, production, distribution and administrative employee
groups and, accordingly, provided for $10.7 of termination benefits, of which
$5.7 has been paid as of June 30, 1996. Additionally, approximately $6.7
relates to facility closure and consolidation costs, of which $4.2 has been
paid as of June 30, 1996, and $7.6 relates to other costs, of which $4.6 has
been paid as of June 30, 1996. The remaining amounts, as of June 30, 1996, are
included in accrued expenses and other.
6. RELATED PARTY TRANSACTIONS
At June 30, 1996 and December 31, 1995, the Company and its
subsidiaries had advances from Mafco Holdings and its subsidiaries of $542.7
and $307.1, respectively. These advances bear interest primarily at 2% over
the prime rate. At June 30, 1996 and December 31, 1995, the Company had
advances of $278.8 and $441.0 to Mafco Holdings and its subsidiaries.
At August 5, 1996, an aggregate of 79.4 million shares of common
stock of Marvel were pledged to secure the indebtedness and letters of credit
of Marvel Holdings, Parent Holdings, Holdings III and Four Star Holdings and
2.9 million shares of common stock of Marvel are subject to a negative pledge
under the terms of the Marvel Holdings Notes. At August 5, 1996, an aggregate
of 34.5 million shares of NWCG were pledged to secure the NWCG Holdings Notes.
7. SUBSEQUENT EVENTS
In August, 1996, Toy Biz sold in an offering .7 million shares of its
Class A common stock at a price to the public of $15 per share. As part of Toy
Biz's offering, Marvel sold 2.5 million shares of Toy Biz Class A common
stock. In the third quarter of 1996, Marvel will record a gain on the sale of
this common stock. The net proceeds to Toy Biz and Marvel were approximately
$9.0 and $35.0, respectively. The net proceeds from each of those sales, along
with additional funds provided by Toy Biz from operations and by Marvel from
operations and borrowings, are expected to be contributed
7
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)
from time to time to an entity to be formed by Marvel and Toy Biz to
facilitate the development of television programming, feature films and other
media and theatrical productions based upon Marvel's characters
("Marvel Studios"). Marvel will receive common equity interests in Marvel
Studios representing 75% of the equity and Toy Biz will receive preferred
equity interests representing 25% of the equity. Pending such use, Marvel
intends to use its net proceeds from this offering to repay debt and for
working capital and general corporate purposes and Toy Biz, pending such
investment in Marvel Studios, intends to use its net proceeds for working
capital and general corporate purposes.
As a result of the offering by Toy Biz and the sale of Class A common
stock of Toy Biz by Marvel, Marvel's ownership percentage of Toy Biz decreased
to 26.7% and its voting control decreased to 78.4%.
NWCG, NWCG (Parent) Holdings Corporation ("NWCG Parent"), a
subsidiary of the Company, NWCG Holdings and The News Corporation Limited, a
South Australia corporation ("News Corp."), entered into a binding Memorandum
of Understanding, dated as of July 17, 1996 (the "Agreement") pursuant to
which (a) a subsidiary of News Corp. will merge with and into NWCG and NWCG
will become a subsidiary of News Corp. (the "Merger"), and each outstanding
share of common stock of NWCG (other than shares held by News Corp.) will be
converted into the right to receive 1.45 American Depository Receipts ("ADRs")
of News Corp., each representing four Preferred Limited Voting Ordinary Shares
of News Corp. (b) News Corp. will purchase from NWCG Parent (i) all of the
shares of capital stock of NWCG owned by NWCG Parent and (ii) all of the
outstanding stock of NWCG Holdings for 1.45 ADRs per share of common stock of
NWCG owned in the aggregate by NWCG Parent and NWCG Holdings, reduced by the
amount of certain indebtedness of NWCG Holdings, (c) News Corp. will purchase
from an affiliate of the Company certain real estate consisting of an office
building that serves as NWCG's headquarters in Los Angeles, California, and
(d) News Corp. will assume all of the obligations of an affiliate of the
Company under certain promissory notes issued in connection with the
acquisition of NW Entertainment, a subsidiary of NWCG. In addition, NWCG
Parent has agreed to vote, or cause to be voted, all of the shares of capital
stock of NWCG beneficially owned by it or its subsidiaries in favor of the
Merger and, if applicable, the other transactions contemplated by the
Agreement.
The Merger and the other transactions are conditioned on one another
and the Merger is subject to certain other conditions, including regulatory
approvals and the approval of the shareholders of NWCG. There can be no
assurance that all of the conditions to the consummation of the Merger will be
satisfied or that, as a condition to the grant of any approvals by government
agencies, changes will not be required to the terms of the Agreement. No
effects of the proposed merger with News Corp. are reflected in the
accompanying unaudited consolidated financial statements.
8
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
RESULTS OF OPERATIONS
General
The Company operates in the youth entertainment segment through its
approximately 79% 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, licenses from
professional athletes, sports teams and leagues and popular entertainment
characters and other properties owned by third parties. Marvel also licenses
its characters and properties for consumer products, television and film and
advertising promotions. Marvel's products include comic books and other
publications, sports and entertainment trading cards, children's activity
stickers, Toy Biz toys, adhesives and confectionery products.
The Company operates in the broadcasting and production and
distribution segments through its approximately 42% ownership interest (83%
voting interest) in NWCG, assuming conversion of NWCG Series B Preferred
Stock. NWCG operates broadcast television stations, a television production
company, and a filmed entertainment distribution business.
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's
net revenues have been derived from businesses other than comic book
publishing. For the year ended December 31, 1995, net publishing revenues
represented approximately 17.8% of Marvel's total net revenues. Marvel's
business has been augmented by the 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. Although Marvel's consolidated net revenues have
increased as a result of diversification, certain changes in market
conditions, primarily associated with its publishing and trading card
businesses, adversely affected Marvel's net revenues and operating results in
recent periods.
As a result of a significant reduction in speculative purchases of
comic books, Marvel has undertaken several strategic actions which it believes
will have the long-term effect of bolstering its publishing business. Marvel
has substantially completed eliminating unprofitable and marginally profitable
titles to create a strong line-up comprising Marvel's most popular and most
profitable titles; focused its comic books more on editorial content and less
on physical product features and enhancements; and streamlined operations
through introduction of new technology and consolidation of facilities.
Combined with the reduction in titles, these measures will reduce editorial,
production, distribution, manufacturing and administrative overhead expense.
Marvel believes these actions, together with the exclusive distribution by
Heroes World of Marvel's comic books to the direct market, which commenced
July 1995, should improve the future operating results of Marvel's publishing
business.
9
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
Marvel believes that there has been a general contraction in the
sports trading card market, related in part to lower speculative purchases.
This contraction was compounded by the baseball, hockey and basketball labor
situations, which adversely affected sports trading card sales and returns for
those periods. Although Major League Baseball resumed in April 1995, there
still is no collective bargaining agreement in effect between the owners and
players, and the level of fan interest, although showing signs of improvement
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 contributed to decreased trading card
consumer interest and, therefore, generally decreased levels of consumer
purchases of all trading cards. Accordingly, Marvel believes that the overall
trading card industry has been negatively affected, causing Marvel to
experience lower sales, higher returns, and higher inventory obsolescence.
Throughout 1995, the lower sales and higher returns of Marvel's
trading cards primarily related to distribution channels other than trading
card specialty stores. Marvel has revamped its trading card business to
concentrate its distribution of trading card products in trading card
specialty stores and in select mass market accounts. Marvel believes that
these distribution channels have a more focused customer base and proven
efficiencies, and therefore should allow Fleer/SkyBox to realize an
improvement in operating income in the future.
Also as part of the revamping of Fleer, operational overhead has been
reduced through the closure of Fleer's Philadelphia facility, which had been
used for confections and trading card manufacturing. Marvel anticipates
additional reductions in future operating expenses of Fleer/SkyBox due to the
concentration of sales activities to trading card specialty stores and
selected mass market accounts.
With these actions, Marvel has simplified and refocused its
publishing and trading card operations by concentrating on what it believes to
be the strongest elements of the businesses and more efficient channels of
distribution. Although Marvel believes that these actions will position itself
for an improvement in future operating performance of these businesses, the
extent of improvement will be determined by, among other things, the state of
the markets in which Marvel's products are sold, the effectiveness of Marvel's
implementation of changes to these businesses and the level of reception by
consumers to Marvel's changes in these businesses and to Marvel's products.
THREE MONTHS ENDED JUNE 30, 1996 COMPARED WITH THREE MONTHS ENDED JUNE 30, 1995
The Company's net revenues in 1996 were $355.9 compared with $336.7
in 1995. Revenues in 1996 include $182.2 from the Company's youth
entertainment segment and $173.7 from the Company's broadcasting and
production and distribution segment. Revenues in 1995 include $169.2 from the
Company's youth entertainment segment and $167.5 from the Company's
broadcasting and production and distribution segment.
The increase in revenues from the youth entertainment segment
reflects an increase of $15.2 in toy revenues, a $11.3 increase in trading
card and sticker net revenues and $1.8 in other revenues, partially offset by
a $12.0 decrease in net publishing revenues and a $3.3 decrease in licensing
revenues. The increase in toy revenues was principally due to Toy Biz's
expanded product offerings
10
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
and increased international distribution of products. The increase in net
sticker and trading card revenues was primarily due to increased Panini net
revenues of stickers. Panini net revenues increased due to the 1996 European
Cup soccer tournament and expansion into new markets such as Brazil, partially
offset by lower net revenues in certain European markets principally due to
lower net revenues from entertainment stickers based on properties licensed
from third parties due to lower commercial success of such properties in 1996
as compared to 1995. Net revenues from trading cards increased slightly as
compared to 1995. Marvel's concentration of distribution to trading card
specialty stores and select mass market accounts generally resulted in lower
gross sales in 1996. In addition, entertainment card sales decreased due to
lower sales of cards based on properties licensed from third parties resulting
from lower commercial success of such properties in 1996 as compared to 1995,
as well as lower sales of cards based on comic book characters due in part to
market conditions in the comic book specialty store market. However, as
compared to 1995, provisions for trading card sales returns were significantly
lower, reflecting the change in distribution and the inclusion in the second
quarter of 1995 of a significant increase in sales returns reserves related to
market conditions. Such lower sales returns provisions offset the lower sales
discussed above, resulting in a slight increase in net revenues from trading
cards. The decrease in net publishing revenues was due to the reduction of
unprofitable titles, in accordance with Marvel's business strategy, and the
discontinuance commencing in July 1995 of the distribution by Heroes World of
comic book publications other than Marvel's titles. Licensing revenues will
vary depending on the volume and extent of licensing agreements entered into
during any particular financial period, as well as the level and commercial
success of the media exposure of Marvel's characters.
The increase in revenues from the broadcasting and production and
distribution segment reflects an increase in broadcasting revenues of $5.2 due
primarily to political advertising and the recovery of a portion of the market
share enjoyed prior to the Fox conversion. NWCG had expected the conversion to
Fox to result in an initial decline in revenues. Production and distribution
revenue increased primarily due to increases in network and cable revenues.
Direct costs for 1996 and 1995 relates to the youth entertainment
segment ($115.4 and $116.9, respectively) and to the broadcasting and
production and distribution segment ($90.2 and $91.0, respectively). The youth
entertainment segment's direct costs as a percentage of sales was 63% in 1996
and 69% in 1995, reflecting lower provisions for sales returns and inventory
obsolescence in the trading card business and a reduction of unprofitable
titles in Marvel's publishing business, offset by an unfavorable product mix
for trading cards, stickers and toys as compared to 1995 as well as weaker
operating results in certain of Panini's European markets. The decrease in
broadcasting direct costs reflects lower programming contract costs.
Selling, general and administrative ("SG&A") expenses in 1996
increased by $9.0 to $107.4. The youth entertainment segment's SG&A expenses
increased from $55.4 to $60.7. The increase of $5.3 was mainly attributable to
the increase in Toy Biz's and Panini's advertising, promotion and selling
costs, partially offset by a general reduction in overhead expenses associated
with the restructuring of the trading card, publishing and confectionery
operations. The broadcasting and production and distribution segment's SG&A
expenses were $39.7 and $37.1 in 1996 and 1995, respectively. The increase in
broadcasting SG&A expenses primarily reflects higher costs to support the
increase in local programming associated with NWCG's conversion of certain
broadcast stations to
11
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
the Fox Network. The increase in production and distribution SG&A expenses was
primarily due to amortization of production costs associated with increased
production activity. Also included in SG&A expenses are $7.0 and $5.9 of
corporate overhead expenses in 1996 and 1995, respectively.
Amortization of goodwill and intangibles increased to $18.1 in 1996
from $16.1 in 1995 primarily due to the amortization related to the
acquisition of the Argyle Stations and to the SkyBox Acquisition.
Interest expense increased to $79.2 in 1996 from $74.0 in 1995
primarily due to increased average borrowings.
Interest and net investment income increased from $9.6 in 1995 to
$18.8 in 1996 primarily due to an increase in net loans to affiliates.
The benefit for income taxes of $1.8 and $2.8 in 1996 and 1995,
respectively, relate to subsidiaries which file separate income tax returns.
The Company has not recorded a benefit in 1995 and 1996 for its separate
company loss as the Company is not assured that it will be able to realize the
benefit for such losses in the future.
Marvel recorded an extraordinary loss of $3.3, net of taxes of $2.1,
in 1995 which represented 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, 1996 COMPARED WITH SIX MONTHS ENDED JUNE 30, 1995
The Company's net revenues in 1996 were $707.3 compared with $609.5
in 1995. Revenues in 1996 include $371.8 from the Company's youth
entertainment segment and $335.5 from the Company's broadcasting and
production and distribution segment. Revenues in 1995 include $327.1 from the
Company's youth entertainment segment and $282.4 from the Company's
broadcasting and production and distribution segment.
The increase in revenues from the youth entertainment segment
reflects an increase of $40.4 in toy revenues, a $28.0 increase in trading
card and sticker net revenues and $4.0 in other revenues, partially offset by
an $23.8 decrease in net publishing revenues and a $3.9 decrease in licensing
revenues. The increase in toy revenues was principally due to Toy Biz's
expanded product offerings, increased international distribution of products
and the consolidation of Toy Biz for six months in 1996 as compared to four
months in 1995. The increase in net sticker and trading card revenues was
primarily due to increased net trading card revenues and, to a lesser extent,
increased net revenues from stickers. Net revenues from trading cards
increased by approximately $20 for the six months of 1996 as compared to 1995.
Marvel's concentration of distribution to trading card specialty stores and
select mass market accounts generally resulted in lower sales in 1996. In
addition, entertainment card sales decreased due to lower sales of cards based
on properties licensed from third parties resulting from lower commercial
success of such properties in 1996 as compared to 1995, as well as lower sales
of cards based on comic book characters due in part to market conditions in
the comic book specialty store market. However, as compared to 1995,
provisions for trading card sales returns were
12
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
significantly lower, reflecting the change in distribution and the inclusion
in the second quarter of 1995 of a significant increase in sales returns
reserves. Such lower sales return provisions, combined with the inclusion of
net revenues from SkyBox trading cards for six months in 1996 versus only two
months in 1995 as SkyBox was acquired on April 27, 1995, offset the lower
sales discussed above, resulting in the increase in net revenues from trading
cards for the six months ended June 30, 1996 as compared to the same period in
1995. Panini net revenues increased due to the 1996 European Cup soccer
tournament and expansion into new markets such as Brazil, partially offset by
lower net revenues in certain European markets principally due to lower net
revenues from entertainment stickers based on properties licensed from third
parties due to lower commercial success of such properties in 1996 as compared
to 1995. The decrease in net publishing revenues was due to the reduction of
unprofitable titles, in accordance with Marvel's business strategy, and the
discontinuance commencing in July 1995 of the distribution by Heroes World of
comic book publications other than Marvel's titles. Licensing revenues will
vary depending on the volume and extent of licensing agreements entered into
during any particular financial period, as well as the level and commercial
success of the media exposure of Marvel's characters.
The increase in revenues from the broadcasting segment of $30.6
reflects an increase of $25.1 for the four stations acquired on March 31, 1995
from Argyle and an increase of $11.2 for the eight original stations owned for
both periods ("Eight Stations"), partially offset by a decrease of $5.7
reflecting the sale of the Boston Station in March of 1995. On a same station
basis for both periods, net revenue increased $6.7 due primarily to political
advertising and the recovery of a portion of the market share enjoyed prior to
the Fox conversion. NWCG had expected the conversion to Fox to result in an
initial decline in revenues. Production and distribution revenue increased
$22.5 primarily due to increases in network and cable revenues, reflecting
substantially increased production activity.
Direct costs for 1996 and 1995 relates to the youth entertainment
segment ($229.3 and $213.8, respectively) and to the broadcasting and
production and distribution segment ($192.2 and $166.1, respectively). The
youth entertainment segment's direct costs as a percentage of sales was 62% in
1996 and 65% in 1995, reflecting lower provisions for sales returns and
inventory obsolescence in the trading card business and a reduction of
unprofitable titles in Marvel's publishing business, offset by an unfavorable
product mix for trading cards, stickers and toys as compared to 1995 as well
as weaker operating results in certain of Panini's European markets. The
increase in broadcasting direct costs reflects an increase related to the
acquisition of the Argyle stations partially offset by a decrease for the
Eight Stations and by a decrease reflecting the sale of the Boston Station in
March of 1995. On a same station basis for both periods, operating expenses
increased due to higher costs to support the increase in local programming
associated with the conversion of certain broadcast stations to the Fox
Network offset by lower programming contract costs. Production and
distribution direct costs increased due primarily to amortization of
production costs associated with increased production activity.
Selling, general and administrative ("SG&A") expenses in 1996
increased by $31.8 to $211.2. The youth entertainment's SG&A expenses
increased from $101.4 to $117.4. The increase of $16.0 was mainly attributable
to the increase in advertising, promotion and selling expenses of Panini and
Toy Biz, the consolidation of Toy Biz's results for six months in 1996 as
compared to four months in 1995, and the inclusion of Sky Box for six months
in 1996 as compared to two months in 1995. This increase was partially offset
by a general reduction in overhead expenses associated with the
13
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
restructuring of the trading card, publishing and confectionery operations.
The broadcasting and production and distribution segment's SG&A expenses were
$78.4 and $67.2 in 1996 and 1995, respectively. The increase in broadcasting
and production and distribution SG&A expenses primarily reflects an increase
related to the acquisition of the Argyle stations, partially offset by a
decrease for the Eight Stations and by a decrease reflecting the sale of the
Boston Station in March 1995. Also included in SG&A expenses are $15.4 and
$10.8 of corporate overhead expenses in 1996 and 1995, respectively.
Amortization of goodwill and intangibles increased to $37.8 in 1996
from $28.0 in 1995 primarily due to the amortization related to the
acquisition of the Argyle Stations and the SkyBox Acquisition.
Interest expense increased to $164.3 in 1996 from $139.3 in 1995
primarily due to increased average borrowings.
Interest and net investment income increased from $19.5 in 1995 to
$34.4 in 1996 primarily due to an increase in net loans to affiliates.
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 benefit (provision) for income taxes of $4.9 and ($40.5) in 1996
and 1995, respectively, relate to subsidiaries which file separate income tax
returns. The tax provision in 1995 reflected the recognition of income taxes
on the sale of WSBK by NWCG. The Company has not recorded a benefit in 1995
and 1996 for its separate company losses as the Company is not assured that it
will be able to realize benefit for such losses in the future.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
(a) Marvel
In August, 1996, Toy Biz sold in an offering .7 million shares of its
Class A common stock at a price to the public of $15 per share. As part of Toy
Biz's offering, Marvel sold 2.5 million shares of Toy Biz Class A common
stock. In the third quarter of 1996, Marvel will record a gain on the sale of
this common stock. The net proceeds to Toy Biz and Marvel were approximately
$9.0 and $35.0, respectively. The net proceeds from each of those sales, along
with additional funds provided by Toy Biz from operations and by Marvel from
operations and borrowings, are expected to be contributed from time to time to
Marvel Studios, an entity to be formed by Marvel and Toy Biz to facilitate the
development of television programming, feature films and other media and
theatrical productions based upon Marvel's characters. Marvel will receive
common equity interests in Marvel Studios representing 75% of the equity and
Toy Biz will receive preferred equity interests representing 25% of the
equity. Pending such use, Marvel intends to use its net proceeds from this
offering to repay debt and for working capital and general corporate purposes
and Toy Biz, pending such investment in Marvel Studios, intends to use its net
proceeds for working capital and general corporate purposes. Marvel
14
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
expects to incur approximately $4 in net production costs for The Hulk
animated series (which costs would be offset by any sales of video cassettes
or international distribution rights to the series). The Hulk series is
expected to begin broadcasting on the United Paramount Network in September
1996. The Hulk series is expected to be a project of Marvel Studios. Marvel
announced a project with Fox Kids Worldwide ("FKW"), which will involve the
development and production of a variety of Marvel's characters to be broadcast
over the Fox Children's Network over a period of seven years (which could be
extended to ten years in certain circumstances). Marvel will be required to
reimburse FKW a portion of its production costs. The arrangements with FKW are
expected to be a project of Marvel Studios.
As a result of the offering by Toy Biz and the sale of Class A common
stock of Toy Biz by Marvel, Marvel's ownership percentage of Toy Biz decreased
to 26.7% and its voting control decreased to 78.4%.
During the first quarter of 1996, Marvel formed Marvel Interactive
for the development of on-line services and interactive software utilizing or
based upon Marvel's characters. Marvel anticipates commencing development of
titles in the second half of 1996 with commercial release scheduled for 1997.
Marvel, along with its joint venture partner, is continuing
development of Marvel theme restaurants. Five restaurants are currently under
development, with the first restaurant expected to open in the first half of
1997. Marvel expects to invest approximately $36 over the next three years to
fund the development of such restaurants.
In March 1996 and August 1996, Marvel amended its credit agreements
to, among other things; (i) provide for an additional $25.0 revolving credit
facility which will expire on December 31, 1996; (ii) secure the borrowings
with substantially all of Marvel's domestic assets and all of the capital
stock of Marvel's domestic subsidiaries and 65% of the capital stock of
Marvel's first tier foreign subsidiaries; and (iii) amend certain financial
covenants. The additional revolving credit facility is pari passu with the
loans extended by the banks pursuant to Marvel's existing loan agreements.
At August 13, 1996, Marvel's outstanding bank indebtedness was
approximately $643.0, of which $16.5 relates to the borrowings for the Adespan
adhesives facility. Marvel had $35.0 available under its domestic credit
facilities and approximately $25.0 available under its foreign credit
facilities. In addition, there was $30.0 available under the Toy Biz line of
credit at August 13, 1996.
As of August 5, 1996, 79.4 million shares, or 78.0%, of Marvel's
Common Stock were pledged by subsidiaries of Mafco Holdings Inc. ("Mafco"),
other than Marvel and its subsidiaries, to secure indebtedness or letters of
credit of such subsidiaries. In addition, 2.9 million shares, or 2.9% of
Marvel's Common Stock, are subject to a negative pledge under the terms of the
Marvel Holdings Notes indenture. The indentures governing this indebtedness
contain various covenants relating to Marvel, including certain limitations on
Marvel's indebtedness.
Although there can be no assurance, Marvel anticipates that
internally generated funds, the net proceeds from the offering by Toy Biz and
Marvel of Class A common stock of Toy Biz, borrowings
15
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
under the various credit agreements of Marvel and Toy Biz, other borrowings
and refinancings of existing indebtedness will be sufficient to enable Marvel
to meet its consolidated cash requirements, including debt service and
repayment, for the foreseeable future.
(b) NWCG
At June 30, 1996, NWCG has total outstanding debt of $987.0. NWCG has
limited additional borrowing capacity under its borrowing facilities.
Significant expansion of NWCG's broadcasting or production segments will
require additional funding not currently available to NWCG.
NWCG plans to reduce certain of its debt with the proceeds from the
pending sales of the San Diego and Birmingham stations to NBC. The gross
proceeds from the sale of the San Diego Station of $225, subject to certain
adjustments, will be used to pay off the Bank Credit Agreement Loans and to
offer to purchase all of the outstanding Step-Up Notes and a portion of the
11% Notes. There is no guarantee that the offers made to repurchase the
Step-Up Notes and the 11% Notes will be accepted by all of the holders; any
remaining net proceeds will be available for use by NWCG as permitted by its
various debt instruments. A portion of the gross proceeds from the sale of the
Birmingham Station of $200, subject to certain adjustments, will be used to
reduce the Acquisition Credit Agreement balance.
NWCG currently anticipates that any other necessary financing may be
obtained through restructuring or refinancing outstanding capitalization or
possibly through additional equity or debt financings or additional bank
credit arrangements. Should such additional sources of financing be needed to
fund acquisitions or operations and not be obtainable, NWCG's liquidity would
be severely adversely affected. There can be no assurance that any of such
actions could be 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.
The Merger will result in a change of control under certain of NWCG's
debt agreements, which will result in an event of default thereunder or give
the holders of such debt the right to require NWCG to repurchase such
indebtedness. No effect of a change in control is reflected in the
accompanying unaudited consolidated financial statements.
NWCG's capital budget for 1996 is approximately $30.0, 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.
(c) Corporate and other subsidiaries
In order to meet principal payments upon the final maturity of its
various debt facilities outstanding, the earliest of which occur in 1998, NWCG
Holdings, Holdings III, Parent Holdings and Marvel Holdings will be required
to adopt one or more alternatives, such as borrowing funds, selling its equity
securities or seeking capital contributions or loans from Mafco Holdings or
affiliates.
16
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
Andrews' 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 June 30, 1996 and December 31, 1995, the Company
and its subsidiaries had advances from Mafco Holdings and its subsidiaries of
$542.7 and $307.1, respectively.
On April 9, 1996, Marvel IV Holdings Inc. ("Marvel IV Holdings")
amended the Marvel IV Credit Agreement. In connection with such amendment (i)
the term loan was paid down to $5.2 and the revolver was repaid in full with
the proceeds from the collection of loans to an affiliate and (ii) the aggregate
commitment under the term loan and revolving credit facilities was reduced to
$150.0. On June 6, 1996, the Marvel IV Credit Agreement was further amended to
provide for a revolving credit and letter of credit commitment in an aggregate
of $250.0. No borrowings were outstanding under this facility at June 30, 1996.
In July 1996, Andrews' 12 3/4% Subordinated Debentures were redeemed
at maturity.
FORWARD-LOOKING STATEMENTS
Statements in this quarterly report on Form 10-Q for the quarter
ended June 30, 1996 which are not historical are forward-looking statements
that involve risks and uncertainties. Such statements include, without
limitation, Marvel's expectation as to financial performance for the remainder
of 1996. In addition to factors that may be described in the Company's
Securities and Exchange Commission filings, including this filing, the
following factors, among others, could cause the Company's financial
performance to differ materially from that expressed in any forward-looking
statements made by, or on behalf of, the Company: (i) the failure of fan
interest in baseball to return to traditional levels prior to the 1994
baseball strike, thereby negatively impacting Marvel's baseball card business;
(ii) continued weakness in the comic book market which cannot be overcome by
Marvel's new editorial and production initiatives in comic publishing; (iii)
continued weakness in the trading card market; (iv) the effectiveness of
Marvel's changes to its trading card and publishing distribution; (v) a
decrease in the popularity or level of media exposure of Marvel's characters
resulting in declining licensing revenues, (vi) the lack of continued
commercial success of properties owned by major licensors which have granted
Marvel licenses for its sports and entertainment trading card and sticker
businesses; and (vii) unanticipated costs or delays in completing projects
associated with Marvel's new ventures including media, interactive software
and on-line services and theme restaurants.
17
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In July and August 1996, Joseph Gorga, Brian Barry and Anthony
Inguaggiato commenced separate actions on behalf of themselves and,
purportedly, all other similarly situated shareholders of NWCG other than the
defendants against NWCG, its directors, News Corp. and Fox Television
Stations, Inc., asserting, among other things, breaches of fiduciary duty,
unjust enrichment and abuse of control in connection with the transactions
contemplated by the Merger and the Agreement with News Corp. These actions,
pending in the Delaware Court of Chancery, have been or will be consolidated
under the caption In re New World Communications Group Incorporated
Shareholders Litigation, C.A. No. 15110. The consolidated actions seek
equitable relief and damages, including an injunction against the Merger. NWCG
believes that the consolidated actions are entirely without merit and intends
to contest them vigorously.
The Company is also a party to various legal proceedings as described
in previous filings. During the quarter, there were no material developments
in any of such proceedings.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.1* Third Amended and Restated Credit Agreement dated as of
June 3, 1996 among Marvel IV Holdings Inc., the financial
institutions and issuing bank named therein, and Citibank,
N.A., as agent.
10.2 Third Amendment, dated as of June 29, 1996, to the
Credit Agreement, dated as of September 29, 1994,
by and among NW Acquisition, the financial
institutions from time to time parties thereto, the
Co-Agents named therein, the Managing Agents named
therein, The Chase Manhattan Bank (as successor by
merger to the Chase Manhattan Bank, N.A.), as
Documentation Agent, and the Chase Manhattan Bank
(formerly named Chemical Bank), as Administrative
Agent (incorporated by reference to Exhibit 10.1 of
the New World Communications Group Incorporated
Form 10-Q for the quarter ended June 30, 1996).
10.3 Consent Number Three dated as of June 30, 1996 to the Credit
and Guarantee Agreement among Marvel, Fleer Corp., the
financial institutions from time to time parties thereto, and
The Chase Manhattan Bank (formerly named Chemical Bank) as
administrative agent (incorporated by reference to Exhibit
10.1 to the June 30, 1996 Marvel Quarterly Report on Form
10-Q (the "Marvel 10-Q")).
10.4 Consent Number Two and Fourth Amendment, dated as of
June 30, 1996, to the Amended and Restated Credit and
Guarantee Agreement, by and among Marvel, Fleer Corp., the
financial institutions from time to time parties thereto,
18
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
and The Chase Manhattan Bank (formerly named Chemical Bank)
(incorporated by reference to Exhibit 10.2 to the Marvel
10-Q).
10.5 Line of Credit, dated as of March 27, 1996 between
Fleer Corp. and The Chase Manhattan Bank (formerly named
Chemical Bank) (incorporated by reference to Exhibit 10.3 to
the Marvel 10-Q).
27* Financial Data Schedule
* filed herein
(b) Reports on Form 8-K
May 22, 1996 (Items 5 and 7)
19
<PAGE>
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 14, 1996 Joseph P. Page
Executive Vice President and
Chief Financial Officer
<PAGE>
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 14, 1996 Laurence Winoker
Vice President and Controller
(Principal Accounting Officer)
</TABLE>
<PAGE>
EXECUTION COPY
$250,000,000
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of June 3, 1996
Among
MARVEL IV HOLDINGS INC.,
as Borrower,
THE FINANCIAL INSTITUTIONS AND
THE INITIAL ISSUING BANK NAMED HEREIN,
as Financial Institutions and
Initial Issuing Bank,
and
CITIBANK, N.A.,
as Agent
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
<S> <C> <C>
SECTION 1.01. Certain Defined Terms........................................................................... 2
SECTION 1.02. Computation of Time Periods..................................................................... 30
SECTION 1.03. Accounting Terms................................................................................ 30
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances.................................................................................... 30
SECTION 2.02. Making the Advances............................................................................. 32
SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters of
Credit.................................................................................. 34
SECTION 2.04. Repayment....................................................................................... 36
SECTION 2.05. Termination or Reduction of the Commitments..................................................... 37
SECTION 2.06. Prepayments..................................................................................... 39
SECTION 2.07. Interest........................................................................................ 40
SECTION 2.08. Interest Rate Determination..................................................................... 41
SECTION 2.09. Fees ........................................................................................ 42
SECTION 2.10. Increased Costs; Illegality..................................................................... 43
SECTION 2.11. Conversion of Advances.......................................................................... 45
SECTION 2.12. Payments and Computations....................................................................... 45
SECTION 2.13. Taxes ........................................................................................ 47
SECTION 2.14. Sharing of Payments, Etc........................................................................ 49
SECTION 2.15. Removal of Lender............................................................................... 50
SECTION 2.16. Defaulting Lender............................................................................... 50
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Effective Date.......................................................... 53
SECTION 3.02. Conditions Precedent to Each Revolving Credit Borrowing and
Issuance................................................................................ 60
SECTION 3.03. Determinations Under Section 3.01............................................................... 61
ARTICLE IV
</TABLE>
<PAGE>
ii
<TABLE>
<CAPTION>
Page
<S> <C> <C>
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower.................................................. 61
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants........................................................................... 66
(a) Compliance with Laws, Etc........................................................ 66
(b) Compliance with Environmental Laws............................................... 66
(c) Maintenance of Insurance......................................................... 67
(d) Preservation of Corporate Existence, Etc......................................... 67
(e) Visitation Rights................................................................ 67
(f) Keeping of Books................................................................. 67
(g) Maintenance of Properties, Etc................................................... 67
(h) Termination of Financing Statements.............................................. 68
(i) Performance of Related Documents................................................. 68
(j) Collateral Account............................................................... 68
(k) Reporting Requirements........................................................... 68
(l) Look-Forward Certificate......................................................... 72
(m) Transactions with Affiliates..................................................... 72
(n) Use of Proceeds.................................................................. 73
(o) Mafco Tax Group.................................................................. 73
(p) Marvel Tax Agreements............................................................ 73
(q) Net Cash Proceeds................................................................ 73
(r) LYONS Utilization................................................................ 73
SECTION 5.02. Negative Covenants............................................................................. 73
(a) Liens, Etc....................................................................... 74
(b) Lease Obligations................................................................ 74
(c) Mergers, Etc..................................................................... 74
(d) Sales, Etc. of Assets............................................................ 74
(e) Dividends, Repurchases, Etc...................................................... 75
(f) Investments...................................................................... 75
(g) Change in Nature of Business..................................................... 75
(h) Accounting Changes............................................................... 75
(i) Debt............................................................................. 76
(j) Charter Amendments............................................................... 76
(k) Prepayments, Etc. of Debt........................................................ 76
(l) Amendment, Etc. of Related Documents............................................. 76
(m) Negative Pledge.................................................................. 76
(n) Partnerships..................................................................... 77
(o) Capital Expenditures............................................................. 77
</TABLE>
<PAGE>
iii
<TABLE>
<CAPTION>
Page
<S> <C> <C>
(p) Issuance of Capital Stock.............................................................. 77
(q) Payment Restrictions................................................................... 77
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default............................................................................... 77
SECTION 6.02. Actions in Respect of the Letters of Credit upon Event Default.................................. 82
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action........................................................................ 83
SECTION 7.02. Agent's Reliance, Etc........................................................................... 83
SECTION 7.03. Citibank and Affiliates......................................................................... 84
SECTION 7.04. Lender Party Credit Decision.................................................................... 84
SECTION 7.05. Indemnification................................................................................. 84
SECTION 7.06. Successor Agent................................................................................. 86
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc................................................................................. 86
SECTION 8.02. Notices, Etc.................................................................................... 87
SECTION 8.03. No Waiver; Remedies............................................................................. 87
SECTION 8.04. Costs; Expenses................................................................................. 88
SECTION 8.05. Right of Set-off................................................................................ 89
SECTION 8.06. Binding Effect.................................................................................. 89
SECTION 8.07. Assignments and Participations.................................................................. 90
SECTION 8.08. Governing Law; Submission to Jurisdiction....................................................... 93
SECTION 8.09. Execution in Counterparts....................................................................... 93
SECTION 8.10. No Liability of the Issuing Bank................................................................ 94
SECTION 8.11. WAIVER OF JURY TRIAL............................................................................ 94
</TABLE>
<PAGE>
iv
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 - Form of Revolving Credit Note
Exhibit B - Form of Assignment and Acceptance
Exhibit C - Form of Notice of Borrowing
Exhibit D-1 - Form of Mafco Security Agreement
Exhibit D-2 - Form of Borrower Security Agreement
Exhibit E-1 - Form of Mafco Guaranty
Exhibit E-2 - Form of Borrower Parent Guaranty
Exhibit E-3 - Form of C&F Guaranty
Exhibit E-4 - Form of Cigar Guaranty
Exhibit E-5 - Form of Coleman Guaranty
Exhibit E-6 - Form of Flavors Guaranty
Exhibit E-7 - Form of New World Guaranty
Exhibit F-1 - Form of Coleman Pledge Agreement
Exhibit F-2 - Form of Coleman Worldwide Pledge Agreement
Exhibit G - Form of Confidentiality Letter
<PAGE>
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as of June
3, 1996 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, the
Initial Issuing Bank (as hereinafter defined) and CITIBANK, N.A. ("Citibank"),
as agent (together with any successor appointed pursuant to Article VII, the
"Agent") for the Lender Parties (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 "Original Credit Agreement"), with the financial
institutions and other institutional lenders party thereto (the "Original
Lenders") and Citibank, as agent for the Original Lenders.
(2) Pursuant to the Original Credit Agreement, the Borrower
requested that the Original 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) Subsequently, the Borrower entered into an Amended and
Restated Credit Agreement dated as of June 29, 1995, as amended by the First
Amendment dated as of October 27, 1995 (said agreement, as so amended, being
the "Second Credit Agreement"), with the financial institutions and other
institutional lenders thereto and Citibank, as agent for such financial
institutions and other institutional lenders.
(4) Pursuant to the Second Credit Agreement, the Borrower
requested that the financial institutions and other institutional lenders
party thereto make advances to it in an aggregate principal amount of up to
$350,000,000, on the terms and conditions set forth therein.
(5) Subsequently, the Borrower entered into a Second Amended
and Restated Credit Agreement dated as of December 15, 1995, as amended by the
First Amendment dated as of January 9, 1996, the Second Amendment dated as of
January 24, 1996 and the Third Amendment dated as of April 9, 1996 (said
agreement, as so amended, being the "Existing Credit Agreement"), with the
financial institutions and other institutional
<PAGE>
2
lenders party thereto (the "Existing Lenders") and Citibank, as agent for the
Existing Lenders.
(6) 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 $430,000,000, on the terms and conditions set forth
therein.
(7) 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 and issue Letters of
Credit for the benefit of the Borrower from time to time in an aggregate
principal amount of up to $250,000,000. 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 Letter of
Credit 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.
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3
"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.
"Andrews" means Andrews Group Incorporated, a Delaware
corporation.
"Applicable Lending Office" means, with respect to each
Lender Party, such Lender Party's Domestic Lending Office in the case of a
Base Rate Advance and such Lender Party's Eurodollar Lending Office in the
case of a Eurodollar Rate Advance.
"Applicable Margin" means, at any time, 2.50% per annum for
Base Rate Advances and 4.50% per annum for Eurodollar Rate Advances.
"Asset Sale" means the sale, lease, transfer or other
disposition of assets of Mafco or any of its Subsidiaries other than the sale,
lease, transfer or other disposition of (w) all or any portion of the capital
stock of Laboratory Corporation of America Holdings Inc., (x) all or any
portion of the capital stock of Meridian Sports Incorporated, (y) all or any
portion of the capital stock of the Bank and (z) any asset of the Bank;
provided, however, that a sale, lease, transfer or other disposition of assets
of a Designated Operating Company or Revlon or any of their respective
Subsidiaries shall only be considered an Asset Sale for purposes of this
Agreement to the extent, and only to the extent, that all or a portion of the
proceeds of such sale, lease, transfer or other disposition are received by
any of Mafco or any of its Subsidiaries (other than a Designated Operating
Company, Revlon or any of their respective Subsidiaries) through a dividend,
distribution, loan or advance.
"Asset Sale Threshhold" means the receipt on and after the
date hereof by Mafco and its Subsidiaries of aggregate Net Cash Proceeds from
Asset Sales in an amount equal to $1 billion.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender Party and an assignee of such Lender
Party, and accepted by the Agent, in substantially the form of Exhibit B
hereto.
"Available Amount" of any Letter of Credit means, at any
time, the maximum amount available to be drawn under such Letter of Credit at
such time (assuming compliance at such time with all conditions to drawing).
"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
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4
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 2.07(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.
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5
"Borrower Parent" means Marvel V Holdings Inc., a Delaware
corporation.
"Borrower Parent Guaranty" means the Second Amended and
Restated Guaranty dated as of June 3, 1996 made by the Borrower Parent in
favor of the Lender Parties 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, as amended by the Third Amendment dated as of
April 9, 1996 to the Existing Credit Agreement, 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 Third Amended and
Restated Borrower Security Agreement dated as of June 3, 1996 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.
"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.
"C&F Guarantor" means Mafco Consolidated Holdings Inc., a
Delaware corporation (formerly known as C&F (Parent) Holdings Inc.).
"C&F Guaranty" means the Amended and Restated Guaranty dated
as of June 3, 1996 made by C&F Guarantor in favor of the Lender Parties 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.
"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.
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6
"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 Party 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.
"Cigar" means Consolidated Cigar Corporation, a Delaware
corporation.
"Cigar Guarantor" means Consolidated Cigar II Holdings Inc.,
a Delaware corporation.
"Cigar Guaranty" means the Second Amended and Restated Cigar
Guaranty dated as of June 3, 1996 made by Cigar Guarantor in favor of the
Lender Parties 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.
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7
"Cigar Pledge Agreement" means the Amended and Restated
Cigar Pledge Agreement dated as of June 15, 1995 made by Cigar Guarantor and
NationsBank of Georgia, National Association 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.
"Clean-Up Period" means any period of 30 consecutive days
during which the aggregate principal amount of Revolving Credit Advances
(other than an aggregate principal amount of Revolving Credit Advances equal
to the lesser of (x) $50,000,000 and (y) an amount equal to the LYONS
Utilization on any day during such Clean-Up Period) and Letter of Credit
Advances outstanding does not exceed $0.
"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 Second Amended and Restated
Coleman Guaranty dated as of June 3, 1996 made by Coleman Guarantor in favor
of the Lender Parties 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 Amended and Restated
Pledge Agreement dated as of June 3, 1996 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
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8
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.
"Coleman Worldwide LYONS" means the Liquid Yield Option
Notes Due 2013 issued by Coleman Worldwide.
"Coleman Worldwide Pledge Agreement" means the Non-Recourse
Guaranty and Pledge Agreement dated June 3, 1996 made by Coleman Worldwide to
the Agent, as such agreement may be amended or otherwise modified from time to
time in accordance with its terms.
"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, the Second Mafco Collateral Account and the L/C
Cash Collateral Account.
"Collateral Documents" means each Security Agreement and
each Pledge Agreement.
"Commitment" means a Revolving Credit Commitment or a Letter
of Credit Commitment.
"Consolidated" for any Person refers to the consolidation of
the financial statements of such Person and its Subsidiaries in accordance
with GAAP.
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9
"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 2.11.
"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 Party
at any time, the amount of any Advance required to be made by such Lender
Party 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 Party pursuant to Section 2.02(c)
shall not be considered a Defaulted Advance even if, at
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10
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 2.16(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 Party
at any time, any amount required to be paid by such Lender Party to the Agent
or any other Lender Party 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
Issuing Bank pursuant to Section 2.03(c) to purchase a portion of a Letter of
Credit Advance made by the Issuing Bank, (b) 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 Party, (c) any other Lender Party pursuant to
Section 2.14 to purchase any interest or participating interest in Advances
owing to such other Lender Party and (d) the Agent or the Issuing Bank
pursuant to Section 7.05 to reimburse the Agent or the Issuing Bank for such
Lender Party's ratable share of any amount required to be paid by the Lender
Parties to the Agent or the Issuing Bank as provided therein. In the event
that a portion of a Defaulted Amount shall be deemed paid pursuant to Section
2.16(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 Party
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.
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"Designated Operating Companies" means Coleman, New World,
Marvel and MCG and, after compliance by Mafco with the provisions of Section
7(o)(iv) of the Mafco Guaranty, Revlon.
"Designated Persons" means the Borrower, Coleman Guarantor,
New World Guarantor, C&F Guarantor and, after compliance by Mafco with the
provisions of Section 7(o)(iv) of the Mafco Guaranty, Revlon Guarantor.
"Dollars" and the sign "$" each means lawful money of the
United States.
"Domestic Lending Office" means, with respect to any Lender
Party, the office of such Lender Party 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 Party, as the case may be, or
such other office of such Lender Party as such Lender Party 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 $500,000,000; (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 $500,000,000; 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,
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12
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 July 27, 1994, as amended by the Third
Amendment dated as of April 9, 1996 to the Existing Credit Agreement, between
the Borrower and the Borrower Parent, as such agreement may be further 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
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13
(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 Party, the office of such Lender Party 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 Party (or, if no such
office is specified, its Domestic Lending Office), or such other office of
such Lender Party as such Lender Party 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 Revolving Credit
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 2.07(a)(ii).
"Eurodollar Rate Reserve Percentage" of any Lender Party 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
<PAGE>
14
requirement (including, without limitation, any emergency, supplemental or
other marginal reserve requirement) for such Lender Party 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 Advances" means the Existing Term Advances and the
Existing Revolving Advances.
"Existing Credit Agreement" has the meaning specified in the
Preliminary Statements.
"Existing Lenders" has the meaning specified in the
Preliminary Statements.
"Existing Revolving Advance" has the meaning set forth in
Section 2.01(a).
"Existing Term Advance" has the meaning set forth in Section
2.01(a).
"Facility" means the Revolving Credit Facility or the Letter
of Credit 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 Gibraltar" means First Gibraltar Holdings Inc., a
Delaware corporation.
"First Gibraltar Charter Document" means the restated
certificate of incorporation of First Gibraltar.
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15
"First Gibraltar Loan Agreement" means the Loan Agreement
dated as of April 17, 1996 between the Borrower Parent and First Gibraltar, as
amended or otherwise modified from time to time in accordance with its terms.
"Flavors" means Mafco Worldwide Corporation, a Delaware
corporation.
"Flavors Guarantor" means Flavors (Parent) Holdings Inc., a
Delaware corporation.
"Flavors Guaranty" means the Second Amended and Restated
Flavors Guaranty dated as of June 3, 1996 made by Flavors Guarantor in favor
of the Lender Parties 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
and NationsBank of Georgia, National Association 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 Document, the FN
Holdings New Debt Document, the FN Parent Debt Document, 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 and any other
agreement or instrument which governs the terms of the FN Holdings Debt.
"FN Holdings New Debt" means the 9-1/8% Senior Subordinated
Notes Due 2003 issued by FN Holdings in an aggregate principal amount equal to
$140,000,000.
"FN Holdings New Debt Document" means the Indenture dated as
of January 31, 1996 made by FN Holdings in favor of The Bank of New York, as
trustee, in connection
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16
with the FN Holdings New Debt and any other agreement or instrument which
governs the terms of the FN Holdings New Debt.
"FN Management Incentive Plan" means the Management
Incentive Plan for Certain Employees of the Bank established by FN Holdings to
provide long-term incentives to certain key executives of the Bank.
"FN Parent" means First Nationwide (Parent) Holdings Inc., a
Delaware corporation.
"FN Parent Debt" means the 12-1/2% Senior Notes due 2003
issued by FN Parent in an aggregate principal amount equal to $455,000,000.
"FN Parent Debt Document" means the Indenture dated as of
April 15, 1996 made by FN Parent in favor of The Bank of New York, as trustee,
in connection with the FN Parent Debt and any other agreement or instrument
which governs the terms of the FN Parent Debt.
"FN Parties" means the Bank, FN Holdings and FN Parent.
"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, (b) the Commitments shall have been terminated in full,
(c) all outstanding Letters of Credit shall have been (i) terminated or (ii)
cash collateralized by an amount sufficient in the reasonable judgment of the
Agent and the Required Lenders to secure any claims under such outstanding
Letters of Credit or (iii) secured by one or more letters of credit on terms
and conditions, and with one or more financial institutions, reasonably
satisfactory to the Agent and the Required Lenders and (d) 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 Lender Parties shall have made any claims in respect of Payment
Obligations
<PAGE>
17
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 Party (if such Lender Party 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, C&F
Guarantor and, after compliance by Mafco with the provisons of Section
7(o)(iv) of the Mafco Guaranty, Revlon 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, the New World Guaranty and, after compliance by Mafco with
the provisons of Section 7(o)(iv) of the Mafco Guaranty, the guaranty entered
into in respect of this Agreement by Revlon Guarantor.
"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 2.13, 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.
"Initial Issuing Bank" means Citibank, N.A.
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18
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Revolving Credit 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 June 3, 1999;
(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.
"Issuing Bank" means the Initial Issuing Bank and each
Eligible Assignee to which the Letter of Credit Commitment hereunder has been
assigned pursuant to Section 8.07.
"L/C Cash Collateral Account" has the meaning specified in
the Borrower Security Agreement.
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19
"L/C Certificate" means a certificate of the Borrower
delivered to the Agent in respect of a Letter of Credit Advance (A) to the
effect that on the date of delivery (i) the representations and warranties
contained in the Loan Documents are correct in all material respects on and as
of such date, as though made on and as of such date (except to the extent such
representations and warranties 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 which constitutes a Default and (B) specifying the
Type of Advance such Letter of Credit Advance shall be and, if such Letter of
Credit Advance is to be a Eurodollar Rate Advance, the Interest Period for
such Letter of Credit Advance.
"L/C Related Documents" has the meaning specified in Section
2.04(b)(ii).
"Lender Party" means any Lender or the Issuing Bank.
"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.
"Letter of Credit" has the meaning specified in Section
2.01(c).
"Letter of Credit Advance" means an advance made by the
Issuing Bank or any Lender pursuant to Section 2.03(c).
"Letter of Credit Agreement" has the meaning specified in
Section 2.03(a).
"Letter of Credit Commitment" means, with respect to the
Issuing Bank at any time, the amount set forth opposite the Issuing Bank's
name on Schedule I hereto under the caption "Letter of Credit Commitment" or,
if the Issuing Bank has entered into one or more Assignments and Acceptances,
the amount set forth for the Issuing Bank in the Register maintained by the
Agent pursuant to Section 8.07(c) as the Issuing Bank's "Letter of Credit
Commitment", as such amount may be reduced at or prior to such time pursuant
to Section 2.05.
"Letter of Credit Facility" means, at any time, an amount
equal to the amount of the Issuing Bank's Letter of Credit Commitment at such
time.
"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.
<PAGE>
20
"Loan Documents" means this Agreement, the Notes, each
Letter of Credit Agreement, each Guaranty, each Collateral Document, the
Equity Contribution Agreement and the First Gibraltar Loan Agreement.
"Loan Party" means each of the Borrower, each Guarantor,
M&F, Andrews, Four Star, New Coleman and First Gibraltar.
"Look-Forward Certificate" has the meaning specified in
Section 5.01(l).
"LYONS Utilization" means, on any date, the aggregate amount
of cash applied by the Borrower from and after the Effective Date, as shown in
the most recent report furnished to the Agent and the Lender Parties pursuant
to the provisons of Section 5.01(r), to the purchase of the Coleman Worldwide
LYONS or the payment, in cash, of the exchange price to a holder of Coleman
Worldwide LYONS in respect of such holder's Coleman Worldwide LYONS.
"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.
"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 Third Amended and Restated Mafco
Guaranty dated as of June 3, 1996 made by Mafco in favor of the Lender Parties
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 29, 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 Third Amended and
Restated Mafco Security Agreement dated as of June 3, 1996 made by Mafco to
the Agent, as such agreement may be amended or otherwise modified from time to
time in accordance with its terms.
<PAGE>
21
"Mandatory Clean-Up Period" means, for each 12-month period
commencing on June 1 and terminating on May 31, the 30 day period commencing
on May 2 and terminating on May 31, if a Clean-Up Period has not commenced
prior to May 2 during such 12-month period; provided, however, that if a
Clean-Up Period has not commenced by the date that is 30 days prior to the end
of any period of 15 consecutive months, a mandatory Clean-Up Period shall
commence on such date.
"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 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 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 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.
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22
"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 Party 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.
"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
<PAGE>
23
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 (not less than
$0) 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 (not less
than $0) 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 (not
less than $0) 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 (not less than
$0) 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
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24
(v) with respect to Revlon Guarantor (after the date on
which Mafco complies with the provisions of Section 7(o)(iv) of the
Mafco Guaranty), an amount (not less than $0) equal to the excess of
(A) the product of the number of shares of common stock of Revlon
owned directly or indirectly by Revlon 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 Revlon Guarantor.
"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 Third Amended and Restated
New World Guaranty dated as of June 3, 1996 made by New World Guarantor in
favor of the Lender Parties 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 29, 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.
"Notice of Borrowing" has the meaning specified in Section
2.02(a).
"Notice of Issuance" has the meaning specified in Section
2.03(a).
"Notice of Termination" has the meaning specified in Section
2.01(c).
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25
"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, Letter of Credit commissions, 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 Party, in its sole discretion, may elect to pay or advance on behalf of
such Loan Party.
"Original Credit Agreement" has the meaning specified in the
Preliminary Statements.
"Original Lenders" has the meaning specified in the
Preliminary Statements.
"Other Taxes" has the meaning specified in Section 2.13(b).
"Payment Obligations" shall mean all principal, interest,
fees, Letter of Credit commissions, 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 C&F Pledge Agreement, the
Cigar Pledge Agreement, the Coleman Pledge Agreement, the Coleman Worldwide
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, the Second Andrews
Pledge Agreement, and, after compliance by Mafco with
<PAGE>
26
the provisions of Section 7(o)(iv) of the Mafco Guaranty, the pledge agreement
entered into in respect of this Agreement by Revlon Guarantor.
"Pro Rata Share" of any amount means, with respect to any
Lender at any time, the product of such amount times a fraction the numerator
of which is the amount of such Lender's Revolving Credit Commitment at such
time and the denominator of which is the Revolving Credit Facility at such
time.
"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, the MCG Tax Agreement and, after
compliance by Mafco with the provisions of Section 7(o)(iv) of the Mafco
Guaranty, the Revlon Tax Agreements.
"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
Available Amount of all Letters of Credit outstanding at such time, or, if no
such principal amount and no Letters of Credit are outstanding at such time,
Lenders holding at least a majority in interest of the aggregate of the
Revolving Credit Commitments (provided that, for purposes hereof, neither the
Borrower, nor any of its Affiliates, if a Lender, shall be included in (x) the
Lenders holding such amount of the Advances or the Available Amount of all
Letters of Credit or having such amount of the Commitments or (y) 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 owing to such Lender (in its capacity as a Lender) and outstanding at
such time, (ii) such Lender's Pro Rata Share of the aggregate Available Amount
of all Letters of Credit issued by such Lender as of such time and (iii) the
aggregate Commitments of such Lender at such time. For purposes of this
definition, the aggregate principal amount of Letter of Credit Advances owing
to the Issuing Bank and the Available Amount of each Letter of Credit shall be
considered to be owed to the Lenders ratably in accordance with their
respective Revolving Credit Commitments.
"Revlon" means Revlon, Inc., a Delaware corporation.
"Revlon Guarantor" means the Person designated as the
"Revlon Guarantor" in the certificate delivered by Mafco to the Agent pursuant
to the terms of Section 7(o)(iv) of the Mafco Guaranty.
<PAGE>
27
"Revlon Tax Agreements" means (i) the Allocation Agreement
dated as of June 26, 1990 among M&F, Revlon Group Incorporated (in its own
capacity and as successor by merger to New Revlon Holdings Inc.) and certain
subsidiaries of Revlon Group Incorporated, (ii) the Tax Sharing Agreement
dated as of June 24, 1992, as amended by the First Amendment thereto dated as
of June 24, 1992, among Mafco, Revlon Holdings, Inc., Revlon, Revlon Consumer
Products Corporation and certain subsidiaries of Revlon and (iii) the Tax
Sharing Agreement dated as of March 17, 1993 between Mafco and Revlon
Worldwide Corporation.
"Revolving Credit Advance" has the meaning specified in
Section 2.01(b).
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by the Lenders.
"Revolving Credit Commitment" means, with respect to any
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 2.05.
"Revolving Credit Facility" means, at any time, the
aggregate amount of the Lenders' Revolving Credit Commitments at such time.
"Revolving Credit Note" means a promissory note of the
Borrower payable to the order of any Lender, in substantially the form of
Exhibit A 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 29, 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 Credit Agreement" has the meaning specified in the
Preliminary Statements.
"Second Mafco Collateral Account" has the meaning specified
in the Mafco Security Agreement.
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28
"Security Agreements" means the Borrower Security Agreement,
the Borrower Parent Security Agreement and the Mafco 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.
"Standby Letter of Credit" means any Letter of Credit issued
under the Letter of Credit Facility, other than a Trade Letter of Credit.
"Stockholders Agreement" means the Stockholders Agreement
dated as of October 3, 1994, among FN Parent, FN Holdings and Gerald J. Ford,
as such agreement may be amended, modified or otherwise supplemented from time
to time with the consent of the Required Lenders.
"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
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29
time and (b) the aggregate Available Amount of all Letters of Credit
outstanding at such time, or, if no such principal amount and no Letters of
Credit are outstanding at such time, Lenders holding at least a majority in
interest of the aggregate of the Revolving Credit Commitments (provided that,
for purposes hereof, neither the Borrower nor any of its Affiliates, if a
Lender, shall be included in (x) the Lenders holding such amount of the
Advances or the Available Amount of all Letters of Credit or having such
amount of the Commitments or (y) 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 owing to such Lender (in its capacity as a
Lender) and outstanding at such time, (ii) such Lender's Pro Rata Share of the
aggregate Available Amount of all Letters of Credit issued by such Lender at
such time and (iii) the aggregate Commitments of such Lender at such time. For
purposes of this definition, the aggregate principal amount of Letter of
Credit Advances owing to the Issuing Bank and the Available Amount of each
Letter of Credit shall be considered to be owed to the Lenders ratably in
accordance with their respective Revolving Credit Commitments.
"Tax Certificate" has the meaning specified in Section
5.01(k)(xiii).
"Taxes" has the meaning specified in Section 2.13(a).
"Termination Date" means the earlier of (a) June 3, 1999 or
(b) the date of termination in whole of the Letter of Credit Commitments and
the Revolving Credit Commitments pursuant to Section 2.05 or 6.01.
"Trade Letter of Credit" means any Letter of Credit that is
issued under the Letter of Credit Facility for the benefit of a supplier of
inventory to the Borrower or any of its Subsidiaries to effect payment for
such Inventory.
"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 Revolving Credit
Advances bearing interest at the Base Rate and Revolving Credit 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
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30
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 sum of (i) the aggregate principal amount of all Revolving
Credit Advances and Letter of Credit Advances made by such Lender (in its
capacity as a Lender) pursuant to Sections 2.02(a) and 2.03(c), respectively,
and outstanding at such time, plus (ii) such Lender's Pro Rata Share of (A)
the aggregate Available Amount of all Letters of Credit outstanding at such
time and (B) the aggregate principal amount of all Letter of Credit Advances
made by the Issuing Bank pursuant to Section 2.03(c) 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
AND THE LETTERS OF CREDIT
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
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31
names under the caption "Existing Term Advances" on Schedule I (the "Existing
Term Advances") and under the caption "Existing Revolving Advances" on
Schedule I (the "Existing Revolving Advances") to the Financial Institutions
and the Financial Institutions will purchase and assume the Existing Advances
set forth opposite their names under the caption "Revolving Advances" on
Schedule I.
(b) The Revolving Credit Advances. Each 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 (taking into account the
aggregate principal amount of the Existing Revolving Advances and the Existing
Term advances purchased and assumed by such Lender on the Effective Date which
are still outstanding on such Business Day); provided, however, that (x) on
each day, after giving effect to any Revolving Credit Borrowing on such day,
the sum of (i) the aggregate amount of the Revolving Credit Advances (other
than an aggregate principal amount of Revolving Credit Advances outstanding on
such day equal to the lesser of (x) $50,000,000 and (y) an amount equal to the
LYONS Utilization on such day) outstanding on such day plus (ii) the aggregate
amount of the Letter of Credit Advances outstanding on such day plus (iii) the
aggregate Available Amount of all Letters of Credit outstanding on such day,
shall not exceed an amount equal to the aggregate Revolving Credit Commitments
of the Lenders on such day less $50,000,000 and (y) on each day on or before
the date that the LYONS Utilization equals or exceeds $50,000,000, after
giving effect to any Revolving Credit Borrowing on such day, the aggregate
Unused Revolving Credit Commitments of all the Lenders shall not be less than
the excess, if any, of (1) $50,000,000 over (2) an amount equal to the LYONS
Utilization on such day. The Existing Revolving Advances and the Existing Term
Advances purchased and assumed pursuant to Section 2.01(a) by the Financial
Institutions shall be deemed to be Revolving Credit Advances for all purposes
hereunder. 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
(other than a Revolving Credit Borrowing the proceeds of which shall be used
solely to repay or prepay in full outstanding Letter of Credit Advances) and
shall consist of Revolving Credit Advances made on the same day by the Lenders
ratably according to their Revolving Credit Commitments. Within the limits of
each Lender's Unused Revolving Credit Commitment in effect from time to time,
the Borrower may borrow under this Section 2.01(b), prepay pursuant to Section
2.06(a) and reborrow under this Section 2.01(b); provided, however, that to
the extent the Borrower makes a prepayment of the Advances pursuant to Section
2.06(a) from funds on deposit in the Mafco Collateral Account that constitute
Net Cash Proceeds of an Asset Sale that are required, pursuant to the
provisions of Section 7(q) of the Mafco Guaranty, to be applied to prepay or
repay outstanding Debt of any A Company, a portion of the Revolving Credit
Facility equal to the amount of such prepayment shall only be available (x) to
repay or
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32
prepay outstanding Debt of any A Company or (y) to be redeposited in the Mafco
Collateral Account.
(c) Letters of Credit. The Issuing Bank agrees, on the terms
and conditions hereinafter set forth, to issue letters of credit (the "Letters
of Credit") for the account of the Borrower from time to time on any Business
Day during the period from the date hereof until 60 days before the
Termination Date (i) in an aggregate Available Amount for all Letters of
Credit not to exceed at any time the Issuing Bank's Letter of Credit
Commitment at such time and (ii) in an Available Amount for each such Letter
of Credit not to exceed the least of (x) the Letter of Credit Facility at such
time, (y) the Unused Revolving Credit Commitments of the Lenders at such time
and (z) an amount equal to the aggregate Revolving Credit Commitments of the
Lenders at such time, less the Advances (other than an aggregate principal
amount of Revolving Credit Advances outstanding at such time equal to the
lesser of (x) $50,000,000 and (y) an amount equal to the LYONS Utilization on
such day) outstanding at such time, less the aggregate Available Amount of all
Letters of Credit outstanding at such time, less $50,000,000. No Letter of
Credit shall have an expiration date (including all rights of the Borrower or
the beneficiary to require renewal) later than the earlier of 60 days before
the Termination Date and (A) in the case of a Standby Letter of Credit, one
year after the date of issuance thereof, but may by its terms be automatically
renewable annually unless the Issuing Bank has notified the Borrower (with a
copy to the Agent) on or after the 60th Business Day prior to the first
anniversary (or any subsequent anniversary) of the date of issuance thereof
but in any event at least 30 Business Days prior to the date of automatic
renewal of its election not to renew such Standby Letter of Credit (a "Notice
of Termination") and (B) in the case of a Trade Letter of Credit, 60 days
after the date of issuance thereof; provided, however, that the terms of each
Standby Letter of Credit that is automatically renewable annually shall (x)
require the Issuing Bank to give the beneficiary named in such Standby Letter
of Credit notice of any Notice of Termination, (y) permit such beneficiary,
upon receipt of such notice, to draw under such Standby Letter of Credit prior
to the date such Standby Letter of Credit otherwise would have been
automatically renewed and (z) not permit the expiration date (after giving
effect to any renewal) of such Standby Letter of Credit in any event to be
extended to a date later than 60 days before the Termination Date. If a Notice
of Termination is given by the Issuing Bank pursuant to the immediately
preceding sentence, such Standby Letter of Credit shall expire on the date on
which it otherwise would have been automatically renewed. Within the limits of
the Letter of Credit Facility, and subject to the limits referred to above,
the Borrower may request the issuance of Letters of Credit under this Section
2.01(c), repay any Letter of Credit Advances resulting from drawings
thereunder pursuant to Section 2.03(c) and request the issuance of additional
Letters of Credit under this Section 2.01(c).
(d) Clean-Up. Notwithstanding the provisions of Sections
2.01(b) and 2.01(c), no Revolving Credit Borrowings may be made under Section
2.01(b) during any Clean-Up Period, other than, on or before the date on which
the LYONS Utilization equals
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33
or exceeds $50,000,000, Revolving Credit Borrowings in respect of which the
Borrower certifies that the proceeds of such Revolving Credit Borrowing shall
be used solely to purchase Coleman Worldwide LYONS or to make the payment in
cash, of the exchange price to a holder of Coleman Worldwide LYONS in respect
of such holder's Coleman Worldwide LYONS.
SECTION 2.02. Making the Advances. (a) Except as otherwise
provided in Section 2.16, each Revolving Credit 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 Revolving Credit Borrowing
consisting of Base Rate Advances or the third Business Day prior to the date
of a proposed Revolving Credit Borrowing consisting of Eurodollar Rate
Advances, by the Borrower to the Agent, which shall give to each Lender prompt
notice thereof by telecopier, telex or cable. Each such notice of a Revolving
Credit 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 Revolving Credit
Borrowing, (ii) Type of Advances comprising such Revolving Credit Borrowing,
(iii) aggregate amount of such Revolving Credit Borrowing and (iv) Interest
Period for each Eurodollar Rate Advance included in such Revolving Credit
Borrowing. In the case of a proposed Revolving Credit Borrowing comprised of
Eurodollar Rate Advances, the Agent shall promptly notify the Borrower and
each Lender of the applicable interest rate under Section 2.07(a)(ii). Each
Lender shall, before 12:00 noon (New York City time) on the date of such
Revolving Credit 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 Revolving Credit 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. In the case of any Revolving Credit Borrowing that
the related Notice of Borrowing specifies is to be comprised of Eurodollar
Rate Advances, the Borrower shall indemnify each 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 Revolving
Credit 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 Revolving
Credit 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 a
Lender prior to the date of any Revolving Credit Borrowing that such Lender
will not make available to the Agent such Lender's ratable portion of such
Revolving Credit Borrowing, the Agent may
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34
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
Revolving Credit 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 2.07 to Advances comprising such Revolving Credit 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 Revolving Credit 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 Revolving Credit Borrowing shall not relieve any other
Lender of its obligation, if any, hereunder to make its Advance on the date of
such Revolving Credit 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 Revolving Credit Borrowing.
(e) The Borrower may not request a Revolving Credit
Borrowing comprised of Eurodollar Rate Advances or, pursuant to Section 2.11,
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 Revolving Credit 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. Issuance of and Drawings and Reimbursement
Under Letters of Credit. (a) Request for Issuance. Each Letter of Credit shall
be issued upon notice, given not later than 11:00 A.M. (New York City time) on
the seventh Business Day prior to the date of the proposed issuance of such
Letter of Credit, by the Borrower to the Issuing Bank, which shall give to the
Agent and each Lender prompt notice thereof by telex or telecopier. Each such
notice of issuance of a Letter of Credit (a "Notice of Issuance") shall be by
telephone, confirmed immediately in writing, or telex or telecopier,
specifying therein the requested (A) date of such issuance (which shall be a
Business Day), (B) Available Amount of such Letter of Credit, (C) expiration
date of such Letter of Credit, (D) name and address of the beneficiary of such
Letter of Credit and (E) form of such Letter of Credit, and shall be
accompanied by such application and agreement for letter of credit as such
Issuing
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35
Bank may specify to the Borrower for use in connection with such requested
Letter of Credit (a "Letter of Credit Agreement"). If the requested form of
such Letter of Credit is acceptable to the Issuing Bank in its sole
discretion, the Issuing Bank will, upon fulfillment of the applicable
conditions set forth in Article III, make such Letter of Credit available to
the Borrower at its office referred to in Section 8.02 or as otherwise agreed
with the Borrower in connection with such issuance. In the event and to the
extent that the provisions of any Letter of Credit Agreement shall conflict
with this Agreement, the provisions of this Agreement shall govern.
(b) Letter of Credit Reports. The Issuing Bank shall furnish
(A) to the Agent and the Borrower on the first Business Day of each week
during which one or more Letters of Credit have been issued or drawn upon, a
written report summarizing issuance and expiration dates of Letters of Credit
issued during the previous week and drawings during such week under all
Letters of Credit issued, (B) to each Lender and the Borrower on the first
Business Day of each month a written report summarizing issuance and
expiration dates of Letters of Credit issued during the preceding month and
drawings during such month under all Letters of Credit and (C) to the Agent,
each Lender and the Borrower on the first Business Day of each calendar
quarter a written report setting forth the average daily aggregate Available
Amount during the preceding calendar quarter of all Letters of Credit.
(c) Drawing and Reimbursement. The payment by the Issuing
Bank of a draft drawn under any Letter of Credit shall constitute for all
purposes of this Agreement the making by the Issuing Bank of a Letter of
Credit Advance, in the amount of such draft, which shall be a Base Rate
Advance until the third Business Day after the date which the Borrower shall
have delivered a L/C Certificate in respect of such Letter of Credit Advance
which specified that such Advance shall be a Eurodollar Advance. Upon written
demand by the Issuing Bank, with a copy of such demand to the Agent, each
Lender shall purchase from the Issuing Bank, and the Issuing Bank shall sell
and assign to each such Lender, such Lender's Pro Rata Share of such
outstanding Letter of Credit Advance as of the date of such purchase, by
making available for the account of its Applicable Lending Office to the Agent
for the account of the Issuing Bank, by deposit to the Agent's Account, in
same day funds, an amount equal to the portion of the outstanding principal
amount of such Letter of Credit Advance to be purchased by such Lender.
Promptly after receipt thereof, the Agent shall transfer such funds to the
Issuing Bank. The Borrower hereby agrees to each such sale and assignment.
Each Lender irrevocably and unconditionally agrees to purchase its Pro Rata
Share of an outstanding Letter of Credit Advance on (i) the Business Day on
which demand therefor is made by the Issuing Bank, provided notice of such
demand is given not later than 11:00 A.M. (New York City time) on such
Business Day or (ii) the first Business Day next succeeding such demand if
notice of such demand is given after such time. Upon any such assignment by
the Issuing Bank to any other Lender of a portion of a Letter of Credit
Advance, the Issuing Bank represents and warrants to such other Lender that
the Issuing Bank is the legal and beneficial owner of such interest being
assigned by it, free and clear of
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any liens, but makes no other representation or warranty and assumes no
responsibility with respect to such Letter of Credit Advance, the Loan
Documents or any Loan Party. If and to the extent that any Lender shall not
have so made the amount of such Letter of Credit Advance available to the
Agent, such Lender agrees to pay to the Agent forthwith on demand such amount
together with interest thereon, for each day from the date of demand by the
Issuing Bank until the date such amount is paid to the Agent, at the Federal
Funds Rate for its account or the account of the Issuing Bank, as applicable.
If such Lender shall pay to the Agent such amount for the account of the
Issuing Bank on any Business Day, such amount so paid in respect of principal
shall constitute a Letter of Credit Advance made by such Lender on such
Business Day for purposes of this Agreement, and the outstanding principal
amount of the Letter of Credit Advance made by the Issuing Bank shall be
reduced by such amount on such Business Day.
(d) Failure to Make Letter of Credit Advances. The failure
of any Lender to make the Letter of Credit Advance to be made by it on the
date specified in Section 2.03(c) shall not relieve any other Lender of its
obligation hereunder to make its Letter of Credit Advance on such date, but no
Lender shall be responsible for the failure of any other Lender to make the
Letter of Credit Advance to be made by such other Lender on such date.
SECTION 2.04. Repayment. (a) Revolving Credit Advances. The
Borrower shall repay to the Agent for the ratable account of the Lenders on
the Termination Date the aggregate principal amount of the Revolving Credit
Advances then outstanding.
(b) Letter of Credit Advances. (i) The Borrower shall repay
to the Agent for the account of the Issuing Bank and each other Lender that
has made a Letter of Credit Advance on the Termination Date the outstanding
principal amount of each Letter of Credit Advance made by each of them;
provided, however, that if the Borrower fails to deliver a L/C Certificate in
respect of such Letter of Credit Advance on the Business Day following the
date on which the Issuing Bank paid a draft drawn under a Letter of Credit
which resulted in such Letter of Credit Advance, the Borrower shall repay such
Letter of Credit Advance on demand.
(ii) The Obligations of the Borrower under this Agreement,
any Letter of Credit Agreement and any other agreement or instrument relating
to any Letter of Credit shall be unconditional and irrevocable, and shall be
paid strictly in accordance with the terms of this Agreement, such Letter of
Credit Agreement and such other agreement or instrument under all
circumstances, including, without limitation, the following circumstances:
(A) any lack of validity or enforceability of any Loan
Document, any Letter of Credit Agreement, any Letter of Credit or any
other agreement or instrument relating thereto (all of the foregoing
being, collectively, the "L/C Related Documents");
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37
(B) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Obligations of the
Borrower in respect of any L/C Related Document or any other
amendment or waiver of or any consent to departure from all or any of
the L/C Related Documents;
(C) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against any beneficiary
or any transferee of a Letter of Credit (or any Persons for whom any
such beneficiary or any such transferee may be acting), the Issuing
Bank or any other Person, whether in connection with the transactions
contemplated by the L/C Related Documents or any unrelated
transaction;
(D) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(E) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit;
(F) any exchange, release or non-perfection of any
Collateral or other collateral, or any release or amendment or waiver
of or consent to departure from any Guaranty or any other guarantee,
for all or any of the Obligations of the Borrower in respect of the
L/C Related Documents; or
(G) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, including, without
limitation, any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Borrower or a guarantor.
SECTION 2.05. 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 Letter of Credit Facility and 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 Lenders
in accordance with their Commitments.
(b) Mandatory. (i) On any date (A) on which a cash equity
contribution is deposited in the Borrower Collateral Account as a result of a
loan made by First Gibraltar to the Borrower Parent pursuant to the terms of
the First Gibraltar Loan Agreement or 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 a deposit of amounts constituting Net Cash
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Proceeds from an Asset Sale 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 2 Business Days following the date of the receipt of Deposit
Certificate, as the case may be, referred to in clause (B)(II), that the pro
forma amounts available to be loaned by First Gibraltar to Marvel V, together
with amounts received by Mafco pursuant to or in connection with any Related
Document, will be less than $8 million in any calendar quarter or will not be
sufficient to pay interest on the Advances then outstanding, the Revolving
Credit Facility shall be automatically and permanently reduced by an amount
equal to the excess of (x) the amount of such cash equity contribution or the
amount on deposit in the Mafco Collateral Account, as the case may be, plus
any interest on Collateral Investments made with such contribution or deposit
over (y) the sum of the amount of interest and fees then due and payable in
respect of the Facilities plus the amount of expenses of the Agent (including
the reasonable fees and expenses of counsel to the Agent) then due and
payable. Each such reduction of the Revolving Credit Facility shall be made
ratably among the Lenders in accordance with their Revolving Credit
Commitments.
(ii) The Revolving Credit Facility shall be automatically
and permanently reduced:
(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 (other than FN
Holdings and FN Parent),
(C) 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 but excluding any Asset Sale) of, or the sale, issuance or
incurrence of any Debt by, any Designated Operating Company, and
(D) 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,
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39
by an amount equal to the excess of (x) the amount so received (except, in
each case, to the extent (1) required pursuant to the terms of any agreement
or instruments relating to Debt existing on the date hereof or otherwise
approved by the Required Lenders of any A Company or Designated Operating
Company to prepay or redeem or purchase such Debt or (2) prohibited to be so
applied by the terms of any agreement or instrument relating to Debt existing
on the date hereof or otherwise approved by the Required Lenders of any A
Company or Designated Operating Company) over (y) the sum of the amount of
interest and fees then due and payable in respect of the Facilities plus the
amount of expenses of the Agent (including the reasonable fees and expenses of
counsel to the Agent) then due and payable. Each such reduction of the
Revolving Credit Facility shall be made ratably among the Lenders in
accordance with their Revolving Credit Commitments.
(iii) On the date of receipt by Mafco or any of its
Subsidiaries of the Net Cash Proceeds from the sale, transfer or other
disposition of (x) all or any portion of the Capital Stock of the Bank or (y)
any asset of the Bank, the Revolving Credit Facility shall be automatically
and permanently reduced by an amount equal to the excess of (A) such Net Cash
Proceeds (other than the portion of such Net Cash Proceeds required to be paid
to the holders of the Class B common stock of FN Holdings) over (B) the sum of
the amount of interest and fees then due and payable in respect of the
Facilities plus the amount of expenses of the Agent (including the reasonable
fees and expenses of counsel to the Agent) then due and payable. Each such
reduction of the Revolving Credit Facility shall be made ratably among the
Lenders in accordance with their Revolving Credit Commitments.
(iv) On and after Mafco and its Subsidiaries have received
Net Cash Proceeds in an amount equal to the Asset Sale Threshold from Asset
Sales, upon any Asset Sale in respect of which Mafco and its Subsidiaries have
received Net Cash Proceeds (which, together with the aggregate amount of Net
Cash Proceeds from and after the Effective Date from Asset Sales, exceeds the
Asset Sale Threshhold), the Revolving Credit Facility shall be automatically
and permanently reduced by an amount equal to the excess of (x) 50% of the Net
Cash Proceeds from such Asset Sale over (y) the sum of the amount of interest
and fees then due and payable in respect of the Facilities plus the amount of
expenses of the Agent (including the reasonable fees and expenses of counsel
to the Agent) then due and payable. Each such reduction of the Revolving
Credit Facility shall be made ratably among the Lenders in accordance with
their Revolving Credit Commitments.
(v) On each date that an Event of Default set forth in
Section 6.01(a) shall have occurred and be continuing, the Revolving Credit
Facility shall be automatically and permanently reduced by an amount equal to
the excess of (x) the amount on deposit in the Second Mafco Collateral Account
over (y) the sum of the amount of interest and fees then due and payable in
respect of the Facilities plus the amount of expenses of the Agent (including
the reasonable fees and expenses of counsel to the Agent) then due and
payable.
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40
Each such reduction of the Revolving Credit Facility shall be made ratably
among the Lenders in accordance with their Revolving Credit Commitments.
(vi) The Letter of Credit Facility shall be permanently
reduced from time to time on the date of each reduction in the Revolving
Credit Facility by the amount, if any, by which the Letter of Credit Facility
exceeds the Revolving Credit Facility after giving effect to such reduction of
the Revolving Credit Facility.
SECTION 2.06. 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, and the 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 Revolving Credit 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 7(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 7(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 Revolving Credit 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).
(b) Mandatory. (i) The Borrower shall, on each Business Day,
prepay an aggregate principal amount of the Revolving Credit Advances
comprising part of the same Revolving Credit Borrowing and the Letter of
Credit Advances equal to the amount by which (A) the sum of aggregate
principal amount of (x) the Revolving Credit Advances and (y) the Letter of
Credit Advances then outstanding plus the aggregate Available Amount of all
Letters of Credit then outstanding exceeds (B) the Revolving Credit Facility.
(ii) The Borrower shall, on each Business Day, pay to the
Agent for deposit in the L/C Cash Collateral Account an amount sufficient to
cause the aggregate amount on deposit in such Collateral Account to equal the
amount by which the aggregate Available Amount of all Letters of Credit then
outstanding exceeds the Letter of Credit Facility on such Business Day.
(iii) The Borrower shall, on the first day of each Mandatory
Clean-up Period, prepay in full the Revolving Credit Advances (other than an
aggregate principal amount of Revolving Credit Advances equal to the lesser of
(x) $50,000,000 and (y) an
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41
amount equal to the LYONS Utilization on any day during such Mandatory
Clean-Up Period) and the Letter of Credit Advances.
(iv) Prepayments of the Revolving Credit Facility made
pursuant to clause (i) or (ii) above shall be first, applied to prepay Letter
of Credit Advances then outstanding until such Advances are paid in full and
second, applied to prepay Revolving Credit Advances then outstanding
comprising part of the same Revolving Credit Borrowings.
(v) If, as a result of the making of any prepayment required
to be made pursuant to this Section 2.06, 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 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 dominion or control over any such amounts.
SECTION 2.07. 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 3, 1996, 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
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42
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 2.07(a)(i) above.
SECTION 2.08. 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 2.07(a)(i) or
(ii), and the applicable rate, if any, furnished by Citibank for the purpose
of determining the applicable interest rate under Section 2.07(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 2.09. Fees. (a) Commitment Fee. The Borrower agrees
to pay to the Agent for the account of the Lenders a commitment fee on the
average daily Unused Revolving Credit Commitment of such Lender from the date
hereof, in the case of each Financial Institution, and from the effective date
specified in the Assignment and Acceptance
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43
pursuant to which it became a Lender, in the case of each other Lender, until
the Termination Date at a rate equal to 1-1/4% per annum, payable in arrears
on the date of the initial Revolving Credit Borrowing, thereafter quarterly on
the first Business Day of each March, June, September and December commencing
September 3, 1996 and on the Termination Date.
(b) Letter of Credit Fees, Etc. (i) The Borrower shall pay
to the Agent for the account of each Lender a commission, payable in arrears
quarterly on the first Business Day of each March, June, September and
December, commencing September 3, 1996, and on the earliest to occur of the
full drawing, expiration, termination or cancellation of any such Letter of
Credit and on the Termination Date, on such Lender's Pro Rata Share of the
average daily aggregate Available Amount during such quarter of (A) all
Standby Letters of Credit outstanding from time to time at the rate of 4-1/2%
per annum and (B) all Trade Letters of Credit then outstanding at the rate of
4-1/2% per annum.
(ii) The Borrower shall pay to each Issuing Bank, for its
own account, such commissions, issuance fees, fronting fees, transfer fees and
other fees and charges in connection with the issuance or administration of
each Letter of Credit as the Borrower and such Issuing Bank shall agree.
(c) 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 3, 1996
between Mafco and Citibank, as the same may be amended or otherwise modified
from time to time.
SECTION 2.10. 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 2.13), 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 Party 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 Party or (y) imposed on any Lender Party any other condition
relating to this Agreement or the Advances made by it or the issuance by it of
Letters of Credit, and the result of any event referred to in clause (x) or
(y) shall be to increase the cost to such Lender Party of agreeing to make or
making, funding or maintaining Eurodollar Rate Advances or of agreeing to
issue or of issuing or maintaining Letters of Credit or of agreeing to make or
of making or maintaining Letter of Credit Advances, then the Borrower shall
from time to time,
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44
upon demand by such Lender Party (with a copy of such demand to the Agent)
made within 60 days after the first date on which such Lender Party has actual
knowledge that it is entitled to make demand for payment under this Section
2.10(a), pay to the Agent for the account of such Lender Party additional
amounts sufficient to compensate such Lender Party for such increased cost;
provided, however, that if such Lender Party 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 Party notifies the Borrower; provided further
that, before making any such demand, such Lender Party 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 Party,
be otherwise disadvantageous to such Lender Party. A certificate as to the
amount of such increased cost, submitted to the Borrower and the Agent by such
Lender Party, shall be conclusive and binding for all purposes, absent
manifest error.
(b) If any Lender Party 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 Party or any corporation controlling
such Lender Party as a consequence of such Lender Party's Advances or
Commitments hereunder or the issuance by it of any Letter of Credit and other
commitments of this type, by increasing the amount of capital required or
expected to be maintained by such Lender Party or any corporation controlling
such Lender Party, to a level below that which such Lender Party or any
corporation controlling such Lender Party could have achieved but for such
adoption, effectiveness, change or compliance (taking into account such Lender
Party's or such corporation's policies with respect to capital adequacy), then
the Borrower shall, from time to time, pay such Lender Party, upon demand by
such Lender Party (with a copy of such demand to the Agent) made within 60
days after the first date on which such Lender Party has actual knowledge that
it is entitled to make demand for payment under this Section 2.10(b) of such
reduction in return, such additional amount as may be specified by such Lender
Party as being sufficient to compensate such Lender Party for such reduction
in return, to the extent that such Lender Party reasonably determines such
reduction to be attributable to the existence of such Lender Party's
commitment to lend or to issue Letters of Credit hereunder or to the issuance
or maintenance of any Letters of Credit; provided, however, that if such
Lender Party fails to so notify the Borrower within such 60-day period, such
amounts shall commence accruing on such later date on which the Lender Party
notifies
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45
the Borrower. A certificate as to such amounts submitted to the Borrower and
the Agent by such Lender Party 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 2.10(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 2.11. 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 2.08 and
2.10, Convert all or any portion of the Advances of one Type comprising the
same Revolving Credit 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 $5,000,000. 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 Revolving Credit
Borrowing shall be reduced, by payment or prepayment or otherwise, to less
than $5,000,000, such Advances shall automatically Convert into Base Rate
Advances.
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46
(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 2.12. 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 2.10 or 2.13) to the Lender Parties for the account of their
respective Applicable Lending Offices, and like funds relating to the payment
of any other amount payable to any Lender Party to such Lender Party 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(c), 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 Party 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 Party, if and
to the extent payment of principal, interest or fees owed to such Lender Party
is not made when due hereunder or, in the case of a Lender 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 Party 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 and
Letter of Credit commissions 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
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47
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 any Lender Party
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 such Lender Party on such due date an amount equal to the
amount then due such Lender Party. If and to the extent the Borrower shall not
have so made such payment in full to the Agent, each Lender Party shall repay
to the Agent forthwith on demand such amount distributed to such Lender Party
together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party 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
appropriate Lender Party ratably in accordance with such Lender Party'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 Party, and for
application to such principal installments, as the Agent shall direct.
SECTION 2.13. Taxes. (a) Any and all payments by the
Borrower hereunder or under the Notes shall be made, in accordance with
Section 2.12, 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 Party
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 Party 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 Party'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 Party 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
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48
respect of any sum payable hereunder or under any Note to any Lender Party 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 2.13) such Lender
Party 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 Party
shall designate a different Applicable Lending Office if, in the judgment of
such Lender Party, 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 Party or the Agent and would not, in the
judgment of such Lender Party, be otherwise disadvantageous to such Lender
Party.
(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 Party 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 2.13) paid by such Lender Party 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 Party 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 Party or the
Agent shall refund, to the extent of any refund thereof made to such Lender
Party or the Agent, any amounts paid by the Borrower under this Section
2.13(c) in respect of such Taxes, Other Taxes or liabilities arising therefrom
or with respect thereto. Each Lender Party 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 Party or
the Agent to the effect that such Taxes or Other Taxes were wrongfully or
illegally imposed and (ii) such Lender Party 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 Party 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
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49
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 2.13, the terms "United States" and "United States
person" shall have the meanings specified in Section 7701 of the Code.
(e) Each Lender Party 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 Party or the
Agent remains lawfully able to do so), provide the Borrower and (in the case
of any such Lender Party 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 Party 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 Party 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 Party 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 Party 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 Party shall reasonably request to assist the
Lender Party 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 Party 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 2.13 shall survive the payment in full of principal
and interest hereunder and under the Notes.
(h) If a Lender Party 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 2.13 requiring the Borrower to
make a greater payment than if such change had not been made, such Lender
Party shall not be entitled to receive any greater payment under this
<PAGE>
50
Section 2.13 than such Lender Party would have been entitled to receive had it
not changed its Applicable Lending Office.
SECTION 2.14. Sharing of Payments, Etc. If any Lender Party
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 2.10 or 2.13) in excess of its ratable share
of payments on account of the Advances obtained by all the Lender Parties,
such Lender Party shall forthwith purchase from the other Lender Parties such
interests or participating interests in the Advances owing to them as shall be
necessary to cause such purchasing Lender Party 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 Party,
such purchase from each Lender Party shall be rescinded and such Lender Party
shall repay to the purchasing Lender Party the purchase price to the extent of
such recovery together with an amount equal to such Lender Party's ratable
share (according to the proportion of (i) the amount of such Lender Party's
required repayment to (ii) the total amount so recovered from the purchasing
Lender Party) of any interest or other amount paid or payable by the
purchasing Lender Party in respect of the total amount so recovered. The
Borrower agrees that any Lender Party so purchasing an interest or
participating interest from another Lender Party pursuant to this Section 2.14
may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off) with respect to such interest or
participating interest, as the case may be, as fully as if such Lender Party
were the direct creditor of the Borrower in the amount of such interest or
participating interest, as the case may be.
SECTION 2.15. Removal of Lender. In the event that any
Lender Party demands payment of costs or additional amounts pursuant to
Section 2.10 or Section 2.13 or asserts pursuant to Section 2.10(c) that it is
unlawful for such Lender Party to make Eurodollar Rate Advances, then (subject
to such Lender Party'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 Party and the Agent, elect
to cause such Lender Party 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 Party 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 Party as of the date of such
assignment (including without limitation amounts owing pursuant to Section
2.10 or 2.13), and in such case such Lender Party agrees to make such
assignment, and such assignee shall agree to accept such assignment and assume
all obligations of such Lender Party hereunder, in accordance with Section
8.07.
SECTION 2.16. Defaulting Lender. (a) In the event that, at
any one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such
Defaulting Lender shall owe a
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51
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 Revolving Credit 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 2.16.
(b) In the event that, at any one time, (i) any Lender Party
shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a
Defaulted Amount to the Agent or any of the other Lender Parties 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 Lender Parties 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 up to the amount 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 Lender Parties, ratably in accordance
with the respective portions of such Defaulted Amounts payable at such time to
the Agent and such other Lender Parties and, if the amount of such payment
made by the Borrower shall at such time be insufficient
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52
to pay all Defaulted Amounts owing at such time to the Agent and the other
Lender Parties, 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 Lender Parties for any Defaulted
Amounts then owing to such other Lender Parties, ratably in
accordance with such respective Defaulted Amounts then owing to such
other Lender Parties.
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 2.16.
(c) In the event that, at any one time, (i) any Lender Party
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 Party 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 Party 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 Party, 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 Lender Parties for any amount then
due and payable by such Defaulting Lender to such other Lender
Parties hereunder, ratably in
<PAGE>
53
accordance with such respective amounts then due and payable to such
other Lender Parties; 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 Party 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 2.16 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 Party 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) There shall have been no adverse change since December
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, 1995 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
<PAGE>
54
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 Lender
Parties 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 Original Credit Agreement, the Second Credit Agreement or the
Existing Credit Agreement and the Lender Parties 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 Lender Parties 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 Party:
(i) the Revolving Credit Notes to the
order of the Lenders, in exchange, where applicable, for
"Notes" under (and as defined in) 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;
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55
(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 Original
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 Original 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
<PAGE>
56
(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 Original 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 Original 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) the absence of any amendments to the bylaws of
MCG 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 of the Existing Credit Agreement 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
Original Credit Agreement, the Second Credit Agreement, 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
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57
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), the charter documents of
each A Company and each FN Party, the Loan Documents and the
Related Documents, 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 that would
impair the ability of any Loan Party to perform, any of the
obligations of such Loan Party under the Loan Documents;
(vii) the Mafco Security Agreement in
substantially the form of Exhibit D-1 duly executed by Mafco
and the Borrower Security Agreement in substantially the
form of Exhibit D-2 duly executed by the Borrower, in each
case together with evidence that all other action that the
Agent may deem necessary or desirable in order to perfect
and protect the Liens created by such Security Agreement
have been taken and, in the case of the Borrower Security
Agreement, together with:
(1) instruments in
evidencing the Pledged Debt referred to in
the Borrower Security Agreement indorsed
in blank, and
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58
(2) acknowledgement
copies or stamped receipt copies of
property amendments to the financing
statements previously filed in connection
with the Borrower Security Agreement;
(viii) the Mafco Guaranty in substantially the form
of Exhibit E-1, duly executed by Mafco, the Borrower Parent
Guaranty in substantially the form of Exhibit E-2, duly
executed by Borrower Parent, the C&F Guaranty in
substantially the form of Exhibit E-3, duly executed by the
C&F Guarantor, the Cigar Guaranty in substantially the form
of Exhibit E-4, duly executed by Cigar Guarantor, the
Coleman Guaranty in substantially the form of Exhibit E-5,
duly executed by Coleman Guarantor, the Flavors Guaranty in
substantially the form of Exhibit E-6, duly executed by
Flavors Guarantor and the New World Guaranty in
substantially the form of Exhibit E-7, duly executed by New
World Guarantor;
(ix) the Coleman Pledge Agreement in substantially
the form of Exhibit F-1, duly executed by Coleman Guarantor
and the Coleman Worldwide Pledge Agreement in substantially
the form of Exhibit F-2, duly executed by Coleman Worldwide,
together with (in the case of the Coleman Worldwide Pledge
Agreement):
(1) certificates
representing the Pledged Shares referred
to therein accompanied by undated stock
powers executed in blank,
(2) acknowledgement
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
the Liens created by the Coleman Worldwide
Pledge Agreement, covering the Collateral
described in the Coleman Worldwide Pledge
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
Coleman Worldwide, as debtor, together
with copies of such other financing
statements, and
(4) evidence that all
other action that the Agent may deem
necessary or desirable in order to perfect
and protect the Liens created by the Mafco
Security Agreement has been taken;
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59
(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
Original Credit Agreement and other than as specified in and
delivered pursuant to such certificate and the certificate
of Mafco delivered pursuant to Section 3.01(f)(x) of the
Second Credit Agreement and Section 3.01(f)(ix) of the
Existing Credit Agreement, there is no other contract, loan
agreement, indenture, mortgage, deed of trust, lease or
other instrument (1) 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
Lender Parties 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, 1995,
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 Lender
Parties, 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 Lender Parties have relied upon the
financial statements of Marvel, Coleman, New World, Flavors,
Cigar and MCG 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 Party 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 Lender Parties have
relied
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60
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 Party for such
information;
(xiv) a consent, in form and substance reasonably
satisfactory to the Lender Parties, duly executed by each of
the Loan Parties (other than the Borrower) with respect to
the amendment and restatement of the Existing Credit
Agreement;
(xv) favorable opinions of counsel to
Mafco reasonably satisfactory to the Lender Parties, in form
and substance reasonably satisfactory to the Lender Parties;
(xvi) a favorable opinion of Shearman &
Sterling, counsel for the Agent, in form and substance
reasonably satisfactory to the Agent; and
(xvii) such other information, approvals, opinions
or other documents as the Agent may reasonably request.
SECTION 3.02. Conditions Precedent to Each Revolving Credit
Borrowing and Issuance. The obligation of each Lender to make an Advance
(other than a Letter of Credit Advance made by the Issuing Bank or a Lender
pursuant to Section 2.03(c)) on the occasion of each Revolving Credit
Borrowing (including the initial Revolving Credit Borrowing), and the
obligation of the Issuing Bank to issue a Letter of Credit (including the
initial issuance) or renew a Letter of Credit and the right of the Borrower to
request the issuance or renewal of a Letter of Credit, shall be subject to the
further conditions precedent that on the date of such Revolving Credit
Borrowing or issuance (a) the following statements shall be true (and each of
the giving of the applicable Notice of Borrowing or Notice of Issuance and the
acceptance by the Borrower of the proceeds of such Revolving Credit Borrowing
or of such Letter of Credit or the renewal of such Letter of Credit shall
constitute a representation and warranty by the Borrower that both on the date
of such notice and on the date of such Revolving Credit Borrowing or issuance
or renwal such statements are true):
(i) The representations and warranties contained in the Loan
Documents are correct in all material respects on and as of such
date, before and after giving effect to such Revolving Credit
Borrowing or issuance 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
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61
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 Revolving Credit Borrowing or issuance or from the
application of the proceeds therefrom, which constitutes a Default,
(b) the Borrower shall, on the seventh Business Day prior to the date of such
Revolving Credit Borrowing or issuance, 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 Revolving Credit Borrowing or issuance, 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 the pro forma amounts available to be loaned
by First Gibralter to Marvel V, together with amounts received by Mafco
pursuant to or in connection with any Related Document, will be less than $8
million in any calendar quarter or will not be sufficient to pay interest on
the Advances then outstanding, and (c) the Agent shall have received such
other certificates, opinions and other documents as any Lender Party 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 Party 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 Lender Parties unless an officer of the Agent responsible for the
transactions contemplated by this Agreement shall have received notice from
such Lender Party prior to the earlier of the initial Revolving Credit
Borrowing or the initial issuance of a Letter of Credit specifying its
objection thereto and if such earlier event consists of a Revolving Credit
Borrowing, such Lender Party shall not have made available to the Agent such
Lender Party's ratable portion of such Revolving Credit Borrowing.
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62
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 or a Subsidiary of
Mafco 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,
as of the date hereof, 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
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63
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 Original 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, 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 and the Voting Trust
Agreement dated as of April 17, 1996 among First Gibraltar, Trans
Network Insurance Services Inc., Bank of New York 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
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64
Lender Party 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 Original Credit Agreement, Section
3.01(f)(vii) and (viii) of the Second Credit Agreement and Section
3.01(f)(vii) of the Existing 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.
(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, 1995, 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, 1996, 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 Party, fairly present,
subject, in the case of said balance sheets as at March 31, 1996, 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, 1995, 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
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65
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 or drawings under any Letter of Credit will
be used to purchase or carry any Margin Stock (other than the Coleman
Worldwide LYONS or common stock of Coleman), or to extend credit to
others for the purpose of purchasing or carrying any Margin Stock.
(i) No proceeds of any Advance or drawings under any Letter
of Credit will be used to acquire any equity security of a class that
is registered pursuant to Section 12 of the Exchange Act (other than
the Coleman Worldwide LYONS).
(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 1994 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 or made
available to the Lender Parties, 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,
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66
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 issuance of any Letters
of Credit, 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 (other than intercompany Debt and Debt
under the Loan Documents) 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
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67
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, any Letter of Credit shall be outstanding or any Lender
Party 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
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68
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 Lender
Parties.
(e) Visitation Rights. At any reasonable time and from time
to time, upon reasonable prior notice permit the Agent or any of the
Lender Parties 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 Section 3.01(f)(ix)(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
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69
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 and the L/C Cash Collateral Account with Citibank pursuant to
the terms of the Borrower Security Agreement.
(k) Reporting Requirements. Furnish to the Lender Parties
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
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70
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 annual 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 annual financial
statements referred to in Section 4.01(f);
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71
(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
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72
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
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73
the Second Mafco Collateral Account and the L/C Cash 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 the pro forma amounts available to be
loaned by First Gibralter to Marvel V, together with amounts received
by Mafco pursuant to or in connection with any Related Document, will
not be less than $8 million in any calendar quarter and will not be
insufficient to pay interest on the Advances then outstanding,
together with a schedule in form reasonably satisfactory to the Agent
setting forth in reasonable detail the computations, assumptions 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);
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 or Asset Sale,
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 Mafco and its Subsidiaries.
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74
(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, other than as a result of an Asset Sale pursuant to
which all of the common stock held by Mafco and its Subsidiaries in
the Borrower or any of its Subsidiaries is sold and the Net Cash
Proceeds of such Assets Sale is applied in accordance with the Loan
Documents.
(p) Marvel Tax Agreements. If Marvel III shall receive any
payment under 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.
(q) Net Cash Proceeds. Deposit, and cause each of its
Non-Operating Subsidiaries to deposit, all of the Net Cash Proceeds
received by the Borrower and its Non-Operating Subsidiaries from and
after the Effective Date from Asset Sales (other than Net Cash
Proceeds required to be applied to prepay or repay the Facilities) in
the Mafco Collateral Account.
(r) LYONS Utilization. On the first Business Day of each
month or upon request of the Agent, deliver a written report to the
Agent and each Lender Party summarizing the LYONS Utilization since
the Effective Date.
SECTION 5.02. Negative Covenants. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
Party 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
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75
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, (iii) a transfer of any
Coleman Worldwide LYONS held by the Borrower to Coleman Worldwide and
(iv) sales, leases, transfers or other dispositions of assets for
cash and for no less than fair market value, provided that, in the
case of an Asset Sale, the Borrower and its Non- Operating
Subsidiaries comply with the provisions of Section 5.01(q) in respect
of the Net Cash Proceeds of such Asset Sale.
(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
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76
(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 $250,000,000 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, (vi) contributions by the Borrower or any of its
Non-Operating Subsidiaries of common stock of Marvel to any
Non-Operating Subsidiary and (vii) Investments by the Borrower in the
Coleman Worldwide LYONS.
(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.
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77
(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 (i) 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 (ii) prepayments of Debt required by Section 7(q)
of the Mafco Guaranty.
(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
Party 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 Lender Parties 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.
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(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 Section 5.01(h), 5.01(j),
5.01(k), 5.01(l), 5.01(n), 5.01(o), 5.01(q) or 5.02, (ii) Mafco shall
fail to perform or observe any term, covenant or agreement contained
in Section 7(i), 7(j), 7(l), 7(o), 7(p), 7(q) or 8 of the Mafco
Guaranty, (iii) Coleman Guarantor shall fail to perform or observe
any term, covenant or agreement contained in Section 7(i), 7(k), 7(n)
or 8 of the Coleman Guaranty, (iv) Borrower Parent shall fail to
perform or observe any term, covenant or agreement contained in
Section 7(j) or 8 of the Borrower Parent Guaranty, (v) New World
Guarantor shall fail to perform or observe any term, covenant or
agreement contained in Section 7(h), 7(j), 7(k) or 8 of the New World
Guaranty, (vii) C&F Guarantor shall fail to perform or observe any
term, covenant or agreement contained in Section
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79
7(h), 7(j), 7(k) or 8 of the C&F Guaranty, (vii) Cigar Guarantor
shall fail to perform or observe any term, covenant or agreement
contained in Section 7(h), 7(j), 7(k) or 8 of the Cigar Guaranty,
(viii) Flavors Guaranty shall fail to perform or observe any term,
covenant or agreement contained in Section 7(h), 7(j), 7(k) or 8 of
the Flavors Guaranty or (ix) 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
Party; 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
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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, in each
case other than as a result of an Asset Sale pursuant to which all of
the common stock held by Mafco and its Subsidiaries in any A Company,
any Designated Operating Company or the Bank is sold and the Net Cash
Proceeds of such Asset Sale is applied in accordance with the terms
of the Loan Documents; 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
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81
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 Original Credit
Agreement, the Second Credit Agreement, the Existing Credit Agreement
or Section 3.01 hereof 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 Original Credit Agreement, the Second Credit Agreement, the
Existing Credit Agreement or Section 3.01 hereof 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, the FN
Holdings New Debt Document or the FN Parent Debt Document shall be
terminated, amended, waived or otherwise modified without the consent
of the Required Lenders or any provision of the First Gibraltar
Charter Document 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) 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,
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MCG and, after compliance by Mafco with the provisions of Section
7(o)(iv) of the Mafco Guaranty, Revlon, 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
(q) 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
(r) 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
(s) (i) Mafco shall fail to furnish to the Agent and the
Lender Parties on or prior to December 1, 1997, a business plan
setting forth, in respect of all of the Debt of Mafco and its
Subsidiaries (other than Debt of the Designated Operating Companies,
the Bank, Revlon and their respective Subsidiaries) that is scheduled
to come due during calendar year 1998 and 1999, the method by which
all such Debt shall be repaid, prepaid, redeemed or refinanced on a
timely basis, including without limitation, through Asset Sales,
issuances of Debt, issuances of equity or contributions to capital,
in each case in reasonable detail as to the identity of the assets to
be sold, the issuer of the Debt or equity and such other details as
the Required Lenders shall request or (ii) the Required Lenders shall
not have approved the form and substance of such business plan on or
prior to December 31, 1997;
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
Commitment of each Lender to make Advances (other than Letter of Credit
Advances by the Issuing Bank or a Revolving Credit Lender pursuant to Section
2.03(c)) and of the Issuing Bank to issue Letters of Credit 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 (other than Letter of Credit Advances by an Issuing
Bank or a Revolving Credit Lender pursuant to Section 2.03(c)) and of each
Issuing Bank to issue Letters of Credit shall
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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.
SECTION 6.02. Actions in Respect of the Letters of Credit
upon Event Default. If any Event of Default shall have occurred and be
continuing, the Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions described in Section
6.01 or otherwise, make demand upon the Borrower to, and forthwith upon such
demand the Borrower will, pay to the Agent on behalf of the Lender Parties in
same day funds at the Agent's office designated in such demand, for deposit in
the L/C Cash Collateral Account, an amount equal to the aggregate Available
Amount of all Letters of Credit then outstanding. If at any time the Agent
determines that any funds held in the L/C Cash Collateral Account are subject
to any right or claim of any Person other than the Agent and the Lender
Parties or that the total amount of such funds is less than the aggregate
Available Amount of all Letters of Credit then outstanding, the Borrower will,
forthwith upon demand by the Agent, pay to the Agent, as additional funds to
be deposited and held in the L/C Cash Collateral Account, an amount equal to
the excess of (a) such aggregate Available Amount over (b) the total amount of
funds, if any, then held in the L/C Cash Collateral Account that the Agent
determines to be free and clear of any such right and claim.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender Party
(in its capacities as a Lender and the Issuing Bank (if applicable)) 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 Lender Parties 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
Party 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
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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 Party and shall not be
responsible to any Lender Party 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 Party 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
Party and may exercise the same as though it were not the Agent and the term
"Lender Party" or "Lender Parties" 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 Parties.
SECTION 7.04. Lender Party Credit Decision. Each Lender
Party acknowledges that it has, independently and without reliance upon the
Agent or any other Lender Party 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 Party also acknowledges that it will,
independently and without reliance upon the Agent or any other Lender Party
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.
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SECTION 7.05. Indemnification. (a) Each Lender Party
severally agrees to indemnify the Agent (to the extent not promptly reimbursed
by the Borrower) from and against such Lender Party's ratable share
(determined as provided below) of any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that 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, however, that no Lender Party 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 Party agrees to reimburse the Agent promptly upon
demand for its ratable share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Borrower under
Section 8.04, to the extent that the Agent is not promptly reimbursed for such
costs and expenses by the Borrower. For purposes of this Section 7.05(a), the
Lender Parties' respective ratable shares of any amount shall be determined,
at any time, according to the sum of (a) the aggregate principal amount of the
Advances outstanding at such time and owing to the respective Lender Parties,
(b) their respective Pro Rata Shares of the aggregate Available Amount of all
Letters of Credit outstanding at such time and (c) their respective Unused
Revolving Credit Commitments at such time; provided that the aggregate
principal amount of Letter of Credit Advances owing to the Issuing Bank shall
be considered to be owed to the Lenders ratably in accordance with their
respective Revolving Credit Commitments. In the event that any Defaulted
Advance shall be owing by any Defaulting Lender at any time, such Lender
Party's Commitment with respect to the Facility under which such Defaulted
Advance was required to have been made shall be considered to be unused for
purposes of this Section 7.05(a) to the extent of the amount of such Defaulted
Advance. The failure of any Lender Party to reimburse the Agent promptly upon
demand for its ratable share of any amount required to be paid by the Lender
Party to the Agent as provided herein shall not relieve any other Lender Party
of its obligation hereunder to reimburse the Agent for its ratable share of
such amount, but no Lender Party shall be responsible for the failure of any
other Lender Party to reimburse the Agent for such other Lender Party's
ratable share of such amount. Without prejudice to the survival of any other
agreement of any Lender Party hereunder, the agreement and obligations of each
Lender Party contained in this Section 7.05(a) shall survive the payment in
full of principal, interest and all other amounts payable hereunder and under
the other Loan Documents.
(b) Each Lender Party severally agrees to indemnify the
Issuing Bank (to the extent not promptly reimbursed by the Borrower) from and
against such Lender Party's ratable share (determined as provided below) of
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against the
Issuing Bank in any way relating to or arising out of the Loan Documents or
any action taken or
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omitted by the Issuing Bank under the Loan Documents; provided, however, that
no Lender Party shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Issuing Bank's gross negligence
or willful misconduct. Without limitation of the foregoing, each Lender Party
agrees to reimburse the Issuing Bank promptly upon demand for its ratable
share of any costs and expenses (including, without limitation, fees and
expenses of counsel) payable by the Borrower under Section 8.04, to the extent
that the Issuing Bank is not promptly reimbursed for such costs and expenses
by the Borrower. For purposes of this Section 7.05(b), the Lender Party's
respective ratable shares of any amount shall be determined, at any time,
according to the sum of (a) the aggregate principal amount of the Advances
outstanding at such time and owing to the respective Lender Parties, (b) their
respective Pro Rata Shares of the aggregate Available Amount of all Letters of
Credit outstanding at such time plus (c) their respective Unused Revolving
Credit Commitments at such time; provided that the aggregate principal amount
of Letter of Credit Advances owing to the Issuing Bank shall be considered to
be owed to the Lenders ratably in accordance with their respective Revolving
Credit Commitments. In the event that any Defaulted Advance shall be owing by
any Defaulting Lender at any time, such Lender Party's Commitment with respect
to the Facility under which such Defaulted Advance was required to have been
made shall be considered to be unused for purposes of this Section 7.05(b) to
the extent of the amount of such Defaulted Advance. The failure of any Lender
Party to reimburse the Issuing Bank promptly upon demand for its ratable share
of any amount required to be paid by the Lender Parties to the Issuing Bank as
provided herein shall not relieve any other Lender Party of its obligation
hereunder to reimburse the Issuing Bank for its ratable share of such amount,
but no Lender Party shall be responsible for the failure of any other Lender
Party to reimburse the Issuing Bank for such other Lender Party's ratable
share of such amount. Without prejudice to the survival of any other agreement
of any Lender Party hereunder, the agreement and obligations of each Lender
contained in this Section 7.05(b) shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the
other Loan Documents.
SECTION 7.06. Successor Agent. The Agent may resign at any
time by giving written notice thereof to the Lender Parties 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 Lender
Parties, 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
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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 Lender Parties (other than
any Lender Party 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 (A) releases of any material portion of the Collateral or the
creation, incurrence, assumption or existence of any such Lien in connection
with Asset Sales the Net Cash Proceeds of which are applied as contemplated by
the Loan Documents and (B) the Liens created by the Collateral Documents and
the Liens permitted by Section 5.02(a), Section 8(a) of the Borrower Parent
Guaranty, Section 8(a) of the Coleman Guaranty, Section 8(a) of the Mafco
Guaranty, Section 8(a) of the C&F Guaranty, Section 8(a) of the Cigar
Guaranty, Section 8(a) of the Flavors Guaranty and Section 8(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; provided further that no amendment, waiver or consent
shall, unless in writing and signed by the Issuing Bank, in addition to the
Lenders required above to take such action, affect the rights or obligations
of the Issuing Bank under this Agreement.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including
telecopier, telegraphic, telex or cable
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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 Party, at the address specified in
the Assignment and Acceptance pursuant to which it became a Lender Party; and
if to the Agent, at its address at 399 Park Avenue, New York, New York 10043,
Attention: Judith Fishlow, 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 Party 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
Lender Parties 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 (including the allocated costs of internal counsel) and
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reasonable expenses of counsel for the Agent and each Lender Party 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 Party other
than on the last day of the Interest Period for such Advance, as a result of a
payment or Conversion pursuant to Section 2.10(c) or 2.11, 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 Party (with a copy of such demand
to the Agent), pay to the Agent for the account of such Lender Party any
amounts required to compensate such Lender Party 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 Party to fund or maintain such Advance.
(c) The Borrower agrees to indemnify and hold harmless the
Agent and each Lender Party and each of their affiliates and their officers,
directors, trustees, 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, whether or not any such
claim, investigation, litigation or proceeding is brought by the Borrower or
any other person and whether or not such Indemnified Party is a Lender Party
at such time) 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 Party by any other Lender
Party (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 in connection with any claim for which Final Judgment is
rendered in the Borrower's favor in a litigation described in clause (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
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payable pursuant to the provisions of Section 6.01, each Lender Party 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 Party to or for the credit or
the account of the Borrower against any and all of the obligations of the
Borrower to such Lender Party now or hereafter existing under this Agreement
and the Note or Notes held by such Lender Party, whether or not such Lender
Party shall have made any demand under this Agreement or such Note or Notes
and although such obligations may be unmatured. Each Lender Party agrees
promptly to notify the Borrower after any such set-off and application shall
be made by such Lender Party, provided that the failure to give such notice
shall not affect the validity of such set-off and application; provided
further that no Lender Party 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 Party under this Section 8.05 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which such
Lender Party 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 Party
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 2.15, 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 all 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 2.15 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
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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 2.15
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, (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
and (vii) no such assignments shall be permitted without the consent of the
Agent and the Borrower (such consent not to be unreasonably withheld). 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
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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.
(e) The Issuing Bank may assign to an Eligible Assignee all
of its rights and obligations under the undrawn portion of its Letter of
Credit Commitment at any time; provided, however, that (i) except in the case
of an assignment to a Person that immediately prior to such assignment was an
Issuing Bank or an assignment of all of an Issuing Bank's rights and
obligations under this Agreement, the amount of the Letter of Credit
Commitment of the assigning Issuing Bank 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 $3,000,000 and
shall be in an integral multiple of $1,000,000 in excess thereof, (ii) each
such assignment shall be to an Eligible Assignee, (iii) 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 a
processing and recordation fee
<PAGE>
93
of $3000 and (iv) no such assignments shall be permitted without the consent
of the Agent and the Borrower (such consent not to be unreasonably withheld).
(f) 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.
(g) 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 G to preserve
the confidentiality of any confidential information relating to the Borrower
received by it from such Lender.
(h) 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
<PAGE>
94
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. No Liability of the Issuing Bank. The Borrower
assumes all risks of the acts or omissions of any beneficiary or transferee of
any Letter of Credit with respect to its use of such Letter of Credit. Neither
the Issuing Bank nor any of its officers or directors shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith;
(b) the validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (c) payment by the
Issuing Bank against presentation of documents that do not comply with the
terms of a Letter of Credit, including failure of any documents to bear any
reference or adequate reference to the Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, except that the Borrower shall have a claim against the Issuing
Bank, and the Issuing Bank shall be liable to the Borrower, to the extent of
any direct, but not consequential, damages
<PAGE>
95
suffered by the Borrower that the Borrower proves were caused by (i) the
Issuing Bank's willful misconduct or gross negligence in determining whether
documents presented under any Letter of Credit comply with the terms of the
Letter of Credit or (ii) the Issuing Bank's willful failure to make lawful
payment under a Letter of Credit after the presentation to it of a draft and
certificates strictly complying with the terms and conditions of the Letter of
Credit. In furtherance and not in limitation of the foregoing, the Issuing
Bank may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
SECTION 8.11. WAIVER OF JURY TRIAL. EACH OF THE BORROWER,
THE AGENT AND THE LENDER PARTIES 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 PARTY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
<PAGE>
96
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 /s/ Glenn Dickes
-------------------------
Name: Glenn Dickes
Title:
CITIBANK, N.A.,
as Agent
By
-------------------------
Name:
Title:
FINANCIAL INSTITUTIONS AND
ISSUING BANK
CITIBANK, N.A.,
as Issuing Bank
By
-------------------------
Name:
Title:
CITIBANK, N.A.
By
-------------------------
Name:
Title:
<PAGE>
96
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 /s/ James Buchanan
-------------------------
Name: James Buchanan
Title:
FINANCIAL INSTITUTIONS AND
ISSUING BANK
CITIBANK, N.A.,
as Issuing Bank
By /s/ James Buchanan
-------------------------
Name: James Buchanan
Title:
CITIBANK, N.A.
By /s/ James Buchanan
-------------------------
Name: James Buchanan
Title:
<PAGE>
97
BANK OF AMERICA ILLINOIS
By /s/ Phillip E. Van Winkle
-------------------------
Name: Phillip E. Van Winkle
Title:
THE BANK OF NEW YORK
By
-------------------------
Name:
Title:
CHEMICAL BANK
By
-------------------------
Name:
Title:
CREDIT SUISSE
By
-------------------------
Name:
Title:
By
-------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By
-------------------------
Name:
Title:
<PAGE>
97
BANK OF AMERICA ILLINOIS
By
-------------------------
Name:
Title:
THE BANK OF NEW YORK
By /s/ Edward Foley, Jr.
-------------------------
Name: Edward Foley, Jr.
Title:
CHEMICAL BANK
By
-------------------------
Name:
Title:
CREDIT SUISSE
By
-------------------------
Name:
Title:
By
-------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By
-------------------------
Name:
Title:
<PAGE>
97
BANK OF AMERICA ILLINOIS
By
-------------------------
Name:
Title:
THE BANK OF NEW YORK
By /s/ Bruce S. Borden
-------------------------
Name: Bruce S. Borden
Title:
CHEMICAL BANK
By
-------------------------
Name:
Title:
CREDIT SUISSE
By
-------------------------
Name:
Title:
By
-------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By
-------------------------
Name:
Title:
<PAGE>
97
BANK OF AMERICA ILLINOIS
By
-------------------------
Name:
Title:
THE BANK OF NEW YORK
By /s/ Edward Foley, Jr.
-------------------------
Name: Edward Foley, Jr.
Title:
CHEMICAL BANK
By
-------------------------
Name:
Title:
CREDIT SUISSE
By /s/ Kristina Catlin
-------------------------
Name: Kristina Catlin
Title:
By /s/ J. Hamilton Crawford
-------------------------
Name: J. Hamilton Crawford
Title:
THE FIRST NATIONAL BANK OF BOSTON
By
-------------------------
Name:
Title:
<PAGE>
97
BANK OF AMERICA ILLINOIS
By
-------------------------
Name:
Title:
THE BANK OF NEW YORK
By /s/ Edward Foley, Jr.
-------------------------
Name: Edward Foley, Jr.
Title:
CHEMICAL BANK
By
-------------------------
Name:
Title:
CREDIT SUISSE
By
-------------------------
Name:
Title:
By
-------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By /s/ Gretchen Troiano
-------------------------
Name: Gretchen Troiano
Title:
<PAGE>
98
THE FUJI BANK, LIMITED
By /s/ Katsunori Nozawa
-------------------------
Name: Katsunori Nozawa
Title:
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By
-------------------------
Name:
Title:
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION
By
-------------------------
Name:
Title:
PILGRIM PRIME RATE TRUST
By
-------------------------
Name:
Title:
<PAGE>
98
THE FUJI BANK, LIMITED
By
-------------------------
Name:
Title:
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By /s/ Jeffrey W. Maillet
-------------------------
Name: Jeffrey W. Maillet
Title: Sr. Vice Pres.-Portfolio Mgr.
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION
By
-------------------------
Name:
Title:
PILGRIM PRIME RATE TRUST
By
-------------------------
Name:
Title:
<PAGE>
98
THE FUJI BANK, LIMITED
By
-------------------------
Name:
Title:
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By
-------------------------
Name:
Title:
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION
By /s/ Kunduck Moon
-------------------------
Name: Kunduck Moon
Title: Managing Director
PILGRIM PRIME RATE TRUST
By
-------------------------
Name:
Title:
<PAGE>
98
THE FUJI BANK, LIMITED
By
-------------------------
Name:
Title:
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By
-------------------------
Name:
Title:
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION
By
-------------------------
Name:
Title:
PILGRIM PRIME RATE TRUST
By /s/ Howard Tiffen
-------------------------
Name: Howard Tiffen
Title: Senior Vice President
<TABLE>
<CAPTION>
SCHEDULE I
EXISTING ADVANCES, ADVANCES, COMMITMENTS AND APPLICABLE LENDING OFFICES
Existing
Existing Term Revolving
Advances Advances Revolving Advances Revolving Credit
Name of Bank (being assigned) (being assigned) (being assumed) Commitment Applicable Lending Office
- ------------ -------------- -------------- ------------- ------------------ -------------------------
<S> <C> <C> <C> <C> <C>
Citibank, N.A. -0- -0- $23,720,930.24 $40,000,000 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
The Bank of New York -0- -0- -0- $20,000,000 Domestic:
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>
<PAGE>
2
<TABLE>
<CAPTION>
Existing
Existing Term Revolving
Advances Advances Revolving Advances Revolving Credit
Name of Bank (being assigned) (being assigned) (being assumed) Commitment Applicable Lending Office
- ------------ -------------- -------------- ------------- ------------------ -------------------------
<S> <C> <C> <C> <C> <C>
Bank of America -0- -0- -0- $15,000,000 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 Manhattan -0- $5,232,558.14 -0- -0- Domestic:
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>
<PAGE>
3
<TABLE>
<CAPTION>
Existing
Existing Term Revolving
Advances Advances Revolving Advances Revolving Credit
Name of Bank (being assigned) (being assigned) (being assumed) Commitment Applicable Lending Office
- ------------ -------------- -------------- ------------- ------------------ -------------------------
<S> <C> <C> <C> <C> <C>
Chemical Bank -0- -0- $5,232,558.14 $30,000,000 Domestic:
270 Park Avenue, 9th Floor
New York, New York 10017
Attention: Bruce Borden
Tel. No.: 212-552-1479
Fax No.: 212-552-5189
ABA No.: 021-0001-28
Via Fed Transfer
Account Name: Credit Commercial
Loan Operations
Attention: John Gallagher
Reference: Mafco Holdings Inc.
Eurodollar:
Same
Credit Lyonnais -0- $11,511,627.91 -0- -0- 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>
<PAGE>
4
<TABLE>
<CAPTION>
Existing
Existing Term Revolving
Advances Advances Revolving Advances Revolving Credit
Name of Bank (being assigned) (being assigned) (being assumed) Commitment Applicable Lending Office
- ------------ -------------- -------------- ------------- ------------------ -------------------------
<S> <C> <C> <C> <C> <C>
Credit Suisse -0- -0- $12,906,976.74 $30,000,000 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 National -0- -0- -0- $15,000,000 Domestic:
Bank of Boston 100 Rustcraft Road
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
Eurodollar:
Same
</TABLE>
<PAGE>
5
<TABLE>
<CAPTION>
Existing
Existing Term Revolving
Advances Advances Revolving Advances Revolving Credit
Name of Bank (being assigned) (being assigned) (being assumed) Commitment Applicable Lending Office
- ------------ -------------- -------------- ------------- ------------------ -------------------------
<S> <C> <C> <C> <C> <C>
The Fuji Bank, -0- -0- -0- $30,000,000 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 Credit -0- $6,976,744.19 -0- -0- Domestic:
Bank of Japan, Ltd. 444 South Flower Street
Los Angeles, CA 90071
Attention: Ken Nakagawa
Tel. No.: 213-689-6244
Fax No.: 213-626-1067
ABA No.: 122000218
Via Fed Transfer
Account No.: 220234834
Account Name: Long-Term Credit
Bank of Japan
Attention: Ken Nakagawa
Reference: Mafco Holdings Inc.
Eurdollar:
Same
</TABLE>
<PAGE>
6
<TABLE>
<CAPTION>
Existing
Existing Term Revolving
Advances Advances Revolving Advances Revolving Credit
Name of Bank (being assigned) (being assigned) (being assumed) Commitment Applicable Lending Office
- ------------ -------------- -------------- ------------- ------------------ -------------------------
<S> <C> <C> <C> <C> <C>
NationsBank, -0- $12,906,976.74 -0- -0- Domestic:
National Association 101 No. Tryon Street
(Carolinas) 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
Eurodollar:
Same
Internationale -0- -0- -0- $15,000,000 Domestic:
Nederlanden (U.S.) 135 East 57th Street
Capital Corporation New York, NY 10022
Attention: Kunduck Moon
Tel. No.: (212) 446-0911
Fax No.: (212) 593-3362
ABA No.: 021000238
Via Fed Transfer
Account No.: 60007116
Account Name: Internationale
Nederlanden (U.S.) Capital
Corporation
Reference: Marvel IV Holdings
Eurodollar:
Same
Van Kampen American -0- -0- -0- $25,000,000 Domestic:
Capital Prime Rate One Parkview Plaza
Income Trust Oakbrook Terrace, IL 60181
Attention: Jeffrey Mailet
Tel. No.: (708) 684-6438
Fax No.: (708) 684-6740
ABA No.: 011000028
Via Fed Transfer
Account No.: 99001265
Account Name: VKM PRIT
Reference: Marvel IV Holdings
Eurodollar:
Same
</TABLE>
<PAGE>
7
<TABLE>
<CAPTION>
Existing
Existing Term Revolving
Advances Advances Revolving Advances Revolving Credit
Name of Bank (being assigned) (being assigned) (being assumed) Commitment Applicable Lending Office
- ------------ -------------- -------------- ------------- ------------------ -------------------------
<S> <C> <C> <C> <C> <C>
Pilgrim Prime -0- -0- -0- $30,000,000 Domestic:
Rate Trust 40 N. Central Ave.
Suite 1200
Phoenix, AZ 85004
Attention:
Tel. No.: (602) 417-8259
Fax. No.: (602) 417-8327
ABA No.: 011000028
Via Fed Transfer
Account No.: 37926342
Account Name: PL1F - Pilgrim Prime
Rate Trust
Reference: Mafco Holdings
Eurodollar:
Same
Prime Income Trust $5,232,558.14 -0- -0- -0- Domestic:
2 World Trade Center
72nd Floor
New York, New York 10048
Attention: April Chrysostomas
Tel. No.: (212) 392-5709
Fax No.: (212) 392-5345
ABA No.: 0210000018
Via Fed Transfer
Account No.: 003348
Account Name: Prime Income Trust
Reference: Marvel IV Holdings
Eurodollar:
Same
</TABLE>
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
SCHEDULE II
SUBSIDIARIES
Marvel IV Holdings Inc.
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 shares of Common Stock
Shares Outstanding: 1,000 shares of Common Stock
Percentage Owned: 99.5% by Marvel V Holdings Inc.
Options, Warrants and Similar Rights: None
Marvel III Holdings Inc.
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 shares of Common Stock
Shares Outstanding: 1,000 shares of Common Stock
Percentage Owned: 100% owned by Borrower
Options, Warrants and Similar Rights: None
Marvel (Parent) Holdings Inc.
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 shares of Common Stock
Shares Outstanding: 1,000 shares of Common Stock
Percentage Owned: 100% owned indirectly by Borrower
Options, Warrants and Similar Rights: None
Marvel Holdings Inc.
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 shares of Common Stock
Shares Outstanding: 1,000 shares of Common Stock
Percentage Owned: 100% owned indirectly by Borrower
Options, Warrants and Similar Rights: None
Marvel Entertainment Group, Inc.
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 250,000,000 shares of Common
<PAGE>
Stock and 50,000,000 shares of Preferred Stock
Shares Outstanding: 101,806,757 shares of Common
Stock (as of 5/24/96)
Percentage Owned: 80.2% owned indirectly by Borrower
and other Subsidiaries of Mafco
Options, Warrants and Similar Rights: 8,830,668 stock
options (as of 5/17/96)
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
SCHEDULE III
DEBT
A. Marvel III Holdings Inc.
1. $125,000,000 9-1/8% Senior Secured Notes due 1998 (Indenture dated
February 15, 1994 with NationsBank of Georgia, National Association).
B. Marvel (Parent) Holdings Inc.
1. $251,678,000 Senior Secured Discount Notes due 1998 (Indenture
dated October 1, 1993 with NationsBank of Georgia, National
Association).
2. Non-Recourse Guaranty of Marvel III Holdings Inc.'s 9-1/8% Senior
Secured Notes due 1998.
C. Marvel Holdings Inc.
1. $517,447,000 Series B Senior Secured Discount Notes due 1998
(Indenture dated April 15, 1993 with NationsBank of Georgia, National
Association).
D. Marvel Entertainment Group, Inc.
1. Guaranty of Fleer Corp.'s obligations under the Amended and Restated
Credit and Guarantee Agreement dated as of August 30, 1994, among
Marvel Entertainment Group, Inc., Fleer Corp., the banks party
thereto and Chemical Bank, as administrative agent (as amended on
November 22, 1994, April 24, 1995 and March 1, 1996).
- principal amount outstanding as of May 17, 1996: $104,500,000
2. Guaranty of Panini S.p.A. obligations under Term Loan and Guarantee
Agreement dated as of August 30, 1994 among Marvel Entertainment
<PAGE>
Group, Inc., Panini S.p.A. and Istituto Bancario San Paolo Di Torino,
S.p.A.
- principal amount outstanding as of May 17, 1996: $140,000,000
(approx.)
3. Guaranty of Fleer Corp.'s obligations under the Credit and Guarantee
Agreement dated as of April 24, 1995, among Marvel Entertainment
Group, Inc., Fleer Corp., the banks party thereto and Chemical Bank,
as administrative agent (as amended on March 1, 1996).
- principal amount outstanding as of May 17, 1996: $350,000,000
4. Capitalized Lease/Other Miscellaneous Debt - $286,000 (as of
May 17, 1996).
E. Fleer Corp.
1. See item D.1 above.
2. See item D.3 above.
3. Capitalized Leases: $360,000.
F. Skybox International Inc.
None.
G. Panini S.p.A.
1. Loan for working capital purposes with San Paolo Di Torino -
$3,100,000 (approximately).
2. Loan for working capital purposes with Monte Paschi - $1,390,000
(approximately).
3. Loan for working capital purposes with Banca Commerciale Mo -
$290,000 (approximately).
4. Loan for working capital purposes with Carimonte Banca S.p.A. -
$300,000 (approximately).
<PAGE>
5. Loan for working capital purposes with B.S. Geminiano - $1,950,000
(approximately).
6. Loan for working capital purposes with B. Agricola Mantovana -
$3,380,000 (approximately).
7. Loan for working capital purposes with B. Popalare Emilia - $50,000
(approximately).
8. Loan for working capital purposes with Cariplo - $5,850,000
(approximately).
9. Loan for working capital purposes with Cassa Di Risp Vignola -
$2,000,000 (approximately).
10. Loan for working capital purposes with Cred Bergamasco - $2,500,000
(approximately).
11. Loan for working capital purposes with Deutsche Bank - US $1,060,000
(approximately).
12. Loan with Banco Napoli due 11/6/2001 - $10,100,000 (approximately).
13. Fixed rate loan with Bimer Banca due 6/3/96 - $70,000 (approximately).
14. See item D.2 above.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
SCHEDULE IV
INVESTMENTS
Investment
Person Issuer Type Amount
- ------ ------ ---- ----------
Marvel IV Holdings Inc. Marvel III Holdings Inc. Common 100%
Stock
Marvel III Holdings Inc. Marvel(Parent) Holdings Common 100%
Inc. Stock
Marvel (Parent) Marvel Holdings Inc. Common 100%
Stock
Marvel Entertainment Common 29%
Group, Inc. Stock
Marvel Holdings Inc. Marvel Entertainment Common 50%
Group, Inc. Stock
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
SCHEDULE V
LIENS
Marvel III Holdings Inc.
1. Lien on 1,000 shares of Common Stock of Marvel Parent owned
by Marvel III in favor of NationsBank of Georgia, National
Association, pursuant to Marvel III's Indenture dated
February 15, 1994.
Marvel (Parent) Holdings Inc.
1. Lien on 1,000 shares of Common Stock of Marvel Holdings
owned by Marvel Parent in favor of NationsBank of Georgia,
National Association, pursuant to Marvel Parent's Indenture
dated October 1, 1993.
2. Lien on 9,302,326 shares of Common Stock of Marvel owned by
Marvel Parent in favor of NationsBank of Georgia, National
Association, pursuant to Marvel III Holdings Inc.'s
Indenture dated February 15, 1994.
3. Lien on 20,000,000 shares of Common Stock of Marvel owned
by Marvel Parent in favor of NationsBank of Georgia,
National Association, pursuant to Marvel Parent's Indenture
dated October 1, 1993.
Marvel Holdings Inc.
1. Lien on 48,000,000 shares of Common Stock of Marvel owned
by Marvel Holdings in favor of NationsBank of Georgia,
National Association, pursuant to Marvel Holdings'
Indenture dated April 15, 1993.
Four Star Holdings Corp.
1. Lien on 285,200 shares of Common Stock of Marvel owned by
Four Star in favor of NationsBank of North Carolina,
National Association pursuant to the Letter of Credit
Agreement and Reimbursement Agreement, dated April 20,
1994, between Four Star and NationsBank of North Carolina,
National Association.
<PAGE>
Meridian Sports Holdings Inc.
1. Lien on 573,599 shares of Common Stock of Marvel owned by
Meridian Sports Holdings Inc., a Delaware corporation
("MSH"), in favor of Chemical Bank pursuant to the Meridian
Sports Holdings Pledge Agreement dated as of April 28, 1995
among MSH, Chemical Bank, as agent under each Reimbursement
Agreement and Credit Agreement (as defined therein), and
Chemical Bank, as depositary.
SCHEDULE VI
Defeased Debt Calculations
The Defeased Debt Amount for each Designated Person listed
below for any date of determination shall be calculated as follows for each
such Designated Person:
Borrower: The Defeased Debt Amount for the Borrower shall be an
amount equal to the sum of:
(i) the greater of (A) the "repurchase price"
(assuming a repurchase date 105 days after the date of
determination) of the aggregate amount of all Debt
outstanding under the Marvel III Indenture as of the
repurchase date plus accrued and unpaid interest thereon
through the repurchase date, as determined pursuant to
Section 4.07(a) of the Marvel III Indenture and (B) the
"redemption price" (assuming a redemption date 60 days
after the date of determination) for a "Change of Control"
(as defined in the Marvel III Indenture) of the aggregate
amount of all Debt outstanding under the Marvel III
Indenture as of the redemption date, as determined pursuant
to Section 5 of Exhibit B to the Marvel III Indenture, plus
(ii) the greater of (A) the "repurchase price"
(assuming a repurchase date 105 days after the date of
determination) of the aggregate amount of all Debt
outstanding under the Marvel Parent Indenture as of the
repurchase date, as determined pursuant to Section 4.07(a)
of the Marvel Parent Indenture and (B) the "redemption
price" (assuming a redemption date 60 days after the date
of determination) for a "Change of Control" (as defined in
the Marvel Parent Indenture) of the aggregate amount of all
Debt outstanding under the Marvel Parent Indenture as of
the redemption date, as determined pursuant to Section 5 of
Exhibit A to the Marvel Parent Indenture, plus
(iii) the greater of (A) the "repurchase price"
(assuming a repurchase date 105 days after the date of
determination) of the aggregate amount of all Debt
outstanding under the Marvel Holdings Indenture as of the
repurchase date, as determined pursuant to Section 4.07(a)
of the Marvel Holdings Indenture and (B) the "redemption
price" (assuming a redemption date 60 days after the date
of determination) for a "Change of Control" (as defined in
the Marvel Holdings Indenture) of the aggregate amount of
all Debt outstanding under the Marvel Holdings Indenture as
of the redemption date, as
<PAGE>
2
determined pursuant to Section 5 of Exhibit B to the Marvel
Holdings Indenture.
Coleman
Guarantor: The Defeased Debt Amount for Coleman Guarantor shall be an
amount equal to the sum of:
(i) the greater of (A) the "repurchase price"
(assuming a repurchase date 105 days after the date of
determination) of the aggregate amount of all Debt
outstanding under the Coleman Holdings Indenture as of the
repurchase date plus accrued and unpaid interest thereon
through the repurchase date, as determined pursuant to
Section 4.08(a) of the Coleman Holdings Indenture and (B)
the aggregate amount required as of the date of
determination to be deposited with the Trustee (as defined
in the Coleman Holdings Indenture) to effect the "legal
defeasance option" or the "covenant defeasance option"
under the Coleman Holdings Indenture (assuming a redemption
date of July 15, 1996), as provided for in Sections 8.02(1)
and 8.02(2) of the Coleman Holdings Indenture and Section 5
of Exhibit B to the Coleman Holdings Indenture, plus
(ii) the "Redemption Price" as defined in Section 5 of
Exhibit A to the Coleman Worldwide Indenture (assuming a
redemption date of May 27, 1998) of the aggregate amount of
all Debt outstanding under the Coleman Worldwide Indenture
as of the redemption date.
New World
Guarantor: The Defeased Debt Amount for New World Guarantor shall be
an amount equal to the greater of (A) the "repurchase
price" (assuming a repurchase date 105 days after the date
of determination) of the aggregate amount of all Debt
outstanding under the NWCG Holdings Indenture as of the
repurchase date, as determined pursuant to Section 4.07(a)
of the NWCG Holdings Indenture and (B) the aggregate amount
required as of the date of determination to be deposited
with the Trustee (as defined in the NWCG Holdings
Indenture) to effect the "legal defeasance option" or the
"covenant defeasance option" under the NWCG Holdings
Indenture (assuming a maturity date of June 15, 1999), as
provided for in Sections 8.02(1) and 8.02(2) of the NWCG
Holdings Indenture.
<PAGE>
3
As used in this Schedule VI, the following terms shall have
the following meanings:
"Coleman Worldwide Indenture" means the Indenture, dated as of May
27, 1993, made by Coleman Worldwide in favor of Continental Bank, National
Association as trustee pursuant to which Coleman Worldwide issued its Liquid
Yield Option(TM) Notes due 2013.
"Coleman Holdings Indenture" means the Indenture, dated as of July
15, 1993 made by Coleman Holdings in favor of Continental Bank, National
Association as trustee pursuant to which Coleman Holdings issued its Senior
Secured Discount Notes due 1998 and its Series B Senior Secured Discount Notes
due 1998.
"NWCG Holdings Indenture" means the Indenture, dated as of June 30,
1994 made by NWCG Holdings in favor of Nationsbank of Georgia, National
Association as trustee pursuant to which NWCG Holdings issued its Senior
Secured Discount Notes due 1999 and will issue its Series B Senior Secured
Discount Notes due 1999.
EXHIBIT A
TO THE THIRD
AMENDED AND
RESTATED
CREDIT AGREEMENT
FORM OF REVOLVING CREDIT NOTE
$____________ Dated: June __, 1996
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 Third 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 Third
Amended and Restated Credit Agreement (as defined below) on the dates and in
the amounts specified in the Third Amended and Restated Credit Agreement, but
in no event later than June __, 1999.
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 Third
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 Revolving Credit 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 Revolving Credit Notes
referred to in, and is entitled to the benefits of, the Third Amended and
Restated Credit Agreement dated as of June __, 1996 (such agreement, as it may
hereafter be amended or modified, being the "Third Amended and Restated Credit
Agreement") among the Borrower, the Lender, certain other lenders parties
thereto, the initial issuing bank thereunder and Citibank, N.A., as Agent for
the Lender and such other lenders and the initial issuing bank. The Third
Amended and
<PAGE>
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:
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
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Amount of Principal Paid Unpaid Principal Notation
Date Advance or Prepaid Balance Made by
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<PAGE>
EXHIBIT B
TO THE THIRD AMENDED
AND RESTATED
CREDIT AGREEMENT
FORM OF
ASSIGNMENT AND ACCEPTANCE
Dated _________, 199_
Reference is made to the Third Amended and Restated Credit
Agreement dated as of June __, 1996 (as amended or otherwise modified from
time to time, the "Third Amended and Restated Credit Agreement") among MARVEL
IV HOLDINGS INC., a Delaware corporation (the "Borrower"), the Lender Parties
(as defined in the Third Amended and Restated Credit Agreement) and CITIBANK,
N.A., as Agent for the Lender Parties (the "Agent"). Terms defined in the
Third 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 Third 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 Revolving Credit Note or
Notes held by the Assignor and requests that the Agent exchange such Revolving
Credit Note or Notes for a new Revolving Credit Note or Notes payable to the
<PAGE>
2
order of the Assignee in an amount equal to the Commitment assumed by the
Assignee pursuant hereto or new Revolving Credit 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 Third Amended and Restated Credit Agreement,
respectively, as specified on Annex 1.
3. The Assignee (i) confirms that it has received a copy of the
Third 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 Third 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 Third 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
Third 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 Third 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 Third 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
- ---------------------
1 Include clause (vii) if the Assignee is organized under the laws of a
jurisdiction outside the United States.
<PAGE>
3
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Third Amended and Restated Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and
after the Effective Date, the Agent shall make all payments under the Third
Amended and Restated Credit Agreement and the Revolving Credit 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 Third Amended and Restated Credit Agreement and the
Revolving Credit 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.
<PAGE>
Annex 1
to
Assignment and Acceptance
Dated , 199
As to each Facility in respect of which an interest is being assigned.
Percentage Interest assigned: __________%
Assignee's Commitment: $__________
Aggregate outstanding principal
amount of Advances assigned: $__________
Principal amount of Revolving Credit
Note payable to Assignee: $__________
Principal amount of Revolving Credit
Note payable to Assignor: $__________
Effective Date**: ____________________, 199_
[NAME OF ASSIGNOR, as Assignor]
By:______________________________
Title:
[NAME OF ASSIGNEE], as Assignee
By:______________________________
Title:
Lending Office
(and address for notices):
[Address]
Accepted this ___ day of __________,
199
CITIBANK, N.A., as Agent
By:________________________________
Title:
___________________
** This date should be no earlier than the date of acceptance by the Agent.
<PAGE>
1
EXHIBIT C
TO THE THIRD AMENDED
AND RESTATED
CREDIT AGREEMENT
FORM OF
NOTICE OF BORROWING
CITIBANK, N.A.
as Agent for the Lenders parties
to the Third 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 Third Amended
and Restated Credit Agreement dated as of June __, 1996 (as amended or
otherwise modified form time to time, the "Third Amended and Restated Credit
Agreement"; the terms defined therein being used herein as therein defined),
among the undersigned, certain Lender Parties parties thereto and CITIBANK,
N.A., as Agent for said Lender Parties, and hereby gives you notice,
irrevocably, pursuant to Section 2.02 of the Third Amended and Restated Credit
Agreement that the undersigned hereby requests a Borrowing under the Third
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 Third Amended and Restated Credit
Agreement:
(i) The Business Day of the Proposed Borrowing is ____________, [199_].
(ii) The Type of Advances comprising the Proposed Borrowing is [Base
Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Borrowing is $__________.
(iv) 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,
<PAGE>
2
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 such Proposed Borrowing or from the application of the proceeds
therefrom.
Very truly yours,
MARVEL IV HOLDINGS INC.
By:
-------------------------
Title:
<PAGE>
EXHIBIT G
TO THE THIRD 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 Third Amended and Restated Credit Agreement dated as of June __,
1996 (as amended or otherwise modified from time to time, the "Third 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 Lender Parties thereunder, the Initial Issuing
Bank, the banks and financial institutions and other institutional lenders
party thereto (the "Lender Parties"). 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 Third 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 Third Amended and Restated Credit
<PAGE>
4
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 Third 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 1999 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:
<PAGE>
EXECUTION COPY
THIRD AMENDED AND RESTATED BORROWER SECURITY AGREEMENT
Dated as of June 3, 1996
from
MARVEL IV HOLDINGS INC.,
to
CITIBANK, N.A.,
as Agent
--------
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
1. Grant of Security................................................... 2
2. Security for Obligations............................................ 4
3. Borrower Remains Liable............................................. 4
4. Delivery of Security Collateral and Account Collateral.............. 5
5. Maintaining the Borrower Collateral Account and the L/C Cash
Collateral Account................................................ 5
6. Investing of Amounts in the Borrower Collateral Account and the
L/C Cash Collateral Account....................................... 5
7. Release of Amounts.................................................. 6
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; Additional
Pledged Debt...................................................... 11
15. Agent Appointed Attorney-in-Fact.................................... 11
16. Agent May Perform................................................... 12
17. The Agent's Duties.................................................. 12
18. Remedies............................................................ 12
<PAGE>
ii
SECTION PAGE
19. Indemnity and Expenses.............................................. 14
20. Amendments; Waivers; Etc............................................ 14
21. Addresses for Notices............................................... 14
22. Continuing Security Interest; Assignments Under the Credit
Agreement......................................................... 15
23. Release and Termination............................................. 15
24. Governing Law; Terms................................................ 15
25. Execution in Counterparts; Delivery by Telecopier................... 16
Schedule I - Pledged Shares and Pledged Debt
<PAGE>
THIRD AMENDED AND RESTATED SECURITY AGREEMENT
THIRD AMENDED AND RESTATED SECURITY AGREEMENT dated as of
June 3, 1996 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 Credit Agreement (as hereinafter defined)
and the intial issuing bank (the "Issuing Bank"; together with the Lenders,
the "Lender Parties").
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 "Original Credit Agreement"), with
financial institutions and other institutional lenders party thereto ( the
"Original Lenders") and Citibank, as agent for the Original Lenders. In
consideration of the premises and in order to induce the Original Lenders to
make advances under the Original Credit Agreement, the Borrower entered into a
Security Agreement dated July 27, 1994 (the "Original Security Agreement") in
favor of Citibank, as agent for the Original Lenders.
(2) Subsequently, the Borrower entered into an Amended and
Restated Credit Agreement dated as of June 29, 1995, as amended by the First
Amendment dated as of October 27, 1995 (as so amended, being the "Second
Credit Agreement"), with the financial institutions and other institutional
lenders party thereto (the "Second Lenders") and Citibank, as agent for the
Second Lenders. In consideration of the premises and in order to induce the
Second Lenders to make advances under the Second Credit Agreement, the
Borrower entered into an Amended and Restated Security Agreement dated as of
June 29, 1995 (the "Second Security Agreement") in favor of Citibank as agent
for the Second Lenders.
(3) Subsequently, the Borrower entered into a Second Amended
and Restated Credit Agreement dated as of December 15, 1995, as amended by the
First Amendment dated as of January 9, 1996, the Second Amendment dated as of
January 24, 1996 and the Third Amendment dated as of April 9, 1996 (as so
amended, being 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 Borrower entered into a Second
Amended and Restated Security Agreement dated as of December 15, 1995, as
heretofore amended (as so
<PAGE>
2
amended, the "Existing Security Agreement") in favor of Citibank as agent for
the Existing Lenders.
(4) The Borrower has entered into a Third Amended and
Restated Credit Agreement dated as of June 3, 1996 (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 the Lender Parties and the Agent
which amends and restates the Existing Credit Agreement in its entirety.
(5) 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") and the indebtedness held by the Borrower
described in Schedule I and issued by Coleman Worldwide (the "Pledged Debt").
(6) 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.
(7) The Borrower has opened a non-interest bearing cash
collateral account (the "L/C Cash Collateral Account") with Citibank at its
office at 399 Park Avenue, New York, New York 10043, Account No. 40701231, in
the name of the Borrower but under the sole control and dominion of the Agent
and subject to the terms of this Agreement.
(8) It is a condition precedent to the effectiveness of the
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 Lender Parties to enter into the Credit Agreement, the
Borrower hereby agrees with the Agent for its benefit and the ratable benefit
of the Lender Parties 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 Lender
Parties, and hereby grants to the Agent for its benefit and the ratable
benefit of the Lender Parties 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"):
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3
(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) the Pledged Debt and the instruments
evidencing the Pledged Debt, and all interest, 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 Debt;
(iii) 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;
and
(iv) all additional indebtedness of Coleman
Worldwide from time to time held by and owed to the Borrower
and the instruments evidencing such indebtedness, and all
interest, 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
indebtedness;
(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) the L/C Cash Collateral Account, all funds
held therein and all certificates and instruments, if any,
from time to time representing or evidencing the L/C Cash
Collateral Account;
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4
(iii) 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;
(iv) 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
(v) 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 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 Lender Parties 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 Party 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
Party be obligated to perform any of the obligations or duties of the
<PAGE>
5
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 and
the L/C Cash 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 and the L/C Cash Collateral Account.
(b) It shall be a term and condition of each of the Borrower
Collateral Account and the L/C Cash Collateral Account,
notwithstanding any term or condition to the contrary in any other
agreement relating to the Borrower Collateral Account or the L/C Cash
Collateral Account, as the case may be, 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 or the L/C Cash Collateral Account, as the case
may be.
The Borrower Collateral Account and the L/C Cash 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 and the L/C Cash 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 and
the L/C Cash 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
<PAGE>
6
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 or the L/C Cash Collateral Account, as
the case may be.
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 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) At any time that a reduction of the Revolving Credit
Facility is required pursuant to Section 2.05(b)(i) of the 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(a) above
(including interest on Collateral Investments) and shall apply such amounts to
make the reduction required pursuant to the provisions of Section 2.05(b)(i)
of the 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 Credit Agreement and Section 8(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 Credit Agreement and Section 8(a) of the Borrower Parent
Guaranty. The Borrower has no trade names.
<PAGE>
7
(c) The Pledged Shares have been duly authorized and validly
issued and are fully paid and non-assessable. The Pledged Debt has
been duly authorized, authenticated or issued and delivered, is the
legal, valid and binding obligation of Coleman Worldwide and is not
in default. 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 Party, 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 April 17, 1996 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 Original
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 8(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
<PAGE>
8
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:
<PAGE>
9
(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.
<PAGE>
10
(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;
<PAGE>
11
(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;
Additional Pledged Debt. (a) Except to the extent permitted by the 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 Credit Agreement and Section 8(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.
(c) The Borrower shall pledge hereunder, immediately upon
its acquisition thereof, any and all additional indebtedness of Coleman
Worldwide from time to time held by and owed to the Borrower.
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
<PAGE>
12
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
Party 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
<PAGE>
13
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 Lender Parties 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).
<PAGE>
14
(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 Lender Parties hereunder
or (iv) the failure by the Borrower to perform or observe any of the
provisions hereof.
Section 20. Amendments; Waivers; Etc. (a) In the event that
the Agent at any time receives additional instruments representing
indebtedness of Coleman Worldwide held by and owed to the Borrower, Schedule I
hereto shall be deemed to be automatically amended on the date of such receipt
to reflect any changes in the indebtedness of Coleman Worldwide held by and
owed to the Borrower and pledged hereunder.
(b) 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 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.
<PAGE>
15
Section 22. 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 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 Lender Parties and their
respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender Party 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 Party herein or otherwise,
in each case as provided in Section 8.07 of the 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 and Section 2.06 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 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
<PAGE>
16
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 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: Glenn Dickes
-------------------------
Title:
<PAGE>
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>
PLEDGED DEBT
<PAGE>
EXECUTION COPY
THIRD AMENDED AND RESTATED MAFCO SECURITY AGREEMENT
Dated as of June 3, 1996
from
MAFCO HOLDINGS INC.
to
CITIBANK, N.A.
as Agent
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
1. Grant of Security........................................... 3
2. Security for Obligations.................................... 4
3. Mafco Remains Liable........................................ 4
4. Delivery of Security Collateral and Account Collateral...... 5
5. Maintaining the Mafco Collateral Account.................... 5
6. Investing of Amounts in the Mafco Collateral Account........ 5
7. Release of Amounts......................................... 6
8. Representations and Warranties............................. 8
9. Further Assurances......................................... 10
10. Place of Perfection; Records............................... 10
11. Voting Rights; Dividends; Etc.............................. 11
12. As to the Assigned Agreements.............................. 12
13. Payments Under the Assigned Agreements..................... 13
14. Transfers and Other Liens; Additional Shares............... 13
15. Agent Appointed Attorney-in-Fact........................... 13
16. Agent May Perform.......................................... 14
17. The Agent's Duties......................................... 14
18. Remedies................................................... 14
19. Indemnity and Expenses..................................... 16
<PAGE>
ii
20. Security Interest Absolute................................. 16
21. Amendments; Waivers; Etc................................... 17
22. Addresses for Notices...................................... 17
23. Continuing Security Interest; Assignments Under the
Credit Agreement ...........................................17
24. Release and Termination.................................... 18
25. Governing Law; Terms....................................... 18
26. Execution in Counterparts; Delivery by Telecopier.......... 18
Schedule I - Pledged Shares
Schedule II - Assigned Agreements
Exhibit A-Form of Consent and Agreement
<PAGE>
THIRD AMENDED AND RESTATED SECURITY AGREEMENT
THIRD AMENDED AND RESTATED SECURITY AGREEMENT dated as of June 3,
1996 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 Credit Agreement (as hereinafter defined) and the
initial issuing bank (the "Issuing Bank"; together with the Lenders, the
"Lender Parties") party to the Credit Agreement.
PRELIMINARY STATEMENTS.
(1) Marvel IV Holdings Inc., a Delaware corporation (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 (as so amended, the
"Original Credit Agreement"), with the financial institutions and other
institutional lenders party thereto (the "Original Lenders") and Citibank, as
agent for the Original Lenders. In consideration of the premises and in order
to induce the Original Lenders to make advances under the Original Credit
Agreement, Mafco entered into a Guaranty dated July 27, 1994 (the "Original
Mafco Guaranty") in favor of the Original Lenders and Citibank, as agent for
the Original Lenders, and a Security Agreement dated July 27, 1994 in favor of
Citibank, as agent for the Existing Lenders.
(2) Subsequently, the Borrower entered into an Amended and Restated
Credit Agreement dated as of June 29, 1995, as amended by the First Amendment
dated as of October 27, 1995 (said Agreement, as so amended, being the "Second
Credit Agreement"), with the financial institutions and other institutional
lenders party thereto (the "Second Lenders") and Citibank, as agent for the
Second Lenders. In consideration of the premises and in order to induce the
Second Lenders to make advances under the Second Credit Agreement, the
Guarantor entered into an Amended and Restated Guaranty dated as of June 29,
1995, as heretofore amended (as so amended, the "Second Mafco Guaranty"), in
favor of the Second Lenders and Citibank, as agent for the Second Lenders, and
an Amended and Restated Security Agreement dated as of June 29, 1995 in favor
of Citibank, as agent for the Second Lenders.
(3) Subsequently, the Borrower entered into a Second Amended and
Restated Credit Agreement dated as of December 15, 1995, as amended by the
First Amendment dated as of January 9, 1996, the Second Amendment dated as of
January 24, 1996 and the Third Amendment dated as of April 9, 1996 (said
Agreement, as so amended, being 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
<PAGE>
2
make advances under the Existing Credit Agreement, the Guarantor entered into
a Second Amended and Restated Guaranty dated as of December 15, 1995, as
heretofore amended (as so amended, the "Existing Mafco Guaranty"), in favor of
the Existing Lenders and Citibank, as agent for the Existing Lenders, and a
Second Amended and Restated Security Agreement dated as of December 15, 1995
in favor of Citibank, as agent for the Existing Lenders.
(4) The Borrower has entered into a Third Amended and Restated
Credit Agreement dated as of June 3, 1996 (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 the Lender Parties and the Agent which
amends and restates the Existing Credit Agreement in its entirety.
(5) Mafco has entered into a Third Amended and Restated Guaranty
dated as of June 3, 1996 (said Guaranty, as it may hereafter be amended or
otherwise modified from time to time, being the "Mafco Guaranty") in favor of
the Lender Parties and Citibank, as Agent for the Lender Parties, which amends
and restates the Existing Mafco Guaranty in its entirety.
(6) Mafco 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").
(7) 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.
(8) 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.
(9) It is a condition precedent to the effectiveness of the 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 promises and in order to
induce the Lender Parties to enter into the Credit Agreement, Mafco hereby
agrees with the Agent for its benefit and the ratable benefit of the Lender
Parties as follows:
<PAGE>
3
Section 1. Grant of Security. Mafco hereby assigns and pledges to
the Agent for its benefit and the ratable benefit of the Lender Parties, and
hereby grants to the Agent for its benefit and the ratable benefit of the
Lender Parties 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 Issuer 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, the FN Holdings Debt Document, the FN Holdings New Debt
Document and the FN Parent 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;
<PAGE>
4
(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 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 Lender Parties 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 Party 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 Party 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.
<PAGE>
5
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.
<PAGE>
6
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) and
Section 7(c) 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)(i) of the 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)(i) of the Credit
Agreement.
(c) In respect of any deposit in the Mafco Collateral Account
constituting, or related to, Net Cash Proceeds received by Mafco and its
Subsidiaries from and after the Effective Date from Asset Sales, 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 of such deposit to the extent,
and only to the extent, that (i) no Default shall have occurred and be
continuing, (ii) no reduction of the Revolving Credit Facility is required
pursuant to Section 2.05(b)(i) of the Credit Agreement out of amounts
deposited in the Mafco Collateral Account and (iii) Mafco delivers a
certificate to the Agent certifying that such amount so released either (x)
constitutes an amount up to or equal to the first $100 million of Net Cash
Proceeds received by Mafco and its Subsidiaries from and after the Effective
Date from Asset Sales or constitutes an amount up to or equal to 10% of Net
Cash Proceeds received by Mafco and its Subsidiaries from and after the
Effective Date from Asset Sales in excess of the first $100 million of such
Net Cash Proceeds or (y) shall be used to prepay or repay any outstanding Debt
of any A Company or to prepay or repay the Advances, together with, in the
case of clause (y), a schedule in reasonable detail identifying the
outstanding Debt to be prepaid or repaid, as the case may be, and the amounts
of such prepayment or repayment, as the case may be. If the conditions set
forth in clauses (i), (ii) and (iii) above are not satisfied, any amounts on
deposit in the Mafco Collateral Account constituting, or related to, Net Cash
Proceeds received by Mafco and its Subsidiaries from and after the Effective
Date from Asset Sales shall remain on deposit in the Mafco Collateral Account
and shall not be released pursuant to the provisions of Section 7(a) above
until such time as the conditions set forth in clauses (i), (ii) and (iii)
above are satisfied.
(d) 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:
(w) the Supermajority Lenders and Mafco shall have agreed to accept
the substitution, pursuant to the provisions of Section 7(o)(i) of
the Mafco
<PAGE>
7
Guaranty, of other identified collateral for the cash collateral
in the Second Mafco Collateral Account,
(x) the ratio of the sum of the Net Residual Value at such time plus
the fair market value of the Coleman Worldwide Lyons pledged in
favor of the Lender Parties pursuant to the terms of the Borrower
Security Agreement or the Coleman Pledge Agreement, as the case
may be, plus the fair market value of the shares of common stock
of Coleman that are released from the escrow created under the
Escrow Agreement (as defined in the Mafco Guaranty) and are owned
by Coleman Worldwide and pledged in favor of the Lender Parties
pursuant to the terms of the Coleman Worldwide Pledge Agreement
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 7(o)(i) of
the Mafco Guaranty to the sum of the aggregate principal amount of
all Advances then outstanding plus the aggregate Available Amount
of all Letters of Credit then outstanding less the aggregate
amount then on deposit in the L/C Cash Collateral Account is equal
to or exceeds 3 to 1, or
(y) in respect of a Clause (ii) Person (as defined in the Mafco
Guaranty), the sum of (A) the amount on deposit in the Second
Mafco Collateral Account in respect of such Clause (ii) Person,
(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 7(o)(ii)(y) of the Mafco
Guaranty in respect of such Clause (ii) Person, (C) the Net Equity
Value on such date of such Clause (ii) Person and (D) at the
option of Mafco and subject to the provisions of Section 7(o)(ii)
of the Mafco Guaranty, the Net Equity Value of the Person listed
in Section 7(o)(ii) of the Mafco Guaranty which is not satisfying
the minimum amount requirements in Section 7(o)(ii) of the Mafco
Guaranty is equal to or exceeds $100,000,000,
(z) in respect of the requirements set forth in Section 7(o)(iii) of
the Mafco Guaranty, the sum of (A) the amount on deposit in the
Second Mafco Collateral Account in respect of such Section
7(o)(iii), (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 7(o)(iii)(y) of the
Mafco Guaranty, (C) the Net Equity Value on such date of C&F
Guarantor and (D) the fair market
<PAGE>
8
value of the Coleman Worldwide Lyons pledged in favor of the
Lender Parties pursuant to the terms of the Borrower Security
Agreement or the Coleman Pledge Agreement, as the case may be,
plus the fair market value of the shares of common stock of
Coleman that are released from the escrow created under the Escrow
Agreement (as defined in the Mafco Guaranty) and are owned by
Coleman Worldwide and pledged in favor of the Lender Parties
pursuant to the terms of the Coleman Worldwide Pledge Agreement is
equal to or exceeds the aggregate amount of the Commitments of the
Lenders at such time.
then the Agent shall promptly pay and release (in the case of clause (w),
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 (w), the amount on deposit,
(2) in the case of clause (x), an amount such that after the release
and payment of such amount, the ratio referred to in such clause
(x) is equal to 3 to 1,
(3) in the case of clause (y), the excess amount referred to in such
(4) in the case of clause (z), the excess amount referred to in such
clause (y), and clause (z).
(d) At any time that an Event of Default set forth in Section
6.01(a) of the Credit Agreement shall have occurred and be continuing, the
Agent shall apply any amounts on deposit in the Second Mafco Collateral
Account to the reduction of the Revolving Credit Facility in accordance with
the provisions of Section 2.05(b)(v) of the 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
2.06(a) of the 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.
<PAGE>
9
(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 Issuer 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 Original 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
<PAGE>
10
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
<PAGE>
11
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
<PAGE>
12
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;
<PAGE>
13
(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 the 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 the 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:
<PAGE>
14
(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
Party 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
<PAGE>
15
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 under the Marvel III
Indenture, the Marvel Holdings Indenture, the Coleman Worldwide
Indenture, the FN Holdings Debt Document, the New FN Holdings Debt
Document and the FN Parent 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.
<PAGE>
16
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 Lender Parties 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;
<PAGE>
17
(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 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
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 Party 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 Party herein or otherwise, in each case as provided in
Section 8.07 of the Credit Agreement.
<PAGE>
18
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 and Section
2.06 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 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 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.
<PAGE>
19
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 /s/ Glenn Dickes
-------------------------------------------
Title:
Address: 38 East 63rd Street
New York, New York 10021
<PAGE>
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 Common $1.00 2 1,000 100%
</TABLE>
<PAGE>
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.
<PAGE>
EXHIBIT A
FORM OF CONSENT AND AGREEMENT
The undersigned hereby acknowledges notice of, and consents to the
terms and provisions of, the Third Amended and Restated Security Agreement
dated as of June __, 1996 (the "Third 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 Lender Parties 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 Party
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 Lender
Parties 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.
<PAGE>
2
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 GRANTOR]
By:
---------------------------------
Title:
<PAGE>
EXECUTION COPY
AMENDED AND RESTATED PLEDGE AGREEMENT
Dated June 3, 1996
From
COLEMAN (PARENT) HOLDINGS INC.
as Pledgor
to
CITIBANK, N.A.
as Agent
<PAGE>
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...................................... 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; Additional
Pledged Debt ............................................... 6
9. Agent Appointed Attorney-in-Fact............................ 7
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................................................ 12
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ii
SECTION PAGE
20. Governing Law; Submission to Jurisdiction; Waiver of
Jury Trial ................................................ 12
21. Execution in Counterparts.................................. 13
Schedule I - Pledged Shares and Pledged Debt
<PAGE>
AMENDED AND RESTATED PLEDGE AGREEMENT
AMENDED AND RESTATED PLEDGE AGREEMENT dated as of June 3, 1996 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) and the
initial issuing bank (the "Issuing Bank"; together with the Lenders, the
"Lender Parties").
PRELIMINARY STATEMENTS.
(1) Marvel IV Holdings Inc., a Delaware corporation (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 (as so amended, the
"Original Credit Agreement"), with financial institutions and other
institutional lenders party thereto (the "Original Lenders") and Citibank, as
agent for the Original Lenders. In consideration of the premises and in order
to induce the Original Lenders to make advances under the Original Credit
Agreement, the Pledgor entered into a Pledge Agreement dated July 27, 1994
(the "Original Pledge Agreement"), in favor of Citibank, as agent for the
Original Lenders.
(2) Subsequently, the Borrower entered into an Amended and Restated
Credit Agreement dated as of June 29, 1995, as amended by the First Amendment
dated as of October 27, 1995 (as so amended, being the "Second Credit
Agreement"), with the financial institutions and other institutional lenders
party thereto (the "Second Lenders") and Citibank, as agent for the Second
Lenders.
(3) Subsequently, the Borrower entered into a Second Amended and
Restated Credit Agreement dated as of December 15, 1995, as amended by the
First Amendment dated as of January 9, 1996, the Second Amendment dated as of
January 24, 1996 and the Third Amendment dated as of April 9, 1996 (as so
amended, being 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.
(4) The Borrower has entered into a Third Amendment and Restated
Credit Agreement dated as of June 3, 1996 (as it may hereinafter be amended or
otherwise modified from time to time, the "Credit Agreement"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined) with the Lender Parties and the Agent which amends and restates the
Existing Credit Agreement in its entirety.
(5) 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 and the indebtedness held by the Pledgor described in Schedule I and
issued by Coleman Worldwide (the "Pledged Debt").
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2
(6) It is a condition precedent to the effectiveness of 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 Lender Parties to enter into the Credit Agreement, the Pledgor
hereby agrees to amend and restate the Original Pledge Agreement as follows:
Section 1. Grant of Security. The Pledgor hereby pledges to the
Agent for its benefit and the ratable benefit of the Lender Parties, and
hereby grants to the Agent for its benefit and the ratable benefit of the
Lender Parties 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) the Pledged Debt and the instruments evidencing the Pledged
Debt, and all interest, 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 Debt;
(c) 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;
(d) all additional indebtedness of Coleman Worldwide from time to
time held by and owed to the Pledgor and the instruments evidencing such
indebtedness, and all interest, 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 indebtedness; and
(e) all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of the
types described in clauses (a) through (d) 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,
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3
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 Lender Parties 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. The Pledged Debt has been duly
authorized, authenticated or issued and delivered, is the legal, valid
and binding obligation of Coleman Worldwide and is not in default.
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4
(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
<PAGE>
5
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,
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6
(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; Additional
Pledged Debt. (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 the 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 such
issuer of the Pledged Shares.
(c) The Pledgor shall pledge hereunder, immediately upon its
acquisition thereof, any and all additional indebtedness of Coleman Worldwide
from time to time held by and owed to the Pledgor.
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7
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 Party 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
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8
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 Lender
Parties 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
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9
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 Lender Parties 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
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10
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 Lender Parties 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
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11
(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. (a) In the event that the
Agent at any time receives additional instruments representing indebtedness of
Coleman Worldwide held by and owed to the Pledgor, Schedule I hereto shall be
deemed to be automatically amended on the date of such receipt to reflect any
changes in the indebtedness of Coleman Worldwide held by and owed to the
Pledgor and pledged hereunder.
(b) 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 Lender Parties and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing
clause (c), any Lender Party may assign or otherwise transfer all or any
portion of its rights and obligations under the Credit Agreement (including,
without limitation, all or
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12
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 Party
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.
<PAGE>
13
(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 PARTY 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.
<PAGE>
14
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 /s/ Glenn Dickes
---------------------------------------
Title:
<PAGE>
SCHEDULE I
PLEDGED SHARES
<TABLE>
<CAPTION>
PERCENTAGE
OF
STOCK CERTIFICATE NUMBER OUTSTANDING
STOCK ISSUER CLASS OF STOCKPAR VALUE NO(S) OF SHARES SHARES
<S> <C> <C> <C> <C>
Coleman Holdings Inc. Common $1.00 2 1,000 100%
</TABLE>
PLEDGE DEBT
<PAGE>
EXECUTION COPY
COLEMAN WORLDWIDE NON-RECOURSE GUARANTY
AND PLEDGE AGREEMENT
Dated as of June 3, 1996
From
COLEMAN WORLDWIDE CORPORATION
as Pledgor
and
Nationsbank of Georgia,
National Association
as Voting Trustee
to
CITIBANK, N.A.
as Agent
<PAGE>
TABLE OF CONTENTS
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.......................................................... 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....................................................... 12
<PAGE>
20. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial... 12
21. Execution in Counterparts......................................... 13
Schedule I - Pledged Shares
<PAGE>
NON-RECOURSE GUARANTY
AND PLEDGE AGREEMENT
NON-RECOURSE GUARANTY AND PLEDGE AGREEMENT dated as of June 3, 1996
made by COLEMAN WORLDWIDE CORPORATION, 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) and the
initial issuing bank (the "Issuing Bank"; together with the Lenders, the "Lender
Parties") .
PRELIMINARY STATEMENTS.
(1) Marvel IV Holdings Inc., a Delaware corporation (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 (as so amended, the
"Original Credit Agreement"), with financial institutions and other
institutional Lenders party thereto (the "Original Lenders") and Citibank, as
agent for the Original Lenders.
(2) Subsequently, the Borrower entered into an Amended and Restated
Credit Agreement dated as of June 29, 1995, as amended by the First Amendment
dated as of October 27, 1995 (as so amended, being the "Second Credit
Agreement"), with the financial institutions and other institutional Lenders
party thereto (the "Second Lenders") and Citibank, as agent for the Second
Lenders.
(3) Subsequently, the Borrower entered into a Second Amended and
Restated Credit Agreement dated as of December 15, 1995, as amended by the
First Amendment dated as of January 9, 1996, the Second Amendment dated as of
January 24, 1996 and the Third Amendment dated as of April 9, 1996 (as so
amended, being 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.
(4) The Borrower has entered into a Third Amendment and Restated
Credit Agreement dated as of June 3, 1996 (as it may hereinafter be amended or
otherwise modified form time to time, the "Credit Agreement"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined) with the Lender Parties and the Agent which amends and restates the
Existing Credit Agreement in its entirety.
(5) The Pledgor is the owner of the shares of stock listed in
Schedule I hereto which, upon their release from the Escrow Agreement (as
defined in the Mafco Guaranty) after the date hereof, shall be pledged
pursuant to the terms of this Agreement (the "Pledged Shares").
<PAGE>
2
(6) It is a condition precedent to the effectiveness of 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 Lender Parties to enter into the Credit Agreement, the Pledgor
hereby agrees with the Agent for its benefit and the ratable benefit of the
Lender Parties 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 Lender Parties, and
hereby grants to the Agent for its benefit and the ratable benefit of the
Lender Parties 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 Pledged Shares from time to time released from
the Escrow Agreement 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) The
Pledgor, 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 Lender Parties in
enforcing any rights under this Agreement; provided, however, that the
Pledgor'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
<PAGE>
3
guaranty set forth in this Section 2 otherwise is a non-recourse obligation of
the Pledgor and that the Agent's right to recover against the Pledgor
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 Lender Parties 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 Pledgor under this Agreement in respect of
the Guaranteed Obligations shall not exceed the greater of (i) 95% of the
Adjusted Net Assets of the Pledgor on the date hereof and (ii) 95% of the
Adjusted Net Assets of the Pledgor on the date of any exercise of remedies by
the Agent hereunder. "Adjusted Net Assets" of the Pledgor at any date means
the lesser of (x) the amount by which the fair value of the property of the
Pledgor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities, but excluding any liabilities or
obligations under this Agreement, of the Pledgor at such date and (y) the
amount by which the present fair salable value of the assets of the Pledgor at
such date exceeds the amount that will be required to pay the probable
liability of the Pledgor 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 Pled gor 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
<PAGE>
4
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 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
<PAGE>
5
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.
<PAGE>
6
(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 Loan Documents (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 the
release of any and all additional shares from the Escrow Agreement, such
shares of stock of the issuer of the Pledged Shares.
<PAGE>
7
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 Party 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
<PAGE>
8
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 Lender
Parties 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
<PAGE>
9
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 Lender Parties 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
<PAGE>
10
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 Lender Parties 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
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
<PAGE>
11
(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. (a) In the event that the
Agent at any time receives additional Pledged Shares, Schedule I hereto shall
be deemed to be automatically amended on the date of such receipt to reflect
any changes in the shares of common stock of Coleman held by the Pledgor and
pledged hereunder.
(b) 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
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 and its 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 Lender Parties and their
respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender Party 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
<PAGE>
12
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender Party 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 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 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.
<PAGE>
13
(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 PARTY 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.
<PAGE>
14
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 WORLDWIDE
38 East 63rd Street CORPORATION
New York, New York 10021
By /s/ Glenn Dickes
-----------------
Title:
<PAGE>
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>
</TABLE>
<PAGE>
SECOND AMENDED AND RESTATED
BORROWER PARENT GUARANTY
Dated as of June 3, 1996
From
MARVEL V HOLDINGS INC.
as Guarantor
in favor of
THE LENDER PARTIES PARTY TO THE CREDIT AGREEMENT
REFERRED TO HEREIN
and
CITIBANK, N.A.
as Agent
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
1. Guaranty.................................................... 2
2. Guaranty Absolute........................................... 2
3. Waivers..................................................... 3
4. Subrogation................................................. 3
5. Payments Free and Clear of Taxes, Etc....................... 4
6. Representations and Warranties.............................. 6
7. Affirmative Covenants....................................... 9
(a) Compliance with Laws, Etc............................ 9
(b) Compliance with Environmental Laws................... 10
(c) Maintenance of Insurance............................. 10
(d) Preservation of Corporate Existence, Etc............. 10
(e) Visitation Rights.................................... 10
(f) Keeping of Books..................................... 11
(g) Maintenance of Properties, Etc....................... 11
(h) Performance of Related Documents..................... 11
(i) Transactions with Affiliates......................... 11
(j) Mafco Tax Group...................................... 11
(k) Asset Sales.......................................... 12
8. Negative Covenants.......................................... 12
(a) Liens, Etc........................................... 12
(b) Lease Obligations.................................... 12
(c) Mergers, Etc......................................... 12
(d) Sales, Etc. of Assets................................ 13
(e) Dividends, Repurchases, Etc.......................... 13
(f) Investments.......................................... 13
(g) Change in Nature of Business......................... 13
(h) Accounting Changes................................... 14
(i) Debt................................................. 14
(j) Charter Amendments................................... 14
<PAGE>
ii
(k) Prepayments, Etc. of Debt............................ 14
(l) Amendment, Etc. of Related Documents................. 14
(m) Negative Pledge...................................... 15
(n) Partnerships......................................... 15
(o) Capital Expenditures................................. 15
(p) Issuance of Capital Stock............................ 15
(q) Payment Restrictions................................. 15
9. Amendments, Etc............................................. 15
10. Notices, Etc............................................... 16
11. No Waiver; Remedies........................................ 16
12. Right of Set-off........................................... 16
13. Indemnification............................................ 16
14. Continuing Guaranty; Assignments Under the Credit Agreement 17
15. Governing Law; Submission to Jurisdiction; Waiver of
Jury Trial ................................................ 17
16. Execution in Counterparts; Delivery by Telecopier.......... 18
Schedule I Debt
Schedule II - Investments
<PAGE>
SECOND AMENDED AND RESTATED GUARANTY
SECOND AMENDED AND RESTATED GUARANTY dated as of June 3, 1996 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 the initial issuing bank (the "Issuing Bank"; together with the
Lenders, the "Lender Parties") and Citibank, N.A. ("Citibank"), as agent (the
"Agent") for the Lender Parties.
PRELIMINARY STATEMENTS. (1) Marvel IV Holdings Inc., a Delaware
corporation (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 (as so
amended, the "Original Credit Agreement"), with financial institutions and
other institutional lenders party thereto (the "Original Lenders") and
Citibank, as agent for the Original Lenders. In consideration of the premises
and in order to induce the Original Lenders to make advances under the
Original Credit Agreement, the Guarantor entered into a Guaranty dated July
27, 1994 (the "Original Guaranty") in favor of the Original Lenders and
Citibank, as agent for the Original Lenders.
(2) Subsequently, the Borrower entered into an Amended and Restated
Credit Agreement dated as of June 29, 1995, as amended by the First Amendment
dated as of October 27, 1995 (said Agreement, as so amended, being the "Second
Credit Agreement"), with the financial institutions and other institutional
lenders party thereto (the "Second Lenders") and Citibank, as agent for the
Second Lenders.
(3) Subsequently, the Borrower entered into a Second Amended and
Restated Credit Agreement dated as of December 15, 1995, as amended by the
First Amendment dated as of January 9, 1996, the Second Amendment dated as of
January 24, 1996 and the Third Amendment dated as of April 9, 1996 (said
Agreement, as so amended, being 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.
(4) The Borrower has entered into a Third Amended and Restated
Credit Agreement dated as of June 3, 1996 (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 the Lender Parties and the Agent which
amends and restates the Existing Credit Agreement in its entirety.
(5) It is a condition precedent to the effectiveness of 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.
<PAGE>
2
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lender Parties to enter into 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 Lender Parties 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 Lender Parties 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 Lender Parties 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
<PAGE>
3
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 Party) 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 Party 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 Party 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 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. Subrogation. The Guarantor will not exercise any 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 Party against the Borrower or
<PAGE>
4
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, unless and until all of the Payment Obligations in
respect of the Guaranteed Obligations and this Guaranty shall have been Fully
Satisfied. If any amount shall be paid to the Guarantor in violation of the
preceding sentence at any time prior to the later of the date on which the
Payment Obligations in respect of the Guaranteed Obligations and this Guaranty
have been Fully Satisfied and the Termination Date, such amount shall be held
in trust for the benefit of the Agent and the Lender Parties and shall
forthwith be paid to the Agent to be credited and applied to the Guaranteed
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. If (i) the Guarantor shall make
payment to the Agent or any other Lender Party of all or any part of the
Guaranteed Obligations, (ii) all of the Payment Obligations in respect of the
Guaranteed Obligations and this Guaranty shall be Fully Satisfied and (iii)
the Termination Date shall have occurred, the Agent and the Lender Parties
will, at the Guarantor's request and expense, execute and deliver to the
Guarantor appropriate documents, without recourse and without representation
or warranty, necessary to evidence the transfer by subrogation to the
Guarantor of an interest in the Guaranteed Obligations resulting from such
payment by the Guarantor.
Section 5. Payments Free and Clear of Taxes, Etc. (a) Any and all
payments made by the Guarantor hereunder shall be made, in accordance with
Section 2.13 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 Party 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 Party 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 Party shall designate
a different Lending Office if, in the judgment of such Lender Party, 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 Party or the Agent and would not, in the judgment of such Lender
Party, be otherwise disadvantageous to such Lender Party.
(b) In addition, the Guarantor agrees to pay any present or future
Other Taxes.
(c) The Guarantor will indemnify each Lender Party and the Agent
for the full amount of Taxes or Other Taxes (including, without limitation,
any Taxes or Other
<PAGE>
5
Taxes imposed by any jurisdiction on amounts payable under this Section) paid
by such Lender Party 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 Party 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 Party
or the Agent shall refund, to the extent of any refund thereof made to such
Lender Party 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 Party 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 Party or
the Agent to the effect that such Taxes or Other Taxes were wrongfully or
illegally imposed and (ii) such Lender Party 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 Party 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 Party 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 Party 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 Party 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 Party 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
Party has failed to provide the Guarantor with the appropriate forms described
in subsection (e) above
<PAGE>
6
(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 Party 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 Party 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 Party shall reasonably request to assist the Lender Party 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 Party 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 5 shall survive the payment in full of the Guaranteed
Obligations and all other amounts payable under this Guaranty.
(h) If a Lender Party 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 requiring the Guarantor to make a
greater payment than if such change had not been made, such Lender Party shall
not be entitled to receive any greater payment under this Section than such
Lender Party would have been entitled to receive had it not changed its
Applicable Lending Office.
Section 6. 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 Original
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
<PAGE>
7
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 Party 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 Original 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. 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
<PAGE>
8
adverse conditions upon 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 under the Original Credit Agreement,
the Second Credit Agreement, the Existing Credit Agreement or the Credit
Agreement 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 Original Credit Agreement, the Second Credit
Agreement, the Existing Credit Agreement or the Credit Agreement 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 1994 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 or made available
to the Lender Parties, 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.
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9
(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 7. Affirmative Covenants. The Guarantor covenants and
agrees that, so long as any part of the Advances shall remain unpaid or any
Lender Party 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
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10
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 Lender Parties.
(e) Visitation Rights. At any reasonable time and from time to
time, upon reasonable prior notice permit the Agent or any of the Lender
Parties 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
<PAGE>
11
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 7(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 7(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 Code) of which Mafco is the common parent, other than as a result of an
Asset Sale pursuant to which all of the common stock held by Mafco and its
Subsidiaries in any such Person is sold and the Net Cash Proceeds of such
Asset Sale is applied in accordance with the Loan Documents.
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12
(k) Asset Sales. Deposit, and cause the Borrower and its
Non-Operating Subsidiaries to deposit, all of the Net Cash Proceeds received
by the Guarantor and the Borrower and its Non-Operating Subsidiaries from and
after the Effective Date from Asset Sales (other than Net Cash Proceeds
required to prepay or repay the Facilities) in the Mafco Collateral Account.
Section 8. Negative Covenants. The Guarantor covenants and agrees
that, so long as any part of the Advances shall remain unpaid or any Lender
Party 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.
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13
(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, (iii) a transfer by the Borrower of
any Coleman Worldwide LYONS held by the Borrower to Coleman Worldwide and (iv)
sales, leases, transfers or other dispositions of assets for cash and for no
less than fair market value, provided that, in the case of any Asset Sale, the
Guarantor, the Borrower or any other Non-Operating Subsidiary of the Guarantor
comply with the provisions of Section 7(k) in respect of the Net Cash Proceeds
of such Asset Sale.
(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 $250,000,000 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, (vi) contributions by
the Guarantor, the Borrower or any of its Non-Operating Subsidiaries of common
stock of Marvel to any Non-Operating Subsidiary and (vii) Investments by the
Borrower in the Coleman Worldwide LYONS.
(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-
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14
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, FN Parent and First
Gibraltar; (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, (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, (iii) in the case of the Guarantor, the
prepayment of Debt owing to FN Parent, FN Holdings or First Gibraltar, as the
case may be, 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 and
(iv) prepayments of Debt required by Section 7(q) of the Mafco Guaranty.
(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
<PAGE>
15
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 Party 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 Lender Parties 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 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 Lender Parties (other than any Lender
Party that is, at such time, a Defaulting Lender), (a) release or limit the
liability of the
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16
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 38 East
63rd Street, New York, New York 10021 Attention: Secretary, if to the Agent or
any Lender Party, 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 11. No Waiver; Remedies. No failure on the part of the
Agent or any Lender Party 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 Credit Agreement
to authorize the Agent to declare the Notes due and payable pursuant to the
provisions of said Section 6.01, each Lender Party 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 Party 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 Party shall
have made any demand under this Guaranty and although such Obligations may be
unmatured. Each Lender Party agrees promptly to notify the Guarantor after any
such set-off and application made by such Lender Party; 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 Party under this Section
are in addition to other rights and remedies (including, without limitation,
other rights of set-off) that such Lender Party may have.
Section 13. Indemnification. Without limitation on any other
Obligations of the Guarantor or remedies of the Lender Parties under this
Guaranty, the Guarantor shall, to the fullest extent permitted by law,
indemnify, defend and save and hold harmless the Lender Parties 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 Lender Parties and the reasonable
and documented
<PAGE>
17
charges of the internal legal counsel of the Lender Parties) suffered or
incurred by the Lender Parties 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 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 Lender Parties, the Agent and their
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), any Lender Party 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 Party herein or otherwise, in each case
as provided in Section 8.07 of the Credit Agreement.
Section 15. 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
<PAGE>
18
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 PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.
Section 16. 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.
<PAGE>
19
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 /s/ Glenn Dickes
--------------------------------------
Title:
<PAGE>
SECOND AMENDED AND RESTATED BORROWER PARENT GUARANTY
SCHEDULE I
DEBT
1. Borrower Parent Guaranty (as defined in the Credit Agreement).
SECOND AMENDED AND RESTATED BORROWER PARENT GUARANTY
SCHEDULE II
INVESTMENTS
<TABLE>
<CAPTION>
INVESTMENT
PERSON ISSUER TYPE AMOUNT
------- ------ ---- ----------
<S> <C>
Marvel V Holdings Inc. Marvel IV Holdings Inc. Common 100%
Stock
</TABLE>
EXECUTION COPY
THIRD AMENDED AND RESTATED MAFCO GUARANTY
Dated as of June 3, 1996
from
MAFCO HOLDINGS INC.
as Guarantor
in favor of
THE LENDER PARTIES PARTY TO THE CREDIT AGREEMENT
REFERRED TO HEREIN
and
CITIBANK, N.A.
as Agent
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
1. Guaranty.................................................... 2
2. Guaranty Absolute........................................... 2
3. Waivers..................................................... 3
4. Subrogation................................................. 4
5. Payments Free and Clear of Taxes, Etc....................... 4
6. Representations and Warranties.............................. 6
7. Affirmative Covenants....................................... 13
(a) Compliance with Laws, Etc....................... 13
(b) Compliance with Environmental Laws.............. 13
(c) Maintenance of Insurance........................ 13
(d) Preservation of Corporate Existence, Etc........ 13
(e) Visitation Rights............................... 14
(f) Keeping of Books................................ 14
(g) Maintenance of Properties, Etc.................. 14
(h) Performance of Related Documents and FN
Documents ...................................... 14
(i) Collateral Account.............................. 14
(j) Reporting Requirements.......................... 14
(k) Transactions with Affiliates.................... 18
(l) Mafco Tax Group................................. 18
(m) Notices......................................... 18
(n) Certain Payments................................ 18
(o) Prepayment of Advances and Additional Collateral 19
(p) Termination of Financing Statements............. 23
(q) Asset Sales..................................... 23
(r) Business Plan................................... 23
8. Negative Covenants.......................................... 24
(a) Liens, Etc...................................... 24
(b) Lease Obligations............................... 24
(c) Mergers, Etc.................................... 24
(d) Sales, Etc. of Assets........................... 24
<PAGE>
ii
(e) Dividends, Repurchases, Etc..................... 25
(f) Investments..................................... 25
(g) Change in Nature of Business.................... 26
(h) Accounting Changes.............................. 26
(i) Debt............................................ 26
(j) Charter Amendments.............................. 26
(k) Prepayments, Etc. of Debt....................... 26
(l) Amendment, Etc. of Related Documents............ 27
(m) Negative Pledge................................. 27
(n) Partnerships.................................... 27
(o) Capital Expenditures............................ 27
(p) Issuance of Capital Stock....................... 27
(q) Payment Restrictions............................ 27
(r) Restriction on the Revlon Companies............. 28
9. Amendments, Etc............................................. 28
10. Notices, Etc............................................... 28
11. No Waiver; Remedies........................................ 29
12. Right of Set-off........................................... 29
13. Indemnification............................................ 29
14. Continuing Guaranty; Assignments Under the Credit
Agreement ................................................. 29
15. Governing Law; Submission to Jurisdiction; Waiver of
Jury Trial ................................................ 30
16. Execution in Counterparts; Delivery by Telecopier.......... 31
Schedule I - Subsidiaries
Schedule II - Liens
Schedule III - Authorizations, Etc.
Schedule IV - Open Years
Schedule V - Debt
Schedule VI - Investments
Exhibit A - Terms of Subordination for Loans to Borrower Parent
Exhibit B - Revolving Credit Facility Term Sheet
<PAGE>
THIRD AMENDED AND RESTATED GUARANTY
THIRD AMENDED AND RESTATED GUARANTY dated as of June 3,
1996 made by Mafco Holdings Inc., a Delaware corporation (the "Guarantor"), in
favor of the lenders (the "Lenders") party to the Credit Agreement (as defined
below) and the initial issuing bank (the "Issuing Bank"; together with the
Lenders, the "Lender Parties") and Citibank, N.A. ("Citibank"), as agent (the
"Agent") for the Lender Parties.
PRELIMINARY STATEMENTS. (1) Marvel IV Holdings Inc., a Delaware
corporation (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 (as so
amended, the "Original Credit Agreement"), with financial institutions and
other institutional lenders party thereto (the "Original Lenders") and
Citibank, as agent for the Original Lenders. In consideration of the premises
and in order to induce the Original Lenders to make advances under the
Original Credit Agreement, the Guarantor entered into a Guaranty dated July
27, 1994 in favor of the Original Lenders and Citibank, as agent for the
Original Lenders.
(2) Subsequently, the Borrower entered into an Amended and Restated
Credit Agreement dated as of June 29, 1995, as amended by the First Amendment
dated as of October 27, 1995 (said Agreement, as so amended, being the "Second
Credit Agreement"), with the financial institutions and other institutional
lenders party thereto (the "Second Lenders") and Citibank, as agent for the
Second Lenders. In consideration of the premises and in order to induce the
Second Lenders to make advances under the Second Credit Agreement, the
Guarantor entered into an Amended and Restated Guaranty dated as of June 29,
1995 in favor of the Second Lenders and Citibank, as agent for the Second
Lenders.
(3) Subsequently, the Borrower entered into a Second Amended and
Restated Credit Agreement dated as of December 15, 1995, as amended by the
First Amendment dated as of January 9, 1996, the Second Amendment dated as of
January 24, 1996, and the Third Amendment dated as of April 9, 1996 (said
Agreement, as so amended, being 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.
(4) The Borrower has entered into a Third Amended and Restated
Credit Agreement dated as of June 3, 1996 (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 the Lender Parties and the Agent which
amends and restates the Existing Credit Agreement in its entirety.
<PAGE>
2
(5) It is a condition precedent to the effectiveness of the 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 Lender Parties to enter into 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 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
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 Lender Parties 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 Lender Parties 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 Lender Parties 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;
<PAGE>
3
(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 Party) 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 Party 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 Party 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 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.
<PAGE>
4
(c) The Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements contemplated by
the Loan Documents and that the waivers set forth in this Section 3 are
knowingly made in contemplation of such benefits.
Section 4. Subrogation. The Guarantor will not exercise any 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 Party against 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, unless and until all of the Payment Obligations in
respect of the Guaranteed Obligations and this Guaranty shall have been Fully
Satisfied. If any amount shall be paid to the Guarantor in violation of the
preceding sentence at any time prior to the later of the date on which the
Payment Obligations in respect of the Guaranteed Obligations and this Guaranty
have been Fully Satisfied and the Termination Date, such amount shall be held
in trust for the benefit of the Agent and the Lender Parties and shall
forthwith be paid to the Agent to be credited and applied to the Guaranteed
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. If (i) the Guarantor shall make
payment to the Agent or any other Lender Party of all or any part of the
Guaranteed Obligations, (ii) all of the Payment Obligations in respect of the
Guaranteed Obligations and this Guaranty shall be Fully Satisfied and (iii)
the Termination Date shall have occurred, the Agent and the Lender Parties
will, at the Guarantor's request and expense, execute and deliver to the
Guarantor appropriate documents, without recourse and without representation
or warranty, necessary to evidence the transfer by subrogation to the
Guarantor of an interest in the Guaranteed Obligations resulting from such
payment by the Guarantor.
Section 5. Payments Free and Clear of Taxes, Etc. (a) Any and all
payments made by the Guarantor hereunder shall be made, in accordance with
Section 2.13 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 Party 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 Party 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 Party
<PAGE>
5
shall designate a different Applicable Lending Office if, in the judgment of
such Lender Party, 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 Party or the Agent and would not, in the
judgment of such Lender Party, be otherwise disadvantageous to such Lender
Party.
(b) In addition, the Guarantor agrees to pay any present or future
Other Taxes.
(c) The Guarantor will indemnify each Lender Party 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 Party 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 Party 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 Party or the Agent shall refund, to the extent of any refund
thereof made to such Lender Party 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 Party 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 Party or the Agent to the effect that such Taxes or
Other Taxes were wrongfully or illegally imposed and (ii) such Lender Party 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 Party 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 Party 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 Party or the Agent
remains lawfully able to do so and only so long as
<PAGE>
6
Guarantor is making payments under this Guaranty), provide the Guarantor and
(in the case of any such Lender Party 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 Party 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
Party 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 Party 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 Party 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 Party shall reasonably request to assist the Lender Party
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
Party 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 5 shall survive the payment in full of the Guaranteed
Obligations and all other amounts payable under this Guaranty.
(h) If a Lender Party 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 5 requiring the Guarantor to make a
greater payment than if such change had not been made, such Lender Party shall
not be entitled to receive any greater payment under this Section 5 than such
Lender Party would have been entitled to receive had it not changed its
Applicable Lending Office.
Section 6. 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
<PAGE>
7
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, FN Parent and First Gibraltar (FN Holdings, FN Parent and First
Gibraltar 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
<PAGE>
8
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
Original Credit Agreement and the Voting Trust Agreement dated as of April 17,
1996 among First Gibraltar, Trans Network Insurance Services Inc., Citibank,
N.A. and Bank of New York, 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 Party 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
<PAGE>
9
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 Original Credit Agreement, the Second Credit Agreement, the Existing
Credit Agreement or the 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 Original Credit
Agreement, the Second Credit Agreement, the Existing Credit Agreement or the
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, 1995, 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, 1996, 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 Party, fairly present, subject, in
the case of said balance sheets as at March 31, 1996, 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, 1995, there has been no Material
Adverse Change relating to the Bank.
<PAGE>
10
(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 1994 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 or made available to the Lender Parties, 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).
<PAGE>
11
(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 6(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, 1995 to be filed by the affiliated group of
corporations with respect to which the Guarantor files a consolidated Federal
income tax return (the "Group"), as of December 31, 1995 the consolidated net
operating loss (including carryforwards) of the Group for Federal income
<PAGE>
12
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 $2,400,000,000 for regular tax purposes and is
not less than $1,200,000,000 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
the Guarantor pursuant to Section 1504(a)(3) of the Code and has been so
included since March 26, 1993.
<PAGE>
13
Section 7. Affirmative Covenants. The Guarantor covenants and
agrees that, so long as any part of the Advances shall remain unpaid or any
Lender Party 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 Lender Parties.
<PAGE>
14
(e) Visitation Rights. At any reasonable time and from time to
time, upon reasonable prior notice, permit the Agent or any of the Lender
Parties 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 Lender Parties 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
<PAGE>
15
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);
<PAGE>
16
(vi) in the event of any change in GAAP from the date of the
financial statements referred to in Section 6(f) and upon delivery of
any financial statement required to be furnished under clauses (i) or
(ii) of this Section 7(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 6(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 Lender Parties
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 Lender
Parties 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 Lender Parties pursuant to any other clause of this Section 7(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
Code) of which the Guarantor is a member aggregating $10,000,000 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
<PAGE>
17
that the Guarantor, as the common parent of the affiliated group (within
the meaning of Section 1504(a)(1) of the 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 7(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);
<PAGE>
18
(xvi) promptly after the making of any payment to the Guarantor 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 Party 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
7(k), 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
7(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 Code) of which the Guarantor is the common parent, other
than as a result of an Asset Sale pursuant to which all of the common stock
held by Mafco and its Subsidiaries in any such Person is sold and the Net Cash
Proceeds of such Asset Sale is applied in accordance with the Loan Documents.
(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 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. (i) Cause each advance made by First
Gibraltar to Borrower Parent to be subordinated to all Obligations of Borrower
Parent under the Loan Documents upon the terms and conditions set forth on
Exhibit A hereto; (ii) if FN Holdings shall make any advance to Borrower
Parent, cause any such advance to be (A) on the terms
<PAGE>
19
and conditions set forth on Exhibit B hereto and (B) subordinated to all
Obligations of Borrower Parent under the Loan Documents upon the terms and
conditions set forth on Exhibit A hereto, subject to the provisions set forth
under the heading "Ranking" and in the penultimate sentence under the heading
"Condition Precedent to Initial Loan" on Exhibit B hereto; and (iii) if FN
Parent shall make any advance to Borrower Parent, cause any such advance to be
subordinated to all Obligations of Borrower Parent under the Loan Documents
upon the terms and conditions set forth on Exhibit A hereto.
(o) Prepayment of Advances and Additional Collateral. (i) At any
time that the ratio of (A) Net Residual Value plus the fair market value of
the Coleman Worldwide LYONS pledged in favor of the Lender Parties pursuant to
the terms of the Borrower Security Agreement or the Coleman Pledge Agreement,
as the case may be, plus the fair market value of the shares of common stock
of Coleman that are released from the escrow created under the Escrow
Agreement dated as of May 27, 1993 (as amended or otherwise modified from time
to time, the "Escrow Agreement") between Coleman Worldwide and Continental
Bank, National Association, as escrow agent ), and are owned by Coleman
Worldwide and pledged in favor of the Lender Parties pursuant to the terms of
the Coleman Worldwide Pledge Agreement 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 7(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 Available Amount of all Letters of Credit then
outstanding less the aggregate amount then on deposit in the L/C Cash
Collateral Account 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 fair market value of the
Coleman Worldwide LYONS pledged in favor of the Lender Parties pursuant to the
terms of the Borrower Security Agreement or the Coleman Pledge Agreement, as
the case may be, plus the fair market value of the shares of common stock of
Coleman that are released from the escrow created under the Escrow Agreement
and are owned by Coleman Worldwide and pledged in favor of the Lender Parties
pursuant to the terms of the Coleman Worldwide Pledge Agreement 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
7(o)(i), in each case at such time, to the sum of the aggregate principal
amount of all Advances then outstanding plus the aggregate Available Amount of
all Letters of Credit then outstanding less the aggregate amount then on
deposit in the L/C Cash Collateral Account 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
<PAGE>
20
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
the Guarantor or at its order and at the request of the Guarantor, the amount
on deposit in the Second Mafco Collateral Account.
(ii) At any time that the Net Equity Value of at least two of
Coleman Guarantor, the Borrower or New World Guarantor, on an individual
basis, is not greater than or equal to $100,000,000 (each such Person
necessary to meet such requirement whose Net Equity Value is less than such
minimum amount being referred to herein as a "Clause (ii) Person"), 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 (A) the aggregate amount of all deposits made pursuant to
clause (x) in connection with the failure of the Net Equity Value of such
Clause (ii) Person to satisfy such minimum amount and the aggregate amount of
all previous deposits, if any, made pursuant to clause (x) in connection with
the failure of the Net Equity Value of such Clause (ii) Person to satisfy such
minimum amount, plus (B) 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) in connection with the failure of
the Net Equity Value of such Clause (ii) Person to satisfy such minimum amount
and 50% of 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 (y) in connection with the failure of the Net
Equity Value of such Clause (ii) Person to satisfy such minimum amount, plus
(C) the Net Equity Value of such Clause (ii) Person, plus (D) at the option of
the Guarantor, the Net Equity Value of the Person listed above which is not
satisfying the minimum amount requirements in this Section 7(o)(ii) (but only
in the event that such Net Equity Value is not being added to the Net Equity
Value of another Person to satisfy the requirements of this Section 7(o)(ii)),
equals or exceeds $100,000,000. Such cash collateral or pledged shares shall
secure the obligations of the Loan Parties under the Loan Documents.
(iii) At any time that the sum of the Net Equity Value of C&F
Guarantor plus the fair market value of the Coleman Worldwide LYONS pledged in
favor of the Lender
<PAGE>
21
Parties pursuant to the terms of the Borrower Security Agreement or the
Coleman Pledge Agreement, as the case may be, plus the fair market value of
the shares of common stock of Coleman that are released from the escrow
created under the Escrow Agreement and are owned by Coleman Worldwide and
pledged in favor of the Lender Parties pursuant to the terms of the Coleman
Worldwide Pledge Agreement is not greater than or equal to the aggregate
amount of the Commitments of the Lenders, the Guarantor shall on the Business
Day immediately following the date of such event, either (x) deposit cash in
the Second Mafco 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 (A) the aggregate amount of
all deposits made pursuant to clause (x) in connection with the failure to
satisfy such minimum amount and the aggregate amount of all previous deposits,
if any, made pursuant to clause (x) in connection with the failure to satisfy
such minimum amount, plus (B) 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) in connection with the failure to
satisfy such minimum amount and 50% of 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 (y) in
connection with the failure to satisfy such minimum amount, plus (C) the Net
Equity Value of C&F Guarantor, plus (D) the fair market value at such time of
the Coleman Worldwide LYONS owned by the Borrower or Coleman Worldwide and
pledged in favor of the Lender Parties pursuant to the terms of the Borrower
Security Agreement or the Coleman Pledge Agreement, as the case may be, plus
the fair market value of the shares of common stock of Coleman that are
released from the escrow created under the Escrow Agreement and are owned by
Coleman Worldwide and pledged in favor of the Lender Parties pursuant to the
terms of the Coleman Worldwide Pledge Agreement equals or exceeds the
aggregate amount of the Commitments of the Lenders at such time. Such cash
collateral or pledged shares shall secure the obligations of the Loan Parties
under the Loan Documents.
(iv) At the option of the Guarantor, Revlon Guarantor may be
substituted for one of Coleman Guarantor, the Borrower or New World Guarantor
for purposes of satisfying the requirements of Section 7(o)(ii) above if the
following conditions shall be met:
(A) a newly-formed indirect parent corporation of Revlon ("Revlon
Guarantor") shall be established which shall have a certificate of
incorporation and by-laws substantially identical to the certificate of
incorporation and by-laws of Coleman Guarantor;
<PAGE>
22
(B) Revlon Guarantor shall enter into a voting trust agreement with
Revlon Finance Corporation, the Agent and Bank of New York relating to
the common stock of Revlon Guarantor substantially identical to the
Voting Trust Agreement dated as of July 27, 1994 among NationsBank of
Georgia, National Association, New Coleman
Holdings Inc., Coleman Guarantor and the Agent;
(C) Revlon Guarantor shall have executed and delivered a guaranty
in favor of the Lender Parties substantially identical to the Coleman
Guaranty;
(D) Revlon Guarantor shall have executed and delivered a pledge
agreement in favor of the Agent and the Lender Parties substantially
identical to the Coleman Pledge Agreement pursuant to which Revlon
Guarantor shall pledge to the Agent for its benefit and the benefit of
the Lender Parties 100% of the capital stock of Revlon Holdings Inc.;
(E) The Guarantor shall have delivered to the Lender Parties
favorable opinions of counsel to Revlon Guarantor reasonably
satisfactory to the Lender Parties, in form and substance reasonably
satisfactory to the Lender Parties;
(F) The Guarantor shall have delivered to the Lender Parties a
consent, in form and substance reasonably satisfactory to the Lender
Parties, duly executed by each of the Loan Parties with respect to the
guaranty and pledge agreement referenced above;
(G) The Guarantor shall have delivered to the Agent (i) an amended
Schedule II to the Mafco Security Agreement to include the Revlon Tax
Agreements as part of the Collateral described therein and (ii)
acknowledgment copies or stamped receipt copies of proper amendments to
the financing statements filed in connection with the Mafco Security
Agreement to reflect the inclusion of the Revlon Tax Agreements as part
of the Collateral under the Mafco Security Agreement;
(H) The Guarantor shall have delivered to the Agent an amended
Schedule VI to the Credit Agreement to include the calculation of
Defeased Debt for Revlon Guarantor, in form and substance satisfactory
to the Required Lenders;
(I) The Guarantor shall have delivered to the Agent a certificate
to the effect that the conditions specified in clauses (A) through (H)
above have been satisfied and specifying the identity of Revlon
Guarantor and the identity of the corporation specified in Section
7(o)(ii) above for which Revlon Guarantor is being substituted; and
<PAGE>
23
(J) The Guarantor shall have delivered to the Agent such other
information, approvals, certificates or other documents as the Agent may
reasonably request.
Upon the satisfaction of all of the conditions specified above, Revlon
Guarantor shall be substituted for the corporation specified in the
certificate delivered pursuant to clause (I) above.
(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) and 3.02(j)(viii) of the Original Credit
Agreement and Sections 3.01(f)(vii) and 3.01(f)(viii) of the Second Credit
Agreement.
(q) Asset Sales. (i) Deposit, and cause each of its Subsidiaries to
deposit, all of the Net Cash Proceeds received by the Guarantor and its
Subsidiaries from and after the Effective Date from Asset Sales (other than
Net Cash Proceeds required to repay or prepay the Facilities) in the Mafco
Collateral Account.
(ii) Apply, or cause to be applied, all amounts released from the
Mafco Collateral Account pursuant to the provisions of Section 7(c) of the
Mafco Security Agreement (including, without limitation, any amounts released
which are not required to prepay the Advances pursuant to Section 2.06(b)(i)
but which are related to Net Cash Proceeds from an Asset Sale that resulted in
a reduction of the Revolving Credit Facility pursuant to Section 2.05(b)(iv))
either to the prepayment or repayment of any outstanding Debt of any A Company
or to the prepayment of the Advances, other than (x) any amounts so released
that constitute an amount up to or equal to the first $100 million of Net Cash
Proceeds received by the Guarantor and its Subsidiaries from and after the
Effective Date from Asset Sales and (y) any amounts so released that
constitute an amount up to or equal to 10% of Net Cash Proceeds received by
the Guarantor and its Subsidiaries from and after the Effective Date from
Asset Sales in excess of the first $100 million of such Net Cash Proceeds.
(r) Business Plan. Deliver to the Agent and the Lender Parties, on
or prior to December 1, 1997, a business plan, in form and substance
reasonably acceptable to the Required Lenders, setting forth, in respect of
all of the Debt of the Guarantor and its Subsidiaries (other than Debt of the
Designated Operating Companies, the Bank, Revlon and their respective
Subsidiaries) that is scheduled to come due during calendar year 1998 and
1999, the method by which all such Debt shall be repaid, prepaid, redeemed or
refinanced on a timely basis, including, without limitation, through Asset
Sales, issuances of Debt, issuances of equity or contributions to capital, in
each case in reasonable detail as to the
<PAGE>
24
identity of the assets to be sold, the issuer of the Debt or equity and such
other details as the Required Lenders shall request.
Section 8. Negative Covenants. The Guarantor covenants and agrees
that, so long as any of the Advances shall remain unpaid or any Lender Party
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 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. Sell, lease, transfer or otherwise
dispose of, or permit any other 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
<PAGE>
25
(x) for dispositions of obsolete, worn out or surplus property disposed of in
the ordinary course of business and (y) sales, leases, transfers or other
dispositions of assets for cash and for no less than fair market value,
provided that, in the case of any Asset Sale, the Guarantor and the other
Relevant Parties comply with the provisions of Section 7(q) in respect of the
Net Cash Proceeds of such Asset Sale.
(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 Credit Agreement shall have occurred and be
continuing, (y) a Default set forth in Section 7(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) amounts paid under or in connection with any Related Document,
(B) Net Cash Proceeds from Asset Sales and (C) other amounts required to be
applied to a prepayment of the Advances pursuant to the terms of the Credit
Agreement) is being released solely as a result of the application of the
provisions of Section 2.05(b)(i) of the Credit Agreement (it being understood
and agreed that Section 2.05(b)(i) 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 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 Credit Agreement shall have occurred and be continuing, (y) a
Default set forth in Section 7(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) amounts paid
under or in connection with any Related Document, (B) Net Cash Proceeds from
Asset Sales and (C) other amounts required to be applied to a prepayment of
the Advances pursuant to the terms of the Credit Agreement) is being released
solely as a result of the application of the provisions of Section 2.05(b)(i)
of the Credit Agreement (it being understood and agreed that Section
2.05(b)(i) 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 Credit Agreement).
<PAGE>
26
(ii) Permit any Designated Relevant Party to make or hold any
Investment in any Person other than (w) Investments by First Gibraltar in
Borrower Parent pursuant to the terms of the First Gibraltar Loan Agreement
and the First Gibraltar Certificate of Incorporation, (x) Investments in Cash
Equivalents, (y) the Investments set forth on Schedule VI hereto and (z)
Investments by FN Holdings and FN Parent in Borrower Parent so long as such
Investments comply with the provisions of Section 7(n).
(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 VI 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, the Debt set forth on
Schedule V hereto and Debt under the guaranty of all loans made by FN Holdings
to Borrower Parent, provided that such guaranty shall be subordinated to Debt
under this Guaranty on terms and conditions substantially identical to the
terms and conditions set forth on Exhibit A hereto subject to the provisions
set forth under the heading "Ranking" on Exhibit B hereto, (ii) in the case of
the other Relevant Parties, Debt 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, (iv) in
the case of FN Parent, the issuance of FN Parent Debt pursuant to the FN
Parent Debt Document and any Debt issued by FN Parent in exchange for the FN
Parent Debt, (v) in the case of FN Holdings, the issuance of FN HoldingsDebt
pursuant to the FN Holdings Debt Document and any Debt issued by FN Holdings
in exchange for the FN Holdings Debt and the issuance of the FN Holdings New
Debt pursuant to the FN Holdings New Debt Document and any Debt issued by FN
Holdings in exchange for the FN Holdings New Debt and (vi) Debt under the FN
Management Incentive Plan.
(j) Charter Amendments. Amend, or permit any other Relevant Party
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
<PAGE>
27
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 (i) to make regularly scheduled or required repayments or
redemptions of the Debt set forth on Schedule V hereto and (ii) to make
repayments or prepayments of Debt required by Section 7(q).
(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 Party 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 Lender
Parties 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 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
<PAGE>
28
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.
(r) Restriction on the Revlon Companies. (i) Create or suffer to
exist, any Lien, upon or with respect to any or all of the capital stock of
Revlon Worldwide Corporation, a Delaware corporation ("Revlon Worldwide"),
whether now owned or hereafter acquired, or sign or file, or permit any of its
Subsidiaries to sign or file, under the Uniform Commercial Code of any
jurisdiction, a financing statement that names the Guarantor or any of its
Subsidiaries as debtor, or sign, or permit any of its Subsidiaries to sign,
any security agreement authorizing any secured party thereunder to file such
financing statement, in each case in respect of any or all of the capital
stock of Revlon Worldwide.
(ii) Use or apply, or permit any of its Subsidiaries to use or
apply, any Net Cash Proceeds from any sale, public offering or issuance or
private placement of any capital stock of Revlon Inc. other than (A) to repay
Debt of Revlon Worldwide or any of the Subsidiaries of Revlon Worldwide, (B)
to use in the business of Revlon Worldwide or any of the Subsidiaries of
Revlon Worldwide or (C) to prepay the Advances in accordance with the terms of
the Credit Agreement.
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 Lender Parties (other than any Lender
Party 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 Lender Parties required to take any
action hereunder; provided further that no amendment or waiver of Section 7(o)
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 Supermajority Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
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 38 East
63rd Street, New York, New York 10021, Attention: Secretary if to the Agent or
any Lender Party, 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
<PAGE>
29
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 Party 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 Credit Agreement
to authorize the Agent to declare the Notes due and payable pursuant to the
provisions of said Section 6.01, each Lender Party 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 Party 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 Party shall
have made any demand under this Guaranty and although such Obligations may be
unmatured. Each Lender Party agrees promptly to notify the Guarantor after any
such set-off and application made by such Lender Party; 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 Party under this Section
are in addition to other rights and remedies (including, without limitation,
other rights of set-off) that such Lender Party may have.
Section 13. Indemnification. Without limitation on any other
Obligations of the Guarantor or remedies of the Lender Parties under this
Guaranty, the Guarantor shall, to the fullest extent permitted by law,
indemnify, defend and save and hold harmless the Lender Parties 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 Lender Parties and the reasonable
and documented charges of the internal legal counsel of the Lender Parties)
suffered or incurred by the Lender Parties 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 Credit
Agreement. This Guaranty is a continuing guaranty and shall (a) remain in full
force and effect until the
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30
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 Lender Parties, the Agent and their successors, transferees
and assigns. Without limiting the generality of the foregoing clause (c), any
Lender Party 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
Party herein or otherwise, in each case as provided in Section 8.07 of the
Credit Agreement.
Section 15. 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
<PAGE>
31
PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT THEREOF.
Section 16. 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.
<PAGE>
32
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 /s/ Glenn Dickes
-----------------------------------
Title:
<PAGE>
THIRD AMENDED AND RESTATED MAFCO GUARANTY
SCHEDULE I
SUBSIDIARIES
Mafco Holdings Inc.
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 shares of Common Stock
Shares Outstanding: 1,000 shares of Common Stock
Percentage of Outstanding Shares Owned by Ronald O. Perelman: 100%
Options, Warrants and Similar Rights: None
MacAndrews & Forbes Holdings Inc.
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 shares of Common Stock
Shares Outstanding: 1,000 shares of Common Stock
Percentage of Outstanding Shares Owned by Guarantor: 100%
Options, Warrants and Similar Rights: None
Andrews Group Incorporated
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 shares of Common Stock
Shares Outstanding: 1,000 shares of Common Stock
Percentage of Outstanding Shares Owned (indirectly) by Guarantor: 100%
Options, Warrants and Similar Rights: None
Four Star Holdings Corp.
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 shares of Common Stock and 10,000
shares of Preferred Stock
Shares Outstanding: 1,000 shares of Common Stock and 5,127 shares of
Preferred Stock
Percentage of Outstanding Shares Owned (indirectly) by Guarantor: 100%
of shares of Common Stock and 0% of shares of Preferred Stock
Options, Warrants and Similar Rights: None
New Coleman Holdings Inc.
Jurisdiction of Incorporation: Kansas
Authorized Capital Stock: 1,000 shares of Common Stock and 10,000
shares of Preferred Stock
Shares Outstanding: 1,000 shares of Common Stock and 10,000 shares
of Preferred Stock
<PAGE>
2
Percentage of Outstanding Shares Owned (indirectly) by Guarantor:
100% of shares of Common Stock and 100% of shares of Preferred Stock
Options, Warrants and Similar Rights: None
Marvel V Holdings Inc.
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 shares of Common Stock
Shares Outstanding: 1,000 shares of Common Stock
Percentage of Outstanding Shares Owned (indirectly) by Guarantor: 99.5%
Options, Warrants and Similar Rights: None
NWCG (Parent) Holdings Corporation
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 shares of Common Stock and 1,000
shares of Preferred Stock
Shares Outstanding: 100 shares of Common Stock and 0 shares
of Preferred Stock
Percentage of Outstanding Shares Owned (Indirectly) by Guarantor:
100% of shares of Common Stock Options, Warrants and
Similar Rights: None
NWCG Holdings Corporation
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 shares of Common Stock and 1,000
shares of Preferred Stock
Shares Outstanding: 100 shares of Common Stock and 0 shares of
Preferred Stock
Percentage of Outstanding Shares Owned (indirectly) by Guarantor:
100% of shares of Common Stock
Options, Warrants and Similar Rights: None
New World Communications Group Incorporated
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 400,000,000 shares of Class A Common
Stock, 400,000,000 shares of Class B Common Stock and 100,000,000
shares of Preferred Stock
Shares Outstanding: 28,799,626 Class A Common Stock, 39,925,157
Class B Common Stock, 1,200,000 Series A Preferred Stock, 250,000
Series B Preferred Stock, 25,000 Series C Preferred Stock and
300,000 Series E Preferred Stock (as of 5/23/96)
Percentage of Outstanding Shares Owned (Indirectly) by Guarantor: 54%
Options, Warrants and Similar Rights:
5,000,000 Class A Warrants (converts at $15 to Class A Common Stock)
4,625,000 Class A Warrants (converts at $50 to Class A Common Stock)
1,000,000 Class A Warrants (converts at $11.50 to Class A Common Stock)
<PAGE>
3
500,000 Class A Warrants (converts at $25 to Class A Common Stock)
1,250,000 Class A warrants (converts at $15 per share to Class A
Common Stock)
1,000,000 Class A Warrants (converts at $11.875 per share to Class A
Comm+on Stock)
1,829,706 Class B Warrants (converts at $8.47 per share to Class B
Common Stock) 5,362,549 employee stock options (converts at $8.47 to
Class A Common Stock) (as of 5/23/95)
Mafco Consolidated Holdings Inc.
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 shares of Common Stock
Shares Outstanding: 1,000 shares of Common Stock
Percentage of Outstanding Shares Owned (indirectly) by Guarantor: 99.4%
Options, Warrants and Similar Rights: None
First Gibraltar Holdings Inc.
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 shares of Common Stock
Shares Outstanding: 1,000 shares of Common Stock
Percentage of Outstanding Shares owned (indirectly) by Guarantor: 99.5%
Options, Warrants and Similar Rights: None
First Nationwide (Parent) Holdings Inc.
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 shares of Common Stock
Shares Outstanding: 1,000 shares of Common Stock
Percentage of Outstanding Shares Owned (indirectly) by Guarantor: 100%
Options, Warrants and Similar Rights: None
First Nationwide Holdings Inc.
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 800 shares of Class A Common Stock, 200
shares of Class B Common Stock and 250 shares of Class C Common
Stock
Shares Outstanding: 800 shares of Class A Common Stock, 200 shares
of Class B Common Stock and 130.4 shares of Class C Common Stock
Percentage of Outstanding Shares Owned (indirectly) by Guarantor:
100% of Class A Common Stock and 100% of Class C Common Stock
Options, Warrants and Similar Rights: None
<PAGE>
First Nationwide Bank, FSB
Jurisdiction of Organization: Dallas, Texas
Authorized Capital Stock: 50,000 shares of Common Stock and 5,000,000
shares of Preferred Stock
Shares Outstanding: 800 shares of Common Stock and 3,007,300 shares of
Preferred Stock
Percentage of Outstanding Shares Owned (indirectly) by Guarantor: 80%
of Common Stock Options, Warrants and Similar Rights: None
<PAGE>
THIRD AMENDED AND RESTATED MAFCO GUARANTY
SCHEDULE II
LIENS
MACANDREWS & FORBES HOLDINGS INC.
1. UCC-1 Financing Statement filed March 26, 1993 with the City
Register New York County naming MacAndrews & Forbes Holdings
Incorporated as Lessee and AT&T Credit Corporation as Lessor.
UCC-1 sets forth that such financing statement is for
notification purposes only.
FOUR STAR HOLDINGS CORP.
1. Pledge Agreement dated as of April 20, 1994 between Four Star
Holdings Corp. ("Four Star") and NationsBank of North Carolina,
National Association, with respect to the capital stock of
Marvel Entertainment Group, Inc. entered into to secure Four
Star's obligations under the Letter of Credit and Reimbursement
Agreement dated as of April 20, 1994 between Four Star and
NationsBank of North Carolina, National Association.
NEW COLEMAN HOLDINGS INC.
1. UCC-1 Financing Statement filed June 7, 1993 with the Secretary
of State of California naming New Coleman Holdings Inc. as
Debtor and Credit Suisse, as Agent and Collateral Holder, as
Secured Party. The underlying indebtedness has been discharged;
UCC-3 Termination Statement to be filed promptly.
NWCG HOLDINGS CORPORATION
1. 34,510,000 shares of Class B Common Stock of New World
Communications Group Incorporated pledged to secure NWCG
Holdings Corporation Senior Secured Discount Notes due 1999.
<PAGE>
ANDREWS GROUP INCORPORATED
1. Aircraft Chattel Mortgage dated March 3, 1995 with respect to
12.5% interest of Andrews Group Incorporated in Hawker 1000
Aircraft S/N 259045 and security interest in related ancillary
rights securing $1,200,000 Promissory Note dated March 3, 1995
made by Andrews payable to GECC.
<PAGE>
THIRD AMENDED AND RESTATED MAFCO GUARANTY
SCHEDULE III
Authorizations
None.
<PAGE>
THIRD AMENDED AND RESTATED MAFCO GUARANTY
SCHEDULE IV
OPEN YEARS
Tax Year Extended Expiration Date
Mafco Holdings Inc. December 31, 1991 December 31, 1996
December 31, 1992 December 31, 1996
December 31, 1993 September 15, 1997
December 31, 1994 September 15, 1998
December 31, 1995 September 15, 1999
<PAGE>
THIRD AMENDED AND RESTATED MAFCO GUARANTY
SCHEDULE V
DEBT
A. MAFCO HOLDINGS INC.
None.
B. MACANDREWS & FORBES HOLDINGS INC.
1. 13% $110,000,000 Subordinated Debentures due March 1, 1999
(Indenture dated as of March 1, 1984 with the United States
Trust Company of New York).
- principal amount outstanding as of May 31, 1996:
$66,000,000, $10,355,000 of which is held by Revlon
Group Incorporated, and $650,000 of which is held by
Andrews Group Incorporated)
2. Guarantee of Four Star Holdings Corp.'s obligations under
Reimbursement Agreement dated as of June 5, 1989, as amended
as of December 31, 1991, with Manufacturers Hanover Trust
Company relating to letters of credit issued by Manufacturers
Hanover Trust Company to former shareholders.
C. ANDREWS GROUP INCORPORATED
1. 10% $32,200,000 Senior Subordinated Debentures due 1999
pursuant to Indenture dated as of June 4, 1990 with First
Trust of California, National Association (as successor
trustee to Security Pacific National Trust Company (New
York)).
- principal amount outstanding as of May 24, 1996:
$31,309,196.25 (approximately)
2. 12-3/4% $80,000,000 Subordinated Debentures due 1996
(Indenture dated as of July 1, 1986, with the United States
Trust Company of New York, as amended on June 13, 1988).
- principal amount outstanding as of May 31, 1996:
$14,320,000 - (approximately)
<PAGE>
2
3. Guaranty executed by Andrews Group Incorporated in favor of
The Bank of New York in connection with $4,230,000 principal
amount of indebtedness of 924 Bel Aire Corp., a Subsidiary
of Andrews Group Incorporated.
4. Guaranty executed by Andrews Group Incorporated in favor of
The Bank of New York in connection with $3,000,000 principal
amount of indebtedness of 924 Bel Aire Corp., a subsidiary
of Andrews Group Incorporated.
5. $1,200,000 Promissory Note dated March 3, 1995 made by
Andrews Group Incorporated payable to GECC secured by
Aircraft Chattel Mortgage dated March 3, 1995 on 12.5%
interest of Andrews Group Incorporated in Hawker 1000
Aircraft S/N 259045.
D. FOUR STAR HOLDINGS CORP.
1. Amended and Restated Reimbursement Agreement dated as of July
18, 1994, with Chemical Bank (formerly Manufacturers Hanover
Trust Company) relating to letters of credit issued by
Manufacturers Hanover Trust Company to former shareholders.
2. $46,154,500 Senior Notes due June 7, 1999 payable to former
shareholders.
3. Series A Adjustable Rate Cumulative Preferred Stock
mandatorily redeemable on June 8, 1999 for $5,127,000 or
Promissory Notes in the aggregate of $5,127,000, maturity on
June 8, 1995, providing for no prior installments and interest
at a rate equal to the dividend rate on the Series A
Adjustable Rate Cumulative Preferred Stock.
4. Exchange Agreement dated April 10, 1989, as amended, among
former shareholders (Lawrence L. Kuppin, Robert C. Rehme and
Harry Evans Sloan) and Andrews Group Incorporated, Four Star
Holdings Corp. and Four Star Acquisition Corp.
5. Letter of Credit and Reimbursement Agreement dated as of April
20, 1994 between Four Star Holdings Corp. and NationsBank of
North Carolina, N.A., providing for issuance of $1,638,456
face amount standby letter of credit.
E. FIRST NATIONWIDE HOLDINGS INC.
1. $200,000,000 12-1/4% Senior Notes Due 2001 and 12-1/4%
Senior Exchange Notes Due 2001, pursuant to Indenture dated
July 15, 1994
<PAGE>
with State Street Bank and Trust Company (as successor trustee
to The First National Bank of Boston, as trustee).
2. Escrow Agreement, dated as of July 27, 1994, among First
Nationwide Holdings Inc., First Madison Bank, FSB and The
First National Bank of Boston, as escrow agent, with respect
to the 11-1/2% Noncumulative Perpetual Preferred Stock of
First Madison Bank, FSB.
3. Management Incentive Plan for Certain Employees of First
Nationwide Bank.
4. $140,000,000 9 % Senior Subordinated Notes Due 2003 and 9 %
Senior Subordinated Exchange Notes Due 2003, pursuant to
Indenture dated January 31, 1996 with The Bank of New York,
as trustee.
F. FIRST NATIONWIDE (PARENT) HOLDINGS INC.
1. $455,000,000 12 1/2% Senior Notes due 2003 and 12 1/2% Senior
Exchange Notes due 2003, pursuant to Indenture dated April 15,
1996 with The Bank of New York, as trustee.
<PAGE>
THIRD AMENDED AND RESTATED MAFCO GUARANTY
SCHEDULE VI
Investments
<TABLE>
<CAPTION>
Investment
Person Issuer Type Amount
<S> <C> <C> <C>
Mafco Holdings Inc. MacAndrews & Forbes Holdings Inc. Common Stock 100%
Consolidated Cigar II Holdings Inc. Common Stock 100%
Flavors (Parent) Holdings Inc. Common Stock 100%
MacAndrews & Forbes Holdings Andrews Group Incorporated Common Stock 100%
Inc.
Trans Network Insurance Services Inc. Common Stock 100%
New Coleman Holdings Inc. Common Stock and
Preferred
Stock 100%
MacAndrews & Forbes Group, Common Stock 100%
Incorporated
MFH Holding Corp. Common Stock 100%
RV Acquisition Corp. Common Stock 100%
Andrews Group Incorporated NWCG (Parent) Holdings Corporation Common Stock 100%
Four Star Holdings Corp. Common Stock 100%
L.C. Holding Corporation Common Stock 100%
924 Bel Aire Corp. Common Stock 100%
<PAGE>
Investment
Person Issuer Type Amount
1001 Holdings Corp. Common Stock 100%
AGI Management Corp. Common Stock 100%
New Coleman Holdings Inc. Coleman (Parent) Common Stock 100%
Holdings Inc.
Coleman Cutlery Co. Voting Shares and 100%
Nonvoting shares
California Cooperage Common Stock 100%
Coleman Benelux, Inc. Common Stock 100%
Coleman France, Inc. Common Stock 100%
CP Coleman Acquisition, Inc. Common Stock 100%
Coast Catamaran Corp. Common Stock 100%
Coleman Lighting, Inc. Common Stock 100%
Coleman Coil Co., Inc. Common Stock 100%
Canadian Coleman Properties Inc. Common Stock and 100%
Preferred Stock
LaSalle Lighting, Inc. Common Stock 100%
Coleman Airguns, Inc. Common Stock 100%
Four Star Holdings Corp. Marvel V Holdings Inc. Common Stock 100%
<PAGE>
Investment
Person Issuer Type Amount
First Gibraltar Holdings Inc. First Nationwide (Parent) Holdings Common Stock 100%
Inc.
Common Stock 100%
Unified Mortgage Corporation
Subordinated loans that may be issued
from time to time to Marvel V
Holdings Inc. in accordance with the
Restated Certificate of Incorporation
of First Gibraltar Holdings Inc., as
the same may be amended from time to
time, and/or the First Gibraltar Loan
Agreement.
Dividends that may be received
by First Gibraltar Holdings
Inc. from time to time from
First Nationwide (Parent)
Holdings Inc. representing
subordinated loans made by
First Nationwide Holdings Inc.
or First Nationwide (Parent)
Holdings Inc. to Marvel V
Holdings Inc. in accordance
with the Mafco Guaranty.
First Nationwide (Parent) First Nationwide Holdings Inc. Class A Common 100%
Holdings Inc. Stock and Class C
Common Stock
Loans to any of M&F, Mafco or Marvel
V Holdings Inc., and in the case of
loans to Marvel V Holdings Inc., such
loans shall be subordinated in
accordance with the Mafco Guaranty.
Dividends that may be received
by First Nationwide (Parent)
Holdings Inc. from time to
time from First Nationwide
Holdings Inc. representing
subordinated loans made by
First Nationwide Holdings Inc.
to Marvel V Holdings Inc. in
accordance with the Mafco
Guaranty.
First Nationwide Holdings Inc. First Nationwide Bank, FSB Common Stock 80%
Loans to any of M&F, Mafco or Marvel
V Holdings Inc., and in the case of
loans to Marvel V Holdings Inc., such
loans shall be subordinated in
accordance with the Mafco Guaranty.
<PAGE>
Investment
Person Issuer Type Amount
Unified Mortgage Corporation Millenium Mortgage Corporation Common Stock 100%
</TABLE>
<PAGE>
EXHIBIT A
to
MAFCO GUARANTY
TERMS OF SUBORDINATION
1. Reference is made to (i) the Third Amended and Restated Credit
Agreement dated as of June 3, 1996 (said Agreement, as the same may be amended
or otherwise modified from time to time, the "Credit Agreement"; terms defined
therein are used herein as therein defined) among Marvel IV Holdings Inc., the
Lenders party thereto, Citibank, N.A. ("Citibank") as the initial issuing bank
(the "Issuing Bank"; together with the Lenders, the "Lender Parties") and
Citibank, as agent (the "Agent") for the Lender Parties, and (ii) [the loans
and advances made by First Gibraltar to the Borrower Parent pursuant to the
terms of the First Gibraltar Loan Agreement][the loans and advances made by FN
Parent to the Borrower Parent][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 [First Gibraltar][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 Payment Obligations (as
hereinafter defined) until such time as the Payment Obligations have been
Fully Satisfied. For purposes hereof, the term "Payment Obligations" shall
mean all 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, charges, expenses, attorney's fees and expenses,
indemnities and any other amounts payable by the Loan Parties under the Loan
Documents.
3. So long as the Payment Obligations shall not have been Fully
Satisfied, 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 any 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
<PAGE>
2
other manner, including, without limitation, from or by way of collateral,
payment of all or any of the Subordinated Debt, unless and until the Payment
Obligations shall have been Fully Satisfied.
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 have the Payment Obligations be Fully Satisfied 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
Payment Obligations until the Payment Obligations shall have been Fully
Satisfied.
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 have all amounts due or
to become due on or in respect of all Payment Obligations be Fully Satisfied
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 Payment Obligations have been Fully
Satisfied, 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
<PAGE>
3
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 these Terms of Subordination 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 Payment 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 Payment Obligations shall have been
Fully Satisfied.
11. The holders of the Payment 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 Payment Obligations (including any
change in the rate of interest thereon), or amend in any manner any agreement
under which
<PAGE>
4
any of the Payment 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 Payment Obligations; (iii) release anyone liable in
any manner under or in respect of the Payment 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 Payment 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 the Payment Obligations being Fully Satisfied),
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 Payment 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 Payment 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 Payment Obligations and shall be enforceable by them directly against the
holders of any Subordinated Debt, and no holder of the Payment 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.
<PAGE>
EXECUTION COPY
SECOND AMENDED AND RESTATED COLEMAN GUARANTOR GUARANTY
Dated as of June 3, 1996
from
COLEMAN (PARENT) HOLDINGS INC.
as Guarantor
in favor of
THE LENDER PARTIES PARTY TO THE CREDIT AGREEMENT
REFERRED TO HEREIN
and
CITIBANK, N.A.
as Agent
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
1. Guaranty; Limitation of Liability........................... 2
2. Guaranty Absolute........................................... 2
3. Waivers..................................................... 3
4. Subrogation................................................. 4
5. Payments Free and Clear of Taxes, Etc....................... 4
6. Representations and Warranties.............................. 6
7. Affirmative Covenants....................................... 11
(a) Compliance with Laws, Etc....................... 11
(b) Compliance with Environmental Laws.............. 12
(c) Maintenance of Insurance........................ 12
(d) Preservation of Corporate Existence, Etc........ 12
(e) Visitation Rights............................... 12
(f) Keeping of Books................................ 13
(g) Maintenance of Properties, Etc.................. 13
(h) Performance of Related Documents................ 13
(i) Reporting Requirements.......................... 13
(j) Transactions with Affiliates.................... 16
(k) Mafco Tax Group................................. 16
(l) Coleman Tax Agreements.......................... 16
(m) Asset Sales..................................... 16
8. Negative Covenants.......................................... 16
(a) Liens, Etc...................................... 17
(b) Lease Obligations............................... 17
(c) Mergers, Etc.................................... 17
(d) Sales, Etc. of Assets........................... 17
(e) Dividends, Repurchases, Etc..................... 18
(f) Investments..................................... 18
(g) Change in Nature of Business.................... 18
(h) Accounting Changes.............................. 19
(i) Debt............................................ 19
<PAGE>
(j) Charter Amendments.............................. 19
(k) Prepayments, Etc. of Debt....................... 19
(l) Amendment, Etc. of Related Documents............ 19
(m) Negative Pledge................................. 19
(n) Partnerships.................................... 20
(o) Capital Expenditures............................ 20
(p) Issuance of Capital Stock....................... 20
(q) Payment Restrictions............................ 20
9. LYONS Refinancing............................................20
10. Amendments, Etc............................................ 21
12. No Waiver; Remedies........................................ 21
13. Right of Set-off........................................... 21
14. Indemnification............................................ 22
15. Continuing Guaranty; Assignments under the Amended
and Restated Credit Agreement............................. 22
16. Governing Law; Submission to Jurisdiction; Waiver of
Jury Trial ............................................... 22
17. Execution in Counterparts, Delivery by Telecopier.......... 24
Schedule I - Subsidiaries
Schedule II - Liens
Schedule III - Debt
Schedule IV - Investments
<PAGE>
SECOND AMENDED AND RESTATED GUARANTY
SECOND AMENDED AND RESTATED GUARANTY dated as of June 3,
1996 made by Coleman (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 initial
issuing bank (the "Issuing Bank"; together with the Lenders, the "Lender
Parties") and 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 "Original Credit
Agreement"), with financial institutions and other institutional lenders party
thereto (the "Original Lenders") and Citibank, as agent for the Original
Lenders. In consideration of the premises and in order to induce the Original
Lenders to make advances under the Original Credit Agreement, the Guarantor
entered into a Guaranty dated July 27, 1994 (the "Original Guaranty") 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) Subsequently, the Borrower entered into an Amended and Restated
Credit Agreement dated as of June 29, 1995, as amended by the First Amendment
dated as of October 27, 1995 (as so amended, the "Second Credit Agreement")
with the financial institutions and other institutional lenders party thereto
(the "Second Lenders") and Citibank, as agent for the Second Lenders. In order
to induce the Second Lenders to enter into the Second Credit Agreement, the
Guarantor entered into an Amended and Restated Guaranty dated as of June 29,
1995 (as heretofore amended, the "Existing Guaranty") in favor of the Second
Lenders.
(3) Subsequently, the Borrower entered into a Second Amended and
Restated Credit Agreement dated as of December 15, 1995, as amended by the
First Amendment dated as of January 9, 1996, the Second Amendment dated as of
January 24, 1996 and the Third Amendment dated as of April 9, 1996 (as so
amended, being 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.
(4) The Borrower has entered into a Third Amended and Restated
Credit Agreement dated as of June 3, 1996 (as it may hereafter be amended or
otherwise modified from time to time, the "Credit Agreement"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined) with the Lender Parties and the Agent which amends and restates the
Existing Credit Agreement in its entirety.
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2
(5) It is a condition precedent to the effectiveness of the 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 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 Lender Parties 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
<PAGE>
3
terms or the rights of the Agent or the Lender Parties 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 Party) 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 Party 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
<PAGE>
4
with respect to any of the Guaranteed Obligations and this Guaranty and any
requirement that the Agent or any Lender Party 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 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. Subrogation. The Guarantor will not exercise any 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 Party against 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, unless and until all of the Payment Obligations in
respect of the Guaranteed Obligations and this Guaranty shall have been Fully
Satisfied. If any amount shall be paid to the Guarantor in violation of the
preceding sentence at any time prior to the later of the date on which the
Payment Obligations in respect of the Guaranteed Obligations and this Guaranty
have been Fully Satisfied and the Termination Date, such amount shall be held
in trust for the benefit of the Agent and the Lender Parties and shall
forthwith be paid to the Agent to be credited and applied to the Guaranteed
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. If (i) the Guarantor shall make
payment to the Agent or any other Lender Party of all or any part of the
Guaranteed Obligations, (ii) all of the Payment Obligations in respect of the
Guaranteed Obligations and this Guaranty shall be Fully Satisfied and (iii)
the Termination Date shall have occurred, the Agent and the Lender Parties
will, at the Guarantor's request and expense, execute and deliver to the
Guarantor appropriate documents, without recourse and without representation
or warranty, necessary to evidence the transfer by subrogation to the
Guarantor of an interest in the Guaranteed Obligations resulting from such
payment by the Guarantor.
Section 5. Payments Free and Clear of Taxes, Etc. (a) Any and all
payments made by the Guarantor hereunder shall be made, in accordance with
Section 2.13 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 Party 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 Party or
the
<PAGE>
5
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 Party shall designate a different
Applicable Lending Office if, in the judgment of such Lender Party, 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 Party,
be otherwise disadvantageous to such Lender Party.
(b) In addition, the Guarantor agrees to pay any present or future
Other Taxes.
(c) The Guarantor will indemnify each Lender Party 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 Party 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 Party 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 Party or the Agent shall refund, to the extent of any refund
thereof made to such Lender Party 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 Party 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 Party or the Agent to the effect that such Taxes or
Other Taxes were wrongfully or illegally imposed and (ii) such Lender Party 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 Party 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.
<PAGE>
6
(e) Each Lender Party 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 Party 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 Party 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 Party 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 Guaranty or the Notes or certifying
that the income receivable pursuant to this Guaranty 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
Party 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 Party 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 Party 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 Party shall reasonably request to assist the Lender Party
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
Party 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 Party 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 Party shall
not be entitled to receive any greater payment under this Section 4 than such
Lender Party would have been entitled to receive had it not changed its
Applicable Lending Office.
Section 6. Representations and Warranties. The Guarantor hereby
represents and warrants as follows:
<PAGE>
7
(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 Original 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.
<PAGE>
8
(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 thereby, 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 Party 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 Original
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. All applicable
waiting periods in connection with the transactions contemplated hereby
have expired without any action having been taken by any competent
authority restraining, preventing or imposing
<PAGE>
9
materially adverse conditions upon 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 Original Credit
Agreement, the Second Credit Agreement or the 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 Original Credit Agreement or the 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, 1995, 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, 1996, 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 Party, fairly present, subject, in the
case of said balance sheets as at March 31, 1996 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, 1995, 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.
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10
(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 1994 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 or made available to the Lender Parties, 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 have filed, have
caused to be filed or have been included in all tax returns (Federal,
state, local and foreign) required to be filed and have paid all taxes
shown thereon to be due, together with applicable interest and
penalties.
<PAGE>
11
(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 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 7. Affirmative Covenants. The Guarantor covenants and
agrees that, so long as any part of the Advances shall remain unpaid or any
Lender Party 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
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12
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 Lender
Parties.
(e) Visitation Rights. At any reasonable time and from time to
time, upon reasonable prior notice permit the Agent or any of the Lender
Parties 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.
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13
(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 Lender Parties 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
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14
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 6(f) and upon delivery
of any financial statement required to be furnished under clauses
(ii) or (iii) of this Section 7(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 6(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
<PAGE>
15
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
Party through the Agent may reasonably request to enable the Lender
Parties 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 Lender Parties
pursuant to any other clause of this Section 7(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
<PAGE>
16
(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 Party 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 7(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 7(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, other than as a result of an Asset Sale pursuant to which
all of the common stock held by Mafco and its Subsidiaries is sold and
the Net Cash Proceeds of such Asset Sale is applied in accordance with
the Loan Documents..
(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.
(m) Asset Sales. Deposit, and cause the Coleman Non-Operating
Subsidiaries to deposit, all of the Net Cash Proceeds received by the
Guarantor and the Coleman Non-Operating Subsidiaries from and after the
Effective Date from Asset Sales (other than Net Cash Proceeds required
to prepay or repay the Facilities) in the Mafco Collateral Account.
Section 8. Negative Covenants. The Guarantor covenants and agrees
that, so long as any part of the Advances shall remain unpaid or any Lender
Party shall have any Commitment, the Guarantor will not:
<PAGE>
17
(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 int o 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
<PAGE>
18
Non-Operating Subsidiary to any other wholly owned Coleman Non-Operating
Subsidiary, (iii) sales, leases, transfers or other dispositions of
assets for cash and for no less than fair market value, provided that,
in the case of any Asset Sale, the Guarantor and the Coleman
Non-Operating Subsidiaries comply with the provisions of Section 7(m) in
respect of the Net Cash Proceeds of such Asset Sale, (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, (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, (v) Investments by the Guarantor or Coleman Worldwide
consisting of Coleman Worldwide LYONS and (vi) Investments by the
Guarantor and each Coleman Non-Operating Subsidiaries in its direct
Subsidiary in order to permit Coleman Worldwide to purchase Coleman
Worldwide LYONS with the proceeds of the Advances in a manner consistent
with the Credit Agreement.
(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.
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19
(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 (i) 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 and
(ii) to make repayments or prepayments of Debt required by Section 7(q)
of the Mafco Guaranty.
(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 Party 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
<PAGE>
20
property or assets other than (i) in favor of the Agent and the Lender
Parties 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 9. 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 (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 Credit Agreement shall be modified in
connnection with the Refinancing in a manner acceptable to the Required
Lenders.
<PAGE>
21
Section 10. 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 Lender Parties (other
than any Lender Party 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 Lender Parties required to
take any action hereunder.
Section 11. 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 Party, 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 12. No Waiver; Remedies. No failure on the part of the
Agent or any Lender Party 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 13. 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 Party 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 Party 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 Party shall
have made any demand under this Guaranty and although such Obligations may be
unmatured. Each Lender Party agrees promptly to notify the Guarantor after any
such set-off and application made by such Lender Party; 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 Party under this Section
are in addition to other rights and
<PAGE>
22
remedies (including, without limitation, other rights of set-off) that such
Lender Party may have.
Section 14. Indemnification. Without limitation on any other
Obligations of the Guarantor or remedies of the Lender Parties under this
Guaranty, the Guarantor shall, to the fullest extent permitted by law,
indemnify, defend and save and hold harmless the Lender Parties 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 Lender Parties and the reasonable
and documented charges of the internal legal counsel of the Lender Parties)
suffered or incurred by the Lender Parties 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 15. 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 Lender
Parties, the Agent and their successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), any Lender Party 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 16. 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
<PAGE>
23
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.
<PAGE>
24
(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 PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.
Section 17. 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 /s/ Glenn Dickes
------------------------------
Title:
<PAGE>
SECOND AMENDED AND RESTATED COLEMAN GUARANTY
SCHEDULE I
GUARANTOR AND SUBSIDIARIES
COLEMAN (PARENT) HOLDINGS INC.
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 shares of Common Stock
Shares Outstanding: 1,000 shares of Common Stock
Percentage of Shares Owned by
New Coleman Holdings Inc.: 100%
Options, Warrants and Similar Rights: None
COLEMAN HOLDINGS INC.
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 shares of Common Stock
Shares Outstanding: 1,000 shares of Common Stock
Percentage of Shares Owned by Guarantor: 100%
Options, Warrants and Similar Rights: None
COLEMAN WORLDWIDE CORPORATION
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 shares of Common Stock
Shares Outstanding: 1,000 shares of Common Stock
Percentage of Shares Owned (Indirectly) by
Guarantor: 100%
Options, Warrants and Similar Rights: Liquid Yield Option Notes due 2013
- each $1,000 principal amount at maturity of LYONS are
exchangeable into 7.853 shares of Common Stock of The Coleman
Company, Inc. at the option of the holder thereof.
<PAGE>
SECOND AMENDED AND RESTATED COLEMAN GUARANTY
SCHEDULE II
LIENS
COLEMAN HOLDINGS INC.
1. Lien on 1,000 shares of Common Stock of Coleman Worldwide
Corporation in favor of Continental Bank, National
Association, pursuant to Coleman Holdings Inc s Indenture
dated July 15, 1993 with Continental Bank, National
Association.
COLEMAN WORLDWIDE CORPORATION
1. Lien on 8,298,367 shares of Common Stock of The
Coleman Company, Inc. in favor of Continental Bank,
National Association, pursuant to the Escrow and
Pledge Agreement dated as of May 27, 1993 between
Coleman Worldwide Corporation and Continental
Bank, National Association.
2. Lien on 13,000,000 shares of Common Stock of The
Coleman Company, Inc. in favor of Continental Bank,
National Association, pursuant to Coleman Holdings
Inc s Indenture dated July 15, 1993 with Continental
Bank, National Association.
<PAGE>
SECOND AMENDED AND RESTATED COLEMAN GUARANTY
SCHEDULE III
Debt
A. Coleman Holdings Inc.
1. $281,281,000 Series B Senior Secured Discount Notes due
1998 (Indenture dated as of July 15, 1993 with Continental
Bank, National Association)
- accreted value as of May 31, 1996: $227,852,602
B. Coleman Worldwide Corporation
1. Liquid Yield Option Notes Due 2013 (zero coupon - senior
secured) ("LYONs") (Indenture dated as of May 27, 1993 with
Continental Bank, National Association)
- accreted value as of May 31, 1996: $167,474,596
2. Securities Loan Agreement dated as of May 27, 1993 among
Merrill Lynch Pierce Fenner & Smith Incorporated, Coleman
Worldwide Corporation and Continental Trust Company, as
custodian, in connection with the LYONs.
3. Non-Recourse Guaranty of Coleman Holdings Inc.'s Senior
Secured Discount Notes Due 1998 set forth in the Indenture
referred to in item B.1. above.
C. The Coleman Company, Inc. and Subsidiaries
1. Amended and Restated Credit Agreement dated as of
August 3, 1995 among The Coleman Company, Inc., certain
subsidiaries of The Coleman Company, Inc. listed therein,
the banks named therein (the "Lenders"), Credit Suisse, as
issuing bank and as agent for the Lenders, and co-agents
named therein as amended to date and guarantees made by
certain subsidiaries of The Coleman Company, Inc. in favor
of the Agent of The Coleman Company, Inc.'s obligations
under such Credit Agreement.
<PAGE>
- principal amount outstanding as of June
1, 1996: $275,000,000 (approx.)
2. 7.26% Senior Notes due 2007 (Note Purchase Agreements
dated as of August 3, 1995 executed by The Coleman
Company, Inc. and each of the initial purchasers).
- principal amount outstanding as of June 1, 1996:
$200,000,000
3. The First National Bank of Chicago ISDA Master Agreement,
dated as of September 8, 1993, as amended.
4. NationsBank of North Carolina, N.A., ISDA Master
Agreement, dated as of September 28, 1993, as amended.
5. Citibank letter confirming interest rate swap transaction,
dated as of November 1, 1995.
June 1, 1996
6. Other Debt: (approx.)
Foreign Working Capital Debt $70,000,000
Property, Plant & Equipment $ 2,607,000
Credit Suisse Letters of Credit $ 3,942,000
Other Letters of Credit and $41,650,000
Bankers Acceptances
Loans Against Insurance Policies $ 6,157,000
Deferred Purchase Price of $36,250,000
Acquisitions
Miscellaneous Debt $ 2,230,000
<PAGE>
SECOND AMENDED AND RESTATED COLEMAN GUARANTY
SCHEDULE IV
INVESTMENTS
Investment
Person Issuer Type Amount
- ------ ------ ---- -------
Coleman (Parent) Coleman Common Stock 100%
Holdings Inc. Holdings Inc.
Coleman Coleman Common Stock 100%
Holdings Inc. Worldwide
Corporation
Coleman The Coleman Common Stock 83.2%
Worldwide Company, Inc.
Corporation
COLEMAN WORLDWIDE CORPORATION
1. Loan of up to 700,000 shares of Common Stock of The
Coleman Company, Inc., pursuant to Securities Loan
Agreement dated as of May 27, 1993 among Merrill
Lynch Pierce Fenner & Smith Incorporated, Coleman
Worldwide Corporation and Continental Trust
company, as custodian in connection with the Liquid
Yield Option Notes due 2013 (Indenture dated as of
May 27, 1993 with Continental Bank, National
Association).
<PAGE>
EXECUTION COPY
SECOND AMENDED AND RESTATED FLAVORS GUARANTY
Dated as of June 3, 1996
from
FLAVORS (PARENT) HOLDINGS INC.
as Guarantor
in favor of
THE LENDER PARTIES PARTY TO THE CREDIT AGREEMENT
REFERRED TO HEREIN
and
CITIBANK, N.A.
as Agent
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
<S> <C>
1. Guaranty; Limitation of Liability........................................................................... 2
2. Guaranty Absolute........................................................................................... 2
3. Waivers..................................................................................................... 3
4. Subrogation................................................................................................. 4
5. Payments Free and Clear of Taxes, Etc....................................................................... 4
6. Representations and Warranties.............................................................................. 6
7. 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............................................. 11
(e) Visitation Rights.................................................................... 12
(f) Keeping of Books..................................................................... 12
(g) Maintenance of Properties, Etc....................................................... 12
(h) Reporting Requirements............................................................... 12
(i) Transactions with Affiliates......................................................... 13
(j) Mafco Tax Group...................................................................... 13
(k) Asset Sales.......................................................................... 14
8. Negative Covenants.......................................................................................... 14
(a) Liens, Etc........................................................................... 14
(b) Lease Obligations.................................................................... 14
(c) Mergers, Etc......................................................................... 14
(d) Sales, Etc. of Assets................................................................ 15
(e) Dividends, Repurchases, Etc.......................................................... 15
(f) Investments.......................................................................... 15
(g) Change in Nature of Business......................................................... 15
(h) Accounting Changes................................................................... 15
(i) Debt................................................................................. 15
(j) Charter Amendments................................................................... 16
(k) Prepayments, Etc. of Debt............................................................ 16
<PAGE>
ii
(l) Negative Pledge...................................................................... 16
(m) Partnerships......................................................................... 16
(n) Capital Expenditures................................................................. 16
(o) Issuance of Capital Stock............................................................ 16
(p) Payment Restrictions................................................................. 16
9. Amendments, Etc............................................................................................. 17
10. Notices, Etc............................................................................................... 17
11. No Waiver; Remedies........................................................................................ 17
12. Right of Set-off........................................................................................... 17
13. Indemnification............................................................................................ 18
14. Continuing Guaranty; Assignments under the Credit Agreement................................................ 18
15. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial............................................ 18
16. Execution in Counterparts, Delivery by Telecopier.......................................................... 19
Schedule I - Subsidiaries
Schedule II - Liens
Schedule III - Debt
Schedule IV - Investments
</TABLE>
<PAGE>
SECOND AMENDED AND RESTATED GUARANTY
SECOND AMENDED AND RESTATED GUARANTY dated as of June 3,
1996, 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 the initial issuing bank (the "Issuing Bank";
together with the Lenders, the "Lender Parties") and Citibank, N.A.
("Citibank"), as agent (the "Agent") for the Lender Parties.
PRELIMINARY STATEMENTS.
(1) Marvel IV Holdings Inc., a Delaware corporation (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 (as so amended, the
"Original Credit Agreement"), with financial institutions and other
institutional lenders party thereto (the "Original Lenders") and Citibank, as
agent for the Original Lenders. In consideration of the premises and in order
to induce the Original Lenders to make advances under the Original Credit
Agreement, the Guarantor entered into a Guaranty dated September 30, 1994, as
heretofore amended (as so amended, the "Original Guaranty"), in favor of the
Original Lenders and Citibank, as agent for the Original Lenders.
(2) Subsequently, the Borrower entered into an Amended and
Restated Credit Agreement dated as of June 29, 1995, as amended by the First
Amendment dated as of October 27, 1995 (as so amended, being the "Second
Credit Agreement"), with the financial institutions and other institutional
lenders party thereto (the "Second Lenders") and Citibank, as agent for the
Second Lenders.
(3) Subsequently, the Borrower entered into a Second Amended
and Restated Credit Agreement dated as of December 15, 1995, as amended by the
First Amendment dated as of January 9, 1996, the Second Amendment dated as of
January 24, 1996 and the Third Amendment dated as of April 9, 1996 (as so
amended, being 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.
(4) The Borrower has entered into a Third Amended and
Restated Credit Agreement dated as of June 3, 1996 (as it may hereafter be
amended or otherwise modified from time to time, the "Credit Agreement"; the
terms defined therein and not otherwise defined herein being used herein as
therein defined) with the Lender Parties and the Agent which amends and
restates the Existing Credit Agreement in its entirety.
(5) It is a condition precedent to the effectiveness of the
Credit Agreement that the Guarantor shall have executed and delivered this
Guaranty.
<PAGE>
2
NOW, THEREFORE, in consideration of the premises and in
order to induce the Lender Parties to enter into the Credit Agreement, the
Guarantor hereby agrees to amend and restate the Original 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 Lender
Parties 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 Lender Parties 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 Lender Parties 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
<PAGE>
3
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 Party) 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 Party 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
Party protect, secure, perfect or insure any Lien or any property
<PAGE>
4
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 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. Subrogation. The Guarantor will not exercise any
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 Party against
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, unless and until all of the Payment
Obligations in respect of the Guaranteed Obligations and this Guaranty shall
have been Fully Satisfied. If any amount shall be paid to the Guarantor in
violation of the preceding sentence at any time prior to the later of the date
on which the Payment Obligations in respect of the Guaranteed Obligations and
this Guaranty have been Fully Satisfied and the Termination Date, such amount
shall be held in trust for the benefit of the Agent and the Lender Parties and
shall forthwith be paid to the Agent to be credited and applied to the
Guaranteed 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. If (i) the Guarantor
shall make payment to the Agent or any other Lender Party of all or any part
of the Guaranteed Obligations, (ii) all of the Payment Obligations in respect
of the Guaranteed Obligations and this Guaranty shall be Fully Satisfied and
(iii) the Termination Date shall have occurred, the Agent and the Lender
Parties will, at the Guarantor's request and expense, execute and deliver to
the Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation
to the Guarantor of an interest in the Guaranteed Obligations resulting from
such payment by the Guarantor.
Section 5. Payments Free and Clear of Taxes, Etc. (a) Any
and all payments made by the Guarantor hereunder shall be made, in accordance
with Section 2.13 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 Party 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 Party 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
<PAGE>
5
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 Party shall designate a different Lending Office
if, in the judgment of such Lender Party, 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 Party or the Agent and
would not, in the judgment of such Lender Party, be otherwise disadvantageous
to such Lender Party.
(b) In addition, the Guarantor agrees to pay any present or
future Other Taxes.
(c) The Guarantor will indemnify each Lender Party 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 Party 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 Party 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 Party or the Agent shall refund, to the
extent of any refund thereof made to such Lender Party 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 Party 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 Party or the Agent to the effect that
such Taxes or Other Taxes were wrongfully or illegally imposed and (ii) such
Lender Party 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 Party 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 Party organized under the laws of a
jurisdiction outside the United States and the Agent, if organized under the
laws of a jurisdiction outside the
<PAGE>
6
United States, shall, if requested in writing by the Guarantor or the Agent
(but only so long as such Lender Party 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 Party 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 Party 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 Party 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 Party 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 Party 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 Party shall reasonably request to assist the
Lender Party 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 Party 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 6 shall survive the payment in full of the
Guaranteed Obligations and all other amounts payable under this Guaranty.
(h) If a Lender Party 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 5 requiring the Guarantor to make a greater
payment than if such change had not been made, such Lender Party shall not be
entitled to receive any greater payment under this Section 5 than such Lender
Party would have been entitled to receive had it not changed its Lending
Office.
Section 6. 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
<PAGE>
7
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 Original 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 in respect of the Flavors Non-Operating Subsidiary,
showing as of the date hereof (as to 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 Subsidiary 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. The 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 thereby, are within the
Guarantor's corporate powers, have been duly authorized by all
necessary corporate action, and do not (i) contravene the
<PAGE>
8
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, the Flavors Non-Operating Subsidiary
or any of 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 the Flavors Non-Operating Subsidiary. Neither the
Guarantor nor the Flavors Non-Operating Subsidiary 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 Party 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 Original Credit
Agreement and Section 3(c)(viii) of the First Amendment to the
Original 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. 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 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.
<PAGE>
9
(e) This Guaranty has been, and each other Loan Document to
which the Guarantor is a party when delivered under the Original
Credit Agreement or the Credit Agreement 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 Original Credit Agreement or the Credit Agreement 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
the Flavors Non-Operating Subsidiary 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 1994 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 or made
available to the Lender Parties, 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 Subsidiary 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).
<PAGE>
10
(h) The operations and properties of the Guarantor and the
Flavors Non- Operating Subsidiary 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 Subsidiary and the Guarantor
and the Flavors Non-Operating Subsidiary 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 the Flavors
Non-Operating Subsidiary 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 Subsidiary
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
Subsidiary 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 Subsidiary, 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 the Flavors Non-Operating Subsidiary that imposes any
material Obligation or material restriction on the Guarantor or the
Flavors Non-Operating Subsidiary (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 the Flavors Non-Operating Subsidiary, showing as of the
date hereof the amount, obligor or issuer and maturity, if any,
thereof.
<PAGE>
11
Section 7. Affirmative Covenants. The Guarantor covenants
and agrees that, so long as any part of the Advances shall remain unpaid or any
Lender Party 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 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
<PAGE>
12
that the loss thereof is not disadvantageous in any material respect
to the Guarantor, such Subsidiary or the Lender Parties.
(e) Visitation Rights. At any reasonable time and from time
to time, upon reasonable prior notice permit the Agent or any of the
Lender Parties 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 Lender Parties
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 Party through the Agent may
reasonably request to enable the Lender Parties 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
<PAGE>
13
or credit or similar agreement and not otherwise required to
be furnished to the Lender Parties 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 Party
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 7(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, other than as a result of an Asset Sale
pursuant to which all of the common stock held by Mafco and its
Subsidiaries in any such Person is sold and the Net Cash Proceeds of
such Asset Sale is applied in accordance with the Loan Documents..
<PAGE>
14
(k) Asset Sales. Deposit, and cause the Flavors
Non-Operating Subsidiary to deposit, all of the Net Cash Proceeds
received by the Guarantor and the Flavors Non-Operating Subsidiary
from and after the Effective Date from Asset Sales (other than Net
Cash Proceeds required to prepay or repay the Facilities) in the
Mafco Collateral Account.
Section 8. Negative Covenants. The Guarantor covenants and
agrees that, so long as any part of the Advances shall remain unpaid or any
Lender Party shall have any Commitment, the Guarantor will not:
(a) Liens, Etc. Create or suffer to exist, or permit the
Flavors Non- Operating Subsidiary 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 Subsidiary to sign or file, under the Uniform
Commercial Code of any jurisdiction, a financing statement that names
the Guarantor or the Flavors Non-Operating Subsidiary as debtor, or
sign, or permit the Flavors Non-Operating Subsidiary to sign, any
security agreement authorizing any secured party thereunder to file
such financing statement, or assign, or permit the Flavors
Non-Operating Subsidiary 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 the Flavors Non-Operating Subsidiary 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 Flavors Non-Operating
Subsidiary to do so.
<PAGE>
15
(d) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of, or permit the Flavors Non-Operating Subsidiary to sell,
lease, transfer or otherwise dispose of, any assets or grant, or permit
the Flavors Non-Operating Subsidiary 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 for cash and for no less than fair market value,
provided that, in the case of an Asset Sale, the Guarantor or the Flavors
Non-Operating Subsidiary comply with the provisions of Section 7(k) in
respect of the Net Cash Proceeds of such Asset Sale.
(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 Flavors Non-Operating Subsidiary 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 the Flavors Non-Operating
Subsidiary to make or hold, any Investment in any Person, other than (i)
Investments by the Guarantor and the Flavors Non-Operating Subsidiary 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
Subsidiary or (ii) permit the Flavors Non-Operating Subsidiary to make
any change in the nature of its business carried on at the date hereof.
(h) Accounting Changes. Make or permit, or permit the Flavors Non-
Operating Subsidiary 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
Flavors Non-Operating Subsidiary 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 the Flavors Non-Operating
Subsidiary, the Debt listed on Schedule III hereto; and (iii) in the case
of the Guarantor and the Flavors Non-Operating Subsidiary,
<PAGE>
16
endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business.
(j) Charter Amendments. Amend, or permit the Flavors Non-Operating
Subsidiary 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 Flavors
Non-Operating Subsidiary to do any of the foregoing, other than
prepayments of Debt required by Section 7(q) of the Mafco Guaranty.
(l) Negative Pledge. Enter into or suffer to exist, or permit the
Flavors Non-Operating Subsidiary 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 Lender Parties 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 the Flavors Non-Operating Subsidiary to do so.
(n) Capital Expenditures. Make, or permit the Flavors Non-Operating
Subsidiary to make, any Capital Expenditures.
(o) Issuance of Capital Stock. Issue, or permit the Flavors
Non-Operating Subsidiary 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 the Flavors Non-Operating Subsidiary
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 Subsidiary to (i) pay
dividends or make any other distributions on the Guarantor's or the
Flavors 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 the Flavors 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 the Flavors Non-Operating
Subsidiary, as the case may be.
<PAGE>
17
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 Lender Parties (other
than any Lender Party 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 Lender Parties 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 Party, 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 11. No Waiver; Remedies. No failure on the part of
the Agent or any Lender Party 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 Credit
Agreement to authorize the Agent to declare the Notes due and payable pursuant
to the provisions of said Section 6.01, each Lender Party 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 Party 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 Party shall
have made any demand under this Guaranty and although such Obligations may be
unmatured. Each Lender Party agrees promptly to notify the Guarantor after any
such set-off and application made by such Lender Party; 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 Party under this Section
are in addition to other rights and
<PAGE>
18
remedies (including, without limitation, other rights of set-off) that such
Lender Party may have.
Section 13. Indemnification. Without limitation on any other
Obligations of the Guarantor or remedies of the Lender Parties under this
Guaranty, the Guarantor shall, to the fullest extent permitted by law,
indemnify, defend and save and hold harmless the Lender Parties 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 Lender Parties and the reasonable
and documented charges of the internal legal counsel of the Lender Parties)
suffered or incurred by the Lender Parties 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
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 Lender Parties, the
Agent and their successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender Party 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 Party herein or otherwise,
in each case as provided in Section 8.07 of the Credit Agreement.
Section 15. 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
<PAGE>
19
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 PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT THEREOF.
Section 16. 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.
<PAGE>
20
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 /s/ Glenn Dickes
------------------------------
Name:
Title:
<PAGE>
SECOND AMENDED AND RESTATED FLAVORS GUARANTY
SCHEDULE I
FLAVORS NON-OPERATING SUBSIDIARIES
MAFCO CONSOLIDATED HOLDINGS INC.
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 Shares of Common Stock
Shares Outstanding: 1,000 Shares of Common Stock
Percentage of Shares
Beneficially Owned by
Flavors (Parent) Holdings Inc.: 50%
Options, Warrants
and Similar Rights: None
<PAGE>
SECOND AMENDED AND RESTATED FLAVORS GUARANTY
SCHEDULE II
LIENS
None.
<PAGE>
SECOND AMENDED AND RESTATED FLAVORS GUARANTY
SCHEDULE III
DEBT
FLAVORS (PARENT) HOLDINGS INC.
1. Flavors Guaranty (as defined in the Credit
Agreement).
MAFCO CONSOLIDATED HOLDINGS INC.
1. C&F Guaranty (as defined in the Credit Agreement).
<PAGE>
SECOND AMENDED AND RESTATED FLAVORS GUARANTY
SCHEDULE IV
INVESTMENTS
<TABLE>
<CAPTION>
Investment
Person Obligor or Issuer Type Amount
- ------ ------------------ ---- -----------
<S> <C>
Flavors (Parent) Mafco Consolidated Holdings Inc. Common Stock 50%
Holdings Inc.
Mafco Consolidated Mafco Consolidated Group Inc. Common Stock 50%
Holdings Inc.
<PAGE>
EXECUTION COPY
SECOND AMENDED AND RESTATED CIGAR GUARANTY
Dated as of June 3, 1996
from
CIGAR (PARENT) HOLDINGS INC.
as Guarantor
in favor of
THE LENDER PARTIES PARTY TO THE CREDIT AGREEMENT
REFERRED TO HEREIN
and
CITIBANK, N.A.
as Agent
<PAGE>
TABLE OF CONTENTS
</TABLE>
<TABLE>
<CAPTION>
Section Page
<S> <C> <C>
1. Guaranty; Limitation of Liability........................................................................... 2
2. Guaranty Absolute........................................................................................... 2
3. Waivers..................................................................................................... 3
4. Subrogation................................................................................................. 4
5. Payments Free and Clear of Taxes, Etc....................................................................... 4
6. Representations and Warranties.............................................................................. 6
7. 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............................................. 11
(e) Visitation Rights.................................................................... 12
(f) Keeping of Books..................................................................... 12
(g) Maintenance of Properties, Etc....................................................... 12
(h) Reporting Requirements............................................................... 12
(i) Transactions with Affiliates......................................................... 13
(j) Mafco Tax Group...................................................................... 13
(k) Asset Sales.......................................................................... 13
8. Negative Covenants.......................................................................................... 14
(a) Liens, Etc........................................................................... 14
(b) Lease Obligations.................................................................... 14
(c) Mergers, Etc......................................................................... 14
(d) Sales, Etc. of Assets................................................................ 15
(e) Dividends, Repurchases, Etc.......................................................... 15
(f) Investments.......................................................................... 15
(g) Change in Nature of Business......................................................... 15
(h) Accounting Changes................................................................... 15
(i) Debt................................................................................. 15
(j) Charter Amendments................................................................... 16
(k) Prepayments, Etc. of Debt............................................................ 16
<PAGE>
(l) Negative Pledge...................................................................... 16
(m) Partnerships......................................................................... 16
(n) Capital Expenditures................................................................. 16
(o) Issuance of Capital Stock............................................................ 16
(p) Payment Restrictions................................................................. 16
9. Amendments, Etc............................................................................................. 17
10. Notices, Etc............................................................................................... 17
11. No Waiver; Remedies........................................................................................ 17
12. Right of Set-off........................................................................................... 17
13. Indemnification............................................................................................ 18
14. Continuing Guaranty; Assignments under the Credit Agreement................................................ 18
15. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial............................................ 18
16. Execution in Counterparts, Delivery by Telecopier.......................................................... 19
Schedule I - Subsidiaries
Schedule II - Liens
Schedule III - Debt
Schedule IV - Investments
</TABLE>
<PAGE>
SECOND AMENDED AND RESTATED GUARANTY
SECOND AMENDED AND RESTATED GUARANTY dated as of June 3,
1996, 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 the initial issuing bank (the "Issuing Bank";
together with the Lenders, the "Lender Parties") and Citibank, N.A.
("Citibank"), as agent (the "Agent") for the Lender Parties.
PRELIMINARY STATEMENTS.
(1) Marvel IV Holdings Inc., a Delaware corporation (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 (as so amended, the
"Original Credit Agreement"), with the financial institutions and other
institutional lenders party thereto (the "Original Lenders") and Citibank, as
agent for the Original Lenders. In consideration of the premises and in order
to induce the Original Lenders to make advances under the Original Credit
Agreement, the Guarantor entered into a Guaranty dated September 30, 1994, as
heretofore amended (as so amended, the "Original Guaranty"), in favor of the
Original Lenders and Citibank, as agent for the Original Lenders.
(2) Subsequently, the Borrower entered into an Amended and
Restated Credit Agreement dated as of June 29, 1995, as amended by the First
Amendment dated as of October 27, 1995 (as so amended, the "Second Credit
Agreement"), with the financial institutions and other institutional lenders
party thereto (the "Second Lenders") and Citibank, as agent for the Second
Lenders.
(3) Subsequently, the Borrower entered into a Second Amended
and Restated Credit Agreement dated as of December 15, 1995, as amended by the
First Amendment dated as of January 9, 1996, the Second Amendment dated as of
January 24, 1996 and the Third Amendment dated as of April 9, 1996 (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.
(4) The Borrower has entered into a Third Amended and
Restated Credit Agreement dated as of June 3, 1996 (as it may hereafter be
amended or otherwise modified from time to time, the "Credit Agreement"; the
terms defined therein and not otherwise defined herein being used herein as
therein defined) with the Lender Parties and the Agent which amends and
restates the Existing Credit Agreement in its entirety.
(5) It is a condition precedent to the effectiveness of the
Credit Agreement that the Guarantor shall have executed and delivered this
Guaranty.
<PAGE>
2
NOW, THEREFORE, in consideration of the premises and in
order to induce the Lender Parties to enter into the Credit Agreement, the
Guarantor hereby agrees to amend and restate the Original 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 Lender
Parties 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 Lender Parties 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 Lender Parties 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
<PAGE>
3
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 Party) 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 Party 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
Party protect, secure, perfect or insure any Lien or any property
<PAGE>
4
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 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. Subrogation. The Guarantor will not exercise any
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 Party against
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, unless and until all of the Payment
Obligations in respect of the Guaranteed Obligations and this Guaranty shall
have been Fully Satisfied. If any amount shall be paid to the Guarantor in
violation of the preceding sentence at any time prior to the later of the date
on which the Payment Obligations in respect of the Guaranteed Obligations and
this Guaranty have been Fully Satisfied and the Termination Date, such amount
shall be held in trust for the benefit of the Agent and the Lender Parties and
shall forthwith be paid to the Agent to be credited and applied to the
Guaranteed 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. If (i) the Guarantor
shall make payment to the Agent or any other Lender Party of all or any part
of the Guaranteed Obligations, (ii) all of the Payment Obligations in respect
of the Guaranteed Obligations and this Guaranty shall be Fully Satisfied and
(iii) the Termination Date shall have occurred, the Agent and the Lender
Parties will, at the Guarantor's request and expense, execute and deliver to
the Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation
to the Guarantor of an interest in the Guaranteed Obligations resulting from
such payment by the Guarantor.
Section 5. Payments Free and Clear of Taxes, Etc. (a) Any
and all payments made by the Guarantor hereunder shall be made, in accordance
with Section 2.13 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 Party 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 Party 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
<PAGE>
5
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 Party shall designate a different Lending Office
if, in the judgment of such Lender Party, 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 Party or the Agent and
would not, in the judgment of such Lender Party, be otherwise disadvantageous
to such Lender Party.
(b) In addition, the Guarantor agrees to pay any present
or future Other Taxes.
(c) The Guarantor will indemnify each Lender Party 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 Party 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 Party 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 Party or the Agent shall refund, to the
extent of any refund thereof made to such Lender Party 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 Party 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 Party or the Agent to the effect that
such Taxes or Other Taxes were wrongfully or illegally imposed and (ii) such
Lender Party 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 Party 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 Party organized under the laws of a
jurisdiction outside the United States and the Agent, if organized under the
laws of a jurisdiction outside the
<PAGE>
6
United States, shall, if requested in writing by the Guarantor or the Agent
(but only so long as such Lender Party 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 Party 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 Party 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 Party 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 Party 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 Party 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 Party shall reasonably request to assist the
Lender Party 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 Party 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 5 shall survive the payment in full of the
Guaranteed Obligations and all other amounts payable under this Guaranty.
(h) If a Lender Party 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 5 requiring the Guarantor to make a greater
payment than if such change had not been made, such Lender Party shall not be
entitled to receive any greater payment under this Section 5 than such Lender
Party would have been entitled to receive had it not changed its Lending
Office.
Section 6. 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
<PAGE>
7
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 Original 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 in respect of the Cigar Non-Operating Subsidiary,
showing as of the date hereof (as to 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 Subsidiary 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. The 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 thereby, are within the
Guarantor's corporate powers, have been duly authorized by all
necessary corporate action, and do not (i) contravene the
<PAGE>
8
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, the Cigar Non-Operating Subsidiary or
any of 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 the Cigar Non-Operating Subsidiary. Neither the
Guarantor nor the Cigar Non-Operating Subsidiary 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 Party 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 Original Credit
Agreement and Section 3(c)(viii) of the First Amendment to the
Original 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. 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 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.
<PAGE>
9
(e) This Guaranty has been, and each other Loan Document to
which the Guarantor is a party when delivered under the Original
Credit Agreement or the Credit Agreement 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
the Cigar Non-Operating Subsidiary 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 1994 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 or made
available to the Lender Parties, 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 Subsidiary 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 Subsidiary are in substantial compliance with
all Environmental Laws, all
<PAGE>
10
necessary Environmental Permits have been obtained and are in effect
for the operations and properties of the Guarantor and the Cigar
Non-Operating Subsidiary and the Guarantor and the Cigar
Non-Operating Subsidiary 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 the Cigar Non-Operating
Subsidiary 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 Subsidiary
have filed, has caused to be filed or have been included in all tax
returns (Federal, state, local and foreign) required to be filed and
have paid all taxes shown thereon to be due, together with applicable
interest and penalties.
(j) Neither the Guarantor nor the Cigar Non-Operating
Subsidiary 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 Subsidiary, 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 the Cigar Non-Operating Subsidiary that imposes any
material Obligation or material restriction on the Guarantor or the
Cigar Non-Operating Subsidiary (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 the Cigar Non- Operating Subsidiary, showing as of the
date hereof the amount, obligor or issuer and maturity, if any,
thereof.
<PAGE>
11
Section 7. Affirmative Covenants. The Guarantor covenants
and agrees that, so long as any part of the Advances shall remain unpaid or any
Lender Party 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 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
<PAGE>
12
that the loss thereof is not disadvantageous in any material respect
to the Guarantor, such Subsidiary or the Lender Parties.
(e) Visitation Rights. At any reasonable time and from time
to time, upon reasonable prior notice permit the Agent or any of the
Lender Parties 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 Lender Parties
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 Party through the Agent may
reasonably request to enable the Lender Parties 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
<PAGE>
13
or credit or similar agreement and not otherwise required to
be furnished to the Lender Parties pursuant to any other
clause of this Section 7(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 Party
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 7(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, other than as a result of an Asset Sale
pursuant to which all of the common stock held by Mafco and its
Subsidiaries in any such Person is sold and the Net Cash Proceeds of
such Asset Sale is applied in accordance with the Loan Documents..
<PAGE>
14
(k) Asset Sales. Deposit, and cause the Cigar Non-Operating
Subsidiary to deposit, all of the Net Cash Proceeds received by the
Guarantor and the Cigar Non- Operating Subsidiary from and after the
Effective Date from Asset Sales (other than Net Cash Proceeds
required to prepay or repay the Facilities) in the Mafco Collateral
Account.
Section 8. Negative Covenants. The Guarantor covenants and
agrees that, so long as any part of the Advances shall remain unpaid or any
Lender Party shall have any Commitment, the Guarantor will not:
(a) Liens, Etc. Create or suffer to exist, or permit the
Cigar Non- Operating Subsidiary 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 Subsidiary to sign or file, under the Uniform
Commercial Code of any jurisdiction, a financing statement that names
the Guarantor or the Cigar Non-Operating Subsidiary as debtor, or
sign, or permit the Cigar Non- Operating Subsidiary to sign, any
security agreement authorizing any secured party thereunder to file
such financing statement, or assign, or permit the Cigar Non-
Operating Subsidiary 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 the Cigar Non-Operating Subsidiary 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 Cigar
Non-Operating Subsidiary to do so.
<PAGE>
15
(d) Sales, Etc. of Assets. Sell, lease, transfer or
otherwise dispose of, or permit the Cigar Non-Operating Subsidiary to
sell, lease, transfer or otherwise dispose of, any assets or grant,
or permit 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 for cash and for no
less than fair market value, provided that, in the case of an Asset
Sale, the Guarantor or the Cigar Non-Operating Subsidiary comply with
the provisions of Section 7(k) in respect of the Net Cash Proceeds of
such Asset Sale.
(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 Cigar Non-Operating
Subsidiary 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 the Cigar
Non-Operating Subsidiary 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 Subsidiary or (ii) permit the Cigar Non-Operating
Subsidiary to make any change in the nature of its business carried
on at the date hereof.
(h) Accounting Changes. Make or permit, or permit the Cigar
Non- Operating Subsidiary 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 Cigar Non-Operating Subsidiary 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 the
Cigar Non-Operating Subsidiary, the Debt listed on Schedule III
hereto; and (iii) in the case of the Guarantor and the Cigar
Non-Operating Subsidiary,
<PAGE>
16
endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business.
(j) Charter Amendments. Amend, or permit the Cigar
Non-Operating Subsidiary 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 Cigar Non-Operating Subsidiary to do any of the foregoing,
other than prepayments of Debt required by Section 7(q) of the Mafco
Guaranty.
(l) Negative Pledge. Enter into or suffer to exist, or
permit the Cigar Non-Operating Subsidiary 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 Lender Parties 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 the Cigar Non-Operating Subsidiary to
do so.
(n) Capital Expenditures. Make, or permit the Cigar
Non-Operating Subsidiary to make, any Capital Expenditures.
(o) Issuance of Capital Stock. Issue, or permit the Cigar
Non-Operating Subsidiary 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 the Cigar
Non-Operating Subsidiary 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 the Cigar
Non-Operating Subsidiary to (i) pay dividends or make any other
distributions on any of the Guarantor's or the Cigar 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 the Cigar 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 the Cigar
Non-Operating Subsidiary, as the case may be.
<PAGE>
17
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 Lender Parties (other
than any Lender Party 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 Lender Parties 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 Party, 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 11. No Waiver; Remedies. No failure on the part of
the Agent or any Lender Party 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 Credit
Agreement to authorize the Agent to declare the Notes due and payable pursuant
to the provisions of said Section 6.01, each Lender Party 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 Party 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 Party shall
have made any demand under this Guaranty and although such Obligations may be
unmatured. Each Lender Party agrees promptly to notify the Guarantor after any
such set-off and application made by such Lender Party; 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 Party under this Section
are in addition to other rights and remedies (including, without limitation,
other rights of set-off) that such Lender Party may have.
<PAGE>
18
Section 13. Indemnification. Without limitation on any other
Obligations of the Guarantor or remedies of the Lender Parties under this
Guaranty, the Guarantor shall, to the fullest extent permitted by law,
indemnify, defend and save and hold harmless the Lender Parties 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 Lender Parties and the reasonable
and documented charges of the internal legal counsel of the Lender Parties)
suffered or incurred by the Lender Parties 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
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 Lender Parties, the
Agent and their successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender Party 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 Party herein or otherwise,
in each case as provided in Section 8.07 of the Credit Agreement.
Section 15. 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
<PAGE>
19
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 PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT THEREOF.
Section 16. 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.
<PAGE>
20
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 /s/ Glenn Dickes
----------------------------------
Name:
Title:
<PAGE>
SECOND AMENDED AND RESTATED CIGAR GUARANTY
SCHEDULE I
CIGAR NON-OPERATING SUBSIDIARIES
Mafco Consolidated Holdings Inc.
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 Shares of Common Stock
Shares Outstanding: 1,000 Shares of Common Stock
Percentage of Shares
Beneficially Owned by
Consolidated Cigar II Holdings Inc.: 50%
Options, Warrants and
Similar Rights: None
<PAGE>
SECOND AMENDED AND RESTATED CIGAR GUARANTY
SCHEDULE II
LIENS
None.
<PAGE>
SECOND AMENDED AND RESTATED CIGAR GUARANTY
SCHEDULE III
DEBT
CONSOLIDATED CIGAR II HOLDINGS INC.
1. Cigar Guaranty (as defined in the Credit Agreement).
MAFCO CONSOLIDATED HOLDINGS INC.
1. C&F Guaranty (as defined in the Credit Agreement).
<PAGE>
SECOND AMENDED AND RESTATED CIGAR GUARANTY
SCHEDULE IV
INVESTMENTS
Investment
Person Obligor or Issuer Type Amount
------ ----------------- ----- -----------
Consolidated Cigar II Mafco Consolidated Common 50%
Holdings Inc. Holdings Inc. Stock
Mafco Consolidated Mafco Common
Holdings Inc. Consolidated Group Inc. Stock 85.2%
<PAGE>
EXECUTION COPY
THIRD AMENDED AND RESTATED NEW WORLD GUARANTY
Dated as of June 3, 1996
From
NWCG (PARENT) HOLDINGS CORPORATION
as Guarantor
in favor of
THE LENDER PARTIES PARTY TO
THE AMENDED AND RESTATED CREDIT AGREEMENT
REFERRED TO HEREIN
and
CITIBANK, N.A.
as Agent
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
<S> <C>
1. Guaranty; Limitation of Liability........................................................................... 2
2. Guaranty Absolute........................................................................................... 3
3. Waivers..................................................................................................... 4
4. Subrogation................................................................................................. 4
5. Payments Free and Clear of Taxes, Etc....................................................................... 5
6. Representations and Warranties.............................................................................. 7
7. Affirmative Covenants....................................................................................... 12
(a) Compliance with Laws, Etc............................................................ 12
(b) Compliance with Environmental Laws................................................... 12
(c) Maintenance of Insurance............................................................. 12
(d) Preservation of Corporate Existence, Etc............................................. 12
(e) Visitation Rights.................................................................... 13
(f) Keeping of Books..................................................................... 13
(g) Maintenance of Properties, Etc....................................................... 13
(h) Reporting Requirements............................................................... 13
(i) Transactions with Affiliates......................................................... 15
(j) Mafco Tax Group...................................................................... 16
(k) Asset Sales.......................................................................... 16
8. 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......................................................... 17
(h) Accounting Changes................................................................... 17
(i) Debt................................................................................. 17
(j) Charter Amendments................................................................... 18
(k) Prepayments, Etc. of Debt............................................................ 18
<PAGE>
(l) Negative Pledge...................................................................... 18
(m) Partnerships......................................................................... 18
(n) Capital Expenditures................................................................. 18
(o) Issuance of Capital Stock............................................................ 18
(p) Payment Restrictions................................................................. 18
9. Amendments, Etc............................................................................................. 18
10. Notices, Etc............................................................................................... 19
11. No Waiver; Remedies........................................................................................ 19
12. Right of Set-off........................................................................................... 19
13. Indemnification............................................................................................ 19
14. Continuing Guaranty; Assignments under the Credit Agreement................................................ 20
15. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial............................................ 20
16. Execution in Counterparts, Delivery by Telecopier.......................................................... 21
Schedule I - Subsidiaries
Schedule II - Liens
Schedule III - Debt
Schedule IV - Investments
</TABLE>
<PAGE>
THIRD AMENDED AND RESTATED GUARANTY
THIRD AMENDED AND RESTATED GUARANTY dated as of June 3, 1996
made by NWCG (Parent) Holdings Corporation, 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 initial
issuing bank (the "Issuing Bank"; together with the Lenders, the "Lender
Parties") and Citibank, as agent (the "Agent") for the Lender Parties.
PRELIMINARY STATEMENTS.
(1) Marvel IV Holdings Inc., a Delaware corporation (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 (as so amended, the
"Original Credit Agreement"), with the financial institutions and other
institutional lenders party thereto (the "Original Lenders") and Citibank, as
agent for the Original Lenders. In consideration of the premises and in order
to induce the Original Lenders to make advances under the Original Credit
Agreement, the Guarantor entered into a Guaranty dated September 30, 1994 in
favor of the Original Lenders and Citibank, as agent for the Original Lenders.
(2) Subsequently, the Borrower entered into an Amended and
Restated Credit Agreement dated as of June 29, 1995, as amended by the First
Amendment dated as of October 27, 1995 (as amended, being the "Second Credit
Agreement"), with the financial institutions and other institutional lenders
party thereto (the "Second Lenders") and Citibank, as agent for the Second
Lenders. In consideration of the premises and in order to induce the Second
Lenders to make advances under the Second Credit Agreement, the Guarantor
entered into an Amended and Restated Guaranty dated as of June 29, 1995 in
favor of the Second Lenders and Citibank, as agent for the Second Lenders.
(3) Subsequently, the Borrower entered into a Second Amended
and Restated Credit Agreement dated as of December 15, 1995, as amended by the
First Amendment dated as of January 9, 1996, the Second Amendment dated as of
January 24, 1996 and the Third Amendment dated as of April 9, 1996 (as so
amended, being 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 an Amended and
Restated Guaranty dated as of December 15, 1995 in favor of the Existing
Lenders and Citibank, as agent for the Existing Lenders.
<PAGE>
2
(4) The Borrower has entered into a Third Amended and
Restated Credit Agreement dated as of June 3, 1996 (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 the Lender Parties and the Agent
which amends and restates the Existing Credit Agreement in its entirety.
(5) It is a condition precedent to the effectiveness of the
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 Lender Parties to enter into the 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 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 Lender
Parties 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 Lender Parties 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
<PAGE>
3
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 Lender Parties 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 Party) that might otherwise
constitute a defense available to, or a discharge of, the Borrower,
the Guarantor or any other guarantor or surety.
<PAGE>
4
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 Party 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
Party 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 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. Subrogation. The Guarantor will not exercise any
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 Party against
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, unless and until the date on which
all of the Payment Obligations in respect of the Guaranteed Obligations and
this Guaranty shall have been Fully Satisfied. If any amount shall be paid to
the Guarantor in violation of the preceding sentence at any time prior to the
later of the date on which the Payment Obligations in respect of the
Guaranteed Obligations and this Guaranty shall have been Fully Satisfied and
the Termination Date, such amount shall be held in trust for the benefit of
the Agent and the Lender Parties and shall forthwith be paid to the Agent to
be credited and applied to the Guaranteed 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. If (i) the Guarantor shall make payment to the Agent or any other
Lender Party of all or any part of the Guaranteed Obligations, (ii) all of the
Payment Obligations in respect of the Guaranteed Obligations and this Guaranty
shall have been Fully Satisfied and (iii) the Termination Date shall have
occurred, the Agent and the Lender Parties will, at the Guarantor's request
and expenses, execute and deliver to the Guarantor appropriate documents,
without recourse and without representation or warranty, necessary to evidence
the transfer by subrogation to the Guarantor of an interest in the Guaranteed
Obligations resulting from such payment by the Guarantor.
<PAGE>
5
Section 5. 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 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 Party 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 Party 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 Party shall designate a different Applicable Lending Office if, in the
judgment of such Lender Party, 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 Party or the Agent and would not, in
the judgment of such Lender Party, be otherwise disadvantageous to such Lender
Party.
(b) In addition, the Guarantor agrees to pay any present or
future Other Taxes.
(c) The Guarantor will indemnify each Lender Party 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 Party 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 Party 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 Party or the Agent shall refund, to the
extent of any refund thereof made to such Lender Party 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 Party 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 Party or the Agent to the effect that
such Taxes or Other Taxes were wrongfully or illegally imposed and (ii) such
Lender Party 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 Party 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
<PAGE>
6
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 Party 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 Party
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 Party 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 Party 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 Party 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 Party 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 Party 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 Party shall reasonably request to assist the
Lender Party 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 Party 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 5 shall survive the payment in full of the
Guaranteed Obligations and all other amounts payable under this Guaranty.
(h) If a Lender Party 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 5 requiring the Guarantor to make
a greater payment than if such change had not
<PAGE>
7
been made, such Lender Party shall not be entitled to receive any greater
payment under this Section 5 than such Lender Party would have been entitled
to receive had it not changed its Applicable Lending Office.
Section 6. 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.
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 Original 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
<PAGE>
8
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 Party 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 Original 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,
<PAGE>
9
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 under the Original
Credit Agreement, the Second Credit Agreement, the Existing Credit
Agreement or the Credit Agreement 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
Original Credit Agreement, the Second Credit Agreement, the Existing
Credit Agreement or the Credit Agreement 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, 1995, 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, 1996 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 Party, fairly
present, subject, in the case of said balance sheets as at March 31,
1996, 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, 1995, there has been no Material Adverse Change
relating to the Guarantor.
<PAGE>
10
(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 1994 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 or made
available to the Lender Parties, 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
<PAGE>
11
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.
<PAGE>
12
Section 7. Affirmative Covenants. The Guarantor covenants
and agrees that, so long as any part of the Advances shall remain unpaid or any
Lender Party 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 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
<PAGE>
13
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 Lender Parties.
(e) Visitation Rights. At any reasonable time and from time
to time, upon reasonable prior notice permit the Agent or any of the
Lender Parties 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 Lender Parties
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;
<PAGE>
14
(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 6(f)
and upon delivery of any financial statement required to be
furnished under clauses (i) or (ii) of this Section 7(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 6(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"
<PAGE>
15
shall refer to the Guarantor); together in each case with
such other information as any Lender Party through the Agent
may reasonably request to enable the Lender Parties 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 Lender Parties pursuant to any other clause
of this Section 7(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 Party 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 7(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.
<PAGE>
16
(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 Code) of which Mafco is the
common parent, other than as a result of an Asset Sale pursuant to
which all of the common stock held by Mafco and its Subsidiaries in
any such Person is sold and the Net Cash Proceeds of such Asset Sale
is applied in accordance with the Loan Documents.
(k) Asset Sales. Deposit, and cause NWCG Holdings to
deposit, all of the Net Cash Proceeds received by the Guarantor and
NWCG Holdings from and after the Effective Date from Asset Sales
(other than Net Cash Proceeds required to prepay or repay the
Facilities) in the Mafco Collateral Account.
Section 8. Negative Covenants. The Guarantor covenants and
agrees that, so long as any part of the Advances shall remain unpaid or any
Lender Party 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
<PAGE>
17
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 and other dispositions for
cash and for no less than fair market value, provided that, in the
case of any Asset Sale, the Guarantor and NWCG Holdings comply with
the provisions of Section 7(k) in respect of the Net Cash Proceeds of
such Asset Sale and (iii) the transfer or other disposition by the
Guarantor to an Affiliate of Mafco of shares of common stock of New
World so long as the aggregate number of such shares so transferred
or otherwise disposed (on and after September 30, 1994) of plus the
aggregate number of such shares delivered (on and after September 30,
1994) in accordance with Section 8(e) below shall not exceed 2.7
million shares.
(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 (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 deliver dividends and distributions to an Affiliate of Mafco
consisting of shares of common stock of New World so long as the
aggregate number of such shares so delivered (on and after September
30, 1994) plus the aggregate number of such shares transferred (on
and after September 30, 1994) in accordance with Section 8(d) above
shall not exceed 2.7 million shares.
(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.
<PAGE>
18
(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, other than to make
repayments or prepayments of Debt required by Section 7(q) of the
Mafco Guaranty.
(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 Lender Parties 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.
<PAGE>
19
(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 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 Lender Parties (other
than any Lender Party 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 Lender Parties 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 Party, 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 11. No Waiver; Remedies. No failure on the part of
the Agent or any Lender Party 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 Credit
Agreement to authorize the Agent to declare
<PAGE>
20
the Notes due and payable pursuant to the provisions of said Section 6.01,
each Lender Party 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 Party 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 Party shall have made any demand under this Guaranty and although
such Obligations may be unmatured. Each Lender Party agrees promptly to notify
the Guarantor after any such set-off and application made by such Lender
Party; 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
Party under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that such Lender
Party may have.
Section 13. Indemnification. Without limitation on any other
Obligations of the Guarantor or remedies of the Lender Parties under this
Guaranty, the Guarantor shall, to the fullest extent permitted by law,
indemnify, defend and save and hold harmless the Lender Parties 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 Lender Parties and the reasonable
and documented charges of the internal legal counsel of the Lender Parties)
suffered or incurred by the Lender Parties 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
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 Lender Parties, the
Agent and their successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender Party 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 Party herein or otherwise,
in each case as provided in Section 8.07 of the Credit Agreement.
<PAGE>
21
Section 15. 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 PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT THEREOF.
Section 16. 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.
<PAGE>
22
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 /s/ Glenn Dickes
---------------------------------
Title:
<PAGE>
THIRD AMENDED AND RESTATED NEW WORLD GUARANTY
SCHEDULE I
SUBSIDIARIES
NWCG (PARENT) HOLDINGS CORPORATION
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 shares of Common
Stock and 1,000 shares of Preferred Stock
Shares Outstanding: 100 shares of Common Stock and
0 shares of Preferred Stock
Percentage of Outstanding Shares Owned by
Andrews Group Incorporated: 100%
Options, Warrants and Similar Rights: None
NWCG HOLDINGS CORPORATION
Jurisdiction of Incorporation: Delaware
Authorized Capital Stock: 1,000 shares of Common Stock
and 1,000 shares of Preferred Stock
Shares Outstanding: 100 shares of Common Stock
and 0 shares of Preferred Stock
Percentage of Outstanding Shares Owned by
Guarantor: 100%
Options, Warrants and Similar Rights: None
<PAGE>
EXECUTION COPY
AMENDED AND RESTATED C&F GUARANTY
Dated as of June 3, 1996
from
MAFCO CONSOLIDATED HOLDINGS INC.
as Guarantor
in favor of
THE LENDER PARTIES TO THE CREDIT AGREEMENT
REFERRED TO HEREIN
and
CITIBANK, N.A.
as Agent
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
<S> <C>
1. Guaranty; Limitation of Liability........................................................................... 2
2. Guaranty Absolute........................................................................................... 2
3. Waivers..................................................................................................... 3
4. Subrogation................................................................................................. 4
5. Payments Free and Clear of Taxes, Etc....................................................................... 4
6. Representations and Warranties.............................................................................. 6
7. Affirmative Covenants....................................................................................... 10
(a) Compliance with Laws, Etc............................................................ 10
(b) Compliance with Environmental Laws................................................... 11
(c) Maintenance of Insurance............................................................. 11
(d) Preservation of Corporate Existence, Etc............................................. 11
(e) Visitation Rights.................................................................... 11
(f) Keeping of Books..................................................................... 12
(g) Maintenance of Properties, Etc....................................................... 12
(h) Reporting Requirements............................................................... 12
(i) Transactions with Affiliates......................................................... 14
(j) Mafco Tax Group...................................................................... 14
(k) Asset Sales.......................................................................... 14
8. Negative Covenants.......................................................................................... 14
(a) Liens, Etc........................................................................... 15
(b) Lease Obligations.................................................................... 15
(c) Mergers, Etc......................................................................... 15
(d) Sales, Etc. of Assets................................................................ 15
(e) Dividends, Repurchases, Etc.......................................................... 15
(f) Investments.......................................................................... 16
(g) Change in Nature of Business......................................................... 16
(h) Accounting Changes................................................................... 16
(i) Debt................................................................................. 16
(j) Charter Amendments................................................................... 16
(k) Prepayments, Etc. of Debt............................................................ 16
(l) Negative Pledge...................................................................... 16
(m) Partnerships......................................................................... 16
<PAGE>
ii
(n) Capital Expenditures................................................................. 16
(o) Issuance of Capital Stock............................................................ 16
(p) Payment Restrictions................................................................. 17
9. Amendments, Etc............................................................................................. 17
10. Notices, Etc............................................................................................... 17
11. No Waiver; Remedies........................................................................................ 17
12. Right of Set-off........................................................................................... 17
13. Indemnification............................................................................................ 18
14. Continuing Guaranty; Assignments under the Credit Agreement................................................ 18
15. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial............................................ 18
16. Execution in Counterparts, Delivery by Telecopier.......................................................... 19
Schedule I - Liens
Schedule II - Debt
Schedule III - Investments
</TABLE>
<PAGE>
AMENDED AND RESTATED GUARANTY
AMENDED AND RESTATED GUARANTY dated as of June 3, 1996 made
by Mafco Consolidated Holdings Inc. (formerly known as 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 the initial
issuing bank (the "Issuing Bank"; together with the Lenders, the "Lender
Parties") and Citibank, N.A. ("Citibank"), as agent (the "Agent") for the
Lender Parties.
PRELIMINARY STATEMENTS.
(1) Marvel IV Holdings Inc., a Delaware corporation (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 (as so amended, the
"Original Credit Agreement"), with the financial institutions and other
institutional lenders party thereto (the "Original Lenders") and Citibank, as
agent for the Original Lenders. In consideration of the premises and in order
to induce the Original Lenders to enter into the First Amendment to the
Original Credit Agreement, the Guarantor entered into a Guaranty dated June
15, 1995, as heretofore amended (as so amended, the "Original Guaranty"), in
favor of the Original Lenders and Citibank, as agent for the Original Lenders.
(2) Subsequently, the Borrower entered into an Amended and
Restated Credit Agreement dated as of June 29, 1995, as amended by the First
Amendment dated as of October 27, 1995 (as so amended, the "Second Credit
Agreement"), with the financial institutions and other institutional lenders
party thereto (the "Second Lenders") and Citibank, as agent for the Second
Lenders.
(3) Subsequently, the Borrower entered into a Second Amended
and Restated Credit Agreement dated as of December 15, 1995, as amended by the
First Amendment dated as of January 9, 1996, the Second Amendment dated as of
January 24, 1996 and the Third Amendment dated as of April 9, 1996 (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.
(4) The Borrower has entered into a Third Amended and
Restated Credit Agreement dated as of June 3, 1996 (as it may hereafter be
amended or otherwise modified from time to time, the "Credit Agreement; the
terms defined therein and not otherwise defined herein being used herein as
therein defined) with the Lender Parties and the Agent which amends and
restates the Existing Credit Agreement in its entirety.
<PAGE>
2
(5) It is a condition precedent to the effectiveness of the
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 Lender Parties to enter into the Credit Agreement, the
Guarantor hereby agrees to amend and restate the Original 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 Lender
Parties 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 Lender Parties 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
<PAGE>
3
terms or the rights of the Agent or the Lender Parties 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 Party) 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 Party 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
<PAGE>
4
with respect to any of the Guaranteed Obligations and this Guaranty and any
requirement that the Agent or any Lender Party 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 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. Subrogation. The Guarantor will not exercise any
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 Party against
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, unless and until all of the Payment
Obligations in respect of the Guaranteed Obligations and this Guaranty shall
have been Fully Satisfied. If any amount shall be paid to the Guarantor in
violation of the preceding sentence at any time prior to the later of the date
on which the Payment Obligations in respect of the Guaranteed Obligations and
this Guaranty have been Fully Satisfied and the Termination Date, such amount
shall be held in trust for the benefit of the Agent and the Lender Parties and
shall forthwith be paid to the Agent to be credited and applied to the
Guaranteed 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. If (i) the Guarantor
shall make payment to the Agent or any other Lender Party of all or any part
of the Guaranteed Obligations, (ii) all of the Payment Obligations in respect
of the Guaranteed Obligations and this Guaranty shall be Fully Satisfied and
(iii) the Termination Date shall have occurred, the Agent and the Lender
Parties will, at the Guarantor's request and expense, execute and deliver to
the Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation
to the Guarantor of an interest in the Guaranteed Obligations resulting from
such payment by the Guarantor.
Section 5. Payments Free and Clear of Taxes, Etc. (a) Any
and all payments made by the Guarantor hereunder shall be made, in accordance
with Section 2.13 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 Party 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 Party or the
<PAGE>
5
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 Party shall designate a different
Lending Office if, in the judgment of such Lender Party, 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 Party
or the Agent and would not, in the judgment of such Lender Party, be otherwise
disadvantageous to such Lender Party.
(b) In addition, the Guarantor agrees to pay any present or
future Other Taxes.
(c) The Guarantor will indemnify each Lender Party 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 Party 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 Party 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 Party or the Agent shall refund, to the
extent of any refund thereof made to such Lender Party 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 Party 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 Party or the Agent to the effect that
such Taxes or Other Taxes were wrongfully or illegally imposed and (ii) such
Lender Party 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 Party 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.
<PAGE>
6
(e) Each Lender Party 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 Party
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 Party 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 Party 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 Guaranty or the Notes or
certifying that the income receivable pursuant to this Guaranty 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 Party 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 Party 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 Party 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 Party shall reasonably request to assist the
Lender Party 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 Party 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 5 shall survive the payment in full of the
Guaranteed Obligations and all other amounts payable under this Guaranty.
(h) If a Lender Party 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 5 requiring the Guarantor to make a greater
payment than if such change had not been made, such Lender Party shall not be
entitled to receive any greater payment under this Section 5 than such Lender
Party would have been entitled to receive had it not changed its Lending
Office.
Section 6. Representations and Warranties. The Guarantor
hereby represents and warrants as follows:
<PAGE>
7
(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.
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 to the Original Credit Agreement
(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
Section 3(c)(xi)(A) of the First Amendment to the Original Credit
Agreement (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,
<PAGE>
8
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 Party 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 to the Original
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.
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 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 under the Original
Credit Agreement or the Credit Agreement 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 Original Credit Agreement or the Credit Agreement 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
<PAGE>
9
"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 1994 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 or made
available to the Lender Parties, 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).
<PAGE>
10
(h) The Guarantor and each of its Subsidiaries have filed,
have caused to be filed or have been included in all tax returns
(Federal, state, local and foreign) required to be filed and have
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 7. Affirmative Covenants. The Guarantor covenants and
agrees that, so long as any part of the Advances shall remain unpaid
or any Lender Party 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
<PAGE>
11
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 Lender Parties.
(e) Visitation Rights. At any reasonable time and from time
to time, upon reasonable prior notice permit the Agent or any of the
Lender Parties 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,
<PAGE>
12
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 Lender
Parties 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
<PAGE>
13
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 Party through the Agent may
reasonably request to enable the Lender Parties 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 Lender Parties pursuant to any other clause
of this Section 7(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
<PAGE>
14
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 Party
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 7(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, other than as a result of an Asset Sale
pursuant to which all of the common stock held by Mafco and its
Subsidiaries in any such Person is sold and the Net Cash Proceeds of
such Asset Sale is applied in accordance with the Loan Documents.
(k) Asset Sales. Deposit all of the Net Cash Proceeds
received by the Guarantor from and after the Effective date from
Asset Sales (other than Net Cash Proceeds required to prepay or repay
the facilities) in the Mafco Collateral Account.
Section 8. Negative Covenants. The Guarantor covenants and
agrees that, so long as any part of the Advances shall remain unpaid or any
Lender Party shall have any Commitment, the Guarantor will not:
<PAGE>
15
(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, provided that, in the case of an Asset Sale, the
Guarantor comply with the provisions of Section 7(k) in respect of
the Net Cash Proceeds of such Asset Sale.
(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,
<PAGE>
16
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, other than prepayments of Debt required by Section 7(g) of the
Mafco Guaranty.
(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 Lender Parties 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.
<PAGE>
17
(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 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 Lender Parties (other
than any Lender Party 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 Lender Parties 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 Party, 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 11. No Waiver; Remedies. No failure on the part of
the Agent or any Lender Party 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 Credit
Agreement to authorize the Agent to declare the Notes due and payable pursuant
to the provisions of said Section 6.01, each Lender Party is hereby authorized
at any time and from time to time, to the fullest extent permitted by
<PAGE>
18
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 Party 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 Party shall
have made any demand under this Guaranty and although such Obligations may be
unmatured. Each Lender Party agrees promptly to notify the Guarantor after any
such set-off and application made by such Lender Party; 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 Party under this Section
are in addition to other rights and remedies (including, without limitation,
other rights of set-off) that such Lender Party may have.
Section 13. Indemnification. Without limitation on any other
Obligations of the Guarantor or remedies of the Lender Parties under this
Guaranty, the Guarantor shall, to the fullest extent permitted by law,
indemnify, defend and save and hold harmless the Lender Parties 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 Lender Parties and the reasonable
and documented charges of the internal legal counsel of the Lender Parties)
suffered or incurred by the Lender Parties 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
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 Lender Parties, the
Agent and their successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender Party 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 Party herein or otherwise,
in each case as provided in Section 8.07 of the Credit Agreement.
Section 15. 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.
<PAGE>
19
(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 PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT THEREOF.
Section 16. 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.
<PAGE>
20
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 CONSOLIDATED HOLDINGS INC.
By /s/ Glenn Dickes
-------------------------------
Name:
Title:
<PAGE>
AMENDED AND RESTATED C&F GUARANTY
Schedule I
LIENS
MAFCO CONSOLIDATED HOLDINGS INC.
None.
<PAGE>
AMENDED AND RESTATED C&F GUARANTY
SCHEDULE II
DEBT
A. MAFCO CONSOLIDATED HOLDINGS INC.
1. C&F Guaranty (as defined in the Credit Agreement).
B. MAFCO CONSOLIDATED GROUP INC.
1. Letter of Credit Reimbursement and Cash Collateral
Agreement dated as of June 15, 1995 with Chemical Bank
2. Guaranty of Pneumo Abex Corporation's 9-5/8% Debentures
C. MCG INTERMEDIATE HOLDINGS INC. AND ITS SUBSIDIARIES
None.
D. FLAVORS HOLDINGS INC.
1. Guarantee and Security Agreement, dated as of June 29,
1994, between Flavors Holdings Inc. and The Chase
Manhattan Bank (National Association), as agent (the "Chase
Agent"), under the Credit Agreement dated as of June 29,
1994 (the "Flavors Chase Credit Agreement"), between Mafco
Worldwide Corporation, each of the lenders party thereto
and the Chase Agent, executed in connection with the Chase
Credit Agreement.
E. MAFCO WORLDWIDE CORPORATION AND ITS SUBSIDIARIES
1. Flavors Chase Credit Agreement (as defined in D.1. above).
2. $85,000,000 11-7/8% Senior Subordinated Notes Due 2002,
pursuant to Indenture dated November 12, 1992 with
Security Pacific National Trust Company (New York), as
trustee.
F. CONSOLIDATED CIGAR (PARENT) HOLDINGS INC.
1. Chase Guaranty and Security Agreement, dated as of February
27, 1993, between consolidated Cigar (Parent) Holdings Inc.
and the Chase Manhattan Bank (National Association), as
agent (the "Chase Agent") under the Credit Agreement (the
"Cigar Chase Credit Agreement"), dated as of February 27,
1993, as amended, among Consolidated Cigar
<PAGE>
Corporation, as successor-in-interest to Consolidated Cigar
Acquisition Corp., Congar Newco Inc., the lenders parties
thereto and the Chase Agent, executed in connection with the
Chase Credit Agreement.
G. CONSOLIDATED CIGAR CORPORATION AND SUBSIDIARIES
1. Cigar Chase Credit Agreement (as defined in item F.1.
above).
2. 10 1/2% $90 million Senior Subordinated Notes Due 2003,
pursuant to Indenture dated as of March 1, 1993 with
Continental Bank, N.A.
3. NationsBank of North Carolina, N.A., ISDA Master
Agreement dated as of December 16, 1993.
<PAGE>
AMENDED AND RESTATED C&F GUARANTY
Schedule III
INVESTMENTS
Investment
Person Obligor or Issuer Type Amount
------ ----------------- ---- ------------
Mafco Consolidated Mafco Consolidated Common 85.2%
Holdings Inc. Group Inc. Stock
<PAGE>
VOTING TRUST AGREEMENT
VOTING TRUST AGREEMENT dated as of June 15, 1995
(this "Agreement") among NationsBank of Georgia, National
Association ("Voting Trustee"), Flavors (Parent) Holdings
Inc., a Delaware corporation (the "Shareholder"), C&F
(Parent) Holdings Inc., a Delaware corporation (the
"Company"), and Citibank, N.A., a national banking
association ("Citibank"), as agent (the "Bank Agent")
for the Lenders (as defined below).
WHEREAS the Company is a duly organized and existing
corporation under the laws of the State of Delaware with authorized capital
stock consisting of 1000 shares of Common Stock, par value $1.00 per share
(the "Common Stock");
WHEREAS the Shareholder is the owner of 500 shares of the
Common Stock, constituting 50% of the outstanding Common Stock;
WHEREAS the Shareholder intends to deposit three shares of
the Common Stock owned by it in the voting trust created by this Agreement;
WHEREAS the Shareholder is contributing such shares of
Common Stock to the voting trust created hereby, and such trust is being
created, in consideration for the Lenders' entering into the First Amendment,
dated as of March 10, 1995, to the Credit Agreement (as defined below); and
WHEREAS to secure the obligations of the Shareholder under
the Flavors Guaranty (as defined in the Credit Agreement), the Shareholder is
pledging the Common Stock owned by it to the Bank Agent pursuant to the
Amended and Restated Flavors Pledge Agreement, dated the date hereof, among
the Shareholder, the Bank Agent and, with respect to certain sections thereof,
the Voting Trustee, as amended or modified from time to time (the "Pledge
Agreement").
NOW, THEREFORE, a voting trust with respect to three shares
of Common Stock is hereby created and established (the "Voting Trust"),
subject to the following terms and conditions, to which the parties hereto
expressly agree:
SECTION 1. Registration of Voting Trust Stock. The
Shareholder, in connection with the First Amendment, dated as of March 10,
1995, to the Credit Agreement dated as of July 20, 1994, as amended,
supplemented or modified from time to time (the "Credit Agreement"), by and
among Marvel IV Holdings Inc., a Delaware corporation, the lenders named
therein (the "Lenders") and the Bank Agent, shall deposit with the Voting
Trustee three shares of Common Stock by
<PAGE>
2
delivering to the Voting Trustee certificates representing such shares of
Common Stock, together with executed stock powers transferring such
certificates to the Voting Trustee, with any requisite stock transfer stamps
annexed thereto. The Shareholder and the Voting Trustee shall take such action
as is necessary to effect the transfer of such shares of Common Stock to, and
in the name of, the Voting Trustee on the books of the Company, including the
immediate filing of a duplicate of this Agreement with the Secretary of the
Company. After the filing of this Agreement in the registered office of the
Company pursuant to Section 14, certificates for the Common Stock transferred
and delivered to the Voting Trustee pursuant to this Agreement shall be issued
to and held by the Voting Trustee in the name of "NationsBank of Georgia,
National Association, as Voting Trustee" (such shares of Common Stock being
referred to herein as the "Voting Trust Stock"). The Voting Trustee accepts
the trust created hereby and upon receipt by the Voting Trustee of the
certificates for and upon the transfer of such shares of Common Stock into the
name of the Voting Trustee, the Voting Trustee shall hold the Voting Trust
Stock, as stockholder of record, in each case subject to the terms and
conditions of this Agreement; provided, however, that the Voting Trustee shall
pledge the certificate evidencing the Voting Trust Stock to the Bank Agent and
the Voting Trustee shall deliver such certificate, along with a stock power
relating to such certificate executed in blank, to the Bank Agent, in each
case pursuant to the Pledge Agreement.
SECTION 2. Stock Certificates. On all certificates representing Voting
Trust Stock, as well as in the stock ledger of the Company, the following
legend shall conspicuously appear:
"The shares of Common Stock evidenced by this stock certificate are
subject to certain restrictions contained in (i) the Voting Trust
Agreement dated as of June 15, 1995 (the "Agreement"), by and among
NationsBank of Georgia, National Association, as Voting Trustee,
Flavors (Parent) Holdings Inc., C&F (Parent) Holdings Inc. (the
"Company") and Citibank, N.A., as agent for the Lenders (as defined
in the Agreement), as such agreement may be amended, supplemented or
otherwise modified from time to time, (ii) the Pledge Agreement (as
defined in the Agreement) and (iii) the Certificate of Incorporation
and By-laws of the Company. The holder of this stock certificate, by
his acceptance hereof, agrees to be bound by all the provisions of
such agreements and instruments, which agreements and instruments are
available for inspection by the owner hereof at the registered office
of the Company in the State of Delaware."
<PAGE>
3
SECTION 3. Issuance of Voting Trust Certificates. Promptly
after the date hereof, the Voting Trustee shall issue to the Shareholder, in
exchange for the Voting Trust Stock delivered hereunder, a Voting Trust
Certificate substantially in the form annexed as Exhibit A hereto (the "Voting
Trust Certificate"). Except as otherwise expressly provided herein, all
options, rights of purchase and other powers and privileges affecting the
Voting Trust Stock represented by the Voting Trust Certificate, shall attach
to the Voting Trust Certificate.
SECTION 4. Voting of the Voting Trust Stock. (a) The Voting
Trustee shall have the right to exercise, in person or by its nominees or
proxies, all rights and powers to vote the shares of the Voting Trust Stock
deposited hereunder and to take part in or give consent with respect to any
lawful corporate action with respect to which such shares are able or required
to be voted, except as otherwise provided herein. The Voting Trustee shall in
each such case (other than with respect to the Enumerated Actions set forth in
Section 4(b) below) vote the shares represented by the Voting Trust
Certificate in accordance with the written instructions of the registered
holder thereof or, if no such written instructions are received by the Voting
Trustee by the close of business on the 7th business day immediately following
receipt by the Voting Trustee of the prior written notice required by Section
13, vote such shares in accordance with the recommendation of a majority of
the Board of Directors of the Company as expressed in the written notice
required by Section 13; provided, however, that, with respect to any proposed
actions or resolutions described in or covered by the Enumerated Actions set
forth in Section 4(b), the Voting Trustee shall vote or refrain to vote as
provided in such Section.
(b) Until this Agreement is terminated pursuant to Section
6, the Voting Trustee shall, in voting with respect to each action set forth
below (each, an "Enumerated Action"), vote in accordance with the written
instructions of the Bank Agent acting on behalf of the Lenders, or, if no such
written instructions are received by the Voting Trustee by the close of
business on the 7th business day immediately following receipt by the Voting
Trustee of the prior written notice required by Section 13, vote in accordance
with the written recommendation of a majority of the entire Board of Directors
of the Company as expressed in the written notice required by Section 13 with
respect to such action:
(A) an action to dissolve or liquidate the Company,
in whole or in part, or institute proceedings with respect to the
Company to be adjudicated bankrupt or insolvent;
(B) a consent to the institution of bankruptcy or
insolvency proceedings against the Company;
<PAGE>
4
(C) the filing of a petition seeking, or consent
to, liquidation, reorganization or other relief with respect to the
Company under any applicable Federal or state law relating to
bankruptcy or insolvency;
(D) a consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or a substantial part of its property;
(E) the making of any assignment for the benefit
of creditors;
(F) an admission in writing of the Company's
inability to pay its debts generally as they become due;
(G) the taking of any corporate action in
furtherance of any action specified in clauses (A)- (F) above;
(H) a merger or consolidation of the Company with
any other corporation, company or entity or any sale, lease or other
transfer of all or substantially all the Company's assets to, or
acquisition of all or substantially all the assets or capital stock
or other ownership interest of, any other corporation, company or
entity; or
(I) any amendment, alteration, change or repeal of
any provision of the Restricted Articles (as defined in the Company's
Certificate of Incorporation).
In the absence of the written notice of the Company required by Section 13 or
written instructions to the Voting Trustee pursuant to this Section 4 from
either the Bank Agent or the Board of Directors, the Voting Trustee shall not
have any obligation whatsoever to vote upon any proposal referred to herein.
(c) The Shareholder and the Bank Agent agree that neither
the Voting Trustee nor any officer, director, employee or agent of the Voting
Trustee shall be liable for the consequence of any vote cast, or any failure
to vote or consent given by them, or any other action taken or omitted to be
taken by them, in good faith, except for any such liability resulting from
their gross negligence or willful misconduct.
SECTION 5. Record of Beneficial Owners; Restriction on
Transfer. (a) The Voting Trustee shall keep a record on its books of the name
of each holder of a Voting Trust Certificate and the number of shares of
Voting Trust Stock beneficially owned by each holder.
<PAGE>
5
(b) No holder of a Voting Trust Certificate shall transfer
its Voting Trust Certificate or the beneficial ownership of any Voting Trust
Stock represented by such Voting Trust Certificate without (i) the prior
written consent of the Bank Agent acting on behalf of the Lenders, such
consent not to be unreasonably withheld, prior to the termination of this
Agreement and (ii) receipt by the Voting Trustee of a copy of such consent;
provided, however, that such holder may pledge such Voting Trust Certificate
or its beneficial ownership of any Voting Trust Stock represented by such
Voting Trust Certificate to the Bank Agent pursuant to the Pledge Agreement
and the transactions contemplated thereby. In addition, no transfer of a
Voting Trust Certificate shall be made unless (i) such transfer is made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "Securities Act"), and all applicable state securities
laws, or is exempt from the registration requirements of the Securities Act
and such applicable state securities laws, and (ii) the Voting Trustee shall
have received an opinion of legal counsel, if so requested by the Voting
Trustee, reasonably satisfactory to it stating that such registration
statement has become effective and to the best of such counsel's knowledge, no
stop order or proceeding to suspend the effectiveness of the registration
statement has been instituted or is pending or contemplated, or that such
transfer is exempt from the registration requirements of the Securities Act.
(c) The transfer of a Voting Trust Certificate may be
registered only upon the books of the Voting Trustee kept for the registration
and registration of transfer of Voting Trust Certificates upon surrender
thereof to the Voting Trustee together with transfer instructions duly
executed by the registered owner having such signature guaranteed by a member
firm of the New York Stock Exchange or a commercial bank or trust company, in
such form as shall be reasonably satisfactory to the Voting Trustee. Upon any
such registration of transfer the Voting Trustee shall execute and deliver in
exchange for such Voting Trust Certificate a new registered Voting Trust
Certificate, registered in the name of the transferee.
(d) If any mutilated Voting Trust Certificate is surrendered
to the Voting Trustee, or the Voting Trustee receives evidence to its
satisfaction that any Voting Trust Certificate has been destroyed, lost or
stolen, and upon proof of ownership satisfactory to the Voting Trustee
together with such security or indemnity as may be requested by the Voting
Trustee to save it harmless, the Voting Trustee shall execute and deliver a
new Voting Trust Certificate for the same number of shares of Voting Trust
Stock as the Voting Trust Certificate so mutilated, destroyed, lost or stolen,
with such notations, if any, as the Voting Trustee shall determine.
<PAGE>
6
(e) Prior to due presentment of a Voting Trust Certificate
for transfer and compliance with the requirements of this Section 5, the
Voting Trustee may, except as otherwise required by law, treat the registered
holder of any Voting Trust Certificate as the owner thereof for all purposes
whatsoever and shall not be affected by any notice to the contrary.
(f) The Voting Trustee 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 shares of Voting Trust Stock or (ii) create or
suffer to exist any lien, security interest or other charge or encumbrance of
any kind, or any other type of preferential arrangement (a "Lien") upon or
with respect to any of the Voting Trust Stock except for the Lien created by
this Agreement and the Pledge Agreement.
SECTION 6. Termination. (a) The Voting Trust and this
Agreement shall terminate upon the earlier of:
(i) receipt by the Voting Trustee of notice from
the Shareholder or the Bank Agent certifying that the Payment
Obligations have been Fully Satisfied (as each such term is defined
below); and
(ii) transfer to, or registration in the name of,
the Bank Agent or any of its nominees of any or all of the Voting
Trust Stock pledged by the Voting Trustee under the Pledge Agreement.
(b) Upon the termination of this Voting Trust (other than by
reason of action by the Bank Agent or its nominee under Section 6(a)(ii)) and
the return of the Voting Trust Stock to the Voting Trustee by the Bank Agent,
the Voting Trustee shall, in exchange for, and upon the surrender of, the
Voting Trust Certificates representing the Voting Trust Stock, deliver the
certificates representing the Voting Trust Stock to the holder of such Voting
Trust Certificates.
(c) "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 (as
each such term is defined in the 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 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
<PAGE>
7
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.
SECTION 7. Extension. (a) The duration of this Agreement
may be extended by an instrument or concurrent instruments in writing, signed
by the parties hereto.
(b) If this Agreement shall be extended pursuant to this
Section 7, a copy of the instrument effecting such extension shall be filed by
the Voting Trustee in the registered office of the Company in the State of
Delaware.
SECTION 8. Dividends. Subject to the provisions of the
Pledge Agreement, neither the Voting Trustee nor the Bank Agent shall be
entitled to retain any dividends or other distributions of cash or other
property or securities, if any, with respect to the Voting Trust Stock and
such distributions, if any, shall be paid over directly to the registered
holder of each Voting Trust Certificate. Notwithstanding any provision in the
Pledge Agreement to the contrary, the Voting Trustee shall distribute any
dividends or other distributions of any kind with respect to the Voting Trust
Stock directly to the registered holder of the Voting Trust Certificate.
SECTION 9. Compensation of Voting Trustee. During the term
of this Agreement, the Shareholder shall pay the Voting Trustee a fee and the
Voting Trustee's reasonable expenses, disbursements and advances in connection
with Agreement, as agreed to between the Shareholder and the Voting Trustee.
SECTION 10. Successor Voting Trustee. The Voting Trustee may
resign at any time by giving written notice thereof to the Shareholder, the
Company and the Bank Agent. Upon any such resignation, the remaining parties
hereto shall appoint a successor Voting Trustee with qualifications
substantially similar to those of the Voting Trustee being so replaced. Upon
the acceptance in writing by a successor Voting Trustee of any appointment as
Voting Trustee hereunder, such successor Voting Trustee shall succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Voting Trustee, and upon (but only upon) such acceptance, the
retiring Voting Trustee shall be discharged from further responsibilities
under this Agreement.
SECTION 11. Concerning the Trustee. (a) The Voting Trustee
shall have all requisite power and authority as shall be necessary or
appropriate to enable it to take all such actions as it is required to take
pursuant to this
<PAGE>
8
Agreement. The Voting Trustee shall have no liability hereunder except for its
own gross negligence or willful misconduct.
(b) The Voting Trustee may consult with any counsel, banker,
broker, accountant or other professional adviser satisfactory to it and the
written opinion of such person shall be full and complete authorization and
protection in respect of any action taken, omitted to be taken or suffered by
it hereunder in good faith and in accordance with such opinion, in the absence
of gross negligence or willful misconduct on the part of the Voting Trustee.
(c) The Voting Trustee shall be protected and shall incur no
liability for, or in respect of, any action taken or omitted to be taken or
anything suffered by it in reliance upon any notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the
proper parties.
(d) The Voting Trustee shall be obligated to perform such
duties and only such duties as are herein specifically set forth, and no
implied duties or obligations shall be read into this Agreement. Except for
the terms and provisions of this Agreement and the Pledge Agreement, the
Voting Trustee shall not be charged with knowledge of, or be deemed to have
any implied duties or obligations under, the Credit Agreement or any document
or instrument related to or delivered in connection with the transactions
contemplated by the Credit Agreement. The Voting Trustee shall not be under
any obligation to take any action hereunder which might reasonably be expected
to involve it in any expense or liability, the payment of which within a
reasonable time is not, in its reasonable opinion, assured to it.
SECTION 12. Indemnification. (a) The Shareholder covenants
and agrees to indemnify and hold harmless the Voting Trustee and its
affiliates, directors, officers, employees and agents (each, an "Indemnified
Party"), without duplication, from and against any and all claims, damages,
losses, liabilities, obligations, actions, suits, costs, disbursements and
expenses (including reasonable fees and expenses of counsel) incurred by any
Indemnified Party arising out of, from, or in conjunction with the Voting
Trustee's execution of or performance or inaction under this Agreement, except
to the extent such claim, damage, loss, liability, obligation, action, suit,
cost, disbursement or expense results from such Indemnified Party's gross
negligence or willful misconduct.
(b) The indemnities set forth in this Section 12 shall be in
addition to any other obligations or liabilities of the Shareholder hereunder
or at common law or otherwise and shall survive the termination of this
Agreement or the
<PAGE>
9
transfer by the Shareholder of all or any part of its interest in the Voting
Trust Certificate.
SECTION 13. Obligation of the Company. For any meeting of
the Company's shareholders at which the Voting Trustee shall be asked to vote,
the Company shall give the Voting Trustee, the Bank Agent and the registered
holder of the Voting Trust Certificate written notice setting forth (i) the
date, time and place of the meeting, and (ii) the recommendation of a majority
of the Company's Board of Directors (which shall be the majority of the
Company's entire Board of Directors in the event of an Enumerated Action) with
respect to the actions to be considered at such meeting. Such notification
shall be sent to the Voting Trustee, the Bank Agent and the registered holder
of the Voting Trust Certificate not less than 10 business days nor more than
60 days prior to such meeting.
SECTION 14. Other Obligation of the Voting Trustee. The
Voting Trustee shall file a copy of this Agreement (and any amendments hereto)
in the registered office of the Company in the State of Delaware, which copy
the Company shall cause to be open to the inspection of any stockholder of the
Company and any holder of a Voting Trust Certificate daily during business
hours.
SECTION 15. No Legal Title to Voting Trust Stock in Holders
of Voting Trust Certificates. The holders of Voting Trust Certificates shall
not have legal title to any part of the Voting Trust Stock and, except as
contemplated by Sections 5, 6 and 17, shall not be entitled to create any
liens upon or transfer or convey any interest in the Voting Trust Stock. No
creditor of any holder of a Voting Trust Certificate shall be able to obtain
legal title to or exercise legal or equitable remedies with respect to the
Voting Trust Stock. No transfer, by operation of law or otherwise, of any
right, title and interest of any holder of a Voting Trust Certificate in and
to its undivided beneficial interest in the Voting Trust Stock or hereunder
shall operate to terminate this Agreement or the Voting Trust or entitle any
successor of any holder of a Voting Trust Certificate to an accounting or to
the transfer to it of any legal title to any part of the Voting Trust Stock;
provided, however, that notwithstanding anything herein to the contrary,
nothing in this Section 15 shall be deemed to limit the rights or interest of
(x) the Bank Agent as pledgee of the certificate representing the Voting Trust
Stock pursuant to the pledge provided for under Section 1 hereof and in the
Pledge Agreement or (y) any pledgee of the Voting Trust Stock or Voting Trust
Certificate pursuant to a pledge permitted under Section 5(b) hereof.
SECTION 16. Beneficiaries. Nothing in this Agreement,
whether express or implied, shall be construed to give any person other than
the Voting Trustee, the Share-
<PAGE>
10
holder and the Company any right in the Voting Trust Stock or under or in
respect of this Agreement or any covenant, conditions or provisions contained
herein.
SECTION 17. Assignment. No assignment or transfer of any
interest, right or obligation of the Shareholder under this Agreement shall be
allowed, except for the pledge of the Voting Trust Certificate pursuant to
Section 5 hereof.
SECTION 18. Amendments. This Agreement may not be amended,
supplemented or otherwise modified except in a writing signed by or on behalf
of the parties hereto.
SECTION 19. Notices. All notices, consents, approvals and
other communications given or made pursuant hereto shall be in writing and
shall be (a) delivered personally against receipt thereof, (b) by overnight
courier, (c) transmitted by telecopier or (d) by registered or certified mail
(postage prepaid, return receipt requested), in each case to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice):
(a) if to the Voting Trustee:
NationsBank of Georgia, National Association
600 Peachtree Street, Suite 900
Atlanta, Georgia 30308
Telecopy: (404) 607-6534
Telephone: (404) 607-4696
Attention: Peggy T. McWhorter
(b) if to the Shareholder or the Company:
c/o MacAndrews & Forbes Holdings Inc.
38 East 63rd Street
New York, New York 10021
Telecopy: (212) 572-8435
Telephone: (212) 572-8500
Attention: Corporate Secretary
(c) if to the Bank Agent:
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Telecopy: (212) 793-3963
Telephone: (212) 248-4636
Attention: Jolie Eisner
All such notices, consents, approvals and other
communications shall be deemed to have been given on (x) the date of receipt
if delivered personally or by overnight courier, (y) the date of transmission
with confirmation
<PAGE>
11
answer back if transmitted by telecopier or (z) the second day following
posting if transmitted by mail.
SECTION 20. Interpretation. The terms defined in this
Agreement include the plural as well as the singular. When a reference is made
in this Agreement to a Section or Exhibit, such reference shall be to a
Section or Exhibit of this Agreement unless otherwise indicated. The headings
contained herein are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation."
SECTION 21. Severability. If any provision of this Agreement
shall be held to be invalid, illegal or unenforceable, in whole or in part,
under the laws of the State of Delaware, such invalidity, illegality or
enforceability shall not in any way whatsoever affect the validity of the
other provisions of this Agreement and such other provisions shall remain in
full force and effect.
SECTION 22. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. One or more
counterparts of this document may be delivered via telecopier with the
intention that they shall have the same effect as an original, executed
counterpart hereof.
SECTION 23. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware,
regardless of the laws that might be applied under applicable principles of
conflicts of laws.
<PAGE>
12
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION
By: /s/ Mary Willis
------------------------------
Name: Mary Willis
Title: Trust Officer
FLAVORS (PARENT) HOLDINGS INC.
By:
-------------------------------
Name:
Title:
C&F (PARENT) HOLDINGS INC.
By:
-------------------------------
Name:
Title:
CITIBANK, N.A., as Agent
By:
------------------------------
Name:
Title:
<PAGE>
12
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION
By:
------------------------------
Name:
Title:
FLAVORS (PARENT) HOLDINGS INC.
By:/s/ Glenn Dickes
-------------------------------
Name:
Title:
C&F (PARENT) HOLDINGS INC.
By: /s/ Glenn Dickes
-------------------------------
Name:
Title:
CITIBANK, N.A., as Agent
By:
------------------------------
Name:
Title:
<PAGE>
12
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION
By:
------------------------------
Name:
Title:
FLAVORS (PARENT) HOLDINGS INC.
By:
-------------------------------
Name:
Title:
C&F (PARENT) HOLDINGS INC.
By:
-------------------------------
Name:
Title:
CITIBANK, N.A., as Agent
By: /s/ Douglas H. Guff
------------------------------
Name: Douglas H. Guff
Title: Attorney-in-fact
<PAGE>
EXHIBIT A
TO THE
VOTING TRUST AGREEMENT
Form of
Voting Trust Certificate
Registered Holder:________________ Certificate No.__
THE SALE, ASSIGNMENT, TRANSFER, PLEDGE, HYPOTHECATION OR
OTHER ENCUMBRANCE OF THIS VOTING TRUST CERTIFICATE OR THE COMMON STOCK
REFERRED TO HEREIN IS SUBJECT TO THE RESTRICTIONS, TERMS AND CONDITIONS SET
FORTH IN THE VOTING TRUST AGREEMENT DESCRIBED IN THIS CERTIFICATE AND PURSUANT
TO WHICH THIS CERTIFICATE IS ISSUED. THIS CERTIFICATE AND SUCH COMMON STOCK
ARE SUBJECT TO AND MAY BE TRANSFERRED OR ENCUMBERED ONLY IN ACCORDANCE WITH
SUCH AGREEMENT, A DUPLICATE OF WHICH IS ON FILE WITH THE SECRETARY OF THE
CORPORATION.
Voting Trust Certificate
for
Three (3) shares of Common Stock
$1.00 par value per share
of
C&F (Parent) Holdings Inc.
a Delaware corporation
THIS IS TO CERTIFY THAT, upon the termination of a certain
Voting Trust established by a Voting Trust Agreement, dated as of June 15,
1995 (the "Agreement"), by and among NationsBank of Georgia, National
Association, as Voting Trustee, Flavors (Parent) Holdings Inc., a Delaware
corporation (the "Shareholder"), C&F (Parent) Holdings Inc., a Delaware
corporation, and Citibank, N.A., as agent (the "Bank Agent") for the Lenders
(as defined in the Agreement) pursuant to which this certificate has been
issued and after receipt by the Voting Trustee from the Bank Agent of the
shares hereinabove specified (the "Shares"), the Shareholder, as registered
holder of this certificate, will be entitled to receive certificates, for the
Shares and, for the duration of such Agreement, to receive distributions equal
to the cash or property or non-voting stock distributions, if any, received by
the Voting Trustee upon a like number of the Shares standing in its name.
Prior to the termination of the Agreement, the Voting Trustee, with respect to
any and all of the Shares, shall possess and be entitled to exercise, in the
<PAGE>
manner and to the extent provided in the Agreement, all the rights of every
kind of the holder of this certificate, including the right to vote and to
take part in, or to consent to any corporate or shareholders' action, it being
expressly stipulated that no right to vote, or take part in, or to consent to
any corporate or shareholders' action, shall pass to the registered holder
hereof by, or under, this certificate.
This certificate is not transferable except as permitted by
the Agreement, and is not valid unless signed by the Voting Trustee. The
holder hereof, by accepting this certificate, manifests its consent that the
undersigned Voting Trustee may treat the registered holder hereof as the true
owner of this certificate for all purposes.
IN WITNESS WHEREOF, the undersigned, Voting Trustee has
caused this certificate to be signed as of the ____ day of __________, 1995.
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION,
as Voting Trustee
By:
----------------------------------
Name:
Title:
<PAGE>
VOTING TRUST AGREEMENT
VOTING TRUST AGREEMENT dated as of June 15, 1995
(this "Agreement") among NationsBank of Georgia, National
Association ("Voting Trustee"), Consolidated Cigar II
Holdings Inc., a Delaware corporation (the "Shareholder"),
C&F (Parent) Holdings Inc., a Delaware corporation (the
"Company"), and Citibank, N.A., a national banking
association ("Citibank"), as agent (the "Bank Agent") for
the Lenders (as defined below).
WHEREAS the Company is a duly organized and existing
corporation under the laws of the State of Delaware with authorized capital
stock consisting of 1000 shares of Common Stock, par value $1.00 per share
(the "Common Stock");
WHEREAS the Shareholder is the owner of 500 shares of the
Common Stock, constituting 50% of the outstanding Common Stock;
WHEREAS the Shareholder intends to deposit three shares of
the Common Stock owned by it in the voting trust created by this Agreement;
WHEREAS the Shareholder is contributing such shares of
Common Stock to the voting trust created hereby, and such trust is being
created, in consideration for the Lenders' entering into the First Amendment,
dated as of March 10, 1995, to the Credit Agreement (as defined below); and
WHEREAS to secure the obligations of the Shareholder under
the Cigar Guaranty (as defined in the Credit Agreement), the Shareholder is
pledging the Common Stock owned by it to the Bank Agent pursuant to the
Amended and Restated Cigar Pledge Agreement, dated as of the date hereof,
among the Shareholder, the Bank Agent and, with respect to certain sections
thereof, the Voting Trustee, as amended or modified from time to time (the
"Pledge Agreement").
NOW, THEREFORE, a voting trust with respect to three shares
of Common Stock is hereby created and established (the "Voting Trust"),
subject to the following terms and conditions, to which the parties hereto
expressly agree:
SECTION 1. Registration of Voting Trust Stock. The
Shareholder, in connection with the First Amendment, dated as of March 10,
1995, to the Credit Agreement dated as of July 20, 1994, as amended,
supplemented or modified from time to time (the "Credit Agreement"), by and
among Marvel IV Holdings Inc., a Delaware corporation, the lenders named
therein (the "Lenders") and the Bank Agent, shall deposit with the Voting
Trustee three shares of Common Stock by
<PAGE>
2
delivering to the Voting Trustee certificates representing such shares of
Common Stock, together with executed stock powers transferring such
certificates to the Voting Trustee, with any requisite stock transfer stamps
annexed thereto. The Shareholder and the Voting Trustee shall take such action
as is necessary to effect the transfer of such shares of Common Stock to, and
in the name of, the Voting Trustee on the books of the Company, including the
immediate filing of a duplicate of this Agreement with the Secretary of the
Company. After the filing of this Agreement in the registered office of the
Company pursuant to Section 14, certificates for the Common Stock transferred
and delivered to the Voting Trustee pursuant to this Agreement shall be issued
to and held by the Voting Trustee in the name of "NationsBank of Georgia,
National Association, as Voting Trustee" (such shares of Common Stock being
referred to herein as the "Voting Trust Stock"). The Voting Trustee accepts
the trust created hereby and upon receipt by the Voting Trustee of the
certificates for and upon the transfer of such shares of Common Stock into the
name of the Voting Trustee, the Voting Trustee shall hold the Voting Trust
Stock, as stockholder of record, in each case subject to the terms and
conditions of this Agreement; provided, however, that the Voting Trustee shall
pledge the certificate evidencing the Voting Trust Stock to the Bank Agent and
the Voting Trustee shall deliver such certificate, along with a stock power
relating to such certificate executed in blank, to the Bank Agent, in each
case pursuant to the Pledge Agreement.
SECTION 2. Stock Certificates. On all certificates
representing Voting Trust Stock, as well as in the stock ledger of the Company,
the following legend shall conspicuously appear:
"The shares of Common Stock evidenced by this stock certificate are
subject to certain restrictions contained in (i) the Voting Trust
Agreement dated as of June 15, 1995 (the "Agreement"), by and among
NationsBank of Georgia, National Association, as Voting Trustee,
Consolidated Cigar II Holdings Inc., C&F (Parent) Holdings Inc. (the
"Company") and Citibank, N.A., as agent for the Lenders (as defined
in the Agreement), as such agreement may be amended, supplemented or
otherwise modified from time to time, (ii) the Pledge Agreement (as
defined in the Agreement) and (iii) the Certificate of Incorporation
and By-laws of the Company. The holder of this stock certificate, by
his acceptance hereof, agrees to be bound by all the provisions of
such agreements and instruments, which agreements and instruments are
available for inspection by the owner hereof at the registered office
of the Company in the State of Delaware."
<PAGE>
3
SECTION 3. Issuance of Voting Trust Certificates. Promptly
after the date hereof, the Voting Trustee shall issue to the Shareholder, in
exchange for the Voting Trust Stock delivered hereunder, a Voting Trust
Certificate substantially in the form annexed as Exhibit A hereto (the "Voting
Trust Certificate"). Except as otherwise expressly provided herein, all
options, rights of purchase and other powers and privileges affecting the
Voting Trust Stock represented by the Voting Trust Certificate, shall attach
to the Voting Trust Certificate.
SECTION 4. Voting of the Voting Trust Stock. (a) The Voting
Trustee shall have the right to exercise, in person or by its nominees or
proxies, all rights and powers to vote the shares of the Voting Trust Stock
deposited hereunder and to take part in or give consent with respect to any
lawful corporate action with respect to which such shares are able or required
to be voted, except as otherwise provided herein. The Voting Trustee shall in
each such case (other than with respect to the Enumerated Actions set forth in
Section 4(b) below) vote the shares represented by the Voting Trust
Certificate in accordance with the written instructions of the registered
holder thereof or, if no such written instructions are received by the Voting
Trustee by the close of business on the 7th business day immediately following
receipt by the Voting Trustee of the prior written notice required by Section
13, vote such shares in accordance with the recommendation of a majority of
the Board of Directors of the Company as expressed in the written notice
required by Section 13; provided, however, that, with respect to any proposed
actions or resolutions described in or covered by the Enumerated Actions set
forth in Section 4(b), the Voting Trustee shall vote or refrain to vote as
provided in such Section.
(b) Until this Agreement is terminated pursuant to Section
6, the Voting Trustee shall, in voting with respect to each action set forth
below (each, an "Enumerated Action"), vote in accordance with the written
instructions of the Bank Agent acting on behalf of the Lenders, or, if no such
written instructions are received by the Voting Trustee by the close of
business on the 7th business day immediately following receipt by the Voting
Trustee of the prior written notice required by Section 13, vote in accordance
with the written recommendation of a majority of the entire Board of Directors
of the Company as expressed in the written notice required by Section 13 with
respect to such action:
(A) an action to dissolve or liquidate the Company,
in whole or in part, or institute proceedings with respect to the
Company to be adjudicated bankrupt or insolvent;
(B) a consent to the institution of bankruptcy or
insolvency proceedings against the Company;
<PAGE>
4
(C) the filing of a petition seeking, or consent to,
liquidation, reorganization or other relief with respect to the
Company under any applicable Federal or state law relating to
bankruptcy or insolvency;
(D) a consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the
Company or a substantial part of its property;
(E) the making of any assignment for the benefit of creditors;
(F) an admission in writing of the Company's inability to pay
its debts generally as they become due;
(G) the taking of any corporate action in furtherance of any
action specified in clauses (A)- (F) above;
(H) a merger or consolidation of the Company with any other
corporation, company or entity or any sale, lease or other transfer
of all or substantially all the Company's assets to, or acquisition
of all or substantially all the assets or capital stock or other
ownership interest of, any other corporation, company or entity; or
(I) any amendment, alteration, change or repeal of any
provision of the Restricted Articles (as defined in the Company's
Certificate of Incorporation).
In the absence of the written notice of the Company required by Section 13 or
written instructions to the Voting Trustee pursuant to this Section 4 from
either the Bank Agent or the Board of Directors, the Voting Trustee shall not
have any obligation whatsoever to vote upon any proposal referred to herein.
(c) The Shareholder and the Bank Agent agree that neither
the Voting Trustee nor any officer, director, employee or agent of the Voting
Trustee shall be liable for the consequence of any vote cast, or any failure
to vote or consent given by them, or any other action taken or omitted to be
taken by them, in good faith, except for any such liability resulting from
their gross negligence or willful misconduct.
SECTION 5. Record of Beneficial Owners; Restriction on
Transfer. (a) The Voting Trustee shall keep a record on its books of the name
of each holder of a Voting Trust Certificate and the number of shares of
Voting Trust Stock beneficially owned by each holder.
<PAGE>
5
(b) No holder of a Voting Trust Certificate shall transfer
its Voting Trust Certificate or the beneficial ownership of any Voting Trust
Stock represented by such Voting Trust Certificate without (i) the prior
written consent of the Bank Agent acting on behalf of the Lenders, such
consent not to be unreasonably withheld, prior to the termination of this
Agreement and (ii) receipt by the Voting Trustee of a copy of such consent;
provided, however, that such holder may pledge such Voting Trust Certificate
or its beneficial ownership of any Voting Trust Stock represented by such
Voting Trust Certificate to the Bank Agent pursuant to the Pledge Agreement
and the transactions contemplated thereby. In addition, no transfer of a
Voting Trust Certificate shall be made unless (i) such transfer is made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "Securities Act"), and all applicable state securities
laws, or is exempt from the registration requirements of the Securities Act
and such applicable state securities laws, and (ii) the Voting Trustee shall
have received an opinion of legal counsel, if so requested by the Voting
Trustee, reasonably satisfactory to it stating that such registration
statement has become effective and to the best of such counsel's knowledge, no
stop order or proceeding to suspend the effectiveness of the registration
statement has been instituted or is pending or contemplated, or that such
transfer is exempt from the registration requirements of the Securities Act.
(c) The transfer of a Voting Trust Certificate may be
registered only upon the books of the Voting Trustee kept for the registration
and registration of transfer of Voting Trust Certificates upon surrender
thereof to the Voting Trustee together with transfer instructions duly
executed by the registered owner having such signature guaranteed by a member
firm of the New York Stock Exchange or a commercial bank or trust company, in
such form as shall be reasonably satisfactory to the Voting Trustee. Upon any
such registration of transfer the Voting Trustee shall execute and deliver in
exchange for such Voting Trust Certificate a new registered Voting Trust
Certificate, registered in the name of the transferee.
(d) If any mutilated Voting Trust Certificate is surrendered
to the Voting Trustee, or the Voting Trustee receives evidence to its
satisfaction that any Voting Trust Certificate has been destroyed, lost or
stolen, and upon proof of ownership satisfactory to the Voting Trustee
together with such security or indemnity as may be requested by the Voting
Trustee to save it harmless, the Voting Trustee shall execute and deliver a
new Voting Trust Certificate for the same number of shares of Voting Trust
Stock as the Voting Trust Certificate so mutilated, destroyed, lost or stolen,
with such notations, if any, as the Voting Trustee shall determine.
<PAGE>
6
(e) Prior to due presentment of a Voting Trust Certificate
for transfer and compliance with the requirements of this Section 5, the
Voting Trustee may, except as otherwise required by law, treat the registered
holder of any Voting Trust Certificate as the owner thereof for all purposes
whatsoever and shall not be affected by any notice to the contrary.
(f) The Voting Trustee 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 shares of Voting Trust Stock or (ii) create or
suffer to exist any lien, security interest or other charge or encumbrance of
any kind, or any other type of preferential arrangement (a "Lien") upon or
with respect to any of the Voting Trust Stock except for the Lien created by
this Agreement and the Pledge Agreement.
SECTION 6. Termination. (a) The Voting Trust and this
Agreement shall terminate upon the earlier of:
(i) receipt by the Voting Trustee of notice from
the Shareholder or the Bank Agent certifying that the Payment
Obligations have been Fully Satisfied (as each such term is defined
below); and
(ii) transfer to, or registration in the name of,
the Bank Agent or any of its nominees of any or all of the Voting
Trust Stock pledged by the Voting Trustee under the Pledge Agreement.
(b) Upon the termination of this Voting Trust (other than by
reason of action by the Bank Agent or its nominee under Section 6(a)(ii)) and
the return of the Voting Trust Stock to the Voting Trustee by the Bank Agent,
the Voting Trustee shall, in exchange for, and upon the surrender of, the
Voting Trust Certificates representing the Voting Trust Stock, deliver the
certificates representing the Voting Trust Stock to the holder of such Voting
Trust Certificates.
(c) "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 (as
each such term is defined in the 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 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
<PAGE>
7
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.
SECTION 7. Extension. (a) The duration of this Agreement
may be extended by an instrument or concurrent instruments in writing, signed
by the parties hereto.
(b) If this Agreement shall be extended pursuant to this
Section 7, a copy of the instrument effecting such extension shall be filed by
the Voting Trustee in the registered office of the Company in the State of
Delaware.
SECTION 8. Dividends. Subject to the provisions of the
Pledge Agreement, neither the Voting Trustee nor the Bank Agent shall be
entitled to retain any dividends or other distributions of cash or other
property or securities, if any, with respect to the Voting Trust Stock and
such distributions, if any, shall be paid over directly to the registered
holder of each Voting Trust Certificate. Notwithstanding any provision in the
Pledge Agreement to the contrary, the Voting Trustee shall distribute any
dividends or other distributions of any kind with respect to the Voting Trust
Stock directly to the registered holder of the Voting Trust Certificate.
SECTION 9. Compensation of Voting Trustee. During the term
of this Agreement, the Shareholder shall pay the Voting Trustee a fee and the
Voting Trustee's reasonable expenses, disbursements and advances in connection
with Agreement, as agreed to between the Shareholder and the Voting Trustee.
SECTION 10. Successor Voting Trustee. The Voting Trustee may
resign at any time by giving written notice thereof to the Shareholder, the
Company and the Bank Agent. Upon any such resignation, the remaining parties
hereto shall appoint a successor Voting Trustee with qualifications
substantially similar to those of the Voting Trustee being so replaced. Upon
the acceptance in writing by a successor Voting Trustee of any appointment as
Voting Trustee hereunder, such successor Voting Trustee shall succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Voting Trustee, and upon (but only upon) such acceptance, the
retiring Voting Trustee shall be discharged from further responsibilities
under this Agreement.
SECTION 11. Concerning the Trustee. (a) The Voting Trustee
shall have all requisite power and authority as shall be necessary or
appropriate to enable it to take all such actions as it is required to take
pursuant to this
<PAGE>
8
Agreement. The Voting Trustee shall have no liability hereunder except for its
own gross negligence or willful misconduct.
(b) The Voting Trustee may consult with any counsel, banker,
broker, accountant or other professional adviser satisfactory to it and the
written opinion of such person shall be full and complete authorization and
protection in respect of any action taken, omitted to be taken or suffered by
it hereunder in good faith and in accordance with such opinion, in the absence
of gross negligence or willful misconduct on the part of the Voting Trustee.
(c) The Voting Trustee shall be protected and shall incur no
liability for, or in respect of, any action taken or omitted to be taken or
anything suffered by it in reliance upon any notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the
proper parties.
(d) The Voting Trustee shall be obligated to perform such
duties and only such duties as are herein specifically set forth, and no
implied duties or obligations shall be read into this Agreement. Except for
the terms and provisions of this Agreement and the Pledge Agreement, the
Voting Trustee shall not be charged with knowledge of, or be deemed to have
any implied duties or obligations under, the Credit Agreement or any document
or instrument related to or delivered in connection with the transactions
contemplated by the Credit Agreement. The Voting Trustee shall not be under
any obligation to take any action hereunder which might reasonably be expected
to involve it in any expense or liability, the payment of which within a
reasonable time is not, in its reasonable opinion, assured to it.
SECTION 12. Indemnification. (a) The Shareholder covenants
and agrees to indemnify and hold harmless the Voting Trustee and its
affiliates, directors, officers, employees and agents (each, an "Indemnified
Party"), without duplication, from and against any and all claims, damages,
losses, liabilities, obligations, actions, suits, costs, disbursements and
expenses (including reasonable fees and expenses of counsel) incurred by any
Indemnified Party arising out of, from, or in conjunction with the Voting
Trustee's execution of or performance or inaction under this Agreement, except
to the extent such claim, damage, loss, liability, obligation, action, suit,
cost, disbursement or expense results from such Indemnified Party's gross
negligence or willful misconduct.
(b) The indemnities set forth in this Section 12 shall be in
addition to any other obligations or liabilities of the Shareholder hereunder
or at common law or otherwise and shall survive the termination of this
Agreement or the
<PAGE>
9
transfer by the Shareholder of all or any part of its interest in the Voting
Trust Certificate.
SECTION 13. Obligation of the Company. For any meeting of
the Company's shareholders at which the Voting Trustee shall be asked to vote,
the Company shall give the Voting Trustee, the Bank Agent and the registered
holder of the Voting Trust Certificate written notice setting forth (i) the
date, time and place of the meeting, and (ii) the recommendation of a majority
of the Company's Board of Directors (which shall be the majority of the
Company's entire Board of Directors in the event of an Enumerated Action) with
respect to the actions to be considered at such meeting. Such notification
shall be sent to the Voting Trustee, the Bank Agent and the registered holder
of the Voting Trust Certificate not less than 10 business days nor more than
60 days prior to such meeting.
SECTION 14. Other Obligation of the Voting Trustee. The
Voting Trustee shall file a copy of this Agreement (and any amendments hereto)
in the registered office of the Company in the State of Delaware, which copy
the Company shall cause to be open to the inspection of any stockholder of the
Company and any holder of a Voting Trust Certificate daily during business
hours.
SECTION 15. No Legal Title to Voting Trust Stock in Holders
of Voting Trust Certificates. The holders of Voting Trust Certificates shall
not have legal title to any part of the Voting Trust Stock and, except as
contemplated by Sections 5, 6 and 17, shall not be entitled to create any
liens upon or transfer or convey any interest in the Voting Trust Stock. No
creditor of any holder of a Voting Trust Certificate shall be able to obtain
legal title to or exercise legal or equitable remedies with respect to the
Voting Trust Stock. No transfer, by operation of law or otherwise, of any
right, title and interest of any holder of a Voting Trust Certificate in and
to its undivided beneficial interest in the Voting Trust Stock or hereunder
shall operate to terminate this Agreement or the Voting Trust or entitle any
successor of any holder of a Voting Trust Certificate to an accounting or to
the transfer to it of any legal title to any part of the Voting Trust Stock;
provided, however, that notwithstanding anything herein to the contrary,
nothing in this Section 15 shall be deemed to limit the rights or interest of
(x) the Bank Agent as pledgee of the certificate representing the Voting Trust
Stock pursuant to the pledge provided for under Section 1 hereof and in the
Pledge Agreement or (y) any pledgee of the Voting Trust Stock or Voting Trust
Certificate pursuant to a pledge permitted under Section 5(b) hereof.
SECTION 16. Beneficiaries. Nothing in this Agreement,
whether express or implied, shall be construed to give any person other than
the Voting Trustee, the Share-
<PAGE>
10
holder and the Company any right in the Voting Trust Stock or under or in
respect of this Agreement or any covenant, conditions or provisions contained
herein.
SECTION 17. Assignment. No assignment or transfer of any
interest, right or obligation of the Shareholder under this Agreement shall be
allowed, except for the pledge of the Voting Trust Certificate pursuant to
Section 5 hereof.
SECTION 18. Amendments. This Agreement may not be amended,
supplemented or otherwise modified except in a writing signed by or on behalf
of the parties hereto.
SECTION 19. Notices. All notices, consents, approvals and
other communications given or made pursuant hereto shall be in writing and
shall be (a) delivered personally against receipt thereof, (b) by overnight
courier, (c) transmitted by telecopier or (d) by registered or certified mail
(postage prepaid, return receipt requested), in each case to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice):
(a) if to the Voting Trustee:
NationsBank of Georgia, National Association
600 Peachtree Street, Suite 900
Atlanta, Georgia 30308
Telecopy: (404) 607-6534
Telephone: (404) 607-4696
Attention: Peggy T. McWhorter
(b) if to the Shareholder or the Company:
c/o MacAndrews & Forbes Holdings Inc.
38 East 63rd Street
New York, New York 10021
Telecopy: (212) 572-8435
Telephone: (212) 572-8500
Attention: Corporate Secretary
(c) if to the Bank Agent:
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Telecopy: (212) 793-3963
Telephone: (212) 248-4636
Attention: Jolie Eisner
All such notices, consents, approvals and other
communications shall be deemed to have been given on (x) the date of receipt
if delivered personally or by overnight courier, (y) the date of transmission
with confirmation
<PAGE>
11
answer back if transmitted by telecopier or (z) the second day following
posting if transmitted by mail.
SECTION 20. Interpretation. The terms defined in this
Agreement include the plural as well as the singular. When a reference is made
in this Agreement to a Section or Exhibit, such reference shall be to a
Section or Exhibit of this Agreement unless otherwise indicated. The headings
contained herein are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation."
SECTION 21. Severability. If any provision of this Agreement
shall be held to be invalid, illegal or unenforceable, in whole or in part,
under the laws of the State of Delaware, such invalidity, illegality or
enforceability shall not in any way whatsoever affect the validity of the
other provisions of this Agreement and such other provisions shall remain in
full force and effect.
SECTION 22. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. One or more
counterparts of this document may be delivered via telecopier with the
intention that they shall have the same effect as an original, executed
counterpart hereof.
SECTION 23. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware,
regardless of the laws that might be applied under applicable principles of
conflicts of laws.
<PAGE>
12
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION
By: /s/ Mary Willis
-------------------------------
Name: Mary Willis
Title: Trust Officer
CONSOLIDATED CIGAR II HOLDINGS INC.
By:
-------------------------------
Name:
Title:
C&F (PARENT) HOLDINGS INC.
By:
-------------------------------
Name:
Title:
CITIBANK, N.A., as Agent
By:
--------------------------------
Name:
Title:
<PAGE>
12
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION
By:
-------------------------------
Name:
Title:
CONSOLIDATED CIGAR II HOLDINGS INC.
By: /s/ Glenn Dickes
-------------------------------
Name:
Title:
C&F (PARENT) HOLDINGS INC.
By: /s/ Glenn Dickes
-------------------------------
Name:
Title:
CITIBANK, N.A., as Agent
By:
--------------------------------
Name:
Title:
<PAGE>
12
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION
By:
-------------------------------
Name:
Title:
CONSOLIDATED CIGAR II HOLDINGS INC.
By:
-------------------------------
Name:
Title:
C&F (PARENT) HOLDINGS INC.
By:
-------------------------------
Name:
Title:
CITIBANK, N.A., as Agent
By: /s/ Douglas H. Guff
--------------------------------
Name: Douglas H. Guff
Title: Attorney-in-fact
<PAGE>
EXHIBIT A
TO THE
VOTING TRUST AGREEMENT
Form of
Voting Trust Certificate
Registered Holder: ________________ Certificate No.__
THE SALE, ASSIGNMENT, TRANSFER, PLEDGE, HYPOTHECATION OR
OTHER ENCUMBRANCE OF THIS VOTING TRUST CERTIFICATE OR THE COMMON STOCK
REFERRED TO HEREIN IS SUBJECT TO THE RESTRICTIONS, TERMS AND CONDITIONS SET
FORTH IN THE VOTING TRUST AGREEMENT DESCRIBED IN THIS CERTIFICATE AND PURSUANT
TO WHICH THIS CERTIFICATE IS ISSUED. THIS CERTIFICATE AND SUCH COMMON STOCK
ARE SUBJECT TO AND MAY BE TRANSFERRED OR ENCUMBERED ONLY IN ACCORDANCE WITH
SUCH AGREEMENT, A DUPLICATE OF WHICH IS ON FILE WITH THE SECRETARY OF THE
CORPORATION.
Voting Trust Certificate
for
Three (3) shares of Common Stock
$1.00 par value per share
of
C&F (Parent) Holdings Inc.
a Delaware corporation
THIS IS TO CERTIFY THAT, upon the termination of a certain
Voting Trust established by a Voting Trust Agreement, dated as of June 15,
1995 (the "Agreement"), by and among NationsBank of Georgia, National
Association, as Voting Trustee, Consolidated Cigar II Holdings Inc., a
Delaware corporation (the "Shareholder"), C&F (Parent) Holdings Inc., a
Delaware corporation, and Citibank, N.A., as agent (the "Bank Agent") for the
Lenders (as defined in the Agreement) pursuant to which this certificate has
been issued and after receipt by the Voting Trustee from the Bank Agent of the
shares hereinabove specified (the "Shares"), the Shareholder, as registered
holder of this certificate, will be entitled to receive certificates, for the
Shares and, for the duration of such Agreement, to receive distributions equal
to the cash or property or non-voting stock distributions, if any, received by
the Voting Trustee upon a like number of the Shares standing in its name.
Prior to the termination of the Agreement, the Voting Trustee, with respect to
any and all of the Shares, shall possess and be entitled to exercise, in the
<PAGE>
manner and to the extent provided in the Agreement, all the rights of every
kind of the holder of this certificate, including the right to vote and to
take part in, or to consent to any corporate or shareholders' action, it being
expressly stipulated that no right to vote, or take part in, or to consent to
any corporate or shareholders' action, shall pass to the registered holder
hereof by, or under, this certificate.
This certificate is not transferable except as permitted by
the Agreement, and is not valid unless signed by the Voting Trustee. The
holder hereof, by accepting this certificate, manifests its consent that the
undersigned Voting Trustee may treat the registered holder hereof as the true
owner of this certificate for all purposes.
IN WITNESS WHEREOF, the undersigned, Voting Trustee has
caused this certificate to be signed as of the ____ day of __________, 1995.
NATIONSBANK OF GEORGIA,
NATIONAL ASSOCIATION,
as Voting Trustee
By:
-----------------------------------
Name:
Title:
<PAGE>
LOAN AGREEMENT
Dated as of April 17, 1996
among
MARVEL V HOLDINGS INC.
and
FIRST GIBRALTAR HOLDINGS INC.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
<S> <C>
1. Loans.............................................................................................. 1
2. Obligations of First Gibraltar..................................................................... 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
</TABLE>
<PAGE>
LOAN AGREEMENT
LOAN AGREEMENT (this "Agreement") dated as of April 17, 1996
by and between Marvel V Holdings Inc., a Delaware corporation (the "Borrower
Parent"), and First Gibraltar Holdings Inc., a Delaware corporation ("First
Gibraltar") .
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 Second Amended and Restated
Credit Agreement dated as of December 15, 1996, as heretofore amended (said
Agreement, as so amended and 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 $430,000,000.
(2) It is a condition precedent to the effectiveness of the
Third Amendment that the Borrower Parent and First Gibraltar shall have
executed and delivered this Agreement.
NOW, THEREFORE, in consideration of the premises, 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 First Gibraltar
receives dividends, other distributions or any loans or advances from FN
Parent, First Gibraltar 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 First
Gibraltar and the Required Lenders.
Section 2. Obligations of FN Parent. The obligation of First
Gibraltar 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 First Gibraltar
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,
<PAGE>
2
conditions, covenants or agreements of the Borrower Parent in respect of any
obligations of the Borrower Parent to any other Person, whether or not First
Gibraltar 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 First Gibraltar herefrom, shall in any event be effective
unless the same shall be in writing and signed by the Borrower Parent and
First Gibraltar 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
First Gibraltar, 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, First
Gibraltar, 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 First Gibraltar shall assign or delegate any
of their respective rights or obligations under this Agreement without the
prior written consent of the Agent.
<PAGE>
3
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 First Gibraltar
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 V HOLDINGS INC.
By /s/ Glenn P. Dickes
-------------------------
Title: Glenn P. Dickes
Vice President
FIRST GIBRALTAR HOLDINGS INC.
By /s/ Glenn P. Dickes
-------------------------
Title: Glenn P. Dickes
Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Andrews
Group Incorporated Consolidated Balance Sheet and Statement of Operations and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<NAME> Andrews Group
<CIK> 0000277025
<MULTIPLIER> 1,000,000
<PERIOD-TYPE> 6-MOS
<PERIOD-START> JAN-01-1996
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 84
<SECURITIES> 0
<RECEIVABLES> 437
<ALLOWANCES> (50)
<INVENTORY> 96
<CURRENT-ASSETS> 808
<PP&E> 396
<DEPRECIATION> (92)
<TOTAL-ASSETS> 4,452
<CURRENT-LIABILITIES> 493
<BONDS> 0
341
0
<COMMON> 0
<OTHER-SE> (668)
<TOTAL-LIABILITY-AND-EQUITY> 4,452
<SALES> 707
<TOTAL-REVENUES> 707
<CGS> (422)
<TOTAL-COSTS> (671)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (164)
<INCOME-PRETAX> (108)
<INCOME-TAX> 5
<INCOME-CONTINUING> (94)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (94)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
