FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to _________
Commission File Number 1-6948
SPX CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware 38-1016240
(State of Incorporation) (I.R.S. Employer Identification No.)
700 Terrace Point Drive, Muskegon, Michigan 49443-3301
(Address of Principal Executive Office)
Registrant's Telephone Number including Area Code (616) 724-5000
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
Common shares outstanding October 30, 1998 - 30,593,627
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
SPX CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
(Unaudited)
September 30, December 31,
1998 1997
---------- ----------
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ 10,532 $ 12,113
Receivables 162,437 172,783
Inventories 120,643 92,875
Deferred income tax asset and refunds 58,621 72,021
Prepaid and other current assets 20,553 33,753
---------- ----------
Total current assets $ 372,786 $ 383,545
Property, plant and equipment, at cost 288,208 263,821
Accumulated depreciation (152,349) (141,703)
---------- ----------
Net property, plant and equipment $ 135,859 $ 122,118
Goodwill 102,854 60,156
Other assets 24,024 17,988
---------- ----------
Total assets $ 635,523 $ 583,807
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable and current maturities
of long-term debt $ 3,848 $ 2,774
Accounts payable 84,492 91,491
Accrued liabilities 157,224 182,773
Income taxes payable 18,296 9,516
---------- ----------
Total current liabilities $ 263,860 $ 286,554
Long-term liabilities 94,351 90,205
Deferred income taxes 45,459 46,142
Minority interest 1,947 1,764
Long-term debt 251,856 202,490
Shareholders' equity:
Common stock 169,250 166,999
Paid in capital 71,307 68,400
Retained deficit (23,864) (63,837)
Common stock held in treasury (219,939) (191,413)
Unearned compensation (16,205) (17,704)
Cumulative translation adjustments (2,499) (5,793)
---------- ----------
Total shareholders' equity $ (21,950) $ (43,348)
---------- ----------
Total liabilities and shareholders' equity $ 635,523 $ 583,807
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
SPX CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues $231,919 $213,672 $693,937 $680,597
Costs and expenses:
Cost of products sold 166,409 152,336 499,095 492,582
Selling, general and administrative 42,022 42,420 125,428 129,650
Goodwill/intangible amortization 1,398 822 2,961 2,602
Minority and equity interests 79 132 236 229
Special charges and (gains) - - (7,092) 6,500
-------- -------- -------- --------
Operating income $ 22,011 $ 17,962 $ 73,309 $ 49,034
Other expense (income), net 23 (437) (1,450) (73,131)
Interest expense, net 4,377 3,315 12,301 10,567
-------- -------- -------- --------
Income before income taxes $ 17,611 $ 15,084 $ 62,458 $111,598
Provision for income taxes 6,340 5,185 22,485 55,029
-------- -------- -------- --------
Income before extraordinary item $ 11,271 $ 9,899 $ 39,973 $ 56,569
Extraordinary item, net of tax - - - (10,330)
-------- -------- -------- --------
Net income $ 11,271 $ 9,899 $ 39,973 $ 46,239
Other comprehensive income (foreign
currency translation adjustment) 2,579 (1,496) 3,294 (5,425)
-------- -------- -------- --------
Comprehensive income $ 13,850 $ 8,403 $ 43,267 $ 40,814
======== ======== ======== ========
Basic income (loss) per share:
Income before extraordinary item $ 0.96 $ 0.83 $ 3.36 $ 4.34
Extraordinary item, net of tax - - - (0.79)
-------- -------- -------- --------
Net income $ 0.96 $ 0.83 $ 3.36 $ 3.55
======== ======== ======== ========
Weighted average number of
common shares outstanding 11,793 11,931 11,912 13,024
Diluted income (loss) per share:
Income before extraordinary item $ 0.94 $ 0.80 $ 3.27 $ 4.17
Extraordinary item, net of tax - - - (0.76)
-------- -------- -------- --------
Net income $ 0.94 $ 0.80 $ 3.27 $ 3.41
======== ======== ======== ========
Weighted average number of
common shares outstanding 11,963 12,406 12,218 13,547
Dividends per share $ - $ - $ - $ 0.10
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
SPX CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
(Unaudited)
Nine Months Ended
September 30,
1998 1997
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income from operating activities $ 39,973 $ 46,239
Adjustments to reconcile net income to net
cash from operating activities -
Extraordinary item - 10,330
Depreciation and amortization 18,423 19,327
Special charges and (gains) (7,092) 6,500
Gain on sale of business - (71,895)
Compensation recognized under employee stock plan 3,635 2,872
Deferred taxes 12,697 17,980
Change in operating assets and liabilities (net of
effect of acquired and disposed businesses):
Receivables 28,629 (37,655)
Inventories (12,151) (10,327)
Prepaid and other assets 8,967 (5,353)
Accounts payable and accrued liabilities (39,577) (8,930)
Income taxes payable 7,589 21,323
Other, net 5,449 809
---------- ----------
Net cash provided (used) by operating activities $ 66,542 $ (8,780)
Cash flows from investing activities:
Proceeds from sale of business $ - $ 223,000
Investment in businesses (70,243) (5,109)
Capital expenditures (21,818) (15,588)
---------- ----------
Net cash provided (used) by investing activities $ (92,061) $ 202,303
Cash flows from financing activities:
Net borrowings (payments) under debt agreements $ 50,304 $ (37,504)
Payment of costs related to debt extinguishment - (16,397)
Purchases of common stock (28,526) (140,474)
Net shares sold under stock option plan 2,911 4,736
Dividends paid - (1,424)
---------- ----------
Net cash provided (used by) financing activities $ 24,689 $(191,063)
Effect of exchange rate changes on cash (751) 578
---------- ----------
Net increase in cash and equivalents $ (1,581) $ 3,038
Cash and equivalents, beginning of period 12,113 12,312
---------- ----------
Cash and equivalents, end of period $ 10,532 $ 15,350
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
SPX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 (Unaudited)
1. The interim financial statements reflect the adjustments that are, in the
opinion of management, necessary to a fair statement of the results of the
interim periods presented. Adjustments are of a normal recurring nature.
The preparation of SPX Corporation's (the "Company" or "SPX") consolidated
condensed financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the consolidated
condensed financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
2. Information regarding the Company's segments was as follows:
<TABLE>
<CAPTION>
Three months Nine months
ended September 30, ended September 30,
1998 1997 1998 1997
-------- -------- -------- --------
(in millions)
<S> <C> <C> <C> <C>
Revenues:
Service Solutions $ 172.5 $ 151.0 $ 505.7 $ 456.9
Vehicle Components (1) 59.4 62.7 188.2 223.7
-------- -------- -------- --------
Total $ 231.9 $ 213.7 $ 693.9 $ 680.6
======== ======== ======== ========
Operating income (loss):
Service Solutions (2) $ 18.7 $ 15.3 $ 55.1 $ 36.5
Vehicle Components 8.0 8.7 26.0 29.9
General Corporate (3) (4.7) (6.0) (7.8) (17.4)
-------- -------- -------- --------
Total $ 22.0 $ 18.0 $ 73.3 $ 49.0
======== ======== ======== ========
Capital Expenditures:
Service Solutions $ 4.0 $ 1.3 $ 8.5 $ 4.2
Vehicle Components 3.1 3.6 13.1 11.0
General Corporate 0.1 0.1 0.2 0.4
-------- -------- -------- --------
Total $ 7.2 $ 5.0 $ 21.8 $ 15.6
======== ======== ======== ========
Depreciation and Amortization:
Service Solutions $ 3.3 $ 2.8 $ 8.3 $ 8.3
Vehicle Components 3.0 2.9 9.4 10.2
General Corporate 0.1 0.3 0.7 0.8
-------- -------- -------- --------
Total $ 6.4 $ 6.0 $ 18.4 $ 19.3
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
--------- ---------
<S> <C> <C>
Identifiable Assets:
Service Solutions $ 378.7 $ 320.0
Vehicle Components 162.8 147.6
General Corporate 94.0 116.2
--------- ---------
Total $ 635.5 $ 583.8
========= =========
</TABLE>
(1) The Company sold its Sealed Power division in February 1997, see Note 5.
(2) Includes a $6.5 million special charge in the first quarter of 1997, see
Note 10.
(3) Includes a $7.1 million special gain in the first half of 1998 related to
the Echlin transaction, see Note 11.
<PAGE>
SPX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 (Unaudited)
3. On October 6, 1998, the Company completed its merger with General Signal
Corporation ("GSX") for a combination of $784.1 million in cash and 18.2
million shares of common stock of the Company. The Company also assumed
approximately $358 million of GSX's debt, net of cash acquired. GSX is a
leading manufacturer of quality products for the process control,
electrical control and industrial technology industries worldwide and had
annual 1997 revenues of approximately $2 billion. Financing for the merger
was obtained under a new credit agreement providing for financing of up to
$1.65 billion in loans. See Note 4.
The transaction will be accounted for as a reverse acquisition as the
shareholders of GSX own a majority of the shares of the combined company as
of the completion of the transaction. Accordingly, for accounting purposes,
the Company will be treated as the acquired company and GSX will be
considered to be the acquiring company. The purchase price will be
allocated to the assets and liabilities of the Company based on their
estimated fair market values at the acquisition date. The Company is
currently conducting asset valuation studies of its tangible and intangible
assets, including in-process research and development projects, for the
purpose of allocating the purchase price to its net assets. Under reverse
acquisition accounting, the purchase price of the Company is based on the
average fair market value of the Company's common stock near July 19, 1998,
the date of the signing of the definitive merger agreement. The cash
portion of the purchase price will be accounted for as a dividend by the
combined company. In addition, the historical financial statements of the
Company will be those of GSX subsequent to the transaction. The
accompanying financial statements of the Company included herein are those
of SPX.
The Company is also in the process of developing its plan to integrate the
operations of GSX, which may include certain exit and restructuring costs.
As a result of this plan, a charge, which may be material but which cannot
now be quantified, is expected to be recognized in the period in which such
a restructuring occurs.
4. In connection with the merger with GSX, the Company replaced its existing
$400 million revolving credit facility with a $1.65 billion credit facility
consisting of a six year, $600 million Tranche A Loan ("Tranche A Loan"),
an eight year, $600 million Tranche B Loan ("Tranche B Loan"), an eighteen
month, $200 million Interim Term Loan ("Interim Loan") and an eight year,
$250 million Revolving Facility ("Revolving Loan"), collectively
hereinafter referred to as the "New Credit Facility." On October 6, 1998,
$1.4 billion was drawn from the New Credit Facility and was used to finance
the cash portion of the merger with GSX and to repay certain indebtedness
of the Company and GSX. No amounts were drawn from the Revolving Facility.
The New Credit Facility bears interest at variable rates using a Base Rate
or a Eurodollar Rate, plus the applicable margin. The applicable margin for
the Tranche B Loan is 2.5% for Base Rate borrowings and 3.5% for Eurodollar
Rate borrowings. The Tranche A Loan, Interim Loan and Revolving Loan have
variable margins between .5% and 1.75% for Base Rate Loans and 1.5% and
2.75% for Eurodollar Rate borrowings. The Revolving Loan also is subject to
annual commitment fees
<PAGE>
SPX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 (Unaudited)
on the unused portion of the facility that vary between .25% and .5%. The
variable margins and commitment fees are based on certain financial
measurements of the Company as defined in the New Credit Facility. Interest
and principal is payable quarterly. The Company has effectively fixed the
underlying Eurodollar rate at approximately 4.8% on $800 million of
indebtedness through interest rate protection agreements over the next
three years. Aggregate principal repayments for the New Credit Facility are
$37.3 million in 1999, $268.5 million in 2000, $112.3 million in 2001,
$137.3 million in 2002 and $156.0 million in 2003.
The New Credit Facility is secured by substantially all of the assets of
the Company and requires the Company to maintain certain leverage and
interest coverage ratios. The New Credit Facility also requires compliance
with certain operating covenants which limit, among other things, the
incurrence of additional indebtedness by the Company and its subsidiaries,
sales of assets, the distribution of dividends, capital expenditures,
mergers, acquistions and dissolutions.
5. On February 7, 1997, the Company completed the sale of substantially all of
the assets and rights used in the manufacture and distribution of piston
rings and cylinder liners, known as the Sealed Power division ("SPD"). The
gain on the sale of SPD was $71.9 million. On an after-tax basis, the gain
was $31.2 million, which reflects the effect of the write-off of
non-deductible goodwill attributable to SPD of $59.4 million.
The accompanying consolidated condensed financial statements include the
results of SPD through February 7, 1997, its date of disposition. The
following unaudited proforma selected financial data reflects the
disposition of this division as if it had occurred as of January 1, 1997.
The unaudited proforma selected results of operations do not purport to
represent what the Company's results of operations would actually have been
had the disposition in fact occurred as of January 1, 1997, or project the
results for any future date or period (in millions, except per share):
<TABLE>
<CAPTION>
First Nine
Months 1997
Proforma
<S> <C>
Revenues $ 657.1
Cost of products sold 473.0
-------
Gross margin $ 184.1
SG&A 128.7
Goodwill/intangible amortization 2.4
Minority and equity interests 0.2
Special charges 6.5
-------
Operating income $ 46.3
Other income (1.2)
Interest expense, net 9.6
-------
Income before income taxes $ 37.9
Provision for income taxes 13.7
-------
Income before extraordinary item $ 24.2
=======
Diluted income per share $ 1.79
Weighted average number of shares 13.5
</TABLE>
<PAGE>
SPX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 (Unaudited)
6. During the first half of 1997, the Company commenced a cash tender offer
for all $128.4 million (principal amount) of its outstanding 11 3/4% Senior
Subordinated Notes, due 2002, and $126.7 million of the Notes were
tendered. The Company recorded an extraordinary pretax charge of $16.4
million, or $10.3 million after-tax, for the cost to repurchase the Notes.
7. During 1997, the Company purchased 2.147 million shares of its common stock
through a Dutch auction self-tender offer for $56.00 per share. As of
September 30, 1998, the Company had purchased an additional 787,700 shares
(397,500 in 1998) through open market purchases. Also, concurrent with the
Dutch auction, the Company announced the elimination of quarterly cash
dividends and stated that future distributions to shareholders would be in
the form of open purchases of common stock, when deemed appropriate by
management.
8. During 1998, the Company acquired three businesses. On June 19, 1998, the
Company acquired 89% of Tecnotest S.r.l. ("Tecnotest"), an Italian company,
for $15.1 million in cash and assumed debt. The Company has an option to
purchase the remaining 11% of the company. Tecnotest designs, manufactures
and distributes hand-held scan tools and other hand-held electronic
equipment, diagnostic software, gas and diesel emissions testing equipment
and safety lane products and has annual revenues of approximately $25
million. On June 30, 1998, the Company acquired The Valley Forge Group
("Valley Forge") for $43.9 in cash and assumed debt. Valley Forge develops
service procedures, owners' literature and service training materials, and
provides other services such as language conversion and labor time studies,
for vehicle manufacturers and has annual revenues of approximately $30
million. On August 4, 1998, the Company acquired Toledo Trans-Kit ("TTK")
for $11.5 million in cash and assumed debt. TTK supplies transmission
repair kits to the global automotive repair industry and has annual
revenues of approximately $18 million.
During 1997, the Company made three strategic investments totaling $5.1
million. Effective the beginning of 1997, the Company acquired an
additional 30% of JATEK which raised the Company's ownership in this
Japanese company to 80%. Also effective the beginning of 1997, the Company
purchased an additional 10% of IBS Filtran which raised the Company's
ownership to 60% in this German company. Effective March 1, 1997, the
Company acquired A.R. Brasch Marketing Inc., which provides technical
service and training materials for vehicle manufacturers. A.R. Brasch has
annual sales approaching $10 million
Each of the acquisitions was accounted for under the purchase method. Pro
forma results of operations, assuming the above acquisitions had occurred
on January 1, 1997, are not presented, as the pro forma results would not
differ significantly from reported results.
9. In the fourth quarter of 1997, the Company recorded special charges of
$110.0 million. These charges included a $99.0 million restructuring
charge, a $4.1 million charge for corporate executive staff reductions, and
$6.9 million of costs associated with various legal matters, including
legal costs associated with a settled case in California.
<PAGE>
SPX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 (Unaudited)
The Company recorded the $99.0 million restructuring charge to combine two
divisions within the Service Solution segment and to recognize reduced
carrying value of certain assets resulting from the decision to combine the
divisions and exit certain manufactured diagnostic equipment product lines.
The restructuring of the two Service Solutions businesses was in response
to changing market dynamics and changing needs of customers. The Company
decided to combine its OE Tool and Equipment business with its Aftermarket
Tool and Equipment business to provide a single business focused on the
combined market and customer needs. Additionally, the Company decided to
exit certain products to focus upon new generation products that will
better meet customer needs. The decision resulted in a reduction of
workforce and the closing of certain facilities. The components of the
charge have been computed based on management's estimate of the realizable
value of the affected tangible and intangible assets and estimated exit
costs including severance and other employee benefits based on existing
severance policies and local laws.
The $99.0 million charge included $63.7 million of restructuring costs,
$25.8 million of reduced inventory value and $9.5 million of reduced value
of other tangible and intangible assets related to exiting certain product
lines. These restructuring costs included $13.7 million of severance
related costs for approximately 800 people, $20.3 million for incremental
repossession and distribution exit costs (including the termination of
lease financing and distributor agreements), $21.2 million for incremental
service and software update obligations resulting from the Company's
decision to exit these product lines, and $8.5 million of costs associated
with idled facilities. The implementation of this restructuring is expected
to be substantially complete by the end of 1998.
Of the total 1997 special charges of $116.5 million (including the special
charge described in Note 10), the components of the charge that have or
will require the future payment of cash total $80.9 million. Cash payments
through September 30, 1998 related to the special charges were $24.8
million. The expected future cash payments include an estimated $20.0
million over the balance of 1998 with the remainder, principally
repossession costs and service and software update obligations, over the
following two years. As there is some uncertainty associated with the
timing of the cash payments, the remaining accrual at September 30, 1998 of
$56.1 million has all been classified as current liabilities. Management
estimates that savings from the restructuring will increase operating
income by $3.0 million in 1998 and $10.0 million in 1999. The savings
result primarily from the reduction in headcount and facilities. Through
the third quarter of 1998, approximately 470 employees had been terminated.
10. During the first quarter of 1997, the Company recorded a $6.5 million
special charge ($4.1 million after-tax). This charge reflects anticipated
future legal costs associated with the ongoing litigation with Snap-on
Incorporated. This charge was previously classified as other expense
(income), net, in the Company's 1997 filing on Form 10-Q for the nine
months ended September 30, 1997.
<PAGE>
SPX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 (Unaudited)
11. On May 6, 1998, the Company announced that it was withdrawing its exchange
offer for Echlin Inc. As of June 30, 1998, the Company had liquidated its
investment in 1.150 million shares of Echlin Inc. common stock, which were
acquired in late 1997 and early 1998. During the first quarter of 1998, the
Company recorded a $12.8 million gain relating to the Echlin transaction
consisting of an unrealized gain on the investment in Echlin stock of $17.3
million and transaction costs of $4.5 million. During the second quarter,
the Company recorded a $5.7 million charge to adjust the unrealized gain on
the investment to the actual realized total gain of $13.7 million and to
record the final $2.1 million of transaction costs related to the proposed
acquisition.
<PAGE>
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
The following unaudited information should be read in conjunction with the
Company's unaudited consolidated financial statements and related footnotes.
On October 6, 1998, the Company completed its merger with GSX. For accounting
purposes, the transaction will be accounted for as a reverse acquisition where
the Company will be treated as the acquired company and GSX as the acquiring
company. While the combined company will continue to be named SPX Corporation,
the combined company will treat GSX's historical financial statements as the
historical financial statements of the combined company. SPX's businesses will
be consolidated into the combined company's financial statements beginning on
the date of the merger. The following discussions, however, relate only to the
historical financial results of SPX since the merger took place subsequent to
the end of the third quarter.
Results of Operations - Third Quarter 1998 vs. Third Quarter 1997
Consolidated:
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1998 1997 1998 1997
-------- -------- -------- --------
(in millions)
<S> <C> <C> <C> <C>
Revenues:
Service Solutions $ 172.5 $ 151.0 $ 505.7 $ 456.9
Vehicle Components 59.4 62.7 188.2 223.7
-------- -------- -------- --------
Total $ 231.9 $ 213.7 $ 693.9 $ 680.6
======== ======== ======== ========
Operating income (loss):
Service Solutions $ 18.7 $ 15.3 $ 55.1 $ 36.5
Vehicle Components 8.0 8.7 26.0 29.9
General corporate expense (4.7) (6.0) (7.8) (17.4)
-------- -------- -------- --------
Total $ 22.0 $ 18.0 $ 73.3 $ 49.0
Other expense (income), net (0.0) (0.4) (1.5) (73.1)
Interest expense, net 4.4 3.3 12.3 10.6
-------- -------- -------- --------
Income before income taxes $ 17.6 $ 15.1 $ 62.5 $ 111.5
Provision for income taxes 6.3 5.2 22.5 55.0
-------- -------- -------- --------
Income before extraordinary item $ 11.3 $ 9.9 $ 40.0 $ 56.5
Extraordinary item, net of tax - - - (10.3)
-------- -------- -------- --------
Net income $ 11.3 $ 9.9 $ 40.0 $ 46.2
======== ======== ======== ========
Capital expenditures $ 7.2 $ 5.0 $ 21.8 $ 15.6
Depreciation and amortization 6.4 6.0 18.4 19.3
</TABLE>
September 30, 1998 December 31, 1997
Identifiable assets $ 635.5 $ 583.8
General corporate expenses and other consolidated items that are not allocated
to the segments are explained below, followed by segment information.
Third Quarter 1998 vs. Third Quarter 1997
General Corporate expense
These expenses represent general unallocated expenses. The $1.3 million
decline in general corporate expenses from the third quarter of 1998 to the
comparable period in 1997 was the result of cost reduction initiatives
implemented at the end of 1997.
Other expense (income), net
These expense and income items represent expenses and income not included
in the determination of operating results. Included are gains or losses on
currency exchange, translation gains or losses of financial statements in highly
inflationary countries, gains or losses on the sale of fixed assets, and unusual
non-operational gains or losses.
<PAGE>
Interest expense, net
Third quarter 1998 interest expense was greater than the third quarter 1997
interest expense due to higher debt levels.
Provision for Income Taxes
The overall third quarter 1998 effective income tax rate was 36% and
represents the Company's estimated rate for the year. The third quarter 1997
effective income tax rate was 37%.
First Nine Months of 1998 vs. First Nine Months of 1997
General Corporate expense
These expenses represent general unallocated expenses. The first nine
months of 1998 included a $13.7 million realized gain on the Company's
investment in Echlin Inc., which was liquidated during the second quarter, and
$6.6 million of expenses associated with the Company's offer to acquire Echlin
Inc. This net gain, $7.1 million, is classified as special charges and gains on
the consolidated statement of income. Excluding this net gain, first nine months
of 1998 corporate expenses were approximately $2.5 million lower than the first
nine months of 1997 due to cost reduction initiatives implemented at the end of
1997.
Other expense (income), net
These expense and income items represent expenses and income not included
in the determination of operating results. Included are gains or losses on
currency exchange, translation gains or losses of financial statements in highly
inflationary countries, gains or losses on the sale of fixed assets, and unusual
non-operational gains or losses.
In the first quarter of 1997, the Company completed the sale of the Sealed
Power division for $223.0 million in cash. The Company recorded a $71.9 million
gain on the sale, and the after-tax gain was $31.2 million. The results of
operations of Sealed Power are included in the Company's consolidated results
through the date of divestiture, February 7, 1997.
Interest expense, net
First nine months of 1998 interest expense was greater than the first nine
months of 1997 interest expense due to higher debt levels.
Provision for Income Taxes
The overall first nine months of 1998 effective income tax rate was 36% and
represents the Company's estimated rate for the year. The first nine months of
1997 income tax provision includes $40.7 million provided on the sale of the
Sealed Power division. Without this item, the effective income tax rate for the
first nine months of 1997 was 37%.
Extraordinary item, net of taxes
In the first quarter of 1997, the Company recorded a pretax charge of $16.4
million, $10.3 million after-tax, to reflect the costs to repurchase $126.4
million of its 11 3/4% Senior Subordinated Notes tendered as of March 25, 1997,
pursuant to the Company's tender offer for these notes.
<PAGE>
Service Solutions:
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1998 1997 1998 1997
-------- -------- -------- --------
(in millions)
<S> <C> <C> <C> <C>
Revenues............................. $ 172.5 $ 151.0 $ 505.7 $ 456.9
Gross Profit......................... 52.8 48.9 155.1 145.2
% of revenues...................... 30.6% 32.4% 30.7% 31.8%
Selling, general & administrative.... 33.0 33.0 97.8 100.5
% of revenues...................... 19.1% 21.9% 19.3% 22.0%
Goodwill/intangible amortization..... 1.1 0.6 2.2 1.7
Minority and equity interests........ 0.0 0.0 0.0 0.0
Special charge....................... - - - 6.5
-------- -------- -------- --------
Operating income..................... $ 18.7 $ 15.3 $ 55.1 $ 36.5
======== ======== ======== ========
Capital expenditures................. $ 4.0 $ 1.3 $ 8.5 $ 4.2
Depreciation and amortization........ 3.3 2.8 8.3 8.3
</TABLE>
September 30, 1998 December 31, 1997
(in millions)
Identifiable assets.................. $ 378.7 $ 320.0
Third Quarter 1998 vs. Third Quarter 1997
Revenues
Third quarter 1998 revenues increased $21.5 million, or 14.2%, from the
third quarter of 1997. The increase was principally due to the acquisition of
Tecnotest and Valley Forge and to higher sales of high-pressure hydraulic
equipment and dealer equipment. Sales of certain PC based engine diagnostic and
wheel service equipment were down as a result of the Company's decision to exit
these product lines.
Gross margin
Third quarter 1998 gross margin of 30.6% declined from the 32.4% gross
margin in 1997. The decline resulted from a revenue mix shift towards lower
margin service-related business, namely dealer equipment and technical
information services.
Selling, General and Administrative ("SG&A")
Third quarter 1998 SG&A expense was $33.0 million, or 19.1% of revenues,
compared to $33.0 million, or 21.9% of revenues, in 1997. The reduction as a
percentage of revenues resulted from an increased portion of revenues
attributable to service-related sales, which have relatively low SG&A costs, and
continuing cost reductions due to restructuring and other cost savings
initiatives undertaken over the past year.
Goodwill/Intangible Amortization
Third quarter 1998 expense increased by $0.5 million from second quarter
1997 due to the June 1998 acquisitions of Tecnotest and Valley Forge.
Minority and equity interests
This line represents the 20% minority interest in JATEK's results. Such
minority interest was immaterial in both quarters.
Operating Income
The increase in the 1998 third quarter operating income to $18.7 million
from $15.3 million in the third quarter 1997 was primarily attributable to
increased revenues and cost reductions.
<PAGE>
First Nine Months of 1998 vs. First Nine Months of 1997
Revenues
First nine months of 1998 revenues increased $48.8 million, or 10.7%, from
the first nine months of 1997. The increase was principally due to the
acquisitions of Tecnotest and Valley Forge and higher hand-held diagnostic
equipment, high-pressure hydraulic equipment, dealer equipment and gas emission
testing equipment revenues. Air conditioning tool sales were down from 1997, and
are expected to be lower than full year 1997 levels for the remainder of 1998
primarily due to lower industry wide demand for refrigerant recycling and
recovery equipment. Sales of certain PC based engine diagnostic and wheel
service equipment were down as a result of the Company's decision to exit these
product lines . During the first quarter 1998, the Company enhanced its dealer
equipment program with a major vehicle manufacturer and is now recording
revenues and related cost of goods sold from this program.
Gross margin
First nine months of 1998 gross margin of 30.7% was lower than the 31.8%
gross margin in 1997. The decrease in the gross margin was a result of the
higher gas emissions testing equipment and service-related sales during the
first nine months of 1998, which carry lower gross margins.
Selling, General and Administrative ("SG&A")
First nine months of 1998 SG&A expense was $97.8 million, or 19.3% of
revenues, compared to $100.5 million, or 22.0% of revenues, in 1997. The
reduction in costs resulted from an increased portion of revenues attributable
to service-related sales, which have relatively low SG&A costs, and continuing
cost reductions due to initiatives undertaken over the past year.
Goodwill/Intangible Amortization
First nine months of 1998 expense increased $0.5 million from the first
nine months of 1997 due to the June 1998 acquisition of Tecnotest and Valley
Forge.
Minority and equity interests
This line represents the 20% minority interest in JATEK's results. Such
minority interest was immaterial in both periods.
Special Charge
During the first quarter 1997, the Company recorded a $6.5 million special
charge ($4.1 million after-tax). This charge reflects anticipated future legal
costs associated with the ongoing litigation with Snap-on Incorporated.
Operating Income
The increase in first nine months of 1998 operating income to $55.1 million
from $36.5 million in the first nine months of 1997 was primarily attributable
to increased revenues and cost reductions. Additionally, operating income for
the first nine months of 1997 was reduced by the $6.5 million special charge
related to the Snap-on litigation.
Capital Expenditures
First nine months of 1998 capital expenditures were $8.5 million compared
to first nine months of 1997 capital expenditures of $4.2 million. Capital
expenditures for 1998 are expected to total approximately $14 million and to
include further expenditures for new information systems.
Identifiable Assets
First nine months of 1998 identifiable assets increased approximately $58.7
million from year-end 1997. The increase was predominately due to the
acquisitions of Tecnotest and Valley Forge, which increased identifiable assets
by approximately $75 million. Excluding the effect of the acquisitions,
inventory increased approximately $14 million from year-end and accounts
receivable decreased approximately $30 million from year-end. The increase in
inventory reflects expected fourth quarter demand. The decrease in accounts
receivable reflects lower revenues in the third quarter of 1998 compared to the
fourth quarter of 1997.
<PAGE>
Vehicle Components:
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1998 1997 1998 1997
-------- -------- -------- --------
(in millions)
<S> <C> <C> <C> <C>
Revenues........................... $ 59.4 $ 62.7 $ 188.2 $ 223.7
Gross Profit....................... 12.7 12.5 39.7 42.9
% of revenues.................... 21.4% 19.9% 21.1% 19.2%
Selling, general & administrative.. 4.4 3.4 12.7 11.8
% of revenues.................... 7.4% 5.4% 6.7% 5.3%
Goodwill/intangible amortization... 0.2 0.3 0.8 1.0
Minority and equity interests...... 0.1 0.1 0.2 0.2
-------- -------- -------- --------
Operating income................... $ 8.0 $ 8.7 $ 26.0 $ 29.9
======== ======= ======== ========
Capital expenditures............... $ 3.1 $ 3.6 $ 13.1 $ 11.0
Depreciation and amortization...... 3.0 2.9 9.4 10.2
</TABLE>
September 30, 1998 December 31, 1997
(in millions)
Identifiable assets.............. $ 162.8 $ 147.6
Third Quarter 1998 vs. Third Quarter 1997
Revenues
Third quarter 1998 revenues were down $3.3 million, or 5.3%, from third
quarter 1997 revenues primarily due to less product demand caused by a strike at
General Motors Corporation. Partially offsetting this decline in revenues were
revenues associated with the August 1998 acquisition of TTK. The General Motors
strike ended in late July, and the Company expects its sales to General Motors
to resume to pre-strike levels during the fourth quarter.
Gross Profit
Third quarter 1998 gross margin of 21.4% compares favorably to third
quarter 1997 gross margin of 19.9% as favorable product mix shifts and
operational improvements are being realized.
Selling, General and Administrative ("SG&A")
SG&A was $4.4 million, or 7.4% of revenues, in the third quarter of 1998
compared to $3.4 million, or 5.4% of revenues, in 1997. The increase in SG&A as
a percentage of revenues reflected higher costs associated with market
penetration and business expansion efforts.
Goodwill/Intangible Amortization
Goodwill and intangible amortization expense in 1998 was lower than 1997
due to the sale of the Sealed Power Division in 1997.
Minority and equity interests
This represents the 40% minority interest in IBS Filtran's results.
Operating Income
Third quarter 1998 operating income was $8.0 million compared to $8.7
million in the third quarter of 1997. The decrease was primarily a result of the
lower revenues.
First Nine Months of 1998 vs. First Nine Months of 1997
Revenues
First nine months quarter 1998 revenues were down $35.5 million from the
first nine months of 1997 revenues primarily due to the February 7, 1997
divestiture of the Sealed Power division. The first quarter of 1997 includes
$23.5 million of revenues from Sealed Power. The remaining decrease from 1997
was due primarily to less product demand caused by a strike at General Motors,
which continued through late July, and the elimination of a product at the
die-casting operation. The reduction in die-casting revenues will be partially
offset over the fourth quarter of 1998 as the Company's new die-casting facility
ramps up production.
<PAGE>
Gross Profit
First nine months 1998 gross margin of 21.1% compares favorably to first
nine months 1997 gross margin of 19.2% as favorable product mix shifts and
operational improvements are being realized. A portion of the increase in gross
margin was due to the disposal of Sealed Power, which was a lower margin
business.
Selling, General and Administrative ("SG&A")
SG&A was $12.7 million, or 6.7% of revenues, in the first nine months of
1998 compared to $11.8 million, or 5.3% of revenues, in 1997. The increase in
SG&A as a percentage of revenues reflected higher costs associated with market
penetration and business expansion efforts. Additionally, the lower revenues
associated with the strike at General Motors resulted in SG&A representing an
increased percentage of revenues.
Goodwill/Intangible Amortization
Goodwill and intangible amortization expense was lower in 1998 due to the
sale of the Sealed Power division.
Minority and equity interests
This represents the 40% minority interest in IBS Filtran's results.
Operating Income
First nine months 1998 operating income was $26.0 million compared to $29.9
million in the first nine months of 1997. The first nine months of 1997
operating income included $2.7 million attributable to the Sealed Power division
(which was sold effective February 7, 1997).
Capital Expenditures
Capital expenditures in the first nine months of 1998 were $13.1 million
and $11.0 million in the first nine months of 1997. Capital expenditures for
1998 are expected to total approximately $18 million and will be focused upon
certain capacity expansions (including a new die-casting facility), cost
reductions and maintenance of the operations.
Identifiable Assets
Identifiable assets increased $15.2 million from year-end 1997 due
primarily to the August 1998 acquisition of Toledo Trans-Kit, which accounted
for $13.5 million of the increase.
Liquidity and Financial Condition
The Company's liquidity needs arise primarily from capital investment in
equipment, funding working capital requirements to support business growth
initiatives and to pay interest costs.
Cash Flow
<TABLE>
<CAPTION>
Nine months ended September 30,
1998 1997
--------- ---------
(in millions)
<S> <C> <C>
Cash flow from:
Operating activities...... $ 66.5 $ (8.8)
Investing activities...... (92.0) 202.3
Financing activities...... 23.9 (190.5)
--------- ---------
Net Cash Flow............ $ (1.6) $ 3.0
========== =========
</TABLE>
<PAGE>
Operating Activities - The principal element that contributed to the first nine
months 1998 cash flow was net income adjusted for depreciation and amortization
and deferred income taxes totaling $71.1 million. Offsetting this positive cash
flow was a net increase in working capital and other items of $4.6 million.
Changes in working capital include a $28.6 million reduction in accounts
receivable due to lower revenues in the third quarter of 1998 compared to the
fourth quarter of 1997, a $12.2 million increase in inventory to meet higher
fourth quarter revenue expectations, a $14.4 million decrease in prepaid and
other assets due to the liquidation of the Echlin investment that was held at
year-end ($14.9 million), and a $39.6 million reduction in current liabilities
due to incentive compensation and restructuring payments made in the first nine
months of 1998. At September 30, 1998, days sales outstanding of accounts
receivable were 63 days compared to 64 days at December 31, 1997. Days sales of
inventory on hand was 47 days at September 30, 1998 compared to 35 days at
December 31, 1997, because of anticipated fourth quarter 1998 demand. The cash
outflow from operations for the first nine months of 1997 of $8.8 million was
partially due to seasonal buildups of inventories and included the $26.0 million
effect of terminating an accounts receivable securitization program during the
first quarter of 1997.
Investing Activities - The first nine months of 1998 cash flow from investing
activities reflected $21.8 million in capital expenditures and $70.2 million to
purchase Tecnotest, Valley Forge, and Toledo Trans-Kit. Capital expenditures for
1998 are expected to total approximately $33 million. Cash flow from investing
activities during the first nine months of 1997 included $223.0 million of cash
received on the sale of Sealed Power, offset by $5.1 million used for
investments in A.R. Brasch, JATEK and IBS Filtran, and $15.6 million used for
capital expenditures.
Financing Activities - The first nine months of 1998 cash flow from financing
activities consists of net borrowings of $50.3 million (principally to fund the
acquisitions of Tecnotest, Valley Forge, and Toledo Trans-Kit), $28.5 million
used to purchase 397,500 shares of common stock in the open market, and proceeds
from shares sold under the stock option plan. Cash flow from financing
activities during the first nine months of 1997 reflects uses comprised of the
Company's former quarterly dividend payment, $16.4 million of extinguishment
costs paid in the second quarter to repurchase $126.7 million of 11 3/4% Senior
Subordinated Notes, $120.2 million to purchase 2.147 million shares of common
stock in the Company's "Dutch" auction, $20.3 million to purchase common shares
on the open market and a $37.5 million reduction in borrowings, offset by
proceeds from shares sold under the stock option plan.
Total Debt
In connection with the merger with GSX on October 6, 1998, the Company replaced
its existing $400 million revolving credit facility with a $1.65 billion credit
facility consisting of a six year, $600 million Tranche A Loan ("Tranche A
Loan"), an eight year, $600 million Tranche B Loan ("Tranche B Loan"), an
eighteen month, $200 million Interim Term Loan ("Interim Loan") and an eight
year, $250 million Revolving Facility ("Revolving Loan") collectively
hereinafter referred to as the "New Credit Facility. On October 6, 1998, $1.4
billion was drawn on the New Credit Facility and was used to finance the cash
portion of the merger with GSX and to repay certain indebtedness of the Company
and GSX. No amounts were drawn from the Revolving Facility.
The New Credit Facility bears interest at variable rates using a Base Rate or a
Eurodollar Rate, plus the applicable margin. The applicable margin for the
Tranche B Loan is 2.5% for Base Rate borrowings and 3.5% for Eurodollar Rate
borrowings. The Tranche A Loan, Interim Loan and Revolving Loan have variable
margins between .5% and 1.75% for Base Rate Loans and 1.5% and 2.75% for
Eurodollar Rate borrowings. The Revolving Loan also is subject to annual
commitment fees on the unused portion of the facility that vary between .25% and
.5%. The variable margins and commitment fees are based on certain financial
measurements of the Company as defined in the New Credit Facility. Interest and
principal is payable quarterly. The Company has effectively fixed the underlying
Eurodollar Rate at approximately 4.8% on $800 million of indebtedness through
interest rate protection agreements over the next three years. Aggregate
principal repayments for the New Credit Facility are $37.3 million in 1999,
$268.5 million in 2000, $112.3 million in 2001, $137.3 million in 2002 and
$156.0 million in 2003.
<PAGE>
The New Credit Facility is secured by substantially all of the assets of the
Company and requires the Company to maintain certain leverage and interest
coverage ratios. The New Credit Facility also requires compliance with certain
operating covenants which limit, among other things, the incurrence of
additional indebtedness by the Company and its subsidiaries, sales of assets,
the distribution of dividends, capital expenditures, mergers, acquisitons and
dissolutions.
Management believes that the New Credit Facility will be sufficient to meet
operating cash needs, including working capital requirements and capital
expenditures of the Company (including GSX).
Other Matters
General Signal Corporation Transaction - On October 6, 1998, the Company
completed its merger with GSX for a combination of $784.1 million in cash and
18.2 million shares of common stock of the Company. The Company also assumed
approximately $358 million of GSX's debt, net of cash acquired. GSX is a leading
manufacturer of quality products for the process control, electrical control and
industrial technology industries worldwide and had annual 1997 revenues of
approximately $2 billion. Funding for the merger was obtained under a new credit
agreement providing for financing of up to $1.65 billion in loans.
The transaction will be accounted for as a reverse acquisition as the
shareholders of GSX own a majority of the shares of the combined company as of
the completion of the transaction. Accordingly, for accounting purposes, the
Company will be treated as the acquired company and GSX will be considered to be
the acquiring company. The purchase price will be allocated to the assets and
liabilities of the Company based on their estimated fair market values at the
acquisition date. The Company is currently conducting asset valuation studies of
its tangible and intangible assets, including in-process research and
development projects, for the purpose of allocating the purchase price to its
net assets. Under reverse acquisition accounting, the purchase price of the
Company is based on the average fair market value of the Company's common stock
near July 19, 1998, the date of the signing of the definitive merger agreement.
The cash portion of the purchase price will be accounted for as a dividend by
the Company. In addition, the historical financial statements of the Company
will be those of GSX subsequent to the transaction. The accompanying financial
statements of the Company included herein are those of SPX.
The Company is in the process of developing its plan to integrate the operations
of GSX, which may include certain exit and restructuring costs. As a result of
this plan, a charge, which may be material but which cannot now be quantified,
is expected to be recognized in the period in which such a restructuring occurs.
Leverage - After consummation of the merger with GSX, the Company is more highly
leveraged that either the Company or GSX prior to the merger. The New Credit
Facility includes substantial debt service obligations, including principal and
interest, and restricts the ability of the Company to incur additional
indebtedness, sell assets, distribute dividends and engage in mergers or
divestitures. The New Credit Facility also requires the Company to maintain
certain leverage and interest coverage ratios. The level of the Company's
indebtedness could limit the cash flow available for capital expenditures and
acquisitions, limit the Company's ability to obtain (or obtain on favorable
terms) additional debt financing in the future, limit the Company's flexibility
in reacting to competitive and other changes in the industry or general economic
conditions, expose the Company to a risk that substantial decreases in net
operating cash flows could make it difficult to meet debt service requirements
and expose the Company to risks inherent in interest rate fluctuations because
the New Credit Facility is at variable rates of interest. The Company has
effectively fixed the underlying Eurodollar Rate at approximately 4.8% on $800
million of indebtedness through interest rate protection agreements over the
next three years.
<PAGE>
Year 2000 Costs - The Company utilizes software and related computer technology
essential to its operations and to certain products that use two digits rather
than four to specify the year, which could result in a date recognition problem
with the transition to the year 2000. In 1997, the Company established a plan,
utilizing both internal and external resources, to assess the potential impact
of the year 2000 problem on its systems and operations and to implement
solutions to address this issue. The Company has essentially completed the
assessment phase of its year 2000 plan, and is continuing to survey its
suppliers and service providers for year 2000 compliance. The Company's target
completion date for correction of critical systems is December 31, 1998 and its
plan is to conduct testing of corrected systems in 1999. Third party compliance
and other factors could adversely affect these goals. The Company does not
believe the cost to remediate software and computer technologies for the year
2000 problem will exceed $5.0 million over the next year, which does not include
costs to replace certain existing systems. The Company is in the process of
implementing a new enterprise resource planning system across its Service
Solutions business. The Company estimates that it will spend approximately $10.0
million to acquire and install this new system over the next year. There can be
no assurances that the costs of remediation and testing will not be material.
Moreover, there can be no assurances that the Company will not experience
material unanticipated costs and/or business interruption due to year 2000
problems in its internal systems, its supply chain or from customer product
migration issues. Based upon currently available information, the Company
believes that the greatest risk associated with the year 2000 problem relates to
compliance of third parties including, but not limited to, electrical power and
other utilities. A worse case scenario could result in business interruptions,
which could have a material effect on the Company's operations. The Company is
addressing third party compliance in its year 2000 plan. The Company is
developing contingency plans to mitigate the risks associated with the year 2000
problem and expects to complete these plans by March 1999. The statements set
forth in the foregoing paragraph are year 2000 readiness disclosures (as defined
under the Year 2000 Information and Readiness Act) and shall be treated as such
for all purposes permissible under such Act.
Significance of Goodwill - The Company had goodwill of $102.9 million and
shareholders' deficit of $22.0 million at September 30, 1998. The Company
amortizes its goodwill on a straight-line method over the estimated periods
benefited, not to exceed 40 years. In determining the estimated useful life,
management considers the nature, competitive position, life cycle position, and
historical and expected future operating income of each acquired company, as
well as the Company's commitment to support these acquired companies through
continued investment in capital expenditures, operational improvements, and
research and development. After an acquisition, the Company continually reviews
whether subsequent events and circumstances have occurred that indicate the
remaining estimated useful life of goodwill may warrant revision or that the
remaining balance of goodwill may not be recoverable. If events and
circumstances indicate that goodwill related to a particular business should be
reviewed for possible impairment, the Company uses projections to assess whether
future operating income on a non-discounted basis (before goodwill amortization)
of the unit is likely to exceed the goodwill amortization over the remaining
life of the goodwill, to determine whether a write-down of goodwill to
recoverable value is appropriate. There can be no assurance that circumstances
will not change in the future that will effect the useful life or carrying value
of goodwill.
<PAGE>
EVA Incentive Compensation - The Company utilizes a measure known as Economic
Value Added ("EVA") for its incentive compensation plans for a majority of
employees. EVA is internally computed by the Company based upon Net Operating
Profit after Tax less a charge on the capital invested in the Company. These
computations use certain assumptions that vary from generally accepted
accounting principles. EVA is not a measure under generally accepted accounting
principles and is not intended to be used as an alternative to net income and
measuring operating performance presented in accordance with generally accepted
accounting principles. The Company believes that EVA, as internally computed,
does represent a strong correlation to the ultimate returns of the Company's
shareholders. Annual incentive compensation expense is dependent upon the annual
change in EVA relative to pre-established improvement targets and the expense
can vary significantly.
Accounting Pronouncements - In 1998, the Company must adopt Statement of
Financial Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information" and Statement No. 132, "Employers'
Disclosures about Pensions and Other Postretirement Benefits." Statement No. 131
will require the Company to report certain information about operating segments
in the consolidated financials statements. The Company is currently evaluating
the provisions of this statement to determine its impact upon current segment
disclosures. Statement No. 132 will require the Company to standardize its
disclosures and other information for pensions and other postretirement
benefits.
In 2000, the Company must adopt Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities." Statement
No. 133 will require the Company to record derivatives on the balance sheet as
assets or liabilities, measured at fair value, and gains or losses resulting
from the changes in the values of those derivatives would be accounted for
depending on the use of the derivative and whether it qualifies for hedge
accounting. The Company is evaluating the standard and does not expect it to
have a material impact on the financial results or condition of the Company, as
the use of derivatives at the Company is not significant.
--------------------
The foregoing discussion in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" contains forward looking
statements which reflect management's current views with respect to future
events and financial performance. These forward looking statements are subject
to certain risks and uncertainties, including but not limited to those matters
discussed above. Due to such uncertainties and risks, readers are cautioned not
to place undue reliance on such forward looking statements, which speak only as
of the date hereof. Reference is made to the Company's 1997 Annual Report on
Form 10-K for additional cautionary statements and discussion of certain
important factors as they relate to forward looking statements.
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Company held a special meeting on October 5, 1998 at which
shareholders voted to approve the issuance of shares of common
stock in the merger of General Signal Corporation with and into
SAC Corporation in accordance with the Agreement and Plan of
Merger and to approve an amendment to the 1992 Stock Compensation
Plan to increase the number of shares of common stock issuable
under the 1992 Stock Compensation Plan to 3,000,000 shares.
The results of the voting in connection with the above items were
as follows:
Voting on: For Against Abstain
Issuance of common shares 7,990,169 222,523 39,232
Amendment to increase
Common stock issuable
under 1992 Stock
Compensation Plan 7,703,334 483,185 64,405
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(2) None.
(3) None.
(4) Credit Agreement between SPX and Chase Manhattan Bank, as agent
for the banks named therein, dated as of October 6, 1998.
(10) None.
(11) Statement regarding computation of earnings per share. See
Consolidated Condensed Statements of Income.
(15) None.
(18) None.
(19) None.
(20) None.
(22) None.
(23) None.
(24) None.
(27) Financial data schedule.
(99) None.
<PAGE>
(b) Reports on Form 8-K
8-K Dated July 19, 1998, Announcement of Merger Agreement with
General Signal Corporation
8-K Dated August 14, 1998, Announcement that SPX is comfortable
with analysts' estimates
8-K Dated October 5, 1998, Announcement of the approval of the
SPX and General Signal merger by the respective shareholders
8-K Dated October 9, 1998, Announcement of the completion of the
SPX and General Signal merger
8-K/A Dated September 9, 1998, Amending the July 19, 1998 8-K
8-K/A Dated November 5, 1998, Amending the October 9, 1998 8-K
<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.
SPX CORPORATION
(Registrant)
Date: November 16, 1998 By /s/ John B. Blystone
---------------------
John B. Blystone
Chairman, President and
Chief Executive Officer
Date: November 16, 1998 By /s/ Patrick J. O'Leary
-----------------------
Patrick J. O'Leary
Vice President, Finance,
Treasurer and Chief
Financial Officer
Date: November 16, 1998 By /s/ Kenneth C. Dow
-------------------
Kenneth C. Dow
Controller and Chief
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 10,532
<SECURITIES> 0
<RECEIVABLES> 169,957
<ALLOWANCES> (7,520)
<INVENTORY> 120,643
<CURRENT-ASSETS> 372,786
<PP&E> 288,208
<DEPRECIATION> (152,349)
<TOTAL-ASSETS> 635,523
<CURRENT-LIABILITIES> 263,860
<BONDS> 0
0
0
<COMMON> 169,250
<OTHER-SE> (191,200)
<TOTAL-LIABILITY-AND-EQUITY> 635,523
<SALES> 693,937
<TOTAL-REVENUES> 693,937
<CGS> 499,095
<TOTAL-COSTS> 620,628
<OTHER-EXPENSES> (1,450)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,301
<INCOME-PRETAX> 62,458
<INCOME-TAX> 22,485
<INCOME-CONTINUING> 39,973
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 39,973
<EPS-PRIMARY> 3.27
<EPS-DILUTED> 3.27
</TABLE>
EXECUTION COPY
===========================================================================
CREDIT AGREEMENT
dated as of
October 6, 1998
among
SPX CORPORATION,
The Lenders Party Hereto,
THE FIRST NATIONAL BANK OF CHICAGO,
as Documentation Agent,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
---------------------------
CHASE SECURITIES INC.,
as Lead Arranger and Book Manager
===========================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions............................... 1
SECTION 1.1 Defined Terms......................................... 1
SECTION 1.2 Classification of Loans and Borrowings................ 19
SECTION 1.3 Terms Generally....................................... 19
SECTION 1.4 Accounting Terms; GAAP................................ 19
ARTICLE II
The Credits............................... 20
SECTION 2.1 Commitments........................................... 20
SECTION 2.2 Loans and Borrowings.................................. 20
SECTION 2.3 Requests for Borrowings............................... 21
SECTION 2.4 Swingline Loans....................................... 21
SECTION 2.5 Letters of Credit..................................... 22
SECTION 2.6 Funding of Borrowings................................. 25
SECTION 2.7 Interest Elections.................................... 26
SECTION 2.8 Termination and Reduction of Commitments.............. 27
SECTION 2.9 Evidence of Debt...................................... 27
SECTION 2.10 Repayment of Loans................................... 28
SECTION 2.11 Prepayment of Loans.................................. 29
SECTION 2.12 Certain Payment Application Matters.................. 30
SECTION 2.13 Fees................................................. 31
SECTION 2.14 Interest............................................. 32
SECTION 2.15 Alternate Rate of Interest........................... 32
SECTION 2.16 Increased Costs...................................... 33
SECTION 2.17 Break Funding Payments............................... 34
SECTION 2.18 Taxes................................................ 34
SECTION 2.19 Payments Generally; Pro Rata Treatment; Sharing of
Set-offs..................................................... 36
SECTION 2.20 Mitigation Obligations; Replacement of Lenders....... 38
ARTICLE III
Representations and Warranties............ 38
SECTION 3.1 Organization; Powers.................................. 38
SECTION 3.2 Authorization; Enforceability......................... 38
SECTION 3.3 Governmental Approvals; No Conflicts.................. 39
SECTION 3.4 Financial Condition; No Material Adverse Change....... 39
SECTION 3.5 Properties............................................ 40
SECTION 3.6 Litigation and Environmental Matters.................. 40
SECTION 3.7 Compliance with Laws and Agreements................... 41
SECTION 3.8 Investment and Holding Company Status................. 41
SECTION 3.9 Taxes................................................. 41
SECTION 3.10 ERISA................................................. 41
SECTION 3.11 Disclosure........................................... 41
SECTION 3.12 Subsidiaries......................................... 41
SECTION 3.13 Insurance............................................ 42
SECTION 3.14 Labor Matters........................................ 42
SECTION 3.15 Solvency............................................. 42
SECTION 3.16 Senior Indebtedness.................................. 42
SECTION 3.17 Security Documents................................... 42
SECTION 3.18 Year 2000............................................ 43
ARTICLE IV
Conditions................................ 43
SECTION 4.1 Effective Date........................................ 43
SECTION 4.2 Each Credit Event..................................... 45
ARTICLE V
Affirmative Covenants..................... 45
SECTION 5.1 Financial Statements and Other Information............ 45
SECTION 5.2 Notices of Material Events............................ 47
SECTION 5.3 Information Regarding Collateral...................... 47
SECTION 5.4 Existence; Conduct of Business........................ 48
SECTION 5.5 Payment of Obligations................................ 48
SECTION 5.6 Maintenance of Properties............................. 48
SECTION 5.7 Insurance............................................. 48
SECTION 5.8 Books and Records; Inspection and Audit Rights........ 48
SECTION 5.9 Compliance with Laws and Contractual Obligations...... 48
SECTION 5.10 Use of Proceeds and Letters of Credit................ 48
SECTION 5.11 Additional Collateral................................ 49
SECTION 5.12 Further Assurances................................... 49
SECTION 5.13 Interest Rate Protection............................. 50
ARTICLE VI
Negative Covenants........................ 50
SECTION 6.1 Financial Condition Covenants......................... 50
SECTION 6.2 Indebtedness.......................................... 51
SECTION 6.3 Liens................................................. 52
SECTION 6.4 Fundamental Changes................................... 53
SECTION 6.5 Investments, Loans, Advances, Guarantees and
Acquisitions................................................. 54
SECTION 6.6 Capital Expenditures.................................. 55
SECTION 6.7 Disposition of Assets................................. 56
SECTION 6.8 Sale and Leaseback Transactions....................... 56
SECTION 6.9 Restricted Payments................................... 56
SECTION 6.10 Payments of Subordinated Debt; Certain Derivative
Transactions................................................. 57
SECTION 6.11 Transactions with Affiliates......................... 57
SECTION 6.12 Restrictive Agreements............................... 57
SECTION 6.13 Amendment of Material Documents, etc................. 58
ARTICLE VII
Events of Default......................... 58
ARTICLE VIII
The Administrative Agent.................. 60
ARTICLE IX
Miscellaneous............................. 62
SECTION 9.1 Notices............................................... 62
SECTION 9.2 Waivers; Amendments................................... 62
SECTION 9.3 Expenses; Indemnity; Damage Waiver.................... 63
SECTION 9.4 Successors and Assigns................................ 64
SECTION 9.5 Survival.............................................. 66
SECTION 9.6 Counterparts; Integration; Effectiveness.............. 66
SECTION 9.7 Severability.......................................... 67
SECTION 9.8 Right of Setoff....................................... 67
SECTION 9.9 Governing Law; Jurisdiction; Consent to Service of
Process...................................................... 67
SECTION 9.10 Acknowledgements..................................... 68
SECTION 9.11 Headings............................................. 68
SECTION 9.12 Confidentiality...................................... 68
SECTION 9.13 WAIVER OF JURY TRIAL................................. 68
SECTION 9.14 Release of Collateral................................ 69
<PAGE>
SCHEDULES:
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1.1A Commitments
1.1B Material Subsidiaries
1.1C Mortgaged Properties
2.5 Existing Letters of Credit
3.4 Disclosed Matters
3.5 Real Property
3.12 Subsidiaries
3.13 Insurance
3.17(a) UCC Filing Jurisdictions
3.17(b) Mortgage Filing Jurisdictions
4.1(f) Liens to be Released
6.2 Existing Indebtedness
6.3 Existing Liens
6.5 Existing Investments
6.12 Existing Restrictions
EXHIBITS:
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A-1 Form of Guarantee and Collateral Agreement
A-2 Form of Shared Collateral Agreement
A-3 Form of Mortgage
A-4 Form of Collateral Sharing Agreement
B Form of Closing Certificate
C Form of Assignment and Acceptance
D-1 Form of Legal Opinion of Fried, Frank, Harris, Shriver & Jacobson
D-2 Form of Legal Opinion of General Counsel of the Borrower
E Form of Addendum
F Form of Exemption Certificate
<PAGE>
CREDIT AGREEMENT, dated as of October 6, 1998, among SPX
CORPORATION, the Lenders party hereto, THE FIRST NATIONAL BANK OF CHICAGO,
as Documentation Agent, and THE CHASE MANHATTAN BANK, as Administrative
Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
-----------
SECTION 1.1 Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR": when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the Alternate Base
Rate.
"Acquisition": the acquisition by the Borrower of all of the
outstanding Capital Stock of GSX.
"Acquisition Agreement": the Agreement and Plan of Merger, dated
as of July 19, 1998, among the Borrower, SAC Corp. and GSX.
"Acquisition Documents": collectively, the Acquisition Agreement
and all schedules, exhibits and annexes thereto and all side letters and
agreements affecting the terms thereof or entered into in connection
therewith.
"Adjusted LIBO Rate": with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent": The Chase Manhattan Bank, in its capacity
as administrative agent for the Lenders hereunder and, unless the context
otherwise requires, in its capacity as Collateral Agent.
"Administrative Questionnaire": an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"Affiliate": as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person
means the power, directly or indirectly, either to (a) vote 10% or more of
the securities having ordinary voting power for the election of directors
(or persons performing similar functions) of such Person or (b) direct or
cause the direction of the management and policies of such Person, whether
by contract or otherwise.
"Alternate Base Rate": for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate
in effect on such day plus 1% and (c) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. If for any reason the Administrative
Agent shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds Effective
Rate for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in respect thereof,
the Alternate Base Rate shall be determined without regard to clause (c) of
the first sentence of this definition until the circumstances giving rise
to such inability no longer exist. Any change in the Alternate Base Rate
due to a change in the Prime Rate, the Base CD Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of
such change in the Prime Rate, the Base CD Rate or the Federal Funds
Effective Rate, respectively.
"Applicable Percentage": with respect to any Revolving Lender,
the percentage of the total Revolving Commitments represented by such
Lender's Revolving Commitment. If the Revolving Commitments have terminated
or expired, the Applicable Percentages shall be determined based upon the
Revolving Commitments most recently in effect, giving effect to any
assignments.
"Applicable Rate": (a) with respect to Tranche B Term Loans,
2.50% in the case of ABR Loans and 3.50% in the case of Eurodollar Loans
and (b) with respect to Revolving Loans, Swingline Loans, Tranche A Term
Loans and Interim Term Loans, for any day, the applicable rate per annum
set forth below, based upon the Consolidated Leverage Ratio as of the most
recent determination date; provided that until the Conversion Date, the
"Applicable Rate" for the purposes of this clause (b) shall be the
applicable rate per annum set forth below opposite the caption "Until
Conversion Date":
Applicable
Margin Applicable
Consolidated for Margin
Leverage Eurodollar for ABR Commitment
Ratio Loans Loans Fee Rate
----------------------------------------------------------
Until Conversion Date 2.75% 1.75% 0.500%
Greater than or 2.50% 1.50% 0.500%
equal to 4.00 to 1.0
Greater than or 2.25% 1.25% 0.375%
equal to 3.50 to 1.0
and less than 4.00
to 1.0
Greater than or 2.00% 1.00% 0.300%
equal to 3.00 to 1.0
and less than 3.50
to 1.0
Greater than or 1.75% 0.75% 0.300%
equal to 2.50 to 1.0
and less than 3.00
to 1.0
Less than 2.50 to 1.0 1.50% 0.50% 0.250%
For purposes of the foregoing, (a) the Consolidated Leverage
Ratio shall be determined as of the end of each fiscal quarter of the
Borrower's fiscal year based upon the Borrower's consolidated financial
statements delivered pursuant to Section 5.1(a) or (b), and (b) each change
in the Applicable Rate resulting from a change in the Consolidated Leverage
Ratio shall be effective during the period commencing on and including the
date of delivery to the Administrative Agent of such consolidated financial
statements indicating such change and ending on the date immediately
preceding the effective date of the next such change; provided that, on and
after the Conversion Date, the Consolidated Leverage Ratio shall be deemed
to be greater than or equal to 4.00 to 1.0 (i) at any time that an Event of
Default has occurred and is continuing or (ii) at the option of the
Administrative Agent or at the request of the Required Lenders, if the
Borrower fails to deliver the consolidated financial statements required to
be delivered by it pursuant to Section 5.1(a) or (b), during the period
from the expiration of the time for delivery thereof until such
consolidated financial statements are delivered.
"Assessment Rate": for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R.
Part 327 (or any successor provision) to the Federal Deposit Insurance
Corporation for insurance by such Corporation of time deposits made in
dollars at the offices of such member in the United States; provided that
if, as a result of any change in any law, rule or regulation, it is no
longer possible to determine the Assessment Rate as aforesaid, then the
Assessment Rate shall be such annual rate as shall be determined by the
Administrative Agent to be representative of the cost of such insurance to
the Lenders.
"Assignment and Acceptance": an assignment and acceptance in the
form of Exhibit C or any other form approved by the Administrative Agent.
"Attributable Debt": in respect of a Sale/Leaseback Transaction,
as at the time of determination, the present value (discounted at the
interest rate assumed in making calculations in accordance with FAS 13) of
the total obligations of the Borrower or the relevant Subsidiary, as
lessee, for rental payments during the remaining term of the lease included
in such Sale/Leaseback Transaction (including any period for which such
lease has been extended).
"Base CD Rate": the sum of (a) the Three-Month Secondary CD Rate
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Board": the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrower": SPX Corporation, a Delaware corporation.
"Borrowing": (a) Loans of the same Class and Type, made,
converted or continued on the same date and, in the case of Eurodollar
Loans, as to which a single Interest Period is in effect, or (b) a
Swingline Loan.
"Borrowing Request": a request by the Borrower for a Borrowing in
accordance with Section 2.3.
"Business Day": any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required
by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on
which banks are not open for dealings in dollar deposits in the London
interbank market.
"Capital Expenditures": for any period, (a) the additions to
property, plant and equipment and other capital expenditures of the
Borrower and its consolidated Subsidiaries that are (or would be) set forth
in a consolidated statement of cash flows of the Borrower for such period
prepared in accordance with GAAP and (b) Capital Lease Obligations incurred
by the Borrower and its consolidated Subsidiaries during such period.
"Capital Lease Obligations": with respect to any Person, the
obligations of such Person to pay rent or other amounts under any lease of
(or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such
Person under GAAP, and the amount of such obligations shall be the
capitalized amount thereof determined in accordance with GAAP.
"Capital Stock": shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests
in a trust or other equity ownership interests in a Person, and any and all
warrants, rights or options to purchase any of the foregoing.
"Change in Law": (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any
Governmental Authority after the date of this Agreement or (c) compliance
by any Lender (or, for purposes of Section 2.16(b), by any lending office
of such Lender or by such Lender's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of
any Governmental Authority made or issued after the date of this Agreement.
"Change of Control": (a) the acquisition of ownership, directly
or indirectly, beneficially or of record, by any "person" or "group"
(within the meaning of the Securities Exchange Act of 1934 and the rules of
the Securities and Exchange Commission thereunder as in effect on the date
hereof) of Capital Stock representing more than 35% of either the aggregate
ordinary voting power or the aggregate equity value represented by the
issued and outstanding Capital Stock of the Borrower; (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors
of the Borrower by Persons who were neither (i) nominated by the board of
directors of the Borrower nor (ii) appointed by directors so nominated; or
(c) the occurrence of a "Change of Control" (or any comparable concept) as
defined in the Subordinated Debt Documents.
"Class": when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are Revolving
Loans, Tranche A Term Loans, Tranche B Term Loans, Interim Term Loans or
Swingline Loans and, when used in reference to any Commitment, refers to
whether such Commitment is a Revolving Commitment, Tranche A Commitment,
Tranche B Commitment or Interim Commitment.
"Code": the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral": all property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Collateral Agent": The Chase Manhattan Bank, in its capacities
as (a) collateral agent under the Guarantee and Collateral Agreement for
the Lenders and (b) collateral agent under the Shared Collateral Agreement
for the Lenders and for the Holders (as defined in the MTN Indenture).
"Collateral Agreements": the collective reference to the
Guarantee and Collateral Agreement and the Shared Collateral Agreement.
"Collateral Date": each date on which, pursuant to Section 5.1,
the Borrower delivers annual financial statements in respect of its fiscal
year or quarterly financial statements in respect of the second quarter of
its fiscal year.
"Collateral Sharing Agreement": the Collateral Sharing Agreement
between GSX and the Collateral Agent, substantially in the Form of Exhibit
A-4, as the same may be amended, supplemented or otherwise modified from
time to time.
"Commitment": a Revolving Commitment, Tranche A Commitment,
Tranche B Commitment, Interim Commitment, or any combination thereof (as
the context requires).
"Consideration": in connection with any acquisition, the
consideration paid by the Borrower or any of its Subsidiaries in connection
therewith (including consideration in the form of issuance of Capital Stock
of the Borrower or any Subsidiary and assumption of Indebtedness but
excluding, for the purposes of any calculation made pursuant to Section
6.5, consideration in the form of issuance of Capital Stock of the
Borrower).
"Consolidated EBITDA": for any period, Consolidated Net Income
for such period plus, without duplication and to the extent reflected as a
charge in the statement of such Consolidated Net Income for such period,
the sum of (a) income tax expense, (b) interest expense, amortization or
write-off of debt discount and debt issuance costs and commissions,
discounts and other fees and charges associated with Indebtedness
(including the Loans, letters of credit, bankers' acceptances and net costs
under Hedging Agreements), (c) depreciation and amortization expense, (d)
amortization or write-off of intangibles (including, but not limited to,
goodwill) and organization costs, (e) any extraordinary or non-recurring
non-cash expenses or non-cash losses, provided that in the event that the
Borrower or any Subsidiary makes any cash payment in respect of any such
extraordinary or non-recurring non-cash expense, such cash payment shall be
deducted from Consolidated EBITDA in the period in which such cash payment
is made, (f) losses on Dispositions of assets outside of the ordinary
course of business, (g) non-recurring cash charges taken on or prior to
March 31, 1999 resulting from severance, integration and other adjustments
made as a result of the Acquisition, provided, that the amounts referred to
in this clause (g) shall not, in the aggregate, exceed on an after-tax
basis the sum of (i) $57,400,000, representing the after-tax charges as a
result of the Acquisition that were identified in the Information
Memorandum plus (ii) $60,000,000 and (h) non-cash compensation expenses
arising from the sale of stock, the granting of stock options, the granting
of stock appreciation rights and similar arrangements, and minus, to the
extent included in the statement of such Consolidated Net Income for such
period, (a) any extraordinary or non-recurring non-cash income or non-cash
gains and (b) gains on Dispositions of assets outside of the ordinary
course of business, all as determined on a consolidated basis; provided
that in determining Consolidated EBITDA for such period, the cumulative
effect of any change in accounting principles (effected either through
cumulative effect adjustment or a retroactive application) shall be
excluded. For the purposes of calculating Consolidated EBITDA for any
period of four consecutive fiscal quarters (each, a "Reference Period")
pursuant to any determination of the Consolidated Leverage Ratio, if during
such Reference Period (or, in the case of pro forma calculations, during
the period from the last day of such Reference Period to and including the
date as of which such calculation is made) the Borrower or any Subsidiary
shall have made a Material Disposition or Material Acquisition,
Consolidated EBITDA for such Reference Period shall be calculated after
giving pro forma effect thereto as if such Material Disposition or Material
Acquisition occurred on the first day of such Reference Period (with the
Reference Period for the purposes of pro forma calculations being the most
recent period of four consecutive fiscal quarters for which the relevant
financial information is available), without giving effect to cost savings.
As used in this definition, "Material Acquisition" means any acquisition of
property or series of related acquisitions of property that (a) constitutes
assets comprising all or substantially all of an operating unit of a
business or constitutes all or substantially all of the common stock of a
Person and (b) involves Consideration in excess of $10,000,000; and
"Material Disposition" means any Disposition of property or series of
related Dispositions of property that (a) involves assets comprising all or
substantially all of an operating unit of a business or constitutes all or
substantially all of the common stock of a Subsidiary and (b) yields gross
proceeds to the Borrower or any of its Subsidiaries in excess of
$10,000,000.
"Consolidated Interest Coverage Ratio": for any period, the ratio
of (a) Consolidated EBITDA for such period to (b) Consolidated Interest
Expense for such period.
"Consolidated Interest Expense": for any period, the sum of (a)
total cash interest expense (including that attributable to Capital Lease
Obligations) of the Borrower and its Subsidiaries for such period with
respect to all outstanding Indebtedness of the Borrower and its
Subsidiaries (including all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing and net costs under Hedging Agreements in respect of such
Indebtedness to the extent such net costs are allocable to such period in
accordance with GAAP) and (b) total dividend payments made by the Borrower
or any of its Subsidiaries to any Person (other than the Borrower or any
Wholly Owned Subsidiary Guarantor) during such period in respect of
preferred Capital Stock.
"Consolidated Leverage Ratio": as at the last day of any period,
the ratio of (a) Consolidated Total Debt on such day to (b) Consolidated
EBITDA for such period.
"Consolidated Net Income": for any period, the consolidated net
income (or loss) of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the
date it becomes a Subsidiary of the Borrower or is merged into or
consolidated with the Borrower or any of its Subsidiaries and (b) the
income (or deficit) of any Person (other than a Subsidiary of the Borrower)
in which the Borrower or any of its Subsidiaries has an ownership interest,
except to the extent that any such income is actually received by the
Borrower or such Subsidiary in the form of dividends or similar
distributions.
"Consolidated Total Debt": at any date, the aggregate principal
amount of all Indebtedness of the Borrower and its Subsidiaries at such
date (excluding the face amount of undrawn letters of credit), determined
on a consolidated basis in accordance with GAAP.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control": the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative
thereto.
"Conversion Date": the later of (a) the date that is six months
after the Effective Date and (b) the date on which the Interim Term Loans
have been paid in full.
"Default": any event or condition which upon notice, lapse of
time or both would, unless cured or waived, become an Event of Default
(including, in any event, a "Default" under and as defined in the
Subordinated Debt Documents).
"Disclosed Matters": the matters disclosed in Schedule 3.4.
"Disposition": with respect to any property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other disposition
thereof. "Dispose" and "Disposed of" have meanings correlative thereto.
"Documentation Agent": The First National Bank of Chicago, in its
capacity as documentation agent.
"dollars" or "$" refers to lawful money of the United States of
America.
"Domestic Subsidiary": any Subsidiary other than a Foreign
Subsidiary.
"ECF Percentage": 50%; provided, that the ECF Percentage shall be
permanently reduced to 35% after the first fiscal year as to which the
Consolidated Leverage Ratio (determined as of the last day of such fiscal
year) is less than 3.0 to 1.0.
"Effective Date": the date on which the conditions specified in
Section 4.1 are satisfied, which date is October 6, 1998.
"Environmental Laws": all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental
Authority, relating in any way to the environment, preservation or
reclamation of natural resources, the management, release or threatened
release of any Hazardous Material or to health and safety matters.
"Environmental Liability": any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation,
fines, penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to
any Hazardous Materials, (d) the release or threatened release of any
Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate": any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Event": (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan
(other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency"
(as defined in Section 412 of the Code or Section 302 of ERISA), whether or
not waived; (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan; (d) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability under Title IV of
ERISA with respect to the termination of any Plan; (e) the receipt by the
Borrower or any ERISA Affiliate from the PBGC or a plan administrator of
any notice relating to an intention to terminate any Plan or Plans or to
appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to
the withdrawal or partial withdrawal from any Plan or Multiemployer Plan;
or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or
the receipt by any Multiemployer Plan from the Borrower or any ERISA
Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar": when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the Adjusted LIBO
Rate.
"Event of Default": as defined in Article VII.
"Excess Cash Flow": for any fiscal year of the Borrower, the
excess (if any), determined without duplication, of (a) the sum of (i)
Consolidated Net Income for such fiscal year, (ii) the amount, if any, by
which Net Working Capital decreased during such fiscal year (without
duplication for acquisitions and divestitures), (iii) depreciation,
amortization and other non-cash charges or non-cash losses deducted in
determining such Consolidated Net Income, (iv) the net increase (if any)
during such fiscal year in the Borrower's accrued long-term liability
accounts and (v) the net decrease (if any) during such fiscal year in the
Borrower's accrued long-term asset accounts over (b) the sum of (i) Capital
Expenditures made in cash (excluding those financed with the proceeds of
Indebtedness (excluding Loans), Capital Stock or Dispositions of property)
during such fiscal year in accordance with Section 6.6, (ii) the aggregate
amount of scheduled principal payments in respect of Indebtedness made
during such fiscal year, (iii) the aggregate principal amount of all
prepayments of Revolving Loans during such fiscal year to the extent
accompanied by permanent optional reductions of the Revolving Commitments,
(iv) the aggregate principal amount of all optional prepayments of the Term
Loans during such fiscal year, (v) the amount, if any, by which Net Working
Capital increased during such fiscal year (without duplication for
acquisitions and divestitures), (vi) cash expenditures made in respect of
Investments (excluding those financed with the proceeds of Indebtedness
(excluding Loans), Capital Stock or Dispositions of property) during such
fiscal year pursuant to Section 6.5(e), (g) or (i), (vii) any non-cash
gains included in determining such Consolidated Net Income, (viii) any
gains on asset Dispositions constituting a Prepayment Event that are
included in determining such Consolidated Net Income, (ix) the net decrease
(if any) during such fiscal year in the Borrower's accrued long-term
liability accounts and (x) the net increase (if any) during such fiscal
year in the Borrower's accrued long-term asset accounts.
"Excluded Taxes": with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of
any obligation of the Borrower hereunder, (a) income or franchise taxes
imposed on (or measured by) its net income by the United States of America,
or by the jurisdiction under the laws of which such recipient is organized
or in which its principal office is located or, in the case of any Lender,
in which its applicable lending office is located, (b) any branch profits
taxes imposed by the United States of America or any similar tax imposed by
any other jurisdiction in which the Borrower is located, (c) in the case of
a Lender (other than an assignee pursuant to a request by the Borrower
under Section 2.20(b)), any United States withholding tax that is (i)
imposed on amounts payable to such Lender at the time such Lender becomes a
party to this Agreement or (ii) is attributable to such Lender's failure to
comply with Section 2.18(e), except to the extent that such Lender (or its
assignor, if any) was entitled, to receive additional amounts from the
Borrower with respect to such withholding tax pursuant to Section 2.18(a)
and (d) United States withholding taxes imposed other than as a result of a
Change in Law (it being understood that for this purpose the term Change in
Law shall not include final Treasury regulations under Section 1441 of the
Code becoming effective).
"Existing Letters of Credit": as defined in Section 2.5(a).
"Facility": each of (a) the Tranche A Term Commitments and the
Tranche A Term Loans made thereunder (the "Tranche A Term Facility"), (b)
the Tranche B Term Commitments and the Tranche B Term Loans made thereunder
(the "Tranche B Term Facility"), (c) the Interim Term Commitments and the
Interim Term Loans made thereunder (the "Interim Term Facility") and (d)
the Revolving Commitments and the extensions of credit made thereunder (the
"Revolving Facility").
"Federal Funds Effective Rate": for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"Financial Officer": the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.
"Financing Transactions": the execution, delivery and performance
by each Loan Party of the Loan Documents to which it is to be a party, the
borrowing of Loans, the use of the proceeds thereof and the issuance of
Letters of Credit hereunder.
"Foreign Subsidiary": any Subsidiary (a) that is organized under
the laws of a jurisdiction other than the United States of America or any
State thereof or the District of Columbia or (b) that is a Foreign
Subsidiary Holdco.
"Foreign Subsidiary Holdco": any Domestic Subsidiary that has no
material assets other than the Capital Stock of one or more Foreign
Subsidiaries, and other assets relating to an ownership interest in any
such Capital Stock.
"GAAP": generally accepted accounting principles in the United
States of America.
"Governmental Authority": any nation or government, any state or
other political subdivision thereof, any agency, authority,
instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative functions of or pertaining to government, any securities
exchange and any self-regulatory organization (including the National
Association of Insurance Commissioners).
"GSX": General Signal Corporation, a New York corporation, or,
after giving effect to the Acquisition, a Delaware corporation.
"Guarantee: with respect to any Person (the "guarantor"), any
obligation, contingent or otherwise, of the guarantor guaranteeing or
having the economic effect of guaranteeing any Indebtedness or other
obligation of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation
or to purchase (or to advance or supply funds for the purchase of) any
security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition
or liquidity of the primary obligor so as to enable the primary obligor to
pay such Indebtedness or other obligation or (d) as an account party in
respect of any letter of credit or letter of guaranty issued to support
such Indebtedness or obligation; provided, that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course
of business.
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement made by the Borrower and the Subsidiary Guarantors in
favor of the Collateral Agent, substantially in the form of Exhibit A-1, as
the same may be amended, supplemented or otherwise modified from time to
time.
"Hazardous Materials": all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"Hedging Agreement": any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement
or other interest or currency exchange rate or commodity price hedging
arrangement.
"Indebtedness": with respect to any Person, without duplication,
(a) all obligations of such Person for borrowed money, (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person under conditional sale or
other title retention agreements relating to property acquired by such
Person, (d) all obligations of such Person in respect of the deferred
purchase price of property or services (other than current trade payables
or liabilities for deferred payment for services to employees and former
employees, in each case incurred in the ordinary course of business and
payable in accordance with customary practices), (e) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (f) all Guarantees by such Person of
Indebtedness of others, (g) all Capital Lease Obligations of such Person,
(h) all obligations, contingent or otherwise, of such Person as an account
party in respect of letters of credit and letters of guaranty, (i) all
obligations, contingent or otherwise, of such Person in respect of bankers'
acceptances and (j) all preferred and/or redeemable Capital Stock of any
Subsidiary of such Person. The Indebtedness of any Person (i) shall include
the Indebtedness of any other entity (including any partnership in which
such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor and (ii) shall
exclude customer deposits in the ordinary course of business.
"Indemnified Taxes": Taxes other than Excluded Taxes.
"Information Memorandum": the collective reference to each
Confidential Information Memorandum dated September 1998 relating to the
Borrower and any one or more of the Facilities.
"Interest Election Request": a request by the Borrower to convert
or continue a Revolving Borrowing or Term Borrowing in accordance with
Section 2.7.
"Interest Payment Date": (a) with respect to any ABR Loan (other
than a Swingline Loan), the last day of each March, June, September and
December, (b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a Eurodollar Borrowing with an Interest Period of more
than three months' duration, each day prior to the last day of such
Interest Period that occurs at intervals of three months' duration after
the first day of such Interest Period, and (c) with respect to any
Swingline Loan, the day that such Loan is required to be repaid.
"Interest Period": with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three
or six months thereafter, as the Borrower may elect; provided, that (i) if
any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar
month, in which case such Interest Period shall end on the next preceding
Business Day and (ii) any Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of
such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter
shall be the effective date of the most recent conversion or continuation
of such Borrowing.
"Interim Commitment": with respect to each Lender, the
commitment, if any, of such Lender to make an Interim Term Loan hereunder
on the Effective Date. The initial aggregate amount of the Lenders' Interim
Commitments is $200,000,000.
"Interim Lender": a Lender with an Interim Commitment or an
outstanding Interim Term Loan.
"Interim Maturity Date": April 6, 2000.
"Interim Term Loan": a Loan made pursuant to Section 2.1(c).
"Investments": as defined in Section 6.5.
"Issuing Lender": The Chase Manhattan Bank, in its capacity as
the issuer of Letters of Credit hereunder, and its successors in such
capacity as provided in Section 2.5(i); provided that, with respect to any
Existing Letter of Credit, the term "Issuing Lender" shall mean The First
National Bank of Chicago, as the issuer of such Existing Letter of Credit.
The Issuing Lender may, in its discretion, arrange for one or more Letters
of Credit to be issued by Affiliates of the Issuing Lender, in which case
the term "Issuing Lender" shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate.
"LC Disbursement": a payment made by the Issuing Lender pursuant
to a Letter of Credit.
"LC Exposure": at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed
by or on behalf of the Borrower at such time. The LC Exposure of any
Revolving Lender at any time shall be its Applicable Percentage of the
total LC Exposure at such time.
"Lenders": the Persons listed on Schedule 1.1A and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto
pursuant to an Assignment and Acceptance. Unless the context otherwise
requires, the term "Lenders" includes the Swingline Lender and the Issuing
Lender.
"Letter of Credit": any letter of credit issued pursuant to this
Agreement, including the Existing Letters of Credit.
"LIBO Rate": with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Dow Jones Markets
screen (or on any successor or substitute page of such Service, or any
successor to or substitute for such screen, providing rate quotations
comparable to those currently provided on such page of such screen, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the
rate for dollar deposits with a maturity comparable to such Interest
Period. In the event that such rate is not available at such time for any
reason, then the "LIBO Rate" with respect to such Eurodollar Borrowing for
such Interest Period shall be the rate at which dollar deposits of
$5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of
such Interest Period.
"Lien": with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor
under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic
effect as any of the foregoing) relating to such asset and (c) in the case
of securities, any purchase option, call or similar right of a third party
with respect to such securities.
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Documents": this Agreement and the Security Documents.
"Loan Parties": the Borrower and the Subsidiary Guarantors.
"Majority Facility Lenders": with respect to any Facility, the
holders of more than 50% of the aggregate unpaid principal amount of the
Term Loans or Revolving Exposure, as the case may be, outstanding under
such Facility (or, in the case of the Revolving Facility, prior to any
termination of the Revolving Commitments, the holders of more than 50% of
the Revolving Commitments).
"Material Adverse Effect": a material adverse effect on (a) the
business, property, operations or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole, (b) the ability of the Loan
Parties, taken as a whole, to perform any of their obligations under any
Loan Document or (c) the rights of or benefits available to the Lenders
under any Loan Document.
"Material Indebtedness": the collective reference to (a)
Indebtedness (other than the Loans and Letters of Credit), or obligations
in respect of one or more Hedging Agreements, of any one or more of the
Borrower and its Subsidiaries in an aggregate principal amount exceeding
$35,000,000 and (b) obligations under the MTN Indenture or any notes issued
pursuant thereto. For purposes of determining Material Indebtedness, the
"principal amount" of the obligations of the Borrower or any Subsidiary in
respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that the Borrower or such
Subsidiary would be required to pay if such Hedging Agreement were
terminated at such time.
"Material Subsidiary": any Subsidiary listed on Schedule 1.1B.
"Moody's": Moody's Investors Service, Inc.
"Mortgage": a mortgage, deed of trust, assignment of leases and
rents, leasehold mortgage or other security document granting a Lien on any
Mortgaged Property to secure the obligations of any Loan Party under any
Loan Document. Each Mortgage shall be satisfactory in form and substance to
the Administrative Agent.
"Mortgaged Property": each parcel of real property owned by a
Loan Party and identified on Schedule 1.1C and the improvements thereto,
together with each other parcel of real property and improvements thereto
with respect to which a Mortgage is granted to the Administrative Agent or
the Collateral Agent.
"MTN Indenture": the Indenture dated as of April 15, 1996 between
GSX and The Chase Manhattan Bank, as trustee.
"Multiemployer Plan": a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Proceeds": with respect to any event (a) the cash proceeds
received in respect of such event including (i) any cash received in
respect of any non-cash proceeds, but only as and when received, (ii) in
the case of a casualty, insurance proceeds, and (iii) in the case of a
casualty or a condemnation or similar event, condemnation awards and
similar payments, net of (b) the sum of (i) all reasonable fees and
out-of-pocket expenses paid by the Borrower and the Subsidiaries to third
parties (other than Affiliates) in connection with such event, (ii) in the
case of a Disposition of an asset (including pursuant to a condemnation or
similar proceeding), the amount of all payments required to be made by the
Borrower and the Subsidiaries as a result of such event to repay
Indebtedness (other than Loans) or to repay any other Contractual
Obligation secured by such asset or otherwise subject to mandatory
prepayment or repayment as a result of such event, and (iii) the amount of
all taxes paid (or reasonably estimated to be payable) by the Borrower and
the Subsidiaries (including all taxes paid in connection with the
repatriation of the Net Proceeds of a Disposition), and the amount of any
reserves established by the Borrower and the Subsidiaries to fund
contingent liabilities reasonably estimated to be payable, in each case
that are directly attributable to such event (as determined reasonably and
in good faith by the chief financial officer of the Borrower).
"Net Working Capital": at any date, (a) the consolidated current
assets of the Borrower and its consolidated Subsidiaries as of such date
(excluding cash and Permitted Investments) minus (b) the consolidated
current liabilities of the Borrower and its consolidated Subsidiaries as of
such date (excluding current liabilities in respect of Indebtedness). Net
Working Capital at any date may be a positive or negative number. Net
Working Capital increases when it becomes more positive or less negative
and decreases when it becomes less positive or more negative.
"Obligations": the collective reference to the unpaid principal
of and interest (and premium, if any) on the Loans and Reimbursement
Obligations and all other obligations and liabilities of the Borrower
(including, without limitation, interest accruing at the then applicable
rate provided in the Credit Agreement after the maturity of the Loans and
Reimbursement Obligations and interest accruing at the then applicable rate
provided herein after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating
to the Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) to the Administrative Agent or any
Lender (or, in the case of any Hedging Agreement, any Affiliate of any
Lender), whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, this Agreement, the other Loan Documents,
any Letter of Credit, any Hedging Agreement with any Lender or any
Affiliate of any Lender or any other document made, delivered or given in
connection with any of the foregoing, in each case whether on account of
principal, interest, premium, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Administrative Agent or to the Lenders that
are required to be paid by the Borrower pursuant to the terms of any of the
foregoing agreements).
"Other Taxes": any and all present or future stamp or documentary
taxes or any other excise charges or similar levies arising from the
execution, delivery or enforcement of any Loan Document.
"Participant": as defined in Section 9.4(e).
"PBGC": the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Acquisition": any acquisition by the Borrower or any
Wholly Owned Subsidiary Guarantor of all of the Capital Stock of, or all or
substantially all of the assets of, or of a business, unit or division of,
any Person; provided that (a) the Borrower shall be in compliance, on a pro
forma basis after giving effect to such acquisition, with the covenants
contained in Section 6.1, in each case recomputed as at the last day of the
most recently ended fiscal quarter of the Borrower for which the relevant
information is available as if such acquisition had occurred on the first
day of each relevant period for testing such compliance (as demonstrated in
a certificate of a Financial Officer delivered to the Administrative Agent
not more than ten days after such acquisition), (b) no Default or Event of
Default shall have occurred and be continuing, or would occur after giving
effect to such acquisition, (c) the Capital Stock and substantially all of
the other property so acquired (including substantially all of the property
of any Person whose Capital Stock is directly or indirectly acquired, but
excluding real property to the extent such property is not required by
Section 5.11(b) to become Collateral) shall constitute Collateral and (d)
any such acquisition shall have been approved by the Board of Directors or
comparable governing body of the relevant Person.
"Permitted Encumbrances": (a) Liens imposed by law for taxes that
are not yet due or are being contested in compliance with Section 5.5; (b)
carriers', warehousemen's, mechanics', materialmen's, repairmen's and other
like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than 90 days or are being
contested in compliance with Section 5.5; (c) pledges and deposits made in
the ordinary course of business in compliance with workers' compensation,
unemployment insurance and other social security laws or regulations; (d)
deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of
business; (e) deposits securing liabilities to insurance carriers under
insurance or self-insurance arrangements; and (f) easements, ground leases,
zoning restrictions, building codes, rights-of-way, minor defects or
irregularities in title and similar encumbrances on real property imposed
by law or arising in the ordinary course of business that do not secure any
monetary obligations and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business of the
Borrower or any Subsidiary. Notwithstanding the foregoing, the term
"Permitted Encumbrances" shall not include any Lien securing Indebtedness.
"Permitted Investments": (a) direct obligations of, or
obligations the principal of and interest on which are unconditionally
guaranteed by, the United States of America (or by any agency thereof to
the extent such obligations are backed by the full faith and credit of the
United States of America), in each case maturing within one year from the
date of acquisition thereof; (b) investments in commercial paper maturing
within 270 days from the date of acquisition thereof and having, at such
date of acquisition, the highest credit rating obtainable from S&P or from
Moody's; (c) investments in certificates of deposit, banker's acceptances
and time deposits maturing within 180 days from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, any domestic office of any commercial bank
organized under the laws of the United States of America or any State
thereof which has a combined capital and surplus and undivided profits of
not less than $500,000,000; and (d) fully collateralized repurchase
agreements with a term of not more than 30 days for securities described in
clause (a) above and entered into with a financial institution satisfying
the criteria described in clause (c) above.
"Person": any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA, and in respect of which
the Borrower or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined
in Section 3(5) of ERISA.
"Prepayment Event":
(a) any Disposition of property or series of related Dispositions
of property (excluding any such Disposition permitted by paragraph (a)
or (b) of Section 6.7) that yields aggregate gross proceeds to the
Borrower or any of the Subsidiary Guarantors (valued at the initial
principal amount thereof in the case of non-cash proceeds consisting
of notes or other debt securities and valued at fair market value in
the case of other non-cash proceeds) in excess of $10,000,000; or
(b) any casualty or other insured damage to, or any taking under
power of eminent domain or by condemnation or similar proceeding of,
any property of the Borrower or any Subsidiary Guarantor that yields
Net Proceeds in excess of $10,000,000; or
(c) the issuance by the Borrower or any Subsidiary Guarantor of
any Capital Stock for cash, or the receipt by the Borrower or any
Subsidiary Guarantor of any capital contribution in cash, other than
any such issuance of Capital Stock to, or receipt of any such capital
contribution from, the Borrower or a Subsidiary Guarantor; or
(d) the incurrence by the Borrower or any Subsidiary Guarantor of
any Indebtedness pursuant to Section 6.2(b).
"Prime Rate": the rate of interest per annum publicly announced
from time to time by The Chase Manhattan Bank as its prime rate in effect
at its principal office in New York City; each change in the Prime Rate
shall be effective from and including the date such change is publicly
announced as being effective.
"Register" has the meaning set forth in Section 9.4(c).
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 2.5 for amounts drawn
under Letters of Credit.
"Related Parties": with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees,
agents, trustees and advisors of such Person and such Person's Affiliates.
"Release Date": as defined in Section 9.14.
"Required Lenders": at any time, Lenders having Revolving
Exposures, Term Loans and unused Commitments representing at least 51% of
the sum of the total Revolving Exposures, outstanding Term Loans and unused
Commitments at such time.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Restricted Payment": any dividend or other distribution (whether
in cash, securities or other property) with respect to any Capital Stock of
the Borrower or any Subsidiary, or any payment (whether in cash, securities
or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation
or termination of any Capital Stock of the Borrower or any Subsidiary or
any option, warrant or other right to acquire any such Capital Stock of the
Borrower or any Subsidiary.
"Revolving Availability Period": the period from and including
the Effective Date to but excluding the earlier of the Revolving Maturity
Date and the date of termination of the Revolving Commitments.
"Revolving Commitment": with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, as such
commitment may be changed from time to time pursuant to this Agreement. The
initial amount of each Lender's Revolving Commitment is set forth on
Schedule 1.1A, or in the Assignment and Acceptance pursuant to which such
Lender shall have assumed its Revolving Commitment, as applicable. The
initial aggregate amount of the Revolving Commitments is $250,000,000.
"Revolving Exposure": with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender's Revolving Loans
and its LC Exposure and Swingline Exposure at such time.
"Revolving Lender": a Lender with a Revolving Commitment or with
Revolving Exposure.
"Revolving Loan": a Loan made pursuant to Section 2.1(d).
"Revolving Maturity Date": September 30, 2004.
"Risk Management Subsidiary": any Subsidiary (a) that is formed
for the purpose of better controlling the costs associated with certain
post-retirement benefit obligations, workers' compensation claims,
severance, deferred compensation, keyman life insurance reserves,
environmental liabilities and other liabilities, (b) that is a Subsidiary
Guarantor and a "Grantor" for the purposes of each relevant Collateral
Agreement and (c) all of the Capital Stock of which, to the extent owned by
the Borrower or any Domestic Subsidiary, is pledged as Collateral under
each relevant Collateral Agreement.
"S&P": Standard & Poor's.
"Sale/Leaseback Transaction": as defined in Section 6.8.
"Security Documents": the Collateral Agreements, the Collateral
Sharing Agreement, the Mortgages and any other security documents granting
a Lien on any property of any Person to secure the obligations of any Loan
Party under any Loan Document.
"Shared Collateral Agreement": the Collateral Agreement made by
GSX and each of its Subsidiaries that is a Subsidiary Guarantor in favor of
the Collateral Agent, substantially in the form of Exhibit A-2, as the same
may be amended, supplemented or otherwise modified from time to time.
"Statutory Reserve Rate": a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is
the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Board to which any Lender or any
London branch of any Lender is subject (a) with respect to the Base CD
Rate, for new negotiable nonpersonal time deposits in dollars of over
$100,000 with maturities approximately equal to three months and (b) with
respect to the Adjusted LIBO Rate, for eurocurrency funding. Such reserve
percentages shall include those imposed pursuant to Regulation D of the
Board. Eurodollar Loans shall be deemed to constitute eurocurrency funding
and to be subject to such reserve requirements without benefit of or credit
for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable regulation.
The Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"Subordinated Debt": any Indebtedness incurred by the Borrower
pursuant to Section 6.2(b).
"Subordinated Debt Documents": all indentures, instruments,
agreements and other documents evidencing or governing the Subordinated
Debt or providing for any Guarantee or other right in respect thereof.
"Subsidiary": with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association
or other entity the accounts of which would be consolidated with those of
the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date,
as well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power or, in the case of a partnership, more than 50% of
the general partnership interests are, as of such date, owned, controlled
or held, or (b) that is, as of such date, otherwise Controlled, by the
parent or one or more Subsidiaries of the parent or by the parent and one
or more Subsidiaries of the parent. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall
refer to a Subsidiary or Subsidiaries of the Borrower. For purposes of the
representations and warranties made herein on or after the Effective Date,
the "Subsidiaries" of the Borrower include each of GSX and its
Subsidiaries.
"Subsidiary Guarantor": any Subsidiary that has guaranteed the
Obligations pursuant to the relevant Collateral Agreement.
"Swingline Exposure": at any time, the aggregate principal amount
of all Swingline Loans outstanding at such time. The Swingline Exposure of
any Lender at any time shall be its Applicable Percentage of the total
Swingline Exposure at such time.
"Swingline Lender": The Chase Manhattan Bank, in its capacity as
lender of Swingline Loans hereunder.
"Swingline Loan": a Loan made pursuant to Section 2.4.
"Taxes": any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Term Loans": Tranche A Term Loans, Tranche B Term Loans and
Interim Term Loans.
"Three-Month Secondary CD Rate": for any day, the secondary
market rate for three-month certificates of deposit reported as being in
effect on such day (or, if such day is not a Business Day, the next
preceding Business Day) by the Board through the public information
telephone line of the Federal Reserve Bank of New York (which rate will,
under the current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day) or, if
such rate is not so reported on such day or such next preceding Business
Day, the average of the secondary market quotations for three-month
certificates of deposit of major money center banks in New York City
received at approximately 10:00 a.m., New York City time, on such day (or,
if such day is not a Business Day, on the next preceding Business Day) by
the Administrative Agent from three negotiable certificate of deposit
dealers of recognized standing selected by it.
"Tranche A Commitment": with respect to each Lender, the
commitment, if any, of such Lender to make a Tranche A Term Loan hereunder
on the Effective Date. The initial aggregate amount of the Lenders' Tranche
A Commitments is $600,000,000.
"Tranche A Lender": a Lender with a Tranche A Commitment or an
outstanding Tranche A Term Loan.
"Tranche A Maturity Date": September 30, 2004.
"Tranche A Term Loan": a Loan made pursuant to Section 2.1(a).
"Tranche B Commitment": with respect to each Lender, the
commitment, if any, of such Lender to make a Tranche B Term Loan hereunder
on the Effective Date. The initial aggregate amount of the Lenders' Tranche
B Commitments is $600,000,000.
"Tranche B Lender": a Lender with a Tranche B Commitment or an
outstanding Tranche B Term Loan.
"Tranche B Maturity Date": September 30, 2006.
"Tranche B Term Loan": a Loan made pursuant to Section 2.1(b).
"Transactions": the Acquisition and the Financing Transactions.
"Type": when used in reference to any Loan or Borrowing, refers
to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.
"Wholly Owned Domestic Subsidiary": any Domestic Subsidiary that
is a Wholly Owned Subsidiary of the Borrower.
"Wholly Owned Subsidiary": as to any Person, any other Person all
of the Capital Stock of which (other than directors' qualifying shares
required by law) is owned by such Person directly and/or through other
Wholly Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower, provided that, in any
event, each Risk Management Subsidiary shall be deemed to constitute a
Wholly Owned Subsidiary Guarantor for the purposes of Sections 6.2 and 6.5.
"Withdrawal Liability": liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.2 Classification of Loans and Borrowings. For purposes
of this Agreement, Loans may be classified and referred to by Class (e.g.,
a "Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and
Type (e.g., a "Eurodollar Revolving Loan"). Borrowings also may be
classified and referred to by Class (e.g., a "Revolving Borrowing") or by
Type (e.g., a "Eurodollar Borrowing") or by Class and Type (e.g., a
"Eurodollar Revolving Borrowing").
SECTION 1.3 Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase
"without limitation". The word "will" shall be construed to have the same
meaning and effect as the word "shall". Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument
or other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments,
supplements or modifications set forth herein), (b) any reference herein to
any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of
similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (d) all references
herein to Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles and Sections of, and Exhibits and Schedules to, this
Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.4 Accounting Terms; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature
shall be construed in accordance with GAAP, as in effect from time to time;
provided that if at any time after the date hereof there shall occur any
change in respect of GAAP from that used in the preparation of audited
financial statements referred to in Section 5.1 in a manner that would have
a material effect on any matter which is material to Article VI, the
Borrower and the Administrative Agent will, within five Business Days of
notice from the Administrative Agent or the Borrower, as the case may be,
to that effect, commence, and continue in good faith, negotiations with a
view towards making appropriate amendments to the provisions hereof
acceptable to the Required Lenders, to reflect as nearly as possible the
effect of Article VI as in effect on the date hereof; provided further
that, until such notice shall have been withdrawn or the relevant
provisions amended in accordance herewith, Article VI shall be interpreted
on the basis of GAAP as in effect and applied immediately before such
change shall have become effective.
ARTICLE II
The Credits
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SECTION 2.1 Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees (a) to make a Tranche A Term Loan to the
Borrower on the Effective Date in a principal amount not exceeding its
Tranche A Commitment, (b) to make a Tranche B Term Loan to the Borrower on
the Effective Date in a principal amount not exceeding its Tranche B
Commitment, (c) to make an Interim Term Loan to the Borrower on the
Effective Date in a principal amount not exceeding its Interim Commitment
and (d) to make Revolving Loans to the Borrower from time to time during
the Revolving Availability Period in an aggregate principal amount that
will not result in such Lender's Revolving Exposure exceeding such Lender's
Revolving Commitment. Within the foregoing limits and subject to the terms
and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Revolving Loans. Amounts repaid in respect of Term Loans may not
be reborrowed.
SECTION 2.2 Loans and Borrowings. (a) Each Loan (other than a
Swingline Loan) shall be made as part of a Borrowing consisting of Loans of
the same Class and Type made by the Lenders ratably in accordance with
their respective Commitments of the applicable Class. The failure of any
Lender to make any Loan required to be made by it shall not relieve any
other Lender of its obligations hereunder.
(b) Subject to Section 2.15, each Revolving Borrowing and Term
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as
the Borrower may request in accordance herewith; provided that all
Borrowings made on the Effective Date must be made as ABR Borrowings. Each
Swingline Loan shall be an ABR Loan. Each Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan; provided that any exercise of such option
shall not affect the obligation of the Borrower to repay such Loan in
accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that
is an integral multiple of $1,000,000 and not less than $10,000,000. At the
time that each ABR Revolving Borrowing is made, such Borrowing shall be in
an aggregate amount that is an integral multiple of $1,000,000 and not less
than $5,000,000; provided that an ABR Revolving Borrowing may be in an
aggregate amount that is equal to the entire unused balance of the total
Revolving Commitments or that is required to finance the reimbursement of
an LC Disbursement as contemplated by Section 2.5(e). Each Swingline Loan
shall be in an amount that is an integral multiple of $500,000 and not less
than $1,000,000. No more than 20 Eurodollar Borrowings may be outstanding
at any one time.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or
continue, any Borrowing if the Interest Period requested with respect
thereto would end after the Revolving Maturity Date, Tranche A Maturity
Date, Tranche B Maturity Date or Interim Maturity Date, as applicable.
SECTION 2.3 Requests for Borrowings. To request a Revolving
Borrowing or Term Borrowing, the Borrower shall notify the Administrative
Agent of such request by telephone (a) in the case of a Eurodollar
Borrowing, not later than 11:00 a.m., New York City time, three Business
Days before the date of the proposed Borrowing or (b) in the case of an ABR
Borrowing, not later than 11:00 a.m., New York City time, one Business Day
before the date of the proposed Borrowing; provided that any such notice of
an ABR Revolving Borrowing to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.5(e) may be given not later than
10:00 a.m., New York City time, on the date of the proposed Borrowing. Each
such telephonic Borrowing Request shall be irrevocable and shall be
confirmed promptly by delivery to the Administrative Agent of a written
Borrowing Request in a form approved by the Administrative Agent and signed
by the Borrower. Each such telephonic and written Borrowing Request shall
specify the following information in compliance with Section 2.2: (i) the
Class and Type of the requested Borrowing; (ii) the aggregate amount of
such Borrowing; (iii) the date of such Borrowing, which shall be a Business
Day; (iv) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto; and (v) the location and number of the
Borrower's account to which funds are to be disbursed, which shall comply
with the requirements of Section 2.6. If no election as to the Type of
Borrowing is specified, then the requested Borrowing shall be an ABR
Borrowing. If no Interest Period is specified with respect to any requested
Eurodollar Revolving Borrowing, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration, in the case of a
Eurodollar Borrowing. Promptly following receipt of a Borrowing Request in
accordance with this Section, the Administrative Agent shall advise each
relevant Lender of the details thereof and of the amount of such Lender's
Loan to be made as part of the requested Borrowing.
SECTION 2.4 Swingline Loans. (a) Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make Swingline
Loans to the Borrower from time to time during the Revolving Availability
Period, in an aggregate principal amount at any time outstanding that will
not result in (i) the aggregate principal amount of outstanding Swingline
Loans exceeding $20,000,000 or (ii) the sum of the total Revolving
Exposures exceeding the total Revolving Commitments; provided that the
Swingline Lender shall not be required to make a Swingline Loan to
refinance an outstanding Swingline Loan. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may
borrow, prepay and reborrow Swingline Loans.
(b) To request a Swingline Loan, the Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy
promptly thereafter), not later than 12:00 noon, New York City time, on the
day of a proposed Swingline Loan. Each such notice shall be irrevocable and
shall specify the requested date (which shall be a Business Day) and amount
of the requested Swingline Loan. The Administrative Agent will promptly
advise the Swingline Lender of any such notice received from the Borrower.
The Swingline Lender shall make each Swingline Loan available to the
Borrower by means of a credit to the general deposit account of the
Borrower with the Swingline Lender (or, in the case of a Swingline Loan
made to finance the reimbursement of an LC Disbursement as provided in
Section 2.5(e), by remittance to the Issuing Lender) by 3:00 p.m., New York
City time, on the requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 12:00 noon, New York City time, on any
Business Day require the Revolving Lenders to acquire participations on
such Business Day in all or a portion of the Swingline Loans outstanding.
Such notice shall specify the aggregate amount of Swingline Loans in which
Revolving Lenders will participate. Promptly upon receipt of such notice,
the Administrative Agent will give notice thereof to each Revolving Lender,
specifying in such notice such Lender's Applicable Percentage of such
Swingline Loans. Each Revolving Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to
the Administrative Agent, for the account of the Swingline Lender, such
Lender's Applicable Percentage of such Swingline Loans. Each Revolving
Lender acknowledges and agrees that its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is absolute
and unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or Event of Default
or reduction or termination of the Commitments, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever. Each Revolving Lender shall comply with its obligation under
this paragraph by wire transfer of immediately available funds, in the same
manner as provided in Section 2.6 with respect to Loans made by such Lender
(and Section 2.6 shall apply, mutatis mutandis, to the payment obligations
of the Revolving Lenders), and the Administrative Agent shall promptly pay
to the Swingline Lender the amounts so received by it from the Revolving
Lenders. The Administrative Agent shall notify the Borrower of any
participations in any Swingline Loan acquired pursuant to this paragraph,
and thereafter payments in respect of such Swingline Loan shall be made to
the Administrative Agent and not to the Swingline Lender. Any amounts
received by the Swingline Lender from the Borrower (or other party on
behalf of the Borrower) in respect of a Swingline Loan after receipt by the
Swingline Lender of the proceeds of a sale of participations therein shall
be promptly remitted to the Administrative Agent; any such amounts received
by the Administrative Agent shall be promptly remitted by the
Administrative Agent to the Revolving Lenders that shall have made their
payments pursuant to this paragraph and to the Swingline Lender, as their
interests may appear. The purchase of participations in a Swingline Loan
pursuant to this paragraph shall not relieve the Borrower of any default in
the payment thereof.
SECTION 2.5 Letters of Credit. (a) General. Subject to the terms
and conditions set forth herein, the Borrower may request the issuance of
Letters of Credit for its own account, in a form reasonably acceptable to
the Administrative Agent and the Issuing Lender, at any time and from time
to time during the Revolving Availability Period. In the event of any
inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any form of letter of credit application or other
agreement submitted by the Borrower to, or entered into by the Borrower
with, the Issuing Lender relating to any Letter of Credit, the terms and
conditions of this Agreement shall control. The letters of credit
identified on Schedule 2.5 (the "Existing Letters of Credit") shall be
deemed to be "Letters of Credit" for all purposes of this Agreement and the
other Loan Documents.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the
amendment, renewal or extension of an outstanding Letter of Credit), the
Borrower shall deliver to the Issuing Lender and the Administrative Agent
(reasonably in advance of the requested date of issuance, amendment,
renewal or extension) a notice requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended, renewed or
extended, and specifying the date of issuance, amendment, renewal or
extension (which shall be a Business Day), the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) of this
Section), the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit. If requested by the
Issuing Lender, the Borrower also shall submit a letter of credit
application on the Issuing Lender's standard form in connection with any
request for a Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if (and upon issuance, amendment, renewal
or extension of each Letter of Credit the Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the LC Exposure, when added to the
aggregate outstanding amount of Indebtedness incurred pursuant to Section
6.2(j), shall not exceed $150,000,000 and (ii) the total Revolving
Exposures shall not exceed the total Revolving Commitments.
(c) Expiration Date. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date one year
after the date of the issuance of such Letter of Credit (or, in the case of
any renewal or extension thereof, one year after such renewal or extension)
and (ii) the date that is five Business Days prior to the Revolving
Maturity Date.
(e) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the Issuing Lender or the Lenders, the
Issuing Lender hereby grants to each Revolving Lender, and each Revolving
Lender hereby acquires from the Issuing Lender, a participation in such
Letter of Credit equal to such Lender's Applicable Percentage of the
aggregate amount available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each Revolving Lender
hereby absolutely and unconditionally agrees to pay to the Administrative
Agent, for the account of the Issuing Lender, such Lender's Applicable
Percentage of each LC Disbursement made by the Issuing Lender and not
reimbursed by the Borrower on the date due as provided in paragraph (e) of
this Section, or of any reimbursement payment required to be refunded to
the Borrower for any reason. Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect
of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal
or extension of any Letter of Credit or the occurrence and continuance of a
Default or Event of Default or reduction or termination of the Commitments,
and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Lender shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse
such LC Disbursement by paying to the Administrative Agent an amount equal
to such LC Disbursement not later than 12:00 noon, New York City time, on
the date that such LC Disbursement is made, if the Borrower shall have
received notice of such LC Disbursement prior to 10:00 a.m., New York City
time, on such date, or, if such notice has not been received by the
Borrower prior to such time on such date, then not later than 12:00 noon,
New York City time, on the Business Day immediately following the day that
the Borrower receives such notice; provided that the Borrower may, subject
to the conditions to borrowing set forth herein, request in accordance with
Section 2.3 or 2.4 that such payment be financed with an ABR Revolving
Borrowing or Swingline Loan in an equivalent amount and, to the extent so
financed, the Borrower's obligation to make such payment shall be
discharged and replaced by the resulting ABR Revolving Borrowing or
Swingline Loan. If the Borrower fails to make such payment when due, the
Administrative Agent shall notify each Revolving Lender of the applicable
LC Disbursement, the payment then due from the Borrower in respect thereof
and such Lender's Applicable Percentage thereof. Promptly following receipt
of such notice, each Revolving Lender shall pay to the Administrative Agent
its Applicable Percentage of the payment then due from the Borrower, in the
same manner as provided in Section 2.6 with respect to Loans made by such
Lender (and Section 2.6 shall apply, mutatis mutandis, to the payment
obligations of the Revolving Lenders), and the Administrative Agent shall
promptly pay to the Issuing Lender the amounts so received by it from the
Revolving Lenders. Promptly following receipt by the Administrative Agent
of any payment from the Borrower pursuant to this paragraph, the
Administrative Agent shall distribute such payment to the Issuing Lender
or, to the extent that Revolving Lenders have made payments pursuant to
this paragraph to reimburse the Issuing Lender, then to such Lenders and
the Issuing Lender as their interests may appear. Any payment made by a
Revolving Lender pursuant to this paragraph to reimburse the Issuing Lender
for any LC Disbursement (other than the funding of ABR Revolving Loans or a
Swingline Loan as contemplated above) shall not constitute a Loan and shall
not relieve the Borrower of its obligation to reimburse such LC
Disbursement.
(f) Obligations Absolute. The Borrower's obligation to reimburse
LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability
of any Letter of Credit or this Agreement, or any term or provision
therein, (ii) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, (iii) payment
by the Issuing Lender under a Letter of Credit against presentation of a
draft or other document that does not comply with the terms of such Letter
of Credit, or (iv) any other event or circumstance whatsoever, whether or
not similar to any of the foregoing, that might, but for the provisions of
this Section, constitute a legal or equitable discharge of, or provide a
right of setoff against, the Borrower's obligations hereunder. Neither the
Administrative Agent, the Lenders nor the Issuing Lender, nor any of their
Related Parties, shall have any liability or responsibility by reason of or
in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any
draft, notice or other communication under or relating to any Letter of
Credit (including any document required to make a drawing thereunder), any
error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Lender; provided that neither of
the foregoing sentences shall be construed to excuse the Issuing Lender
from liability to the Borrower to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) suffered
by the Borrower that are caused by the Issuing Lender's gross negligence,
willful misconduct or failure to exercise care when determining whether
drafts and other documents presented under a Letter of Credit comply with
the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or willful misconduct on the part of the Issuing Lender
(as finally determined by a court of competent jurisdiction), the Issuing
Lender shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality
thereof, the parties agree that, with respect to documents presented which
appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the Issuing Lender may, in its sole discretion, either
accept and make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to the
contrary, or refuse to accept and make payment upon such documents if such
documents are not in strict compliance with the terms of such Letter of
Credit.
(g) Disbursement Procedures. The Issuing Lender shall, promptly
following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit. The Issuing Lender
shall promptly notify the Administrative Agent and the Borrower by
telephone (confirmed by telecopy promptly thereafter) of such demand for
payment and whether the Issuing Lender has made or will make an LC
Disbursement thereunder; provided that any failure to give or delay in
giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Lender and the Revolving Lenders with respect to any
such LC Disbursement.
(h) Interim Interest. If the Issuing Lender shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC
Disbursement in full on the date such LC Disbursement is made, the unpaid
amount thereof shall bear interest, for each day from and including the
date such LC Disbursement is made to but excluding the date that the
Borrower reimburses such LC Disbursement, at the rate per annum then
applicable to ABR Revolving Loans; provided that, if the Borrower fails to
reimburse such LC Disbursement when due pursuant to paragraph (e) of this
Section, then Section 2.14(c) shall apply. Interest accrued pursuant to
this paragraph shall be for the account of the Issuing Lender, except that
interest accrued on and after the date of payment by any Revolving Lender
pursuant to paragraph (e) of this Section to reimburse the Issuing Lender
shall be for the account of such Lender to the extent of such payment.
(i) Replacement of the Issuing Lender. The Issuing Lender may be
replaced at any time by written agreement among the Borrower, the
Administrative Agent, the replaced Issuing Lender and the successor Issuing
Lender. The Administrative Agent shall notify the Lenders of any such
replacement of the Issuing Lender. At the time any such replacement shall
become effective, the Borrower shall pay all unpaid fees accrued for the
account of the replaced Issuing Lender pursuant to Section 2.13(b). From
and after the effective date of any such replacement, (i) the successor
Issuing Lender shall have all the rights and obligations of the Issuing
Lender under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term "Issuing Lender" shall be
deemed to refer to such successor or to any previous Issuing Lender, or to
such successor and all previous Issuing Lenders, as the context shall
require. After the replacement of an Issuing Lender hereunder, the replaced
Issuing Lender shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Lender under this Agreement with
respect to Letters of Credit issued by it prior to such replacement, but
shall not be required to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur
and be continuing, on the Business Day that the Borrower receives notice
from the Administrative Agent or the Required Lenders (or, if the maturity
of the Loans has been accelerated, Revolving Lenders with LC Exposure
representing at least 51% of the total LC Exposure) demanding the deposit
of cash collateral pursuant to this paragraph, the Borrower shall deposit
in an account with the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Lenders, an amount in cash
equal to the LC Exposure as of such date plus any accrued and unpaid
interest thereon; provided that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall
become immediately due and payable, without demand or other notice of any
kind, upon the occurrence of any Event of Default with respect to the
Borrower described in paragraph (h) or (i) of Article VII. Each such
deposit shall be held by the Administrative Agent as collateral for the
payment and performance of the obligations of the Borrower under this
Agreement. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account.
Other than any interest earned on the investment of such deposits, which
investments shall be made at the option and sole discretion of the
Administrative Agent and at the Borrower's risk and expense, such deposits
shall not bear interest. Interest or profits, if any, on such investments
shall accumulate in such account. Moneys in such account shall be applied
by the Administrative Agent to reimburse the Issuing Lender for LC
Disbursements for which it has not been reimbursed and, to the extent not
so applied, shall be held for the satisfaction of the reimbursement
obligations of the Borrower for the LC Exposure at such time or, if the
maturity of the Loans has been accelerated (but subject to the consent of
Revolving Lenders with LC Exposure representing at least 51% of the total
LC Exposure), be applied to satisfy other obligations of the Borrower under
this Agreement. If the Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default,
such amount (to the extent not applied as aforesaid) shall be returned to
the Borrower within three Business Days after all Events of Default have
been cured or waived.
SECTION 2.6 Funding of Borrowings. (a) Each Lender shall make
each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 12:00 noon, New York City time,
to the account of the Administrative Agent most recently designated by it
for such purpose by notice to the Lenders; provided that Swingline Loans
shall be made as provided in Section 2.4. The Administrative Agent will
make such Loans available to the Borrower by promptly crediting the amounts
so received, in like funds, to an account of the Borrower maintained with
the Administrative Agent in New York City and designated by the Borrower in
the applicable Borrowing Request; provided that ABR Revolving Loans made to
finance the reimbursement of an LC Disbursement as provided in Section
2.5(e) shall be remitted by the Administrative Agent to the Issuing Lender.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender
will not make available to the Administrative Agent such Lender's share of
such Borrowing, the Administrative Agent may assume that such Lender has
made such share available on such date in accordance with paragraph (a) of
this Section and may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. In such event, if a Lender has not in
fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such
corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the Borrower to but excluding the
date of payment to the Administrative Agent, at (i) in the case of such
Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation or (ii) in the case of the Borrower, the
interest rate applicable to ABR Loans. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender's
Loan included in such Borrowing.
SECTION 2.7 Interest Elections. (a) Each Revolving Borrowing and
Term Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter,
the Borrower may elect to convert such Borrowing to a different Type or to
continue such Borrowing and, in the case of a Eurodollar Borrowing, may
elect Interest Periods therefor, all as provided in this Section. The
Borrower may elect different options with respect to different portions of
the affected Borrowing, in which case each such portion shall be allocated
ratably among the Lenders holding the Loans comprising such Borrowing, and
the Loans comprising each such portion shall be considered a separate
Borrowing. This Section shall not apply to Swingline Borrowings, which may
not be converted or continued.
(b) To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election by telephone by the
time that a Borrowing Request would be required under Section 2.3 if the
Borrower were requesting a Revolving Borrowing of the Type resulting from
such election to be made on the effective date of such election. Each such
telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by delivery to the Administrative Agent of a written
Interest Election Request in a form approved by the Administrative Agent
and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.2 of this
Section: (i) the Borrowing to which such Interest Election Request applies;
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day; (iii) whether the
resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;
and (iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election. If
any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request,
the Administrative Agent shall advise each relevant Lender of the details
thereof and of such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid
as provided herein, at the end of such Interest Period such Borrowing shall
be converted to an ABR Borrowing. Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies
the Borrower, then, so long as an Event of Default is continuing (i) no
outstanding Borrowing may be converted to or continued as a Eurodollar
Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be
converted to an ABR Borrowing at the end of the Interest Period applicable
thereto.
SECTION 2.8 Termination and Reduction of Commitments. (a) Unless
previously terminated, (i) the Tranche A Commitments, Tranche B Commitments
and Interim Commitments shall terminate at 5:00 p.m., New York City time,
on the Effective Date and (ii) the Revolving Commitments shall terminate on
the Revolving Maturity Date.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Commitments of any Class; provided that (i) each reduction of
the Commitments of any Class shall be in an amount that is an integral
multiple of $1,000,000 and not less than $10,000,000 and (ii) the Borrower
shall not terminate or reduce the Revolving Commitments if, after giving
effect to any concurrent prepayment of the Revolving Loans in accordance
with Section 2.11, the sum of the Revolving Exposures would exceed the
total Revolving Commitments.
(c) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section, at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by
the Borrower pursuant to this Section shall be irrevocable; provided that a
notice of termination of the Revolving Commitments delivered by the
Borrower may state that such notice is conditioned upon the effectiveness
or closing of other credit facilities, debt financings or Dispositions, in
which case such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments
shall be permanent. Each reduction of the Commitments of any Class shall be
made ratably among the Lenders in accordance with their respective
Commitments of such Class.
SECTION 2.9 Evidence of Debt. (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Loan made
by such Lender, including the amounts of principal and interest (and
premium, if any) payable and paid to such Lender from time to time
hereunder.
(b) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 9.4(c) and a subaccount for each
Lender in which it shall record (i) the amount of each Loan made hereunder
(whether or not evidenced by a promissory note), the Class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any
principal or interest (or premium, if any) due and payable or to become due
and payable from the Borrower to each Lender hereunder and (iii) the amount
of any sum received by the Administrative Agent hereunder for the account
of the Lenders and each Lender's share thereof.
(c) The entries made in the accounts maintained pursuant to
paragraph (a) or (b) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that
the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay the Loans in accordance with the terms of this
Agreement.
(d) Any Lender may request that Loans of any Class made by it be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order
of such Lender and its registered assigns and in a form approved by the
Administrative Agent. Thereafter, the Loans evidenced by such promissory
note and interest (and premium, if any) thereon shall at all times
(including after assignment pursuant to Section 9.4) be represented by one
or more promissory notes in such form payable to such payee and its
registered assigns.
SECTION 2.10 Repayment of Loans. (a) The Borrower shall repay
Tranche A Term Borrowings on each date set forth below in the aggregate
principal amount set forth opposite such date:
Date Amount
---- ------
December 31, 1998 $ 6,250,000
March 31, 1999 $ 6,250,000
June 30, 1999 $ 6,250,000
September 30, 1999 $ 6,250,000
December 31, 1999 $12,500,000
March 31, 2000 $12,500,000
June 30, 2000 $12,500,000
September 30, 2000 $12,500,000
December 31, 2000 $25,000,000
March 31, 2001 $25,000,000
June 30, 2001 $25,000,000
September 30, 2001 $25,000,000
December 31, 2001 $31,250,000
March 31, 2002 $31,250,000
June 30, 2002 $31,250,000
September 30, 2002 $31,250,000
December 31, 2002 $37,500,000
March 31, 2003 $37,500,000
June 30, 2003 $37,500,000
September 30, 2003 $37,500,000
December 31, 2003 $37,500,000
March 31, 2004 $37,500,000
June 30, 2004 $37,500,000
September 30, 2004 $37,500,000
(b) The Borrower shall repay Tranche B Term Borrowings on each
date set forth below in the aggregate principal amount set forth opposite
such date:
Date Amount
---- ------
December 31, 1998 $ 1,500,000
March 31, 1999 $ 1,500,000
June 30, 1999 $ 1,500,000
September 30, 1999 $ 1,500,000
December 31, 1999 $ 1,500,000
March 31, 2000 $ 1,500,000
June 30, 2000 $ 1,500,000
September 30, 2000 $ 1,500,000
December 31, 2000 $ 1,500,000
March 31, 2001 $ 1,500,000
June 30, 2001 $ 1,500,000
September 30, 2001 $ 1,500,000
December 31, 2001 $ 1,500,000
March 31, 2002 $ 1,500,000
June 30, 2002 $ 1,500,000
September 30, 2002 $ 1,500,000
December 31, 2002 $ 1,500,000
March 31, 2003 $ 1,500,000
June 30, 2003 $ 1,500,000
September 30, 2003 $ 1,500,000
December 31, 2003 $ 1,500,000
March 31, 2004 $ 1,500,000
June 30, 2004 $ 1,500,000
September 30, 2004 $ 1,500,000
December 31, 2004 $70,500,000
March 31, 2005 $70,500,000
June 30, 2005 $70,500,000
September 30, 2005 $70,500,000
December 31, 2005 $70,500,000
March 31, 2006 $70,500,000
June 30, 2006 $70,500,000
September 30, 2006 $70,500,000
(c) The Borrower shall repay all outstanding Interim Term
Borrowings on the Interim Maturity Date.
(d) The Borrower shall repay (i) the then unpaid principal
amount of the Revolving Loans on the Revolving Maturity Date and (ii) the
then unpaid principal amount of each Swingline Loan on the earlier of the
Revolving Maturity Date and the first date after such Swingline Loan is
made that is the 15th or last day of a calendar month and is at least two
Business Days after such Swingline Loan is made; provided that on each date
that a Revolving Borrowing is made, the Borrower shall repay all Swingline
Loans then outstanding.
SECTION 2.11 Prepayment of Loans. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing in whole or
in part, subject to the requirements of this Section.
(b) If on any date any Net Proceeds are received by or on behalf
of the Borrower or any Subsidiary in respect of any Prepayment Event, the
Borrower shall, within ten Business Days after such Net Proceeds are
received, prepay Term Borrowings in an amount equal to the aggregate amount
of such Net Proceeds; provided that, in the case of any event described in
clause (a) or (b) of the definition of the term Prepayment Event, if the
Borrower shall deliver to the Administrative Agent a certificate of a
Financial Officer to the effect that the Borrower and the Subsidiaries
intend to apply the Net Proceeds from such event ("Reinvestment Net
Proceeds"), within 360 days after receipt of such Net Proceeds, to make
Permitted Acquisitions or Investments permitted by Section 6.5 or acquire
real property, equipment or other tangible assets to be used in the
business of the Borrower and the Subsidiaries, and certifying that no
Default or Event of Default has occurred and is continuing, then no
prepayment shall be required pursuant to this paragraph in respect of such
event except to the extent of any Net Proceeds therefrom that have not been
so applied by the end of such 360-day period, at which time a prepayment
shall be required in an amount equal to the Net Proceeds that have not been
so applied. Notwithstanding the foregoing, Net Proceeds may not be
designated as "Reinvestment Net Proceeds" on any date if, after giving
effect to such designation, the aggregate amount of Net Proceeds so
designated from and including the first day of the then-current fiscal year
to and including such date would exceed (i) $20,000,000 prior to the date
on which the Interim Term Loans have been paid in full or (ii) $50,000,000
thereafter; provided that if the Consolidated Leverage Ratio (as of the
last day of the most recent period of four consecutive fiscal quarters for
which the relevant financial information is available) is less than 3.00 to
1.0, the amount referred to in clause (ii) above as of the relevant date of
designation shall instead be $100,000,000.
(c) The Borrower shall prepay Term Borrowings in an aggregate
amount equal to the ECF Percentage of Excess Cash Flow for such fiscal
year, commencing with the fiscal year ending December 31, 1999. Each
prepayment pursuant to this paragraph shall be made on or before the date
on which financial statements are delivered pursuant to Section 5.1 with
respect to the fiscal year for which Excess Cash Flow is being calculated
(and in any event within 90 days after the end of such fiscal year).
(d) The Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy promptly thereafter) of any prepayment
hereunder (i) in the case of prepayment of a Eurodollar Revolving
Borrowing, not later than 11:00 a.m., New York City time, three Business
Days before the date of prepayment, (ii) in the case of prepayment of an
ABR Revolving Borrowing, not later than 11:00 a.m., New York City time, one
Business Day before the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 12:00 noon, New York City
time, on the date of prepayment. Each such notice shall be irrevocable and
shall specify the prepayment date, the principal amount of each Borrowing
or portion thereof to be prepaid and, in the case of a mandatory
prepayment, a reasonably detailed calculation of the amount of such
prepayment; provided that, if a notice of optional prepayment is given in
connection with a conditional notice of termination of the Revolving
Commitments as contemplated by Section 2.8, then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with
Section 2.8. Promptly following receipt of any such notice (other than a
notice relating solely to Swingline Loans), the Administrative Agent shall
advise the Lenders of the contents thereof. Each partial prepayment of any
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.2, except
as necessary to apply fully the required amount of a mandatory prepayment.
(e) Prepayments of Tranche B Term Loans shall be at par plus
accrued interest on the amount prepaid plus a premium. The premium shall
initially be 2% of the aggregate principal amount prepaid, shall decline to
1% on the first anniversary of the Effective Date and, from and after the
second anniversary of the Effective Date, shall be 0%.
SECTION 2.12 Certain Payment Application Matters. (a) Each
repayment or prepayment of a Borrowing shall be applied ratably to the
Loans included in the repaid Borrowing. Repayments and prepayments of Term
Borrowings shall be accompanied by accrued interest on the amount repaid
and, in the case of Tranche B Term Loans, shall be accompanied by the
applicable premium provided for in Section 2.11(e).
(b) Any optional or mandatory prepayment of Term Borrowings
shall be allocated, first, to Interim Borrowings and, second, pro rata
among the Tranche A Term Borrowings and Tranche B Term Borrowings based on
the aggregate principal amount of outstanding Borrowings of each such
Class.
(c) Each optional prepayment and each mandatory prepayment
pursuant to Section 2.11(b) (to the extent resulting from a Prepayment
Event of the type described in clause (c) of the definition thereof) or
2.11(c) allocated to the Tranche A Term Borrowings or the Tranche B Term
Borrowings shall be applied to the installments thereof, first to any
remaining scheduled installments due prior to the first anniversary of the
date of such prepayment (applied pro rata to such remaining installments)
and, second, to the remaining scheduled installments due on or after the
first anniversary of the date of such prepayment (applied pro rata to such
remaining installments). Each other mandatory prepayment allocated to the
Tranche A Term Borrowings or the Tranche B Term Borrowings shall be applied
pro rata to the remaining installments thereof.
SECTION 2.13 Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender a commitment
fee, which shall accrue at the Applicable Rate on the average daily unused
amount of each Revolving Commitment of such Lender during the period from
and including the Effective Date to but excluding the date on which such
Revolving Commitment terminates. Accrued commitment fees shall be payable
in arrears on the last day of March, June, September and December of each
year and on the date on which the Revolving Commitments terminate,
commencing on the first such date to occur after the date hereof.
Commitment fees shall be computed on the basis of a year of 365 days (or
366 days in a leap year) and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day). For purposes
of computing commitment fees, a Revolving Commitment of a Lender shall be
deemed to be used to the extent of the outstanding Revolving Loans and LC
Exposure of such Lender (and the Swingline Exposure of such Lender shall be
disregarded for such purpose).
(b) The Borrower agrees to pay (i) to the Administrative Agent
for the account of each Revolving Lender a participation fee with respect
to its participations in Letters of Credit, which shall accrue at the same
Applicable Rate as interest on Eurodollar Revolving Loans on the average
daily amount of such Lender's LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date on
which such Lender's Revolving Commitment terminates and the date on which
such Lender ceases to have any LC Exposure, and (ii) to the Issuing Lender
a fronting fee, which shall accrue at the rate of 0.20% per annum on the
average daily amount of the LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date of
termination of the Revolving Commitments and the date on which there ceases
to be any LC Exposure, as well as the Issuing Lender's standard fees with
respect to the issuance, amendment, renewal or extension of any Letter of
Credit or processing of drawings thereunder. Participation fees and
fronting fees accrued through and including the last day of March, June,
September and December of each year shall be payable on the third Business
Day following such last day, commencing on the first such date to occur
after the Effective Date; provided that all such fees shall be payable on
the date on which the Revolving Commitments terminate and any such fees
accruing after the date on which the Revolving Commitments terminate shall
be payable on demand. Any other fees payable to the Issuing Lender pursuant
to this paragraph shall be payable within 10 days after demand. All
participation fees and fronting fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent, for
its own account, fees payable in the amounts and at the times separately
agreed upon between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent (or to the
Issuing Lender, in the case of fees payable to it) for distribution, in the
case of commitment fees and participation fees, to the Lenders entitled
thereto. Fees paid shall not be refundable under any circumstances.
SECTION 2.14 Interest. (a) ABR Loans shall bear interest at the
Alternate Base Rate plus the Applicable Rate.
(b) Eurodollar Loans shall bear interest at the Adjusted LIBO
Rate for the applicable Interest Period plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or
interest (or premium, if any) on any Loan or any fee or other amount
payable by the Borrower hereunder is not paid when due, whether at stated
maturity, upon acceleration or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal to
(i) in the case of overdue principal of any Loan, 2% plus the rate
otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Revolving Loans as provided in paragraph (a) of this
Section.
(d) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan and, in the case of Revolving
Loans, upon termination of the Revolving Commitments; provided that (i)
interest accrued pursuant to paragraph (c) of this Section shall be payable
on demand, (ii) in the event of any repayment or prepayment of any Loan
(other than a prepayment of an ABR Revolving Loan prior to the end of the
Revolving Availability Period), accrued interest (and premium, if any) on
the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of
such conversion.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the
Alternate Base Rate at times when the Alternate Base Rate is based on the
Prime Rate shall be computed on the basis of a year of 365 days (or 366
days in a leap year), and in each case shall be payable for the actual
number of days elapsed (including the first day but excluding the last
day). The applicable Alternate Base Rate or Adjusted LIBO Rate shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.15 Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and
reasonable means do not exist for ascertaining the Adjusted LIBO Rate
for such Interest Period; or
(b) the Administrative Agent is advised by the Majority Facility
Lenders under the relevant Facility that the Adjusted LIBO Rate for
such Interest Period will not adequately and fairly reflect the cost
to such Lenders (or Lender) of making or maintaining their Loans (or
its Loan) included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and
the relevant Lenders by telephone or telecopy as promptly as practicable
thereafter and, until the Administrative Agent notifies the Borrower and
the relevant Lenders that the circumstances giving rise to such notice no
longer exist, then, in the case of the relevant Facility, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be
ineffective and (ii) if any Borrowing Request requests a Eurodollar
Borrowing, such Borrowing shall be made as an ABR Borrowing.
SECTION 2.16 Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such
Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the net cost to
such Lender of making or maintaining any Eurodollar Loan (or of maintaining
its obligation to make any such Loan) or to increase the cost to such
Lender of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender
hereunder (whether of principal, interest, premium or otherwise), then the
Borrower will pay to such Lender such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction
suffered.
(b) If any Lender determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of
return on such Lender's capital or on the capital of such Lender's holding
company, if any, as a consequence of this Agreement or the Loans made by,
or participations in Letters of Credit held by, such Lender, or the Letters
of Credit issued by the Issuing Lender, to a level below that which such
Lender or such Lender's holding company could have achieved but for such
Change in Law (taking into consideration such Lender's policies and the
policies of such Lender's holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender such
additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth in reasonable detail
the computation of the amount or amounts necessary to compensate such
Lender or its holding company, as the case may be, as specified in
paragraph (a) or (b) of this Section shall be delivered to the Borrower and
shall be conclusive absent manifest error. The Borrower shall pay such
Lender the amount shown as due on any such certificate within 10 days after
receipt thereof. All amounts payable by the Borrower pursuant to paragraph
(a) or (b) of this Section shall be deemed to constitute interest expense
in respect of the Loans.
(d) Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's right to demand such compensation; provided that the Borrower
shall not be required to compensate a Lender pursuant to this Section for
any increased costs or reductions incurred more than 270 days prior to the
date that such Lender notifies the Borrower of the Change in Law giving
rise to such increased costs or reductions and of such Lender's intention
to claim compensation therefor; provided further that, if the Change in Law
giving rise to such increased costs or reductions is retroactive, then the
270-day period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.17 Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day
of an Interest Period applicable thereto (including as a result of an Event
of Default), (b) the conversion of any Eurodollar Loan other than on the
last day of the Interest Period applicable thereto, (c) the failure to
borrow, convert, continue or prepay any Revolving Loan or Term Loan on the
date specified in any notice delivered pursuant hereto (regardless of
whether such notice may be revoked under Section 2.11(d) and is revoked in
accordance therewith), or (d) the assignment of any Eurodollar Loan other
than on the last day of the Interest Period applicable thereto as a result
of a request by the Borrower pursuant to Section 2.20, then, in any such
event, the Borrower shall compensate each Lender for the loss, cost and
expense attributable to such event. In the case of a Eurodollar Loan, such
loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had
such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the
last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been
the Interest Period for such Loan), over (ii) the amount of interest which
would accrue on such principal amount for such period at the interest rate
which such Lender would bid were it to bid, at the commencement of such
period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market. A certificate of any Lender setting forth
any amount or amounts that such Lender is entitled to receive pursuant to
this Section shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay such Lender the amount shown
as due on any such certificate within 10 days after receipt thereof.
SECTION 2.18 Taxes. (a) Any and all payments by or on account of
any obligation of the Borrower hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any Indemnified
Taxes; provided that if the Borrower shall be required to deduct any
Indemnified Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section) the Administrative Agent or the relevant Lender receives an amount
equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall
pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law and
indemnify the Lender from and against any Other Taxes and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto.
(c) The Borrower shall indemnify the Administrative Agent and
each Lender, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes paid by the Administrative Agent or such
Lender on or with respect to any payment by or on account of any obligation
of the Borrower hereunder or under any other Loan Document (including
Indemnified Taxes imposed or asserted on or attributable to amounts payable
under this Section) and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified
Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender, or by the Administrative
Agent on its own behalf or on behalf of a Lender, shall be conclusive
absent manifest error, and shall be so delivered as promptly as reasonably
practicable after such Lender or the Administrative Agent, as the case may
be, obtains actual knowledge of such amount.
(d) As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy
of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such
payment reasonably satisfactory to the Administrative Agent.
(e) Each Lender that is not a United States person within the
meaning of Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall
deliver to the Borrower and the Administrative Agent, on or before the date
on which it becomes a party to this Agreement either:
(A) (x) two duly completed and signed original copies of either
Internal Revenue Service form 1001 or Internal Revenue Service Form
4224 (relating to such Non-U.S. Lender and entitling it to a complete
exemption from or reduction of withholding of United States federal
income taxes on all amounts to be received by such Non-U.S. Lender
pursuant to this Agreement and the other credit documents), or
successor and related applicable forms, as the case may be, and (y)
two duly completed and signed original copies of Internal Revenue
Service Form W-8 or W-9, or successor and related applicable forms, as
the case may be, (including, where applicable with respect to both (x)
and (y) any such forms required to be provided to certify to such
exemption on behalf of such Non-U.S. Lender's beneficial owners).
(B) in the case of a Non-U.S. Lender that is not a "Bank" within
the meaning of Section 881(c)(3)(A) of the Code and that does not
comply with the requirements of clause (A) hereof, (x) a statement in
the form of Exhibit F (and any similar statements required to certify
to the exemption of its beneficial owners) or such other form of
statements as shall be reasonably requested by the Borrower from time
to time to the effect that such Non-U.S. Lender (and, where
applicable, its beneficial owners) is eligible for a complete
exemption from withholding of United States federal income taxes under
Code Section 871(h) or 881(c), and (y) two duly completed and signed
original copies of Internal Revenue Service Form W-8 or successor and
related applicable forms (including, where applicable, copies of such
forms with respect to such entity's beneficial owners).
Further, each Non-U.S. Lender agrees (i) to deliver to the
Borrower and the Administrative Agent, and if applicable, the
assigning Lender two further duly completed and signed original copies
of such Forms 1001, 4224, W-8 or W-9, as the case may be (and, where
applicable, any such forms on behalf of its beneficial owners) or
successor and related applicable forms, on or before the date that any
such form expires or becomes obsolete and promptly after the
occurrence of any event requiring a change from the most recent
form(s) previously delivered by it to the Borrower in accordance with
applicable U.S. laws and regulations, (ii) in the case of a Non-U.S.
Lender that delivers a statement in the form of Exhibit F (or such
other form of statement as shall have been requested by the Borrower),
to deliver to the Borrower and the Administrative Agent, and if
applicable, the assigning Lender, such statement (and where
applicable, any such statements from its beneficial owners) on the two
year anniversary of the date on which such Non-U.S. Lender became a
party to this Agreement and to deliver promptly to the Borrower and
the Administrative Agent, such additional statements and forms as
shall be reasonably requested by the Borrower from time to time, and
(iii) to notify promptly the Borrower and the Administrative Agent if
it (or, as applicable, its beneficial owners) is no longer able to
deliver, or if it is required to withdraw or cancel, any form of
statement previously delivered by it pursuant to this subsection
2.18(e).
(f) Each Lender which is not a Non-U.S. Lender shall deliver to
Borrower and the Administrative Agent (and if applicable the assigning or
participating Lender) two copies of a statement which shall contain the
address of such Lender's office or place of business in the United States,
which shall be signed by an authorized officer of such Lender, together
with two duly completed copies of Internal Revenue Service Form W-9 (or
applicable successor form) unless it establishes to the satisfaction of the
Borrower that it is otherwise eligible for an exemption from backup
withholding tax or other applicable withholding tax. Each such Lender shall
deliver to the Borrower and Administrative Agent two further duly completed
and signed forms and statements (or successor form) at or before the time
any such form or statement becomes obsolete.
(g) Each Lender agrees to indemnify and hold harmless the
Borrower from and against any Taxes imposed by or on behalf of the United
States or any taxing jurisdiction thereof, penalties, additions to tax,
fines, interest or other liabilities, costs or losses (including, without
limitation, reasonable attorney's fees and expenses) incurred or payable by
the Borrower as a result of the failure of the Borrower to comply with its
obligations to deduct or withhold any Taxes imposed by or on behalf of the
United States or any taxing jurisdiction thereof (including penalties,
additions to tax, fines or interest on such Taxes) from any payments made
pursuant to this Agreement to such Non-U.S. Lender or the Administrative
Agent which failure resulted from (i) the Borrower's reliance on Exhibit F
pursuant to this subsection 2.18(e) or (ii) such Lender being a "conduit
entity" within the meaning of Treasury Reg. Section 1.881-3 or any
successor provision thereto; and, provided additionally, that, without
limitation, no amounts shall be due and owing to such Lender pursuant to
Section 2.18 if either provisions (i) or (ii) are applicable.
Notwithstanding any other provision of this subsection 2.18(e), a Non-U.S.
Lender shall not be required to deliver any form or statement pursuant to
the immediately preceding sentences in this subsection 2.18(e) that such
Non-U.S. Lender is not legally able to deliver.
(h) If the Administrative Agent or any Lender receives a refund
in respect of Taxes or Other Taxes paid by the Borrower, which in the
reasonable good faith judgment of such Lender is allocable to such payment,
it shall promptly pay such refund, together with any other amounts paid by
the Borrower in connection with such refunded Taxes or Other Taxes, to the
Borrower, net of all out-of-pocket expenses of such Lender incurred in
obtaining such refund, provided, however, that the Borrower agrees to
promptly return such refund to the Administrative Agent or the applicable
Lender as the case may be, if it receives notice from the Administrative
Agent or applicable Lender that such Administrative Agent or Lender is
required to repay such refund.
SECTION 2.19 Payments Generally; Pro Rata Treatment; Sharing of
Set-offs. (a) The Borrower shall make each payment required to be made by
it hereunder or under any other Loan Document (whether of principal,
interest, premium, fees or reimbursement of LC Disbursements, or of amounts
payable under Section 2.16, 2.17 or 2.18, or otherwise) prior to the time
expressly required hereunder or under such other Loan Document for such
payment (or, if no such time is expressly required, prior to 12:00 noon,
New York City time), on the date when due, in immediately available funds,
without set-off or counterclaim. Any amounts received after such time on
any date may, in the discretion of the Administrative Agent, be deemed to
have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made to the
Administrative Agent at its offices at 270 Park Avenue, New York, New York,
except as otherwise expressly provided herein. The Administrative Agent
shall distribute any such payments received by it for the account of any
other Person to the appropriate recipient promptly following receipt
thereof. If any payment under any Loan Document shall be due on a day that
is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All
payments under each Loan Document shall be made in dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of
principal, unreimbursed LC Disbursements, interest, premium and fees then
due hereunder, such funds shall be applied (i) first, towards payment of
interest and fees then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest and fees then due to
such parties, and (ii) second, towards payment of principal and
unreimbursed LC Disbursements then due hereunder, and any premium then due
hereunder, ratably among the parties entitled thereto in accordance with
the amounts of principal and unreimbursed LC Disbursements, and any
premium, then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest (or premium, if any) on any of its Revolving Loans, Term Loans or
participations in LC Disbursements or Swingline Loans resulting in such
Lender receiving payment of a greater proportion of the aggregate amount of
its Revolving Loans, Term Loans and participations in LC Disbursements and
Swingline Loans and accrued interest (and premium, if any) thereon than the
proportion received by any other Lender, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations
in the Revolving Loans, Term Loans and participations in LC Disbursements
and Swingline Loans of other Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest
(and premium, if any) on their respective Revolving Loans, Term Loans and
participations in LC Disbursements and Swingline Loans; provided that (i)
if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest, and (ii) the provisions of this paragraph shall not be
construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained
by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in LC Disbursements to
any assignee or participant, other than to the Borrower or any Subsidiary
or Affiliate thereof (as to which the provisions of this paragraph shall
apply). The Borrower consents to the foregoing and agrees, to the extent it
may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against
the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders (or any of them)
hereunder that the Borrower will not make such payment, the Administrative
Agent may assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute
to the relevant Lenders the amount due. In such event, if the Borrower has
not in fact made such payment, then each relevant Lender severally agrees
to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the
date of payment to the Administrative Agent, at the greater of the Federal
Funds Effective Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be
made by it to the Administrative Agent, the Swingline Lender or the Issuing
Lender, then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender's obligations under such Sections until all
such unsatisfied obligations are fully paid.
SECTION 2.20 Mitigation Obligations; Replacement of Lenders. (a)
If any Lender requests compensation under Section 2.16, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.18, then such
Lender shall use reasonable efforts to designate a different lending office
for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates,
if, in the judgment of such Lender, such designation or assignment (i)
would eliminate or reduce amounts payable pursuant to Section 2.16 or 2.18,
as the case may be, in the future and (ii) would not subject such Lender to
any unreimbursed cost or expense and would not otherwise be disadvantageous
to such Lender. The Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or
assignment.
(b) If any Lender requests compensation under Section 2.16, or if
the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section
2.18, or if any Lender defaults in its obligation to fund Loans hereunder,
then the Borrower may, at its sole expense and effort, upon notice to such
Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 9.4), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrower shall have received the prior
written consent of the Administrative Agent, which consent shall not
unreasonably be withheld and (ii) such Lender shall have received payment
of an amount equal to the outstanding principal of its Loans and
participations in LC Disbursements and Swingline Loans, accrued interest
(and premium, if any) thereon, accrued fees and all other amounts payable
to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of
all other amounts). A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply.
ARTICLE III
Representations and Warranties
------------------------------
The Borrower represents and warrants to the Administrative Agent
and the Lenders that:
SECTION 3.1 Organization; Powers. Each of the Borrower and its
Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has all
requisite power and authority to carry on its business as now conducted and
(c) except where the failure to do so, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.
SECTION 3.2 Authorization; Enforceability. (a) The Transactions
to be entered into by each Loan Party are within such Loan Party's
corporate powers and have been duly authorized by all necessary corporate
and, if required, stockholder action. This Agreement has been duly executed
and delivered by the Borrower and constitutes, and each other Loan Document
to which any Loan Party is to be a party, when executed and delivered by
such Loan Party, will constitute, a legal, valid and binding obligation of
the Borrower or such Loan Party (as the case may be), enforceable against
the Borrower or such other Loan Party, as the case may be, in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
SECTION 3.3 Governmental Approvals; No Conflicts. (a) The
Financing Transactions (i) do not require any material consent or approval
of, registration or filing with, or any other action by, any Governmental
Authority, except such as have been obtained or made and are in full force
and effect and except filings necessary to perfect Liens created under the
Loan Documents, (ii) will not violate any applicable material law or
regulation or the charter, by-laws or other organizational documents of the
Borrower or any of its Subsidiaries or any order of any Governmental
Authority, (iii) will not violate or result in a default under any material
indenture, agreement or other instrument binding upon the Borrower or any
of its Subsidiaries or its assets, or give rise to a right thereunder to
require any payment to be made by the Borrower or any of its Subsidiaries,
and (iv) will not result in the creation or imposition of any Lien on any
asset of the Borrower or any of its Subsidiaries, except Liens created
under the Loan Documents.
(b) Except as, in the aggregate, could not reasonably be expected
to have a Material Adverse Effect, the Acquisition (i) does not require any
consent or approval of, registration or filing with, or any other action
by, any Governmental Authority, except such as have been obtained or made
and are in full force and effect and except filings necessary to perfect
Liens created under the Loan Documents, (ii) will not violate any
applicable law or regulation or the charter, by-laws or other
organizational documents of the Borrower or any of its Subsidiaries or any
order of any Governmental Authority, (iii) will not violate or result in a
default under any indenture, agreement or other instrument binding upon the
Borrower or any of its Subsidiaries or its assets, or give rise to a right
thereunder to require any payment to be made by the Borrower or any of its
Subsidiaries, and (iv) will not result in the creation or imposition of any
Lien on any asset of the Borrower or any of its Subsidiaries, except Liens
created under the Loan Documents.
SECTION 3.4 Financial Condition; No Material Adverse Change. (a)
The Borrower has heretofore furnished to the Lenders its consolidated
balance sheet and statements of income, stockholders equity and cash flows
(i) as of and for the fiscal year ended December 31, 1997, reported on by
Arthur Andersen LLP, independent public accountants, and (ii) as of and for
the fiscal quarter and the portion of the fiscal year ended June 30, 1998,
certified by its chief financial officer. Such financial statements present
fairly, in all material respects, the financial position and results of
operations and cash flows of the Borrower and its consolidated Subsidiaries
as of such dates and for such periods in accordance with GAAP, subject to
year-end audit adjustments and the absence of footnotes in the case of the
statements referred to in clause (ii) above.
(b) The Borrower has heretofore furnished to the Lenders GSX's
consolidated balance sheet and statements of income, stockholders equity
and cash flows (i) as of and for the fiscal year ended December 31, 1997,
reported on by Ernst & Young LLP, independent public accountants, and (ii)
as of and for the fiscal quarter and the portion of the fiscal year ended
June 30, 1998, certified by the chief financial officer of GSX. To the
knowledge of the Borrower, such financial statements present fairly, in all
material respects, the financial position and results of operations and
cash flows of GSX and its consolidated Subsidiaries as of such dates and
for such periods in accordance with GAAP, subject to year-end audit
adjustments and the absence of footnotes in the case of the statements
referred to in clause (ii) above.
(c) The Borrower has heretofore furnished to the Lenders its pro
forma consolidated balance sheet as of June 30, 1998, prepared giving
effect to the Transactions as if the Transactions had occurred on such
date. Such pro forma consolidated balance sheet (i) has been prepared in
good faith based on the same assumptions used to prepare the pro forma
financial statements included in the Information Memorandum (which
assumptions are believed by the Borrower to be reasonable), (ii) is based
on the best information available to the Borrower after due inquiry and
(iii) appropriately reflects all adjustments necessary to give effect to
the Transactions.
(d) Except as disclosed in the financial statements referred to
above or the notes thereto or in the Information Memorandum and except for
the Disclosed Matters, based on the facts and circumstances in existence on
the Effective Date and taking into consideration the likelihood of any
realization with respect to contingent liabilities, after giving effect to
the Transactions, none of the Borrower or its Subsidiaries has, as of the
Effective Date, any material contingent liabilities, unusual long-term
commitments or unrealized losses; provided that the foregoing
representation, insofar as it relates to GSX and its Subsidiaries, is made
only to the best of the Borrower's knowledge.
(e) Since December 31, 1997, there has been no development or
event that has had or could reasonably be expected to have a Material
Adverse Effect.
SECTION 3.5 Properties. (a) Each of the Borrower and its
Subsidiaries has good title to, or valid leasehold interests in, all its
real and personal property material to its business, except as, in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(b) Except as, in the aggregate, could not reasonably be expected
to have a Material Adverse Effect, each of the Borrower and its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, patents and other intellectual property material to its
business, and the use thereof by the Borrower and its Subsidiaries does not
infringe upon the rights of any other Person.
(c) Schedule 3.5 sets forth the location of substantially all of
the real property that is owned or leased by the Borrower or any of its
Subsidiaries as of the Effective Date after giving effect to the
Transactions.
(d) As of the Effective Date, neither the Borrower nor any of its
Subsidiaries has received notice of, or has knowledge of, any pending or
contemplated condemnation proceeding affecting any Mortgaged Property or
any sale or disposition thereof in lieu of condemnation. To the Borrower's
knowledge, neither any Mortgaged Property nor any interest therein is
subject to any right of first refusal, option or other contractual right to
purchase such Mortgaged Property or interest therein.
SECTION 3.6 Litigation and Environmental Matters. (a) There are
no actions, suits or proceedings by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or any of its
Subsidiaries (i) as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, could reasonably
be expected, in the aggregate, to have a Material Adverse Effect or (ii)
that involve any of the Loan Documents or the Transactions.
(b) Except as, in the aggregate, could not reasonably be expected
to have a Material Adverse Effect, neither the Borrower nor any of its
Subsidiaries (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has become subject to any
Environmental Liability, (iii) has received notice of any claim with
respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.
SECTION 3.7 Compliance with Laws and Agreements. Each of the
Borrower and its Subsidiaries is in compliance with all laws, regulations
and orders of any Governmental Authority applicable to it or its property
and all indentures, agreements and other instruments binding upon it or its
property, except where the failure to do so, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. No Default has
occurred and is continuing.
SECTION 3.8 Investment and Holding Company Status. Neither the
Borrower nor any of its Subsidiaries is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of
1940 or (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
SECTION 3.9 Taxes. Each of the Borrower and its Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to
have been filed and has paid or caused to be paid all Taxes required to
have been paid by it, except (a) Taxes that are being contested in good
faith by appropriate proceedings and for which the Borrower or such
Subsidiary, as applicable, has set aside on its books adequate reserves or
(b) to the extent that the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
SECTION 3.10 ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could
reasonably be expected to have a Material Adverse Effect. Except to the
extent such excess could not reasonably be expected to have a Material
Adverse Effect, the present value of all accumulated benefit obligations
under each Plan (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed the fair market
value of the assets of such Plan, and the present value of all accumulated
benefit obligations of all underfunded Plans (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did
not, as of the date of the most recent financial statements reflecting such
amounts, exceed the fair market value of the assets of all such underfunded
Plans.
SECTION 3.11 Disclosure. The Borrower has disclosed to the
Lenders all agreements, instruments and corporate or other restrictions to
which the Borrower or any of its Subsidiaries is subject, and all other
matters known to any of them, that, in the aggregate, could reasonably be
expected to have a Material Adverse Effect. Neither the Information
Memorandum nor any of the other reports, financial statements, certificates
or other information furnished by or on behalf of any Loan Party to the
Administrative Agent or any Lender in connection with the negotiation of
this Agreement or any other Loan Document or delivered hereunder or
thereunder (as modified or supplemented by other information so furnished)
contains any material misstatement of fact 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; provided that,
with respect to projected financial information, the Borrower represents
only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time.
SECTION 3.12 Subsidiaries. Schedule 3.12 sets forth the name of,
and the direct and indirect ownership interest of the Borrower in, each
Subsidiary of the Borrower and identifies each Subsidiary that is a
Subsidiary Guarantor, in each case as of the Effective Date.
SECTION 3.13 Insurance. Schedule 3.13 sets forth a description of
all insurance maintained by or on behalf of the Borrower and its
Subsidiaries as of the Effective Date. As of the Effective Date, all
premiums due and payable in respect of such insurance have been paid.
SECTION 3.14 Labor Matters. Except as, in the aggregate, could
not reasonably be expected to have a Material Adverse Effect: (a) there are
no strikes, lockouts or slowdowns against the Borrower or any Subsidiary
pending or, to the knowledge of the Borrower, threatened; (b) the hours
worked by and payments made to employees of the Borrower and the
Subsidiaries have not been in violation of the Fair Labor Standards Act or
any other applicable Federal, state, local or foreign law dealing with such
matters; and (c) all payments due from the Borrower or any Subsidiary, or
for which any claim may be made against the Borrower or any Subsidiary, on
account of wages and employee health and welfare insurance and other
benefits, have been paid or accrued as a liability on the books of the
Borrower or such Subsidiary. The consummation of the Transactions will not
give rise to any right of termination or right of renegotiation on the part
of any union under any collective bargaining agreement to which the
Borrower or any Subsidiary is bound.
SECTION 3.15 Solvency. Immediately after the consummation of the
Transactions to occur on the Effective Date and immediately following the
making of each Loan made on the Effective Date and after giving effect to
the application of the proceeds of such Loans, (a) the fair value of the
assets of the Borrower and its Subsidiaries, taken as a whole, at a fair
valuation, will exceed their debts and liabilities, subordinated,
contingent or otherwise; (b) the present fair saleable value of the
property of the Borrower and its Subsidiaries, taken as a whole, will be
greater than the amount that will be required to pay the probable liability
of their debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured;
(c) the Borrower and its Subsidiaries, taken as a whole, will be able to
pay their debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute and matured; and (d) the
Borrower and its Subsidiaries, taken as a whole, will not have unreasonably
small capital with which to conduct the business in which they are engaged
as such business is now conducted and is proposed to be conducted following
the Effective Date.
SECTION 3.16 Senior Indebtedness. At all times after the issuance
of any Subordinated Debt, (a) the Obligations will constitute "Senior
Indebtedness" (or any comparable concept) under and as defined in the
Subordinated Debt Documents and (b) in the event that any Subsidiary
Guarantees the Subordinated Debt, the obligations of such Subsidiary
Guarantor under each Collateral Agreement to which it is a party will
constitute "Guarantor Senior Indebtedness" (or any comparable concept) of
such Subsidiary Guarantor under and as defined in the Subordinated Debt
Documents.
SECTION 3.17 Security Documents. (a) Each Collateral Agreement is
effective to create in favor of the Administrative Agent or the Collateral
Agent, as the case may be, a legal, valid and enforceable security interest
in the Collateral described therein and proceeds thereof. In the case of
the Pledged Stock described in the relevant Collateral Agreement, when
stock certificates representing such Pledged Stock are delivered to the
Administrative Agent or the Collateral Agent, as the case may be, and in
the case of the other Collateral described in the relevant Collateral
Agreement, when financing statements and other filings specified on
Schedule 3.17(a) in appropriate form are filed in the offices specified on
Schedule 3.17(a), each Collateral Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest
of the Loan Parties in such Collateral and the proceeds thereof, as
security for the Obligations (as defined in the relevant Collateral
Agreement), in each case, subject to Permitted Encumbrances, prior and
superior in right to any other Person.
(b) Each of the Mortgages is effective to create in favor of the
Administrative Agent or the Collateral Agent, as the case may be, for the
benefit of the Lenders, a legal, valid and enforceable Lien on the
Mortgaged Properties described therein and proceeds thereof. When the
Mortgages are filed in the offices specified on Schedule 3.17(b) (in the
case of Mortgaged Properties owned on the Effective Date) or such offices
as shall have been notified to the Administrative Agent (in the case of any
other Mortgaged Properties) and all applicable mortgage recording taxes,
charges and fees are paid in full, each such Mortgage shall constitute a
fully perfected Lien on, and security interest in, all right, title and
interest of the Loan Parties in the Mortgaged Properties referred to
therein and the proceeds thereof, as security for the Obligations (as
defined in the relevant Mortgage), in each case, subject to Permitted
Encumbrances, prior and superior in right to any other Person.
SECTION 3.18 Year 2000. The cost to the Borrower and its
Subsidiaries of any reprogramming required to permit the proper
functioning, in and following the year 2000, of (a) the computer systems of
the Borrower and its Subsidiaries and (b) equipment containing embedded
microchips (including systems and equipment supplied by others or with
which the Borrower's systems interface) and the testing of all such systems
and equipment, as so reprogrammed, and of the reasonably foreseeable
consequences of year 2000 to the Borrower and its Subsidiaries (including
reprogramming errors and the failure of others' systems or equipment) could
not reasonably be expected to result in a Default, an Event of Default or a
Material Adverse Effect. To the knowledge of the Borrower, except for such
of the reprogramming referred to in the preceding sentence as may be
necessary, the computer and management information systems of the Borrower
and its Subsidiaries are and, with ordinary course upgrading and
maintenance, will continue to be, sufficient to permit the Borrower to
conduct its businesses without Material Adverse Effect.
ARTICLE IV
Conditions
----------
SECTION 4.1 Effective Date. The obligations of the Lenders to
make Loans and of the Issuing Lender to issue Letters of Credit hereunder
shall not become effective until the date on which each of the following
conditions is satisfied:
(a) Credit Agreement. The Administrative Agent shall have
received (i) from the Borrower, a counterpart of this Agreement signed
on behalf of the Borrower and (ii) from each Lender, an Addendum in
the form of Exhibit E, signed on behalf of such Lender.
(b) Acquisition. The Acquisition shall have been, or
substantially simultaneously with the initial funding of Loans on the
Effective Date shall be, consummated in accordance with the
Acquisition Documents and applicable law, without any amendment to or
waiver of any material terms or conditions of the Acquisition
Documents not approved by the Required Lenders. The Administrative
Agent shall have received satisfactory evidence that all existing
Indebtedness of the Borrower and its Subsidiaries (other than the
Indebtedness permitted under Section 6.2) shall have been paid in
full.
(c) Legal Opinions. The Administrative Agent shall have received
legal opinions (addressed to the Administrative Agent and the Lenders
and dated the Effective Date) (i) from Fried, Frank, Harris, Shriver &
Jacobson, counsel for the Borrower, substantially in the form of
Exhibit D-1, (ii) from Christopher J. Kearney, General Counsel of the
Borrower, substantially in the form of Exhibit D-2, and (iii)
delivered by each firm of counsel that has rendered a legal opinion in
connection with the Acquisition Agreement accompanied, in the case of
this clause (iii) with a reliance letter. The Borrower hereby requests
each such counsel to deliver such opinions.
(d) Closing Certificates. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of each
Loan Party, dated the Effective Date, substantially in the form of
Exhibit B, with appropriate insertions and attachments.
(e) Fees. The Administrative Agent shall have received all fees
and other amounts due and payable on or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses (including fees, charges and disbursements of
counsel) required to be reimbursed or paid by any Loan Party hereunder
or under any other Loan Document. All such amounts will be paid with
proceeds of Loans made on the Effective Date and will be reflected in
the funding instructions given by the Borrower to the Administrative
Agent on or before the Effective Date.
(f) Collateral Agreements. The Administrative Agent shall have
received counterparts of each Collateral Agreement and the Collateral
Sharing Agreement signed on behalf of each relevant Loan Party,
together with the following:
(i) stock certificates representing all the outstanding
shares of capital stock of each Material Subsidiary owned by any
Loan Party as of the Effective Date after giving effect to the
Transactions (except that stock certificates representing shares
of common stock of a Foreign Subsidiary may be limited to 66% of
the outstanding shares of common stock of such Foreign Subsidiary
and shall be pledged on the Effective Date only to the extent
available on the Effective Date (and any such items that are not
pledged on the Effective Date shall be pledged in accordance with
Section 5.11(c))), promissory notes evidencing all Indebtedness
owed to any Loan Party and stock powers and instruments of
transfer, endorsed in blank, with respect to such stock
certificates and promissory notes;
(ii) all documents and instruments, including Uniform
Commercial Code financing statements, required by law or
reasonably requested by the Administrative Agent to be filed,
registered or recorded to create or perfect the Liens intended to
be created under such Loan Documents; and
(iii) evidence reasonably satisfactory to the Administrative
Agent that the Liens set forth on Schedule 4.1(f) have been, or
on or promptly after the Effective Date will be, released.
(g) Mortgages. To the extent available on the Effective Date, the
Administrative Agent shall have received (i) counterparts of a
Mortgage with respect to each Mortgaged Property owned on the
Effective Date signed on behalf of the record owner of such Mortgaged
Property, (ii) a policy or policies of title insurance issued by a
nationally recognized title insurance company, insuring the Lien of
each such Mortgage as a valid first Lien on the Mortgaged Property
described therein, free of any other Liens except as permitted by
Section 6.3, together with such endorsements, coinsurance and
reinsurance as the Administrative Agent may reasonably request, and
(iii) such surveys and abstracts as may be reasonably required
pursuant to such Mortgages or as the Administrative Agent may
reasonably request. Any items described in this paragraph (g) that are
not delivered on the Effective Date shall be delivered in accordance
with Section 5.11(c).
(h) Insurance. The Administrative Agent shall have received
evidence that the insurance required by Section 5.7 and the Security
Documents is in effect.
(i) Consents. All consents and approvals required to be obtained
from any Governmental Authority or other Person in connection with the
Acquisition shall have been obtained, and all applicable waiting
periods and appeal periods shall have expired, in each case without
the imposition of any burdensome conditions, except to the extent that
the failure to obtain any such consent could not reasonably be
expected to have a Material Adverse Effect.
(j) Expenses. The aggregate amount of fees and expenses payable
by the Borrower and its Subsidiaries in connection with the
Transactions shall not exceed $50,000,000.
SECTION 4.2 Each Credit Event. The obligation of each Lender to
make a Loan on the occasion of any Borrowing, and of the Issuing Lender to
issue, amend, renew or extend any Letter of Credit, is subject to receipt
of the request therefor in accordance herewith and to the satisfaction of
the following conditions:
(a) The representations and warranties of each Loan Party set
forth in the Loan Documents shall be true and correct on and as of the
date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable.
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, no Default or Event of Default shall
have occurred and be continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a
Letter of Credit shall be deemed to constitute a representation and
warranty by the Borrower on the date thereof as to the matters specified in
paragraphs (a) and (b) of this Section.
ARTICLE V
Affirmative Covenants
---------------------
Until the Commitments have expired or been terminated and the
principal of and interest (and premium, if any) on each Loan and all fees
payable hereunder shall have been paid in full and all Letters of Credit
shall have expired or terminated and all LC Disbursements shall have been
reimbursed, the Borrower covenants and agrees with the Administrative Agent
and the Lenders that:
SECTION 5.1 Financial Statements and Other Information. The
Borrower will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the
Borrower, its audited consolidated balance sheet and related
statements of operations, stockholders' equity and cash flows as of
the end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, all
reported on by Arthur Andersen LLP or other independent public
accountants of recognized national standing (without a "going concern"
or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such
consolidated financial statements present fairly in all material
respects the financial condition and results of operations of the
Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied; provided that delivery
within the time period specified above of copies of the Annual Report
on Form 10-K of the Borrower filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this Section
5.1(a);
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Borrower, its consolidated
balance sheet and related statements of operations for such fiscal
quarter and the then elapsed portion of the fiscal year, and cash
flows for the then elapsed portion of the fiscal year, setting forth
in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the
end of) the previous fiscal year, all certified by one of its
Financial Officers as presenting fairly in all material respects the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes; provided that delivery
within the time period specified above of copies of the Quarterly
Report on Form 10-Q of the Borrower filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of
this Section 5.1(b);
(c) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer of the
Borrower (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action
taken or proposed to be taken with respect thereto, (ii) setting forth
reasonably detailed calculations demonstrating compliance with Section
6.1 and (iii) stating whether any change in GAAP or in the application
thereof has occurred since the date of the Borrower's audited
financial statements referred to in Section 3.4 and, if any such
change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate;
(d) concurrently with any delivery of financial statements under
clause (a) above, a certificate of the accounting firm that reported
on such financial statements stating whether they obtained knowledge
during the course of their examination of such financial statements of
any Default or Event of Default (which certificate may be limited to
the extent required by accounting rules or guidelines);
(e) prior to the commencement of each fiscal year of the
Borrower, a consolidated budget for such fiscal year (including a
projected consolidated balance sheet and related statements of
projected operations and cash flow as of the end of and for such
fiscal year and setting forth the assumptions used for purposes of
preparing such budget) and, promptly when available, any significant
revisions of such budget;
(f) no later than 10 Business Days prior to the effectiveness
thereof, copies of substantially final drafts of any proposed
amendment, supplement, waiver or other modification with respect to
the Subordinated Debt Documents or the Acquisition Documents;
(g) promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials
filed by the Borrower or any Subsidiary with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any
or all of the functions of said Commission, or with any national
securities exchange, or distributed by the Borrower to its
shareholders generally, as the case may be; and
(h) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Borrower or any Subsidiary, or compliance with the
terms of any Loan Document, as the Administrative Agent or any Lender
may reasonably request.
SECTION 5.2 Notices of Material Events. The Borrower will furnish
to the Administrative Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default or Event of Default;
(b) the filing or commencement of any action, suit or proceeding
by or before any arbitrator or Governmental Authority against or
affecting the Borrower or any Affiliate thereof that, if adversely
determined, could reasonably be expected to have a Material Adverse
Effect;
(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Borrower and its Subsidiaries
in an aggregate amount exceeding $35,000,000;
(d) any casualty or other insured damage to any material portion
of any Collateral or the commencement of any action or proceeding for
the taking of any material portion of the Collateral or interest
therein under power of eminent domain or by condemnation or similar
proceeding that could reasonably be expected to reduce the value of
the Collateral by an aggregate amount in excess of $10,000,000; and
(e) any development that results in, or could reasonably be
expected to have, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a
statement of a Financial Officer or other executive officer of the Borrower
setting forth the details of the event or development requiring such notice
and any action taken or proposed to be taken with respect thereto.
SECTION 5.3 Information Regarding Collateral. (a) The Borrower
will furnish to the Administrative Agent prompt written notice of any
change (i) in any Loan Party's corporate name or in any trade name used to
identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of any Loan Party's chief executive office
or its principal place of business, any office in which it maintains books
or records relating to Collateral owned by it or any office or facility at
which Collateral (other than any inventory and equipment kept at locations
where there is less than $1,000,000 aggregate book value of inventory and
equipment) owned by it is located (including the establishment of any such
new office or facility), (iii) in any Loan Party's identity or corporate
structure or (iv) in any Loan Party's Federal Taxpayer Identification
Number. Unless the Borrower shall have provided to the Administrative Agent
at least 30 days' prior written notice of any such change, the Borrower
agrees not to effect or permit any change referred to in the preceding
sentence until such time as all filings have been made under the Uniform
Commercial Code or otherwise that are required in order for the
Administrative Agent or the Collateral Agent, as applicable, to continue at
all times following such change to have a valid, legal and perfected
security interest in all the Collateral.
(b) On each Collateral Date, the Borrower shall deliver to the
Administrative Agent a certificate of a Financial Officer of the Borrower
setting forth (i) the information required by Section 5.11 and (ii) a
summary of any change referred to in the first sentence of paragraph (a)
above that has occurred since the immediately preceding Collateral Date
(or, in the case of the first Collateral Date, since the Effective Date).
SECTION 5.4 Existence; Conduct of Business. The Borrower will,
and will cause each of its Subsidiaries to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its
legal existence and the rights, licenses, permits, privileges, franchises,
patents, copyrights, trademarks and trade names material to the conduct of
its business, except to the extent that the failure to do so could not
reasonably be expected to have a Material Adverse effect; provided that the
foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.4.
SECTION 5.5 Payment of Obligations. The Borrower will, and will
cause each of its Subsidiaries to, pay its material Indebtedness and other
obligations, including material Tax liabilities, before the same shall
become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b)
the Borrower or such Subsidiary has set aside on its books adequate
reserves with respect thereto in accordance with GAAP, (c) such contest
effectively suspends collection of the contested obligation and the
enforcement of any Lien securing such obligation and (d) the failure to
make payment pending such contest could not reasonably be expected to have
a Material Adverse Effect.
SECTION 5.6 Maintenance of Properties. The Borrower will, and
will cause each of its Subsidiaries to, keep and maintain all property
material to the conduct of its business in good condition, ordinary wear
and tear excepted.
SECTION 5.7 Insurance. The Borrower will, and will cause each of
its Subsidiaries to, maintain, with financially sound and reputable
insurance companies (a) insurance in such amounts (with no greater risk
retention) and against such risks as are customarily maintained by
companies of established repute engaged in the same or similar businesses
operating in the same or similar locations and (b) all insurance required
to be maintained pursuant to the Security Documents. The Borrower will
furnish to the Lenders, upon request of the Administrative Agent,
information in reasonable detail as to the insurance so maintained.
SECTION 5.8 Books and Records; Inspection and Audit Rights. The
Borrower will, and will cause each of its Subsidiaries to, keep proper
books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its Subsidiaries to,
permit any representatives designated by the Administrative Agent or any
Lender, upon reasonable prior notice, to visit and inspect its properties,
to examine and make extracts from its books and records, and to discuss its
affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably
requested.
SECTION 5.9 Compliance with Laws and Contractual Obligations. The
Borrower will, and will cause each of its Subsidiaries to, comply with all
laws, rules, regulations and orders of any Governmental Authority
(including Environmental Laws) and all Contractual Obligations applicable
to it or its property, except where the failure to do so, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
SECTION 5.10 Use of Proceeds and Letters of Credit. The proceeds
of the Term Loans will be used only (a) to finance the payment of amounts
payable under the Acquisition Documents as consideration for the
Acquisition, (b) to refinance certain indebtedness of the Borrower, GSX and
their respective Subsidiaries and (c) to finance the payment of fees and
expenses payable in connection with the Transactions. The proceeds of the
Revolving Loans and Swingline Loans, and the Letters of Credit, will be
used only for working capital and general corporate purposes of the
Borrower and its Subsidiaries, including Permitted Acquisitions,
Investments and Restricted Payments permitted hereby. No part of the
proceeds of any Loan will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations U and X.
SECTION 5.11 Additional Collateral. (a) On each Collateral Date,
the Borrower will notify the Administrative Agent of the identity of any
Wholly Owned Subsidiary that is not already a Subsidiary Guarantor and,
promptly after such Collateral Date, will cause (i) such Subsidiary (unless
it is a Foreign Subsidiary) to become a "Subsidiary Guarantor" and a
"Grantor" under each relevant Collateral Agreement, (ii) the Capital Stock
of such Wholly Owned Subsidiary to be pledged pursuant to the relevant
Collateral Agreement (except that, if such Subsidiary is a Foreign
Subsidiary, no shares of common stock of such Subsidiary shall be pledged
unless such Subsidiary (x) is directly owned by the Borrower or a Domestic
Subsidiary and (y) together with any of its Subsidiaries, has aggregate
assets in excess of $15,000,000, and then the amount of voting common stock
of such Subsidiary to be pledged pursuant to such Collateral Agreement may
be limited to 66% of the outstanding shares of voting common stock of such
Subsidiary) and (iii) except in the case of a Foreign Subsidiary, take all
steps required by the relevant Security Documents and this Agreement to
create and perfect Liens in the relevant property of such Subsidiary.
(b) If, as of any Collateral Date, any property of the Borrower,
any Subsidiary Guarantor or any Subsidiary that is required to become a
Subsidiary Guarantor pursuant to Section 5.11(a) (including any parcel of
owned domestic real property having a fair market value in excess of
$10,000,000 but excluding all other real property) is not already subject
to a perfected first priority Lien in favor of the Administrative Agent or
the Collateral Agent, as the case may be, the Borrower will notify the
Administrative Agent thereof, and, promptly after such Collateral Date,
will cause such assets to become subject to a Lien under the relevant
Security Documents and will take, and cause the relevant Subsidiary to
take, such actions as shall be necessary or reasonably requested by the
Administrative Agent to grant and perfect such Liens, including actions
described in Section 5.12, all at the expense of the Loan Parties; provided
that the Borrower and its Subsidiaries shall not be required to comply with
the requirements of this Section 5.11(b) if the Administrative Agent, in
its sole discretion, determines that the cost of such compliance is
excessive in relation to the value of the collateral security to be
afforded thereby.
(c) Within 30 days after the Effective Date, each of the Borrower
and its Domestic Subsidiaries, will pledge 66% of the Capital Stock
directly owned by it of any Material Subsidiary that is a Foreign
Subsidiary and that was not pledged on the Effective Date and will deliver
legal opinions from local counsel in each of Canada, Germany, Italy,
Barbados, the Netherlands and the United Kingdom, in each case in form and
substance satisfactory to the Administrative Agent. Within 90 days after
the Effective Date, the Borrower will deliver any items described in
Section 4.1(g) that were not delivered on the Effective Date.
(d) Notwithstanding anything to the contrary in this Section
5.11, after the Release Date, no property other than Capital Stock shall be
required to become Collateral.
SECTION 5.12 Further Assurances. The Borrower will, and will
cause each of the Subsidiaries to, execute any and all further documents,
financing statements, agreements and instruments, and take all such further
actions (including the filing and recording of financing statements,
fixture filings, mortgages, deeds of trust and other documents), which may
be required under any applicable law, or which the Administrative Agent may
reasonably request, to effectuate the transactions contemplated by the Loan
Documents or to grant, preserve, protect or perfect the Liens created or
intended to be created by the Security Documents or the validity or
priority of any such Lien, all at the expense of the Loan Parties. The
Borrower also agrees to provide to the Administrative Agent, from time to
time upon request, evidence reasonably satisfactory to the Administrative
Agent as to the perfection and priority of the Liens created or intended to
be created by the Security Documents.
SECTION 5.13 Interest Rate Protection. As promptly as
practicable, and in any event within 60 days after the Effective Date, the
Borrower will enter into, and thereafter for a period of not less than
three years will maintain in effect, one or more interest rate protection
agreements on such terms and with such parties as shall be reasonably
satisfactory to the Administrative Agent, the effect of which shall be to
fix or limit the interest cost to the Borrower with respect to at least 50%
of the outstanding Tranche A Term Loans and Tranche B Term Loans.
ARTICLE VI
Negative Covenants
------------------
Until the Commitments have expired or terminated and the
principal of and interest (and premium, if any) on each Loan and all fees
payable hereunder have been paid in full and all Letters of Credit have
expired or terminated and all LC Disbursements shall have been reimbursed,
the Borrower covenants and agrees with the Lenders that:
SECTION 6.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. The Borrower will not permit the
Consolidated Leverage Ratio as at the last day of any period of four
consecutive fiscal quarters of the Borrower ending during any period set
forth below to exceed the ratio set forth below opposite such period:
Period Consolidated Leverage Ratio
------ ---------------------------
March 31, 1999 - June 29, 1999 4.85 to 1.0
June 30, 1999 - September 29, 1999 4.50 to 1.0
September 30, 1999 - December 30, 1999 4.25 to 1.0
December 31, 1999 - December 30, 2000 4.00 to 1.0
December 31, 2000 - December 30, 2001 3.75 to 1.0
December 31, 2001 and thereafter 3.50 to 1.0
; provided, that for the purposes of determining the ratio described above
for the fiscal quarters of the Borrower ending March 31, 1999 and June 30,
1999, Consolidated EBITDA for the quarter ending June 30, 1998 shall be
deemed to be $93,000,000, and Consolidated EBITDA for the quarter ending
September 30, 1998 shall be calculated after giving pro forma effect to the
Transactions.
(b) Consolidated Interest Coverage Ratio. The Borrower will not
permit the Consolidated Interest Coverage Ratio for any period of four
consecutive fiscal quarters of the Borrower (or, if less, the number of
full fiscal quarters subsequent to the Effective Date) ending during any
period set forth below to be less than the ratio set forth below opposite
such period:
Consolidated Interest
Period Coverage Ratio
------ --------------
March 31, 1999 - June 29, 1999 2.00 to 1.00
June 30, 1999 - September 29, 1999 2.25 to 1.00
September 30, 1999 - December 30, 1999 2.50 to 1.00
December 31, 1999 - December 30, 2000 2.75 to 1.00
December 31, 2000 and thereafter 3.00 to 1.00
SECTION 6.2 Indebtedness. The Borrower will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness created under the Loan Documents;
(b) Subordinated Debt, so long as (i) such Indebtedness has no
scheduled principal payments prior to October 1, 2007, (ii) no
covenant or default contained in the Subordinated Debt Documents is
more restrictive than those contained in this Agreement and (iii) the
Subordinated Debt Documents contain subordination terms that are no
less favorable to the Lenders than those customarily applicable to
offerings of "high-yield" subordinated debt;
(c) Indebtedness existing on the date hereof and set forth in
Schedule 6.2 and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount
thereof;
(d) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or any other Subsidiary; provided that
Indebtedness pursuant to this paragraph (d) of any Subsidiary that is
not a Wholly Owned Subsidiary Guarantor shall be subject to Section
6.5;
(e) Indebtedness consisting of reimbursement obligations under
surety, indemnity, performance, release and appeal bonds and
guarantees thereof, in each case securing obligations not constituting
Indebtedness for borrowed money and obtained in the ordinary course of
business;
(f) Guarantees by the Borrower of Indebtedness of any Subsidiary
and by any Subsidiary of Indebtedness of the Borrower or any other
Subsidiary; provided that Guarantees pursuant to this paragraph (f) of
Indebtedness of any Subsidiary that is not a Wholly Owned Subsidiary
Guarantor shall be subject to Section 6.5;
(g) (i) Indebtedness of the Borrower or any Subsidiary incurred
to finance the acquisition, construction or improvement of any fixed
or capital assets, including Capital Lease Obligations and any
Indebtedness assumed in connection with the acquisition of any such
assets or secured by a Lien on any such assets prior to the
acquisition thereof, and extensions, renewals and replacements of any
such Indebtedness that do not increase the outstanding principal
amount thereof, provided that such Indebtedness is incurred prior to
or within 90 days after such acquisition or the completion of such
construction or improvement, and (ii) Attributable Debt in connection
with Sale/Leaseback Transactions involving fixed or capital assets, so
long as the aggregate principal amount of all Indebtedness incurred
pursuant to this paragraph (g) shall not exceed $50,000,000 at any
time outstanding;
(h) Indebtedness of any Person that becomes a Subsidiary after
the date hereof; provided that (i) such Indebtedness exists at the
time such Person becomes a Subsidiary and is not created in
contemplation of or in connection with such Person becoming a
Subsidiary and (ii) the aggregate principal amount of Indebtedness
permitted by this paragraph (h) shall not exceed $50,000,000 at any
time outstanding;
(i) Indebtedness to finance the general working capital needs of
the Borrower and its Subsidiaries incurred after the Revolving
Maturity Date in an aggregate principal amount not to exceed the
amount of the Revolving Commitments as in effect immediately prior to
the Revolving Maturity Date, provided that (i) the Revolving
Commitments shall have been or shall concurrently be terminated, the
Revolving Loans and Swingline Loans shall have been or shall
concurrently be repaid in full and all Letters of Credit shall have
been or shall concurrently be cancelled or replaced and (ii) the terms
and conditions of such replacement working capital facility (including
any arrangements for sharing of Collateral) shall be satisfactory to
the Required Lenders (determined after giving effect to the
termination of the Revolving Commitments);
(j) letters of credit required in the ordinary course of business
in an aggregate face amount, when added to the aggregate face amount
of Letters of Credit and unreimbursed Reimbursement Obligations then
outstanding, not exceeding $150,000,000 at any time outstanding;
(k) other Indebtedness of Foreign Subsidiaries and non-Wholly
Owned Domestic Subsidiaries in an aggregate principal amount not
exceeding $30,000,000 at any time outstanding (with the amount of
Indebtedness under overdraft lines being determined net of cash held
for the benefit of the relevant Subsidiary by the institution creating
such overdraft); and
(l) other Indebtedness in an aggregate principal amount not
exceeding $50,000,000 at any time outstanding, provided that the
aggregate principal amount of secured Indebtedness incurred pursuant
to this paragraph (l) shall not exceed $15,000,000.
SECTION 6.3 Liens. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights in respect
of any thereof, except:
(a) Liens created under the Loan Documents;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of the Borrower or any
Subsidiary existing on the date hereof and set forth in Schedule 6.3;
provided that (i) such Lien shall not apply to any other property or
asset of the Borrower or any Subsidiary and (ii) such Lien shall
secure only those obligations which it secures on the date hereof and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;
(d) any Lien existing on any fixed or capital asset prior to the
acquisition thereof by the Borrower or any Subsidiary or existing on
any fixed or capital asset of any Person that becomes a Subsidiary
after the date hereof prior to the time such Person becomes a
Subsidiary; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person
becoming a Subsidiary, as the case may be, (ii) such Lien shall not
apply to any other property of the Borrower or any Subsidiary and
(iii) such Lien shall secure only those obligations which it secures
on the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be and extensions, renewals and
replacements thereof that do not increase the outstanding principal
amount thereof;
(e) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Subsidiary; provided that (i) such
security interests secure Indebtedness permitted by Section 6.2(g),
(ii) such security interests and the Indebtedness secured thereby are
incurred prior to or within 90 days after such acquisition or the
completion of such construction or improvement, (iii) the Indebtedness
secured thereby does not exceed 100% of the cost of acquiring,
constructing or improving such fixed or capital assets and (iv) such
security interests shall not apply to any other property or assets of
the Borrower or any Subsidiary;
(f) Liens on Collateral securing Indebtedness permitted by
Section 6.2(i);
(g) Liens on property of any Foreign Subsidiary or non-Wholly
Owned Domestic Subsidiary securing Indebtedness of such Foreign
Subsidiary or non-Wholly Owned Domestic Subsidiary, as the case may
be, permitted by Section 6.2(j) or (k); provided that the aggregate
amount of the Indebtedness so secured shall not exceed $45,000,000 at
any one time; and
(h) Liens not otherwise permitted by this Section so long as
neither (i) the aggregate outstanding principal amount of the
obligations secured thereby nor (ii) the aggregate fair market value
(determined as of the date such Lien is incurred) of the assets
subject thereto exceeds (as to the Borrower and all Subsidiaries)
$15,000,000 at any one time.
SECTION 6.4 Fundamental Changes. The Borrower will not, and will
not permit any Subsidiary to, merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
liquidate or dissolve, except that, if at the time thereof and immediately
after giving effect thereto no Default or Event of Default shall have
occurred and be continuing (a) any Person may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, (b) any
Person may merge with any Wholly Owned Subsidiary Guarantor so long as the
surviving entity is or becomes a Wholly Owned Subsidiary Guarantor, (c) any
Subsidiary may Dispose of its assets to the Borrower or any Wholly Owned
Subsidiary Guarantor pursuant to a transaction of liquidation or
dissolution, (d) the Borrower or any Subsidiary may Dispose of its interest
in any Subsidiary pursuant to a merger of such Subsidiary, (e) any Foreign
Subsidiary may merge with any other Person so long as the surviving entity
is a Subsidiary or Dispose of its assets to any other Subsidiary pursuant
to a transaction of liquidation or dissolution and (f) the Borrower may
merge into any other Person so long as (i) the surviving entity assumes all
the Obligations of the Borrower hereunder and under the other Loan
Documents pursuant to a written agreement satisfactory to the
Administrative Agent, (ii) the surviving entity is organized under the laws
of a jurisdiction within the United States of America, (iii) no Default or
Event of Default shall have occurred and be continuing, or would occur
after giving effect to such merger, (iv) the Borrower shall be in
compliance, on a pro forma basis after giving effect to such merger, with
the covenants contained in Section 6.1, in each case recomputed as at the
last day of the most recently ended fiscal quarter of the Borrower for
which the relevant information is available as if such merger had occurred
on the first day of each relevant period for testing such compliance (as
demonstrated in a certificate of a Financial Officer delivered to the
Administrative Agent at least ten Business Days prior to such merger) and
(v) all filings have been made under the Uniform Commercial Code or
otherwise that are required in order for the Collateral Agent to continue
at all times following such merger to have a valid, legal and perfected
security interest in all the Collateral. It is understood that no
transaction pursuant to this Section 6.4 shall be permitted unless any
Investment or Disposition made in connection therewith is also expressly
permitted by Section 6.5 or 6.7, as applicable.
SECTION 6.5 Investments, Loans, Advances, Guarantees and
Acquisitions. The Borrower will not, and will not permit any of its
Subsidiaries to, purchase, hold or acquire (including pursuant to any
merger with any Person that was not a Wholly Owned Subsidiary prior to such
merger) any Capital Stock of or evidences of Indebtedness or other
securities (including any option, warrant or other right to acquire any of
the foregoing) of, make or permit to exist any loans or advances to,
Guarantee any obligations of, or make or permit to exist any investment or
any other interest in, any other Person, or purchase or otherwise acquire
(in one transaction or a series of transactions) any assets of any other
Person constituting a business unit (collectively, "Investments"), except:
(a) the Acquisition;
(b) Permitted Investments;
(c) investments existing on the date hereof and set forth on
Schedule 6.5;
(d) intercompany investments in the ordinary course of business
made by the Borrower and its Subsidiaries in any Subsidiary that,
prior to such Investment, is a Subsidiary; provided that, after giving
effect to any such investment made on a particular date, the aggregate
amount of such Investments by Loan Parties from the Effective Date
through and including such date, net of any repayments of any such
Investments, in or with respect to Subsidiaries that are not Wholly
Owned Subsidiary Guarantors shall not exceed (i) $45,000,000, if the
Consolidated Leverage Ratio, determined as of the last day of the most
recent period of four consecutive fiscal quarters for which the
relevant financial information is available, is greater than or equal
to 3.00 to 1.0 or the Interim Term Loans have not been paid in full or
(ii) $75,000,000, if the Consolidated Leverage Ratio as so determined
is less than 3.00 to 1.0 and the Interim Term Loans have been paid in
full;
(e) loans and advances to employees of the Borrower or any
Subsidiary in the ordinary course of business (including for travel,
entertainment and relocation expenses) in an aggregate amount for the
Borrower or any Subsidiary not to exceed $10,000,000 at any one time
outstanding;
(f) Guarantees constituting Indebtedness permitted by Section
6.2; provided that (i) a Subsidiary shall not Guarantee the
Subordinated Debt unless (A) such Subsidiary also has Guaranteed the
Obligations pursuant to each relevant Collateral Agreement, (B) such
Guarantee of the Subordinated Debt is subordinated to such Guarantee
of the Obligations on terms no less favorable to the Lenders than the
subordination provisions of the Subordinated Debt and (C) such
Guarantee of the Subordinated Debt provides for the release and
termination thereof, without action by any party, upon Disposition of
the relevant Subsidiary or of substantially all of its assets, and
(ii) the aggregate principal amount of Indebtedness of Subsidiaries
that are not Wholly Owned Subsidiary Guarantors that is Guaranteed by
any Loan Party shall be subject to the limitation set forth in
paragraph (d) above;
(g) Permitted Acquisitions, provided that, after giving effect to
any Permitted Acquisition made on a particular date, the aggregate
Consideration expended in connection with all Permitted Acquisitions
pursuant to this paragraph (g) from the Effective Date through and
including such date shall not exceed (i) $50,000,000 if the
Consolidated Leverage Ratio, determined as of the last day of the most
recent period of four consecutive fiscal quarters for which the
relevant financial information is available, is greater than or equal
to 3.50 to 1.0 or the Interim Term Loans have not been paid in full,
(ii) $130,000,000 if the Consolidated Leverage Ratio as so determined
is less than 3.50 to 1.0 and greater than or equal to 3.00 to 1.0 and
the Interim Term Loans have been paid in full or (iii) $175,000,000 if
the Consolidated Leverage Ratio as so determined is less than 3.00 to
1.0 and the Interim Term Loans have been paid in full;
(h) Guarantees, not constituting Indebtedness permitted by
Section 6.2, by the Borrower and its Subsidiaries of the Contractual
Obligations of the Borrower or any Subsidiary Guarantor;
(i) intercompany investments in any Wholly Owned Subsidiary
created by the Borrower or any of its Subsidiaries in connection with
any corporate restructuring, provided that (A) such newly-created
Subsidiary is, or contemporaneously with the consummation of such
restructuring becomes, a Wholly Owned Subsidiary Guarantor, (B) all
property transferred to such newly-created Subsidiary that constituted
Collateral shall continue to constitute Collateral as to which the
Collateral Agent has a first priority perfected security interest,
subject to Permitted Encumbrances, and (C) contemporaneously with the
consummation of such restructuring (i) the Capital Stock and assets of
such newly-created Subsidiary are pledged under the relevant Security
Documents (except to the extent that any of the foregoing would not
otherwise be required pursuant to Section 5.11 to be so pledged on the
next succeeding Collateral Date) and (ii) the Borrower takes, and
causes the relevant Subsidiary to take, such actions as shall be
necessary or reasonably requested by the Administrative Agent to grant
and perfect such Liens, including actions described in Section 5.12,
all at the expense of the Loan Parties; and
(j) Investments that are not permitted by any other paragraph of
this Section, so long as, after giving effect to any such Investment
made on a particular date, the aggregate Consideration expended in
connection with all such Investments from the Effective Date through
and including such date shall not exceed (i) $50,000,000 if the
Consolidated Leverage Ratio, determined as of the last day of the most
recent period of four consecutive fiscal quarters for which the
relevant financial infirmation is available, is greater than or equal
to 3.00 to 1.0 or the Interim Term Loans have not been paid in full or
(ii) $75,000,000 if the Consolidated Leverage Ratio as so determined
is less than 3.00 to 1.0 and the Interim Term Loans have been paid in
full.
SECTION 6.6 Capital Expenditures. The Borrower will not, and will
not permit any of its Subsidiaries to, make or commit to make any Capital
Expenditure, except Capital Expenditures of the Borrower and its
Subsidiaries not exceeding (a) for the period from the Effective Date to
and including December 31, 1998, $35,000,000 and (b) for any fiscal year of
the Borrower thereafter set forth below, the amount set forth opposite such
fiscal year:
Fiscal Year Amount
----------- ------
1999 $115,000,000
2000 and thereafter $105,000,000;
provided, that (i) any such amount referred to above, if not so expended in
the fiscal year for which it is permitted, may be carried over for
expenditure in the next succeeding fiscal year and (ii) Capital
Expenditures made pursuant to this Section during any fiscal year shall be
deemed made, first, in respect of amounts permitted for such fiscal year as
provided above and, second, in respect of amounts carried over from the
prior fiscal year pursuant to clause (i) above.
SECTION 6.7 Disposition of Assets. The Borrower will not, and
will not permit any of its Subsidiaries to, Dispose of any asset, including
any Capital Stock owned by it, nor will the Borrower permit any of it
Subsidiaries to issue any additional Capital Stock of such Subsidiary,
except:
(a) (i) sales of inventory, obsolete or worn out equipment and
Permitted Investments and (ii) leases of real or personal property, in
each case in the ordinary course of business;
(b) Dispositions to the Borrower or a Subsidiary; provided that
any such Dispositions involving a Subsidiary that is not a Loan Party
shall be made in compliance with Section 6.5; and
(c) Dispositions of assets that are not permitted by any other
paragraph of this Section; provided that the aggregate gross proceeds
(including any non-cash proceeds, determined on the basis of face
amount in the case of notes or similar consideration and on the basis
of fair market value in the case of other non-cash proceeds) of all
assets Disposed of in reliance upon this paragraph (c) (excluding any
such proceeds that are applied to prepay Interim Term Loans in
accordance with Section 2.11) shall not exceed $200,000,000 during any
fiscal year of the Borrower; and provided further that all
Dispositions permitted by this paragraph (c) shall be made for fair
value and for at least 85% cash consideration.
SECTION 6.8 Sale and Leaseback Transactions. The Borrower will
not, and will not permit any Subsidiary to, enter into any arrangement
(each, a "Sale/Leaseback Transaction") providing for the leasing to the
Borrower or any Subsidiary of real or personal property that has been or is
to be (a) sold or transferred by the Borrower or any Subsidiary or (b)
constructed or acquired by a third party in anticipation of a program of
leasing to the Borrower or any Subsidiary, in each case unless the
Attributable Debt resulting therefrom is permitted by Section 6.2(g).
SECTION 6.9 Restricted Payments. The Borrower will not, and will
not permit any Subsidiary to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, or incur any obligation
(contingent or otherwise) to do so, except (a) the Borrower may declare and
pay dividends with respect to its Capital Stock payable solely in
additional shares of its Capital Stock, (b) any Wholly Owned Subsidiary may
declare and pay Restricted Payments to its immediate parent, (c) any
non-Wholly Owned Subsidiary may declare and pay dividends ratably with
respect to its Capital Stock, (d) the Borrower may make Restricted
Payments, not exceeding $10,000,000 during any fiscal year, pursuant to and
in accordance with stock option plans or other benefit plans for management
or employees of the Borrower and its Subsidiaries, (e) the Borrower may
make Restricted Payments not otherwise permitted by this Section 6.9,
provided that (i) on the date of any such Restricted Payment after giving
effect thereto, the aggregate amount expended in connection with all
Restricted Payments pursuant to this clause (e) during the fiscal year in
which such date occurs shall not exceed $10,000,000 unless, on such date,
(x) the Interim Term Loans have been paid in full and (y) the Consolidated
Leverage Ratio, on a pro forma basis after giving effect to such Restricted
Payment (with the reference period for Consolidated EBITDA being the most
recent period of four consecutive fiscal quarters for which the relevant
financial information is available), is less than 2.50 to 1.0 and (ii) in
no event shall the aggregate amount of Restricted Payments made pursuant to
this clause (e) during any fiscal year exceed 25% of Consolidated Net
Income for the immediately preceding fiscal year, (f) the Borrower may
repurchase its Capital Stock, provided that no such repurchase shall be
permitted by this clause (f) unless (x) the Interim Term Loans have been
paid in full, (y) the aggregate principal amount of outstanding Tranche A
Term Loans and Tranche B Term Loans is less than $700,000,000 and (z) the
Consolidated Leverage Ratio, on a pro forma basis after giving effect to
such repurchase (with the reference period for Consolidated EBITDA being
the most recent period of four consecutive fiscal quarters for which the
relevant financial information is available), is less than 2.00 to 1.0, and
(g) the Borrower or any Subsidiary may make Restricted Payments to the
extent required by the terms of its joint venture or similar agreements
relating to non-Wholly Owned Subsidiaries, provided that no such Restricted
Payment shall be permitted by this clause (g) unless any Investment made in
connection therewith is also expressly permitted by Section 6.5.
SECTION 6.10 Payments of Subordinated Debt; Certain Derivative
Transactions. The Borrower will not, nor will it permit any Subsidiary to,
(a) make or agree or offer to pay or make, directly or indirectly, any
payment or other distribution (whether in cash, securities or other
property) of or in respect of principal of or interest on any Subordinated
Debt, or any payment or other distribution (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account
of the purchase, redemption, retirement, acquisition, cancellation or
termination of any Subordinated Debt, except payment of regularly scheduled
interest and principal payments as and when due in respect of any
Subordinated Debt, other than payments in respect of the Subordinated Debt
prohibited by the subordination provisions thereof or (b) enter into any
derivative transaction or similar transaction obligating the Borrower or
any of its Subsidiaries to make payments to any other Person as a result of
a change in market value of any Subordinated Debt.
SECTION 6.11 Transactions with Affiliates. The Borrower will not,
and will not permit any Subsidiary to, sell, lease or otherwise transfer
any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions
with, any of its Affiliates, except (a) transactions in the ordinary course
of business that are at prices and on terms and conditions not less
favorable to the Borrower or such Subsidiary than could be obtained on an
arm's-length basis from unrelated third parties, (b) transactions between
or among the Borrower and the Subsidiaries not involving any other
Affiliate, (c) any Restricted Payment permitted by Section 6.9 and (d) any
other transaction expressly permitted by Section 6.5.
SECTION 6.12 Restrictive Agreements. The Borrower will not, and
will not permit any Wholly Owned Subsidiary Guarantor to, directly or
indirectly, enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon (a) the
ability of the Borrower or any Subsidiary to create, incur or permit to
exist any Lien upon any of its property, (b) the ability of any Subsidiary
to pay dividends or other distributions with respect to any shares of its
capital stock or to make or repay loans or advances to the Borrower or any
other Subsidiary or to Guarantee Indebtedness of the Borrower or any other
Subsidiary or (c) the ability of any Subsidiary to transfer any of its
assets to the Borrower or any other Subsidiary; provided that (i) the
foregoing shall not apply to restrictions and conditions imposed by law or
by any Loan Document or Subordinated Debt Document, (ii) the foregoing
shall not apply to restrictions and conditions existing on the date hereof
identified on Schedule 6.12 (but shall apply to any amendment or
modification expanding the scope of, any such restriction or condition),
(iii) the foregoing shall not apply to customary restrictions and
conditions contained in agreements relating to the sale of a Subsidiary
pending such sale, provided such restrictions and conditions apply only to
the Subsidiary that is to be sold and such sale is permitted hereunder,
(iv) clause (a) above shall not apply to restrictions or conditions imposed
by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness and (v) clause (a) above shall not apply
to customary provisions in leases and other contracts restricting the
assignment thereof.
SECTION 6.13 Amendment of Material Documents, etc. The Borrower
will not, and will not permit any Subsidiary to, (a) amend, modify,
supplement or waive in any material respect any of its rights under any
Subordinated Debt Document, the MTN Indenture or the Acquisition Documents
or (b) designate any Indebtedness (other than obligations of the Loan
Parties pursuant to the Loan Documents) as "Designated Senior Indebtedness"
(or any comparable concept) for the purposes of the Subordinated Debt
Documents.
ARTICLE VII
Events of Default
-----------------
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan or
any reimbursement obligation in respect of any LC Disbursement when
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest (or premium, if
any) on any Loan or any fee or any other amount (other than an amount
referred to in paragraph (a) of this Article) payable under this
Agreement or any other Loan Document, when and as the same shall
become due and payable, and such failure shall continue unremedied for
a period of five days;
(c) any representation or warranty made or deemed made by or on
behalf of the Borrower or any Subsidiary in or in connection with any
Loan Document or any amendment or modification thereof or waiver
thereunder, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with any Loan
Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been incorrect when made or deemed
made;
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.2, 5.4 (with respect to
the existence of the Borrower) or 5.10 or in Article VI;
(e) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than
those specified in paragraph (a), (b) or (d) of this Article), and
such failure shall continue unremedied for a period of 30 days after
notice thereof to the Borrower from the Administrative Agent or the
Required Lenders;
(f) the Borrower or any Subsidiary shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect
of any Material Indebtedness, when and as the same shall become due
and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with the giving of notice, if required) the holder
or holders of any Material Indebtedness or any trustee or agent on its
or their behalf to cause any Material Indebtedness to become due, or
to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity (including, in any event, an
"Event of Default" under and as defined in the Subordinated Debt
Documents);
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower or any
Subsidiary or its debts, or of a substantial part of its assets, under
any Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for the Borrower or any Subsidiary or for a substantial part
of its assets, and, in any such case, such proceeding or petition
shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;
(i) the Borrower or any Subsidiary shall (i) voluntarily commence
any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter
in effect, (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or petition described in
paragraph (h) of this Article, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary or
for a substantial part of its assets, (iv) file an answer admitting
the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors
or (vi) take any action for the purpose of effecting any of the
foregoing;
(j) the Borrower or any Subsidiary shall become unable, admit in
writing its inability or fail generally to pay its debts as they
become due;
(k) one or more judgments for the payment of money in an
aggregate amount in excess of $35,000,000 shall be rendered against
the Borrower, any Subsidiary or any combination thereof and the same
shall remain undischarged for a period of 30 consecutive days during
which execution shall not be effectively stayed, or any action shall
be legally taken by a judgment creditor to attach or levy upon any
assets of the Borrower or any Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to have a Material
Adverse Effect;
(m) the guarantee contained in Section 2 of either Collateral
Agreement shall cease, for any reason, to be in full force and effect
or any Loan Party or any Affiliate of any Loan Party shall so assert;
(n) any Lien purported to be created under any Security Document
shall cease to be, or shall be asserted by any Loan Party or any
Affiliate of any Loan Party not to be, a valid and perfected Lien on
any Collateral (other than immaterial Collateral), with the priority
required by the applicable Security Document;
(o) the Subordinated Debt or any Guarantees thereof shall cease,
for any reason, to be validly subordinated to the Obligations or the
obligations of the Subsidiary Guarantors under the Collateral
Agreements, as the case may be, as provided in the Subordinated Debt
Documents, or any Loan Party, any Affiliate of any Loan Party, the
trustee in respect of the Subordinated Debt or the holders of at least
25% in aggregate principal amount of the Subordinated Debt shall so
assert; or
(p) a Change of Control shall occur;
then, and in every such event (other than an event with respect to the
Borrower described in paragraph (h) or (i) of this Article), and at any
time thereafter during the continuance of such event, the Administrative
Agent may, and at the request of the Required Lenders shall, by notice to
the Borrower, take either or both of the following actions, at the same or
different times: (i) terminate the Commitments, and thereupon the
Commitments shall terminate immediately, and (ii) declare the Loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared
to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest (and
premium, if any) thereon and all fees and other obligations of the Borrower
accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; and in case of any event with respect to the
Borrower described in paragraph (h) or (i) of this Article, the Commitments
shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon (and premium, if any)
and all fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the
Borrower.
ARTICLE VIII
The Administrative Agent
------------------------
Each of the Lenders hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent
to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms of the Loan Documents,
together with such actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent,
and such bank and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of business with the Borrower or any
Subsidiary or other Affiliate thereof as if it were not the Administrative
Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting
the generality of the foregoing, (a) the Administrative Agent shall not be
subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative Agent shall
not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated by the Loan Documents that the Administrative Agent is
required to exercise in writing by the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.2), and (c) except as expressly set
forth in the Loan Documents, the Administrative Agent shall not have any
duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Borrower or any of its Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent or
any of its Affiliates in any capacity. The Administrative Agent shall not
be liable for any action taken or not taken by it with the consent or at
the request of the Required Lenders (or such other number or percentage of
the Lenders as shall be necessary under the circumstances as provided in
Section 9.2) or in the absence of its own gross negligence or willful
misconduct. The Administrative Agent shall not be deemed not to have
knowledge of any Default unless and until written notice thereof is given
to the Administrative Agent by the Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered thereunder or in connection
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan Document,
(iv) the validity, enforceability, effectiveness or genuineness of any Loan
Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any
Loan Document, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing
believed by it to be genuine and to have been signed or sent by the proper
Person. The Administrative Agent also may rely upon any statement made to
it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon. The
Administrative Agent may consult with legal counsel (who may be counsel for
the Borrower), independent accountants and other experts selected by it,
and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any
such sub-agent may perform any and all its duties and exercise its rights
and powers through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent
and to the Related Parties of each Administrative Agent and any such
sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well
as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor to the
Administrative Agent as provided in this paragraph, the Administrative
Agent may resign at any time by notifying the Lenders and the Borrower.
Upon any such resignation, the Required Lenders shall have the right, in
consultation with the Borrower, to appoint a successor. If no successor
shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, then the retiring Administrative
Agent may, on behalf of the Lenders, appoint a successor Administrative
Agent which shall be a bank with an office in New York, New York, or an
Affiliate of any such bank. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed
to and become vested with all the rights, powers, privileges and duties of
the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrower to a successor Administrative Agent shall be the
same as those payable to its predecessor unless otherwise agreed between
the Borrower and such successor. After the Administrative Agent's
resignation hereunder, the provisions of this Article and Section 9.3 shall
continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any
actions taken or omitted to be taken by any of them while it was acting as
Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent, any other Lender or any of their
respective affiliates and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon the Administrative Agent, any other Lender or any
of their respective affiliates and based on such documents and information
as it shall from time to time deem appropriate, continue to make its own
decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document or related agreement or any document
furnished hereunder or thereunder.
The Documentation Agent shall not have any duties or
responsibilities hereunder in its capacity as such.
ARTICLE IX
Miscellaneous
-------------
SECTION 9.1 Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices
and other communications provided for herein shall be in writing and shall
be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at 700 Terrace Point Drive,
Muskegon, Michigan 49443, Attention of Treasurer and Chief Financial
Officer (Telecopy No. 616-724-5720);
(b) if to the Administrative Agent, to The Chase Manhattan Bank,
Loan and Agency Services Group, One Chase Manhattan Plaza, 8th Floor,
New York, New York 10081, Attention of Janet Belden (Telecopy No.
212-552-5658), with a copy to The Chase Manhattan Bank, 270 Park
Avenue, New York, New York 10017, Attention of Julie Long (Telecopy
No. 212-972-9854); and
(c) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on
the date of receipt.
SECTION 9.2 Waivers; Amendments. (a) No failure or delay by the
Administrative Agent or any Lender in exercising any right or power
hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a
right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the
Administrative Agent and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in
any event be effective unless the same shall be permitted by paragraph (b)
of this Section, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. Without limiting
the generality of the foregoing, the making of a Loan or issuance of a
Letter of Credit shall not be construed as a waiver of any Default or Event
of Default, regardless of whether the Administrative Agent or any Lender
may have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in
the case of this Agreement, pursuant to an agreement or agreements in
writing entered into by the Borrower and the Required Lenders or, in the
case of any other Loan Document, pursuant to an agreement or agreements in
writing entered into by the Administrative Agent and the Loan Party or Loan
Parties that are parties thereto, in each case with the consent of the
Required Lenders; provided that no such agreement shall (i) increase the
Commitment of any Lender without the written consent of such Lender, (ii)
reduce the principal amount of any Loan or LC Disbursement, or reduce the
rate of interest thereon, or reduce any premium or fees payable hereunder,
without the written consent of each Lender directly affected thereby, (iii)
postpone the scheduled date of payment of the principal amount of any Loan
or LC Disbursement, or any interest (or premium, if any) thereon, or any
fees payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Commitment,
without the written consent of each Lender directly affected thereby, (iv)
require any Lender to make Loans having an Interest Period of one year or
longer, without the written consent of such Lender, (v) reduce the amount
of Net Proceeds or Excess Cash Flow required to be applied to prepay Loans
under this Agreement, without the written consent of the Majority Facility
Lenders under each Facility, (vi) change any of the provisions of this
Section or the definition of "Required Lenders" or any other provision of
any Loan Document specifying the number or percentage of Lenders (or
Lenders of any Class) required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder,
without the written consent of each Lender (or each Lender of such Class,
as the case may be), (vii) release all or substantially all of the
Subsidiary Guarantors from their Guarantees under the Guarantee and
Collateral Agreement (except as expressly provided in the Loan Documents),
without the written consent of each Lender, or (viii) release all or
substantially all of the Collateral from the Liens of the Security
Documents (except as expressly provided in the Loan Documents), without the
written consent of each Lender.
SECTION 9.3 Expenses; Indemnity; Damage Waiver. (a) The Borrower
shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees,
charges and disbursements of counsel for the Administrative Agent, in
connection with the syndication of the credit facilities provided for
herein, the preparation and administration of the Loan Documents or any
amendments, modifications or waivers of the provisions thereof (whether or
not the transactions contemplated hereby or thereby shall be consummated),
including the reasonable fees and disbursements of counsel to the
Administrative Agent, with statements with respect to the foregoing to be
submitted to the Borrower prior to the Effective Date (in the case of
amounts to be paid on the Effective Date) and from time to time thereafter
on a quarterly basis or such other periodic basis as the Administrative
Agent shall deem appropriate, (ii) all reasonable out-of-pocket expenses
incurred by the Issuing Lender in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment
thereunder and (iii) all out-of-pocket expenses incurred by the
Administrative Agent or any Lender, including the fees, charges and
disbursements of any counsel for the Administrative Agent or any Lender, in
connection with the enforcement or protection of its rights in connection
with the Loan Documents, including its rights under this Section, or in
connection with the Loans made or Letters of Credit issued hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of
Credit.
(b) The Borrower shall indemnify the Administrative Agent and
each Lender, and each Related Party of any of the foregoing Persons (each
such Person being called an "Indemnitee") against, and hold each Indemnitee
harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result
of (i) the execution, delivery, enforcement, performance and administration
of any Loan Document or any other agreement or instrument contemplated
hereby, the performance by the parties to the Loan Documents of their
respective obligations thereunder or the consummation of the Transactions
or any other transactions contemplated hereby, (ii) any Loan or Letter of
Credit or the use of the proceeds therefrom (including any refusal by the
Issuing Lender to honor a demand for payment under a Letter of Credit if
the documents presented in connection with such demand do not strictly
comply with the terms of such Letter of Credit), (iii) any actual or
alleged presence or release of Hazardous Materials on or from any property
currently or formerly owned or operated by the Borrower or any of its
Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct
of such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent, the Issuing Lender
or the Swingline Lender under paragraph (a) or (b) of this Section, each
Lender severally agrees to pay to the Administrative Agent, the Issuing
Lender or the Swingline Lender, as the case may be, such Lender's pro rata
share (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against
the Administrative Agent, the Issuing Lender or the Swingline Lender in its
capacity as such. For purposes hereof, a Lender's "pro rata share" shall be
determined based upon its share of the sum of the total Revolving
Exposures, outstanding Term Loans and unused Commitments at the time;
provided that in the case of amounts owing to the Issuing Lender or the
Swingline Lender, in each case in its capacity as such, a Lender's "pro
rata" share shall be determined based solely upon its share of the sum of
Revolving Exposures and unused Commitments at the time.
(d) To the extent permitted by applicable law, the Borrower shall
not assert, and hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Transactions, any Loan or Letter of
Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable not later
than 15 days after written demand therefor. Statements payable by the
Borrower pursuant to this Section shall be sent to Attention of Treasurer
and Chief Financial Officer (Telephone No. 616-724-5000) (Telecopy No.
616-724-5720), at the address of the Borrower set forth in Section 9.1, or
to such other Person or address as may be hereafter designated by the
Borrower in a written notice to the Administrative Agent.
SECTION 9.4 Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except
that the Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and
any attempted assignment or transfer by the Borrower without such consent
shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to
the extent expressly contemplated hereby, the Related Parties of each of
the Administrative Agent and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all
or a portion of its Commitment and the Loans at the time owing to it);
provided that (i) except in the case of an assignment to a Lender or an
Affiliate of a Lender, each of the Borrower and the Administrative Agent
must give their prior written consent to such assignment (which consent
shall not be unreasonably withheld), (ii) except in the case of an
assignment to a Lender or an Affiliate of a Lender or an assignment of the
entire remaining amount of the assigning Lender's Commitment or Loans, the
amount of the Commitment or Loans of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative Agent)
shall not be less than $2,000,000 unless the Borrower and the
Administrative Agent otherwise consent, (iii) the parties to each
assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with a processing and recordation fee
of $3,500 (which fee need not be paid in the case of any assignment by a
Lender to an Affiliate of such Lender), and (iv) the assignee, if not
already a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire; and provided further that any consent of the
Borrower otherwise required under this paragraph shall not be required if
an Event of Default under paragraph (h) or (i) of Article VII has occurred
and is continuing. Any such assignment need not be ratable as among the
Facilities. Subject to acceptance and recording thereof pursuant to
paragraph (d) of this Section, from and after the effective date specified
in each Assignment and Acceptance the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto but
shall continue to be entitled to the benefits of Sections 2.16, 2.17, 2.18
and 9.3). Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this paragraph shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph
(e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent
of the Borrower, shall maintain at one of its offices in The City of New
York a copy of each Assignment and Acceptance delivered to it and a
register for the recordation of the names and addresses of the Lenders, and
the Commitment of, and principal amount of the Loans (whether or not
evidenced by a promissory note) and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder
for all purposes of this Agreement, notwithstanding notice to the contrary.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee is already a
Lender hereunder), the processing and recordation fee referred to in
paragraph (b) of this Section and any written consent to such assignment
required by paragraph (b) of this Section, the Administrative Agent shall
accept such Assignment and Acceptance and record the information contained
therein in the Register. No assignment shall be effective for purposes of
this Agreement unless it has been recorded in the Register as provided in
this paragraph. Any assignment or transfer of all or part of a Loan
evidenced by a promissory note shall be registered as to both principal and
interest on the Register only upon surrender for registration of assignment
or transfer of the promissory note evidencing such loan, accompanied by a
duly executed Assignment and Acceptance, and thereupon one or more new
promissory notes in the same aggregate principal amount shall be issued to
the designated Assignee and the old promissory notes shall be returned by
the Administrative Agent to the Borrower marked "cancelled".
(e) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other
entities (a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative
Agent and the Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. In no event shall any Participant under any such participation
have any right to approve any amendment or waiver of any provision of any
Loan Document, or any consent to any departure by any Loan Party therefrom,
except to the extent that such amendment, waiver or consent would reduce
the principal of, or interest (or premium, if any) on, the Loans or any
fees payable hereunder, or postpone the date of the final maturity of the
Loans, in each case to the extent subject to such participation. Subject to
paragraph (f) of this Section, the Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.16, 2.17 and 2.18 to the
same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section provided that, in the
case of Section 2.18, such Participant shall have complied with the
requirements of said section. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 9.8 as though
it were a Lender, provided such Participant agrees to be subject to Section
2.19(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.16 or 2.18 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is
made with the Borrower's prior written consent.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to
any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any
of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.
SECTION 9.5 Survival. All covenants, agreements, representations
and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant
to this Agreement or any other Loan Document shall be considered to have
been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made
by any such other party or on its behalf and notwithstanding that the
Administrative Agent or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as
the principal of or any accrued interest (or premium, if any) on any Loan
or any fee or any other amount payable under this Agreement is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the
Commitments have not expired or terminated. The provisions of Sections
2.16, 2.17, 2.18 and 9.3 and Article VIII shall survive and remain in full
force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Commitments or the termination
of this Agreement or any provision hereof.
SECTION 9.6 Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto
on different counterparts), each of which shall constitute an original, but
all of which when taken together shall constitute a single contract. This
Agreement, the other Loan Document and any separate letter agreements with
respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in
Section 4.1, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear
the signatures of each of the other parties hereto, and thereafter shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 9.7 Severability. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.
SECTION 9.8 Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates 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
obligations at any time owing by such Lender or Affiliate to or for the
credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement
held by such Lender, irrespective of whether or not such Lender shall have
made any demand under this Agreement and although such obligations may be
unmatured. The rights of each Lender under this Section are in addition to
other rights and remedies (including other rights of setoff) which such
Lender may have.
SECTION 9.9 Governing Law; Jurisdiction; Consent to Service of
Process. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of
the United States District Court of the Southern District of New York, and
any appellate court from any thereof, in any action or proceeding arising
out of or relating to any Loan Document, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the
extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement
or any other Loan Document shall affect any right that the Administrative
Agent or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or any other Loan Document against the Borrower
or its properties 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, (i) 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 or
any other Loan Document in any court referred to in paragraph (b) of this
Section, (ii) the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court and (iii) any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.
(d) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 9.1. Nothing in
this Agreement or any other Loan Document will affect the right of any
party to this Agreement to serve process in any other manner permitted by
law.
SECTION 9.10 Acknowledgements. The Borrower hereby acknowledges
that:
(a) it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and
the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between Administrative Agent and Lenders, on one
hand, and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.
SECTION 9.11 Headings. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part
of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 9.12 Confidentiality. Each of the Administrative Agent
and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and
its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any Governmental
Authority or rating agency, (c) to the extent required by applicable laws
or regulations or by any subpoena or similar legal process, (d) to any
other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this
Agreement or any other Loan Document or the enforcement of rights hereunder
or thereunder, (f) to any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement, (g) with the consent of the Borrower or (h) to the extent such
Information (i) becomes publicly available other than as a result of a
breach of this Section or (ii) becomes available to the Administrative
Agent or any Lender on a nonconfidential basis from a source other than the
Borrower. For the purposes of this Section, "Information" means all
information received from the Borrower relating to the Borrower or its
business, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Borrower; provided that such information is clearly
identified at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section
shall be considered to have complied with its obligation to do so if such
Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
SECTION 9.13 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR
ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE
OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.14 Release of Collateral. On the first date (the
"Release Date") on which the outstanding Indebtedness under this Agreement
is rated "Baa3" or better by Moody's and "BBB-" or better by S&P, so long
as no Event of Default exists on such date, all Collateral (other than
Pledged Stock (as defined in each of the Collateral Agreements)) shall be
released from the Liens created by the Collateral Agreements (all such
released Collateral being the "Released Collateral"), all without delivery
of any instrument or performance of any act by any party, and all rights to
the Released Collateral shall revert to the Loan Parties. At the request
and sole expense of any Loan Party following any such release, the
Collateral Agent shall deliver to such Loan Party any Released Collateral
held by the Collateral Agent under the Collateral Agreements, and execute
and deliver to such Loan Party such documents as such Loan Party shall
reasonably request to evidence such release.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day
and year first above written.
SPX CORPORATION
By /s/ Patrick J. O'Leary
------------------------------------------
Name: Patrick J. O'Leary
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO, as
Documentation Agent
By /s/ Jason McIntyre
------------------------------------------
Name: Jason McIntyre
Title: Vice President
THE CHASE MANHATTAN BANK, as Administrative
Agent
By /s/ Marian N. Schulman
------------------------------------------
Name: Marian N. Schulman
Title: Vice President
<PAGE>
<TABLE>
<CAPTION>
Schedule 1.1A
-------------
COMMITMENTS
-----------
Tranche A Tranche B
Lender Commitment Commitment Interim Commitment Revolving Commitment
- ------ ---------- --------------- ----------------- --------------------
<S> <C> <C> <C> <C>
The Chase Manhattan Bank $91,428,571.41 $280,000,000.00 $30,476,190.47 $38,095,238.12
270 Park Avenue
New York, NY 10017
Attention: Julie Long
Telecopy No. 212-972-9854
Telephone No. 212-270-1053
The First National Bank of $82,857,142.85 $0 $27,619,047.62 $34,523,809.53
Chicago
One First National Plaza
Chicago, IL 60670
Attention: Suzanne Ergastolo
Telecopy No. 312-732-1117
Telephone No. 312-732-7349
BankBoston, N.A. $37,142,857.14 $15,000,000.00 $12,380,952.38 $15,476,190.48
100 Federal St.
Boston, MA 02110
Attention: Richard Briggs
Telecopy No. 617-434-0816
Telephone No. 617-434-5300
The Bank of Nova Scotia $37,142,857.14 $10,000,000.00 $12,380,952.38 $15,476,190.48
600 Peachtree St. NE, Suite
2700
Atlanta, GA 30308
Attention: David Brooks
Telecopy No. 312-201-4108
Telephone No. 312-201-4182
CIBC Inc. $37,142,857.14 $5,000,000.00 $12,380,952.38 $15,476,190.48
425 Lexington Avenue
New York, NY 10017
Attention: Stephanie Devane
Telecopy No. 212-856-3991
Telephone No. 212-856-3727
Comerica Bank $37,142,857.14 $0 $12,380,952.38 $15,476,190.48
500 Woodward Avenue MC 3200
Detroit, MI 48226
Attention: Lana Anderson
Telecopy No. 313-222-2776
Telephone No. 313-222-9129
Bank of America National $28,571,428.57 $0 $9,523,809.53 $11,904,761.90
Trust and Savings
Association
231 S. LaSalle
Chicago, IL 60697
Attention: Raju Patel
Telecopy No. 312-987-0303
Telephone No. 312-828-7225
The Sumitomo Bank, Limited $28,571,428.57 $0 $9,523,809.53 $11,904,761.90
233 South Wacker Drive
Suite 4800
Chicago, IL 60606
Attention: Dan Casey
Telecopy No. 312-876-6436
Telephone No. 312-879-7672
The Bank of New York $20,000,000.00 $0 $6,666,666.67 $8,333,333.33
One Wall Street
New York, NY 10286
Attention: John Lokay
Telecopy No. 212-635-7659
Telephone No. 212-635-1208
Societe Generale $20,000,000.00 $0 $6,666,666.67 $8,333,333.33
181 West Madison St., Suite
3400
Chicago, IL 60602
Attention: Pradeep Bhatia
Telecopy No. 312-578-5099
Telephone No. 312-578-5008
Dresdner Bank AG $14,285,714.29 $15,000,000.00 $4,761,904.76 $5,952,380.95
190 South LaSalle Street
Suite 2700
Chicago, IL 60603
Attention: Fikret Durmus
Telecopy No. 312-444-1192
Telephone No. 312-444-1825
Bank of Montreal $14,285,714.29 $5,000,000.00 $4,761,904.76 $5,952,380.95
115 South LaSalle Street
Chicago, IL 60603
Attention: Sheila Weimer
Telecopy No. 312-750-3702
Telephone No. 312-750-6044
Bank of Tokyo-Mitsubishi $14,285,714.29 $0 $4,761,904.76 $5,952,380.95
Trust Company
1251 Avenue of the Americas
New York, NY 10020
Attention: Friedrich Wilms
Telecopy No. 212-782-6445
Telephone No. 212-782-4341
The Fuji Bank Ltd. $14,285,714.29 $5,000,000.00 $4,761,904.76 $5,952,380.95
Suite 2000, 225 West Wacker
Drive
Chicago, IL 60606
Attention: Jim Fayen
Telecopy No. 312-621-0305
Telephone No. 312-621-0397
Marine Midland Bank $14,285,714.29 $0 $4,761,904.76 $5,952,380.95
c/o HSBC Securities Inc.
140 Broadway, Fifth Floor
New York, NY 10005
Attention: Christopher
French
Telecopy No. 212-658-2586
Telephone No. 212-658-2742
Lloyds Bank Plc $14,285,714.29 $0 $4,761,904.76 $5,952,380.95
575 Fifth Avenue
New York, NY 10017
Attention: Paul Briamonte
Telecopy No. 212-930-5098
Telephone No. 212-930-8904
Michigan National Bank $14,285,714.29 $0 $4,761,904.76 $5,952,380.95
27777 Inkster Road 10-36
Farmington Hills, MI 48334
Attention: Joseph M.
Redoutey
Telecopy No. 248-473-4345
Telephone No. 248-473-4334
National City Bank $14,285,714.29 $0 $4,761,904.76 $5,952,380.95
1001 South Worth
Birmingham, MI 48009
Attention: Kenneth Ehrhardt
Telecopy No. 248-901-2034
Telephone No. 248-901-1402
Toronto Dominion (Texas) $14,285,714.29 $0 $4,761,904.76 $5,952,380.95
Inc.
31 West 52nd Street
New York, NY 10017
Attention: Bill Evenson
Telecopy No. 212-262-1926
Telephone No. 212-827-7593
BHF-Bank Aktiengesellschaft $8,571,428.57 $0 $2,857,142.86 $3,571,428.57
590 Madison Avenue
New York, NY 10022
Attention: Linda Pace
Telecopy No. 212-756-5536
Telephone No. 212-756-5915
Credit Agricole Indosuez $8,571,428.57 $0 $2,857,142.86 $3,571,428.57
55 E. Monroe St.
Suite 4700
Chicago, IL 60603
Attention: Jerome Leblond
Telecopy No. 312-372-3724
Telephone No. 312-917-7589
Erste Bank $8,571,428.57 $0 $2,857,142.86 $3,571,428.57
280 Park Avenue, West
Building
New York, NY 10017
Attention: Rima Terradista
Telecopy No. 212-984-5627
Telephone No. 212-984-5638
National Westminster Bank $8,571,428.57 $0 $2,857,142.86 $3,571,428.57
PLC
25 Old Broad Street
London, UK EC2
Attention: Simon White
Telecopy No.
011-41-161-228-0108
Telephone No.
011-41-161-228-0105
Compagnie Financiere de CIC $8,571,428.57 $10,000,000.00 $2,857,142.86 $3,571,428.57
et de l'Union Europeenne
520 Madison Avenue
New York, NY 10022
Attention: Brian O'Leary
Telecopy No. 212-715-4477
Telephone No. 212-715-4422
Star Bank, N.A. $5,714,285.72 $5,000,000.00 $1,904,761.90 $2,380,952.38
425 Walnut Street
Cincinnati, OH 45201
Attention: Mark Whitson
Telecopy No. 513-632-2068
Telephone No. 513-632-2013
Natexis Banque BFCE $2,857,142.86 $5,000,000.00 $952,380.95 $1,190,476.19
645 Fifth Avenue
New York, NY 10022
Attention: Frank Madden, Jr.
Telecopy No. 212-872-5045
Telephone No. 212-872-5180
Merrill Lynch Senior $0 $18,000,000.00 $0 $0
Floating Rate Fund, Inc.
c/o Merrill Lynch Asset
Management
800 Scudders Mill Road -
Area 1B
Plainsboro, NJ 08536
Attention: Colleen Wade
Telecopy No. 609-282-3542
Telephone No. 609-282-4165
Debt Strategies Fund II, $0 $5,000,000.00 $0 $0
Inc.
c/o Merrill Lynch Asset
Management
800 Scudders Mill Road -
Area 1B
Plainsboro, NJ 08536
Attention: Colleen Wade
Telecopy No. 609-282-3542
Telephone No. 609-282-4165
Debt Strategies Fund III $0 $2,000,000.00 $0 $0
c/o Merrill Lynch Asset
Management
800 Scudders Mill Road -
Area 1B
Plainsboro, NJ 08536
Attention: Colleen Wade
Telecopy No. 609-282-3542
Telephone No. 609-282-4165
KZH ING-2, LLC $0 $12,500,000.00 $0 $0
c/o ING Capital Advisors
233 South Wacker Drive
Chicago, IL 60606
Attention: Jane Nelson
Telecopy No. 312-496-7610
Telephone No. 312-496-7606
KZH ING-3, LLC $0 $5,000,000.00 $0 $0
c/o ING Capital Advisors
233 South Wacker Drive
Chicago, IL 60606
Attention: Jane Nelson
Telecopy No. 312-496-7610
Telephone No. 312-496-7606
The Travelers Insurance $0 $20,000,000.00 $0 $0
Company
1 Tower Square
Securities Department, 10-PB
Hartford, CT 06183
Attention: John Console
Telecopy No. 860-277-2299
Telephone No. 860-277-0940
Boeing Capital Corporation $0 $20,000,000.00 $0 $0
4060 Lakewood Blvd., 6th
Floor
Long Beach, CA 90808
Attention: April Wakeman
Telecopy No. 562-627-3002
Telephone No. 562-627-3064
North America Senior $0 $250,000.00 $0 $0
Floating Rate Fund
125 High Street, 14th Floor
Boston, MA 02110
Attention: Tim Barns
Telecopy No. 617-946-5687
Telephone No. 617-946-0600
CypressTree Investment $0 $2,500,000.00 $0 $0
Fund, LLC
125 High Street, 14th Floor
Boston, MA 02110
Attention: Tim Barns
Telecopy No. 617-946-5687
Telephone No. 617-946-0600
First Allmerica Financial $0 $1,250,000.00 $0 $0
Life Insurance Company
125 High Street, 14th Floor
Boston, MA 02110
Attention: Tim Barns
Telecopy No. 617-946-5681
Telephone No. 617-946-0600
CypressTree Senior Floating $0 $250,000.00 $0 $0
Rate Fund
125 High Street, 14th Floor
Boston, MA 02110
Attention: Tim Barns
Telecopy No. 617-946-5681
Telephone No. 617-946-0600
KZH CypressTree -- 1 LLC $0 $13,750,000.00 $0 $0
c/o The Chase Manhattan Bank
450 West 33rd Street, 15th
Floor
New York, NY 10001
Attention: Virginia Conway
Telecopy No. 212-946-7776
Telephone No. 212-946-7575
CypressTree Institutional $0 $2,000,000.00 $0 $0
Fund, LLC Insurance Company
125 High Street, 14th Floor
Boston, MA 02110
Attention: Tim Barns
Telecopy No. 617-946-5681
Telephone No. 617-946-0600
Massachusetts Mutual Life $0 $10,500,000.00 $0 $0
Insurance Company
1295 State Street
Springfield, MA 01111
Attention: John Wheeler
Telecopy No. 413-744-6127
Telephone No. 413-744-6228
Massachusetts Mutual High $0 $7,000,000.00 $0 $0
Yield Partners II, LLC
c/o Massachusetts Mutual
Life Insurance Company
1295 State Street
Springfield, MA 01111
Attention: John Wheeler
Telecopy No. 413-744-6127
Telephone No. 413-744-6228
Morgan Stanley Dean Witter $0 $12,500,000.00 $0 $0
Prime Income Trust
c/o Morgan Stanley Dean
Witter Advisers Inc.
Two World Trade Center,
72nd Floor
New York, NY 10048
Attention: Peter Gewirtz
Telecopy No. 212-392-5345
Telephone No. 212-392-9034
Balanced High Yield Fund II $0 $10,000,000.00 $0 $0
Ltd.
590 Madison Avenue
New York, NY 10022
Attention: Linda Pace
Telecopy No. 212-756-5536
Telephone No. 212-756-5915
GCB Investment Portfolio by $0 $5,000,000.00 $0 $0
Citibank, N.A.
c/o Citibank, N.A.
599 Lexington Avenue, 26th
Floor
New York, NY 10043
Attention: Steven Kaufman
Telecopy No. 212-793-1871
Telephone No. 212-559-7086
Osprey Investments Portfolio $0 $5,000,000.00 $0 $0
c/o Citibank, N.A.
599 Lexington Avenue, 26th
Floor
New York, NY 10043
Attention: Steven Kaufman
Telecopy No. 212-793-1871
Telephone No. 212-559-7086
Heller Financial, Inc. $0 $10,000,000.00 $0 $0
500 West Monroe
Chicago, IL 60661
Attention: Linda Wolf
Telecopy No. 312-441-7357
Telephone No. 312-441-7894
Jackson National Life $0 $10,000,000.00 $0 $0
Insurance Company
c/o PPM America, Inc.
225 West Wacker Drive,
Suite 1200
Chicago, IL 60606
Attention: Michael Difts
Telecopy No. 312-634-0054
Telephone No. 312-634-2509
Integrity Life Insurance Co. $0 $5,000,000.00 $0 $0
c/o ARM Financial Group,
Inc.
515 W. Market Street
Louisville, KY 40202
Attention: Edward Zeman
Telecopy No. 502-582-7903
Telephone No. 502-582-7900
212 Certificate Company $0 $5,000,000.00 $0 $0
c/o ARM Financial Group,
Inc.
515 W. Market Street
Louisville, KY 40202
Attention: Edward Zeman
Telecopy No. 502-582-7903
Telephone No. 502-582-7900
Orix USA Corporation $0 $10,000,000.00 $0 $0
1177 Avenue of the Americas
10th Floor
New York, NY 10036
Attention: Duane Morikawa
Telecopy No. 212-739-1535
Telephone No. 212-739-1650
KZH Sterling LLC $0 $10,000,000.00 $0 $0
c/o Sterling Asset
Management
40 Fulton Street, 10th Floor
New York, NY 10038
Attention: Louis Pistecchia
Telecopy No. 212-406-3710
Telephone No. 212-406-3609
KZH Crescent-3 LLC $0 $7,500,000.00 $0 $0
c/o The Chase Manhattan Bank
450 West 33rd Street, 15th
Floor
New York, NY 10001
Attention: Virginia Conway
Telecopy No. 212-946-7776
Telephone No. 212-946-7575
Crescent/Mach I Partners, $0 $2,500,000.00 $0 $0
L.P.
TCW Asset Management Company
200 Park Avenue, Suite 2200
New York, NY 10166
Attention: Mark Gold/Justin
Driscoll
Telecopy No. 212-771-4159
Telephone No. 212-771-4000
Norse CBO, Ltd. $0 $7,500,000.00 $0 $0
c/o Peterson Capital
Advisors, LLC
600 Atlantic Avenue, Floor
16
Boston, MA 02210
Attention: Timothy Peterson
Telecopy No. 617-367-4826
Telephone No. 617-720-4850
Allstate Life Insurance $0 $7,500,000.00 $0 $0
Company
3075 Sanders Road, STE G3A
Northbrook, IL 60062
Attention: Chris Georgen
Telecopy No. 847-402-3092
Telephone No. 847-402-3095
KZH Shenkman LLC $0 $7,500,000.00 $0 $0
c/o Shenkman Capital
461 Fifth Avenue, 22nd Floor
New York, NY 10017
Attention: Mark Greendorfer
Telecopy No. 212-867-9106
Telephone No. 212-753-7200
Conseco Life Insurance $0 $5,000,000.00 $0 $0
Company
c/o Conseco Capital
Management, Inc.
11825 N. Pennsylvania St.
Carmel, IN 46032
Attention: Eric Johnson
Telecopy No. 317-817-2763
Telephone No. 317-817-6806
KZH Riverside LLC $0 $5,000,000.00 $0 $0
c/o Scudder Kemper
Investments
222 South Riverside Plaza
Chicago, IL 60606
Attention: Dale Burrow
Telecopy No. 312-537-4239
Telephone No. 312-537-4230
TOTALS $600,000,000.00 $600,000,000.00 $200,000,000.00 $250,000,000.00
</TABLE>
<PAGE>
Schedule 1.1B
-------------
MATERIAL SUBSIDIARIES
---------------------
Kodiak Partners Corp.
Kodiak Partners II Corp.
SPX Sales and Service, Inc.
A. R. Brasch Marketing Inc.
Valley Forge Manufacturing Corporation
Sun Technicom, Inc.
Toledo Trans-Kit, Inc.
SPX Risk Management Co.
General Signal Corporation (formerly SAC Corp.)
GenSig Corporation**
General Signal Power Systems, Inc.
G. S. Building Systems Corporation
Dual-Lite Manufacturing, Inc.
Aurora/Hydromatic Pumps Inc.
Fairbanks Morse Pump Corporation
General Signal Holdings Company
Inrange Technologies Corporation
Data Switch Collections, Inc.
Data Switch Intellectual Property, Inc.
Data Switch Subsidiary Stock Corporation
General Signal Technology Corporation
General Farebox Service of Atlanta, Inc.
General Signal Laboratory Equipment, Inc.
Metal Forge Company, Inc.
General Signal International Corporation
New Signal, Inc.
Leeds & Northrup Company
LDN, Ltd.*
GCA International Corporation
GSR Merger Sub, Inc.
General Signal Limited*
General Signal UK Ltd.*
SPX Netherlands, B.V.*
SPX Deutschland GmbH*
Borri Elettronica Industriale S.r.l.*
GS International (Barbados) Ltd.*
General Signal (Barbados) Ltd.*
- ---------------
[FN]
* A Foreign Subsidiary and therefore not a Loan Party.
** Being merged into General Signal Corporation within 2 days of
Acquisition.
</FN>
<PAGE>
Schedule 1.1C
-------------
MORTGAGED PROPERTIES
--------------------
Property Owner* Property Address
- --------------- ----------------
Best Power Technology, Inc. N9246 Highway 80
Necedah, WI 54646
Dezurik 250 Riverside Ave., N.
Sartell, MN 88377
Belmont Drive
McMinnville, TN 37110
GS Electrical/OZ/Gedney Main Street, RT 72
Terryville, CT 06786
GS Pump/Fairbanks 3601 Fairbanks Ave.
Kansas City, KS 66106
GS Pump/Aurora 800 Airport Rd.
North Aurora, IL 60542
GS Pump/Hydromatic 1840 Baney Rd.
Ashland, OH 44805
Lightnin 135 Mt. Read Blvd.
Rochester, NY 14611
NYAB Starbuck Ave.
Watertown, NY 13601
Revco 275 Aiken Road
Asheville, NC 28804
Edwards System Technology Main Street
Pittsfield, ME 04967
GS Networks/Tautron 101 Lyberty Way
Westford, MA 01880
Lindberg 304 Hart St.
Watertown, WI 53094
Dielectric Tower Hill Road
Raymond, ME 04171
Stock Equipment Company 16490 Chillicothe Rd.
Chagrin Falls, OH 44023
Waukesha/Hevi-Duty Hwy. 117S.
Goldsboro, NC 27530
13 Fountain Place S.
Mt. Vernon, IL 62864
Waukesha 400 South Prairie Ave.
Waukesha, WI 53106
Aftermarket Tool & 1224 Robinair Way
Equipment Division Montpelier, OH
SPX Corporation Auburn Plant
1200 Power Drive
Auburn, IN
875 Seegers Road
Des Plaines, IL 60016
Kodiak Partners II Corp. Dowagiac Plant
51241 M-51 North
Dowagiac, MI
8001 Angling Road
Kalamazoo, MI
28635 Mound Road
Warren, MI 48092
OE Tool & Equipment Divisions 655 Eisenhower
Owatonna, MN 55060
OTC Industrial SPX Corporation 2121 W. Bridge Street
Owatonna, MN 55060
- ---------------
[FN]
* Subject to confirmation upon receipt of results of title search.
</FN>
<PAGE>
<TABLE>
<CAPTION>
Schedule 2.5
------------
LETTERS OF CREDIT
-----------------
ISSUING BANK BENEFICIARY AMOUNT TYPE EXPIRATION NUMBER
------------ ----------- ------ ---- ---------- ------
<S> <C> <C> <C> <C> <C>
The First National Bank of Reliance National $ 6,277,683 Standby February 1, 1999 LOC#313879
Chicago
The First National Bank of National Union $ 525,500 Standby February 1, 1999 LOC#326187
Chicago Insurance Co.
The First National Bank of Corporate Real Estate & $ 253,995 Standby July 8, 1999 LOC#365046
Chicago Chicago Title
The First National Bank of Banco De Roma L.250,000,000 Standby September 30, LOC#313613
Chicago 1999
The First National Bank of Banco Toscana L.600,000,000 Standby September 30, LOC#313614
Chicago 1999
The First National Bank of Cassa di Risparmio di L.200,000,000 Standby September 30, LOC#366003
Chicago Pisa 1999
The First National Bank of Cassa di Risparmio de L.150,000,000 Standby September 30, LOC#366004
Chicago Prato 1999
The First National Bank of Monte del Paschi de L.300,000,000 Standby September 30, LOC#366005
Chicago Siena 1999
NBD Bank (an affiliate of Pittsburgh National $ 1,143,905 Standby November 15, 1999 LOC#3002
The First National Bank of Bank, as Trustee
Chicago)
NBD Bank (an affiliate of Pittsburgh National $ 8,546,987 Standby November 15, 1999 LOC#3003
The First National Bank of Bank, as Trustee
Chicago)
NBD Bank (an affiliate of Pittsburgh National $ 4,694,932 Standby November 15, 1999 LOC#3004
The First National Bank of Bank, as Trustee
Chicago)
NBD Bank (an affiliate of Pittsburgh National $ 1,363,425 Standby November 15, 1999 LOC#3005
The First National Bank of Bank, as Trustee
Chicago)
</TABLE>
<PAGE>
Schedule 3.4
------------
DISCLOSED MATTERS
-----------------
None
<PAGE>
Schedule 3.5
------------
REAL PROPERTY
-------------
Part I: SPX Corporation Real Property Owned or Leased (other than
that of General Signal Corporation)
Part II: General Signal Corporation Real Property Owned or Leased
<PAGE>
Part I: SPX Corporation Real Property
Owned or Leased
(Other than General Signal Corporation)
---------------------------------------
- -------------------------------------------------------------------------------
Owned/
Unit/Division Address Leased Use Code
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Corporate 700 Terrace Point Drive L Corporate
Muskegon, MI 49443-3301 Headquarters
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Corporate Terrace Plaza L Office
Muskegon, MI 49443
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Corporate Airport Hangar L Airport Hangar
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Acutex Division 2001 Peach Street O M, S, E, A
Whitehall, MI 49461
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Contech Division 205 N. Grover Street O M
Alma, MI 48801
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Contech Division 1200 Power Drive O M
Auburn, IN
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Contech Division 51241 M-51 North O M
Dowagiac, MI
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Contech Division 520 S. Byrkit O M
Mishawaka, IN
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Contech Division Pierceton, IN O M
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Contech Division 8080 Moorsbridge Rd. L S, E, A
Ste 200
Portage, MI 49024
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Filtran Division 875 Seegers Road O M, S, E, A
Des Plaines, IL 60016-0308
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Filtran Division 140 Werz Industrial Blvd. L M
Newnan, GA
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Aftermarket Tool & 300 Industrial Growth O M
Equipment Div. (ATEG) Parkway
Angola, IN 46703
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Aftermarket Tool & 351 Pokegon Trail L W
Equipment Div. (ATEG) Angola, IN
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Aftermarket Tool & 1224 Robinair Way O M, S, E, A
Equipment Div. (ATEG) Montpelier, OH
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Aftermarket Tool & 8001 Angling Road O S, E, A
Equipment Div. (ATEG) Kalamazoo, MI
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Aftermarket Tool & 800 S. Main Street O Product
Equipment Div. (ATEG) Wayland, MI refurbishment
facility
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Aftermarket Tool & 2300 Park Drive O M
Equipment Div. (ATEG) Owatonna, MN
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
OE Tool and Equipment Div. 655 Eisenhower O M, S, E, A
(OETEG) Owatonna, MN 55060
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
OE Tool and Equipment Div. Depot O Office
(OETEG) Owatonna, MN
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
OE Tool and Equipment Div. 2100 Park Drive O W
(OETEG) Owatonna, MN
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
OE Tool and Equipment Div. 28635 Mound Road O S, E, A
(OETEG) Warren, MI 48092
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Power Team 2121 W. Bridge Street O M, S, E, A
Owatonna, MN 55060
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
A. R. Brasch Wayne City 1633 Fairlane Circle L General office,
Allen Park, MI 48101 research and
development
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Valley Forge Wayne County 1525 Fairlane Circle/Ste L General office,
200 research and
Allen Park, MI 48101 development
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Valley Forge Orange 25691 Atlantic Ocean Drive L Sales, research
Suites B-5 thru B-9 and development
Lake Forest, CA 92630
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Valley Forge Chester 860 Springsdale Drive L General office,
Exton, PA 19341 warehouse
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Valley Forge Oakland 21455 Melrose Avenue L General office,
Suite B, Building 9 warehouse
Southfield, MI 48075
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Toledo Trans-Kit Lucas 1235 Expressway Drive North L General office,
Toledo, OH 43608 warehouse
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Toledo Trans-Kit Cook 1510 Midway Ct., Ste E3 L General office,
Elk Grove Village, IL 60007 warehouse
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Burroughs Property 2429 N. Burdick O Leased to
Kalamazoo, MI unaffiliated
party
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Corporate 1474 Harbour Towne Circle O Residential
Muskegon, MI Condominium
- -------------------------------------------------------------------------------
Use Codes for SPX Corporation:
M-Manufacturing
S-Sales
W-Warehouse
A-Administrative Office
E-Engineering
<PAGE>
Part II: General Signal Corporation Real Property
Owned or Leased
---------------
- -------------------------------------------------------------------------------
Owned/
Unit/Division Address Leased Use Code
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Dual-Lite Manufacturing, Inc. 120 East Glendale Ave. L
Sparks, NV
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
501 South Washington Ave. L W
Scranton, PA
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
G. S. Building Systems
Corporation 120 East Glendale Ave. L
Sparks, NV
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
501 South Washington Ave. L W
Scranton, PA
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Edwards Systems Technology 301 Oak St. L
Pittston, PA
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1021 East Glendale Ave. L
Sparks, NV
- -------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
Properties
----------
General Signal
Real Estate Listing
1/6/98
- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BUILDING
--------
AREA
----
OWNED/ (SQUARE
----- -------
UNIT COUNTRY STATE STREET CITY ZIP CODE LEASED USE CODE FEET)
- ---- ------- ----- ------ ---- -------- ------ -------- -----
BEST USA CA 1888 CENTURY PARK EAST LOS ANGELES 90067 L M 1,000
BEST USA WI 1430 SECOND STREET N. WISCONSIN RAPIDS 54494 L W 5,000
BEST USA WI N9246 HIGHWAY 80 (PO BOX 280) NECEDAH 54646 O A,D,F,M,R,T,U 377,857
BEST USA WI 1430 - 2ND STREET WISCONSIN RAPIDS L W 5,000
BEST USA TX 15770 N. DALLAS PARKWAY, DALLAS 75248 L A 11,638
11TH FLOOR
BEST UK ENGLAND WYKEHAM INDUST. EST. WINCHESTER, SO237 RX L A,M 18,000
MOORSIDE RD. HAMPSHIRE
BEST GERMANY GERMANY AM WEICHSELGARTEN 23 ERLANGEN D-91058 L A,R,M 13,057
BEST MEXICO MEXICO GOLFO DE RIGA NO. 34 MEXICO CITY FED. D.F. L AMWR 3,114
DISTRI. 11410
BEST (SEE
GSX INTERNAT.) SINGAPORE SINGAPORE 30 PRINSEP STREET SINGAPORE 718 L M -
BEST TAIWAN TAIWAN 12F, 77, KEELUNG ROAD SEC 2 TAIPEI R.O.C. O H 3,829
BLDG #1772 110
BEST TAIWAN TAIWAN 12F, 77, KEELUNG ROAD SEC 2 TAIPEI 10549 L O 50
BEST TAIWAN TAIWAN 12F, 77 KEELUNG ROAD SEC 2 TAIPEI 10549 L O 50
BEST TAIWAN TAIWAN 12F, 77, KEELUNG ROAD SEC 2 TAIPEI 10549 L O 50
BEST TAIWAN TAIWAN 12F, 77, KEELUNG ROAD SEC 2 TAIPEI 10549 L ADM 2,895
BEST TAIWAN TAIWAN 31 DING PING ROAD JUL FENG TOWN 224 O F 35,725
BEST/SOLA AUSTRALIA NEW SOUTH WALES 2A/3-9 KENNETH RD. MANLY VALE 2093 L MW 2,217
BEST/SOLA AUSTRALIA VICTORIA 13 HEALY RD. DANDENONG 3175 O ADFMPRW 53,323
BEST/SOLA AUSTRALIA QUEENSLAND 1/8 LOCKHART CTR. WOOLLOONGABBA 4102 L MW 600
BEST/SOLA AUSTRALIA WESTERN 321 GT. EASTERN HWY REDCLIFFE 6104 L MW 3,000
AUSTRALIA
BEST/SOLA ITALY N/A VIA OTTO 8 MARZO, N2 SOCI BIBBIENA STAZIONE NONE O ADFMPRUW 76,568
BEST/SOLA SWITZERLAND N/A LIMMATSTR.8 SPREITENBACH CH8957 L ADMPRW 4,013
BEST/SOLA UK ENGLAND 8-17 SERGEANTS WAY ELMS IND BEDFORD NONE L L 17,750
ESTATE
BEST/SOLA USA IL 250 W. HIGGINSROAD HOFFMAN ESTATES 60195 L M 1,338
636,092
-------
DEZURIK AUSTRALIA NEW SOUTH WALES UNIT 5, REGENTS PARK REGENTS PARK L FWA 12,767
INDUSTRIAL ESTATE
DEZURIK AUSTRALIA VICTORIA UNIT 7, WHITEHORSE RD BLACKBURN 3130 L M 2,500
DEZURIK AUSTRIA VIENNA JOHAN STEINBOCK STRASSE 10 BRUNN AM GEBIRGE A-2345 L ALMRW 11,700
DEZURIK CANADA ONTARIO 385 FRANKLIN BLVD. CAMBRIDGE O AFWL 46,600
DEZURIK UK ENGLAND NELSON WAY NORTHUMBERLAND O MAF 26,255
DEZURIK USA AL 22313 FIRST ST., NORTH ALABASTER 35007 L M 1,133
DEZURIK USA GA 600B KIRK ROAD MARIETTA 30060 L MRT 5,500
DEZURIK USA LA HWY 167 NORTH HODGE 71247 L M 1,500
DEZURIK USA MN 250 RIVERSIDE AVE. N. SARTELL 56377 O ADFMW 309,340
DEZURIK
(GLOBE) USA PA ? MONTGOMERYVILLE
DEZURIK USA TN BELMONT DRIVE MCMINNVILLE 37110 O AFW 177,515
DEZURIK USA TX 25100 PITKIN, SUITE 84B SPRING 77386 L M 750
DEZURIK USA TX 5927 SOUTH LOOR EAST HOUSTON 77033 L MR 6,300
DEZURIK USA WI 5906A HILGEMANN ST. SCHOFIELD 54476 L MR 4,000
605,860
-------
DIELECTRIC USA ME TOWER HILL RD. RAYMOND 04171 O AFW 96,800
DIELECTRIC USA NJ 1 APPOLLO DR. WHIPPANY 07981 L AF 15,000
111,800
-------
EST CANADA ALBERTA 18124-102 AVE. EDMONTON L MR 2,500
EST CANADA ALBERTA 5875 9TH ST. SE CALGARY L MR 3,142
EST CANADA BRITISH COLUMBIA 7989 ENTERPRISE ST. BURNABY L MR 2,400
EST CANADA BRITISH COLUMBIA 202-3375 WHITTIER AVENUE VICTORIA L MR 980
EST CANADA MANITOBA 1137 KEEWATIN STREET WINNIPEG L MR 2,475
EST CANADA NEW BRUNSWICK 537 MOUNTAIN RD. MONCTON L MR 3,345
EST CANADA NEWFOUNDLAND 6-8 DUFFY PLACE ST. JOHN'S L MR 1,370
EST CANADA NOVA SCOTIA 80 RADDALL AVE. SUITE 3 DARTMOUTH L MR 3,140
EST CANADA ONTARIO 250 BAYVIEW DRIVE, UNIT #8 BARRIE L MR 1,633
EST CANADA ONTARIO 320 NEPTUNE CRESCENT LONDON L M 2,500
EST CANADA ONTARIO 920 BRANT ST., UNITS 16 & 17 BURLINGTON L MR 2,464
EST CANADA ONTARIO 125 QUEEN STREET EAST SAULT STE. MARIE L MR 600
EST CANADA ONTARIO 6305 NORTHAM DRIVE MISSISSAUGA L AMR 12,565
EST CANADA ONTARIO 5454 TECUMSEH ROAD WINDSOR L MR 1,050
EST CANADA ONTARIO 500 WENTWORTH ST. EAST, UNIT OSHAWA L MR 1,500
11
EST CANADA ONTARIO 625 6TH ST. EAST OWEN SOUND O ADFMPRW 85,000
EST CANADA ONTARIO 201 CITY CENTRE DRIVE MISSISSAUGA L AM 5,997
EST CANADA ONTARIO 764 NOTRE DAME AVENUE SUDBURY L MR 2,000
EST CANADA ONTARIO 68 ROBERTSON RD., SUITE 101 NEPEAN L MR 3,198
EST CANADA QUEBEC 6850-54 JARRY STREET EAST MONTREAL L MR 6,300
EST CANADA QUEBEC 3200 RUE WATT 101A ST. FOY L MR 2,415
EST CANADA SASKATCHEWAN 1815 RAE STREET REGINA L MR 1,030
EST USA CA 5653 STONERIDGE DRIVE, SUITE PLEASANTON 94566 L MR 4,192
116
EST USA CA 6646 OWENS DR. SUITE B PLEASANTON 94588 L MR 4,311
EST USA CA 646 BREA CANYON RD. WALNUT 91789 L MR 4,704
EST USA CO 12860 W. CEDAR DR., SUITE 211 LAKEWOOD 80228 L RM 2,500
EST USA CT 23 BERKSHIRE BLVD, BLDG. 3D BETHEL 06801 L MR 5,000
EST USA CT 90 FIELDSTONE COURT CHESIRE 06032 O AD 72,160
EST USA FL 979 SHOTGUN ROAD SUNRISE 33326 L R 7,845
EST USA GA 8601 DUNWOODY PLACE ATLANTA 30350 L MR 3,904
EST USA IL 18W. 100 22ND STREET OAK BROOK TERRACE 60181 L M 2,798
EST USA MA 70 SHAWMUT ROAD CANTON 02021 L R 9,600
EST USA MD 7172 COLUMBIA GATWAY DRIVE COLUMBIA 21046 L M 5,933
EST USA ME MAIN STREET PITTSFIELD 04967 O F 132,500
EST USA ME 101 INDUSTRIAL PARK ROAD PITTSFIELD 04967 L W 100,000
EST USA MI 11920 FARMINGTON ROAD LIVONIA 48051 L RM 3,850
EST USA MO 2300 MILLPARK DR. SUITE 114 ST. LOUIS 63042 L M 2,089
EST USA NC 801 CLANTON ROAD SUITE 105 CHARLOTTE 28217 L M 2,974
EST USA NE 14224 PIERCE PLAZA OMAHA 68144 L M 580
EST USA PA 2500 BALDWICK ROAD, SUITE 280 PITTSBURGH 15205 L R 835
EST USA NJ 2428 ROUTE #38 CHERRY HILL 08002 L MR 4,050
EST USA TX 16507 HEDGECROFT SUITE 100 HOUSTON 77060 L MR 6,403
EST USA TX 1611 N. STEMMONS FRWY SUITE CARROLLTON 75006 L M 3,000
414
EST USA TX 9550 SKILLMAN SUITE 108 DALLAS 75243 L M 635
EST USA VA 4953 COX ROAD GLEN ALLEN 23060 L R 2,400
EST USA WA 331 ANDOVER PARK, EAST SUITE SEATTLE 98188 L M -
37
EST/FAST USA FL 6411 PARKLAND DR. SARASOTA 34243 L AF 77,925
607,792
-------
G S ELECTRIC USA CO THREE (3) SMALL LOTS COLORADO CITY 81019 O U -
G S ELECTRIC USA PA 1051 SHEFFLER DR. CHAMBERSBURG 17201 L AFW 80,000
G S ELECTRIC USA PA 1700 RITNER HIGHWAY CARLISLE 17013 O AFW 65,000
G S ELECTRIC USA WI 1301, 1400 & 1401 INDUSTRIAL HUDSON 54016 L AFW 87,160
RD.
232,160
-------
GFI/GENFARE USA IL 751 PRATT BLVD. ELK GROVE VILLAGE 60007 O ADF 53,000
------
GS ELECTRICAL/OZ USA CT MAIN ST., RT. 72 TERRYVILLE 06786 O L 239,290
/GEDNEY -------
GS INTERNATIONAL SINGAPORE SINGAPORE 30 PRINSEP STREET SINGAPORE 718 L M 4,586
-----
GS NETWORKS/DATA USA CA 3401 W. SUNFLOWER SUITE 150 SANTA ANA 92704 L M 1,182
SWITCH
GS NETWORKS/DATA USA CT 1 WATERVIEW DRIVE SHELTON 06484 O ADFMRW 93,300
SWITCH
GS NETWORKS/DATA USA CT 406 FARMINGTON AVE., SUITE FARMINGTON 06032 L M 125
SWITCH 1023
GS NETWORKS/DATA USA NY 90 WEST STREET, SUITE 1908 NEW YORK 10006 L M 4,298
SWITCH
GS NETWORKS/DATA USA NY 90 WEST STREET, SUITE 1915 NEW YORK 10006 L M 1,338
SWITCH
GS NETWORKS/DATA USA NJ 2424 MORRIS AVENUE NEW JERSEY 07083 L M 780
SWITCH
GS NETWORKS/DATA USA FL 2301 MAITLAND CTR. PARKWAY, MAITLAND 32751 L M 2,025
SWITCH SUITE 432
GS NETWORKS/DATA USA TX 4606 FM 1960 WEST, SUITE 417 HOUSTON 77069 L M 168
SWITCH
GS NETWORKS/DATA USA GA 3091 GOVERNORS LAKE DRIVE, NORCROSS 30071 L M 360
SWITCH SUITE 3,7,8
GS NETWORKS/DATA USA OH 1660 NORTHWEST PROF. PLAZA COLUMBUS 43220 L M 1,200
SWITCH SUITE C
GS NETWORKS/DATA USA VA 8614 WESTWOOD CENTER DRIVE, VIENNA 22182 L M 4,242
SWITCH SUITE 600
GS NETWORKS/DATA USA PA 600 NORTH BELL AVE., SUITE CARNEGIE 15106 L M 556
SWITCH 240
GS NETWORKS/DATA USA CO 1777 SOUTH HARRISON STREET, DENVER 80210 L M 1,807
SWITCH SUITE 900
GS NETWORKS/DATA ITALY N/A VIA BENEDETTO CROCE 49 ROME 00142 L M 1,300
SWITCH
GS NETWORKS/DATA UK ENGLAND 1A ROXBOROUGH WAY BERKSHIRE, SL6 3UD L M 9,350
SWITCH MAIDENHEAD
GS NETWORKS/DATA UK ENGLAND OFFICE 14 CHAPEL HOUSE CHESIRE, WA159RA L M 100
SWITCH ALTTRINCHAM
GS NETWORKS/DATA GERMANY N/A AM MOOSEFELD 26 MUNCHEN 81829 L M 10,000
SWITCH
GS NETWORKS/DATA GERMANY N/A GESCHAFSSTELLE MITTE, 60437 HOMBURGER HOHL 53 L M 1,000
SWITCH FRANKFORT
GS NETWORKS/DATA GERMANY N/A BATAVERSTR 82 NEUSS 41462 L M 1,000
SWITCH
GS NETWORKS/DATA GERMANY N/A STAMMESTR 40D HANOVER 30459 L M 1,000
SWITCH
GS NETWORKS/
TAUTRON UK ENGLAND 14 RIVERSIDE HOUSE, STE 6 WICKFORD L V 670
GS NETWORKS/
TAUTRON USA CA SUITE 209 MURPHY SQ., III W. SUNNYVALE L MRW 1,599
EVELYN
GS NETWORKS/
TAUTRON USA MA 10 LYBERTY WAY WESTFORD 01880 O ADFMR 104,000
GS NETWORKS/
TELENEX USA IL 1245 CORPORATE BLVD SUITE 202 AURORA 60504 L M 1,570
GS NETWORKS/
TELENEX USA NJ 8000 MIDLANTIC DR. MOUNT LAUREL 08054 L ADM 49,895
GS NETWORKS/
TELENEX USA NJ 13000 MIDLANTIC DRIVE MOUNT LAUREL 08054 L AMFDWRT 66,143
GS NETWORKS/
TELENEX USA CA 951 MARINERS ISLAND BLVD., SAN MATEO 94404 L M 1,682
SUITE 440
GS NETWORKS/
TELENEX USA NJ 1829 UNDERWOOD BLVD, UNIT 5 DELRAN 08075 L W 6,050
GS NETWORKS/
TELENEX USA TX 800 E. CAMPBELL RD., SUITE RICHARDSON 75081 L M 2,767
253, 203
369,507
-------
GS PUMP/AURORA USA IL 800 AIRPORT ROAD NORTH AURORA 60542 O L 253,200
GS PUMP/
FAIRBANKS USA KS 3601 FAIRBANKS AVE KANSAS CITY 66106 O L 421,930
GS PUMP/
HYDROMATIC USA OH 1840 BANEY ROAD ASHLAND 44805 O L 229,000
904,130
-------
GSX USA CT ONE HIGH RIDGE PARK STAMFORD 06094 L A 73,611
GSX USA CT ELM ST. GENERAL RE BLDG. STAMFORD 06904 L A 684
GSX USA NY HANGAR C-1, WESTCHESTER CNTY WHITE PLAINS L O 4,884
AP
GSX
(DATA CENTER) USA PA 500 DICKERSON ROAD NORTH WALES 19454 L A 30,000
109,179
-------
HYDRECO USA GA 1885 TOBACCO RD. AUGUSTA 30906 O L 73,640
KAYEX USA NY 1000 MILLSTEAD WAY ROCHESTER 14624 O ADFM 43,500
KAYEX USA OR 2865 22ND STREET, SE BLDG. A SALEM 97302 L ADH 3,120
46,620
------
L&N USA NJ BUCK & SASSAFRAS STREETS MILLVILLE 08332 O V 31,412
------
23,930
LIGHTNIN AUSTRALIA NEW SOUTH WALES 391 PARK RD. SYDNEY 2143 L AF 29,930
LIGHTNIN CANADA ONTARIO 100 MIRANDA TORONTO M9C3N2 O AFW 45,276
LIGHTNIN CHINA SHANGHAI 485 GUIPING RD, CAOHEJING SHANGHAI 200233 L AF 7,542
HI-TECH PARK
LIGHTNIN IRELAND N/A CLONSHAUGH INDUSTRIAL ESTATE DUBLIN 17 L FA 40,000
LIGHTNIN SINGAPORE N/A 19 NEYTHAL RD. SINGAPORE 6285484 L AF 45,900
LIGHTNIN UK ENGLAND LONDON RD. S. POYNTON SK121LH O ADFMRW 79,170
LIGHTNIN USA IL 1115 N. HILLTOP ITASCA 60143 L MR 10,100
LIGHTNIN USA NJ 101 EISENHOWER PKWY ROSELAND 07068 L M 3,205
LIGHTNIN USA NY 135 MT. READ BLVD ROCHESTER 14611 O ADFW 278,600
LIGHTNIN USA NY 69 CASCADE DR. ROCHESTER 14614 L W 10,000
LIGHTNIN USA TX HOWARD AVE. DEER PARK ? L ARW 10,500
LIGHTNIN USA VA RT. 1 FAIRVIEW RD. WYTHEVILLE 24382 O AFW 79,800
LIGHTNIN USA VA 500 STAFFORD-UMBERGER DR. WYTHEVILLE 24392 L W 400
634,423
-------
LINDBERG CANADA ONTARIO 7625 KIMBEL ST., UNIT 20A MISSISSAUGA L5S 1A9 L MFRW 4,000
LINDBERG USA AZ 4040 E. MCDOWELL STE 418 PHOENIX L M 1,200
LINDBERG USA IL 31 E. HIGGINS GILBERTS 60136 L DFW 24,000
LINDBERG USA IL RT. 72 GILBERTS 60136 O W 900
LINDBERG USA IL RT. 72 GILBERTS 60136 L ADFM 28,800
LINDBERG USA IL 1815 DIXIE HIGHWAY HOMEWOOD L M 1,200
LINDBERG USA WI 306 HYLAND ST. WATERTOWN 53094 L W 5,000
LINDBERG USA WI 1129 S. THIRD WATERTOWN 53094 O A 1,500
LINDBERG USA WI 1202 WAKOKA ST. WATERTOWN 53094 O FW 24,000
LINDBERG USA WI 312 HYLAND WATERTOWN 53094 L W 1,800
LINDBERG USA WI 304 HART ST. WATERTOWN 53094 O ADFMR 150,800
LINDBERG/BLUE M USA CA 333 COBALT WAY #107 SUNNYVALE 94086 L M 300
LINDBERG/BLUE M USA IL 2218 W. 138TH ST. BLUE ISLAND 60406 O L 7,000
LINDBERG/BLUE M USA MA 840 MAIN ST., SUITE 203 MILLIS 02054 L M 395
LINDBERG/BLUE M USA OH 680 NORTHLAND RD #23 CINCINNATI 45240 L M 313
LINDBERG/MPH USA MI RIVERSIDE RD. & 1ST STREET RIVERSIDE 49084 O ADFM 58,000
309,208
-------
METAL FORGE USA MI 3182-3186 MARTIN RD. WALLED LAKE 48390 L W 7,200
METAL FORGE USA NC 1600 WOODHURST LANE ALBEMARLE 28001 O FWA 149,000
METAL FORGE USA NC 1301 MABRY DRIVE ALBEMARLE 28001 L FWA 41,650
METAL FORGE USA OH 601 W. LYNN ST. STRYKER 43557 O FWA 67,000
METAL FORGE USA OH 320 S. VINE ST. DESHLER 43516 O FWA 102,000
METAL FORGE USA OH 5555 PARK CENTER CIRCLE DUBLIN 43017 L AD 25,200
METAL FORGE USA TN 901 ALFRED THUN RD. CLARKSVILLE 37043-3159 O FWA 98,000
METAL FORGE
(RYKEN) USA MI 3171 RIDGWAY COURT WALLED LAKE #3 48390 O FWA 60,000
METAL FORGE
(RYKEN) USA MI 3160 DALLAVO COURT WALLED LAKE #1 48390 O FWAD 82,000
632,050
-------
NYAB USA NY STARBUCK AVE. WATERTOWN 13601 O V 227,000
-------
REVCO USA CA 7011 HAYVENHURST ST., UNIT D VAN NUYS 91406 L MR 5,000
REVCO USA NC 181 REEMS CREEK WEAVERVILLE 28787 L W 8,000
REVCO USA NC 275 AIKEN ROAD ASHEVILLE 28804 O ADFM 279,400
REVCO USA NC 388 WEAVERVILLE HWY ASHEVILLE 28804 L W 5,000
297,400
-------
STOCK JAPAN N/A 1719-1, AZA KASASHI-MAE TSUCHIURA 300-41 L AFMV 27,100
STOCK USA MO 12015 MANCHESTER RD. ST. LOUIS 63131 L M 524
STOCK USA OH 16490 CHILLICOTHE RD. CHAGRIN FALLS 44023-4398 O FOAMV 147,000
174,624
-------
WAUKESHA USA FL 8051 NORTH TAMIAMI TRAIL STE SARASOTA 34243 L M 150
42
WAUKESHA USA OR 541 WILLAMETTE SUITE 108 EUGENE 97401 L M 180
WAUKESHA USA RI 580 THAMES STREET NEWPORT 02840 L M 150
WAUKESHA USA TX 1055 NW FREEWAY SUITE 24 HOUSTON 77092 L M 376
WAUKESHA USA WI 400 SOUTH PRAIRIE AVE WAUKESHA 53186 O F,D,R,W,U 191,400
WAUKESHA USA WI 810 PROGRESS AVE. WAUKESHA 53186 L A,W,F 31,960
WAUKESHA USA WI 1100 SOUTH PRAIRIE AVE. WAUKESHA 53186 L A,M,F 26,718
NORTH HALF
WAUKESHA USA WI 1100 SOUTH PRAIRIE AVE. WAUKESHA 53186 L A,M,F 26,719
SOUTH HALF
WAUKESHA/
HEVI-DUTY USA AL IND PK #1 DOWZER AVE. PELL CITY 35125 O FWAR 54,000
WAUKESHA/
HEVI-DUTY USA IL WOODLAND DRIVE - TRACT 1 MT. VERNON 62864 O U -
WAUKESHA/
HEVI-DUTY USA IL WOODLAND DRIVE - TRACT 5 MT. VERNON 62864 O U -
WAUKESHA/
HEVI-DUTY USA IL 13 FOUNTAIN PLACE S. MT. VERNON 62864 O AFRW 141,000
WAUKESHA/
HEVI-DUTY USA IL 1ST & CASTLETON MT. VERNON 62864 O U -
WAUKESHA/
HEVI-DUTY USA IL FOUNTAIN PL., LOT #1 MT. VERNON 62864 O U -
WAUKESHA/
HEVI-DUTY USA IL ROUTE 37 (HOUSE) - LOT C MT. VERNON 62864 O V 1,200
WAUKESHA/
HEVI-DUTY USA IL FOUNTAIN PL., LOT #6 MT. VERNON 62864 O U -
WAUKESHA/
HEVI-DUTY USA IL 510 1ST ST. MT. VERNON 62864 O V 6,600
WAUKESHA/
HEVI-DUTY USA IL FOUNTAIN PL., LOT #3B MT. VERNON 62864 O U -
WAUKESHA/
HEVI-DUTY USA IL CASTLETON AVE. MT. VERNON 62864 O U -
WAUKESHA/
HEVI-DUTY USA IL ROUTE 37, LOT A MT. VERNON 62864 O U -
WAUKESHA/
HEVI-DUTY USA IL FOUNTAIN PL., LOT #12 MT. VERNON 62864 O U -
WAUKESHA/
HEVI-DUTY USA IL FOUNTAIN PL., LOT #9 MT. VERNON 62864 O U -
WAUKESHA/
HEVI-DUTY USA NC HYWY 117 S. GOLDSBORO 27530 O AMF 199,700
WAUKESHA/
HEVI-DUTY USA NY 215 S. MAIN ST. CORTLAND 13045 O FWAR 70,500
WAUKESHA/
HEVI-DUTY USA NY 312 TITUSVILLE ROAD POUGHKEEPSIE 12603 L M 200
WAUKESHA/
HEVI-DUTY USA PA ROUTE 1 BOX 1659 BERWICK 18603 L WAR 35,000
785,853
-------
<CAPTION>
<S> <C>
LAND
----
AREA
----
UNIT (ACRES)
- ---- ------
BEST N/A
BEST N/A
BEST 66.75
BEST N/A
BEST N/A
BEST N/A
BEST N/A
BEST N/A
BEST (SEE
GSX INTERNAT.) N/A
BEST 0.00765
BEST N/A
BEST N/A
BEST N/A
BEST N/A
BEST 0.765
BEST/SOLA N/A
BEST/SOLA 4
BEST/SOLA N/A
BEST/SOLA N/A
BEST/SOLA 4.8
BEST/SOLA N/A
BEST/SOLA N/A
BEST/SOLA N/A
DEZURIK N/A
DEZURIK N/A
DEZURIK N/A
DEZURIK 3.60
DEZURIK 5.50
DEZURIK N/A
DEZURIK N/A
DEZURIK N/A
DEZURIK 29.90
DEZURIK
(GLOBE)
DEZURIK 16.85
DEZURIK N/A
DEZURIK N/A
DEZURIK N/A
DIELECTRIC 75.00
DIELECTRIC N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST 6.00
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST 9.09
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST 7.00
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST N/A
EST/FAST N/A
G S ELECTRIC 1.00
G S ELECTRIC N/A
G S ELECTRIC 46.31
G S ELECTRIC N/A
GFI/GENFARE 3.50
GS ELECTRICAL/OZ 19.40
/GEDNEY
GS INTERNATIONAL N/A
GS NETWORKS/DATA N/A
SWITCH
GS NETWORKS/DATA 14.88
SWITCH
GS NETWORKS/DATA N/A
SWITCH
GS NETWORKS/DATA N/A
SWITCH
GS NETWORKS/DATA N/A
SWITCH
GS NETWORKS/DATA N/A
SWITCH
GS NETWORKS/DATA N/A
SWITCH
GS NETWORKS/DATA N/A
SWITCH
GS NETWORKS/DATA N/A
SWITCH
GS NETWORKS/DATA N/A
SWITCH
GS NETWORKS/DATA N/A
SWITCH
GS NETWORKS/DATA N/A
SWITCH
GS NETWORKS/DATA N/A
SWITCH
GS NETWORKS/DATA N/A
SWITCH
GS NETWORKS/DATA N/A
SWITCH
GS NETWORKS/DATA N/A
SWITCH
GS NETWORKS/DATA N/A
SWITCH
GS NETWORKS/DATA N/A
SWITCH
GS NETWORKS/DATA N/A
SWITCH
GS NETWORKS/DATA N/A
SWITCH
GS NETWORKS/
TAUTRON N/A
GS NETWORKS/
TAUTRON N/A
GS NETWORKS/
TAUTRON 19.74
GS NETWORKS/
TELENEX N/A
GS NETWORKS/
TELENEX N/A
GS NETWORKS/
TELENEX N/A
GS NETWORKS/
TELENEX N/A
GS NETWORKS/
TELENEX N/A
GS NETWORKS/
TELENEX N/A
GS PUMP/AURORA 18.4
GS PUMP/
FAIRBANKS 37.26
GS PUMP/
HYDROMATIC 21.53
GSX N/A
GSX N/A
GSX N/A
GSX (DATA CENTER) N/A
HYDRECO 27.29
KAYEX 7.20
KAYEX N/A
L&N 0.60
LIGHTNIN N/A
LIGHTNIN 4.00
LIGHTNIN N/A
LIGHTNIN 6.10
LIGHTNIN 1.50
LIGHTNIN 4.77
LIGHTNIN N/A
LIGHTNIN N/A
LIGHTNIN 17.40
LIGHTNIN N/A
LIGHTNIN N/A
LIGHTNIN 20.00
LIGHTNIN N/A
LINDBERG N/A
LINDBERG N/A
LINDBERG N/A
LINDBERG 3.10
LINDBERG N/A
LINDBERG N/A
LINDBERG N/A
LINDBERG 0.10
LINDBERG 0.96
LINDBERG N/A
LINDBERG 8.00
LINDBERG/BLUE M N/A
LINDBERG/BLUE M 1.07
LINDBERG/BLUE M N/A
LINDBERG/BLUE M N/A
LINDBERG/MPH 12.71
METAL FORGE N/A
METAL FORGE 12.42
METAL FORGE N/A
METAL FORGE 6.56
METAL FORGE 7.50
METAL FORGE N/A
METAL FORGE 11.00
METAL FORGE
(RYKEN) 4.50
METAL FORGE
(RYKEN) 11.50
NYAB 18.05
REVCO N/A
REVCO N/A
REVCO 40.26
REVCO N/A
STOCK N/A
STOCK N/A
STOCK 15.00
WAUKESHA N/A
WAUKESHA N/A
WAUKESHA N/A
WAUKESHA N/A
WAUKESHA 36.1
WAUKESHA N/A
WAUKESHA N/A
WAUKESHA N/A
WAUKESHA/
HEVI-DUTY 10.00
WAUKESHA/
HEVI-DUTY 22.01
WAUKESHA/
HEVI-DUTY 40.00
WAUKESHA/
HEVI-DUTY 6.07
WAUKESHA/
HEVI-DUTY 0.16
WAUKESHA/
HEVI-DUTY 5.18
WAUKESHA/
HEVI-DUTY 1.01
WAUKESHA/
HEVI-DUTY 5.18
WAUKESHA/
HEVI-DUTY 5.69
WAUKESHA/
HEVI-DUTY 3.59
WAUKESHA/
HEVI-DUTY 0.16
WAUKESHA/
HEVI-DUTY 0.90
WAUKESHA/
HEVI-DUTY 5.67
WAUKESHA/
HEVI-DUTY 5.34
WAUKESHA/
HEVI-DUTY 127.8
WAUKESHA/
HEVI-DUTY 8.75
WAUKESHA/
HEVI-DUTY N/A
WAUKESHA/
HEVI-DUTY N/A
</TABLE>
<PAGE>
Use Codes for General Signal Corporation and Entities:
A Administrative Office
D R&D facility
F Factory
H Housing
L Leased Out
M Marketing and Sales
O Other
P Parking or Garage
R Repair/Service
T Training Service
U Undeveloped Land
V Vacant
W Warehouse
<PAGE>
Schedule 3.12
-------------
SUBSIDIARIES
------------
Borrower's Direct and
Indirect Ownership Subsidiary
Subsidiary Interest (%) Guarantor
- ---------- ------------ ---------
Kodiak Partners Corp. 100 Yes
Kodiak Partners II Corp. 100 Yes
SPX Sales and Service, Inc. 100 Yes
A. R. Brasch Marketing Inc. 100 Yes
Valley Forge Manufacturing Corporation 100 Yes
Sun Technicom, Inc. 100 Yes
Toledo Trans-Kit, Inc. 100 Yes
SPX Risk Management Co. 100 Yes
SPX Development Corporation* 100 No
Sealed Power Corporation* 100 No
SPX International, Ltd. 100 No
SPX Netherlands, B.V. 100 No
SPX United Kingdom, Ltd. 100 No
SPX Italia, Srl 100 No
SPX France, S.A.S. 100 No
SPX Deutschland GmbH 100 No
SPX Australia Pty., Ltd. 100 No
Kent-Moore do Brasil Industria 100 No
Commerce, Ltda.
SPX Canada, Inc. 100 No
SPX de Mexico S.A. de C.V. 100 No
IBS Filtran GmbH 60 No
SPX Europe AG 100 No
JATEK, Limited 80 No
SPX Iberia SA 100 No
Technotest Srl 89 No
Lowener GmbH 100 No
Valley Forge Technical Information 100 No
Services GmbH
Jurubatech Technologia 100 No
General Signal Corporation (formerly 100 Yes
SAC Corp.)
GenSig Corporation** 100
Aurora/Hydromatic Pumps Inc. 100 Yes
Fairbanks Morse Pump Corporation 100 Yes
1283608 Ontario Inc. 100 No
DeZurik of Australia Pty Ltd 100 No
DeZurik Vertriebs GmbH 100 No
Lightnin Private Limited 100 No
General Signal (China) Co., Ltd. 100 No
Stock Japan, Ltd. 100 No
Lightnin Mixers Pty. Ltd. 60 No
General Signal Power Systems, Inc. 100 Yes
Best Power Technology Limited 100 No
Best Power Taiwan Trading Co. Ltd. 100 No
Best Power Technology Mexico, S.A. de 100 No
C.V.
Best Power Technology Pte. Ltd. 100 No
Best Power Technology SARL 100 No
G. S. Building Systems Corporation 100 Yes
Dual-Lite Manufacturing, Inc. 100 Yes
Borri Elettronica Industriale S.r.l. 100 No
Sola Australia Ltd. 100 No
Best Power Technology AG 100 No
Sola Electric GmbH 100 No
General Signal Holdings Company 100 Yes
Inrange Technologies Corporation 100 Yes
Data Switch Collections, Inc. 100 Yes
Data Switch Intellectual Property, Inc. 100 Yes
Data Switch Subsidiary Stock Corporation 100 Yes
Data Switch UK Limited 100 No
General Signal Networks Italia S.r.l. 100 No
General Signal Networks Limited 100 No
General Signal Technology Corporation 100 Yes
General Farebox Service of Atlanta Inc. 100 Yes
General Signal Laboratory Equipment, 100 Yes
Inc.
Metal Forge Company, Inc. 100 Yes
General Signal Mauritius, Inc. 100 No
General Signal Corporation (DE)* 100 No
General Signal International Corporation 100 Yes
High Ridge Company Ltd 100 No
New Signal, Inc. 100 Yes
Leeds & Northrup Company 100 Yes
Leeds & Northrup GmbH 100 No
Leeds and Northrup S.A. 100 No
Leeds & Northrup Mexicana, S.A. 100 No
L & N Products Pty. Limited 100 No
LDN, Ltd. 100 No
General Signal Ireland B.V. 100 No
Leeds & Northrup (France) S.A.R.L. 100 No
Leeds & Northurp Singapore Pte. Limited 100 No
GCA International Corporation 100 Yes
General Signal FSC, Inc. 100 No
General Signal (S.E.G.) Asia Limited 100 No
GSR Merger Sub, Inc. 100 Yes
Kayex China Holdings, Inc. 100 No
Hangzhou Kayex Zheda Electromechanical 53.3 No
Co., Ltd.
General Signal Limited 100 No
General Signal UK Limited 100 No
Leeds & Northrup Italy, S.p.A. 100 No
High Ridge Ireland Ltd. 100 No
General Signal Enterprises 99 No
Best Power Technology Limited 100 No
Sola (UK) Limited 100 No
DeZurik International Limited 100 No
Lightnin Europe Limited 100 No
Lightnin Mixers Limited 100 No
G.C.A. Limited 100 No
General Signal S.E.G. Ltd. 100 No
G.S. Iona Ltd. 100 No
Leeds & Northrup Limited 100 No
Leeds & Northup (New Zealand) Limited 100 No
Tau-tron (UK) Limited 100 No
Telenex Europe Limited 100 No
General Signal Europe Limited 100 No
General Signal Verwaltungsgesellschaft 100 No
mbH
General Signal GmbH & Co KG 100 No
Best Power Technology GmbH 100 No
Data Switch GmbH Elektronische Systeme 100 No
GmbH
General Signal Networks GmbH 100 No
GS International (Barbados) Ltd. 100 No
General Signal (Barbados) Ltd. 100 No
- ---------------
[FN]
* Being dissolved.
** To be merged into General Signal Corporation within 2 days of
Acquisition.
</FN>
<PAGE>
<TABLE>
<CAPTION>
Schedule 3.13
-------------
INSURANCE
---------
SPX/GSX Key = SPX Information
Property & Casualty Insurance Summary GSX Information
<S> <C> <C> <C> <C>
Carrier Limits Policy Period Deductible/Retention
Line of Coverage SPX/GSX SPX/GSX SPX/GSX SPX/GSX
- ---------------- ------- ------- ------- -------
Property Kemper $785,052,000 1/1/98 to 1/1/00 $1,800,000
(Domestic) Allianz/IRI (50/50) $1,823,921,296 3/1/98 to 3/1/01 $100,000
Inland Marine Kemper $421,088-Fine Arts 1/1/98 to 1/1/99 $500-Fine Arts
$700,000-Transportation $5,000-Transportation
Property (Foreign Zurich $60,000,000-PD & BI 1/1/98 to 1/1/99 $5,000
Excess & DIC)
$40,000,000-B & M
Foreign Property Zurich $80,883,582 1/1/98 to 1/1/99 $5,000 & Various
Allianz $151,752,434 3/1/98 to 3/1/01 TBD
Workers Compensation United States Fidelity Statutory-WC 1/1/98 to 1/1/99 $350,000
& Guarantee Co. 4/1/98 to 4/1/01 $500,000
Travelers $1,000,000-EL
Statutory-WC
$2,000,000-EL
Excess Workers' United States Fidelity Statutory-WC 1/1/98 to 1/1/99 $350,000
Compensation & Guaranty Co. 4/1/98 to 4/1/99 $500,000
Travelers $1,000,000-EL
Same
Loss Control AEGIS N/A 1/1/98 to 1/1/99 N/A
Travelers 4/1/98 to 4/1/99
Claims System RSG N/A 1/1/98 to 1/1/99 N/A
CARMA 4/1/98 to 4/1/99
TPA Crawford N/A 1/1/98 to 1/1/99
Travelers 4/1/98 to 4/1/99
General Liabilty United States Fidelity $3,000,000-Gen. Agg. 1/1/98 to 1/1/00 $350,000
& Guarantee Co. 4/1/98 to 4/1/01 $1,000,000
Travelers $1,000,000-Occ.
$2,000,000
Automobile Liability United States Fidelity $2,000,000 CSL 1/1/98 to 1/1/00 $1,000,000
& Guarantee Co. $2,000,000 4/4/98 to 4/1/01 $500,000
Travelers
Umbrella Liability National Union $25,000,000-Occ. 1/1/98 to 1/1/01 NIL
National Union $50,000,000-Agg. 4/1/98 to 4/1/01 NIL
$25,000,000
Excess Liability Federal Ins. Co. $10,000,000-Occ. 1/1/98 to 1/1/01 NIL
$20,000,000-Occ.
American Zurich $25,000,000 4/1/98 to 4/1/99 NIL
Federal Ins. Co. $25,000,000 4/1/98 to 4/1/99
Hartford $25,000,000 4/1/98 to 4/1/99
Reliance $25,000,000 4/1/98 to 4/1/99
Ace Ins. Co. $100,000,000 4/1/98 to 4/1/99
Aircraft Products & National Union Fire $20,000,000 5/6/98 to 5/6/99 NIL
Grounding Liability Ins. Co. $200,000,000 5/1/98 to 5/1/99
USAIG
Aircraft Hull Associated Aviation $75,000,000 12/31/97 to 12/31/98 NIL
& Liability Underwriters $200,000,000 5/1/98 to 5/1/99
USAIG
Open Cargo & War Risk St. Paul Fire & Marine $2,000,000 12/31/97 to 12/31/98 NIL
Chubb $3,000,000 Continuous NIL
Foreign Liability & Zurich $1,000,000-Gen. Agg. 1/1/98 to 1/1/99 $1,000
Excess DIC
3,000,000-Pr. Agg.
$1,000,000-Occ.
Foreign GL & AL Zurich $1,000,000-Occ. 1/1/98 to 1/1/99 NIL
AIG $3,000,000-Agg. 4/1/98 to 4/1/99 NIL
$2,000,000
Crime Federal Ins. Co. $10,000,000 7/21/98 to 7/21/01 $100,000
Federal Ins. Co. $10,000,000 9/1/97 to 9/1/98 $250,000
Special Casualty Federal Insurance Co. $5,000,000 7/21/98 to 7/21/01 NIL
Federal Ins. Co. $25,000,000 9/1/95 to 9/1/98 NIL
Fiduciary Liability National Union Co. $5,000,000 7/21/98 to 7/21/01 $10,000 Indemnifiable Loss
Federal Ins. Co. $20,000,000 9/1/97 to 9/1/98
$0 Non-indemnifiable Loss
$25,000
Director & Officers Federal Ins. Co. $20,000,000 7/21/98 to 7/21/01 NIL - Each Person
(Executive Protection) National Union $25,000,000 9/1/97 to 9/1/98
$500,000 - Insd. Org.
NIL - Each Person
$250,000 - Insd. Org.
Excess Directors & National Union Fire $30,000,000 Each 7/21/98 to 7/21/01 NIL
Officers Ins. Co. Policy Period 9/1/97 to 9/1/98 NIL
Great American effective 10/15/97
$15,000,000
Travel Accident Zurich 5 times salary 4/25/97 to 4/25/00 NIL
Nuclear Liability NELIA/MAELU $150,000,000 1/1/98 to 1/1/99
(US)
Nuclear Liability ANI/NAELU $25,000,000 1/1/98 TO 1/1/99
(Foreign)
Computer Services Travelers $2,000,000 Each Claim 4/1/98 to 4/1/99 $2,000,000 Each Claim
E&O $8,000,000 Aggregate
Surety CNA Bond Amount Various
Seaboard Bond Amount Various
</TABLE>
<PAGE>
Schedule 3.17(a)
----------------
UCC FILING JURISDICTIONS
------------------------
Location of Chief Executive
Debtor Office, Inventory or Equipment County State
------ ------------------------------ ------ -----
SPX Corporation 700 Terrace Point Drive Muskegon Michigan
Muskegon, MI
Terrace Plaza Muskegon Michigan
Muskegon, MI
Airport Hangar
2001 Peach Street Muskegon Michigan
Whitehall, MI
205 N. Grover Street Gratiot Michigan
Alma, MI
1200 Power Drive De Kalb Indiana
Auburn, IN
51241 M-51 North Cass Michigan
Dowagiac, MI
520 S. Byrkit St. Joseph Indiana
Mishawaka, IN
Pierceton, IN Kosciusko Indiana
8080 Moorsbridge Rd., Kalamazoo Michigan
Ste 200
Portage, MI
875 Seegers Road Cook Illinois
Des Plaines, IL
140 Werz Industrial Blvd. Coweta Georgia
Newnan, GA
300 Industrial Growth Steuben Indiana
Parkway
Angola, IN
1224 Robinair Way Williams Ohio
Montpelier, OH
351 Pokegon Trail Steuben Indiana
Angola, IN
8001 Angling Road Kalamazoo Michigan
Kalamazoo, MI
800 S. Main Street Allegan Michigan
Wayland, MI
2300 Park Drive Steele Minnesota
Owatonna, MN
655 Eisenhower Steele Minnesota
Owatonna, MN
Depot Steele Minnesota
Owatonna, MN
2100 Park Drive Steele Minnesota
Owatonna, MN
28635 Mound Road Macomb Michigan
Warren, MI
2121 W. Bridge Street Steele Minnesota
Owatonna, MN
2429 N. Burdick Kalamazoo Michigan
Kalamazoo, MI
1474 W. Harbour Towne Muskegon Michigan
Circle
Muskegon, MI
A. R. Brasch Marketing 1633 Fairlane Circle Wayne Michigan
Inc. Allen Park, MI
Valley Forge 860 Springdale Drive Chester Pennsylvania
Manufacturing Exton, PA
Corporation
1525 Farlane Circle Wayne Michigan
Ste. 200
Allen Park, MI
25691 Atlantic Ocean Orange California
Drive
Suites B-5 through B-9
Lake Forest, CA
21455 Melrose Avenue Oakland Michigan
Suite B, Building 9
Southfield, MI
Sun Technicom, Inc. 1633 Fairlane Circle Wayne Michigan
Allen Park, MI
Toledo Trans-Kit, Inc. 1235 Expressway Drive Lucas Ohio
North
Toledo, OH
1510 Midway Ct., Ste E3 Cook Illinois
Elk Grove Village, IL
Kodiak Partners Corp. 700 Terrace Point Drive Muskegon Michigan
Muskegon, MI
Kodiak Partners II Corp. 700 Terrace Point Drive Muskegon Michigan
Muskegon, MI
SPX Sales and Service, 700 Terrace Point Drive Muskegon Michigan
Inc. Muskegon, MI
SPX Risk Management Co. 700 Terrace Point Drive Muskegon Michigan
Muskegon, MI
General Signal One High Ridge Park Fairfield Connecticut
Corporation Stamford, CT
(formerly SAC Corp.)
1430 Second Street N. Wood Wisconsin
Wisconsin Rapids, WI
N9246 Highway 60 Juneau Wisconsin
(PO BOX 280)
Necedah, WI
1430 2nd Street Wood Wisconsin
Wisconsin Rapids, WI
250 Riverside Ave., N. Stearns Minnesota
Sartell, MN
Belmont Drive Warren Tennessee
McMinnville, TN
Tower Hill Rd. Cumberland Maine
Raymond, ME
1 Appollo Dr. Morris New Jersey
Whippany, NJ
135 Mt. Read Blvd. Monroe New York
Rochester, NY
69 Cascade Dr. Monroe New York
Rochester, NY
Howard Ave. Harris Texas
Deer Park, TX
Rt. 1 Fairview Rd. Wythe Virginia
Wytheville, VA
500 Stafford-Umberger Wythe Virginia
Drive
Wytheville, VA
16490 Chillicothe Rd. Geauga Ohio
Chagrin Falls, OH
Suite 209 Murphy Sq., Santa Clara California
III W. Evelyn
Sunnyvale, CA
10 Lyberty Way Middlesex Massachusetts
Westford, MA
IND Pk # 1 Dowzer Ave. St. Clair Alabama
Pell City, AL
13 Fountain Place S. Mobile Illinois
Mt. Vernon, IL
Hywy 117 S. Wayne North
Goldsboro, NC Carolina
215 S. Main St. Cortland New York
Cortland, NY
Route 1 Box 1659 Columbia Pennsylvania
Berwick, PA
500 Dickerson Road Montgomery Pennsylvania
Berwick, PA
General Signal Power One High Ridge Park Fairfield Connecticut
Systems, Inc. Stamford, CT
400 South Prairie Ave. Waukesha Wisconsin
Waukesha, WI
810 Progress Ave. Waukesha Wisconsin
Waukesha, WI
1100 South Prairie Ave., Waukesha Wisconsin
North Half
Waukesha, WI
1100 South Prairie Ave., Waukesha Wisconsin
South Half
Waukesha, WI
Aurora/Hydromatic Pumps One High Ridge Park Fairfield Connecticut
Inc. Stamford, CT
Fairbanks Morse Pump One High Ridge Park Fairfield Connecticut
Corporation Stamford, CT
G. S. Building Systems 90 Fieldstone Court New Haven Connecticut
Corporation Chesire, CT
Main Street Somerset Maine
Pittsfield, ME
6411 Parkland Dr. Sarasota Florida
Sarasota, FL
1021 East Glendale Ave. Washoe Nevada
Sparks, NV
501 South Washington Ave. Lackawanna Pennsylvania
Scranton, PA
301 Oak Street Luzerne Pennsylvania
Pittston, PA
Dual-Lite 90 Fieldstone Court New Haven Connecticut
Manufacturing, Inc. Chesire, CT
1021 East Glendale Ave. Washoe Nevada
Sparks, NV
501 South Washington Ave. Lackawanna Pennsylvania
Scranton, PA
General Signal Holdings One High Ridge Park Fairfield Connecticut
Company Stamford, CT
Inrange Technologies 800 Midlantic Avenue Burlington New Jersey
Corporation Mt. Laurel, NJ
1 Waterview Drive Fairfield Connecticut
Shelton, CT
13000 Midlantic Drive Burlington New Jersey
Mount Laurel, NJ
1829 Underwood Blvd., Burlington New Jersey
Unit 5
Delran, NJ
Data Switch 800 Midlantic Avenue Burlington New Jersey
Collections, Inc. Mt. Laurel, NJ
Data Switch 800 Midlantic Avenue Burlington New Jersey
Intellectual Property, Mt. Laurel, NJ
Inc.
Data Switch Subsidiary 800 Midlantic Avenue Burlington New Jersey
Stock Corporation Mt. Laurel, NJ
General Signal One High Ridge Park Fairfield Connecticut
Technology Corporation Stamford, CT
1051 Sheffler Dr. Franklin Pennsylvania
Chambersburg, PA
1700 Ritner Highway Cumberland Pennsylvania
Carlisle, PA
1301, 1400 & 1401 St. Croix Wisconsin
Industrial Rd.
Hudson, WI
751 Pratt Blvd. Cook Illinois
Elk Grove Village, IL
1000 Millstead Way Monroe New York
Rochester, NY
31 E. Higgins Kane Illinois
Gilberts, IL
Rt. 72 Kane Illinois
Gilberts, IL
Rt. 72 Kane Illinois
Gilberts, IL
306 Hyland St. Jefferson Wisconsin
Watertown, WI
1202 Wakoka St. Jefferson Wisconsin
Watertown, WI
312 Hyland Jefferson Wisconsin
Watertown, WI
304 Hart St. Jefferson Wisconsin
Watertown, WI
Riverside Rd. & 1st Berrien Michigan
Street
Riverside, MI
General Farebox Service 751 Pratt Blvd. Cook Illinois
of Atlanta, Inc. Elk Grove Village, IL
Metal Forge Company, 5555 Park Center Circle Franklin Ohio
Inc. Dublin, OH
3182-3186 Martin Rd Oakland Michigan
Walled Lake MI
1600 Woodhurst Lane Metro North
Albemarle, NC Stanly Carolina
1301 Mabry Drive Metro North
Albemarle, NC Stanly Carolina
601 W. Lynn St. Williams Ohio
Stryker, OH
901 Alfred Thun Rd. Montgomery Tennessee
Clarksville, TN
3171 Ridgway Court Oakland Michigan
Walled Lake #3, MI
3160 Dallavo Court Oakland Michigan
Walled Lake #1, MI
General Signal One High Ridge Park Fairfield Connecticut
International Stamford, CT
Corporation
New Signal, Inc. One High Ridge Park Fairfield Connecticut
Stamford, CT
Leeds & Northrup Company One High Ridge Park Fairfield Connecticut
Stamford, CT
GCA International One High Ridge Park Fairfield Connecticut
Corporation Stamford, CT
GSR Merger Sub, Inc. One High Ridge Park Fairfield Connecticut
Stamford, CT
General Signal 275 Aiken Road Buncombe North
Laboratory Equipment, Asheville, NC Carolina
Inc.
101 Reems Creek Buncombe North
Weaverville, NC Carolina
388 Weaverville Hwy Buncombe North
Asheville, NC Carolina
<PAGE>
Schedule 3.17(b)
----------------
MORTGAGE FILING JURISDICTIONS
-----------------------------
Property Address County of Filing
- ---------------- ----------------
N9246 Highway 80 Juneau
Necedah, WI 54646
250 Riverside Ave., N. Stearns
Sartell, MN 88377
Belmont Drive Warren
McMinnville, TN 37110
Main Street, RT 72 Litchfield
Terryville, CT 06786
3601 Fairbanks Ave. Wyandotte
Kansas City, KS 66106
800 Airport Rd. Kane
North Aurora, IL 60542
1840 Baney Rd. Ashland
Ashland, OH 44805
135 Mt. Read Blvd. Monroe
Rochester, NY 14611
Starbuck Ave. Jefferson
Watertown, NY 13601
275 Aiken Road Buncombe
Asheville, NC 28804
Main Street Somerset
Pittsfield, ME 04967
101 Lyberty Way Middlesex
Westford, MA 01880
304 Hart St. Jefferson
Watertown, WI 53094
Tower Hill Road Cumberland
Raymond, ME 04171
16490 Chillicothe Rd. Cuyahoga
Chagrin Falls, OH 44023
Hwy. 117S. Wayne
Goldsboro, NC 27530
13 Fountain Place S. Jefferson
Mt. Vernon, IL 62864
400 South Prairie Ave. Waukesha
Waukesha, WI 53106
1224 Robinair Way Williams
Montpelier, OH
Auburn Plant DeKalb
1200 Power Drive
Auburn, IN
875 Seegers Road Cook
Des Plaines, IL 60016
Dowagiac Plant Cass
51241 M-51 North
Dowagiac, MI
8001 Angling Road Kalamazoo
Kalamazoo, MI
655 Eisenhower Steele
Owatonna, MN 55060
28635 Mound Road Macomb
Warren, MI 48092
2121 W. Bridge Street Steele
Owatonna, MN 55060
<PAGE>
Schedule 4.1(f)
---------------
LIENS TO BE RELEASED
--------------------
County Tax Lien, File No. 14288070, was filed on July 17, 1998 by
the County of Santa Clara, Tax Collector, in Santa Clara County,
California, against the unsecured property of General Signal
Corporation, Xynetics Ultratech Photomask Division, in the amount
of $387,179.92.
Currently effective UCC-1 financing statements were filed on
October 1, 1993 with the Michigan Secretary of State securing
property of A. R. Brasch Marketing, Inc. in favor of Comerica
Bank, under the following file numbers:
C763587 C763591 C763594
C763588 C763592 C833342
C763589 C763593 C833343
C763590
The indebtedness has been repaid.
Currently effective UCC-1 financing statement, No. AK55095, was
filed on October 26, 1993 with the Ohio Secretary of State in
favor of The First National Bank of Chicago. The indebtedness has
been repaid.
Deed of Trust in favor of John S. Stephens, as trustee, and
Fidelity Bank, N.A., dated November 23, 1987, as modified by
Modification of Deed of Trust dated December 1, 1992, securing a
Revolving Credit Facility in the amount of $20,000,000.
<PAGE>
Schedule 6.2
------------
EXISTING INDEBTEDNESS
---------------------
(i) $15.1 million principal amount of industrial revenue bonds
(described on part I of Exhibit A attached to this Schedule),
each of which is secured by a letter of credit issued by The
First National Bank of Chicago (successor to NBD Bank, N.A.) and
(ii) the Reimbursement Agreement, dated as of November 1, 1992,
between SPX and The First National Bank of Chicago (successor to
NBD Bank, N.A.), pursuant to which the aforementioned letters of
credit were issued
(i) $32.5 million principal amount of industrial revenue bonds
(described on part II of Exhibit A attached to this Schedule),
$30.5 million principal amount of which are secured by a letter
of credit issued by Wachovia Bank, National Association
(successor by merger to Wachovia Bank of Georgia, National
Association) and $26 million principal amount of which are
secured by a Guaranty provided by General Signal Corporation and
(ii) the Reimbursement Agreements, dated as indicated on part II
of Exhibit A attached to this Schedule), between General Signal
Corporation and Wachovia Bank, National Association (successor by
merger to Wachovia Bank of Georgia, National Association),
pursuant to which the aforementioned letters of credit were
issued
Indebtedness may be incurred by SPX Corporation pursuant to the
(a) Credit Agreement, dated as of September 20, 1994, by and
between SPX and The First National Bank of Chicago (successor to
NBD Bank, N.A.) (as amended) providing 4,000,000 principal amount
of British pounds revolving credit facility, (ii) 1,000,000
principal amount of British pounds uncommitted discretionary
credit facility and (iii) 250,000 principal amount of Australian
dollars revolving credit facility, including letters of credit,
(b) Business Purchasing Card Agreement between SPX Corporation
and First Chicago NBD Corporation, entered into in May 1, 1996,
covering a principal amount up to $3,500,000 (c) Resolution
accepting the offer of bank facilities from the United Overseas
Bank Limited, in a principal amount up to SGD 2,000,000, (d)
Guaranty between Dresdner Bank Aktiengesellschaft and SPX
Deutschland GmbH, in a principal amount up to DEM 2,000,000, (e)
General Guarantee made by SPX Corporation in favor of the Bank of
Nova Scotia in respect of the indebtedness and liability of SPX
Canada Inc. to the Bank, dated July 14, 1998 in a principal
amount up to CAD 500,000, (f) two JPY $50,000,000 debt facilities
(committed) with Sanwa Bank, terminating on May 30, 1999 and June
29, 1999, (g) a JPY $100,000,000 debt facility (committed) with
Ashikaga, terminating on February 20, 1999 and (h) a CHF
1,000,000 debt facility (uncommitted) with Credit Suisse
terminating on October 9, 1998
Commercial paper issued by General Signal Corporation (as of
October 1, 1998, $111 million principal amount scheduled to
remain outstanding after October 6, 1998 until October 16, 1998)
(i) $25 million principal amount of 7% Medium-Term Notes due 2000
and (ii) $25 million principal amount of 7.114% Medium-Term Notes
due 2002, each issued pursuant to an Indenture, dated as of April
15, 1986, between General Signal and The Chase Manhattan Bank
(successor to Chemical Bank), as trustee
$1,250,000 principal amount of The Industrial Development Board
of the City of Fort Payne Industrial Revenue Bonds (General
Signal Project), Series 1979 (General Signal Corporation is
contingently liable)
$2,000,000 principal amount of Industrial Development Revenue
Bond (General Signal Corporation Second Project) of The
Industrial Board of the City of Fort Payne, Series 1992 (General
Signal Corporation is contingently liable)
G.S. Signal Technology Corporation (acting by G.S. Electric
Company, a division of General Signal Technology Corporation)
$1.7 million principal amount of net indebtedness incurred to
finance the 80,000, sq. ft. facility on 10.55 acre site in
Carlisle, Pennsylvania (the "Chambersburg Facility") consisting
of (i) $1.2 principal amount of non-recourse indebtedness to the
Pennsylvania Industrial Development Authority (the "PIDA")
secured by a first lien on the Chambersburg Facility and (ii)
$500,000 principal amount of net indebtedness to the Chambersburg
(Pennsylvania) Area Development Corporation ("CADC") (such net
indebtedness consisting of $2.3 million principal amount capital
lease financing provided by the CADC to General Signal Technology
Corporation, acting by its GS Electric Company division ("GST")
under a capital lease dated July 1, 1992, from the CADC to GST,
net of $1.8 principal amount loan by GST to the CADC and which
loan is secured by a second mortgage, dated November 17, 1992, on
the Chambersburg Facility)
Waukesha Electric Systems (a unit of General Signal) $901,000
principal amount capital (equipment) lease, dated April 17, 1986,
between Waukesha (as successor to ASEA Electric Inc.) and
Forsythe McArthur Associates, Inc.
INRANGE Technologies Corporation (formerly known as Data Switch
Corporation) $2,500,000 principal amount mortgage loan, dated
March 31, 1995, to Data Switch Corporation from Connecticut
Development Authority for Shelton, Connecticut project and
related promissory note delivered to the Connecticut Development
Authority in connection with such mortgage loan
Miscellaneous loans, notes and leases aggregating less than
$600,000 in principal amount
<PAGE>
EXHIBIT A to Schedule 6.2
-------------------------
I. SPX INDUSTRIAL REVENUE BONDS AND RELATED REIMBURSEMENT
AGREEMENT AND LETTERS OF CREDIT
There follows a list of outstanding debt of SPX in the form of four
industrial revenue bond issues, each supported by a letter of credit, as
indicated below, provided by The First National Bank of Chicago pursuant to
a Reimbursement Agreement, dated as of November 1, 1992, by and between SPX
and The First National Bank of Chicago (as successor to NBD Bank, N.A.):
$1,100,000 City of Dallas Industrial Development Corporation Variable
Rate Demand Industrial Development Revenue Bonds (Sealed Power
Corporation Project) Series 1985
Letter of Credit Date: November 13, 1992
Letter of Credit No. 3002
Letter of Credit Amount: $1,143,905
$8,300,000 City of Auburn Variable Rate Demand Economic Development
Revenue Bonds (Sealed Power Corporation Project)
($8,200,000 currently outstanding)
Letter of Credit Date: November 13, 1992
Letter of Credit No. 3003
Letter of Credit Amount: $8,651,096
$4,500,000 The Economic Development Corporation of the County of
Jackson Variable Rate Demand Economic Development Revenue Refunding
Bonds (Sealed Power Corporation Project)
Letter of Credit Date: November 13, 1992
Letter of Credit No. 3004
Letter of Credit Amount: $4,694,932
$1,300,000 Town of LaGrange Variable Rate Demand Economic
Development Revenue Bonds (Sealed Power Corporation Project)
Letter of Credit Date: November 13, 1992
Letter of Credit No. 3005
Letter of Credit Amount: $1,363,425
<PAGE>
II. GENERAL SIGNAL INDUSTRIAL REVENUE BONDS AND RELATED
REIMBURSEMENT AGREEMENTS AND LETTERS OF CREDIT
There follows a list of outstanding debt of General Signal in the form
of ten industrial revenue bond issues, each supported by a letter of
credit, as indicated below, provided by Wachovia Bank, National Association
(successor by merger to Wachovia Bank of Georgia, National Association)
("Wachovia") pursuant to certain Reimbursement Agreements, each, by and
between General Signal and Wachovia, as indicated below:
$7,500,000 Massachusetts Industrial Finance Agency Industrial
Development Revenue Bonds (General Signal Corporation, Guarantor)
Series 1984
Reimbursement Agreement dated as of: September 1, 1992
Letter of Credit Date: September 25, 1992
Letter of Credit No. LC 870-007251
Letter of Credit amount: $7,875,000
$3,500,000 Massachusetts Industrial Finance Agency Industrial
Development Revenue Bonds (General Signal Corporation Project) Series
1984
Reimbursement Agreement dated as of: October 1, 1992
Letter of Credit Date: October 26, 1992
Letter of Credit No. LC 870-007259
Letter of Credit amount: $3,675,000
$1,750,000 Cortland County 1983 Industrial Development Agency
Industrial Development Revenue Bonds (Dowzer Electric--Facility
General Signal Corporation, Guarantor)
Reimbursement Agreement dated as of: October 1, 1992
Letter of Credit Date: October 26, 1992
Letter of Credit No. LC 870-007258
Letter of Credit amount: $1,826,562.50
$3,000,000 Development Authority of Richmond County Refunding Revenue
Bonds (General Signal Corporation, Guarantor) Series 1983
Reimbursement Agreement dated as of: December 1, 1992
Letter of Credit Date: December 31, 1992
Letter of Credit No. LC 870-007275
Letter of Credit amount: $3,150,000
$2,700,000 Salt Lake City, Utah Industrial Development Revenue Bonds
(Leeds & Northrup Project-General Signal Corporation, Guarantor)
Series 1983
Reimbursement Agreement dated as of: December 1, 1992
Letter of Credit Date: December 31, 1992
Letter of Credit No. LC 870-007274
Letter of Credit amount: $2,818,125
$3,300,000 The Stanly County Industrial Facilities and Pollution
Control Financing Authority Refunding Revenue Bonds (General Signal
Corporation, Guarantor), Series 1983
Reimbursement Agreement dated as of: November 1, 1992
Letter of Credit Date: November 30, 1992
Letter of Credit No. LC 870-007264
Letter of Credit amount: $3,465,000
$2,000,000 The Wayne County Industrial Facilities and Pollution
Control Financing Authority Industrial Development Revenue Refunding
Bonds (General Signal Corporation, Guarantor) Series 1983
Reimbursement Agreement dated as of: November 1, 1992
Letter of Credit Date: November 30, 1992
Letter of Credit No. LC 870-007265
Letter of Credit amount: $2,100,000
$2,750,000 Pinellas County Industry Council Refunding Revenue Bonds
(Leeds & Northrup Company Project) Series 1984
Reimbursement Agreement dated as of: November 1, 1992
Letter of Credit Date: November 30, 1992
Letter of Credit No. LC 870-007263
Letter of Credit amount: $2,887,500
$3,000,000 County of Geauga, Ohio Industrial Development Revenue Bonds
(General Signal Corporation Project) Series 1984
Reimbursement Agreement dated as of: October 1, 1992
Letter of Credit Date: October 26, 1992
Letter of Credit No. LC 870-007256
Letter of Credit amount: $3,150,000
$1,000,000 The Industrial Development Board of the City of Pell City,
Alabama Refunding Revenue Bonds (General Signal Corporation,
Guarantor) Series 1983
Reimbursement Agreement dated as of: October 1, 1992
Letter of Credit Date: October 26, 1992
Letter of Credit No. LC 870-007257
Letter of Credit amount: $1,050,000
In addition, the following fixed-rate IRBs, aggregating $2 million,
were also issued on behalf of General Signal:
$1,000,000 Development Authority of Richmond County (Georgia)
55/8% Development Revenue Bonds, Series 1977
$1,000,000 Industrial Development Authority of Wythe County
(Virginia) 55/8% Industrial Development Revenue Bonds, Series
1977
<PAGE>
Schedule 6.3
------------
EXISTING LIENS
--------------
Industrial Revenue Bonds
------------------------
Pledge and Security Agreements (4), each between SPX Corporation and
The First National Bank of Chicago (successor to NBD Bank, N.A.),
pursuant to which SPX Corporation has agreed to pledge any industrial
revenue bonds that may be repurchased by SPX Corporation out of the
proceeds of draws under the respective letters of credit issued
(described in part I of Exhibit A to Schedule 6.2) (Pledge and
Security Agreements dated the same date as related Reimbursement
Agreement)
Pledge and Security Agreements (10), each between General Signal
Corporation and Wachovia Bank, National Association (successor by
merger to Wachovia Bank of Georgia, National Association), pursuant to
which General Signal Corporation has agreed to pledge any industrial
revenue bonds that may be repurchased by General Signal Corporation
out of the proceeds of draws under the respective letters of credit
issued (described in part II of Exhibit A to Schedule 6.2) (Pledge and
Security Agreements dated the same date as related Reimbursement
Agreement)
INRANGE Technologies Corporation (formerly known as Data Switch
Corporation)
----------------------------------------------------------------------
$2,500,000 principal amount mortgage loan, dated March 31, 1995, to
Data Switch Corporation from Connecticut Development Authority which
secures the Shelton Connecticut facility financed thereby
Best Power Technology Asia Limited
----------------------------------
NT$63,000,000 (New Taiwan dollars) principal amount mortgage loan from
United World Chinese Commercial Bank relating to General Signal
Corporation's Best Power Technology Asia Limited facility in Taiwan
SPX Corporation
---------------
Fixture Lien, which describes the insured premises, wherein the debtor
is the City of Auburn and the secured party is PNC Bank, filed June
16, 1994 as UCC #54292.
Currently effective UCC-1 financing statement, No. D042678, was filed
on December 13, 1995 with the Secretary of State of Michigan in favor
of Textron Financial Corporation. (Debtor on file is SPX Credit
Corporation.)
Currently effective UCC-1 financing statement, No. 03931B, was filed
on June 13, 1990 with the Secretary of State of Michigan in favor of
Sanwa Business Credit Corporation.
Currently effective UCC-1 financing statement, No. D042677, was filed
on December 13, 1995 with the Secretary of State of Michigan in favor
of Textron Financial Corporation.
Currently effective UCC-1 financing statement, No. 35997B, was filed
on October 13, 1993 with the Secretary of State of Michigan in favor
of Sanwa Business Credit Corporation. (Debtor on file is SPX Credit
Corporation.)
Currently effective UCC-1 financing statement, No. 09561B, was filed
on March 1, 1991 with the Secretary of State of Michigan in favor of
Sanwa Business Credit Corporation. (Original debtor was The Allen
Group Leasing Corp., amended to SPX Credit Corporation.)
Best Power Technology, Inc.
---------------------------
Lis Pendens: Dairyland Power Cooperative vs. Joseph W. Lehman, Jr.,
Virginia M. Lehman, Joseph W. Lehman, III and Jeanine Marie Lehman
dated and recorded 12-19-91 in Vol. 6 of Lis Pendens, on Page 492, as
Doc. No. 309921.
Waukesha
--------
Mortgage from Accurate Products Manufacturing Corp., to Bank One,
Milwaukee, NA, for $500,000.00, dated April 30, 1990 and recorded on
May 2, 1990 in Reel 1197, Image 581 as Document No. 1583567. (NOTE:
Bank One, Milwaukee, NA is now known as Bank One, Wisconsin.)
Mortgage from Accurate Products MFG. Corp. to Faye Steen, for
$188,000.00, dated April 30, 1990 and recorded on May 2, 1990, in Reel
1197, Image 583, as Document No. 1589568.
G.S. Signal Technology Corporation (acting by G.S. Electric Company, a
division of General Signal Technology Corporation)
----------------------------------------------------------------------
Liens securing $1.7 million net principal amount of indebtedness and
owed with respect to Chambersburg Facility described in Schedule 6.2
<PAGE>
Schedule 6.5
------------
EXISTING INVESTMENTS
--------------------
- -------------------------------------------------------------------------------
Percent
Ownership or
Person in Which Borrower has Principal
a Direct or Indirect Investment Amount of Note Holder of Investment
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Fairbanks Morse India Limited 35% Fairbanks Morse Pump Corp.
- -------------------------------------------------------------------------------
DeZurik India 40% General Signal Corporation
- -------------------------------------------------------------------------------
EGS LLC 40.29% General Signal Corporation
4.21% G. S. Building Systems
Corporation
- -------------------------------------------------------------------------------
Koyo Lindberg Ltd. 50% General Signal Corporation
- -------------------------------------------------------------------------------
Shenyang Stock Electric Power 50% General Signal Corporation
Equipment Company Limited
- -------------------------------------------------------------------------------
DeZurik Japan Co., Ltd. 48% General Signal Corporation.
- -------------------------------------------------------------------------------
HMS Ventures Ltd. 13.6% General Signal Corporation
- -------------------------------------------------------------------------------
DeZurik-Mexico S.A. de C.V. 49% General Signal Corporation
- -------------------------------------------------------------------------------
GS International (Barbados) Ltd. $38,500,000 a Foreign Subsidiary of
Intercompany General Signal Corporation
Note
- -------------------------------------------------------------------------------
General Signal (Barbados) Ltd. $38,500,000 a Foreign Subsidiary of
Intercompany General Signal Corporation
Note
- -------------------------------------------------------------------------------
Chambersburg (Pennsylvania) $1,800,000 General Signal Technology
Area Development Corporation (as described Corporation (as described in
(as described in Schedule 6.2) in Schedule Schedule 6.2)
6.2)
- -------------------------------------------------------------------------------
Industrial Board of the City of $2,000,000 General Signal Corporation
Fort Payne Industrial
Revenue Bond
- -------------------------------------------------------------------------------
SPX Corporation $2,365,000 SPX Netherlands, B.V.
Intercompany
Note
- -------------------------------------------------------------------------------
SPX Europe AG $4,487,000 SPX Netherlands, B.V.
- -------------------------------------------------------------------------------
<PAGE>
Schedule 6.12
-------------
EXISTING RESTRICTIONS
---------------------
INRANGE Technologies Corporation (formerly known as Data Switch
Corporation)
----------------------------------------------------------------------
$2,500,000 principal amount mortgage loan, dated March 31, 1995, to
Data Switch Corporation from Connecticut Development Authority for
Shelton, Connecticut facility, prohibits borrower from encumbering
real property securing the loan
Waukesha Electric Systems (a unit of General Signal)
---------------------------------------------------
$901,000 principal amount capital (equipment) lease, dated April 17,
1986, between Waukesha (as successor to ASEA Electric Inc.) and
Forsythe McArthur Associates, Inc. prohibits encumbrances on equipment
being leased
Industrial Revenue Bonds
------------------------
Certain of the Loan Agreements or Lease Agreements, as applicable,
entered into in connection with the industrial revenue bonds described
on Exhibit A to Schedule 6.2 impose restrictions relating to the
borrower's ability to assign, sell, lease, sublease, place liens on,
remove or encumber equipment relating to, the project financed by such
bonds
<PAGE>
EXHIBIT A-1
===========================================================================
GUARANTEE AND COLLATERAL AGREEMENT
made by
SPX CORPORATION
and certain of its Subsidiaries
in favor of
THE CHASE MANHATTAN BANK,
as Collateral Agent
Dated as of October 6, 1998
===========================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINED TERMS .............................................. 2
1.1 Definitions ................................................ 2
1.2 Other Definitional Provisions .............................. 6
SECTION 2. GUARANTEE .................................................. 7
2.1 Guarantee .................................................. 7
2.2 Right of Contribution ...................................... 8
2.3 No Subrogation ............................................. 8
2.4 Amendments, etc. with respect to the Borrower Obligations .. 8
2.5 Guarantee Absolute and Unconditional ....................... 9
2.6 Reinstatement .............................................. 10
2.7 Payments ................................................... 10
SECTION 3. GRANT OF SECURITY INTEREST ................................. 10
SECTION 4. REPRESENTATIONS AND WARRANTIES ............................. 11
4.1 Title; No Other Liens ...................................... 11
4.2 Perfected First Priority Liens ............................. 11
4.3 Chief Executive Office ..................................... 12
4.4 Inventory and Equipment .................................... 12
4.5 Farm Products .............................................. 12
4.6 Investment Property ........................................ 12
4.7 Intellectual Property ...................................... 13
SECTION 5. COVENANTS .................................................. 13
5.1 Delivery of Instruments, Certificated Securities and
Chattel Paper ............................................. 13
5.2 Maintenance of Insurance ................................... 14
5.3 Payment of Obligations ..................................... 14
5.4 Maintenance of Perfected Security Interest; Further
Documentation ............................................. 14
5.5 Notices .................................................... 15
5.6 Investment Property ........................................ 15
5.7 Receivables ................................................ 16
5.8 Intellectual Property ...................................... 17
SECTION 6. REMEDIAL PROVISIONS ........................................ 18
6.1 Certain Matters Relating to Receivables .................... 18
6.2 Communications with Obligors; Grantors Remain Liable ....... 19
6.3 Pledged Stock .............................................. 19
6.4 Proceeds to be Turned Over To Collateral Agent ............. 20
6.5 Application of Proceeds .................................... 21
6.6 Code and Other Remedies .................................... 21
6.7 Registration Rights ........................................ 22
6.8 Waiver; Deficiency ......................................... 23
SECTION 7. THE COLLATERAL AGENT ....................................... 23
7.1 Collateral Agent's Appointment as Attorney-in-Fact, etc .... 23
7.2 Duty of Collateral Agent ................................... 25
7.3 Execution of Financing Statements .......................... 26
7.4 Authority of Collateral Agent .............................. 26
SECTION 8. MISCELLANEOUS .............................................. 26
8.1 Amendments in Writing ...................................... 26
8.2 Notices .................................................... 26
8.3 No Waiver by Course of Conduct; Cumulative Remedies ........ 26
8.4 Enforcement Expenses; Indemnification ...................... 27
8.5 Successors and Assigns ..................................... 27
8.6 Set-Off .................................................... 27
8.7 Counterparts ............................................... 28
8.8 Severability ............................................... 28
8.9 Section Headings ........................................... 28
8.10 Integration ................................................ 28
8.11 GOVERNING LAW .............................................. 29
8.12 Submission To Jurisdiction; Waivers ........................ 29
8.13 Acknowledgements ........................................... 29
8.14 Additional Grantors ........................................ 30
8.15 Releases ................................................... 30
8.16 Notice of Event of Default ................................. 30
8.17 WAIVER OF JURY TRIAL ....................................... 31
SCHEDULES
- ---------
Schedule 1 Notice Addresses
Schedule 2 Investment Property
Schedule 3 Perfection Matters
Schedule 4 Jurisdictions of Organization and Chief Executive Offices
Schedule 5 Inventory and Equipment Locations
Schedule 6 Intellectual Property
<PAGE>
GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of October 6, 1998,
made by each of the signatories hereto (together with any other entity that
may become a party hereto as provided herein, the "Grantors"), in favor of
THE CHASE MANHATTAN BANK, as Collateral Agent (in such capacity, the
"Collateral Agent") for the banks and other financial institutions (the
"Lenders") from time to time parties to the Credit Agreement, dated as of
October 6, 1998 (as amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among SPX Corporation (the "Borrower"),
the Lenders and The Chase Manhattan Bank, as Administrative Agent (in such
capacity, the "Administrative Agent").
W I T N E S S E T H:
--------------------
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrower upon the
terms and subject to the conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of
companies that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the
Credit Agreement will be used in part to enable the Borrower to make
valuable transfers to one or more of the other Grantors in connection with
the operation of their respective businesses;
WHEREAS, each Grantor will derive substantial direct and indirect
benefit from the making of the extensions of credit under the Credit
Agreement; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrower under
the Credit Agreement that the Grantors shall have executed and delivered
this Agreement to the Collateral Agent for the ratable benefit of the
Secured Parties (as defined below);
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement
and to induce the Lenders to make their respective extensions of credit to
the Borrower thereunder, each Grantor hereby agrees with the Collateral
Agent, for the ratable benefit of the Secured Parties, as follows:
<PAGE>
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement, and the following terms are used
herein as defined in the New York UCC: Accounts, Certificated Security,
Chattel Paper, Documents, Equipment, Farm Products, Instruments and
Inventory.
(b) The following terms shall have the following meanings:
"Agreement": this Guarantee and Collateral Agreement, as the same
may be amended, supplemented or otherwise modified from time to time.
"Borrower Obligations": the collective reference to the unpaid
principal of and interest on the Loans and Reimbursement Obligations
and all other obligations and liabilities of the Borrower (including,
without limitation, interest accruing at the then applicable rate
provided in the Credit Agreement after the maturity of the Loans and
Reimbursement Obligations and interest accruing at the then applicable
rate provided in the Credit Agreement after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization
or like proceeding, relating to the Borrower, whether or not a claim
for post-filing or post-petition interest is allowed in such
proceeding) to the Collateral Agent or any other Secured Party (or, in
the case of any Lender Hedge Agreement, any Affiliate of any Lender),
whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, the Credit Agreement, this Agreement, the
other Loan Documents, any Letter of Credit, any Lender Hedge Agreement
or any other document made, delivered or given in connection with any
of the foregoing, in each case whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Collateral Agent or to the other
Secured Parties that are required to be paid by the Borrower pursuant
to the terms of any of the foregoing agreements).
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by the
Collateral Agent as provided in Section 6.1 or 6.4.
"Copyrights": (i) all copyrights arising under the laws of the
United States, any other country or any political subdivision thereof,
whether registered or unregistered and whether published or
unpublished (including, without limitation, those listed in Schedule
6), all registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, all
registrations, recordings and applications in the United States
Copyright Office, and (ii) the right to obtain all renewals thereof.
"Copyright Licenses": any written agreement naming any Grantor as
licensor or licensee (including, without limitation, those listed in
Schedule 6, but excluding any Excluded License), granting any right
under any Copyright, including, without limitation, the grant of
rights to manufacture, distribute, exploit and sell materials derived
from any Copyright; provided, that the foregoing limitation with
respect to Excluded Licenses shall not affect, limit, restrict or
impair the grant by such Grantor of a security interest pursuant to
this Agreement in any Receivable or any money or other amounts due or
to become due under any such Excluded License.
"Deposit Account": as defined in the Uniform Commercial Code of
any applicable jurisdiction and, in any event, including, without
limitation, any demand, time, savings, passbook or like account
maintained with a depositary institution.
"Excluded License": any present or future written agreement
naming any Grantor as licensee or licensor of a Copyright, Patent or
Trademark, in each case to the extent, and only to the extent, the
grant by such Grantor of a security interest pursuant to this
Agreement in its right, title and interest in such agreement is
prohibited by such agreement without the consent of any other party
thereto, would give any other party to such agreement the right to
terminate its obligations thereunder, or is permitted only with
consent if all necessary consents to such grant of a security interest
have not been obtained from the other parties thereto (it being
understood that the foregoing shall not be deemed to obligate such
Grantor to obtain such consents).
"Foreign Subsidiary Voting Stock": the voting Capital Stock of
any Foreign Subsidiary.
"General Intangibles": all "general intangibles" as such term is
defined in Section 9-106 of the New York UCC and, in any event,
including, without limitation, with respect to any Grantor, all
contracts, agreements, instruments and indentures in any form, and
portions thereof, to which such Grantor is a party or under which such
Grantor has any right, title or interest or to which such Grantor or
any property of such Grantor is subject, as the same may from time to
time be amended, supplemented or otherwise modified, including,
without limitation, (i) all rights of such Grantor to receive moneys
due and to become due to it thereunder or in connection therewith,
(ii) all rights of such Grantor to damages arising thereunder and
(iii) all rights of such Grantor to perform and to exercise all
remedies thereunder, in each case to the extent, and only to the
extent, the grant by such Grantor of a security interest pursuant to
this Agreement in its right, title and interest in such contract,
agreement, instrument or indenture is not prohibited by such contract,
agreement, instrument or indenture without the consent of any other
party thereto, would not give any other party to such contract,
agreement, instrument or indenture the right to terminate its
obligations thereunder, or is permitted with consent if all necessary
consents to such grant of a security interest have been obtained from
the other parties thereto (it being understood that the foregoing
shall not be deemed to obligate such Grantor to obtain such consents);
provided, that the foregoing limitation shall not affect, limit,
restrict or impair the grant by such Grantor of a security interest
pursuant to this Agreement in any Receivable or any money or other
amounts due or to become due under any such contract, agreement,
instrument or indenture.
"Guarantor Obligations": with respect to any Guarantor, all
obligations and liabilities of such Guarantor which may arise under or
in connection with this Agreement (including, without limitation,
Section 2) or any other Loan Document to which such Guarantor is a
party, in each case whether on account of guarantee obligations,
reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements
of counsel to the Collateral Agent or to the other Secured Parties
that are required to be paid by such Guarantor pursuant to the terms
of this Agreement or any other Loan Document).
"Guarantors": the collective reference to each Grantor other than
the Borrower.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or
otherwise, including, without limitation, the Copyrights, the
Copyright Licenses, the Patents, the Patent Licenses, the Trademarks
and the Trademark Licenses, and all rights to sue at law or in equity
for any infringement or other impairment thereof, including the right
to receive all proceeds and damages therefrom.
"Intercompany Note": any promissory note evidencing loans made by
any Grantor to the Borrower or any of its Subsidiaries.
"Investment Property": the collective reference to (i) all
"investment property" as such term is defined in Section 9-115 of the
New York UCC (other than any Foreign Subsidiary Voting Stock excluded
from the definition of "Pledged Stock") and (ii) whether or not
constituting "investment property" as so defined, all Pledged Notes
and all Pledged Stock.
"Issuers": the collective reference to each issuer of any
Investment Property.
"Lender Hedge Agreements": all Hedging Agreements entered into by
the Borrower with any Lender (or any Affiliate of any Lender).
"New York UCC": the Uniform Commercial Code as from time to time
in effect in the State of New York.
"Obligations": (i) in the case of the Borrower, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"Patents": (i) all letters patent of the United States, any other
country or any political subdivision thereof, all reissues and
extensions thereof and all goodwill associated therewith, including,
without limitation, any of the foregoing referred to in Schedule 6,
(ii) all applications for letters patent of the United States or any
other country and all divisions, continuations and
continuations-in-part thereof and (iii) all rights to obtain any
reissues or extensions of the foregoing.
"Patent License": all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to
manufacture, use or sell any invention covered in whole or in part by
a Patent, including, without limitation, any of the foregoing referred
to in Schedule 6, but excluding any Excluded License; provided, that
the foregoing limitation with respect to Excluded Licenses shall not
affect, limit, restrict or impair the grant by such Grantor of a
security interest pursuant to this Agreement in any Receivable or any
money or other amounts due or to become due under any such Excluded
License.
"Pledged Notes": all promissory notes listed on Schedule 2, all
Intercompany Notes at any time issued to any Grantor and all other
promissory notes issued to or held by any Grantor (other than
promissory notes issued in connection with extensions of trade credit
by any Grantor in the ordinary course of business).
"Pledged Stock": the shares of Capital Stock listed on Schedule
2, together with any other shares, stock certificates, options or
rights of any nature whatsoever in respect of the Capital Stock of any
Person (other than, in the case of GSX, the Capital Stock of G.S.
Building Systems Corporation) that may be issued or granted to, or
directly held by, any Grantor while this Agreement is in effect;
provided that (i) in no event shall more than 66% of the total
outstanding Foreign Subsidiary Voting Stock of any Foreign Subsidiary
be required to be pledged hereunder and (ii) in no event shall the
Capital Stock of any non-Wholly Owned Subsidiary be required to be
pledged hereunder by any Grantor to the extent, and only to the
extent, the grant by such Grantor of a security interest pursuant to
this Agreement in its right, title and interest in such Capital Stock
is prohibited by the organizational or governing documents of such
non-Wholly Owned Subsidiary.
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the New York UCC and, in any event, shall include, without
limitation, all dividends or other income from the Investment
Property, collections thereon or distributions or payments with
respect thereto.
"Receivable": any right to payment for goods sold or leased or
for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned by
performance (including, without limitation, any Account).
"Secured Parties": the collective reference to the Collateral
Agent, the Administrative Agent and the Lenders.
"Securities Act": the Securities Act of 1933, as amended.
"Shared Collateral": the collective reference to all
"Collateral", as such term is defined in the Shared Collateral
Agreement.
"Trademarks": (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers,
and all goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, and all common-law rights related
thereto, including, without limitation, any of the foregoing referred
to in Schedule 6, and (ii) the right to obtain all renewals thereof.
"Trademark License": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any
Trademark, including, without limitation, any of the foregoing
referred to in Schedule 6, but excluding any Excluded License;
provided, that the foregoing limitation with respect to Excluded
Licenses shall not affect, limit, restrict or impair the grant by such
Grantor of a security interest pursuant to this Agreement in any
Receivable or any money or other amounts due or to become due under
any such Excluded License.
1.2 Other Definitional Provisions. (a) The words "hereof,"
"herein", "hereto" and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section and Schedule references
are to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral
or any part thereof, when used in relation to a Grantor, shall refer to
such Grantor's Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1. Guarantee. (a) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the Collateral
Agent, for the ratable benefit of the Secured Parties and their respective
successors, indorsees, transferees and assigns, the prompt and complete
payment and performance by the Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Borrower Obligations.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and
under the other Loan Documents shall in no event exceed the amount which
can be guaranteed by such Guarantor under applicable federal and state laws
relating to the insolvency of debtors (after giving effect to the right of
contribution established in Section 2.2).
(c) Each Guarantor agrees that the Borrower Obligations may at
any time and from time to time exceed the amount of the liability of such
Guarantor hereunder without impairing the guarantee contained in this
Section 2 or affecting the rights and remedies of the Collateral Agent or
any other Secured Party hereunder.
(d) The guarantee contained in this Section 2 shall remain in
full force and effect until all the Borrower Obligations and the
obligations of each Guarantor under the guarantee contained in this Section
2 shall have been satisfied by payment in full, no Letter of Credit shall
be outstanding and the Commitments shall be terminated, notwithstanding
that from time to time during the term of the Credit Agreement the Borrower
may be free from any Borrower Obligations.
(e) No payment made by the Borrower, any of the Guarantors, any
other guarantor or any other Person or received or collected by the
Collateral Agent or any other Secured Party from the Borrower, any of the
Guarantors, any other guarantor or any other Person by virtue of any action
or proceeding or any set-off or appropriation or application at any time or
from time to time in reduction of or in payment of the Borrower Obligations
shall be deemed to modify, reduce, release or otherwise affect the
liability of any Guarantor hereunder which shall, notwithstanding any such
payment (other than any payment made by such Guarantor in respect of the
Borrower Obligations or any payment received or collected from such
Guarantor in respect of the Borrower Obligations), remain liable for the
Borrower Obligations up to the maximum liability of such Guarantor
hereunder until the Borrower Obligations are paid in full, no Letter of
Credit shall be outstanding and the Commitments are terminated.
2.2 Right of Contribution. Each Guarantor hereby agrees that to
the extent that a Guarantor shall have paid more than its proportionate
share of any payment made hereunder, such Guarantor shall be entitled to
seek and receive contribution from and against any other Guarantor
hereunder which has not paid its proportionate share of such payment. Each
Guarantor's right of contribution shall be subject to the terms and
conditions of Section 2.3. The provisions of this Section 2.2 shall in no
respect limit the obligations and liabilities of any Guarantor to the
Collateral Agent and the other Secured Parties, and each Guarantor shall
remain liable to the Collateral Agent and the other Secured Parties for the
full amount guaranteed by such Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor
by the Collateral Agent or any other Secured Party, no Guarantor shall be
entitled to be subrogated to any of the rights of the Collateral Agent or
any other Secured Party against the Borrower or any other Guarantor or any
collateral security or guarantee or right of offset held by the Collateral
Agent or any other Secured Party for the payment of the Borrower
Obligations, nor shall any Guarantor seek or be entitled to seek any
contribution or reimbursement from the Borrower or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts
owing to the Collateral Agent and the other Secured Parties by the Borrower
on account of the Borrower Obligations are paid in full, no Letter of
Credit shall be outstanding and the Commitments are terminated. If any
amount shall be paid to any Guarantor on account of such subrogation rights
at any time when all of the Borrower Obligations shall not have been paid
in full, such amount shall be held by such Guarantor in trust for the
Collateral Agent and the other Secured Parties, segregated from other funds
of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be
turned over to the Collateral Agent in the exact form received by such
Guarantor (duly indorsed by such Guarantor to the Collateral Agent, if
required), to be applied against the Borrower Obligations, whether matured
or unmatured, in such order as the Collateral Agent may determine.
2.4 Amendments, etc. with respect to the Borrower Obligations.
Each Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Guarantor and without notice
to or further assent by any Guarantor, any demand for payment of any of the
Borrower Obligations made by the Collateral Agent or any other Secured
Party may be rescinded by the Collateral Agent or such Secured Party and
any of the Borrower Obligations continued, and the Borrower Obligations, or
the liability of any other Person upon or for any part thereof, or any
collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or
released by the Collateral Agent or any other Secured Party, and the Credit
Agreement and the other Loan Documents and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Collateral Agent (or the
Administrative Agent, the Required Lenders or all Lenders, as the case may
be) may deem advisable from time to time, and any collateral security,
guarantee or right of offset at any time held by the Collateral Agent or
any other Secured Party for the payment of the Borrower Obligations may be
sold, exchanged, waived, surrendered or released. Neither the Collateral
Agent nor any other Secured Party shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for
the Borrower Obligations or for the guarantee contained in this Section 2
or any property subject thereto.
2.5 Guarantee Absolute and Unconditional. Each Guarantor waives
any and all notice of the creation, renewal, extension or accrual of any of
the Borrower Obligations and notice of or proof of reliance by the
Collateral Agent or any other Secured Party upon the guarantee contained in
this Section 2 or acceptance of the guarantee contained in this Section 2;
the Borrower Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon the guarantee contained in this Section 2; and all
dealings between the Borrower and any of the Guarantors, on the one hand,
and the Collateral Agent and the other Secured Parties, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Section 2. Each Guarantor
waives diligence, presentment, protest, demand for payment and notice of
default or nonpayment to or upon the Borrower or any of the Guarantors with
respect to the Borrower Obligations. Each Guarantor understands and agrees
that the guarantee contained in this Section 2 shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard
to (a) the validity or enforceability of the Credit Agreement or any other
Loan Document, any of the Borrower Obligations or any other collateral
security therefor or guarantee or right of offset with respect thereto at
any time or from time to time held by the Collateral Agent or any other
Secured Party, (b) any defense, set-off or counterclaim (other than a
defense of payment or performance) which may at any time be available to or
be asserted by the Borrower or any other Person against the Collateral
Agent or any other Secured Party, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of the Borrower or such Guarantor)
which constitutes, or might be construed to constitute, an equitable or
legal discharge of the Borrower for the Borrower Obligations, or of such
Guarantor under the guarantee contained in this Section 2, in bankruptcy or
in any other instance. When making any demand hereunder or otherwise
pursuing its rights and remedies hereunder against any Guarantor, the
Collateral Agent or any other Secured Party may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such rights and
remedies as it may have against the Borrower, any other Guarantor or any
other Person or against any collateral security or guarantee for the
Borrower Obligations or any right of offset with respect thereto, and any
failure by the Collateral Agent or any other Secured Party to make any such
demand, to pursue such other rights or remedies or to collect any payments
from the Borrower, any other Guarantor or any other Person or to realize
upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of the Borrower, any other Guarantor or any
other Person or any such collateral security, guarantee or right of offset,
shall not relieve any Guarantor of any obligation or liability hereunder,
and shall not impair or affect the rights and remedies, whether express,
implied or available as a matter of law, of the Collateral Agent or any
other Secured Party against any Guarantor. For the purposes hereof "demand"
shall include the commencement and continuance of any legal proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2
shall continue to be effective, or be reinstated, as the case may be, if at
any time payment, or any part thereof, of any of the Borrower Obligations
is rescinded or must otherwise be restored or returned by the Collateral
Agent or any other Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Borrower or any
Guarantor, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or
otherwise, all as though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Collateral Agent without set-off or
counterclaim in Dollars at the office of the Collateral Agent located at
270 Park Avenue, New York, New York 10017.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the Collateral
Agent, and hereby grants to the Collateral Agent, for the ratable benefit
of the Secured Parties, a security interest in, all of the following
property now owned or at any time hereafter acquired by such Grantor or in
which such Grantor now has or at any time in the future may acquire any
right, title or interest (collectively, the "Collateral"), as collateral
security for the prompt and complete payment and performance when due
(whether at the stated maturity, by acceleration or otherwise) of such
Grantor's Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Deposit Accounts;
(d) all Documents;
(e) all Equipment;
(f) all General Intangibles;
(g) all Instruments;
(h) all Intellectual Property;
(i) all Inventory;
(j) all Investment Property;
(k) all other property not otherwise described above;
(l) all books and records pertaining to the Collateral; and
(m) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral security
and guarantees given by any Person with respect to any of the
foregoing;
provided, however that notwithstanding the foregoing, "Collateral" shall
not include any Shared Collateral.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into
the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby
represents and warrants to the Collateral Agent and each other Secured
Party that:
4.1 Title; No Other Liens. Except for the security interest
granted to the Collateral Agent for the ratable benefit of the Secured
Parties pursuant to this Agreement and the other Liens permitted to exist
on the Collateral by the Credit Agreement, such Grantor owns each item of
the Collateral free and clear of any and all Liens or claims of others. No
financing statement or other public notice with respect to all or any part
of the Collateral is on file or of record in any public office, except such
as have been filed in favor of the Collateral Agent, for the ratable
benefit of the Secured Parties, pursuant to this Agreement or as are
permitted by the Credit Agreement.
4.2 Perfected First Priority Liens. The security interests
granted pursuant to this Agreement (a) upon completion of the filings and
other actions specified on Schedule 3 (which, in the case of all filings
and other documents referred to on said Schedule, have been delivered to
the Collateral Agent in completed and duly executed form) will constitute
valid perfected security interests in all of the Collateral (other than any
Inventory and Equipment kept at locations where there is less than
$1,000,000 aggregate book value of Inventory and Equipment) in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, as
collateral security for such Grantor's Obligations, enforceable in
accordance with the terms hereof against all creditors of such Grantor and
any Persons purporting to purchase any Collateral from such Grantor and (b)
are prior to all other Liens on the Collateral in existence on the date
hereof except for Liens permitted by the Credit Agreement which have
priority over the Liens on the Collateral by operation of law.
4.3 Chief Executive Office. On the date hereof, such Grantor's
jurisdiction of organization and the location of such Grantor's chief
executive office or sole place of business are specified on Schedule 4.
4.4 Inventory and Equipment. On the date hereof, the Inventory
and the Equipment (other than mobile goods and other than any Inventory and
Equipment kept at locations where there is less than $1,000,000 aggregate
book value of Inventory and Equipment) are kept at the locations listed on
Schedule 5.
4.5 Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
4.6 Investment Property. (a) The shares of Pledged Stock pledged
by such Grantor hereunder constitute all the issued and outstanding shares
of all classes of the Capital Stock of each Issuer listed on Schedule 2
owned by such Grantor or, in the case of Foreign Subsidiary Voting Stock,
if less, 66% of the outstanding Foreign Subsidiary Voting Stock of each
relevant Issuer.
(b) All the shares of the Pledged Stock have been duly and
validly issued and are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid and
binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of, and has
good and marketable title to, the Investment Property pledged by it
hereunder, free of any and all Liens or options in favor of, or claims of,
any other Person, except the security interest created by this Agreement.
4.7 Intellectual Property. (a) Schedule 6 lists all Intellectual
Property owned by such Grantor in its own name on the date hereof.
(b) On the date hereof, all Intellectual Property is valid,
subsisting, unexpired and enforceable, has not been abandoned and does not
infringe the intellectual property rights of any other Person, except as
could not reasonably be expected to have a Material Adverse Effect.
(c) Except as set forth in Schedule 6, on the date hereof, none
of the Intellectual Property is the subject of any licensing or franchise
agreement pursuant to which such Grantor is the licensor or franchisor.
(d) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity
of, or such Grantor's rights in, any Intellectual Property in any respect
that could reasonably be expected to have a Material Adverse Effect.
(e) No action or proceeding is pending, or, to the knowledge of
such Grantor, threatened, on the date hereof (i) seeking to limit, cancel
or question the validity of any Intellectual Property or such Grantor's
ownership interest therein, or (ii) which, if adversely determined, would
have an adverse effect on the value of any Intellectual Property, except
for actions and proceedings as could not reasonably be expected to have a
Material Adverse Effect.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Collateral Agent and
the other Secured Parties that, from and after the date of this Agreement
until the Obligations shall have been paid in full, no Letter of Credit
shall be outstanding and the Commitments shall have terminated:
5.1 Delivery of Instruments, Certificated Securities and Chattel
Paper. If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any Instrument, Certificated
Security or Chattel Paper, such Instrument, Certificated Security or
Chattel Paper shall be immediately delivered to the Collateral Agent, duly
indorsed in a manner satisfactory to the Collateral Agent, to be held as
Collateral pursuant to this Agreement.
5.2 Maintenance of Insurance. (a) Such Grantor will maintain,
with financially sound and reputable companies, insurance policies (i)
insuring the Inventory and Equipment against loss by fire, explosion, theft
and such other casualties comparable in scope and coverage as insurance
maintained by companies engaged in the same or similar businesses and (ii)
insuring such Grantor and the Collateral Agent against liability for
personal injury and property damage relating to such Inventory and
Equipment, such policies to be in such form and amounts and having such
coverage as are usually maintained by companies engaged in the same or
similar businesses.
(b) All such insurance shall (i) provide that no cancellation,
material reduction in amount or material change in coverage thereof shall
be effective until at least 30 days after receipt by the Collateral Agent
of written notice thereof, (ii) name the Collateral Agent as additional
insured party or loss payee, (iii) if reasonably requested by the
Collateral Agent, include a breach of warranty clause and (iv) be
reasonably satisfactory in all other respects to the Collateral Agent.
(c) The Borrower shall deliver to the Collateral Agent and the
other Secured Parties a report of a reputable insurance broker with respect
to such insurance substantially concurrently with each delivery of the
Borrower's audited annual financial statements and such supplemental
reports with respect thereto as the Collateral Agent may from time to time
reasonably request.
5.3 Payment of Obligations. Such Grantor will pay and discharge
or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all taxes, assessments and governmental
charges or levies imposed upon the Collateral or in respect of income or
profits therefrom, as well as all claims of any kind (including, without
limitation, claims for labor, materials and supplies) against or with
respect to the Collateral, except that no such charge need be paid if the
amount or validity thereof is currently being contested in good faith by
appropriate proceedings, reserves in conformity with GAAP with respect
thereto have been provided on the books of such Grantor and such
proceedings could not reasonably be expected to result in a Material
Adverse Effect.
5.4 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest
created by this Agreement as a perfected security interest having at least
the priority described in Section 4.2 and shall defend such security
interest against the claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Collateral Agent and the
other Secured Parties from time to time statements and schedules further
identifying and describing the assets and property of such Grantor and such
other reports in connection therewith as the Collateral Agent may
reasonably request, all in reasonable detail.
(c) At any time and from time to time, upon the written request
of the Collateral Agent, and at the sole expense of such Grantor, such
Grantor will promptly and duly execute and deliver, and have recorded, such
further instruments and documents and take such further actions as the
Collateral Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, (i) filing any financing or
continuation statements under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with respect to the security interests
created hereby and (ii) in the case of Investment Property, Deposit
Accounts and any other relevant Collateral, taking any actions necessary to
enable the Collateral Agent to obtain "control" (within the meaning of the
applicable Uniform Commercial Code) with respect thereto.
5.5 Notices. Such Grantor will advise the Collateral Agent
promptly, in reasonable detail, of the occurrence of any event which could
reasonably be expected to have a material adverse effect on the aggregate
value of the Collateral or on the security interests created hereby.
5.6 Investment Property. (a) If such Grantor shall become
entitled to receive or shall receive any stock certificate (including,
without limitation, any certificate representing a stock dividend or a
distribution in connection with any reclassification, increase or reduction
of capital or any certificate issued in connection with any
reorganization), option or rights in respect of the Capital Stock of any
Issuer, whether in addition to, in substitution of, as a conversion of, or
in exchange for, any shares of the Pledged Stock, or otherwise in respect
thereof, such Grantor shall accept the same as the agent of the Collateral
Agent and the other Secured Parties, hold the same in trust for the
Collateral Agent and the other Secured Parties and deliver the same
forthwith to the Collateral Agent in the exact form received, duly indorsed
by such Grantor to the Collateral Agent, if required, together with an
undated stock power covering such certificate duly executed in blank by
such Grantor and with, if the Collateral Agent so requests, signature
guaranteed, to be held by the Collateral Agent, subject to the terms
hereof, as additional collateral security for the Obligations. Any sums
paid upon or in respect of the Investment Property upon the liquidation or
dissolution of any Issuer shall be paid over to the Collateral Agent to be
held by it hereunder as additional collateral security for the Obligations,
and in case any distribution of capital shall be made on or in respect of
the Investment Property or any property shall be distributed upon or with
respect to the Investment Property pursuant to the recapitalization or
reclassification of the capital of any Issuer or pursuant to the
reorganization thereof, the property so distributed shall, unless otherwise
subject to a perfected security interest in favor of the Collateral Agent,
be delivered to the Collateral Agent to be held by it hereunder as
additional collateral security for the Obligations. If any sums of money or
property so paid or distributed in respect of the Investment Property shall
be received by such Grantor, such Grantor shall, until such money or
property is paid or delivered to the Collateral Agent, hold such money or
property in trust for the Collateral Agent and the other Secured Parties,
segregated from other funds of such Grantor, as additional collateral
security for the Obligations.
(b) Without the prior written consent of the Collateral Agent,
such Grantor will not (i) vote to enable, or take any other action to
permit, any Issuer to issue any stock or other equity securities of any
nature or to issue any other securities convertible into or granting the
right to purchase or exchange for any stock or other equity securities of
any nature of any Issuer (except pursuant to a transaction expressly
permitted by the Credit Agreement), (ii) sell, assign, transfer, exchange,
or otherwise dispose of, or grant any option with respect to, the
Investment Property or Proceeds thereof (except pursuant to a transaction
expressly permitted by the Credit Agreement), (iii) create, incur or permit
to exist any Lien or option in favor of, or any claim of any Person with
respect to, any of the Investment Property or Proceeds thereof, or any
interest therein, except for the security interests created by this
Agreement or (iv) enter into any agreement or undertaking restricting the
right or ability of such Grantor or the Collateral Agent to sell, assign or
transfer any of the Investment Property or Proceeds thereof (other than in
anticipation of a Disposition of Investment Property in a transaction
expressly permitted by the Credit Agreement).
(c) In the case of each Grantor which is an Issuer, such Issuer
agrees that (i) it will be bound by the terms of this Agreement relating to
the Investment Property issued by it and will comply with such terms
insofar as such terms are applicable to it, (ii) it will notify the
Collateral Agent promptly in writing of the occurrence of any of the events
described in Section 5.6(a) with respect to the Investment Property issued
by it and (iii) the terms of Sections 6.3(c) and 6.7 shall apply to it,
mutatis mutandis, with respect to all actions that may be required of it
pursuant to Section 6.3(c) or 6.7 with respect to the Investment Property
issued by it.
5.7 Receivables. (a) Other than in the ordinary course of
business consistent with its past practice, such Grantor will not (i) grant
any extension of the time of payment of any Receivable, (ii) compromise or
settle any Receivable for less than the full amount thereof, (iii) release,
wholly or partially, any Person liable for the payment of any Receivable,
(iv) allow any credit or discount whatsoever on any Receivable or (v)
amend, supplement or modify any Receivable in any manner that could
adversely affect the value thereof.
(b) Such Grantor will deliver to the Collateral Agent a copy of
each material demand, notice or document received by it that questions or
calls into doubt the validity or enforceability of more than 5% of the
aggregate amount of the then outstanding Receivables.
5.8 Intellectual Property. (a) Such Grantor (either itself or
through licensees) will (i) use each material Trademark with the
appropriate notice of registration and all other notices and legends
required by applicable Requirements of Law and (ii) not (and not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any
act whereby such Trademark may become invalidated or impaired in any way.
(b) Such Grantor (either itself or through licensees) will not do
any act, or omit to do any act, whereby any material Patent may become
forfeited, abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) will not
(and will not permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby any material portion of the Copyrights
may become invalidated or otherwise impaired. Such Grantor will not (either
itself or through licensees) do any act whereby any material portion of the
Copyrights may fall into the public domain.
(d) Such Grantor (either itself or through licensees) will not do
any act that knowingly uses any material Intellectual Property to infringe
the intellectual property rights of any other Person.
(e) Such Grantor will notify the Collateral Agent and the other
Secured Parties immediately if it knows, or has reason to know, that any
application or registration relating to any material Intellectual Property
may become forfeited, abandoned or dedicated to the public, or of any
adverse determination or development (including, without limitation, the
institution of, or any such determination or development in, any proceeding
in the United States Patent and Trademark Office, the United States
Copyright Office or any court or tribunal in any country) regarding such
Grantor's ownership of, or the validity of, any material Intellectual
Property or such Grantor's right to register the same or to own and
maintain the same, in each case to the extent the same could reasonably be
expected to have a Material Adverse Effect.
(f) Whenever such Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the
registration of any Intellectual Property with the United States Patent and
Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, such
Grantor shall report such filing to the Collateral Agent on the Collateral
Date next succeeding the date on which such filing occurs. Upon request of
the Collateral Agent at any time after the occurrence and during the
continuance of an Event of Default, such Grantor shall execute and deliver,
and have recorded, any and all agreements, instruments, documents, and
papers as the Collateral Agent may request to evidence the Collateral
Agent's and the other Secured Parties' security interest in any Copyright,
Patent or Trademark and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby.
(g) Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States
Patent and Trademark Office, the United States Copyright Office or any
similar office or agency in any other country or any political subdivision
thereof, to maintain and pursue each application (and to obtain the
relevant registration) and to maintain each registration of the material
Intellectual Property, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of
incontestability.
(h) In the event that any Intellectual Property is infringed,
misappropriated or diluted by a third party, such Grantor shall (i) take
such actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Collateral Agent after it learns thereof and sue for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate
and to recover any and all damages for such infringement, misappropriation
or dilution, except to the extent that failure to take such action could
not reasonably be expected to have a Material Adverse Effect.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) The Collateral
Agent shall at reasonable times and upon reasonable request have the right
to make test verifications of the Receivables in any manner and through any
medium that it reasonably considers advisable, and each Grantor shall
furnish all such assistance and information as the Collateral Agent may
require in connection with such test verifications. At any time after the
occurrence and during the continuance of an Event of Default, upon the
Collateral Agent's request and at the expense of the relevant Grantor, such
Grantor shall cause independent public accountants or others satisfactory
to the Collateral Agent to furnish to the Collateral Agent reports showing
reconciliations, aging and test verifications of, and trial balances for,
the Receivables.
(b) The Collateral Agent hereby authorizes each Grantor to
collect such Grantor's Receivables and the Collateral Agent may curtail or
terminate said authority at any time after the occurrence and during the
continuance of an Event of Default. If required by the Collateral Agent at
any time after the occurrence and during the continuance of an Event of
Default, any payments of Receivables, when collected by any Grantor, (i)
shall be forthwith (and, in any event, within two Business Days) deposited
by such Grantor in the exact form received, duly indorsed by such Grantor
to the Collateral Agent if required, in a Collateral Account maintained
under the sole dominion and control of the Collateral Agent, subject to
withdrawal by the Collateral Agent for the account of the Secured Parties
only as provided in Section , and (ii) until so turned over, shall be held
by such Grantor in trust for the Collateral Agent and the other Secured
Parties, segregated from other funds of such Grantor. Each such deposit of
Proceeds of Receivables shall be accompanied by a report identifying in
reasonable detail the nature and source of the payments included in the
deposit.
(c) At any time after the occurrence and during the continuance
of an Event of Default, upon the Collateral Agent's request, each Grantor
shall deliver to the Collateral Agent all original and other documents
evidencing, and relating to, the agreements and transactions which gave
rise to the Receivables, including, without limitation, all original
orders, invoices and shipping receipts.
6.2 Communications with Obligors; Grantors Remain Liable. (a) At
any time after the occurrence and during the continuance of an Event of
Default, the Collateral Agent in its own name or in the name of others may
at any time communicate with obligors under the Receivables to verify with
them to the Collateral Agent's satisfaction the existence, amount and terms
of any Receivables.
(b) Upon the request of the Collateral Agent at any time after
the occurrence and during the continuance of an Event of Default, each
Grantor shall notify obligors on the Receivables that the Receivables have
been assigned to the Collateral Agent for the ratable benefit of the
Secured Parties and that payments in respect thereof shall be made directly
to the Collateral Agent.
(c) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of the Receivables to observe and perform
all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. Neither the Collateral Agent nor any other Secured Party shall
have any obligation or liability under any Receivable (or any agreement
giving rise thereto) by reason of or arising out of this Agreement or the
receipt by the Collateral Agent or any other Secured Party of any payment
relating thereto, nor shall the Collateral Agent or any other Secured Party
be obligated in any manner to perform any of the obligations of any Grantor
under or pursuant to any Receivable (or any agreement giving rise thereto),
to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take
any action to enforce any performance or to collect the payment of any
amounts which may have been assigned to it or to which it may be entitled
at any time or times.
6.3 Pledged Stock. (a) Unless an Event of Default shall have
occurred and be continuing and the Collateral Agent shall have given notice
to the relevant Grantor of the Collateral Agent's intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Grantor shall be
permitted to receive all cash dividends paid in respect of the Pledged
Stock and all payments made in respect of the Pledged Notes, in each case
paid in the normal course of business of the relevant Issuer, to the extent
permitted in the Credit Agreement, and to exercise all voting and corporate
rights with respect to the Investment Property; provided, however, that no
vote shall be cast or corporate right exercised or other action taken which
could reasonably be expected to impair the Collateral or which would be
inconsistent with or result in any violation of any provision of the Credit
Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and the
Collateral Agent shall give notice of its intent to exercise such rights to
the relevant Grantor or Grantors, (i) the Collateral Agent shall have the
right to receive any and all cash dividends, payments or other Proceeds
paid in respect of the Investment Property and make application thereof to
the Obligations in such order as the Collateral Agent may determine, and
(ii) any or all of the Investment Property shall be registered in the name
of the Collateral Agent or its nominee, and the Collateral Agent or its
nominee may thereafter exercise (x) all voting, corporate and other rights
pertaining to such Investment Property at any meeting of shareholders of
the relevant Issuer or Issuers or otherwise and (y) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Investment Property as if it were the absolute
owner thereof (including, without limitation, the right to exchange at its
discretion any and all of the Investment Property upon the merger,
consolidation, reorganization, recapitalization or other fundamental change
in the corporate structure of any Issuer, or upon the exercise by any
Grantor or the Collateral Agent of any right, privilege or option
pertaining to such Investment Property, and in connection therewith, the
right to deposit and deliver any and all of the Investment Property with
any committee, depositary, transfer agent, registrar or other designated
agency upon such terms and conditions as the Collateral Agent may
determine), all without liability except to account for property actually
received by it, but the Collateral Agent shall have no duty to any Grantor
to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of
any Investment Property pledged by such Grantor hereunder to (i) comply
with any instruction received by it from the Collateral Agent in writing
that (x) states that an Event of Default has occurred and is continuing and
(y) is otherwise in accordance with the terms of this Agreement, without
any other or further instructions from such Grantor, and each Grantor
agrees that each Issuer shall be fully protected in so complying, and (ii)
unless otherwise expressly permitted hereby, pay any dividends or other
payments with respect to the Investment Property directly to the Collateral
Agent.
6.4 Proceeds to be Turned Over To Collateral Agent. In addition
to the rights of the Collateral Agent and the other Secured Parties
specified in Section 6.1 with respect to payments of Receivables, if an
Event of Default shall occur and be continuing, all Proceeds received by
any Grantor consisting of cash, checks and other near-cash items shall be
held by such Grantor in trust for the Collateral Agent and the other
Secured Parties, segregated from other funds of such Grantor, and shall,
forthwith upon receipt by such Grantor, be turned over to the Collateral
Agent in the exact form received by such Grantor (duly indorsed by such
Grantor to the Collateral Agent, if required). All Proceeds received by the
Collateral Agent hereunder shall be held by the Collateral Agent in a
Collateral Account maintained under its sole dominion and control. All
Proceeds while held by the Collateral Agent in a Collateral Account (or by
such Grantor in trust for the Collateral Agent and the other Secured
Parties) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as
provided in Section 6.5.
6.5 Application of Proceeds. At such intervals as may be agreed
upon by the Borrower and the Collateral Agent, or, if an Event of Default
shall have occurred and be continuing, at any time at the Collateral
Agent's election, the Collateral Agent may apply all or any part of
Proceeds held in any Collateral Account in payment of the Obligations in
such order as the Collateral Agent may elect, and any part of such funds
which the Collateral Agent elects not so to apply and deems not required as
collateral security for the Obligations shall be paid over from time to
time by the Collateral Agent to the Borrower or to whomsoever may be
lawfully entitled to receive the same. Any balance of such Proceeds
remaining after the Obligations shall have been paid in full, no Letters of
Credit shall be outstanding and the Commitments shall have terminated shall
be paid over to the applicable Grantor or to whomsoever may be lawfully
entitled to receive the same.
6.6 Code and Other Remedies. If an Event of Default shall occur
and be continuing, the Collateral Agent, on behalf of the Secured Parties,
may exercise, in addition to all other rights and remedies granted to them
in this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a
secured party under the New York UCC or any other applicable law. Without
limiting the generality of the foregoing, the Collateral Agent, without
demand of performance or other demand, presentment, protest, advertisement
or notice of any kind (except any notice required by law referred to below)
to or upon any Grantor or any other Person (all and each of which demands,
defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign,
give option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in
one or more parcels at public or private sale or sales, at any exchange,
broker's board or office of the Collateral Agent or any other Secured Party
or elsewhere upon such terms and conditions as it may deem advisable and at
such prices as it may deem best, for cash or on credit or for future
delivery without assumption of any credit risk. The Collateral Agent or any
other Secured Party shall have the right upon any such public sale or
sales, and, to the extent permitted by law, upon any such private sale or
sales, to purchase the whole or any part of the Collateral so sold, free of
any right or equity of redemption in any Grantor, which right or equity is
hereby waived and released. Each Grantor further agrees, at the Collateral
Agent's request, to assemble the Collateral and make it available to the
Collateral Agent at places which the Collateral Agent shall reasonably
select, whether at such Grantor's premises or elsewhere. The Collateral
Agent shall apply the net proceeds of any action taken by it pursuant to
this Section 6.6, after deducting all reasonable costs and expenses of
every kind incurred in connection therewith or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Collateral Agent and the other Secured
Parties hereunder, including, without limitation, reasonable attorneys'
fees and disbursements, to the payment in whole or in part of the
Obligations, in such order as the Collateral Agent may elect, and only
after such application and after the payment by the Collateral Agent of any
other amount required by any provision of law, including, without
limitation, Section 9-504(1)(c) of the New York UCC, need the Collateral
Agent account for the surplus, if any, to any Grantor. To the extent
permitted by applicable law, each Grantor waives all claims, damages and
demands it may acquire against the Collateral Agent or any other Secured
Party arising out of the exercise by them of any rights hereunder. If any
notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given
at least 10 days before such sale or other disposition.
6.7 Registration Rights. (a) If the Collateral Agent shall
determine to exercise its right to sell any or all of the Pledged Stock
pursuant to Section 6.6, and if in the opinion of the Collateral Agent it
is necessary or advisable to have the Pledged Stock, or that portion
thereof to be sold, registered under the provisions of the Securities Act,
the relevant Grantor will cause the Issuer thereof to (i) execute and
deliver, and cause the directors and officers of such Issuer to execute and
deliver, all such instruments and documents, and do or cause to be done all
such other acts as may be, in the opinion of the Collateral Agent,
necessary or advisable to register the Pledged Stock, or that portion
thereof to be sold, under the provisions of the Securities Act, (ii) use
its best efforts to cause the registration statement relating thereto to
become effective and to remain effective for a period of one year from the
date of the first public offering of the Pledged Stock, or that portion
thereof to be sold, and (iii) make all amendments thereto and/or to the
related prospectus which, in the opinion of the Collateral Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto. Each Grantor agrees to cause such Issuer to
comply with the provisions of the securities or "Blue Sky" laws of any and
all jurisdictions which the Collateral Agent shall designate and to make
available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) which will satisfy the provisions of
Section 11(a) of the Securities Act.
(b) Each Grantor recognizes that the Collateral Agent may be
unable to effect a public sale of any or all the Pledged Stock, by reason
of certain prohibitions contained in the Securities Act and applicable
state securities laws or otherwise, and may be compelled to resort to one
or more private sales thereof to a restricted group of purchasers which
will be obliged to agree, among other things, to acquire such securities
for their own account for investment and not with a view to the
distribution or resale thereof. Each Grantor acknowledges and agrees that
any such private sale may result in prices and other terms less favorable
than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have
been made in a commercially reasonable manner. The Collateral Agent shall
be under no obligation to delay a sale of any of the Pledged Stock for the
period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable
state securities laws, even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or cause to
be done all such other acts as may be necessary to make such sale or sales
of all or any portion of the Pledged Stock pursuant to this Section 6.7
valid and binding and in compliance with any and all other applicable
Requirements of Law. Each Grantor further agrees that a breach of any of
the covenants contained in this Section 6.7 will cause irreparable injury
to the Collateral Agent and the other Secured Parties, that the Collateral
Agent and the other Secured Parties have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section 6.7 shall be specifically enforceable against
such Grantor, and such Grantor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants
except for a defense that no Event of Default has occurred under the Credit
Agreement.
6.8 Waiver; Deficiency. Each Grantor waives and agrees not to
assert any rights or privileges which it may acquire under Section 9-112 of
the New York UCC. Each Grantor shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Collateral are
insufficient to pay its Obligations and the fees and disbursements of any
attorneys employed by the Collateral Agent or any other Secured Party to
collect such deficiency.
6.9 Letter of Credit Matters. Notwithstanding anything to the
contrary in this Agreement, Specified Letter of Credit Obligations (as
defined below) shall be deemed not to be secured by any Collateral granted
hereunder by GSX or any of its Subsidiaries. As used in this Section,
"Specified Letter of Credit Obligations" refers to Guarantor Obligations of
GSX and its Subsidiaries to the extent, but only to the extent, that such
Guarantor Obligations cover any reimbursement obligations of the Borrower
to the Issuing Lender in respect of the Letter of Credit issued on the
Effective Date for the benefit of Wachovia Bank, National Association.
SECTION 7. THE COLLATERAL AGENT
7.1 Collateral Agent's Appointment as Attorney-in-Fact, etc. (a)
Each Grantor hereby irrevocably constitutes and appoints the Collateral
Agent and any officer or agent thereof, with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of such Grantor and in the name of such
Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any
and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement, and, without limiting the
generality of the foregoing, each Grantor hereby gives the Collateral Agent
the power and right, on behalf of such Grantor, without notice to or assent
by such Grantor, to do any or all of the following:
(i) in the name of such Grantor or its own name, or otherwise,
take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under
any Receivable or with respect to any other Collateral and file any
claim or take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Collateral Agent for the
purpose of collecting any and all such moneys due under any Receivable
or with respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and
deliver, and have recorded, any and all agreements, instruments,
documents and papers as the Collateral Agent may request to evidence
the Collateral Agent's and the other Secured Parties' security
interest in such Intellectual Property and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of
the premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in Section
6.6 or 6.7, any indorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Collateral Agent or as the Collateral Agent
shall direct; (2) ask or demand for, collect, and receive payment of
and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any
Collateral; (3) sign and indorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other documents in
connection with any of the Collateral; (4) commence and prosecute any
suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any portion
thereof and to enforce any other right in respect of any Collateral;
(5) defend any suit, action or proceeding brought against such Grantor
with respect to any Collateral; (6) settle, compromise or adjust any
such suit, action or proceeding and, in connection therewith, give
such discharges or releases as the Collateral Agent may deem
appropriate; (7) assign any Copyright, Patent or Trademark (along with
the goodwill of the business to which any such Copyright, Patent or
Trademark pertains), throughout the world for such term or terms, on
such conditions, and in such manner, as the Collateral Agent shall in
its sole discretion determine; and (8) generally, sell, transfer,
pledge and make any agreement with respect to or otherwise deal with
any of the Collateral as fully and completely as though the Collateral
Agent were the absolute owner thereof for all purposes, and do, at the
Collateral Agent's option and such Grantor's expense, at any time, or
from time to time, all acts and things which the Collateral Agent
deems necessary to protect, preserve or realize upon the Collateral
and the Collateral Agent's and the other Secured Parties' security
interests therein and to effect the intent of this Agreement, all as
fully and effectively as such Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Collateral Agent agrees that it will not exercise any rights under the
power of attorney provided for in this Section 7.1(a) unless an Event of
Default shall have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Collateral Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The expenses of the Collateral Agent incurred in connection
with actions undertaken as provided in this Section 7.1, together with
interest thereon at a rate per annum equal to the highest rate per annum at
which interest would then be payable on any category of past due ABR Loans
under the Credit Agreement, from the date of payment by the Collateral
Agent to the date reimbursed by the relevant Grantor, shall be payable by
such Grantor to the Collateral Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the
security interests created hereby are released.
7.2 Duty of Collateral Agent. The Collateral Agent's sole duty
with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Collateral
Agent deals with similar property for its own account. Neither the
Collateral Agent, any other Secured Party nor any of their respective
officers, directors, employees or agents shall be liable for failure to
demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of
any Collateral upon the request of any Grantor or any other Person or to
take any other action whatsoever with regard to the Collateral or any part
thereof. The powers conferred on the Collateral Agent and the other Secured
Parties hereunder are solely to protect the Collateral Agent's and the
other Secured Parties' interests in the Collateral and shall not impose any
duty upon the Collateral Agent or any other Secured Party to exercise any
such powers. The Collateral Agent and the other Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to any Grantor for any
act or failure to act hereunder, except for their own gross negligence or
willful misconduct.
7.3 Execution of Financing Statements. Pursuant to Section 9-402
of the New York UCC and any other applicable law, each Grantor authorizes
the Collateral Agent to file or record financing statements and other
filing or recording documents or instruments with respect to the Collateral
without the signature of such Grantor in such form and in such offices as
the Collateral Agent determines appropriate to perfect the security
interests of the Collateral Agent under this Agreement. A photographic or
other reproduction of this Agreement shall be sufficient as a financing
statement or other filing or recording document or instrument for filing or
recording in any jurisdiction.
7.4 Authority of Collateral Agent. Each Grantor acknowledges that
the rights and responsibilities of the Collateral Agent under this
Agreement with respect to any action taken by the Collateral Agent or the
exercise or non-exercise by the Collateral Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Collateral
Agent and the other Secured Parties, be governed by the Credit Agreement
and by such other agreements with respect thereto as may exist from time to
time among them, but, as between the Collateral Agent and the Grantors, the
Collateral Agent shall be conclusively presumed to be acting as agent for
the Secured Parties with full and valid authority so to act or refrain from
acting, and no Grantor shall be under any obligation, or entitlement, to
make any inquiry respecting such authority.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified
except in accordance with Section 9.2(b) of the Credit Agreement.
8.2 Notices. All notices, requests and demands to or upon the
Collateral Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 9.1 of the Credit Agreement; provided that any such
notice, request or demand to or upon any Guarantor shall be addressed to
such Guarantor at its notice address set forth on Schedule 1.
8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither
the Collateral Agent nor any other Secured Party shall by any act (except
by a written instrument pursuant to Section 8.1), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default. No
failure to exercise, nor any delay in exercising, on the part of the
Collateral Agent or any other Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise
of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Collateral Agent or any other Secured Party of
any right or remedy hereunder on any one occasion shall not be construed as
a bar to any right or remedy which the Collateral Agent or such Secured
Party would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and
are not exclusive of any other rights or remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor
agrees to pay or reimburse the Collateral Agent and each other Secured
Party for all its costs and expenses incurred in collecting against such
Guarantor under the guarantee contained in Section 2 or otherwise enforcing
or preserving any rights under this Agreement and the other Loan Documents
to which such Guarantor is a party, including, without limitation, the fees
and disbursements of counsel (including the allocated fees and expenses of
in-house counsel) to the Collateral Agent and of counsel to each other
Secured Party.
(b) Each Guarantor agrees to pay, and to save the Collateral
Agent and the other Secured Parties harmless from, any and all liabilities
with respect to, or resulting from any delay in paying, any and all stamp,
excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of
the transactions contemplated by this Agreement.
(c) Each Guarantor agrees to pay, and to save the Collateral
Agent and the other Secured Parties harmless from, any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to
the execution, delivery, enforcement, performance and administration of
this Agreement to the extent the Borrower would be required to do so
pursuant to Section 9.3 of the Credit Agreement.
(d) The agreements in this Section 8.4 shall survive repayment of
the Obligations and all other amounts payable under the Credit Agreement
and the other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be binding upon
the successors and assigns of each Grantor and shall inure to the benefit
of the Collateral Agent and the other Secured Parties and their successors
and assigns; provided that no Grantor may assign, transfer or delegate any
of its rights or obligations under this Agreement without the prior written
consent of the Collateral Agent.
8.6 Set-Off. Each Grantor hereby irrevocably authorizes the
Collateral Agent and each other Secured Party at any time and from time to
time while an Event of Default shall have occurred and be continuing,
without notice to such Grantor or any other Grantor, any such notice being
expressly waived by each Grantor, to set-off and appropriate and apply any
and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in
any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the
Collateral Agent or such Secured Party to or for the credit or the account
of such Grantor, or any part thereof in such amounts as the Collateral
Agent or such Secured Party may elect, against and on account of the
obligations and liabilities of such Grantor to the Collateral Agent or such
Secured Party hereunder and claims of every nature and description of the
Collateral Agent or such Secured Party against such Grantor, in any
currency, whether arising hereunder, under the Credit Agreement, any other
Loan Document or otherwise, as the Collateral Agent or such Secured Party
may elect, whether or not the Collateral Agent or any other Secured Party
has made any demand for payment and although such obligations, liabilities
and claims may be contingent or unmatured. The Collateral Agent and each
other Secured Party shall notify such Grantor promptly of any such set-off
and the application made by the Collateral Agent or such Secured Party of
the proceeds thereof, provided that the failure to give such notice shall
not affect the validity of such set-off and application. The rights of the
Collateral Agent and each other Secured Party under this Section 8.6 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Collateral Agent or such Secured Party may
have.
8.7 Counterparts. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall
be deemed to constitute one and the same instrument.
8.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
8.9 Section Headings. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.
8.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Collateral Agent and the other
Secured Parties with respect to the subject matter hereof and thereof, and
there are no promises, undertakings, representations or warranties by the
Collateral Agent or any other Secured Party relative to subject matter
hereof and thereof not expressly set forth or referred to herein or in the
other Loan Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW 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, IN WHICH CASE THE LAW OF SUCH STATE JURISDICTION SHALL APPLY.
8.12 Submission To Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction
of the Courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and appellate
courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Grantor at its address referred to in Section 8.2 or
at such other address of which the Collateral Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this Section any special, exemplary,
punitive or consequential damages.
8.13 Acknowledgements. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Loan Documents to which
it is a party;
(b) neither the Collateral Agent nor any other Secured Party has
any fiduciary relationship with or duty to any Grantor arising out of
or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Grantors, on the one hand,
and the Collateral Agent and the other Secured Parties, on the other
hand, in connection herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Secured Parties or among the Grantors
and the Secured Parties.
8.14 Additional Grantors. Each Subsidiary of the Borrower that is
required to become a party to this Agreement pursuant to Section 5.11 of
the Credit Agreement shall become a Grantor for all purposes of this
Agreement upon execution and delivery by such Subsidiary of an Assumption
Agreement in the form of Annex 1 hereto.
8.15 Releases. (a) At such time as the Loans, the Reimbursement
Obligations and the other Obligations shall have been paid in full, the
Commitments have been terminated and no Letters of Credit shall be
outstanding, the Collateral shall be released from the Liens created
hereby, and this Agreement and all obligations (other than those expressly
stated to survive such termination) of the Collateral Agent and each
Grantor hereunder shall terminate, all without delivery of any instrument
or performance of any act by any party, and all rights to the Collateral
shall revert to the Grantors. At the request and sole expense of any
Grantor following any such termination, the Collateral Agent shall deliver
to such Grantor any Collateral held by the Collateral Agent hereunder, and
execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Grantor in a transaction permitted by the
Credit Agreement, then the Collateral Agent, at the request and sole
expense of such Grantor, shall execute and deliver to such Grantor all
releases or other documents reasonably necessary or desirable for the
release of the Liens created hereby on such Collateral. At the request and
sole expense of the Borrower, a Guarantor shall be released from its
obligations hereunder in the event that such Guarantor ceases to be a
Wholly Owned Subsidiary pursuant to a transaction expressly permitted by
the Credit Agreement and if, as a result of such transaction, the Borrower
and its Subsidiaries own less than 75% of the outstanding voting Capital
Stock of such Guarantor.
8.16 Notice of Event of Default. Prior to exercising any remedies
hereunder against GSX or any of its Subsidiaries, or in respect of any
Collateral in which a security interest is granted by any of them
hereunder, the Collateral Agent agrees to deliver to the Borrower two
Business Days' notice of the Event of Default giving rise to such exercise
of remedies and a demand for payment of all Obligations then outstanding;
provided, however, that the occurrence of an Event of Default in respect of
the Borrower under Section 7(h), (i) or (j) of the Credit Agreement shall
be deemed to constitute delivery by the Collateral Agent to the Borrower of
such notice. If the event or condition giving rise to such Event of Default
is not cured within two Business Days after notice thereof has been so
delivered or deemed delivered, there shall be no restriction on the ability
of the Collateral Agent to exercise its rights and remedies hereunder
against GSX and its Subsidiaries and the Collateral in which a security
interest is granted by them hereunder.
8.17 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has caused
this Guarantee and Collateral Agreement to be duly executed and delivered as
of the date first above written.
<PAGE>
SPX CORPORATION
By:
------------------------
Title:
KODIAK PARTNERS CORP.
By:
------------------------
Title:
KODIAK PARTNERS II CORP.
By:
------------------------
Title:
SPX SALES AND SERVICE, INC.
By:
------------------------
Title:
A. R. BRASCH MARKETING INC.
By:
------------------------
Title:
SUN TECHNICOM, INC.
By:
------------------------
Title:
VALLEY FORGE MANUFACTURING CORPORATION
By:
------------------------
Title:
TOLEDO TRANS-KIT, INC.
By:
------------------------
Title:
SPX RISK MANAGEMENT CO.
By:
------------------------
Title:
GENERAL SIGNAL CORPORATION
By:
------------------------
Title:
AURORA/HYDROMATIC PUMPS INC.
By:
------------------------
Title:
FAIRBANKS MORSE PUMP CORPORATION
By:
------------------------
Title:
GENERAL SIGNAL POWER SYSTEMS, INC.
By:
------------------------
Title:
G.S. BUILDING SYSTEMS CORPORATION
By:
------------------------
Title:
GENERAL SIGNAL HOLDINGS COMPANY
By:
------------------------
Title:
GENERAL SIGNAL TECHNOLOGY
CORPORATION
By:
------------------------
Title:
INRANGE TECHNOLOGIES CORPORATION
By:
------------------------
Title:
GENERAL FAREBOX SERVICE OF ATLANTA, INC.
By:
------------------------
Title:
DATA SWITCH COLLECTIONS, INC.
By:
------------------------
Title:
DATA SWITCH INTELLECTUAL PROPERTY, INC.
By:
------------------------
Title:
DATA SWITCH SUBSIDIARY STOCK
CORPORATION
By:
------------------------
Title:
METAL FORGE COMPANY, INC.
By:
------------------------
Title:
GCA INTERNATIONAL CORPORATION
By:
------------------------
Title:
GENERAL SIGNAL INTERNATIONAL CORPORATION
By:
------------------------
Title:
NEW SIGNAL, INC.
By:
------------------------
Title:
GSR MERGER SUB., INC.
By:
------------------------
Title:
LEEDS & NORTHRUP COMPANY
By:
------------------------
Title:
DUAL-LITE MANUFACTURING, INC.
By:
------------------------
Title:
<PAGE>
Schedule 1
----------
NOTICE ADDRESSES OF GUARANTORS
<PAGE>
Schedule 2
----------
DESCRIPTION OF INVESTMENT PROPERTY
PLEDGED STOCK:
Stock Percent of
Class of Certificate Number of Outstanding
Issuer Holder Stock Number Shares Shares
---------- -------- --------- ---------- ---------- -----------
PLEDGED NOTES:
Issuer Holder Principal Amount
- ------------------------------------- -------------- ---------------------------
<PAGE>
Schedule 3
----------
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
-------------------------------
[List each office where a financing statement is to be filed]
Actions with respect to Pledged Stock
-------------------------------------
Other Actions
-------------
[Describe other actions to be taken]
<PAGE>
Schedule 4
----------
LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
Grantor Location
------- --------
<PAGE>
Schedule 5
----------
LOCATION OF INVENTORY AND EQUIPMENT
Grantor Location
------- --------
<PAGE>
Schedule 6
----------
COPYRIGHTS AND COPYRIGHT LICENSES
PATENTS AND PATENT LICENSES
TRADEMARKS AND TRADEMARK LICENSES
<PAGE>
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Guarantee
and Collateral Agreement dated as of October 6, 1998 (the "Agreement"),
made by the Grantors parties thereto for the benefit of The Chase Manhattan
Bank, as Collateral Agent. The undersigned agrees for the benefit of the
Collateral Agent and the other Secured Parties as follows:
(a) The undersigned will be bound by the terms of the Agreement and
will comply with such terms insofar as such terms are applicable to the
undersigned.
(b) The undersigned will notify the Collateral Agent promptly in
writing of the occurrence of any of the events described in Section 5.6(a)
of the Agreement.
(c) The terms of Sections 6.3(c) and 6.7 of the Agreement shall apply
to it, mutatis mutandis, with respect to all actions that may be required
of it pursuant to Section 6.3(c) or 6.7 of the Agreement.
[NAME OF ISSUER]
By
--------------------------------------
Name:
Title:
Address for Notices:
-----------------------------------------
-----------------------------------------
-----------------------------------------
<PAGE>
Annex 1 to
Guarantee and Collateral Agreement
----------------------------------
ASSUMPTION AGREEMENT, dated as of ________________, ____, made by
______________________________, a ______________ corporation (the
"Additional Grantor"), in favor of THE CHASE MANHATTAN BANK, as collateral
agent (in such capacity, the "Collateral Agent") for the banks and other
financial institutions (the "Lenders") parties to the Credit Agreement
referred to below. All capitalized terms not defined herein shall have the
meaning ascribed to them in such Credit Agreement.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, SPX Corporation (the "Borrower"), the Lenders and the
Administrative Agent have entered into a Credit Agreement, dated as of
October 6, 1998 (as amended, supplemented or otherwise modified from time
to time, the "Credit Agreement");
WHEREAS, in connection with the Credit Agreement, the Borrower and
certain of its Affiliates (other than the Additional Grantor) have entered
into the Guarantee and Collateral Agreement, dated as of October 6, 1998
(as amended, supplemented or otherwise modified from time to time, the
"Guarantee and Collateral Agreement") in favor of the Collateral Agent for
the benefit of the Secured Parties (as defined in the Guarantee and
Collateral Agreement);
WHEREAS, the Credit Agreement requires the Additional Grantor to
become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee and
Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and delivering
this Assumption Agreement, the Additional Grantor, as provided in Section
8.14 of the Guarantee and Collateral Agreement, hereby becomes a party to
the Guarantee and Collateral Agreement as a Grantor thereunder with the
same force and effect as if originally named therein as a Grantor and,
without limiting the generality of the foregoing, hereby expressly assumes
all obligations and liabilities of a Grantor thereunder. The information
set forth in Annex 1-A hereto is hereby added to the information set forth
in the Schedules to the Guarantee and Collateral Agreement. The Additional
Grantor hereby represents and warrants that each of the representations and
warranties contained in Section 4 of the Guarantee and Collateral Agreement
is true and correct on and as the date hereof (after giving effect to this
Assumption Agreement) as if made on and as of such date.
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above
written.
[ADDITIONAL GRANTOR]
By:
--------------------------
Name:
Title:
<PAGE>
Annex 1-A to
Assumption Agreement
--------------------
Supplement to Schedule 1
------------------------
Supplement to Schedule 2
------------------------
Supplement to Schedule 3
------------------------
Supplement to Schedule 4
------------------------
Supplement to Schedule 5
------------------------
Supplement to Schedule 6
------------------------
<PAGE>
EXHIBIT A-2
===========================================================================
COLLATERAL AGREEMENT
made by
GENERAL SIGNAL CORPORATION
and certain of its Subsidiaries
in favor of
THE CHASE MANHATTAN BANK,
as Collateral Agent
Dated as of October 6, 1998
===========================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINED TERMS................................................. 2
1.1 Definitions................................................... 2
1.2 Other Definitional Provisions................................. 4
SECTION 2. GRANT OF SECURITY INTEREST.................................... 4
SECTION 3. REPRESENTATIONS AND WARRANTIES................................ 5
3.1 Title; No Other Liens......................................... 5
3.2 Perfected First Priority Liens................................ 5
3.3 Inventory and Equipment....................................... 6
3.4 Farm Products................................................. 6
3.5 Investment Property........................................... 6
SECTION 4. COVENANTS..................................................... 6
4.1 Delivery of Instruments, Certificated Securities and Chattel
Paper........................................................ 6
4.2 Maintenance of Insurance...................................... 7
4.3 Payment of Obligations........................................ 7
4.4 Maintenance of Perfected Security Interest; Further
Documentation................................................ 7
4.5 Notices....................................................... 8
4.6 Investment Property........................................... 8
SECTION 5. REMEDIAL PROVISIONS........................................... 9
5.1 Pledged Stock................................................. 9
5.2 Proceeds to be Turned Over To Collateral Agent................ 10
5.3 Application of Proceeds....................................... 11
5.4 Code and Other Remedies....................................... 11
5.5 Registration Rights........................................... 12
5.6 Waiver; Deficiency............................................ 13
SECTION 6. THE COLLATERAL AGENT.......................................... 13
6.1 Collateral Agent's Appointment as Attorney-in-Fact, etc....... 13
6.2 Duty of Collateral Agent...................................... 15
6.3 Execution of Financing Statements............................. 15
6.4 Authority of Collateral Agent................................. 15
SECTION 7. MISCELLANEOUS................................................. 16
7.1 Amendments in Writing......................................... 16
7.2 Notices....................................................... 16
7.3 No Waiver by Course of Conduct; Cumulative Remedies........... 16
7.4 Enforcement Expenses; Indemnification......................... 16
7.5 Successors and Assigns........................................ 17
7.6 Counterparts.................................................. 17
7.7 Severability.................................................. 17
7.8 Section Headings.............................................. 17
7.9 Integration................................................... 18
7.10 GOVERNING LAW................................................. 18
7.11 Submission To Jurisdiction; Waivers........................... 18
7.12 Acknowledgements.............................................. 19
7.13 Additional Grantors........................................... 19
7.14 Releases...................................................... 19
7.15 Notice of Event of Default.................................... 20
7.16 WAIVER OF JURY TRIAL.......................................... 20
7.17 Collateral Sharing Agreement.................................. 20
SCHEDULES
Schedule 1 Notice Addresses
Schedule 2 Investment Property
Schedule 3 Perfection Matters
Schedule 4 Inventory and Equipment Locations
ANNEX
Annex 1 Assumption Agreement
<PAGE>
COLLATERAL AGREEMENT
COLLATERAL AGREEMENT, dated as of October 6, 1998, made by each
of the signatories hereto (together with any other entity that may become a
party hereto as provided herein, the "Grantors"), in favor of THE CHASE
MANHATTAN BANK, as Collateral Agent (in such capacity, the "Collateral
Agent") for the Secured Parties (as defined below).
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated as of October 6,
1998 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among SPX Corporation (the "Borrower"), the banks and
other financial institutions (the "Lenders") from time to time party
thereto and The Chase Manhattan Bank, as Administrative Agent (in such
capacity, the "Administrative Agent"), the Lenders have severally agreed to
make extensions of credit to the Borrower upon the terms and subject to the
conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of
companies that includes each Grantor;
WHEREAS, the proceeds of the extensions of credit under the
Credit Agreement will be used in part to enable the Borrower to make
valuable transfers to one or more of the Grantors in connection with the
operation of their respective businesses;
WHEREAS, each Grantor will derive substantial direct and indirect
benefit from the making of the extensions of credit under the Credit
Agreement;
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrower under
the Credit Agreement that the Grantors shall have executed and delivered
this Agreement to the Collateral Agent for the ratable benefit of the
Secured Parties; and
WHEREAS, it is a requirement under the MTN Indenture (as defined
in the Credit Agreement) that the assets in which a security interest is
created hereunder must secure the securities issued under the MTN Indenture
(the "Public Debt Securities") equally and ratably with all other
indebtedness secured thereby;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit
Agreement, to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder and to satisfy the requirement referred
to in the preceding paragraph, each Grantor hereby agrees with the
Collateral Agent, for the ratable benefit of the Secured Parties, as
follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement, and the following terms are used
herein as defined in the New York UCC: Certificated Security, Chattel
Paper, Documents, Equipment, Farm Products, Instruments and Inventory.
(b) The following terms shall have the following meanings:
"Agreement": this Collateral Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
"Collateral": as defined in Section 2.
"Collateral Account": any collateral account established by the
Collateral Agent as provided in Section 5.2.
"Foreign Subsidiary Voting Stock": the voting Capital Stock of
any Foreign Subsidiary.
"Guarantor Obligations": with respect to any Grantor, all
obligations and liabilities of such Grantor which may arise under or
in connection with the Subsidiary Guarantee, this Agreement or any
other Loan Document to which such Grantor is a party, in each case
whether on account of guarantee obligations, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel
to the Collateral Agent, the Administrative Agent or the Lenders that
are required to be paid by such Grantor pursuant to the terms of this
Agreement or any other Loan Document).
"Holder Representative": (i) in respect of the Guarantor
Obligations, the Administrative Agent, and (ii) in respect of the
Public Debt Obligations, the Public Debt Trustee.
"Holders": the holders of the Public Debt Obligations (including,
when the context permits, the Public Debt Trustee acting on behalf of
such holders).
"Intercompany Note": any promissory note evidencing loans made by
any Grantor to the Borrower or any of its Subsidiaries.
"Investment Property": the collective reference to (i) all
"investment property" as such term is defined in Section 9-115 of the
New York UCC (other than any Foreign Subsidiary Voting Stock excluded
from the definition of "Pledged Stock") and (ii) whether or not
constituting "investment property" as so defined, all Pledged Notes
and all Pledged Stock.
"Issuers": the collective reference to each issuer of any
Investment Property.
"New York UCC": the Uniform Commercial Code as from time to time
in effect in the State of New York.
"Pledged Notes": all Intercompany Notes at any time issued to any
Grantor.
"Pledged Stock": the shares of Capital Stock listed on Schedule
2, together with any other shares, stock certificates, options or
rights of any nature whatsoever in respect of the Capital Stock of any
Person (other than, in the case of GSX, the Capital Stock of G.S.
Building Systems Corporation) that may be issued or granted to, or
directly held by, any Grantor while this Agreement is in effect;
provided that (i) in no event shall more than 66% of the total
outstanding Foreign Subsidiary Voting Stock of any Foreign Subsidiary
be required to be pledged hereunder and (ii) in no event shall the
Capital Stock of any non-Wholly Owned Subsidiary be required to be
pledged hereunder by any Grantor to the extent, and only to the
extent, the grant by such Grantor of a security interest pursuant to
this Agreement in its right, title and interest in such Capital Stock
is prohibited by the organizational or governing documents of such
non-Wholly Owned Subsidiary.
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the New York UCC and, in any event, shall include, without
limitation, all dividends or other income from the Investment
Property, collections thereon or distributions or payments with
respect thereto.
"Public Debt Obligations": the unpaid principal of, and premium,
if any, and interest on, the Public Debt Securities (including,
without limitation, interest accruing at the then applicable rate
provided in the instruments governing the Public Debt Securities after
the maturity of the Public Debt Securities and interest accruing at
the then applicable rate provided in such instruments after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to GSX, whether or not a
claim for post-filing or post-petition interest is allowed in such
proceeding).
"Public Debt Securities": as defined in the recitals hereto.
"Public Debt Trustee": The Chase Manhattan Bank, in its capacity
as trustee under the MTN Indenture, and any successor trustee
appointed under the MTN Indenture.
"Secured Obligations": the collective reference to (a) the
Guarantor Obligations of each Grantor, (b) the Public Debt Obligations
and (c) the Collateral Agent Fees (as defined in the Collateral Sharing
Agreement).
"Secured Parties": the collective reference to (a) the Lenders,
(b) the Holders, (c) the Administrative Agent and (d) the Collateral
Agent.
"Securities Act": the Securities Act of 1933, as amended.
"Subsidiary Guarantee": the guarantee contained in Section 2 of
the Guarantee and Collateral Agreement.
1.2 Other Definitional Provisions. (a) The words "hereof,"
"herein", "hereto" and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section and Schedule references
are to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral
or any part thereof, when used in relation to a Grantor, shall refer to
such Grantor's Collateral or the relevant part thereof.
SECTION 2. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the Collateral
Agent, and hereby grants to the Collateral Agent, for the ratable benefit
of the Secured Parties, a security interest in, all of the following
property now owned or at any time hereafter acquired by such Grantor or in
which such Grantor now has or at any time in the future may acquire any
right, title or interest (collectively, the "Collateral"), as collateral
security for the prompt and complete payment and performance when due
(whether at the stated maturity, by acceleration or otherwise) of the
Secured Obligations:
(a) all Chattel Paper;
(b) all Documents;
(c) all Equipment;
(d) all Instruments;
(e) all Inventory;
(f) all Investment Property;
(g) all other tangible property not otherwise described above;
(h) all books and records pertaining to the Collateral; and
(i) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral security
and guarantees given by any Person with respect to any of the
foregoing;
provided, however that notwithstanding the foregoing, "Collateral" shall
only include the foregoing items to the extent, and only to the extent,
that such items constitute "Principal Property, shares of stock or Debt of
a Restricted Subsidiary" within the meaning of the MTN Indenture as in
effect on the date of this Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES
Each Grantor hereby represents and warrants to the Collateral Agent
that:
3.1 Title; No Other Liens. Except for the security interest
granted to the Collateral Agent for the ratable benefit of the Secured
Parties pursuant to this Agreement and the other Liens permitted to exist
on the Collateral by the Credit Agreement, such Grantor owns each item of
the Collateral free and clear of any and all Liens or claims of others. No
financing statement or other public notice with respect to all or any part
of the Collateral is on file or of record in any public office, except such
as have been filed in favor of the Collateral Agent, for the ratable
benefit of the Secured Parties, pursuant to this Agreement or as are
permitted by the Credit Agreement.
3.2 Perfected First Priority Liens. The security interests
granted pursuant to this Agreement (a) upon completion of the filings and
other actions specified on Schedule 3 (which, in the case of all filings
and other documents referred to on said Schedule, have been delivered to
the Collateral Agent in completed and duly executed form) will constitute
valid perfected security interests in all of the Collateral (other than any
Inventory and Equipment kept at locations where there is less than
$1,000,000 aggregate book value of Inventory and Equipment) in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, as
collateral security for the Secured Obligations, enforceable in accordance
with the terms hereof against all creditors of such Grantor and any Persons
purporting to purchase any Collateral from such Grantor and (b) are prior
to all other Liens on the Collateral in existence on the date hereof except
for Liens permitted by the Credit Agreement which have priority over the
Liens on the Collateral by operation of law.
3.3 Inventory and Equipment. On the date hereof, the Inventory
and the Equipment (other than mobile goods and other than any Inventory and
Equipment kept at locations where there is less than $1,000,000 aggregate
book value of Inventory and Equipment) are kept at the locations listed on
Schedule 4.
3.4 Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
3.5 Investment Property. (a) The shares of Pledged Stock pledged
by such Grantor hereunder constitute all the issued and outstanding shares
of all classes of the Capital Stock of each Issuer listed on Schedule 2
owned by such Grantor or, in the case of Foreign Subsidiary Voting Stock,
if less, 66% of the outstanding Foreign Subsidiary Voting Stock of each
relevant Issuer.
(b) All the shares of the Pledged Stock have been duly and
validly issued and are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid and
binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of, and has
good and marketable title to, the Investment Property pledged by it
hereunder, free of any and all Liens or options in favor of, or claims of,
any other Person, except the security interest created by this Agreement.
SECTION 4. COVENANTS
Each Grantor covenants and agrees with the Collateral Agent that,
from and after the date of this Agreement until the Secured Obligations
shall have been paid in full, no Letter of Credit shall be outstanding and
the Commitments shall have terminated:
4.1 Delivery of Instruments, Certificated Securities and Chattel
Paper. If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any Instrument, Certificated
Security or Chattel Paper, such Instrument, Certificated Security or
Chattel Paper shall be immediately delivered to the Collateral Agent, duly
indorsed in a manner satisfactory to the Collateral Agent, to be held as
Collateral pursuant to this Agreement.
4.2 Maintenance of Insurance. (a) Such Grantor will maintain,
with financially sound and reputable companies, insurance policies (i)
insuring the Inventory and Equipment against loss by fire, explosion, theft
and such other casualties comparable in scope and coverage as insurance
maintained by companies engaged in the same or similar businesses and (ii)
insuring such Grantor and the Collateral Agent against liability for
personal injury and property damage relating to such Inventory and
Equipment, such policies to be in such form and amounts and having such
coverage as are usually maintained by companies engaged in the same or
similar businesses.
(b) All such insurance shall (i) provide that no cancellation,
material reduction in amount or material change in coverage thereof shall
be effective until at least 30 days after receipt by the Collateral Agent
of written notice thereof, (ii) name the Collateral Agent as additional
insured party or loss payee, (iii) if reasonably requested by the
Collateral Agent, include a breach of warranty clause and (iv) be
reasonably satisfactory in all other respects to the Collateral Agent.
4.3 Payment of Obligations. Such Grantor will pay and discharge
or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all taxes, assessments and governmental
charges or levies imposed upon the Collateral or in respect of income or
profits therefrom, as well as all claims of any kind (including, without
limitation, claims for labor, materials and supplies) against or with
respect to the Collateral, except that no such charge need be paid if the
amount or validity thereof is currently being contested in good faith by
appropriate proceedings, reserves in conformity with GAAP with respect
thereto have been provided on the books of such Grantor and such
proceedings could not reasonably be expected to result in a Material
Adverse Effect.
4.4 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest
created by this Agreement as a perfected security interest having at least
the priority described in Section 3.2 and shall defend such security
interest against the claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Collateral Agent from time
to time statements and schedules further identifying and describing the
assets and property of such Grantor and such other reports in connection
therewith as the Collateral Agent may reasonably request, all in reasonable
detail.
(c) At any time and from time to time, upon the written request
of the Collateral Agent, and at the sole expense of such Grantor, such
Grantor will promptly and duly execute and deliver, and have recorded, such
further instruments and documents and take such further actions as the
Collateral Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, (i) filing any financing or
continuation statements under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with respect to the security interests
created hereby and (ii) in the case of Investment Property and any other
relevant Collateral, taking any actions necessary to enable the Collateral
Agent to obtain "control" (within the meaning of the applicable Uniform
Commercial Code) with respect thereto.
4.5 Notices. Such Grantor will advise the Collateral Agent
promptly, in reasonable detail, of the occurrence of any event which could
reasonably be expected to have a material adverse effect on the aggregate
value of the Collateral or on the security interests created hereby.
4.6 Investment Property. (a) If such Grantor shall become
entitled to receive or shall receive any stock certificate (including,
without limitation, any certificate representing a stock dividend or a
distribution in connection with any reclassification, increase or reduction
of capital or any certificate issued in connection with any
reorganization), option or rights in respect of the Capital Stock of any
Issuer, whether in addition to, in substitution of, as a conversion of, or
in exchange for, any shares of the Pledged Stock, or otherwise in respect
thereof, such Grantor shall accept the same as the agent of the Collateral
Agent and the other Secured Parties, hold the same in trust for the
Collateral Agent and the other Secured Parties and deliver the same
forthwith to the Collateral Agent in the exact form received, duly indorsed
by such Grantor to the Collateral Agent, if required, together with an
undated stock power covering such certificate duly executed in blank by
such Grantor and with, if the Collateral Agent so requests, signature
guaranteed, to be held by the Collateral Agent, subject to the terms
hereof, as additional collateral security for the Secured Obligations. Any
sums paid upon or in respect of the Investment Property upon the
liquidation or dissolution of any Issuer shall be paid over to the
Collateral Agent to be held by it hereunder as additional collateral
security for the Secured Obligations, and in case any distribution of
capital shall be made on or in respect of the Investment Property or any
property shall be distributed upon or with respect to the Investment
Property pursuant to the recapitalization or reclassification of the
capital of any Issuer or pursuant to the reorganization thereof, the
property so distributed shall, unless otherwise subject to a perfected
security interest in favor of the Collateral Agent, be delivered to the
Collateral Agent to be held by it hereunder as additional collateral
security for the Secured Obligations. If any sums of money or property so
paid or distributed in respect of the Investment Property shall be received
by such Grantor, such Grantor shall, until such money or property is paid
or delivered to the Collateral Agent, hold such money or property in trust
for the Collateral Agent and the other Secured Parties, segregated from
other funds of such Grantor, as additional collateral security for the
Secured Obligations.
(b) Without the prior written consent of the Collateral Agent,
such Grantor will not (i) vote to enable, or take any other action to
permit, any Issuer to issue any stock or other equity securities of any
nature or to issue any other securities convertible into or granting the
right to purchase or exchange for any stock or other equity securities of
any nature of any Issuer (except pursuant to a transaction expressly
permitted by the Credit Agreement), (ii) sell, assign, transfer, exchange,
or otherwise dispose of, or grant any option with respect to, the
Investment Property or Proceeds thereof (except pursuant to a transaction
expressly permitted by the Credit Agreement), (iii) create, incur or permit
to exist any Lien or option in favor of, or any claim of any Person with
respect to, any of the Investment Property or Proceeds thereof, or any
interest therein, except for the security interests created by this
Agreement or (iv) enter into any agreement or undertaking restricting the
right or ability of such Grantor or the Collateral Agent to sell, assign or
transfer any of the Investment Property or Proceeds thereof (other than in
anticipation of a Disposition of Investment Property in a transaction
expressly permitted by the Credit Agreement).
(c) In the case of each Grantor which is an Issuer, such Issuer
agrees that (i) it will be bound by the terms of this Agreement relating to
the Investment Property issued by it and will comply with such terms
insofar as such terms are applicable to it, (ii) it will notify the
Collateral Agent promptly in writing of the occurrence of any of the events
described in Section 4.6(a) with respect to the Investment Property issued
by it and (iii) the terms of Sections 5.1(c) and 5.5 shall apply to it,
mutatis mutandis, with respect to all actions that may be required of it
pursuant to Section 5.1(c) or 5.5 with respect to the Investment Property
issued by it.
SECTION 5. REMEDIAL PROVISIONS
5.1 Pledged Stock. (a) Unless an Event of Default shall have
occurred and be continuing and the Collateral Agent shall have given notice
to the relevant Grantor of the Collateral Agent's intent to exercise its
corresponding rights pursuant to Section 5.1(b), each Grantor shall be
permitted to receive all cash dividends paid in respect of the Pledged
Stock and all payments made in respect of the Pledged Notes, in each case
paid in the normal course of business of the relevant Issuer, to the extent
permitted in the Credit Agreement, and to exercise all voting and corporate
rights with respect to the Investment Property; provided, however, that no
vote shall be cast or corporate right exercised or other action taken which
could reasonably be expected to impair the Collateral or which would be
inconsistent with or result in any violation of any provision of the Credit
Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and the
Collateral Agent shall give notice of its intent to exercise such rights to
the relevant Grantor or Grantors, (i) the Collateral Agent shall have the
right to receive any and all cash dividends, payments or other Proceeds
paid in respect of the Investment Property and make application thereof to
the Secured Obligations in the order specified in the Collateral Sharing
Agreement, and (ii) any or all of the Investment Property shall be
registered in the name of the Collateral Agent or its nominee, and the
Collateral Agent or its nominee may thereafter exercise (x) all voting,
corporate and other rights pertaining to such Investment Property at any
meeting of shareholders of the relevant Issuer or Issuers or otherwise and
(y) any and all rights of conversion, exchange and subscription and any
other rights, privileges or options pertaining to such Investment Property
as if it were the absolute owner thereof (including, without limitation,
the right to exchange at its discretion any and all of the Investment
Property upon the merger, consolidation, reorganization, recapitalization
or other fundamental change in the corporate structure of any Issuer, or
upon the exercise by any Grantor or the Collateral Agent of any right,
privilege or option pertaining to such Investment Property, and in
connection therewith, the right to deposit and deliver any and all of the
Investment Property with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as the
Collateral Agent may determine), all without liability except to account
for property actually received by it, but the Collateral Agent shall have
no duty to any Grantor to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of
any Investment Property pledged by such Grantor hereunder to (i) comply
with any instruction received by it from the Collateral Agent in writing
that (x) states that an Event of Default has occurred and is continuing and
(y) is otherwise in accordance with the terms of this Agreement, without
any other or further instructions from such Grantor, and each Grantor
agrees that each Issuer shall be fully protected in so complying, and (ii)
unless otherwise expressly permitted hereby, pay any dividends or other
payments with respect to the Investment Property directly to the Collateral
Agent.
5.2 Proceeds to be Turned Over To Collateral Agent. If an Event
of Default shall occur and be continuing, all Proceeds received by any
Grantor consisting of cash, checks and other near-cash items shall be held
by such Grantor in trust for the Collateral Agent and the other Secured
Parties, segregated from other funds of such Grantor, and shall, forthwith
upon receipt by such Grantor, be turned over to the Collateral Agent in the
exact form received by such Grantor (duly indorsed by such Grantor to the
Collateral Agent, if required). All Proceeds received by the Collateral
Agent hereunder shall be held by the Collateral Agent in a Collateral
Account maintained under its sole dominion and control. All Proceeds while
held by the Collateral Agent in a Collateral Account (or by such Grantor in
trust for the Collateral Agent and the other Secured Parties) shall
continue to be held as collateral security for all the Secured Obligations
and shall not constitute payment thereof until applied as provided in
Section 5.3.
5.3 Application of Proceeds. At such intervals as may be agreed
upon by GSX and the Collateral Agent, or, if an Event of Default shall have
occurred and be continuing, at any time at the Collateral Agent's election,
the Collateral Agent may apply all or any part of Proceeds held in any
Collateral Account in payment of the Secured Obligations in the order
specified in the Collateral Sharing Agreement.
5.4 Code and Other Remedies. If an Event of Default shall occur
and be continuing, the Collateral Agent, on behalf of the Secured Parties,
may exercise, in addition to all other rights and remedies granted to them
in this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Secured Obligations, all rights and remedies
of a secured party under the New York UCC or any other applicable law.
Without limiting the generality of the foregoing, the Collateral Agent,
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law
referred to below) to or upon any Grantor or any other Person (all and each
of which demands, defenses, advertisements and notices are hereby waived),
may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith
sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to
do any of the foregoing), in one or more parcels at public or private sale
or sales, at any exchange, broker's board or office of the Collateral Agent
or any other Secured Party or elsewhere upon such terms and conditions as
it may deem advisable and at such prices as it may deem best, for cash or
on credit or for future delivery without assumption of any credit risk. The
Collateral Agent or any other Secured Party shall have the right upon any
such public sale or sales, and, to the extent permitted by law, upon any
such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in any
Grantor, which right or equity is hereby waived and released. Each Grantor
further agrees, at the Collateral Agent's request, to assemble the
Collateral and make it available to the Collateral Agent at places which
the Collateral Agent shall reasonably select, whether at such Grantor's
premises or elsewhere. The Collateral Agent shall apply the net proceeds of
any action taken by it pursuant to this Section 5.4, after deducting all
reasonable costs and expenses of every kind incurred in connection
therewith or incidental to the care or safekeeping of any of the Collateral
or in any way relating to the Collateral or the rights of the Collateral
Agent and the other Secured Parties hereunder, including, without
limitation, reasonable attorneys' fees and disbursements, to the payment in
whole or in part of the Secured Obligations, in the order specified in the
Collateral Sharing Agreement, and only after such application and after the
payment by the Collateral Agent of any other amount required by any
provision of law, including, without limitation, Section 9-504(1)(c) of the
New York UCC, need the Collateral Agent account for the surplus, if any, to
any Grantor. To the extent permitted by applicable law, each Grantor waives
all claims, damages and demands it may acquire against the Collateral Agent
or any other Secured Party arising out of the exercise by them of any
rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable
and proper if given at least 10 days before such sale or other disposition.
5.5 Registration Rights. (a) If the Collateral Agent shall
determine to exercise its right to sell any or all of the Pledged Stock
pursuant to Section 5.4, and if in the opinion of the Collateral Agent it
is necessary or advisable to have the Pledged Stock, or that portion
thereof to be sold, registered under the provisions of the Securities Act,
the relevant Grantor will cause the Issuer thereof to (i) execute and
deliver, and cause the directors and officers of such Issuer to execute and
deliver, all such instruments and documents, and do or cause to be done all
such other acts as may be, in the opinion of the Collateral Agent,
necessary or advisable to register the Pledged Stock, or that portion
thereof to be sold, under the provisions of the Securities Act, (ii) use
its best efforts to cause the registration statement relating thereto to
become effective and to remain effective for a period of one year from the
date of the first public offering of the Pledged Stock, or that portion
thereof to be sold, and (iii) make all amendments thereto and/or to the
related prospectus which, in the opinion of the Collateral Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto. Each Grantor agrees to cause such Issuer to
comply with the provisions of the securities or "Blue Sky" laws of any and
all jurisdictions which the Collateral Agent shall designate and to make
available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) which will satisfy the provisions of
Section 11(a) of the Securities Act.
(b) Each Grantor recognizes that the Collateral Agent may be
unable to effect a public sale of any or all the Pledged Stock, by reason
of certain prohibitions contained in the Securities Act and applicable
state securities laws or otherwise, and may be compelled to resort to one
or more private sales thereof to a restricted group of purchasers which
will be obliged to agree, among other things, to acquire such securities
for their own account for investment and not with a view to the
distribution or resale thereof. Each Grantor acknowledges and agrees that
any such private sale may result in prices and other terms less favorable
than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have
been made in a commercially reasonable manner. The Collateral Agent shall
be under no obligation to delay a sale of any of the Pledged Stock for the
period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable
state securities laws, even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or cause to
be done all such other acts as may be necessary to make such sale or sales
of all or any portion of the Pledged Stock pursuant to this Section 5.5
valid and binding and in compliance with any and all other applicable
Requirements of Law. Each Grantor further agrees that a breach of any of
the covenants contained in this Section 5.5 will cause irreparable injury
to the Collateral Agent and the other Secured Parties, that the Collateral
Agent and the other Secured Parties have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section 5.5 shall be specifically enforceable against
such Grantor, and such Grantor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants
except for a defense that no Event of Default has occurred under the Credit
Agreement.
5.6 Waiver; Deficiency. Each Grantor waives and agrees not to
assert any rights or privileges which it may acquire under Section 9-112 of
the New York UCC. Each Grantor shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Collateral are
insufficient to pay the Secured Obligations and the fees and disbursements
of any attorneys employed by the Collateral Agent or any other Secured
Party to collect such deficiency.
5.7 Letter of Credit Matters. Notwithstanding anything to the
contrary in this Agreement, Specified Letter of Credit Obligations (as
defined below) shall be deemed not to be secured by any Collateral granted
hereunder by GSX or any of its Subsidiaries. As used in this Section,
"Specified Letter of Credit Obligations" refers to Guarantor Obligations of
GSX and its Subsidiaries to the extent, but only to the extent, that such
Guarantor Obligations cover any reimbursement obligations of the Borrower
to the Issuing Lender in respect of the Letter of Credit issued on the
Effective Date for the benefit of Wachovia Bank, National Association.
SECTION 6. THE COLLATERAL AGENT
6.1 Collateral Agent's Appointment as Attorney-in-Fact, etc. (a)
Each Grantor hereby irrevocably constitutes and appoints the Collateral
Agent and any officer or agent thereof, with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of such Grantor and in the name of such
Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any
and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement, and, without limiting the
generality of the foregoing, each Grantor hereby gives the Collateral Agent
the power and right, on behalf of such Grantor, without notice to or assent
by such Grantor, to do any or all of the following:
(i) in the name of such Grantor or its own name, or otherwise,
take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due with
respect to any Collateral and file any claim or take any other action
or proceeding in any court of law or equity or otherwise deemed
appropriate by the Collateral Agent for the purpose of collecting any
and all such moneys due with respect to any Collateral whenever
payable;
(ii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of
the premiums therefor and the costs thereof;
(iii) execute, in connection with any sale provided for in
Section 5.4 or 5.5, any indorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral; and
(iv) (1) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Collateral Agent or as the Collateral Agent
shall direct; (2) ask or demand for, collect, and receive payment of
and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any
Collateral; (3) sign and indorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other documents in
connection with any of the Collateral; (4) commence and prosecute any
suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any portion
thereof and to enforce any other right in respect of any Collateral;
(5) defend any suit, action or proceeding brought against such Grantor
with respect to any Collateral; (6) settle, compromise or adjust any
such suit, action or proceeding and, in connection therewith, give
such discharges or releases as the Collateral Agent may deem
appropriate; and (7) generally, sell, transfer, pledge and make any
agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though the Collateral Agent were the
absolute owner thereof for all purposes, and do, at the Collateral
Agent's option and such Grantor's expense, at any time, or from time
to time, all acts and things which the Collateral Agent deems
necessary to protect, preserve or realize upon the Collateral and the
Collateral Agent's and the other Secured Parties' security interests
therein and to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.
Anything in this Section 6.1(a) to the contrary notwithstanding, the
Collateral Agent agrees that it will not exercise any rights under the
power of attorney provided for in this Section 6.1(a) unless an Event of
Default shall have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Collateral Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The expenses of the Collateral Agent incurred in connection
with actions undertaken as provided in this Section 6.1, together with
interest thereon at a rate per annum equal to the highest rate per annum at
which interest would then be payable on any category of past due ABR Loans
under the Credit Agreement, from the date of payment by the Collateral
Agent to the date reimbursed by the relevant Grantor, shall be payable by
such Grantor to the Collateral Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the
security interests created hereby are released.
6.2 Duty of Collateral Agent. The Collateral Agent's sole duty
with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Collateral
Agent deals with similar property for its own account. Neither the
Collateral Agent, any other Secured Party nor any of their respective
officers, directors, employees or agents shall be liable for failure to
demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of
any Collateral upon the request of any Grantor or any other Person or to
take any other action whatsoever with regard to the Collateral or any part
thereof. The powers conferred on the Collateral Agent and the other Secured
Parties hereunder are solely to protect the Collateral Agent's and the
other Secured Parties' interests in the Collateral and shall not impose any
duty upon the Collateral Agent or any other Secured Party to exercise any
such powers. The Collateral Agent and the other Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to any Grantor for any
act or failure to act hereunder, except for their own gross negligence or
willful misconduct.
6.3 Execution of Financing Statements. Pursuant to Section 9-402
of the New York UCC and any other applicable law, each Grantor authorizes
the Collateral Agent to file or record financing statements and other
filing or recording documents or instruments with respect to the Collateral
without the signature of such Grantor in such form and in such offices as
the Collateral Agent determines appropriate to perfect the security
interests of the Collateral Agent under this Agreement. A photographic or
other reproduction of this Agreement shall be sufficient as a financing
statement or other filing or recording document or instrument for filing or
recording in any jurisdiction.
6.4 Authority of Collateral Agent. Each Grantor and each Secured
Party by accepting the benefits of this Agreement acknowledges that the
rights and responsibilities of the Collateral Agent under this Agreement
with respect to any action taken by the Collateral Agent or the exercise or
non-exercise by the Collateral Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or
arising out of this Agreement shall, as between the Collateral Agent and
the other Secured Parties, be governed by the Credit Agreement, the
Collateral Sharing Agreement and such other agreements with respect thereto
as may exist from time to time among them, but, as between the Collateral
Agent and the Grantors, the Collateral Agent shall be conclusively presumed
to be acting as agent for the Secured Parties with full and valid authority
so to act or refrain from acting, and no Grantor or Secured Party shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.
SECTION 7. MISCELLANEOUS
7.1 Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified
except in accordance with Section 9.2(b) of the Credit Agreement.
7.2 Notices. All notices, requests and demands to or upon the
Collateral Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 6.1 of the Collateral Sharing Agreement; provided
that any such notice, request or demand to or upon any Grantor shall be
addressed to such Grantor at its notice address set forth on Schedule 1 and
that any such notice, request or demand to or upon the Collateral Agent
shall be addressed to the Collateral Agent at its notice address set forth
in the Collateral Sharing Agreement.
7.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither
the Collateral Agent nor any other Secured Party shall by any act (except
by a written instrument pursuant to Section 7.1), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default. No
failure to exercise, nor any delay in exercising, on the part of the
Collateral Agent or any other Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise
of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Collateral Agent or any other Secured Party of
any right or remedy hereunder on any one occasion shall not be construed as
a bar to any right or remedy which the Collateral Agent or such Secured
Party would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and
are not exclusive of any other rights or remedies provided by law.
7.4 Enforcement Expenses; Indemnification. (a) Each Grantor
agrees to pay or reimburse the Collateral Agent for all its costs and
expenses incurred in enforcing or preserving any rights under this
Agreement and the other Loan Documents to which such Grantor is a party,
including, without limitation, the fees and disbursements of counsel
(including the allocated fees and expenses of in-house counsel) to the
Collateral Agent.
(b) Each Grantor agrees to pay, and to save the Collateral Agent
and the other Secured Parties harmless from, any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamp,
excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of
the transactions contemplated by this Agreement.
(c) Each Grantor agrees to pay, and to save the Collateral Agent
and the other Secured Parties harmless from, any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to
the execution, delivery, enforcement, performance and administration of
this Agreement to the extent the Borrower would be required to do so
pursuant to Section 9.3 of the Credit Agreement.
(d) The agreements in this Section 7.4 shall survive repayment of
the Secured Obligations and all other amounts payable under the Credit
Agreement and the other Loan Documents.
7.5 Successors and Assigns. This Agreement shall be binding upon
the successors and assigns of each Grantor and shall inure to the benefit
of the Collateral Agent and the other Secured Parties and their successors
and assigns; provided that no Grantor may assign, transfer or delegate any
of its rights or obligations under this Agreement without the prior written
consent of the Collateral Agent.
7.6 Counterparts. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall
be deemed to constitute one and the same instrument.
7.7 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
7.8 Section Headings. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.
7.9 Integration. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Collateral Agent and the other
Secured Parties with respect to the subject matter hereof and thereof, and
there are no promises, undertakings, representations or warranties by the
Collateral Agent or any other Secured Party relative to subject matter
hereof and thereof not expressly set forth or referred to herein or in the
other Loan Documents.
7.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW 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, IN WHICH CASE THE LAW OF SUCH STATE JURISDICTION SHALL APPLY.
7.11 Submission To Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction
of the Courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and appellate
courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Grantor at its address referred to in Section 7.2 or
at such other address of which the Collateral Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this Section any special, exemplary,
punitive or consequential damages.
7.12 Acknowledgements. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Loan Documents to which
it is a party;
(b) neither the Collateral Agent nor any other Secured Party has
any fiduciary relationship with or duty to any Grantor arising out of
or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Grantors, on the one hand,
and the Collateral Agent and the other Secured Parties, on the other
hand, in connection herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Secured Parties or among the Grantors
and the Secured Parties.
7.13 Additional Grantors. Each Subsidiary of GSX that is required
to become a party to this Agreement pursuant to Section 5.11 of the Credit
Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the
form of Annex 1 hereto.
7.14 Releases. (a) At such time as the Loans, the Reimbursement
Obligations and the other Secured Obligations shall have been paid in full,
the Commitments have been terminated, no Letters of Credit shall be
outstanding, and the Holder Representatives on behalf of the Secured
Parties have so certified to the Collateral Agent, the Collateral shall be
released from the Liens created hereby, and this Agreement and all
obligations (other than those expressly stated to survive such termination)
of the Collateral Agent and each Grantor hereunder shall terminate, all
without delivery of any instrument or performance of any act by any party,
and all rights to the Collateral shall revert to the Grantors. At the
request and sole expense of any Grantor following any such termination, the
Collateral Agent shall deliver to such Grantor any Collateral held by the
Collateral Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such
termination. In addition, the Collateral Agent shall release the Collateral
upon directions from the Administrative Agent as provided in Section 6.9 of
the Collateral Sharing Agreement.
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Grantor in a transaction permitted by the
Credit Agreement, then the Collateral Agent, at the request and sole
expense of such Grantor, shall execute and deliver to such Grantor all
releases or other documents reasonably necessary or desirable for the
release of the Liens created hereby on such Collateral. At the request and
sole expense of the Borrower, a Grantor shall be released from its
obligations hereunder in the event that such Grantor ceases to be a Wholly
Owned Subsidiary pursuant to a transaction expressly permitted by the
Credit Agreement and if, as a result of such transaction, the Borrower and
its Subsidiaries own less than 75% of the outstanding voting Capital Stock
of such Grantor.
(c) The Collateral Agent will, at any time, upon the written
instruction of the Administrative Agent, at the sole expense of the
relevant Grantor, execute and deliver to the relevant Grantor all releases
or other documents reasonably necessary or desirable for the release of the
Liens created hereby on the Collateral specified by the Administrative
Agent in such instruction.
(d) By acceptance of the benefits hereof, each Secured Party
acknowledges and consents to the provisions of this Section 7.14, agrees
that the Collateral Agent shall incur no liability whatsoever to any
Secured Party for any release effected by the Collateral Agent in
accordance with this Section 7.14 and agrees that the Administrative Agent
shall incur no liability whatsoever to any Secured Party for any release
directed or consented to by it in accordance with the Credit Agreement.
7.15 Notice of Event of Default. Prior to exercising any remedies
hereunder against any Grantor, or in respect of any Collateral in which a
security interest is granted by any of them hereunder, the Collateral Agent
agrees to deliver to the Borrower two Business Days' notice of the Event of
Default giving rise to such exercise of remedies and a demand for payment
of all Obligations then outstanding; provided, however, that the occurrence
of an Event of Default in respect of the Borrower under Section 7(h), (i)
or (j) of the Credit Agreement shall be deemed to constitute delivery by
the Collateral Agent to the Borrower of such notice. If the event or
condition giving rise to such Event of Default is not cured within two
Business Days after notice thereof has been so delivered or deemed
delivered, there shall be no restriction on the ability of the Collateral
Agent to exercise its rights and remedies hereunder against the Grantors
and the Collateral in which a security interest is granted by them
hereunder.
7.16 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
7.17 Collateral Sharing Agreement. By becoming a party to this
Agreement, each Grantor agrees to be bound by the terms of the Collateral
Sharing Agreement and, without limiting the generality of the foregoing,
expressly agrees that all obligations and liabilities of a Grantor
thereunder apply to such Grantor with the same force and effect as if such
Grantor were a signatory thereto.
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has caused this
Collateral Agreement to be duly executed and delivered as of the date first
above written.
GENERAL SIGNAL CORPORATION
By:
------------------------------------------
Title:
AURORA/HYDROMATIC PUMPS INC.
By:
------------------------------------------
Title:
FAIRBANKS MORSE PUMP CORPORATION
By:
------------------------------------------
Title:
GENERAL SIGNAL POWER SYSTEMS, INC.
By:
------------------------------------------
Title:
G. S. BUILDING SYSTEMS CORPORATION
By:
------------------------------------------
Title:
GENERAL SIGNAL HOLDINGS COMPANY
By:
------------------------------------------
Title:
GENERAL SIGNAL TECHNOLOGY CORPORATION
By:
------------------------------------------
Title:
INRANGE TECHNOLOGIES CORPORATION
By:
------------------------------------------
Title:
GENERAL FAREBOX SERVICE OF ATLANTA, INC.
By:
------------------------------------------
Title:
DATA SWITCH COLLECTIONS, INC.
By:
------------------------------------------
Title:
DATA SWITCH INTELLECTUAL PROPERTY, INC.
By:
------------------------------------------
Title:
DATA SWITCH SUBSIDIARY STOCK CORPORATION
By:
------------------------------------------
Title:
METAL FORGE COMPANY, INC.
By:
------------------------------------------
Title:
GCA INTERNATIONAL CORPORATION
By:
------------------------------------------
Title:
GENERAL SIGNAL INTERNATIONAL CORPORATION
By:
------------------------------------------
Title:
NEW SIGNAL, INC.
By:
------------------------------------------
Title:
GSR MERGER SUB, INC.
By:
------------------------------------------
Title:
LEEDS & NORTHRUP COMPANY
By:
------------------------------------------
Title:
DUAL-LITE MANUFACTURING, INC.
By:
------------------------------------------
Title:
<PAGE>
Schedule 1
----------
NOTICE ADDRESSES OF GRANTORS
<PAGE>
Schedule 2
----------
DESCRIPTION OF INVESTMENT PROPERTY
PLEDGED STOCK:
Stock Percent of
Class of Certificate Number of Outstanding
Issuer Holder Stock Number Shares Shares
- ------ ------ ----- ------ ------ ------
PLEDGED NOTES:
Issuer Holder Principal Amount
- ------ ------ ----------------
<PAGE>
Schedule 3
----------
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
-------------------------------
[List each office where a financing statement is to be filed]
Actions with respect to Pledged Stock
-------------------------------------
Other Actions
-------------
[Describe other actions to be taken]
<PAGE>
Schedule 4
----------
LOCATION OF INVENTORY AND EQUIPMENT
Grantor Locations
------- ---------
<PAGE>
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the
Collateral Agreement dated as of October 6, 1998 (the "Agreement"), made by
the Grantors parties thereto for the benefit of The Chase Manhattan Bank,
as Collateral Agent. The undersigned agrees for the benefit of the
Collateral Agent and the other Secured Parties as follows:
(a) The undersigned will be bound by the terms of the Agreement and
will comply with such terms insofar as such terms are applicable to the
undersigned.
(b) The undersigned will notify the Collateral Agent promptly in
writing of the occurrence of any of the events described in Section 4.6(a)
of the Agreement.
(c) The terms of Sections 5.1(c) and 5.5 of the Agreement shall apply
to it, mutatis mutandis, with respect to all actions that may be required
of it pursuant to Section 5.1(c) or 5.5 of the Agreement.
[NAME OF ISSUER]
By:
------------------------------------------
Name:
Title:
Address for Notices:
----------------------------------------------
----------------------------------------------
----------------------------------------------
Fax:
<PAGE>
Annex 1 to
Collateral Agreement
--------------------
ASSUMPTION AGREEMENT, dated as of ________________, ____, made by
______________________________, a ______________ corporation (the
"Additional Grantor"), in favor of THE CHASE MANHATTAN BANK, as collateral
agent (in such capacity, the "Collateral Agent") for the banks and other
financial institutions (the "Lenders") parties to the Credit Agreement
referred to below. All capitalized terms not defined herein shall have the
meaning ascribed to them in such Credit Agreement.
W I T N E S S E T H :
WHEREAS, SPX Corporation (the "Borrower"), the Lenders and the
Administrative Agent have entered into a Credit Agreement, dated as of
October 6, 1998 (as amended, supplemented or otherwise modified from time
to time, the "Credit Agreement");
WHEREAS, in connection with the Credit Agreement, GSX and certain
of its Affiliates (other than the Additional Grantor) have entered into the
Collateral Agreement, dated as of October 6, 1998 (as amended, supplemented
or otherwise modified from time to time, the "Shared Collateral Agreement")
in favor of the Collateral Agent for the benefit of the Secured Parties (as
defined in the Shared Collateral Agreement);
WHEREAS, the Credit Agreement requires the Additional Grantor to
become a party to the Shared Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and deliver
this Assumption Agreement in order to become a party to the Shared
Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Collateral Agreement. By executing and delivering this
Assumption Agreement, the Additional Grantor, as provided in Section 7.13
of the Shared Collateral Agreement, hereby becomes a party to the Shared
Collateral Agreement as a Grantor thereunder with the same force and effect
as if originally named therein as a Grantor and, without limiting the
generality of the foregoing, hereby expressly assumes all obligations and
liabilities of a Grantor thereunder and under the Collateral Sharing
Agreement. The information set forth in Annex 1-A hereto is hereby added to
the information set forth in the Schedules to the Shared Collateral
Agreement. The Additional Grantor hereby represents and warrants that each
of the representations and warranties contained in Section 3 of the Shared
Collateral Agreement is true and correct on and as the date hereof (after
giving effect to this Assumption Agreement) as if made on and as of such
date.
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above
written.
[ADDITIONAL GRANTOR]
By:
------------------------------------------
Name:
Title:
<PAGE>
Annex 1-A to
Assumption Agreement
--------------------
Supplement to Schedule 1
------------------------
Supplement to Schedule 2
------------------------
Supplement to Schedule 3
------------------------
Supplement to Schedule 4
------------------------
<PAGE>
EXHIBIT A-3
TO CREDIT AGREEMENT
-------------------
FORM OF
MORTGAGE
from
[Owner/Mortgagor]
to
THE CHASE MANHATTAN BANK, as Collateral Agent, Mortgagee
DATED AS OF ________ __, 199_
After recording, please return to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
ATTN: Daniel E. Karp, Esq.
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
Background ............................................................ 1
Granting Clauses ...................................................... 2
Terms and Conditions .................................................. 6
1. Warranty of Title ........................................... 6
2. Payment of Indebtedness ..................................... 6
3. Requirements ................................................ 6
4. Payment of Taxes and Other Impositions ...................... 7
5. Insurance ................................................... 8
6. Restrictions on Liens and Encumbrances ...................... 12
7. Due on Sale and Other Transfer Restrictions ................. 12
8. Maintenance; No Alteration; Inspection; Utilities ........... 12
9. Condemnation/Eminent Domain ................................. 13
10. Restoration ................................................ 13
11. Leases ........................................................14
12. Further Assurances ............................................15
13. Mortgagee's Right to Perform ............................... 15
14. Events of Default .......................................... 16
15. Remedies ................................................... 16
16. Right of Mortgagee to Credit Sale .......................... 17
17. Appointment of Receiver .................................... 17
18. Extension, Release, etc. ................................... 18
19. Security Agreement under Uniform Commercial Code ........... 18
20. Assignment of Rents ........................................ 19
21. Additional Rights .......................................... 20
22. Changes in Method of Taxation .............................. 20
23. Notices .................................................... 20
24. No Oral Modification ....................................... 21
25. Partial Invalidity ......................................... 21
26. Mortgagor's Waiver of Rights ............................... 21
27. Remedies Not Exclusive ..................................... 22
28. Multiple Security .......................................... 22
29. Successors and Assigns ..................................... 23
30. No Waivers, etc. ........................................... 23
31. Governing Law, etc. ........................................ 24
32. Waiver of Trial by Jury .................................... 24
33. Certain Definitions ........................................ 24
34. Release of Mortgage ........................................ 24
35. Conflict with Credit Agreement ............................. 25
Schedule A .............................................................. 27
<PAGE>
FORM OF MORTGAGE
----------------
THIS MORTGAGE, dated as of _______ ___, 199_ and which includes a
security agreement, an assignment of leases, rents and profits, a financing
statement and a fixture filing, is made by [Insert name of owner/mortgagor]
("Mortgagor"), a [ ] corporation whose address is
__________________________ ("Mortgagor"), to THE CHASE MANHATTAN BANK, a
New York banking corporation whose address is 270 Park Avenue, New York,
New York 10017, as Collateral Agent ("Mortgagee") for [(a) itself, (b) the
banks and other financial institutions (collectively, the "Lenders")
(together with any banking affiliate of any Lender entering into any
Hedging Agreement) from time to time parties to the Credit Agreement, dated
as of October 6, 1998 (as the same may be amended, waived, supplemented or
otherwise modified from time to time and together with any successor
agreement, the "Credit Agreement") among SPX Corporation (the "Borrower"),
the Lenders and The Chase Manhattan Bank, as administrative agent (in such
capacity, the "Administrative Agent"), and (c) the Administrative Agent
(the Persons referred to in the foregoing clauses (a) through (c) being,
collectively, the "Secured Parties")] [(a) itself, (b) the banks and other
financial institutions (collectively, the "Lenders") together with any
banking affiliate of any Lender entering into any Hedging Agreement) from
time to time parties to the Credit Agreement, dated as of October 6, 1998
(as the same may be amended, waived, supplemented or otherwise modified
from time to time and together with any successor agreement the "Credit
Agreement"), among SPX Corporation (the "Borrower"), the Lenders and The
Chase Manhattan Bank, as administrative agent (in such capacity, the
"Administrative Agent"), (c) the Administrative Agent and (d) the holders
of debt securities issued pursuant to the MTN Indenture (as defined in the
Credit Agreement), including The Chase Manhattan Bank, in its capacity as
trustee (the "Public Debt Trustee") under the MTN Indenture acting on
behalf of such holders (the Persons referred to in the foregoing clauses
(a) through (d) being, collectively, the "Secured Parties")]. References to
this "Mortgage" shall mean this instrument and any and all renewals,
modifications, amendments, supplements, extensions, consolidations,
substitutions, spreaders and replacements of this instrument. Unless
otherwise defined herein, capitalized terms herein shall have the meanings
ascribed to them in the Credit Agreement.
Background
----------
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrower upon the
terms and subject to the conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of
companies (collectively, the "Affiliates") that includes Mortgagor;
WHEREAS, the proceeds of the extensions of credit under the
Credit Agreement will be used in part to enable the Borrower to make
valuable transfers to one or more of the other Affiliates in connection
with the operation of their respective businesses;
WHEREAS, Mortgagor will derive substantial direct and indirect
benefit from the making of the extensions of credit under the Credit
Agreement; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrower under
the Credit Agreement that Mortgagor shall have executed and delivered this
Agreement to the Collateral Agent for the ratable benefit of Mortgagee and
the Secured Parties;
[WHEREAS, it is a requirement under the MTN Indenture that the
assets in which a security interest is created hereunder must secure the
securities issued under the MTN Indenture equally and ratably with all
other indebtedness secured thereby;]
WHEREAS, pursuant to the terms of the Credit Agreement, the
Lenders have agreed, among other things, to make the Loans and each Issuing
Lender has agreed to issue the Letter(s) of Credit for the account of
Mortgagor on the condition (among others) that Mortgagor grant to Mortgagee
a first lien upon and perfected security interest in, among other things,
all estate, right, title and interest of Mortgagor in and to the Real
Estate pursuant to the terms hereof; and
WHEREAS, Mortgagor is the fee owner of the parcel(s) of real
property together with the improvements located thereon (the
"Improvements") described on Schedule A attached hereto (the "Real
Estate");
NOW THEREFORE, in consideration of the premises and for the sum
of Ten Dollars ($10.00), the receipt and sufficiency of which is hereby
acknowledged, Mortgagor hereby agrees as follows:
Granting Clauses
----------------
For good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Mortgagor agrees that to secure:
(a) the repayment of principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
Reimbursement Obligations and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Loan Party, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding) the Loans (as they may be evidenced by notes from time to time)
and all other obligations (including the Reimbursement Obligations) and
liabilities of Mortgagor to Mortgagee, the Administrative Agent, the
Issuing Lender and the Lenders (and) any banking affiliate of any Lender),
whether direct or indirect, absolute or contingent, due or to become due,
now existing or hereafter incurred, which may arise under, out of, or in
connection with, the Credit Agreement, the Loans, the Letters of Credit,
the Security Documents (as defined below) or any other document made,
delivered or given in connection therewith, in each case whether on account
of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees,
charges and disbursements of counsel to the Administrative Agent or any
Lender that are required to be paid by any Loan Party pursuant to the
Credit Agreement) (the items set forth above being referred to collectively
as the "[Secured] [Loan Document]Indebtedness"); [and]
[(b)] the repayment of principal of, and premium, if any, and
interest on, the securities issued under the MTN Indenture (the "Public
Debt Securities") (including, without limitation, interest accruing at the
then applicable rate provided in the instruments governing the Public Debt
Securities after the maturity of the Public Debt Securities and interest
accruing at the then applicable rate provided in such instruments after the
filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to GSX, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding) (the items set forth above being referred to collectively as
the "Public Debt Obligations" and, together with the Loan Document
Indebtedness, the "Secured Indebtedness"); and]
[(c)] the performance of all covenants, agreements, obligations
and liabilities of Mortgagor (the "Obligations") under or pursuant to the
provisions of the Credit Agreement, the Loans, [the MTN Indenture, the
Public Debt Securities,] this Mortgage, any other document securing payment
of the Secured Indebtedness (the "Security Documents") and any amendments,
supplements, extensions, renewals, restatements, replacements or
modifications of any of the foregoing (the Credit Agreement, the Loans, the
Letters of Credit, this Mortgage and all other documents and instruments
from time to time evidencing, securing or guaranteeing the payment of the
Secured Indebtedness or the performance of the Obligations, as any of the
same may be amended, supplemented, extended, renewed, restated, replaced or
modified from time to time, are collectively referred to as the "Loan
Documents"); and
MORTGAGOR HEREBY GRANTS TO MORTGAGEE A LIEN UPON AND A SECURITY INTEREST
IN, AND HEREBY MORTGAGES, WARRANTS, GRANTS, BARGAINS, SELLS, CONVEYS,
ASSIGNS, TRANSFERS AND SETS OVER TO MORTGAGEE:
(A) the Real Estate;
(B) all the estate, right, title, claim or demand whatsoever of
Mortgagor, in possession or expectancy, in and to the Real Estate or
any part thereof;
(C) all right, title and interest of Mortgagor in, to and under
all easements, rights of way, gores of land, streets, ways, alleys,
passages, sewer rights, waters, water courses, water and riparian
rights, development rights, air rights, mineral rights and all
estates, rights, titles, interests, privileges, licenses, tenements,
hereditaments and appurtenances belonging, relating or appertaining to
the Real Estate, and any reversions, remainders, rents, issues,
profits and revenue thereof and all land lying in the bed of any
street, road or avenue, in front of or adjoining the Real Estate to
the center line thereof;
(D) all right, title and interest of Mortgagor in and to all of
the fixtures, chattels, business machines, machinery, apparatus,
equipment, furnishings, fittings and articles of personal property of
every kind and nature whatsoever, and all appurtenances and additions
thereto and substitutions or replacements thereof (together with, in
each case, attachments, components, parts and accessories), currently
owned or subsequently acquired by Mortgagor and now or subsequently
attached to, or contained in or used or usable in any way in
connection with any operation or letting of the Real Estate, including
but without limiting the generality of the foregoing, all screens,
awnings, shades, blinds, curtains, draperies, artwork, carpets, rugs,
storm doors and windows, furniture and furnishings, heating,
electrical, and mechanical equipment, lighting, switchboards,
plumbing, ventilating, air conditioning and air-cooling apparatus,
refrigerating, and incinerating equipment, escalators, elevators,
loading and unloading equipment and systems, stoves, ranges, laundry
equipment, cleaning systems (including window cleaning apparatus),
telephones, communication systems (including satellite dishes and
antennae), televisions, computers, sprinkler systems and other fire
prevention and extinguishing apparatus and materials, security
systems, motors, engines, machinery, pipes, pumps, tanks, conduits,
appliances, fittings and fixtures of every kind and description (all
of the foregoing in this paragraph (D) being referred to as the
"Equipment");
(E) all right, title and interest of Mortgagor in and to all
substitutes and replacements of, and all additions and improvements
to, the Real Estate and the Equipment, subsequently acquired by or
released to Mortgagor or constructed, assembled or placed by Mortgagor
on the Real Estate, immediately upon such acquisition, release,
construction, assembling or placement, including, without limitation,
any and all building materials whether stored at the Real Estate or
offsite, and, in each such case, without any further mortgage,
conveyance, assignment or other act by Mortgagor;
(F) all right, title and interest of Mortgagor in, to and under
all leases, subleases, underlettings, concession agreements,
management agreements, licenses and other agreements relating to the
use or occupancy of the Real Estate or the Equipment or any part
thereof, now existing or subsequently entered into by Mortgagor and
whether written or oral and all guarantees of any of the foregoing
(collectively, as any of the foregoing may be amended, restated,
extended, renewed or modified from time to time, the "Leases"), and
all rights of Mortgagor in respect of cash and securities deposited
thereunder and the right to receive and collect the revenues, income,
rents, issues and profits thereof, together with all other rents,
royalties, issues, profits, revenue, income and other benefits arising
from the use and enjoyment of the Mortgaged Property (as defined
below) (collectively, the "Rents");
(G) all books and records relating to or used in connection with
the operation of the Real Estate or the Equipment or any part thereof;
(H) all unearned premiums under insurance policies now or
subsequently obtained by Mortgagor relating to the Real Estate or
Equipment and Mortgagor's interest in and to all proceeds of any such
insurance policies (including title insurance policies) including the
right to collect and receive such proceeds, subject to the provisions
relating to insurance generally set forth below; and all awards and
other compensation, including the interest payable thereon and the
right to collect and receive the same, made to the present or any
subsequent owner of the Real Estate or Equipment for the taking by
eminent domain, condemnation or otherwise, of all or any part of the
Real Estate or any easement or other right therein, subject to the
provisions relating to condemnation awards generally set forth below;
(I) all right, title and interest of Mortgagor, to the extent
assignable without causing invalidity, termination or default
thereunder, in and to (i) all contracts from time to time executed by
Mortgagor or any manager or agent on its behalf relating to the
ownership, construction, maintenance, repair, operation, occupancy,
sale or financing of the Real Estate or Equipment or any part thereof
and all agreements relating to the purchase or lease of any portion of
the Real Estate or any property which is adjacent or peripheral to the
Real Estate, together with the right to exercise such options
(collectively, the "Contracts"), (ii) all consents, licenses, building
permits, certificates of occupancy and other governmental approvals
relating to construction, completion, occupancy, use or operation of
the Real Estate or any part thereof (collectively, the "Permits") and
(iii) all drawings, plans, specifications and similar or related items
relating to the Real Estate (collectively, the "Plans");
(J) any and all monies now or subsequently on deposit for the
payment of real estate taxes or special assessments against the Real
Estate or for the payment of premiums on insurance policies covering
the foregoing property or otherwise on deposit with or held by
Mortgagee as provided in this Mortgage;
(K) all accounts and revenues arising from the operation of the
Improvements; and
(L) all proceeds, both cash and noncash, of the foregoing;
(all of the foregoing property and rights and interests now owned
or held or subsequently acquired by Mortgagor and described in the
foregoing clauses (A) through (E) are collectively referred to as the
"Premises", and those described in the foregoing clauses (A) through
(L) are collectively referred to as the "Mortgaged Property").
Mortgagee shall have a lien upon and security interest in the
plant, property and equipment and all replacements thereof and
accessions thereto, including replacement parts and equipment, located
in and on the Mortgaged Property owned by Mortgagor and which are now
and hereafter shall become fixtures, to the extent that the foregoing
are deemed to be real property under the laws of the State in which
the Premises are located. This instrument shall constitute a fixture
financing statement and filing under the Uniform Commercial Code (the
"Code").
TO HAVE AND TO HOLD the Mortgaged Property and the rights and
privileges hereby mortgaged unto Mortgagee, its successors and assigns for
the uses and purposes set forth, until the Secured Indebtedness is fully paid
and the Obligations fully performed.
Terms and Conditions
--------------------
Mortgagor further represents, warrants, covenants and agrees with
Mortgagee as follows:
1. Warranty of Title. Mortgagor warrants that Mortgagor has good
title to the Real Estate in fee simple and good title to the rest of the
Mortgaged Property, subject only to the matters that are set forth in
Schedule B of the title insurance policy or policies being issued to
Mortgagee to insure the lien of this Mortgage and Liens permitted by
Section 6.3 of the Credit Agreement (the "Permitted Exceptions") and
Mortgagor shall warrant, defend and preserve such title and the lien of the
Mortgage thereon against all claims of all persons and entities. Mortgagor
further warrants that it has the right to mortgage the Mortgaged Property.
2. Payment of Indebtedness. Mortgagor shall pay the Secured
Indebtedness at the times and places and in the manner specified in the
Credit Agreement [and the MTN Indenture, as the case may be,] and shall
perform all the Obligations.
3. Requirements. (a) Mortgagor shall promptly comply with, or
cause to be complied with, and conform to all applicable present and future
laws, statutes, codes, ordinances, orders, judgments, decrees, rules,
regulations and requirements, and irrespective of the nature of the work to
be done, of each of the United States of America, any State and any
municipality, local government or other political subdivision thereof and
any agency, department, bureau, board, commission or other instrumentality
of any of them, now existing or subsequently created (collectively,
"Governmental Authority") which has jurisdiction over the Mortgaged
Property and all covenants, restrictions and conditions now or later of
record which may be applicable to any of the Mortgaged Property, or to the
use, manner of use, occupancy, possession, operation, maintenance,
alteration, repair or reconstruction of any of the Mortgaged Property,
except to the extent that failure to comply therewith, in the aggregate,
would not reasonably be expected to have a Material Adverse Effect. All
present and future laws, statutes, codes, ordinances, orders, judgments,
decrees, rules, regulations and requirements of every Governmental
Authority applicable to Mortgagor or to any of the Mortgaged Property and
all covenants, restrictions, and conditions which now or later may be
applicable to any of the Mortgaged Property are collectively referred to as
the "Legal Requirements".
(b) From and after the date of this Mortgage, Mortgagor shall not
by act or omission permit, other than Permitted Exceptions, any building or
other improvement on any premises not subject to the lien of this Mortgage
to rely on the Premises or any part thereof or any interest therein to
fulfill any Legal Requirement without Mortgagee's consent, which consent
shall not be unreasonably withheld or delayed, and such consent shall be
deemed granted if not denied within 15 days after Mortgagee's request
therefor. Mortgagor shall not by act or omission impair the integrity of
any of the Real Estate as a single zoning lot separate and apart from all
other premises. Mortgagor represents that each parcel of the Real Estate
constitutes one or more legally subdivided lots, in compliance with all
subdivision laws and similar Legal Requirements, except to the extent that
failure to comply therewith, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. Any act or omission by
Mortgagor which would result in a violation of any of the provisions of
this subsection shall be void.
4. Payment of Taxes and Other Impositions. (a) Subject to the
terms of clause (d) below, Mortgagor, prior to delinquency, shall pay and
discharge all taxes of every kind and nature (including, without
limitation, all real and personal property, income, franchise, withholding,
transfer, gains, profits and gross receipts taxes), all charges for any
easement or agreement maintained for the benefit of any of the Mortgaged
Property, all general and special assessments, levies, permits, inspection
and license fees, all water and sewer rents and charges and all other
public charges even if unforeseen or extraordinary, in each case, imposed
upon or assessed against or which may become a lien on any of the Mortgaged
Property, or arising in respect of the occupancy, use or possession
thereof, together with any penalties or interest on any of the foregoing
(all of the foregoing are collectively referred to as the "Impositions").
Mortgagor shall within thirty (30) days after the written request of
Mortgagee deliver to Mortgagee (i) copies of receipted bills and cancelled
checks evidencing payment of such Imposition if it is a real estate tax or
other public charge or (ii) other evidence reasonably acceptable to
Mortgagee showing the payment of any Imposition. If by law any Imposition,
at Mortgagor's option, may be paid in installments (whether or not interest
shall accrue on the unpaid balance of such Imposition), Mortgagor may elect
to pay such Imposition in such installments and shall be responsible for
the payment of such installments with interest, if any.
(b) Subject to the terms of clause (d) below, nothing herein
shall affect any right or remedy of Mortgagee under this Mortgage or
otherwise, without notice or demand to Mortgagor, to pay any Imposition
after the date such Imposition shall have become delinquent, and to add to
the Indebtedness the amount so paid, together with interest from the time
of payment at the rate of interest described in Subsection 2.14(c) of the
Credit Agreement (the "Default Rate"). Any sums paid by Mortgagee in
discharge of any Impositions shall be (i) a lien on the Premises secured
hereby prior to any right or title to, interest in, or claim upon the
Premises subordinate to the lien of this Mortgage, and (ii) payable on
demand by Mortgagor to Mortgagee together with interest at the Default Rate
as set forth above.
(c) Mortgagor shall not claim, demand or be entitled to receive
any credit or credits toward the satisfaction of this Mortgage or on any
interest payable thereon for any taxes assessed against the Mortgaged
Property or any part thereof, and shall not claim any deduction from the
taxable value of the Mortgaged Property by reason of this Mortgage.
(d) Mortgagor shall have the right to contest or object in good
faith to the amount or validity of any Imposition by appropriate legal
proceedings, but such right shall not be deemed or construed in any way as
relieving, modifying, or extending Mortgagor's covenant to pay any such
Imposition at the time and in the manner provided in this Section unless
(i) Mortgagor has given prior written notice to Mortgagee of Mortgagor's
intent so to contest or object to an Imposition and (ii) Mortgagor shall
demonstrate to Mortgagee's satisfaction that the legal proceedings shall
operate conclusively to prevent the sale of the Mortgaged Property, or any
part thereof, to satisfy such Imposition prior to final determination of
such proceedings.
(e) Upon written notice to Mortgagor, Mortgagee during the
continuance of an Event of Default (as defined below) shall be entitled to
require Mortgagor to pay monthly in advance to Mortgagee the equivalent of
1/12th of the estimated annual Impositions. Such funds shall be held by
Mortgagee in a segregated, interest-bearing account. Upon the cure of said
Event of Default, all such funds on deposit, plus interest thereon, shall
be returned to Mortgagor.
5. Insurance. (a) Mortgagor shall maintain or cause to be
maintained on all of the Premises
(i) property insurance against loss or damage by fire, lightning,
windstorm, tornado, water damage, flood and by such other further
risks and hazards as now are or subsequently may be covered by an "all
risk" policy or a fire policy covering "special" causes of loss
(provided, however, that the maintenance of insurance against flood
risks shall be subject to availability of such insurance coverage on
commercially reasonable terms). The policy shall include (x) boiler
and machinery property insurance covering pressure vessels, air tanks,
boilers, machinery, pressure piping, heating, air conditioning and
elevator equipment and escalator equipment, provided the Improvements
contain equipment of such nature and (y) building ordinance law
endorsements and the policy limits shall be automatically reinstated
after each loss (other than with respect to flood coverage which shall
be reinstated on a commercially reasonable basis) ;
(ii) commercial general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language or similar language of such endorsement), covering all claims
for personal injury, bodily injury or death, or property damage,
subject to standard policy terms, conditions and exclusions, occurring
on, in or about the Premises in an amount not less than $10,000,000
combined single limit with respect to personal injury, bodily injury
or death, or property damage, relating to any one occurrence plus such
excess limits as are then being generally and reasonably required by
lenders similar to Mortgagee in connection with credit facilities
similar to the credit facility evidenced by the Credit Agreement;
(iii) during the course of any construction or material repair of
Improvements, commercial general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language or similar language of such endorsement), (including coverage
for elevators and escalators, if any). The policy shall include
coverage for independent contractors and completed operations. The
policy shall provide coverage on an occurrence basis against claims
for personal injury, bodily injury, death and property damage
resulting from Mortgagor's negligence or other behavior for which
Mortgagor may be adjudged tortiously liable, subject to standard
policy terms, conditions and exclusions, occurring on, in or about the
Premises and the adjoining streets, sidewalks and passageways, such
insurance to afford immediate minimum protection to a limit of not
less than that reasonably required by Mortgagee with respect to
personal injury, bodily injury or death to any one or more persons or
damage to property;
(iv) during the course of any construction or repair of the
Improvements, workers' compensation insurance (including employer's
liability insurance) for all employees of Mortgagor engaged on or with
respect to the Premises in such amounts as are no less than the
amounts established by law;
(v) if any portion of the Premises are located in an area
identified as a special flood hazard area by the Federal Emergency
Management Agency or other applicable agency, flood insurance in an
amount reasonably satisfactory to Mortgagee, which coverages and in
which amounts are then being reasonably carried by similarly situated
Persons occupying or using like properties in the locality or
localities in which the Real Estate is situated; and
(vi) such other insurance in such amounts as Mortgagee may
reasonably request from time to time, which coverages and in which
amounts are then being reasonably carried by similarly situated
persons occupying or using like properties in the locality or
localities in which the Real Estate is situated;
provided, however, that so long as no Event of Default shall have occurred
and be continuing, Mortgagee may not request an increase to any of the
coverages identified above more than once in any calendar year.
Each insurance policy (other than flood insurance written under the
National Flood Insurance Act of 1968, as amended, in which case to the
extent available) shall (i) provide that it shall not be cancelled,
non-renewed or materially amended without thirty (30) days' prior written
notice to Mortgagee, and (ii) with respect to all property insurance,
provide for deductibles not to exceed $500,000, other than with respect to
windstorm perils for which deductibles shall not exceed $750,000, contain a
"Replacement Cost Endorsement" without any deduction made for depreciation
and with no co-insurance penalty (or attaching an agreed amount endorsement
reasonably satisfactory to Mortgagee), with (except as provided in clause
(f) below) loss payable solely to Mortgagee (modified, if necessary, to
provide that proceeds in the amount of actual cash value may be retained by
Mortgagee without the obligation to rebuild) as its interest may appear,
without contribution, under a "standard" or "New York" mortgagee clause
reasonably acceptable to Mortgagee and be written by insurance companies
having an A.M. Best Company, Inc. rating of A- or higher and a financial
size category of not less than VII, or otherwise as reasonably approved by
Mortgagee. Liability insurance policies shall name Mortgagee as an
additional insured and contain a waiver of subrogation against Mortgagee;
all such policies shall indemnify and hold Mortgagee harmless as an
additional insured, subject to standard policy terms, conditions and
exclusions. The amounts of each insurance policy and the form of each such
policy shall at all times be reasonably satisfactory to Mortgagee, taking
into account policy amounts then being carried by Persons similar to
Mortgagor in locations similar to the location of the Mortgaged Property.
If any required insurance shall expire, be withdrawn, become void by breach
of any condition thereof by Mortgagor or by any lessee of any part of the
Mortgaged Property or become void or unsafe by reason of the failure or
impairment of the capital of any insurer, Mortgagor shall immediately
obtain new or additional insurance reasonably satisfactory to Mortgagee in
accordance with the provisions of this Section 5. As of the date hereof,
Mortgagor's present insurers and coverages required under this Mortgage are
deemed approved.
(b) Mortgagor shall deliver to Mortgagee an original certificate
in respect of each insurance policy required to be maintained, reasonably
acceptable to Mortgagee, together with a copy of the declaration page for
each such policy. Mortgagor shall (i) pay as they become due all premiums
for such insurance, (ii) not later than 7 days prior to the expiration of
each policy to be furnished pursuant to the provisions of this Section,
deliver a renewed certificate of insurance reasonably acceptable to
Mortgagee. Within 60 days of the inception of each insurance policy or
renewal, Mortgagor shall deliver, within 10 days of Mortgagee's written
request therefor, to Mortgagee evidence reasonably satisfactory to
Mortgagee of payment therefor.
(c) If Mortgagor is in default of its obligations to insure or
deliver any such prepaid policy or policies or certificates of insurance
reasonably acceptable to Mortgagee, then Mortgagee, upon thirty (30) days'
prior written notice to Mortgagor, may effect such insurance from year to
year, and pay the premium or premiums therefor, and Mortgagor shall pay to
Mortgagee on demand such premium or premiums so paid by Mortgagee with
interest from the time of payment at the Default Rate and the same shall be
deemed to be secured by this Mortgage and shall be collectible in the same
manner as the Indebtedness secured by this Mortgage.
(d) Mortgagor promptly shall in all material respects comply with
and conform to (i) all provisions of each such insurance policy, and (ii)
all requirements of the insurers applicable to Mortgagor or to any of the
Mortgaged Property or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration or repair of any of the Mortgaged
Property. Mortgagor shall not use or permit the use of the Mortgaged
Property in any manner which would permit any insurer to cancel any
insurance policy or void coverage required to be maintained by this
Mortgage.
(e) If the Mortgaged Property, or any material part thereof,
shall be destroyed or damaged by fire or any other casualty, whether
insured or uninsured, or in the event any claim is made against Mortgagor
for any personal injury, bodily injury or property damage incurred on or
about the Premises, Mortgagor shall promptly give notice thereof to
Mortgagee. If the Mortgaged Property is damaged by fire or other casualty
and the cost to repair such damage is less than $10,000,000, then provided
that no Event of Default shall have occurred and be continuing, Mortgagor
shall have the right to adjust or otherwise settle such loss without
Mortgagee's consent, and the insurance proceeds relating to such loss shall
be paid over to Mortgagor; provided that Mortgagor shall, promptly after
any such damage, repair in all material respects all such damage regardless
of whether any insurance proceeds have been received or whether such
proceeds, if received, are sufficient to pay for the costs of repair. In
the event of the total or substantial destruction of the Mortgaged
Property, by fire or any other casualty, then Mortgagor may, upon prompt
notice to Mortgagee, opt not to restore or rebuild the Mortgaged Property;
provided, however that any insurance proceeds received by Mortgagee as a
result thereof shall be applied, toward the reimbursement of the Secured
Indebtedness [in the order specified in the Credit Agreement/Collateral
Sharing Agreement].
(f) If the Mortgaged Property is damaged by fire or other
casualty, and the cost to repair such damage exceeds limit set forth in
clause (e) above, or if an Event of Default shall have occurred and be
continuing, then Mortgagor authorizes and empowers Mortgagee, at
Mortgagee's option and in Mortgagee's reasonable discretion, as
attorney-in-fact for Mortgagor, to make proof of loss, to adjust and
compromise any claim under any insurance policy, to appear in and prosecute
any action arising from any policy, to collect and receive insurance
proceeds and to deduct therefrom Mortgagee's reasonable out-of-pocket
expenses (including but not limited to attorney's fees) incurred in the
collection process. Each insurance company concerned is hereby authorized
and directed to make payment for such loss directly to Mortgagee. Mortgagee
shall have the right to require Mortgagor to repair or restore the
Mortgaged Property in all material respects, and Mortgagor hereby
designates Mortgagee as its attorney-in-fact for the purpose of making any
election required or permitted under any insurance policy relating to
repair or restoration. The insurance proceeds or any part thereof received
by Mortgagee may be applied by Mortgagee toward reimbursement of all
reasonable out-of-pocket costs (including but not limited to attorney's
fees) and expenses of Mortgagee in collecting such proceeds, and the
balance shall be advanced to Mortgagor to be used for the restoration or
repair of the Mortgaged Property, provided, however, if an Event of Default
has occurred and is continuing, the balance may be applied, at Mortgagee's
option in its sole and absolute discretion, to the principal (to the
installments in inverse order of maturity, if payable in installments) and
interest due or to become due on the Loans, to fulfill any other Obligation
of Mortgagor, to the restoration or repair of the property damaged, or
released to Mortgagor. In the event Mortgagee elects to release such
proceeds to Mortgagor, Mortgagor shall be obligated to use such proceeds to
restore or repair the Mortgaged Property. Application by Mortgagee of any
insurance proceeds toward the last maturing installments of principal and
interest due or to become due on the Loans shall not excuse Mortgagor from
making any regularly scheduled payments due thereunder, nor shall such
application extend or reduce the amount of such payments.
(g) In the event of foreclosure of this Mortgage or other
transfer of title to the Mortgaged Property in extinguishment of the
Indebtedness, all right, title and interest of Mortgagor in and to any
insurance policies then in force shall pass to the purchaser or grantee and
Mortgagor hereby appoints Mortgagee its attorney-in-fact, in Mortgagor's
name, to assign and transfer all such policies and proceeds to such
purchaser or grantee.
(h) Upon written notice to Mortgagor, Mortgagee, during the
continuance of an Event of Default, shall be entitled to require Mortgagor
to pay monthly in advance to Mortgagee the equivalent of 1/12th of the
estimated annual premiums due on such insurance. Mortgagee shall maintain
such funds in a separate, interest-bearing account and shall not commingle
such funds with its own funds. Upon the cure of said Event of Default, all
such funds on deposit, plus interest thereon, shall be returned to
Mortgagor.
(i) Mortgagor may maintain insurance required under this Mortgage
by means of one or more blanket insurance policies maintained by Mortgagor;
provided, however, that (A) any such policy shall specify, or Mortgagor
shall furnish to Mortgagee a written statement from the insurer so
specifying, the maximum amount of the total insurance afforded by such
blanket policy that is allocated to the Premises and the other Mortgaged
Property and any sublimits in such blanket policy applicable to the
Premises and the other Mortgaged Property, (B) each such blanket policy
shall include an endorsement providing that, in the event of a loss
resulting from an insured peril, insurance proceeds shall be allocated to
the Mortgaged Property in an amount equal to the coverages required to be
maintained by Mortgagor as provided above and (C) the protection afforded
under any such blanket policy shall be no less than that which would have
been afforded under a separate policy or policies relating only to the
Mortgaged Property.
6. Restrictions on Liens and Encumbrances. Except for the lien of
this Mortgage and the Permitted Exceptions and except as otherwise
permitted pursuant to the terms of the Credit Agreement, Mortgagor shall
not further mortgage, nor otherwise encumber the Mortgaged Property nor
create or suffer to exist any lien, charge or encumbrance on the Mortgaged
Property, or any part thereof, whether superior or subordinate to the lien
of this Mortgage and whether recourse or non-recourse; provided, however
that Mortgagor shall have the right to contest, diligently and in good
faith, the imposition of any mechanics' liens placed on the Mortgaged
Property. The presence of any such mechanic's liens shall not constitute an
Event of Default so long as Mortgagor is so diligently contesting such
mechanics' liens.
7. Due on Sale and Other Transfer Restrictions. Except as may be
permitted pursuant to Sections 6.7 and 6.8 of the Credit Agreement,
Mortgagor shall not sell, transfer, convey or assign all or any portion of,
or any interest in, the Mortgaged Property.
8. Maintenance; No Alteration; Inspection; Utilities. (a)
Mortgagor shall maintain or cause to be maintained all the Improvements in
good condition and repair, ordinary wear and tear excepted, and shall not
commit or suffer any waste of the Improvements. Subject to the terms of
Section 5, Mortgagor shall repair, restore, replace or rebuild promptly any
part of the Premises which may be damaged or destroyed by any casualty
whatsoever to a condition substantially equivalent to its condition prior
to the damage or destruction. Except as permitted by the Credit Agreement,
the Improvements shall not be demolished or materially altered, nor any
material additions built, without the prior written consent of Mortgagee,
provided that Mortgagor may make alterations or additions without the
consent of Mortgagee that do not materially reduce the value of the
Mortgaged Property.
(b) Mortgagee and any persons authorized by Mortgagee shall, upon
reasonable prior notice and at any reasonable time during business hours,
on Business Days, have the right to enter and inspect the Premises and the
right to inspect all work done, labor performed and materials furnished in
and about the Improvements and the right to inspect and make copies, to the
extent reasonable, of all books, contracts and records of Mortgagor
relating to the Mortgaged Property, it being understood that the terms of
Section 9.12 of the Credit Agreement shall be deemed applicable to any
inspection of the Mortgaged Property and any books and records relating
thereto.
(c) Mortgagor shall pay or cause to be paid prior to delinquency,
all utility charges which are incurred for gas, electricity, water or sewer
services furnished to the Premises and all other assessments or charges of
a similar nature, whether public or private, affecting the Premises or any
portion thereof, whether or not such assessments or charges are liens
thereon; provided that Mortgagor shall have the right to contest,
diligently and in good faith, the imposition of any such charges or
assessments and the failure of Mortgagor to pay such utility charges shall
not constitute an Event of Default so long as Mortgagor is so diligently
contesting such charges or assessments..
9. Condemnation/Eminent Domain. Promptly upon obtaining knowledge
of the institution of any proceedings for the condemnation of the Mortgaged
Property, or any portion thereof, Mortgagor will notify Mortgagee of the
pendency of such proceedings. Mortgagor authorizes Mortgagee, at
Mortgagee's option and in Mortgagee's reasonable discretion, as
attorney-in-fact for Mortgagor, to commence, appear in and prosecute, in
Mortgagee's or Mortgagor's name, any action or proceeding relating to any
condemnation of the Mortgaged Property, or any portion thereof, and to
settle or compromise any claim in connection with such condemnation upon
the occurrence and during the continuance of an Event of Default. Prior to
the occurrence of an Event of Default, Mortgagor may, without Mortgagee's
consent, settle or compromise any such claim, and all awards and proceeds
of condemnation shall be applied, toward the restoration of the Mortgaged
Property. If Mortgagee elects not to participate in such condemnation
proceeding, then Mortgagor shall, at its expense, diligently prosecute any
such proceeding and shall consult with Mortgagee, its attorneys and experts
and cooperate with them in any defense of any such proceedings. All awards
and proceeds of condemnation shall be assigned to Mortgagee to be applied
in the same manner as insurance proceeds, as provided above, and Mortgagor
agrees to execute any such assignments of all such awards as Mortgagee may
request.
10. Restoration. If Mortgagee elects or is required hereunder to
release funds to Mortgagor for restoration of any of the Mortgaged
Property, then such restoration shall be performed only in accordance with
the following conditions:
(i) prior to the commencement of any restoration, the plans and
specifications for such restoration, and the budgeted costs, shall be
submitted to and reasonably approved by Mortgagee; provided, that if
Mortgagee fails to approve or deny approval within 10 days of its
receipt of such submission, Mortgagee shall be deemed to have
consented to such proposal;
(ii) prior to making any advance of restoration funds, Mortgagee
shall be reasonably satisfied that the remaining restoration funds are
sufficient to complete the restoration and to pay all related
expenses, including interest on the Indebtedness and real estate taxes
on the Premises, during restoration, or that Mortgagor will otherwise
be able to pay the same out of other funds;
(iii) at the time of any disbursement of the restoration funds,
(A) no Event of Default shall then exist and be continuing and (B) no
mechanics' or materialmen's liens shall have been filed and remain
undischarged, except those either discharged by the disbursement of
the requested restoration funds or being contested in accordance with
Section 6 above;
(iv) disbursements shall be made from time to time in an amount
not exceeding the cost of the work completed since the last
disbursement, upon receipt by Mortgagee of a certificate from
Mortgagor's architect of the stage of completion and of performance of
the work in a good and workmanlike manner and substantially in
accordance with the contracts, plans and specifications reasonably
acceptable to Mortgagee;
(v) the restoration funds shall bear interest and may not be
commingled with Mortgagee's other funds;
(vi) any restoration funds remaining shall be paid to Mortgagor
or, at Mortgagor's option, be applied by Mortgagee to the Indebtedness
in the order specified in the [Credit Agreement/Shared Collateral
Agreement] or to other expenses related to the Mortgaged Property, as
herein permitted.
11. Leases. (a) Mortgagor shall not execute an assignment or
pledge of any Lease relating to all or any portion of the Mortgaged
Property other than in favor of Mortgagee.
(b) As to any Lease now or hereafter in effect, Mortgagor shall:
(i) promptly deliver to Mortgagee copies of any notices of
default which Mortgagor may at any time forward to or receive from the
lessee;
(ii) promptly deliver to Mortgagee a fully executed counterpart
of the Lease; and
(iii) promptly deliver to Mortgagee, upon Mortgagee's reasonable
request, an assignment of the Mortgagor's interest under such Lease.
(c) Mortgagor shall deliver to Mortgagee, within 10 days after a
reasonable request by Mortgagee, which request shall not be made more than
once in any calendar year, a written statement, certified by Mortgagor as
being true, correct and complete, containing the names of all lessees and
other occupants of the Mortgaged Property, the terms of all Leases and the
spaces occupied and rentals payable thereunder, and a list of all Leases
which are then in default, including the nature and magnitude of the
default.
(d) All Leases entered into by Mortgagor after the date hereof,
if any, and all rights of any lessees thereunder shall be subject and
subordinate in all respects to the lien and provisions of this Mortgage
unless Mortgagee shall otherwise elect in writing.
(e) As to any Lease now or hereafter in existence Mortgagor shall
not accept the payment of rent more than thirty (30) days in advance of its
due date.
(f) In the event of the enforcement by Mortgagee of any remedy
under this Mortgage, the lessee under each Lease shall, if requested by
Mortgagee or any other person succeeding to the interest of Mortgagee as a
result of such enforcement, attorn to Mortgagee or to such person and shall
recognize Mortgagee or such successor in interest as lessor under the Lease
without change in the provisions thereof; provided however, that Mortgagee
or such successor in interest shall not be: (i) bound by any payment of an
installment of rent or additional rent which may have been made more than
thirty (30) days before the due date of such installment, unless paid over
to Mortgagee; (ii) bound by any amendment or modification to the Lease of
which Mortgagee or such successor in interest does not have notice; (iii)
liable for any previous act or omission of Mortgagor (or its predecessors
in interest); (iv) responsible for any monies owing by Mortgagor to the
credit of such lessee or subject to any credits, offsets, claims,
counterclaims, demands or defenses which the lessee may have against
Mortgagor (or its predecessors in interest) unless expressly set forth in
the applicable Lease; (v) bound by any covenant to undertake or complete
any construction of the Premises or any portion thereof, unless expressly
set forth in the Lease; or (vi) obligated to make any payment to such
lessee other than any security deposit actually delivered to Mortgagee or
such successor in interest. Each lessee or other occupant, upon request by
Mortgagee or such successor in interest, shall execute and deliver an
instrument or instruments confirming such attornment. In addition,
Mortgagor agrees that each Lease entered into after the date of this
Mortgage shall include language to the effect of subsections (d)-(f) of
this Section; provided that the provisions of such subsections shall be
self-operative and any failure of any Lease to include such language shall
not impair the binding effect of such provisions on any lessee under such
Lease.
12. Further Assurances. To further assure Mortgagee's rights
under this Mortgage, Mortgagor agrees as soon as reasonably practicable
after demand of Mortgagee to do any act or execute any additional documents
(including, but not limited to, security agreements on any personalty
included or to be included in the Mortgaged Property and a separate
assignment of each Lease in recordable form) as may be reasonably required
by Mortgagee to confirm the lien of this Mortgage and all other rights or
benefits conferred on Mortgagee by Mortgagor.
13. Mortgagee's Right to Perform. If Mortgagor fails to perform
any of the covenants or agreements of Mortgagor, Mortgagee, without waiving
or releasing Mortgagor from any obligation or default under this Mortgage,
may (but shall be under no obligation to), upon thirty (30) days' prior
written notice to Mortgagor (unless an emergency would warrant shorter
notice) pay or perform the same, and the amount or cost thereof, with
interest at the Default Rate, shall immediately be due from Mortgagor to
Mortgagee and the same shall be secured by this Mortgage and shall be a
lien on the Mortgaged Property prior to any right, title to, interest in or
claim upon the Mortgaged Property attaching subsequent to the lien of this
Mortgage. No payment or advance of money by Mortgagee under this Section
shall be deemed or construed to waive any right or remedy of Mortgagee.
14. Events of Default. The occurrence of an Event of Default
under the Credit Agreement shall constitute an Event of Default hereunder.
15. Remedies. (a) Upon the occurrence and during the continuance
of any Event of Default, in addition to any other rights and remedies
Mortgagee may have pursuant to the Loan Documents, or as provided by law,
the [Secured] [Loan Documents] Indebtedness and all other amounts payable
with respect to the Loans, the Letters of Credit, the Credit Agreement,
this Mortgage and the other Security Documents shall become due and payable
as provided in the Credit Agreement. Except as expressly provided above in
this Section, presentment, demand, protest and all other notices of any
kind are hereby expressly waived. In addition, upon the occurrence of any
Event of Default, Mortgagee may immediately take such commercially
reasonable action, without notice or demand, as it deems advisable to
protect and enforce its rights against Mortgagor and in and to the
Mortgaged Property, including, but not limited to, the following actions,
each of which may be pursued concurrently or otherwise, at such time and in
such manner as Mortgagee may determine, in its sole discretion, without
impairing or otherwise affecting the other rights and remedies of
Mortgagee:
(i) Mortgagee may, to the extent permitted by applicable law, (A)
institute and maintain an action of mortgage foreclosure against all
or any part of the Mortgaged Property, (B) institute and maintain an
action on the Loans (including any notes issued to evidence the
Loans), (C) sell all or part of the Mortgaged Property (Mortgagor
expressly granting to Mortgagee the power of sale), or (D) take such
other action at law or in equity for the enforcement of this Mortgage
or any of the Loan Documents as the law may allow. Mortgagee may
proceed in any such action to final judgment and execution thereon for
all sums due hereunder, together with interest thereon as provided in
the Credit Agreement and all reasonable costs of suit, including,
without limitation, reasonable attorneys' fees and disbursements.
Interest at the Default Rate shall be due on any judgment obtained by
Mortgagee from the date of judgment until actual payment is made of
the full amount of the judgment.
(ii) Subject to any applicable requirements of law, Mortgagee may
personally, or by its agents, attorneys and employees and without
regard to the adequacy or inadequacy of the Mortgaged Property or any
other collateral as security for the Secured Indebtedness and
Obligations enter into and upon the Mortgaged Property and each and
every part thereof and exclude Mortgagor and its agents and employees
therefrom without liability for trespass, damage or otherwise
(Mortgagor hereby agreeing to surrender possession of the Mortgaged
Property to Mortgagee upon demand at any such time) and use, operate,
manage, maintain and control the Mortgaged Property and every part
thereof. Following such entry and taking of possession, Mortgagee
shall be entitled, without limitation, (x) to lease all or any part or
parts of the Mortgaged Property for such periods of time and upon such
commercially reasonable conditions as Mortgagee may, in its
discretion, deem proper, (y) to enforce, cancel or modify any Lease
and (z) generally to execute, do and perform any other commercially
reasonable act, deed, matter or thing concerning the Mortgaged
Property as Mortgagee shall deem appropriate as fully as Mortgagor
might do.
(b) In case of a foreclosure sale, the Real Estate may be sold,
at Mortgagee's election, in one parcel or in more than one parcel and
Mortgagee is specifically empowered (without being required to do so, and
in its sole and absolute discretion) to cause successive sales of portions
of the Mortgaged Property to be held.
(c) In the event of any breach of any of the covenants,
agreements, terms or conditions contained in this Mortgage, and
notwithstanding to the contrary any exculpatory or non-recourse language
which may be contained herein, Mortgagee shall be entitled to enjoin such
breach and obtain specific performance of any covenant, agreement, term or
condition and Mortgagee shall have the right to invoke any equitable right
or remedy as though other remedies were not provided for in this Mortgage.
[(d) Prior to exercising any remedies hereunder against
Mortgagor, or in respect of any Mortgaged Property in which a security
interest is granted by any of them hereunder, the Mortgagee agrees to
deliver to the Borrower two Business Days' notice of the Event of Default
giving rise to such exercise of remedies and a demand for payment of all
Loan Document Indebtedness then outstanding; provided, however, that the
occurrence of an Event of Default in respect of the Borrower under Section
7(h), (i) or (j) of the Credit Agreement shall be deemed to constitute
delivery by the Mortgagee to the Borrower of such notice. If the event or
condition giving rise to such Event of Default is not cured within two
Business Days after notice thereof has been so delivered or deemed
delivered, there shall be no restriction on the ability of the mortgagee to
exercise its rights and remedies hereunder against Mortgagor and the
Mortgaged Property in which a security interest is granted by them
hereunder.]
[(e) Notwithstanding anything to the contrary contained in this
Mortgage, Specified Letters of Credit Obligations shall be deemed not to be
secured by any Mortgaged Property granted hereunder by Mortgagor. As used
in this subsection, "Specified Letter of Credit Obligations" refers to any
Loan Document Indebtedness of Mortgagor to the extent, but only to the
extent, that such Loan Document Indebtedness covers any reimbursement
obligations of the Borrower to the Issuing Lender in respect of the Letter
of Credit issued on the Effective Date for the benefit of Wachovia Bank,
National Association.]
16. Right of Mortgagee to Credit Sale. Upon the occurrence of any
sale made under this Mortgage, whether made under the power of sale or by
virtue of judicial proceedings or of a judgment or decree of foreclosure
and sale, Mortgagee may bid for and acquire the Mortgaged Property or any
part thereof. In lieu of paying cash therefor, Mortgagee may make
settlement for the purchase price by crediting upon the Secured
Indebtedness or other sums secured by this Mortgage the net sales price
after deducting therefrom the expenses of sale and the cost of the action
and any other sums which Mortgagee is authorized to deduct under this
Mortgage. In such event, this Mortgage and any and all documents evidencing
expenditures secured hereby may be presented to the person or persons
conducting the sale in order that the amount so used or applied may be
credited upon the Indebtedness as having been paid.
17. Appointment of Receiver. If an Event of Default shall have
occurred and be continuing, Mortgagee as a matter of right and without
notice to Mortgagor, unless otherwise required by applicable law, and
without regard to the adequacy or inadequacy of the Mortgaged Property or
any other collateral as security for the Secured Indebtedness and
Obligations or the interest of Mortgagor therein, shall have the right to
apply to any court having jurisdiction to appoint a receiver or receivers
or other manager of the Mortgaged Property, and Mortgagor hereby
irrevocably consents to such appointment and waives notice of any
application therefor (except as may be required by law). Any such receiver
or receivers shall have all the usual powers and duties of receivers in
like or similar cases and all the powers and duties of Mortgagee in case of
entry as provided in this Mortgage, including, without limitation and to
the extent permitted by law, the right to enter into commercially
reasonable leases of all or any part of the Mortgaged Property, and shall
continue as such and exercise all such powers until the date of
confirmation of sale of the Mortgaged Property unless such receivership is
sooner terminated.
18. Extension, Release, etc. (a) Without affecting the lien or
charge of this Mortgage upon any portion of the Mortgaged Property not then
or theretofore released as security for the full amount of the Secured
Indebtedness, Mortgagee may, from time to time and without notice, agree to
(i) release any person liable for the [Secured][Loan Document]
Indebtedness, (ii) extend the maturity or alter any of the terms of the
[Secured][Loan Document] Indebtedness or any guaranty thereof, (iii) grant
other indulgences, (iv) release or reconvey, or cause to be released or
reconveyed at any time at Mortgagee's option any parcel, portion or all of
the Mortgaged Property, (v) take or release any other or additional
security for any obligation herein mentioned, or (vi) make compositions or
other arrangements with debtors in relation thereto. If at any time this
Mortgage shall secure less than all of the principal amount of the Secured
Indebtedness, it is expressly agreed that any repayments of the principal
amount of the Secured Indebtedness shall not reduce the amount of the lien
of this Mortgage until the lien amount shall equal the principal amount of
the Indebtedness outstanding.
(b) No recovery of any judgment by Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect the lien of this Mortgage or any liens,
rights, powers or remedies of Mortgagee hereunder, and such liens, rights,
powers and remedies shall continue unimpaired.
(c) If Mortgagee shall have the right to foreclose this Mortgage,
Mortgagor authorizes Mortgagee at its option to foreclose the lien of this
Mortgage subject to the rights of any tenants of the Mortgaged Property.
The failure to make any such tenants parties defendant to any such
foreclosure proceeding and to foreclose their rights will not be asserted
by Mortgagor as a defense to any proceeding instituted by Mortgagee to
collect the Indebtedness or to foreclose the lien of this Mortgage.
(d) Unless expressly provided otherwise, in the event that
ownership of this Mortgage and title to the Mortgaged Property or any
estate therein shall become vested in the same person or entity, this
Mortgage shall not merge in such title but shall continue as a valid lien
on the Mortgaged Property for the amount secured hereby.
19. Security Agreement under Uniform Commercial Code. (a) It is
the intention of the parties hereto that this Mortgage shall constitute a
Security Agreement within the meaning of the Uniform Commercial Code of the
State in which the Mortgaged Property is located (the "Code). If an Event
of Default shall occur under this Mortgage, then in addition to having any
other right or remedy available at law or in equity, Mortgagee shall have
the option of either (i) proceeding under the Code and exercising such
rights and remedies as may be provided to a secured party by the Code with
respect to all or any portion of the Mortgaged Property which is personal
property (including, without limitation, taking possession of and selling
such property) or (ii) treating such property as real property and
proceeding with respect to both the real and personal property constituting
the Mortgaged Property in accordance with Mortgagee's rights, powers and
remedies with respect to the real property (in which event the default
provisions of the Code shall not apply). If Mortgagee shall elect to
proceed under the Code, then 10 days' notice of sale of the personal
property shall be deemed reasonable notice and the reasonable expenses of
retaking, holding, preparing for sale, selling and the like incurred by
Mortgagee shall include, but not be limited to, reasonable attorneys' fees
and legal expenses. At Mortgagee's request during the continuance of an
Event of Default, Mortgagor shall assemble the personal property and make
it available to Mortgagee at a place designated by Mortgagee which is
reasonably convenient to both parties.
(b) Mortgagor and Mortgagee agree, to the extent permitted by
law, that: (i) all of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Real Estate; (ii) this
Mortgage upon recording or registration in the real estate records of the
proper office shall constitute a financing statement filed as a "fixture
filing" within the meaning of Sections 9-313 and 9-402 of the Code; (iii)
Mortgagor is the record owner of the Real Estate; and (iv) the addresses of
Mortgagor and Mortgagee are as set forth on the first page of this
Mortgage.
(c) Mortgagor, upon request by Mortgagee from time to time, shall
execute, acknowledge and deliver to Mortgagee one or more separate security
agreements, in form reasonably satisfactory to Mortgagee, covering all or
any part of the Mortgaged Property and will further execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, any
financing statement, affidavit, continuation statement or certificate or
other document as Mortgagee may request in order to perfect, preserve,
maintain, continue or extend the security interest under and the priority
of this Mortgage and such security instrument. Mortgagor further agrees to
pay to Mortgagee on demand all reasonable costs and expenses incurred by
Mortgagee in connection with the preparation, execution, recording, filing
and re-filing of any such document and all reasonable costs and expenses of
any record searches for financing statements Mortgagee shall reasonably
require. If Mortgagor shall fail to furnish any financing or continuation
statement within 10 Business Days after request by Mortgagee, then pursuant
to the provisions of the Code, Mortgagor hereby authorizes Mortgagee,
without the signature of Mortgagor, to execute and file any such financing
and continuation statements. The filing of any financing or continuation
statements in the records relating to personal property or chattels shall
not be construed as in any way impairing the right of Mortgagee to proceed
against any personal property encumbered by this Mortgage as real property,
as set forth above.
20. Assignment of Rents. Mortgagor hereby assigns to Mortgagee
the Rents as further security for the payment of the Secured Indebtedness
and performance of the Obligations, and Mortgagor grants to Mortgagee the
right to enter the Mortgaged Property for the purpose of collecting the
same and to let the Mortgaged Property or any part thereof[, and to apply
the Rents on account of the Secured Indebtedness] [in accordance with the
Collateral Sharing Agreement]. The foregoing assignment and grant is
present and absolute and shall continue in effect until the Indebtedness is
paid in full, but Mortgagee hereby waives the right to enter the Mortgaged
Property for the purpose of collecting the Rents, letting the Mortgaged
Property or any part thereof or applying the Rents and Mortgagor shall be
entitled to collect, receive, use and retain the Rents until the occurrence
and during the continuance of an Event of Default under this Mortgage; such
right of Mortgagor to collect, receive, use and retain the Rents may be
revoked by Mortgagee upon the occurrence of any Event of Default under this
Mortgage by giving not less than five days' written notice of such
revocation to Mortgagor; in the event such notice is given, Mortgagor shall
pay over to Mortgagee, or to any receiver appointed to collect the Rents,
any lease security deposits, and shall pay monthly in advance to Mortgagee,
or to any such receiver, the fair and reasonable rental value as determined
by Mortgagee for the use and occupancy of the Mortgaged Property or of such
part thereof as may be in the possession of Mortgagor or any affiliate of
Mortgagor, and upon default in any such payment Mortgagor and any such
affiliate will vacate and surrender the possession of the Mortgaged
Property to Mortgagee or to such receiver, and in default thereof may be
evicted by summary proceedings or otherwise. Mortgagor shall not accept
prepayments of installments of Rent to become due for a period of more than
one month in advance (except for security deposits and estimated payments
of percentage rent, if any). Upon the cure of any Event of Default arising
under this Section 20, Mortgagor's rights under this Section 20 shall be
fully restored without further action.
21. Additional Rights. The holder of any subordinate lien on the
Mortgaged Property shall have no right to terminate any Lease whether or
not such Lease is subordinate to this Mortgage nor shall any holder of any
subordinate lien join any tenant under any Lease in any action to foreclose
the lien or modify, interfere with, disturb or terminate the rights of any
tenant under any Lease. By recordation of this Mortgage all subordinate
lienholders are subject to and notified of this provision, and any action
taken by any such lienholder contrary to this provision shall be null and
void. Upon the occurrence of any Event of Default, Mortgagee may, in its
sole discretion and without regard to the adequacy of its security under
this Mortgage, apply all or any part of any amounts on deposit with
Mortgagee under this Mortgage against all or any part of the Indebtedness.
Any such application shall not be construed to cure or waive any Default or
Event of Default or invalidate any act taken by Mortgagee on account of
such Default or Event of Default.
22. Changes in Method of Taxation. In the event of the passage
after the date hereof of any law of any Governmental Authority deducting
from the value of the Premises for the purposes of taxation any lien
thereon, or changing in any materially adverse way the laws for the
taxation of mortgages or debts secured thereby for federal, state or local
purposes, or the manner of collection of any such taxes, and imposing a
tax, either directly or indirectly, on mortgages or debts secured thereby,
the holder of this Mortgage shall have the right to declare the
Indebtedness due on a date to be specified by not less than thirty (30)
days' written notice to be given to Mortgagor unless within such 30-day
period Mortgagor shall assume as an Obligation hereunder the payment of any
tax so imposed until full payment of the Secured Indebtedness and such
assumption shall be permitted by law.
23. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices
and other communications provided for herein shall be in writing and shall
be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to Mortgagor, to it at ________________________________,
Attention of ____________________ (Telecopy No. ____________________);
(b) if to Mortgagee, to The Chase Manhattan Bank, Loan and Agency
Services Group, One Chase Manhattan Plaza, 8th Floor, New York, New
York 10081, Attention of Janet Belden (Telecopy No. 212-552-5658),
with a copy to The Chase Manhattan Bank, 270 Park Avenue, New York,
New York 10017, Attention of Julie Long (Telecopy No. 212-972-9854);
and
(c) if to any other Lender, to it at its address (or telecopy
number) set forth in the Administrative Questionnaire.
24. No Oral Modification. This Mortgage may not be changed or
terminated orally. Any agreement made by Mortgagor and Mortgagee after the
date of this Mortgage relating to this Mortgage shall be superior to the
rights of the holder of any intervening or subordinate lien or encumbrance.
25. Partial Invalidity. In the event any one or more of the
provisions contained in this Mortgage shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision hereof,
but each shall be construed as if such invalid, illegal or unenforceable
provision had never been included. Notwithstanding anything to the contrary
contained in this Mortgage or in any provisions of the Secured Indebtedness
or Loan Documents, the obligations of Mortgagor and of any other obligor
under the Secured Indebtedness or Loan Documents shall be subject to the
limitation that Mortgagee shall not charge, take or receive, nor shall
Mortgagor or any other obligor be obligated to pay to Mortgagee, any
amounts constituting interest in excess of the maximum rate permitted by
law to be charged by Mortgagee.
26. Mortgagor's Waiver of Rights. To the fullest extent permitted
by law, Mortgagor waives the benefit of all laws now existing or that may
subsequently be enacted providing for (i) any appraisement before sale of
any portion of the Mortgaged Property, (ii) any extension of the time for
the enforcement of the collection of the Secured Indebtedness or the
creation or extension of a period of redemption from any sale made in
collecting such debt and (iii) exemption of the Mortgaged Property from
attachment, levy or sale under execution or exemption from civil process.
To the full extent Mortgagor may do so, Mortgagor agrees that Mortgagor
will not at any time insist upon, plead, claim or take the benefit or
advantage of any law now or hereafter in force providing for any
appraisement, valuation, stay, exemption, extension or redemption, or
requiring foreclosure of this Mortgage before exercising any other remedy
granted hereunder and Mortgagor, for Mortgagor and its successors and
assigns, and for any and all persons ever claiming any interest in the
Mortgaged Property, to the extent permitted by law, hereby waives and
releases all rights of redemption, valuation, appraisement, stay of
execution, notice of election to mature or declare due the whole of the
secured indebtedness and marshalling in the event of foreclosure of the
liens hereby created.
27. Remedies Not Exclusive. Mortgagee shall be entitled to
enforce payment of the Secured Indebtedness and performance of the
Obligations and to exercise all rights and powers under this Mortgage or
under any of the other Loan Documents or other agreement or any laws now or
hereafter in force, notwithstanding some or all of the Secured Indebtedness
and Obligations may now or hereafter be otherwise secured, whether by
mortgage, security agreement, pledge, lien, assignment or otherwise.
Neither the acceptance of this Mortgage nor its enforcement, shall
prejudice or in any manner affect Mortgagee's right to realize upon or
enforce any other security now or hereafter held by Mortgagee, it being
agreed that Mortgagee shall be entitled to enforce this Mortgage and any
other security now or hereafter held by Mortgagee in such order and manner
as Mortgagee may determine in its absolute discretion. No remedy herein
conferred upon or reserved to Mortgagee is intended to be exclusive of any
other remedy herein or by law provided or permitted, but each shall be
cumulative and shall be in addition to every other remedy given hereunder
or now or hereafter existing at law or in equity or by statute. Every power
or remedy given by any of the Loan Documents to Mortgagee or to which it
may otherwise be entitled, may be exercised, concurrently or independently,
from time to time and as often as may be deemed expedient by Mortgagee. In
no event shall Mortgagee, in the exercise of the remedies provided in this
Mortgage (including, without limitation, in connection with the assignment
of Rents to Mortgagee, or the appointment of a receiver and the entry of
such receiver on to all or any part of the Mortgaged Property), be deemed a
"mortgagee in possession," and Mortgagee shall not in any way be made
liable for any act, either of commission or omission, in connection with
the exercise of such remedies.
28. Multiple Security. If (a) the Premises shall consist of one
or more parcels, whether or not contiguous and whether or not located in
the same county, or (b) in addition to this Mortgage, Mortgagee shall now
or hereafter hold one or more additional mortgages, liens, deeds of trust
or other security (directly or indirectly) for the Secured Indebtedness
upon other property in the State in which the Premises are located (whether
or not such property is owned by Mortgagor or by others) or (c) both the
circumstances described in clauses (a) and (b) shall be true, then to the
fullest extent permitted by law, Mortgagee may, at its election, commence
or consolidate in a single foreclosure action all foreclosure proceedings
against all such collateral securing the Secured Indebtedness (including
the Mortgaged Property), which action may be brought or consolidated in the
courts of any county in which any of such collateral is located. Mortgagor
acknowledges that the right to maintain a consolidated foreclosure action
is a specific inducement to the Secured Parties to extend the Secured
Indebtedness, and Mortgagor expressly and irrevocably waives any objections
to the commencement or consolidation of the foreclosure proceedings in a
single action and any objections to the laying of venue or based on the
grounds of forum non conveniens which it may now or hereafter have.
Mortgagor further agrees that if Mortgagee shall be prosecuting one or more
foreclosure or other proceedings against a portion of the Mortgaged
Property or against any collateral other than the Mortgaged Property, which
collateral directly or indirectly secures the Secured Indebtedness, or if
Mortgagee shall have obtained a judgment of foreclosure and sale or similar
judgment against such collateral, then, whether or not such proceedings are
being maintained or judgments were obtained in or outside the State in
which the Premises are located, Mortgagee may commence or continue
foreclosure proceedings and exercise its other remedies granted in this
Mortgage against all or any part of the Mortgaged Property and Mortgagor
waives any objections to the commencement or continuation of a foreclosure
of this Mortgage or exercise of any other remedies hereunder based on such
other proceedings or judgments, and waives any right to seek to dismiss,
stay, remove, transfer or consolidate either any action under this Mortgage
or such other proceedings on such basis. Neither the commencement nor
continuation of proceedings to foreclose this Mortgage nor the exercise of
any other rights hereunder nor the recovery of any judgment by Mortgagee in
any such proceedings shall prejudice, limit or preclude Mortgagee's right
to commence or continue one or more foreclosure or other proceedings or
obtain a judgment against any other collateral (either in or outside the
State in which the Premises are located) which directly or indirectly
secures the Secured Indebtedness, and Mortgagor expressly waives any
objections to the commencement of, continuation of, or entry of a judgment
in such other proceedings or exercise of any remedies in such proceedings
based upon any action or judgment connected to this Mortgage, and Mortgagor
also waives any right to seek to dismiss, stay, remove, transfer or
consolidate either such other proceedings or any action under this Mortgage
on such basis. It is expressly understood and agreed that to the fullest
extent permitted by law, Mortgagee may, at its election, cause the sale of
all collateral which is the subject of a single foreclosure action at
either a single sale or at multiple sales conducted simultaneously and take
such other measures as are appropriate in order to effect the agreement of
the parties to dispose of and administer all collateral securing the
Secured Indebtedness (directly or indirectly) in the most economical and
least time-consuming manner.
29. Successors and Assigns. All covenants of Mortgagor contained
in this Mortgage are imposed solely and exclusively for the benefit of
Mortgagee and its successors and assigns, and no other person or entity
shall have standing to require compliance with such covenants or be deemed,
under any circumstances, to be a beneficiary of such covenants, any or all
of which may be freely waived in whole or in part by Mortgagee at any time
if in its sole discretion it deems such waiver advisable. All such
covenants of Mortgagor shall run with the land and bind Mortgagor, the
successors and assigns of Mortgagor (and each of them) and all subsequent
owners, encumbrancers and tenants of the Mortgaged Property, and shall
inure to the benefit of Mortgagee, its successors and assigns. The word
"Mortgagor" shall be construed as if it read "Mortgagors" whenever the
sense of this Mortgage so requires and if there shall be more than one
Mortgagor, the obligations of the Mortgagors shall be joint and several.
30. No Waivers, etc. Any failure by Mortgagee to insist upon the
strict performance by Mortgagor of any of the terms and provisions of this
Mortgage shall not be deemed to be a waiver of any of the terms and
provisions hereof, and Mortgagee, notwithstanding any such failure, shall
have the right thereafter to insist upon the strict performance by
Mortgagor of any and all of the terms and provisions of this Mortgage to be
performed by Mortgagor. Mortgagee may release, regardless of consideration
and without the necessity for any notice to or consent by the holder of any
subordinate lien on the Mortgaged Property, any part of the security held
for the obligations secured by this Mortgage without, as to the remainder
of the security, in anywise impairing or affecting the lien of this
Mortgage or the priority of such lien over any subordinate lien.
31. Governing Law, etc. This Mortgage shall be governed by and
construed in accordance with the laws of the State in which the Premises
are located, except that Mortgagor expressly acknowledges that by its terms
the Credit Agreement shall be governed and construed in accordance with the
laws of the State of New York, without regard to principles of conflict of
law, and for purposes of consistency, Mortgagor agrees that in any in
personam proceeding related to this Mortgage the rights of the parties to
this Mortgage shall also be governed by and construed in accordance with
the laws of the State of New York governing contracts made and to be
performed in that State, without regard to principles of conflict of law.
32. Waiver of Trial by Jury. Mortgagor and Mortgagee each hereby
irrevocably and unconditionally waive trial by jury in any action, claim,
suit or proceeding relating to this Mortgage and for any counterclaim
brought therein.
33. Certain Definitions. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words
used in this Mortgage shall be used interchangeably in singular or plural
form and the word "Mortgagor" shall mean "each Mortgagor or any subsequent
owner or owners of the Mortgaged Property or any part thereof or interest
therein," the word "Mortgagee" shall mean "Mortgagee or any successor
Collateral Agent," the word "notes" shall mean "the notes that may from
time to time be issued pursuant to the terms of the Credit Agreement or any
other evidence of indebtedness secured by this Mortgage," the word "person"
shall include any individual, corporation, partnership, limited liability
company, trust, unincorporated association, government, governmental
authority, or other entity, and the words "Mortgaged Property" shall
include any portion of the Mortgaged Property or interest therein. Whenever
the context may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural and vice versa. The captions in
this Mortgage are for convenience or reference only and in no way limit or
amplify the provisions hereof.
34. Release of Mortgage. Upon payment in full of all the Loans,
all Reimbursement Obligations and all other Secured Indebtedness the
termination or expiration of all Letters of Credit, the termination of all
Commitments (as defined in the Guarantee and Collateral Agreement) and the
compliance with the Obligations then required to be complied with, [and the
Administrative Agent and the Public Debt Trustee, on behalf of the Secured
Parties, have so certified to Mortgagee] Mortgagee shall release the lien
of this Mortgage and will promptly execute and deliver to Mortgagee
satisfactions of mortgage and UCC-3 Financing Statements. This obligation
of Mortgagee shall survive Mortgagor's repayment of the obligations set
forth herein.
[By acceptance of the benefits hereof, each Secured Party
acknowledges and consents to the provisions of this Section 34, agrees that
the Mortgagee shall incur no liability whatsoever to any Secured Party for
any release effected by the Mortgagee in accordance with this Section 34
and agrees that the Administrative Agent shall incur no liability
whatsoever to any Secured Party for any release directed or consented to by
it in accordance with the Credit Agreement.]
35. Conflict with Credit Agreement. In the event of any conflict
or inconsistency between the terms and provisions of this Mortgage and the
terms and provisions of the Credit Agreement, the terms and provisions of
the Credit Agreement shall govern, other than with respect to the Governing
Law provision set forth in Section 31 hereof.
This Mortgage has been duly executed by Mortgagor on the date
first above written.
[MORTGAGOR]
By:
-------------------------
Name:
--------------------
Title:
--------------------
<PAGE>
[Insert appropriate acknowledgment]
<PAGE>
Schedule A
----------
Description of the Premises
[Attach Legal Description of all parcels]
<PAGE>
EXHIBIT A-4
- ----------------------------------------------------------------------------
COLLATERAL SHARING AGREEMENT
Dated as of October 6, 1998
between
GENERAL SIGNAL CORPORATION
and
THE CHASE MANHATTAN BANK,
as Collateral Agent
- ----------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
PREAMBLE..................................................................... 1
SECTION 1.
DEFINED TERMS................................................................ 1
1.1 Definitions...................................................... 1
SECTION 2.
AUTHORITY OF COLLATERAL AGENT................................................ 3
2.1 General Authority of the Collateral Agent over the Shared
Collateral ..................................................... 3
2.2 Right to Initiate Judicial Proceedings........................... 4
2.3 Right to Appoint a Receiver...................................... 4
2.4 Exercise of Powers............................................... 4
2.5 Remedies Not Exclusive........................................... 5
2.6 Waiver and Estoppel.............................................. 5
2.7 Limitation on Collateral Agent's Duty in Respect of Shared
Collateral...................................................... 6
2.8 Limitation by Law................................................ 6
2.9 Rights of Secured Parties under Secured Instruments.............. 6
SECTION 3.
COLLATERAL ACCOUNT; DISTRIBUTIONS............................................ 7
3.1 The Collateral Account........................................... 7
3.2 Control of Collateral Account.................................... 7
3.3 Investment of Funds Deposited in Collateral Account ............. 7
3.4 Application of Moneys............................................ 7
3.5 Application of Moneys Distributable to Public Debt Trustee....... 9
3.6 Collateral Agent's Calculations.................................. 9
3.7 Pro Rata Sharing................................................. 9
SECTION 4.
AGREEMENTS WITH COLLATERAL AGENT............................................. 10
4.1 Delivery of Secured Instruments.................................. 10
4.2 Information as to Secured Parties, Administrative Agent and
Public Debt Trustee............................................. 10
4.3 Compensation and Expenses........................................ 10
4.4 Stamp and Other Similar Taxes.................................... 10
4.5 Filing Fees, Excise Taxes, Etc................................... 11
4.6 Indemnification.................................................. 11
4.7 Collateral Agent's Lien.......................................... 11
4.8 Further Assurances............................................... 12
SECTION 5.
THE COLLATERAL AGENT......................................................... 12
5.1 Exculpatory Provisions........................................... 12
5.2 Delegation of Duties............................................. 13
5.3 Reliance by Collateral Agent..................................... 13
5.4 Limitations on Duties of Collateral Agent........................ 14
5.5 Moneys to be Held in Trust....................................... 15
5.6 Resignation and Removal of the Collateral Agent.................. 15
5.7 Status of Successor Collateral Agent............................. 17
5.8 Merger of the Collateral Agent................................... 17
5.9 Co-Collateral Agent; Separate Collateral Agent................... 17
5.10 Treatment of Payee or Indorsee by Collateral Agent;
Representatives of Secured Parties.............................. 9
SECTION 6.
MISCELLANEOUS................................................................ 19
6.1 Notices.......................................................... 19
6.2 No Waivers....................................................... 19
6.3 Amendments, Supplements and Waivers.............................. 20
6.4 Heading.......................................................... 20
6.5 Severability..................................................... 20
6.6 Successors and Assigns........................................... 20
6.7 Governing Law.................................................... 20
6.8 Counterparts..................................................... 21
6.9 Termination...................................................... 21
6.10 Inspection by Regulatory Agencies................................ 21
6.11 Agreement to be Bound............................................ 21
<PAGE>
COLLATERAL SHARING AGREEMENT, dated as of October 6, 1998,
between GENERAL SIGNAL CORPORATION, a Delaware corporation ("GSX"), and THE
CHASE MANHATTAN BANK, as collateral agent (in such capacity, the
"Collateral Agent").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, in order to induce the Lenders parties thereto to enter
into the Credit Agreement (such term and certain other capitalized terms
used herein being defined in Section 1.1), GSX and certain of its
Subsidiaries (collectively, the "Grantors") are granting to the Collateral
Agent liens and security interests to secure the Guarantor Obligations; and
WHEREAS, in order to comply with certain covenants in the MTN
Indenture, the Grantors desire that the Shared Collateral secure the Public
Debt Obligations equally and ratably with the Guarantor Obligations for so
long as the Guarantor Obligations are secured;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein and to induce the Administrative Agent and the
Lenders to enter into the Credit Agreement, to induce the Lenders to make
their respective extensions of credit to the Borrower thereunder and to
satisfy the requirements of the MTN Indenture, each Grantor hereby agrees
with the Collateral Agent, for the benefit of the Secured Parties, as
follows:
SECTION 1.
DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Shared Collateral Agreement or the Credit Agreement and used
herein shall have the meanings given to them in the Shared Collateral
Agreement or the Credit Agreement, as the case may be.
(b) The following terms shall have the respective meanings set
forth below:
"Administrative Agent" shall mean The Chase Manhattan Bank, in
its capacity as administrative agent under the Credit Agreement, and
any successor administrative agent appointed thereunder.
"Agreement" shall mean this Collateral Sharing Agreement as the
same may from time to time be amended, supplemented or otherwise
modified.
"Cash Equivalents": (i) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit
of the United States, in each case maturing within one year from the
date of acquisition; (ii) certificates of deposit, time deposits,
eurodollar time deposits or overnight bank deposits having maturities
of six months or less from the date of acquisition issued by any
Lender or by any commercial bank organized under the laws of the
United States or any state thereof having combined capital and surplus
of not less than $500,000,000; (iii) commercial paper of an issuer
rated at least A-1 by Standard & Poor's Ratings Services ("S&P") or
P-1 by Moody's Investors Service, Inc. ("Moody's"), or carrying an
equivalent rating by a nationally recognized rating agency, if both of
the two named rating agencies cease publishing ratings of commercial
paper issuers generally, and maturing within six months from the date
of acquisition; (iv) repurchase obligations of any Lender or of any
commercial bank satisfying the requirements of clause (ii) of this
definition, having a term of not more than 30 days, with respect to
securities issued or fully guaranteed or insured by the United States
government; (v) securities with maturities of one year or less from
the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least A by S&P or
A by Moody's; (vi) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit
issued by any Lender or any commercial bank satisfying the
requirements of clause (ii) of this definition; or (g) shares of money
market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (i) through (vi) of this
definition.
"Collateral Account" shall have the meaning assigned in Section
3.1.
"Collateral Agent" shall mean The Chase Manhattan Bank, in its
capacity as collateral agent under the Shared Collateral Security
Documents and this Agreement, and any successor collateral agent
appointed hereunder.
"Collateral Agent Fees" shall mean all fees, costs and expenses
of the Collateral Agent of the types described in Sections 4.3, 4.4,
4.5 and 4.6.
"Collateral Estate" shall have the meaning assigned in Section
2.1(c).
"Distribution Date" shall mean each date fixed by the Collateral
Agent in its sole discretion for a distribution to the Secured Parties
of funds held in the Collateral Account.
"Grantors" shall have the meaning assigned in the recitals
hereto.
"GSX" shall have the meaning assigned in the preamble hereto.
"Opinion of Counsel" shall mean an opinion in writing signed by
legal counsel satisfactory to the Collateral Agent, who may be counsel
regularly retained by the Collateral Agent.
"Proceeds" shall mean all "proceeds" as such term is defined in
Section 9-306(1) of the Uniform Commercial Code in effect in the State
of New York on the date hereof.
"Secured Instruments" shall mean at any time (i) the MTN
Indenture and the securities issued thereunder and (ii) the Subsidiary
Guarantee and the other Loan Documents to which any Grantor is a
party.
"Shared Collateral" shall mean the collective reference to (i)
"Collateral" under and as defined in the Shared Collateral Agreement
and (ii) unless otherwise expressly provided therein, all other
collateral under any other Shared Collateral Security Document.
"Shared Collateral Agreement" shall mean the Collateral
Agreement, dated as of October 6, 1998, made by the Grantors in favor
of the Collateral Agent, for the benefit of the Secured Parties, as
the same may from time to time be amended, supplemented or otherwise
modified.
"Shared Collateral Security Documents" shall mean (i) the Shared
Collateral Agreement, (ii) each Mortgage granted by any Grantor in
favor of the Collateral Agent and (iii) any other security document
entered into by any Grantor in favor of the Collateral Agent that
expressly provides that all or any portion of the collateral
thereunder shall constitute "Shared Collateral" for the purposes of
this Agreement.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement, and Section
references are to this Agreement unless otherwise specified.
SECTION 2.
AUTHORITY OF COLLATERAL AGENT
2.1 General Authority of the Collateral Agent over the Shared
Collateral. (a) Each Grantor hereby irrevocably constitutes and appoints
the Collateral Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full power and
authority in its or his own name, from time to time in the Collateral
Agent's discretion to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable
to carry out the terms of this Agreement and the Shared Collateral Security
Documents and accomplish the purposes hereof and thereof and, without
limiting the generality of the foregoing, each Grantor hereby acknowledges
that the Collateral Agent shall have all powers and remedies set forth in
the Shared Collateral Security Documents.
(b) By acceptance of the benefits of this Agreement and the
Shared Collateral Security Documents, each Secured Party shall be deemed
irrevocably (i) to consent to the appointment of the Collateral Agent as
its agent hereunder and under the Shared Collateral Security Documents,
(ii) to confirm that the Collateral Agent shall have the authority to act
as the exclusive agent of such Secured Party for enforcement of any
provisions of this Agreement and the Shared Collateral Security Documents
against any Grantor or the exercise of remedies hereunder or thereunder,
(iii) to agree that such Secured Party shall not take any action to enforce
any provisions of this Agreement or any Shared Collateral Security Document
against any Grantor or to exercise any remedy hereunder or thereunder and
(iv) to agree to be bound by the terms of this Agreement and the Shared
Collateral Security Documents.
(c) The Collateral Agent hereby agrees that it holds and will
hold all of its right, title and interest in, to and under the Shared
Collateral Security Documents and the Shared Collateral granted to the
Collateral Agent thereunder whether now existing or hereafter arising (all
such right, title and interest being hereinafter referred to as the
"Collateral Estate") under and subject to the conditions set forth in this
Agreement; and the Collateral Agent further agrees that it will hold such
Collateral Estate for the benefit of the Secured Parties, for the
enforcement of the payment of all Secured Obligations and as security for
the performance of and compliance with the covenants and conditions of this
Agreement, each of the Secured Instruments and each of the Shared
Collateral Security Documents.
2.2 Right to Initiate Judicial Proceedings. The Collateral Agent,
subject to the provisions of Section 5, (i) shall have the right and power
to institute and maintain such suits and proceedings as it may deem
appropriate to protect and enforce the rights vested in it by this
Agreement and each Shared Collateral Security Document and (ii) may, either
after entry, or without entry, proceed by suit or suits at law or in equity
to enforce such rights and to foreclose upon the Shared Collateral and to
sell all or, from time to time, any of the Shared Collateral under the
judgment or decree of a court of competent jurisdiction.
2.3 Right to Appoint a Receiver. Upon the filing of a bill in
equity or other commencement of judicial proceedings to enforce the rights
of the Collateral Agent under this Agreement or any Shared Collateral
Security Document, the Collateral Agent shall, to the extent permitted by
law, with notice to the Borrower and GSX but without notice to any party
claiming through the Grantors, without regard to the solvency or insolvency
at the time of any Person then liable for the payment of any of the Secured
Obligations, without regard to the then value of the Collateral Estate, and
without requiring any bond from any complainant in such proceedings, be
entitled as a matter of right to the appointment of a receiver or receivers
of the Collateral Estate, or any part thereof, and of the rents, issues,
tolls, profits, royalties, revenues and other income thereof, pending such
proceedings, with such powers as the court making such appointment shall
confer, and to the entry of an order directing that the rents, issues,
tolls, profits, royalties, revenues and other income of the property
constituting the whole or any part of the Collateral Estate be segregated,
sequestered and impounded for the benefit of the Collateral Agent and the
Secured Parties, and each Grantor irrevocably consents to the appointments
of such receiver or receivers and to the entry of such order; provided
that, notwithstanding the appointment of any receiver, the Collateral Agent
shall be entitled to retain possession and control of all cash and Cash
Equivalents held by or deposited with it pursuant to this Agreement or any
Shared Collateral Security Document.
2.4 Exercise of Powers. All of the powers, remedies and rights of
the Collateral Agent as set forth in this Agreement may be exercised by the
Collateral Agent in respect of any Shared Collateral Security Document as
though set forth in full therein and all of the powers, remedies and rights
of the Collateral Agent as set forth in any Shared Collateral Security
Document may be exercised from time to time as herein and therein provided.
2.5 Remedies Not Exclusive. (a) No remedy conferred upon or reserved
to the Collateral Agent herein or in the Shared Collateral Security
Documents is intended to be exclusive of any other remedy or remedies, but
every such remedy shall be cumulative and shall be in addition to every
other remedy conferred herein or in any Shared Collateral Security Document
or now or hereafter existing at law or in equity or by statute.
(b) No delay or omission by the Collateral Agent to exercise any
right, remedy or power hereunder or under any Shared Collateral Security
Document shall impair any such right, remedy or power or shall be construed
to be a waiver thereof, and every right, power and remedy given by this
Agreement or any Shared Collateral Security Document to the Collateral
Agent may be exercised from time to time and as often as may be deemed
expedient by the Collateral Agent.
(c) If the Collateral Agent shall have proceeded to enforce any
right, remedy or power under this Agreement or any Shared Collateral
Security Document and the proceeding for the enforcement thereof shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Collateral Agent, then the Grantors, the Collateral Agent
and the other Secured Parties shall, subject to any determination in such
proceeding, severally and respectively be restored to their former
positions and rights hereunder or thereunder with respect to the Collateral
Estate and in all other respects, and thereafter all rights, remedies and
powers of the Collateral Agent shall continue as though no such proceeding
had been taken.
(d) All rights of action and of asserting claims upon or under
this Agreement and the Shared Collateral Security Documents may be enforced
by the Collateral Agent without the possession of any Secured Instrument or
instrument evidencing any Secured Obligation or the production thereof at
any trial or other proceeding relative thereto, and any suit or proceeding
instituted by the Collateral Agent shall be, subject to Sections 5.4(c) and
5.9(b)(ii), brought in its name as Collateral Agent and any recovery of
judgment shall be held as part of the Collateral Estate.
2.6 Waiver and Estoppel. (a) Each Grantor agrees, to the extent
it may lawfully do so, that it will not at any time in any manner
whatsoever claim, or take the benefit or advantage of, any appraisement,
valuation, stay, extension, moratorium, turnover or redemption law, or any
law permitting it to direct the order in which the Shared Collateral shall
be sold, now or at any time hereafter in force, which may delay, prevent or
otherwise affect the performance or enforcement of this Agreement or any
Shared Collateral Security Document and hereby waives all benefit or
advantage of all such laws and covenants that it will not hinder, delay or
impede the execution of any power granted to the Collateral Agent in this
Agreement or any Shared Collateral Security Document but will suffer and
permit the execution of every such power as though no such law were in
force; provided that nothing contained in this Section 2.6(a) shall be
construed as a waiver of any rights of the Grantors under any applicable
federal bankruptcy law or state insolvency law.
(b) Each Grantor, to the extent it may lawfully do so, on behalf
of itself and all who may claim through or under it, including without
limitation any and all subsequent creditors, vendees, assignees and
lienors, waives and releases all rights to demand or to have any
marshalling of the Shared Collateral upon any sale, whether made under any
power of sale granted herein or in any Shared Collateral Security Document
or pursuant to judicial proceedings or upon any foreclosure or any
enforcement of this Agreement or any Shared Collateral Security Document
and consents and agrees that all the Shared Collateral may at any such sale
be offered and sold as an entirety.
(c) Each Grantor waives, to the extent permitted by applicable
law, presentment, demand, protest and any notice of any kind (except
notices explicitly required hereunder or under any Shared Collateral
Security Document) in connection with this Agreement and the Shared
Collateral Security Documents and any action taken by the Collateral Agent
with respect to the Shared Collateral.
2.7 Limitation on Collateral Agent's Duty in Respect of Shared
Collateral. Beyond its duties as to the custody thereof expressly provided
herein or in any Shared Collateral Security Document and to account to the
Secured Parties and the Grantors for moneys and other property received by
it hereunder or under any Shared Collateral Security Document, the
Collateral Agent shall not have any duty to the Grantors or to the Secured
Parties as to any Shared Collateral in its possession or control or in the
possession or control of any of its agents or nominees, or any income
thereon or as to the preservation of rights against prior parties or any
other rights pertaining thereto.
2.8 Limitation by Law. All rights, remedies and powers provided
in this Agreement or any Shared Collateral Security Document may be
exercised only to the extent that the exercise thereof does not violate any
applicable provision of law, and all the provisions hereof are intended to
be subject to all applicable mandatory provisions of law which may be
controlling and to be limited to the extent necessary so that they will not
render this Agreement invalid, unenforceable in whole or in part or not
entitled to be recorded, registered or filed under the provisions of any
applicable law.
2.9 Rights of Secured Parties under Secured Instruments.
Notwithstanding any other provision of this Agreement or any Shared
Collateral Security Document, the right of each Secured Party to receive
payment of the Secured Obligations held by such Secured Party when due
(whether at the stated maturity thereof, by acceleration or otherwise) as
expressed in the related Secured Instrument or other instrument evidencing
or agreement governing a Secured Obligation or to institute suit for the
enforcement of such payment on or after such due date, and the obligation
of the Grantors to pay such Secured Obligation when due, shall not be
impaired or affected without the consent of such Secured Party given in the
manner prescribed by the Secured Instrument under which such Secured
Obligation is outstanding.
SECTION 3.
COLLATERAL ACCOUNT; DISTRIBUTIONS
3.1 The Collateral Account. At such time as the Collateral Agent
deems appropriate, there shall be established and, at all times thereafter
until this Agreement shall have terminated, there shall be maintained with
the Collateral Agent an account which shall be entitled the "GSX Collateral
Account" (the "Collateral Account"). All moneys which are received by the
Collateral Agent or any agent or nominee of the Collateral Agent in respect
of the Shared Collateral, whether in connection with the exercise of the
remedies provided in this Agreement or any Shared Collateral Security
Document, shall be deposited in the Collateral Account and held by the
Collateral Agent as part of the Collateral Estate and applied in accordance
with the terms of this Agreement.
3.2 Control of Collateral Account. All right, title and interest
in and to the Collateral Account shall vest in the Collateral Agent, and
funds on deposit in the Collateral Account shall constitute part of the
Collateral Estate. The Collateral Account shall be subject to the exclusive
dominion and control of the Collateral Agent.
3.3 Investment of Funds Deposited in Collateral Account. The
Collateral Agent may, but is under no obligation to, invest and reinvest
moneys on deposit in the Collateral Account at any time in Cash
Equivalents. All such investments and the interest and income received
thereon and the net proceeds realized on the sale or redemption thereof
shall be held in the Collateral Account as part of the Collateral Estate.
The Collateral Agent shall not be responsible for any diminution in funds
resulting from such investments or any liquidation prior to maturity.
3.4 Application of Moneys. (a) The Collateral Agent shall have
the right at any time to apply moneys held by it in the Collateral Account
to the payment of due and unpaid Collateral Agent Fees.
(b) All remaining moneys held by the Collateral Agent in the
Collateral Account or received by the Collateral Agent with respect to the
Shared Collateral shall, to the extent available for distribution (it being
understood that the Collateral Agent may liquidate investments prior to
maturity in order to make a distribution pursuant to this Section 3.4), be
distributed (subject to the provisions of Sections 3.5 and 3.6) by the
Collateral Agent on each Distribution Date in the following order of
priority (with such distributions being made by the Collateral Agent to the
respective Holder Representatives for the Secured Parties entitled thereto
as provided in Section 3.4(d), and each such Holder Representative shall be
responsible for insuring that amounts distributed to it are distributed to
its Secured Parties in the order of priority set forth below):
First: to the Collateral Agent for any unpaid Collateral Agent
Fees and then to any Secured Party which has theretofore advanced or
paid any Collateral Agent Fees constituting administrative expenses
allowable under Section 503(b) of the Bankruptcy Code, an amount equal
to the amount thereof so advanced or paid by such Secured Party and
for which such Secured Party has not been reimbursed prior to such
Distribution Date, and, if such moneys shall be insufficient to pay
such amounts in full, then ratably (without priority of any one over
any other) to such Secured Parties in proportion to the amounts of
such Collateral Agent Fees advanced by the respective Secured Parties
and remaining unpaid on such Distribution Date;
Second: to any Secured Party which has theretofore advanced or
paid any Collateral Agent Fees other than such administrative
expenses, an amount equal to the amount thereof so advanced or paid by
such Secured Party and for which such Secured Party has not been
reimbursed prior to such Distribution Date, and, if such moneys shall
be insufficient to pay such amounts in full, then ratably (without
priority of any one over any other) to such Secured Parties in
proportion to the amounts of such Collateral Agent Fees advanced by
the respective Secured Parties and remaining unpaid on such
Distribution Date;
Third: to the Secured Parties in an amount equal to the unpaid
principal, interest, premium, fees and other charges in respect of
such Secured Obligations then outstanding whether or not then due and
payable, and, if such moneys shall be insufficient to pay such amounts
in full, then ratably (without priority of any one over any other) to
the Secured Parties in proportion to the unpaid amounts thereof on
such Distribution Date;
Fourth: to the Secured Parties, amounts equal to all other sums
which constitute Secured Obligations, including without limitation the
costs and expenses of the Secured Parties and their representatives
which are due and payable under the relevant Secured Instruments and
which constitute Secured Obligations as of such Distribution Date,
and, if such moneys shall be insufficient to pay such amounts in full,
then ratably to the Secured Parties in proportion to the unpaid
amounts thereof on such Distribution Date; and
Fifth: any surplus then remaining shall be paid to the Grantors
or their successors or assigns or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction
may direct.
(c) The term "unpaid" as used in clause Third of Section 3.4(b)
refers:
(i) in the absence of a bankruptcy proceeding with respect
to the relevant Grantor(s), to all amounts of Public Debt
Obligations or Guarantor Obligations, as the case may be,
outstanding as of a Distribution Date, and
(ii) during the pendency of a bankruptcy proceeding with
respect to the relevant Grantor(s), to all amounts allowed by the
bankruptcy court in respect of Public Debt Obligations or
Guarantor Obligations, as the case may be, as a basis for
distribution (including estimated amounts, if any, allowed in
respect of contingent claims),
to the extent that prior distributions (whether actually
distributed or set aside pursuant to Section 3.5) have not been made in
respect thereof.
(d) The Collateral Agent shall make all payments and
distributions under this Section 3.4: (i) on account of Guarantor
Obligations to the Administrative Agent, pursuant to directions of the
Administrative Agent, for re-distribution in accordance with the provisions
of the Credit Agreement; and (ii) on account of Public Debt Obligations
(subject to Section 3.5) to the Public Debt Trustee, pursuant to directions
of the Public Debt Trustee, for re-distribution in accordance with the
provisions of the MTN Indenture.
3.5 Application of Moneys Distributable to Public Debt Trustee.
If at any time any moneys collected or received by the Collateral Agent
pursuant to this Agreement are distributable pursuant to Section 3.4 to the
Public Debt Trustee, and if the Public Debt Trustee shall notify the
Collateral Agent in writing that no provision is made under the MTN
Indenture for the application by such Public Debt Trustee of such moneys
(whether because the Public Debt Obligations under such MTN Indenture have
not become due and payable or otherwise) and that such MTN Indenture does
not effectively provide for the receipt and the holding by such Public Debt
Trustee of such moneys pending the application thereof, then the Collateral
Agent, after receipt of such notification, shall, at the direction of the
Public Debt Trustee, invest such amounts in Cash Equivalents maturing
within 90 days after they are acquired by the Collateral Agent or, in the
absence of such direction, hold such moneys uninvested and shall hold all
such amounts so distributable and all such investments and the net proceeds
thereof in trust solely for such Public Debt Trustee (in its capacity as
trustee) and for no other purpose until such time as such Public Debt
Trustee shall request in writing the delivery thereof by the Collateral
Agent for application pursuant to such MTN Indenture.
3.6 Collateral Agent's Calculations. In making the
determinations and allocations required by Section 3.4, the Collateral
Agent may conclusively rely upon information supplied by the Public Debt
Trustee as to the amounts of unpaid principal and interest and other
amounts outstanding with respect to the Public Debt Obligations and
information supplied by the Administrative Agent as to the amounts of
unpaid principal and interest and other amounts outstanding with respect to
the Guarantor Obligations, and the Collateral Agent shall have no liability
to any of the Secured Parties for actions taken in reliance on such
information, provided that nothing in this sentence shall prevent any
Grantor from contesting any amounts claimed by any Secured Party in any
information so supplied. All distributions made by the Collateral Agent
pursuant to Section 3.4 shall be (subject to any decree of any court of
competent jurisdiction) final (absent manifest error), and the Collateral
Agent shall have no duty to inquire as to the application by the
Administrative Agent or the Public Debt Trustee of any amounts distributed
to them.
3.7 Pro Rata Sharing. If, through the operation of any
bankruptcy, reorganization, insolvency or other laws or otherwise, the
Collateral Agent's security interest hereunder and under the Shared
Collateral Security Documents is enforced with respect to some, but not
all, of the Secured Obligations then outstanding, the Collateral Agent
shall nonetheless apply the proceeds of the Shared Collateral for the
benefit of the holders of all Secured Obligations in the proportions and
subject to the priorities specified herein. To the extent that the
Collateral Agent distributes Proceeds collected with respect to Secured
Obligations held by one holder to or on behalf of Secured Obligations held
by a second holder, the first holder shall be deemed to have purchased a
participation in the Secured Obligations held by the second holder, or
shall be subrogated to the rights of the second holder to receive any
subsequent payments and distributions made with respect to the portion
thereof paid or to be paid by the application of such Proceeds.
SECTION 4.
AGREEMENTS WITH COLLATERAL AGENT
4.1 Delivery of Secured Instruments. On the Effective Date, GSX
shall deliver to the Collateral Agent true and complete copies of each
Secured Instrument as in effect on the Effective Date. GSX shall deliver to
the Collateral Agent, promptly upon the execution thereof, a true and
complete copy of all amendments, modifications or supplements to any
Secured Instrument entered into after the Effective Date.
4.2 Information as to Secured Parties, Administrative Agent and
Public Debt Trustee. GSX shall deliver to the Collateral Agent, on the
Effective Date, on each anniversary of the Effective Date, and from time to
time upon request of the Collateral Agent, a list setting forth as of a
date not more than 30 days prior to the date of such delivery, (a) the
aggregate unpaid principal amount of Guarantor Obligations outstanding and
the name and address of the Administrative Agent and (b) the aggregate
unpaid principal amount of Public Debt Obligations outstanding and the name
and address of the Public Debt Trustee. In addition, GSX will promptly
notify the Collateral Agent of each change in the identity of the
Administrative Agent or the Public Debt Trustee.
4.3 Compensation and Expenses. GSX agrees to pay to the
Collateral Agent, from time to time upon demand, (a) reasonable
compensation (which shall not be limited by any provision of law in regard
to compensation of fiduciaries) for its services hereunder and under the
Shared Collateral Security Documents and for administering the Collateral
Estate and (b) all of the fees, costs and expenses of the Collateral Agent
(including, without limitation, the reasonable fees and disbursements of
its counsel, advisors and agents) (i) arising in connection with the
preparation, execution, delivery, modification, and termination of this
Agreement and each Shared Collateral Security Document or the enforcement
of any of the provisions hereof or thereof, (ii) incurred or required to be
advanced in connection with the administration of the Collateral Estate,
the sale or other disposition of Shared Collateral pursuant to any Shared
Collateral Security Document and the preservation, protection or defense of
the Collateral Agent's rights under this Agreement and the Shared
Collateral Security Documents and in and to the Shared Collateral and the
Collateral Estate or (iii) incurred by the Collateral Agent in connection
with the removal of the Collateral Agent pursuant to Section 5.6(a). Such
fees, costs and expenses are intended to constitute expenses of
administration under any bankruptcy law relating to creditors rights
generally. The obligations of GSX under this Section 4.3 shall survive the
termination of the other provisions of this Agreement and the resignation
or removal of the Collateral Agent hereunder.
4.4 Stamp and Other Similar Taxes. GSX agrees to indemnify and
hold harmless the Collateral Agent, the Administrative Agent, the Public
Debt Trustee and each other Secured Party from any present or future claim
for liability for any stamp or any other similar tax, and any penalties or
interest with respect thereto, which may be assessed, levied or collected
by any jurisdiction in connection with this Agreement, any Shared
Collateral Security Document, the Collateral Estate or any Shared
Collateral. The obligations of GSX under this Section 4.4 shall survive the
termination of the other provisions of this Agreement and the resignation
or removal of the Collateral Agent hereunder.
4.5 Filing Fees, Excise Taxes, Etc. GSX agrees to pay or to
reimburse the Collateral Agent for any and all payments made by the
Collateral Agent in respect of all search, filing, recording and
registration fees, taxes, excise taxes and other similar imposts which may
be payable or determined to be payable in respect of the execution and
delivery of this Agreement and each Shared Collateral Security Document.
The obligations of GSX under this Section 4.5 shall survive the termination
of the other provisions of this Agreement and the resignation or removal of
the Collateral Agent hereunder.
4.6 Indemnification. GSX agrees to pay, indemnify, and hold the
Collateral Agent, the Administrative Agent and the Public Debt Trustee (and
their respective directors, officers, agents and employees) harmless from
and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including, without
limitation, the reasonable fees and expenses of counsel, advisors and
agents) or disbursements of any kind or nature whatsoever with respect to
the execution, delivery, enforcement, performance and administration of
this Agreement and the Shared Collateral Security Documents, unless arising
from the gross negligence or willful misconduct of the indemnified party,
including for taxes in any jurisdiction in which the Collateral Agent is
subject to tax by reason of actions hereunder or under the Shared
Collateral Security Documents, unless such taxes are imposed on or measured
by compensation paid to the Collateral Agent under Section 4.3. In any
suit, proceeding or action brought by the Collateral Agent under or with
respect to any contract, agreement, interest or obligation constituting
part of the Shared Collateral for any sum owing thereunder, or to enforce
any provisions thereof, GSX will save, indemnify and keep the Collateral
Agent, the Administrative Agent, the Public Debt Trustee and the other
Secured Parties harmless from and against all expense, loss or damage
suffered by reason of any defense, setoff, counterclaim, recoupment or
reduction of liability whatsoever of the obligor thereunder, arising out of
a breach by any Grantor of any obligation thereunder or arising out of any
other agreement, indebtedness or liability at any time owing to or in favor
of such obligor or its successors from any Grantor, and all such
obligations of GSX shall be and remain enforceable against and only against
GSX and shall not be enforceable against the Collateral Agent, the
Administrative Agent, the Public Debt Trustee or any other Secured Party.
The agreements in this Section 4.6 shall survive the termination of the
other provisions of this Agreement and the resignation or removal of the
Collateral Agent hereunder.
4.7 Collateral Agent's Lien. Notwithstanding anything to the
contrary in this Agreement, as security for the payment of Collateral Agent
Fees (a) the Collateral Agent is hereby granted a lien upon all Shared
Collateral and (b) the Collateral Agent shall have the right to use and
apply any of the funds held by the Collateral Agent in the Collateral
Account to cover such Collateral Agent Fees.
4.8 Further Assurances. At any time and from time to time, upon
the written request of the Administrative Agent or the Collateral Agent,
and at the expense of GSX, each Grantor will promptly execute and deliver
any and all such further instruments and documents and take such further
action as is necessary or reasonably requested further to perfect, or to
protect the perfection of, the liens and security interests granted under
the Shared Collateral Security Documents, including, without limitation,
the filing of any financing or continuation statements under the Uniform
Commercial Code in effect in any jurisdiction. In addition to the
foregoing, at any time and from time to time, upon the written request of
the Collateral Agent, and at the expense of GSX, each Grantor will promptly
execute and deliver any and all such further instruments and documents and
take such further action as the Collateral Agent determines is necessary or
reasonably requested to obtain the full benefits of this Agreement and the
Shared Collateral Security Documents and of the rights and powers herein
and therein granted, including, without limitation, the filing of any
financing or continuation statements under the Uniform Commercial Code in
effect in any jurisdiction with respect to the liens and security interests
granted by the Shared Collateral Security Documents. Each Grantor also
hereby authorizes the Collateral Agent to sign and file any such financing
or continuation statements without the signature of such Grantor to the
extent permitted by applicable law. Notwithstanding the foregoing, in no
event shall the Collateral Agent have any obligation to monitor the
perfection or continuation of perfection or the sufficiency or validity of
any security interest in or related to the Shared Collateral.
SECTION 5.
THE COLLATERAL AGENT
5.1 Exculpatory Provisions. (a) The Collateral Agent shall not be
responsible in any manner whatsoever for the correctness of any recitals,
statements, representations or warranties herein, all of which are made
solely by the Grantors. The Collateral Agent makes no representations as to
the value or condition of the Collateral Estate or any part thereof, or as
to the title of the Grantors thereto or as to the security afforded by this
Agreement or any Shared Collateral Security Document, or as to the
validity, execution (except its execution), enforceability, legality or
sufficiency of this Agreement, the Shared Collateral Security Documents or
the Secured Obligations, and the Collateral Agent shall incur no liability
or responsibility in respect of any such matters.
(b) The Collateral Agent shall not be required to ascertain or
inquire as to the performance by the Grantors of any of the covenants or
agreements contained herein or in any Shared Collateral Security Document
or Secured Instrument. Whenever it is necessary, or in the opinion of the
Collateral Agent advisable, for the Collateral Agent to ascertain the
amount of Secured Obligations then held by Secured Parties, the Collateral
Agent may rely on a certificate of the Public Debt Trustee, in the case of
Public Debt Obligations, or a certificate of the Administrative Agent, in
the case of Guarantor Obligations, and, if the Public Debt Trustee or the
Administrative Agent shall not give such information to the Collateral
Agent, such Person shall not be entitled to receive distributions hereunder
(in which case distributions to those Persons who have supplied such
information to the Collateral Agent shall be calculated by the Collateral
Agent using, for those Persons who have not supplied such information, the
list then most recently delivered by GSX pursuant to Section 4.2), and the
amount so calculated to be distributed to the Person who fails to give such
information shall be held in trust for such Person until such Person does
supply such information to the Collateral Agent, whereupon on the next
Distribution Date the amount distributable to such Person shall be
recalculated using such information and distributed to it. Nothing in the
preceding sentence shall prevent any Grantor from contesting any amounts
claimed by any Secured Party in any certificate so supplied.
(c) The Collateral Agent shall be under no obligation or duty to
take any action under this Agreement or any Shared Collateral Security
Document if taking such action (i) would subject the Collateral Agent to a
tax in any jurisdiction where it is not then subject to a tax or (ii) would
require the Collateral Agent to qualify to do business in any jurisdiction
where it is not then so qualified, unless the Collateral Agent receives
security or indemnity satisfactory to it against such tax (or equivalent
liability), or any liability resulting from such qualification, in each
case as results from the taking of such action under this Agreement or any
Shared Collateral Security Document.
(d) The Collateral Agent shall have the same rights with respect
to any Secured Obligation held by it as any other Secured Party and may
exercise such rights as though it were not the Collateral Agent hereunder,
and may accept deposits from, lend money to, and generally engage in any
kind of banking or trust business with, any of the Grantors as if it were
not the Collateral Agent.
(e) The Collateral Agent shall not be liable for any action taken
or omitted to be taken in accordance with this Agreement or the Shared
Collateral Security Documents except for its own gross negligence or
willful misconduct.
5.2 Delegation of Duties. The Collateral Agent may execute any
of the powers hereof and perform any duty hereunder either directly or by
or through agents or attorneys-in-fact. The Collateral Agent shall be
entitled to advice of counsel concerning all matters pertaining to such
powers and duties. The Collateral Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it
without gross negligence or willful misconduct.
5.3 Reliance by Collateral Agent. (a) Whenever in the
administration of this Agreement or the Shared Collateral Security
Documents the Collateral Agent shall deem it necessary or desirable that a
factual matter be proved or established in connection with the Collateral
Agent taking, suffering or omitting any action hereunder or thereunder,
such matter (unless other evidence in respect thereof is herein
specifically prescribed) may be deemed to be conclusively proved or
established by a certificate of a responsible officer of GSX delivered to
the Collateral Agent, and such certificate shall be full warrant to the
Collateral Agent for any action taken, suffered or omitted in reliance
thereon, subject, however, to the provisions of Section 5.4.
(b) The Collateral Agent may consult with counsel, and any
Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken or suffered by it hereunder or under any
Shared Collateral Security Document in accordance therewith. The Collateral
Agent shall have the right at any time to seek instructions concerning the
administration of this Agreement and the Shared Collateral Security
Documents from any court of competent jurisdiction.
(c) The Collateral Agent may rely, and shall be fully protected
in acting, upon any resolution, statement, certificate, instrument,
opinion, report, notice, request, consent, order, bond or other paper or
document which it has no reason to believe to be other than genuine and to
have been signed or presented by the proper party or parties or, in the
case of cables, telecopies and telexes, to have been sent by the proper
party or parties. In the absence of its own gross negligence or willful
misconduct, the Collateral Agent may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Collateral Agent and
conforming to the requirements of this Agreement.
(d) The Collateral Agent shall not be under any obligation to
exercise any of the rights or powers vested in the Collateral Agent by this
Agreement and the Shared Collateral Security Documents unless the
Collateral Agent shall have been provided adequate security and indemnity
against the costs, expenses and liabilities which may be incurred by the
Collateral Agent, including such reasonable advances as may be requested by
the Collateral Agent.
(e) Any Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate of a responsible officer of GSX or
representations made by a responsible officer of GSX in a writing filed
with the Collateral Agent.
5.4 Limitations on Duties of Collateral Agent. (a) The
Collateral Agent shall be obligated to perform such duties and only such
duties as are specifically set forth in this Agreement and the Shared
Collateral Security Documents, and no implied covenants or obligations
shall be read into this Agreement or any Shared Collateral Security
Document against the Collateral Agent. By acceptance of the benefits under
this Agreement, the Public Debt Trustee and the Holders of the Public Debt
Obligations shall be deemed to have agreed that they shall not be entitled
to, and shall not, (i) direct the actions of the Collateral Agent hereunder
or under any Shared Collateral Security Document, (ii) have the right to
consent to any amendment, supplement, waiver or other modification to this
Agreement or any Shared Collateral Security Document, (iii) take any
action, or commence any legal proceeding seeking, to require, compel or
cause the Collateral Agent to enforce any of the provisions of this
Agreement or any Shared Collateral Security Document against any Grantor or
to exercise any remedy hereunder or thereunder, (iv) take any action, or
commence any legal proceeding seeking, to prevent or enjoin the Collateral
Agent from taking any action (including, without limitation, the
enforcement of any provisions of this Agreement or any Shared Collateral
Security Document against any Grantor, the exercise of any remedy hereunder
or thereunder, the release of any Shared Collateral Security Document, the
consent to any amendment or modification of this Agreement or any Shared
Collateral Security Document or the grant of any waiver hereunder or
thereunder), or refraining from taking any such action, in accordance with
this Agreement or any Shared Collateral Security Document, as the case may
be, or (v) otherwise take any action, or commence any legal proceeding
seeking, to delay, hinder or otherwise impair the Collateral Agent in
taking any such action in accordance with this Agreement or any Shared
Collateral Security Document. By acceptance of the benefits under this
Agreement, the Public Debt Trustee and the Holders of the Public Debt
Obligations, as Secured Parties, will be deemed to have acknowledged and
agreed that the provisions of the preceding sentence are intended to induce
the Lenders to permit such Persons to be Secured Parties under this
Agreement and under the Shared Collateral Security Documents and are being
relied upon by the Lenders as consideration therefor.
(b) Except as herein otherwise expressly provided, the Collateral
Agent shall not be under any obligation to take any action which is
discretionary with the Collateral Agent under the provisions hereof or of
any Shared Collateral Security Document. The Collateral Agent shall make
available for inspection and copying by the Administrative Agent and the
Public Debt Trustee each certificate or other paper furnished to the
Collateral Agent by any of the Grantors under or in respect of this
Agreement or any of the Shared Collateral.
(c) No provision of this Agreement or of any Shared Collateral
Security Document shall be deemed to impose any duty or obligation on the
Collateral Agent to perform any act or acts or exercise any right, power,
duty or obligation conferred or imposed on it, in any jurisdiction in which
it shall be illegal, or in which the Collateral Agent shall be unqualified
or incompetent, to perform any such act or acts or to exercise any such
right, power, duty or obligation or if such performance or exercise would
constitute doing business by the Collateral Agent in such jurisdiction or
impose a tax on the Collateral Agent by reason thereof or to risk its own
funds or otherwise incur any financial liability in the performance of its
duties hereunder.
5.5 Moneys to be Held in Trust. All moneys received by the
Collateral Agent under or pursuant to any provision of this Agreement or
any Shared Collateral Security Document (except Collateral Agent Fees)
shall be held in trust for the purposes for which they were paid or are
held.
5.6 Resignation and Removal of the Collateral Agent. The
Collateral Agent may at any time, by giving written notice to GSX, the
Administrative Agent and the Public Debt Trustee, resign and be discharged
of the responsibilities hereby created, such resignation to become
effective upon (i) the appointment of a successor Collateral Agent, (ii)
the acceptance of such appointment by such successor Collateral Agent and
(iii) the approval of such successor Collateral Agent evidenced by one or
more instruments signed by the Administrative Agent and GSX (which
approval, in the case of GSX, shall not be unreasonably withheld). If no
successor Collateral Agent shall be appointed and shall have accepted such
appointment within 90 days after the Collateral Agent gives the aforesaid
notice of resignation, the Collateral Agent, GSX, the Administrative Agent,
the Public Debt Trustee or any other Secured Party may apply to any court
of competent jurisdiction to appoint a successor Collateral Agent to act
until such time, if any, as a successor Collateral Agent shall have been
appointed as provided in this Section 5.6. Any successor so appointed by
such court shall immediately and without further act be superseded by any
successor Collateral Agent appointed by the Administrative Agent as
provided in Section 5.6(b). The Administrative Agent may, at any time upon
giving 30 days' prior written notice thereof to the Collateral Agent and
the Public Debt Trustee, remove the Collateral Agent and appoint a
successor Collateral Agent, such removal to be effective upon the
acceptance of such appointment by the successor. The Collateral Agent shall
be entitled to Collateral Agent Fees to the extent incurred or arising, or
relating to events occurring, before such resignation or removal.
(b) If at any time the Collateral Agent shall resign or be
removed or otherwise become incapable of acting, or if at any time a
vacancy shall occur in the office of the Collateral Agent for any other
cause, a successor Collateral Agent may be appointed by the Administrative
Agent with the consent of GSX, which consent shall not be unreasonably
withheld. The powers, duties, authority and title of the predecessor
Collateral Agent shall be terminated and cancelled without procuring the
resignation of such predecessor and without any other formality (except as
be required by applicable law) than appointment and designation of a
successor in writing duly acknowledged and delivered to the predecessor and
GSX. Such appointment and designation shall be full evidence of the right
and authority to make the same and of all the facts therein recited, and
this Agreement and the Shared Collateral Security Documents shall vest in
such successor, without any further act, deed or conveyance, all the
estates, properties, rights, powers, duties, authority and title of its
predecessor; but such predecessor shall, nevertheless, on the written
request of the Administrative Agent, GSX, or the successor, execute and
deliver an instrument transferring to such successor all the estates,
properties, rights, powers, duties, authority and title of such predecessor
hereunder and under the Shared Collateral Security Documents and shall
deliver all Shared Collateral held by it or its agents to such successor.
Should any deed, conveyance or other instrument in writing from any Grantor
be required by any successor Collateral Agent for more fully and certainly
vesting in such successor the estates, properties, rights, powers, duties,
authority and title vested or intended to be vested in the predecessor
Collateral Agent, any and all such deeds, conveyances and other instruments
in writing shall, on request of such successor, be executed, acknowledged
and delivered by such Grantor. If such Grantor shall not have executed and
delivered any such deed, conveyance or other instrument within 10 days
after it receives a written request from the successor Collateral Agent to
do so, or if an Event of Default shall have occurred and be continuing, the
predecessor Collateral Agent may execute the same on behalf of such
Grantor. Such Grantor hereby appoints any predecessor Collateral Agent as
its agent and attorney to act for it as provided in the next preceding
sentence.
5.7 Status of Successor Collateral Agent. Every successor
Collateral Agent appointed pursuant to Section 5.6 shall be a bank or trust
company in good standing and having power to act as Collateral Agent
hereunder, incorporated under the laws of the United States of America or
any State thereof or the District of Columbia and having its principal
office within the 48 contiguous States and shall also have capital, surplus
and undivided profits of not less than $500,000,000, if there be such an
institution with such capital, surplus and undivided profits willing,
qualified and able to accept the powers and duties hereunder upon
reasonable or customary terms.
5.8 Merger of the Collateral Agent. Any corporation into which
the Collateral Agent may be merged, or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which the
Collateral Agent shall be a party, shall be the Collateral Agent under this
Agreement and the Shared Collateral Security Documents without the
execution or filing of any paper or any further act on the part of the
parties hereto.
5.9 Co-Collateral Agent; Separate Collateral Agent. (a) If at any
time or times it shall be necessary or prudent in order to conform to any
law of any jurisdiction in which any of the Shared Collateral shall be
located, or to avoid any violation of law or imposition on the Collateral
Agent of taxes by such jurisdiction not otherwise imposed on the Collateral
Agent, or the Collateral Agent shall be advised by counsel, satisfactory to
it, that it is necessary or prudent in the interest of the Secured Parties,
or the Collateral Agent shall deem it desirable for its own protection in
the performance of its duties hereunder or under any Shared Collateral
Security Document, the Collateral Agent and each of the Grantors shall
execute and deliver all instruments and agreements necessary or proper to
constitute another bank or trust company, or one or more Persons approved
by the Collateral Agent and the Grantors, either to act as co-collateral
agent or co-collateral agents of all or any of the Shared Collateral under
this Agreement or under any of the Shared Collateral Security Documents,
jointly with the Collateral Agent originally named herein or therein or any
successor Collateral Agent, or to act as separate collateral agent or
collateral agents of any of the Shared Collateral. If any of the Grantors
shall not have joined in the execution of such instruments and agreements
within 10 days after it receives a written request from the Collateral
Agent to do so, or if an Event of Default shall have occurred and be
continuing, the Collateral Agent may act under the foregoing provisions of
this Section 5.9(a) without the concurrence of such Grantors and execute
and deliver such instruments and agreements on behalf of such Grantors.
Each of the Grantors hereby appoints the Collateral Agent as its agent and
attorney to act for it under the foregoing provisions of this Section
5.9(a) in either of such contingencies.
(b) Every separate collateral agent and every co-collateral
agent, other than any successor Collateral Agent appointed pursuant to
Section 5.6, shall, to the extent permitted by law, be appointed and act
and be such, subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred
upon the Collateral Agent in respect of the custody, control and
management of moneys, papers or securities shall be exercised
solely by the Collateral Agent or any agent appointed by the
Collateral Agent;
(ii) all rights, powers, duties and obligations conferred or
imposed upon the Collateral Agent hereunder and under the
relevant Shared Collateral Security Document or Documents shall
be conferred or imposed and exercised or performed by the
Collateral Agent and such separate collateral agent or separate
collateral agents or co-collateral agent or co-collateral agents,
jointly, as shall be provided in the instrument appointing such
separate collateral agent or separate collateral agents or
co-collateral agent or co-collateral agents, except to the extent
that under any law of any jurisdiction in which any particular
act or acts are to be performed the Collateral Agent shall be
incompetent or unqualified to perform such act or acts, or unless
the performance of such act or acts would result in the
imposition of any tax on the Collateral Agent which would not be
imposed absent such joint act or acts, in which event such
rights, powers, duties and obligations shall be exercised and
performed by such separate collateral agent or separate
collateral agents or co-collateral agent or co-collateral agents;
(iii) no power given hereby or by the relevant Shared
Collateral Security Documents to, or which it is provided herein
or therein may be exercised by, any such co-collateral agent or
co-collateral agents or separate collateral agent or separate
collateral agents shall be exercised hereunder or thereunder by
such co-collateral agent or co-collateral agents or separate
collateral agent or separate collateral agents except jointly
with, or with the consent in writing of, the Collateral Agent,
anything contained herein to the contrary notwithstanding;
(iv) no collateral agent hereunder shall be personally liable
by reason of any act or omission of any other collateral agent
hereunder; and
(v) GSX and the Collateral Agent, at any time by an
instrument in writing executed by them jointly, may accept the
resignation of or remove any such separate collateral agent or
co-collateral agent and, in that case by an instrument in writing
executed by them jointly, may appoint a successor to such
separate collateral agent or co-collateral agent, as the case may
be, anything contained herein to the contrary notwithstanding. If
GSX shall not have joined in the execution of any such instrument
within 10 days after it receives a written request from the
Collateral Agent to do so, or if an Event of Default shall have
occurred and be continuing, the Collateral Agent shall have the
power to accept the resignation of or remove any such separate
collateral agent or co-collateral agent and to appoint a
successor without the concurrence of GSX, GSX hereby appointing
the Collateral Agent its agent and attorney to act for it in such
connection in such contingency. If the Collateral Agent shall
have appointed a separate collateral agent or separate collateral
agents or co-collateral agent or co-collateral agents as above
provided, the Collateral Agent may at any time, by an instrument
in writing, accept the resignation of or remove any such separate
collateral agent or co-collateral agent and the successor to any
such separate collateral agent or co-collateral agent shall be
appointed by GSX and the Collateral Agent, or by the Collateral
Agent alone pursuant to this Section 5.9(b).
5.10 Treatment of Payee or Indorsee by Collateral Agent;
Representatives of Secured Parties. (a) The Collateral Agent may treat the
registered holder or, if none, the payee or indorsee of any promissory note
or debenture evidencing a Secured Obligation as the absolute owner thereof
for all purposes and shall not be affected by any notice to the contrary,
whether such promissory note or debenture shall be past due or not.
(b) Any Person (other than the Administrative Agent and the
Public Debt Trustee) which shall be designated as the duly authorized
representative of one or more Secured Parties to act as such in connection
with any matters pertaining to this Agreement or the Shared Collateral
shall present to the Collateral Agent such documents, including, without
limitation, Opinions of Counsel, as the Collateral Agent may reasonably
require, in order to demonstrate to the Collateral Agent the authority of
such Person to act as the representative of such Secured Parties (it being
understood that (i) the holders of Guarantor Obligations are represented
hereunder by the Administrative Agent, and the Holders of the Public Debt
Obligations are represented hereunder by the Public Debt Trustee and (ii)
such holders shall have no other rights pursuant to this Section 5.10(b)).
The authority of the Administrative Agent and the Public Debt Trustee shall
be demonstrated by their inclusion as such in the lists from time to time
delivered pursuant to Section 4.2.
SECTION 6.
MISCELLANEOUS
6.1 Notices. Unless otherwise specified herein, all notices,
requests, demands or other communications given to any of the Grantors, the
Collateral Agent, the Administrative Agent or the Public Debt Trustee shall
be given in writing or by facsimile transmission and shall be deemed to
have been duly given when personally delivered or when duly deposited in
the mails, registered or certified mail postage prepaid, or when
transmitted by facsimile transmission, addressed (i) if to any Grantor, to
such party at its address specified in the Shared Collateral Agreement or
any other address which such party shall have specified as its address for
the purpose of communications hereunder, by notice given in accordance with
this Section 6.1 to the party sending such communication, (ii) if to the
Collateral Agent at its address specified in the Credit Agreement or any
other address which such party shall have specified as its address for the
purpose of communications hereunder, by notice given in accordance with
this Section 6.1 to the party sending such communication or (iii) if to the
Administrative Agent or the Public Debt Trustee, to it at its address
specified from time to time in the list provided by GSX to the Collateral
Agent pursuant to Section 4.2; provided that any notice, request or demand
to the Collateral Agent shall not be effective until received by the
Collateral Agent in writing or by facsimile transmission at the office
designated by it pursuant to this Section 6.1.
6.2 No Waivers. No failure on the part of the Collateral Agent,
any co-collateral agent, any separate collateral agent, the Administrative
Agent, the Public Debt Trustee or any other Secured Party to exercise, no
course of dealing with respect to, and no delay in exercising, any right,
power or privilege under this Agreement or any Shared Collateral Security
Document shall operate as a waiver thereof nor shall any single or partial
exercise of any such right, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege.
6.3 Amendments, Supplements and Waivers. With the written consent
of the Administrative Agent, the Collateral Agent and the Grantors may,
from time to time, enter into written agreements supplemental hereto or to
any Shared Collateral Security Document for the purpose of adding to, or
waiving any provisions of, this Agreement or any Shared Collateral Security
Document or changing in any manner the rights of the Collateral Agent, the
Secured Parties or the Grantors hereunder or thereunder. In addition, if
the Administrative Agent shall advise the Collateral Agent in writing that
the Required Lenders have agreed with the Borrower that additional
indebtedness of GSX shall be secured equally and ratably by all or any
portion of the Shared Collateral, the Collateral Agent shall enter into
such supplemental agreements satisfactory to the Collateral Agent with the
Grantors as shall be reasonably requested by the Administrative Agent to
effect such agreement (which supplemental agreement may be in the form of
an amendment and restatement of this Agreement). Any waiver, amendment,
modification or supplemental agreement entered into pursuant to this
Section 6.3 shall be binding upon the Grantors, the Administrative Agent,
the Public Debt Trustee, the other Secured Parties and the Collateral Agent
and their respective successors.
6.4 Headings. The table of contents and the headings of Sections
have been included herein and in the Shared Collateral Security Documents
for convenience only and should not be considered in interpreting this
Agreement or the Shared Collateral Security Documents.
6.5 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions hereof, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
6.6 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of each of the parties hereto and their
respective successors and assigns and shall inure to the benefit of each of
the Secured Parties and their respective successors and assigns, and
nothing herein is intended or shall be construed to give any other Person
any right, remedy or claim under, to or in respect of this Agreement or any
Shared Collateral.
6.7 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
6.8 Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures thereto and hereto
were upon the same instrument.
6.9 Termination. (a) Upon (i) receipt by the Collateral Agent
from the Administrative Agent of (A) a written direction to cause the liens
created by Section 4.7 and by the Shared Collateral Security Documents to
be released and discharged or (B) a written notice stating that the Credit
Agreement has terminated in accordance with the terms thereof, and (ii)
payment in full of all Collateral Agent Fees, the security interests
created by Section 4.7 and by the Shared Collateral Security Documents
shall terminate forthwith and all right, title and interest of the
Collateral Agent in and to the Shared Collateral shall revert to the
Grantors, their successors and assigns.
(b) Upon the termination of the Collateral Agent's security
interest and the release of the Shared Collateral in accordance with
Section 6.9(a), the Collateral Agent will promptly, at GSX's written
request and expense, (i) execute and deliver to GSX such documents as GSX
shall reasonably request to evidence the termination of such security
interest or the release of the Shared Collateral and (ii) deliver or cause
to be delivered to the Grantors all property of the Grantors then held by
the Collateral Agent or any agent thereof.
(c) This Agreement shall terminate when the security interest
granted under the Shared Collateral Security Documents has terminated and
the Shared Collateral has been released; provided that the provisions of
Sections 4.3, 4.4, 4.5 and 4.6 shall not be affected by any such
termination.
(d) The Collateral Agent will, at any time, upon the written
instruction of the Administrative Agent, at the sole expense of the
relevant Grantor, execute and deliver to the relevant Grantor all releases
or other documents reasonably necessary or desirable for the release of the
Liens created by the Shared Collateral Security Documents on the Shared
Collateral specified by the Administrative Agent in such instruction. The
Administrative Agent may give such instructions at any time, whether or not
at any such time any or all of the Secured Obligations are still
outstanding.
6.10 Inspection by Regulatory Agencies. The Collateral Agent
shall make available, and shall cause each custodian and agent acting on
its behalf in connection with this Agreement to make available, all Shared
Collateral in such Person's possession at all times for inspection by any
regulatory agency having jurisdiction over a Grantor to the extent required
by such regulatory agency in its discretion.
6.11 Agreement to be Bound. Pursuant to Section 7.16 of the
Shared Collateral Agreement, each Grantor (other than GSX) has agreed to be
bound by the terms of this Agreement and, without limiting the generality
of the foregoing, has expressly agreed that all obligations and liabilities
of a Grantor hereunder apply to such Grantor with the same force and effect
as if such Grantor were a signatory hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day
and year first written above.
GENERAL SIGNAL CORPORATION
By:
------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Collateral Agent
By:
------------------------------
Name:
Title:
<PAGE>
EXHIBIT B
[FORM OF] CLOSING CERTIFICATE
-----------------------------
I, the undersigned, [President/Executive Vice President/Chief
Financial Officer] of [Name of Loan Party], a corporation organized and
existing under the laws of the State of _______________ (the "Company"), do
hereby certify on behalf of the Company that:
1. This Certificate is furnished pursuant to the Credit
Agreement, dated as of October ___, 1998, among SPX Corporation, a Delaware
corporation, the Lenders party thereto, and The Chase Manhattan Bank, as
Administrative Agent (such Credit Agreement, as in effect on the date of
this Certificate, being herein called the "Credit Agreement"). Unless
otherwise defined herein, capitalized terms used in this Certificate shall
have the meanings set forth in the Credit Agreement.
2. The following named individuals are elected or appointed
officers of the Company, each holds the office of the Company set forth
opposite his name and has held such office since __________________, 19__(FN1).
The signature written opposite the name and title of each such officer is
his genuine signature.
[FN]
- --------
1 Insert a date prior to the time of any corporate action relating to
the Loan Documents or related documentation.
</FN>
Name(FN2) Office Signature
---- ------ ---------
---------------- ---------------- ----------------------
---------------- ---------------- ----------------------
---------------- ---------------- ----------------------
[FN]
- --------
2 Include name, office and signature of each officer who will sign any
Loan Document, including the officer who will sign the certification
at the end of this Certificate or related documentation.
</FN>
3. Attached hereto as Exhibit A is a certified copy of the
Certificate of [Incorporation] [Formation] of the Company, as filed in the
Office of the Secretary of State of the State of ______________ on
__________________, 19_, together with all amendments thereto adopted
through the date hereof.
<PAGE>
4. Attached hereto as Exhibit B is a true and correct copy of the
[By-Laws] [limited liability company agreement] of the Company which were
duly adopted, are in full force and effect on the date hereof, and have
been in effect since ________, 19___
5. Attached hereto as Exhibit C is a true and correct copy of
resolutions which were duly adopted on _______, 19__ [by unanimous written
consent of the [Board of Directors] [Managers] of the Company] [by a
meeting of the [Board of Directors] [Managers] of the Company at which a
quorum was present and acting throughout], and said resolutions have not
been rescinded, amended or modified. Except as attached hereto as Exhibit
C, no resolutions have been adopted by the [Board of Directors] [Managers]
of the Company which deal with the execution, delivery or performance of
any of the Loan Documents to which the Company is party.
6. On the date hereof, all of the conditions set forth in
Sections 4.2(a) and (b) of the Credit Agreement have been satisfied.
7. On the date hereof, the representations and warranties [of
each Loan Party] [of the Company](FN3) set forth in the Credit Agreement
and in the other Loan Documents are true and correct with the same effect
as though such representations and warranties had been made on the date
hereof.
[FN]
- --------
3 The Borrower brings down the representations and warranties for each
Loan Party, and each other Loan Party brings down the representations
and warranties made by it.
</FN>
8. On the date hereof, no Default or Event of Default has
occurred and is continuing or would result from any Borrowing to occur on
the date hereof or the application of the proceeds thereof, or the issuance
of any Letter of Credit to occur on the date hereof, as applicable.
9. There is no proceeding for the dissolution or liquidation of
the Company or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of
October, 1998.
[NAME OF LOAN PARTY]
----------------------
Name:
Title:
<PAGE>
I, the undersigned, [Secretary/Assistant Secretary] of the Company, do
hereby certify that:
1. [Name of Person making above certifications] is the duly
elected and qualified [President/Executive Vice President/Chief Financial
Officer] of the Company and the signature above is his genuine signature.
2. The certifications made by [name of Person making above
certifications] in Items 2, 3, 4, 5, 6, 7, 8 and 9 above are true and
correct.
IN WITNESS WHEREOF, I have hereunto set my hand this ______ day
of October, 1998.
[NAME OF LOAN PARTY]
----------------------
Name:
Title:
<PAGE>
EXHIBIT C
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of October 6,
1998 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among SPX Corporation (the "Borrower"), the Lenders
party thereto and The Chase Manhattan Bank, as Administrative Agent. Unless
otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.
The Assignor identified on Schedule l hereto (the "Assignor") and
the Assignee identified on Schedule l hereto (the "Assignee") agree as
follows:
1. The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor (except as otherwise expressly
provided in Section 2(a)), and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor (except as
otherwise expressly provided in Section 2(a)), as of the Effective Date (as
defined below), the interest described in Schedule 1 hereto (the "Assigned
Interest") in and to the Assignor's rights and obligations under the Credit
Agreement with respect to those credit facilities contained in the Credit
Agreement as are set forth on Schedule 1 hereto (individually, an "Assigned
Facility"; collectively, the "Assigned Facilities"), in a principal amount
for each Assigned Facility as set forth on Schedule 1 hereto.
2. The Assignor (a) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or with
respect to the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, any other Loan Document or
any other instrument or document furnished pursuant thereto, other than
that the Assignor is legally authorized to enter into this Assignment and
Acceptance and that the Assignor has not created any adverse claim upon the
interest being assigned by it hereunder and that such interest is free and
clear of any such adverse claim; (b) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
the Borrower, any of its Subsidiaries or any other obligor or the
performance or observance by the Borrower, any of its Subsidiaries or any
other obligor of any of their respective obligations under the Credit
Agreement or any other Loan Document or any other instrument or document
furnished pursuant hereto or thereto; and (c) attaches any Notes held by it
evidencing the Assigned Facilities and (i) requests that the Administrative
Agent, upon request by the Assignee, exchange the attached Notes for a new
Note or Notes payable to the Assignee and (ii) if the Assignor has retained
any interest in the Assigned Facility, requests that the Administrative
Agent exchange the attached Notes for a new Note or Notes payable to the
Assignor, in each case in amounts which reflect the assignment being made
hereby (and after giving effect to any other assignments which have become
effective on the Effective Date).
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that
it has received a copy of the Credit Agreement, together with copies of the
financial statements delivered pursuant to Section 3.4 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; (c) agrees that it will, independently and without reliance
upon the Assignor, the Administrative Agent or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under the Credit Agreement, the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; (d) appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers and discretion under the Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto as are delegated to the Administrative
Agent by the terms thereof, together with such powers as are incidental
thereto; and (e) agrees that it will be bound by the provisions of the
Credit Agreement and will perform in accordance with its terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender including, if it is organized under the laws of
a jurisdiction outside the United States, its obligation pursuant to
Section 2.18(e) of the Credit Agreement.
4. The effective date of this Assignment and Acceptance shall be
the Effective Date of Assignment described in Schedule 1 hereto (the
"Effective Date"). Following the execution of this Assignment and
Acceptance, it will be delivered to the Administrative Agent for acceptance
by it and recording by the Administrative Agent pursuant to the Credit
Agreement, effective as of the Effective Date (which shall not, unless
otherwise agreed to by the Administrative Agent, be earlier than five
Business Days after the date of such acceptance and recording by the
Administrative Agent).
5. Upon such acceptance and recording, from and after the
Effective Date, the Administrative Agent shall make all payments in respect
of the Assigned Interest (including payments of principal, interest, fees
and other amounts) to the Assignor for amounts which have accrued prior to
the Effective Date and to the Assignee for amounts which have accrued on
and subsequent to the Effective Date. The Assignor and the Assignee shall
make all appropriate adjustments in payments by the Administrative Agent
for periods prior to the Effective Date or with respect to the making of
this assignment directly between themselves.
6. From and after the Effective Date, (a) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the other Loan Documents and shall be bound by the
provisions thereof and (b) the Assignor shall, to the extent provided in
this Assignment and Acceptance, relinquish its rights and be released from
its obligations under the Credit Agreement.
7. This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed as of the date first above written
by their respective duly authorized officers on Schedule 1 hereto.
<PAGE>
<PAGE>
Exhibit D-1
-----------
October 6, 1998 (212) 859-8189
(FAX: 212-859-8587)
The Lenders, and the
Administrative Agent
Referred to Below
c/o The Chase Manhattan Bank,
as Administrative Agent
270 Park Avenue
New York, New York 10017
RE: Credit Agreement, dated as of October 6, 1998, among SPX
Corporation, the financial institutions listed therein as
Lenders, and The Chase Manhattan Bank, as Administrative
Agent for the Lenders.
Ladies and Gentlemen:
We have acted as special New York counsel to SPX Corporation, a
Delaware corporation (the "Company"), and the corporations listed on
Schedule 1 hereto (the "Subsidiary Guarantors" and, together with the
Company, the "Loan Parties") in connection with that certain Credit
Agreement, dated as of October 6, 1998 (the "Credit Agreement"), among the
Company, the financial institutions listed therein as Lenders (the
"Lenders"), and The Chase Manhattan Bank, as Administrative Agent for the
Lenders (in such capacity, the "Administrative Agent").
This opinion is delivered to you pursuant to Section 4.1(c) of
the Credit Agreement. All capitalized terms used herein that are defined
in, or by reference in, the Credit Agreement have the meanings assigned to
such terms therein, or by reference therein, unless otherwise defined
herein. The Uniform Commercial Code, as amended and in effect in the State
of New York, is referred to herein as the "UCC." With your permission, all
assumptions and statements of reliance herein have been made without any
independent investigation or verification on our part except to the extent
otherwise expressly stated, and we express no opinion with respect to the
subject matter or accuracy of such assumptions or items relied upon.
In connection with this opinion, we have (i) investigated such
questions of law, (ii) examined originals or certified, conformed or
reproduction copies of such agreements, instruments, documents and records
of the Loan Parties, such certificates of public officials and such other
documents, and (iii) received such information from officers and
representatives of the Loan Parties, as we have deemed necessary or
appropriate for the purposes of this opinion. We have examined, among other
documents, the following (in each case dated as of the date of the Credit
Agreement unless otherwise stated):
(a) the Credit Agreement;
(b) the Guarantee and Collateral Agreement;
(c) the Shared Collateral Agreement;
(d) the Collateral Sharing Agreement;
(e) those certain financing statements on Form UCC-1 listed on
Schedule 2 hereto (the "Financing Statements"), each naming
the applicable Loan Party as debtor and the Administrative
Agent as secured party and delivered by such Loan Party,
which financing statements will be presented pursuant to the
Credit Agreement for filing in the appropriate filing
offices of the Secretary of State of the State of New York
and the Counties of Monroe and Cortland of the State of New
York;
(f) an Officer's Certificate delivered to us in connection with
this opinion, a copy of which is attached hereto as Exhibit
A (the "Officer's Certificate").
The documents referred to in items (b) through (d) above,
inclusive, are sometimes collectively referred to as the "Security
Documents". The documents referred to in items (a) through (e) above,
inclusive, are sometimes collectively referred to as the "Loan Documents".
In all such examinations, we have assumed the legal capacity of
all natural persons, the genuineness of all signatures, the authenticity of
original and certified documents and the conformity to original or
certified documents of all copies submitted to us as conformed or
reproduction copies. As to various questions of fact relevant to the
opinions expressed herein, we have relied upon, and assume the accuracy of,
representations and warranties contained in the Loan Documents and
certificates and oral or written statements and other information of or
from public officials, representatives of the Loan Parties and others, and
assume compliance on the part of all parties to the Loan Documents with
their covenants and agreements contained therein. Insofar as statements
herein are based upon our knowledge, such phrase means and is limited to
the conscious awareness of facts or other information by lawyers in this
firm who gave substantive attention to representation of the Company in
connection with the Transactions. With respect to the opinions expressed in
clauses (i) and (ii)(A) of paragraph (b) below, our opinions are limited
(x) to our actual knowledge, if any, of the respective business activities
and properties of the Loan Parties based solely upon the Officer's
Certificate in respect of such matters and without any independent
investigation or verification on our part and (y) to our review of only
those laws and regulations that, in our experience, are normally applicable
to transactions of the type contemplated by the Loan Documents.
To the extent it may be relevant to the opinions expressed
herein, we have assumed that all of the parties to the Loan Documents have
the corporate power and authority to enter into and perform such documents
and to consummate the transactions contemplated thereby, that the Loan
Documents have been duly authorized, executed and delivered by all of the
parties to the Loan Documents, other than the Loan Parties, and that the
Loan Documents constitute legal, valid and binding obligations of all such
parties, other than the Loan Parties, and are enforceable against such
parties, other than the Loan Parties, in accordance with their respective
terms, and that all parties to the Loan Documents will comply with all of
their obligations under the Loan Documents and all laws applicable thereto.
Based upon the foregoing, and subject to the limitations,
qualifications and assumptions set forth herein, and reliance to the extent
hereinafter stated upon the opinions of other counsel referred to
hereunder, we are of the opinion that:
(a) Each Loan Party that is a New York or Delaware corporation
has the requisite corporate power and authority to enter into, execute, and
deliver each of the Loan Documents to which it is a party, and to perform
its obligations thereunder and each such Loan Party has taken all requisite
corporate action to authorize the execution and delivery of the Loan
Documents to which it is a party and the performance of its obligations
thereunder.
(b) The execution and delivery by each Loan Party of each of the
Loan Documents to which it is a party and the performance by each Loan
Party of its respective obligations thereunder, the extensions of credit
under the Credit Agreement, the making by the Company of the borrowings
under the Credit Agreement, and the granting by each Loan Party of the
security interests provided for in the Security Documents to which such
Loan Party is a party, (i) do not require under present law any filing or
registration by any Loan Party with, or approval or consent to any Loan
Party of, any governmental agency or authority of the State of New York or
the United States or the State of Delaware pursuant to the Delaware General
Corporation Law that has not been made or obtained, other than the filing
of the applicable financing statements and except those required in the
ordinary course of business in connection with the future performance, if
any, by each Loan Party of its respective obligations under certain
covenants contained in the Loan Documents to which it is a party or
pursuant to securities and other laws that may be applicable to the
disposition of any collateral subject thereto and to perfect security
interests thereunder, and (ii) do not violate or conflict with (A) any
present law, or present regulation of any governmental agency or authority,
of the State of New York or the United States or the State of Delaware
pursuant to the Delaware General Corporation Law known by us to be
applicable to such Loan Party or its property, or (B) any agreement or
instrument binding upon such Loan Party (this opinion being limited (x) to
those agreements and instruments that have been identified to us in the
Officer's Certificate and (y) in that we express no opinion with respect to
any violation not readily ascertainable from the face of or arising under
such agreement or instrument, or arising under or based upon any
cross-default provision insofar as it relates to a default under an
agreement or instrument not so identified to us, or arising under or based
upon any covenant of a financial or numerical nature or requiring
computation), and (iii) will not result in or require the creation or
imposition of any Lien upon any of the properties of any Loan Party
pursuant to the provisions of any agreement or instrument binding upon any
Loan Party or its properties, other than any Lien created by the Security
Documents and the other Loan Documents or other rights of set-off or Liens
in favor of the Lenders under the Security Documents and the other Loan
Documents (the opinion in this clause (iii) being limited to our review of
only those agreements and instruments listed in the Officer's Certificate).
(c) Each of the Loan Documents constitutes the valid and binding
obligation of each Loan Party that is a party thereto, enforceable against
each such Loan Party in accordance with its terms.
(d) Upon the making of the initial Loans under the Credit
Agreement, but, with your permission, without expressing any opinion as to
the proper characterization of any of the Collateral (as defined in the
Security Documents) under the UCC or otherwise, the Security Documents are
sufficient under the UCC to create in favor of the Collateral Agent for the
benefit of the Secured Parties (as defined in the Security Documents), as
security for the Obligations or Secured Obligations, as the case may be (as
each such term is defined in the Security Documents), a valid and perfected
security interest in all of each Loan Party's right, title and interest in
and to the Collateral to the extent constituting (i) "equipment" and
"inventory" now owned or hereafter acquired by such Loan Party, assuming
with your permission and without expressing any opinion as to whether,
insofar as perfection of such security interest is concerned, such
"equipment" and "inventory" is now and, in the case of after-acquired
property, will be at the time of acquisition thereof, located in the
Counties of Monroe and Cortland in the State of New York, (ii) "accounts"
and "general intangibles" now owned or hereafter acquired by such Loan
Party assuming, with your permission and without expressing any opinion as
to whether, insofar as the perfection of the security interest in such
"accounts" and "general intangibles," is concerned, that such Loan Party is
deemed to be located in the State of New York within the meaning of Section
9-103 of the UCC, and (iii) "proceeds" of such "equipment," "inventory,"
"accounts" and "general intangibles," in each case above in respect of
which a security interest may be perfected by the filing of a financing
statement under the UCC in the appropriate filing offices of the Secretary
of State of New York and the Counties of Monroe and Cortland. The terms
"equipment," "inventory," "accounts," "general intangibles" and "proceeds"
are used in this opinion letter as defined in Article 9 of the UCC and such
items, to the extent referred to in clauses (i), (ii) and (iii) above, are
collectively referred to herein as the "Applicable Collateral." For
purposes of this paragraph, we have assumed with your permission that the
Financing Statements have been duly filed in the appropriate filing offices
of the Secretary of State of New York and the Counties of Monroe and
Cortland for the perfection of a security interest in the Applicable
Collateral and that each Loan Party and conducts no business under any name
in the State of New York other than as specified in the Officer's
Certificate.
(e) Upon the making of the initial Loans under the Credit
Agreement and delivery to the Collateral Agent pursuant to the Guarantee
and Collateral Agreement and the Shared Collateral Agreement (collectively,
"Collateral Agreements") of the certificates representing the shares of
stock of each of the Subsidiaries listed on Exhibit B hereto pledged
thereunder (the "Pledged Shares"), the Collateral Agent, on behalf of the
Secured Parties, will have a valid and perfected security interest in all
of the right, title and interest of the Company and the Subsidiary
Guarantors in and to the Pledged Shares that are certificated securities
(as defined in the UCC) as security for the Obligations or the Secured
Obligations, as the case may be, and, assuming that the Collateral Agent
takes possession of the Pledged Shares in good faith without notice of any
"adverse claims" (as defined in Section 8-105 of the UCC) thereto, such
security interest shall have priority over any conflicting consensual
security interest therein by reason of the perfection of such security
interest under the UCC, except as hereinafter stated.
For purposes of this paragraph (e), we have assumed that (i) the
executed certificates representing and evidencing all of the Pledged Shares
under the Collateral Agreements were delivered, in bearer form or in
registered form issued or endorsed to the Collateral Agent, or endorsed in
blank, to, and are in the possession of, the Collateral Agent in the State
of New York in pledge under and in accordance with the terms of the
Collateral Agreements and (ii) the Collateral Agent will continuously
maintain exclusive possession and control of such Pledge Shares and of the
proceeds thereof, if any, in the State of New York in the manner required
by Sections 8-313, 8-321, 9-304 and 9-305 of the UCC for perfection of the
security interests therein and in accordance with the provisions of the
Collateral Agreements.
(f) No Loan Party is an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
In the course of our engagement to represent or advise the
Company, we have not become aware of any pending legal proceeding before,
or pending investigation by, any court or administrative agency or
authority of the United States or the State of New York, or any arbitration
tribunal, against or directly affecting the Company, any of its
Subsidiaries or any of their respective properties which seeks to enjoin or
otherwise prevent the consummation of, or to recover any damages or obtain
relief in connection with or which would adversely affect the legality,
validity or enforceability of, any of the Loan Documents or the
transactions contemplated thereby. In making the foregoing statement, we
have endeavored, to the extent we have believed necessary, to determine
from lawyers currently in our firm who have performed substantive legal
services for the Company, whether such services involved substantive
attention in the form of legal representation concerning pending legal
proceedings or pending investigations of the nature referred to above.
Beyond that, we have not made any review, search or investigation of public
files or records or files or records of the Company, its Subsidiaries or of
their respective transactions, or any other investigation or inquiry with
respect to the foregoing statement.
The opinions set forth above are subject to the following
qualifications:
(A) We express no opinion as to:
(i) the right, title or interest of any Loan Party or any
other person or entity in or to any collateral under any of Loan
Documents, or property purporting to constitute such collateral,
or any other property, or the value, validity or effectiveness
for any purpose of any such collateral or purported collateral or
other property interest;
(ii) except as set forth in paragraphs (c) through (e)
above, the validity, binding effect or enforceability of, or the
perfection of, or the priority of, any Lien that may be created
under the Security Documents or any of the other Loan Documents;
(iii) the enforceability of any provision in the Security
Documents or any of the other Loan Documents to the extent such
provision purports to provide for a security interest in the
proceeds of any Collateral subject thereto, or as to the
perfection thereof, in either case, other than in accordance
with, and subject to the limitations set forth in, Section 9-306
of the UCC;
(iv) the legality, validity, binding effect, enforceability
or perfection of any security interests under the Loan Documents
(a) in any circumstances under which such legality, validity,
binding effect, enforceability or perfection is governed by or
subject to the laws of any jurisdiction other than the State of
New York, whether such circumstances arise by reason of any
Collateral under the Loan Documents being located, or deemed
located, in any such other jurisdiction or otherwise, or (b) in
any Collateral the granting, effectiveness and perfecting of a
security interest in which, or of any security interest that, is
not governed exclusively by Article 9 (and in the case of
securities, Articles 8 and 9) of the UCC whether by reason of
Sections 9-102 or 9-104 of the UCC or otherwise, or (c) in
Collateral constituting (1) farm products or minerals or the like
(including oil and gas) or accounts or general intangibles
arising from or relating to the sale of farm products or the sale
of minerals and the like (including gas and oil), (2) equipment
used in farming operations, (3) goods covered by a certificate of
title, (4) consumer goods, (5) mobile goods, (6) crops growing or
to be grown or timber to be cut, (7) fixtures or goods that are
or are to become fixtures, (8) an ownership interest evidenced by
certificates of stock or other instruments, or a leasehold
evidenced by a proprietary lease, in either case, from a
corporation or partnership formed for the purpose of cooperative
ownership of real estate or (9) cash or deposit accounts;
(v) the legality, validity, binding effect or enforceability
of any provision in the Loan Documents that purports (a) to
permit the Administrative Agent, any Secured Party or any other
person or entity to sell or otherwise dispose of, or purchase,
any collateral subject thereto, or enforce any other right or
remedy thereunder (including without limitation any self-help or
taking-possession remedy) except in accordance with the UCC or
any other applicable New York law, or (b) to limit the ability of
the Company or any Loan Party, or any other person or entity, to
transfer voluntarily or involuntarily (by way of sale, creation
of a security interest, attachment, levy, garnishment or other
judicial process) its right, title or interest in or to any
Collateral subject thereto, as contemplated by Section 9-311 of
the UCC or any applicable New York law regarding restraints on
alienation;
(vi) the priority of the security interests under the Loan
Documents as against a temporary perfected security interest in
an instrument or certificated security under Section 9-304 of the
UCC;
(vii) the legality, validity, binding effect or
enforceability of the security interests under the Loan Documents
in any item of Collateral which is subject to any restriction on
or prohibition against transfer contained in any instrument or
document evidencing or relating to such item;
(viii) the enforceability of the security interests under
the Loan Documents to the extent the security interests are in
after-acquired collateral and involve circumstances in which such
security interests are deemed to be taken as security for an
antecedent debt and other than for new value under Section 9-108
of the UCC;
(ix) the legality, validity, binding effect or
enforceability of the security interests under the Loan Documents
as against the competing interests of those third parties who
would, in accordance with the provisions of the UCC or other
applicable law, take free of, or have claims in the collateral
that are prior or superior to, any of such security interests
notwithstanding perfection thereof;
(x) the legality, validity, binding effect or enforceability
of (a) any provision of the Loan Documents relating to
indemnification, contribution or exculpation in connection with
violations of any securities laws or statutory duties or public
policy, or in connection with willful, reckless or unlawful acts
or gross negligence of the indemnified or exculpated party or the
party receiving contribution; or (b) any provision of any of the
Loan Documents relating to exculpation of any party in connection
with its own negligence that a court would determine in the
circumstances under applicable law to be unfair or insufficiently
explicit;
(xi) the legality, validity, binding effect or
enforceability of (a) any purported waiver, release, variation,
disclaimer, consent or other agreement to similar effect (all of
the foregoing, collectively, a "Waiver") by any Loan Party under
any of the Loan Documents to the extent limited by Sections
1-102(3) or 9-501(3) of the UCC or other provisions of applicable
law (including judicial decisions), or to the extent that such a
Waiver applies to a right, claim, duty, defense or ground for
discharge otherwise existing or occurring as a matter of law
(including judicial decisions), except to the extent that such a
Waiver is effective under and is not prohibited by or void or
invalid under Section 9-501 of the UCC or other provisions of
applicable law (including judicial decisions), or (b) any Waiver
in the Guarantee and Collateral Agreement insofar as it relates
to causes or circumstances that would operate as a discharge or
release of, or defense available to, any one of the Subsidiary
Guarantors thereunder as a matter of law (including judicial
decisions), except to the extent that such a Waiver is effective
under and is not prohibited by or void or invalid under
applicable law (including judicial decisions), or (c) any
provision of any of the Loan Documents insofar as it provides
that any person or entity purchasing a participation from the
Lenders or other person or entity pursuant thereto may exercise
set-off or similar rights with respect to such participation or
that the Lenders or other person or entity may exercise set-off
rights other than in accordance with and pursuant to applicable
law, or (d) any provision of any Loan Document related to (I)
forum selection or submission to jurisdiction (including, without
limitation, any waiver of any objection to venue in any court or
of any objection that a court is an inconvenient forum) to the
extent the forum is a federal court or to the extent that any
relevant action or proceeding does not arise out of or relate to
such Loan Document or to the extent that such Loan Document has
not made a choice of New York law in whole or in part or to the
extent that the legality, validity, binding effect or
enforceability of any such provision is to be determined by any
court other than a court of the State of New York, or by a court
of the State of New York to the extent such New York State court
determines in the circumstances that such selection or waiver
would be unfair or unreasonable or to the extent such forum
selection or submission specifies a jurisdiction other than the
State of New York or (II) choice of governing law to the extent
that the legality, validity, binding effect or enforceability of
any such provision is to be determined by any court other than a
court of the State of New York or a federal district court
sitting in the State of New York, in each case, applying the
choice of law principles of the State of New York or (III)
waivers of any rights to trial by jury, or (e) any provision of
the Loan Documents that requires or relates to payment of
interest or any premium at a rate or in an amount, after the
maturity or after or upon acceleration of the respective
liabilities evidenced or secured thereby or after or during the
continuance of any default, event of default or other
circumstance, or upon prepayment, that a court would determine in
the circumstances under applicable law to be commercially
unreasonable or a penalty or a forfeiture;
(xii) the enforceability of any provision in any of the Loan
Documents specifying that provisions thereof may be waived only
in writing, to the extent that an oral agreement or an implied
agreement by trade practice or course of conduct has been created
that modifies any provision of such Loan Documents;
(xiii) the enforceability of any provision of the Loan
Documents that purports to give any person or entity the power to
accelerate obligations without any notice to the obligor;
(xiv) the effect of any law of any jurisdiction other than
the State of New York wherein any Lender may be located or
wherein enforcement of any document referred to above may be
sought that limits the rates of interest legally chargeable or
collectible;
(xv) the validity, binding effect or enforceability of any
provision of the Loan Documents which is inconsistent with
Article 5 of the UCC; and
(xvi) the legality, validity, binding effect or
enforceability of any provision of the Guarantee and Collateral
Agreement providing for the performance by any of the Subsidiary
Guarantors of any of Borrower's non-monetary obligations under
the Loan Documents.
(B) Our opinions above are subject to (i) applicable bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or similar
laws (and related judicial doctrines) of general application affecting
creditors' rights generally, (ii) general principles of equity
(including, without limitation, standards of materiality, good faith,
fair dealing and reasonableness, equitable defenses and limits on the
availability of equitable remedies), whether such principles are
considered in a proceeding at law or in equity, and (iii) the
qualification that certain provisions of the Security Documents may be
unenforceable in whole or in part under the laws (including judicial
decisions) of the State of New York or the United States, but the
inclusion of such provisions does not affect the validity as against
each Loan Party of the Security Documents to which it is a party as a
whole, and the Security Documents contain adequate provisions for
enforcing payment of the obligations governed or secured thereby, and
for the realization of the principal rights and benefits afforded
thereby, subject to the other qualifications contained in this opinion
letter.
(C) With respect to our opinion set forth in paragraph (c) above,
with respect to the obligations of the Subsidiary Guarantors under the
Security Documents, we have assumed the receipt by the Subsidiary
Guarantors of consideration sufficient to support the contractual
obligations undertaken by the Subsidiary Guarantors.
(D) In the case of property that becomes collateral under the
Security Documents after the date hereof, Section 552 of title 11 of
the United States Code (the "Bankruptcy Code") limits the extent to
which property acquired by a debtor after the commencement of a case
under the Bankruptcy Code may be subject to a security interest
arising from a security agreement entered into by the debtor before
the commencement of such case.
(E) Our opinions in paragraph (d) above are limited to Applicable
Collateral, respectively, as to which perfection of a security
interest is obtained by the filing of a financing statement in the
appropriate offices as contemplated hereby in accordance with Section
9-401(1)(c) of the UCC.
(F) Article 9 of the UCC requires the filing of continuation
statements within the period of six months prior to the expiration of
five years from the date of original filing of UCC financing
statements to maintain effectiveness of such financing statements and
perfection of security interests. Further, additional financing
statements may be required to be filed to maintain the perfection of a
security interest if any grantor thereof changes its name, identity,
corporate structure, or location or the location of collateral, or
makes certain other changes, as provided in the UCC.
(G) Our opinions, insofar as they relate to priority, are subject
to the limitation that any pledge or other security interest referred
to herein may be subject to the following prior liens, claims and
rights: (i) claims or liens in favor of the United States of America
or any political subdivision thereof or any agency or instrumentality
of any of the foregoing (including, without limitation, liens for
taxes and liens under Title IV of the Employee Retirement Income
Security Act of 1974, as amended) and any other claim, lien or
encumbrance arising by operation of statute or other rule of law and
having priority under applicable law, if any, and (ii) the claims and
liens of any lien creditor (as defined in the UCC) to the extent that
such security interest or pledge purports to secure any advances or
other extensions of credit other than advances and extensions made
pursuant to existing commitments under the Credit Agreement entered
into without knowledge of such claims and liens, as contemplated by
Section 9-301(4) of the UCC.
As to the opinions expressed above, we have relied with your
permission on the opinion dated the date hereof of Christopher J. Kearney
without any independent verification of the matters set forth therein. To
the extent the opinion of Christopher J. Kearney contains conditions and
limitations, we are incorporating such conditions and limitations herein.
The opinions expressed herein are limited to the federal laws of
the United States of America and the laws of the State of New York and, to
the extent relevant hereto, the General Corporation Law of the State of
Delaware, as currently in effect. We assume no obligation to supplement
this opinion if any applicable laws change after the date hereof or if we
become aware of any facts that might change the opinions expressed herein
after the date hereof or for any other reason.
The opinions expressed herein are solely for the benefit of the
Lenders and the Administrative Agent and may not be relied on in any manner
or for any purpose by any other person or entity and may not be quoted in
whole or in part without our prior written consent.
Very truly yours,
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
By:
------------------------------------------------------
F. William Reindel
<PAGE>
Exhibit D-2
-----------
October 6, 1998
The Lenders, and the
Administrative Agent Referred to Below
c/o The Chase Manhattan Bank,
as Administrative Agent
270 Park Avenue
New York, NY 10017
Ladies and Gentlemen:
I, the undersigned, Vice President, Secretary and General Counsel
of SPX Corporation, a Delaware corporation ("SPX"), am rendering this
opinion in connection with the Credit Agreement, dated as of October 6,
1998 (the "Credit Agreement"), among SPX, the Lenders party thereto and The
Chase Manhattan Bank, as Administrative Agent, providing for credit
facilities consisting of (i) Tranche A Term Loans in an initial aggregate
principal amount of up to $600,000,000, (ii) Tranche B Term Loans in an
initial aggregate principal amount of up to $600,000,000, (iii) Interim
Term Loans with an initial aggregate principal amount of up to
$200,000,000, and (iv) a Revolving Commitment in an initial aggregate
principal amount of up to $250,000,000 and which will include a subfacility
for the issuance of letters of credit.
This opinion is delivered to you pursuant to Section 4.1(c) of
the Credit Agreement. All capitalized terms used herein that are defined
in, or by reference in, the Credit Agreement have the meanings assigned to
such terms therein or by reference therein, unless otherwise defined
herein. All assumptions and statements of reliance herein have been made
without any independent investigation or verification except to the extent
otherwise expressly stated, and I express no opinion with respect to the
subject matter or accuracy of such assumptions or items relied upon.
In rendering this opinion, I, or persons reporting to me, have
(i) investigated such questions of law, (ii) examined originals or
certified, conformed or reproduction copies of such agreements,
instruments, documents and records of the Loan Parties, such certificates
of public officials and such other documents, (iii) received such
information from officers and representatives of the Loan Parties, in each
case as I have deemed necessary or appropriate for the purposes of this
opinion. I, or persons reporting to me, have also examined the Credit
Agreement, the Guarantee and Collateral Agreement, the Shared Collateral
Agreement and the Collateral Sharing Agreement being executed and delivered
on the date hereof pursuant to the Credit Agreement (collectively, the
"Loan Documents").
Based upon the foregoing, and subject to the limitations,
qualifications and assumptions set forth herein, I am of the opinion that:
1. Each Loan Party is a corporation validly existing and in
good standing under the laws of its jurisdiction of
incorporation.
2. Each Loan Party has the requisite corporate power and
authority to enter into, execute, and deliver each of the
Loan Documents to which it is a party, and to perform its
obligations thereunder.
3. Each Loan Party has taken all necessary corporate action to
authorize the execution and delivery of each of the Loan
Documents to which it is a party and the performance of its
obligations thereunder.
4. Each Loan Party has duly executed and delivered each of the
Loan Documents to which it is a party.
5. The execution and delivery by each of the Loan Parties of
the Loan Documents to which it is a party, and the
performance by each of the Loan Parties of its obligations
thereunder do not (i) contravene any provision of the
Certificate of Incorporation or the By-Laws of any of the
Loan Parties, or (ii) violate or conflict with any material
Contractual Obligation or any material court decree or order
binding upon any of the Loan Parties.
The opinions expressed herein are limited to the laws of the
United States of America, the laws of the State of Michigan and, to the
extent relevant to the opinions expressed in paragraphs 1 through 4 above,
the General Corporation Law of the State of Delaware, as currently in
effect. The opinions expressed herein are given as of the date hereof, and
I undertake no obligation to supplement this letter if any applicable laws
change after the date hereof or if I become aware of any facts that might
change the opinion expressed herein after the date hereof or for any other
reason.
The opinions expressed herein are solely for the benefit of the
Lenders in connection with the transactions covered by the first paragraph
of this letter and may not be relied on in any manner or for any purpose by
any other person or entity and may not be quoted in whole or in part
without my prior written consent, except that Fried, Frank, Harris, Shriver
& Jacobson may, in issuing its opinion letter dated the date hereof to the
Lenders, rely on this opinion as if it were addressed to them.
Very truly yours,
SPX CORPORATION
By:
-----------------------------------
Christopher J. Kearney
<PAGE>
EXHIBIT E
FORM OF LENDER ADDENDUM
The undersigned Lender (i) agrees to all of the provisions of the
Credit Agreement, dated as of October 6, 1998, among SPX Corporation (the
"Borrower"), the Lenders party thereto, and The Chase Manhattan Bank, as
Administrative Agent (as the same may be amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), and (ii) becomes a
party thereto, as a Lender, with obligations applicable to such Lender
thereunder, including, without limitation, the obligation to make
extensions of credit to the Borrower in an aggregate principal amount not
to exceed the amount of its Tranche A Commitment, Tranche B Commitment,
Interim Commitment and/or Revolving Commitment, as the case may be, as set
forth opposite the undersigned Lender's name in Schedule 1.1A to the Credit
Agreement, as such amount may be changed from time to time as provided in
the Credit Agreement. Capitalized terms defined in the Credit Agreement
shall have their respective defined meanings herein.
-------------------------------
(Name of Lender)
By:
---------------------------
Name:
Title:
Dated as of October 6, 1998
<PAGE>
EXHIBIT F
[FORM OF CERTIFICATE RE NON-BANK STATUS]
CERTIFICATE RE NON-BANK STATUS
Reference is made to that certain Credit Agreement dated as of
______ __, 1998 (as the same may be amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), by and among SPX
Corporation, a Delaware corporation, the financial institutions listed
therein as Lender, and The Chase Manhattan Bank as Administrative Agent.
Capitalized terms used herein that are not defined herein shall have the
meanings ascribed to them in the Credit Agreement. [Name of Non-U.S.
Person] (the "Lender") is providing this certificate pursuant to subsection
2.18(e)(B) of the Credit Agreement. The Lender hereby represents and
warrants that:
1. The Lender is the sole record and beneficial owner of the
Note(s) in respect of which it is providing this certificate and it shall
remain the sole beneficial owner of the Notes at all times during which it
is the record holder of such Note.
2. The Lender is not a "bank" for purposes of Section
881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the "Code").
In this regard, the Lender represents and warrants that:
(a) the Lender is not subject to regulatory or other legal
requirements as a bank in any jurisdiction; and
(b) the Lender has not been treated as a bank for purposes
of any tax, securities law or other filing or submission made to any
governmental authority, any application made to a rating agency or
qualification for any exemption from tax, securities law or other legal
requirements.
3. The Lender meets all of the requirements under Code Section
871(a) or 881(c) to be eligible for a complete exemption from withholding
of Taxes on interest payments made to it under the Credit Agreement (i.e.,
the Borrower will not be required to withhold any amounts under U.S. tax
law with respect to such interest payments), including without limitation
that it is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) or the Code) of the Borrower and is not a controlled foreign
corporation related to the Borrower (within the meaning of Section
864(d)(4) of the Code).
4. The Lender shall promptly notify the Company and the
Administrative Agent if any of the representations and warranties made
herein are no longer true and correct.
IN WITNESS WHEREOF, the undersigned has duly executed this
certificate as of the __day of ______________, [199__][200__].
[NAME OF LENDER]
By
------------------------------------------
Name:
Title:
