EXHIBIT 10.5
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GUARANTEE AND COLLATERAL AGREEMENT
made by
TELECOMMUNICATIONS TECHNIQUES CO., LLC
and its parent
DYNATECH CORPORATION
and
certain of its Subsidiaries
in favor of
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Administrative Agent
Dated as of May 21, 1998
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TABLE OF CONTENTS
Page
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SECTION 1. DEFINED TERMS....................................................... 2
1.1 Definitions........................................................ 2
1.2 Other Definitional Provisions...................................... 8
SECTION 2. GUARANTEE........................................................... 8
2.1 Guarantee.......................................................... 8
2.2 Right of Contribution.............................................. 9
2.3 No Subrogation..................................................... 9
2.4 Amendments, etc. with respect to the Borrower Obligations.......... 10
2.5 Guarantee Absolute and Unconditional............................... 10
2.6 Reinstatement...................................................... 11
2.7 Payments........................................................... 11
SECTION 3. GRANT OF SECURITY INTEREST.......................................... 11
3.1 Grant.............................................................. 11
3.2 Pledged Collateral................................................. 12
3.3 Certain Exceptions................................................. 13
SECTION 4. REPRESENTATIONS AND WARRANTIES...................................... 13
4.1 Representations and Warranties of Each Guarantor................. 13
4.2 Representations and Warranties of Each Grantor................... 13
4.2.1 Title; No Other Liens............................................ 14
4.2.2 Perfected First Priority Liens................................... 14
4.2.3 Chief Executive Office........................................... 16
4.2.4 Inventory and Equipment.......................................... 16
4.2.5 Farm Products.................................................... 16
4.2.6 Accounts......................................................... 16
4.2.7 Intellectual Property............................................ 16
4.3 Representations and Warranties of Each Pledgor................... 16
SECTION 5. COVENANTS........................................................... 17
5.1 Covenants of Each Guarantor...................................... 17
5.2 Covenants of Each Grantor........................................ 18
5.2.1 Delivery of Instruments and Chattel Paper........................ 18
5.2.2 Maintenance of Insurance......................................... 18
5.2.3 Payment of Obligations........................................... 18
5.2.4 Maintenance of Perfected Security Interest; Further Documentation 19
5.2.5 Changes in Locations, Name, etc.................................. 19
5.2.6 Notices.......................................................... 20
5.2.7 Pledged Securities............................................... 20
5.2.8 Accounts......................................................... 20
5.2.9 Maintenance of Records........................................... 20
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5.2.10 Acquisition of Intellectual Property............................ 20
5.2.11 Protection of Trade Secrets..................................... 21
5.3 Covenants of Each Pledgor......................................... 21
SECTION 6. REMEDIAL PROVISIONS................................................. 22
6.1 Certain Matters Relating to Accounts............................... 22
6.2 Communications with Obligors; Grantors Remain Liable............... 24
6.3 Pledged Stock...................................................... 24
6.4 Proceeds to be Turned Over To Administrative Agent................. 25
6.5 Application of Proceeds............................................ 26
6.6 Code and Other Remedies............................................ 26
6.7 Registration Rights................................................ 27
6.8 Waiver; Deficiency................................................. 28
SECTION 7. THE ADMINISTRATIVE AGENT............................................ 28
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc........ 28
7.2 Duty of Administrative Agent....................................... 30
7.3 Execution of Financing Statements.................................. 31
7.4 Authority of Administrative Agent.................................. 31
7.5 Right Of Inspection................................................ 31
SECTION 8. MISCELLANEOUS....................................................... 31
8.1 Amendments in Writing.............................................. 31
8.2 Notices............................................................ 32
8.3 No Waiver by Course of Conduct; Cumulative Remedies................ 32
8.4 Enforcement Expenses; Indemnification.............................. 32
8.5 Successors and Assigns............................................. 33
8.6 Set-Off............................................................ 33
8.7 Counterparts....................................................... 33
8.8 Severability....................................................... 33
8.9 Section Headings................................................... 34
8.10 Integration....................................................... 34
8.11 GOVERNING LAW..................................................... 34
8.12 Submission To Jurisdiction; Waivers............................... 34
8.13 Acknowledgements.................................................. 35
8.14 WAIVER OF JURY TRIAL.............................................. 35
8.15 Additional Granting Parties....................................... 35
8.16 Releases.......................................................... 35
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SCHEDULES
1 Notice Addresses of Guarantors
2 Description of Pledged Securities
3 Location of Jurisdiction of Organization and Chief Executive Office or
Sole Place of Business
4 Location of Inventory and Equipment
5 Copyrights and Copyright Licenses; Patents and Patent Licenses;
Trademarks and Trademark Licenses
6 Existing Prior Liens
7 Accounts
8 Contracts
ANNEXES
1 Assumption Agreement
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GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of May 21, 1998, made by
Dynatech Corporation, a Massachusetts corporation ("Dynatech"),
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Telecommunications Techniques Co., LLC, a Delaware limited liability company
(the "Borrower") and successor by merger to Newco (as defined below), and
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certain Subsidiaries of the Borrower that are signatories hereto, in favor of
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as administrative agent (in such
capacity, the "Administrative Agent") for the banks and other financial
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institutions (collectively, the "Lenders"; individually, a "Lender") from time
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to time parties to the Credit Agreement, dated as of May 21, 1998 (as amended,
waived, supplemented or otherwise modified from time to time, the "Credit
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Agreement"), among the Borrower (as successor in interest by merger and
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assumption), the Lenders, the Administrative Agent, Credit Suisse First Boston,
as syndication agent for the Lenders, and The Chase Manhattan Bank, as
documentation agent for the Lenders.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, on the date hereof, the following transactions have occurred:
(i) Dynatech has contributed, assigned and transferred to its
wholly owned subsidiary, TTC International Holdings, Inc., a Delaware
corporation ("International"), all of the capital stock of Dynatech's other
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Foreign Subsidiaries;
(ii) Dynatech and its wholly owned subsidiary, TTC Merger Co.
LLC, a Delaware limited liability company ("Newco"), have entered into the
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Credit Agreement, and pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit upon the terms and subject to
the conditions set forth therein;
(iii) As contemplated by subsection 12.11 of the Credit
Agreement, Dynatech, Newco, and the Borrower have executed and delivered
the Assumption Agreement, pursuant to which the Borrower has assumed the
rights and obligations of Newco and Dynatech as borrower under the Credit
Agreement, and substantially contemporaneously therewith, Newco has merged
with and into the Borrower, with the Borrower surviving, and the Borrower
has succeeded to all the rights and obligations of Newco under the Credit
Agreement and has become the Borrower thereunder (the "Assumption");
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(iv) Following the effectiveness of the Assumption, Dynatech
was released as Borrower under the Credit Agreement, and in consideration
of such assumption and release has contributed, assigned and transferred to
the Borrower, all of the capital stock of Dynatech's other Active
Subsidiaries that are Domestic Subsidiaries and International and has
agreed to guarantee the obligations of the Borrower as provided herein;
WHEREAS, the Borrower is a member of an affiliated group of companies
that includes or will include Dynatech, the Borrower's Active Subsidiaries which
are Domestic Subsidiaries and any Subsidiary of the Borrower that becomes a
party hereto from time to time after the date hereof (the Borrower, Dynatech,
the Borrower's Active Subsidiaries which are Domestic Subsidiaries and each such
other Subsidiary collectively, the "Granting Parties");
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WHEREAS, the proceeds of extensions of credit under the Credit
Agreement will be used in part to make valuable transfers to one or more of the
Granting Parties in connection with the operation of their respective
businesses,
WHEREAS, the Borrower and the other Granting Parties are engaged in
related businesses, and each such Granting Party 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 to the obligation of the Lenders to make
their respective extensions of credit under the Credit Agreement that the
Granting Parties shall execute and deliver this Agreement to the Administrative
Agent for the benefit of the Secured Parties;
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 thereunder,
each Granting Party hereby agrees with the Administrative 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
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in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement, and the following terms that are defined in the Code (as
defined below) are used herein as so defined: Chattel Paper, Documents,
Equipment, Farm Products, Fixtures and Inventory.
(b) The following terms shall have the following meanings:
"Accounts": all accounts (as defined in the Code) of each Grantor.
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"Active Subsidiaries": as defined in the Credit Agreement.
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"Agreement": this Guarantee and Collateral Agreement, as the same may
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be amended, supplemented or otherwise modified from time to time.
"Borrower Obligations": the collective reference to the unpaid
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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 Administrative Agent or any
Lender (or, in the case of any Hedge Agreement referred to below, 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 Credit Documents and any Letter of Credit, or any
Hedge Agreement entered into by the
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Borrower with any Lender or any Affiliate of any Lender, any Guarantee
Obligations of Dynatech or any of its Subsidiaries referred to in
subsection 14.3(e) of the Credit Agreement as to which any Lender or any
Affiliate thereof is a beneficiary, 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 reasonable 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).
"Code": the Uniform Commercial Code as from time to time in effect in
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the State of New York.
"Collateral": as defined in Section 3.
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"Collateral Account Bank": Morgan Guaranty Trust Company of New York
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or another bank which at all times is a Lender as selected by the relevant
Grantor and notified to the Administrative Agent in writing promptly
following such selection.
"Collateral Proceeds Account": the cash collateral account
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established by the relevant Grantor at an office of the Collateral Account
Bank in the name of the Administrative Agent.
"Commitments": the collective reference to the Revolving Credit
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Commitments, the Swing Line Commitments, the Tranche A Commitment, Tranche
B Commitment, Tranche C Commitment, Tranche D Commitment and the L/C
Commitment; individually, a "Commitment".
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"Contracts": with respect to any Grantor, all contracts, agreements,
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instruments and indentures in any form, and portions thereof (except for
the contracts listed on Schedule 8), to which such Grantor is a party or
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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.
"Copyright Licenses": with respect to any Grantor, all United States
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written license agreements of such Grantor providing for the grant by or to
such Grantor of any right to use any Copyright of such Grantor, other than
agreements with any Person who is an Affiliate or a Subsidiary of the
Borrower, including, without limitation, any license agreements listed on
Schedule 5 hereto subject, in each case, to the terms of such license
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agreements, and the right to prepare for sale, sell and advertise for sale,
all Inventory now or hereafter covered by such licenses.
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"Copyrights": with respect to any Grantor, all of such Grantor's
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right, title and interest in and to all United States copyrights, whether
or not the underlying works of authorship have been published or
registered, United States copyright registrations and copyright
applications, and (a) all renewals thereof, (b) all income, royalties,
damages and payments now and hereafter due and/or payable with respect
thereto, including, without limitation, payments under all licenses entered
into in connection therewith, and damages and payments for past or future
infringements thereof and (c) the right to sue or otherwise recover for
past, present and future infringements thereof.
"Credit Documents": the collective reference to the "Credit
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Documents" as defined in the Credit Agreement.
"Default": a "Default" as defined in the Credit Agreement.
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"Event of Default": an "Event of Default" as defined in the Credit
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Agreement.
"Foreign Subsidiary": as defined in the Credit Agreement.
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"Foreign Subsidiary Holdco": as defined in the Credit Agreement.
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"General Fund Account": the general fund account of the relevant
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Grantor established at the same office of the Collateral Account Bank as
the Collateral Proceeds Account.
"General Intangibles": all "general intangibles" as such term is
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defined in Section 9-106 of the Uniform Commercial Code in effect in the
State of New York on the date hereof.
"Granting Parties": as defined in the recitals hereto.
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"Grantor": the Borrower and each Domestic Subsidiary of the Borrower
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that from time to time becomes a party hereto.
"Guarantor Obligations": with respect to any Guarantor, the
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collective reference to (i) the Borrower Obligations and (ii) all
obligations and liabilities of such Guarantor that may arise under or in
connection with this Agreement or any other Credit 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 Administrative Agent or to the Lenders that are required to
be paid by such Guarantor pursuant to the terms of this Agreement or any
other Credit Document).
"Guarantors": the collective reference to each Granting Party other
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than the Borrower.
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"Hedge Agreements": as to any Grantor, all interest rate swaps, caps
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or collar agreements or similar arrangements entered into by such Person
providing for protection against fluctuations in interest rates or currency
exchange rates or the exchange of nominal interest obligations, either
generally or under specific contingencies (including, without limitation,
all Hedging Arrangements with respect to currency exchange rates entered
into in connection with the Credit Agreement).
"Instruments": has the meaning specified in the Code, but excluding
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the Pledged Securities.
"Intellectual Property": with respect to any Grantor, the collective
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reference to such Grantor's Copyrights, Copyright Licenses, Patents, Patent
Licenses, Trade Secrets, Trademarks and Trademark Licenses.
"Intercompany Note": with respect to any Grantor, any promissory note
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in a principal amount in excess of $1,000,000 evidencing loans made by such
Grantor to the Borrower or any of its Subsidiaries.
"Issuers": the collective reference to the Persons identified on
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Schedule 2 as the issuers of the Pledged Stock.
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"Inventory": with respect to any Grantor, all inventory (as defined
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in the Code) of such Grantor.
"Loans": the collective reference to the "Loans" as defined in the
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Credit Agreement.
"Notes": the collective reference to the "Notes" as defined in the
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Credit Agreement.
"Obligations": (i) in the case of the Borrower, the Borrower
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Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"Patent Licenses": with respect to any Grantor, all United States
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written license agreements of such Grantor with any Person who is not an
Affiliate or a Subsidiary in connection with any of the Patents of such
Grantor or such other Person's patents, whether such Grantor is a licensor
or a licensee under any such agreement, including, without limitation, the
license agreements listed on Schedule 5, subject, in each case, to the
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terms of such license agreements, and the right to prepare for sale, sell
and advertise for sale, all Inventory now or hereafter covered by such
licenses.
"Patents": with respect to any Grantor, all of such Grantor's right,
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title and interest in and to all United States patents, patent applications
and patentable inventions, including, without limitation, all patents and
patent applications identified in Schedule 5, and including, without
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limitation, (a) all inventions and improvements described and claimed
therein, (b) the right to sue or otherwise recover for any and all past,
present and
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future infringement thereof, (c) all income, royalties, damages and other
payments now and hereafter due and/or payable with respect thereto
(including, without limitation, payments under all licenses entered into in
connection therewith, and damages and payments for past or future
infringements thereof), and (d) all other rights corresponding thereto in
the United States and all reissues, divisions, continuations,
continuations-in-part, substitutes, renewals, and extensions thereof, all
improvements thereon, and all other rights of any kind whatsoever of such
Grantor accruing thereunder or pertaining thereto.
"Pledged Collateral": as defined in Section 3.
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"Pledged Notes": with respect to any Pledgor, all Intercompany Notes
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at any time issued to such Pledgor.
"Pledged Securities": the collective reference to the Pledged Notes
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and the Pledged Stock.
"Pledged Stock": with respect to any Pledgor, the shares of Capital
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Stock listed on Schedule 2 as held by such Pledgor, together with any other
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shares, stock certificates, options or rights of any nature whatsoever in
respect of the Capital Stock of any Issuer that may be issued or granted
to, or held by, such Pledgor while this Agreement is in effect (provided
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that in no event shall there be pledged, nor shall any Pledgor be required
to pledge, directly or indirectly, (x) any Capital Stock of any Subsidiary
other than an Active Subsidiary or (y) more than 65% of any series of the
outstanding Capital Stock of any Foreign Subsidiary pursuant to this
Agreement).
"Pledgor": Dynatech (with respect to the Pledged Stock of the
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Borrower), the Borrower (with respect to Pledged Stock of the entities
listed on Schedule 2 hereto under the name of the Borrower and any other
Pledged Securities held by the Borrower) and any other Granting Party (with
respect to Pledged Securities held by such Granting Party).
"Proceeds": all "proceeds" as such term is defined in Section 9-
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306(1) of the Uniform Commercial Code in effect in the State of New York on
the date hereof and, in any event, Proceeds of Pledged Securities shall
include, without limitation, all dividends or other income from the Pledged
Securities, collections thereon or distributions or payments with respect
thereto.
"Revolving Credit Commitments": the collective reference to the
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"Revolving Credit Commitments" as defined in the Credit Agreement.
"Secured Parties": the collective reference to the Administrative Agent,
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the Lenders (including, without limitation the Issuing Lender) and any
Affiliate of any Lender which has entered into any Hedge Agreement with the
Borrower or any of its Subsidiaries, and their respective successors,
indorsees, transferees and assigns.
"Securities Act": the Securities Act of 1933, as amended from time to
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time.
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"Security Collateral": as defined in Section 3.
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"Trade Secrets": with respect to any Grantor, all of such Grantor's
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right, title and interest in and to all United States trade secrets,
including, without limitation, know-how, processes, formulae, compositions,
designs, and confidential business and technical information, and all
rights of any kind whatsoever accruing thereunder or pertaining thereto,
including, without limitation, (a) all income, royalties, damages and
payments now and hereafter due and/or payable with respect thereto,
including, without limitation, payments under all licenses, non-disclosure
agreements and memoranda of understanding entered into in connection
therewith, and damages and payments for past or future misappropriations
thereof, and (b) the right to sue or otherwise recover for past, present or
future misappropriations thereof.
"Trademark Licenses": with respect to any Grantor, all United States
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written license agreements of such Grantor with any Person who is not an
Affiliate or a Subsidiary in connection with any of the Trademarks of such
Grantor or such other Person's names or trademarks, whether such Grantor is
a licensor or a licensee under any such agreement, including, without
limitation, the license agreements listed on Schedule 5, subject, in each
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case, to the terms of such license agreements, and the right to prepare for
sale, sell and advertise for sale, all Inventory now or hereafter covered
by such licenses.
"Trademarks": with respect to any Grantor, all of such Grantor's
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right, title and interest in and to all United States trademarks, service
marks, trade names, trade dress or other indicia of trade origin or
business identifiers, trademark and service mark registrations, and
applications for trademark or service mark registrations (except for
"intent to use" applications for trademark or service mark registrations
filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. (S) 1051,
unless and until an Amendment to Allege Use or a Statement of Use under
Sections 1(c) and 1(d) of said Act has been filed), and any renewals
thereof, including, without limitation, each registration and application
identified in Schedule 5, and including, without limitation, (a) the right
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to sue or otherwise recover for any and all past, present and future
infringements or dilutions thereof, (b) all income, royalties, damages and
other payments now and hereafter due and/or payable with respect thereto
(including, without limitation, payments under all licenses entered into in
connection therewith, and damages and payments for past or future
infringements thereof), and (c) all other rights corresponding thereto in
the United States and all other rights of any kind whatsoever of such
Grantor accruing thereunder or pertaining thereto in the United States,
together in each case with the goodwill of the business connected with the
use of, and symbolized by, each such trademark, service mark, trade name,
trade dress or other indicia of trade origin or business identifiers.
"Vehicles": all cars, trucks, trailers, construction and earth moving
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equipment and other vehicles covered by a certificate of title law of any
state and all tires and other appurtenances to any of the foregoing.
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1.2 Other Definitional Provisions. (a) The words "hereof,"
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"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, Schedule and Annex 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,
Pledged Collateral or Security Collateral, or any part thereof, when used in
relation to a Granting Party shall refer to such Granting Party's Collateral,
Pledged Collateral or Security Collateral or the relevant part thereof.
(d) All references in this Agreement to any of the property described
in the definition of the term "Collateral" or "Pledged Collateral," or to any
Proceeds thereof, shall be deemed to be references thereto only to the extent
the same constitute Collateral or Pledged Collateral, respectively.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and
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severally, unconditionally and irrevocably, guarantees to the Administrative
Agent, for the ratable benefit of the Secured Parties, the prompt and complete
payment and performance by the Borrower when due and payable (whether at the
stated maturity, by acceleration or otherwise) of the Borrower Obligations.
(b) Anything herein or in any other Credit Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Credit Documents shall in no event exceed the amount that can be
guaranteed by such Guarantor under applicable law, including applicable federal
and state laws relating to the insolvency of debtors.
(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 Administrative Agent or any other
Secured Party hereunder.
(d) The guarantee contained in this Section 2 shall remain in full
force and effect until the earlier to occur of (i) the first date on which all
the Loans, any Reimbursement Obligations, all other Borrower Obligations then
due and owing, and the obligations of each Guarantor under the guarantee
contained in this Section 2 then due and owing 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 or
(ii) as to any Guarantor, the sale or other disposition of all of the Capital
Stock of such Guarantor as permitted under the Credit Agreement.
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(e) No payment made by the Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Administrative
Agent or any 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 earlier to occur of (i) the
first date on which the Loans, any Reimbursement Obligations, and all other
Borrower Obligations then due and owing, are paid in full, no Letter of Credit
shall be outstanding and the Commitments are terminated or (ii) the sale or
other disposition of all of the Capital Stock of such Guarantor as permitted
under the Credit Agreement.
2.2 Right of Contribution. Each Guarantor hereby agrees that to the
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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 that 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 Administrative Agent and the other Secured Parties, and
each Guarantor shall remain liable to the Administrative Agent and the Lenders
for the full amount guaranteed by such Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any
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Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Administrative Agent or any other Secured Party, no Guarantor shall be
entitled to be subrogated to any of the rights of the Administrative 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 Administrative
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 Administrative
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 Administrative 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 Administrative Agent in the exact form
received by such Guarantor (duly indorsed by such Guarantor to the
Administrative Agent, if required), to be applied against the Borrower
Obligations, whether matured or unmatured, in such order as the Administrative
Agent may determine.
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2.4 Amendments, etc. with respect to the Borrower Obligations. To
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the maximum extent permitted by law, 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 Administrative Agent
or any other Secured Party may be rescinded by the Administrative Agent or such
other 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 Administrative Agent or any other Secured Party, and the Credit
Agreement and the other Credit Documents and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders, as the case may be) may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by the
Administrative Agent or any other Secured Party for the payment of the Borrower
Obligations may be sold, exchanged, waived, surrendered or released. Neither
the Administrative 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, except to the extent required by
applicable law.
2.5 Guarantee Absolute and Unconditional. Each Guarantor waives, to
------------------------------------
the maximum extent permitted by applicable law, 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 Administrative 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 Administrative 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, to the maximum extent permitted by applicable
law, diligence, presentment, protest, demand for payment and notice of default
or nonpayment to or upon the Borrower or any of the other Guarantors with
respect to the Borrower Obligations. Each Guarantor understands and agrees, to
the extent permitted by law, that the guarantee contained in this Section 2
shall be construed as a continuing, absolute and unconditional guarantee of
payment. Each Guarantor hereby waives, to the maximum extent permitted by
applicable law, any and all defenses (other than any suit for breach of a
contractual provision of any of the Loan Documents) that it may have arising out
of or in connection with any and all of the following: (a) the validity or
enforceability of the Credit Agreement or any other Credit 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 Administrative Agent or any other Secured Party, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) that may at any
time be available to or be asserted by the Borrower against the Administrative
Agent or any other Secured Party, (c) any change in the time, place, manner or
place of payment, amendment, or waiver or increase in the Obligations,
11
(d) any exchange, taking, or release of Security Collateral, (e) any change in
the limited liability company structure or existence of the Borrower, (f) any
application of Security Collateral to Obligations or (g) any other circumstance
whatsoever (other than payment in full of the Borrower Obligations) (with or
without notice to or knowledge of the Borrower or such Guarantor) that
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrower for the 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 Administrative 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 Administrative 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 Administrative 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 Administrative 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 Administrative Agent without set-off or
counterclaim in Dollars at the office of the Administrative Agent located at 60
Wall Street, New York, New York 10260 or such other address of the
Administrative Agent as may be designated in writing to such Guarantor from time
to time in accordance with subsection 18.2 of the Credit Agreement.
SECTION 3. GRANT OF SECURITY INTEREST
3.1 Grant. Each Granting Party (1) that is a Grantor hereby grants
-----
to the Administrative Agent, for the ratable benefit of the Secured Parties, a
security interest in all of the Collateral of the Grantor, as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of the Obligations of such
Grantor, except as provided in Section 3.3 hereof. The term "Collateral", as to
----------
any Grantor, means the following property now owned or at any time hereafter
acquired by
12
such Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interest except as specified in Section 3.3 hereof:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Documents;
(e) all Equipment (other than Vehicles);
(f) all General Intangibles;
(g) all Instruments;
(h) all Intellectual Property;
(i) all Inventory;
(j) all books and records pertaining to any of the foregoing;
(k) the Collateral Proceeds Account; and
(l) 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 that Collateral shall not include any Pledged Collateral, or any
- --------
property or assets specifically excluded from Pledged Collateral (including any
Capital Stock of any Foreign Subsidiary in excess of 65% of any series of such
stock).
3.2 Pledged Collateral. Each Granting Party that is a Pledgor hereby
------------------
grants to the Administrative Agent, for the ratable benefit of the Secured
Parties, a security interest in all of the Pledged Collateral of such Pledgor,
as collateral security for the prompt and complete performance when due (whether
at the stated maturity, by acceleration or otherwise) of the Obligations of such
Pledgor, except as provided in Section 3.3 hereof. The term "Pledged
-------
Collateral", as to any Pledgor, means the Pledged Securities now owned or at any
- ----------
time hereafter acquired by such Pledgor, and any Proceeds thereof. The term
"Security Collateral", as to any Granting Party, means, collectively, the
-------------------
Collateral (if any) and the Pledged Collateral (if any) of such Granting Party.
13
3.3 Certain Exceptions. No security interest is or will be granted
------------------
pursuant hereto in any right, title or interest of any Granting Party under or
in:
(a) any Instruments, Contracts, Chattel Paper, General Intangibles,
Copyright Licenses, Patent Licenses, Trademark Licenses or other contracts
or agreements with or issued by Persons other than a Subsidiary of the
Borrower (collectively, "Excluded Agreements") that would otherwise be
-------------------
included in the Security Collateral (and such Excluded Agreements shall not
be deemed to constitute a part of the Security Collateral) for so long as,
and to the extent that, the granting of such a security interest pursuant
hereto would result in a breach, default or termination of such Excluded
Agreements, or
(b) any Equipment that would otherwise be included in the Security
Collateral (and such Equipment shall not be deemed to constitute a part of
the Security Collateral) during such time as such Equipment is subject to a
Lien permitted by subsection 14.2(f) of the Credit Agreement.
SECTION 4. REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Each Guarantor. 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 Guarantor hereby represents and warrants to the Administrative
Agent and each other Secured Party that the representations and warranties set
forth in Section 10 of the Credit Agreement as they relate to such Guarantor or
to the Credit Documents to which such Guarantor is a party, each of which
representations and warranties is hereby incorporated herein by reference, are
true and correct in all material respects, and the Administrative Agent and each
other Secured Party shall be entitled to rely on each of such representations
and warranties as if fully set forth herein; provided that each reference in
--------
each such representation and warranty to the Borrower's knowledge shall, for the
purposes of this Section 4.1, be deemed to be a reference to such Guarantor's
knowledge.
4.2 Representations and Warranties of Each Grantor. 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 Administrative
Agent and each other Secured Party that:
4.2.1 Title; No Other Liens. Except for the security interest
---------------------
granted to the Administrative Agent, for the ratable benefit of the Secured
Parties, pursuant to this Agreement and the other Liens permitted to exist on
such Grantor's Collateral by the Credit Agreement (including without limitation
subsection 14.2 thereof), such Grantor owns each item of such Grantor's
Collateral free and clear of any and all Liens. Except as set forth on
Schedule 6, no currently effective financing statement or other similar public
notice with respect to all or any part of such Grantor's Collateral is on file
or of record in any public office, except such as have been filed in favor of
the Administrative Agent, for the ratable benefit of the Secured Parties,
pursuant to this Agreement or as are permitted by the Credit Agreement
(including without
14
limitation subsection 14.2 thereof) or any other Credit Document or for which
termination statements will be delivered on the Closing Date.
4.2.2 Perfected First Priority Liens. (i) This Agreement is
------------------------------
effective to create, as collateral security for the Obligations of such Grantor,
valid and enforceable Liens on such Grantor's Collateral in favor of the
Administrative Agent, for the benefit of the Secured Parties, except as
enforceability may be affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditor's 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.
(ii) Except with regard to Liens (if any) on Specified Assets, upon
the completion of the Filings, and the delivery to and continuing possession by
the Administrative Agent of all Instruments, Chattel Paper and Documents a
security interest in which is perfected by possession, the Liens created
pursuant to this Agreement will constitute valid Liens on and (to the extent
provided herein) perfected security interests in such Grantor's Collateral in
favor of the Administrative Agent for the benefit of the Secured Parties, and
will be prior to all other Liens of all other Persons other than Permitted
Liens, and enforceable as such as against all other Persons other than Ordinary
Course Buyers, except to the extent that the recording of an assignment or other
transfer of title to the Administrative Agent or the recording of other
applicable documents in the United States Patent and Trademark Office or United
States Copyright Office may be necessary for perfection or enforceability, and
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law) or by an implied
covenant of good faith and fair dealing. As used in this Section 4.2.2(ii), the
following terms shall have the following meanings:
"Filings": the filing or recording of the Financing Statements, any
-------
Patent and Trademark Security Agreement as set forth in Schedule 9, and any
filings after the Closing Date in any other jurisdiction as may be
necessary under any Requirement of Law.
"Financing Statements": the financing statements delivered to the
--------------------
Administrative Agent by such Grantor on the Closing Date for filing in the
jurisdictions listed in Schedule 9.
"Ordinary Course Buyers": with respect to goods only, buyers in the
----------------------
ordinary course of business to the extent provided in Section 9-307(1) of
the Uniform Commercial Code as in effect from time to time in the relevant
jurisdiction.
"Permitted Liens": Liens permitted pursuant to the Credit Documents,
---------------
including without limitation those permitted to exist pursuant to
subsection 14.2 of the Credit Agreement.
"Specified Assets": the following property and assets of such
----------------
Grantor:
15
(1) Equipment constituting Fixtures;
(2) Patents, Patent Licenses, Trademarks and Trademark Licenses
to the extent that (a) Liens thereon which cannot be perfected by the
filing of financing statements under the Uniform Commercial Code or by
the filing and acceptance thereof in the United States Patent and
Trademark Office or (b) such Patents, Patent Licenses, Trademarks and
Trademark Licenses are not, individually or in the aggregate, material
to the business of Dynatech and its Subsidiaries taken as a whole;
(3) Copyrights and Copyright Licenses and Accounts or
receivables arising therefrom to the extent that the Uniform
Commercial Code as in effect from time to time in the relevant
jurisdiction is not applicable to the creation or perfection of Liens
thereon;
(4) uncertificated securities;
(5) Collateral for which the perfection of Liens thereon
requires filings in or other actions under the laws of jurisdictions
outside the United States of America, any State, territory or
dependency thereof or the District of Columbia;
(6) contracts, Accounts or receivables subject to the Assignment
of Claims Act;
(7) goods included in Collateral received by any Person for
"sale or return" within the meaning of Section 2-326 of the Uniform
Commercial Code of the applicable jurisdiction, to the extent of
claims of creditors of such Person;
(8) Proceeds of Accounts, receivables or Inventory which do not
themselves constitute Collateral or which have not been transferred to
or deposited in the Collateral Proceeds Account (if any); and
(9) Equipment at various sales offices with a fair market value
of less than $10,000 per sales office and mobile goods.
4.2.3 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 3.
----------
4.2.4 Inventory and Equipment. On the date hereof, such Grantor's
-----------------------
Inventory (other than Inventory held by various Persons (other than a Grantor
and its Affiliates) that is being finished or modified by such Persons and
thereafter returned to the respective Grantor ("WIP Inventory")) and Equipment
-------------
(other than equipment at various sales offices with a fair market value of less
than $10,000 per sales office and mobile goods) are kept at the locations listed
on Schedule 4.
----------
16
4.2.5 Farm Products. None of such Grantor's Collateral constitutes,
-------------
or is the Proceeds of, Farm Products.
4.2.6 Accounts. The amount represented by such Grantor to the
--------
Administrative Agent or the other Secured Parties from time to time as owing by
each account debtor or by all account debtors in respect of such Grantor's
Accounts will at such time be the correct amount, in all material respects,
actually owing by such account debtor or debtors thereunder, except to the
extent that appropriate reserves therefor have been established on the books of
such Grantor in accordance with GAAP. The places where such Grantor keeps its
records concerning such Grantor's Accounts are listed on Schedule 7 or such
----------
other location or locations of which such Grantor shall have provided prior
written notice to the Administrative Agent pursuant to Section 5.2.5 hereof.
Unless otherwise indicated in writing to the Administrative Agent, each Account
of such Grantor arises out of a bona fide sale and delivery of goods or
rendition of services by such Grantor. Such Grantor has not given any account
debtor any deduction in respect of the amount due under any such Account, except
in the ordinary course of business or as such Grantor may otherwise advise the
Administrative Agent in writing.
4.2.7 Intellectual Property. Schedule 5 lists all material
---------------------
Trademarks and material Patents, in each case, registered in the United States
Patent and Trademark Office and owned by such Grantor in its own name as of the
date hereof, and all material Trademark Licenses and all material Patent
Licenses (including, without limitation, material Trademark Licenses for
registered Trademarks and material Patent Licenses for registered Patents) owned
by such Grantor in its own name as of the date hereof.
4.3 Representations and Warranties of Each Pledgor. 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 thereunder,
each Pledgor hereby represents and warrants to the Administrative Agent and each
other Secured Party that:
4.3.1 The shares of Pledged Stock pledged by such Pledgor hereunder
constitute (i) in the case of each Active Subsidiary which is a Domestic
Subsidiary, all the issued and outstanding shares of all classes of the Capital
Stock of each such Active Subsidiary owned by such Pledgor and (ii) in the case
of each Foreign Subsidiary such percentage (not more than 65%) as is specified
on Schedule 2 of all the issued and outstanding shares of all classes of the
----------
Capital Stock of each such Foreign Subsidiary.
4.3.2 All the shares of the Pledged Stock pledged by such Pledgor
hereunder have been duly and validly issued and are fully paid and
nonassessable.
4.3.3 Such Pledgor is the record and beneficial owner of, and has
good title to, the Pledged Securities 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 and Liens arising by operation of
law or permitted by the Credit Agreement.
4.3.4 Upon delivery to the Administrative Agent of the certificates
evidencing the Pledged Securities held by such Pledgor together with executed
stock or bond powers or other
17
instruments of transfer, the security interest created by this Agreement in such
Pledged Securities evidenced by certificates, assuming the continuing possession
of such Pledged Securities by the Administrative Agent, will constitute a valid,
perfected first priority security interest in such Pledged Securities to the
extent provided in and governed by the Code, enforceable in accordance with its
terms against all creditors of such Pledgor and any persons purporting to
purchase such Pledged Securities from such Pledgor, except as enforceability may
be affected by 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.
4.3.5 Upon the filing of financing statements in the appropriate
jurisdictions under the Code, the security interest created by this Agreement in
such Pledged Securities that constitute uncertificated securities, will
constitute a valid, perfected first priority security interest in such Pledged
Securities constituting uncertificated securities to the extent provided in and
governed by the Code, enforceable in accordance with its terms against all
creditors of such Pledgor and any persons purporting to purchase such Pledged
Securities from such Pledgor, except as enforceability may be affected by
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.
SECTION 5. COVENANTS
5.1 Covenants of Each Guarantor. Each Guarantor covenants and agrees
---------------------------
with the Administrative Agent and the other Secured Parties that, from and after
the date of this Agreement until the earlier to occur of (i) the date upon which
the Loans, any Reimbursement Obligations, and all other Obligations then due and
owing, shall have been paid in full, no Letter of Credit shall be outstanding
and the Commitments shall have terminated, or (ii) as to any Guarantor the date
upon which all the Capital Stock of such Guarantor shall have been sold or
otherwise disposed of in accordance with the terms of the Credit Agreement, such
Guarantor shall take, or shall refrain from taking, as the case may be, each
action that is necessary to be taken or not taken, as the case may be, so that
no Default or Event of Default is caused by the failure to take such action or
to refrain from taking such action by such Guarantor or any of its Subsidiaries.
5.2 Covenants of Each Grantor. Each Grantor covenants and agrees
-------------------------
with the Administrative Agent and the other Secured Parties that, from and after
the date of this Agreement until the earlier to occur of (i) the date upon which
the Loans, any Reimbursement Obligations, and all other Obligations then due and
owing, shall have been paid in full, no Letter of Credit shall be outstanding
and the Commitments shall have terminated or (ii) as to any Grantor the date
upon which all the Capital Stock of such Grantor shall have been sold or
otherwise disposed of in accordance with the terms of the Credit Agreement:
5.2.1 Delivery of Instruments and Chattel Paper. If any amount
-----------------------------------------
payable under or in connection with any of such Grantor's Collateral shall be or
become evidenced by any
18
Instrument or Chattel Paper, such Grantor shall (except as provided in the
following sentence) be entitled to retain possession of all Collateral of such
Grantor evidenced by any Instrument or Chattel Paper, and shall hold all such
Collateral in trust for the Administrative Agent, for the ratable benefit of the
Secured Parties. In the event that an Event of Default shall have occurred and
be continuing, upon the request of the Administrative Agent, such Instrument or
Chattel Paper shall be promptly delivered to the Administrative Agent, duly
indorsed in a manner satisfactory to the Administrative Agent, to be held as
Collateral pursuant to this Agreement. Such Grantor shall not permit any other
Person to possess any such Collateral at any time other than in connection with
any sale or other disposition of such Collateral in a transaction permitted by
the Credit Agreement.
5.2.2 Maintenance of Insurance. (a) Such Grantor will maintain,
------------------------
with financially sound and reputable companies, insurance policies (i) insuring
such Grantor's Inventory and Equipment against loss by fire, explosion, theft
and such other casualties as may be reasonably satisfactory to the
Administrative Agent and (ii) insuring such Grantor, the Administrative Agent
and the other Secured Parties 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 may be reasonably satisfactory to
the Administrative Agent.
(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 15 days after receipt by the Administrative Agent of
written notice thereof, (ii) name the Administrative Agent as an additional
insured party or loss payee, (iii) include deductibles consistent with past
practice or consistent with industry practice or otherwise reasonably
satisfactory to the Administrative Agent.
5.2.3 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 material taxes, assessments and governmental charges or levies
imposed upon such Grantor's Collateral or in respect of income or profits
therefrom, as well as all material claims of any kind (including, without
limitation, material claims for labor, materials and supplies) against or with
respect to such Grantor's Collateral, except that no such tax, assessment,
charge or levy need be paid or satisfied if the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
such Grantor.
5.2.4 Maintenance of Perfected Security Interest; Further
---------------------------------------------------
Documentation. (a) Such Grantor shall maintain the security interest created
- -------------
by this Agreement in such Grantor's Collateral as a perfected security interest
having at least the priority described in Section 4.2.2 and shall defend such
security interest against the claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Administrative Agent from time
to time statements and schedules further identifying and describing such
Grantor's Collateral and such other reports in connection with such Grantor's
Collateral as the Administrative Agent may reasonably request in writing, all in
reasonable detail.
19
(c) At any time and from time to time, upon the written request of
the Administrative Agent, and at the sole expense of such Grantor, such Grantor
will promptly and duly execute and deliver such further instruments and
documents and take such further actions as the Administrative Agent may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted by such Grantor,
including, without limitation, the filing of 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.
5.2.5 Changes in Locations, Name, etc. Such Grantor will not, except
--------------------------------
upon not less than 30 days' prior written notice to the Administrative Agent and
delivery to the Administrative Agent, if applicable, of a written supplement to
Schedule 4 showing any additional location at which such Grantor's Inventory or
- ----------
Equipment shall be kept:
(i) permit any of such Grantor's Inventory (other than WIP
Inventory) or Equipment (other than Equipment at various sales offices with
a fair market value of less than $10,000 per sales office and mobile goods)
to be kept at a location other than the location(s) applicable to such
Grantor listed on Schedule 4 (other than Inventory or Equipment being
----------
conveyed, sold, leased, assigned, transferred or otherwise disposed of as
permitted by the Credit Agreement or Inventory having a fair market value
not in excess of $500,000 in the aggregate;
(ii) change the location of its chief executive office or sole
place of business from that referred to in Section 4.2.3; or
(iii) change its name, identity or corporate structure to such
an extent that any financing statement filed by the Administrative Agent in
connection with this Agreement would become seriously misleading;
provided that, prior to taking any such action, or promptly after receiving a
- --------
written request therefor from the Administrative Agent, such Grantor shall
deliver to the Administrative Agent all additional executed financing statements
and other documents reasonably requested by the Administrative Agent to maintain
the validity, perfection and priority of the security interests provided for
herein.
5.2.6 Notices. Such Grantor will advise the Administrative Agent
-------
promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or Liens
permitted under the Credit Agreement) on any of such Grantor's Collateral which
would adversely affect the ability of the Administrative Agent to exercise any
of its remedies hereunder; and
(b) of the occurrence of any other event which would reasonably be
expected to have a material adverse effect on the aggregate value of such
Grantor's Collateral or on the security interests created hereby.
20
5.2.7 Pledged Securities. In the case of each Grantor that is an
------------------
Issuer, such Issuer agrees that (i) it will be bound by the terms of this
Agreement relating to the Pledged Stock issued by it and will comply with such
terms insofar as such terms are applicable to it, (ii) it will notify the
Administrative Agent promptly in writing of the occurrence of any of the events
described in Section 5.3.1 with respect to the Pledged Stock 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 Pledged Stock issued by it.
5.2.8 Accounts. (a) Other than in the ordinary course of business
--------
or as permitted by the Credit Documents, such Grantor will not (i) grant any
extension of the time of payment of any of such Grantor's Accounts, (ii)
compromise or settle any such Account for less than the full amount thereof,
(iii) release, wholly or partially, any Person liable for the payment of any
Account, (iv) allow any credit or discount whatsoever on any such Account or (v)
amend, supplement or modify any Account unless such extensions, compromises,
settlements, releases, credits or discounts would not reasonably be expected to
materially adversely affect the value of the Accounts constituting Collateral
taken as a whole.
(b) Such Grantor will deliver to the Administrative 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 10% of the aggregate
amount of the then outstanding Accounts.
5.2.9 Maintenance of Records. Such Grantor will keep and maintain at
----------------------
its own cost and expense reasonably satisfactory and complete records of its
Collateral, including, without limitation, a record of all payments received and
all credits granted with respect to such Collateral, and shall mark such records
to evidence this Agreement and the Liens and the security interests created
hereby.
5.2.10 Acquisition of Intellectual Property. Within 90 days after
------------------------------------
the end of each calendar year, such Grantor will notify the Administrative Agent
of any acquisition by such Grantor of (i) any registration of any material
Copyright, Patent or Trademark or (ii) any exclusive rights under a material
Copyright License, Patent License or Trademark License constituting Collateral,
and shall take such actions as may be reasonably requested by the Administrative
Agent (but only to the extent such actions are within such Grantor's control) to
perfect the security interest granted to the Administrative Agent and the other
Secured Parties therein, to the extent provided in respect of the Copyright
Patent or Trademark constituting Collateral on the date hereof by, (x) the
execution and delivery of a Patent and Trademark Security Agreement (or
amendments to any such agreement previously executed or delivered by such
Grantor) or other comparable agreements with respect to Copyrights or Copyright
Licenses constituting Collateral and/or (y) the making of appropriate filings
(I) of financing statements under the Uniform Commercial Code of any applicable
jurisdiction and/or (II) in the United States Patent and Trademark Office, or
with respect to Copyrights and Copyright Licenses, other applicable office).
5.2.11 Protection of Trade Secrets. Such Grantor shall take all
---------------------------
steps which it deems commercially reasonable to preserve and protect the secrecy
of all material Trade Secrets of such Grantor.
21
5.3 Covenants of Each Pledgor. Each Pledgor covenants and agrees
-------------------------
with the Administrative Agent and the other Secured Parties that, from and after
the date of this Agreement until the earlier to occur of (i) the Loans, any
Reimbursement Obligations, and all other Obligations then due and owing shall
have been paid in full, no Letter of Credit shall be outstanding and the
Commitments shall have terminated or (ii) as to any Pledgor, all the Capital
Stock of such Pledgor shall have been sold or otherwise disposed of as permitted
under the terms of the Credit Agreement:
5.3.1 If such Pledgor shall, as a result of its ownership of its
Pledged Securities, become entitled to receive or shall receive any stock
certificate (including, without limitation, any stock 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), stock option or similar 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 Pledgor shall accept the same as the agent of the Administrative
Agent and the other Secured Parties, hold the same in trust for the
Administrative Agent and deliver the same forthwith to the Administrative Agent
in the exact form received, duly indorsed by such Pledgor to the Administrative
Agent, if required, together with an undated stock power covering such
certificate duly executed in blank by such Grantor, to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations (provided that in no event shall there be pledged,
--------
nor shall any Pledgor be required to pledge, more than 65% of any series of the
outstanding Capital Stock of any Foreign Subsidiary Holdco or other Foreign
Subsidiary pursuant to this Agreement). Any sums paid upon or in respect of the
Pledged Securities upon the liquidation or dissolution of any Issuer or maker
(except any liquidation or dissolution of any Subsidiary of the Borrower in
accordance with the Credit Agreement) shall be paid over to the Administrative
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 Pledged Stock or any property shall be distributed upon or with
respect to the Pledged Stock 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 Administrative Agent, be delivered
to the Administrative 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 Pledged Securities shall be received by such
Pledgor, such Pledgor shall, until such money or property is paid or delivered
to the Administrative Agent, hold such money or property in trust for the
Secured Parties, segregated from other funds of such Pledgor, as additional
collateral security for the Obligations.
5.3.2 Without the prior written consent of the Administrative Agent,
such Pledgor will not (except as permitted by the Credit Agreement) (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, (ii) sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with respect
to, the Pledged Securities or Proceeds thereof or (iii) create, incur or permit
to exist any Lien or option in favor of, or any material
22
adverse claim of any Person with respect to, any of the Pledged Securities or
Proceeds thereof, or any interest therein, except for the security interests
created by this Agreement or Liens arising by operation of law.
5.3.3 Such Pledgor shall maintain the security interest created by
this Agreement in such Pledgor's Pledged Collateral as a perfected security
interest having at least the priority described in Section 4.3.4 and shall
defend such security interest against the claims and demands of all Persons
whomsoever. At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Pledgor, such Pledgor will
promptly and duly execute and deliver such further instruments and documents and
take such further actions as the Administrative Agent may reasonably request for
the purpose of obtaining or preserving the full benefits of this Agreement and
of the rights and powers herein granted by such Pledgor.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Accounts. (a) At any time and from
------------------------------------
time to time after the occurrence and during the continuance of an Event of
Default, the Administrative Agent shall have the right to make test
verifications of the Accounts in any reasonable manner and through any
reasonable medium that it reasonably considers advisable, and the relevant
Grantor shall furnish all such assistance and information as the Administrative
Agent may reasonably require in connection with such test verifications. At any
time and from time to time after the occurrence and during the continuance of an
Event of Default, upon the Administrative Agent's reasonable request and at the
expense of the relevant Grantor, such Grantor shall cause independent public
accountants or others reasonably satisfactory to the Administrative Agent to
furnish to the Administrative Agent reports showing reconciliations, aging and
test verifications of, and trial balances for, the Accounts.
(b) The Administrative Agent hereby authorizes each Grantor to
collect such Grantor's Accounts, and the Administrative Agent may curtail or
terminate said authority at any time after the occurrence and during the
continuance of an Event of Default. If required by the Administrative Agent at
any time after the occurrence and during the continuance of an Event of Default,
any Proceeds constituting collections of such Accounts, when collected by such
Grantor, (i) shall be forthwith (and, in any event, within two Business Days of
receipt by such Grantor) be deposited in or otherwise transferred to the
Collateral Proceeds Account established by such Grantor maintained under the
sole dominion and control of the Administrative Agent, subject to withdrawal by
the Administrative Agent for the account of the Secured Parties only as provided
in Section 65, and (ii) until so turned over, shall be held by such Grantor in
trust for the Administrative Agent and the other Secured Parties, segregated
from other funds of such Grantor. All Proceeds constituting collections of
Accounts while held by the Collateral Account Bank (or by any Guarantor in trust
for the benefit of the Administrative Agent and the other Secured Parties) shall
continue to be collateral security for all of the Obligations and shall not
constitute payment thereof until applied as hereinafter provided. At any time
when an Event of Default has occurred and is continuing, at the Administrative
Agent's election, the Administrative Agent may apply all or any part of the
funds on deposit in the Collateral Proceeds Account established by the relevant
Grantor to the payment of the Obligations of such Grantor
23
then due and owing, such application to be made as set forth in Section 6.5
hereof. So long as no Event of Default has occurred and is continuing, the funds
on deposit in the Collateral Proceeds Account shall be remitted as provided in
Section 6.1(d) hereof.
(c) At any time and from time to time after the occurrence and during
the continuance of an Event of Default and if the Administrative Agent has
terminated a Grantor's right to collect Accounts pursuant to clause (b) above,
at the Administrative Agent's request, each Grantor shall deliver to the
Administrative Agent all original and other documents evidencing, and relating
to, the agreements and transactions which gave rise to such Grantor's Accounts,
including, without limitation, all original orders, invoices and shipping
receipts.
(d) General Fund Account. So long as no Event of Default has
--------------------
occurred and is continuing, the Administrative Agent shall instruct the
Collateral Account Bank to promptly remit any funds on deposit in each Grantor's
Collateral Proceeds Account to such Grantor's General Fund Account. In the
event that an Event of Default has occurred and is continuing, the
Administrative Agent and the Grantors agree that the Administrative Agent, at
its option, may require that each Collateral Proceeds Account be established at
Morgan Guaranty Trust Company of New York. Each Grantor shall have the right,
at any time and from time to time, to withdraw such of its own funds from its
own General Fund Account, and to maintain such balances in its General Fund
Account, as it shall deem to be necessary or desirable.
(e) Restructuring of Deposit Accounts. If (a) any Collateral
---------------------------------
Proceeds Account is maintained at a Collateral Account Bank located in a state
within the United States in which Article 9 of the Uniform Commercial Code in
effect in such state has been expressly made applicable to (and only for so long
as it is applicable to) demand deposit accounts and all filings have been made
in such state that are necessary to perfect the Secured Parties' security
interest in such Collateral Proceeds Account or (b) after the Closing Date the
relevant Grantor demonstrates to the Administrative Agent, and the
Administrative Agent in its sole discretion agrees, that the costs associated
with maintaining both a Collateral Proceeds Account and a General Fund Account
outweigh any benefits to the Secured Parties in terms of any additional
protection to their rights in such Grantor's Collateral that could not be
achieved with the use of a single account, then upon the request of such
Grantor, the Administrative Agent may amend this Agreement to delete the
requirement that a separate General Fund Account be maintained and provide that
such Grantor be entitled to withdraw funds on deposit in such Collateral
Proceeds Account at any time so long as no Event of Default has occurred and is
continuing.
6.2 Communications with Obligors; Grantors Remain Liable. (a) The
----------------------------------------------------
Administrative Agent in its own name or in the name of others may at any time
and from time to time after the occurrence and during the continuance of an
Event of Default specified in Section 16.2(a) or 16.3(a) of the Credit
Agreement, communicate with obligors under the Accounts and parties to the
Contracts (in each case, to the extent constituting Collateral) to verify with
them to the Administrative Agent's satisfaction the existence, amount and terms
of any Accounts or Contracts.
(b) Upon the request of the Administrative Agent at any time after
the occurrence and during the continuance of an Event of Default specified in
Section 16.2(a) or 16.3(a) of the
24
Credit Agreement, each Grantor shall notify obligors on such Grantor's Accounts
and parties to such Grantor's Contracts (in each case, to the extent
constituting Collateral) that such Accounts and such Contracts have been
assigned to the Administrative Agent, for the ratable benefit of the Secured
Parties, and that payments in respect thereof shall be made directly to the
Administrative Agent.
(c) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of such Grantor's Accounts to observe and perform
all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. Neither the Administrative Agent nor any Lender shall have any
obligation or liability under any Account (or any agreement giving rise thereto)
by reason of or arising out of this Agreement or the receipt by the
Administrative Agent or any other Secured Party of any payment relating thereto,
nor shall the Administrative 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 Account (or any agreement giving rise thereto) to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by it or
as to the sufficiency of any performance by any party thereunder, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts that 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 Administrative Agent shall have given notice
to the relevant Pledgor of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Pledgor shall be permitted
to receive all cash dividends and distributions paid in respect of the Pledged
Stock and all payments made in respect of the Pledged Notes, to the extent
permitted in the Credit Agreement, and to exercise all voting and corporate
rights with respect to the Pledged Stock; provided, however, that no vote shall
-------- -------
be cast or corporate right exercised or such other action taken (other than in
connection with a transaction expressly permitted by the Credit Agreement)
which, in the Administrative Agent's reasonable judgment, would materially
impair the Pledged Collateral or the related rights or remedies of the Secured
Parties or which would be inconsistent with or result in any violation of any
provision of the Credit Agreement, this Agreement or any other Credit Document.
(b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the relevant Pledgor or Pledgors, (i) the Administrative Agent shall have the
right to receive any and all cash dividends, payments or other Proceeds paid in
respect of the Pledged Stock and make application thereof to the Obligations in
such order as is provided in Section 6.5, and (ii) any or all of the Pledged
Stock shall be registered in the name of the Administrative Agent or its
nominee, and the Administrative Agent or its nominee may thereafter exercise (x)
all voting, corporate and other rights pertaining to such Pledged Stock at any
meeting of shareholders of the relevant Issuer or Issuers or otherwise and (y)
any and all rights of conversion, exchange, subscription and any other rights,
privileges or options pertaining to such Pledged Stock as if it were the
absolute owner thereof (including, without limitation, the right to exchange at
its discretion any and all of the Pledged Stock upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of any Issuer, or upon the exercise by the relevant
25
Pledgor or the Administrative Agent of any right, privilege or option pertaining
to such Pledged Stock, and in connection therewith, the right to deposit and
deliver any and all of the Pledged Stock with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Administrative Agent may reasonably determine), all without
liability (other than for its gross negligence or willful misconduct) except to
account for property actually received by it, but the Administrative Agent shall
have no duty to any Pledgor to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing, provided
--------
that the Administrative Agent shall not exercise any voting or other consensual
rights pertaining to the Pledged Stock in any way that would constitute an
exercise of the remedies described in Section 6.6 other than in accordance with
Section 6.6.
(c) Each Pledgor hereby authorizes and instructs each Issuer or maker
of any Pledged Securities pledged by such Pledgor hereunder to (i) comply with
any instruction received by it from the Administrative 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 Pledgor, and each Pledgor agrees that each Issuer
or maker shall be fully protected in so complying, and (ii) unless otherwise
expressly permitted hereby, pay any dividends or other payments with respect to
the Pledged Securities directly to the Administrative Agent.
6.4 Proceeds to be Turned Over To Administrative Agent. In addition
--------------------------------------------------
to the rights of the Administrative Agent and the other Secured Parties
specified in Section 6.1 with respect to payments of Accounts, if an Event of
Default shall occur and be continuing, and the Administrative Agent shall have
instructed any Grantor to do so, all Proceeds received by such Grantor
consisting of cash, checks and other Cash Equivalent items shall be held by such
Grantor in trust for the Administrative 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 Administrative Agent in the exact form
received by such Grantor (duly indorsed by such Grantor to the Administrative
Agent, if required). All Proceeds received by the Administrative Agent
hereunder shall be held by the Administrative Agent in the relevant Collateral
Proceeds Account maintained under its sole dominion and control. All Proceeds
while held by the Administrative Agent in such Collateral Proceeds Account (or
by such Grantor in trust for the Administrative 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 65.
6.5 Application of Proceeds. It is agreed that if an Event of
-----------------------
Default shall occur and be continuing, any and all Proceeds of the relevant
Granting Party's Security Collateral received by the Administrative Agent
(whether from the relevant Granting Party or otherwise) shall be held by the
Administrative Agent for the benefit of the Secured Parties as collateral
security for the Obligations of the relevant Granting Party (whether matured or
unmatured), and/or then or at any time thereafter may, in the sole discretion of
the Administrative Agent, be applied by the Administrative Agent against the
Obligations of the relevant Granting Party then due and owing in the following
order of priority:
FIRST, to the payment of all reasonable costs and expenses incurred by
the Administrative Agent in connection with this Agreement, the Credit
Agreement, any
26
other Credit Document or any of the Obligations of the relevant Granting
Party, including, without limitation, all court costs and the reasonable
fees and expenses of its agents and legal counsel, and any other reasonable
costs or expenses incurred in connection with the exercise by the
Administrative Agent of any right or remedy under this Agreement, the
Credit Agreement, or any other Credit Document;
SECOND, to the ratable satisfaction of all other Obligations of the
relevant Granting Party; and
THIRD, to the relevant Granting Party or its successors or assigns, 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 Administrative Agent, on behalf of the Secured Parties, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations to the extent permitted by applicable law, all
rights and remedies of a secured party under the Code or any other applicable
law. Without limiting the generality of the foregoing, to the extent permitted
by applicable law, the Administrative Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind (except
any notice required by law referred to below) to or upon any Granting Party 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 Security 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 Security 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 Administrative 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 Administrative 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
Security Collateral so sold, free of any right or equity of redemption in any
Granting Party, which right or equity is hereby waived or released. Each
Granting Party further agrees, at the Administrative Agent's request, to
assemble the Security Collateral and make it available to the Administrative
Agent at places which the Administrative Agent shall reasonably select, whether
at such Granting Party's premises or elsewhere. The Administrative 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
Security Collateral or in any way relating to the Security Collateral or the
rights of the Administrative 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 of the relevant Granting
Party then due and owing (including, without limitation, to the extent required
by Section 16.4 of the Credit Agreement to cash collateralize L/C Obligations
outstanding at such time), in the order of priority specified in Section 6.5
above, and only after such application and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-504(1)(c) of the Code, need the
27
Administrative Agent account for the surplus, if any, to any Granting Party. To
the extent permitted by applicable law, each Granting Party waives all claims,
damages and demands it may acquire against the Administrative Agent or any other
Secured Party arising out of the repossession, retention or sale of collateral,
except to the extent arising as a result of the gross negligence or willful
misconduct of the Administrative Agent or such other Secured Party. 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 Administrative 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 reasonable opinion of the Administrative Agent it
is necessary or reasonably advisable to have the Pledged Stock, or that portion
thereof to be sold, registered under the provisions of the Securities Act, the
relevant Pledgor will use its reasonable best efforts to cause the Issuer
thereof to (i) execute and deliver, and use its best efforts to 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 reasonable opinion of the Administrative Agent, necessary or
advisable to register such Pledged Stock, or that portion thereof to be sold,
under the provisions of the Securities Act, (ii) use its reasonable best efforts
to cause the registration statement relating thereto to become effective and to
remain effective for a period of not more than one year from the date of the
first public offering of such Pledged Stock, or that portion thereof to be sold,
and (iii) make all amendments thereto and/or to the related prospectus which, in
the reasonable opinion of the Administrative 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. Such
Pledgor agrees to cause such Issuer to comply with the provisions of the
securities or "Blue Sky" laws of any and all states and the District of Columbia
that the Administrative Agent shall reasonably designate and to make available
to its security holders, as soon as practicable, an earnings statement (which
need not be audited) that will satisfy the provisions of Section 11(a) of the
Securities Act.
(b) Such Pledgor recognizes that the Administrative Agent may be
unable to effect a public sale of any or all such 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. Such
Pledgor 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 Administrative
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) Such Pledgor agrees to use its reasonable 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
28
such Pledged Stock pursuant to this Section 6.7 valid and binding and in
compliance with any and all other applicable Requirements of Law. Such Pledgor
further agrees that a breach of any of the covenants contained in this Section
6.7 will cause irreparable injury to the Administrative Agent and the Lenders,
that the Administrative Agent and the Lenders 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
Pledgor, and to the extent permitted by applicable law, such Pledgor 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 or is continuing under the Credit Agreement.
6.8 Waiver; Deficiency. Each Granting Party (other than the
------------------
Borrower) waives and agrees not to assert any rights or privileges that it may
acquire under Section 9-112 of the Code, to the extent permitted by applicable
law. Each Granting Party shall remain liable for any deficiency if the proceeds
of any sale or other disposition of the Security Collateral are insufficient to
pay in full, the Loans, Reimbursement Obligations (including, without
limitation, any L/C Obligations which subsequently become Reimbursement
Obligations) and, to the extent then due and owing, all other Obligations of
such Granting Party and the reasonable fees and disbursements of any attorneys
employed by the Administrative Agent or any other Secured Party to collect such
deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. (a)
------------------------------------------------------------
Each Granting Party hereby irrevocably constitutes and appoints the
Administrative Agent and any authorized 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 Granting Party
and in the name of such Granting Party 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 that may be reasonably
necessary or desirable to accomplish the purposes of this Agreement to the
extent permitted by applicable law, provided that the Administrative Agent
agrees not to exercise such power except upon the occurrence and during the
continuance of an Event of Default. Without limiting the generality of the
foregoing, at any time when an Event of Default has occurred and is
continuing (in each case to the extent permitted by applicable law), (x) each
Pledgor hereby gives the Administrative Agent the power and right, on behalf of
such Pledgor, without notice or assent by such Pledgor, to execute, in
connection with any sale provided for in Section 6.6 or 6.7, any indorsements,
assessments or other instruments of conveyance or transfer with respect to such
Pledgor's Pledged Collateral, and (y) each Grantor hereby gives the
Administrative Agent the power and right, on behalf of such Grantor, without
notice to or assent by such Grantor, to do 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
Account of such Grantor that constitutes Collateral or with respect to any
other Collateral of such Grantor and file any claim or take any other
action or institute any proceeding in any court of law or equity or
otherwise deemed
29
appropriate by the Administrative Agent for the purpose of collecting any
and all such moneys due under any Account of such Grantor that constitutes
Collateral or with respect to any other Collateral of such Grantor whenever
payable;
(ii) in the case of any Copyright, Patent or Trademark constituting
Collateral of such Grantor, execute and deliver any and all agreements,
instruments, documents and papers as the Administrative Agent may
reasonably request to such Grantor to evidence the Administrative Agent's
and the Lenders' security interest in such Copyright, Patent or Trademark
and the goodwill and general intangibles of such Grantor relating thereto
or represented thereby;
(iii) pay or discharge taxes and Liens, other than Liens permitted
under this Agreement or the other Credit Documents, levied or placed on the
Collateral of such Grantor, 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; and
(iv) (i) direct any party liable for any payment under any of the
Collateral of such Grantor to make payment of any and all moneys due or to
become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (ii) ask or demand for, collect, 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 of such Grantor; (iii) 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 of such Grantor; (iv) commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral of such Grantor
or any portion thereof and to enforce any other right in respect of any
Collateral of such Grantor; (v) defend any suit, action or proceeding
brought against such Grantor with respect to any Collateral of such
Grantor; (vi) settle, compromise or adjust any such suit, action or
proceeding described in clause (v) above and, in connection therewith, to
give such discharges or releases as the Administrative Agent may deem
appropriate; (vii) subject to any existing reserved rights or licenses,
assign any Copyright, Patent or Trademark constituting Collateral of such
Grantor (along with the goodwill of the business to which any such
Copyright, Patent or Trademark pertains), for such term or terms, on such
conditions, and in such manner, as the Administrative Agent shall in its
sole discretion determine; and (viii) generally, sell, transfer, pledge and
make any agreement with respect to or otherwise deal with any of the
Collateral of such Grantor as fully and completely as though the
Administrative Agent were the absolute owner thereof for all purposes, and
do, at the Administrative Agent's option and such Grantor's expense, at any
time, or from time to time, all acts and things which the Administrative
Agent deems necessary to protect, preserve or realize upon the Collateral
of such Grantor and the Administrative 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.
30
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative 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) The reasonable expenses of the Administrative 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 rate per annum at which
interest would then be payable on past due ABR Loans that are Term Loans under
the Credit Agreement, from the date of payment by the Administrative Agent to
the date reimbursed by the relevant Granting Party, shall be payable by such
Granting Party to the Administrative Agent on demand.
(c) Each Granting Party 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 as to the relevant Granting Party until this Agreement is terminated
as to such Granting Party, and the security interests in the Security Collateral
of such Granting Party created hereby are released.
7.2 Duty of Administrative Agent. The Administrative Agent's sole
----------------------------
duty with respect to the custody, safekeeping and physical preservation of the
Security Collateral in its possession, under Section 9-207 of the Code or
otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account. Neither the
Administrative 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 Security Collateral or for any delay in doing
so or shall be under any obligation to sell or otherwise dispose of any Security
Collateral upon the request of any Granting Party or any other Person or, except
as otherwise provided herein, to take any other action whatsoever with regard to
the Security Collateral or any part thereof. The powers conferred on the
Administrative Agent and the other Secured Parties hereunder are solely to
protect the Administrative Agent's and the other Secured Parties' interests in
the Security Collateral and shall not impose any duty upon the Administrative
Agent or any other Secured Party to exercise any such powers. The
Administrative 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 Granting Party for any act or failure to act hereunder,
except as otherwise provided herein or for their own gross negligence or willful
misconduct.
7.3 Execution of Financing Statements. Pursuant to Section 9-402 of
---------------------------------
the Code and any other applicable law, each Granting Party authorizes the
Administrative Agent to file or record financing statements with respect to such
Granting Party's Security Collateral without the signature of such Granting
Party in such form and in such filing offices as the Administrative Agent
reasonably determines appropriate to perfect the security interests of the
Administrative Agent under this Agreement. A photographic or other reproduction
of this Agreement shall be sufficient as a financing statement in any
jurisdiction. The Administrative Agent agrees to notify the Grantor of any
financing or continuation statement filed by it pursuant to this Section 7.4,
provided that any failure to give such notice shall not affect the validity or
- --------
effectiveness of any such filing.
31
7.4 Authority of Administrative Agent. Each Granting Party
---------------------------------
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement or any amendment, supplement or other
modification of this Agreement shall, as between the Administrative Agent and
the Secured Parties, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Granting Parties the Administrative
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
Granting Party shall be under any obligation, or entitlement, to make any
inquiry respecting such authority.
7.5 Right Of Inspection. Upon reasonable written advance notice to
-------------------
any Grantor and as often as may reasonably be desired, the Administrative Agent
shall have reasonable access during normal business hours to all the books,
correspondence and records of such Granting Party, and the Administrative Agent
and its representatives may examine the same, and to the extent reasonable, take
extracts therefrom and make photocopies thereof, and such Granting Party agrees
to render to the Administrative Agent, at such Granting Party's reasonable cost
and expense, such clerical and other assistance as may be reasonably requested
with regard thereto. The Administrative Agent and its representatives shall
also have the right, upon reasonable advance written notice to such Granting
Party subject to any lease restrictions to enter during normal business hours
into and upon any premises owned, leased or operated by such Granting Party
where any of such Granting Party's Inventory or Equipment is located for the
purpose of inspecting the same, observing its use or otherwise protecting its
interests therein.
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 by a
written instrument executed by each affected Granting Party and the
Administrative Agent, provided that any provision of this Agreement imposing
--------
obligations on any Granting Party may be waived by the Administrative Agent in a
written instrument executed by the Administrative Agent.
8.2 Notices. All notices, requests and demands to or upon the
-------
Administrative Agent or any Granting Party hereunder shall be effected in the
manner provided for in subsection 18.2 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, unless and
----------
until such Guarantor shall change such address by notice to the Administrative
Agent given in accordance with subsection 18.2 of the Credit Agreement.
8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
---------------------------------------------------
Administrative 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.
32
No failure to exercise, nor any delay in exercising, on the part of the
Administrative 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 Administrative 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 Administrative Agent or such other 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 each Secured Party and the Administrative Agent for
all their respective reasonable 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 against such Guarantor
and the other Credit Documents to which such Guarantor is a party, including,
without limitation, the reasonable fees and disbursements of one firm of counsel
to the Secured Parties and the Administrative Agent.
(b) Each Guarantor agrees to pay, and to save the Administrative
Agent and the Secured Parties harmless from, (x) any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamp, excise,
sales or other similar taxes which may be payable or determined to be payable
with respect to any of the Security Collateral or in connection with any of the
transactions contemplated by this Agreement and (y) 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 (collectively, the "indemnified liabilities"), in each case to the
-----------------------
extent the Borrower would be required to do so pursuant to subsection 18.5 of
the Credit Agreement, and in any event excluding any taxes or other indemnified
liabilities arising from gross negligence or willful misconduct of the
Administrative Agent or any Secured Party.
(c) 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 Credit Documents.
8.5 Successors and Assigns. This Agreement shall be binding upon and
----------------------
shall inure to the benefit of the Granting Parties, the Administrative Agent and
the Secured Parties and their respective successors and assigns; provided that
--------
no Granting Party may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent.
8.6 Set-Off. Each Guarantor hereby irrevocably authorizes the
-------
Administrative Agent and each other Secured Party at any time and from time to
time without notice to such Guarantor, any other Guarantor or the Borrower, any
such notice being expressly waived by each Guarantor and by the Borrower, to the
extent permitted by applicable law, upon the occurrence and during the
continuance of an Event of Default under subsection 16.2(a) or 16.3(a) of the
Credit Agreement so long as any amount remains unpaid after it becomes due and
payable by such Guarantor hereunder, to set-off and appropriate and apply
against any such amount any and
33
all deposits (general or special, time or demand, provisional or final) (other
than the Collateral Proceeds Account and the General Fund Account), 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 Administrative Agent or such other
Secured Party to or for the credit or the account of such Guarantor, or any part
thereof in such amounts as the Administrative Agent or such other Secured Party
may elect. The Administrative Agent and each other Secured Party shall notify
such Guarantor promptly of any such set-off and the application made by the
Administrative Agent or such other 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 Administrative 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
Administrative Agent or such other 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, 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; provided that, with
--------
respect to any Pledged Stock issued by a Foreign Subsidiary, all rights, powers
and remedies provided in this Agreement may be exercised only to the extent that
they do not violate any provision of any law, rule or regulation of any
Governmental Authority applicable to any such Pledged Stock or affecting the
legality, validity or enforceability of any of the provisions of this Agreement
against the Pledgor (such laws, rules or regulations, "Applicable Law") and are
--------------
intended to be limited to extent necessary so that they will not render this
Agreement invalid, unenforceable or not entitled to be recorded, registered or
filed under the provisions of any Applicable Law.
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 Credit Documents
-----------
represent the entire agreement of the Granting Parties, the Administrative Agent
and the other Secured Parties with respect to the subject matter hereof, and
there are no promises, undertakings, representations or warranties by the
Granting Parties, the Administrative Agent or any other Secured Party relative
to subject matter hereof not expressly set forth or referred to herein or in the
other Credit Documents.
34
8.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
-------------
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS
PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES
WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
8.12 Submission To Jurisdiction; Waivers. Each party hereto hereby
-----------------------------------
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Credit Documents to
which it is a party, or for recognition and enforcement of any judgement in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such party
at its address referred to in Section 8.2 or at such other address of which
the Administrative Agent (in the case of any other party hereto) or the
Borrower (in the case of the Administrative 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 punitive damages.
8.13 Acknowledgements. Each Guarantor hereby acknowledges that:
----------------
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Credit Documents to which it is a
party;
(b) neither the Administrative Agent nor any other Secured Party has
any fiduciary relationship with or duty to any Guarantor arising out of or
in connection with this Agreement or any of the other Credit Documents, and
the relationship between the Guarantors, on the one hand, and the
Administrative Agent and the Secured Parties, on
35
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 Credit
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Secured Parties or among the Guarantors and the Secured
Parties.
8.14 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND
--------------------
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
8.15 Additional Granting Parties. Each new Domestic Subsidiary of
---------------------------
the Borrower that is required to become a party to this Agreement pursuant to
subsection 12.10(b) of the Credit Agreement shall become a Granting Party for
all purposes of this Agreement upon execution and delivery by such Subsidiary of
an Assumption Agreement in the form of Annex 1 hereto. Each existing Granting
Party that is required to become a Pledgor with respect to Capital Stock of any
new Subsidiary of the Borrower pursuant to Section 12.10(b) of the Credit
Agreement shall become a Pledgor with respect thereto upon execution and
delivery by such Granting Party of a Supplemental Agreement in the form of Annex
2 hereto.
8.16 Releases. (a) At such time as the Loans, the Reimbursement
--------
Obligations and the other Obligations then due and owing shall have been paid in
full, the Commitments have been terminated and no Letters of Credit shall be
outstanding, all Security 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 Administrative Agent and each
Granting Party hereunder shall terminate, all without delivery of any instrument
or performance of any act by any party, and all rights to the Security
Collateral shall revert to the Granting Parties. At the request and sole
expense of any Granting Party following any such termination, the Administrative
Agent shall deliver to such Granting Party any Security Collateral held by the
Administrative Agent hereunder, and execute and deliver to such Granting Party
such documents (including without limitation UCC termination statements) as such
Granting Party shall reasonably request to evidence such termination.
(b) In connection with any sale or other disposition of Security
Collateral permitted by the Credit Agreement, the Lien pursuant to this
Agreement on such sold or disposed of Security Collateral shall be automatically
released. In connection with the sale or other disposition of all of the
Capital Stock of any Guarantor or the sale or other disposition of Security
Collateral permitted under the Credit Agreement and the release of such
Guarantor from its Guarantee or the release of the Security Collateral subject
to such sale or other disposition, the Administrative Agent shall upon receipt
from the Borrower of a written request for release identifying such Guarantor or
the relevant Security Collateral and the terms of the sale or other disposition
in reasonable detail, including the price thereof and any expenses in connection
therewith, together with a certification by the Borrower stating that such
transaction is in compliance with the Credit Agreement and the other Credit
Documents, execute and deliver to the relevant Granting Party (at the sole cost
and expense of such Granting Party) all releases or
36
other documents (including without limitation UCC termination statements)
necessary or reasonably desirable for the release of such Guarantee or the Liens
created hereby on such Security Collateral, as applicable, as such Granting
Party may reasonably request.
37
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.
DYNATECH CORPORATION
By: ____________________________
Name:
Title
TELECOMMUNICATIONS TECHNIQUES CO., LLC
By: Dynatech Corporation, its sole member
By: ____________________________
Name:
Title
AIRSHOW, INC.
By: ____________________________
Name:
Title
COMCOTEC, INC.
By: ____________________________
Name:
Title
DATAVIEWS CORPORATION
By: ____________________________
Name:
Title
38
DA VINCI SYSTEMS, INC.
By: ____________________________
Name:
Title
INDUSTRIAL COMPUTER SOURCE
By: ____________________________
Name:
Title
ITRONIX CORPORATION
By: ____________________________
Name:
Title
PARALLAX GRAPHICS, INC.
By: ____________________________
Name:
Title
SYNERGISTIC SOLUTIONS, INC.
By: ____________________________
Name:
Title
TELE-PATH INSTRUMENTS, INC.
By: ____________________________
Name:
Title
39
Acknowledged and Agreed to as
of the date hereof by:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Administrative Agent
By: _______________________________
Name:
Title:
ITRONIX CORPORATION
By: ____________________________
Name:
Title
Schedule 1
----------
NOTICE ADDRESSES OF GUARANTORS
[Names of Subsidiaries]
[Address]
Attention:
Telephone:
Telecopy:
With copies to:
Attention:
Telephone:
Telecopy:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Attention: David A. Brittenham, Esq.
Telephone: (212) 909-6000
Telecopy: (212) 909-6836
Schedule 2
----------
DESCRIPTION OF PLEDGED SECURITIES
PLEDGED STOCK:
Schedule 3
----------
LOCATION OF JURISDICTION OF
ORGANIZATION AND CHIEF EXECUTIVE
OFFICE OR SOLE PLACE OF BUSINESS
Granting Party Location
-------------- --------
Schedule 4
----------
LOCATION OF INVENTORY AND EQUIPMENT
Granting Party Location
-------------- --------
Schedule 5
----------
PATENTS AND PATENT LICENSES
TRADEMARKS AND TRADEMARK LICENSES
Schedule 6
----------
EXISTING PRIOR LIENS
Schedule 7
----------
ACCOUNTS
Schedule 8
----------
CONTRACTS
Annex 1 to
Guarantee and Collateral Agreement
----------------------------------
ASSUMPTION AGREEMENT, dated as of _________ __, ____, made by
______________________________, a ______________ corporation (the "Additional
----------
Granting Party"), in favor of MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
- --------------
administrative agent (in such capacity, the "Administrative Agent") for the
--------------------
banks and other financial institutions (the "Lenders") from time to time parties
-------
to the Credit Agreement referred to below and the other Secured Parties (as
defined below). All capitalized terms not defined herein shall have the meaning
ascribed to them in such the Guarantee and Collateral Agreement referred to
below, or if not defined therein, in the Credit Agreement.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Dynatech Corporation, a Massachusetts corporation
("Dynatech"), Telecommunications Techniques Co., LLC, a Delaware limited
--------
liability company (the "Borrower"), the Lenders and the Administrative Agent are
--------
parties to a Credit Agreement, dated as of May 21, 1998 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement");
----------------
WHEREAS, in connection with the Credit Agreement, Dynatech, the
Borrower and certain of its Subsidiaries are, or are to become, parties to the
Guarantee and Collateral Agreement, dated as of May 21, 1998 (as amended,
supplemented or otherwise modified from time to time, the "Guarantee and
-------------
Collateral Agreement") in favor of the Administrative Agent, for the ratable
- --------------------
benefit of the Secured Parties (as defined in the Guarantee and Collateral
Agreement);
WHEREAS, the Additional Grantor is a member of an affiliated group of
companies that includes the Borrower and each other Granting Party to the
Guarantee and Collateral Agreement; 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 Granting Parties (including the
Additional Grantor) in connection with the operation of their respective
businesses; and the Borrower and the other Granting Parties (including the
Additional Grantor) are engaged in related businesses, and each such Granting
Party (including the Additional Grantor) will derive substantial direct and
indirect benefit from the making of the extensions of credit under the Credit
Agreement;
WHEREAS, the Credit Agreement requires the Additional Granting Party
to become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Granting Party 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:
2
1. Guarantee and Collateral Agreement. By executing and delivering
----------------------------------
this Assumption Agreement, the Additional Granting Party, as provided in Section
8.15 of the Guarantee and Collateral Agreement, hereby becomes a party to the
Guarantee and Collateral Agreement as a Granting Party thereunder with the same
force and effect as if originally named therein as a Guarantor [, Grantor and
Pledgor] [and Grantor] [and Pledgor]/1/ and, without limiting the generality of
the foregoing, hereby expressly assumes all obligations and liabilities of a
Guarantor [, Grantor and Pledgor] [and Grantor] [and Pledgor]/2/ thereunder.
The information set forth in Annex 1-A hereto is hereby added to the information
set forth in Schedules ____________ to the Guarantee and Collateral Agreement,
and such Schedules are hereby amended and modified to include such information.
The Additional Granting Party hereby represents and warrants that each of the
representations and warranties of such Additional Grantor, in its capacities as
a Guarantor [, Grantor and Pledgor] [and Grantor] [and Pledgor]/3/, contained in
Section 4 of the Guarantee and Collateral Agreement is true and correct in all
material respects 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 AND THE RIGHTS AND
-------------
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH
PRINCIPLES OR RULES WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTING PARTY]
By: _______________________________
Name:
Title:
- -------------
1. Indicate the capacities in which the Additional Grantor is becoming a
Granting Party.
2. Indicate the capacities in which the Additional Grantor is becoming a
Granting Party.
3. Indicate the capacities in which the Additional Grantor is becoming a
Granting Party.
3
Acknowledged and Agreed to as
of the date hereof by:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Administrative Agent
By: _______________________________
Name:
Title:
Annex 1-A to
Assumption Agreement
--------------------
Annex 2 to
Guarantee and Collateral Agreement
----------------------------------
SUPPLEMENTAL AGREEMENT, dated as of __________ __, ____, made by
_____________________, a ___________ corporation [(the "Additional
----------
Pledgor")][(the "Borrower")]/1/, in favor of MORGAN GUARANTY TRUST COMPANY OF
--------
NEW YORK, as administrative agent (in such capacity, the "Administrative Agent")
--------------------
for the banks and other financial institutions (the "Lenders") from time to time
-------
parties to the Credit Agreement referred to below and the other Secured Parties
(as defined below). All capitalized terms not defined herein shall have the
meaning ascribed to them in the Guarantee and Collateral Agreement referred to
below, or if not defined therein, in the Credit Agreement.
W I T N E S S E T H:
-------------------
WHEREAS, Telecommunications Techniques Co., LLC, a Delaware limited
liability company and successor by assumption to Dynatech Corporation
("Dynatech") and TTC Merger Co. LLC (the "Borrower")][the Borrower]/2/, the
--------
Lenders and the Administrative Agent are parties to a Credit Agreement, dated as
of May 21, 1998 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement");
----------------
WHEREAS, in connection with the Credit Agreement, Dynatech, the
Borrower and certain of its Subsidiaries are parties to the Guarantee and
Collateral Agreement, dated as of May 21, 1998 (as amended, supplemented or
otherwise modified from time to time, the "Guarantee and Collateral Agreement")
----------------------------------
in favor of the Administrative Agent, for the ratable benefit of the Secured
Parties (as defined in the Guarantee and Collateral Agreement);
WHEREAS, the Credit Agreement requires the [Additional
Pledgor][Borrower] to become a Pledgor under the Guarantee and Collateral
Agreement with respect to Capital Stock of a new Subsidiary of the Borrower; and
WHEREAS, the [Additional Pledgor][Borrower] has agreed to execute and
deliver this Supplemental Agreement in order to [supplement/become such a
Pledgor to] the Guarantee and Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and delivering
----------------------------------
this Supplemental Agreement, the [Additional Pledgor][Borrower], as provided in
Section 8.15 of the Guarantee and Collateral Agreement, hereby becomes a Pledgor
under the Guarantee and
- -------------
1. Use "Additional Pledgor" if other than the Borrower, and "Borrower" if the
Borrower.
2. Use the former if the Additional Pledgor, and the latter if the Borrower.
2
Collateral Agreement with respect to the shares of Capital Stock of the
Subsidiary of the Borrower listed in Annex 2-A hereto, as a Granting Party
thereunder. The information set forth in Annex 2-A hereto is hereby added to
the information set forth in Schedule 2 to the Guarantee and Collateral
Agreement, and such Schedule 2 is hereby amended and modified to include such
information.
2. GOVERNING LAW. THIS SUPPLEMENTAL AGREEMENT AND RIGHTS AND
-------------
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH
PRINCIPLES OR RULES WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.
3
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL
PLEDGOR] [BORROWER]
By: _______________________________
Name:
Title:
Acknowledged and Agreed to as
of the date hereof by:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Administrative Agent
By: _______________________________
Name:
Title: