Exhibit 10.2
CONFORMED COPY
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GUARANTEE AND COLLATERAL AGREEMENT
made by
DYNATECH 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 23, 2000
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TABLE OF CONTENTS
Page
SECTION 1. DEFINED TERMS.......................................................... 2
1.1 Definitions........................................................... 2
1.2 Other Definitional Provisions......................................... 7
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............................................. 12
3.1 Grant................................................................. 12
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........................ 14
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........................ 17
SECTION 5. COVENANTS.............................................................. 18
5.1 Covenants of Each Guarantor........................................... 18
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................................................ 19
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
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5.2.9 Maintenance of Records................................................ 21
5.2.10 Acquisition of Intellectual Property.................................. 21
5.2.11 Protection of Trade Secrets........................................... 21
5.3 Covenants of Each Pledgor............................................. 21
5.4 Covenant of Dynatech.................................................. 22
SECTION 6. REMEDIAL PROVISIONS.................................................... 23
6.1 Certain Matters Relating to Accounts.................................. 23
6.2 Communications with Obligors; Grantors Remain Liable.................. 25
6.3 Pledged Stock......................................................... 26
6.4 Proceeds to be Turned Over To Administrative Agent.................... 27
6.5 Application of Proceeds............................................... 27
6.6 Code and Other Remedies............................................... 27
6.7 Registration Rights................................................... 28
6.8 Waiver; Deficiency.................................................... 29
SECTION 7. THE ADMINISTRATIVE AGENT............................................... 30
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc........... 30
7.2 Duty of Administrative Agent.......................................... 31
7.3 Execution of Financing Statements..................................... 32
7.4 Authority of Administrative Agent..................................... 32
7.5 Right Of Inspection................................................... 32
SECTION 8. MISCELLANEOUS.......................................................... 33
8.1 Amendments in Writing................................................. 33
8.2 Notices............................................................... 33
8.3 No Waiver by Course of Conduct; Cumulative Remedies................... 33
8.4 Enforcement Expenses; Indemnification................................. 33
8.5 Successors and Assigns................................................ 34
8.6 Set-Off............................................................... 34
8.7 Counterparts.......................................................... 34
8.8 Severability.......................................................... 34
8.9 Section Headings...................................................... 35
8.10 Integration........................................................... 35
8.11 GOVERNING LAW......................................................... 35
8.12 Submission To Jurisdiction; Waivers................................... 35
8.13 Acknowledgments....................................................... 36
8.14 WAIVER OF JURY TRIAL.................................................. 36
8.15 Additional Granting Parties........................................... 36
8.16 Releases.............................................................. 36
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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
9 Filings
10 De Minimus Foreign Subsidiaries
ANNEXES
1 Assumption Agreement
2 Supplemental Agreement
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GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of May 23, 2000, made by
Dynatech Corporation, a Delaware corporation ("Dynatech"), Dynatech LLC, a
Delaware limited liability company wholly owned by Dynatech (the "Primary
Borrower") and certain Subsidiaries of the Primary 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 institutions (collectively, the "Lenders"; individually, a "Lender")
from time to time parties to the Credit Agreement, dated as of May 23, 2000 (as
amended, waived, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Primary Borrower, the German Borrowers (as
defined in the Credit Agreement; together with the Primary Borrower, the
"Borrowers"),Morgan Guaranty Trust Company of New York, as the German Term Loan
Servicing Bank, the Lenders, the Administrative Agent, Credit Suisse First
Boston, as syndication agent for the Lenders, and The Chase Manhattan Bank and
Bankers Trust Company, each in its capacity as co-documentation agent for the
Lenders.
W I T N E S S E T H:
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WHEREAS, the Borrowers are members of an affiliated group of companies
that includes Dynatech, the Primary Borrower's Active Subsidiaries which are
Domestic Subsidiaries and any Subsidiary of the Primary Borrower that becomes a
party hereto from time to time after the date hereof (the Primary Borrower,
Dynatech, the Primary Borrower's Active Subsidiaries which are Domestic
Subsidiaries and each such other Subsidiary collectively, the "Granting
Parties");
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 Primary 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:
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SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement, and the following terms 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.
"Agreement": this Guarantee and Collateral Agreement, as the same may
be amended, supplemented or otherwise modified from time to time.
"Borrower Obligations": the collective reference to the Primary
Borrower Obligations and the German Borrower Obligations.
"Code": the Uniform Commercial Code as from time to time in effect in
the State of New York.
"Collateral": as defined in Section 3.
"Collateral Account Bank": Morgan Guaranty Trust Company of New York
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
established by the relevant Grantor at an office of the Collateral Account
Bank in the name of the Administrative Agent.
"Contracts": with respect to any Grantor, all contracts, agreements,
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
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
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
Primary Borrower, including, without limitation, any license agreements
listed on Schedule 5 hereto, subject, in each 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.
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"Copyrights": with respect to any Grantor, all of such Grantor's
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.
"General Fund Account": the general fund account of the relevant
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
defined in Section 9-106 of the Uniform Commercial Code in effect in the
State of New York on the date hereof.
"German Borrower Obligations": the collective reference to the unpaid
principal and interest of the Reimbursement Term Loans if any incurred by
any German Borrower, the Preference Replacement Loans if any incurred by
any German Borrower, the Reimbursement Obligations of any German Borrower
with respect to the German L/C and all other obligations and liabilities of
any German Borrower (including, without limitation, interest accruing at
the then applicable rate provided in the Credit Agreement after the
maturity of such Reimbursement Term Loans or 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 German Borrower, whether or not a claim for post-filing or post-
petition interest is allowed in such proceeding) to the German L/C Issuing
Bank, the German Term Loan Servicing Bank or the Administrative Agent
arising out of or in connection with the German L/C, the Reimbursement Term
Loans or the Credit Agreement (other than principal or interest owing in
respect of the German Term Loans), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred.
"Granting Parties": as defined in the recitals hereto.
"Grantor": the Primary Borrower and each Domestic Subsidiary of the
Primary Borrower that from time to time becomes a party hereto.
"Guarantor Obligations": with respect to any Guarantor, the collective
reference to (i) the Borrower Obligations guaranteed by such Guarantor
pursuant to Section 2 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).
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"Guarantor": (i) with respect to the Primary Borrower Obligations,
each Granting Party other than the Primary Borrower, and (ii) with respect
to the German Borrower Obligations, each Granting Party including the
Primary Borrower.
"Hedge Agreements": as to any Grantor, all interest rate swaps, caps
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
the Pledged Securities.
"Intellectual Property": with respect to any Grantor, the collective
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
in a principal amount in excess of $1,000,000 evidencing loans made by such
Grantor to the Primary Borrower or any of its Subsidiaries.
"Issuers": the collective reference to the Persons identified on
Schedule 2 as the issuers of the Pledged Stock.
"Inventory": with respect to any Grantor, all inventory (as defined
in the Code) of such Grantor.
"Letters of Credit": the collective reference to the Domestic L/C's
and the German L/C.
"Loans": the collective reference to the "Loans" as defined in the
Credit Agreement.
"Notes": the collective reference to the "Notes" as defined in the
Credit Agreement.
"Obligations": (i) in the case of the Primary Borrower, the Primary
Borrower Obligations and the Guarantor Obligations of the Primary Borrower,
and (ii) in the case of each Guarantor other than the Primary Borrower, the
Guarantor Obligations of such Guarantor.
"Patent Licenses": with respect to any Grantor, all United States
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
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.
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"Patents": with respect to any Grantor, all of such Grantor's right,
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
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 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.
"Pledged Notes": with respect to any Pledgor, all Intercompany Notes
at any time issued to such Pledgor.
"Pledged Securities": the collective reference to the Pledged Notes
and the Pledged Stock.
"Pledged Stock": with respect to any Pledgor, the shares of Capital
Stock listed on Schedule 2 as held by such Pledgor, together with any other
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
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 Primary
Borrower), the Primary Borrower (with respect to Pledged Stock of the
entities listed on Schedule 2 hereto under the name of the Primary Borrower
and any other Pledged Securities held by the Primary Borrower) and any
other Granting Party (with respect to Pledged Securities held by such
Granting Party).
"Primary Borrower Obligations": the collective reference to the unpaid
principal of and interest on the Loans made to the Primary Borrower,
Reimbursement Obligations of the Primary Borrower in respect of any
Domestic L/C and all other obligations and liabilities of the Primary
Borrower (including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of such
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 Primary Borrower,
whether or not a claim for post-filing or
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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 (other than the German L/C) and
any Domestic L/C, or any Hedge Agreement entered into by the Primary
Borrower with any Person which is, at the time such Hedge Agreement is
entered into, a Lender or an Affiliate of any Lender, any Guarantee
Obligations of the Primary Borrower 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 Primary Borrower pursuant to the terms
of any of the foregoing agreements) and obligations in respect of over-
drafts and related liabilities owed to any Lender or any Affiliate of any
Lender and arising from treasury, depository and cash management services
or in connection with any automated clearing house transfers of funds.
"Proceeds": all "proceeds" as such term is defined in Section 9-
306(1) of the Uniform Commercial Code in effect in the State of New York on
the date hereof 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.
"Secured Parties": the collective reference to the Administrative
Agent, the Lenders (including, without limitation the Domestic L/C Issuing
Bank and the German L/C Issuing Bank) and any Affiliate of any Lender which
has entered into any Hedge Agreement with the Primary Borrower or any of
its Subsidiaries or which is the beneficiary of any Guarantee Obligation of
the Primary Borrower or any of its Subsidiaries referred to in subsection
14.3(e) of the Credit Agreement, and their respective successors,
indorsees, transferees and assigns.
"Securities Act": the Securities Act of 1933, as amended from time to
time.
"Security Collateral": as defined in Section 3.
"Trade Secrets": with respect to any Grantor, all of such Grantor's
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.
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"Trademark Licenses": with respect to any Grantor, all United States
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
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
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
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
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.
1.2 Other Definitional Provisions. The words "hereof," "herein", "hereto"
and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section, 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.
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(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. Each of the Guarantors (other than the Primary Borrower)
hereby, jointly and 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 Primary Borrower when due and
payable (whether at the stated maturity, by acceleration or otherwise) of the
Primary Borrower Obligations. Each of the Guarantors (including the Primary
Borrower) hereby, jointly and 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 each German Borrower
when due and payable (whether at the stated maturity, by acceleration or
otherwise) of the German 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 guaranteed by
it hereunder 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 Borrowers 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.
(e) No payment made by any of the Borrowers, 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 any of the Borrowers, 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 any 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
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(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
guaranteed by it hereunder 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 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 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 any 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 any
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 Borrowers 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 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 any of the Borrowers 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 any of the Borrowers 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 Credit 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 any 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, (d) any
exchange, taking, or release of Security Collateral, (e) any change in the
structure or existence of any
11
Borrower, (f) any application of Security Collateral to Obligations or (g) any
other circumstance whatsoever (other than payment in full of the Borrower
Obligations guaranteed by it hereunder) (with or without notice to or knowledge
of the applicable Borrower or such Guarantor) that constitutes, or might be
construed to constitute, an equitable or legal discharge of such Borrower for
such 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 relevant Borrower, any other Guarantor
or any other Person or against any collateral security or guarantee for the
Borrower Obligations guaranteed by such Guarantor hereunder 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 such 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 such 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 of any Guarantor 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
guaranteed by such Guarantor hereunder 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 any
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, any
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 the
currency in which the relevant Borrower Obligations are outstanding pursuant to
the Credit Agreement, at the applicable Payment Office or such at other address
as may be designated in writing by the Administrative Agent to such Guarantor
from time to time in accordance with subsection 17.2 of the Credit Agreement.
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SECTION 3. GRANT OF SECURITY INTEREST
3.1 Grant. Each Granting Party that is a Grantor hereby grants, subject to
existing licenses to use the Copyrights, Patents, Trademarks and Trade Secrets
granted by such Grantor in the ordinary course of its business, to the
Administrative Agent, for the ratable benefit of the Secured Parties, a security
interest in all of the Collateral of such 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. The term "Collateral", as to any Grantor,
means the following property now owned or at any time hereafter acquired by such
Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interest, except as provided in Section 3.3:
(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. 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.
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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
Primary 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;
(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;
(c) any Capital Stock of WWG in excess of 65% of any series of such
Capital Stock;
(d) any Capital Stock of Holdings I GmbH held by the Primary Borrower
(so long as such Capital Stock is equal to or less than 1% of the Capital
Stock of Holdings I GmbH);
(e) any Capital Stock of any Foreign Subsidiary of WWG; or
(f) Capital Stock of any Foreign Subsidiary listed in Schedule 10 (so
long as such Capital Stock is not required to be pledged hereunder pursuant
to subsections 12.9(c) and 12.9(d) 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
Borrowers 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 Primary Borrower's
knowledge shall, for the purposes of this Section 4.1, be deemed to be a
reference to such Guarantor's knowledge.
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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
Borrowers 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
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:
15
"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:
(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;
16
(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.
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:
17
4.3.1 Except as provided in Section 3.3, 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 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
18
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 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. 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.
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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.
(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;
20
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.
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.
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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 herein in respect of any
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, another 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.
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 (subject to Section 3.3 and 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 Primary 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
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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 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.
5.4 Covenant of Dynatech. Dynatech covenants and agrees with the
Administrative Agent and the other Secured Parties that, from and after the date
of this Agreement until 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 that
Dynatech shall not conduct or otherwise engage, in any business or operations
other than: (i) the Transaction, the German Borrower Merger and the other
transactions contemplated by the Transaction Documents or the Existing
Transaction Documents or the provision of administrative, legal, accounting and
management services to or on behalf of any of its Subsidiaries, (ii) the
ownership of the Capital Stock or other interests of its Subsidiaries, the sale
and transfer of such ownership interests (to the extent not otherwise prohibited
by the Credit Agreement), and the exercise of rights and performance of
obligations in connection therewith, (iii) the entry into, and exercise of
rights and performance of obligations in respect of, (A) the Transaction
Documents, the Existing Transaction Documents, this Agreement and any other
Credit Document to which Dynatech is a party, any other agreement to which
Dynatech is a party on the date hereof, the Senior Subordinated Note Indenture
and the Senior Subordinated Notes or any guarantee thereof, and any guarantee of
Indebtedness or other obligations of any of its Subsidiaries permitted pursuant
to
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the Credit Documents, in each case as amended, supplemented, waived or otherwise
modified from time to time, and any refinancings, refundings, renewals or
extensions thereof, (B) contracts and agreements with officers, directors and
employees of Dynatech or a Subsidiary thereof relating to their employment or
directorships, (C) insurance policies and related contracts and agreements, and
(D) equity subscription agreements, registration rights agreements, voting and
other stockholder agreements, engagement letters, underwriting agreements and
other agreements in respect of its equity securities or any offering, issuance
or sale thereof, including but not limited to in respect of the Management
Subscription Agreements, (iv) the offering, issuance, sale and repurchase or
redemption of, and dividends or distributions on, its equity securities, (v) the
filing of registration statements, and compliance with applicable reporting and
other obligations, under federal, state or other securities laws, (vi) the
listing of its equity securities and compliance with applicable reporting and
other obligations in connection therewith, (vii) the retention of (and the entry
into, and exercise of rights and performance of obligations in respect of,
contracts and agreements with) transfer agents, private placement agents,
underwriters, counsel, accountants and other advisors and consultants, (viii)
the performance of obligations under and compliance with its certificate of
incorporation and by-laws, or any applicable law, ordinance, regulation, rule,
order, judgment, decree or permit, including, without limitation, as a result of
or in connection with the activities of its Subsidiaries, (ix) the incurrence
and payment of its operating and business expenses and any taxes for which it
may be liable, (x) making loans to or other Investments in, or incurrence of
Indebtedness to, its Subsidiaries, (xi) the ownership of, and exercise of rights
and performance of obligations in respect of, Intellectual Property (as defined
in the Credit Agreement for the purposes of this subsection only) and foreign
patents, trademarks, trade names, copyrights, technology, know-how and processes
and licensing such Intellectual Property and foreign patents, trademarks, trade
names, copyrights, technology, know-how and processes (other than such
Intellectual Property and foreign patents, trademarks, trade names, copyrights,
technology, know-how and processes which is material to the business of the
Primary Borrower and its Subsidiaries, which Intellectual Property and foreign
patents, trademarks, trade names, copyrights, technology, know-how and processes
shall be owned by the Primary Borrower and its Subsidiaries) and (xii) other
activities incidental or related to the foregoing.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Accounts. 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.
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(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 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
25
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. 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 15.2(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 15.2(a) of the 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. 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.
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(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 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.
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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 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
28
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 15.3 of the Credit
Agreement to cash collateralize Domestic 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 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
29
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 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 Primary
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 (other than the German Term Loans, but including any
Reimbursement Term Loans), Reimbursement Obligations (including, without
limitation, any Domestic L/C Obligations which subsequently become Reimbursement
Obligations) constituting Obligations of such Granting Party 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.
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SECTION 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. 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 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,
31
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.
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
32
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 relevant Granting
Party of any financing or continuation statement filed by it pursuant to this
Section 7.3, provided that any failure to give such notice shall not affect the
validity or effectiveness of any such filing.
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 Grantor, 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 Grantor agrees to
render to the Administrative Agent, at such Grantor'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 Grantor subject to any
lease restrictions to enter during normal business hours into and upon any
premises owned, leased or operated by such
33
Grantor where any of such Grantor'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 17.2 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 17.2 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. 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,
34
enforcement, performance and administration of this Agreement (collectively, the
"indemnified liabilities"), in each case to the extent the Primary Borrower
would be required to do so pursuant to subsection 17.5 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 any Borrower, any
such notice being expressly waived by each Guarantor and by each Borrower, to
the extent permitted by applicable law, upon the occurrence and during the
continuance of an Event of Default under subsection 15.2(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 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
35
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 the 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.
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.
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 Primary 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
36
(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 Acknowledgments. 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 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
Primary Borrower that is required to become a party to this Agreement pursuant
to subsection 12.9(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 Primary Borrower pursuant to Section 12.9(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, the Administrative Agent shall, upon
receipt from the Primary Borrower of a written request for the release of such
Guarantor from its Guarantee or the release of the Security Collateral subject
to such sale or other disposition, 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 Primary 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 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.
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: /s/ Allan M. Kline
----------------------------------------
Name: Allan M. Kline
Title: Corporate Vice President,
Chief Financial Officer and
Treasurer
DYNATECH LLC
By: /s/ Allan M. Kline
----------------------------------------
Name: Allan M. Kline
Title: Vice President
AIRSHOW, INC.
By: /s/ Allan M. Kline
----------------------------------------
Name: Allan M. Kline
Title: Vice President
APPLIED DIGITAL ACCESS, INC.
By: /s/ Allan M. Kline
----------------------------------------
Name: Allan M. Kline
Title: Vice President
DATAVIEWS LCC
By: /s/ Allan M. Kline
----------------------------------------
Name: Allan M. Kline
Title: Vice President
DATAVIEWS INTERNATIONAL, INC.
By: /s/ Allan M. Kline
----------------------------------------
Name: Allan M. Kline
Title: Vice President
DA VINCI SYSTEMS, INC.
By: /s/ Allan M. Kline
----------------------------------------
Name: Allan M. Kline
Title: Vice President
ICSADVENT CORPORATION
By: /s/ Allan M. Kline
----------------------------------------
Name: Allan M. Kline
Title: Vice President
ITRONIX CORPORATION
By: /s/ Allan M. Kline
----------------------------------------
Name: Allan M. Kline
Title: Vice President
PARALLAX GRAPHICS, INC.
By: /s/ Allan M. Kline
----------------------------------------
Name: Allan M. Kline
Title: Vice President
SIERRA DESIGN LABS
By: /s/ Allan M. Kline
----------------------------------------
Name: Allan M. Kline
Title: Vice President
TELE-PATH INSTRUMENTS, INC.
By: /s/ Allan M. Kline
----------------------------------------
Name: Allan M. Kline
Title: Vice President
W&G EQUITIES, INC.
By: /s/ Allan M. Kline
----------------------------------------
Name: Allan M. Kline
Title: Vice President
WANDEL & GOLTERMANN, INC.
By: /s/ Allan M. Kline
----------------------------------------
Name: Allan M. Kline
Title: Vice President
WAVETEK WANDEL GOLTERMANN LLC
By: Dynatech LLC, its sole member
By: /s/ Allan M. Kline
----------------------------------------
Name: Allan M. Kline
Title: Vice President
WANDEL & GOLTERMANN A.T.E. SYSTEMS, INC.
By: /s/ Allan M. Kline
----------------------------------------
Name: Allan M. Kline
Title: Vice President
WANDEL & GOLTERMANN TECHNOLOGIES, INC.
By: /s/ Allan M. Kline
----------------------------------------
Name: Allan M. Kline
Title: Vice President
WAVETEK U.S. INC.
By: /s/ Allan M. Kline
----------------------------------------
Name: Allan M. Kline
Title: Vice President
WESTCOMPCO CORPORATION
By: /s/ Allan M. Kline
----------------------------------------
Name: Allan M. Kline
Title: Vice President
Acknowledged and Agreed to as
of the date hereof by:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Administrative Agent
By: /s/ Colleen B. Galle
-----------------------------------
Name: Colleen B. Galle
Title: Vice President
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
Locations
---------
Schedule 5
----------
PATENTS AND PATENT LICENSES
TRADEMARKS AND TRADEMARK LICENSES
Schedule 6
----------
EXISTING PRIOR LIENS
Schedule 7
----------
ACCOUNTS
Schedule 8
----------
CONTRACTS
Schedule 9
----------
FILINGS
Schedule 10
-----------
DE MINIMUS FOREIGN SUBSIDIARIES
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 LLC, a Delaware limited liability company (the
"Primary Borrower"), the German Borrowers named therein, the Lenders, the
Administrative Agent, Morgan Guaranty Trust Company of New York, as German Term
Loan Servicing Bank, Credit Suisse First Boston, as Syndication Agent, and The
Chase Manhattan Bank and Bankers Trust Company, each as Co-Documentation Agent,
are parties to a Credit Agreement, dated as of May 23, 2000 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement");
WHEREAS, in connection with the Credit Agreement, Dynatech
Corporation, a Delaware corporation ("Dynatech"), the Primary Borrower and
certain of its Subsidiaries are, or are to become, parties to the Guarantee and
Collateral Agreement, dated as of May 23, 2000 (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 Granting Party is a member of an affiliated
group of companies that includes the Borrowers and each other Granting Party;
the proceeds of the extensions of credit under the Credit Agreement will be used
in part to enable the Borrowers to make valuable transfers to one or more of the
other Granting Parties (including the Additional Granting Party) in connection
with the operation of their respective businesses; and the Borrowers and the
other Granting Parties (including the Additional Granting Party) are engaged in
related businesses, and each such Granting Party (including the Additional
Granting Party) 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;
2
NOW, THEREFORE, IT IS AGREED:
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.
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:
Acknowledged and Agreed to as
of the date hereof by:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Administrative Agent
By: _______________________________
Name:
Title:
- - ---------------------------
/1/ Indicate the capacities in which the Additional Granting Party is becoming
a Grantor.
/2/ Indicate the capacities in which the Additional Granting Party is becoming
a Grantor.
/3/ Indicate the capacities in which the Additional Granting Party is becoming
a Grantor.
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 "Primary 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, Dynatech LLC, a Delaware limited liability company (the
"Primary Borrower"), the German Borrowers named therein, the Lenders, the
Administrative Agent, Morgan Guaranty Trust Company of New York, as German Term
Loan Servicing Bank, Credit Suisse First Boston, as Syndication Agent, and The
Chase Manhattan Bank and Bankers Trust Company, each as Co-Documentation Agent,
are parties to a Credit Agreement, dated as of May 23, 2000 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement");
WHEREAS, in connection with the Credit Agreement, Dynatech
Corporation, a Delaware corporation ("Dynatech"), the Primary Borrower and
certain of its Subsidiaries are parties to the Guarantee and Collateral
Agreement, dated as of May 23, 2000 (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 Primary Borrower; and
WHEREAS, the [Additional Pledgor][Primary Borrower] has agreed to
execute and deliver this Supplemental Agreement in order to [supplement/become
such a Pledgor to] the Guarantee and Collateral Agreement;
- - -----------------------
/1/ Use "Additional Pledgor" if other than the Primary Borrower, and "Primary
Borrower" if the Primary Borrower.
2
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and delivering
this Supplemental Agreement, the [Additional Pledgor][Primary Borrower], as
provided in Section 8.15 of the Guarantee and Collateral Agreement, hereby
becomes a Pledgor under the Guarantee and Collateral Agreement with respect to
the shares of Capital Stock of the Subsidiary of the Primary 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.
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: