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EXHIBIT 10.1
EXECUTION COPY
CREDIT AGREEMENT
among
RBS GLOBAL, INC.,
REXNORD CORPORATION,
VARIOUS LENDERS,
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as ADMINISTRATIVE AGENT,
GENERAL ELECTRIC CAPITAL CORPORATION
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Co-Documentation Agents,
and
DEUTSCHE BANK SECURITIES INC.
and
CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch,
as JOINT LEAD ARRANGERS and JOINT BOOK RUNNERS
--------------------------------
Dated as of November 25, 2002
--------------------------------
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TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit.........................................................................1
1.01 Commitments.........................................................................................1
1.02 Minimum Borrowing Amounts, etc......................................................................3
1.03 Notice of Borrowing.................................................................................3
1.04 Disbursement of Funds...............................................................................4
1.05 Notes...............................................................................................5
1.06 Conversions.........................................................................................6
1.07 Pro Rata Borrowings.................................................................................7
1.08 Interest............................................................................................7
1.09 Interest Periods....................................................................................8
1.10 Increased Costs, Illegality, etc....................................................................9
1.11 Compensation.......................................................................................11
1.12 Change of Lending Office...........................................................................11
1.13 Replacement of Lenders.............................................................................12
SECTION 2. Letters of Credit.................................................................................13
2.01 Letters of Credit..................................................................................13
2.02 Letter of Credit Requests; Notices of Issuance.....................................................13
2.03 Agreement to Repay Letter of Credit Drawings.......................................................14
2.04 Letter of Credit Participations....................................................................14
2.05 Increased Costs....................................................................................17
SECTION 3. Fees; Commitments.................................................................................17
3.01 Fees...............................................................................................17
3.02 Voluntary Reduction of Commitments.................................................................18
3.03 Mandatory Reductions of Commitments, etc...........................................................19
SECTION 4. Payments..........................................................................................19
4.01 Voluntary Prepayments..............................................................................19
4.02 Mandatory Prepayments..............................................................................21
4.03 Method and Place of Payment........................................................................24
4.04 Net Payments.......................................................................................24
SECTION 5. Conditions Precedent..............................................................................26
5.01 Conditions Precedent to the Initial Borrowing Date.................................................26
5.02 Conditions Precedent to All Credit Events..........................................................31
SECTION 6. Representations, Warranties and Agreements........................................................32
6.01 Corporate Status...................................................................................32
6.02 Corporate Power and Authority......................................................................32
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(i)
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6.03 No Violation.......................................................................................32
6.04 Litigation.........................................................................................33
6.05 Use of Proceeds; Margin Regulations................................................................33
6.06 Governmental Approvals.............................................................................33
6.07 Investment Company Act.............................................................................33
6.08 Public Utility Holding Company Act.................................................................34
6.09 True and Complete Disclosure.......................................................................34
6.10 Financial Condition; Financial Statements..........................................................34
6.11 Security Interests.................................................................................35
6.12 Consummation of Certain Transactions...............................................................36
6.13 Tax Returns and Payments...........................................................................36
6.14 Compliance with ERISA..............................................................................36
6.15 Subsidiaries.......................................................................................38
6.16 Intellectual Property..............................................................................38
6.17 Environmental Matters..............................................................................38
6.18 Properties.........................................................................................39
6.19 Labor Relations....................................................................................39
6.20 Compliance with Statutes, etc......................................................................39
6.21 Subordination......................................................................................39
6.22 Capitalization.....................................................................................40
6.23 Legal Names; Type of Organization (and Whether a Registered Organization); Jurisdiction of
Organization; etc...............................................................................40
SECTION 7. Affirmative Covenants.............................................................................40
7.01 Information Covenants..............................................................................40
7.02 Books, Records and Inspections.....................................................................43
7.03 Insurance..........................................................................................43
7.04 Payment of Taxes...................................................................................43
7.05 Corporate Franchises...............................................................................44
7.06 Compliance with Statutes, etc......................................................................44
7.07 ERISA..............................................................................................44
7.08 Good Repair........................................................................................45
7.09 End of Fiscal Years; Fiscal Quarters...............................................................45
7.10 Additional Security; Further Assurances............................................................46
7.11 Compliance with Environmental Laws.................................................................47
7.12 Permitted Acquisitions.............................................................................48
SECTION 8. Negative Covenants................................................................................50
8.01 Changes in Business................................................................................50
8.02 Consolidation, Merger, Sale or Purchase of Assets, etc.............................................50
8.03 Liens..............................................................................................52
8.04 Indebtedness.......................................................................................54
8.05 Consolidated Capital Expenditures..................................................................56
8.06 Advances, Investments and Loans....................................................................57
8.07 Limitation on Creation of Subsidiaries.............................................................59
8.08 Modifications; Prepayments; etc....................................................................60
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(ii)
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8.09 Dividends, etc.....................................................................................61
8.10 Transactions with Affiliates.......................................................................62
8.11 Consolidated Interest Coverage Ratio...............................................................63
8.12 Consolidated Leverage Ratio........................................................................64
8.13 Limitation On Issuance of Stock....................................................................65
8.14 Change of Legal Names; Type of Organization (and Whether a Registered Organization); Jurisdiction
of Organization; etc............................................................................65
8.15 No Designation of Other Indebtedness as "Designated Senior Indebtedness"...........................66
8.16 Limitations on Restrictions Affecting Subsidiaries.................................................66
SECTION 9. Events of Default.................................................................................66
9.01 Payments...........................................................................................66
9.02 Representations, etc...............................................................................66
9.03 Covenants..........................................................................................67
9.04 Default Under Other Agreements.....................................................................67
9.05 Bankruptcy, etc....................................................................................67
9.06 ERISA..............................................................................................68
9.07 Security Documents.................................................................................68
9.08 Guaranty...........................................................................................68
9.09 Judgments..........................................................................................69
9.10 Change of Control..................................................................................69
SECTION 10. Definitions and Accounting Terms.................................................................69
10.01 Defined Terms.....................................................................................69
10.02 Certain Pro Forma Calculations...................................................................100
SECTION 11. The Agents......................................................................................102
11.01 Appointment......................................................................................102
11.02 Nature of Duties.................................................................................102
11.03 Lack of Reliance on the Agents...................................................................102
11.04 Certain Rights of the Agents.....................................................................103
11.05 Reliance.........................................................................................103
11.06 Indemnification..................................................................................103
11.07 The Agents in Their Individual Capacity..........................................................103
11.08 Holders..........................................................................................104
11.09 Resignation......................................................................................104
11.10 Releases in Connection With Grants of Certain Liens, etc.........................................105
SECTION 12. Miscellaneous...................................................................................105
12.01 Payment of Expenses, etc.........................................................................105
12.02 Right of Setoff..................................................................................106
12.03 Notices..........................................................................................106
12.04 Benefit of Agreement; Assignments; Participations................................................107
12.05 No Waiver; Remedies Cumulative...................................................................109
12.06 Payments Pro Rata................................................................................109
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(iii)
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12.07 Calculations; Computations.......................................................................110
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL...........................111
12.09 Counterparts.....................................................................................112
12.10 Effectiveness....................................................................................112
12.11 Headings Descriptive.............................................................................112
12.12 Amendment or Waiver, etc.........................................................................112
12.13 Survival.........................................................................................114
12.14 Domicile of Loans................................................................................114
12.15 Confidentiality..................................................................................114
12.16 Lender Register..................................................................................115
12.17 Acquisition of Changzhou Hansen Jianglang Transmissions Co. Ltd and Brook Hansen S.A.............115
12.18 Limitation on Certain Enforcement Actions........................................................116
SECTION 13. Holdings Guaranty...............................................................................116
13.01 The Guaranty.....................................................................................116
13.02 Bankruptcy.......................................................................................117
13.03 Nature of Liability..............................................................................117
13.04 Independent Obligation...........................................................................117
13.05 Authorization....................................................................................118
13.06 Reliance.........................................................................................118
13.07 Subordination....................................................................................118
13.08 Waiver...........................................................................................119
13.09 Enforcement......................................................................................119
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SCHEDULE I -- Commitments
SCHEDULE II -- Lender Addresses
SCHEDULE III -- Real Properties
SCHEDULE IV -- Existing Indebtedness
SCHEDULE V -- ERISA
SCHEDULE VI -- Subsidiaries
SCHEDULE VII -- Legal Names, Type of Organization, Jurisdiction of
Organization
SCHEDULE VIII -- Existing Liens
SCHEDULE IX -- Existing Investments and Other Investments in Connection
with the Acquisition
EXHIBIT A -- Form of Notice of Borrowing
EXHIBIT B-1 -- Form of Term Note
EXHIBIT B-2 -- Form of Revolving Note
EXHIBIT B-3 -- Form of Swingline Note
EXHIBIT C -- Form of Letter of Credit Request
EXHIBIT D -- Form of Section 4.04 Certificate
EXHIBIT E -- Form of Opinion of Latham & Watkins
EXHIBIT F -- Form of Officers' Certificate
(iv)
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EXHIBIT G -- Form of Pledge Agreement
EXHIBIT H -- Form of Security Agreement
EXHIBIT I -- Form of Solvency Certificate
EXHIBIT J -- Form of Subsidiaries Guaranty
EXHIBIT K -- Form of Subordination Agreement
EXHIBIT L -- Form of Joinder Agreement
EXHIBIT M -- Form of Assignment Agreement
(v)
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CREDIT AGREEMENT, dated as of November 25, 2002, among RBS GLOBAL,
INC., a Delaware corporation ("Holdings"), REXNORD CORPORATION, a Delaware
corporation (the "Borrower"), the Lenders party hereto from time to time,
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent (in such capacity,
the "Administrative Agent"), GENERAL ELECTRIC CAPITAL CORPORATION and WACHOVIA
BANK, NATIONAL ASSOCIATION, as Co-Documentation Agents, and DEUTSCHE BANK
SECURITIES INC. and CREDIT SUISSE FIRST BOSTON, acting through its Cayman
Islands Branch, as Joint Lead Arrangers and Joint Book Runners (in such
capacities, the "Joint Lead Arrangers" and, each, a "Joint Lead Arranger") (all
capitalized terms used herein and defined in Section 10 are used herein as
therein defined).
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions herein set
forth, the Lenders are willing to make available to the Borrower the credit
facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. AMOUNT AND TERMS OF CREDIT.
1.01 COMMITMENTS. Subject to and upon the terms and conditions herein
set forth, each Lender severally agrees to make a loan or loans (each, a "Loan"
and, collectively, the "Loans") to the Borrower, which Loans shall be drawn, to
the extent such Lender has a Commitment under such Facility, under the Term
Facility and the Revolving Facility, as set forth below:
(a) Loans under the Term Facility (each, a "Term Loan" and,
collectively, the "Term Loans") (i) shall be made only pursuant to one drawing
on the Initial Borrowing Date, (ii) except as hereinafter provided, may, at the
option of the Borrower, be incurred and maintained as, and/or converted into,
Base Rate Loans or Eurodollar Loans, provided that (A) all Term Loans made as
part of the same Borrowing shall, unless specifically provided herein, consist
of Term Loans of the same Type and (B) unless either the Administrative Agent
and each Joint Lead Arranger otherwise agrees in their sole discretion or the
Syndication Date has occurred (at which time this clause (B) shall no longer be
applicable), prior to the 60th day following the Initial Borrowing Date, Term
Loans may only be incurred and maintained as, and/or converted into, Eurodollar
Loans so long as all such outstanding Eurodollar Loans, together with all
outstanding Revolving Loans that are maintained as Eurodollar Loans, are subject
to a single Interest Period (which, unless the Administrative Agent otherwise
agrees in its sole discretion, may not begin prior to the third Business Day
after the Initial Borrowing Date) of one week, two weeks or one month which, in
any such case, begins and ends on the same day, and (iv) shall not exceed in
aggregate principal amount for any Lender at the time of incurrence thereof the
Term Commitment, if any, of such Lender as in effect on such date. Once repaid,
Term Loans may not be reborrowed.
(b) Loans under the Revolving Facility (each, a "Revolving Loan"
and, collectively, the "Revolving Loans") (i) shall be made at any time and from
time to time on and after the Initial Borrowing Date and prior to the RF
Maturity Date, (ii) except as hereinafter
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provided, may, at the option of the Borrower, be incurred and maintained as,
and/or converted into, Base Rate Loans or Eurodollar Loans, provided that (A)
all Revolving Loans made as part of the same Borrowing shall, unless otherwise
specifically provided herein, consist of Revolving Loans of the same Type and
(B) unless either the Administrative Agent and each Joint Lead Arranger
otherwise agrees in their sole discretion or the Syndication Date has occurred
(at which time this clause (B) shall no longer be applicable), prior to the 60th
day following the Initial Borrowing Date, Revolving Loans may only be incurred
and maintained as, and/or converted into, Eurodollar Loans so long as all such
outstanding Eurodollar Loans, together with all outstanding Term Loans that are
maintained as Eurodollar Loans, are subject to a single Interest Period (which,
unless the Administrative Agent otherwise agrees in its sole discretion, may not
begin prior to the third Business Day after the Initial Borrowing Date) of one
week, two weeks or one month which, in any such case, begins and ends on the
same day, (iii) may be repaid and reborrowed in accordance with the provisions
hereof and (iv) shall not exceed (giving effect to any incurrence thereof and
the use of the proceeds of such incurrence) for any Lender in aggregate
principal amount at any time outstanding that amount which, when combined with
such Lender's Adjusted RF Percentage of the sum of (x) the Letter of Credit
Outstandings at such time and (y) the outstanding principal amount of Swingline
Loans at such time, equals the Revolving Commitment of such Lender.
(c) Subject to and upon the terms and conditions herein set forth,
the Swingline Lender agrees to make at any time and from time to time on and
after the Initial Borrowing Date and prior to the Swingline Expiry Date, a loan
or loans to the Borrower (each, a "Swingline Loan," and, collectively, the
"Swingline Loans"), which Swingline Loans (i) shall be made and maintained as
Base Rate Loans, (ii) may be repaid and reborrowed in accordance with the
provisions hereof, (iii) shall not exceed (giving effect to any incurrence
thereof and the use of the proceeds of such incurrence) in aggregate principal
amount at any time outstanding that amount which, when combined with the
aggregate principal amount of all Revolving Loans made by Non-Defaulting Lenders
then outstanding and the Letter of Credit Outstandings at such time, equals the
Adjusted Total Revolving Commitment then in effect (after giving effect to any
changes on such date) and (iv) shall not exceed in aggregate principal amount at
any time outstanding the Maximum Swingline Amount. Notwithstanding anything to
the contrary contained in this Section 1.01(c), the Swingline Lender shall not
make any Swingline Loan after it has received written notice from the Required
Lenders stating that one or more of the applicable conditions to Credit Events
specified in Section 5 are not then satisfied until such time as all such
conditions are satisfied.
(d) On any Business Day, the Swingline Lender may, in its sole
discretion, give notice to the RF Lenders that its outstanding Swingline Loans
shall be funded with a Borrowing of Revolving Loans (PROVIDED that each such
notice shall be deemed to have been automatically given upon the occurrence of
an Event of Default under Section 9.05 or upon the exercise of any of the
remedies provided in the last paragraph of Section 9), in which case a Borrowing
of Revolving Loans constituting Base Rate Loans (each such Borrowing, a
"Mandatory Borrowing") shall be made on the immediately succeeding Business Day
by all RF Lenders PRO RATA based on each RF Lender's Adjusted RF Percentage, and
the proceeds thereof shall be applied directly to repay the Swingline Lender for
such outstanding Swingline Loans. Each RF Lender hereby irrevocably agrees to
make Base Rate Loans upon one Business Day's prior notice pursuant to each
Mandatory Borrowing in the amount and in the manner specified in the
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preceding sentence and on the date specified in writing by the Swingline Lender
notwithstanding: (i) that the amount of the Mandatory Borrowing may not comply
with the Minimum Borrowing Amount otherwise required hereunder, (ii) whether any
conditions specified in Section 5.02 are then satisfied, (iii) whether a Default
or an Event of Default has occurred and is continuing, (iv) the date of such
Mandatory Borrowing and (v) the amount of the Total Revolving Commitment at such
time. In the event that any Mandatory Borrowing cannot for any reason be made on
the date otherwise required above (including, without limitation, as a result of
the commencement of a proceeding under the Bankruptcy Code in respect of the
Borrower), each RF Lender hereby agrees that it shall forthwith purchase from
the Swingline Lender (without recourse or warranty) such assignment of the
outstanding Swingline Loans as shall be necessary to cause the RF Lenders to
share in such Swingline Loans ratably based upon their respective Adjusted RF
Percentages, PROVIDED that all interest payable on the Swingline Loans shall be
for the account of the Swingline Lender until the date the respective assignment
is purchased and, to the extent attributable to the purchased assignment, shall
be payable to the RF Lender purchasing same from and after such date of
purchase.
1.02 MINIMUM BORROWING AMOUNTS, ETC. The aggregate principal amount of
each Borrowing shall not be less than the Minimum Borrowing Amount. More than
one Borrowing may be incurred on any day, provided that at no time shall there
be outstanding more than fifteen Borrowings of Eurodollar Loans.
1.03 NOTICE OF BORROWING. (a) Whenever the Borrower desires to incur
Loans under any Facility (excluding Borrowings of Swingline Loans and Mandatory
Borrowings), it shall give the Administrative Agent at the Notice Office, prior
to 12:00 Noon (New York time), at least three Business Days' prior written
notice (or telephonic notice promptly confirmed in writing) of each proposed
incurrence of Eurodollar Loans and at least one Business Day's prior written
notice (or telephonic notice promptly confirmed in writing) of each proposed
incurrence of Base Rate Loans. Each such notice (each, a "Notice of Borrowing")
shall be in the form of Exhibit A and shall be irrevocable and shall specify (i)
the Facility pursuant to which such incurrence is being made, (ii) the aggregate
principal amount of the Loans to be made pursuant to such incurrence, (iii) the
date of incurrence (which shall be a Business Day) and (iv) whether the
respective Borrowing shall consist of Base Rate Loans or Eurodollar Loans and,
if Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall promptly give each Lender with commitments pursuant
to the respective Facility written notice (or telephonic notice promptly
confirmed in writing) of each proposed incurrence of Loans, of such Lender's
proportionate share thereof and of the other matters covered by the Notice of
Borrowing.
(b) (i) Whenever the Borrower desires to make a Borrowing of
Swingline Loans hereunder, it shall give the Swingline Lender, prior to 2:00
P.M. (New York time) on the day such Swingline Loan is to be made, written
notice (or telephonic notice promptly confirmed in writing) of each Swingline
Loan to be made hereunder. Each such notice shall be irrevocable and shall
specify in each case (x) the date of such Borrowing (which shall be a Business
Day) and (y) the aggregate principal amount of the Swingline Loan to be made
pursuant to such Borrowing.
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(ii) Mandatory Borrowings shall be made upon the notice specified
in Section 1.01(d), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of Mandatory Borrowings as set forth in such
Section 1.01(d).
(c) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent, the Swingline Lender (in the case of a Borrowing of
Swingline Loans), or the respective Letter of Credit Issuer (in the case of the
issuance of Letters of Credit), as the case may be, may prior to receipt of
written confirmation act without liability upon the basis of and consistent with
such telephonic notice, believed by the Administrative Agent, the Swingline
Lender or the respective Letter of Credit Issuer in good faith to be from an
Authorized Officer of the Borrower. In each such case, the Borrower hereby
waives the right to dispute the Administrative Agent's, the Swingline Lender's
or the respective Letter of Credit Issuer's record of the terms of such
telephonic notice, unless such record reflects gross negligence or willful
misconduct on the part of the Administrative Agent, the Swingline Lender or the
respective Letter of Credit Issuer, as the case may be.
1.04 DISBURSEMENT OF FUNDS. (a) No later than 1:00 P.M. (New York
time) on the date specified in each Notice of Borrowing or 2:00 P.M. (New York
time) on the date specified in a notice described in Section 1.03(b)(i), each
Lender with a Commitment under the respective Facility will make available its
PRO RATA share of each Borrowing requested to be made on such date or in the
case of Swingline Loans, the Swingline Lender shall make available the full
amount thereof in the manner provided below. All such amounts shall be made
available to the Administrative Agent in Dollars and immediately available funds
at the Payment Office and the Administrative Agent promptly will make available
to the Borrower by depositing to its account at the Payment Office or as
otherwise directed in the applicable Notice of Borrowing the aggregate of the
amounts so made available in the type of funds received. Unless the
Administrative Agent shall have been notified by any Lender prior to the date of
the proposed incurrence that such Lender does not intend to make available to
the Administrative Agent its portion of the Borrowing or Borrowings to be made
on such date, the Administrative Agent may assume that such Lender has made such
amount available to the Administrative Agent on such date, and the
Administrative Agent, in reliance upon such assumption, may (in its sole
discretion and without any obligation to do so) make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made available
to the Administrative Agent by such Lender and the Administrative Agent has made
available same to the Borrower, the Administrative Agent shall be entitled to
recover such corresponding amount from such Lender. If such Lender does not pay
such corresponding amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent may notify the Borrower, and, upon receipt of
such notice, the Borrower shall promptly pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to recover
on demand from such Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrower to the
date such corresponding amount is recovered by the Administrative Agent, at a
rate per annum equal to (x) if paid by such Lender, the overnight Federal Funds
Effective Rate for the first three days and at the interest rate otherwise
applicable to such Loans for each day thereafter or (y) if paid by the Borrower,
the then applicable rate of interest, calculated in accordance with Section
1.08, for the respective Loans.
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(b) Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights which
the Borrower may have against any Lender as a result of any default by such
Lender hereunder.
1.05 NOTES. (a) The Borrower's obligation to pay the principal of, and
interest on, the Loans made to it by each Lender shall be evidenced in the
Lender Register maintained by the Administrative Agent pursuant to Section 12.16
and, if requested by such Lender, shall also be evidenced (i) if Term Loans, by
a promissory note substantially in the form of Exhibit B-1 with blanks
appropriately completed in conformity herewith (each, a "Term Note" and,
collectively, the "Term Notes"), (ii) if Revolving Loans, by a promissory note
substantially in the form of Exhibit B-2 with blanks appropriately completed in
conformity herewith (each, a "Revolving Note" and, collectively, the "Revolving
Notes") and (iii) if Swingline Loans, by a promissory note substantially in the
form of Exhibit B-3, with blanks appropriately completed in conformity herewith
(the "Swingline Note").
(b) The Term Note issued to each Lender requesting same that has a
Term Commitment or outstanding Term Loans shall (i) be executed by the Borrower,
(ii) be payable to the order of such Lender and be dated the Initial Borrowing
Date (or, if issued after the Initial Borrowing Date, be dated the date of
issuance thereof), (iii) be in a stated principal amount equal to the Term
Commitment of such Lender (or, if issued after the Initial Borrowing Date, be in
a stated principal amount equal to the Term Loans of such Lender) and be payable
in the principal amount of Term Loans evidenced thereby, (iv) mature on the Term
Loan Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to mandatory repayment as provided in
Section 4.02 and (vii) be entitled to the benefits of this Agreement and the
other Credit Documents.
(c) The Revolving Note issued to each RF Lender requesting same
shall (i) be executed by the Borrower, (ii) be payable to the order of such RF
Lender and be dated the Initial Borrowing Date (or, if issued after the Initial
Borrowing Date, be dated the date of issuance thereof), (iii) be in a stated
principal amount equal to the Revolving Commitment of such RF Lender and be
payable in the principal amount of the Revolving Loans evidenced thereby, (iv)
mature on the RF Maturity Date, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans,
as the case may be, evidenced thereby, (vi) be subject to mandatory repayment as
provided in Section 4.02 and (vii) be entitled to the benefits of this Agreement
and the other Credit Documents.
(d) The Swingline Note issued to the Swingline Lender (if
requested) shall (i) be executed by the Borrower, (ii) be payable to the order
of the Swingline Lender and be dated the Initial Borrowing Date (or, if issued
after the Initial Borrowing Date, be dated the date of issuance thereof), (iii)
be in a stated principal amount equal to the Maximum Swingline Amount and be
payable in the principal amount of Swingline Loans evidenced thereby, (iv)
mature on the Swingline Expiry Date, (v) bear interest as provided in Section
1.08 in respect of the Base Rate Loans evidenced thereby, (vi) be subject to
mandatory prepayment as provided in Section 4.02 and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents.
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(e) Each Lender will note on its internal records the amount of
each Loan made by it and each payment in respect thereof and will, prior to any
transfer of any of its Notes, endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby. Failure to make any
such notation shall not affect the Borrower's obligations in respect of such
Loans.
(f) Notwithstanding anything to the contrary contained above in
this Section 1.05 or elsewhere in this Agreement, Notes shall only be delivered
to Lenders which at any time specifically request the delivery of such Notes. No
failure of any Lender to request or obtain a Note evidencing its Loans to the
Borrower shall affect or in any manner impair the obligations of the Borrower to
pay the Loans (and all related Obligations) incurred by the Borrower which would
otherwise be evidenced thereby in accordance with the requirements of this
Agreement, and shall not in any way affect the security or guaranties therefor
provided pursuant to the various Credit Documents. Any Lender which does not
have a Note evidencing its outstanding Loans shall in no event be required to
make the notations otherwise described in preceding clause (e). At any time when
any Lender requests the delivery of a Note to evidence any of its Loans, the
Borrower shall promptly execute and deliver to the respective Lender the
requested Note in the appropriate amount or amounts to evidence such Loans.
1.06 CONVERSIONS. The Borrower shall have the option to convert on any
Business Day all or a portion at least equal to the applicable Minimum Borrowing
Amount of the outstanding principal amount of the Loans (other than Swingline
Loans which at all times shall be maintained as Base Rate Loans) owing pursuant
to a single Facility into a Borrowing or Borrowings pursuant to such Facility of
another Type of Loan provided that (i) no partial conversion of a Borrowing of
Eurodollar Loans shall reduce the outstanding principal amount of the Eurodollar
Loans made pursuant to such Borrowing to less than the Minimum Borrowing Amount
applicable thereto, (ii) Base Rate Loans may not be converted into Eurodollar
Loans when a Default under Section 9.01 or 9.05 or an Event of Default is in
existence on the date of the proposed conversion if the Administrative Agent or
the Required Lenders shall have determined in its or their sole discretion not
to permit such conversion, (iii) Borrowings of Eurodollar Loans resulting from
this Section 1.06 shall be limited in number as provided in Section 1.02, (iv)
unless the Administrative Agent otherwise agrees in its sole discretion,
conversions may not be effected pursuant to this Section 1.06 which result in
Eurodollar Loans with an Interest Period beginning prior to the third Business
Day after the Initial Borrowing Date and (v) until the 60th day following the
Initial Borrowing Date, unless the Administrative Agent and each Joint Lead
Arranger otherwise agrees in their sole discretion or the Syndication Date has
occurred, any conversions into Eurodollar Loans shall be subject to the
applicable requirements contained in clause (B) of the proviso to Section
1.01(a)(ii) or 1.01(b)(ii), as the case may be. Each such conversion shall be
effected by the Borrower giving the Administrative Agent at its Notice Office,
prior to 12:00 Noon (New York time), at least three Business Days' (or one
Business Day's, in the case of a conversion into Base Rate Loans) prior written
notice (or telephonic notice promptly confirmed in writing) (each, a "Notice of
Conversion") specifying the Loans to be so converted (including the relevant
Facility), the Type of Loans to be converted into and, if to be converted into a
Borrowing of Eurodollar Loans, the Interest Period to be initially applicable
thereto. The Administrative Agent shall give each Lender prompt notice of any
such proposed conversion affecting any of its Loans.
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1.07 PRO RATA BORROWINGS. All Loans under this Agreement (other than
Swingline Loans) shall be made by the Lenders PRO RATA on the basis of their
Term Commitments or Revolving Commitments, as the case may be, PROVIDED, that
each Mandatory Borrowing shall be funded by the RF Lenders on the basis of their
Adjusted RF Percentages. It is understood that no Lender shall be responsible
for any default by any other Lender in its obligation to make Loans hereunder
and that each Lender shall be obligated to make the Loans provided to be made by
it hereunder, regardless of the failure of any other Lender to fulfill its
commitments hereunder.
1.08 INTEREST. (a) The unpaid principal amount of each Base Rate Loan
shall bear interest from the date of the Borrowing thereof until the earlier of
repayment or conversion thereof and maturity (whether by acceleration or
otherwise) at a rate per annum which shall at all times be the Applicable Margin
plus the Base Rate in effect from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall bear
interest from the date of the Borrowing thereof until the earlier of repayment
or conversion thereof and maturity (whether by acceleration or otherwise) at a
rate per annum which shall at all times be the Applicable Margin plus the
relevant Eurodollar Rate.
(c) All overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan shall in each case, bear interest at a
rate per annum equal to the greater of (x) the rate which is 2% in excess of the
rate then borne by such Loans and (y) the rate which is 2% in excess of the rate
otherwise applicable to Base Rate Loans of the respective Facility from time to
time, and all other overdue amounts payable hereunder and under any other Credit
Document shall bear interest at a rate per annum equal to the rate which is 2%
in excess of the rate applicable to Revolving Loans that are maintained as Base
Rate Loans from time to time. Interest that accrues under this Section 1.08(c)
shall be payable on demand.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (i) in respect of each Base Rate Loan, (x) quarterly in arrears on the
first Business Day of each January, April, July and October, (y) on the date of
any repayment or prepayment in full of all outstanding Base Rate Loans of any
Facility (but in the case of any such repayment or prepayment in full of all
outstanding Revolving Loans maintained as Base Rate Loans, only if the Total
Revolving Loan Commitment is contemporaneously terminated in its entirety), and
(z) at maturity (whether by acceleration or otherwise) and, after such maturity,
on demand, and (ii) in respect of each Eurodollar Loan, (x) on the last day of
each Interest Period applicable thereto and, in the case of an Interest Period
in excess of three months, on each date occurring at three month intervals after
the first day of such Interest Period and (y) on the date of any prepayment or
conversion (on the amount prepaid or converted), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(e) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
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(f) The Administrative Agent, upon determining the interest rate
for any Borrowing of Eurodollar Loans for any Interest Period, shall promptly
notify the Borrower and the Lenders thereof.
1.09 INTEREST PERIODS. (a) At the time the Borrower gives a Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 12:00 Noon (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans, it shall have the right to elect by giving the
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) of the Interest Period applicable to such Borrowing, which Interest
Period shall, at the option of the Borrower (but otherwise subject to the
provisions of clause (B) of the proviso to Section 1.01(a)(ii) or 1.01(b)(ii),
as applicable), be a one, two, three, six or, to the extent available to all
Lenders with a Commitment under the respective Facility, nine or twelve month
period or, to the extent the provisions of clause (B) of the proviso to Section
1.01(a)(ii) or 1.01(b)(ii) are applicable (and subject to compliance with such
provisions), a one week, two week or one month period. Notwithstanding anything
to the contrary contained above:
(i) the initial Interest Period for any Borrowing of Eurodollar
Loans shall commence on the date of such Borrowing (including the date of
any conversion from a Borrowing of Base Rate Loans) and each Interest
Period occurring thereafter in respect of such Borrowing shall commence on
the day on which the next preceding Interest Period expires;
(ii) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last Business Day of
such calendar month;
(iii) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, PROVIDED that if any Interest Period would
otherwise expire on a day which is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) no Interest Period with respect to a Borrowing of Loans shall
extend beyond the respective Maturity Date therefor;
(v) no Interest Period with respect to any Term Loans may be
elected that would extend beyond any date upon which a Scheduled Repayment
is required to be made in respect of such Term Loans if, after giving
effect to the selection of such Interest Period, the aggregate principal
amount of Term Loans maintained as Eurodollar Loans with Interest Periods
ending after such date would exceed the aggregate principal amount of Term
Loans permitted to be outstanding after such Scheduled Repayment; and
(vi) no Interest Period may be elected at any time when a Default
under Section 9.01 or 9.05 or an Event of Default is then in existence if
the Administrative
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Agent or the Required Lenders shall have determined in its or their sole
discretion not to permit such election.
(b) If upon the expiration of any Interest Period, the Borrower
has failed to (or may not) elect a new Interest Period to be applicable to the
respective Borrowing of Eurodollar Loans as provided above, the Borrower shall
be deemed to have elected to convert such Borrowing into a Borrowing of Base
Rate Loans effective as of such expiration.
1.10 INCREASED COSTS, ILLEGALITY, ETC. (a) In the event that (x) in
the case of clause (i) below, the Administrative Agent or (y) in the case of
clauses (ii) and (iii) below, any Lender shall have determined (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for any
Interest Period that, by reason of any changes arising after the date of
this Agreement affecting the interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the applicable interest rate on the
basis provided for in the definition of Eurodollar Rate or the making or
continuance of any Eurodollar Loan has become impracticable as a result of
a contingency occurring after the Effective Date which materially and
adversely affects the interbank Eurodollar market;
(ii) at any time, that such Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loans (other than taxes addressed in Section 4.04 and any
increased cost or reduction in the amount received or receivable resulting
from the imposition of or a change in the rate of taxes on the net income
or net profits of such Lender imposed by the jurisdiction in which its
principal office or applicable lending office is located) because of (x)
any change since the Effective Date in any applicable law, governmental
rule, regulation, guideline or order (or in the interpretation or
administration thereof and including the introduction of any new law or
governmental rule, regulation, guideline or order) (such as, for example,
but not limited to, a change in the basis of taxation of payments to a
Lender of the principal of or interest on the Eurodollar Loans or any other
amounts payable hereunder or official reserve requirements, but, in all
events, excluding reserves required under Regulation D to the extent
included in the computation of the Eurodollar Rate) and/or (y) other
circumstances arising after the Effective Date affecting the interbank
Eurodollar market or the position of such Lender in such market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has become unlawful by compliance by such Lender in good faith with
any law, governmental rule, regulation, guideline or order (or would
conflict with any such governmental rule, regulation, guideline or order
not having the force of law but with which such Lender customarily complies
even though the failure to comply therewith would not be unlawful);
then, and in any such event, such Lender (or the Administrative Agent in the
case of clause (i) above) shall (x) on such date and (y) within ten Business
Days of the date on which such event no longer exists give notice (by telephone
confirmed in writing) to the Borrower and to the
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Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in
the case of clause (i) above, Eurodollar Loans shall no longer be available
until such time as the Administrative Agent notifies the Borrower and the
Lenders that the circumstances giving rise to such notice by the Administrative
Agent no longer exist, and any Notice of Borrowing or Notice of Conversion given
by the Borrower with respect to Eurodollar Loans which have not yet been
incurred shall be deemed rescinded by the Borrower, (y) in the case of clause
(ii) above, the Borrower shall pay to such Lender, within 10 Business Days after
Borrower's receipt of written demand therefor, such additional amounts (in the
form of an increased rate of, or a different method of calculating, interest or
otherwise as such Lender in its reasonable discretion shall determine after
consultation with the Borrower) as shall be required to compensate such Lender
for such increased costs or reductions in amounts receivable hereunder (a
written notice as to the additional amounts owed to such Lender, describing the
basis for such increased costs and showing the calculation thereof, submitted to
the Borrower by such Lender shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) and (z) in the case of clause
(iii) above, the Borrower shall take one of the actions specified in Section
1.10(b) as promptly as possible and, in any event, within the time period
required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii), the Borrower may (and in the
case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii), the
Borrower shall within the time period required by law) either (x) if the
affected Eurodollar Loan is then being made pursuant to a Borrowing, cancel said
Borrowing by giving the Administrative Agent telephonic notice (confirmed
promptly in writing) thereof on the same date that the Borrower was notified by
a Lender pursuant to Section 1.10(a)(ii) or (iii), or (y) if the affected
Eurodollar Loan is then outstanding, upon at least three Business Days' notice
to the Administrative Agent, require the affected Lender to convert each such
Eurodollar Loan into a Base Rate Loan (which conversion, in the case of the
circumstances described in Section 1.10(a)(iii), shall occur no later than the
last day of the Interest Period then applicable to such Eurodollar Loan (or such
earlier date as shall be required by applicable law)); PROVIDED, that if more
than one Lender is affected at any time, then all affected Lenders must be
treated the same pursuant to this Section 1.10(b). Each Lender, upon determining
in good faith that any additional amounts will be payable pursuant to this
Section 1.10(b), will give prompt written notice thereof to the Borrower, which
notice shall set forth the basis of the calculation of such additional amounts,
although the failure to give any such notice shall not release or diminish the
Borrower's obligations to pay additional amounts pursuant to this Section
1.10(b) upon the subsequent receipt of such notice.
(c) If any Lender shall have determined that the adoption or
initial effectiveness of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, in each case
after the Effective Date, or compliance by such Lender or its parent corporation
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency first
made after the Effective Date, has or would have the effect of reducing the rate
of return on such Lender's or its parent corporation's capital or assets as a
consequence of its commitments or obligations hereunder to a level below that
which such Lender or its parent corporation could have achieved but for such
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adoption, effectiveness, change or compliance (taking into consideration such
Lender's or its parent corporation's policies with respect to capital adequacy),
then from time to time, within 10 Business Days after demand by such Lender
(with a copy to the Administrative Agent), the Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender or its parent
corporation for such reduction. Each Lender, upon determining in good faith that
any additional amounts will be payable pursuant to this Section 1.10(c), will
give prompt written notice thereof to the Borrower, which notice shall describe
the basis for such claim and set forth in reasonable detail the calculation of
such additional amounts, although the failure to give any such notice shall not
release or diminish any of the Borrower's obligations to pay additional amounts
pursuant to this Section 1.10(c) upon the subsequent receipt of such notice.
1.11 COMPENSATION. (a) The Borrower shall compensate each Lender, upon
its written request (which request shall set forth the basis for requesting such
compensation and reasonably detailed calculations thereof), for all reasonable
losses, expenses and liabilities (including, without limitation, any loss,
expense or liability incurred by reason of the liquidation or reemployment of
deposits or other funds required by such Lender to fund its Eurodollar Loans but
excluding in any event the loss of anticipated profits) which such Lender may
actually sustain: (i) if for any reason (other than a default by such Lender or
the Administrative Agent) a Borrowing of Eurodollar Loans does not occur on a
date specified therefor in a Notice of Borrowing or Notice of Conversion
(whether or not withdrawn by the Borrower or deemed withdrawn pursuant to
Section 1.10(a)); (ii) if any prepayment, repayment or conversion of any of its
Eurodollar Loans occurs on a date which is not the last day of an Interest
Period applicable thereto; (iii) if any prepayment of any of its Eurodollar
Loans is not made on any date specified in a notice of prepayment given by the
Borrower; or (iv) as a consequence of (x) any other default by the Borrower to
repay its Eurodollar Loans when required by the terms of this Agreement or (y)
an election made pursuant to Section 1.10(b) or (z) the early termination of an,
or the funding of a shortened, Interest Period (other than an Interest Period
elected pursuant to Section 1.09(a) which may be required by any Lender in
connection with any assignment effected after the Initial Borrowing Date and on
or prior to the first to occur of the 60th day after the Initial Borrowing Date
and the Syndication Date).
(b) Notwithstanding anything in this Agreement to the contrary, to
the extent any notice or request required by Section 1.10, 1.11, 2.05 or 4.04 is
given by any Lender more than 180 days after such Lender obtained, or reasonably
should have obtained, knowledge of the occurrence of the event giving rise to
the additional costs, reductions in amounts, losses, taxes or other additional
amounts of the type described in such Section, such Lender shall not be entitled
to compensation under Section 1.10, 1.11, 2.05 or 4.04 for any amounts incurred
or accruing prior to the date on which such notice is given to the Borrower.
1.12 CHANGE OF LENDING OFFICE. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), 1.10(c), 2.05 or 4.04 with respect to such Lender, it will, if requested
by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any Loans
or Letter of Credit participations affected by such event, PROVIDED that such
designation is made on such terms that such Lender and its lending office, in
its determination, suffer no material economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the
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event giving rise to the operation of any such Section. Nothing in this Section
1.12 shall affect or postpone any of the obligations of the Borrower or the
right of any Lender provided in Section 1.10, 2.05 or 4.04.
1.13 REPLACEMENT OF LENDERS. (x) Upon the occurrence of any event
giving rise to the operation of Section 1.10(a)(ii) or (iii), Section 1.10(c),
Section 1.11, Section 2.05 or Section 4.04 with respect to any Lender which
results in such Lender charging to the Borrower increased costs materially in
excess of those being charged generally by the Lenders, (y) if a Lender becomes
a Defaulting Lender and/or (z) in the case of a refusal by a Lender to consent
to a proposed change, waiver, discharge or termination with respect to this
Agreement which has been approved by the Required Lenders, the Borrower shall
have the right to replace such Lender (the "Replaced Lender") with one or more
other Eligible Transferee or Transferees, none of whom shall constitute a
Defaulting Lender at the time of such replacement (collectively, the
"Replacement Lender") reasonably acceptable to the Administrative Agent,
provided that (i) at the time of any replacement pursuant to this Section 1.13,
the Replacement Lender shall enter into one or more Assignment Agreements
pursuant to Section 12.04(b) (and with all fees payable pursuant to said Section
12.04(b) to be paid by the Replacement Lender) pursuant to which the Replacement
Lender shall acquire all of the Commitments and outstanding Loans of, and in
each case participations in Letters of Credit by, the Replaced Lender and, in
connection therewith, shall pay to (x) the Replaced Lender an amount equal to
the sum of (A) an amount equal to the principal of, and all accrued and unpaid
interest on, all outstanding Loans of the Replaced Lender, (B) an amount equal
to all Unpaid Drawings that have been funded by (and not reimbursed to) such
Replaced Lender, together with all accrued and unpaid interest with respect
thereto at such time and (C) an amount equal to all accrued and unpaid Fees
owing to the Replaced Lender pursuant to Section 3.01, (y) each Letter of Credit
Issuer an amount equal to such Replaced Lender's Adjusted RF Percentage (for
this purpose, and for the purpose of clause (z) below, determined as if the
adjustment described in clause (y) of the immediately succeeding sentence had
been made with respect to such Replaced Lender) of any Unpaid Drawing (which at
such time remains an Unpaid Drawing) to the extent such amount was not
theretofore funded by such Replaced Lender and (z) the Swingline Lender, any
portion of a Mandatory Borrowing as to which the Replaced Lender is then in
default, and (ii) all obligations of the Borrower owing to the Replaced Lender
(other than those specifically described in clause (i) above in respect of which
the assignment purchase price has been, or is concurrently being, paid) shall be
paid in full to such Replaced Lender by the Borrower concurrently with such
replacement. Upon the execution of the respective Assignment Agreements, the
payment of amounts referred to in clauses (i) and (ii) above and, if so
requested by the Replacement Lender, delivery to the Replacement Lender of the
appropriate Note or Notes executed by the Borrower, (x) the Replacement Lender
shall become a Lender hereunder and the Replaced Lender shall cease to
constitute a Lender hereunder, except with respect to indemnification provisions
applicable to the Replaced Lender under this Agreement, which shall survive as
to such Replaced Lender and (y) in the case of a replacement of a Defaulting
Lender with a Non-Defaulting Lender, the Adjusted RF Percentages of the
respective Lenders and the Adjusted Total Revolving Commitment shall be
automatically adjusted at such time to give effect to such replacement.
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SECTION 2. LETTERS OF CREDIT.
2.01 LETTERS OF CREDIT. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request of any Letter of Credit
Issuer at any time and from time to time on or after the Initial Borrowing Date
and prior to the tenth Business Day prior to the RF Maturity Date that it issue,
for the account of the Borrower (x) trade letters of credit in support of trade
obligations of the Borrower and its Subsidiaries incurred in the ordinary course
of business (such letters of credit issued for such purposes, "Trade Letters of
Credit") and (y) standby letters of credit issued for any other lawful purposes
of the Borrower and its Subsidiaries (such letters of credit issued for such
purposes, "Standby Letters of Credit"), and subject to and upon the terms and
conditions herein set forth, each Letter of Credit Issuer agrees to issue from
time to time following its receipt of the respective Letter of Credit Request to
it, irrevocable letters of credit denominated in Dollars or an Alternate
Currency and issued on a sight basis only, in such form as may be approved by
the respective Letter of Credit Issuer and the Administrative Agent. "Letters of
Credit" shall include Trade Letters of Credit and Standby Letters of Credit.
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall
be issued if after giving effect thereto the aggregate amount of the Letter of
Credit Outstandings at such time would exceed either (x) $25,000,000 or (y) when
added to the sum of (I) the aggregate principal amount of all Revolving Loans
made by Non-Defaulting Lenders then outstanding, plus (II) the aggregate
principal amount of all Swingline Loans then outstanding, an amount equal to the
Adjusted Total Revolving Commitment at such time; (ii) no Letter of Credit
denominated in an Alternate Currency shall be issued if after giving effect
thereto the aggregate amount of the Letter of Credit Outstandings with respect
to all Letters of Credit denominated in an Alternative Currency would exceed
$7,500,000; (iii) each Standby Letter of Credit shall have an expiry date
occurring not later than 12 months after such Letter of Credit's date of
issuance although any Standby Letter of Credit may be extendable for successive
periods of up to 12 months, but not beyond the tenth Business Day next preceding
the RF Maturity Date, on terms acceptable to the respective Letter of Credit
Issuer and in no event shall any Standby Letter of Credit have an expiry date
occurring later than the tenth Business Day next preceding the RF Maturity Date;
(iv) each Trade Letter of Credit shall have an expiry date occurring not later
than (x) 180 days after such Letter of Credit's date of issuance or (y) the date
ten Business Days prior to the RF Maturity Date; and (v) each Letter of Credit
issued to support obligations of any Foreign Subsidiary shall be deemed to
constitute a Contingent Obligation pursuant to Section 8.04(k) and shall only be
permitted to be issued if in accordance with the requirements of said Section
8.04(k).
2.02 LETTER OF CREDIT REQUESTS; NOTICES OF ISSUANCE. (a) Whenever it
desires that a Letter of Credit be issued, the Borrower shall give the
Administrative Agent and the respective Letter of Credit Issuer written notice
thereof (including by way of facsimile transmission) in the form of Exhibit C,
appropriately completed (each, a "Letter of Credit Request"), prior to 1:00 P.M.
(New York time) at least two Business Days (or such shorter period as may be
acceptable to the respective Letter of Credit Issuer) prior to the proposed date
of issuance (which shall be a Business Day), which Letter of Credit Request
shall include any other documents that the respective Letter of Credit Issuer
customarily requires in connection therewith.
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(b) The making of each Letter of Credit Request shall be deemed to
be a representation and warranty by the Borrower to the Lenders that such Letter
of Credit may be issued in accordance with, and will not violate the
requirements of, Section 2.01. Notwithstanding anything to the contrary
contained in this Section 2, no Letter of Credit Issuer shall issue any Letters
of Credit after it has received written notice from the Required Lenders stating
that one or more of the applicable conditions to Credit Events specified in
Section 5 are not then satisfied until such time as all such conditions are
satisfied. Upon the issuance of or modification or amendment to any Standby
Letter of Credit, the respective Letter of Credit Issuer shall promptly notify
the Borrower and the Administrative Agent, in writing of such issuance,
modification or amendment and such notice shall be accompanied by a copy of such
Letter of Credit or the respective modification or amendment thereto, as the
case may be. Promptly after receipt of such notice the Administrative Agent
shall notify the Participants, in writing, of such issuance, modification or
amendment. On the first Business Day of each week, each Letter of Credit Issuer
shall furnish the Administrative Agent with a written (including via facsimile)
report of the daily aggregate outstandings of Trade Letters of Credit issued by
the such Letter of Credit Issuer for the immediately preceding week.
2.03 AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS. (a) The Borrower
hereby agrees to reimburse each Letter of Credit Issuer, by making payment to
the Administrative Agent at the Payment Office, for any payment or disbursement
made by such Letter of Credit Issuer under any Letter of Credit (each such
amount (calculated using the Dollar Equivalent thereof in the case of any
payment or disbursement made in an Alternate Currency) so paid or disbursed
until reimbursed, with Revolving Loan proceeds or otherwise, an "Unpaid
Drawing") promptly after, and in any event within three Business Days after the
date on which, the Borrower is notified by such Letter of Credit Issuer of such
payment or disbursement with interest on the amount so paid or disbursed by such
Letter of Credit Issuer, to the extent not reimbursed prior to 1:00 P.M. (New
York time) on the date of such payment or disbursement, from and including the
date paid or disbursed to but not including the date such Letter of Credit
Issuer is reimbursed therefor at a rate per annum which shall be the Base Rate
plus the Applicable Margin for Revolving Loans maintained as Base Rate Loans as
in effect from time to time (plus an additional 2% per annum if not reimbursed
by the third Business Day after the date of such notice of payment or
disbursement), such interest also to be payable on demand.
(b) The Borrower's obligation under this Section 2.03 to reimburse
each Letter of Credit Issuer with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower may have or have had against such Letter of Credit Issuer,
the Administrative Agent or any Lender, including, without limitation, any
defense based upon the failure of any drawing under a Letter of Credit to
conform substantially to the terms of the Letter of Credit or any
non-application or misapplication by the beneficiary of the proceeds of such
drawing provided that the Borrower shall not be obligated to reimburse such
Letter of Credit Issuer for any wrongful payment made by such Letter of Credit
Issuer under a Letter of Credit as a result of acts or omissions constituting
willful misconduct or gross negligence on the part of such Letter of Credit
Issuer.
2.04 LETTER OF CREDIT PARTICIPATIONS. (a) Immediately upon the
issuance by any Letter of Credit Issuer of any Letter of Credit, such Letter of
Credit Issuer shall be deemed to
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have sold and transferred to each other RF Lender, and each such RF Lender
(each, a "Participant") shall be deemed irrevocably and unconditionally to have
purchased and received from such Letter of Credit Issuer, without recourse or
warranty, an undivided interest and participation, to the extent of such
Participant's Adjusted RF Percentage, in such Letter of Credit, each substitute
letter of credit, each drawing made thereunder and the obligations of the
Borrower under this Agreement with respect thereto (although the Letter of
Credit Fee shall be payable directly to the Administrative Agent for the account
of the RF Lenders as provided in Section 3.01(b) and the Participants shall have
no right to receive any portion of any Facing Fees) and any security therefor or
guaranty pertaining thereto. Upon any change in the Adjusted RF Percentages
pursuant to Section 1.13 and/or 12.04(b) and/or as a result of a Lender Default,
it is hereby agreed that, with respect to all outstanding Letters of Credit and
Unpaid Drawings, there shall be an automatic adjustment to the participations
pursuant to this Section 2.04 to reflect the new Adjusted RF Percentages of all
of the Lenders with Revolving Commitments as a result thereof.
(b) In determining whether to pay under any Letter of Credit, no
Letter of Credit Issuer shall have any obligation relative to the Participants
other than to determine that any documents required to be delivered under such
Letter of Credit have been delivered and that they substantially comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by any Letter of Credit Issuer under or in connection with any
Letter of Credit if taken or omitted in the absence of gross negligence or
willful misconduct, shall not create for such Letter of Credit Issuer any
resulting liability.
(c) In the event that any Letter of Credit Issuer makes any
payment under any Letter of Credit and the Borrower shall not have reimbursed
such amount in full to such Letter of Credit Issuer pursuant to Section 2.03(a),
such Letter of Credit Issuer shall promptly notify the Administrative Agent, and
the Administrative Agent shall promptly notify each Participant of such failure,
and each Participant shall promptly and unconditionally pay to the
Administrative Agent for the account of such Letter of Credit Issuer, the amount
of such Participant's Adjusted RF Percentage of such Unpaid Drawing in Dollars
and in same day funds provided that no Participant shall be obligated to pay to
the Administrative Agent its Adjusted RF Percentage of such unreimbursed amount
for any wrongful payment made by such Letter of Credit Issuer under a Letter of
Credit as a result of acts or omissions constituting willful misconduct or gross
negligence on the part of such Letter of Credit Issuer. If the Administrative
Agent so notifies any Participant prior to 11:00 A.M. (New York time) on any
Business Day, such Participant shall make available to the Administrative Agent,
such Participant's Adjusted RF Percentage of the amount of such Unpaid Drawing
on such Business Day in same day funds. If and to the extent such Participant
shall not have so made its Adjusted RF Percentage of the amount of such Unpaid
Drawing available to the Administrative Agent, such Participant agrees to pay to
the Administrative Agent for the account of such Letter of Credit Issuer,
forthwith on demand such amount, together with interest thereon, for each day
from such date until the date such amount is so paid to the Administrative Agent
at the overnight Federal Funds Effective Rate for the first three days and at
the interest rate applicable to Revolving Loans that are maintained as Base Rate
Loans for each day thereafter. The failure of any Participant to so pay to the
Administrative Agent its Adjusted RF Percentage of any Unpaid Drawing shall not
relieve any other Participant of its obligation hereunder to so pay to the
Administrative Agent its Adjusted RF Percentage of any Unpaid Drawing on the
date required, as specified above, but no Participant shall be
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responsible for the failure of any other Participant to so pay to the
Administrative Agent such other Participant's Adjusted RF Percentage of any such
payment.
(d) Whenever any Letter of Credit Issuer receives a payment of a
reimbursement obligation (or interest thereon) as to which the Administrative
Agent has received for the account of such Letter of Credit Issuer any payments
from the Participants pursuant to clause (c) above, such Letter of Credit Issuer
shall pay to the Administrative Agent and the Administrative Agent shall
promptly pay to each Participant which has paid its Adjusted RF Percentage
thereof, in Dollars and in same day funds, an amount equal to such Participant's
Adjusted RF Percentage of the principal amount thereof and interest thereon
accruing after the purchase of the respective participations.
(e) The obligations of the Participants to make payments to the
Administrative Agent for the account of each Letter of Credit Issuer with
respect to Letters of Credit issued by such Letter of Credit Issuer shall be
irrevocable and not subject to counterclaim, set-off or other defense or any
other qualification or exception whatsoever (provided that no Participant shall
be required to make payments resulting from the respective Letter of Credit
Issuer's gross negligence or willful misconduct) and shall be made in accordance
with the terms and conditions of this Agreement under all circumstances,
including, without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other right
which any Credit Party or any of their Subsidiaries may have at any time
against a beneficiary named in a Letter of Credit, any transferee of any
Letter of Credit (or any Person for whom any such transferee may be
acting), the Administrative Agent, any Joint Lead Arranger, any Letter of
Credit Issuer, any Lender or other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or
any unrelated transactions (including any underlying transaction between
the Borrower and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
(f) To the extent the respective Letter of Credit Issuer is not
indemnified by the Borrower, the Participants will reimburse and indemnify such
Letter of Credit Issuer, in proportion to their respective RF Percentages, for
and against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, costs, expenses or disbursements of whatsoever kind
or nature which may be imposed on, asserted against or incurred by such Letter
of Credit Issuer in performing its respective duties in any way relating to or
arising out of its
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issuance of Letters of Credit; PROVIDED that no Participant shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from such
Letter of Credit Issuer's gross negligence or willful misconduct.
2.05 INCREASED COSTS. If at any time after the Effective Date, the
adoption or initial effectiveness of any applicable law, rule or regulation, or
any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Letter
of Credit Issuer or any Participant with any request or directive (whether or
not having the force of law) first made by any such authority, central bank or
comparable agency, in each case after the Effective Date, shall either (i)
impose, modify or make applicable any reserve, deposit, capital adequacy or
similar requirement against Letters of Credit issued by any Letter of Credit
Issuer or any Participant's participation therein, or (ii) shall impose on any
Letter of Credit Issuer or any Participant any other conditions affecting this
Agreement, any Letter of Credit or any Participant's participation therein; and
the result of any of the foregoing is to increase the cost to such Letter of
Credit Issuer or such Participant of issuing, maintaining or participating in
any Letter of Credit, or to reduce the amount of any sum received or receivable
by such Letter of Credit Issuer or such Participant hereunder (other than taxes
addressed in Section 4.04 and any increased cost or reduction in the amount
received or receivable resulting from the imposition of or a change in the rate
of taxes on the net income or net profits of such Lender imposed by the
jurisdiction in which its principal office or applicable lending office is
located), then, within 10 Business Days of Borrower's receipt of a written
demand to the Borrower by such Letter of Credit Issuer or such Participant (a
copy of which notice shall be sent by such Letter of Credit Issuer or such
Participant to the Administrative Agent), the Borrower shall pay to such Letter
of Credit Issuer or such Participant such additional amount or amounts as will
compensate such Letter of Credit Issuer or such Participant for such increased
cost or reduction. A certificate submitted to the Borrower by such Letter of
Credit Issuer or such Participant, as the case may be (a copy of which
certificate shall be sent by such Letter of Credit Issuer or such Participant to
the Administrative Agent), setting forth the basis for, and reasonably detailed
calculations of, the determination of such additional amount or amounts
necessary to compensate such Letter of Credit Issuer or such Participant as
aforesaid shall be conclusive and binding on the Borrower absent manifest error,
although the failure to deliver any such certificate shall not release or
diminish any of the Borrower's obligations to pay additional amounts pursuant to
this Section 2.05 upon the subsequent receipt thereof.
SECTION 3. FEES; COMMITMENTS.
3.01 FEES. (a) The Borrower agrees to pay to the Administrative Agent
a commitment commission ("Commitment Commission") for the account of each RF
Lender that is a Non-Defaulting Lender for the period from and including the
Effective Date to but not including the date upon which the Total Revolving
Commitment has been terminated, computed at a rate per annum equal to 1/2 of 1%
of the Unutilized Revolving Commitment of such Non-Defaulting Lender as in
effect from time to time. Such Commitment Commission shall be due and payable in
arrears on the first Business Day of each January, April, July and October and
on the date upon which the Total Revolving Commitment is terminated.
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(b) The Borrower agrees to pay to the Administrative Agent, for
the account of each RF Lender, PRO RATA on the basis of their respective
Adjusted RF Percentages, a fee in respect of each Letter of Credit (the "Letter
of Credit Fee") for the period from and including the date of issuance of such
Letter of Credit to and including the date of termination or expiration of such
Letter of Credit, computed at a rate per annum equal to the Applicable Margin as
in effect from time to time during such period with respect to Revolving Loans
that are maintained as Eurodollar Loans on the daily Stated Amount of each such
Letter of Credit. Accrued Letter of Credit Fees shall be due and payable
quarterly in arrears on the first Business Day of each January, April, July and
October of each year and on the first day on or after the termination of the
Total Revolving Commitment upon which no Letters of Credit remain outstanding.
(c) The Borrower agrees to pay to the respective Letter of Credit
Issuer a fee in respect of each Letter of Credit issued by it (the "Facing Fee")
for the period from and including the date of issuance of such Letter of Credit
to and including the date of termination or expiration of such Letter of Credit,
computed for each day during such period at the rate of 1/4 of 1% per annum on
the Stated Amount of such Letter of Credit as in effect from time to time;
PROVIDED that in any event the minimum amount of Facing Fees payable in any
twelve-month period for any Letter of Credit shall not be less than $500; it
being agreed that, on the day of issuance of any Letter of Credit and on each
anniversary thereof prior to the termination or expiration of such Letter of
Credit, if $500 will exceed the amount of Facing Fees that will accrue with
respect to such Letter of Credit for the immediately succeeding twelve-month
period, $125 shall be payable in respect of such Letter of Credit on each date
on which Facing Fees are required to be paid pursuant to this clause (c) during
such 12-month period (and, if the Total Revolving Commitment terminates before
the end of such 12 month period, on the date of such termination there shall be
paid an amount equal to the amount by which $500 exceeds the Facing Fees
actually paid with respect to such Letter of Credit since the date of the
issuance thereof or, if later, the last anniversary of such issuance which has
theretofore occurred). Accrued Facing Fees shall be due and payable quarterly in
arrears on the first Business Day of each January, April, July and October of
each year and on the first day on or after the termination of the Total
Revolving Commitment upon which no Letters of Credit remain outstanding.
(d) The Borrower agrees to pay directly to the respective Letter
of Credit Issuer upon each issuance of, payment under, and/or amendment of, a
Letter of Credit such amount as shall at the time of such issuance, payment or
amendment be the administrative charge which such Letter of Credit Issuer is
customarily charging for issuances of, payments under or amendments of, letters
of credit issued by it.
(e) The Borrower shall pay to the Joint Lead Arrangers and the
Administrative Agent for their respective accounts, such fees as may be agreed
to by the Borrower and such Persons.
(f) All computations of Fees shall be made in accordance with
Section 12.07(b).
3.02 VOLUNTARY REDUCTION OF COMMITMENTS. (a) Upon at least one
Business Day's prior written notice (or telephonic notice confirmed in writing)
to the Administrative Agent at the Notice Office (which notice shall be deemed
to be given on a certain day only if
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given before 2:00 P.M. (New York time) on such day and shall be promptly
transmitted by the Administrative Agent to each of the Lenders), the Borrower
shall have the right, without premium or penalty, to terminate or partially
reduce the Total Unutilized Revolving Commitment provided that (x) any such
partial reduction shall apply to proportionately and permanently reduce the
Revolving Commitment of each Lender, (y) no such reduction shall reduce any
Non-Defaulting Lender's Revolving Commitment in an amount greater than the then
Unutilized Revolving Commitment of such Lender and (z) any partial reduction
pursuant to this Section 3.02 shall be in the amount of at least $1,000,000.
(b) In the event of a refusal by a Lender to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Lenders as (and to the
extent) provided in Section 12.12(b), the Borrower may, subject to its
compliance with the requirements of Section 12.12(b), upon five Business Days'
prior written notice to the Administrative Agent at the Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the Lenders)
terminate all of the Commitments of such Lender, so long as all Loans, together
with accrued and unpaid interest, Fees and all other amounts, owing to such
Lender are repaid concurrently with the effectiveness of such termination
pursuant to Section 4.01(b) (at which time Schedule I shall be deemed modified
to reflect such changed amounts, and the Adjusted RF Percentages of the various
RF Lenders shall be automatically adjusted to give effect to such changes) and
any mandatory repayments required pursuant to Section 4.02(A)(a) as a result of
the changes to the Adjusted RF Percentages of the various RF Lenders are made,
and at such time, such Lender shall no longer constitute a "Lender" for purposes
of this Agreement, except with respect to indemnifications under this Agreement
(including, without limitation, Sections 1.10, 1.11, 2.06, 4.04, 11.06 and
12.01), which shall survive as to such repaid Lender.
3.03 MANDATORY REDUCTIONS OF COMMITMENTS, ETC. (a) The Total
Commitment (and the Term Commitment and Revolving Commitment of each Lender)
shall terminate in its entirety at 11:59 P.M. (New York time) on the Expiration
Date unless the Initial Borrowing Date has occurred on or before such date.
(b) The Total Revolving Commitment (and the Revolving Commitmentof
each Lender) shall terminate in its entirety on the RF Maturity Date.
(c) The Total Revolving Commitment shall be reduced on each day on
which Term Loans are required to be repaid (or would be required to be repaid if
Term Loans were then outstanding) pursuant to Section 4.02(A)(c), (d) and/or (g)
by the amount, if any, by which the amount required to be applied to repay
outstanding principal of Term Loans pursuant to Section 4.02(B)(a) as a result
thereof (determined as if an unlimited amount of Term Loans were actually
outstanding) exceeds the aggregate principal amount of Term Loans actually
outstanding on such date.
SECTION 4. PAYMENTS.
4.01 VOLUNTARY PREPAYMENTS. (a) The Borrower shall have the right to
prepay Loans in whole or in part, without premium or, except as provided in
Section 1.11(a), penalty, from time to time on the following terms and
conditions: (i) the Borrower shall give the
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Administrative Agent at the Payment Office written notice (or telephonic notice
promptly confirmed in writing) of its intent to prepay the Loans, whether such
Loans are Term Loans, Revolving Loans or Swingline Loans, the amount of such
prepayment and (A) in the case of Eurodollar Loans, the specific Borrowing(s)
pursuant to which made and (B) in the case of Term Loans, the manner in which
such prepayment shall be applied to the then remaining Scheduled Repayments to
repay outstanding principal of Term Loans, which notice shall be given by the
Borrower prior to 3:00 P.M. (New York time) on (x) the Business Day prior to the
date of such prepayment in the case of prepayments of Base Rate Loans (or on the
same day of such prepayment in the case of prepayments of Swingline Loans) or
(y) three Business Days prior to the date of such prepayment in the case of
prepayments of Eurodollar Loans, and which notice shall, except in the case of a
prepayment of Swingline Loans, promptly be transmitted by the Administrative
Agent to each of the Lenders; (ii) (x) each partial prepayment of any Borrowing
(other than a Borrowing of Swingline Loans) shall be in an aggregate principal
amount of at least $500,000 and (y) each partial prepayment of Swingline Loans
shall be in an aggregate principal amount of at least $100,000, provided that no
partial prepayment of Eurodollar Loans made pursuant to a Borrowing shall reduce
the aggregate principal amount of the Loans outstanding pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto; (iii) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied PRO RATA among such Loans, provided that at the
Borrower's election in connection with any prepayment of Revolving Loans
pursuant to this Section 4.01, such prepayment shall not be applied to any
Revolving Loans of a Defaulting Lender; and (iv) each prepayment of Term Loans
pursuant to this Section 4.01 shall be applied to reduce the then remaining
Scheduled Repayments in the manner directed by the Borrower to the
Administrative Agent in writing as provided above, provided that if no such
written direction is given with respect to the application of any such
prepayment of Term Loans, such prepayment shall be applied (x) first, in direct
order of maturity to those Scheduled Repayments which will be due and payable
within 12 months after the date of such prepayment and (y) second, to the extent
in excess thereof, to the then remaining Scheduled Repayments on a PRO RATA
basis (based on the then remaining unpaid principal amount of such Scheduled
Repayments after giving effect to all prior reductions thereto).
(b) In the event of a refusal by a Lender to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Lenders as (and to the
extent) provided in Section 12.12(b), the Borrower may, upon five Business Days'
prior written notice to the Administrative Agent at the Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the Lenders)
repay all Loans, together with accrued and unpaid interest, Fees, and other
amounts owing to such Lender in accordance with, and subject to the requirements
of, said Section 12.12(b) so long as (I) all Commitments of such Lender are
terminated concurrently with such repayment pursuant to Section 3.02(b) (at
which time Schedule I shall be deemed modified to reflect the changed
Commitments, and the Adjusted RF Percentages of the various RF Lenders shall be
automatically adjusted to give effect to such changes), (II) any mandatory
repayments required pursuant to Section 4.02(A)(a) as a result of the changes to
the Adjusted RF Percentages of the various RF Lenders are made and (III) the
consents, if any, required under Section 12.12(b) in connection with the
repayment pursuant to this clause (b) have been obtained. Each prepayment of any
Term Loans pursuant to this Section 4.01(b) shall be applied (except to the
extent such Term Loans are being replaced pursuant to Section 1.13) to reduce
the
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then remaining Scheduled Repayments of the Term Loans on a PRO RATA basis (based
upon the then remaining unpaid principal amounts of such Scheduled Repayments
after giving effect to all prior reductions thereto).
4.02 MANDATORY PREPAYMENTS.
(A) Requirements:
(a) (i) If on any date (and after giving effect to all other
repayments on such date) the sum of the aggregate outstanding principal amount
of Revolving Loans made by Non-Defaulting Lenders, the aggregate outstanding
principal amount of Swingline Loans and the aggregate amount of Letter of Credit
Outstandings exceeds the Adjusted Total Revolving Commitment as then in effect,
the Borrower shall repay on such date the principal of outstanding Swingline
Loans and, after all Swingline Loans have been repaid in full or if no Swingline
Loans are outstanding, Revolving Loans made by Non-Defaulting Lenders in an
aggregate amount equal to such excess. If, after giving effect to the repayment
of all outstanding Swingline Loans and Revolving Loans made by Non-Defaulting
Lenders, the aggregate amount of Letter of Credit Outstandings exceeds the
Adjusted Total Revolving Commitment then in effect, the Borrower shall pay to
the Administrative Agent an amount in cash and/or Cash Equivalents equal to such
excess and the Administrative Agent shall hold such payment as security for the
obligations of the Borrower in respect of Letters of Credit pursuant to a cash
collateral agreement to be entered into in form and substance reasonably
satisfactory to the Administrative Agent (which shall permit certain investments
in Cash Equivalents reasonably satisfactory to the Administrative Agent, until
all proceeds are applied to the secured obligations or until all Letters of
Credit so secured expire undrawn or are otherwise terminated or all drawings
thereunder are paid, at which time such amount shall be returned to the
Borrower).
(ii) If on any date the aggregate outstanding principal amount of
the Revolving Loans made by any Defaulting Lender exceeds the Revolving
Commitment of such Defaulting Lender, the Borrower shall repay principal of
Revolving Loans of such Defaulting Lender in an amount equal to such excess.
(b) On each date set forth below, the Borrower shall repay the
principal amount of Term Loans set forth opposite such date (each such
repayment, as the same may be reduced as provided in Sections 4.01(a), 4.01(b)
and 4.02(B), a "Scheduled Repayment"):
<Table>
<Caption>
Date Amount
---- ------
May 31, 2003 $ 5,400,000
November 30, 2003 $ 5,400,000
May 31, 2004 $ 7,200,000
November 30, 2004 $ 7,200,000
May 31, 2005 $ 7,200,000
November 30, 2005 $ 7,200,000
May 31, 2006 $ 7,200,000
November 30, 2006 $ 7,200,000
</Table>
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<Table>
<Caption>
Date Amount
---- ------
May 31, 2007 $ 13,500,000
November 30, 2007 $ 13,500,000
May 31, 2008 $ 13,500,000
November 30, 2008 $ 13,500,000
May 31, 2009 $ 126,000,000
Term Loan Maturity Date $ 126,000,000
</Table>
(c) On the third Business Day following the date of receipt
thereof by Holdings and/or any of its Subsidiaries of the Net Cash Proceeds from
any Asset Sale, an amount equal to 100% of the Net Cash Proceeds from such Asset
Sale shall be applied as a mandatory repayment of principal of the then
outstanding Loans in accordance with the requirements of Section 4.02(B)(a),
PROVIDED that up to an aggregate of $15,000,000 of the Net Cash Proceeds
received by Holdings and its Subsidiaries from Asset Sales during any fiscal
year of Holdings (but no more than $30,000,000 in the aggregate for all such
Asset Sales after the Effective Date) shall not be required to be used to so
repay Loans to the extent the Borrower elects, as hereinafter provided, to cause
such Net Cash Proceeds to be reinvested in Reinvestment Assets (a "Reinvestment
Election"). The Borrower may exercise its Reinvestment Election (within the
parameters specified in the preceding sentence) with respect to an Asset Sale
only if (x) no Default or Event of Default exists and (y) the Borrower delivers
a Reinvestment Notice to the Administrative Agent no later than three Business
Days following the date of the consummation of the respective Asset Sale, with
such Reinvestment Election being effective with respect to the Net Cash Proceeds
of such Asset Sale equal to the Anticipated Reinvestment Amount specified in
such Reinvestment Notice. Notwithstanding anything to the contrary contained in
this Agreement (including without limitation the foregoing provisions of this
Section 4.02(A)(c)), if any Asset Sale, Asset Disposition (as defined in the
Senior Subordinated Note Indenture) or similar event occurs and as a result
thereof (after giving effect to any reinvestments and/or permanent repayments of
Indebtedness actually made in amounts up to, or equal to, the amount of proceeds
received from any such event) any obligation would arise on the part of the
Borrower and/or any of its Subsidiaries to offer to purchase any Senior
Subordinated Notes, then at least two Business Days before any such obligation
arises, the Borrower shall prepay then outstanding Term Loans and, after all
outstanding Term Loans have been repaid in full, prepay outstanding Revolving
Loans and/or Swingline Loans (and permanently reduce the Total Revolving
Commitment in a corresponding amount)) in such amount as is necessary so that no
obligation to make any such offer to purchase arises.
(d) On the date of the receipt thereof by Holdings and/or any of
its Subsidiaries, an amount equal to 100% of the amount of proceeds (net of
underwriting discounts and commissions and other reasonable costs associated
therewith) from the incurrence of Indebtedness by Holdings or any of its
Subsidiaries (other than Indebtedness permitted by Section 8.04), shall be
applied as a mandatory repayment of principal of the then outstanding Term Loans
in accordance with the requirements of Section 4.02(B)(a).
(e) On the date of the receipt thereof by Holdings, an amount
equal to the EP Percentage of the cash proceeds (net of underwriting discounts
and commissions and other reasonable costs associated therewith) of any sale or
issuance of its equity or any equity
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contribution (other than equity issued to officers and employees of Holdings and
its Subsidiaries) shall be applied as a mandatory repayment of principal of the
then outstanding Term Loans in accordance with the requirements of Section
4.02(B)(a).
(f) On each Excess Cash Payment Date, 50% (or, if the Consolidated
Leverage Ratio on such Excess Cash Payment Date (calculated before giving effect
to any repayment required to be made on such date pursuant to this clause (f))
is less than 3.00:1.00 and no Default or Event of Default exists on such Excess
Cash Payment Date, 25%) of Excess Cash Flow for the fiscal year then last ended
shall be applied as a mandatory repayment of principal of the then outstanding
Term Loans in accordance with the requirements of Section 4.02(B)(a).
(g) On the Reinvestment Prepayment Date with respect to a
Reinvestment Election, an amount equal to the Reinvestment Prepayment Amount, if
any, for such Reinvestment Election shall be applied as a repayment of the
principal amount of the then outstanding Term Loans in accordance with the
requirements of Section 4.02(B)(a).
(h) To the extent not theretofore repaid pursuant to the other
provisions of this Agreement, (i) all then outstanding Term Loans shall be
repaid in full on the Term Loan Maturity Date, (ii) all then outstanding
Swingline Loans shall be repaid in full on the Swingline Expiry Date, (iii) all
then outstanding Revolving Loans shall be repaid in full on the RF Maturity Date
and (iv) all outstanding Swingline Loans and Revolving Loans shall be repaid in
full upon the termination of the Total Revolving Commitment.
(B) Application:
(a) Each mandatory repayment required to be made pursuant to
Sections 4.02(A)(c) (to the extent relating to Asset Sales as described in
clause (z) of the definition thereof), (d), (e), (f) and (g) shall be applied to
the outstanding principal of Term Loans (1) first, in direct order of maturity
to those Scheduled Repayments which will be due and payable within 12 months
after the date of the respective repayment and (2) second, to the extent in
excess thereof, to the then remaining Scheduled Repayments on a PRO RATA basis
(based upon the then remaining principal amount of each such Scheduled Repayment
after giving effect to all prior reductions thereto). Each mandatory repayment
pursuant to Section 4.02(A)(c) (to the extent relating to Asset Sales other than
those described in clause (z) of the definition thereof) shall be applied (1)
first, at the Borrower's election (delivered in writing to the Administrative
Agent) to repay outstanding principal of Revolving Loans (with no corresponding
reduction to the Revolving Commitments) (although, (x) no election may be made
pursuant to this clause (1) with respect to any mandatory repayment required to
be made as a result of the receipt of Net Cash Proceeds from any sale of assets
made pursuant to sub-clause (A) of Section 8.02(f), and (y) for all other
repayments made pursuant to this sentence, not more than $25,000,000 in the
aggregate may be applied (or elected to be applied) pursuant to this clause
(1)), and (2) second, to the extent in excess of the amount to be applied
pursuant to preceding clause (1), to repay principal of all then outstanding
Term Loans, which repayment shall be applied (x) first, in direct order of
maturity to those Scheduled Repayments which will be due and payable within 12
months after the date of the respective repayment and (y) second, to the extent
in excess thereof, to the then remaining Scheduled Repayments on a PRO RATA
basis (based upon the then remaining
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principal amount of each such Scheduled Repayment after giving effect to all
prior reductions thereto).
(b) With respect to each prepayment of Loans required by
Section 4.02, the Borrower may designate the Types of Loans which are to be
prepaid and the specific Borrowing(s) under the affected Facility pursuant to
which made PROVIDED that (i) if any prepayment of Eurodollar Loans made pursuant
to a single Borrowing shall reduce the outstanding Loans made pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount for such
Borrowing, such Borrowing shall be immediately converted into Base Rate Loans;
(ii) each prepayment of any Loans under a Facility shall be applied PRO RATA
among such Loans; and (iii) except for differing treatments of Defaulting
Lenders and Non-Defaulting Lenders as expressly provided in Section 4.02(A)(a),
each prepayment of any Eurodollar Loans made pursuant to a Borrowing shall be
applied PRO RATA among such Eurodollar Loans. In the absence of a designation by
the Borrower as described in the preceding sentence, the Administrative Agent
shall, subject to the above, make such designation in its sole discretion with a
view, but no obligation, to minimize breakage costs owing under Section 1.11.
4.03 METHOD AND PLACE OF PAYMENT. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Administrative Agent for the ratable account of the Lenders entitled thereto,
not later than 1:00 P.M. (New York time) on the date when due and shall be made
in immediately available funds and in Dollars at the Payment Office, it being
understood that written notice by the Borrower to the Administrative Agent to
make a payment from the funds in the Borrower's account at the Payment Office
shall constitute the making of such payment to the extent of such funds held in
such account. Any payments under this Agreement which are made later than 1:00
P.M. (New York time) shall be deemed to have been made on the next succeeding
Business Day. Whenever any payment to be made hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.
4.04 NET PAYMENTS. (a) All payments made by any Credit Party hereunder
or under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income or net profits of a Lender pursuant to the laws
of the jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Lender is located or any
subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect to such non-excluded taxes, levies, imposts, duties,
fees, assessments or other charges (all such non-excluded taxes, levies,
imposts, duties, fees, assessments or other charges being referred to
collectively as "Taxes"). Except as provided in Section 4.04(b), if any Taxes
are so levied or imposed, the Borrower agrees to pay the full amount of such
Taxes, and such additional amounts as may be necessary so that every payment of
all amounts due under this Agreement or under any Note, after withholding or
deduction for or on account of any
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Taxes, will not be less than the amount provided for herein or in such Note. If
any amounts are payable in respect of Taxes pursuant to the preceding sentence,
the Borrower agrees to reimburse each Lender, upon the written request of such
Lender, for taxes imposed on or measured by the net income or net profits of
such Lender pursuant to the laws of the jurisdiction in which such Lender is
organized or in which the principal office or applicable lending office of such
Lender is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which such Lender is organized or in which
the principal office or applicable lending office of such Lender is located and
for any withholding of taxes as such Lender shall determine are payable by, or
withheld from, such Lender, in respect of such amounts so paid to or on behalf
of such Lender pursuant to the preceding sentence and in respect of any amounts
paid to or on behalf of such Lender pursuant to this sentence. The Borrower will
furnish to the Administrative Agent within 45 days after the date the payment of
any Taxes is due pursuant to applicable law certified copies of tax receipts
evidencing such payment by the Borrower. The Borrower agrees to indemnify and
hold harmless each Lender, and reimburse such Lender upon its written request,
for the amount of any Taxes so levied or imposed and paid by such Lender.
(b) Each Lender that is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes agrees to deliver to the Borrower and the Administrative Agent on or
prior to the Effective Date (i) two accurate and complete original signed copies
of Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a
complete exemption under an income tax treaty) (or successor forms) certifying
to such Lender's entitlement as of such date to a complete exemption from United
States withholding tax with respect to payments to be made under this Agreement
and under any Note, or (ii) if the Lender is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption under
an income tax treaty) pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit D (any such certificate, a "Section 4.04
Certificate") and (y) two accurate and complete original signed copies of
Internal Revenue Service Form W-8BEN (with respect to the portfolio exemption)
(or successor form) certifying to such Lender's entitlement as of such date to a
complete exemption from United States withholding tax with respect to payments
of interest to be made under this Agreement and under any Note. In addition,
each Lender agrees that from time to time after the Effective Date, when a lapse
in time or change in circumstances renders the previous certification obsolete
or inaccurate in any material respect, it will deliver to the Borrower or the
Administrative Agent two new accurate and complete original signed copies of
Internal Revenue Service Form W-8ECI, Form W-8BEN (with respect to the benefits
of any income tax treaty) or Form W-8BEN (with respect to the portfolio interest
exemption) and a Section 4.04 Certificate, as the case may be, and such other
forms as may be required in order to confirm or establish the entitlement of
such Lender to a continued exemption from or reduction in United States
withholding tax with respect to payments under this Agreement and any Note, or
it shall immediately notify the Borrower and the Administrative Agent of its
inability to deliver any such Form or Certificate, in which case such Lender
shall not be required to deliver any such Form or Certificate pursuant to this
Section 4.04(b). Notwithstanding anything to the contrary contained in Section
4.04(a), but subject to Section 12.04(b) and the immediately succeeding
sentence, (x) the Borrower shall be entitled, to the extent it is required to do
so by law, to deduct or withhold income or similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the account of any
Lender which is not a
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United States person (as such term is defined in Section 7701(a)(30) of the
Code) for U.S. Federal income tax purposes to the extent that such Lender has
not provided to the Borrower U.S. Internal Revenue Service Forms that establish
a complete exemption from such deduction or withholding and (y) the Borrower
shall not be obligated pursuant to Section 4.04(a) hereof to gross-up payments
to be made to a Lender in respect of income or similar taxes imposed by the
United States if (I) such Lender has not provided to the Borrower the Internal
Revenue Service Forms required to be provided to the Borrower pursuant to this
Section 4.04(b) or (II) in the case of a payment, other than interest, to a
Lender described in clause (ii) above, to the extent that such forms do not
establish a complete exemption from withholding of such taxes. Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere in
this Section 4.04 and except as set forth in Section 12.04(b), the Borrower
agrees to pay any additional amounts and to indemnify each Lender in the manner
set forth in Section 4.04(a) (without regard to the identity of the jurisdiction
requiring the deduction or withholding) in respect of any Taxes deducted or
withheld by it as described in the immediately preceding sentence as a result of
any changes that are effective after the Effective Date in any applicable law,
treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of such Taxes.
(c) If a Credit Party pays any additional amount under this
Section 4.04 to a Lender and such Lender determines in its sole discretion that
it has actually received or realized in connection therewith any refund or any
reduction of, or credit against, its Tax liabilities in or with respect to the
taxable year in which the additional amount is paid (a "Tax Benefit"), such
Lender shall pay to such Credit Party an amount that the Lender shall, in its
sole discretion, determine is equal to the net benefit, after tax, which was
obtained by the Lender in such year as a consequence of such Tax Benefit;
PROVIDED, HOWEVER, that (i) any Lender may determine, in its sole discretion
consistent with the policies of such Lender, whether to seek a Tax Benefit; (ii)
any Taxes that are imposed on a Lender as a result of a disallowance or
reduction (including through the expiration of any tax credit carryover or
carryback of such Lender that otherwise would not have expired) of any Tax
Benefit with respect to which such Lender has made a payment to a Credit Party
pursuant to this Section 4.04(c) shall be treated as a Tax for which the Credit
Party is obligated to indemnify such Lender pursuant to this Section 4.04
without any exclusions or defenses, provided, however, that the amount of such
Tax shall not exceed the amount of the payments received by a Credit Party
pursuant to this section 4.04(c); (iii) nothing in this Section 4.04(c) shall
require the Lender to disclose any confidential information to any Credit Party
(including, without limitation, its tax returns); and (iv) no Lender shall be
required to pay any amounts pursuant to this Section 4.04(c) at any time which a
Default or Event of Default exists.
SECTION 5. CONDITIONS PRECEDENT.
5.01 CONDITIONS PRECEDENT TO THE INITIAL BORROWING DATE. The
obligation of each Lender to make Loans, and the obligation of each Letter of
Credit Issuer to issue Letters of Credit, on the Initial Borrowing Date, is
subject to the satisfaction of each of the following conditions:
(a) EFFECTIVE DATE; NOTES. (i) The Effective Date shall have
occurred and (ii) there shall have been delivered to the Administrative Agent
for the account of each of the
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Lenders that has requested same the appropriate Term Note and/or Revolving Note
executed by the Borrower and, if requested by the Swingline Lender, the
Swingline Note executed by the Borrower, in each case in the amount, maturity
and as otherwise provided herein.
(b) OPINIONS OF COUNSEL. The Administrative Agent shall have
received (i) from Latham & Watkins, special counsel to the Credit Parties, an
opinion addressed to the Joint Lead Arrangers, the Administrative Agent, the
Collateral Agent and each of the Lenders and dated the Initial Borrowing Date
covering the matters set forth in Exhibit E, (ii) reliance letters addressed to
the Joint Lead Arrangers, the Administrative Agent, the Collateral Agent and the
Lenders dated the Initial Borrowing Date with respect to all legal opinions to
Holdings or any Subsidiary thereof delivered in connection with the consummation
of the Acquisition, which reliance letters shall be in form and substance
reasonably satisfactory to the Joint Lead Arrangers, and (iii) from such local
counsel as may be reasonably requested by the Joint Lead Arrangers, which
opinions shall cover the perfection of security interests granted pursuant to
the Mortgages and the Security Agreement and shall be in form and substance
reasonably satisfactory to the Joint Lead Arrangers.
(c) CORPORATE DOCUMENTS; PROCEEDINGS; ETC. (i) The Joint Lead
Arrangers shall have received a certificate from each Credit Party, dated the
Initial Borrowing Date, signed by the Chairman of the Board, the Chief Executive
Officer, the President or any Vice President of such Credit Party, and attested
to by the Secretary or any Assistant Secretary of such Credit Party, in the form
of Exhibit F with appropriate insertions and deletions, together with copies of
the certificate or articles of incorporation and by-laws (or equivalent
organizational documents), as applicable, of such Credit Party and the
resolutions of such Credit Party referred to in such certificate, and each of
the foregoing shall be in form and substance reasonably satisfactory to the
Joint Lead Arrangers.
(ii) On the Initial Borrowing Date, the Joint Lead Arrangers shall
have received all information and copies of all documents and papers, including
records of corporate proceedings, necessary governmental approvals, good
standing certificates and bring-down telegrams or facsimiles, if any, which the
Joint Lead Arrangers reasonably may have requested in connection therewith, such
documents and papers where appropriate to be certified by proper corporate,
limited liability company or governmental authorities.
(d) SENIOR SUBORDINATED NOTES. On or prior to the Initial
Borrowing Date, the Borrower shall have received gross cash proceeds (calculated
before underwriting fees) of at least $225,000,000 from the issuance of the
Senior Subordinated Notes. There shall have been delivered to the Agents true
and correct copies of the Senior Subordinated Note Documents, and all the terms
and conditions of the Senior Subordinated Note Documents (including, without
limitation, amortization, maturities, interest rates, covenants, defaults,
remedies, sinking fund provisions, subordination provisions and other terms)
shall be substantially consistent with the terms of the commitment letter with
respect thereto dated as of September 27, 2002, among CSFB Cayman, DB Cayman and
Holdings or otherwise reasonably satisfactory to the Joint Lead Arrangers.
(e) COMMON EQUITY FINANCING. On or prior to the Initial Borrowing
Date, (i) Holdings shall have received cash proceeds in an aggregate amount
equal to at least
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$350,000,000, and Holdings shall have contributed all such proceeds to the
Borrower as a contribution of cash common equity (the "Common Equity Financing")
and (ii) the cash proceeds from the Common Equity Financing, when aggregated
with the cash proceeds of the issuance or incurrence of the Senior Subordinated
Notes, the Term Loans and up to $21,500,000 of Revolving Loans, shall be
sufficient to consummate the Acquisition, to repay any outstanding Indebtedness
of the Rexnord Business to be repaid by Holdings or any of its Subsidiaries in
connection therewith and to pay all fees and expenses arising in connection with
the Transaction.
(f) CONSUMMATION OF THE ACQUISITION. On the Initial Borrowing
Date, the Acquisition Agreement (together with all exhibits and schedules
thereto), shall be in the form executed on September 27, 2002, with any
additions or changes thereto or waivers of the terms thereof to be in form and
substance reasonably satisfactory to the Joint Lead Arrangers. The Acquisition
Agreement shall be in full force and effect and all of the material conditions
precedent to the consummation of the Acquisition as set forth in the Acquisition
Agreement shall have been satisfied (and not waived, except with consent of the
Joint Lead Arrangers) to the reasonable satisfaction of the Joint Lead
Arrangers. The Acquisition shall have been consummated in accordance in all
material respects with the terms and conditions of the Acquisition Agreement and
all applicable laws.
(g) ADVERSE CHANGE, APPROVALS. (i) Since March 31, 2002, nothing
shall have occurred which has had, or could reasonably be expected to have, a
Material Adverse Effect.
(ii) All material necessary governmental (domestic and foreign) and
material third party approvals and/or consents required in connection with the
Transaction pursuant to the Acquisition Agreement, the other transactions
contemplated hereby and the granting of Liens under the Credit Documents shall
have been obtained and remain in effect, and all applicable waiting periods with
respect thereto shall have expired without any action being taken by any
competent authority which in the judgment of the Joint Lead Arrangers restrains,
prevents or imposes materially adverse conditions upon the consummation of the
Transaction or the other transactions contemplated by the Documents. There shall
not exist any judgment, order, injunction or other restraint issued or filed or
a hearing seeking injunctive relief or other restraint pending prohibiting or
imposing materially adverse conditions upon the Transaction or the other
transactions contemplated by the Documents.
(h) LITIGATION. There shall be no actions, suits or proceedings
pending with respect to the Transaction, this Agreement or any other Document.
(i) PLEDGE AGREEMENT. Each Credit Party shall have duly
authorized, executed and delivered the Pledge Agreement in the form of Exhibit G
(as amended, modified or supplemented from time to time, the "Pledge Agreement")
and shall have delivered to the Collateral Agent, as Pledgee thereunder, all of
the Pledge Agreement Collateral, if any, referred to therein, required to be
delivered thereby and then owned by such Credit Party, (x) endorsed in blank in
the case of promissory notes constituting Pledge Agreement Collateral and (y)
together with executed and undated endorsements for transfer in the case of
Equity Interests constituting certificated Pledge Agreement Collateral, along
with evidence that all other actions necessary or, in the reasonable opinion of
the Collateral Agent, desirable, to perfect the security interests
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purported to be created by the Pledge Agreement have been taken, or arrangements
therefor reasonably satisfactory to the Collateral Agent have been made, and the
Pledge Agreement shall be in full force and effect.
(j) SECURITY AGREEMENT. Each Credit Party shall have duly
authorized, executed and delivered the Security Agreement in the form of Exhibit
H (as amended, modified or supplemented from time to time, the "Security
Agreement") covering all of such Credit Party's Security Agreement Collateral,
together with:
(i) proper financing statements (Form UCC-1 or the equivalent)
authorized for filing under the UCC or other appropriate filing offices of
each jurisdiction as may be necessary or, in the reasonable opinion of the
Collateral Agent, desirable, to perfect the security interests purported to
be created by the Security Agreement;
(ii) certified copies of requests for information or copies (Form
UCC-11), or equivalent reports as of a recent date, listing all effective
financing statements that name Holdings, the Borrower or any Subsidiary
Guarantor as debtor and that are filed in the jurisdictions referred to in
clause (i) above and in such other jurisdictions in which material
Collateral is located on the Effective Date, together with copies of such
financing statements that name Holdings, the Borrower or any Subsidiary
Guarantor as debtor (none of which shall cover any of the Collateral except
(x) to the extent evidencing Permitted Liens or (y) those in respect of
which the Collateral Agent shall have received termination statements (Form
UCC-3) or such other termination statements as shall be required by local
law authorized for filing) or arrangements therefor reasonably satisfactory
to the Collateral Agent have been made;
(iii) evidence of the completion of or arrangements therefor
reasonably satisfactory to the Collateral Agent for all other recordings
and filings of, or with respect to, the Security Agreement as may be
necessary or, in the reasonable opinion of the Collateral Agent, desirable,
to perfect the security interests intended to be created by the Security
Agreement; and
(iv) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect and
protect the security interests purported to be created by the Security
Agreement have been taken, and the Security Agreement shall be in full
force and effect.
(k) MORTGAGE; TITLE INSURANCE; SURVEY; LANDLORD WAIVERS; ETC. On
the Initial Borrowing Date, the Collateral Agent shall have received:
(i) fully executed counterparts of the Mortgages, in each case in
form and substance reasonably satisfactory to the Administrative Agent,
which Mortgages shall cover the Real Property owned and/or leased by the
Borrower and designated as the "Mortgaged Property" on Schedule III,
together with evidence that counterparts of such Mortgages have been
delivered to the title insurance company insuring the Lien of each such
Mortgage for recording in all places to the extent necessary or, in the
reasonable opinion of the Collateral Agent desirable, to effectively create
a valid and enforceable
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first priority mortgage lien, subject only to Liens permitted under
Sections 8.03(a), (b), (g), (h), (j) and (l), on the Mortgaged Property
described therein in favor of the Collateral Agent (or such other trustee
as may be required or desired under local law) for the benefit of the
Secured Creditors;
(ii) a Mortgage Policy relating to each Mortgage on each Mortgaged
Property referred to above issued by a title insurer reasonably
satisfactory to the Collateral Agent and in amounts reasonably satisfactory
to the Collateral Agent and assuring the Collateral Agent that the
respective Mortgage on each such Mortgaged Property is a valid and
enforceable first priority mortgage lien on the respective such Mortgaged
Property, free and clear of all defects and encumbrances except Liens
permitted under Sections 8.03(a), (b), (g), (h), (j) and (l), and each such
Mortgage Policy shall otherwise be in form and substance reasonably
satisfactory to the Collateral Agent and shall include, if available in any
particular State and as appropriate, an endorsement for future advances
under this Agreement and the Notes and for any other matter that the
Collateral Agent in its discretion may reasonably request, shall not
include a survey exception or an exception for mechanics' liens, and shall
provide for affirmative insurance and such reinsurance as the Collateral
Agent in its discretion may reasonably request;
(iii) fully executed landlord waivers in respect of those Leaseholds
of the Borrower designated as "Leaseholds Subject to Landlord Waivers" on
Schedule III, each of which landlord waivers shall be in form and substance
reasonably satisfactory to the Collateral Agent (it being understood, that
the Borrower shall only be required to use its commercially reasonable
efforts for the purposes of the satisfaction of the condition contained in
this clause (iii)); and
(iv) flood certificates covering each Mortgaged Property certifying
whether or not each such Mortgaged Property lies in an area of flood hazard
(with reference to the applicable FEMA (Federal Emergency Management
Agency) map) in form and substance reasonably satisfactory to the
Collateral Agent.
(l) FINANCIAL STATEMENTS; PRO FORMA BALANCE SHEET; PROJECTIONS.
The Joint Lead Arrangers shall have received true and correct copies of the
historical financial statements, the pro forma financial statements and the
Projections referred to in Sections 6.10(b) and (d).
(m) SOLVENCY; INSURANCE CERTIFICATES. The Administrative Agent
shall have received:
(i) a solvency certificate, dated the Initial Borrowing Date, from
the Chief Financial Officer of Holdings, in the form of Exhibit I; and
(ii) certificates of insurance complying with the requirements of
Section 7.03 for the business and properties of the Credit Parties, in form
and substance reasonably satisfactory to the Administrative Agent and
naming the Collateral Agent as an additional insured and/or as loss payee,
and stating that such insurance shall not be canceled without at least 30
days' prior written notice by the insurer to the Collateral Agent.
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(n) SUBSIDIARIES GUARANTY. Each Domestic Subsidiary existing on
the Initial Borrowing Date shall have duly authorized, executed and delivered a
Subsidiaries Guaranty in the form of Exhibit J hereto (as modified, amended or
supplemented from time to time in accordance with the terms hereof and thereof,
the "Subsidiaries Guaranty"), and the Subsidiaries Guaranty shall be in full
force and effect.
(o) EXISTING INDEBTEDNESS. On the Initial Borrowing Date and after
giving effect to the Transaction and the Loans then incurred, neither Holdings
nor any of its Subsidiaries shall have any preferred stock or Indebtedness
outstanding except for (i) the Loans and any Letter of Credit issued on the
Initial Borrowing Date, (ii) the Senior Subordinated Notes, (iii) intercompany
loans among Qualified Credit Parties and other intercompany loans made pursuant
to Section 8.06(p) (but in any event excluding intercompany loans made by any
Foreign Subsidiary to Holdings or any Domestic Subsidiary), (iv) the
Indebtedness set forth on Schedule IV hereto and (v) certain other Indebtedness
in an aggregate principal amount not to exceed $1,000,000 (the Indebtedness set
forth on such Schedule IV, together with the Indebtedness described in this
clause (v), the "Existing Indebtedness"), with all of the Existing Indebtedness
set forth on Schedule IV to be reasonably satisfactory to the Joint Lead
Arrangers as to amount and material terms and conditions.
(p) FEES, ETC. The Borrower shall have paid to the Joint Lead
Arrangers and the Administrative Agent all reasonable, documented, out-of-pocket
costs, fees and expenses (including, without limitation, legal fees and
expenses) and other compensation contemplated hereby payable to the Joint Lead
Arrangers and the Administrative Agent to the extent then due.
All of the Notes, certificates, legal opinions and other documents and
papers referred to in this Section 5.01, unless otherwise specified, shall be
delivered to the Administrative Agent for the account of each of the Lenders
and, except for the Notes, in sufficient counterparts or copies for each of the
Lenders.
5.02 CONDITIONS PRECEDENT TO ALL CREDIT EVENTS. The obligation of each
Lender to make Loans (including Loans made on the Initial Borrowing Date but
excluding any Mandatory Borrowings), and the obligation of each Letter of Credit
Issuer to issue Letters of Credit (including Letters of Credit issued on the
Initial Borrowing Date), is subject, at the time of each such Credit Event, to
the satisfaction of the following conditions:
(a) NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of
each such Credit Event and also after giving effect thereto (i) there shall
exist no Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of such Credit Event (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).
(b) NOTICE OF BORROWING; LETTER OF CREDIT REQUEST. (i) Prior to
the making of each Loan (other than a Swingline Loan or a Revolving Loan made
pursuant to a Mandatory Borrowing), the Administrative Agent shall have received
a Notice of Borrowing meeting the
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requirements of Section 1.03(a). Prior to the making of each Swingline Loan, the
Swingline Lender shall have received the notice referred to in Section
1.03(b)(i).
(ii) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the respective Letter of Credit Issuer shall have
received a Letter of Credit Request meeting the requirements of Section 2.03(a).
The acceptance of the benefits of each Credit Event (other than a
Mandatory Borrowing) shall constitute a representation and warranty by Holdings
and the Borrower to the Administrative Agent and each of the Lenders that all
the conditions specified in Section 5.01 (with respect to Credit Events on the
Initial Borrowing Date) and in this Section 5.02 (with respect to Credit Events
on and after the Initial Borrowing Date) and applicable to such Credit Event are
satisfied as of that time.
SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. In order to
induce the Lenders to enter into this Agreement and to make the Loans and issue
and/or participate in Letters of Credit provided for herein, each of Holdings
and the Borrower makes the following representations and warranties to, and
agreements with, the Lenders, all of which shall survive the execution and
delivery of this Agreement and the making of the Loans:
6.01 CORPORATE STATUS. Each of Holdings and its Subsidiaries (i) is a
duly organized and validly existing Company, is in good standing (for each
Company of a type, and organized in a jurisdiction, where the concept of "good
standing" exists) under the laws of the jurisdiction of its organization and has
the Company power and authority to own its property and assets and to transact
the business in which it is engaged and (ii) is duly qualified and is authorized
to do business and, to the extent relevant, is in good standing in all
jurisdictions where it is required to be so qualified and where the failure to
be so qualified, authorized or in good standing is reasonably likely to have a
Material Adverse Effect.
6.02 CORPORATE POWER AND AUTHORITY. Each Credit Party has the Company
power and authority to execute, deliver and carry out the terms and provisions
of the Credit Documents to which it is a party and has taken all necessary
Company action to authorize the execution, delivery and performance of the
Credit Documents to which it is a party. Each Credit Party has duly executed and
delivered each Credit Document to which it is a party and each such Credit
Document constitutes the legal, valid and binding obligation of such Person
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws generally affecting creditors'
rights and by general equitable principles (regardless of whether enforcement is
sought in equity or at law).
6.03 NO VIOLATION. Neither the execution, delivery or performance by
any Credit Party of the Credit Documents to which it is a party nor compliance
with the terms and provisions thereof, (i) will contravene any applicable
provision of any law, statute, rule, regulation, order, writ, injunction or
decree of any court or governmental instrumentality, (ii) will conflict or be
inconsistent with or result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or (other than
pursuant to the Security Documents) result in the creation or imposition of (or
the obligation to create or impose) any
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Lien upon any of the property or assets of Holdings or any of its Subsidiaries
pursuant to the terms of any indenture, mortgage, deed of trust or other
material agreement or instrument to which Holdings or any of its Subsidiaries is
a party or by which it or any of its property or assets are bound or to which it
may be subject or (iii) will violate any provision of the organizational
documents (including by-laws) of Holdings or any of its Subsidiaries.
6.04 LITIGATION. There are no actions, suits or proceedings pending
or, to the best of its knowledge, threatened with respect to Holdings or any of
its Subsidiaries (i) that have, or that could reasonably be expected to have, a
Material Adverse Effect or (ii) that have, or that could reasonably be expected
to have, a material adverse effect on (a) the rights or remedies of the Lenders
or on the ability of the Credit Parties taken as a whole to perform their
obligations under the other Credit Documents or (b) the consummation of the
Transaction.
6.05 USE OF PROCEEDS; MARGIN REGULATIONS. (a) The proceeds of all Term
Loans incurred on the Initial Borrowing Date shall be utilized (i) to finance
the Acquisition and (ii) to pay certain fees and expenses relating to the
Transaction. Without limiting the generality of the foregoing, $39,752,614.00 of
the proceeds of the Term Loans shall be used by the Borrower, directly or
indirectly, solely to finance the acquisition of MCC Holding BV and to pay fees
and expenses related to the acquisition of MCC Holding BV.
(b) The proceeds of all Revolving Loans and all Swingline Loans
may be used on and after the Initial Borrowing Date for general corporate and
working capital purposes, including, without limitation, for making Investments
and consummating Permitted Acquisitions permitted hereunder, PROVIDED that (x)
up to, but no more than, $21,500,000 (less any amounts utilized as provided in
clause (y) below) of Revolving Loans may be utilized to pay amounts owing in
respect of non-cash related post-closing purchase price adjustments pursuant to
the Acquisition Agreement and (y) up to, but no more than, $5,000,000 of the
Revolving Loans may be utilized on the Initial Borrowing Date to pay any fees
and expenses incurred in connection with the Transaction.
(c) Neither the making of any Loan hereunder, nor the use of the
proceeds thereof, will violate the provisions of Regulation T, U or X of the
Board of Governors of the Federal Reserve System and no part of the proceeds of
any Loan will be used to purchase or carry any Margin Stock or to extend credit
for the purpose of purchasing or carrying any Margin Stock.
6.06 GOVERNMENTAL APPROVALS. Except for filings and recordings in
connection with the Security Documents, no order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required in
connection with (i) the execution, delivery and performance of any Credit
Document or (ii) the legality, validity, binding effect or enforceability of any
Credit Document except, in any such case, as expressly provided herein or in the
Security Documents.
6.07 INVESTMENT COMPANY ACT. No Credit Party is an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
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6.08 PUBLIC UTILITY HOLDING COMPANY ACT. No Credit Party is a "holding
company," or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
6.09 TRUE AND COMPLETE DISCLOSURE. All factual information (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of the Credit
Parties in writing to the Joint Lead Arrangers, the Administrative Agent or any
Lender for purposes of or in connection with this Agreement or any transaction
contemplated herein is, and all other such factual information (taken as a
whole) hereafter furnished by or on behalf of any Credit Party in writing to the
Lenders hereunder will be, true and accurate in all material respects on the
date as of which such information is dated or certified and not incomplete by
omitting to state any material fact necessary to make such information (taken as
a whole) not misleading at such time in any material respect in light of the
circumstances under which such information was provided. The projections and PRO
FORMA financial information contained in such materials are based on good faith
estimates and assumptions believed by Holdings and the Borrower to be reasonable
at the time made, it being recognized by the Lenders that such projections as to
future events are not to be viewed as facts and that actual results during the
period or periods covered by any such projections may differ from the projected
results. There is no fact known to any Credit Party (other than matters relating
to general economic conditions) which would have a Material Adverse Effect,
which has not been disclosed herein or in such other documents, certificates and
statements furnished to the Lenders for use in connection with the transactions
contemplated hereby.
6.10 FINANCIAL CONDITION; FINANCIAL STATEMENTS. (a) On and as of the
Initial Borrowing Date, on a PRO FORMA basis after giving effect to the
Transaction and all Indebtedness incurred, and to be incurred (including,
without limitation, the Loans and the Senior Subordinated Notes), and Liens
created, and to be created, by each Credit Party in connection therewith, (x)
the fair valuation of all of the tangible and intangible assets of the Credit
Parties (on a consolidated basis) will exceed their debts, (y) the Credit
Parties will not have incurred or intended to incur debts beyond their ability
to pay such debts as such debts mature and (z) the Credit Parties will not have
unreasonably small capital with which to conduct their business. For purposes of
this Section 6.10, "debt" means any liability on a claim, and "claim" means any
(i) right to payment whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured; or (ii) right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
(b) The consolidated balance sheets of the Rexnord Business at
March 31, 2002 and September 30, 2002 and the related consolidated statements of
operations and cash flows of the Rexnord Business for the fiscal year or the six
month period, as the case may be, ended as of said dates, which, in the case of
the annual financial statements, have been audited by Ernst & Young LLP
independent certified public accountants, who delivered an unqualified opinion
in respect therewith, copies of all of which have heretofore been furnished to
the Joint Lead Arrangers, present fairly the consolidated financial position of
the Rexnord Business (and reasonably reflect in all material respects the
combined financial condition and results of
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operations of the Rexnord Business) at the dates of said statements and the
results for the periods covered thereby in accordance with GAAP, except to the
extent provided in the notes to said financial statements. All such financial
statements have been prepared in accordance with GAAP and practices consistently
applied except to the extent provided in the notes to said financial statements.
The PRO FORMA consolidated balance sheet and the related consolidated statements
of operations and cash flows of Holdings and its Subsidiaries as of, and for the
four fiscal quarter period ending on, September 30, 2002, copies of which have
heretofore been furnished to each Lender, present a good faith estimate of the
consolidated PRO FORMA financial position of Holdings and its Subsidiaries
(after giving effect to the Transaction) as at the date thereof and the results
for the period covered thereby. Nothing has occurred since March 31, 2002 that
has had, or is reasonably likely to have, a Material Adverse Effect, it being
understood that for periods prior to the Initial Borrowing Date the Rexnord
Business shall be included for the purposes of making determinations pursuant to
this sentence as if the Rexnord Business had been owned by Holdings at all times
during such periods.
(c) Except as reflected in the financial statements described in
Section 6.10(b) or in the footnotes thereto, there were as of the Initial
Borrowing Date no liabilities or obligations with respect to Holdings or any of
its Subsidiaries of a nature (whether absolute, accrued, contingent or otherwise
and whether or not due) which, either individually or in aggregate, would be
material to Holdings and its Subsidiaries taken as a whole, except as incurred
in the ordinary course of business consistent with past practices.
(d) The Projections delivered to the Administrative Agent and the
Lenders prior to the Initial Borrowing Date have been prepared in good faith and
are based on assumptions believed by the Borrower to be reasonable at the time
such Projections were prepared (it being understood that the Projections are
subject to significant uncertainties and contingencies, many of which are beyond
the control of Holdings and its Subsidiaries, and that no assurance can be given
that the Projections will be realized).
6.11 SECURITY INTERESTS. (a) The provisions of the Security Agreement
are effective to create in favor of the Collateral Agent for the benefit of the
Secured Creditors a legal, valid and enforceable security interest in all right,
title and interest of the Credit Parties in the Security Agreement Collateral
described therein, and the Collateral Agent, for the benefit of the Secured
Creditors, has (or within 10 days following the Initial Borrowing Date will
have) a fully perfected security interest in all right, title and interest in
all of the Security Agreement Collateral described therein to the extent
contemplated therein, subject to no other Liens other than Permitted Liens. The
recordation of (x) the Grant of Security Interest in U.S. Patents, if
applicable, and (y) the Grant of Security Interest in U.S. Trademarks, if
applicable, in the respective form attached to the Security Agreement, in each
case in the United States Patent and Trademark Office, together with filings on
Form UCC-1 made pursuant to the Security Agreement, will create, to the extent
the security interest granted pursuant thereto may be perfected by such filings
and recordation, a perfected security interest in the United States trademarks
and patents covered by the Security Agreement, and the recordation of the Grant
of Security Interest in U.S. Copyrights, if applicable, in the form attached to
the Security Agreement with the United States Copyright Office, together with
filings on Form UCC-1 made pursuant to the Security Agreement, will create, to
the extent the security interest granted
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pursuant thereto may be perfected by such filings and recordation, a perfected
security interest in the United States copyrights covered by the Security
Agreement.
(b) The provisions of the Pledge Agreement are effective to create
in favor of the Collateral Agent, for the benefit of the Secured Creditors, a
legal, valid and enforceable security interest in all right, title and interest
of the Credit Parties in the Pledge Agreement Collateral (as described therein),
and the Collateral Agent, for the benefit of the Secured Creditors, has (or
within 10 days following the Initial Borrowing Date will have) a fully perfected
security interest in all right, title and interest in all of the Pledge
Agreement Collateral described therein to the extent contemplated therein,
subject to no other Liens other than Permitted Liens.
(c) Each Mortgage is effective to create, as security for the
obligations purported to be secured thereby, a valid and enforceable perfected
security interest in and mortgage lien on the respective Mortgaged Property in
favor of the Collateral Agent (or such other trustee as may be party thereto)
for the benefit of the Secured Creditors, superior and prior to the rights of
all third Persons (except that the security interest and mortgage lien created
on such Mortgaged Property may be subject to the Permitted Encumbrances related
thereto) and subject to no other Liens (other than Permitted Liens related
thereto).
6.12 CONSUMMATION OF CERTAIN TRANSACTIONS. As of the Initial Borrowing
Date, the Transaction shall have been consummated in accordance with the
material terms and conditions of the respective Transaction Documents and all
applicable laws. All applicable waiting periods with respect thereto have or,
prior to the time when required, will have, expired without, in all such cases,
any action being taken by any competent authority which restrains, prevents, or
imposes material adverse conditions upon the consummation of the Transaction.
6.13 TAX RETURNS AND PAYMENTS. Each of Holdings and its Subsidiaries
has timely filed with the appropriate taxing authority, all material returns,
statements, forms and reports for taxes (the "Returns") required to be filed by
or with respect to the income, properties or operations of Holdings and/or any
of its Subsidiaries, except, in the case of any such filing required to be filed
by a Foreign Subsidiary, to the extent failure to do so is not reasonably likely
to have a Material Adverse Effect. Holdings and each of its Subsidiaries have
paid all material taxes payable by them when due except (i) those contested in
good faith and adequately disclosed and for which adequate reserves have been
established in accordance with generally accepted accounting principles and (ii)
in the case of any such taxes payable by a Foreign Subsidiary, to the extent the
failure to pay such taxes is not reasonably likely to have a Material Adverse
Effect.
6.14 COMPLIANCE WITH ERISA. (a) Part A of Schedule V sets forth each
Plan other than ERISA Affiliate Plans as of the Initial Borrowing Date, after
giving effect to the Transaction. Except to the extent that a breach of any of
the following representations with respect to an ERISA Affiliate Plan would not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect (provided, however, (i) any of the following representations with
respect to an ERISA Affiliate Plan shall be deemed not qualified by any
reference therein to materiality and (ii) this exception shall not apply to any
of the following representations that expressly refer to a Material Adverse
Effect): each Plan (and each related
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trust, insurance contract or fund) is in substantial compliance with its terms
and with all applicable laws, including without limitation ERISA and the Code;
each Plan (and each related trust, if any) which is intended to be qualified
under Section 401(a) of the Code is so qualified; no Reportable Event has
occurred with respect to a Plan, except as disclosed in Part B of Schedule V; to
the knowledge of Borrower no Plan which is a multiemployer plan (as defined in
Section 4001(a)(3) of ERISA) is insolvent or in reorganization; no Plan has an
Unfunded Current Liability which, when added to the aggregate amount of Unfunded
Current Liabilities with respect to all other Plans is reasonably likely to
result in a Material Adverse Effect; no Plan which is subject to Section 412 of
the Code or Section 302 of ERISA has an accumulated funding deficiency, within
the meaning of such sections of the Code or ERISA, or has applied for or
received a waiver of an accumulated funding deficiency or an extension of any
amortization period, within the meaning of Section 412 of the Code or Section
303 or 304 of ERISA; all contributions required to be made with respect to a
Plan have been timely made in all material respects; neither Holdings, the
Borrower nor any Subsidiary of Holdings has incurred any material liability
(including any indirect, contingent or secondary liability) to or on account of
a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or
to the knowledge of Holdings, the Borrower or such Subsidiary reasonably expects
to incur any such material liability under any of the foregoing sections with
respect to any Plan; to the knowledge of Holdings, the Borrower or such
Subsidiary no condition exists which presents a material risk to Holdings, the
Borrower or any Subsidiary of Holdings of incurring a material liability to or
on account of a Plan pursuant to the foregoing provisions of ERISA and the Code;
no proceedings have been instituted to terminate (in a distress termination
pursuant to ERISA Section 4042) or appoint a trustee to administer any Plan
which is subject to Title IV of ERISA; no action, suit, proceeding, hearing,
audit or investigation with respect to the administration, operation or the
investment of assets of any Plan (other than routine claims for benefits) is
pending, expected or to the knowledge of the Credit Parties threatened, other
than any of the foregoing which would not, individually or in the aggregate,
reasonably be expected to result in a material liability of Holdings, the
Borrower or any Subsidiary of Holdings; using actuarial assumptions and
computation methods consistent with Part 1 of subtitle E of Title IV of ERISA,
the aggregate liabilities of Holdings, its Subsidiaries and its ERISA Affiliates
to all Plans which are multiemployer plans (as defined in Section 4001(a)(3) of
ERISA) in the event of a complete withdrawal therefrom, as of the close of the
most recent fiscal year of each such Plan ended prior to the date of the most
recent Credit Event (other than a Mandatory Borrowing) is not reasonably likely
to result in a Material Adverse Effect; and each group health plan (as defined
in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) which covers or
has covered employees or former employees of Holdings or any Subsidiary of
Holdings has at all times been operated in compliance with the provisions of
Part 6 of subtitle B of Title I of ERISA and Section 4980B of the Code, other
than any failure to so comply which would not, individually or in the aggregate,
reasonably be expected to result in a material liability of Holdings, the
Borrower or any Subsidiary of Holdings; no lien imposed under the Code or ERISA
on the assets of Holdings or any Subsidiary of Holdings exists or is likely to
arise on account of any Plan.
(b) Except as could not reasonably be expected to have a Material
Adverse Effect, each Foreign Pension Plan has been maintained in compliance with
its terms and with the requirements of any and all applicable laws, statutes,
rules, regulations and orders and has been maintained, where required, in good
standing with applicable regulatory authorities; all
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contributions required to be made with respect to a Foreign Pension Plan have
been timely made; and neither Holdings, the Borrower nor any of its Subsidiaries
has incurred any obligation in connection with the termination of or withdrawal
from any Foreign Pension Plan; and the present value of the accrued benefit
liabilities (whether or not vested) under each Foreign Pension Plan, determined
as of the end of the Borrower's most recently ended fiscal year on the basis of
actuarial assumptions, each of which is reasonable, did not exceed the current
value of the assets of such Foreign Pension Plan allocable to such benefit
liabilities.
6.15 SUBSIDIARIES. On and as of the Initial Borrowing Date and after
giving effect to the consummation of the Transaction, (i) Holdings has no direct
Subsidiaries other than the Borrower and (ii) the Borrower has no Subsidiaries
other than those Subsidiaries listed on Schedule VI. Schedule VI correctly sets
forth, as of the Initial Borrowing Date and after giving effect to the
Transaction, the percentage ownership (direct and indirect) of the Borrower in
each class of capital stock of each of its Subsidiaries and also identifies the
direct owner thereof.
6.16 INTELLECTUAL PROPERTY. Each of Holdings and its Subsidiaries owns
or has the right to use all the domestic and foreign patents, trademarks,
service marks, trade names, domain names, technology, copyrights, licenses,
permits, franchises, inventions, formulas, trade secrets, proprietary
information and know-how of any type, whether or not written (including, but not
limited to, computer programs, databases and data collections) or has rights
with respect to the foregoing, and has obtained assignments of all leases and
licenses and other rights of whatever nature, that are used in the operation of
each such Credit Party's respective business as presently conducted, where the
failure to own or hold such rights is reasonably likely to have a Material
Adverse Effect.
6.17 ENVIRONMENTAL MATTERS. (a) Each of Holdings its Subsidiaries is
in compliance with all applicable Environmental Laws governing its business, and
neither Holdings nor any of its Subsidiaries is liable for any material
penalties, fines or forfeitures for failure to comply with any of the foregoing
in the manner set forth above, except where any such failure to comply or any
liability for any such penalties, fines or forfeitures is not reasonably likely
to result in a Material Adverse Effect. All licenses, permits, registrations or
approvals required for the business of Holdings and each of its Subsidiaries, as
conducted as of the Initial Borrowing Date, under any Environmental Law have
been secured and each of Holdings and its Subsidiaries is in substantial
compliance therewith, except such licenses, permits, registrations or approvals
the failure to secure or to comply therewith is not reasonably likely to have a
Material Adverse Effect. Neither Holdings nor any of its Subsidiaries is in any
respect in noncompliance with, breach of or default under any applicable writ,
order, judgment, injunction, or decree to which Holdings or such Subsidiary is a
party or which could affect the ability of Holdings or such Subsidiary to
operate any Real Property and no event has occurred and is continuing which,
with the passage of time or the giving of notice or both, would reasonably be
expected to constitute noncompliance, breach of or default thereunder, except in
each such case, such noncompliance, breaches or defaults as are not reasonably
likely to, in the aggregate, have a Material Adverse Effect. There are as of the
Initial Borrowing Date no Environmental Claims pending or, to the best knowledge
of Holdings and the Borrower threatened, where any decision, ruling or finding
with respect thereto is reasonably likely to have a Material Adverse Effect.
There are no facts, circumstances, conditions or occurrences concerning the
business or operations of Holdings or any of its Subsidiaries, or any Real
Property at any time owned or operated by Holdings or any
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of its Subsidiaries or, to the knowledge of Holdings or the Borrower, on any
property adjacent to any such Real Property that could reasonably be expected
(i) to form the basis of an Environmental Claim against Holdings, any of its
Subsidiaries or any of their respective Real Property or (ii) to cause any such
currently owned or operated Real Property to be subject to any restrictions on
the ownership, occupancy, use or transferability of such Real Property under any
Environmental Law, except in each such case, such Environmental Claims or
restrictions that individually, or in the aggregate, are not reasonably likely
to have a Material Adverse Effect.
(b) Hazardous Materials have not at any time been (i) generated,
used, treated or stored on, or transported to or from, any Real Property owned
or operated by Holdings or any of its Subsidiaries or (ii) released on or from
any such Real Property, in each case where such occurrence or event individually
or in the aggregate is reasonably likely to have a Material Adverse Effect.
6.18 PROPERTIES. Holdings and each of its Subsidiaries have good and
insurable title to, or a validly existing leasehold interest in, all material
properties owned and used by them, including, as of the Initial Borrowing Date,
all Real Property reflected in the consolidated balance sheets of the Rexnord
Business at March 31, 2002 referred to in Section 6.10(b), free and clear of all
Liens, other than (i) as referred to in the consolidated balance sheet or in the
notes thereto, (ii) otherwise permitted by Section 8.03 or (iii) in the case of
any such property owned or used by a Foreign Subsidiary, as is not reasonably
likely to have a Material Adverse Effect. Schedule III contains a true and
complete list of each domestic Real Property owned or leased by the Borrower or
any of its Domestic Subsidiaries (other than any such leased Real Property where
the annual base rental obligation with respect thereto is less than $250,000) as
of the Initial Borrowing Date and after giving effect to the Transaction, and
the type of interest therein held by Holdings or the respective Subsidiary.
6.19 LABOR RELATIONS. No Credit Party is engaged in any unfair labor
practice that could reasonably be expected to have a Material Adverse Effect.
There is (i) no unfair labor practice complaint pending against any Credit Party
or, to the best of its knowledge, threatened against any of them, before the
National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against any Credit Party or, to the best of its knowledge, threatened against
any of them, (ii) no strike, labor dispute, slowdown or stoppage pending against
any Credit Party or, to the best of its knowledge, threatened against any Credit
Party and (iii) no union representation question existing with respect to the
employees of any Credit Party and no union organizing activities are taking
place, except with respect to any matter specified in clause (i), (ii) or (iii)
above, either individually or in the aggregate, such as could not reasonably be
expected to have a Material Adverse Effect.
6.20 COMPLIANCE WITH STATUTES, ETC. Each of Holdings and each of its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property, except such non-compliance as is not reasonably likely to,
individually or in the aggregate, have a Material Adverse Effect.
6.21 SUBORDINATION. The subordination provisions contained in the
Senior Subordinated Note Indenture are enforceable by the Lenders against the
Borrower and the
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holders of the Senior Subordinated Notes, and all Obligations of the Borrower
are or will be within the definitions of "Senior Indebtedness" and "Designated
Senior Indebtedness," as the case may be, included in such provisions of the
Senior Subordinated Note Indenture.
6.22 CAPITALIZATION. (a) On the Initial Borrowing Date, the authorized
capital stock of Holdings consists of 5,000,000 shares of common stock, $.01 par
value, of which 3,595,000 shares are issued and outstanding and owned by the
Initial Investors. All outstanding shares of capital stock of Holdings have been
duly and validly issued and are fully paid and non-assessable.
(b) On the Initial Borrowing Date, the authorized capital stock of
the Borrower consists of 1,000 shares of common stock, $.01 par value, of which
1,000 shares are issued and outstanding and owned by Holdings. All outstanding
shares of the capital stock of the Borrower have been duly and validly issued
and are fully paid and non-assessable. The Borrower does not have outstanding
any securities convertible into or exchangeable for its capital stock or
outstanding any rights to subscribe for or to purchase, or any options for the
purchase of, or any agreement providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock.
6.23 LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A REGISTERED
ORGANIZATION); JURISDICTION OF ORGANIZATION; ETC. Schedule VII attached hereto
contains for each Credit Party, as of the Initial Borrowing Date, (i) the exact
legal name of such Credit Party, (ii) the type of organization of such Credit
Party, (iii) whether or not such Credit Party is a registered organization, (iv)
the jurisdiction of organization of such Credit Party, (v) such Credit Party's
Location and (vi) the organizational identification number (if any) of such
Credit Party. To the extent that such Credit Party does not have an
organizational identification number on the date hereof and later obtains one,
such Credit Party shall promptly thereafter notify the Collateral Agent of such
organizational identification number and shall take all actions reasonably
satisfactory to the Collateral Agent to the extent necessary to maintain the
security interest of the Collateral Agent in the Collateral intended to be
granted pursuant to the Security Documents fully perfected and in full force and
effect.
SECTION 7. AFFIRMATIVE COVENANTS. Holdings and the Borrower hereby
covenant and agree that for so long as this Agreement is in effect and until the
Commitments have terminated, no Letters of Credit or Notes are outstanding and
the Loans and Unpaid Drawings, together with interest, Fees and all other
Obligations (other than any indemnities hereunder and under the other Credit
Documents which are not then owing) incurred hereunder, are paid in full:
7.01 INFORMATION COVENANTS. Holdings will furnish to the
Administrative Agent for distribution to each Lender:
(a) ANNUAL FINANCIAL STATEMENTS. Within 90 days after the close of
each fiscal year of Holdings, the audited consolidated balance sheet of Holdings
and its Subsidiaries, as at the end of such fiscal year and the related
consolidated statements of operations and of cash flows for such fiscal year, in
each case setting forth comparative consolidated figures for the preceding
fiscal year, and examined by independent certified public accountants of
recognized national standing whose opinion shall not be qualified as to the
scope of audit or as to the status
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of Holdings or any of its Subsidiaries as a going concern. Notwithstanding the
foregoing, in the event that Holdings delivers to the Administrative Agent an
Annual Report for Holdings on Form 10-K for such fiscal year, as filed with the
SEC, within 90 days after the end of such fiscal year, such Form 10-K shall
satisfy all requirements of this clause (a) so long as the certified public
accountants' opinion included in such Form 10-K satisfies the requirements with
respect thereto set forth in the immediately preceding sentence.
(b) QUARTERLY FINANCIAL STATEMENTS. Commencing with the fiscal
quarter ending on December 31, 2002, within 60 days after the close of each of
the first three quarterly accounting periods in each fiscal year of Holdings,
the unaudited consolidated balance sheet of Holdings and its Subsidiaries, as at
the end of such quarterly accounting period and the related unaudited
consolidated statements of operations and of cash flows for such quarterly
accounting period and for the elapsed portion of the fiscal year ended with the
last day of such quarterly accounting period, and in each case, commencing with
the quarter ending December 31, 2003, setting forth comparative consolidated
figures for the related periods in the prior fiscal year, all of which shall be
in reasonable detail and certified by the chief financial officer or controller
of Holdings, subject to changes resulting from audit and normal year-end audit
adjustments. Notwithstanding the foregoing, in the event that Holdings delivers
to the Administrative Agent a Quarterly Report for Holdings on Form 10-Q for
such fiscal quarter, as filed with the SEC, within 45 days after the end of such
fiscal quarter, such Form 10-Q shall satisfy all requirements of this clause
(b).
(c) MONTHLY REPORTS. Commencing with the fiscal month ending
December 31, 2002, within 30 days after the end of each monthly accounting
period of each fiscal year of Holdings (other than the last monthly accounting
period in such fiscal year) the unaudited consolidated balance sheet of Holdings
and its Subsidiaries, as at the end of such period, and the related unaudited
consolidated statements of operations and cash flows for such period, and, in
each case, commencing with the month ending December 31, 2003, setting forth
comparative figures for the corresponding period of the previous year, all of
which shall be certified by the chief financial officer or controller of
Holdings subject to changes resulting from audit and normal year-end audit
adjustments.
(d) BUDGETS; ETC. Not more than 30 days after the commencement of
each fiscal year of Holdings, a consolidated budget of Holdings and its
Subsidiaries (including budgeted statements of income, sources and uses of cash
and balance sheets for Holdings and its Subsidiaries on a consolidated basis)
for each of the twelve months of such fiscal year prepared in reasonable detail
as customarily prepared by management for its internal use and setting forth,
with appropriate discussion, the principal assumptions upon which such budgets
are based. Together with each delivery of consolidated financial statements
pursuant to Sections 7.01(a) and (b), a comparison of the current year-to-date
financial results against the budgets required to be submitted pursuant to this
clause (d) shall be presented.
(e) OFFICER'S CERTIFICATES. At the time of the delivery of the
financial statements provided for in Sections 7.01(a) and (b), a certificate of
the chief financial officer or controller of Holdings to the effect that no
Default or Event of Default exists or, if any Default or Event of Default does
exist, specifying the nature and extent thereof, which certificate (x) shall set
forth the calculations required to establish (I) the Consolidated Leverage Ratio
on the last day
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of the fiscal period covered by such financial statements and (II) whether
Holdings and its Subsidiaries were in compliance with the provisions of Sections
8.11 and 8.12 as at the end of such fiscal period and (y) in the case of the
certificate delivered at the time of the delivery of the financial statements
provided for in Section 7.01(a) shall set forth the amount of the Excess Cash
Flow for the relevant period ending on the last day of the fiscal year covered
by such financial statements.
(f) NOTICE OF DEFAULT OR LITIGATION. Promptly, and in any event
within ten Business Days after any officer of Holdings or the Borrower obtains
knowledge thereof, notice of (i) the occurrence of any event which constitutes a
Default or Event of Default which notice shall specify the nature thereof, the
period of existence thereof and what action Holdings or the Borrower proposes to
take with respect thereto and (ii) the commencement of, or any significant
adverse development in, any litigation or governmental proceeding pending
against Holdings or any of its Subsidiaries that is reasonably likely to have a
Material Adverse Effect or is reasonably likely to have a material adverse
effect on the ability of the Credit Parties to perform their obligations under
the Credit Documents.
(g) ENVIRONMENTAL MATTERS. Promptly after obtaining knowledge of
any of the following (but only to the extent (A) not disclosed in an
environmental report delivered to the Administrative Agent prior to the Initial
Borrowing Date and (B) that any of the following could reasonably be expected to
(x) have a Material Adverse Effect, either individually or in the aggregate, or
(y) result in a remedial cost to Holdings, the Borrower, and/or its Subsidiaries
in respect of liabilities to the extent not otherwise covered by existing
indemnities, in excess of $5,000,000:
(i) any pending or threatened Environmental Claim against Holdings
or any of its Subsidiaries or any Real Property owned or operated by
Holdings or any of its Subsidiaries;
(ii) any condition or occurrence on any Real Property owned or
operated by Holdings or any of its Subsidiaries that (x) results in
noncompliance by Holdings or any of its Subsidiaries with any applicable
Environmental Law or (y) is reasonably likely to result in an Environmental
Claim against Holdings or any of its Subsidiaries or any such Real
Property;
(iii) any condition or occurrence on any Real Property owned or
operated by the Borrower or any of its Subsidiaries that is reasonably
likely to result in such Real Property being subject to any restrictions on
the ownership, occupancy, use or transferability by Holdings or its
Subsidiary, as the case may be, of its interest in such Real Property under
any Environmental Law; and
(iv) the taking of any removal or remedial action in response to
the actual or alleged presence of any Hazardous Material on any Real
Property owned or operated by the Borrower or any of its Subsidiaries.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and Holdings'
or the relevant Subsidiary's response or
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proposed response thereto. In addition, the Borrower agrees to provide the
Lenders with such detailed reports relating to any of the matters set forth in
clauses (i)-(iv) above as may reasonably be requested by the Administrative
Agent or the Required Lenders.
(h) OTHER INFORMATION. Promptly upon transmission thereof,
(i) copies of any filings and registrations with, and reports to, the Securities
and Exchange Commission or any successor thereto (the "SEC") by Holdings or any
of its Subsidiaries and (ii) copies of all financial statements, proxy
statements, notices and reports as Holdings or any of its Subsidiaries shall
send generally to analysts and the holders of the Senior Subordinated Notes in
their capacity as such holders (to the extent not otherwise delivered to the
Lenders pursuant to this Agreement), and with reasonable promptness, such other
information or documents (financial or otherwise) as the Administrative Agent on
its own behalf or on behalf of the Required Lenders may reasonably request from
time to time.
7.02 BOOKS, RECORDS AND INSPECTIONS. Holdings will, and will cause its
Subsidiaries to, permit, upon reasonable notice to the chief financial officer,
controller or any other Authorized Officer of Holdings or the Borrower, officers
and designated representatives of the Administrative Agent or the Required
Lenders to visit and inspect any of the properties or assets of Holdings and any
of its Subsidiaries in their possession and to examine the books of account of
Holdings and any of its Subsidiaries and discuss the affairs, finances and
accounts of Holdings and of any of its Subsidiaries with, and be advised as to
the same by, its and their officers and independent accountants, all during
normal business hours, at reasonable intervals and to such reasonable extent as
the Administrative Agent or the Required Lenders may desire.
7.03 INSURANCE. Holdings will, and will cause each of its Subsidiaries
to, at all times maintain in full force and effect insurance with reputable and
solvent insurers in such amounts, covering such risks and liabilities and with
such deductibles or self-insured retentions as are in accordance with normal
industry practice in the relevant region. Holdings will, and will cause each of
its Subsidiaries (but in the case of clause (ii) below, only to the extent such
Subsidiary is a Credit Party) to, furnish to the Administrative Agent on the
Initial Borrowing Date and thereafter annually, upon request of the
Administrative Agent, (i) a summary of the insurance carried and (ii)
certificates of insurance and other evidence of such insurance, if any, naming
the Collateral Agent as an additional insured and/or loss payee, to the extent
of its interests therein.
7.04 PAYMENT OF TAXES. Holdings will pay and discharge, and will cause
each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which penalties attach
thereto, and all lawful claims which, if unpaid, would become a Lien or charge
upon any material properties of Holdings or any of its Subsidiaries, PROVIDED
that (i) no Foreign Subsidiary shall be required to pay any such tax,
assessment, charge, levy or claim to the extent the aggregate failures to pay
same are not reasonably expected to have a Material Adverse Effect and (ii)
neither Holdings nor any Subsidiary shall be required to pay any such tax,
assessment, charge, levy or claim which is being contested in good faith and by
proper proceedings if it has maintained adequate reserves with respect thereto
(in the good faith judgment of the management of Borrower) in accordance with
generally accepted accounting principles.
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7.05 CORPORATE FRANCHISES. Holdings will do, and will cause each
Subsidiary to do, or cause to be done, all things reasonably necessary to
preserve and keep in full force and effect its existence and to preserve its
rights and franchises, other than any such rights or franchises the failure to
preserve which could not reasonably be expected to have a Material Adverse
Effect, PROVIDED that any transaction permitted by Section 8.02 will not
constitute a breach of this Section 7.05.
7.06 COMPLIANCE WITH STATUTES, ETC. The Borrower will, and will cause
each Subsidiary to, comply with all applicable statutes, regulations and orders
of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property other than those the non-compliance with which is not reasonably
likely to have a Material Adverse Effect or have a material adverse effect on
the ability of the Credit Parties to perform their obligations under the Credit
Documents.
7.07 ERISA. As soon as possible and, in any event, within ten (10)
days after Holdings, the Borrower or any Subsidiary knows or has reason to know
of the occurrence of any of the following, the Borrower will deliver to each of
the Lenders a certificate of the chief financial officer of the Borrower setting
forth the full details as to such occurrence and the action, if any, that
Holdings, any Subsidiary or any ERISA Affiliate is required or proposes to take,
together with any notices required or proposed to be given to or filed with or
by Holdings, any Subsidiary, any ERISA Affiliate, the PBGC, a Plan participant
or the Plan administrator with respect thereto: that a Reportable Event has
occurred (except to the extent that such Reportable Event is disclosed in Part B
of Schedule V or the Borrower has previously delivered to the Lender a
certificate and notices (if any) concerning such event pursuant to the next
clause hereof); that a contributing sponsor (as defined in Section 4001(a)(13)
of ERISA) of a Plan subject to Title IV of ERISA is subject to the advance
reporting requirement of PBGC Regulation Section 4043.61 (without regard to
subparagraph (b)(1) thereof), and an event described in subsection .62, .63,
..64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected
to occur with respect to such Plan within the following 30 days; that an
accumulated funding deficiency, within the meaning of Section 412 of the Code or
Section 302 of ERISA, has been incurred or an application may reasonably be
expected to be or has been made for a waiver or modification of the minimum
funding standard (including any required installment payments) or an extension
of any amortization period under Section 412 of the Code or Section 303 or 304
of ERISA with respect to a Plan; that any contribution required to be made with
respect to a Plan or Foreign Pension Plan has not been timely made in all
material respects; that a Plan subject to Title IV of ERISA has been or may
reasonably be expected to be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA; that a Plan has an Unfunded Current Liability
which, when added to the aggregate amount of Unfunded Current Liabilities with
respect to all other Plans is reasonably likely to have a Material Adverse
Effect; that proceedings may reasonably be expected to be or have been
instituted to terminate or appoint a trustee to administer a Plan which is
subject to Title IV of ERISA; that a proceeding has been instituted pursuant to
Section 515 of ERISA to collect a delinquent contribution to a Plan; that
Holdings, the Borrower or any Subsidiary of the Borrower will or may reasonably
be expected to incur any material liability (including any indirect, contingent,
or secondary liability) to or on account of the termination of or withdrawal
from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
to the extent that Holdings, the Borrower or any Subsidiary of the Borrower will
or may reasonably be expected to incur any such liability with respect to a Plan
other than an
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ERISA Affiliate Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or
Section 409 or 502(i) or 502(l) of ERISA or with respect to a group health plan
(as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under
Section 4980B of the Code; or that Holdings or any Subsidiary of Holdings may
incur any material liability pursuant to any employee welfare benefit plan (as
defined in Section 3(1) of ERISA) that provides benefits to retired employees or
other former employees (other than as required by Part 6 of Title I, subpart B)
of ERISA and Section 4980B of the Code) or any Plan or any Foreign Pension Plan
in addition to the liability that existed on the Initial Borrowing Date pursuant
to any such plan or plans. The Borrower will deliver to each of the Lenders (i)
a complete copy of the annual report (on Internal Revenue Service Form
5500-series) of each Plan (including, to the extent required, the related
financial and actuarial statements and opinions and other supporting statements,
certifications, schedules and information) required to be filed with the
Internal Revenue Service and (ii) copies of any records, documents or other
information that must be furnished to the PBGC with respect to any Plan pursuant
to Section 4010 of ERISA; provided that in the case of any Plan that is an ERISA
Affiliate Plan, the foregoing shall only be required to be delivered upon the
reasonable request of the Lender. In addition to any certificates or notices
delivered to the Lender pursuant to the first sentence hereof, copies of annual
reports and any records, documents or other information required to be furnished
to the PBGC, and any material notices received by Holdings or any Subsidiary of
Holdings with respect to any Plan or Foreign Pension Plan shall be delivered to
the Lender no later than thirty days after the date such annual report has been
filed with the Internal Revenue Service or such records, documents and/or
information has been furnished to the PBGC or such notice has been received by
Holdings or any of its Subsidiaries, as applicable. The Borrower will, and will
cause each Subsidiary to, ensure that all Foreign Pension Plans administered by
it or into which it makes payments obtains or retains (as applicable) registered
status under and as required by applicable law and is administered in a timely
manner in all respects in compliance with all applicable laws except where the
failure to do any of the foregoing would not be reasonably likely to result in a
Material Adverse Effect.
7.08 GOOD REPAIR. Holdings will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used or
useful in its business are kept in good repair, working order and condition,
normal wear and tear excepted, and, subject to Section 8.05, that from time to
time there are made in such properties and equipment all needful and proper
repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto, to the extent and in the manner customary for companies in
similar businesses, except, in the case of Foreign Subsidiaries, where all
failures to do the foregoing would not reasonably be likely to result in a
Material Adverse Effect.
7.09 END OF FISCAL YEARS; FISCAL QUARTERS. Holdings will, for
financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries', fiscal years and fourth fiscal quarters to end on March 31 of
each year and (ii) each of its, and each of its Subsidiaries', first three
fiscal quarters to end on the last day of June, September and December of each
year, PROVIDED that Holdings may change its and its Subsidiaries' fiscal year
end to December 31 (and change its and its Subsidiaries fiscal quarters to end
on dates consistent with a December 31 fiscal year end) so long as (i) the
Borrower shall have given the Administrative Agent at least 10 Business Days'
prior written notice thereof and (ii) on or prior to such change in fiscal year
and fiscal quarters, the Borrower and the Required Lenders shall have entered
into certain technical amendments and modifications to this Agreement to
preserve the intent of the parties with
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respect to the covenants and agreements set forth in Sections 8.05, 8.11 and
8.12 and any other provisions of this Agreement deemed appropriate by the Joint
Lead Arrangers and the Borrower.
7.10 ADDITIONAL SECURITY; FURTHER ASSURANCES. (a) Holdings will cause
the Borrower and the Guarantors to grant to the Collateral Agent security
interests and mortgages in owned or leased Real Property with a fair market
value of $5,000,000 or more acquired after the Initial Borrowing Date (including
as a result of the acquisition of any Subsidiary that becomes a Guarantor as
provided in Section 8.07) as may be reasonably requested from time to time by
the Administrative Agent and/or the Required Lenders (collectively, the
"Additional Mortgages"). All such security interests and mortgages shall be
granted pursuant to documentation reasonably satisfactory in form and substance
to the Administrative Agent and shall constitute valid and enforceable Liens
superior to and prior to the rights of all third Persons (except to the extent
subject to any Permitted Encumbrances) and subject to no other Liens except
Permitted Liens. The Additional Mortgages or instruments related thereto shall
be duly recorded or filed in such manner and in such places as are required by
law to establish, perfect, preserve and protect the Liens in favor of the
Collateral Agent required to be granted pursuant to the Additional Mortgages and
all taxes, fees and other charges payable in connection therewith shall be paid
in full. Furthermore, Holdings shall cause to be delivered to the Collateral
Agent such opinions of counsel, title insurance, surveys, flood certificates and
other related documents as may be reasonably requested by the Administrative
Agent to assure itself that this Section 7.10(a) has been complied with.
(b) Holdings will, and will cause the Borrower and the Subsidiary
Guarantors to, at the expense of the Borrower make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
vouchers, invoices, schedules, confirmatory assignments and conveyances,
financing statements, transfer endorsements, powers of attorney, certificates,
reports and other assurances or confirmatory instruments and take such further
steps relating to the Collateral covered by any of the Security Documents as the
Collateral Agent may reasonably require.
(c) Additionally, upon the reasonable request (in each case,
taking into account the relative costs (to the Borrower) and benefits (to the
Secured Creditors)) of the Collateral Agent or the Required Lenders, Holdings
shall take, or cause to be taken, such action as may be reasonably requested
(including, without limitation (i) subject to the above-mentioned cost-benefit
analysis, the execution and delivery of pledge or security agreements governed
by applicable local law and (ii) the filing of financing statements) in order to
perfect (or maintain the perfection of) the security interests (or take any
analogous actions under the applicable provisions of local law in order to
protect such security interests) in (x) any Equity Interests in any Foreign
Subsidiary or other foreign Person pledged pursuant to the Pledge Agreement
owned by Holdings or a Domestic Subsidiary, in each case to the extent such
actions are permitted to be taken under the laws of the applicable jurisdictions
and (y) any Collateral the fair market value of which equals or exceeds
$1,000,000 that is located outside the U.S. and is owned by a Qualified Credit
Party, to the extent that such actions are permitted to be taken under the laws
of the applicable jurisdictions. Furthermore, Holdings will, and will cause the
other Credit Parties that are Subsidiaries of Holdings to, deliver to the
Collateral Agent such opinions of counsel and other related documents as may be
reasonably requested by the Administrative Agent to assure itself with the
Credit Parties' compliance with this Section 7.10(c).
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(d) On or prior to 10 Business Days following the Initial
Borrowing Date, the Borrower shall deliver to the Collateral Agent, to the
extent the absence of same would result in any qualification to the related
Mortgage Policy, surveys, in form and substance reasonably satisfactory to the
Collateral Agent, of the Mortgaged Properties, dated (or updated) as of a recent
date and certified in a manner reasonably acceptable to the Collateral Agent by
a licensed surveyor reasonably satisfactory to the Collateral Agent.
(e) Each Credit Party agrees that each action required above by
Sections 7.10(a) and (b) shall be completed as soon as possible, but in no event
later than 60 days after such action is requested to be taken by the
Administrative Agent, the Collateral Agent or the Required Lenders, as the case
may be, PROVIDED that in no event shall the Borrower be required to take any
action, other than using its reasonable commercial efforts without any material
expenditure, to obtain consents from third parties with respect to its
compliance with this Section 7.10.
7.11 COMPLIANCE WITH ENVIRONMENTAL LAWS. (a)(i) Holdings will comply,
and will cause each of its Subsidiaries to comply, with all Environmental Laws
applicable to the ownership, lease or use of all Real Property now or hereafter
owned, leased or operated by Holdings or any of its Subsidiaries, will promptly
pay or cause to be paid all costs and expenses incurred in connection with such
compliance, and will keep or cause to be kept all such Real Property free and
clear of any Liens imposed pursuant to such Environmental Laws and (ii) neither
Holdings nor any of its Subsidiaries will generate, use, treat, store, release
or dispose of, or permit the generation, use, treatment, storage, release or
disposal of Hazardous Materials on any Real Property now or hereafter owned,
leased or operated by Holdings or any of its Subsidiaries, or transport or
permit the transportation of Hazardous Materials to or from any such Real
Property, except to the extent that the failure to comply with the requirements
specified in clause (i) or (ii) above, either individually or in the aggregate,
is not reasonably likely to have a Material Adverse Effect. If legally required
to do so under any applicable directive or order of any governmental agency,
Holdings agrees to undertake, and cause each of its Subsidiaries to undertake,
any clean up, removal, remedial or other action necessary to remove and clean up
any Hazardous Materials from any Real Property owned, leased or operated by
Holdings or any of its Subsidiaries in accordance with, in all material
respects, the requirements of all applicable Environmental Laws and in
accordance with, in all material respects, such orders and directives of all
governmental authorities, except to the extent that Holdings or such Subsidiary
is contesting such order or directive in good faith and by appropriate
proceedings and for which adequate reserves have been established to the extent
required by GAAP; PROVIDED that it will not constitute a breach of this Section
7.11 if a Person other than Holdings and its Subsidiaries takes such action on
behalf of Holdings and its Subsidiaries.
(b) At the request of the Administrative Agent or the Required
Lenders at any time and from time to time during the continuance of an Event of
Default, upon the reasonable belief by the Administrative Agent that Holdings or
any of its Subsidiaries has breached in any material respect any representation
or covenant herein with respect to any environmental matters affecting any
Mortgaged Property and such breach is continuing and/or a notice has been
provided under Section 7.01(g), Holdings and the Borrower will provide, at their
sole cost and expense (or will cause its relevant Subsidiary to provide at its
sole cost and expense), an environmental site assessment report reasonable in
scope concerning any Mortgaged Property that is the
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subject of the breach or notice of Holdings or its Subsidiaries, prepared by an
environmental consulting firm reasonably acceptable to the Administrative Agent,
indicating the presence or Release or absence of Hazardous Materials on or from
any such Mortgaged Property and the potential cost of any removal or remedial
action in connection with any Hazardous Materials on such Mortgaged Property. If
Holdings or the Borrower fails to provide the same after thirty days' notice and
the Event of Default is continuing, the Administrative Agent may order the same,
and Holdings and the Borrower shall grant and hereby grant to the Administrative
Agent and the Lenders and their agents access to such Mortgaged Property and
specifically grants the Administrative Agent and the Lenders an irrevocable
non-exclusive license, subject to the rights of tenants, to undertake such an
assessment all at Holdings, and the Borrower's (joint and several) reasonable
expense, which assessments, if obtained, will be provided to Holdings.
7.12 PERMITTED ACQUISITIONS. (a) Subject to the provisions of this
Section 7.12 and the requirements contained in the definition of Permitted
Acquisition, the Borrower and its Subsidiaries may effect Permitted Acquisitions
in accordance with the definition thereof, so long as (in each case except to
the extent the Required Lenders otherwise specifically agree in writing in the
case of a specific Permitted Acquisition): (i) no Default or Event of Default
shall have occurred and be continuing at the time of the consummation of the
proposed Permitted Acquisition or immediately after giving effect thereto; (ii)
the Borrower shall have given to the Administrative Agent and the Lenders (x) at
least 5 Business Days' prior written notice of any Permitted Acquisition (or
such shorter period of time as may be reasonably acceptable to the
Administrative Agent), which notice shall describe in reasonable detail the
principal terms and conditions of such Permitted Acquisition and (y) a copy of
any "Phase One" or "Phase Two" environmental assessment that the Borrower, in
its discretion, obtained in connection with the proposed Permitted Acquisition;
(iii) in the case of a Significant Acquisition, calculations are made by
Holdings with respect to the financial covenants contained in Sections 8.11 and
8.12 for the Test Period most recently ended on a Post-Test Period Pro Forma
Basis as if the respective Significant Acquisition (as well as all other
Significant Acquisitions and Significant Asset Sales theretofore consummated
after the first day of such Test Period) had occurred on the first day of' such
Test Period, and such calculations shall show that such financial covenants
would have been complied with if the respective Permitted Acquisition had
occurred on the first day of such Test Period; (iv) all representations and
warranties contained herein and in the other Credit Documents shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Permitted Acquisition (both before and after giving effect thereto), unless
stated to relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date; (v) the Aggregate Consideration for such Permitted Acquisitions
shall not exceed either (x) that amount which, when added to the Aggregate
Consideration for all other Permitted Acquisitions theretofore consummated
during the fiscal year in which such Permitted Acquisition is consummated,
equals $15,000,000 (although the provisions of this sub-clause (x) shall not
apply at any time after the receipt of financial statements pursuant to Section
7.01(a) or (b) for a fiscal quarter or year ended on or after March 31, 2003 if,
and so long as, the Consolidated Leverage Ratio for the Test Period most
recently ended for which financial statements have been delivered pursuant to
Section 7.01(a) or (b), as the case may be, is less than or equal to 3.75:1.00,
it being understood and agreed that any Permitted Acquisition made in accordance
with this clause (v) at any time during a fiscal year when this sub-clause (x)
was not applicable shall continue to be permitted at any time during
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such fiscal year when the $15,000,000 per annum limitation contained above in
this sub-clause (x) is subsequently applicable during such fiscal year, although
such per annum limitation shall affect the amount of future Permitted
Acquisitions permitted during such fiscal year in accordance with this
sub-clause (x)) or (y) that amount which, when added to the Aggregate
Consideration for all other Permitted Acquisitions theretofore consummated after
the Effective Date, equals $50,000,000; (vi) in addition to the requirements of
preceding clause (v), in the case of Permitted Acquisitions made after the
Effective Date by any Foreign Subsidiary or where the respective Acquired Entity
or Business is outside, or is organized outside, the United States (or any
portion thereof is so organized or located outside the United States) (A) the
sum of the Aggregate Consideration for all such Permitted Acquisitions (in the
case where a Qualified Credit Party is making the respective Permitted
Acquisition and only a portion of the respective Acquired Entity or Business is
organized or located outside the United States, calculated including only the
fair market values of such assets located, or (without duplication) owned by any
Person (or a Subsidiary of any Person) that is the target Company of the
respective Permitted Acquisition and is organized, outside of the United States)
shall not exceed $15,000,000 (although the $15,000,000 amount described above
shall be deemed changed to "$30,000,000" at any time after the receipt of
financial statements pursuant to Section 7.01(a) or (b) for a fiscal quarter or
year ended on or after March 31, 2003 if, and so long as, the Consolidated
Leverage Ratio for the Test Period most recently ended for which financial
statements have been delivered pursuant to Section 7.01(a) or (b), as the case
may be, is less than or equal to 3.75:1.00, it being understood and agreed that
any Permitted Acquisition made in accordance with this clause (vi) at a time
when the $30,000,000 amount pursuant to this parenthetical was applicable shall
continue to be permitted at any time when the limitation is subsequently reduced
to $15,000,000, although such reduction shall affect the amount of future
Permitted Acquisitions permitted in accordance with this clause (vi)) and (B) no
such Permitted Acquisition described in this clause (vi) may be effected if same
would reduce the Permitted Foreign Investment Amount and, after giving effect to
the respective reduction, the Permitted Foreign Investment Amount would be less
than $0; and (vii) the Borrower shall have delivered to the Administrative Agent
a certificate executed by the chief financial officer or controller of the
Borrower, certifying to the best of such officer's knowledge, compliance with
the requirements of preceding clauses (i) through (vi), inclusive, and
containing the calculations (in reasonable detail) required to establish
compliance with preceding clauses (iii) (if applicable), (v) and (vi).
(b) At the time of each Permitted Acquisition involving the
creation or acquisition of a Domestic Subsidiary or a Foreign Subsidiary that is
a direct Subsidiary of a Domestic Subsidiary, or the acquisition of any Equity
Interests of any Person by a Domestic Subsidiary, the Equity Interests thereof
created or acquired in connection with such Permitted Acquisition shall be
pledged for the benefit of the Secured Creditors pursuant to (and to the extent
required by) the Pledge Agreement.
(c) The Borrower will cause each Subsidiary which is formed to
effect, or is acquired pursuant to, a Permitted Acquisition to comply with, and
to execute and deliver all of the documentation as and to the extent required
by, Sections 7.10 and 8.07, to the reasonable satisfaction of the Administrative
Agent.
(d) The consummation of each Permitted Acquisition shall be deemed
to be a representation and warranty by each of Holdings and the Borrower that
the certifications pursuant
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to this Section 7.12 are true and correct and that all conditions thereto have
been satisfied and that same is permitted in accordance with the terms of this
Agreement, which representation and warranty shall be deemed to be a
representation and warranty for all purposes hereunder, including, without
limitation, Sections 6 and 9.
SECTION 8. NEGATIVE COVENANTS. Holdings and the Borrower hereby
covenant and agree that for so long as this Agreement is in effect and until the
Commitments have terminated, no Letters of Credit or Notes are outstanding and
the Loans and Unpaid Drawings, together with interest, Fees and all other
Obligations (other than any indemnities hereunder and under the other Credit
Documents which are not then owing) incurred hereunder, are paid in full:
8.01 CHANGES IN BUSINESS. (a) Holdings will not permit at any time the
business activities taken as a whole conducted by the Borrower and its
Subsidiaries to be materially different from the business activities taken as a
whole (including incidental activities) conducted by the Borrower and its
Subsidiaries on the Initial Borrowing Date (after giving effect to the
Transaction) and businesses reasonably related thereto and reasonable extensions
thereof.
(b) Holdings will not engage in any business other than its
ownership of the capital stock of, and the management of, the Borrower (or,
after same is established, Intermediate Holdco), provided that (i) Holdings may
engage in those activities that are incidental to (x) the maintenance of its
corporate existence in compliance with applicable law, (y) legal, tax and
accounting matters in connection with any of the foregoing activities and (z)
the entering into, and performing its obligations under, this Agreement, the
other Documents, and the Management Agreement to which it is a party and (ii)
Holdings may issue Equity Interests to the extent permitted under Section 8.13.
(c) From and after the time of its establishment (if any),
Intermediate Holdco will not engage in any business other than its ownership of
the capital stock of, and the management of, the Borrower and other activities
described in the proviso contained in preceding clause (b).
8.02 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC. Holdings
will not, and will not permit any Subsidiary to, wind up, liquidate or dissolve
its affairs, or enter into any transaction of merger or consolidation, or
convey, sell, lease or otherwise dispose of all or any part of its property or
assets (other than inventory or worn-out or obsolete equipment no longer needed
in the conduct of the business, in each case in the ordinary course of business)
or purchase, lease or otherwise acquire all or any part of the property or
assets of any Person (other than purchases or other acquisitions of inventory,
leases, materials, supplies and equipment, in each case in the ordinary course
of business) or agree to do any of the foregoing at any future time without a
contingency relating to obtaining any required approval hereunder, except that
the following shall be permitted:
(a) (i) any Subsidiary of the Borrower may be merged or
consolidated with or into, or be liquidated into, a Qualified Credit Party (so
long as a Qualified Credit Party (which must be the Borrower in the case of any
such transaction with the Borrower) is the surviving corporation), and (ii) the
Borrower or any Subsidiary thereof may, in the ordinary course of
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business consistent with past practices, convey, sell, lease or otherwise
transfer all or any part of its business, properties and assets to a Qualified
Credit Party;
(b) Consolidated Capital Expenditures may be made by the Borrower
and its Subsidiaries to the extent within the limitations set forth in Section
8.05 hereof, and Reinvestment Assets may be acquired as specifically permitted
by Section 4.02(A)(c) hereof;
(c) the investments, acquisitions and transfers or dispositions of
properties permitted pursuant to Section 8.06;
(d) each of the Borrower and any Subsidiary may lease (as lessee)
real or personal property (but not pursuant to sale-leaseback transactions) in
the ordinary course of business (so long as such lease does not create a
Capitalized Lease Obligation not otherwise permitted by Section 8.04(c) and
(j));
(e) licenses or sublicenses by the Borrower and its Subsidiaries
of intellectual property in the ordinary course of business, PROVIDED, that such
licenses or sublicenses shall not interfere with the business of the Borrower or
any Subsidiary except, in the case of any such license or sublicense by a
Foreign Subsidiary, as is not reasonably likely to have Material Adverse Effect;
(f) sales (but not pursuant to sale-leaseback transactions) of
assets by the Borrower and its Subsidiaries to Persons other than Holdings or a
Subsidiary thereof so long as (A) the assets sold comprise all or a portion of
the Industrial Chain Business (or Equity Interests in Persons whose only assets
at the time of such sale comprise all or a portion of the Industrial Chain
Business) and/or (B) to the extent any assets sold do not qualify pursuant to
the preceding clause (A), the aggregate Net Cash Proceeds received from all
sales permitted by this sub-clause (B) do not exceed $30,000,000 in the
aggregate, PROVIDED that (1) each sale pursuant to this Section 8.02(f) shall
result in the Borrower or the respective Subsidiary receiving consideration in
an amount at least equal to the fair market value of the assets sold, which
consideration shall consist of at least 75% cash (with the assumption of
Indebtedness and the sale for cash within 30 days of receipt of securities
received calculated as cash), (2) the Net Cash Proceeds of each sale pursuant to
this Section 8.02(f) are applied to repay the Loans to the extent required by
Section 4.02(A)(c) and (3) in the case of a sale or disposition of the Equity
Interests of any Subsidiary of the Borrower (or a Person which was a Subsidiary
of the Borrower prior to such sale or disposition) which represent less than
100% of the Equity Interests in such Subsidiary owned by Holdings and its
Subsidiaries (unless the sale or disposition represents a subsequent sale of
Equity Interests in a Subsidiary which previously had Equity Interests sold
after the Effective Date pursuant to this clause (f)), then the amount by which
the fair market value (as determined in good faith by the Borrower) of all the
Equity Interests in such Subsidiary owned by the Borrower and its Subsidiaries
immediately before such sale or disposition exceeds the Net Cash Proceeds
received by the Borrower and its Subsidiaries from such disposition, shall be
deemed to constitute an investment which shall only be permitted if same does
not exceed the Permitted JV Investment Amount at the time of such sale or
disposition; and, PROVIDED FURTHER, that the sale or disposition of Equity
Interests of the Borrower shall be prohibited, except that 100% of the Equity
Interests of the Borrower may be transferred to Intermediate Holdco
contemporaneously with or after the establishment of same in accordance with the
definition thereof;
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(g) the Acquisition;
(h) leases and subleases permitted under Section 8.03(g);
(i) the Borrower and any of its Domestic Subsidiaries may convey,
sell, lease or otherwise transfer assets (other than Equity Interests in any
Domestic Subsidiary) to any Foreign Subsidiary, PROVIDED that the fair market
value (as determined by the Borrower in good faith) of the assets so conveyed,
sold or transferred (net of the amount of any cash consideration received
therefor) does not exceed the Permitted Foreign Investment Amount at the time of
the respective conveyance, sale or transfer;
(j) the Borrower and any of its Subsidiaries may convey, sell,
lease or otherwise transfer assets to any Joint Venture, PROVIDED that the fair
market value (as determined by the Borrower in good faith) of the assets so
conveyed, sold, leased or otherwise transferred (net of the amount of any cash
consideration received therefor) does not exceed the Permitted JV Investment
Amount at the time of the respective such conveyance, sale or transfer;
(k) Foreign Subsidiaries may sell assets pursuant to
Sale/Leaseback Transactions so long as at no time shall the aggregate amount of
the Attributable Debt arising from such Sale/Leaseback Transactions, when added
(without duplication) to the Permitted Factoring Transaction Outstandings and
the aggregate principal amount of Indebtedness outstanding pursuant to Section
8.04(i) at such time, exceed the Permitted Foreign Subsidiary Debt Amount as
then in effect;
(l) Foreign Subsidiaries may convey, sell, lease or otherwise
transfer assets to other Foreign Subsidiaries;
(m) Foreign Subsidiaries may sell receivables and related assets
pursuant to factoring arrangements so long as at no time shall the aggregate
amount of Permitted Factoring Transaction Outstandings arising from such
factoring arrangements, when added (without duplication) to the Attributable
Debt arising from Sale/Leaseback Transactions at such time and the aggregate
principal amount of Indebtedness outstanding pursuant to Section 8.04(i) at such
time, exceed the Permitted Foreign Subsidiary Debt Amount as then in effect; and
(n) the Borrower and its Subsidiaries may sell (without recourse)
receivables (and related assets) arising from goods and services provided to
Honeywell International Inc. pursuant to factoring arrangements entered into in
the ordinary course of business consistent with past practices so long as at no
time shall the aggregate amount of Permitted Honeywell Receivables Transaction
Outstandings arising from such factoring arrangements exceed $1,500,000.
8.03 LIENS. Holdings will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of Holdings or any such Subsidiary whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable or notes with recourse to Holdings or
any of its Subsidiaries) or assign any right to receive income, except:
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(a) Liens for taxes not yet delinquent or Liens for taxes being
contested in good faith and by appropriate proceedings for which adequate
reserves (in the good faith judgment of the management of the Borrower) have
been established;
(b) Liens in respect of property or assets of the Borrower or any
of its Subsidiaries imposed by law which were incurred in the ordinary course of
business, such as carriers', warehousemen's and mechanics' Liens, statutory
landlord's Liens, and other similar Liens arising in the ordinary course of
business, and (x) which do not in the aggregate materially detract from the
value of such property or assets or materially impair the use thereof in the
operation of the business of the Borrower or any of its Subsidiaries or (y)
which are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the property
or asset subject to such Lien;
(c) Liens created by or pursuant to this Agreement or the other
Credit Documents;
(d) Liens created pursuant to Capital Leases permitted by
Section 8.04(c);
(e) Liens arising from judgments, decrees or attachments and Liens
securing appeal bonds arising from judgments, in each case in circumstances not
constituting an Event of Default under Section 9.09 so long as the aggregate
fair market value of all assets subject to such Liens does not exceed
$7,500,000;
(f) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business (x) in connection with workers'
compensation, unemployment insurance and other types of social security or (y)
to secure the performance of tenders, statutory obligations, surety bonds, bids,
leases, government contracts, performance and return-of-money bonds and other
similar obligations incurred in the ordinary course of business (exclusive of
obligations in respect of the payment for borrowed money); PROVIDED that (i) any
consensual Liens as described above shall not apply or attach to any of the
Collateral (other than cash, Cash Equivalents and Foreign Cash Equivalents) and
(ii) consensual Liens as described in clause (y) above shall not be secured at
any time by cash, Cash Equivalents, Foreign Cash Equivalents and/or other
property of Holdings and its Subsidiaries with an aggregate fair market value in
excess of $7,500,000;
(g) leases or subleases to others in the ordinary course of
business not interfering in any material respect with the business of the
Borrower or any of its Subsidiaries;
(h) Permitted Encumbrances, easements, rights-of-way,
restrictions, minor defects or irregularities in title and other similar charges
or encumbrances not interfering in any material respect with the ordinary
conduct of the business of Holdings or any of its Subsidiaries;
(i) Liens arising from UCC financing statements regarding leases
permitted by this Agreement;
(j) (x) receipt of progress payments and advances from customers
in the ordinary course of business to the extent same creates a Lien on the
related inventory and proceeds therefrom and (y) purchase money Liens securing
current account payables arising
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from the purchase by the Borrower or any Subsidiary of any equipment or goods in
the ordinary course of business, PROVIDED that such Liens shall not extend to
any other property of Holdings or any of its Subsidiaries;
(k) any interest or title of a lessor under any lease permitted by
this Agreement;
(l) Liens in existence on, and which are to continue in effect
after, the Initial Borrowing Date which are listed, and the property subject
thereto described in, Schedule VIII, in each case subject to the limitations
with respect to any such Lien set forth in such Schedule VIII and without giving
effect to any extension or renewal thereof;
(m) Liens arising pursuant to purchase money mortgages or security
interests securing Indebtedness representing the purchase price (or financing of
the purchase price within 90 days after the respective purchase) of assets
acquired by the Borrower or any Subsidiary after the Effective Date, PROVIDED
that (x) any such Liens attach only to the assets so acquired and proceeds
thereof, (y) the Indebtedness secured by any such Lien does not exceed 100%, nor
is less than 70%, of the purchase price of the property being purchased at the
time of the incurrence of such Indebtedness and (z) all Indebtedness secured by
Liens created pursuant to this clause (m) shall not exceed the amount permitted
to be outstanding pursuant to Section 8.04(d);
(n) Liens on property or assets (and proceeds therefrom) acquired
pursuant to a Permitted Acquisition, or on property or assets of a Subsidiary of
the Borrower (and proceeds therefrom) in existence at the time such Subsidiary
is acquired pursuant to a Permitted Acquisition, PROVIDED that (x) any
Indebtedness that is secured by such Liens is permitted to exist under Section
8.04(j), and (y) such Liens are not incurred in connection with, or in
contemplation or anticipation of, such Permitted Acquisition and do not attach
to any asset of Holdings or any other asset of the Borrower or any of its
Subsidiaries;
(o) Liens on property or assets of Foreign Subsidiaries securing
Indebtedness permitted under Section 8.04(i); and
(p) Liens on receivables (and proceeds thereof) sold in accordance
with Section 8.02(n).
8.04 INDEBTEDNESS. Holdings will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(b) Indebtedness of (i) any Qualified Credit Party owing to
another Qualified Credit Party, (ii) the Borrower or any of its Domestic
Subsidiaries owing to Foreign Subsidiaries arising from loans and advances made
in accordance with Section 8.06(j), (iii) Foreign Subsidiaries owing to the
Borrower or any of its Domestic Subsidiaries arising from loans and advances
made in accordance with Section 8.06(k) and (iv) any Foreign Subsidiary owing to
another Foreign Subsidiary;
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(c) Capitalized Lease Obligations of the Borrower and its
Subsidiaries arising after the Initial Borrowing Date, PROVIDED that the
aggregate amount of such Capitalized Lease Obligations outstanding pursuant to
this clause (c), when added to the aggregate principal amount of Indebtedness
then outstanding pursuant to following clause (d), shall at no time exceed
$25,000,000;
(d) Indebtedness incurred pursuant to purchase money mortgages or
security interests permitted by Section 8.03(m), provided that the aggregate
principal amount of Indebtedness outstanding pursuant to this clause (d), when
added to the aggregate amount of Capitalized Lease Obligations then outstanding
pursuant to preceding clause (c), shall at no time exceed $25,000,000;
(e) unsecured Indebtedness of the Borrower, as issuer, and
Holdings and any Subsidiary Guarantor (for so long as such Person remains a
Guarantor), in each case as a senior subordinated guarantor, incurred under the
Senior Subordinated Notes and the other Senior Subordinated Note Documents in an
aggregate principal amount not to exceed $225,000,000 less the amount of any
repayments of principal thereof after the Effective Date (it being understood
that the issuance of Senior Subordinated Notes upon the exchange offer as
contemplated in the Senior Subordinated Note Indenture shall not be considered a
repayment of such Indebtedness);
(f) Existing Indebtedness and any Refinancing Indebtedness in
respect thereof;
(g) Indebtedness of the Borrower or any of its Subsidiaries under
Other Hedging Agreements providing protection to the Borrower and its
Subsidiaries against fluctuations in currency values or commodity prices in
connection with the Borrower's or any of its Subsidiaries' operations so long as
the entering into of such Other Hedging Agreements are BONA FIDE hedging
activities and are not for speculative purposes;
(h) Indebtedness of the Borrower or any of its Subsidiaries under
Interest Rate Protection Agreements entered into with respect to other
Indebtedness permitted to be incurred by such Person under this Section 8.04 so
long as the entering into of such Interest Rate Protection Agreements are BONA
FIDE hedging activities and are not for speculative purposes;
(i) `Indebtedness of Foreign Subsidiaries in respect of local
lines of credit, letters of credit, bank guarantees, factoring arrangements,
Sale/Leaseback Transactions and similar extensions of credit, provided that (i)
such Indebtedness shall not be guaranteed by any Credit Party or otherwise
supported by any Credit Party (or any of such Credit Party's assets) in any
manner (except to the extent such guarantee or support is independently
permitted under Section 8.04(k)) and (ii) at no time shall the aggregate
outstanding principal amount of such Indebtedness (calculated without
duplication of any guarantees of such Indebtedness by a Foreign Subsidiary) PLUS
(without duplication) all Attributable Debt at such time PLUS all Permitted
Factoring Transaction Outstandings at such time exceed the Permitted Foreign
Subsidiary Debt Amount as then in effect;
(j) Indebtedness of a Subsidiary of the Borrower (x) acquired
pursuant to a Permitted Acquisition (or Indebtedness assumed at the time of a
Permitted Acquisition of an
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asset securing such Indebtedness), PROVIDED that (i) such Indebtedness was not
incurred in connection with, or in anticipation or contemplation of, such
Permitted Acquisition, (ii) such Indebtedness does not constitute debt for
borrowed money, it being understood and agreed that Capitalized Lease
Obligations and purchase money Indebtedness shall not constitute debt for
borrowed money for purposes of this clause (ii), and (iii) the aggregate
principal amount of all Indebtedness permitted by this clause (j) shall not
exceed $5,000,000 at any time outstanding, and (y) consisting of Refinancing
Indebtedness incurred to refinance Indebtedness theretofore outstanding pursuant
to this clause (j);
(k) Contingent Obligations (including under letters of credit
(including, without limitation, those described in clause (v) of Section
2.01(b)) and other guarantees) of the Borrower and its Domestic Subsidiaries
with respect to Indebtedness and other obligations of Foreign Subsidiaries,
PROVIDED that at no time shall the aggregate outstanding amount of such
Contingent Obligations (calculated taking the maximum liability thereunder)
exceed the Permitted Foreign Investment Amount as then in effect;
(l) Contingent Obligations (including under letters of credit and
other guarantees) of the Borrower and its Domestic Subsidiaries with respect to
Indebtedness and other obligations of Joint Ventures, PROVIDED that at no time
shall the aggregate outstanding amount of such Contingent Obligations
(calculated taking the maximum liability thereunder) exceed the Permitted JV
Investment Amount as then in effect;
(m) earn-out, indemnities and purchase price adjustments pursuant
to the Acquisition Agreement or pursuant to any agreement for any Permitted
Acquisition;
(n) Indebtedness of the Borrower or any of its Subsidiaries
arising in the ordinary course of business from the honoring by a bank or other
financial institution of a check, draft or similar instrument made by a third
party to the Borrower or such Subsidiary and drawn against insufficient funds;
(o) Contingent Obligations arising from guarantees made by
Qualified Credit Parties in the ordinary course of business of obligations
(other than Indebtedness) of other Qualified Credit Parties otherwise permitted
hereunder;
(p) Contingent Obligations arising from guarantees made by Foreign
Subsidiaries in the ordinary course of business of obligations (other than
Indebtedness) of other Foreign Subsidiaries otherwise permitted hereunder;
(q) intercompany loans permitted under Section 8.06(p); and
(r) additional unsecured Indebtedness of the Borrower and its
Subsidiaries not to exceed an aggregate outstanding principal amount of
$10,000,000 at any time.
8.05 CONSOLIDATED CAPITAL EXPENDITURES. (a) Holdings will not, and
will not permit any of its Subsidiaries to, incur Consolidated Capital
Expenditures, except that (i) during the period from the Effective Date through
and including March 31, 2003, the Borrower and its Subsidiaries may make
Consolidated Capital Expenditures so long as the aggregate amount of all such
Consolidated Capital Expenditures does not exceed $17,000,000, and (ii) during
any fiscal
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year of Holdings set forth below, the Borrower and its Subsidiaries may make
Consolidated Capital Expenditures so long as the aggregate amount of all such
Consolidated Capital Expenditures does not exceed in any fiscal year of Holdings
set forth below the amount set forth opposite such fiscal year below:
<Table>
<Caption>
FISCAL YEAR ENDING ON AMOUNT
--------------------- ------
March 31, 2004 $ 31,000,000
March 31, 2005 $ 33,000,000
March 31, 2006 $ 34,000,000
March 31, 2007 $ 35,000,000
March 31, 2008 $ 36,000,000
March 31, 2009 $ 37,000,000
March 31, 2010 $ 38,000,000
</Table>
(b) In addition to the foregoing, in the event that the amount of
Consolidated Capital Expenditures permitted to be made by the Borrower and its
Subsidiaries pursuant to clause (a) above in any fiscal year of Holdings (or
during the period set forth in clause (a)(i) above) (before giving effect to any
increase in such permitted Consolidated Capital Expenditure amount pursuant to
this clause (b)) is greater than the amount of Consolidated Capital Expenditures
actually made by the Borrower and its Subsidiaries during such fiscal year (or
such period, as the case may be), such excess may be carried forward and
utilized to make Consolidated Capital Expenditures in the immediately succeeding
fiscal year, PROVIDED that in no event shall the amount permitted to be carried
over pursuant to this Section 8.05(b) exceed $5,000,000 in any fiscal year and
no amounts once carried forward pursuant to this Section 8.05(b) may be carried
forward to any fiscal year of Holdings thereafter.
8.06 ADVANCES, INVESTMENTS AND LOANS. Holdings will not, and will not
permit any of its Subsidiaries to, lend money or credit or make advances to any
Person, or purchase or acquire any stock, obligations or securities of, or any
other interest in, or make any capital contribution to any Person, or enter into
any Other Hedging Agreement or Interest Rate Protection Agreement; except:
(a) (i) Holdings may invest in cash and Cash Equivalents, (ii) the
Borrower or any Domestic Subsidiary may invest in (x) cash and Cash Equivalents
and (y) Foreign Cash Equivalents in an aggregate amount (for the Borrower and
all Domestic Subsidiaries) not to exceed (taking the Dollar Equivalent thereof)
$5,000,000 at any time outstanding and (iii) any Foreign Subsidiary of the
Borrower may invest in cash, Cash Equivalents and Foreign Cash Equivalents;
(b) the Borrower and any Subsidiary may acquire and hold
receivables owing to them, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade terms
and/or reasonable extensions thereof;
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(c) (i) loans and advances to officers, directors and employees in
the ordinary course of business in an aggregate principal amount not to exceed
$2,000,000 at any time outstanding shall be permitted, PROVIDED that no such
loans or advances may be made to any directors for relocation purposes and (ii)
loans and advances to officers, directors and employees for the purpose of
financing any such Person's purchase of capital stock of Holdings, provided that
100% of the proceeds from each such loan or advance are used to purchase such
capital stock and Holdings thereafter immediately contributes 100% of the
proceeds received as consideration for such purchase to the common equity
capital of the Borrower;
(d) the Borrower and each Subsidiary may acquire and own
investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;
(e) advances, loans and investments in existence on the Effective
Date and listed on Part A of Schedule IX, without giving effect to any additions
thereto or replacements thereof, shall be permitted;
(f) (i) the Borrower and each Domestic Subsidiary may make capital
contributions to any of their Subsidiaries that is a Qualified Credit Party and
(ii) Foreign Subsidiaries may make loans and advances and capital contributions
to, and other investments in, other Foreign Subsidiaries;
(g) Subsidiaries may be established or created in accordance with
the provisions of Section 8.07;
(h) the Borrower and its Subsidiaries may enter into Interest Rate
Protection Agreements to the extent permitted by Section 8.04(h) and the
Borrower and its Subsidiaries may enter into Other Hedging Agreements to the
extent permitted by Section 8.04(g);
(i) Permitted Acquisitions shall be permitted in accordance with
Section 7.12 and the definition thereof;
(j) Foreign Subsidiaries may make loans and advances to the
Borrower and its Domestic Subsidiaries, provided that any and all such loans and
advances made pursuant to this clause (j) are subordinated to the Obligations
pursuant to a Subordination Agreement in the form of Exhibit K;
(k) so long as no Default or Event of Default, in either case
pursuant to Section 9.01 or 9.05 hereof, is then in existence or would exist
immediately after giving effect thereto, the Borrower and its Domestic
Subsidiaries may make capital contributions, loans or advances or other
investments, to any Foreign Subsidiary so long as the aggregate amount of all
such cash capital contributions, loans and advances and other investments made
after the Initial Borrowing Date (without giving effect to any write-offs or
write-downs thereof) does not exceed the Permitted Foreign Investment Amount;
(l) the Acquisition shall be permitted;
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(m) Qualified Credit Parties may make intercompany loans and
advances to one another in accordance with Section 8.04(b)(i), provided that
each such loan and advance shall be subordinated to the Obligations pursuant to
a Subordination Agreement in the form of Exhibit K;
(n) Investments arising from the receipt by the Borrower or any of
its Subsidiaries of non-cash consideration in connection with sales or
dispositions of assets made under Section 8.02(f) shall be permitted;
(o) Borrower may make loans and advances to Holdings if, and to
the extent that, Borrower would have otherwise been permitted to pay Dividends
in a like amount to Holdings pursuant to Section 8.09(iii), (iv), (v) or (viii)
hereof, PROVIDED that any such loan shall reduce the amount permitted to be paid
as Dividends pursuant to Section 8.09(iii), (iv), (v) or (viii), as the case may
be, in an amount equal to the principal amount of each such loan (without giving
effect to the write-down or write-off thereof);
(p) (A) intercompany loans made (i) by the Borrower to Rexnord
Finance BV and to certain other Foreign Subsidiaries and (ii) by RBS Acquisition
Corporation and by RBS North America, Inc. to Rexnord Finance BV and to certain
other Foreign Subsidiaries, in each case in connection with the Acquisition to
finance the purchase price of certain foreign entities of the Rexnord Business
being acquired pursuant to the Acquisition and (B) certain other investments and
sales of notes and Equity Interests made by the Borrower, RBS Acquisition
Corporation and RBS North America, Inc. in or to certain of their respective
Foreign Subsidiaries in connection with the Acquisition in order to finance the
purchase price of certain foreign entities of the Rexnord Business, and
described in Part B of Schedule IX;
(q) so long as no Default or Event of Default is in existence or
would exist immediately after giving effect thereto, loans and investments in,
and acquisition of interests in, Joint Ventures, provided that in no event shall
the aggregate amount of any loan, investment or acquisition made pursuant to
this clause (q) exceed the Permitted Joint Venture Amount at the time of the
respective such loan, investment or acquisition; and
(r) so long as no Default or Event of Default is in existence or
would exist immediately after giving effect thereto, other advances, loans and
investments so long as the aggregate amount thereof (determined as the amount
originally advanced, loaned or otherwise invested (without giving effect to any
write-downs or write-offs thereof), less any returns on the respective
investment not to exceed the original amount invested) at no time outstanding
exceeds $5,000,000.
8.07 LIMITATION ON CREATION OF SUBSIDIARIES. Holdings will not, and
will not permit any Subsidiary to, establish, create or acquire any Subsidiary
after the Initial Borrowing Date; PROVIDED that the Borrower and its
Subsidiaries shall be permitted to establish and create and, to the extent
otherwise permitted pursuant to Section 8.02, acquire (A) Wholly-Owned Domestic
Subsidiaries, so long as (i) 100% of the Equity Interests of each such new
Subsidiary is pledged pursuant to the Pledge Agreement and the certificates
representing such Equity Interests, if any, together with endorsements for the
transfer thereof duly executed in blank, are delivered to the Collateral Agent
and (ii) such new Wholly-Owned Domestic Subsidiary (x) becomes a
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party to the Subsidiaries Guaranty, the Pledge Agreement and the Security
Agreement by executing counterparts of such Credit Documents or by executing a
counterpart of a Joinder Agreement in the form of Exhibit L (each a "Joinder
Agreement") and taking the actions specified therein and (y) executes and
delivers counterparts of one or more Mortgages to the extent required under
Section 7.10, in each case on the same basis (and to the same extent) as such
Subsidiary would have executed such Credit Documents if it were a Credit Party
on the Initial Borrowing Date, provided that to the extent such new Wholly-Owned
Domestic Subsidiary is created solely for the purposes of consummating a merger
transaction pursuant to a Permitted Acquisition, and such new Wholly-Owned
Domestic Subsidiary at no time holds any assets or liabilities other than any
merger consideration contributed to it contemporaneously with the closing of
such merger transaction, such Wholly-Owned Domestic Subsidiary shall not be
required to take the actions set forth in sub-clauses (i) and (ii) of this
clause (A) until the respective Permitted Acquisition is consummated (at which
time the surviving entity of the respective merger transaction shall be required
to so comply (within the 10 Business Day period referred to below)), (B) other
Domestic Subsidiaries, which are not Wholly-Owned Subsidiaries, resulting from
investments made pursuant to Section 8.06(q) and/or (r) (and so long as all
investments therein by Holdings and its Subsidiaries are otherwise permitted
pursuant thereto), so long as 100% of the Equity Interests of such Domestic
Subsidiary held by the Credit Parties is pledged pursuant to the Pledge
Agreement and the certificates representing such Equity Interests, if any,
together with endorsements for the transfer thereof duly executed in blank are
delivered to the Collateral Agent and (C) Foreign Subsidiaries so long as (I) to
the extent such Foreign Subsidiary is owned by a Credit Party, the Equity
Interests of such Foreign Subsidiary are pledged to the Collateral Agent
pursuant to, and to the extent required by, the Pledge Agreement (except that
the Equity Interests of any Foreign Subsidiary created solely for the purposes
of consummating a merger transaction pursuant to a Permitted Acquisition, so
long as such Foreign Subsidiary at no time holds any assets or liabilities other
than merger consideration contributed to it contemporaneously with the closing
of such merger transaction, need not be so pledged until the date of the
consummation of the respective Permitted Acquisition, at which time the Equity
Interests of the surviving entity thereof shall be required to be so pledged
(within the 10 Business Day period referred to below)) and (II) all investments
(and any other contribution) made by Holdings or any of its Subsidiaries in or
to any such Foreign Subsidiary are otherwise permitted under Section 8.06 and
(D) Holdings shall be permitted to create Intermediate Holdco (in accordance
with the definition thereof contained herein) so long as Intermediate Holdco
complies with the requirements set forth above in clause (A)(i) and (A)(ii) (to
the same extent as if it were a direct Wholly-Owned Subsidiary of the Borrower).
All actions required as set forth above shall be completed within 10 Business
Days after the date of the acquisition or creation of the respective Subsidiary,
except that (x) all requirements set forth above with respect to Intermediate
Holdco shall be required to be satisfied on such sooner date, if any, as any
Equity Interests of the Borrower are transferred to it and (y) all requirements
with respect to Mortgages shall be completed within the time set forth in
Section 7.10.
8.08 MODIFICATIONS; PREPAYMENTS; ETC. Holdings will not, and will not
permit any of its Subsidiaries to:
(a) make (or give any notice or offer in respect of) any voluntary
or optional payment or prepayment or redemption or acquisition for value of, or
prepayment or redemption of as a result of any change of control, asset sale or
similar event (including in each case, without
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limitation, by way of depositing with the trustee with respect thereto money or
securities before due for the purpose of paying when due), any Senior
Subordinated Notes (it being understood that the consummation of the exchange
offer as contemplated in the Senior Subordinated Note Indenture shall not
violate this clause (a));
(b) (i) amend or modify (or permit the amendment or modification
of) any subordination provision (or any definition related to any subordination
provision) of the Senior Subordinated Note Documents or (ii) amend or modify (or
permit the amendment or modification) of any other provision of any Senior
Subordinated Note Documents in any manner adverse to the interests of the
Lenders; or
(c) amend, modify or change in any manner adverse to the interests
of the Lenders the organizational documents (including by-laws) of any Credit
Party.
8.09 DIVIDENDS, ETC. Holdings will not, and will not permit any of its
Subsidiaries to, declare or pay any dividends (other than dividends payable
solely in common stock of such Person) or return any capital to, its
stockholders, members and/or other owners of Equity Interests or authorize or
make any other distribution, payment or delivery of property or cash to its
stockholders, members and/or other owners of Equity Interests as such, or
redeem, retire, purchase or otherwise acquire, directly or indirectly, for a
consideration, any of its Equity Interests now or hereafter outstanding (or any
warrants for or options or stock appreciation rights in respect of any of such
Equity Interests), or set aside any funds for any of the foregoing purposes, or
permit any of its Subsidiaries to purchase or otherwise acquire for
consideration any of the Equity Interests of Holdings or any other Subsidiary,
as the case may be, now or hereafter outstanding (or any options or warrants or
stock appreciation rights issued by such Person with respect to its Equity
Interests) (all of the foregoing "Dividends"), except that:
(i) any Subsidiary of the Borrower may pay Dividends or return
capital or make distributions and other similar payments with regard to its
Equity Interests to the Borrower or to a Wholly-Owned Subsidiary of the
Borrower which owns equity therein;
(ii) any non-Wholly-Owned Subsidiary of the Borrower may declare
and pay cash Dividends to its shareholders generally so long as the
Borrower or its respective Subsidiary which owns the Equity Interests in
the Subsidiary paying such Dividends receives at least its proportionate
share thereof (based upon its relative holding of the Equity Interests in
the Subsidiary paying such Dividends and taking into account the relative
preferences, if any, of the various classes of Equity Interests of such
Subsidiary);
(iii) so long as no Default or Event of Default exists at the time
of the respective Dividend, redemption or repurchase or would exist
immediately after giving effect thereto, the Borrower may pay cash
Dividends to Holdings (through Intermediate Holdco to the extent same has
been created) to allow Holdings to redeem or repurchase (and Holdings may
redeem or repurchase), contemporaneously with such Dividend, Equity
Interests of Holdings from officers, employees and directors (or their
estates) after the death, permanent disability, retirement or termination
of employment of any such Person or otherwise in accordance with any stock
option plan or any employee stock ownership plan that has been approved by
the Board of Directors of Holdings, PROVIDED
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that the aggregate principal amount of Dividends made by the Borrower to
Holdings pursuant to this clause (iii), and the aggregate amount paid by
Holdings in respect of all such Equity Interests so redeemed or
repurchased, in any calendar year shall not, in either case, exceed
$2,000,000;
(iv) the Borrower may pay cash Dividends to Holdings (through
Intermediate Holdco to the extent same has been created) so long as the
proceeds thereof are promptly used by Holdings to pay operating expenses in
the ordinary course of business (including, without limitation,
professional fees and expenses) and other similar corporate overhead costs
and expenses, PROVIDED that the aggregate amount of cash Dividends paid
pursuant to this clause (iv) during any fiscal year of Holdings shall not
exceed $1,000,000;
(v) the Borrower may pay cash Dividends to Holdings (through
Intermediate Holdco to the extent same has been created) in the amounts and
at the times of any payment by Holdings in respect of taxes, PROVIDED that
(x) the amount of cash Dividends paid pursuant to this clause (v) to enable
Holdings to pay Federal and state income taxes at any time shall not exceed
the amount of such Federal and state income taxes actually owing by
Holdings at such time for the respective period and (y) any refunds
received by Holdings shall promptly be returned by Holdings to the
Borrower;
(vi) before the occurrence of a Qualified Public Offering, Holdings
may pay Dividends with the net cash proceeds of substantially
contemporaneous sales or issuances of its capital stock (other than
issuances or sales of its capital stock pursuant to a public offering or
Qualified Public Offering) to Persons other than its Subsidiaries;
(vii) any non-Wholly-Owned Subsidiary of the Borrower may repurchase
or redeem its outstanding minority Equity Interests held by third Persons,
provided that the aggregate amount of payments made in respect of all such
repurchases and redemptions shall not exceed $1,000,000;
(viii) the Borrower may pay cash Dividends to Holdings (through
Intermediate Holdco to the extent same has been created) in the amounts and
at the times of any required payments by Holdings (which will actually be
paid with such cash Dividends) pursuant to the Management Agreement, so
long as such amounts are then permitted to be paid pursuant to Section
8.10(v) or (vi), as the case may be; and
(ix) Holdings may return to Carlyle and other Persons cash equity
contributions initially made by Carlyle or such other Persons to Holdings
to finance Permitted Acquisitions, Capital Expenditures or investments in
Joint Ventures or Foreign Subsidiaries (in each case permitted hereunder),
that have not been utilized for such purposes, provided that (i) such cash
equity contributions are returned within 180 days following the respective
cash equity contribution made by Carlyle or such other Person to Holdings
and (ii) such cash equity contributions have not theretofore been
contributed by Holdings to the Borrower or any Subsidiary thereof.
8.10 TRANSACTIONS WITH AFFILIATES. Holdings will not, and will not
permit any Subsidiary to, enter into any transaction or series of transactions
after the Effective Date whether
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or not in the ordinary course of business, with any Affiliate other than on
terms and conditions substantially as favorable to Holdings or such Subsidiary
as would be obtainable by Holdings or such Subsidiary at the time in a
comparable arm's-length transaction with a Person other than an Affiliate,
except that the following in any event shall be permitted:
(i) Dividends may be paid to the extent provided in Section 8.09;
(ii) loans may be made and other transactions may be entered into
by Holdings and its Subsidiaries to the extent permitted by Sections 8.02,
8.04 and 8.06;
(iii) customary fees and indemnifications may be paid to directors
of Holdings and its Subsidiaries;
(iv) Holdings and its Subsidiaries may enter into, and may make
payments under, employment agreements, employee benefits plans, stock
option plans, indemnification provisions and other similar compensatory
arrangements with officers, employees and directors of Holdings and its
Subsidiaries in the ordinary course of business;
(v) so long as no Default under Section 9.01 or 9.05 and no Event
of Default under Section 9.01 or 9.05 shall exist (both before and
immediately after giving effect thereto), Holdings and/or the Borrower may
pay management fees and transaction fees to Carlyle and the Carlyle
Affiliates pursuant to the terms of the Management Agreement; and
(vi) Holdings and/or the Borrower may reimburse Carlyle and the
Carlyle Affiliates for their reasonable out-of-pocket expenses pursuant to
the terms of the Management Agreement.
Notwithstanding anything to the contrary contained above in this Section 8.10,
in no event shall Holdings or any of its Subsidiaries pay any management,
consulting or similar fee to Carlyle or any Carlyle Affiliate except as
specifically provided in clauses (v) and (vi) of this Section 8.10.
8.11 CONSOLIDATED INTEREST COVERAGE RATIO. Holdings will not permit
the Consolidated Interest Coverage Ratio for any Test Period ending on the last
day of any fiscal quarter set forth below to be less than the ratio set forth
opposite such fiscal quarter:
<Table>
<Caption>
Fiscal Quarter Ending Ratio
--------------------- -----
March 31, 2003 2.25:1.00
June 30, 2003 2.25:1.00
September 30, 2003 2.25:1.00
December 31, 2003 2.25:1.00
March 31, 2004 2.25:1.00
June 30, 2004 2.25:1.00
September 30, 2004 2.25:1.00
</Table>
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<Table>
<Caption>
Fiscal Quarter Ending Ratio
--------------------- -----
December 31, 2004 2.25:1.00
March 31, 2005 2.25:1.00
June 30, 2005 2.25:1.00
September 30, 2005 2.35:1.00
December 31, 2005 2.35:1.00
March 31, 2006 2.50:1.00
June 30, 2006 2.50:1.00
September 30, 2006 2.75:1.00
December 31, 2006 2.75:1.00
March 31, 2007 2.75:1.00
June 30, 2007 3.00:1.00
September 30, 2007 3.00:1.00
December 31, 2007 3.00:1.00
March 31, 2008 3.00:1.00
June 30, 2008 3.00:1.00
September 30, 2008 3.25:1.00
December 31, 2008 3.25:1.00
March 31, 2009 3.50:1.00
June 30, 2009 3.50:1.00
September 30, 2009 3.50:1.00
</Table>
8.12 CONSOLIDATED LEVERAGE RATIO. Holdings will not permit the
Consolidated Leverage Ratio on the last day of any Test Period ending on the
last day of any fiscal quarter set forth below to be more than the ratio set
forth opposite such fiscal quarter:
<Table>
<Caption>
Fiscal Quarter Ending Ratio
--------------------- -----
March 31, 2003 5.40:1.00
June 30, 2003 5.40:1.00
September 30, 2003 5.35:1.00
December 31, 2003 5.35:1.00
March 31, 2004 5.25:1.00
June 30, 2004 5.25:1.00
September 30, 2004 5.00:1.00
December 31, 2004 5.00:1.00
March 31, 2005 4.75:1.00
</Table>
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<Table>
<Caption>
Fiscal Quarter Ending Ratio
--------------------- -----
June 30, 2005 4.75:1.00
September 30, 2005 4.50:1.00
December 31, 2005 4.50:1.00
March 31, 2006 4.25:1.00
June 30, 2006 4.25:1.00
September 30, 2006 3.75:1.00
December 31, 2006 3.75:1.00
March 31, 2007 3.50:1.00
June 30, 2007 3.50:1.00
September 30, 2007 3.25:1.00
December 31, 2007 3.25:1.00
March 31, 2008 3.00:1.00
June 30, 2008 3.00:1.00
September 30, 2008 2.75:1.00
December 31, 2008 2.75:1.00
March 31, 2009 2.50:1.00
June 30, 2009 2.50:1.00
September 30, 2009 2.25:1.00
</Table>
8.13 LIMITATION ON ISSUANCE OF STOCK. (a) Holdings will not issue (i)
any preferred Equity Interests other than Qualified Preferred Stock or (ii) any
redeemable common Equity Interests other than common Equity Interests that are
redeemable at the sole option of Holdings.
(b) Holdings will not permit any of its Subsidiaries, directly or
indirectly, to issue any Equity Interests (or warrants, rights or options to
acquire Equity Interests), except (i) for replacements of then outstanding
Equity Interests, (ii) for stock splits, stock dividends and other issuances
which do not decrease the percentage ownership of the Borrower and its
Subsidiaries taken as a whole in any class of the capital stock of such
Subsidiary, (iii) for issuances to the Borrower or any of its Subsidiaries in
connection with the creation of new Subsidiaries in accordance with Section
8.07, (iv) to qualify directors to the extent required by applicable law, (v) in
the case of Foreign Subsidiaries, for nominal amounts of shares held by a third
Person to the extent required by applicable law and other de minimis issuances
of equity by Foreign Subsidiaries if deemed necessary or desirable by the
Borrower and (vi) for issuances by any Foreign Subsidiary of its Equity
Interests to other Foreign Subsidiaries.
8.14 CHANGE OF LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A
REGISTERED ORGANIZATION); JURISDICTION OF ORGANIZATION; ETC. No Credit Party
shall change its legal name, its type of organization, its jurisdiction of
organization, or its organizational identification number (if any), except that
any such changes shall be permitted (so long as same do not involve any
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Credit Party changing its jurisdiction of organization from the United States or
a State thereof to a jurisdiction of organization outside the United States or a
State thereof) if (i) the Borrower shall give to the Administrative Agent notice
promptly, and in any event within 30 days, after such change, written notice
thereof (which written notice shall set forth in reasonable detail the changes
so made), and (ii) in connection with the respective such change or changes, it
shall take all action reasonably requested by the Collateral Agent to maintain
the security interests of the Collateral Agent in the Collateral intended to be
granted hereby pursuant to the Security Documents at all times fully perfected
and in full force and effect.
8.15 NO DESIGNATION OF OTHER INDEBTEDNESS AS "DESIGNATED SENIOR
INDEBTEDNESS". The Borrower will not, and will not permit any of its
Subsidiaries to, designate any Indebtedness (other than the Obligations) of the
Borrower or any such Subsidiary as "Designated Senior Indebtedness" for the
purposes of any Subordinated Note Documents.
8.16 LIMITATIONS ON RESTRICTIONS AFFECTING SUBSIDIARIES. Holdings will
not, and will not permit any of its Subsidiaries to, create or otherwise cause
or suffer to exist (other than as a result of a requirement of law) any
encumbrance or restriction which prohibits or otherwise restricts (A) the
ability of any Subsidiary to (a) pay Dividends or make other distributions or
pay any Indebtedness owed to Holdings or any Subsidiary, (b) make loans or
advances to Holdings or any Subsidiary, (c) transfer any of its properties or
assets to Holdings or any Subsidiary or (B) the ability of Holdings or any other
Subsidiary of Holdings to create, incur, assume or suffer to exist any Lien upon
its property or assets to secure the Obligations, other than prohibitions or
restrictions existing under or by reason of: (i) this Agreement, the other
Credit Documents and the Senior Subordinated Note Documents; (ii) applicable
law, regulation or judicial order; (iii) customary non-assignment provisions
entered into in the ordinary course of business and consistent with past
practices; (iv) any restriction or encumbrance with respect to a Subsidiary
imposed pursuant to an agreement which has been entered into for the sale or
disposition of all or substantially all of the capital stock or assets of such
Subsidiary, so long as such sale or disposition is permitted under this
Agreement; (v) Liens permitted under Sections 8.03(d), (l), (m), (n) and (o) and
any documents or instruments governing the terms of any Indebtedness or other
obligations secured by any such Liens, provided that such prohibitions or
restrictions apply only to the assets subject to such Liens; (vi) provisions
(relating solely to one or more Foreign Subsidiaries) contained in agreements
related to or instruments evidencing Indebtedness incurred pursuant to Section
8.04(i) and (vii) customary provisions in joint venture agreements and similar
agreements that restrict the transfer of Equity Interests in Joint Ventures
(which are not Subsidiaries of the Borrower) subject to such agreements.
SECTION 9. EVENTS OF DEFAULT. Upon the occurrence of any of the
following specified events (each, an "Event of Default"):
9.01 PAYMENTS. The Borrower shall (i) default in the payment when due
of any principal of the Loans or any Unpaid Drawing or (ii) default, and such
default shall continue for three or more Business Days, in the payment when due
of any interest on the Loans or any Fees or any other amounts owing hereunder or
under any other Credit Document; or
9.02 REPRESENTATIONS, ETC. Any representation, warranty or statement
made by any Credit Party herein or in any other Credit Document or in any
statement or certificate
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delivered or required to be delivered pursuant hereto or thereto shall prove to
be untrue in any material respect on the date as of which made or deemed made;
or
9.03 COVENANTS. Any Credit Party shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in
Sections 7.01(f)(i), 7.05 (as it relates to the corporate existence of the
Borrower), 7.09 (as it relates to Holdings or the Borrower) and 8, or (b)
default in the due performance or observance by it of any term, covenant or
agreement (other than those referred to in Section 9.01, 9.02 or clause (a) of
this Section 9.03) contained in this Agreement and such default shall continue
unremedied for a period of at least 30 days after written notice to the
defaulting party by the Administrative Agent or the Required Lenders; or
9.04 DEFAULT UNDER OTHER AGREEMENTS. (a) Holdings or any of its
Subsidiaries shall (i) default in any payment with respect to any Indebtedness
(other than the Obligations) beyond the period of grace, if any, applicable
thereto or (ii) default in the observance or performance of any agreement or
condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause any such
Indebtedness to become due prior to its stated maturity; or (b) any such
Indebtedness of Holdings or any of its Subsidiaries shall be declared to be due
and payable (or shall be required to be prepaid as a result of a default
thereunder or of an event of the type that constitutes an Event of Default)
prior to the stated maturity thereof, PROVIDED that it shall not constitute an
Event of Default pursuant to this Section 9.04 unless the aggregate principal
amount of all Indebtedness referred to in clauses (a) and (b) above exceeds
$7,500,000 in the aggregate at any one time; or
9.05 BANKRUPTCY, ETC. Holdings or any of its Subsidiaries (other than
one or more Immaterial Subsidiaries) shall commence a voluntary case concerning
itself under Title 11 of the United States Code entitled "Bankruptcy", as now or
hereafter in effect, or any successor thereto (the "Bankruptcy Code"); or an
involuntary case is commenced against Holdings or any of its Subsidiaries (other
than one or more Immaterial Subsidiaries) and the petition is not controverted
within 30 days, or is not dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or substantially all of the property of Holdings or any of
its Subsidiaries (other than one or more Immaterial Subsidiaries); or Holdings
or any of its Subsidiaries (other than one or more Immaterial Subsidiaries)
commences any other proceeding under any reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency or liquidation or similar
law of any jurisdiction whether now or hereafter in effect relating to Holdings
or any of its Subsidiaries (other than one or more Immaterial Subsidiaries); or
there is commenced against Holdings or any of its Subsidiaries (other than one
or more Immaterial Subsidiaries) any such proceeding which remains undismissed
for a period of 60 days; or Holdings or any of its Subsidiaries (other than one
or more Immaterial Subsidiaries) is adjudicated insolvent or bankrupt; or any
order of relief or other order approving any such case or proceeding is entered;
or Holdings or any of its Subsidiaries (other than one or more Immaterial
Subsidiaries) suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or Holdings or any of its Subsidiaries (other
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than one or more Immaterial Subsidiaries) makes a general assignment for the
benefit of creditors; or any corporate action is taken by Holdings or any of its
Subsidiaries (other than one or more Immaterial Subsidiaries) for the purpose of
effecting any of the foregoing; or
9.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
..67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made with respect to a Plan or a
Foreign Pension Plan has not been timely made, Holdings, the Borrower or any
Subsidiary of the Borrower or any ERISA Affiliate has incurred or is likely to
incur any liability to or on account of a Plan under Section 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Holdings, the Borrower or any
Subsidiary of the Borrower has incurred or is likely to incur any liability to
or on account of a Plan (other than an ERISA Affiliate Plan) under Section 409,
502(i), 502(l) or Section 401(a)(29), 4971 or 4975 of the Code or on account of
a group health plan (as defined in Section 607(1) of ERISA or Section
4980B(g)(2) of the Code) under Section 4980B of the Code, or Holdings, the
Borrower or any Subsidiary of the Borrower has incurred or is likely to incur
liabilities pursuant to one or more employee welfare benefit plans (as defined
in Section 3(1) of ERISA) that provide benefits to retired employees or other
former employees (other than as required by Part 6 of Title I, Subtitle B of
ERISA and Section 4880B of the Code) or Plans or Foreign Pension Plans in
addition to the liability that existed on the Initial Borrowing Date pursuant to
any such employee welfare benefit plan, Foreign Pension Plan, or Plan; (b) there
shall result from any such event or events described in subsection (a) the
imposition of a lien, the granting of a security interest, or a liability or a
material risk of incurring a liability; and (c) such lien, security interest or
liability, individually, and/or in the aggregate, in the reasonable opinion of
the Required Lenders, has had, or is reasonably likely to have, a Material
Adverse Effect; or
9.07 SECURITY DOCUMENTS. (a) Any Security Document shall cease to be,
in any material respect, in full force and effect, or shall cease, in any
material respect, to give the Collateral Agent the Liens (with the perfection
and priority purported to be created thereby), purported to be created thereby
in favor of the Collateral Agent, or (b) any Credit Party shall default in the
due performance or observance of any material term, covenant or agreement on its
part to be performed or observed pursuant to any such Security Document and such
default shall continue unremedied for a period of at least 30 days after written
notice to the respective Credit Party by the Administrative Agent; or
9.08 GUARANTY. Any of the Guaranties or any material provision thereof
shall cease to be in full force and effect other than pursuant to the terms
thereof, or any Guarantor or
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any Person acting by or on behalf of such Guarantor shall deny or disaffirm such
Guarantor's obligations under any Guaranty; or
9.09 JUDGMENTS. One or more judgments or decrees shall be entered
against Holdings or any of its Subsidiaries (other than one or more Immaterial
Subsidiaries) involving a liability (to the extent not paid or covered by
insurance) in excess of $7,500,000 in the aggregate for all such judgments and
decrees for Holdings and its Subsidiaries (other than one or more Immaterial
Subsidiaries), and all such judgments and decrees in excess of such amount shall
not have been vacated, discharged or stayed or bonded pending appeal within 60
days from the entry thereof; or
9.10 CHANGE OF CONTROL. A Change of Control shall occur;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent shall, upon the written
request of the Required Lenders, by written notice to the Borrower, take any or
all of the following actions, without prejudice to the rights of the
Administrative Agent or any Lender to enforce its claims against any Guarantor
or the Borrower (PROVIDED that, if an Event of Default specified in Section 9.05
shall occur with respect to Holdings or the Borrower, the result which would
occur upon the giving of written notice by the Administrative Agent as specified
in clauses (i) and (ii) below shall occur automatically without the giving of
any such notice): (i) declare the Total Commitment terminated, whereupon the
Commitment of each Lender shall forthwith terminate immediately and any
Commitment Commission shall forthwith become due and payable without any other
notice of any kind; (ii) declare the principal of and any accrued interest in
respect of all Loans and all other obligations owing hereunder (including Unpaid
Drawings) and under the other Credit Documents to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower; (iii)
enforce, as Collateral Agent (or direct the Collateral Agent to enforce), any or
all of the Liens and security interests created pursuant to the Security
Documents; (iv) terminate any Letter of Credit which may be terminated in
accordance with its terms; and (v) direct the Borrower to pay (and the Borrower
hereby agrees upon receipt of such notice, or upon the occurrence of any Event
of Default specified in Section 9.05 in respect of the Borrower, it will pay) to
the Collateral Agent at the Payment Office such additional amounts of cash, to
be held as security for the Borrower's reimbursement obligations in respect of
Letters of Credit then outstanding equal to the aggregate Stated Amount of all
Letters of Credit then outstanding.
SECTION 10. DEFINITIONS AND ACCOUNTING TERMS.
10.01 DEFINED TERMS. As used herein, the following terms shall have
the meanings herein specified unless the context otherwise requires. Defined
terms in this Agreement shall include in the singular number the plural and in
the plural the singular:
"Acquired Entity or Business" shall mean either (x) the assets
constituting a business, division or product line of any Person not already a
Subsidiary of the Borrower or (y) (i) in the case of any such Person which is
incorporated or organized in the United States or any state or territory
thereof, 100% of the Equity Interests of any such Person, which Person shall, as
a result of such acquisition of Equity Interests, become a Wholly-Owned Domestic
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Subsidiary of the Borrower (or shall be merged with and into the Borrower or
another Qualified Credit Party, with the Borrower or such other Qualified Credit
Party being the surviving Person) and (ii) in the case of any such Person
organized outside of the United States or any State or territory thereof, the
Equity Interests of such Person which Person shall as a result of such
acquisition of Equity Interests become a Foreign Subsidiary of the Borrower.
"Acquisition" shall mean the acquisition by the Borrower of the
Rexnord Business pursuant to the Acquisition Agreement.
"Acquisition Agreement" shall mean the Stock Purchase Agreement, dated
as of September 27, 2002 by and among the Borrower, Invensys plc, BTR Inc., BTR
(European Holdings) BV, BTR Industries GmbH, Dunlop
Vermogensverwaltungsgesellschaft GmbH, Brook Hansen Inc., Invensys France SAS,
Invensys Holdings Ltd., Hansen Transmissions International Ltd., Hawker Siddeley
Management Ltd., and BTR Finance BV.
"Acquisition Documents" shall mean the Acquisition Agreement and all
other material agreements and documents relating to the Acquisition, as same may
be amended, modified or supplemented from time to time pursuant to the terms
hereof and thereof.
"Additional Mortgages" shall have the meaning provided in
Section 7.10.
"Adjusted Cash Flow" for any fiscal year of Holdings shall mean
Consolidated Net Income for such fiscal year (after provision for taxes) PLUS
(without duplication) the sum of (x) the amount of all non-cash charges
(including, without limitation, depreciation, deferred tax expense, non-cash
interest expense, amortization and other non-cash charges, but excluding
non-cash charges specifically dealt with in following clauses (y) and (z)) and
losses from sales of assets (other than sales of inventory and equipment in the
normal course of business) that were deducted in arriving at Consolidated Net
Income for such fiscal year, (y) the amount, if positive, by which the tax
expense deducted in arriving at Consolidated Net Income for such fiscal year
(excluding the tax effects of gains and losses on sales of assets (other than
sales of inventory and equipment in the normal course of business)) exceeds the
actual taxes paid in respect of such fiscal year (excluding amounts attributable
to gains or losses on sales of assets (other than sales of inventory and
equipment in the normal course of business)) and (z) the amount, if positive, by
which the expense for pension and post-retirement obligations deducted in
arriving at Consolidated Net Income for such fiscal year exceeds the cash
payments made during such fiscal year in respect of pension and post-retirement
funding obligations, MINUS (without duplication) the sum of (w) the amount of
all non-cash gains (but excluding non-cash gains specifically dealt with below)
and gains from sales of assets (other than sales of inventory and equipment in
the normal course of business) that were added in arriving at Consolidated Net
Income for such fiscal year, (x) the actual cash payments made in such fiscal
year in respect of non-cash charges taken in determining Consolidated Net Income
for previous fiscal years, (y) the amount, if positive, by which the actual
taxes paid in respect of such fiscal year (excluding taxes payable on gains from
sales of assets (other than sales of inventory and equipment in the normal
course of business)) exceeds the tax expense (excluding the portion thereof
attributable to gains or losses on sales of assets (other than sales of
inventory and equipment in the normal course of business)) deducted in arriving
at Consolidated Net Income for such fiscal year and (z) the amount, if positive,
by which the cash payments made during such fiscal year in respect of pension
and
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post-retirement funding obligations exceeds the expense for pension and
post-retirement obligations deducted in determining Consolidated Net Income for
such fiscal year.
"Adjusted Consolidated Working Capital" shall mean, at any time,
Consolidated Current Assets (but excluding therefrom all cash, Cash Equivalents
and Foreign Cash Equivalents) less Consolidated Current Liabilities at such
time.
"Adjusted RF Percentage" shall mean (x) at a time when no Lender
Default exists, for each Lender, such Lender's RF Percentage and (y) at a time
when a Lender Default exists (i) for each Lender that is a Defaulting Lender,
zero and (ii) for each Lender that is a Non-Defaulting Lender, the percentage
determined by dividing such Lender's Revolving Commitment at such time by the
Adjusted Total Revolving Commitment at such time, it being understood that all
references herein to Revolving Commitments and the Adjusted Total Revolving
Commitment at a time when the Total Revolving Commitment has been terminated
shall be references to the Revolving Commitments or Adjusted Total Revolving
Commitment, as the case may be, in effect immediately prior to such termination,
PROVIDED that (A) no Lender's Adjusted RF Percentage shall change upon the
occurrence of a Lender Default from that in effect immediately prior to such
Lender Default if after giving effect to such Lender Default, and any repayment
of Revolving Loans and Swingline Loans at such time pursuant to Section
4.02(A)(a) or otherwise, the sum of (i) the aggregate outstanding principal
amount of Revolving Loans of all Non-Defaulting Lenders, plus (ii) the aggregate
outstanding principal amount of all Swingline Loans, plus (iii) the aggregate
amount of Letter of Credit Outstandings, exceeds the Adjusted Total Revolving
Commitment; (B) the changes to the Adjusted RF Percentage that would have become
effective upon the occurrence of a Lender Default but that did not become
effective as a result of the preceding clause (A) shall become effective on the
first date after the occurrence of the relevant Lender Default on which the sum
of (i) the aggregate outstanding principal amount of the Revolving Loans of all
Non-Defaulting Lenders, plus (ii) the aggregate outstanding principal amount of
all Swingline Loans, plus (iii) the aggregate amount of Letter of Credit
Outstandings is equal to or less than the Adjusted Total Revolving Commitment;
and (C) if (i) a Non-Defaulting Lender's Adjusted RF Percentage is changed
pursuant to the preceding clause (B) and (ii) any repayment of such Lender's
Revolving Loans, Swingline Loans or Unpaid Drawings that were made during the
period commencing after the date of the relevant Lender Default and ending on
the date of such change to its Adjusted RF Percentage must be returned to the
Borrower as a preferential or similar payment in any bankruptcy or similar
proceeding of the Borrower, then the change to such Non-Defaulting Lender's
Adjusted RF Percentage effected pursuant to said clause (B) shall be reduced to
that positive change, if any, as would have been made to its Adjusted RF
Percentage if (x) such repayments had not been made and (y) the maximum change
to its Adjusted RF Percentage would have resulted in the sum of the outstanding
principal of Revolving Loans made by such Lender plus such Lender's new Adjusted
RF Percentage of the outstanding principal amount of Swingline Loans and of
Letter of Credit Outstandings equaling such Lender's Revolving Commitment at
such time.
"Adjusted Total Revolving Commitment" shall mean at any time the Total
Revolving Commitment less the aggregate Revolving Commitments of all Defaulting
Lenders.
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"Administrative Agent" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 11.09.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such Person. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power (i) to
vote 10% or more of the securities having ordinary voting power for the election
of directors of such corporation or (ii) to direct or cause the direction of the
management and policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise.
"Agent" shall mean each of the Administrative Agent, the Collateral
Agent, each Co-Documentation Agent and each Joint Lead Arranger.
"Aggregate Consideration" shall mean, with respect to any Permitted
Acquisition, the aggregate consideration paid and reasonably expected to be paid
in connection therewith as determined at the time of the consummation thereof,
including, without limitation (without duplication), (i) the aggregate amount of
all cash, Cash Equivalents and Foreign Cash Equivalents paid or payable in
connection therewith, (ii) the aggregate principal amount of all Indebtedness
assumed, refinanced, incurred or issued in connection therewith, (iii) the
aggregate amount paid and reasonably expected to be paid (based on the
Borrower's good faith estimates of such payments) pursuant to any earn-out,
non-compete agreement, consulting arrangement, purchase price adjustments,
deferred purchase price and/or similar arrangements, and (iv) the aggregate fair
market value of any other consideration (as reasonably determined by the
Borrower); provided that the Aggregate Consideration for any Permitted
Acquisition shall exclude all consideration in the form of common stock of
Holdings or Qualified Preferred Stock, as well as all cash proceeds contributed
to the Borrower or the respective Subsidiary from a substantially
contemporaneous issuance by Holdings of its common stock or Qualified Preferred
Stock.
"Agreement" shall mean this Credit Agreement, as the same may be from
time to time further modified, amended, restated (including any amendment and
restatement hereof) or supplemented.
"Alternate Currency" shall mean, with respect to any Letter of Credit,
Canadian Dollars, Pounds Sterling and Euros and any other currency other than
Dollars as may be acceptable to the Administrative Agent and the Issuing Lender
with respect thereto in their sole discretion.
"Anticipated Reinvestment Amount" shall mean, with respect to any
Reinvestment Election, the amount specified in the Reinvestment Notice delivered
by the Borrower in connection therewith as the amount of the Net Cash Proceeds
from the related Asset Sale that the Borrower intends to use to purchase,
construct or otherwise acquire Reinvestment Assets.
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"Applicable Margin" for any day during the respective period means (x)
with respect to Term Loans maintained as (i) Eurodollar Loans, 4.00% and (ii)
Base Rate Loans, 2.75% and (y) with respect to Revolving Loans and Swingline
Loans, the respective percentage per annum set forth below under the appropriate
column, opposite the respective Level (i.e., Level 1, Level 2 or Level 3, as the
case may be) of the Consolidated Leverage Ratio indicated to have been achieved
in the respective officer's certificate delivered as required below:
<Table>
<Caption>
Revolving Loans
Revolving Loans maintained as Base
Consolidated maintained as Rate Loans and
Level Leverage Ratio Eurodollar Loans Swingline Loans
--------------------------------------------------------------------------------
3 Greater than or 3.50% 2.25%
equal to 4.00:1.00
--------------------------------------------------------------------------------
2 Greater than or 3.25% 2.00%
equal to 3.00:1.00
but less than
4.00:1.00
--------------------------------------------------------------------------------
1 Less than 3.00:1.00 3.00% 1.75%
--------------------------------------------------------------------------------
</Table>
, with the Consolidated Leverage Ratio to be determined based on the delivery of
a certificate of Holdings by the chief financial officer or controller of
Holdings to the Administrative Agent (who shall make same available to each RF
Lender), within 45 days of the last day of any fiscal quarter of Holdings (or 90
days in the case of the fiscal year end of Holdings) (the date of each such
delivery, the "Start Date"), which certificate shall set forth the calculation
of the Consolidated Leverage Ratio as at the last day of the Test Period ended
immediately prior to the relevant Start Date (or, if any Significant Acquisition
or Significant Asset Sale has occurred after the last day of such Test Period
and prior to the respective Start Date, with the Consolidated Leverage Ratio to
be calculated on a Post-Test Period PRO FORMA Basis as at the date the last such
Significant Acquisition or Significant Asset Sale was affected, after giving
effect thereto) and the Applicable Margins which shall be thereafter applicable
(until same are changed or cease to apply in accordance with this definition)
shall be based upon the Consolidated Leverage Ratio as so calculated; PROVIDED
that at the time of the consummation of any Significant Acquisition and any
Significant Asset Sale, the chief financial officer or controller of Holdings
shall deliver to the Administrative Agent a certificate setting forth the
calculation of the Consolidated Leverage Ratio on a Post-Test Period Pro FORMA
Basis (with Consolidated Debt to be determined on the date of the consummation
of the respective such Significant Acquisition or Significant Asset Sale, and
after giving effect thereto, and with Consolidated EBITDA to be calculated for
the Test Period most recently ended prior to the date on which such Significant
Acquisition or such Significant Asset Sale, as the case may be, is consummated
for which financial statements have been made available (or were required to be
made available) pursuant to Section 7.01(a) or (b), as the case may be), and the
date of such consummation shall be deemed to be a Start Date and the Applicable
Margins which shall be thereafter applicable (until same are changed or cease to
apply in accordance with this definition) shall be based upon the Leverage Ratio
as so calculated. The Applicable Margins so determined shall apply, except as
set forth in the succeeding sentence, from the relevant Start Date to the
earliest of (x) the date on which the next certificate is delivered to the
Administrative Agent, (y) the date on which the next Significant Acquisition or
the next Significant Asset Sale, as the case may be, is consummated
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and (z) the date which is 45 (or, in the case of a fiscal year end, 90) days
following the last day of the Test Period in which the previous Start Date
occurred (such earliest date, the "End Date"), at which time, if no certificate
has been delivered to the Administrative Agent indicating an entitlement to new
Applicable Margins (and thus commencing a new Start Date), the Applicable
Margins pursuant to clause (y) of the preceding sentence shall be those set
forth in the table above determined as if the Consolidated Leverage Ratio were
greater than 4.00:1.00. Notwithstanding anything to the contrary contained above
in this definition, the Applicable Margins with respect to Revolving Loans and
Swingline Loans shall be (x) at all times prior to the date of delivery of the
financial statements pursuant to Section 7.01(b) for the fiscal quarter ending
closest to June 30, 2003 and (y) at any time a Default or Event of Default
exists, (i) 3.50% in the case of Revolving Loans maintained as Eurodollar Loans
and (ii) 2.25% in the case of Revolving Loans maintained as Base Rate Loans or
Swingline Loans.
"Approved Bank" shall have the meaning provided in the definition of
Cash Equivalents.
"Asset Sale" shall mean and include (x) the sale, transfer or other
disposition by Holdings or any Subsidiary to any Person other than Holdings or a
Wholly-Owned Subsidiary of Holdings of any asset of the Borrower or such
Subsidiary (other than sales, transfers or other dispositions of inventory
and/or obsolete equipment, in each case in the ordinary course of business), (y)
the sale or issuance by the Borrower or any of its Subsidiaries of any Equity
Interests to any Person (other than Holdings or a Wholly-Owned Subsidiary of
Holdings) and/or (z) the receipt by Holdings or any Subsidiary of any insurance,
condemnation or similar proceeds in connection with a casualty or taking of any
of its assets but in the case of clauses (x) and (z) above, only to the extent
that the Net Cash Proceeds of any such sale, transfer or disposition (or series
of such sales, transfers or dispositions) or any such receipt of insurance,
condemnation or similar proceeds is, in either case, in excess of $1,000,000.
"Assignment Agreement" shall mean the Assignment Agreement in the form
of Exhibit M (appropriately completed).
"Attributable Debt" in respect of a Sale/Leaseback Transaction shall
mean, as at the time of determination, the present value (discounted at the
interest rate borne at such time by Revolving Loans maintained as Eurodollar
Loans, compounded annually) of the total obligations of the lessee for rental
payments during the remaining term of the lease included in such Sale/Leaseback
Transaction (including any period for which such lease has been extended);
provided, however, that if such Sale/Leaseback Transaction results in a
Capitalized Lease Obligation, the amount of Indebtedness represented thereby
shall be determined in accordance with the definition of Capitalized Lease
Obligations.
"Authorized Officer" shall mean any senior officer of Holdings or the
Borrower designated as such in writing to the Administrative Agent by Holdings
or by the Borrower.
"Bankruptcy Code" shall have the meaning provided in Section 9.05.
"Base Rate" at any time shall mean the higher of (i) the rate which is
1/2 of 1% in excess of the Federal Funds Effective Rate and (ii) the Prime
Lending Rate.
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"Base Rate Loan" shall mean each Loan bearing interest at the rates
provided in Section 1.08(a).
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean the incurrence of (i) Swingline Loans by the
Borrower from the Swingline Lender on a given date or (ii) one Type of Loan
pursuant to a single Facility by the Borrower from the Lenders having
Commitments with respect to such Facility on a PRO RATA basis on a given date
(or resulting from conversions on a given date), having in the case of
Eurodollar Loans the same Interest Period; PROVIDED that Base Rate Loans
incurred pursuant to Section 1.10(b) shall be considered part of any related
Borrowing of Eurodollar Loans.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in Dollar deposits in the interbank Eurodollar market.
"Capital Lease" as applied to any Person shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.
"Carlyle" shall mean TC Group L.L.C. (which operates under the trade
name "The Carlyle Group"), a Delaware limited liability company.
"Carlyle Affiliate" shall mean any entity controlled directly or
indirectly by Carlyle.
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (PROVIDED that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (ii) Dollar denominated time
deposits, certificates of deposit and bankers' acceptances of (x) any Lender
that is a domestic commercial bank of recognized standing having capital and
surplus in excess of $500,000,000 or (y) any bank (or the parent company of such
bank) whose short-term commercial paper rating from Standard & Poor's Ratings
Services, a division of McGraw-Hill, Inc. ("S&P") is at least A-1 or the
equivalent thereof or from Moody's Investors Service, Inc. ("Moody's") is at
least P-1 or the equivalent thereof (any such bank, an "Approved Bank"), in each
case with maturities of not more than one year from the date of acquisition,
(iii) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in
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clause (ii) above, (iv) commercial paper issued by any Approved Bank or by the
parent company of any Approved Bank and commercial paper issued by, or
guaranteed by, any industrial or financial company with a short-term commercial
paper rating of at least A-1 or the equivalent thereof by S&P or at least P-1 or
the equivalent thereof by Moody's, or guaranteed by any industrial company with
a long term unsecured debt rating of at least A or A2, or the equivalent of each
thereof, from S&P or Moody's, as the case may be, and in each case maturing
within six months after the date of acquisition, (v) marketable direct
obligations issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof maturing
within one year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either S&P or
Moody's and (vi) investments in money market funds substantially all of whose
assets are comprised of securities of the type described in clauses (i) through
(v) above.
"Cash Proceeds" shall mean, with respect to any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment constituting interest, but only as and
when so received) received by Holdings and/or any Subsidiary from such Asset
Sale.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et
seq.
"Change of Control" shall mean, at any time and for any reason
whatsoever, (a) Holdings shall fail to own directly, or indirectly through
Intermediate Holdco, 100% on a fully diluted basis of either the economic or
voting interest in the Borrower's Equity Interests or (b) Carlyle and Carlyle
Affiliates shall fail to have beneficial ownership (within the meaning of Rule
13d-3 of the Exchange Act) in the aggregate of (i) prior to any Qualified Public
Offering, at least 51% of Holdings' Equity Interests having normal voting power
in the election of directors or (ii) on and after a Qualified Public Offering,
at least 30% (or such higher percentage that exceeds the highest percentage of
Holdings' Equity Interests having normal voting power in the election of
directors owned by any other person or group (as defined in Section 13(d) of the
Exchange Act)) of Holdings' Equity Interests having normal voting power in the
election of directors or (c) after a Qualified Public Offering has occurred, the
Board of Directors of Holdings shall cease to consist of a majority of
Continuing Directors or (d) a "change of control" or similar event shall occur
as provided in the Senior Subordinated Note Documents.
"Co-Documentation Agent" shall mean each of Wachovia and GECC in their
capacity as such hereunder.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all of the Collateral as defined in each of
the Security Documents.
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"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Lenders.
"Commitment" shall mean, with respect to each Lender, such Lender's
Term Commitment and Revolving Commitment.
"Commitment Commission" shall have the meaning provided in
Section 3.01(a).
"Common Equity Financing" shall have the meaning provided the
Section 5.01(e).
"Company" shall mean any corporation, limited liability company,
partnership or other business entity (or the adjectival form thereof, where
appropriate).
"Consolidated Capital Expenditures" shall mean, for any period, the
aggregate of all expenditures (including in all events all amounts expended
under Capital Leases but excluding any amount representing capitalized interest)
by the Borrower and its Subsidiaries during that period that, in conformity with
GAAP, are or are required to be included in the property, plant or equipment
reflected in the consolidated balance sheet of the Borrower and its
Subsidiaries, PROVIDED that Consolidated Capital Expenditures shall in any event
(x) exclude the purchase price paid in connection with the acquisition of any
Person (including through the purchase of all of the Equity Interests of such
Person or through merger or consolidation) to the extent allocable to property,
plant and equipment and (y) exclude amounts expended to acquire Reinvestment
Assets.
"Consolidated Current Assets" shall mean, at any time, the
consolidated current assets of Holdings and its Subsidiaries at such time.
"Consolidated Current Liabilities" shall mean, at any time, the
consolidated current liabilities of Holdings and its Subsidiaries at such time,
but excluding the current portion of any Indebtedness under this Agreement and
the current portion of any other long term Indebtedness which would otherwise be
included therein.
"Consolidated Debt" shall mean, as of any date of determination, (i)
the aggregate principal amount of all indebtedness for borrowed money and
Capitalized Lease Obligations of Holdings and its Subsidiaries on a consolidated
basis as determined in accordance with GAAP plus (ii) any principal amount of
indebtedness for borrowed money or Capitalized Lease Obligations of any other
Person as to which Holdings and/or any of its Subsidiaries has created a
guarantee or other Contingent Obligation (but only to the extent of such
guarantee or other Contingent Obligation).
"Consolidated EBITDA" shall mean, for any period, Consolidated Net
Income (excluding gains or losses from sales of assets (other than sales of
inventory and equipment in a normal course of business)) for such period,
adjusted by adding thereto (A) the sum of the amounts (in each case without
duplication) for such period (in each case, only to the extent same reduced
Consolidated Net Income for such period) of (i) provisions for taxes based on
income (excluding taxes attributable to gains and losses on sales of assets
(other than sales of inventory and equipment in the normal course of business)),
(ii) Consolidated Interest Expense,
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(iii) depreciation expense, (iv) amortization expense, (v) other non-cash
charges, (vi) amortization or write-off of deferred financing costs, (vii)
extraordinary losses and one-time charges (including restructuring charges),
(viii) write-off of amortization related to write-up of assets due to purchase
accounting, (ix) fees and expenses incurred in connection with the Documents or
the Transaction, and (x) up-front management fees payable at the time of the
closing of the Transaction pursuant to the Management Agreement, plus additional
management fees payable pursuant to the Management Agreement in any fiscal year
not to exceed $2,000,000, minus (B) the aggregate amount of cash payments made
during such period in respect of non-cash charges from prior periods or in
respect of extraordinary losses and one-time charges (including restructuring
charges) whether such losses or one-time charges were taken in such period or a
prior period; PROVIDED that (subject to adjustments which may be required to be
made for Significant Acquisitions and Significant Asset Sales occurring after
the Effective Date, in the case of determinations of Consolidated EBITDA being
made on a PRO FORMA Basis or a Post-Test Period PRO FORMA Basis), Consolidated
EBITDA for Holdings' fiscal quarters ended June 30, 2002, September 30, 2002 and
December 31, 2002 shall be deemed to be $26,700,000, $31,600,000 and
$26,600,000, respectively. Notwithstanding anything to the contrary contained
above, Consolidated EBITDA for the Test Periods ended March 31, 2003, June 30,
2003, September 30, 2003 and December 31, 2003 shall be increased (without
duplication) by $4 million, $3 million, $2 million and $1 million, respectively,
thereby giving Holdings credit for anticipated cost savings (following the
consummation of the Acquisition) which may not be fully realized during the
respective Test Period described above in this sentence.
"Consolidated Interest Coverage Ratio" shall mean, for any period, the
ratio of (i) Consolidated EBITDA for such period to (ii) Consolidated Interest
Expense for such period.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including the portion that is attributable to Capital Leases
in accordance with GAAP) of Holdings and its Subsidiaries on a consolidated
basis with respect to all outstanding Indebtedness of Holdings and its
Subsidiaries (including, without limitation, all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and without duplication net costs and/or net benefits under
Interest Rate Protection Agreements, but excluding, however, amortization of
deferred financing costs to the extent included in total interest expense), less
interest income of Holdings and its Subsidiaries on a consolidated basis for
such period; PROVIDED that (subject to adjustments which may be required to be
made for Significant Acquisitions and Significant Asset Sales occurring after
the Effective Date, in the case of determinations of Consolidated Interest
Expense being made on a Post-Test Period PRO FORMA Basis), Consolidated Interest
Expense for each of Holdings' fiscal quarters ended June 30, 2002, September 30,
2002, and December 31, 2002 shall be deemed to be to be $11,100,000.
"Consolidated Leverage Ratio" shall mean, at any date of
determination, the ratio of (i) Consolidated Debt on such date to (ii)
Consolidated EBITDA for the Test Period then most recently ended; PROVIDED that
(x) in the case of any determination of the Consolidated Leverage Ratio being
made on the last day of a Test Period, Consolidated Debt shall be determined
based on the actual amount of Consolidated Debt outstanding on the last day of
the respective Test Period in accordance with the provisions of Section 10.02
and Consolidated EBITDA shall be determined on a PRO FORMA Basis (in accordance
with Section 10.02) to give effect to all Significant Acquisitions and
Significant Asset Sales (in each case, if any) made after the
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Effective Date and during the respective Test Period and (y) in the case of any
determination of Consolidated Leverage Ratio being made on (or as at) any date
other than the last date of a Test Period, Consolidated Debt shall be calculated
as the actual amount outstanding on the date of determination in accordance with
the provisions of Section 10.02 and Consolidated EBITDA shall be determined on a
Post-Test Period PRO FORMA Basis to give effect to all Significant Acquisitions
and Significant Asset Sales (in each case, if any) actually made after the
Effective Date and during the respective Test Period or thereafter and on or
prior to the date of the required determination thereof (in the case of any
determinations pursuant to Section 7.12 and the definition of Applicable Margin,
after giving effect to the respective events which require the determination to
be made on a Post-Test Period PRO FORMA Basis).
"Consolidated Net Income" shall mean for any period, the net income
(or loss) of Holdings and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP,
PROVIDED that (i) the net income of any Person which is not a Subsidiary of
Holdings or is accounted for by Holdings by the equity method of accounting
shall be included only to the extent of the payment of cash dividends or other
cash distributions by such other Person to Holdings or any of its Subsidiaries
during such period, (ii) the income (or loss) of any Person accrued prior to the
date it becomes a Subsidiary of Holdings or is merged into or consolidated with
Holdings or any of its Subsidiaries or that Person's assets are acquired by
Holdings or any of its Subsidiaries shall be excluded and (iii) to the extent
that Consolidated Net Income reflects amounts attributable to minority interests
in Subsidiaries, Consolidated Net Income shall be reduced by the amounts
attributable to such minority interests.
"Contingent Obligations" shall mean as to any Person any obligation of
such Person guaranteeing or intending to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof, PROVIDED, HOWEVER, that
the term Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated
maximum of the Contingent Obligation or, if none, the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if there is no stated or determinable amount of the primary
obligation, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Continuing Directors" shall mean the directors of Holdings on the
date of consummation of the first Qualified Public Offering to occur after the
Initial Borrowing Date,
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and each other director if such director's nomination for the election to the
Board of Directors of Holdings is recommended by a majority of the then
Continuing Directors.
"Credit Documents" shall mean this Agreement, the Notes, the Security
Documents, the Subsidiaries Guaranty, each Joinder Agreement (after the
execution and delivery thereof) and any related documents executed in connection
therewith.
"Credit Event" shall mean and include the making of a Loan or the
issuance of a Letter of Credit.
"Credit Party" shall mean Holdings, the Borrower and the Subsidiary
Guarantors.
"CSFB Cayman" shall mean Credit Suisse First Boston, acting through
its Cayman Island Branch, in its individual capacity.
"DB Cayman" shall mean Deutsche Bank AG, Cayman Island Branch, in its
individual capacity.
"DBSI" shall mean Deutsche Bank Securities Inc., in its individual
capacity.
"DBTCA" shall mean Deutsche Bank Trust Company Americas, in its
individual capacity.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to which a
Lender Default is in effect.
"Dividends" shall have the meaning provided in Section 8.09.
"Documents" shall mean, collectively, the Credit Documents and the
Transaction Documents.
"Dollar Equivalent" of an amount denominated in an Alternate Currency
shall mean, at any time for the determination thereof, the amount of Dollars
which could be purchased with the amount of the Alternate Currency involved in
such computation at the spot exchange rate therefor as quoted by the
Administrative Agent as of 11:00 a.m. (New York time) on the date two Business
Days prior to the date of any determination thereof for purchase on such date,
PROVIDED that the Dollar Equivalent of any unpaid drawing under a Letter of
Credit expressed in an Alternate Currency shall be determined at the time the
drawing under the related Letter of Credit was paid or disbursed by the
respective Letter of Credit Issuer, PROVIDED FURTHER, that for purposes of (x)
determining compliance with Sections 1.01(b), 1.01(c), 2.01(b) and 4.02(A)(a)(i)
and (y) calculating fees pursuant to Sections 3.01(b) and (c), the Dollar
Equivalent of any amounts denominated in an Alternate Currency shall be revalued
on a monthly basis using the spot exchange rates therefor as shown in The Wall
Street Journal (or, if same does not provide such exchange rates, on such other
basis as is reasonably satisfactory to the Administrative Agent) on the last
Business Day of each calendar month.
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"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of the Borrower that
is not a Foreign Subsidiary.
"Effective Date" shall have the meaning provided in Section 12.10.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other Person in the business of purchasing or investing
in extensions of credit of the types made pursuant to this Agreement, or any
other institutional "accredited investor" (as defined in Regulation D of the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder), but in any event excluding Holdings and its Subsidiaries.
"End Date" shall have the meaning provided in the definition of
Applicable Margin.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations (other than internal reports prepared
by Holdings or any of its Subsidiaries solely in the ordinary course of such
Person's business and not in response to any third party action or request of
any kind) or proceedings relating in any way to any Environmental Law or any
permit issued, or any approval given, under any such Environmental Law
(hereafter, "Claims"), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials arising from alleged injury
or threat of injury to health, safety or the environment.
"Environmental Law" means any applicable Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code and rule of common law now
or hereafter in effect and in each case as amended, and any binding judicial or
administrative interpretation thereof, including any binding judicial or
administrative order, consent decree or judgment, relating to the environment or
Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal
Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the
Toxic Substances Control Act, 15 U.S.C. Section 7401 et seq.; the Clean Air Act,
42 U.S.C. Section 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section
3808 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; and
any applicable state and local or foreign counterparts or equivalents.
"EP Percentage" shall mean in the case of (i) (x) equity issued to, or
equity contributions made by, the Initial Investors, Affiliates thereof and
management and (y) equity issued to, or equity contributions made by, any other
Person the proceeds of which are utilized within 180 days of the respective
issuance or contribution solely to finance Permitted Acquisitions, Consolidated
Capital Expenditures or investments in Joint Ventures or Foreign Subsidiaries,
in each case permitted hereunder, 0%, (it being understood and agreed that in
any case where this clause (y) is applicable, to the extent the respective
proceeds are not actually
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utilized as described above (or returned to the respective Person to whom such
equity was issued or who made such equity contribution as provided in Section
8.09(ix)) within 180 days of the respective issuance or contribution, then on
such 180th day the EP Percentage which would originally have been applicable if
preceding clause (y) did not apply shall be deemed applicable, and such
respective proceeds (to the extent not actually applied as described above)
shall be required on such date to be applied pursuant to the provisions of
Section 4.02(A)(e)) and (ii) all other equity issuances and equity contributions
not described in preceding clause (i), 50%, PROVIDED that (A) if at any time the
Consolidated Leverage Ratio (as established on the last day of the respective
fiscal quarter or year of Holdings pursuant to the officer's certificate last
delivered (or required to be delivered) pursuant to Section 7.01(a) or (b) but
after giving effect to repayments of Loans (but in the case of repayments of
Revolving Loans only to the extent the Total Revolving Commitment was
contemporaneously reduced) made after the last day of such fiscal quarter or
year and prior to the respective application of cash proceeds pursuant to the
provisions of Section 4.02(A)(e)) is equal to or less than 3.00:1.00, then the
EP Percentage for purposes of this clause (ii) shall instead be 0%, PROVIDED
FURTHER, that (i) if the EP Percentage would otherwise be 50% but after giving
effect the respective application of cash proceeds pursuant to Section
4.02(A)(e) in a percentage less than 50%, the Consolidated Leverage Ratio would
be equal to or less than 3.00:1.00, the EP Percentage for the purposes of this
clause (ii) shall instead be such percentage above 0% and below 50% as may be
necessary to reduce the Consolidated Leverage Ratio to 3.00:1.00 after giving
effect to such application and (B) notwithstanding anything to the contrary
contained above, at any time that a Default or an Event of Default is then in
existence, the EP Percentage for the purposes of this clause (ii) shall be 50%.
"Equity Interests" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any preferred
stock, any limited or general partnership interest and any limited liability
company membership interest.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the
date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with Holdings, the Borrower or a Subsidiary of the
Borrower would be deemed to be a "single employer" (i) within the meaning of
Section 414(b), (c), (m) or (o) of the Code or (ii) as a result of Holdings or a
Subsidiary of Holdings being or having been a general partner of such person.
"ERISA Affiliate Plan" shall mean (i) any pension plan as defined in
Section 3(2) of ERISA (other than a Foreign Pension Plan), which is maintained
or contributed to by (or which there is an obligation to contribute of) an ERISA
Affiliate (other than Holdings, the Borrower or any Subsidiary thereof), after
giving effect to the Transaction, and (ii) each such plan for the five year
period immediately following the latest date on which an ERISA Affiliate (other
than Holdings, the Borrower or any Subsidiary thereof), maintained, contributed
to or had
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an obligation to contribute to such plan and with respect to which Holdings, the
Borrower or a Subsidiary thereof may incur any liability (including any
indirect, contingent or secondary liability).
"Eurodollar Loans" shall mean each Loan bearing interest at the rates
provided in Section 1.08(b).
"Eurodollar Rate" shall mean with respect to each Interest Period for
a Eurodollar Loan, (i) the offered quotation to first-class banks in the
interbank Eurodollar market by the Administrative Agent for dollar deposits of
amounts in same day funds comparable to the principal amount of the applicable
Eurodollar Loan of the Administrative Agent, in its capacity as a Lender (or, if
the Administrative Agent is not a Lender under the respective Facility, the
principal amount of the Eurodollar Loan then being made by the Lender with the
largest commitment at such time under the respective Facility), for which the
interest rate is then being determined with maturities comparable to the
Interest Period to be applicable to such Eurodollar Loans, determined as of
10:00 A.M. (New York time) on the date which is two Business Days prior to the
commencement of such Interest Period divided (and rounded upward to the next
whole multiple of 1/100 of 1%) by (ii) a percentage equal to 100% minus the then
stated maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves) applicable to
any member bank of the Federal Reserve System in respect of Eurocurrency
liabilities as defined in Regulation D (or any successor category of liabilities
under Regulation D).
"Event of Default" shall have the meaning provided in Section 9.
"Excess Cash Flow" shall mean, for any period, the remainder of (i)
Adjusted Cash Flow for such period, PLUS (ii) to the extent not included in (i)
above, any amounts received by Holdings and its Subsidiaries in settlement of,
or in payment of any judgments resulting from, actions, suits or proceedings
with respect to Holdings and/or its Subsidiaries from the first day to the last
day of such period, PLUS (iii) the amount of the decrease (if any) in Adjusted
Consolidated Working Capital from the first day of the respective period to the
last day of the respective period, MINUS (iv) the sum of (A) the amount of
Consolidated Capital Expenditures made in compliance with Section 8.05 during
such period (less any amount thereof financed through the incurrence of
Indebtedness or equity issuances or contributions), (B) the aggregate amount of
permanent principal payments of Indebtedness for borrowed money of Holdings and
its Subsidiaries and the repayment of the principal component of Capitalized
Lease Obligations of Holdings and its Subsidiaries (excluding without
duplication (1) payments with proceeds of incurrences of Indebtedness, equity
issuances or contributions, asset sales or with casualty or condemnation
proceeds, (2) payments to Holdings or any Subsidiary thereof, (3) payments of
Indebtedness outstanding pursuant to Section 8.04(i) or (r)), (4) payments of
Loans or other Obligations pursuant to Sections 4.02(A)(c) through (g) and (5)
any repayment of Revolving Loans or Swingline Loans which is not accompanied by
permanent reduction to the Total Revolving Commitment in a like amount) during
such period, (C) to the extent not already deducted in determining Excess Cash
Flow, purchase price adjustments paid by Holdings and/or its Subsidiaries during
the respective period in connection with the Acquisition, (D) to the extent not
already deducted in determining Excess Cash Flow, in the case of the period
ending March 31, 2004 only, fees and expenses incurred in connection with the
Transaction and the Documents
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during such period, provided that no more than $1,000,000 shall be deducted
pursuant to this clause (D), (E) the net amount of investments, loans and
advances made pursuant to clauses (c)(i), (q) (other than in respect of Joint
Ventures that are Subsidiaries) and (r) (other than in Subsidiaries) of Section
8.06 during such period (after giving effect to any return on any investments,
loans or advances made pursuant to said clauses of Section 8.06), (F) to the
extent not already deducted in determining Excess Cash Flow, cash expenditures
made in connection with Permitted Acquisitions (except to the extent financed
with proceeds of Indebtedness or equity contributions or issuances), (G) to the
extent not already deducted in determining Adjusted Cash Flow, amounts paid by
Holdings and its Subsidiaries in settlement of, or in payment of any judgments,
actions, suits or proceedings with respect to Holdings and/or its Subsidiaries
from the first date to the last date of such period and (H) any increase in
Adjusted Consolidated Working Capital from the first day of such period to the
last day of such period.
"Excess Cash Payment Date" shall mean the date occurring 90 days after
the last day of each fiscal year of Holdings (beginning with its fiscal year
ending on March 31, 2004).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Existing Indebtedness" shall have the meaning provided in
Section 5.01(o).
"Expiration Date" shall mean February 15, 2003.
"Facility" shall mean any of the credit facilities established under
this Agreement, i.e., the Term Facility or the Revolving Facility.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Effective Rate" shall mean for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to in,
Section 3.01.
"Foreign Asset Sale" shall mean an Asset Sale by a Foreign Subsidiary
of the Borrower.
"Foreign Cash Equivalents" shall mean (i) certificates of deposit or
bankers acceptances of, and bank deposits with, any bank organized under the
laws of any country that is a member of the European Economic Community, whose
short-term commercial paper rating from S&P is at least A-1 or the equivalent
thereof or from Moody's is at least P-1 or the equivalent thereof, in each case
with maturities of not more than six months from the date of acquisition, (ii)
commercial paper maturing not more than one year from the date of creation
thereof and, at the time of acquisition, having the highest rating obtainable
from either S&P's or
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Moody's and (iii) shares of any money market mutual fund that (a) has its assets
invested continuously in the types of investments referred to in clauses (i) and
(ii) above, (b) has net assets not less than $500,000,000 and (c) has the
highest rating obtainable from either S&P's or Moody's.
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by Holdings, the Borrower or any
one or more of its Subsidiaries, after giving effect to the Transaction,
primarily for the benefit of employees of the Borrower or such Subsidiaries
residing outside the United States of America, which plan, fund or other similar
program provides, or results in, retirement income, a deferral of income in
contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of the Borrower which
is not incorporated or organized in the United States or any State or territory
thereof.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect on the date of this Agreement; it being
understood and agreed that determinations in accordance with GAAP for purposes
of Section 8, including defined terms as used therein, are subject (to the
extent provided therein) to Section 12.07(a).
"GECC" shall mean General Electric Capital Corporation, in its
individual capacity.
"Guaranteed Creditors" shall mean and include each of the
Administrative Agent, the Collateral Agent, the Joint Lead Arrangers, each
Letter of Credit Issuer, the Lenders and each party (other than any Credit
Party) party to an Interest Rate Protection Agreement or Other Hedging Agreement
to the extent such party constitutes a Secured Creditor under the Security
Documents.
"Guaranteed Obligations" shall mean (i) the full and prompt payment
when due (whether at the stated maturity, by acceleration or otherwise) of the
principal and interest on each Note issued by, and all Loans made to, the
Borrower under this Agreement and all reimbursement obligations and Unpaid
Drawings with respect to Letters of Credit, together with all the other
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due), indebtedness and
liabilities (including, without limitation, indemnities, fees and interest
(including any interest accruing after the commencement of any bankruptcy,
insolvency, receivership or similar proceeding at the rate provided for herein,
whether or not such interest is an allowed claim in any such proceeding)
thereon) of the Borrower to the Lenders, each Letter of Credit Issuer, the
Administrative Agent and the Collateral Agent now existing or hereafter incurred
under, arising out of or in connection with this Agreement and each other Credit
Document to which the Borrower is a party and the due performance and compliance
by the Borrower with all the terms, conditions and agreements contained in the
Credit Agreement and in each such other Credit Document and (ii) the full and
prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations (including obligations which, but for the
automatic stay under Section 362(a) of the
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Bankruptcy Code, would become due), liabilities and indebtedness (including any
interest accruing after the commencement of any bankruptcy, insolvency,
receivership or similar proceeding at the rate provided for herein, whether or
not such interest is an allowed claim in any such proceeding) of the Borrower
owing under any Interest Rate Protection Agreement or Other Hedging Agreement
(unless it is expressly provided in the respective Interest Rate Protection
Agreement or Other Hedging Agreement that the liabilities and Indebtedness
thereunder are not "Guaranteed Obligations" for the purposes of the Credit
Documents) entered into by the Borrower with any Lender or any affiliate thereof
(even if such Lender subsequently ceases to be a Lender under this Agreement for
any reason) so long as such Lender or affiliate participates in such Interest
Rate Protection Agreement or Other Hedging Agreement and their subsequent
assigns, if any, whether now in existence or hereafter arising, and the due
performance and compliance with all terms, conditions and agreements contained
therein.
"Guaranties" shall mean and include each of the Holdings Guaranty and
the Subsidiaries Guaranty.
"Guarantor" shall mean Holdings and each Subsidiary Guarantor.
"Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contains
electric fluid containing levels of polychlorinated biphenyls, and radon gas and
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous waste," "restricted hazardous waste," "toxic substances,"
"toxic pollutants," "contaminants," or "pollutants," or words of similar import,
under any applicable Environmental Law.
"Holdings" shall have the meaning provided in the first paragraph of
this Agreement.
"Holdings Guaranty" shall mean the guaranty of Holdings pursuant to
Section 13.
"Immaterial Subsidiary" shall mean any Subsidiary of Holdings (other
than the Borrower) which individually has aggregate assets of not greater than
$25,000,000 and which, if aggregated with all other Subsidiaries of Holding with
respect to which an event described in Section 9.05 or 9.09 has occurred and is
continuing, would have assets of not greater than $25,000,000.
"Indebtedness" of any Person shall mean, without duplication, (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets or services (excluding pension and post-retirement liabilities and
other deferred compensation arrangements for employees generally, in each case
entered into in the ordinary course of business) which in accordance with GAAP
would be shown on the liability side of the balance sheet of such Person, (iii)
the maximum amount available to be drawn under all letters of credit, bankers'
acceptances and similar obligations issued for the account of such Person and
all unpaid drawings or unreimbursed payments in respect of such letters of
credit, bankers' acceptances and similar obligations, (iv) all Indebtedness of
the types described in clause (i), (ii), (iii), (v), (vi), (vii) or
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(viii) of this definition secured by any Lien on any property owned by such
Person, whether or not such Indebtedness has been assumed by such Person
(PROVIDED that, if the Person has not assumed or otherwise become liable in
respect of such Indebtedness, such Indebtedness shall be deemed to be in an
amount equal to the lesser of the aggregate amount of such Indebtedness and the
fair market value of the property to which such Lien relates as determined in
good faith by such Person), (v) all Capitalized Lease Obligations and Synthetic
Lease Obligations of such Person, (vi) all obligations of such Person to pay a
specified purchase price for goods or services whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (vii) all net obligations
of such Person under Interest Rate Protection Agreements and Other Hedging
Agreements and (viii) all Contingent Obligations of such Person, PROVIDED that
Indebtedness shall not include trade payables, accrued expenses and receipt of
progress and advance payments, in each case arising in the ordinary course of
business.
"Industrial Chain Business" shall mean Holdings' and its Subsidiaries'
engineered chain, roller chain, leaf chain and conveying equipment business
(including sprockets, accessories and conveyor components that are complementary
to their chain and conveying equipment products).
"Initial Borrowing Date" shall mean the date upon which the initial
Borrowing of Loans occurs.
"Initial Investors" shall mean Carlyle, Carlyle Affiliates, management
and employees of Holdings and its Subsidiaries and the other owners of the
capital stock of Holdings on the Initial Borrowing Date, after giving effect to
the Transaction.
"Interest Period" with respect to any Loan shall mean the interest
period applicable thereto, as determined pursuant to Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, any interest rate cap agreement, any interest rate collar agreement
or other similar agreement or arrangement designed to protect against
fluctuations in interest rates.
"Intermediate Holdco" shall mean a corporation organized under the
laws of a State of the United States, and in accordance with the requirements of
Section 8.07, which shall be a direct Wholly-Owned Subsidiary of Holdings and
shall own 100% of the Equity Interests of the Borrower.
"Joinder Agreement" shall have the meaning provided in Section 8.07.
"Joint Lead Arrangers" shall mean each of DBSI and CSFB Cayman in
their capacity as such hereunder.
"Joint Venture" shall mean any entity other than a Wholly-Owned
Subsidiary of the Borrower in which the Borrower or one or more of its
Subsidiaries hold Equity Interests representing at least 20% of the total
outstanding Equity Interests of such entity.
"Leasehold" of any Person means all of the right, title and interest
of such Person as lessee or licensee in, to and under leases or licenses of
land, improvements and/or fixtures.
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"Lender" shall mean each financial institution listed on Schedule I,
as well as any Person that becomes a "Lender" hereunder pursuant to Section 1.13
or 12.04(b).
"Lender Default" shall mean (i) the refusal (which has not been
retracted) of a Lender to make available its portion of any incurrence of any
Borrowing (including any Mandatory Borrowing) or to fund its portion of any
unreimbursed payment under Section 2.04(c) or (ii) a Lender having notified the
Administrative Agent and/or the Borrower that it does not intend to comply with
the obligations under Section 1.01 or 2, in the case of either clause (i) or
(ii) as a result of the appointment of a receiver or conservator with respect to
such Lender at the direction or request of any regulatory agency or authority.
"Lender Register" shall have the meaning provided in Section 12.16.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Fee" shall have the meaning provided in
Section 3.01(b).
"Letter of Credit Issuer" shall mean (i) DBTCA in its capacity as a
Letter of Credit Issuer hereunder, (ii) in the case of Trade Letters of Credit
only, M&I Marshall & Ilsley Bank in its capacity as a Letter of Credit Issuer of
Trade Letters of Credit and (iii) any other Lender which at the request of the
Borrower and with the consent of the Administrative Agent (not to be
unreasonably withheld) agrees in such Lender's sole discretion to become a
Letter of Credit Issuer for the purpose of issuing Letters of Credit pursuant to
Section 2, provided that as of the Effective Date and until such time as it
agrees otherwise, neither DBTCA nor any of its Affiliates shall be the Letter of
Credit Issuer with respect to any Trade Letter of Credit. Any Letter of Credit
Issuer may, in its discretion, arrange for one or more Letters of Credit to be
issued by one or more Affiliates of such Letter of Credit Issuer who are
reasonably satisfactory to the Borrower, and the term "Letter of Credit Issuer"
shall include any such Affiliate with respect to Letters of Credit issued by it.
"Letter of Credit Outstandings" shall mean, at any time, the sum of,
without duplication, (i) the aggregate Stated Amount of all outstanding Letters
of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of all
Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in
Section 2.02(a).
"Lien" shall mean any mortgage, pledge, hypothecation, encumbrance,
lien (statutory or other), or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, and any lease in the nature thereof having substantially
the same effect as any of the foregoing).
"Loan" shall have the meaning provided in Section 1.01.
"Location" of any Person means such Person's "location" as determined
pursuant to Section 9-307 of the Uniform Commercial Code of the State of New
York.
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"Management Agreement" shall mean the management agreement entered
into among Carlyle and/or one or more Carlyle Affiliates and Holdings as in
effect in the Effective Date, and as same may be amended with the consent of the
Joint Lead Arrangers.
"Mandatory Borrowing" shall have the meaning provided in
Section 1.01(d).
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on the
business, assets, operations or condition (financial or otherwise) of Holdings
and its Subsidiaries (or, for the purposes of Section 5.01(g) or any
representation or warranty made on the Initial Borrowing Date, the Rexnord
Business) taken as a whole.
"Maturity Date" shall mean each of the RF Maturity Date and the Term
Loan Maturity Date.
"Maximum Swingline Amount" shall mean the lesser of $20,000,000 and
the amount of the Total Revolving Commitment.
"Minimum Borrowing Amount" shall mean (i) for Term Loans, Revolving
Loans and Swingline Loans maintained as Base Rate Loans, $250,000 and (ii) for
Term Loans and Revolving Loans maintained as Eurodollar Loans, $1,000,000.
"Moody's" shall have the meaning provided in the definition of Cash
Equivalents.
"Mortgage" shall mean a mortgage, leasehold mortgage, deed of trust,
leasehold deed of trust, deed to secure debt, leasehold deed to secure debt or
similar security instrument, each in a form designated by counsel, and
reasonably satisfactory, to the Administrative Agent and the Borrower.
"Mortgage Policy" shall mean a mortgage title insurance policy or a
binding commitment with respect thereto.
"Mortgaged Properties" shall mean the Real Property of the Credit
Parties listed on Schedule III and designated as "Mortgaged Properties" therein.
"NAIC" shall mean the National Association of Insurance Commissioners.
"Net Cash Proceeds" shall mean, with respect to any Asset Sale, the
Cash Proceeds resulting therefrom net (without duplication) of (i) expenses of
sale or, in the case of an Asset Sale of the type described in clause (z) of the
definition thereof, of collection, (ii)(A) in the case of Foreign Asset Sales,
all payments of principal, premium and interest of Indebtedness (other than
Indebtedness to the Lenders pursuant to this Credit Agreement) of any Foreign
Subsidiary actually made with the proceeds of the respective Foreign Asset Sale,
provided that the Permitted Foreign Subsidiary Debt Amount shall be permanently
reduced in an amount equal to the aggregate amount so applied, and (B) in the
case of all other Asset Sales, payments of principal, premium and interest of
Indebtedness (other than Indebtedness to the Lenders pursuant to this Credit
Agreement) secured by the assets the subject of the Asset Sale and required to
be,
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and which is, repaid under the terms thereof as a result of such Asset Sale) and
(iii) the marginal increased amount of all taxes and other amounts owing to
governmental entities as a result of such Asset Sale.
"Non-Defaulting Lender" shall mean a Lender that is not a Defaulting
Lender.
"Note" shall mean and include each Term Note, each Revolving Note and
the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section 1.03.
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean (i) for credit notices, the office of the
Administrative Agent located at 31 West 52nd Street, 7th Floor, New York, New
York 10019, Attention: Diane Rolf, Telephone No.: (646) 324-2194, and Telecopier
No.: (646) 324-7460, and (ii) for operational notices, the office of the
Administrative Agent located at 90 Hudson Street, 5th Floor, Jersey City, New
Jersey 07302, Attention: John Quinn, Telephone No.: (201) 593-2177, and
Telecopier No.: (201) 593-2310, or such other office or person as the
Administrative Agent may hereafter designate in writing as such to the other
parties hereto.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
either Joint Lead Arranger, the Administrative Agent, the Collateral Agent, any
Letter of Credit Issuer or any Lender pursuant to the terms of this Agreement or
any other Credit Document.
"Other Hedging Agreements" shall mean any foreign exchange contracts,
currency swap agreements, commodity agreements or other similar arrangements, or
arrangements designed to protect against fluctuations in currency values or
commodity prices.
"Participant" shall have the meaning provided in Section 2.04(a).
"Payment Office" shall mean the office of the Administrative Agent at
90 Hudson Street, 5th Floor, Jersey City, New Jersey or such other office as the
Administrative Agent may hereafter designate in writing as such to the other
parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisition" shall mean the acquisition by a Qualified
Credit Party or a Foreign Subsidiary of an Acquired Entity or Business
(including by way of merger of such Acquired Entity or Business with and into
such Qualified Credit Party or Foreign Subsidiary (so long as the Qualified
Credit Party or the respective Foreign Subsidiary is the surviving
corporation)), PROVIDED that (in each case) (A) the consideration paid or to be
paid by the respective Qualified Credit Party or Foreign Subsidiary consists
solely of cash (including proceeds of Revolving Loans or Swingline Loans), Cash
Equivalents, Foreign Cash Equivalents, the issuance or incurrence of
Indebtedness otherwise permitted by Section 8.04, the assumption/acquisition of
any Indebtedness (calculated at face value) which is permitted to
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remain outstanding in accordance with the requirements of Section 8.04, and the
issuance of common stock of Holdings or Qualified Preferred Stock otherwise
permitted by Section 8.13, (B) in the case of the acquisition of 100% of the
Equity Interests of any Person that is organized in the United States or a State
or territory thereof (including by way of merger), such Person shall own no
Equity Interests of any other Person (excluding DE MINIMIS amounts) unless such
Person owns 100% of the Equity Interests of such other Person, (C) the Acquired
Entity or Business acquired pursuant to the respective Permitted Acquisition is
in a business permitted by Section 8.01 and (D) all applicable requirements of
Sections 7.12, 8.02 and 8.07 applicable to Permitted Acquisitions are satisfied.
Notwithstanding anything to the contrary contained in the immediately preceding
sentence, an acquisition which does not otherwise meet the requirements set
forth above in the definition of "Permitted Acquisition" shall constitute a
Permitted Acquisition if, and to the extent, the Required Lenders agree in
writing that such acquisition shall constitute a Permitted Acquisition for
purposes of this Agreement.
"Permitted Encumbrance" shall mean, with respect to any Mortgaged
Property, such exceptions to title as are set forth in the Mortgage Policy
delivered with respect thereto, all of which exceptions must be acceptable to
the Administrative Agent in its reasonable discretion.
"Permitted Factoring Transaction Outstandings" at any time shall mean
the aggregate amount of cash theretofore paid to Foreign Subsidiaries of the
Borrower in respect of the receivables and related assets sold or transferred by
them pursuant to one or more factoring arrangements, in each case to the extent
the respective receivables have not yet been repaid by the respective account
debtor or repurchased by Foreign Subsidiaries of the Borrower (it being the
intent of the parties that the amount of Permitted Factoring Transaction
Outstandings at any time outstanding approximate as closely as possible the
principal amount of Indebtedness which would be outstanding pursuant to all
factoring arrangements then in effect if same were structured as a secured
lending agreement rather than a purchase agreement).
"Permitted Foreign Investment Amount" shall mean, at the time of any
determination thereof, $35,000,000 less (without duplication) (i) the aggregate
fair market value (as determined by the Borrower in good faith, but in the case
of any lease of assets referred to below, including the fair market value of all
of the assets which are the subject of such lease) of all assets conveyed, sold,
leased or otherwise transferred (net of the amount of any cash consideration
received therefor, when and as received) pursuant to Section 8.02(i) after the
Initial Borrowing Date and on or prior to the date of such determination, (ii)
the aggregate consideration paid by the Borrower and its Subsidiaries in
connection with Permitted Acquisitions made by one or more Foreign Subsidiaries
of the Borrower or where the respective Acquired Entity or Business is outside
(or the Person that is the target Company of the respective Permitted
Acquisition owning any assets so acquired is organized outside) the United
States (or if only a portion the assets of such respective Acquired Entity or
Business is located outside of the United States, the fair market value of such
portion of assets located outside of the United States), except to the extent
such consideration is paid solely from (x) internally generated cash of a
Foreign Subsidiary, (y) cash proceeds of Indebtedness incurred by a Foreign
Subsidiary or (z) capital contributions, loans and advances or other investments
received from the Borrower or any of its Domestic Subsidiaries which have
reduced the Permitted Foreign Investment Amount as provided in clause (v) below,
(iii) the aggregate amount of Contingent Obligations then outstanding pursuant
to Section 8.04(k) (taking the maximum amount then supported by the
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respective Contingent Obligations) and outstanding at the time of determination,
(iv) all amounts theretofore paid with respect to Contingent Obligations
previously outstanding pursuant to Section 8.04(k) (less any cash payments
actually received in reimbursement thereof from the direct obligor whose
obligations were supported by such Contingent Obligations) and (v) the aggregate
amount of capital contributions, loans and advances and other investments made
pursuant to Section 8.06(k) after the Initial Borrowing Date and on or prior to
the time of such determination (net of the amount of returns on such capital
contributions, loans and advances and other investments, to the extent such
amount does not exceed the original amount of such capital contributions, loans
and advances and other investments).
"Permitted Foreign Subsidiary Debt Amount" shall mean, at the time of
any determination thereof, $25,000,000 less (without duplication) the aggregate
amount of all reductions thereto pursuant to clause (ii)(A) of the definition of
Net Cash Proceeds contained herein, as a result of the application of proceeds
of Foreign Asset Sales made after the Initial Borrowing Date and on or prior to
the time of such determination.
"Permitted Honeywell Receivables Transaction Outstandings" at any time
shall mean the aggregate amount of cash theretofore paid to the Borrower and its
Subsidiaries in respect of the receivables (and related assets) arising from
goods and services provided to Honeywell International, Inc. sold or transferred
by them pursuant to one or more factoring arrangements, in each case to the
extent the respective receivables have not yet been repaid by the respective
account debtor or repurchased by the Borrower or its Subsidiaries (it being the
intent of the parties that the amount of Permitted Honeywell Receivables
Transaction Outstandings at any time outstanding approximate as closely as
possible the principal amount of Indebtedness which would be outstanding
pursuant to all such factoring arrangements then in effect if same were
structured as a secured lending agreement rather than a purchase agreement).
"Permitted JV Investment Amount" shall mean, at the time of any
determination thereof, $10,000,000 less (without duplication) (i) the aggregate
amount of all investments deemed made pursuant to clause (3) of Section 8.02(f),
(ii) the aggregate fair market value (as determined by the Borrower in good
faith) of all assets conveyed, sold or transferred (net of the amount of any
cash consideration received therefor) pursuant to Section 8.02(j) after the
Initial Borrowing Date and on or prior to the date of such determination, (iii)
the aggregate amount of Contingent Obligations then outstanding pursuant to
Section 8.04(l) (taking the maximum amount then supported by the respective
Contingent Obligations) and outstanding at the time of determination, (iv) all
amounts theretofore paid with respect to Contingent Obligations previously
outstanding pursuant to Section 8.04(l) (less any cash payments actually
received in reimbursement thereof from the direct obligor whose obligations were
supported by such Contingent Obligations) and (v) the aggregate amount of
capital contributions, loans and advances and other investments made pursuant to
Section 8.06(q) (or deemed made pursuant to clause (3) of the proviso to Section
8.02(f)) after the Initial Borrowing Date and on or prior to the time of such
determination (net of the amount of returns on such capital contributions, loans
and advances and other investments, to the extent such amount does not exceed
the original amount of such capital contributions, loans and advances and other
investments).
"Permitted Liens" shall mean Liens described in Section 8.03.
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"Person" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean (i) any pension plan as defined in Section 3(2) of
ERISA (other than a Foreign Pension Plan), which is maintained or contributed to
by (or to which there is an obligation to contribute of) Holdings, the Borrower
or any of its Subsidiaries or any such pension plan subject to Title IV or
Section 302 of ERISA or Section 412 of the Code which is maintained or
contributed to by (or to which there is an obligation to contribute of) an ERISA
Affiliate, after giving effect to the Transaction, and (ii) each such pension
plan for the five year period immediately following the latest date on which
Holdings, the Borrower or any such Subsidiary of the Borrower or an ERISA
Affiliate maintained, contributed to or had an obligation to contribute to such
plan and with respect to which Holdings, the Borrower or any of its Subsidiaries
may incur any liability (including any indirect, contingent or secondary
liability).
"Pledge Agreement" shall have the meaning provided in Section 5.01(i).
"Pledge Agreement Collateral" shall mean all "Collateral" as defined
in the Pledge Agreement.
"Post-Test Period PRO FORMA Basis" means the making of calculations on
a PRO FORMA basis (with calculations of Consolidated EBITDA to be based on the
Test Period most recently ended) in accordance with, and to the extent required
by, the provisions of Section 10.02, taking into account certain events
occurring after the end of the respective Test Period and on or prior to the
date of determination, in accordance with the provisions of Section 10.02 with
respect to determinations to be made on a Post-Test Period PRO FORMA Basis.
"Prime Lending Rate" shall mean the rate which the Administrative
Agent announces from time to time as its prime lending rate, the Prime Lending
Rate to change when and as such prime lending rate changes. The Prime Lending
Rate is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. The Administrative Agent may make
commercial loans or other loans at rates of interest at, above or below the
Prime Lending Rate.
"PRO FORMA Basis" means, with respect to any Test Period, the making
of calculations on a PRO FORMA basis for certain events (including Significant
Acquisitions and Significant Asset Sales) in accordance with, and to the extent
required by, the provisions of Section 10.02 hereof, but without making
adjustments for events which occurred after the end of the respective Test
Period.
"Projections" shall mean the projections contained in the Confidential
Information Memorandum, dated October 2002, which were prepared by or on behalf
of the Borrower in connection with this Agreement and delivered to the
Administrative Agent and the Lenders prior to the Effective Date.
"Qualified Credit Party" shall mean (i) the Borrower and (ii) each
Wholly-Owned Domestic Subsidiary of the Borrower that is a Subsidiary Guarantor.
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"Qualified Preferred Stock" means any preferred capital stock of
Holdings so long as the terms of any such preferred capital stock (x) do not
contain any mandatory put, redemption, repayment, sinking fund or other similar
provision prior to the date occurring one year following the Term Loan Maturity
Date and (y) do not require the cash payment of dividends or distributions at
any time that such cash payment would result in a Default or an Event of Default
hereunder.
"Qualified Public Offering" shall mean an underwritten public offering
of the common stock of Holdings which generates cash proceeds to Holdings of at
least $100,000,000.
"RCRA" shall mean the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. Section 6901 et seq.
"Real Property" of any Person shall mean all of the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Refinancing Indebtedness" shall mean Indebtedness of the Borrower or
any of its Subsidiaries the proceeds of which are used to refinance Indebtedness
theretofore outstanding pursuant to (and as permitted by) Section 8.04(f) or
(j); PROVIDED that (i) the principal amount of such Refinancing Indebtedness
shall not exceed that of the Indebtedness being refinanced immediately before
the respective refinancing is consummated (plus the amount of any premium
actually paid on the Indebtedness so refinanced), (ii) all net proceeds of
Refinancing Indebtedness are substantially concurrently applied to permanently
repay the Indebtedness being refinanced, (iii) Refinancing Indebtedness shall
not have a final maturity or weighted average life to maturity shorter than the
remaining final maturity or weighted average life to maturity of the
Indebtedness so refinanced, (iv) the terms of Refinancing Indebtedness
(including any applicable subordination terms, but excluding interest rates and
other economic terms so long as based on then current market conditions) shall
not be materially less favorable to the Borrower or the respective Subsidiary or
the Lenders than the terms of the Indebtedness so refinanced, (v) the obligor on
Refinancing Indebtedness shall be the same as the obligor on the Indebtedness so
refinanced and (vi) the Liens, guarantees or other credit support for
Refinancing Indebtedness shall be no more favorable in any material respect to
the obligee of such Indebtedness than such credit support for the Indebtedness
being refinanced.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
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"Reinvestment Assets" shall mean any assets to be employed in the
business of the Borrower and its Subsidiaries as described in Section 8.01.
"Reinvestment Election" shall have the meaning provided in
Section 4.02(A)(c).
"Reinvestment Notice" shall mean a written notice signed by an
Authorized Officer of the Borrower stating that the Borrower, in good faith,
intends and expects to use all or a specified portion of the Net Cash Proceeds
of an Asset Sale to purchase, construct or otherwise acquire Reinvestment
Assets.
"Reinvestment Prepayment Amount" shall mean, with respect to any
Reinvestment Election, the amount, if any, on the Reinvestment Prepayment Date
relating thereto by which (a) the Anticipated Reinvestment Amount in respect of
such Reinvestment Election exceeds (b) the aggregate amount thereof expended by
the Borrower and its Subsidiaries to acquire Reinvestment Assets.
"Reinvestment Prepayment Date" shall mean, with respect to any
Reinvestment Election, the earliest of (i) the date, if any, upon which the
Administrative Agent, on behalf of the Required Lenders, shall have delivered a
written termination notice to the Borrower, PROVIDED that such notice may only
be given while an Event of Default under Section 9.01 or 9.05 exists, (ii) the
date occurring 365 days after such Reinvestment Election and (iii) the date on
which the Borrower shall have determined not to proceed with the purchase,
construction or other acquisition of Reinvestment Assets with the related
Anticipated Reinvestment Amount.
"Release" shall mean actively or passively disposing, discharging,
injecting, spilling, pumping, leaking, leaching, dumping, emitting, escaping,
emptying, pouring, seeping, migrating or the like, into or upon any land or
water or air, or otherwise entering into the environment.
"Replaced Lender" shall have the meaning provided in Section 1.13.
"Replacement Lender" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
..22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required Lenders" shall mean Non-Defaulting Lenders the sum of whose
outstanding Term Loans and Revolving Commitments (or after the termination
thereof, outstanding Revolving Loans and RF Percentages of (x) outstanding
Swingline Loans and (y) Letter of Credit Outstandings) exceed 50% of the sum of
(i) all outstanding Term Loans of Non-Defaulting Lenders, and (ii) the Total
Revolving Commitment less the Revolving Commitments of all Defaulting Lenders
(or after the termination thereof, the sum of then total outstanding Revolving
Loans of Non-Defaulting Lenders and the aggregate RF Percentages of all
Non-Defaulting Lenders of the total (x) outstanding Swingline Loans and (y)
Letter of Credit Outstandings at such time).
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"Returns" shall have the meaning provided in Section 6.13.
"Revolving Commitment" shall mean, with respect to each Lender, the
amount set forth opposite such Lender's name in Schedule I hereto directly below
the column entitled "Revolving Commitment," as the same may be (x) reduced or
terminated from time to time pursuant to Section 3.02, 3.03 and/or 9 or (y)
adjusted from time to time as a result of assignments to or from such Lender
pursuant to Section 1.13 and/or 12.04.
"Revolving Facility" shall mean the Facility evidenced by the
Revolving Commitments (and outstandings pursuant thereto).
"Revolving Loan" shall have the meaning provided in Section 1.01(b).
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"Rexnord Business" shall mean all of the entities comprising the
Rexnord business of Invensys, plc acquired by the Borrower pursuant to the
Acquisition Agreement, including, but not limited to, the Rexnord Corporation, a
Delaware corporation.
"RF Lender" shall mean at any time each Lender with a Revolving
Commitment or with outstanding Revolving Loans.
"RF Maturity Date" shall mean November 25, 2008.
"RF Percentage" shall mean at any time for each RF Lender, the
percentage obtained by dividing such Lender's Revolving Commitment by the Total
Revolving Commitment, PROVIDED that if the Total Revolving Commitment has been
terminated, the RF Percentage of each RF Lender shall be determined by dividing
such RF Lender's Revolving Commitment immediately prior to such termination by
the Total Revolving Commitment immediately prior to such termination.
"S&P" shall have the meaning provided in the definition of Cash
Equivalents.
"Sale/Leaseback Transaction" means an arrangement relating to property
owned by a Foreign Subsidiary on the Initial Borrowing Date or thereafter
acquired by a Foreign Subsidiary whereby such Foreign Subsidiary transfers such
property to one or more third Persons and the Foreign Subsidiary leases such
property from such Person(s).
"Scheduled Repayment" shall have the meaning provided in
Section 4.02(A)(b).
"SEC" shall have the meaning provided in Section 7.01(h).
"Section 4.04 Certificate" shall have the meaning provided in
Section 4.04(b)(ii).
"Secured Creditor" shall mean and include any Secured Creditor as
defined in any Security Document.
"Security Agreement" shall have the meaning provided in
Section 5.01(j).
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"Security Agreement Collateral" shall mean all "Collateral" as defined
in the Security Agreement.
"Security Documents" shall mean the Pledge Agreement, the Security
Agreement, each Mortgage, each Additional Mortgage, if any, and each pledge and
security agreement or similar agreement governed by local law entered into as
contemplated under Section 7.10(c), if any.
"Senior Subordinated Note Documents" shall mean and include each of
the documents, instruments (including the Senior Subordinated Notes) and other
agreements entered into by the Borrower (including, without limitation, the
Senior Subordinated Note Indenture and any documents in respect of any Senior
Subordinated Notes issued upon the exchange offer as contemplated by the Senior
Subordinated Note Indenture) relating to the issuance by the Borrower of the
Senior Subordinated Notes, as in effect on the Initial Borrowing Date and as the
same may be entered into, supplemented, amended or modified from time to time in
accordance with the terms hereof and thereof.
"Senior Subordinated Note Indenture" shall mean an Indenture entered
into by and between the Borrower and Wells Fargo Minnesota National Association,
as trustee thereunder, with respect to Senior Subordinated Notes as in effect on
the Initial Borrowing Date and as the same may be modified, amended or
supplemented from time to time in accordance with the terms hereof and thereof.
"Senior Subordinated Notes" shall mean the Senior Subordinated Notes
due 2012 in an initial aggregate amount of $225,000,000 and issued by Holdings
under the Senior Subordinated Note Indenture and all Senior Subordinated Notes
issued upon the exchange offer as contemplated in the Senior Subordinated Note
Indenture, as in effect on the Initial Borrowing Date and as the same may be
issued, supplemented, amended or modified from time to time in accordance with
the terms thereof and hereof.
"Significant Acquisition" shall mean any Permitted Acquisition the
aggregate consideration (taking the amount of cash and Cash Equivalents, the
aggregate amount expected to be paid on or after the date of the respective
Acquisition pursuant to any earn-out, non-compete, consulting or deferred
compensation or purchase price adjustment of similar arrangements, the fair
market value (as determined in good faith by the Borrower) of all other non-cash
consideration and the aggregate amount of assumed Indebtedness) for which
exceeds $10,000,000.
"Significant Asset Sale" means any Asset Sale the aggregate
consideration (taking the amount of cash and Cash Equivalents, the aggregate
amount expected to be paid on or after the date of the respective Asset Sale
pursuant to any earn-out, non-compete, consulting or deferred compensation or
purchase price adjustment or similar arrangements, the fair market value (as
determined in good faith by the Borrower) of all other non-cash consideration
and the aggregate amount of assumed Indebtedness) for which exceeds $10,000,000.
"Standby Letter of Credit" shall have the meaning provided in
Section 2.01(a).
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"Start Date" shall have the meaning provided in the definition of
Applicable Margin.
"Stated Amount" of each Letter of Credit shall mean the maximum
available to be drawn thereunder (regardless of whether any conditions for
drawing could then be met and using the Dollar Equivalent thereof in the case of
any Letter of Credit denominated in an Alternate Currency).
"Subsidiaries Guaranty" shall have the meaning provided in
Section 5.01(n).
"Subsidiary" of any Person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time. Unless otherwise
expressly provided, all references herein to "Subsidiary" shall mean a
Subsidiary of Holdings.
"Subsidiary Guarantors" shall mean each Domestic Subsidiary other than
any such Domestic Subsidiary created as contemplated in the proviso contained in
clause (A) of Section 8.07 but only until such time as the respective Permitted
Acquisition is consummated.
"Supermajority Lenders" shall mean those Non-Defaulting Lenders which
would constitute the Required Lenders under, and as defined in, this Agreement
if (x) all outstanding Obligations in respect of the Revolving Commitments were
repaid in full and the Total Revolving Commitment was terminated and (y) the
text "exceed 50%" contained therein were changed to "exceed 66-2/3%."
"Swingline Expiry Date" shall mean the date which is two Business Days
prior to the RF Maturity Date.
"Swingline Lender" shall mean DBTCA or, in the event DBTCA ceases to
be Swingline Lender, any Lender which at the request of the Borrower and the
consent of the Administrative Agent agrees in such Lender's sole discretion to
become the Swingline Lender.
"Swingline Loan" shall have the meaning provided in Section 1.01(c).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Syndication Date" shall mean the date upon which the Total Commitment
(and related outstanding Loans) have been "Successfully Syndicated" to Lenders
under this Agreement as previously agreed to in writing between Holdings and the
Joint Lead Arrangers.
"Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic off-balance sheet or tax retention lease, or (b)
an agreement for the use or possession of property creating obligations that do
not appear on the balance sheet of such
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Person which, upon the insolvency or bankruptcy of such Person, would be
characterized as the indebtedness of such Person (without regard to accounting
treatment).
"Tax Benefit" has the meaning provided in Section 4.04(c).
"Taxes" shall have the meaning provided in Section 4.04(a).
"Term Commitment" shall mean, with respect to each Lender, the amount,
if any, set forth opposite such Lender's name on Schedule I hereto directly
below the column entitled "Term Commitment" as the same may be terminated
pursuant to Section 3.03 and/or 9.
"Term Facility" shall mean the Facility evidenced by the Term
Commitments (or, after the termination of the Total Term Commitment, the
outstanding Term Loans).
"Term Loan" shall have the meaning provided in Section 1.01(a).
"Term Loan Maturity Date" shall mean November 25, 2009.
"Term Note" shall have the meaning provided in Section 1.05(a).
"Test Period" shall mean each period of four consecutive fiscal
quarters of Holdings ended (for this purpose, assuming Holdings was in existence
at all times from and after January 1, 2002) after January 1, 2003, in each case
taken as one accounting period.
"Total Commitment" shall mean the sum of the Total Term Commitment and
the Total Revolving Commitment.
"Total Revolving Commitment" shall mean the sum of the Revolving
Commitments of each of the Lenders.
"Total Term Commitment" shall mean the sum of the Term Commitments of
each of the Lenders.
"Total Unutilized Revolving Commitment" shall mean, at any time, (i)
the Total Revolving Commitment at such time less (ii) the sum of the aggregate
principal amount of all Revolving Loans and Swingline Loans at such time plus
the Letter of Credit Outstandings at such time.
"Trade Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Transaction" shall mean (i) the consummation of the Common Equity
Financing, (ii) the consummation of the Acquisition, (iii) the issuance of the
Senior Subordinated Notes and (iv) the incurrence of Loans and issuance of
Letters of Credit, if any, on the Initial Borrowing Date.
"Transaction Documents" shall mean the Acquisition Documents and the
Senior Subordinated Note Documents.
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"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the value of the accumulated plan benefits under the Plan
determined on a plan termination basis in accordance with actuarial assumptions
at such time consistent with those prescribed by the PBGC for purposes of
Section 4044 of ERISA, exceeds the fair market value of all plan assets
allocable to such liabilities under Title IV of ERISA (excluding any accrued but
unpaid contributions).
"Unpaid Drawing" shall have the meaning provided in Section 2.03(a).
"Unutilized Revolving Commitment" for any RF Lender at any time shall
mean the excess of (i) the Revolving Commitment of such Lender over (ii) the sum
of (x) the aggregate outstanding principal amount of Revolving Loans made by
such Lender plus (y) an amount equal to such Lender's Adjusted RF Percentage of
the Letter of Credit Outstandings at such time; PROVIDED that the Unutilized
Revolving Loan Commitment of the Swingline Lender shall at any time be reduced
(but not below zero) by the aggregate amount of Swingline Loans made by it which
are then outstanding.
"U.S." shall mean the United States of America.
"Wachovia" shall mean Wachovia Bank, National Association, in its
individual capacity.
"Wholly-Owned Domestic Subsidiary" shall mean each Wholly-Owned
Subsidiary that is a Domestic Subsidiary.
"Wholly-Owned Subsidiary" of any Person shall mean any Subsidiary of
such Person to the extent all of the Equity Interests in such Subsidiary, other
than directors' qualifying shares and, in the case of Foreign Subsidiaries,
nominal amounts of shares issued to other Persons in accordance with applicable
law, is owned directly or indirectly by such Person.
"Written" or "in writing" shall mean any form of written communication
or a communication by means of telex, facsimile transmission, telegraph or
cable.
10.02 CERTAIN PRO FORMA CALCULATIONS. (a) For purposes of calculating
Consolidated EBITDA for any Test Period on a PRO FORMA Basis or a Post-Test
Period PRO FORMA Basis for purposes of this Agreement, the following rules shall
apply:
(i) if at any time after the Effective Date and during the
respective Test Period (and, in the case of determinations being made on a
Post-Test Period PRO FORMA Basis only, thereafter and on or prior to the
date of determination) the Borrower or any of its Subsidiaries shall have
made any Significant Asset Sale, Consolidated EBITDA for such Test Period
shall be reduced by an amount equal to the Consolidated EBITDA (if
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positive) attributable to the assets or Equity Interests which are the
subject of such Significant Asset Sale for such Test Period or increased by
an amount equal to the Consolidated EBITDA (if negative) applicable thereto
for such Test Period;
(ii) if at any time after the Effective Date and during such Test
Period (and, in the case of determinations being made on a Post-Test Period
PRO FORMA Basis only, thereafter and on or prior to the date of
determination) the Borrower or any Subsidiaries shall have made any
Significant Acquisition, Consolidated EBITDA for such Test Period shall be
calculated after giving PRO FORMA effect thereto as if such Significant
Acquisition had occurred on the first day of such Test Period;
(iii) if during such Test Period (and, in the case of determinations
being made on a Post-Test Period PRO FORMA Basis only, thereafter and on or
prior to the date of determination) any Person that became a Subsidiary or
was merged with or into the Borrower or any of its Subsidiaries since the
beginning of such Test Period pursuant to a Significant Acquisition made
after the Effective Date shall have entered into any disposition or
acquisition transaction that would have required an adjustment pursuant to
clause (i) or (ii) above if made by the Borrower or a Subsidiary of the
Borrower during such Test Period, Consolidated EBITDA for such Test Period
shall be calculated after giving PRO FORMA effect thereto as if such
transaction occurred on the first day of such Test Period; and
(iv) pro forma calculations of Consolidated EBITDA, whether
pursuant to this Section 10.02 or otherwise, shall not give effect to
anticipated cost savings and/or increases to Consolidated EBITDA for the
relevant period, except in cases of Significant Acquisitions for factually
supportable and identifiable cost savings and expenses which would
otherwise be accounted for as an adjustment pursuant to Article 11 of
Regulation S-X under the Securities Act of 1933, as amended, as if such
cost savings or expenses were realized on the first day of the respective
period.
(b) For purposes of calculating Consolidated Debt for purposes of
this Agreement (including as used in the definition of Leverage Ratio), all
determinations thereof shall be made based on the actual amount of Consolidated
Debt outstanding on the date of the required determination of Consolidated Debt
(or of the Leverage Ratio) (in the case of determinations to be made on a
Post-Test Period PRO FORMA Basis, after giving effect to all incurrences and
repayments of Consolidated Debt in connection with the respective event or
occurrence requiring that a determination be made on a Post-Test Period PRO
FORMA Basis).
(c) For purposes of calculating the Consolidated Interest Coverage
Ratio for any Test Period on a Post-Test Period PRO FORMA Basis for purposes of
this Agreement all determinations of Consolidated Interest Coverage Ratio for
the respective Test Period shall be made, with such pro forma adjustments as may
be determined in accordance with GAAP and the rules, regulations and guidelines
of the SEC (including without limitation Article 11 of Regulation S-X), after
giving effect to all Significant Acquisitions and Significant Asset Sales
effected after the first day of the respective Test Period and on or prior to
the date of any determination on a Post-Test Period PRO FORMA Basis, as well as
to all incurrences of Indebtedness and permanent repayments of Indebtedness
(excluding normal fluctuations in
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working capital Indebtedness) during the respective Test Period or thereafter
and on or prior to the date of the respective determination on a Post-Test
Period PRO FORMA Basis as if same had occurred on the first day of the
respective Test Period.
SECTION 11. THE AGENTS.
11.01 APPOINTMENT. The Lenders hereby designate DBTCA as
Administrative Agent (for purposes of this Section 11, the terms "Administrative
Agent" shall include DBTCA in its capacity as Collateral Agent pursuant to the
Security Documents) to act as specified herein and in the other Credit
Documents. The Lenders hereby designate GECC and Wachovia as Co-Documentation
Agents to act as specified herein and in the other Credit Documents. The Lenders
hereby designate DBSI and CSFB Cayman as Joint Lead Arrangers to act as
specified herein and in the other Credit Documents. Each Lender hereby
irrevocably authorizes, and each holder of any Note by the acceptance of such
Note shall be deemed irrevocably to authorize, each Agent to take such action on
its behalf under the provisions of this Agreement, the other Credit Documents
and any other instruments and agreements referred to herein or therein and to
exercise such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of each Agent by the terms hereof and
thereof and such other powers as are reasonably incidental thereto. Each Agent
may perform any of their duties hereunder by or through their respective
officers, directors, agents, employees or affiliates.
11.02 NATURE OF DUTIES. The Agents shall not have any duties or
responsibilities except those expressly set forth in this Agreement and the
Security Documents. No Agent nor any of its respective officers, directors,
agents, employees or affiliates shall be liable for any action taken or omitted
by them hereunder or under any other Credit Document or in connection herewith
or therewith, unless caused by their gross negligence or willful misconduct (as
determined by a court of competent jurisdiction in a final and non-appealable
decision). The duties of the Agents shall be mechanical and administrative in
nature; no Agent shall have by reason of this Agreement or any other Credit
Document a fiduciary relationship in respect of any Lender or the holder of any
Note; and nothing in this Agreement or any other Credit Document, expressed or
implied, is intended to or shall be so construed as to impose upon any Agent any
obligations in respect of this Agreement or any other Credit Document except as
expressly set forth herein or therein.
11.03 LACK OF RELIANCE ON THE AGENTS. Independently and without
reliance upon any Agent, each Lender and the holder of each Note, to the extent
it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of Holdings and
its Subsidiaries in connection with the making and the continuance of the Loans
and the taking or not taking of any action in connection herewith and (ii) its
own appraisal of the creditworthiness of Holdings and its Subsidiaries and,
except as expressly provided in this Agreement, no Agent shall have any duty or
responsibility, either initially or on a continuing basis, to provide any Lender
or the holder of any Note with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter. No Agent shall be responsible to any Lender or the
holder of any Note for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of this
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Agreement or any other Credit Document or the financial condition of Holdings
and its Subsidiaries or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any other Credit Document, or the financial condition of Holdings
and its Subsidiaries or the existence or possible existence of any Default or
Event of Default.
11.04 CERTAIN RIGHTS OF THE AGENTS. If any Agent shall request
instructions from the Required Lenders with respect to any act or action
(including failure to act) in connection with this Agreement or any other Credit
Document, such Agent shall be entitled to refrain from such act or taking such
action unless and until such Agent shall have received instructions from the
Required Lenders; and such Agent shall not incur liability to any Person by
reason of so refraining. Without limiting the foregoing, no Lender nor any
holder of any Note shall have any right of action whatsoever against any Agent
as a result of such Agent acting or refraining from acting hereunder or under
any other Credit Document in accordance with the instructions of the Required
Lenders.
11.05 RELIANCE. Each Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype, facsimile or telecopier message,
cablegram, radiogram, order or other document or telephone message signed, sent
or made by any Person that such Agent believed to be the proper Person, and,
with respect to all legal matters pertaining to this Agreement and any other
Credit Document and its duties hereunder and thereunder, upon advice of counsel
selected by such Agent.
11.06 INDEMNIFICATION. To the extent that any Agent is not reimbursed
and indemnified by the Borrower, each Lender will reimburse and indemnify such
Agent, in proportion to its "percentage" as used in determining the Required
Lenders (determined as if there were no Defaulting Lenders) for and against any
and all liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature which
may be imposed on, asserted against or incurred by such Agent in performing its
duties hereunder or under any other Credit Document, in any way relating to or
arising out of this Agreement or any other Credit Document; PROVIDED that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or willful misconduct of any Agent (as
determined by a court of competent jurisdiction in a final and non-appealable
decision).
11.07 THE AGENTS IN THEIR INDIVIDUAL CAPACITY. With respect to its
obligation to make Loans under this Agreement, each Agent shall have the rights
and powers specified herein for a "Lender" and may exercise the same rights and
powers as though it were not performing the duties specified herein; and the
term "Lenders," "Required Lenders," "Supermajority Lenders," "holders of Notes"
or any similar terms shall, unless the context clearly otherwise indicates,
include each Agent in its individual capacity. Each Agent may accept deposits
from, lend money to, and generally engage in any kind of banking, trust or other
business with any Credit Party or any Affiliate of any Credit Party as if it
were not performing the duties specified herein, and may accept fees and other
consideration from Holdings, or any other Credit Party for
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services in connection with this Agreement and otherwise without having to
account for the same to the Lenders.
11.08 HOLDERS. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
11.09 RESIGNATION. (a) The Administrative Agent may resign from the
performance of all its functions and duties hereunder and/or under the other
Credit Documents at any time by giving 30 days' prior written notice to the
Borrower and the Lenders. Any such resignation by an Administrative Agent
hereunder shall also constitute its resignation as a Letter of Credit Issuer,
the Swingline Lender and the Collateral Agent, in which case upon the
effectiveness of such resignation in accordance with this Section 11.09 the
resigning Administrative Agent (x) shall not be required to issue any further
Letters of Credit, make any additional Swingline Loans hereunder or discharge
any duties of the "Collateral Agent" under the Security Documents and (y) shall
maintain all of its rights as a Letter of Credit Issuer, the Swingline Lender
and the Collateral Agent, as the case may be, with respect to any Letters of
Credit issued by it, Swingline Loans made by it, or actions taken (or omitted to
be taken) by it under the Security Documents, in each case prior to the
effective date of such resignation. Such resignation shall take effect upon the
appointment of a successor Administrative Agent pursuant to clauses (b) and (c)
below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Lenders
shall appoint a successor Administrative Agent hereunder or thereunder (who must
also agree, unless the resigning Administrative Agent otherwise consents (or
another Person is appointed as Collateral Agent in a manner consistent with the
requirements of this clause (b)), to act as Collateral Agent) who shall be a
commercial bank or trust company reasonably acceptable to the Borrower (it being
understood and agreed that (i) the Borrower's acceptance of a successor
Administrative Agent pursuant to this paragraph (b) shall not be unreasonably
withheld and (ii) so long as a Default or Event of Default exists at such time
such successor Administrative Agent shall not be required to be reasonably
acceptable to the Borrower).
(c) If a successor Administrative Agent shall not have been so
appointed within such 30 day period, the Administrative Agent, with the consent
of the Borrower (which consent shall not be unreasonably withheld or delayed but
shall not be required at any time when a Default or an Event of Default exists
and is continuing), shall then appoint a successor Administrative Agent (which
successor Administrative Agent shall be required, unless the resigning
Administrative Agent otherwise consents (or another Person is appointed as
Collateral Agent in a manner consistent with the requirements of this clause
(c)), to also act as Collateral Agent) who shall serve as Administrative Agent
hereunder or thereunder until such time, if any, as the Required Lenders appoint
a successor Administrative Agent as provided above.
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(d) If no successor Administrative Agent has been appointed
pursuant to clause (b) or (c) above by the 30th day after the date such notice
of resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Required Lenders shall thereafter
perform all the duties of the Administrative Agent hereunder and/or under any
other Credit Document until such time, if any, as the Required Lenders appoint a
successor Administrative Agent as provided in clause (b) above.
(e) Notwithstanding anything to the contrary contained in this
Section 11.09, the Administrative Agent's resignation as Collateral Agent as
contemplated in clause (a) above shall not become effective until a successor
Administrative Agent appointed in accordance with the provisions of clause (b)
or (c) above has agreed to act as "Collateral Agent" under the Credit Documents
or another Person has been appointed as Collateral Agent in accordance with the
provisions of clause (b) or (c).
(f) Each Joint Lead Arranger and each Co-Documentation Agent may
resign from the performance of all of its functions and duties hereunder and/or
under the other Credit Documents at any time by giving 5 Business Days' prior
written notice to the Administrative Agent. Such resignation shall take effect
on the 5th Business Day after the respective notice is given to the
Administrative Agent.
(g) Upon a resignation of any Agent pursuant to this
Section 11.09, such Agent shall remain indemnified to the extent provided in
this Agreement and the other Credit Documents and the provisions of this Section
11 shall continue in effect for the benefit of such Agent for all of its actions
and inactions while serving as an Agent.
11.10 RELEASES IN CONNECTION WITH GRANTS OF CERTAIN LIENS, etc. In
connection with the granting by the Borrower or any of its Subsidiaries of Liens
of the type described in clauses (d), (l), (m) and (n) of Section 8.03, the
Lenders hereby authorize the Administrative Agent and the Collateral Agent to
take any actions deemed appropriate by either such Agent in connection therewith
(including, without limitation, by executing appropriate lien releases or lien
subordination agreements in favor of the holder or holders of such Liens, in
either case solely with respect to the item or items of equipment or other
assets subject to such Liens).
SECTION 12. MISCELLANEOUS.
12.01 PAYMENT OF EXPENSES, ETC. The Borrower agrees to: (i) whether or
not the transactions herein contemplated are consummated, pay all reasonable,
documented, out-of-pocket fees and expenses of the Joint Lead Arrangers in
connection with the negotiation, preparation, execution and delivery of the
Credit Documents and the documents and instruments referred to therein and any
amendment, waiver or consent relating thereto (including, without limitation,
the reasonable fees and disbursements of White & Case LLP, counsel to the Joint
Lead Arrangers and other local and foreign counsel (if any)) and of each Agent
and each Lender in connection with the enforcement of the Credit Documents and
the documents and instruments referred to therein (including, without
limitation, the reasonable fees and disbursements of counsel for the Agents and
for each of the Lenders, provided that, except in the case of a bankruptcy of
any Credit Party, no more than one counsel for the Agents and the Lenders may be
used in any one jurisdiction); (ii) pay and hold each of the Lenders harmless
from and against
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any and all present and future stamp and other similar taxes with respect to the
foregoing matters and save each of the Lenders harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Lender) to pay such taxes; and (iii)
indemnify each Lender (including in its capacity as an Agent or Letter of Credit
Issuer), its officers, directors, employees, representatives agents, advisors
and trustees from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them as a result of,
or arising out of, or in any way related to, or by reason of, (a) any
investigation, litigation or other proceeding (whether or not any Agent or any
Lender is a party thereto and whether or not any such investigation, litigation
or other proceeding is between or among any Agent, any Lender, any Credit Party
or any third Person or otherwise) related to the entering into and/or
performance of any Document or the use of the proceeds of any Loans hereunder or
the Transaction or the consummation of any transactions contemplated in any
Credit Document, or (b) the actual or alleged presence of Hazardous Materials in
the air, surface water or groundwater or on the surface or subsurface of any
Real Property owned or at any time operated by the Borrower or any of its
Subsidiaries, the release, generation, storage, transportation, handling or
disposal of Hazardous Materials at any location, whether or not owned or
operated by the Borrower or any of its Subsidiaries, the non-compliance of any
Real Property with foreign, federal, state and local laws, regulations, and
ordinances (including applicable permits thereunder) applicable to any Real
Property, or any Environmental Claim asserted against the Borrower, any of its
Subsidiaries or any Real Property owned or at any time operated by Holdings or
any of its Subsidiaries, including, in each case, without limitation, the
reasonable fees and disbursements of counsel incurred in connection with any
such investigation, litigation or other proceeding (but excluding any such
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified or an affiliate of such Person (as determined by a court of
competent jurisdiction in a final and non-appealable decision)).
12.02 RIGHT OF SETOFF. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, if an Event of Default then exists, each Lender is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to any Credit Party or to any other Person,
any such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special but not trust accounts) and any
other Indebtedness at any time held or owing by such Lender (including, without
limitation, by branches and agencies of such Lender wherever located) to or for
the credit or the account of any Credit Party against and on account of the
Obligations and liabilities of such Credit Party to such Lender under this
Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations of such Credit Party purchased by such
Lender pursuant to Section 12.06(b), and all other claims of any nature or
description arising out of or connected with this Agreement or any other Credit
Document, irrespective of whether or not such Lender shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured.
12.03 NOTICES. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier, facsimile or cable communication) and
mailed, telegraphed, telexed, telecopied, faxed, cabled or delivered, if to a
Credit Party, c/o Rexnord Corporation, 4701 West Greenfield
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Avenue, Milwaukee, Wisconsin, 53214, attention: Chief Financial Officer,
telephone: (414) 643-3000, telecopier: (414) 643-3078; if to any Lender, at its
address specified for such Lender on Schedule II hereto; or, at such other
address as shall be designated by any party in a written notice to the other
parties hereto. All such notices and communications shall be mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier, and
shall be effective when received.
12.04 BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS. (a) This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto; PROVIDED,
HOWEVER, the Borrower may not assign or transfer any of its rights, obligations
or interest hereunder without the prior written consent of the Lenders and,
PROVIDED FURTHER, that, although any Lender may transfer participations, assign
participations or grant participations in its rights hereunder, such Lender
shall remain a "Lender" for all purposes hereunder (and may not transfer or
assign all or any portion of its Commitments hereunder except as provided in
Sections 1.13 and 12.04(b)) and the transferee, assignee or participant, as the
case may be, shall not constitute a "Lender" hereunder and, PROVIDED FURTHER,
that no Lender shall transfer or grant any participation under which the
participant shall have rights to approve any amendment to or waiver of this
Agreement or any other Credit Document except to the extent such amendment or
waiver would (i) extend the final scheduled maturity of any Loan, Note or Letter
of Credit (unless such Letter of Credit is not extended beyond the RF Maturity
Date) in which such participant is participating, or reduce the rate or extend
the time of payment of interest or Fees thereon (except in connection with a
waiver of applicability of any post-default increase in interest rates) or
reduce the principal amount thereof (it being understood that any amendment or
modification to the financial definitions in this Agreement or to Section
12.07(a) shall not constitute a reduction in the rate of interest or Fees
payable hereunder), or increase the amount of the participant's participation
over the amount thereof then in effect (it being understood that a waiver of any
Default or Event of Default or of a mandatory reduction in the Total Commitment
or a mandatory prepayment shall not constitute a change in the terms of such
participation, and that an increase in any Commitment (or the available portion
thereof) or Loan shall be permitted without the consent of any participant if
the participant's participation is not increased as a result thereof), (ii)
consent to the assignment or transfer by Borrower of any of its rights and
obligations under this Agreement or (iii) release all or substantially all of
the Collateral under all of the Security Documents (except as expressly provided
in the Credit Documents) supporting the Loans or Letters of Credit hereunder in
which such participant is participating. In the case of any such participation,
the participant shall not have any rights under this Agreement or any of the
other Credit Documents (the participant's rights against such Lender in respect
of such participation to be those set forth in the agreement executed by such
Lender in favor of the participant relating thereto) and all amounts payable by
the Borrower hereunder shall be determined as if such Lender had not sold such
participation.
(b) Notwithstanding the foregoing, any Lender (or any Lender
together with one or more other Lenders) may (x) assign all or a portion of its
Commitments and related outstanding Obligations (or, if the Commitments with
respect to the relevant Facility have terminated, outstanding Obligations)
hereunder to (i)(A) its parent company and/or any affiliate of such Lender which
is at least 50% owned by such Lender or its parent company or (B) to one or more
other Lenders or any affiliate of any such other Lender which is at least 50%
owned by such other Lender or its parent company (PROVIDED that any fund that
invests in loans and is
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managed or advised by the same investment advisor of another fund which is a
Lender (or by an Affiliate of such investment advisor) shall be treated as an
affiliate of such other Lender for the purposes of this sub-clause (x)(i)(B)),
or (ii) in the case of any Lender that is a fund that invests in loans, any
other fund that invests in loans and is managed or advised by the same
investment advisor of any Lender or by an Affiliate of such investment advisor
or (y) assign all, or if less than all, a portion equal to at least (i) in the
case of Revolving Commitments (and related Outstandings), $5,000,000 and (ii) in
the case of Term Loans, $1,000,000 in each case in the aggregate for the
assigning Lender or assigning Lenders, of such Commitments and related
outstanding Obligations (or, if the Commitments with respect to the relevant
Facility have terminated, outstanding Obligations) hereunder to one or more
Eligible Transferees (treating any fund that invests in loans and any other fund
that invests in loans and is managed or advised by the same investment advisor
of such fund or by an Affiliate of such investment advisor as a single Eligible
Transferee), each of which assignees shall become a party to this Agreement as a
Lender by execution of an Assignment Agreement, PROVIDED that (i) at such time,
Schedule I shall be deemed modified to reflect the Commitments and/or
outstanding Loans, as the case may be, of such new Lender and of the existing
Lenders, (ii) upon the surrender of the relevant Notes by the assigning Lender
(or, upon such assigning Lender's indemnifying the Borrower for any lost Note
pursuant to a customary indemnification agreement) new Notes will be issued, at
the Borrower's expense, to such new Lender and to the assigning Lender upon the
request of such new Lender or assigning Lender, such new Notes to be in
conformity with the requirements of Section 1.05 (with appropriate
modifications) to the extent needed to reflect the revised Commitments and/or
outstanding Loans, as the case may be, (iii) the consent of the Administrative
Agent and, at all times after the earlier of (A) 60 days following the Initial
Borrowing Date and (B) the Syndication Date (so long as no Default or Event of
Default then exists and is continuing), the Borrower shall be required in
connection with any such assignment pursuant to clause (y) above (each of which
consents shall not be unreasonably withheld or delayed), (iv) in the case of any
assignment of Revolving Commitments and relating outstanding Obligations, the
consent of each Letter of Credit Issuer shall be required (which consent shall
not be unreasonably withheld or delayed), (v) the Administrative Agent shall,
except in the cases of assignments by CSFB Cayman, receive at the time of each
such assignment, from the assigning or assignee Lender, the payment of a
non-refundable assignment fee of $3,500 and (vi) no such transfer or assignment
will be effective until recorded by the Administrative Agent on the Lender
Register pursuant to Section 12.16. To the extent of any assignment pursuant to
this Section 12.04(b), the assigning Lender shall be relieved of its obligations
hereunder with respect to its assigned Commitments and outstanding Loans
(including obligations to participate in Letters of Credit and Swingline Loans
and in indemnification payments under Section 11.06 (other than to the extent
not then due)). At the time of each assignment pursuant to this Section 12.04(b)
to a Person which is not already a Lender hereunder and which is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) for
Federal income tax purposes, the respective assignee Lender shall, to the extent
legally entitled to do so, provide to the Borrower the appropriate Internal
Revenue Service Forms (and, if applicable, a Section 4.04 Certificate) described
in Section 4.04(b) to the extent such forms would provide a complete exemption
from or reduction in United States withholding tax. To the extent that an
assignment of all or any portion of a Lender's Commitments and related
outstanding Obligations pursuant to Section 1.13 or this Section 12.04(b) would,
at the time of such assignment, result in increased costs under Section 1.10,
2.05 or 4.04 from those being charged by the respective assigning Lender prior
to
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such assignment, then the Borrower shall not be obligated to pay such increased
costs (although the Borrower, in accordance with and pursuant to the other
provisions of this Agreement, shall be obligated to pay any other increased
costs of the type described above resulting from changes after the date of the
respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Lender
from pledging its Loans and Notes hereunder to a Federal Reserve Bank in support
of borrowings made by such Lender from such Federal Reserve Bank and, with prior
notification to the Administrative Agent (but without the consent of the
Administrative Agent or the Borrower), any Lender which is a fund may pledge all
or any portion of its Loans and Notes to its trustee, to a collateral agent or
to another creditor providing credit or credit support to such Lender in support
of its obligations to such trustee, such collateral agent or a holder of such
obligations, or such other creditor as the case may be. No pledge pursuant to
this clause (c) shall release the transferor Lender from any of its obligations
hereunder.
(d) Notwithstanding any other provisions of this Section 12.04 to
the contrary, no transfer or assignment of the interests or obligations of any
Lender hereunder or any grant of participation therein shall be permitted if
such transfer, assignment or grant would require the Borrower to file a
registration statement with the SEC or to qualify the Loans under the "Blue Sky"
laws of any State.
(e) Each Lender initially party to this Agreement hereby
represents, and each Person that became a Lender pursuant to an assignment
permitted by this Section 12.04 will, upon its becoming party to this Agreement,
represent that it is an Eligible Transferee which is in the business of making,
purchasing or investing in extensions of credit of the types made under this
Agreement and that it will make or acquire Loans for its own account, PROVIDED
that subject to the preceding clauses (a), (b) and (d), the disposition of any
promissory notes or other evidences of or interests in Indebtedness held by such
Lender shall at all times be within its exclusive control.
12.05 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part
of any Agent or any Lender in exercising any right, power or privilege hereunder
or under any other Credit Document and no course of dealing between any Credit
Party and any Agent or any Lender shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder or
under any other Credit Document preclude any other or further exercise thereof
or the exercise of any other right, power or privilege hereunder or thereunder.
The rights and remedies herein expressly provided are cumulative and not
exclusive of any rights or remedies which any Agent or any Lender would
otherwise have. No notice to or demand on any Credit Party in any case shall
entitle any Credit Party to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of any Agent or any
Lender to any other or further action in any circumstances without notice or
demand.
12.06 PAYMENTS PRO RATA. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of any Credit Party
in respect of any Obligations of such Credit Party hereunder, it shall
distribute such payment to the Lenders (other than any Lender that has expressly
waived its right to receive its pro rata share thereof) PRO RATA
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based upon their respective shares, if any, of the Obligations with respect to
which such payment was received.
(b) Each of the Lenders agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security, by
the exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans or Fees, of a sum which with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total of such
Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations of the respective Credit Party to such Lenders in such amount as
shall result in a proportional participation by all of the Lenders in such
amount, PROVIDED that if all or any portion of such excess amount is thereafter
recovered from such Lender, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 12.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders
and in connection with repayments of Loans pursuant to Section 4.01(b).
12.07 CALCULATIONS; COMPUTATIONS. (a) The financial statements to be
furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Lenders), PROVIDED that (x) except as otherwise
specifically provided herein, all computations of Excess Cash Flow and all
computations determining compliance with Sections 8.11 and 8.12, including
definitions used therein, shall utilize accounting principles and policies in
effect at the time of the preparation of, and in conformity with those used to
prepare, the historical financial statements of the Rexnord Business delivered
to the Lenders pursuant to Section 6.10(b) and (y) if, as a result of any change
after the Effective Date in GAAP, any change in such accounting principles and
policies used in the preparation of such financial statements occurs, then,
following the request of the Borrower, or the Administrative Agent or the
Required Lenders, the parties hereto shall negotiate in good faith modifications
to the definitions, covenants and other provisions of this Agreement relating to
the financial covenant calculations required to be made under this Agreement in
order to reflect the impact and the projected impact of such change on the
consolidated financial position and results of operations of Holdings and its
Subsidiaries (and if an amendment to this Agreement is entered into as
contemplated above in this clause (y), then from and after the date thereof the
computations pursuant to preceding clause (x) of this proviso shall be made in
conformity with the accounting principles and policies referenced in preceding
clause (x), but adjusted to give effect to the changes to GAAP made after the
Effective Date and on or prior to the date of the respective such amendment),
PROVIDED FURTHER, that until such time as any modifications have become
effective as contemplated by clause (y) of the immediately preceding proviso, if
there has been any change after the Effective Date (or the date of the last
amendment effected pursuant to clause (y) of the immediately preceding proviso)
in GAAP, then the
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financial statements furnished to the Lenders pursuant hereto shall be
accompanied by reconciliation worksheets showing the information required to
determine compliance with the provisions referenced in clause (x) of the
immediately preceding proviso.
(b) All computations of interest, Commitment Commission and other
Fees hereunder shall be made on the basis of a year of 360 days (or 365/366 days
in the case of interest on Base Rate Loans based on the Prime Lending Rate) for
the actual number of days.
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE
PROVIDED IN THE MORTGAGES OR ANY OTHER SECURITY DOCUMENT, BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE
COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT, EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH OF HOLDINGS AND
THE BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS
LACK PERSONAL JURISDICTION OVER HOLDINGS OR THE BORROWER, AND AGREES NOT TO
PLEAD OR CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENTS BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT
SUCH COURTS LACK PERSONAL JURISDICTION OVER HOLDINGS OR THE BORROWER. EACH OF
HOLDINGS AND THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
HOLDINGS OR THE BORROWER AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW
UNTIL ANOTHER ADDRESS IS PROVIDED TO THE ADMINISTRATIVE AGENT IN WRITING IN
ACCORDANCE WITH SECTION 12.03, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY WAIVES ANY
OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES
NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER
ANY OTHER CREDIT DOCUMENT THAT SUCH SERVICE OF PROCESS WAS IN ANY WAY INVALID OR
INEFFECTIVE IF IN CONFORMITY WITH THE FOREGOING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF ANY AGENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST HOLDINGS OR THE BORROWER IN ANY OTHER JURISDICTION.
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(b) EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY WAIVES
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
12.09 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
12.10 EFFECTIVENESS. This Agreement shall become effective on the date
(the "Effective Date") on which Holdings, the Borrower and each of the Lenders
shall have signed a copy hereof (whether the same or different copies) and shall
have delivered the same to the Administrative Agent or, in the case of the
Lenders, shall have given to the Administrative Agent telephonic (confirmed in
writing), written telex or facsimile transmission notice (actually received)
that the same has been signed and mailed to it.
12.11 HEADINGS DESCRIPTIVE. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
12.12 AMENDMENT OR WAIVER, ETC. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party hereto or thereto and
the Required Lenders (although additional parties may be added to (and annexes
may be modified to reflect such additions), and Subsidiaries of the Borrower may
be released from, the Subsidiaries Guaranty and the Security Documents (in
connection with permitted sales or dispositions of Equity Interests in the
respective Subsidiary Guarantor or Subsidiary Guarantors being released) in
accordance with the provisions hereof and thereof without the consent of the
other Credit Parties party thereto or the Required Lenders), PROVIDED that no
such change, waiver, discharge or termination shall, without the written consent
of each Lender (other than a Defaulting Lender) (with Obligations being directly
adversely affected in the case of following clause (i)), (i) extend, waive or
postpone the final scheduled maturity of any Loan or Note or extend, waive or
postpone the stated expiration date of any Letter of Credit beyond the RF
Maturity Date, or reduce the rate or extend, waive or postpone
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the time of payment of interest or Fees thereon (except in connection with the
waiver of applicability of any post-default increase in interest rates), or
reduce the principal amount thereof (it being understood that any amendment or
modification to the financial definitions in this Agreement or to Section
12.07(a) shall not constitute a reduction in the rate of interest or Fees for
the purposes of this clause (i)), (ii) release all or substantially all of the
Collateral under the Security Documents (except as expressly provided in the
Credit Documents (x) in connection with the termination of commitments hereunder
and repayment in full of all amounts owing pursuant hereto and (y) with respect
to permitted sales or dispositions of property), or release all or substantially
all of the Guarantors from the Guaranties (except (x) in connection with the
termination of commitments hereunder and repayment in full of all amounts owing
pursuant hereto and (y) in the case of Subsidiary Guarantors as expressly
provided in the Subsidiaries Guaranty in connection with permitted sales or
dispositions of Equity Interests in the respective Subsidiary Guarantor or
Subsidiary Guarantors being released), (iii) amend, modify or waive any
provision of this Section 12.12 (except for technical amendments with respect to
additional extensions of credit pursuant to this Agreement which afford the
protections to such additional extensions of credit of the type provided to the
Term Loans and the Revolving Commitments on the Effective Date), (iv) reduce the
percentage specified in the definition of Required Lenders (it being understood
that, with the consent of the Required Lenders, additional extensions of credit
pursuant to this Agreement may be included in the determination of the Required
Lenders on substantially the same basis as the extensions of Term Loans and
Revolving Commitments are included on the Effective Date), (v) consent to the
assignment or transfer by Holdings or the Borrower of any of its rights and
obligations under this Agreement (it being understood that, in each case with
the consent of the Required Lenders, Holdings may be released from the Holdings
Guaranty and the Security Documents to which it is a party in connection with
the consummation of a Qualified Public Offering or after the establishment of
Intermediate Holdco, provided that Intermediate Holdco has taken all action
required by Section 8.07) or (vi) amend, modify or waive any provisions of
Section 12.06(a) providing for payments to be made ratably by the Lenders (it
being understood that, with the consent of the Required Lenders, additional
extensions of credit pursuant to this Agreement may be included in determining
any ratable share pursuant to Section 12.06(a) and adjustments to any such
Section may be made consistent therewith); PROVIDED FURTHER, that no such
change, waiver, discharge or termination shall (1) increase the Commitment of
any Lender over the amount thereof then in effect without the consent of such
Lender (it being understood that waivers or modifications of conditions
precedent, covenants, Defaults or Events of Default or of a mandatory reduction
in the Total Commitment shall not constitute an increase of the Commitment of
any Lender, and that an increase in the available portion of any Commitment of
any Lender shall not constitute an increase of the Commitment of such Lender),
(2) without the consent of each Letter of Credit Issuer, amend, modify or waive
any provision of Section 2 or alter its rights or obligations with respect to
Letters of Credit, (3) without the consent of the Swingline Lender, alter the
Swingline Lender's rights or obligations with respect to Swingline Loans, (4)
without the consent of the respective Agent, amend, modify or waive any
provision of Section 12 or any other provision as same relates to the rights or
obligations of such Agent, (5) without the consent of Collateral Agent, amend,
modify or waive any provision relating to the rights or obligations of the
Collateral Agent, or (6) reduce the amount of, or extend the date of, any
Scheduled Repayment without the consent of the Supermajority Lenders holding
Term Loans, or amend the definition of Supermajority Lenders without the consent
of the Supermajority Lenders holding Term Loans
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(it being understood that, with the consent of the Required Lenders, additional
extensions of credit pursuant to this Agreement may be included in the
determination of the Supermajority Lenders on substantially the same basis as
the extensions of Term Loans and Revolving Commitments are included on the
Effective Date). Notwithstanding anything to the contrary contained above, the
provisions of Section 12.18 hereof may be modified (and may only be modified) in
accordance with the express requirements of Section 12.18(b) as originally in
effect.
(b) If, in connection with any proposed change, waiver, discharge
or termination of any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 12.12(a),
the consent of the Required Lenders is obtained but the consent of one or more
of such other Lenders whose consent is required is not obtained, then the
Borrower shall have the right, so long as all non-consenting Lenders whose
individual consent is required are treated as described in either clauses (A) or
(B) below, to either (A) replace each such non-consenting Lender or Lenders with
one or more Replacement Lenders pursuant to Section 1.13 so long as at the time
of such replacement, each such Replacement Lender consents to the proposed
change, waiver, discharge or termination or (B) terminate such non-consenting
Lender's Commitments and/or repay each Facility of outstanding Loans of such
Lender in accordance with Sections 3.02(b) and/or 4.01(b), provided that, unless
the Commitments that are terminated, and Loans repaid, pursuant to preceding
clause (B) are immediately replaced in full at such time through the addition of
new Lenders or the increase of the Commitments and/or outstanding Loans of
existing Lenders (who in each case must specifically consent thereto), then in
the case of any action pursuant to preceding clause (B) the Required Lenders
(determined after giving effect to the proposed action) shall specifically
consent thereto, provided further, that in any event the Borrower shall not have
the right to replace a Lender, terminate its Commitments or repay its Loans
solely as a result of the exercise of such Lender's rights (and the withholding
of any required consent by such Lender) pursuant to the second proviso to
Section 12.12(a).
12.13 SURVIVAL. All indemnities set forth herein including, without
limitation, in Section 1.10, 1.11, 2.05, 4.04, 11.06 or 12.01 shall survive the
execution and delivery of this Agreement and the making and repayment of the
Loans.
12.14 DOMICILE OF LOANS. Each Lender may transfer and carry its Loans
at, to or for the account of any branch office, subsidiary or affiliate of such
Lender, PROVIDED that the Borrower shall not be responsible for costs arising
under Section 1.10, 2.05 or 4.04 resulting from any such transfer (other than a
transfer pursuant to Section 1.12) to the extent not otherwise applicable to
such Lender prior to such transfer (although the Borrower shall be obligated to
pay any other increased costs of the type described above resulting from changes
after the date of the respective transfer).
12.15 CONFIDENTIALITY. Each of the Lenders agrees that it will use its
commercially reasonable efforts not to disclose without the prior consent of the
Borrower (other than to its employees, auditors, counsel or other professional
advisors, to affiliates or to another Lender if the Lender or such Lender's
holding or parent company in its reasonable discretion determines that any such
party should have access to such information) any information with respect to
Holdings or any of its Subsidiaries which is furnished pursuant to this
Agreement; PROVIDED, that any Lender may disclose any such information (a) as
has become generally available to the public, (b) as may be required or
appropriate in any report, statement or
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testimony submitted to any municipal, state or Federal regulatory body having or
claiming to have jurisdiction over such Lender or to the Federal Reserve Board
or the Federal Deposit Insurance Corporation or similar organizations (whether
in the United States or elsewhere) or their successors or to the NAIC, (c) as
may be required or appropriate in response to any summons or subpoena or in
connection with any litigation (notice of which will be promptly sent to the
Borrower to the extent permitted by Law), (d) in order to comply with any law,
order, regulation or ruling applicable to such Lender, and (e) to any
prospective transferee in connection with any contemplated transfer of any of
the Notes or any interest therein by such Lender; PROVIDED, that such
prospective transferee is notified of the confidentiality requirements relating
thereto and (f) to any direct or indirect contractual counterparty in swap
agreements or such contractual counterparty's professional advisors; PROVIDED,
that such contractual counterparty or such contractual counterparty's
professional advisors, as the case may be, is notified of the confidentiality
requirements relating thereto. No Lender shall be obligated or required to
return any materials furnished by Holdings or any Subsidiary. Holdings and the
Borrower hereby agree that the failure of a Lender to comply with the provisions
of this Section 12.15 shall not relieve the Credit Parties of any of their
obligations to such Lender under this Agreement and the other Credit Documents.
12.16 LENDER REGISTER. The Borrower hereby designates the
Administrative Agent to serve as the Borrower's agent, solely for purposes of
this Section 12.16, to maintain a register (the "Lender Register") on which it
will record the Commitments from time to time of each of the Lenders, the Loans
made by each of the Lenders and each repayment in respect of the principal
amount of the Loans of each Lender. Failure to make any such recordation, or any
error in such recordation shall not affect the Borrower's obligations in respect
of such Loans. With respect to any Lender, the transfer of the Commitments of
such Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Commitments shall not be effective until such transfer is
recorded on the Lender Register maintained by the Administrative Agent with
respect to ownership of such Commitments and Loans and prior to such recordation
all amounts owing to the transferor with respect to such Commitments and Loans
shall remain owing to the transferor. The registration of assignment or transfer
of all or part of any Commitments and Loans shall be recorded by the
Administrative Agent on the Lender Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment Agreement
pursuant to Section 12.04(b). The Borrower agrees to indemnify the
Administrative Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted against or
incurred by the Administrative Agent in performing its duties under this Section
12.16 (but excluding such losses, claims, liabilities or liabilities incurred by
reason of the Administrative Agent's gross negligence or willful misconduct (as
determined by a court of competent jurisdiction in a final and non-appealable
decision)). The Lender Register shall be available for inspection by the
Borrower or any Lender at any reasonable time, and from time to time, upon
reasonable prior notice.
12.17 ACQUISITION OF CHANGZHOU HANSEN JIANGLANG TRANSMISSIONS CO. LTD
AND BROOK HANSEN S.A.. Notwithstanding anything to the contrary contained in the
Credit Agreement, it is understood and agreed that the acquisition of Changzhou
Hansen Jianglang Transmissions Co. Ltd and Brook Hansen S.A. pursuant to the
Acquisition shall not be required to be consummated on the Initial Borrowing
Date, and if either such acquisition is not consummated on such date such
acquisition may later be consummated following (i) in the case
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of the acquisition of Changzhou Hansen Jianglang Transmissions Co. Ltd, the
receipt by Changzhou Hansen Jianglang Transmissions Co. Ltd of the approval of
the Wujin Foreign Economic Relations and Trade Commission so long as no further
consideration is paid therefor and (ii) in the case of Brook Hansen S.A., the
receipt by Rexnord France Holdings SAS of the approval of the Director General
of Competition, Consumer Affairs, and Repression of Frauds so long as the
aggregate purchase price therefor does not exceed $13,000,000. In the event that
either such acquisition is consummated after the Initial Borrowing Date as
contemplated above, the Borrower shall be permitted to make an intercompany loan
to Rexnord France Holdings SAS and a subsequent sale of such loan to Rexnord
Finance BV in exchange for an intercompany loan on substantially the same term
to effect such acquisition, provided that the aggregate principal amount of any
such intercompany loan made to Rexnord France Holdings SAS shall not exceed
$13,000,000.
12.18 LIMITATION ON CERTAIN ENFORCEMENT ACTIONS. (a) The Agents and
the Lenders hereby acknowledge and agree that, notwithstanding anything to the
contrary contained herein or in any other Credit Document, none of the following
actions shall be taken without the prior written consent of each Agent (if any)
who would have a voting percentage of at least 5% in determining the Required
Lenders at such time: (A) the purchase or other acquisition of any direct
ownership interest by any Agent (in such capacity or on behalf of any or all of
the Secured Creditors) or any Lender or Lenders (except as a result of any
purchase by one or more Lenders in their individual capacities pursuant to a
foreclosure sale) of any Equity Interests of any of Rexnord North America
Holding, Inc. or Clarkson Industries, Inc.; (B) the exercise of any voting
rights by any Agent (in such capacity or behalf of any or all of the Secured
Creditors) or any Lender or Lenders (except following any purchase by one or
more Lenders in their individual capacities pursuant to a foreclosure sale) with
respect to the Equity Interests of any of Rexnord North America Holdings, Inc.
or Clarkson Industries, Inc.; or (C) the purchase or other acquisition of any
direct ownership interest by any Agent (in such capacity or on behalf of the
Secured Creditors) or any Lender or Lenders (except as a result of any purchase
by one or more Lenders in their individual capacities pursuant to a foreclosure
sale) in any of the real property listed as items 1, 2, 4, 11 and 13 on Schedule
III, whether through purchase upon foreclosure of any lien granted to the
Administrative Agent for the benefit of the Secured Parties under the Security
Agreement or any Mortgage or otherwise.
(b) It is acknowledged and agreed by all parties hereto that
provisions of this Section 12.18 are solely for the benefit of the Agents and
Lenders (and not the Borrower or any other Credit Party), and, that
notwithstanding anything to the contrary contained herein, the provisions hereof
may be modified, waived or amended only with the consent of the Required Lenders
and each Agent (if any) who would have a voting percentage of at least 5% in
determining Required Lenders at such time, with no consent of any Credit Party
being required in connection with any modification, amendment or waiver of the
provisions of this Section 12.18 effected in accordance with the preceding
portion of this sentence.
SECTION 13. HOLDINGS GUARANTY.
13.01 THE GUARANTY. In order to induce the Lenders to enter into this
Agreement and to extend credit hereunder and in recognition of the direct
benefits to be received by Holdings from the proceeds of the Loans and the
issuance of the Letters of Credit, Holdings
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hereby unconditionally and irrevocably guarantees, as primary obligor and not
merely as surety the full and prompt payment when due, whether upon maturity,
acceleration or otherwise, of any and all of the Guaranteed Obligations. If any
of the Guaranteed Obligations becomes due and payable hereunder, Holdings
unconditionally promises to pay such indebtedness to the Guaranteed Creditors,
on demand, together with any and all expenses which may be actually incurred by
the Guaranteed Creditors in collecting any of the Guaranteed Obligations. If
claim is ever made upon any Guaranteed Creditor for repayment or recovery of any
amount or amounts received in payment or on account of any of the Guaranteed
Obligations and any of the aforesaid payees repays all or part of said amount by
reason of (i) any judgment, decree or order of any court or administrative body
having jurisdiction over such payee or any of its property or (ii) any
settlement or compromise of any such claim effected by such payee with any such
claimant (including the Borrower), then and in such event Holdings agrees that
any such judgment, decree, order, settlement or compromise shall be binding upon
Holdings, notwithstanding any revocation of this Guaranty or any other
instrument evidencing any liability of the Borrower, and Holdings shall be and
remain liable to the aforesaid payees hereunder for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by any such payee.
13.02 BANKRUPTCY. Additionally, Holdings unconditionally and
irrevocably guarantees the payment of any and all of the Guaranteed Obligations
to the Guaranteed Creditors whether or not due or payable by the Borrower upon
the occurrence in respect of the Borrower of any of the events specified in
Section 9.05, and unconditionally promises to pay such indebtedness on demand,
in Dollars.
13.03 NATURE OF LIABILITY. The liability of Holdings hereunder is
exclusive and independent of any security for or other guaranty of the
Guaranteed Obligations whether executed by Holdings, any other guarantor or by
any other party, and the liability of Holdings hereunder is not affected or
impaired by (a) any direction as to application of payment by the Borrower or by
any other party, or (b) any other continuing or other guaranty, undertaking or
maximum liability of a guarantor or of any other party as to the Guaranteed
Obligations, or (c) any payment on or in reduction of any such other guaranty or
undertaking, or (d) any dissolution, termination or increase, decrease or change
in personnel by the Borrower, or (e) any payment made to the Guaranteed
Creditors on the Guaranteed Obligations which any such Guaranteed Creditor
repays to the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
Holdings waives any right to the deferral or modification of its obligations
hereunder by reason of any such proceeding.
13.04 INDEPENDENT OBLIGATION. The obligations of Holdings hereunder
are independent of the obligations of any other guarantor, any other party or
the Borrower, and a separate action or actions may be brought and prosecuted
against Holdings whether or not action is brought against any other guarantor,
any other party or the Borrower and whether or not any other guarantor, any
other party or the Borrower be joined in any such action or actions. Holdings
waives, to the full extent permitted by law, the benefit of any statute of
limitations affecting its liability hereunder or the enforcement hereof. Any
payment by the Borrower or other circumstance which operates to toll any statute
of limitations as to the Borrower shall operate to toll the statute of
limitations as to Holdings.
-117-
<Page>
13.05 AUTHORIZATION. Holdings authorizes the Guaranteed Creditors
without notice or demand (except as shall be required by applicable statute and
cannot be waived), and without affecting or impairing its liability hereunder,
from time to time to:
(a) change the manner, place or terms of payment of, and/or change
or extend the time of payment of, renew, increase, accelerate or alter, any of
the Guaranteed Obligations (including any increase or decrease in the rate of
interest thereon), any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the Guaranty herein made shall apply to the
Guaranteed Obligations as so changed, extended, renewed, increased or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors,
the Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may substitute the
payment of all or any part thereof to the payment of any liability (whether due
or not) of the Borrower to its creditors other than the Guaranteed Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Guaranteed Creditors regardless
of what liability or liabilities of the Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement, any other Credit Document or any of the
instruments or agreements referred to herein or therein, or otherwise amend,
modify or supplement this Agreement, any other Credit Document or any of such
other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
Holdings from its liabilities under this Guaranty.
13.06 RELIANCE. It is not necessary for the Guaranteed Creditors to
inquire into the capacity or powers of the Borrower or the officers, directors,
partners or agents acting or purporting to act on its behalf, and any Guaranteed
Obligations made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
13.07 SUBORDINATION. Any of the indebtedness of the Borrower now or
hereafter owing to Holdings is hereby subordinated to the Guaranteed Obligations
of the Borrower; and if
-118-
<Page>
the Administrative Agent so requests at a time when an Event of Default exists,
all such indebtedness of the Borrower to Holdings shall be collected, enforced
and received by Holdings for the benefit of the Guaranteed Creditors and be paid
over to the Administrative Agent on behalf of the Guaranteed Creditors on
account of the Guaranteed Obligations, but without affecting or impairing in any
manner the liability of Holdings under the other provisions of this Guaranty.
Prior to the transfer by Holdings of any note or negotiable instrument
evidencing any of the indebtedness of the Borrower to Holdings, Holdings shall
mark such note or negotiable instrument with a legend that the same is subject
to this subordination. Without limiting the generality of the foregoing,
Holdings hereby agrees with the Guaranteed Creditors that it will not exercise
any right of subrogation which it may at any time otherwise have as a result of
this Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or
otherwise) until all Guaranteed Obligations have been irrevocably paid in full
in cash.
13.08 WAIVER. (a) Holdings waives any right (except as shall be
required by applicable statute and cannot be waived) to require any Guaranteed
Creditor to (i) proceed against the Borrower, any other guarantor or any other
party, (ii) proceed against or exhaust any security held from the Borrower, any
other guarantor or any other party or (iii) pursue any other remedy in any
Guaranteed Creditor's power whatsoever. Holdings waives any defense based on or
arising out of any defense of the Borrower, any other guarantor or any other
party, other than payment in full of the Guaranteed Obligations, based on or
arising out the disability of the Borrower, any other guarantor or any other
party, or the unenforceability of the Guaranteed Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of the Borrower
other than payment in full of the Guaranteed Obligations. The Guaranteed
Creditors may, at their election, foreclose on any security held by the
Collateral Agent or any other Guaranteed Creditor by one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is commercially
reasonable (to the extent such sale is permitted by applicable law), or exercise
any other right or remedy the Guaranteed Creditors may have against the Borrower
or any other party, or any security, without affecting or impairing in any way
the liability of Holdings hereunder except to the extent the Guaranteed
Obligations have been paid.
(b) Holdings waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
Guaranteed Obligations. Holdings assumes all responsibility for being and
keeping itself informed of the Borrower's financial condition and assets, and of
all other circumstances, bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which Holdings assumes
and incurs hereunder, and agrees that the Guaranteed Creditors shall have no
duty to advise Holdings of information known to them regarding such
circumstances or risks.
13.09 ENFORCEMENT. The Guaranteed Creditors agree that this Guaranty
may be enforced only by the action of the Administrative Agent or the Collateral
Agent, in each case acting upon the instructions of the Required Lenders and no
Guaranteed Creditor shall have any right individually to seek to enforce or to
enforce this Guaranty or to realize upon the security to be granted by the
Security Documents, it being understood and agreed that such rights and remedies
may be exercised by the Administrative Agent or the Collateral Agent for the
benefit of the Guaranteed Creditors upon the terms of this Guaranty and the
Security Documents.
-119-
<Page>
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
RBS GLOBAL, INC.
By /s/
----------------------------
Name: Thomas Jansen
Title: Vice President & CFO
REXNORD CORPORATION
By /s/
----------------------------
Name: Thomas Jansen
Title: Vice President & CFO
DEUTSCHE BANK TRUST COMPANY
AMERICAS, Individually and as Administrative
Agent
By /s/
----------------------------
Name: Diane F. Rolfe
Title: Vice President
DEUTSCHE BANK SECURITIES INC.,
as a Joint Lead Arranger
By /s/
----------------------------
Name: David S. Bailey
Title: Managing Director
By /s/
----------------------------
Name: Mark [illegible]
Title: MD
-120-
<Page>
GENERAL ELECTRIC CAPITAL
CORPORATION, Individually and as Co-
Documentation Agent
By /s/
----------------------------
Name: Laurent Paris, VP
Title: Duly Authorized Signatory
WACHOVIA BANK, NATIONAL
ASSOCIATION, Individually and as Co-
Documentation Agent
By /s/
----------------------------
Name: Chris R. Hetterly
Title: Director
CREDIT SUISSE FIRST BOSTON, acting through
its Cayman Islands Branch, Individually and
as a Joint Lead Arranger
By /s/
----------------------------
Name: Richard B. Carey
Title: Managing Director
By /s/
----------------------------
Name: Mark E. Gleason
Title: Director
CREDIT LYONNAIS NEW YORK BRANCH
By /s/
----------------------------
Name: Alexander Averbukh
Title: VP
-121-
<Page>
M&I MARSHALL & ILSLEY BANK
By /s/
----------------------------
Name: Ronald J. Carey
Title: Vice President
By /s/
----------------------------
Name: Stephen E. Kalmer
Title: Assistant Vice President
TRANSAMERICA BUSINESS CAPITAL
CORPORATION
By /s/
----------------------------
Name: Stephen K. Goetschius
Title: Senior Vice President
CIT LENDING SERVICES CORPORATION
By /s/
----------------------------
Name: John P. Sirico, II
Title: Vice President
NATIONAL CITY BANK
By /s/
----------------------------
Name: Andrew J. Pernsteiner
Title: Account Officer
PROTECTIVE LIFE INSURANCE COMPANY
By /s/
----------------------------
Name: Diane S. Griswold
Title: AVP
-122-
<Page>
SCHEDULE I
COMMITMENTS
<Table>
<Caption>
Term Loan Revolving Loan
Lender Commitment Commitment
- ------ -------------- --------------
Deutsche Bank Trust Company Americas $ 144,750,000 $ 14,625,000
Credit Suisse First Boston $ 144,750,000 $ 14,625,000
Wachovia Bank, National Association $ 0 $ 12,500,000
General Electric Capital Corporation $ 20,000,000 $ 12,500,000
Credit Lyonnais $ 15,000,000 $ 5,000,000
M&I Marshall & Ilsley Bank $ 3,000,000 $ 9,000,000
Protective Life Insurance Company 11,000,000 $ 0
Transamerica Business Capital Corporation $ 7,000,000 $ 3,500,000
CIT Lending Services Corporation $ 8,500,000 $ 1,750,000
National City Bank $ 6,000,000 $ 1,500,000
-------------- --------------
TOTAL: $ 360,000,000 $ 75,000,000
</Table>
<Page>
SCHEDULE II
LENDER ADDRESSES
<Table>
<Caption>
Lender Address
- ------ -------
Deutsche Bank Trust Company Americas Diane Rolfe
31 West 52nd Street
New York, NY 10019
Telephone No.: (646) 324-2194
Telecopier No.: (646) 324-7460
Email:diane.rolfe@db.com
Credit Suisse First Boston William O'Daly
11 Madison Avenue
New York, NY 10010
Telephone No.: (212) 325-1986
Telecopier No.: (212) 325-8615
Email:william.o'daly@csfb.com
Wachovia Bank, National Association Chris Hetterly
301 South College Street 6th Fl
Charlotte, NC 28288
Telephone No.: (704) 715-8024
Telecopier No.: (704) 715-8033
Email:christopher.hetterly@wachovia.com
General Electric Capital Corporation Laurent Paris
335 Madison Ave 12th Fl
NY, NY 10017
Telephone No.: (212) 370-8014
Telecopier No.: (212) 309-8783
Email:laurent.paris@gecapital.com
Credit Lyonnais Alexander Averbukh
1301 Ave of the Americas
NY, NY 10019
Telephone No.: (212) 261-7335
Telecopier No.: (212) 261-3375
Email:alex.averbukh@clamericas.com
M&I Marshall & Ilsley Bank Ronald Carey
770 North Water Street
Milwaukee, WI 53201
Telephone No.: (414) 765-7439
Telecopier No.: (414) 765-7625
Email:ron.carey@micorp.com
</Table>
<Page>
SCHEDULE II
<Table>
<Caption>
Lender Address
- ------ -------
Protective Life Insurance Company Diane Griswold
2801 Highway 280 South
Birmingham, AL 35223
Telephone No.: (205) 868-4427
Telecopier No.: (205) 868-3642
Email:Diane.Griswold@protective.com
Transamerica Business Capital Corporation Steve Goetschius
555 Theodore Fremd Ave
Suite C-301
Rye, NY 10580
Telephone No.: (914) 925-7234
Telecopier No.: (914) 921-9072
Email:steve.goetschius@tramsamerica.com
CIT Lending Services Corporation John P. Sirico
1 CIT Drive 3rd Fl
Livingston, NJ 07039
Telephone No.: (973) 422-5858
Telecopier No.: (973) 422-5822
Email:john.sirico@cit.com
National City Bank Andrew Pernsteiner
National City Center
PO Box 5756
Cleveland, OH 44101
Telephone No.: (216) 222-9400
Telecopier No.: (216) 222-0003
Email:andrew.pernsteiner@nationalcity.com
</Table>
<Page>
SCHEDULE III
REAL PROPERTIES
A. Owned Properties
(1) *2400 Curtiss Street, Downers Grove, Illinois
(2) *2324 Curtiss Street, Downers Grove, Illinois
(3) *634 Glenn Avenue, Wheeling, Illinois
(4) *7601 Rockville Road, Indianapolis, Indiana
(5) *6325 Morenci Trail, Indianapolis, Indiana
(6) *472 Andrew Higgins Drive (Square 136, Lots 10, 1, 2, & 3, and Square
136, Lots 1-7), New Orleans, Louisiana
(7) *1020 Constance Street (Square 136, Lots 11-21), New Orleans, Louisiana
(8) *1039 Constance Street (Square 137, Lot C), New Orleans, Louisiana
(9) *Lot Y Camp Street (Square 159), New Orleans, Louisiana
(10) *Lot J Andrew Higgins Drive (Square 135, Lots 1-6), New Orleans,
Louisiana
(11) *1000 Chain Drive, Morganton, North Carolina
(12) *1272 Dakota Drive, Grafton, Wisconsin
(13) *4701 West Greenfield Avenue, Milwaukee, Wisconsin
(14) *5555 South Moorland Road, New Berlin, Wisconsin
(15) Road 14, KM 25.3, Boulevard Los Llanos (Lot No. 2, Coamo Industrial
Area), Coamo, Puerto Rico
(16) 380 Mountain Grove Street, Bridgeport, Connecticut
(17) 499 Ocean Avenue, East Rockaway, New York
(18) 304 Main Street, Warren, Pennsylvania
(19) 250 Yarnell Industrial Park, Clinton, Tennessee
(20) Route 340 and 909 LD Avenue, Stuarts Draft, Virginia
* indicates mortgaged property.
<Page>
B. Leased Properties
(21) 2175 Union Place, Simi Valley, California
(22) 6040 Fletcher Avenue, Lincoln, Nebraska
(23) 510 Ocean Avenue, East Rockaway, New York
(24) 700 Progress Drive, Horsham, Pennsylvania
(25) 5150 International Drive, Cudahy, Wisconsin
(26) 14434 Best Avenue, Sante Fe Springs, California
(27) 201-A Wharton Circle, Atlanta, Georgia
(28) 2501 Allan Drive, Elk Grove Village, Illinois
(29) 3655 Brookham Drive, Grove City, Ohio
(30) 1105 Howard Street, Deer Park, Texas
(31) 9364 Wallsville Road, Houston, Texas
(32) 2495 Pipestone Road, Benton Harbor, Michigan
<Page>
SCHEDULE IV
Existing Indebtedness
1. SHORT TERM LOANS
a. Borrower: Changzhou Hansen Jianglang Transmissions Company
Limited
Lender: Agricultural Bank China Changzou Branch
Amount: An original principal amount of RMB 17,641,650
(approximately $2,138,381).
Rate: 5.85% per year
Expiry: One-year term loan with automatic renewal for a
period of five years from 4/2/02.
b. Borrower: Changzhou Hansen Jianglang Transmissions Company
Limited
Lender: Agricultural Bank China Changzou Branch
Amount: An original principal amount of RMB 12,000,000
(approximately $1,454,545).
Rate: 5.31% per year
Expiry: 12/31/02 with automatic annual renewal.
2. GUARANTEES
a. Borrower: Changzhou Hansen Jianglang Transmissions Company
Limited (the Note payable facility)
Lender: Agricultural Bank China Changzou Branch
Guarantor Rexnord Corporation (now known as Rexnord North
America Holdings Inc.).
Amount: An original principal amount of RMB 17,641,650
(approximately $2,138,381).
3. CAPTIAL LEASES
a. Lessee: Rexnord Corporation (now known as Rexnord North
America Holdings, Inc.
Lessor: Citicorp Vendor Finance
Amount: $44,000
Lease Term: 48 months (Initial payment made on 3/02)
Lessee: Stephan GmbH
Lessor: Invensys
Amount: Euro 29,500 per month (approximately $32,931)
Lease Term: 15 years
Present Value: Euro 3.24 million (approximately $3.62 million)
<Page>
4. INDUSTRIAL REVENUE BONDS
a. Rexnord Corporation (now known as Rexnord North America Holdings,Inc.)
Issuer: Anderson County Industrial Development Bonds,
Tennessee
Trustee: Bank of New York
Maturity Date: 10/1/09
Amount Outstanding: $1.34 million
5. LETTERS OF CREDIT
The attached chart lists letters of credit outstanding as of the
closing date.
<Page>
<Table>
<Caption>
DIV NATIONSBANK/BANK OF TYPE OPENING AMOUNT DOLLAR BENEFICIARY COUNTRY ISSUE DATE
AMERICA L/C NO. AMOUNT
CED 7401358 W USD 97,500.00 97,500.00 Signal Mountain Cement Company Domestic 3/5/1999
CED 7401810 W USD 84,700.00 84,700.00 Fuller Company Domestic 6/1/1999
CED 7402088 W USD 153,950.00 153,950.00 Fuller Company Domestic 6/18/1999
CED 7402106 W USD 7,480.00 7,480.00 Signal Mountain Cement Company Domestic 6/21/1999
CED 7402655 W USD 7,930.00 7,930.00 Signal Mountain Cement Company Domestic 9/17/1999
CED 7403193 W USD 8,095.00 8,095.00 Anhui Conch Cement Co., Ltd. China 1/20/2000
CED 7403624 W USD 52,160.00 52,160.00 Humboldt Wedag. Inc. Domestic 5/2/2000
CED 7404012 W USD 22,936.00 22,936.00 China National Chemical Consl. Corp. China 8/10/2000
CED 7404011 W USD 31,450.00 31,450.00 Fuller Company Domestic 8/10/2000
CED 7404424 W USD 8,095.00 8,095.00 Anhui Conch Cement Co., Ltd. China 11/8/2000
CED 7404425 W USD 34,248.00 34,248.00 Lafarge Corporation Domestic 11/8/2000
CED 7404423 W USD 8,095.00 8,095.00 Anhui Conch Cement Co., Ltd. China 11/8/2000
CED 7404692 W USD 30,502.00 30,502.00 F.L. Smidth Domestic 1/8/2001
CED 7404693 W USD 16,320.00 16,320.00 F.L. Smidth Domestic 1/8/2001
CED 7404691 W USD 10,970.00 10,970.00 F.L. Smidth Domestic 1/8/2001
CED 7404690 W USD 15,970.00 15,970.00 F.L. Smidth Domestic 1/8/2001
CED 7404733 W USD 30,750.00 30,750.00 Akcansa Cimento Sanayive Ticarel Turkey 1/12/2001
CED 7405008 W USD 15,285.00 15,285.00 Yunnan Phosphate Fertilizer Factory China 3/2/2001
CED 7405321 W USD 34,270.00 34,270.00 PCS Phosphate Company, Inc. Domestic 5/7/2001
CED 7405528 P USD 25,065.00 25,065.00 Krupp Polysius Corp. Domestic 6/27/2001
CED 7405917 W USD 29,600.00 29,600.00 Kawasaki Heavy Industries Ltd. Japan 11/5/2001
CED 7410511 DP USD 35,116.50 35,116.50 ChangZhi Iron & Steel (Group) Co., Ltd. China 10/14/2002
CED 7410632 W USD 16,388.00 16,388.00 ChangZhi Iron & Steel (Group) Co., Ltd. China 11/4/2002
<Caption>
EXPIRY DATE REXNORD REF. NO.
CED 3/31/2003 250026
CED 12/31/2002 250033
CED 12/31/2003 250035
CED 4/30/2003 250031
CED 8/31/2003 200110
CED 4/30/2003 200115 (to be cancelled -- pending reissuance)
CED 5/31/2003 250058
CED 12/31/2002 200140
CED 12/31/2003 250061
CED 3/31/2003 200115 Replacement for 7403193 pending cancellation
CED 10/31/2003 200158
CED 11/30/2003 250060 Replacement for 7403846 cancelled 10/12/00
CED 7/31/2004 200133-01/02/05/06/07
CED 7/31/2004 200133-08-01
CED 7/31/2004 200133-09/10-01
CED 7/31/2004 200133-11/12-01
CED 6/30/2006 200166
CED 1/31/2003 200179
CED 12/1/2003 200142
CED 3/31/2003 250063
CED 4/1/2006 200201
CED 1/31/2003 200235
CED 10/31/2004 200235
</Table>
<Page>
<Table>
<Caption>
DIV NATIONSBANK/BANK OF TYPE OPENING AMOUNT DOLLAR BENEFICIARY
AMERICA L/C NO AMOUNT
CED TOTAL 776,875.50
CORPORATE 7405662 P USD 1,465,000.00 1,215,000.00 FMC Corporation
CORPORATE TOTAL 1,215,000.00
DRIVES 973004 S USD 44,072.50 44,072.50 Lol 6 Associates Limited Partnership
DRIVES TOTAL 44,072.50
GRAND TOTAL 2,035,948.00
<Caption>
COUNTRY ISSUE DATE EXPIRY DATE REXNORD REF.NO.
CED TOTAL
CORPORATE Domestic 8/3/2001 10/1/2009 PT Components, Inc.
CORPORATE TOTAL
DRIVES Domestic 3/9/1998 1/1/2008 "Lease dld. 1/1/98"
DRIVES TOTAL
GRAND TOTAL
</Table>
<Page>
SCHEDULE V
ERISA
PART A: PLANS
DEFINED BENEFIT PLANS
Rexnord Non-Union Pension Plan (to be created effective as of the date hereof
from a spin-off of assets and liabilities from the Invensys Pension Plan)
Rexnord Union Pension Plan
IAM National Pension Plan (Multiemployer Plan); contributions provided per the
Collective Bargaining Agreement Between Prager Incorporated and the
International Association of Machinists and Aerospace Workers, Crescent City
Lodge 37 ("IAM") (Expires 2/6/05)
DEFINED CONTRIBUTION PLANS
Rexnord 401(k) Plan (to be established effective January 1, 2003)
Rexnord Corp. Savings and Investment Plan (Union Employees)
NON-QUALIFIED PLANS
Rexnord Deferred Compensation Plan
Rexnord Supplemental Pension Plan for US Employees
PART B: REPORTABLE EVENTS
The following Reportable Events will occur with respect to Invensys Pension Plan
as a result of the Transaction:
PBGC Reg. 4043.29 - Change in Contributing Sponsor
PBGC Reg. 4043.32 - Transfer of Benefit Liabilities
<Page>
<Table>
<Caption>
BORROWER BORROWER
DIRECT INDIRECT
SUBSIDIARY PARENT OWNERSHIP % OWNERSHIP %
- ------------------------------------------------------------------------------------------------------
Brook Hansen S.A. Rexnord France Holdings S.A.S. 0 100
Brook Hansen France Sales S.A.R.L. Rexnord France Holdings S.A.S. 0 100
Rexnord France S.A.R.L. Rexnord France Holdings S.A.S. 0 100
Einhundertsechsundzwanzigste Einhundertsfunfundzwanzigste
Verwaltungsgesellschaft Dammtor mbH Verwaltungsgesellschaft Dammtor
mbH 0 100
Rexnord GmbH Einhundertsechsundzwanzigste
Verwaltungsgesellschaft Dammtor
mbH 0 100
Stephen GmbH Einhundertsechsundzwanzigste
Verwaltungsgesellschaft Dammtor
mbH 0 100
Rexnord Kette GmbH Rexnord GmbH 0 100
Rexnord Marbett S.r.l. Rexnord Italy Holdings S.r.l. 0 100
Marbett 2 S.r.l. Rexnord Marbett S.r.l. 0 100
M.C.C. Holding B.V. Rexnord Netherlands Holdings B.V. 0 100
Addax, Inc. Rexnord North America Holdings,
Inc. 0 100
Betzdorf Chain Company Inc. Rexnord North America Holdings,
Inc. 0 100
PT Components, Inc. Rexnord North America Holdings,
Inc. 0 100
Rexnord Australia Pty Ltd. Rexnord North America Holdings,
Inc. 0 100
Rexnord Canada Limited Rexnord North America Holdings,
Inc. 0 100
Rexnord Conveyor Products Rexnord North America Holdings,
(WuXi) Co. Limited Inc. 0 100
Rexnord Export Sales Corporation Rexnord North America Holdings,
Inc. 0 100
Rexnord Germany - I Inc. Rexnord North America Holdings,
Inc. 0 100
Rexnord International Inc. Rexnord North America Holdings,
Inc. 0 100
Rexnord Puerto Rico Inc. Rexnord North America Holdings,
Inc. 0 100
Rexnord, Ltd. Rexnord North America Holdings,
Inc. 0 100
Rexnord Industrial, S.A. de C.V. Rexnord North America Holdings,
Inc.
PT Components, Inc.
Rexnord International Inc.
Betzdorf Chain Company Inc.
Rexnord Puerto Rico Inc. 0 100
</Table>
<Page>
<Table>
<Caption>
BORROWER BORROWER
DIRECT INDIRECT
SUBSIDIARY PARENT OWNERSHIP % OWNERSHIP %
- ------------------------------------------------------------------------------------------------------
Rexnord, S.A. de C.V. Rexnord North America Holdings,
Inc.
PT Components, Inc.
Rexnord International Inc.
Betzdorf Chain Company Inc.
Rexnord Puerto Rico Inc. 0 100
Stephen Drives Ltd. Rexnord Stephen GmbH & Co. KG 0 100
Rexnord Stephen GmbH & Co. KG Stephen GmbH (general partner), 0 100 (of
Rexnord Gernany Operations GmbH general
(limited partner) partner and
limited
partner)
Winfred Berg Licensco Inc. W.M. Berg Inc. 0 100
</Table>
<Page>
SCHEDULE VI
Subsidiaries
<Table>
<Caption>
BORROWER BORROWER
DIRECT INDIRECT
SUBSIDIARY PARENT OWNERSHIP % OWNERSHIP %
- --------------------------------------------------------------------------------------------------------
W.M. Berg Inc. Clarkson Industries,
Inc. 0 100
M.C.C. Deutschland Kette GmbH M.C.C. Holding B.V. 0 100
M.C.C. Nederland B.V. M.C.C. Holding B.V. 0 100
Precision Molding
Components Nederland B.V. M.C.C. Holdings B.V. 0 100
Rexnord B.V. M.C.C. Holdings B.V. 0 100
Rexnord M.C.C. Deutschland Kette GmbH M.C.C. Holdings B.V. 0 100
Clarkson Industries, Inc. RAC-I, Inc. 0 100
Prager Incorporated RAC-I, Inc. 0 100
Rexnord North America Holdings, Inc. RAC-I, Inc. 0 100
RBS China Holdings, L.L.C. RBS Acquisition
Corporation 0 100
Rexnord AB RBS Acquisition
Corporation 0 100
Rexnord Correntes Ltda. RBS Acquisition
Corporation 0 99.99
Rexnord do Brasil Industrial Ltda. RBS Acquisition
Corporation 0 99.99
Rexnord France Holdings S.A.S. RBS Acquisition
Corporation 0 100
Einhundertfiinfundzwanzigste RBS Acquisition
Verwaltungsgesellschaft Corporation 0 100
Dammtor mbH
Rexnord Italy Holdings S.r.l. RBS Acquisition
Corporation 0 100
Rexnord Netherlands Holdings B.V. RBS Acquisition
Corporation 0 100
Changzhou Hansen Jianglang Transmissions RBS China Holdings, L.L.C. 0 100
Company Limited
RAC-I, Inc. RBS North America, Inc. 0 100
Rexnord Finance B.V. RBS North America,
Inc.- 50%
RBS Acquisition
Corporation - 50% 0 100
RBS Acquisition Corporation Rexnord Corporation 100 0
RBS North America, Inc. Rexnord Corporation 100 0
Rexnord Belgium NV Rexnord Finance B.V. 0 100
</Table>
<Page>
SCHEDULE VII
Legal Names, Type of Organization, Jurisdiction of Organization
<Table>
<Caption>
ORGANIZATIONAL
LEGAL NAME OF TYPE OF REGISTERED IDENTIFICATION
CREDIT PARTY ORGANIZATION (Y/N) JURISDICTION LOCATION NUMBER
Addax, Inc. Corporation Y Nebraska Nebraska 814962
Betzdorf Chain Company Inc. Corporation Y Wisconsin Wisconsin 1B15971
Clarkson Industries, Inc. Corporation Y New York New York None
Prager Incorporated Corporation Y Louisiana Louisiana 12900040D
PT Components, Inc. Corporation Y Delaware Delaware 921104
RAC-I, Inc. Corporation Y Delaware Delaware 3589997
RBS Acquisition Corporation Corporation Y Delaware Delaware 3573731
RBS China Holdings, L.L.C. Limited Liability Y Delaware Delaware 3582309
Company
RBS Global, Inc. Corporation Y Delaware Delaware 3587253
RBS North America, Inc. Corporation Y Delaware Delaware 3587248
Rexnord Corporation Corporation Y Delaware Delaware 3573858
Rexnord Germany - I Inc. Corporation Y Delaware Delaware 2118244
Rexnord International Inc. Corporation Y Delaware Delaware 617726
Rexnord, Ltd. Corporation Y Nevada Nevada C2244-1970
Rexnord North America Corporation Y Delaware Delaware 2168721
Holdings, Inc.
</Table>
<Page>
<Table>
<Caption>
ORGANIZATIONAL
LEGAL NAME OF TYPE OF REGISTERED IDENTIFICATION
CREDIT PARTY ORGANIZATION (Y/N) JURISDICTION LOCATION NUMBER
Rexnord Puerto Rico Inc. Corporation Y Nevada Nevada C2958-1978
W.M. Berg Inc. Corporation Y Delaware Delaware 897281
Winfred Berg Licensco Inc. Corporation Y Delaware Delaware 2179999
</Table>
<Page>
SCHEDULE VIII
Existing Liens
CAPITAL LEASES
Lessee: Rexnord Corporation (now known as Rexnord North America
Holdings Inc.
Lessor: Citicorp Vendor Finance
Amount: $44,000
Lease Term: 48 months (Initial payment made on 3/02)
Collateral: Equipment: used Daewoo Puma CX 200, includes all tooling,
operations and attachments
Lessee: Stephan GmbH
Lessor: Invensys
Amount: Euro 29,500 per month (approximately $32,931)
Lease Term: 15 years
Present Value: Euro 3.24 million (approximately $3.62 million)
Collateral: Real property located at Ohsener Strasse 79-83, 31789 Hamen,
Germany
The attached chart outlines additional existing liens.
<Page>
<Table>
<Caption>
DEBTOR SECURED PARTY FILE # FILING DATE JURISDICTION
- ------------------------------------------------------------------------------------------------------------------------------------
Addax, Inc. CitiCapital Commercial Leasing Corporation 9901181806-5 12/7/01 NE Secretary of State
Box 81-167 2135 Cornbusker 10561 Barkley, Suite 250 Expires: 12/7/06
Highway Overland Park, KS 66212
Lincoln, NE 68501
Prager Inc. Pitney Bowes Credit Corporation 36-136821 3/12/99 LA - Orleans Parish
472 Howard Avenue 27 Waterview Drive Expires: 3/12/04
New Orleans, LA 70130 Shelton, CT 06484
Rexnord Corporation Dana Commercial Credit Corp. 9926460297 9/13/99 CA Secretary of State
14434 Best Avenue 1801 Richards Rd. Expires: 9/13/04
Santa Fe Springs, CA 90670 Toledo, OH 43607
Rexnord Corporation Citicorp Vendor Finance, Inc./Citicapital 0205060468 2/14/02 CA Secretary of State
2175 Union Place 1990 Vaughn Road, Suite 150 Expires: 2/14/07
Siml Valley, CA 93065 Kennesaw, GA 30144
Rexnord Corporation Meridian Leasing Corporation 11499925 10/25/01 DE Secretary of State
4701 W. Greenfield Avenue 570 Lake Cook Rd., Suite 300 Expires: 10/25/06
Milwaukee, WI 53214 Deerfield, IL 60015
Rexnord Corporation Dell Financial Services, L.P. 20181440 12/21/01 DE Secretary of State
4701 W. Greenfield Avenue 14050 Summit Drive Expires: 12/21/06
Milwaukee, WI 53214 Building A, Suite 101
Austin, TX 78758
Rexnord Corporation Meridian Leasing Corporation 20753552 3/5/02 DE Secretary of State
4701 W. Greenfield Avenue 570 Lake Cook Rd., Suite 300 Expires: 3/5/07
Milwaukee, WI 53214 Deerfield, IL 60015
Rexnord Corporation Storagetek Financial Services Corporation 20786792 3/27/02 DE Secretary of State
6325 Morenci Trail 1000 South McCaslin Blvd. Expires: 3/27/07
Indianapolis, IN 46268 Superior, CO 80027
Rexnord Corporation Meridian Leasing Corporation 21076466 4/9/02 DE Secretary of State
4701 W. Greenfield Avenue 570 Lake Cook Rd., Suite 300 Expires: 4/9/07
Milwaukee, WI 53214 Deerfield, IL 60015
Rexnord Corporation Meridian Leasing Corporation 21696354 6/10/02 DE Secretary of State
4701 W. Greenfield Avenue 570 Lake Cook Rd., Suite 300 Expires: 6/10/07
Milwaukee, WI 53214 Deerfield, IL 60015
Rexnord Corporation Forsythe/McArthur Associates, Inc. 22035701 8/13/02 DE Secretary of State
6325 Morenci Trail 5510 West Howard Street Expires: 8/13/07
Indianapolis, IN 46268 Skokie, IL 60077
Rexnord Corporation GFC Leasing 22094179 8/19/02 DE Secretary of State
5101 W. Beloit Road 2101 W. Beltline Highway Expires: 8/19/07
Milwaukee, WI 53214 Madison, WI 53701
<Caption>
DEBTOR COLLATERAL
- -----------------------------------------------------------
Addax, Inc. Equipment - Scissor Lift
Box 81-167 2135 Cornbusker
Highway
Lincoln, NE 68501
Prager Inc. Equipment - All equipment
472 Howard Avenue manufactured, sold or distributed by
New Orleans, LA 70130 Pitney Bowes Credit Inc., Monarch
marketing Systems Inc., Pitney Bowes
Credit Corp. and Dictaphone Corp. and
subject to lease dated 12/23/98.
Rexnord Corporation Equipment - One(1) Kalmar Forklift
14434 Best Avenue Model DCD 90-6
Santa Fe Springs, CA 90670
Rexnord Corporation Equipment - One (1) used Daewood
2175 Union Place Puma CX200
Simi Valley, CA 93065
Rexnord Corporation Equipment - All equipment leased by
4701 W. Greenfield Avenue Debtor under Supplement No. 37 to
Milwaukee, WI 53214 Master Lease Agreement dated
10/14/1982
Rexnord Corporation Equipment - All equipment leased by
4701 W. Greenfield Avenue Debtor under lease #001222471-004
Milwaukee, WI 53214 dated 12/19/01
Rexnord Corporation Equipment - All equipment leased by
4701 W. Greenfield Avenue Debtor under Supplement No. 38 to
Milwaukee, WI 53214 Master Lease Agreement dated
10/14/1982
Rexnord Corporation Equipment - All equipment financed
6325 Morenci Trail by Secured Party.
Indianapolis, IN 46268
Rexnord Corporation Equipment - All equipment leased by
4701 W. Greenfield Avenue Debtor under Supplement No. 39 to
Milwaukee, WI 53214 Master Lease Agreement dated
10/14/1982
Rexnord Corporation Equipment - All equipment leased by
4701 W. Greenfield Avenue Debtor under Supplement No. 40 to
Milwaukee, WI 53214 Master Lease Agreement dated
10/14/1982
Rexnord Corporation Equipment - All equipment leased by
6325 Morenci Trail Debtor under Master Equipment Lease
Indianapolis, IN 46268 Agreement No. F17632 dated 9/1/92
Rexnord Corporation Equipment - Canon Copier
5101 W. Deloit Road
Milwaukee, WI 53214
</Table>
<Page>
<Table>
<Caption>
DEBTOR SECURED PARTY FILE # FILING DATE
- ---------------------------------------------------------------------------------------------------------------------
Rexnord Corporation Meridian Leasing Corporation 22306110 9/9/02
4701 W. Greenfiled Avenue 570 Lake Cook Rd., Suite 300
Milwaukee, WI 53214 Deerfield, IL 60015 Expires: 9/9/07
Rexnord Corporation Raymond Leasing Corp., as assignee of 004160208 2/1/00
2521 Allan Drive Associated Material Handling Industries Inc.
Elk Grove Village, IL 60007 20 S. Canal Street Expires: 2/1/05
Greene, NY 13778
Rexnord Corporation Meridian Leasing Corporation 004338663 2/13/01
4701 W. Greenfiled Avenue 570 Lake Cook Rd., Suite 300
Milwaukee, WI 53214 Deerfield, IL 60015 Expires: 2/13/06
Rexnord Corporation Arthur Machinery, Inc. 004340049 2/15/01
2400 Curtiss Street 2501 Landmeier Road
Downers Grove, IL 60515-4037 Elk Grove Village, IL 60007 Expires: 2/15/06
Rexnord Corporation Mazak Corporation, as assignee of 004344198 2/23/01
2400 Curtiss Street Machinery Systems, Inc.
Downers Grove, IL 60515-4037 8025 Production Drive Expires: 2/13/06
Florence, KY 41042
Rexnord Corporation Meridian Leasing Corporation 004377498 4/27/01
4701 West Greenfiled Avenue 570 Lake Cook Rd., Suite 300
West Milwaukee, WI 53214 Deerfield, IL 60015 Expires: 4/27/06
Rexnord Corporation Newcourt Financial USA Inc., as assignee of 2196081 (original) 6/15/98 (original)
6325 Morenci Trail Amdahl Corporation Expires: 6/15/03
Indianapolis, IN 46268 111 Anza Blvd., Suite 200 2200580
Burlingame, CA 94010 (assignment) 7/13/98 (assignment)
Rexnord Corporation Meridian Leasing Corporation 2168061 (original) 1/20/98
4701 West Greenfield Avenue 570 Lake Cook Rd., Suite 300
West Milwaukee, WI 53214 Deerfield, IL 60015 Expires: 1/20/03
Rexnord Corporation Meridian Leasing Corporation 2213670 (original) 9/18/98(original)
4701 West Greenfield Avenue 570 Lake Cook Rd., Suite 300 Expires: 9/18/03
West Milwaukee, WI 53214 Deerfield, IL 60015
2216554 10/6/98 (amendment)
(amendment)
Rexnord Corporation Meridian Leasing Corporation 2221974 11/4/98(original)
4701 West Greenfield Avenue 570 Lake Cook Rd., Suite 300 (original) Expires: 11/4/03
West Milwaukee, WI 53214 Deerfield, IL 60015
2246816 3/26/99 (amendment)
(amendment)
<Caption>
DEBTOR JURISDICTION COLLATERAL
- --------------------------------------------------------------------------
Rexnord Corporation DE Secretary of State Equipment - All equipment leased by
4701 W. Greenfiled Avenue Debtor under Supplement No. 41 to
Milwaukee, WI 53214 Master Lease Agreement dated
10/14/1982
Rexnord Corporation IL Secretary of State Equipment - Easi Orderpicker and
2521 Allan Drive Douglas Battery
Elk Grove Village, IL 60007
Rexnord Corporation IL Secretary of State Equipment - All equipment leased by
4701 W. Greenfiled Avenue Debtor under Supplement No. 34 to
Milwaukee, WI 53214 Master Lease Agreement dated
10/14/1982
Rexnord Corporation IL Secretary of State Equipment - Machinery (various)
2400 Curtiss Street
Downers Grove, IL 60515-4037
Rexnord Corporation IL Secretary of State Equipment - One Mazak SQT 250MY
2400 Curtiss Street
Downers Grove, IL 60515-4037
Rexnord Corporation IL Secretary of State Equipment - All equipment leased by
4701 West Greenfiled Avenue Debtor under Supplement No. 36 to
West Milwaukee, WI 53214 Master Lease Agreement dated
10/14/1982
Rexnord Corporation IN Secretary of State Equipment - Informational Lease
6325 Morenci Trail Filing Only
Indianapolis, IN 46268
Rexnord Corporation IN Secretary of State Equipment - All equipment leased by
4701 West Greenfield Avenue Debtor under Supplement No. 27A to
West Milwaukee, WI 53214 Master Lease Agreement dated
10/14/1982
Rexnord Corporation IN Secretary of State Equipment - All equipment leased by
4701 West Greenfield Avenue Debtor under Supplement No. 28 to
West Milwaukee, WI 53214 Master Lease Agreement dated
10/14/1982
Rexnord Corporation IN Secretary of State Equipment - All equipment leased by
4701 West Greenfield Avenue Debtor under Supplement No. 26R to
West Milwaukee, WI 53214 Master Lease Agreement dated
10/14/1982
</Table>
<Page>
<Table>
<Caption>
DEBTOR SECURED PARTY FILE # FILING DATE
- -------------------------------------------------------------------------------------------------------------------
Rexnord Corporation Newcourt Financial USA Inc., as assignee of 2262797 6/15/99
6325 Morenci Trail Amdahl Corporation Expires: 6/15/04
Indianapolis, IN 46268 111 Anza Blvd., Suite 200
Burlingame, CA 94010
Rexnord Corporation Meridian Leasing Corporation 2279842 9/14/99
4701 West Greenfield Avenue 570 Lake Cook Rd., Suite 300 Expires: 9/14/04
West Milwaukee, WI 53214 Deerfield, IL 60015
Rexnord Corporation Crown Credit Company 2296341 12/20/99
7601 Rockville Road 44 S. Washington Street Expires: 12/20/04
Indianapolis, IN 46214 New Bremen, OH 45869
Rexnord Corporation Crown Credit Company 2300938 1/20/00
7601 Rockville Road 44 S. Washington Street Expires: 1/20/05
Indianapolis, IN 46214 New Bremen, OH 45869
Rexnord Corporation(Lessee) StorageTek Financial Services Corporation 2307575 2/25/00
6325 Morenci Trail (Lessor) Expires: 2/25/05
Indianapolis, IN 46206 1000 South McCaslin Blvd.
Superior, CO 80027
Rexnord Corporation Meridian Leasing Corporation 2312330 3/15/00
4701 West Greenfield Avenue 570 Lake Cook Rd., Suite 300 Expires: 3/15/05
West Milwaukee, WI 53214 Deerfield, IL 60015
Rexnord Corporation Meridian Leasing Corporation 2338294 7/27/00
4701 West Greenfield Avenue 570 Lake Cook Rd., Suite 300 Expires: 7/27/05
West Milwaukee, WI 53214 Deerfield, IL 60015
Rexnord Corporation Meridian Leasing Corporation 2355341 10/27/00
4701 West Greenfield Avenue 570 Lake Cook Rd., Suite 300 Expires: 10/27/05
West Milwaukee, WI 53214 Deerfield, IL 60015
Rexnord Corporation(Lessee) Dresdner Kleinwort Benson 2359115 11/15/00
6325 Morenci Trail North America Leasing, Inc., as assignee of Expires: 11/15/05
Indianapolis, IN 46206 Amdahl Corporation
75 Wall Street
New York, NY 10005
Rexnord Corporation Crown Credit Company 2372741 2/5/01
7601 Rockville Road 40 S Washington Street Expires: 2/1/06
Indianapolis, IN 46214 New Bremen, OH 45869
Rexnord Corporation Crown Credit Company 2372770 2/5/01
7601 Rockville Road 40 S Washington Street Expires: 2/1/06
Indianapolis, IN 46214 New Bremen, OH 45869
Rexnord Corporation Crown Credit Company 2372796 2/5/01
7601 Rockville Road 40 S Washington Street Expires: 2/1/06
Indianapolis, IN 46214 New Bremen, OH 45869
<Caption>
DEBTOR JURISDICTION COLLATERAL
- ----------------------------------------------------------------------------------------------
Rexnord Corporation IN Secretary of State Equipment - Informational Lease
6325 Morenci Trail Filing Only
Indianapolis, IN 46268
Rexnord Corporation IN Secretary of State Equipment - All equipment leased by
4701 West Greenfield Avenue Debtor under Supplement No. 29 to
West Milwaukee, WI 53214 Master Lease Agreement dated
10/14/82
Rexnord Corporation IN Secretary of State Equipment - Crown Lift Truck and
7601 Rockville Road related battery and charger
Indianapolis, IN 46214
Rexnord Corporation IN Secretary of State Equipment - Crown Lift Truck and
7601 Rockville Road related battery and charger
Indianapolis, IN 46214
Rexnord Corporation(Lessee) IN Secretary of State Equipment - Electronic Data
6325 Morenci Trail Processing
Indianapolis, IN 46206
Rexnord Corporation IN Secretary of State Equipment - All equipment leased by
4701 West Greenfield Avenue Debtor under Supplement No. 28R to
West Milwaukee, WI 53214 Master Lease Agreement dated
10/14/82
Rexnord Corporation IN Secretary of State Equipment - All equipment leased by
4701 West Greenfiled Avenue Debtor under Supplement No. 30 to
West Milwaukee, WI 53214 Master Lease Agreement dated
10/14/82
Rexnord Corporation IN Secretary of State Equipment - All equipment leased by
4701 West Greenfield Avenue Debtor under Supplement No. 32 to
West Milwaukee, WI 53214 Master Lease Agreement dated
10/14/82
Rexnord Corporation(Lessee) IN Secretary of State Equipment - Informational Lease
6325 Morenci Trail Filing Only
Indianapolis, IN 46206
Rexnord Corporation IN Secretary of State Equipment - One Crown Lift Truck
7601 Rockville Road
Indianapolis, IN 46214
Rexnord Corporation IN Secretary of State Equipment - One Crown Lift Truck
7601 Rockville Road
Indianapolis, IN 46214
Rexnord Corporation IN Secretary of State Equipment - One EZ-GO Lift Truck
7601 Rockville Road
Indianapolis, IN 46214
</Table>
<Page>
<Table>
<Caption>
DEBTOR SECURED PARTY FILE # FILING DATE
- -------------------------------------------------------------------------------------------------------------------
Rexnord Corporation Crown Credit Company 200100000077502 2/19/01
7601 Rockville Road 40 S Washington Street Expires: 2/19/06
Indianapolis, IN 46214 New Bremen, OH 45869
Rexnord Corporation Crown Credit Company 200100002891033 5/29/01
7601 Rockville Road 40 S Washington Street Expires: 5/29/06
Indianapolis, IN 46214 New Bremen, OH 45869
Rexnord Corporation Crown Credit Company 200100003595065 6/25/06
7601 Rockville Road 40 S Washington Street Expires: 6/25/06
Indianapolis, IN 46214 New Bremen, OH 45869
Rexnord Corporation Meridian Leasing Corporation 9901116300 2/12/01
4701 West Greenfield Avenue 570 Lake Cook Rd., Suite 300 Expires: 2/12/06
West Milwaukee, WI 53214 Deerfield, IL 60015
Rexnord Corporation Norstan Financial Services Inc. AP0084604 9/14/98
4040 Fondorf Drive 6900 Wedgwood Road Expires: 9/14/03
Columbus, OH 43228-1026 Suite 150
Maple Grove, MN 55311
Rexnord Corporation Raymond Corporation, as assignee AP0197121 11/19/99
3655 Brookham Drive of Storage Concepts, Inc. Expires: 11/19/04
Grove City, OH 43123 20 South Canal Street
Greene, NY 13778
Rexnord Corporation Raymond Leasing Corporation, as AP0198252 11/23/99
3655 Brookham Drive assignee of Storage Concepts, Inc. Expires: 11/23/04
Grove City, OH 43123 20 South Canal Street
Greene, NY 13778
Rexnord Corporation Raymond Leasing Corp., as assignee AP310528 12/18/00
3655 Gantz Drive of Storage Concepts, Inc. Expires: 12/18/05
Grove City, OH 43123 South Canal Street
Greene, NY 13779
Rexnord Corporation Pitney Bowes Credit Corp. 29350580 9/3/98
700 Enterprise Road 27 Waterview Drive Expires: 9/3/03
Horsham, PA 19044 Shelton, CT 06484
Rexnord Corporation Mellon US Leasing, as assignee of 30340098 6/3/99
304 Main Street Forsythe/McArthur Associates Expires: 6/3/04
Warren, PA 16365 525 Market Street
San Francisco, CA 94105
Rexnord Corporation Meridian Leasing Corporation 33200312 10/19/00
4701 West Greenfield Avenue 570 Lake Cook Rd., Suite 300 Expires: 10/19/05
West Milwaukee, WI 53214 Deerfield, IL 60015
Rexnord Corporation Meridian Leasing Corporation 33261218 10/19/00
4701 West Greenfield Avenue 570 Lake Cook Rd., Suite 300 Expires: 10/19/05
West Milwaukee, WI 53214 Deerfield, IL 60015
<Caption>
DEBTOR JURISDICTION COLLATERAL
- ----------------------------------------------------------------------------------------------
Rexnord Corporation IN Secretary of State Equipment - One Komatsu Lift Truck
7601 Rockville Road
Indianapolis, IN 46214
Rexnord Corporation IN Secretary of State Equipment - One Komatsu Lift Truck
7601 Rockville Road
Indianapolis, IN 46214
Rexnord Corporation IN Secretary of State Equipment - One EZ-Go Cart
7601 Rockville Road
Indianapolis, IN 46214
Rexnord Corporation NE Secretary of State Equipment - All equipment leased by
4701 West Greenfield Avenue Debtor under Supplement No. 34 to
West Milwaukee, WI 53214 Master Lease Agreement dated
10/14/82
Rexnord Corporation OH Secretary of State Equipment - Siemens Model 30 and
4040 Fondorf Drive Octel Telecommunications System
Columbus, OH 43228-1026
Rexnord Corporation OH Secretary of State Equipment - Raymond Orderpicker,
3655 Brookham Drive including battery and charger
Grove City, OH 43123
Rexnord Corporation OH Secretary of State Equipment - Raymond Orderpicker,
3655 Brookham Drive including battery and charger
Grove City, OH 43123
Rexnord Corporation OH Secretary of State Equipment - Raymond R30TT Reach,
3655 Gantz Drive including battery and charger
Grove City, OH 43123
Rexnord Corporation PA Secretary of the Equipment - All equipment
700 Enterprise Road Commonwealth manufactured, sold or distributed by
Horsham, PA 19044 Pitney Bowes Credit Inc., Monarch
marketing Systems Inc., Pitney Bowes
Credit Corp. and Dictaphone Corp. and
subject to lease dated 5/26/98.
Rexnord Corporation PA Secretary of the Equipment
304 Main Street Commonwealth
Warren, PA 16365
Rexnord Corporation PA Secretary of the Equipment - All equipment leased by
4701 West Greenfield Avenue Commonwealth Debtor under supplement No. 31 to
West Milwaukee, WI 53214 Master Lease Agreement dated
10/14/82
Rexnord Corporation PA Secretary of the Equipment - All equipment leased by
4701 West Greenfield Avenue Commonwealth Debtor under supplement No. 33 to
West Milwaukee, WI 53214 Master Lease Agreement dated
10/14/82
</Table>
<Page>
<Table>
<Caption>
DEBTOR SECURED PARTY FILE # FILING DATE
- -------------------------------------------------------------------------------------------------------------------
Rexnord Corporation Meridian Leasing Corporation 201054161 2/27/01
4701 West Greenfield Avenue 570 Lake Cook Rd., Suite 300 Expires: 2/27/06
West Milwaukee, WI 53214 Deerfield, IL 60015
Rexnord Corporation Pitney Bowes Credit Corp. 982081135 9/23/98
250 Yamell Ind. Pkwy. 27 Waterview Drive Expires: 9/23/03
Clinton, TN 37716 Shelton, CT 06484
Rexnord Corporation Ailco Financial Services, Inc. 011001481359 8/10/01
1217 Corporate Dr, West W222 N833 Cheaney Drive Expires: 9/10/06
Arlington, TX 76006 Waukesha, WI 53186
Rexnord Corporation Meridian Leasing Corporation 001107 7053 11/7/00
4701 West Greenfield Avenue 570 Lake Cook Rd., Suite 300 Expires: 11/7/05
West Milwaukee, WI 53214 Deerfield, IL 60015
Rexnord Corporation MTS 010214 7038 2/14/01
150 Johnson Drive 8848-D Red Oak Blvd. Expires: 2/14/06
Stuarts Draft, VA 24477 Charlotte, NC 28217
Rexnord Corporation Associates Commercial Corporation 980730 7130 7/30/98
Rts. 340 & 909 8001 Ridgepoint Drive Expires: 7/30/98
Stuarts Draft, VA 24477 Irving, TX 75063
Rexnord Corporation Norstan Financial Services, Inc. 1710895 10/28/97
4701 W. Greenfield Avenue 6900 Wedgwood Road, Suite 150 Expires: 10/28/02
Milwaukee, WI 53214 Maple Grove, MN 55311
Rexnord Corporation Citicorp Del Lease, Inc., as 1753110 4/21/98
4701 W. Greenfield Avenue assignee of W.T. Billard Inc. Expires: 4/21/03
Milwaukee, WI 53214 450 Mamaroneck Avenue
Harrison, NY 10528
Rexnord Corporation Dell Financial Services, L.P. 1772504 7/3/98
4501 W. Greenfield Avenue 14050 Summit Drive Expires: 7/3/03
Milwaukee, WI 53214 Building A. Suite 101
Austin, TX 78758
BTR PowerDrives (Rexnord Norstan Financial Services, Inc. 1811911 12/21/98
Corporation) 5101 Shady Oak Road Expires: 12/21/03
125 South 84th Street Minnetonka, MN 55343
Wauwalosa, WI 53214
Rexnord Corporation Pitney Bowes Credit Corp. 1822220 2/4/99
120 N Broadway 27 Waterview Drive Expires: 2/4/04
Milwaukee, WI 53202 Shelton, CT 06484
<Caption>
DEBTOR JURISDICTION COLLATERAL
- ----------------------------------------------------------------------------------------------
Rexnord Corporation TN Department of Equipment - All equipment leased by
4701 West Greenfield Avenue State Debtor under supplement No. 35 to
West Milwaukee, WI 53214 Master Lease Agreement dated
10/14/82
Rexnord Corporation TN Department of Equipment - All equipment
250 Yamell Ind. Pkwy. State manufactured, sold or distributed by
Clinton, TN 37716 Pitney Bowes Credit Inc., Monarch
marketing Systems Inc., Pitney Bowes
Credit Corp. and Dictaphone Corp. and
subject to lease dated 5/7/98.
Rexnord Corporation TX Secretary of State Furniture
1217 Corporate Dr, West
Arlington, TX 76006
Rexnord Corporation VA State Corporation Equipment - All equipment leased by
4701 West Greenfield Avenue Commission Debtor under supplement No. 33 to
West Milwaukee, WI 53214 Master Lease Agreement dated
10/14/82
Rexnord Corporation VA State Corporation Equipment
150 Johnson Drive Commission
Stuarts Draft, VA 24477
Rexnord Corporation VA State Corporation Equipment
Rts. 340 & 909 Commission
Stuarts Draft, VA 24477
Rexnord Corporation WI Dept. of Financial Equipment - Telecommunications
4701 W. Greenfield Avenue Institution System
Milwaukee, WI 53214
Rexnord Corporation WI Dept. of Financial Equipment
4701 W. Greenfield Avenue Institution
Milwaukee, WI 53214
Rexnord Corporation WI Dept. of Financial Equipment leased under that lease
4501 W. Greenfield Avenue Institution date 6/26/98.
Milwaukee, WI 53214
BTR PowerDrives (Rexnord WI Dept. of Financial Equipment - Telecommunications
Corporation) Institution Systems
125 South 84th Street
Wauwalosa, WI 53211
Rexnord Corporation WI Dept. of Financial Equipment - All equipment
120 N Broadway Institution manufactured, sold or distributed by
Milwaukee, WI 53202 Pitney Bowes Credit Inc., Monarch
marketing Systems Inc., Pitney Bowes
Credit Corp. and Dictaphone Corp. and
subject to lease dated 10/29/98.
</Table>
<Page>
<Table>
<Caption>
DEBTOR SECURED PARTY FILE # FILING DATE
- -------------------------------------------------------------------------------------------------------------------
Rexnord Corporation Pitney Bowes Credit Corp. 1822217 2/4/99
120 N Broadway 27 Waterview Drive Expires: 2/4/04
Milwaukee, WI 53202 Shelton, CT 06484
Rexnord Corporation Associates Leasing Inc. 1843315 4/30/99
4701 W. Greenfield Avenue 8001 Ridgepoint Drive Expires: 4/30/04
Milwaukee, WI 53214 Irving, TX 75063
Rexnord Corporation Dell Financial Services, LP 1852829 6/8/99
4501 W. Greenfield Avenue 14050 Summit Drive Expires: 6/8/04
Milwaukee, WI 53214 Building A, Suite 101
Austin, TX 78758
Rexnord Corporation Toyota Motor Credit Corporation 1856958 6/23/99
4851 W. Greenfield Avenue P.O. Box 3457 Expires: 6/23/04
Milwaukee, WI 53214 Torrance, CA 90510-3457
Rexnord Corporation Bankers/Softech/Mid-States 1864612 7/19/99
4501 W. Greenfield Avenue a Division of EAB Leasing Corp. Expires: 7/19/04
Milwaukee, WI 53214 4201 Lake Cook Road
Northbrook, IL 60062
Rexnord Corporation Crown Credit Company 1885078 9/27/99
4800 West Mitchell 44 W. Washington Street Expires: 9/27/04
Milwaukee, WI 53214 New Bremen, OH 45869
Rexnord Corporation American Industrial Leasing 1947970 4/20/00
4701 W. Greenfield Avenue P.O. Box 683 Expires: 4/20/05
Milwaukee, WI 53214 Brookfield, WI 53008
Rexnord Corporation American Industrial Leasing 1952991 5/4/00
4701 W. Greenfield Avenue P.O. Box 683 Expires: 5/4/05
Milwaukee, WI 53214 Brookfield, WI 53008
Rexnord Inc. Mellon Leasing 1972213 7/7/00
4800 W. Mitchell Street 100 Corporate North Expires: 7/7/05
Milwaukee, MI 53214 Bannockburn, IL 60015
Rexnord Corporation Dell Financial Services, L.P. 1973411 7/11/00
4501 W. Greenfield Avenue 14050 Summit Drive Expires: 7/11/05
Milwaukee, WI 53214 Building A, Suite 101
Austin, TX 78758
Rexnord Corporation American Industrial Leasing 1975688 7/19/00
4800 W. Mitchell Street P.O. Box 683 Expires: 7/19/05
Milwaukee, WI 53215 Brookfield, WI 53008
Rexnord Corporation St. Francis Bank, as assignee of American 2007673 11/8/00
4800 W. Mitchell Street Industrial Leasing (original) Expires: 11/8/05
Milwaukee, WI 53214 13400 Bishop Lane, Suite 350
Brookfield, WI 53005 2029043
(assignment)
<Caption>
DEBTOR JURISDICTION COLLATERAL
- ----------------------------------------------------------------------------------------------
Rexnord Corporation WI Dept. of Financial Equipment - All equipment
120 N Broadway Institution manufactured, sold or distributed by
Milwaukee, WI 53202 Pitney Bowes Credit Inc., Monarch
marketing Systems Inc., Pitney Bowes
Credit Corp. and Dictaphone Corp. and
subject to lease dated 10/29/98.
Rexnord Corporation WI Dept. of Financial Equipment - Forklift
4701 W. Greenfield Avenue Institution
Milwaukee, WI 53214
Rexnord Corporation WI Dept. of Financial Equipment leased under that lease
4501 W. Greenfield Avenue Institution dated 5/25/99.
Milwaukee, WI 53214
Rexnord Corporation WI Dept. of Financial Equipment - Forklifts
4851 W. Greenfield Avenue Institution
Milwaukee, WI 53214
Rexnord Corporation WI Dept. of Financial Equipment - Computer
4501 W. Greenfield Avenue Institution
Milwaukee, WI 53214
Rexnord Corporation WI Dept. of Financial Equipment - Lift Trucks
4800 West. Mitchell Institution
Milwaukee, WI 53201
Rexnord Corporation WI Dept. of Financial Equipment - Lift Trucks
4701 W. Greenfield Avenue Institution
Milwaukee, WI 53214
Rexnord Corporation WI Dept. of Financial Equipment - All equipment leased by
4701 W. Mitchell Street Institution Lessor to Lessee.
Milwaukee, WI 53214
Rexnord Inc. WI Dept. of Financial Equipment - Truck
4800 W. Greenfield Avenue Institution
Milwaukee, MI 53214
Rexnord Corporation WI Dept. of Financial Equipment leased under that certain
4501 W. Greenfield Avenue Institution lease dated 6/28/00
Milwaukee, WI 53214
Rexnord Corporation WI Dept. of Financial Equipment - Truck
4800 W. Mitchell Street Institution
Milwaukee, WI 53215
Rexnord Corporation WI Dept. of Financial Equipment - Truck and batteries
4800 W. Mitchell Street Institution
Milwaukee, WI 53214
</Table>
<Page>
<Table>
<Caption>
DEBTOR SECURED PARTY FILE # FILING DATE
- -------------------------------------------------------------------------------------------------------------------
Rexnord Corporation American Industrial Leasing 2009579 11/14/00
135 S. 84th Street P.O. Box 683 Expires: 11/14/05
Suite 111 Brookfield, WI 53008
Milwaukee, WI 53214
Rexnord Corporation Dell Financial Services, L.P. 2019513 12/20/00
4501 W. Greenfield Avenue 14050 Summit Drive Expires: 12/20/05
Milwaukee, WI 53214 Building A. Suite 101
Austin, TX 78758
Rexnord Corporation, Plastics Yamazen, Inc. 2026698 1/16/01
Division 735 E. Remington Road Expires: 1/16/06
1272 Dakota Drive Schaumburg, IL 60173
Grafton, WI 53204
Rexnord Corporation St. Francis Bank, as assignee of American 2029028 1/24/01
4800 W. Mitchell Street Industrial Leasing Expires: 1/24/06
Milwaukee, WI 53214 13400 Bishop Lane, Suite 350
Brookfield, WI 53005
Rexnord Corporation American Industrial Leasing 010004416419 09/14/01
4701 W. Greenfield Avenue P.O. Box 683 Expires: 9/14/06
Milwaukee, WI 53214 Brookfield, WI 53008
Rexnord Corporation Citicorp Vendor Finance, Inc., Pk/a 020010835825 6/4/02
4701 W. Greenfield Avenue Copelco Capital Inc. Expires: 6/4/07
Milwaukee, WI 53214 7165 SW Fir Loop
Suite 204
Tigard, OR 97223
WM Berg Inc. Colonial Pacific Leasing corporation, as 97021218 12/18/97
499 Ocean Avenue assignee of NIA National Leasing Inc. Expires: 12/18/02
E. Rockaway, NY 11518 140. Rt. 17
Paramus, NJ 07652
<Caption>
DEBTOR JURISDICTION COLLATERAL
- ----------------------------------------------------------------------------------------------
Rexnord Corporation WI Dept. of Financial Office Furniture
135 S. 84th Street Institution
Suite 111
Milwaukee, WI 53214
Rexnord Corporation WI Dept. of Financial Equipment leased under that certain
4501 W. Greenfield Avenue Institution lease dated 12/8/00
Milwaukee, WI 53214
Rexnord Corporation, Plastics WI Dept. of Financial Equipment - Brother CNC Tapping
Division Institution Center
1272 Dakota Drive
Grafton, WI 53204
Rexnord Corporation WI Dept. of Financial Equipment - Forklift
4800 W. Mitchell Street Institution
Milwaukee, WI 53214
Rexnord Corporation WI Dept. of Financial Furniture
4701 W. Greenfield Avenue Institution
Milwaukee, WI 53214
Rexnord Corporation WI Dept. of Financial Equipment - All equipment leased by
4701 W. Greenfield Avenue Institution Lessor to Lessee.
Milwaukee, WI 53214
WM Berg Inc. NY - Nassau County Equipment - Infoseal Model 2612
499 Ocean Avenue
E. Rockaway, NY 11518
</Table>
<Page>
SCHEDULE IX
Existing Investments
PART A
AFFILIATES
<Table>
<Caption>
AUTHORIZED ISSUED AND
AFFILIATE SHARES OUTSTANDING EQUITY OWNER
- --------- ---------- ----------- ------------
Accessoire 12,000 shares 12,000 shares MCC Holding B.V, - 2,999
Convoyeur
Chain SA
Synergy S.r.l, 10,400; Note: 10,400 Rexnord Marbett S.r.l. - 4,160
The equity
capital is
divided into
quotas
Tre. Bi, S.r.l. 26,000; Note: Approximately Rexnord Marbett S.r.l. - 12,740 quotas
The equity 26,000
capital is
divided into
quotas
</Table>
SUBSIDIARIES
Those investments in Subsidiaries set forth on Schedule VI.
PART B.
The following transactions will occur in connection with the Acquisition:
1. Belgium Acquisition
Each of RBS North America, Inc. ("North America") and RBS
Acquisition Corporation ("Acquisition") will contribute 1/2 of
the shares it holds of Rexnord Belgium NY to Rexnord Finance B.V.
("Finance").
Each of North America and Acquisition will sell 1/2 of the shares
it holds of Rexnord Belgium NV to Finance in exchange for notes.
<Page>
2. French Acquisition
Rexnord Corporation ("Borrower") will loan a portion of the
purchase price to Rexnord France Holdings S.A.S. in exchange of a
note. The note will be sold by the Borrower to Finance in
exchange for a note.
3. Italian Acquisition
Pursuant to a three-way agreement between Borrower, Acquisition
and Rexnord Italy Holdings S.r.l. ("Italy Holdings").
Acquisition will sell its shares of Rexnord Marbett S.r.l.
to Italy Holdings pursuant to an installment sale agreement.
Italy Holdings will issue one note to Acquisition. The note
will convert to equity in Italy Holdings.
4. Netherlands Acquisition
Borrower will loan money to Rexnord Netherlands Holdings B.V.
("Netherlands Holdings") and will receive two notes.
Borrower will sell the notes to Finance in exchange for two
notes.
Acquisition will acquire 1/3 of shares of MCC Holding B.V.
Acquisition will contribute its shares of MCC Holdings B.V. to
Netherlands Holdings.
5. German Acquisition
Acquisition will contribute cash to Rexnord Germany Holdings
GmbH.
Borrower will loan money to Rexnord Germany Operations GmbH in
exchange for a note.
Borrower will sell the note to Finance and receive another note.
<Page>
EXHIBIT A
FORM OF NOTICE OF BORROWING
[Date]
Deutsche Bank Trust Company Americas,
as Administrative Agent
for the Lenders party to the
Credit Agreement referred
to below
90 Hudson Street
Jersey City, New Jersey 07302
Attention:____________
Ladies and Gentlemen:
The undersigned, REXNORD CORPORATION (the "Borrower"), refers to the
Credit Agreement, dated as of November 25, 2002 (as amended, modified or
supplemented from time to time, the "Credit Agreement"; the capitalized terms
defined therein being used herein as therein defined), among RBS Global, Inc.
("Holdings"), the Borrower, the lenders from time to time party thereto (the
"Lenders"), General Electric Capital Corporation and Wachovia Bank, National
Association, as Co-Documentation Agents, and Deutsche Bank Securities Inc. and
Credit Suisse First Boston, acting through its Cayman Islands Branch, as Joint
Lead Arrangers and Joint Book Runners, and you, as Administrative Agent, and,
pursuant to Section 1.03(a) of the Credit Agreement, hereby gives you
irrevocable notice that the undersigned hereby requests a Borrowing under the
Credit Agreement, and in that connection sets forth below the information
relating to such Borrowing (the "Proposed Borrowing") as required by
Section 1.03(a) of the Credit Agreement:
(i) The Proposed Borrowing is to consist of [Term Loans]
[Revolving Loans] [Swingline Loans].
(ii) The aggregate principal amount of the Proposed Borrowing is
$________.
(iii) The Business Day of the Proposed Borrowing is [__________].(1)
(iv) The Loans to be made pursuant to the Proposed Borrowing shall
be initially maintained as [Base Rate Loans][Eurodollar Loans].
[(v) The initial Interest Period for the Proposed Borrowing is
________.](2)
- ----------
(1) Written notice (or telephonic notice promptly confirmed in writing) is
required prior to 12:00 Noon (New York time)(x) at least one Business
Day prior to each incurrence of Base Rate Loans and (y) at least three
Business Days prior to each incurrence of Eurodollar Loans.
(2) To be included for a Proposed Borrowing of Eurodollar Loans.
<Page>
Exhibit A
Page 2
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in the Credit
Agreement and the other Credit Documents are and will be true and correct
in all material respects, both before and after giving effect to the
Proposed Borrowing and to the application of the proceeds thereof, as
though made on such date, unless stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct in all material respects as of such earlier date; and
(B) no Default or Event of Default has occurred and is continuing, or
would result from such Proposed Borrowing or from the application of the
proceeds thereof.
Very truly yours,
REXNORD CORPORATION
By:
--------------------------
Name:
Title:
<Page>
EXHIBIT B-1
FORM OF TERM NOTE
$___________ New York, New York
[Date]
FOR VALUE RECEIVED, REXNORD CORPORATION, a Delaware corporation (the
"Borrower"), hereby promises to pay to ___________ or its registered assigns
(the "Lender"), in lawful money of the United States of America in immediately
available funds, at the office of Deutsche Bank Trust Company Americas (the
"Administrative Agent") initially located at 90 Hudson Street, Jersey City, New
Jersey 07302, on the Term Loan Maturity Date (as defined in the Credit Agreement
referred to below) the principal sum of ________ DOLLARS ($___) or, if less, the
aggregate unpaid principal amount of all Term Loans (as defined in the Credit
Agreement) made by the Lender pursuant to the Credit Agreement.
The Borrower also promises to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Credit Agreement.
This Note is one of the Term Notes referred to in the Credit
Agreement, dated as of November 25, 2002, among RBS Global, Inc., the Borrower,
the lenders from time to time party thereto (including the Lender), the
Administrative Agent, General Electric Capital Corporation and Wachovia Bank,
National Association, as Co-Documentation Agents, and Deutsche Bank Securities
Inc. and Credit Suisse First Boston, acting through its Cayman Islands Branch,
as Joint Lead Arrangers and Joint Book Runners (as amended, modified or
supplemented from time to time, the "Credit Agreement") and is entitled to the
benefits thereof and of the other Credit Documents (as defined in the Credit
Agreement). This Note is secured by the Security Documents (as defined in the
Credit Agreement) and is entitled to the benefits of the Guaranties (as defined
in the Credit Agreement). This Note is subject to voluntary prepayment and
mandatory repayment prior to the Term Loan Maturity Date, in whole or in part,
as provided in the Credit Agreement.
If an Event of Default (as defined in the Credit Agreement) shall
occur and be continuing, the principal of and accrued interest on this Note may
become or be declared to be due and payable in the manner and with the effect
provided in the Credit Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
REXNORD CORPORATION
By:
----------------------------
Name:
Title:
<Page>
EXHIBIT B-2
FORM OF REVOLVING NOTE
$ _________ New York, New York
[Date]
FOR VALUE RECEIVED, REXNORD CORPORATION, a Delaware corporation (the
"Borrower"), hereby promises to pay to ________ or its registered assigns (the
"Lender"), in lawful money of the United States of America in immediately
available funds, at the office of Deutsche Bank Trust Company Americas (the
"Administrative Agent") initially located at 90 Hudson Street, Jersey City, New
Jersey 07302, on the RF Maturity Date (as defined in the Credit Agreement
referred to below) the principal sum of ______ DOLLARS ($_____) or, if less, the
unpaid principal amount of all Revolving Loans (as defined in the Credit
Agreement) made by the Lender pursuant to the Credit Agreement.
The Borrower also promises to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Credit Agreement.
This Note is one of the Revolving Notes referred to in the Credit
Agreement, dated as of November 25, 2002, among RBS Global, Inc., the Borrower,
the lenders from time to time party thereto (including the Lender), the
Administrative Agent, General Electric Capital Corporation and Wachovia Bank,
National Association, as Co-Documentation Agents, and Deutsche Bank Securities
Inc. and Credit Suisse First Boston, acting through its Cayman Islands Branch,
as Joint Lead Arrangers and Joint Book Runners (as amended, modified or
supplemented from time to time, the "Credit Agreement") and is entitled to the
benefits thereof and of the other Credit Documents (as defined in the Credit
Agreement). This Note is secured by the Security Documents (as defined in the
Credit Agreement) and is entitled to the benefits of the Guaranties (as defined
in the Credit Agreement). This Note is subject to voluntary prepayment and
mandatory repayment prior to the RF Maturity Date, in whole or in part, as
provided in the Credit Agreement.
If an Event of Default (as defined in the Credit Agreement) shall
occur and be continuing, the principal of and accrued interest on this Note may
become or be declared to be due and payable in the manner and with the effect
provided in the Credit Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
REXNORD CORPORATION
By:
----------------------
Name:
Title:
<Page>
EXHIBIT B-3
FORM OF SWINGLINE NOTE
$________________ New York, New York
[Initial Borrowing Date]
FOR VALUE RECEIVED, REXNORD CORPORATION, a Delaware corporation (the
"Borrower"), hereby promises to pay to DEUTSCHE BANK TRUST COMPANY AMERICAS or
its registered assigns (the "Lender"), in lawful money of the United States of
America in immediately available funds, at the office of Deutsche Bank Trust
Company Americas (the "Administrative Agent") initially located at 90 Hudson
Street, Jersey City, New Jersey 07302, on the Swingline Expiry Date (as defined
in the Credit Agreement referred to below) the principal sum of __________
DOLLARS ($__________) or, if less, the unpaid principal amount of all Swingline
Loans (as defined in the Credit Agreement) made by the Lender pursuant to the
Credit Agreement.
The Borrower also promises to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Credit Agreement.
This Note is the Swingline Note referred to in the Credit Agreement,
dated as of November 25, 2002, among RBS Global, Inc., the Borrower, the lenders
from time to time party thereto (including the Lender), the Administrative
Agent, General Electric Capital Corporation and Wachovia Bank, National
Association, as Co-Documentation Agents, and Deutsche Bank Securities Inc. and
Credit Suisse First Boston, acting through its Cayman Islands Branch, as Joint
Lead Arrangers and Joint Book Runners (as amended, modified or supplemented from
time to time, the "Credit Agreement") and is entitled to the benefits thereof
and of the other Credit Documents (as defined in the Credit Agreement). This
Note is secured by the Security Documents (as defined in the Credit Agreement)
and is entitled to the benefits of the Guaranties (as defined in the Credit
Agreement). This Note is subject to voluntary prepayment and mandatory repayment
prior to the Swingline Expiry Date, in whole or in part, as provided in the
Credit Agreement.
If an Event of Default (as defined in the Credit Agreement) shall
occur and be continuing, the principal of and accrued interest on this Note may
become or be declared to be due and payable in the manner and with the effect
provided in the Credit Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
REXNORD CORPORATION
By:
----------------------
Name:
Title:
<Page>
EXHIBIT C
FORM OF LETTER OF CREDIT REQUEST
Dated _____(1)
Deutsche Bank Trust Company Americas, as
Administrative Agent under the Credit
Agreement (the "Credit Agreement"),
dated as of November 25, 2002, among
RBS Global, Inc., Rexnord Corporation,
the lenders from time to time party
thereto, Deutsche Bank Trust Company
Americas, as Administrative Agent,
General Electric Capital Corporation
and Wachovia Bank, National
Association, as Co-Documentation
Agents, and Deutsche Bank Securities
Inc. and Credit Suisse First Boston,
acting through its Cayman Islands
Branch, as Joint Lead Arrangers and
Joint Bank Runners
60 Wall Street
New York, New York 10005 - MS NYC 60-2708
Attention: Global Loan Operations
[Standby] Letter of Credit Unit
With a copy to:
Deutsche Bank Trust Company Americas
c/o DB SERVICES NEW JERSEY INC.
90 Hudson Street
5th Floor
Jersey City, New Jersey 07302
Attention:
Letter of Credit Issuer: ___(2)
- ----------
(1) Date of Letter of Credit Request.
(2) If Standby Letter of Credit is to be issued by Deutsche Bank Trust Company
Americas insert: Deutsche Bank Trust Company Americas, Global Loan
Operations, Standby Letter of Credit Unit, 60 Wall Street, New York,
New York 10005, MS NYC 60-2708. For Standby Letters of Credit to be issued
by other Letter of Credit insert name and address of applicable Letter of
Credit Issuer. For Trade Letters of Credit insert name and address of
applicable Letter of Credit Issuer other than Deutsche Bank Trust Company
Americas or its affiliates.
<Page>
Exhibit C
Page 2
Dear Ladies and Gentlemen:
We hereby request that the Letter of Credit Issuer, in its individual
capacity, issue a [Standby] [Trade] Letter of Credit for the account of the
undersigned on ______(3) (the "Date of Issuance"), which Letter of Credit shall
be denominated in ______(4) and shall be in the aggregate Stated Amount of
______(5).
For the purposes of this Letter of Credit Request, unless otherwise
defined herein, all capitalized terms used herein and defined in the Credit
Agreement shall have the respective meaning provided such terms in the Credit
Agreement.
The beneficiary of the requested Letter of Credit will be ______(6),
and such Letter of Credit will be in support of ______(7) and will have a stated
expiration date of ______(8).
We hereby certify that:
(1) the representations and warranties contained in the Credit
Agreement and in the other Credit Documents are and will be true and correct in
all material respects, both before and after giving effect to the issuance of
the Letter of Credit requested hereby, on the Date of Issuance (it being
understood and agreed that any representation or warranty which by its terms is
made as of a specified date shall be required to be true and correct in all
material respects only as of such specified date); and
(2) no Default or Event of Default has occurred and is continuing
nor, after giving effect to the issuance of the Letter of Credit requested
hereby, would such a Default or an Event of Default occur.
REXNORD CORPORATION
By:
----------------------
Name:
Title:
- ----------
(3) Date of Issuance, which shall be at least two [2] Business Days from the
date hereof (or such shorter period as is acceptable to the respective
Letter of Credit Issuer).
(4) Insert name of currency.
(5) Insert initial aggregate Stated Amount.
(6) Insert name and address of beneficiary.
(7) Insert description of supportable obligations in the case of Standby
Letters of Credit and insert description of trade obligations in the case
of Trade Letters of Credit.
(8) Insert the last date upon which drafts may be presented which may not be
later than the earlier of (x) (A) in the case of Standby Letters of Credit,
12 months after the date of issuance and (B) in the case of Trade Letters
of Credit, 180 days after the date of issuance and (y) the 10th Business
Day prior to the RF Maturity Date.
<Page>
EXHIBIT D
FORM OF SECTION 4.04 CERTIFICATE
Reference is hereby made to the Credit Agreement, dated as of
November 25, 2002, among RBS Global, Inc. ("Holdings"), Rexnord Corporation (the
"Borrower"), the Lenders from time to time party thereto, Deutsche Bank Trust
Company Americas, as Administrative Agent, General Electric Capital Corporation
and Wachovia Bank, National Association, as Co-Documentation Agents, and
Deutsche Bank Securities Inc. and Credit Suisse First Boston, acting through its
Cayman Islands Branch, as Joint Lead Arrangers and Joint Book Runners (as
amended from time to time, the "Credit Agreement"). Pursuant to the provisions
of Section 4.04(b)(ii) of the Credit Agreement, the undersigned hereby certifies
that (i) it is not a "bank" as such term is used in Section 881(c)(3)(A) of the
Internal Revenue Code of 1986, as amended and (ii) it meets all of the
requirements under Section 871(h) and Section 881(c) of the Code to be eligible
for a complete exemption from withholding of United States Taxes on interest
payments made to it under the Credit Agreement.
The undersigned shall promptly notify the Borrower and the
Administrative Agent if any of the representations and warranties made herein
are no longer true and correct.
[NAME OF LENDER]
By:
----------------------
Name:
Title:
Date: _______________, 200_
<Page>
EXHIBIT E
[LATHAM & WATKINS LETTERHEAD]
November 25,2002
To Deutsche Bank Trust Company Americas
31 West 52nd Street
New York, NY 10019
and
Each of the Lenders
Identified on Exhibit A hereto
Re: Credit Agreement dated as of November 25, 2002, by and among RBS
Global, Inc., Rexnord Corporation, the lenders party thereto,
Deutsche Bank Trust Company Americas, as administrative agent,
General Electric Capital Corporation and Wachovia Bank, National
Association as co-documentation agents, and Deutsche Bank
Securities Inc. and Credit Suisse First Boston, acting through
its Cayman Islands Branch, as joint lead arrangers and joint book
runners.
Ladies and Gentlemen:
We have acted as special counsel to Rexnord Corporation, a Delaware
corporation ("BORROWER"), RBS Global, Inc., a Delaware corporation ("HOLDINGS"),
PT Components, Inc., a Delaware corporation ("PT COMPONENTS"), RAC-I, Inc., a
Delaware corporation ("RAC-I"), RBS Acquisition Corporation, a Delaware
corporation ("RBS ACQUISITION"), RBS North America, Inc., a Delaware corporation
("RBS NORTH AMERICA"), Rexnord North America Holdings, Inc., a Delaware
corporation ("REXNORD NORTH AMERICA HOLDINGS"), Rexnord Germany - I Inc., a
Delaware corporation ("REXNORD GERMANY - I"), Rexnord International Inc., a
Delaware corporation ("REXNORD INTERNATIONAL"), Winfred Berg Licensco Inc., a
Delaware corporation ("WINFRED BERG LICENSCO"), W.M. Berg Inc., a Delaware
corporation ("W.M. BERG") (each of Borrower, Holdings, PT Components, RAC-I, RBS
Acquisition, RBS North America, Rexnord North America Holdings, Rexnord Germany
- - I, Rexnord International, Winfred Berg Licensco and W.M. Berg, a "DELAWARE
CORPORATE CREDIT PARTY" and, collectively, the "DELAWARE CORPORATE CREDIT
PARTIES"), RBS China Holdings, L.L.C., a Delaware limited liability company
("RBS CHINA HOLDINGS") (each of RBS China Holdings and the Delaware Corporate
Credit Parties, a "DELAWARE CREDIT PARTY" and, collectively, the "DELAWARE
CREDIT PARTIES"), Clarkson Industries Inc., a New York corporation ("CLARKSON")
(each of Clarkson and the Delaware Credit Parties, an "OPINION ENTITY" and,
collectively, the "OPINION ENTITIES"), Betzdorf Chain Company Inc., a Wisconsin
corporation ("BETZDORF CHAIN"), Prager Incorporated, a Louisiana corporation
("PRAGER"), Addax, Inc., a Nebraska corporation ("ADDAX"), Rexnord, Ltd., a
Nevada corporation ("REXNORD LTD."), and Rexnord Puerto Rico
<Page>
LATHAM & WATKINS
Deutsche Bank Trust Company Americas
and the Lenders indentified on Exhibit A
November 25, 2002
Page 2
Inc., a Nevada corporation ("REXNORD PUERTO RICO"), in connection with that
certain Credit Agreement (the "CREDIT AGREEMENT") dated as of November 25, 2002,
by and among Holdings, Borrower, the lenders party thereto (each, a "LENDER"
and, collectively, the "LENDERS"), Deutsche Bank Trust Company Americas, as
administrative agent for the Lenders, General Electric Capital Corporation and
Wachovia Bank, National Association as co-documentation agents, and Deutsche
Bank Securities Inc. and Credit Suisse First Boston, acting through its Cayman
Islands Branch, as joint lead arrangers and joint book runners.
PT Components, RAC-I, RBS Acquisition, RBS North America, Rexnord
North America Holdings, Rexnord Germany - I, Rexnord International, Winfred Berg
Licensco, W.M. Berg, RBS China Holdings, Clarkson, Betzdorf Chain, Prager,
Addax, Rexnord Ltd. and Rexnord Puerto Rico are referred to herein collectively
as the "SUBSIDIARY GUARANTORS." Holdings, Borrower and the Subsidiary Guarantors
are referred to herein collectively as the "CREDIT PARTIES."
This opinion is rendered to you pursuant to Section 5.01(b) of the
Credit Agreement. Capitalized terms defined in the Credit Agreement, used herein
and not otherwise defined herein, shall have the meanings given them in the
Credit Agreement.
As such special counsel, we have examined such matters of fact and
questions of law as we have considered appropriate for purposes this letter,
except where a specific fact confirmation procedure is stated to have been
performed (in which case we have, with your consent, performed the stated
procedure), and except where a statement is qualified as to knowledge or
awareness (in which case we have, with your consent, made no or limited inquiry
as specified below). We have examined, among other things, the following:
(a) the Credit Agreement;
(b) the Pledge Agreement (the "PLEDGE AGREEMENT") dated as of the
date hereof and executed by each of the Credit Parties in favor
of Deutsche Bank Trust Company Americas, acting as collateral
agent for the Secured Creditors (as defined in the Pledge
Agreement) (in such capacity, the "COLLATERAL AGENT");
(c) the Security Agreement dated as of the date hereof and executed
by each of the Credit Parties in favor of the Collateral Agent
(the "SECURITY AGREEMENT");
(d) the Term Notes dated as of the date hereof and executed by
Borrower;
(e) the Revolving Notes dated as of the date hereof and executed by
Borrower;
<Page>
LATHAM & WATKINS
Deutsche Bank Trust Company Americas
and the Lenders indentified on Exhibit A
November 25, 2002
Page 3
(f) the Swingline Note dated as of the date hereof and executed by
Borrower;
(g) the Subsidiaries Guaranty dated as of the date hereof and
executed by each of the Subsidiary Guarantors;
(h) the Subordination Agreement dated as of the date hereof and
executed by each of the Credit Parties;
(i) photocopies of the UCC financing statements each naming a
Delaware Credit Party as debtor and the Collateral Agent as
secured party, together with all schedules and exhibits to such
financing statements, to be filed in the Office of the Secretary
of State of the State of Delaware (the "DELAWARE FILING
OFFICE"), photocopies of which are attached hereto as Exhibit B
and incorporated herein by this reference (collectively, the
"DELAWARE FINANCING STATEMENTS");
(j) a photocopy of the UCC financing statement naming Clarkson as
debtor and the Collateral Agent as secured party, together with
all schedules and exhibits to such financing statement, to be
filed in the Office of the Secretary of State of the State of
New York (the "NEW YORK FILING OFFICE"), a photocopy of which is
attached hereto as Exhibit C and incorporated herein by this
reference (the "NEW YORK FINANCING STATEMENT");
(k) a copy of the Senior Subordinated Note Indenture (the "MATERIAL
AGREEMENT");
(l) a copy of the Certificate of Incorporation and a copy of the
Bylaws of each of Clarkson and the Delaware Corporate Credit
Parties; and
(m) a copy of the Certificate of Formation and a copy of the
Operating Agreement of RBS China Holdings.
The documents described in subsections (a)--(g) above are referred to
herein collectively as the "OPINION DOCUMENTS." The documents described in
subsections (a)-(h) above are referred to herein collectively as the "LOAN
DOCUMENTS." The documents described in subsection (l) and (m) above are referred
to herein collectively as the "GOVERNING DOCUMENTS." As used in this opinion,
the "NY UCC" shall mean the Uniform Commercial Code as now in effect in the
State of New York.
With your consent, we have relied upon the foregoing and certificates
of officers of the Credit Parties and others with respect to certain factual
matters. We have not independently verified such factual matters. Whenever a
statement herein is qualified by "to the
<Page>
LATHAM & WATKINS
Deutsche Bank Trust Company Americas
and the Lenders indentified on Exhibit A
November 25, 2002
Page 4
best of our knowledge" or a similar phrase, it is intended to indicate that
those attorneys in this firm who have rendered legal services in connection with
the Credit Agreement do not have current actual knowledge of the inaccuracy of
such statement. However, except as otherwise expressly indicated, we have not
undertaken any independent investigation to determine the accuracy of any such
statement.
We are opining herein as to the effect on the subject transactions
only of the federal laws of the United States, the internal laws of the State of
New York, the General Corporation Law of the State of Delaware (the "DGCL"), the
Limited Liability Company Act of the State of Delaware (the "DLLCA") and, with
respect to our opinions set forth in paragraph 6, we are opining as to the
effect on the subject transaction only of the Delaware UCC (as defined below),
and we express no opinion with respect to the applicability thereto, or the
effect thereon, of the laws of any other jurisdiction or, in the case of
Delaware, any other laws, or as to any matters of municipal law or the laws of
any local agencies within any state, or, except as expressly set forth in
paragraph 9 of this opinion, any laws which are applicable to the subject
transactions or the parties thereto because of the nature or extent of their
business or that of any of their affiliates.
With your permission, we have based our opinions set forth in
paragraph 6 exclusively upon our review of Article 9 of the Uniform Commercial
Code of the State of Delaware as set forth in the CCH SECURED TRANSACTIONS
GUIDE, as supplemented through February 26, 2002 (without regard to judicial
interpretations thereof or any regulations promulgated thereunder or any other
laws of the State of Delaware), and referred to herein as the "DELAWARE UCC." We
call to your attention that we are not licensed to practice in the State of
Delaware.
For purposes of this opinion, we have assumed, with your permission,
that: (i) all parties to the Loan Documents (other than the Opinion Entities)
are duly organized, validly existing and in good standing under the laws of
their respective jurisdictions of organization; (ii) all parties to the Loan
Documents (other than the Opinion Entities) have the requisite organizational
power and authority to execute and deliver each of the Loan Documents to which
they are a party, and to perform their respective obligations under each of the
Loan Documents to which they are a party; (iii) each of the Loan Documents to
which such parties are a party have been duly authorized, executed and delivered
by all such parties (other than the Opinion Entities); and (iv) each of the Loan
Documents constitutes a legally valid and binding obligation of each of the
parties thereto (other than, with respect to the Opinion Documents, the Credit
Parties), enforceable against such parties in accordance with its terms; and we
express no opinion herein as to such matters.
Our opinions set forth in paragraph 4 below are based upon our
consideration of only those statutes, rules and regulations which, in our
experience, are normally applicable to borrowers and guarantors in secured loan
transactions.
<Page>
LATHAM & WATKINS
Deutsche Bank Trust Company Americas
and the Lenders indentified on Exhibit A
November 25, 2002
Page 5
Subject to the foregoing and the other matters set forth herein, it is
our opinion that, as of the date hereof:
1. Each of the Delaware Corporate Credit Parties is a corporation
and is validly existing and in good standing under the laws of the State of
Delaware, with corporate power and authority to enter into the Loan Documents to
which it is a party and to perform its obligations thereunder. RBS China
Holdings is a limited liability company and is validly existing and in good
standing in the State of Delaware, with limited liability company power and
authority to enter into the Loan Documents to which it is a party and to perform
its obligations thereunder. Clarkson is a corporation and is validly existing
and in good standing under the laws of the State of New York, with corporate
power and authority to enter into the Loan Documents to which it is a party and
to perform its obligations thereunder.
2. The execution, delivery and performance of each of the Loan
Documents have been duly authorized by all necessary corporate or other
organizational action of each of the Opinion Entities which is a party thereto,
and the Loan Documents have been duly executed and delivered by each of the
Opinion Entities which is a party thereto.
3. Each of the Opinion Documents constitutes a legally valid and
binding obligation of each of the Credit Parties which is a party thereto,
enforceable against each of the Credit Parties which is a party thereto in
accordance with its terms.
4. The execution and delivery of the Opinion Documents by the
applicable Credit Party and the borrowing of the loans by the Borrower, the
requesting of letters of credit by the Borrower, the making of the guaranties by
Holdings and the Subsidiary Guarantors and the granting of liens by the Credit
Parties, in each case pursuant to the Loan Documents, do not on the date hereof:
(a) to the best of our knowledge of the applicable facts, violate any federal or
New York statute, rule or regulation applicable to any Credit Party (including,
without limitation, Regulations T, U or X of the Board of Governors of the
Federal Reserve System, assuming the Credit Parties comply with the provisions
of the Loan Documents relating to the use of proceeds) or the DGCL or DLLCA; (b)
violate the provisions of the Governing Documents; (c) result in a breach of or
a default under the Material Agreement; or (d) to the best of our knowledge of
the applicable facts, require any consents, approvals, authorizations,
registrations, declarations or filings by any of the Credit Parties under any
federal or New York statute, rule or regulation applicable to any Credit Party
except filings and recordings required in order to perfect or otherwise protect
the security interests under the Loan Documents. No opinion is expressed in
clauses (a) and (d) of this paragraph 4 as to the application of Section 547 and
548 of the federal Bankruptcy Code and comparable provisions of state law or
under other laws customarily excluded from such opinions, including any
antifraud laws, securities laws, antitrust or trade regulation laws or the
Public Utility Holding Company Act of 1935, as amended.
<Page>
LATHAM & WATKINS
Deutsche Bank Trust Company Americas
and the Lenders indentified on Exhibit A
November 25, 2002
Page 6
5. The Security Agreement creates a valid security interest in favor
of the Collateral Agent for the benefit of the Secured Creditors (as defined in
the Security Agreement) in that portion of the collateral described in
Section 3.1 of the Security Agreement in which any Credit Party has rights and a
valid security interest may be created under Article 9 of the NY UCC (the
"SECURITY COLLATERAL"). The Pledge Agreement creates a valid security interest
in favor of the Collateral Agent for the benefit of the Secured Creditors (as
defined in the Pledge Agreement) in that portion of the collateral described in
Section 1 of the Pledge Agreement in which any Credit Party has rights and a
valid security interest may be created under Article 9 of the NY UCC ( the
"PLEDGED COLLATERAL" and, together with the Security Collateral, the
"COLLATERAL").
6. The Delaware Financing Statements are in appropriate form for
filing in the Delaware Filing Office. Upon the proper filing of the Delaware
Financing Statements in the Delaware Filing Office and the payment of any
applicable filing fees, the security interest in favor of the Collateral Agent
for the benefit of the Secured Creditors in the Collateral described in the
Delaware Financing Statements will be perfected to the extent a security
interest in such Collateral can be perfected under the Delaware UCC by the
filing of a financing statement in that office.
7. The New York Financing Statement is in appropriate form for
filing in the New York Filing Office. Upon the proper filing of the New York
Financing Statement in the New York Filing Office and the payment of any
applicable filing fees, the security interest in favor of the Collateral Agent
for the benefit of the Secured Creditors in the Collateral described in the New
York Financing Statement will be perfected to the extent a security interest in
such Collateral can be perfected under the NY UCC by the filing of a financing
statement in that office.
8. Upon delivery of the certificates in registered form representing
the shares of capital stock listed on Exhibit D hereto ( the "PLEDGED
SECURITIES") to the Collateral Agent in, and while located in, the State of New
York, pursuant to the Pledge Agreement, indorsed to the Collateral Agent or in
blank, in each case, by an effective endorsement, or accompanied by undated
stock powers with respect thereto duly indorsed in blank by an effective
endorsement, the security interest in favor of the Collateral Agent for the
benefit of the Secured Creditors (as defined in the Pledge Agreement) in the
Pledged Securities will be perfected. The Collateral Agent's security interest
in the Pledged Securities has priority over any other security interest in the
Pledged Securities granted by the Credit Parties assuming no other secured party
has control of, and in the absence of any other control agreement with respect
to, the Pledged Securities.
9. None of the Credit Parties is an "investment company" as such
term in defined in the Investment Company Act of 1940, as amended.
<Page>
LATHAM & WATKINS
Deutsche Bank Trust Company Americas
and the Lenders indentified on Exhibit A
November 25, 2002
Page 7
The opinions expressed in paragraphs 3 and 4 above do not include any
opinions with respect to the creation, validity, perfection or priority of any
security interest or lien. The opinions expressed in paragraphs 5, 6 and 7 above
do not include any opinions with respect to the priority of any security
interest or lien.
The opinions expressed in paragraphs 3 and 4, and the opinions
expressed in paragraphs 5, 6, 7 and 8 as to the creation, validity, perfection
and priority, as applicable, of the security interests and liens referred to
therein, are further subject to the following limitations, qualifications, and
exceptions:
(a) the effect of bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to or affecting the
rights or remedies of creditors generally, including, without limitation, the
effect on upstream guarantees of Section 548 of the Federal Bankruptcy Code and
comparable provisions of state law;
(b) the effect of general principles of equity, whether enforcement
is considered in a proceeding in equity or at law (including the possible
unavailability of specific performance or injunctive relief), concepts of
materiality, reasonableness, good faith and fair dealing, and the discretion of
the court before which any proceeding therefor may be brought;
(c) we express no opinion with respect to the enforceability of: (i)
consents to, or restrictions upon, judicial relief or jurisdiction or venue;
(ii) advance waivers of claims, defenses, rights granted by law, or notice,
opportunity for hearing, evidentiary requirements, statutes of limitation, trial
by jury or other procedural rights; (iii) provisions for exclusivity, election
or cumulation of rights or remedies; (iv) restrictions upon non-written
modifications and waivers; (v) provisions authorizing or validating conclusive
or discretionary determinations; (vi) grants of setoff rights; (vii) provisions
to the effect that a guarantor is liable as a primary obligor, and not as a
surety; (viii) proxies, powers and trusts; (ix) provisions prohibiting,
restricting or requiring consent to the assignment or transfer of any right or
property; and (x) provisions for liquidated damages, default interest, late
charges, monetary penalties, prepayment or make whole premiums or other economic
remedies;
(d) the unenforceability under certain circumstances under law or
court decisions of provisions providing for the indemnification of or
contribution to a party with respect to a liability where such indemnification
or contribution is contrary to public policy;
(e) the unenforceability of any provision requiring the payment of
attorney's fees, except to the extent that a court determines such fees to be
reasonable; and
(f) we express no opinion with respect to the enforceability of any
Loan Document insofar as it purports to grant a security interest in, or a
conditional collateral assignment of, the leases, licenses, permits, contracts,
property rights and agreements described
<Page>
LATHAM & WATKINS
Deutsche Bank Trust Company Americas
and the Lenders indentified on Exhibit A
November 25, 2002
Page 8
therein which by their terms require the consent of the other party or parties
to such leases, licenses, permits, contracts, property rights or agreements or
of any third party to any such grant.
The opinions set forth above are also subject to (i) the
unenforceability of contractual provisions waiving or varying the rules listed
in Section 9-602 of the NY UCC, (ii) the unenforceability under certain
circumstances of contractual provisions respecting self-help or summary remedies
without notice of opportunity for hearing or correction, (iii) the effect of
provisions of the NY UCC, which require a secured party, in any disposition of
personal property collateral, to act in good faith and a commercially reasonable
manner and (iv) the unenforceability of contractual provisions purporting to
select the law governing the perfection, effect of perfection or non-perfection
or priority of any security interest.
In rendering the opinions expressed in paragraph 4 insofar as they
require interpretation of the Material Agreement (i) we have assumed with your
permission that all courts of competent jurisdiction would enforce such
agreement as written and would apply the internal laws of the State of New York
without giving effect to any choice of law provisions which would result in
application of the internal laws of any other state, (ii) to the extent that any
questions of legality or legal construction have arisen in connection with our
review, we have applied the laws of the State of New York in resolving such
questions, (iii) we express no opinion with respect to the effect of any action
or inaction by the Borrower under the Opinion Documents or the Material
Agreement which may result in a breach or default under the Material Agreement,
and (iv) we express no opinion with respect to any matters which require us to
perform a mathematical calculation or make a financial or accounting
determination.
Our opinions in paragraphs 5, 7 and 8 above are limited Article 8 and
Article 9 of the NY UCC and our opinion in paragraph 6 above is limited to
Article 9 of Delaware UCC, and, therefore, those opinion paragraphs, among other
things, do not address collateral of a type not subject to, or excluded from,
the coverage of Article 8 and Article 9 of the NY UCC or Article 9 of the
Delaware UCC, as applicable. Additionally:
(i) we express no opinion with respect to (a) the priority of any
security interest except as expressly set forth in paragraph 8 and (b) any
agricultural lien or any collateral that consists of goods covered by a
certificate of title, consumer goods, crops growing or to be grown, timber to be
cut, goods which are or are to become fixtures, as-extracted collateral,
commercial tort claims, claims against any government or governmental agency or
cooperative interests;
(ii) we assume the descriptions of collateral contained in, or
attached as schedules to, the Opinions Documents sufficiently describe the
collateral intended to be covered by the Opinion Documents, and we express no
opinion as to whether the phrases "all personal property" or "all assets" or
similar general phrases would sufficiently describe the collateral or a
particular item or items of collateral;
<Page>
LATHAM & WATKINS
Deutsche Bank Trust Company Americas
and the Lenders indentified on Exhibit A
November 25, 2002
Page 9
(iii) we have assumed that each of the Credit Parties has "rights"
in the Collateral and that "value" has been given, as contemplated by
Section 9-203 of the NY UCC;
(iv) we call to your attention the fact that the perfection of a
security interest in "proceeds" (as defined in the NY UCC or the Delaware UCC,
as applicable) of collateral is governed and restricted by Section 9-315 of the
NY UCC or Section 9-315 of the Delaware UCC, as applicable;
(v) we have assumed that the exact legal name of each of the
Opinion Entities is as set forth in the copy of the organizational documents
certified by the Secretary of State of the State of Delaware or the Secretary of
State of the State of New York, as applicable;
(vii) section 552 of the federal Bankruptcy Code limits the extent
to which property acquired by a debtor after the commencement of a case under
the federal Bankruptcy Code may be subject to a security interest arising from a
security agreement entered into by the debtor before the commencement of such
case;
(viii) we express no opinion as to the creation or perfection of any
security interest in any patents, trademarks, copyrights, trade names and any
other type of intellectual property and any agreements, documents or instruments
relating thereto;
(ix) we call to your attention that the right of the Collateral
Agent, for the benefit of the Secured Parties, to become a member of RBS China
Holdings or a member or partner in any other partnership, limited partnership or
limited liability company may be limited by applicable law and that the only
remedy available to the Collateral Agent, for the benefit of the Secured
Parties, may be the right to receive distributions to which RBS Acquisition is
otherwise entitled;
(x) we express no opinion with respect to the security interest of
the Collateral Agent for the benefit of any Secured Party other than the Lenders
except to the extent that the Secured Party has been or will be duly appointed
as agent for such persons;
(xi) we express no opinion with respect to any property subject to
a statute, regulation or treaty of the United States whose requirements for a
security interest's obtaining priority over the rights of a lien creditor with
respect to the property preempt Section 9-310(a) of the NY UCC or the Delaware
UCC, as applicable;
(xii) we express no opinion with respect to any goods which are
accessions to, or commingled or processed with, other goods to the extent that
the security interest is limited by Section 9-355 or 9-336 of the NYUCC or the
Delaware UCC, as applicable;
(xiii) we express no opinion as to the priority of the security
interest as against any lien creditor to the extent that such security interest
purports to secure any advances or other
<Page>
LATHAM & WATKINS
Deutsche Bank Trust Company Americas
and the Lenders indentified on Exhibit A
November 25, 2002
Page 10
obligations other than those that are made without knowledge of the lien or
pursuant to a commitment entered into without knowledge of the lien; and
(xiv) we call to your attention that in the case of licenses or
permits issued by governmental authorities, the Credit Parties may not have
sufficient rights therein for the security interest of the Collateral Agent to
attach and even if the applicable Credit Party has sufficient rights for the
security interest to attach, exercise of remedies may be limited by the terms of
the license or permit or require the consent of the governmental authority
issuing such license or permit.
This opinion is rendered only to you and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose, or furnished to, quoted to or relied upon by
any other person, firm or corporation for any purpose, without our prior written
consent. At your request, we hereby consent to reliance hereon by any future
participants in or assigns of your interests in the Credit Agreement which are
expressly permitted by Section 12.04 of the Credit Agreement, provided that such
participants and assigns are hereby notified that this opinion is subject to the
limitations and qualifications contained herein and speaks only as of the date
hereof and to its addressees, and that we have no responsibility or obligation
to update this opinion, to consider its applicability or correctness to any
Person other than its addressees, or to take into account changes in law, facts
or any other development of which we may later become aware.
Very truly yours,
/s/ Latham & Watkins
<Page>
LATHAM & WATKINS
Deutsche Bank Trust Company Americas
and the Lenders indentified on Exhibit A
November 25, 2002
Page 11
EXHIBIT A
LENDERS
Credit Suisse First Boston
11 Madison Avenue
New York, NY 10010
Telephone No.: (212) 325-1986
Telecopier No.:(212) 325-8615
Wachovia Bank, National Association
301 South College Street 6th Fl
Charlotte, NC 28288
Telephone No.: (704) 715-8024
Telecopier No.:(704) 715-8033
General Electric Capital Corporation
335 Madison Ave 12th Fl
NY, NY 10017
Telephone No.: (212) 370-8014
Telecopier No.:(212) 309-8783
Credit Lyonnais
1301 Ave of the Americas
NY, NY 10019
Telephone No.: (212) 261-7335
Telecopier No.:(212) 261-3375
M&I Marshall & IIsley Bank
770 North Water Street
Milwaukee, WI 53201
Telephone No.: (414) 765-7439
Telecopier No.: (414) 765-7625
Protective Life Insurance Company
2801 Highway 280 South
Birmingham, AL 35223
Telephone No.: (205) 868-4427
Telecopier No.:(205) 868-3642
<Page>
LATHAM & WATKINS
Deutsche Bank Trust Company Americas
and the Lenders indentified on Exhibit A
November 25, 2002
Page 12
Transamerica Business Capital Corporation
555 Theodore Fremd Ave
Suite C-301
Rye, NY 10580
Telephone No.: (914) 925-7234
Telecopier No.:(914) 921-9072
CIT Lending Services Corporation
1 CIT Drive 3rd Fl
Livingston, NJ 07039
Telephone No.: (973) 422-5858
Telecopier No.:(973) 422-5822
National City Bank
National City Center
PO Box 5756
Cleveland, OH 44101
Telephone No.: (216) 222-9400
Telecopier No.:(216) 222-0003
<Page>
LATHAM & WATKINS
Deutsche Bank Trust Company Americas
and the Lenders indentified on Exhibit A
November 25, 2002
Page 13
EXHIBIT B
DELAWARE FINANCING STATEMENTS
SEE ATTACHED 84 PAGES
<Page>
UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER [optional]
B. SEND ACKNOWLEDGMENT TO: (Name and Address)
Lexis Document Services
PO Box 2969
Sp, IL
THE ABOVE SPACE IS FOR FILLING OFFICE USE ONLY
1. DEBTOR'S EXACT FULL LEGAL NAME - Insert only one debtor name(1a or 1b) - do
not abbreviate or combine names
1a. ORGANIZATION'S NAME
Rexnord Germany-I Inc.
OR 1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
4701 West Greenfield Avenue MILWAUKEE WI 53214 USA
1d. TAX ID # SSN OR EIN ADD'NL. INFO RE
ORGANIZATION
DEBTOR
1e. TYPE OF ORGANIZATION
CORP
1f. JURISDICTION OF ORGANIZATION
DE
1g. ORGANIZATIONAL ID #, if any
/ / NONE
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name
(2a or 2b) - do not abbreviate or combine names
2a. ORGANIZATION'S NAME
OR 2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
2d. TAX ID # SSN OR EIN ADD'NL. INFO RE
ORGANIZATION
DEBTOR
2e. TYPE OF ORGANIZATION
2f. JURISDICTION OF ORGANIZATION
2g. ORGANIZATIONAL ID #, if any
/ / NONE
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSINGNOR S/P) - insert
only ONE selected party name (3a or 3b)
3a. ORGANIZATION'S NAME
Deutsche Bank Trust Company Americas, as Collateral Agent
OR 3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
31 West 52nd Street NEW YORK NY 10019 USA
4. This FINANCING STATEMENT covers the following collateral:
All assets of the Debtor, including, without limitation, as set forth on
Schedule I attached hereto and made a part hereof.
5. ALTERNATIVE DESIGNATION if applicable:
/ / LESSEE/LESSOR
/ / CONSIGNEE/CONSIGNOR
/ / BAILEE/BAILOR
/ / SELLER/BUYER
/ / AG LIEN
/ / NON-UCC FILING
6. / / The FINANCING STATEMENT is to be filed (for record) (or records) in the
REAL ESTATE RECORDS Attach Addendrum (if applicable)
7. Check to REQUEST SEARCH REPORT(S) ON All Debtor(s)
[ADDITIONAL FEE] (optional)
/ / All Debtors
/ / Debtor 1
/ / Debtor 2
8. OPTIONAL FILER REFERENCE DATA
DE-SOS
FILING OFFICE COPY - NATIONAL UCC FINANCING STATEMENT (FORM UCC1)
(REV. 07/29/98)
LexisNexis Document Solutions
[ILLEGIBLE]
<Page>
SCHEDULE I
TO UCC-I FINANCING STATEMENT
BY
REXNORD GERMANY-I INC, AS DEBTOR
IN FAVOR OF
DEUTSCHE BANK TRUST COMPANY AMERICAS, AS COLLATERAL AGENT, SECURED PARTY
1. This Financing Statement is presented to a Filing Officer for filing
pursuant to the Uniform Commercial Code.
2. This Financing Statements covers all of the rights, title and interest
of the Debtor in, to and under all assets, whether now existing or hereafter
from time to time acquired by the Debtor, including without limitation all of
the following (whether now existing or hereafter form time to time acquired by
the Debtor):
(i) each and every Account;
(ii) all cash;
(iii) the Cash Collateral Account and all monies, securities,
Instruments and other investments deposited or required to be
deposited in the Cash Collateral Account;
(iv) all Chattel Paper (including, without limitations, all
Tangible Chattel Paper and all Electronic Chattel Paper);
(v) all Commercial Tort Claims;
(vi) all computer programs of the Debtors and all intellectual
property rights therein and all other proprietary information
of the Debtor, including, but not limited Domain Names and
Trade Secret Rights;
(vii) all Contracts, together with all Contract Rights arising
thereunder;
(viii) all Copyrights;
(ix) all Equipments;
(x) all Documents;
(xi) all General Intangibles;
(xii) all Goods;
(xiii) all Instruments;
(xiv) all Inventory;
(xv) all Investment Property;
(xvi) all Letter-of-Credit Rights (whether or not the respective
letter of credit is evidenced by a writing)
(xvii) all Marks, together with the registrations and right to all
renewals thereof, and the goodwill of the business of the
Debtor symbolized by the Marks;
(xviii) all Patents;
<Page>
(xix) all Permits;
(xx) all Software and all Software licensing rights, all
writings, plans, specifications and schematics, all
engineering drawings, customer lists, goodwill and licenses,
and all recorded data of any kind or nature, regardless of
the medium of recording;
(xxi) all Supporting Obligations;
(xxii) each of the Collateral Accounts, including any and all
assets of whatever type or kind deposited by the Debtor in
any such Collateral Account, whether now owned or hereafter
acquired, existing or arising, including, without
limitation, all Financial Assets, Investment Property,
monies, checks, drafts, Instruments, Securities or interests
therein of any type or nature deposited in such Collateral
Account, and all investments and all certificates and other
Instruments (including depository receipts, if any) from
time to time representing or evidencing the same, and all
dividends, interest, distributions, cash and other property
from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of
the foregoing;
(xxiii) all Securities owned or held by the Debtor from time to time
and all options and warrants owned by the Debtor from time
to time to purchase Securities;
(xxiv) all Limited Liability Company Interests owned by the Debtor
from time to time and all of its right, title and interest
in each limited liability company to which each such Limited
Liability Company Interest relates, whether now existing or
hereafter acquired, including, without limitation, to the
fullest extent permitted under the terms and provisions of
the documents and agreements governing such Limited
Liability Company Interests and applicable law:
(A) all its capital therein and its interest in all
profits, income, surpluses, losses and other distributions to which
the Debtor shall at any time be entitled in respect of such Limited
Liability Company Interests;
(B) all other payments due or to become due to the Debtor
in respect of Limited Liability Company Interests, whether under any
limited liability company agreement or otherwise, whether as
contractual obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any limited liability company agreement or operating agreement,
or at law or otherwise in respect of such Limited Liability Company
Interests;
(D) all present and future claims, if any, of the Debtor
against any such limited liability company for monies loaned or
advanced, for services rendered or otherwise;
(E) all of the Debtor's rights under any limited liability
company agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and privilege of
the Debtor relating to such Limited Liability Company Interests,
including any power to terminate, cancel or modify any such limited
liability company agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf of and in
the name of any of the Debtor in respect of such Limited Liability
Company Interests and any such limited liability company, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing, to enforce or execute any checks or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
<Page>
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxv) all Partnership Interests owned by the Debtor from time to
time and all of its right, title and interest in each
partnership to which each such Partnership Interest relates,
whether now existing or hereafter acquired, including,
without limitation, to the fullest extent permitted under
the terms and provisions of the documents and a agreements
governing such Partnership Interests and applicable law:
(A) all its capital therein and its interest in all
profits, income, surpluses, losses, and other distributions to which
the Debtor shall at any time be entitled in respect of such
Partnership Interests;
(B) all other payments due or to become due to the Debtor
in respect of Partnership Interests, whether under any partnership
agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any partnership agreement or operating agreement, or at law or
otherwise in respect of such Partnership Interests;
(D) all present and future claims, if any, of the Debtor
against any such partnership for monies loaned or advanced, for
services rendered or otherwise;
(E) all of the Debtor's rights under any partnership
agreement or operating agreement or at law to exercise and enforce
every right, power, remedy, authority, option and privilege of the
Debtor relating to such Partnership Interests, including any power to
terminate, cancel or modify any partnership agreement or operating
agreement, to execute any instruments and to take any and all other
action on behalf of and in the name of the Debtor in respect of such
Partnership Interests and any such partnership, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxvi) all Financial Assets owned by the Debtor from time to time;
(xxvii) all Security Entitlements owned by the Debtor from time to
time in any and all of the foregoing; and
(xxviii) all Proceeds and products of any and all of the foregoing
(all of the above, the "Collateral").
3. For the purpose of this Financing Statement, the following terms shall
have the meanings herein specified. Such definitions shall be equally applicable
to the singular and plural forms of the terms defined.
<Page>
"Account" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, and in any event shall include but shall not be limited to, all rights to
payment of any monetary obligation, whether or not earned by performance, (i)
for property that has been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a
policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for
the use or hire of a vessel under a charter or other contract, (vii) arising out
of the use of a credit or charge card or information contained on or for use
with the card, or (viii) as winnings in a lottery or other game of chance
operated or sponsored by a State, governmental unit of a State, or person
licensed or authorized to operate the game by a State or governmental unit of a
State. Without limiting the foregoing, the term "account" shall include all
Health-Care-Insurance Receivables.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Secured Party.
"Chattel Paper" shall mean "chattel paper" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York. Without limiting the foregoing, the term "Chattel Paper" shall in any
event include all Tangible Chattel Paper and all Electronic Chattel Paper.
"Collateral Accounts" shall mean any and all accounts established and
maintained by the Secured Party in the name of the Debtor to which Collateral
may be credited.
"Commercial Tort Claims" shall mean "commercial tort claims" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Contract Rights" shall mean all rights of the Debtor under each
Contract, including, without limitation, (i) any and all rights to receive and
demand payments under any or all Contracts, (ii) any and all rights to receive
and compel performance under any or all Contracts and (iii) any and all other
rights, interests and claims now existing or in the future arising in connection
with any or all Contracts.
"Contracts" shall mean all contracts between the Debtor and one or
more additional parties (including, without limitation, any licensing agreements
and any partnership agreements, joint venture agreements and limited liability
company agreements), except to the extent that the grant by the Debtor of a
security interest in its right, title and interest in any such contract is
prohibited by such contract without the consent of any other party thereto (that
has not obtained) or would give any other party to such contract the right to
terminate its obligations thereunder; PROVIDED, that the foregoing limitation
(i) shall not affect, limit, restrict or impair the grant by the Debtor of a
security interest in any Account or any money or other amounts due or to become
due under any such contract and (ii) shall not apply to the extent the
provisions contained in such contract which prohibit such a grant by the Debtor
or provide such other party such a termination right would be rendered
unenforceable in accordance with applicable law (including the Uniform
Commercial Code) or principles of equity.
"Copyrights" shall mean any United States copyright now or hereafter
owned by the Debtor, including any registrations of any copyrights, in the
United States Copyright Office or any foreign equivalent office, as well as any
application for a copyright registration now or hereafter made with the United
States Copyright Office or any foreign equivalent office by the Debtor.
"Documents" shall mean "documents" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Domain Names" shall mean all Internet domain names and associated URL
addresses in or to which the Debtor now or hereafter has any right, title or
interest.
"Electronic Chattel Paper" shall mean "electronic chattel paper" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
<Page>
"Equipment" shall mean any "equipment" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by the Debtor and, in any event, shall include, but
shall not be limited to, all machinery, equipment, furnishings, fixtures and
vehicles now or hereafter owned by the Debtor and any and all additions,
substitutions and replacements of any of the foregoing and all accessions
thereto, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"Financial Asset" shall mean "financial asset" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"General Intangibles" shall mean "general intangibles" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Goods" shall mean "goods" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Health-Care-Insurance Receivable" shall mean any
"health-care-insurance receivable" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Instrument" shall mean "instruments" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof and all accessions thereto,
wherever located, together with all goods, supplies, incidentals, packaging
materials, labels, materials and any other items used or usable in
manufacturing, processing, packaging or shipping same, in all stages of
production from raw materials through work in process to finished goods, and all
products and proceeds of whatever sort and wherever located any portion thereof
which may be returned, rejected, reclaimed or repossessed by the Secured Party
from the Debtor's customers, and shall specifically include all "inventory" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Investment Property" shall mean "investment property" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Letter-of-Credit Rights" shall mean "letter-of-credit rights" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of new York.
"Limited Liability Company Interests" shall mean the entire limited
liability company membership interest at any time owned by the Debtor in any
limited liability company.
"Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held or hereafter acquired by the
Debtor, including any registration or application for registration of any
trademarks and service marks now held or hereafter acquired by the Debtor, which
are registered or filed in the United States Patent and Trademark Office or the
equivalent thereof in any state of the United States or any equivalent foreign
office or agency, as well as any unregistered trademarks and service marks used
by the Debtor and any trade dress including logos, designs, fictitious business
names and other business identifiers used by the Debtor.
"Notes" shall mean all promissory notes (including intercompany notes)
from time to time issued to, or held by, the Debtor.
"Partnership Interest" shall mean the entire general partnership
interest or limited partnership interest at any time owned by the Debtor in any
general partnership or limited partnership.
<Page>
"Patents" shall mean any United States or foreign patent in or to
which the Debtor now or hereafter has any right, title or interest therein, and
any divisions, continuations (including, but not limited to,
continuations-in-parts) and improvements thereof, as well as any application for
a United States or foreign patent now or hereafter made by the Debtor.
"Permits" shall mean, to the extent permitted to be assigned by the
terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations of or from any governmental authority or
agency.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Proceeds" shall mean all "proceeds" as such term is defined in the
Uniform Commercial Code as in effect in the State of New York on the date hereof
and, in any event, shall also include, but not be limited to, (i) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to the
Secured Party or the Debtor from time to time with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or due and
payable to the Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under color of
governmental authority) and (iii) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Security" and "Securities" shall mean "securities" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York and shall in any event also include all Stock and all Notes.
"Security Entitlement" shall mean "security entitlement" as such term
is defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Software" shall mean "software" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"Stock" shall mean all of the issued and outstanding shares of capital
stock of any corporation at any time directly owned by the Debtor.
"Supporting Obligations" shall mean any "supporting obligation" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York, now or hereafter owned by the Debtor, or in
which the Debtor has any rights, and, in any event, shall include, but shall not
be limited to all of such Debtor's rights in any Letter-of-Credit Right or
secondary obligation that supports the payment or performance of, and all
security for, any Account, Chattel Paper, Document, General Intangible,
Instrument or Investment Property.
"Tangible Chattel Paper" shall mean "tangible chattel paper" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Trade Secrets" shall mean any secretly held existing engineering or
other data, information, production procedures and other know-how relating to
the design manufacture, assembly, installation, use, operation, marketing, sale
and/or servicing of any products or business of the Debtor worldwide whether
written or not.
"Trade Secret Rights" shall mean the rights of the Debtor in a Trade
Secret it holds.
<Page>
UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER [optional]
B. SEND ACKNOWLEDGEMENT TO: (Name and Address)
LEXIS DOCUMENT SERVICES
PO BOX 2969
SP IL
THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
1. DEBTOR'S EXACT FULL LEGAL NAME - Insert only ONE debtor name (1a or 1b) - do
not abbreviate or combine names
1a. ORGANIZATION'S NAME
Rexnord International Inc.
OR 1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
4701 West Greenfield Avenue MILWAUKEE WI 53214 USA
1d. TAX ID # SSN OR EIN ADD'NL INFO RE
ORGANIZATI0N
DEBTOR
1e. TYPE OF ORGANIZATION
CORP
1f. JURISDICTION OF ORGANIZATION
DE
1g. ORGANIZATIONAL ID #, if any
/ / NONE
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only ONE debtor name
(2a or 2b) - do not abbreviate or combine names
2a. ORGANIZATION'S NAME
OR
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
2d. TAX ID # SSN OR EIN ADD'NL INFO RE
ORGANIZATION
DEBTOR
2e. TYPE OF ORGANIZATION
2f. JURISDICTION OF ORGANIZATION
2g. ORGANIZATIONAL ID #, if any
/ / NONE
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P - Insert only
ONE secured party name (3a or 3b)
3a. ORGANIZATION'S NAME
Deutsche Bank Trust Company Americas, as Collateral Agent
OR
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
31 West 52nd Street NEW YORK NY 10019 USA
4. This FINANCING STATEMENT covers the following collateral:
All assets of the Debtor, including, without limitation, as set forth on
Schedule I attached hereto and made a part hereof.
5. ALTERNATIVE DESIGNATION if applicable:
/ / LESSEE/LESSOR
/ / CONSIGNEE/CONSIGNOR
/ / BAILEE/BAILOR
/ / SELLER/BUYER
/ / AG LIEN
/ / NON-UCC FILING
6. / / This FINANCING STATEMENT is to be filed (for record) (or records) in the
REAL ESTATE RECORDS Attach Addendum (if applicable)
7. Check to REQUEST SEARCH REPORT(S) ON Debtor(s)
(optional)
[ADDITIONAL FEE]
/ / All Debtors
/ / Debtor 1
/ / Debtor 2
8. OPTIONAL FILER REFERENCE DATA
DE-SOS
FILING OFFICE COPY - NATIONAL UCC FINANCING STATEMENT (FORM UCC1)
(REV. 07/29/98)
LexisNexis Document Solutions
[ILLEGIBLE]
<Page>
SCHEDULE I
to UCC-1 Financing Statement
by
REXNORD INTERNATIONAL INC., as Debtor
in favor of
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent, Secured Party
1. This Financing Statement is presented to a Filing Officer for filing
pursuant to the Uniform Commercial Code.
2. This Financing Statement covers all of the rights, title and interest
of the Debtor in, to and under all assets, whether now existing or hereafter
from time to time acquired by the Debtor, including without limitation all of
the following (whether now existing or hereafter from time to time acquired by
the Debtor):
(i) each and every Account;
(ii) all cash;
(iii) the Cash Collateral Account and all monies, securities,
Instruments and other investments deposited or required to
be deposited in the Cash Collateral Account;
(iv) all Chattel Paper (including, without limitation, all
Tangible Chattel Paper and all Electronic Chattel Paper);
(v) all Commercial Tort Claims;
(vi) all computer programs of the Debtor and all intellectual
property rights therein and all other proprietary
information of the Debtor, including, but not limited to
Domain Names and Trade Secret Rights;
(vii) all Contracts, together with all Contract Rights arising
thereunder;
(viii) all Copyrights;
(ix) all Equipment;
(x) all Documents;
(xi) all General Intangibles;
(xii) all Goods;
(xiii) all Instruments;
(xiv) all Inventory;
(xv) all Investment Property;
(xvi) all Letter-of-Credit Rights (whether or not the respective
letter of credit is evidenced by a writing);
(xvii) all Marks, together with the registrations and right to all
renewals thereof, and the goodwill of the business of the
Debtor symbolized by the Marks;
(xviii) all Patents;
<Page>
(xix) all Permits;
(xx) all Software and all Software licensing rights, all
writings, plans, specifications and schematics, all
engineering drawings, customer lists, goodwill and licenses,
and all recorded data of any kind or nature, regardless of
the medium of recording;
(xxi) all Supporting Obligations;
(xxii) each of the Collateral Accounts, including any and all
assets of whatever type or kind deposited by the Debtor in
any such Collateral Account, whether now owned or hereafter
acquired, existing or arising, including, without
limitation, all Financial Assets, Investment Property,
monies, checks, drafts, Instruments, Securities or interests
therein of any type or nature deposited in such Collateral
Account, and all investments and all certificates and other
Instruments (including depository receipts, if any) from
time to time representing or evidencing the same, and all
dividends, interest, distributions, cash and other property
from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of
the foregoing;
(xxiii) all Securities owned or held by the Debtor from time to time
and all options and warrants owned by the Debtor from time
to time to purchase Securities;
(xxiv) all Limited Liability Company Interests owned by the Debtor
from time to time and all of its right, title and interest
in each limited liability company to which each such Limited
Liability Company Interest relates, whether now existing or
hereafter acquired, including, without limitation, to the
fullest extent permitted under the terms and provisions of
the documents and agreements governing such Limited
Liability Company Interests and applicable law;
(A) all its capital therein and its interest in all
profits, income, surpluses, losses and other distributions to which
the Debtor shall at any time be entitled in respect of such Limited
Liability Company Interests;
(B) all other payments due or to become due to the Debtor
in respect of Limited Liability Company Interests, whether under any
limited liability company agreement or otherwise, whether as
contractual obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any limited liability company agreement or operating agreement,
or at law or otherwise in respect of such Limited Liability Company
Interests;
(D) all present and future claims, if any, of the Debtor
against any such limited liability company for monies loaned or
advanced, for services rendered or otherwise;
(E) all of the Debtor's rights under any limited liability
company agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and privilege of
the Debtor relating to such Limited Liability Company Interests,
including any power to terminate, cancel or modify any such limited
liability company agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf of and in
the name of any of the Debtor in respect of such Limited Liability
Company Interests and any such limited liability company, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing, to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
<Page>
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxv) all Partnership Interests owned by the Debtor from time to
time and all of its right, title and interest in each
partnership to which each such Partnership Interest relates,
whether now existing or hereafter acquired, including,
without limitation, to the fullest extent permitted under
the terms and provisions of the documents and agreements
governing such Partnership Interests and applicable law:
(A) all its capital therein and its interest in all
profits, income, surpluses, losses, and other distributions to which
the Debtor shall at any time be entitled in respect of such
Partnership Interests;
(B) all other payments due or to become due to the Debtor
in respect of Partnership Interests, whether under any partnership
agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any partnership agreement or operating agreement, or at law or
otherwise in respect of such Partnership Interests;
(D) all present and future claims, if any, of the Debtor
against any such partnership for monies loaned or advanced, for
services rendered or otherwise;
(E) all of the Debtor's rights under any partnership
agreement or operating agreement or at law to exercise and enforce
every right, power, remedy, authority, option and privilege of the
Debtor relating to such Partnership Interests, including any power to
terminate, cancel or modify any partnership agreement or operating
agreement, to execute any instruments and to take any and all other
action on behalf of and in the name of the Debtor in respect of such
Partnership Interests and any such partnership, to make
determinations, to exercise any election (including, but not limited
to; election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxvi) all Financial Assets owned by the Debtor from time to time;
(xxvii) all Security Entitlements owned by the Debtor from time to
time in any and all of the foregoing; and
(xxviii) all Proceeds and products and any and all of the foregoing
(all of the above, the "Collateral").
3. For the purpose of this Financial Statement, the following terms shall
have the meanings herein specified. Such definitions shall be equally applicable
to the singular and plural forms of the terms defined.
<Page>
"Account" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, and in any event shall include but shall not be limited to, all rights to
payment of any monetary obligation, whether or not earned by performance, (i)
for property that has been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (ii) for services rendered or to be rendered (iii) for a
policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for
the use or hire of a vessel under a charter or other contract, (vii) arising out
of the use of a credit or charge card or information contained on or for use
with the card, or (viii) as winnings in a lottery or other game of chance
operated or sponsored by a State, governmental unit of a State, or person
licensed or authorized to operate the game by a State or governmental unit of a
State. Without limiting the foregoing, the term "account" shall include all
Health-Care-Insurance Receivables.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Secured party.
"Chattel Paper" shall mean "chattel paper" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York. Without limiting the foregoing, the term "Chattel Paper" shall in any
event include all Tangible Chattel Paper and all Electronic Chattel Paper.
"Collateral Accounts" shall mean any and all accounts established and
maintained by the Secured Party in the name of the Debtor to which Collateral
may be credited.
"Commercial Tort Claims" shall mean "commercial tort claims" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Contract Rights" shall mean all rights of the Debtor under each
Contract, including, without limitation, (i) any and all rights to receive and
demand payments under any or all Contracts and (ii) any and all rights to
receive and compel performance under any or all Contracts and (iii) any and all
other rights, interests and claims now existing or in the future arising in
connection with any or all Contracts.
"Contracts" shall mean all contracts between the Debtor and one or
more additional parties (including, without limitation, any licensing agreements
and any partnership agreements, joint venture agreements and limited liability
company agreements), except to the extent that the grant by the Debtor of a
security interest in its right, title and interest in any such contract is
prohibited by such contract without the consent of any other party thereto (that
has not obtained) or would give any other party to such contract the right to
terminate its obligations thereunder; PROVIDED, that the foregoing limitation
(i) shall not affect, limit, restrict or impair the grant by the Debtor of a
security interest in any Account or any money or other amounts due to become due
under any such contract and (ii) shall not apply to the extent the provisions
contained in such contract which prohibit such a grant by the Debtor or provide
such other party such a termination right would be rendered unenforceable in
accordance with applicable law (including the Uniform Commercial Code) or
principles of equity.
"Copyrights" shall mean any United States copyright now or hereafter
owned by the Debtor, including any registrations of any copyrights, in the
United States Copyrights Office or any foreign equivalent office, as well as any
application for a copyright registration now or hereafter made with the United
States Copyright Office or any foreign equivalent office by the Debtor.
"Documents" shall mean "documents" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Domain Names" shall mean all Internet domain names and associated URL
addresses in or to which the Debtor now or hereafter has any right, title or
interest.
"Electronic Chattel Paper" shall mean "electronic chattel paper" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
<Page>
"Equipment" shall mean any "equipment" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by the Debtor and, in any event, shall include, but
shall not be limited to, all machinery, equipment, furnishings, fixtures and
vehicles now or hereafter owned by the Debtor and any and all additions,
substitutions and replacements of any of the foregoing and all accessions
thereto, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"Financial Asset" shall mean "financial asset" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"General Intangibles" shall mean "general intangibles" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Goods" shall mean "goods" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Health-Care-Insurance Receivable" shall mean any
"health-care-insurance receivable" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Instrument" shall mean "instruments" as such term defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof and all accessions thereto,
wherever located, together with all goods, supplies, incidentals, packaging
materials, labels, materials and any other items used or usable in
manufacturing, processing, packaging or shipping same, in all stages of
production from raw materials through work in process to finished goods, and all
products and proceeds of whatever sort and wherever located any portion thereof
which may be returned, rejected, reclaimed or repossessed by the Secured Party
from the Debtor's customers, and shall specifically include all "inventory" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Investment Property" shall mean "investment property" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Letter-of-Credit Rights" shall mean "letter-of-credit rights" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Limited Liability Company Interests" shall mean the entire limited
liability company membership interest at any time owned by the Debtor in any
limited liability company.
"Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held or hereafter acquired by the
Debtor, including any registration or application for registration of any
trademarks and service marks now held or hereafter acquired by the Debtor, which
are registered or filed in the United States Patent and Trademark Office or the
equivalent thereof in any state of the United States or any equivalent foreign
office or agency, as well as any unregistered trademarks and service marks used
by the Debtor and any trade dress including logos, designs, fictitious business
names and other business identifiers used by the Debtor.
"Notes" shall mean all promissory notes (including intercompany notes)
from time to time issued to, or held by, the Debtor.
"Partnership Interest" shall mean the entire general partnership
interest or limited partnership interest at any time owned by the Debtor in any
general partnership or limited partnership.
<Page>
"Patents" shall mean any United States or foreign patent in or to
which the Debtor now or hereafter has any right, title or interest therein, and
any divisions, continuations/including, but not limited to
continuations-in-parts) and improvements thereof, as well as any application for
a United States or foreign patent now or hereafter made by the Debtor.
"Permits" shall mean, to the extent permitted to be assigned by the
terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations of or from any governmental authority or
agency.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Proceeds" shall mean all "proceeds" as such term is defined in the
Uniform Commercial Code as in effect in the State of New York on the date hereof
and, in any event, shall also include, but not be limited to, (i) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to the
Secured Party or the Debtor from time to time with respect to any of the
collateral, (ii) any and all payments (in any form whatsoever) made or due and
payable to the Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under color of
governmental authority) and (iii) any and all other amounts from time to time
paid or payable under or in connecting with any of the Collateral.
"Security" and "Securities" shall mean "securities" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York and shall in any event also include all Stock and all Notes.
"Security Entitlement" shall mean "security entitlement" as such term
is defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Software" shall mean "software" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"Stock" shall mean all of the issued and outstanding shares of capital
stock of any corporation at any time directly owned by the Debtor.
"Supporting Obligations" shall mean any "supporting obligation" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York, now or hereafter owned by the Debtor, or in
which the Debtor has any rights, and, in any event, shall include, but shall not
be limited to all of such Debtor's rights in any Letter-of-Credit Right or
secondary obligation that supports the payment or performance of, and all
security for, any Account, Chattel Paper, Document, General Intangible,
Instrument or Investment Property.
"Tangible Chattel Paper" shall mean "tangible chattel paper" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Trade Secrets" shall mean any secretly held existing engineering or
other data, information, production procedures and other know-how relating to
the design manufacture, assembly, installation, use, operation, marketing, sale
and/or servicing of any products or business of the Debtor worldwide whether
written or not.
"Trade Secret Rights" shall mean the rights of the Debtor in a Trade
Secret it holds.
<Page>
UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER [optional]
B. SEND ACKNOWLEDGEMENT TO: (Name and Address)
LexisNexis Document Solutions
PO Box 2969
Springfield, IL 62708
THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only ONE debtor name (1a or 1b) - do
not abbreviate or combine names
1a. ORGANIZATIONS NAME
Rexnord North American Holding, Inc.
OR 1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
4701 West Greenfield Avenue MILWAUKEE WI 53214 USA
1d. TAX ID # SSN OR EIN ADD'NL INFO RE
ORGANIZATI0N
DEBTOR
1e. TYPE OF ORGANIZATION
CORP
1f. JURISDICTION OF ORGANIZATION
DE
1g. ORGANIZATIONAL ID #, if any
/ / NONE
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME-insert only ONE debtor name
(2a or 2b) - do not abbreviate or combine names
2a. ORGANIZATIONS NAME
OR 2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
2d. TAX ID # SSN OR EIN ADD'NL INFO RE
ORGANIZATION
DEBTOR
2e. TYPE OF ORGANIZATION
2f. JURISDICTION OF ORGANIZATION
2g. ORGANIZATIONAL ID #, if any
/ / NONE
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P) - insert
only ONE secured party name (3a or 3b)
3a. ORGANIZATION'S NAME
Deutsche Bank Trust Company Americas, as Collateral Agent.
OR 3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
31 West 52nd Street NEW YORK NY 10019 USA
4. This FINANCING STATEMENT covers the following collateral:
All assets of the Debtor, including, without limitation, as set forth on
Schedule I attached hereto and made a part hereof.
5. ALTERNATIVE DESIGNATION if applicable:
/ / LESSEE/LESSOR
/ / CONSIGNEE/CONSIGNOR
/ / BAILEE/BAILOR
/ / SELLER/BUYER
/ / AG LIEN
/ / NON-UCC FILING
6. / / This FINANCING STATEMENT is to be filed (for record) (or records) in the
REAL ESTATE RECORDS Attach Addendum (if applicable)
7. Check to REQUEST SEARCH REPORT(S) ON Debtor(s) (ADDITIONAL FEE)
(optional)
/ / All Debtors
/ / Debtor 1
/ / Debtor 2
8. OPTIONAL FILER REFERENCE DATA
DE-SOS
FILING OFFICE COPY - NATIONAL UCC FINANCING STATEMENT (FORM UCC1)
(REV. 07/29/98)
LexisNexis Document Solutions
[ILLEGIBLE]
<Page>
REXNORD NORTH AMERICA HOLDINGS, INC., AS DEBTOR
IN FAVOR OF
DEUTSCHE BANK TRUST COMPANY AMERICAS, AS COLLATERAL AGENT, SECURED PARTY
1. This Financing Statement is presented to a Filing Officer for filing
pursuant to the Uniform Commercial Code.
2. This Financing Statement covers all of the rights, title and interest
of the Debtor in, to and under all assets, whether now existing or hereafter
from time to time acquired by the Debtor, including without limitation all of
the following (whether now existing or hereafter from time to time acquired by
the Debtor):
(i) each and every Account;
(ii) all cash;
(iii) the Cash Collateral Account and all monies, securities,
Instruments and other investments deposited or required to
be deposited in the Cash Collateral Account;
(iv) all Chattel Paper (including, without limitation, all
Tangible Chattel Paper and all Electronic Chattel Paper);
(v) all Commercial Tort Claims;
(vi) all computer programs of the Debtor and all intellectual
property rights therein and all other proprietary
information of the Debtor, including, but not limited to
Domain Names and Trade Secret Rights;
(vii) all Contracts, together with all Contract Rights arising
thereunder;
(viii) all Copyrights;
(ix) all Equipment;
(x) all Documents;
(xi) all general Intangibles;
(xii) all Goods;
(xiii) all Instruments;
(xiv) all Inventory;
(xv) all Investment Property;
(xvi) all Letter-of-Credit Rights (whether or not the respective
letter of credit is evidenced by a writing);
(xvii) all Marks, together with the registrations and right to all
renewals thereof, and the goodwill of the business of the
Debtor symbolized by the Marks;
(xviii) all Patents;
(xix) all Permits;
<Page>
(xx) all Software and all Software licensing rights, all
writings, plans, specifications and schematics, all
engineering drawings, customer lists, goodwill and licenses,
and all recorded data of any kind or nature, regardless of
the medium of recording:
(xxi) all Supporting Obligations;
(xxii) each of the Collateral Accounts, including any and all
assets of whatever type or kind deposited by the Debtor in
any such collateral Account, whether now owned or hereafter
acquired, existing or arising, including, without
limitation, all Financial Assets, Investment Property,
monies, checks, drafts, Instruments, Securities or interests
therein of any type or nature deposited in such Collateral
Account, and all investments and all certificates and other
Instruments (including depository receipts, if any) from
time to time representing or evidencing the same, and all
dividends, interest, distributions, cash and other property
from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of
the foregoing;
(xxiii) all Securities owned or held by the Debtor from time to time
and all options and warrants owned by the Debtor from time
to time to purchase Securities;
(xxiv) all Limited Liability Company Interests owned by the Debtor
from time to time and all of its right, title and interest
in each limited liability company to which each such Limited
Liability Company Interest relates, whether now existing or
hereafter acquired, including, without limitation, to the
fullest extent permitted under the terms and provisions of
the documents and agreements governing such Limited
Liability Company Interests and applicable law:
(A) all its capital therein and its interest in all
profits, income, surpluses, losses and other distributions to which
the Debtor shall at any time be entitled in respect of such Limited
Liability Company Interests;
(B) all other payments due or to become due to the Debtor
in respect of Limited Liability Company Interests, whether under any
limited liability company agreement or otherwise, whether as
contractual obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any limited liability company agreement or operating agreement,
or at law or otherwise in respect of such Limited Liability Company
Interests;
(D) all present and future claims, if any, of the Debtor
against any such limited liability company for monies loaned or
advanced, for services rendered or otherwise;
(E) all of the Debtor's rights under any limited liability
company agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and privilege of
the Debtor relating to such Limited Liability Company Interests,
including any power to terminate, cancel or modify any such limited
liability company agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf of and in
the name of any of the Debtor in respect of such Limited Liability
Company Interests and any such limited liability company, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing, to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
<Page>
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof:
(xxv) all Partnership Interests owned by the Debtor from time to
time and all of its right, title and interest in each
partnership to which each such Partnership Interest relates,
whether now existing or hereafter acquired, including,
without limitation, to the fullest extent permitted under
the terms and provisions of the documents and agreements
governing such Partnership Interests and applicable law:
(A) all its capital therein and its interest in all
profits, income, surpluses, losses, and other distributions to which
the Debtor shall at any time be entitled in respect of such
Partnership Interests;
(B) all other payments due or to become due to the Debtor
in respect of Partnership Interests, whether under any partnership
agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any partnership agreement or operating agreement, or at law or
otherwise in respect of such Partnership Interests;
(D) all present and future claims, if any, of the Debtor
against any such partnership for monies loaned or advanced, for
services rendered or otherwise;
(E) all of the Debtor's rights under any partnership
agreement or operating agreement or at law to exercise and enforce
every right, power, remedy, authority, option and privilege of the
Debtor relating to such Partnership Interests, including any power to
terminate, cancel or modify any partnership agreement or operating
agreement, to execute any instruments and to take any and all other
action on behalf of and in the name of the Debtor in respect of such
Partnership Interests and any such partnership, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxvi) all Financial Assets owned by the Debtor from time to time;
(xxvii) all Security Entitlements owned by the Debtor from time to
time in any and all of the foregoing; and
(xxviii) all Proceeds and products of any and all of the foregoing
(all of the above, the "Collateral").
3. For the purpose of this Financing Statement, the following terms
shall have the meanings herein specified. Such definitions shall be equally
applicable to the singular and plural forms of the terms defined.
<Page>
"Account" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, and in any event shall include but shall not be limited to, all rights to
payment of any monetary obligation, whether or not earned by performance, (i)
for property that has been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a
policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for
the use or hire of a vessel under a charter or other contract, (vii) arising out
of the use of a credit or charge card or information contained on or for use
with the card, or (viii) as winnings in a lottery or other game of chance
operated or sponsored by a State, governmental unit of a State, or person
licensed or authorized to operate the game by a State or governmental unit of a
State. Without limiting the foregoing, the term "account" shall include all
Health-Care-Insurance Receivables.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Secured Party.
"Chattel Paper" shall mean "chattel paper" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York. Without limiting the foregoing, the term "Chattel Paper" shall in any
event include all Tangible Chattel Paper and all Electronic Chattel Paper.
"Collateral Accounts" shall mean any and all accounts established and
maintained by the Secured Party in the name of the Debtor to which Collateral
may be credited.
"Commercial Tort Claims" shall mean "commercial tort claims" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Contract Rights" shall mean all rights of the Debtor under each
Contract, including, without limitation, (i) any and all rights to receive and
demand payments under any or all Contracts, (ii) any and all rights to receive
and compel performance under any or all Contracts and (iii) any and all other
rights, interests and claims now existing or in the future arising in connection
with any or all Contracts.
"Contracts" shall mean all contracts between the Debtor and one or
more additional parties (including, without limitation, any licensing agreements
and any partnership agreements, joint venture agreements and limited liability
company agreements), except to the extent that the grant by the Debtor of a
security interest in its right, title and interest in any such contract is
prohibited by such contract without the consent of any other party thereto (that
has not obtained) or would give any other party to such contract the right to
terminate its obligations thereunder; PROVIDED, that the foregoing limitation
(i) shall not affect, limit, restrict or impair the grant by the Debtor of a
Security interest in any Account or any money or other amounts due or to become
due under any such contract and (ii) shall not apply to the extent the
provisions contained in such contract which prohibit such a grant by the Debtor
or provide such other party such a termination right would be rendered
unenforceable in accordance with applicable law (including the Uniform
Commercial Code) or principles of equity.
"Copyrights" shall mean any United States copyright now or hereafter
owned by the Debtor, including any registrations of any copyrights, in the
United States Copyright Office or any foreign equivalent office, as well as any
application for a copyright registration now or hereafter made with the United
States Copyright Office or any foreign equivalent office by the Debtor.
"Documents" shall mean "documents" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Domain Names" shall mean all Internet domain names and associated URL
addresses in or to which the Debtor now or hereafter has any right, title or
interest.
"Electronic Chattel Paper" shall mean" electronic chattel paper" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
<Page>
"Equipment" shall mean any "equipment" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by the Debtor and, in any event, shall include, but
shall not be limited to, all machinery, equipment, furnishings, fixtures and
vehicles now or hereafter owned by the Debtor and any and all additions,
substitutions and replacements of any of the foregoing and all accessions
thereto, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"Financial Asset" shall mean "financial asset" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"General Intangibles" shall mean "general intangibles" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Goods" shall mean "goods" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Health-Care-Insurance Receivable" shall mean any
"health-care-insurance receivable" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Instrument" shall mean "instruments" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof and all accessions thereto,
where ever located, together with all goods, supplies, incidentals, packaging
materials, labels, materials and any other items used or usable in
manufacturing, processing, packaging or shipping same, in all stages of
production from raw materials through work in process to finished goods, and all
products and proceeds of whatever sort and wherever located any protion thereof
which may be returned, rejected, reclaimed or repossessed by the Secured Party
from the Debtor's customers, and shall specifically include all "inventory" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Investment Property" shall mean "investment property" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Letter-of-Credit Rights" shall mean "letter-of-credit rights" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Limited Liability Company Interests" shall mean the entire limited
liability company membership interest at any time owned by the Debtor in any
limited liability company.
"Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held or hereafter acquired by the
Debtor, including any registration or application for registration of any
trademarks and service marks now held or hereafter acquired by the Debtor, which
are registered or filed in the United States Patent and Trademark Office or the
equivalent thereof in any state of the United States or any equivalent foreign
office or agency, as well as any unregistered trademarks and service marks used
by the Debtor and any trade dress including logos, designs, fictitious business
names and other business identifiers used by the Debtor.
"Notes" shall mean all promissory notes (including intercompany notes)
from time to time issued to, or held by, the Debtor.
"Partnership Interest" shall mean the entire general partnership
interest or limited partnership interest at any time owned by the Debtor in any
general partnership or limited partnership.
<Page>
"Patents" shall mean any United States or foreign patent in or to
which the Debtor now or hereafter has any right, title or interest therein, and
any divisions, continuations (including, but not limited to,
continuations-in-parts) and improvements thereof, as well as any application for
a United States or foreign patent now or hereafter made by the Debtor.
"Permits" shall mean, to the extent permitted to be assigned by the
terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations of or from any governmental authority or
agency.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Proceeds" shall mean all "proceeds" as such term is defined in the
Uniform Commercial Code as in effect in the State of New York on the date hereof
and, in any event, shall also include, but not be limited to, (i) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to the
Secured Party or the Debtor from time to time with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or due and
payable to the Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under color of
governmental authority) and (iii) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Security" and "Securities" shall mean "securities" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York and shall in any event also include all Stock and all Notes.
"Security Entitlement" shall mean "Security entitlement" as such term
is defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Software" shall mean" software" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"Stock" shall mean all of the issued and outstanding shares of capital
stock of any corporation at any time directly owned by the Debtor.
"Supporting Obligations" shall mean any "supporting obligation" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York, now or hereafter owned by the Debtor, or in
which the Debtor has any rights, and, in any event, shall include, but shall not
be limited to all of such Debtor's rights in any Letter-of-Credit Right or
secondary obligation that supports the payment or performance of, and all
security for, any Account, Chattel Paper, Document, General Intangible,
Instrument or Investment Property.
"Tangible Chattle Paper" shall mean "tangible chattel paper" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Trade Secrets" shall mean any secretly held existing engineering or
other data, information, production procedures and other know-how relating to
the design manufacture, assembly, installation, use, operation, marketing, sale
and/or servicing of any products or business of the Debtor worldwide whether
written or not.
"Trade Secret Rights" shall mean the rights of the Debtor in a Trade
Secret it holds.
<Page>
UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER [optional]
B. SEND ACKNOWLEDGEMENT TO: (Name and Address)
LexisNexis Document Solutions
PO Box 2969
Springfield, IL 62708
THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only ONE debtor name (1a or 1b) - do
not abbreviate or combine names
1a. ORGANIZATIONS NAME
RAC-I, Inc.
OR 1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
4701 West Greenfield Avenue MILWAUKEE WI 53214 USA
1d. TAX ID # SSN OR EIN ADD'NL. INFO RE
ORGANIZATI0N
DEBTOR
1e. TYPE OF ORGANIZATION
CORP
1f. JURISDICTION OF ORGANIZATION
DE
1g. ORGANIZATIONAL ID #, if any
/ / NONE
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only ONE debtor name
(2a or 2b) - do not abbreviate or combine names
2a. ORGANIZATION'S NAME
OR 2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
2d. TAX ID # SSN OR EIN ADD'NL INFO RE
ORGANIZATION
DEBTOR
2e. TYPE OF ORGANIZATION
2f. JURISDICTION OF ORGANIZATION
2g. ORGANIZATIONAL ID #, if any
/ / NONE
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P) - insert
only ONE secured party name (3a or 3b)
3a. ORGANIZATION'S NAME
Deutsche Bank Trust Company Americas, as Collateral Agent
OR 3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
31 West 52nd Street NEW YORK NY 10019 USA
4. This FINANCING STATEMENT covers the following collateral:
All assets of the Debtor, including, without limitation, as set forth on
Schedule I attached hereto and made a part hereof.
5. ALTERNATIVE DESIGNATION if applicable:
/ / LESSEE/LESSOR
/ / CONSIGNEE/CONSIGNOR
/ / BAILEE/BAILOR
/ / SELLER/BUYER
/ / AG LIEN
/ / NON-UCC FILING
6. / / This FINANCING STATEMENT is to be filed (for record) (or records) in the
REAL ESTATE RECORDS Attach Addendum (if applicable)
7. Check to REQUEST SEARCH REPORT(S) on Debtor(s) (ADDITIONAL FEE)
(optional)
/ / All Debtors
/ / Debtor 1
/ / Debtor 2
8. OPTIONAL FILER REFERENCE DATA
DE-SOS
FILING OFFICE COPY - NATIONAL UCC FINANCING STATEMENT (FORM UCC1)
(REV. 07/29/98)
LexisNexis Document Solutions
[ILLEGIBLE]
<Page>
SCHEDULE I
TO UCC-1 Financing Statement
by
RAC-I, INC., as Debtor
in favor of
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent, Secured Party
1. This Financing Statement is presented to a Filing Officer for filing
pursuant to the Uniform Commercial Code.
2. This Financing Statement covers all of the rights, title and interest
of the Debtor in, to and under all assets, whether now existing or hereafter
from time to time acquired by the Debtor, including without limitation all of
the following (whether now existing or hereafter from time to time acquired by
the Debtor):
(i) each and every Account;
(ii) all cash;
(iii) the Cash Collateral Account and all monies, securities,
Instruments and other investments deposited or required to
be deposited in the Cash Collateral Account;
(iv) all Chattel Paper (including, without limitation, all
Tangible Chattel Paper and all Electronic Chattel Paper);
(v) all Commercial Tort Claims;
(vi) all computer programs of the Debtor and all intellectual
property rights therein and all other proprietary
information of the Debtor, including, but not limited to
Domain Names and Trade Secret Rights;
(vii) all Contracts, together with all Contract Rights arising
thereunder;
(viii) all Copyrights;
(ix) all Equipment;
(x) all Documents;
(xi) all General Intangibles;
(xii) all Goods;
(xiii) all Instruments;
(xiv) all Inventory;
(xv) all Investment Property;
(xvi) all Letter-of-Credit Rights (whether or not the respective
letter of credit is evidenced by a writing);
(xvii) all Marks, together with the registrations and right to all
renewals thereof, and the goodwill of the business of the
Debtor symbolized by the Marks;
(xviii) all Patents;
<Page>
(xix) all Permits;
(xx) all Software and all Software licensing rights, all
writings, plans, specifications and schematics, all
engineering drawings, customer lists, goodwill and licenses,
and all recorded date of any kind or nature, regardless of
the medium of recording;
(xxi) all Supporting Obligations;
(xxii) each of the Collateral Accounts, including any and all
assets of whatever type or kind deposited by the Debtor in
any such Collateral Account, whether now owned or hereafter
acquired, existing or arising, including, without
limitation, all Financial Assets, Investment Property,
monies, checks, drafts, Instruments, Securities or interests
therein of any type or nature deposited in such Collateral
Account, and all investments and all certificates and other
Instruments (including depository receipts, if any) from
time to time representing or evidencing the same, and all
dividends, interest, distributions, cash and other property
from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of
the foregoing;
(xxiii) all Securities owned or held by the Debtor from time to time
and all options and warrants owned by the Debtor from time
to time to purchase Securities;
(xxiv) all Limited Liability Company Interests owned by the Debtor
from time to time and all of its right, title and interest
in each limited liability company to which each such Limited
Liability Company Interest relates, whether now existing or
hereafter acquired, including, without limitation, to the
fullest extent permitted under the terms and provisions of
the documents and agreements governing such Limited
Liability Company Interests and applicable law:
(A) all its capital therein and its interest in all
profits, income, surpluses, losses and other distributions to which
the Debtor shall at any time be entitled in respect of such Limited
Liability Company Interests;
(B) all other payments due or to become due to the Debtor
in respect of Limited Liability Company Interests, whether under any
limited liability company agreement or otherwise, whether as
contractual obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any limited liability company agreement or operating agreement,
or at law or otherwise in respect of such Limited Liability Company
Interests;
(D) all present and future claims, if any, of the Debtor
against any such limited liability company for monies loaned or
advanced, for services rendered or otherwise;
(E) all of the Debtor's rights under any limited liability
company agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and privilege of
the Debtor relating to such Limited Liability Company Interests,
including any power to terminate, cancel or modify any such limited
liability company agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf of and in
the name of any of the Debtor in respect of such Limited Liability
Company Interests and any such limited liability company, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing, to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
<Page>
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxv) all Partnership Interests owned by the Debtor from time to
time and all of its right, title and interest in each
partnership to which each such Partnership Interest relates,
whether now existing or hereafter acquired, including,
without limitation, to the fullest extent permitted under
the terms and provisions of the documents and agreements
governing such Partnership Interests and applicable law:
(A) all its capital therein and its interest in all
profits, income, surpluses, losses, and other distributions to which
the Debtor shall at any time be entitled in respect of such
Partnership Interests;
(B) all other payments due or to become due to the Debtor
in respect of Partnership Interests, whether under any partnership
agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any partnership agreement or operating agreement, or at law or
otherwise in respect of such Partnership Interests;
(D) all present and future claims, if any, of the Debtor
against any such partnership for monies loaned or advanced, for
services rendered or otherwise;
(E) all of the Debtor's rights under any partnership
agreement or operating agreement or at law to exercise and enforce
every right, power, remedy, authority, option and privilege of the
Debtor relating to such Partnership Interests, including any power to
terminate, cancel or modify any partnership agreement or operating
agreement, to execute any instruments and to take any and all other
action on behalf of and in the name of the Debtor in respect of such
Partnership Interests and any such partnership, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxvi) all Financial Assets owned by the Debtor from time to time;
(xxvii) all Security Entitlements owned by the Debtor from time to
time in any and all of the foregoing; and
(xxviii) all Proceeds and products of any and all of the foregoing
(all of the above, the "Collateral").
3. For the purpose of this Financing Statement, the following terms shall
have the meanings herein specified. Such definitions shall be equally applicable
to the singular and plural forms of the terms defined.
<Page>
"Account" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, and in any event shall include but shall not be limited to, all rights to
payment of any monetary obligation, whether or not earned by performance, (i)
for property that has been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a
policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for
the use or hire of a vessel under a charter or other contract, (vii) arising out
of the use of a credit or charge card or information contained on or for use
with the card, or (viii) as winnings in a lottery or other game of chance
operated or sponsored by a State, governmental unit of a State, or person
licensed or authorized to operate the game by a State or governmental unit of a
State. Without limiting the foregoing, the term "account" shall include all
Health-Care-Insurance Receivables.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Secured Party.
"Chattel Paper" shall mean "chattel paper" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York. Without limiting the foregoing, the term "Chattel Paper" shall in any
event include all Tangible Chattel Paper and all Electronic Chattel Paper.
"Collateral Accounts" shall mean any and all accounts established and
maintained by the Secured Party in the name of the Debtor to which Collateral
may be credited.
"Commercial Tort Claims" shall mean "commercial tort claims" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Contract Rights" shall mean all rights of the Debtor under each
Contract, including, without limitation, (i) any and all rights to receive and
demand payments under any or all Contracts, (ii) any and all rights to receive
and compel performance under any or all Contracts and (iii) any and all other
rights, interests and claims now existing or in the future arising in connection
with any or all Contracts.
"Contracts" shall mean all contracts between the Debtor and one or
more additional parties (including, without limitation, any licensing agreements
and any partnership agreements, joint venture agreements and limited liability
company agreements), except to the extent that the grant by the Debtor of a
security interest in its right, title and interest in any such contract is
prohibited by such contract without the consent of any other party thereto (that
has not obtained) or would give any other party to such contract the right to
terminate its obligations thereunder; PROVIDED, that the foregoing limitation
(i) shall not affect, limit, restrict or impair the grant by the Debtor of a
security interest in any Account or any money or other amounts due or to become
due under any such contract and (ii) shall not apply to the extent the
provisions contained in such contract which prohibit such a grant by the Debtor
or provide such other party such a termination right would be rendered
unenforceable in accordance with applicable law (including the Uniform
Commercial Code) or principles of equity.
"Copyrights" shall mean any United States copyright now or hereafter
owned by the Debtor, including any registrations of any copyrights, in the
United States Copyright Office or any foreign equivalent office, as well as any
application for a copyright registration now or hereafter made with the United
States Copyright Office or any foreign equivalent office by the Debtor.
"Documents" shall mean "documents" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Domain Names" shall mean all Internet domain names and associated URL
addresses in or to which the Debtor now or hereafter has any right, title or
interest.
"Electronic Chattel Paper" shall mean "electronic chattel paper" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
<Page>
"Equipment" shall mean any "equipment" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by the Debtor and, in any event, shall include, but
shall not be limited to, all machinery, equipment, furnishings, fixtures and
vehicles now or hereafter owned by the Debtor and any and all additions,
substitutions and replacements of any of the foregoing and all accessions
thereto, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"Financial Asset" shall mean "financial asset" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"General Intangibles" shall mean "general intangibles" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Goods" shall mean "goods" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Health-Care-Insurance Receivable" shall mean any
"health-care-insurance receivable" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Instrument" shall mean "instruments" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof and all accessions thereto,
wherever located, together with all goods, supplies, incidentals, packaging
materials, labels, materials and any other items used or usable in
manufacturing, processing, packaging or shipping same, in all stages of
production from raw materials through work in process to finished goods, and all
products and proceeds of whatever sort and wherever located any portion thereof
which may be returned, rejected, reclaimed or repossessed by the Secured Party
from the Debtor's customers, and shall specifically include all "inventory" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Investment Property" shall mean "investment property" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Letter-of-Credit Rights" shall mean "letter-of-credit rights" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of new York.
"Limited Liability Company Interests" shall mean the entire limited
liability company membership interest at any time owned by the Debtor in any
limited liability company.
"Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held or hereafter acquired by the
Debtor, including any registration or application for registration of any
trademarks and service marks now held or hereafter acquired by the Debtor, which
are registered or filed in the United States Patent and Trademark Office or the
equivalent thereof in any state of the United States or any equivalent foreign
office or agency, as well as any unregistered trademarks and service marks used
by the Debtor and any trade dress including logos, designs, fictitious business
names and other business identifiers used by the Debtor.
"Notes" shall mean all promissory notes (including intercompany notes)
from time to time issued to, or held by, the Debtor.
"Partnership Interest" shall mean the entire general partnership
interest or limited partnership interest at any time owned by the Debtor in any
general partnership or limited partnership.
<Page>
"Patents" shall mean any United States or foreign patent in or to
which the Debtor now or hereafter has any right, title or interest therein, and
any divisions, continuations (including, but not limited to,
continuations-in-parts) and improvements thereof, as well as any application for
a United States or foreign patent now or hereafter made by the Debtor.
"Permits" shall mean, to the extent permitted to be assigned by the
terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations of or from any governmental authority or
agency.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Proceeds" shall mean all "proceeds" as such term is defined in the
Uniform Commercial Code as in effect in the State of New York on the date hereof
and, in any event, shall also include, but not be limited to, (i) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to the
Secured Party or the Debtor from time to time with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or due and
payable to the Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under color of
governmental authority) and (iii) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Security" and "Securities" shall mean "securities" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York and shall in any event also include all Stock and all Notes.
"Security Entitlement" shall mean "security entitlement" as such term
is defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Software" shall mean "software" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Stock" shall mean all of the issued and outstanding shares of capital
stock of any corporation at any time directly owned by the Debtor.
"Supporting Obligations" shall mean any "supporting obligation" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York, now or hereafter owned by the Debtor, or in
which the Debtor has any rights, and, in any event, shall include, but shall not
be limited to all of such Debtor's rights in any Letter-of-Credit Right or
secondary obligation that supports the payment or performance of, and all
security for, any Account, Chattel Paper, Document, General Intangible,
Instrument or Investment Property.
"Tangible Chattel Paper" shall mean "tangible chattel paper" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Trade Secrets" shall mean any secretly held existing engineering or
other data, information, production procedures and other know-how relating to
the design manufacture, assembly, installation, use, operation, marketing, sale
and/or servicing of any products or business of the Debtor worldwide whether
written or not.
"Trade Secret Rights" shall mean the rights of the Debtors in a Trade
Secret it holds.
<Page>
UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER [optional]
B. SEND ACKNOWLEDGEMENT TO : (Name and Address)
LexisNexis Document Solutions
PO Box 2969
Springfield, IL 62708
THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only ONE debtor name (1a or 1b) - do
not abbreviate or combine names
1a. ORGANIZATION'S NAME
RBS China Holdings, L.L.C.
OR
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
4701 West Greenfield Avenue MILWAUKEE WI 53214 USA
1d. TAX ID # SSN OR EIN ADD'NL. INFO RE
ORGANIZATI0N
DEBTOR
1e. TYPE OF ORGANIZATION
LLC
1f. JURISDICTION OF ORGANIZATION
DE
1g. ORGANIZATIONAL ID #, if any
/ / NONE
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only ONE debtor name
(2a or 2b) - do not abbriviate or combine names
2a. ORGANIZATION'S NAME
OR
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
2d. TAX ID # SSN OR EIN ADD'NL INFO RE
ORGANIZATION
DEBTOR
2e. TYPE OF ORGANIZATION
2f. JURISDICTION OF ORGANIZATION
2g. ORGANIZATIONAL ID #, if any
/ / NONE
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P) - insert
only ONE secured party name (3a or 3b)
3a. ORGANIZATION'S NAME
Deutsche Bank Trust Company Americas, as Collateral Agent
OR
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
31 West 52nd Street NEW YORK NY 10019 USA
4. This FINANCING STATEMENT covers the following collateral:
All assets of the Debtor, including, without limitation, as set forth on
Schedule I attached hereto and made a part hereof.
5. ALTERNATIVE DESIGNATION if applicable:
/ / LESSEE/LESSOR
/ / CONSIGNEE/CONSIGNOR
/ / BAILEE/BAILOR
/ / SELLER/BUYER
/ / AG LIEN
/ / NON-UCC FILING
6. / / This FINANCING STATEMENT is to be filed (for record) (or records) in the
REAL ESTATE RECORDS Attach Addendum [if applicable]
7. Check to REQUEST SEARCH REPORT(S) ON Debtor(s) [ADDITIONAL FEE]
[optional]
/ / All Debtors
/ / Debtor 1
/ / Debtor 2
8. OPTIONAL FILER REFERENCE DATA
DE-SOS
FILING OFFICE COPY - NATIONAL UCC FINANCING STATEMENT (FORM UCC1)
(REV. 07/29/98)
LexisNexis Document Solutions
[ILLEGIBLE]
[ILLEGIBLE]
<Page>
SCHEDULE I
to
UCC-1 Financing Statement
by
RBS CHINA HOLDINGS, L.L.C., as Debtor
in favor of
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent, Secured Party
1. This Financing Statement is presented to a Filing Officer for filing
pursuant to the Uniform Commercial Code.
2. This Financing Statement covers all of the rights, title and interest
of the Debtor in, to and under all assets, whether now existing or hereafter
from time to time acquired by the Debtor, including without limitation all of
the following (whether now existing or hereafter from time to time acquired by
the Debtor):
(i) each and every Account;
(ii) all cash;
(iii) the Cash Collateral Account and all monies, securities,
Instruments and other investments deposited or required to
be deposited in the Cash Collateral Account;
(iv) all Chattel Paper (including, without limitation, all
Tangible Chattel Paper and all Electronic Chattel Paper);
(v) all Commercial Tort Claims;
(vi) all computer programs of the Debtor and all intellectual
property rights therein and all other proprietary
information of the Debtor, including, but not limited to
Domain Names and Trade Secret Rights;
(vii) all Contracts, together with all Contract Rights arising
thereunder;
(viii) all Copyrights;
(ix) all Equipment;
(x) all Documents;
(xi) all General Intangibles;
(xii) all Goods;
(xiii) all Instruments;
(xiv) all Inventory;
(xv) all Investment Property;
(xvi) all Letter-of-Credit Rights (whether or not the respective
letter of credit is evidenced by a writing);
(xvii) all Marks, together with the registrations and right to all
renewals thereof, and the goodwill of the business of the
Debtor symbolized by the Marks;
(xviii) all Patents;
<Page>
(xix) all Permits;
(xx) all Software and all Software licensing rights, all
writings, plans, specifications and schematics, all
engineering drawings, customer lists, goodwill and licenses,
and all recorded data of any kind or nature, regardless of
the medium of recording;
(xxi) all Supporting Obligations;
(xxii) each of the Collateral Accounts, including any and all
assets of whatever type or kind deposited by the Debtor in
any such Collateral Account, whether now owned or hereafter
acquired, existing or arising, including, without
limitation, all Financial Assets, Investment Property,
monies, checks, drafts, Instruments, Securities or interests
therein of any type or nature deposited in such Collateral
Account, and all investments and all certificates and other
Instruments (including depository receipts, if any) from
time to time representing or evidencing the same, and all
dividends, interest, distributions, cash and other property
from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of
the foregoing;
(xxiii) all Securities owned or held by the Debtor from time to time
and all options and warrants owned by the Debtor from time
to time to purchase Securities;
(xxiv) all Limited Liability Company Interests owned by the Debtor
from time to time and all of its right, title and interest
in each limited liability company to which each such Limited
Liability Company Interest relates, whether now existing or
hereafter acquired, including, without limitation, to the
fullest extent permitted under the terms and provisions of
the documents and agreements governing such Limited
Liability Company Interests and applicable law;
(A) all its capital therein and its interest in all
profits, income, surpluses, losses and other distributions to which
the Debtor shall at any time be entitled in respect of such Limited
Liability Company Interests;
(B) all other payments due or to become due to the Debtor
in respect of Limited Liability Company Interests, whether under any
limited liability company agreement or otherwise, whether as
contractual obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any limited liability company agreement or operating agreement,
or at law or otherwise in respect of such Limited Liability Company
Interests;
(D) all present and future claims, if any, of the Debtor
against any such limited liability company for monies loaned or
advanced, for services rendered or otherwise;
(E) all of the Debtor's rights under any limited liability
company agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and privilege of
the Debtor relating to such Limited Liability Company Interests,
including any power to terminate, cancel or modify any such limited
liability company agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf of and in
the name of any of the Debtor in respect of such Limited Liability
Company Interests and any such limited liability company, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing, to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
<Page>
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxv) all Partnership Interests owned by the Debtor from time to
time and all of its right, title and interest in each
partnership to which each such Partnership Interest relates,
whether now existing or hereafter acquired, including,
without limitation, to the fullest extent permitted under
the terms and provisions of the documents and agreements
governing such Partnership Interests and applicable law:
(A) all its capital therein and its interest in all
profits, income, surpluses, losses, and other distributions to which
the Debtor shall at any time be entitled in respect of such
Partnership Interests;
(B) all other payments due or to become due to the Debtor
in respect of Partnership Interests, whether under any partnership
agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any partnership agreement or operating agreement, or at law or
otherwise in respect of such Partnership Interests;
(D) all present and future claims, if any, of the Debtor
against any such partnership for monies loaned or advanced, for
services rendered or otherwise;
(E) all of the Debtor's rights under any partnership
agreement or operating agreement or at law to exercise and enforce
every right, power, remedy, authority, option and privilege of the
Debtor relating to such Partnership Interests, including any power to
terminate, cancel or modify any partnership agreement or operating
agreement, to execute any instruments and to take any and all other
action on behalf of and in the name of the Debtor in respect of such
Partnership Interests and any such partnership, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxvi) all Financial Assets owned by the Debtor from time to time;
(xxvii) all Security Entitlements owned by the Debtor from time to
time in any and all of the foregoing; and
(xxviii) all Proceeds and products of any and all of the foregoing
(all of the above, the "Collateral").
3. For the purpose of this Financing Statement, the following terms shall
have the meanings herein specified. Such definitions shall be equally applicable
to the singular and plural forms of the terms defined.
<Page>
"Account" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, and in any event shall include but shall not be limited to, all rights to
payment of any monetary obligation, whether or not earned by performance, (i)
for property that has been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a
policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for
the use or hire of a vessel under a charter or other contract, (vii) arising out
of the use of a credit or charge card or information contained on or for use
with the card (viii) as winnings in a lottery or other game of chance operated
or sponsored by a State governmental unit of a State, or person licensed or
authorized to operate the game by a State or governmental unit of a State.
Without limiting the foregoing, the term "account" shall include all
Health-Care-Insurance Receivables.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Secured Party.
"Chattel Paper" shall mean "chattel paper" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York. Without limiting the foregoing, the term "Chattel Paper" shall in any
event include all Tangible Chattel Paper and all Electronic Chattel Paper.
"Collateral Accounts" shall mean any and all accounts established and
maintained by the Secured Party in the name of the Debtor to which Collateral
may be credited.
"Commercial Tort Claims" shall mean "commercial tort claims" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Contract Rights" shall mean all rights of the Debtor under each
Contract, including, without limitation, (i) any and all rights to receive and
demand payments under any or all Contracts, (ii) any and all rights to receive
and compel performance under any or all Contracts and (iii) any and all other
rights, interests and claims now existing or in the future arising in connection
with any or all Contracts.
"Contracts" shall mean all contracts between the Debtor and one or
more additional parties (including, without limitation, any licensing agreements
and any partnership agreements, joint venture agreements and limited liability
company agreements), except to the extent that the grant by the Debtor of a
security interest in its right, title and interest in any such contract is
prohibited by such contract without the consent of any other party thereto (that
has not obtained) or would give any other party to such contract the right to
terminate its obligations thereunder; PROVIDED, that the foregoing limitation
(i) shall not affect, limit, restrict to impair the grant by the Debtor of a
security interest in any Account or any money or other amounts due or to become
due under any such contract and (ii) shall not apply to the extent the
provisions contained in such contract which prohibit such a grant by the Debtor
or provide such other party such a termination right would be rendered
unenforceable in accordance with applicable law (including the Uniform
Commercial Code) or principles of equity.
"Copyrights" shall mean any United States copyright now or hereafter
owned by the Debtor, including any registrations of any copyrights, in the
United States Copyright Office or any foreign equivalent office, as well as any
application for a copyright registration now or hereafter made with the United
States Copyright Office or any foreign equivalent office by the Debtor.
"Documents" shall mean "documents" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Domain Names" shall mean all Internet domain names and associated URL
addresses in or to which the Debtor now or hereafter has any right, title or
interest.
"Electronic Chattel Paper" shall mean "electronic chattel paper" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
<Page>
"Equipment" shall mean any "equipment" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by the Debtor and, in any event, shall include, but
shall not be limited to, all machinery, equipment, furnishings, fixtures and
vehicles now or hereafter owned by the Debtor and any and all additions,
substitutions and replacements of any of the foregoing and all accessions
thereto, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"Financial Asset" shall mean "financial asset" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"General Intangibles" shall mean "general intangibles" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Goods" shall mean "goods" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Health-Care-Insurance Receivable" shall mean any
"health-care-insurance receivable" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Instrument" shall mean "instruments" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof and all accessions thereto,
wherever located, together with all goods, supplies, incidentals, packaging
materials, labels, materials and any other items used or usable in
manufacturing, processing, packaging or shipping same, in all stages of
production from raw materials through work in process to finished goods, and all
products and proceeds of whatever sort and wherever located any portion thereof
which may be returned, rejected, reclaimed or repossessed by the Secured Party
from the Debtor's customers, and shall specifically include all "inventory" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Investment Property" shall mean "investment property" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Letter-of-Credit Rights" shall mean "letter-of-credit rights" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of new York.
"Limited Liability Company Interests" shall mean the entire limited
liability company membership interest at any time owned by the Debtor in any
limited liability company.
Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held or hereafter acquired by the
Debtor, including any registration or application for registration of any
trademarks and service marks now held or hereafter acquired by the Debtor, which
are registered or filed in the United State Patent and Trademark Office or the
equivalent thereof in any state of the United States or any equivalent foreign
office or agency, as well as any unregistered trademarks and service marks used
by the Debtor and any trade dress including logos, designs, fictitious, business
names and other business identifiers used by the Debtor.
"Notes" shall mean all promissory notes (including intercompany notes)
from time to time issued to, or held by, the Debtor.
"Partnership Interest" shall mean the entire general partnership
interest or limited partnership interest at any time owned by the Debtor in any
general partnership or limited partnership.
<Page>
"Patents" shall mean any United States or foreign patent in or to
which the Debtor now or hereafter has any right, title or interest therein, and
any divisions, continuations (including, but not limited to,
continuations-in-parts) and improvements thereof, as well as any application for
a United States or foreign patent now or hereafter made by the Debtor.
"Permits" shall mean, to the extent permitted to be assigned by the
terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations of or from any governmental authority or
agency.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Proceeds" shall mean all "proceeds" as such term is defined in the
Uniform Commercial Code as in effect in the State of New York on the date hereof
and, in any event, shall also include, but not be limited to (i) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to the
Secured Party or the Debtor from time to time with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or due and
payable to the Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under color of
governmental authority) and (iii) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Security" and "Securities" shall mean "securities" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York and shall in any event also include all Stock and all Notes.
"Security Entitlement" shall mean "security entitlement" as such term
is defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Software" shall mean "software" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Stock" shall mean all of the issued and outstanding shares of capital
stock of any corporation at any time directly owned by the Debtor.
"Supporting Obligations" shall mean any "supporting obligation" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York, now or hereafter owned by the Debtor, or in
which the Debtor has any rights, and, in any event, shall include, but shall not
be limited to all of such Debtor's rights in any Letter-of-Credit Right or
secondary obligation that supports the payment or performance of, and all
security for, any Account, Chattel Paper, Document, General Intangible,
Instrument or Investment Property.
"Tangible Chattel Paper" shall mean "tangible chattel paper" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Trade Secrets" shall mean any secretly held existing engineering or
other data, information, production procedures and other know-how relating to
the design manufacture, assembly, installation, use, operation, marketing, sale
and/or servicing of any products or business of the Debtor worldwide whether
written or not.
"Trade Secret Rights" shall mean the rights of the Debtor in a Trade
Secret it holds.
<Page>
UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER [optional]
B. SEND ACKNOWLEDGEMENT TO : (Name and Address)
LexisNexis Document Solutions
PO Box 2969
Springfield, IL 62708
THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only ONE debtor name (1a or 1b) - do
not abbriviate or combine names
1a. ORGANIZATION'S NAME
RBS North America, Inc.
OR
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
4701 West Greenfield Avenue MILWAUKEE WI 53214 USA
1d. TAX ID # SSN OR EIN ADD'NL. INFO RE
ORGANIZATI0N
DEBTOR
1e. TYPE OF ORGANIZATION
CORP
1f. JURISDICTION OF ORGANIZATION
DE
1g. ORGANIZATIONAL ID #, if any
/ / NONE
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only ONE debtor name
(2a or 2b) - do not abbriviate or combine names
2a. ORGANIZATION'S NAME
OR
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
2d. TAX ID # SSN OR EIN ADD'NL INFO RE
ORGANIZATION
DEBTOR
2e. TYPE OF ORGANIZATION
2f. JURISDICTION OF ORGANIZATION
2g. ORGANIZATIONAL ID #, if any
/ / NONE
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P) - insert
only ONE secured party name (3a or 3b)
3a. ORGANIZATION'S NAME
Deutsche Bank Trust Company Americas, as Collateral Agent
OR
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
31 West 52nd Street NEW YORK NY 10019 USA
4. This FINANCING STATEMENT covers the following collateral:
All assets of the Debtor, including, without limitation, as set forth on
Schedule I attached hereto and made a part hereof.
5. ALTERNATIVE DESIGNATION if applicable:
/ / LESSEE/LESSOR
/ / CONSIGNEE/CONSIGNOR
/ / BAILEE/BAILOR
/ / SELLER/BUYER
/ / AG LIEN
/ / NON-UCC FILING
6. / / This FINANCING STATEMENT is to be filed (for record) (or records) in the
REAL ESTATE RECORDS Attach Addendum [if applicable]
7. Check to REQUEST SEARCH REPORT(S) ON All Debtor(s) [ADDITIONAL FEE]
[optional]
/ / All Debtors
/ / Debtor 1
/ / Debtor 2
8. OPTIONAL FILER REFERENCE DATA
DE-SOS
FILING OFFICE COPY - NATIONAL UCC FINANCING STATEMENT (FORM UCC1)
(REV. 07/29/98)
LexisNexis Document Solutions
[ILLEGIBLE]
[ILLEGIBLE]
<Page>
SCHEDULE I
to UCC-I Financing Statement
by
RBS NORTH AMERICA, INC., as Debtor
in favor of
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent, Secured Party
1. This Financing Statement is presented to a Filing Officer for filing
pursuant to the Uniform Commercial Code.
2. This Financing Statement covers all of the rights, title and interest
of the Debtor in, to and under all assets, whether now existing or hereafter
from time to time acquired by the Debtor, including without limitation all of
the following (whether now existing or hereafter from time to time acquired by
the Debtor):
(i) each and every Account;
(ii) all cash;
(iii) the Cash Collateral Account and all monies, securities,
Instruments and other investments deposited or required to
be deposited in the Cash Collateral Account;
(iv) all Chattel Paper (including, without limitation, all
Tangible Chattel Paper and all Electronic Chattel Paper);
(v) all Commercial Tort Claims;
(vi) all computer programs of the Debtor and all intellectual
property rights therein and all other proprietary
information of the Debtor, including, but not limited to
Domain Names and Trade Secret Rights;
(vii) all Contracts, together with all Contract Rights arising
thereunder;
(viii) all Copyrights;
(ix) all Equipment;
(x) all Documents;
(xi) all General Intangibles;
(xii) all Goods;
(xiii) all Instruments;
(xiv) all Inventory;
(xv) all Investment Property;
(xvi) all Letter-of-Credit Rights (whether or not the respective
letter of credit is evidenced by a writing);
(xvii) all Marks, together with the registrations and right to all
renewals thereof, and the goodwill of the business of the
Debtor symbolized by the Marks;
(xviii) all Patents;
<Page>
(xix) all Permits;
(xx) all Software and all Software licensing rights, all
writings, plans, specifications and schematics, all
engineering drawings, customer lists, goodwill and licenses,
and all recorded data of any kind or nature, regardless of
the medium of recording;
(xxi) all Supporting Obligations;
(xxii) each of the Collateral Accounts, including any and all
assets of whatever type or kind deposited by the Debtor in
any such Collateral Account, whether now owned or hereafter
acquired, existing or arising, including, without
limitation, all Financial Assets, Investment Property,
monies, checks, drafts, Instruments, Securities or interests
therein of any type or nature deposited in such Collateral
Account, and all investments and all certificates and other
Instruments (including depository receipts, if any) from
time to time representing or evidencing the same, and all
dividends, interest, distributions, cash and other property
from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of
the foregoing;
(xxiii) all Securities owned or held by the Debtor from time to time
and all options and warrants owned by the Debtor from time
to time to purchase Securities;
(xxiv) all Limited Liability Company Interests owned by the Debtor
from time to time and all of its right, title and interest
in each limited liability company to which each such Limited
Liability Company Interest relates, whether now existing or
hereafter acquired, including, without limitation, to the
fullest extent permitted under the terms and provisions of
the documents and agreements governing such Limited
Liability Company Interests and applicable law:
(A) all its capital therein and its interest in all
profits, income, surpluses, losses and other distributions to which
the Debtor shall at any time be entitled in respect of such Limited
Liability Company Interests;
(B) all other payments due or to become due to the Debtor
in respect of Limited Liability Company Interests, whether under any
limited liability company agreement or otherwise, whether as
contractual obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any limited liability company agreement or operating agreement,
or at law or otherwise in respect of such Limited Liability Company
Interests;
(D) all present and future claims, if any, of the Debtor
against any such limited liability company for monies loaned or
advanced, for services rendered or otherwise;
(E) all of the Debtor's rights under any limited liability
company agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and privilege of
the Debtor relating to such Limited Liability Company Interests,
including any power to terminate, cancel or modify any such limited
liability company agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf of and in
the name of any of the Debtor in respect of such Limited Liability
Company Interests and any such limited liability company, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing, to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
<Page>
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxv) all Partnership Interests owned by the Debtor from time to
time and all of its right, title and interest in each
partnership to which each such Partnership Interest relates,
whether now existing or hereafter acquired, including,
without limitation, to the fullest extent permitted under
the terms and provisions of the documents and agreements
governing such Partnership Interests and applicable law;
(A) all its capital therein and its interest in all
profits, income, surpluses, losses, and other distributions to which
the Debtor shall at any time be entitled in respect of such
Partnership Interests;
(B) all other payments due or to become due to the Debtor
in respect of Partnership Interests, whether under any partnership
agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any partnership agreement or operating agreement, or at law or
otherwise in respect of such Partnership Interests;
(D) all present and future claims, if any, of the Debtor
against any such partnership for monies loaned or advanced, for
services rendered or otherwise;
(E) all of the Debtor's rights under any partnership
agreement or operating agreement or at law to exercise and enforce
every right, power, remedy, authority, option and privilege of the
Debtor relating to such Partnership Interests, including any power to
terminate, cancel or modify any partnership agreement or operating
agreement, to execute any instruments and to take any and all other
action on behalf of and in the name of the Debtor in respect of such
Partnership Interests and any such partnership, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxvi) all Financial Assets owned by the Debtor from time to time;
(xxvii) all Security Entitlements owned by the Debtor from time to
time in any and all of the foregoing; and
(xxviii) all Proceeds and products of any and all of the foregoing
(all of the above, the "Collateral").
3. For the purpose of this Financing Statement, the following terms shall
have the meanings herein specified. Such definitions shall be equally applicable
to the singular and plural forms of the terms defined.
<Page>
"Account" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, and in any event shall include but shall not be limited to, all rights to
payment of any monetary obligation, whether or not earned by performance, (i)
for property that has been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a
policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for
the use or hire of a vessel under a charter or other contract, (vii) arising out
of the use of a credit or charge card or information contained on or for use
with the card, or (viii) as winnings in a lottery or other game of chance
operated or sponsored by a State, governmental unit of a State, or person
licensed or authorized to operate the game by a State or governmental unit of a
State. Without limiting the foregoing, the term "account" shall include all
Health-Care-Insurance Receivables.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Secured Party.
"Chattel Paper" shall mean "chattel paper" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York. Without limiting the foregoing, the term "Chattel Paper" shall in any
event include all Tangible Chattel Paper and all Electronic Chattel Paper.
"Collateral Accounts" shall mean any and all accounts established and
maintained by the Secured Party in the name of the Debtor to which Collateral
may be credited.
"Commercial Tort Claims" shall mean "commercial tort claims" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Contract Rights" shall mean all rights of the Debtor under each
Contract, including, without limitation, (i) any and all rights to receive and
demand payments under any or all Contracts, (ii) any and all rights to receive
and compel performance under any or all Contracts and (iii) any and all other
rights, interests and claims now existing or in the future arising in connection
with any or all Contracts.
"Contracts" shall mean all contracts between the Debtor and one or
more additional parties (including, without limitation, any licensing agreements
and any partnership agreements, joint venture agreements and limited liability
company agreements), except to the extent that the grant by the Debtor of a
security interest in its right, title and interest in any such contract is
prohibited by such contract without the consent of any other party thereto (that
has not obtained) or would give any other party to such contract the right to
terminate its obligations thereunder; PROVIDED, that the foregoing limitation
(i) shall not affect, limit, restrict or impair the grant by the Debtor of a
security interest in any Account or any money or other amounts due or to become
due under any such contract and (ii) shall not apply to the extent the
provisions contained in such contract which prohibit such a grant by the Debtor
or provide such other party such a termination right would be rendered
unenforceable in accordance with applicable law (including the Uniform
Commercial Code) or principles of equity.
"Copyrights" shall mean any United States copyright now or hereafter
owned by the Debtor, including any registrations of any copyrights, in the
United States Copyright Office or any foreign equivalent office, as well as any
application for a copyright registration now or hereafter made with the United
States Copyright Office or any foreign equivalent office by the Debtor.
"Documents" shall mean "documents" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"Domain Names" shall mean all Internet domain names and associated URL
addresses in or to which the Debtor now or hereafter has any right, title or
interest.
"Electronic Chattel Paper" shall mean "electronic chattel paper" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
<Page>
"Equipment" shall mean any "equipment" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by the Debtor and, in any event, shall include, but
shall not be limited to, all machinery, equipment, furnishings, fixtures and
vehicles now or hereafter owned by the Debtor and any and all additions,
substitutions and replacements of any of the foregoing and all accessions
thereto, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"Financial Asset" shall mean "financial asset" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"General Intangibles" shall mean "general intangibles" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Goods" shall mean "goods" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Health-Care-Insurance Receivable" shall mean any
"health-care-insurance receivable" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Instrument" shall mean "instruments" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof and all accessions thereto,
wherever located, together with all goods, supplies, incidentals, packaging
materials, labels, materials and any other items used or usable in
manufacturing, processing, packaging or shipping same, in all stages of
production from raw materials through work in process to finished goods, and all
products and proceeds of whatever sort and wherever located any portion thereof
which may be returned, rejected, reclaimed or repossessed by the Secured Party
from the Debtor's customers, and shall specifically include all "inventory" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Investment Property" shall mean "investment property" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Letter-of-Credit Rights" shall mean "letter-of-credit rights" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Limited Liability Company Interests" shall mean the entire limited
liability company membership interest at any time owned by the Debtor in any
limited liability company.
"Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held or hereafter acquired by the
Debtor, including any registration or application for registration of any
trademarks and service marks now held or hereafter acquired by the Debtor, which
are registered or filed in the United States Patent and Trademark Office or the
equivalent thereof in any state of the United States or any equivalent foreign
office or agency, as well as any unregistered trademarks and service marks used
by the Debtor and any trade dress including logos, designs, fictitious business
names and other business identifiers used by the Debtor.
"Notes" shall mean all promissory notes (including intercompany notes)
from time to time issued to, or held by, the Debtor.
"Partnership Interest" shall mean the entire general partnership
interest or limited partnership interest at any time owned by the Debtor in any
general partnership or limited partnership.
<Page>
"Patents" shall mean any United States or foreign patent in or to
which the Debtor now or hereafter has any right, title or interest therein, and
any divisions, continuations (including, but not limited to,
continuations-in-parts) and improvements thereof, as well as any application for
a United States or foreign patent now or hereafter made by the Debtor.
"Permits" shall mean, to the extent permitted to be assigned by the
terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations of or from any governmental authority or
agency.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Proceeds" shall mean all "proceeds" as such term is defined in the
Uniform Commercial Code as in effect in the State of New York on the date hereof
and, in any event, shall also include, but not be limited to, (i) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to the
Secured Party or the Debtor from time to time with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or due and
payable to the Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under color of
governmental authority) and (iii) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Security" and "Securities" shall mean "securities" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York and shall in any event also include all Stock and all Notes.
"Security Entitlement" shall mean "security entitlement" as such term
is defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Software" shall mean "software" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Stock" shall mean all of the issued and outstanding shares of capital
stock of any corporation at any time directly owned by the Debtor.
"Supporting Obligations" shall mean any "supporting obligation" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York, now or hereafter owned by the Debtor, or in
which the Debtor has any rights, and, in any event, shall include, but shall not
be limited to all of such Debtor's rights in any Letter-of-Credit Right or
secondary obligation that supports the payment or performance of, and all
security for, any Account, Chattel Paper, Document, General Intangible,
Instrument or Investment Property.
"Tangible Chattel Paper" shall mean "tangible chattel paper" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Trade Secrets" shall mean any secretly held existing engineering or
other data, information, production procedures and other know-how relating to
the design manufacture, assembly, installation, use, operation, marketing, sale
and/or servicing of any products or business of the Debtor worldwide whether
written or not.
"Trade Secret Rights." shall mean the rights of the Debtor in a Trade
Secret it holds.
<Page>
UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER [optional]
B. SEND ACKNOWLEDGEMENT TO: (Name and Address)
LexisNexis Document Solutions
PO Box 2969
Springfield, IL 62708
THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only ONE debtor name (1a or 1b) - do
not abbreviate or combine names
1a. ORGANIZATION'S NAME
Rexnord Corporation
OR
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
4701 West Greenfield Avenue MILWAUKEE WI 53214. USA
1d. TAX ID # SSN OR EIN ADD'NL. INFO RE
ORGANIZATI0N
DEBTOR
1e. TYPE OF ORGANIZATION
CORP
1f. JURISDICTION OF ORGANIZATION
DE
1g. ORGANIZATIONAL ID #, if any
/ / NONE
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME-insert only ONE debtor name
(2a or 2b) - do not abbreviate or combine names
2a. ORGANIZATIONS NAME
OR
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
2d. TAX ID # SSN OR EIN ADD'NL INFO RE
ORGANIZATION
DEBTOR
2e. TYPE OF ORGANIZATION
2f. JURISDICTION OF ORGANIZATION
2g. ORGANIZATIONAL ID #, if any
/ / NONE
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P) - insert
only ONE secured party name (3a or 3b)
3a. ORGANIZATION'S NAME
Deutsche Bank Trust Company Americas, as Collateral Agent
OR
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
31 West 52nd Street NEW YORK NY 10019 USA
4. This FINANCING STATEMENT covers the following collateral:
All assets of the Debtor, including, without limitation, as set forth on
Schedule I attached hereto and made a part hereof.
5. ALTERNATIVE DESIGNATION if applicable:
/ / LESSEE/LESSOR
/ / CONSIGNEE/CONSIGNOR
/ / BAILEE/BAILOR
/ / SELLER/BUYER
/ / AG LIEN
/ / NON-UCC FILING
6. / / The FINANCING STATEMENT is to be filed (for record) (or records) in the
REAL ESTATE RECORDS Attach Addendum (if applicable)
7. Check to REQUEST SEARCH REPORT(S) ON Debtor(s) [ADDITIONAL FEE]
(optional)
/ / All Debtors
/ / Debtor 1
/ / Debtor 2
8. OPTIONAL FILER REFERENCE DATA
DE-SOS
FILING OFFICE COPY. NATIONAL \ (FORM UCC1)
(REV. 07/29/98)
LexisNexis Document Solutions
[ILLEGIBLE]
[ILLEGIBLE]
<Page>
SCHEDULE I
to UCC-1 Financing Statement
by
REXNORD CORPORATION, as Debtor
in favor of
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent, Secured Party
1. This Financing Statement is presented to a Filing Officer for filing
pursuant to the Uniform Commercial Code.
2. This Financing Statement covers all of the rights, title and interest
of the Debtor in, to and under all assets, whether now existing or hereafter
from time to time acquired by the Debtor, including without limitation all of
the following (whether now existing or hereafter from time to time acquired by
the Debtor):
(i) each and every Account;
(ii) all cash;
(iii) the Cash Collateral Account and all monies, securities,
Instruments and other investments deposited or required to
be deposited in the Cash Collateral Account;
(iv) all Chattel Paper (including, without limitation, all
Tangible Chattel Paper and all Electronic Chattel Paper);
(v) all Commercial Tort Claims;
(vi) all computer programs of the Debtor and all intellectual
property rights therein and all other proprietary
information of the Debtor, including, but not limited to
Domain Names and Trade Secret Rights;
(vii) all Contracts, together with all Contract Rights arising
thereunder;
(viii) all Copyrights;
(ix) all Equipment;
(x) all Documents;
(xi) all General Intangibles;
(xii) all Goods;
(xiii) all Instruments;
(xiv) all Inventory;
(xv) all Investment Property;
(xvi) all Letter-of-Credit Rights (whether or not the respective
letter of credit is evidenced by a writing);
(xvii) all Marks, together with the registrations and right to all
renewals thereof, and the goodwill of the business of the
Debtor symbolized by the Marks;
(xviii) all Patents;
<Page>
(xix) all Permits;
(xx) all Software and all Software licensing rights, all
writings, plans, specifications and schematics, all
engineering drawings, customer lists, goodwill and licenses,
and all recorded data of any kind or nature, regardless of
the medium of recording;
(xxi) all Supporting Obligations;
(xxii) each of the Collateral Accounts, including any and all
assets of whatever type or kind deposited by the Debtor in
any such Collateral Account, whether now owned or hereafter
acquired, existing or arising, including, without
limitation, all Financial Assets, Investment Property,
monies, checks, drafts, Instruments, Securities or interests
therein of any type or nature deposited in such Collateral
Account, and all investments and all certificates and other
Instruments (including depository receipts, if any) from
time to time representing or evidencing the same, and all
dividends, interest, distributions, cash and other property
from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of
the foregoing;
(xxiii) all Securities owned or held by the Debtor from time to time
and all options and warrants owned by the Debtor from time
to time to purchase Securities;
(xxiv) all Limited Liability Company Interests owned by the Debtor
from time to time and all of its right, title and interest
in each limited liability company to which each such Limited
Liability Company Interest relates, whether now existing or
hereafter acquired, including, without limitation, to the
fullest extent permitted under the terms and provisions of
the documents and agreements governing such Limited
Liability Company Interests and applicable law:
(A) all its capital therein and its interest in all
profits, income, surpluses, losses and other distributions to which
the Debtor shall at any time be entitled in respect of such Limited
Liability Company Interests;
(B) all other payments due or to become due to the Debtor
in respect of Limited Liability Company Interests, whether under any
limited liability company agreement or otherwise, whether as
contractual obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any limited liability company agreement or operating agreement,
or at law or otherwise in respect of such Limited Liability Company
Interests;
(D) all present and future claims, if any, of the Debtor
against any such limited liability company for monies loaned or
advanced, for services rendered or otherwise;
(E) all of the Debtor's rights under any limited liability
company agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and privilege of
the Debtor relating to such Limited Liability Company Interests,
including any power to terminate, cancel or modify any such limited
liability company agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf of and in
the name of any of the Debtor in respect of such Limited Liability
Company Interests and any such limited liability company, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing, to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
<Page>
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxv) all Partnership Interests owned by the Debtor from time to
time and all of its right, title and interest in each
partnership to which each such Partnership Interest relates,
whether now existing or hereafter acquired, including,
without limitation, to the fullest extent permitted under
the terms and provisions of the documents and a agreements
governing such Partnership Interests and applicable law:
(A) all its capital therein and its interest in all
profits, income, surpluses, losses, and other distributions to which
the Debtor shall at any time be entitled in respect of such
Partnership Interests;
(B) all other payments due or to become due to the Debtor
in respect of Partnership Interests, whether under any partnership
agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any partnership agreement or operating agreement, or at law or
otherwise in respect of such Partnership Interest;
(D) all present and future claims, if any, of the Debtor
against any such partnership for monies loaned or advanced, for
services rendered or otherwise;
(E) all of the Debtor's rights under any partnership
agreement or operating agreement or at law to exercise and enforce
every right, power, remedy, authority, option and privilege of the
Debtor relating to such Partnership Interests, including any power to
terminate, cancel or modify any partnership agreement or operating
agreement, to execute any instruments and to take any and all other
action on behalf of and in the name of the Debtor in respect of such
Partnership Interests and any such partnership, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing: and
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxvi) all Financial Assets owned by the Debtor from time to time;
(xxvii) all Security Entitlements owned by the Debtor form time to
time in any and all of the foregoing; and
(xxviii) all Proceeds and products of any and all of the foregoing
(all of the above, the "Collateral").
3. For the purpose of this Financing Statement, the following terms shall
have the meanings herein specified. Such definitions shall be equally applicable
to the singular and plural forms of the terms defined.
<Page>
"Account" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, and in any event shall include but shall not be limited to, all rights to
payment of any monetary obligation, whether or not earned by performance, (i)
for property that has been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a
policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for
the use or hire of a vessel under a charter or other contract, (vii) arising out
of the use of a credit or charge card or information contained on or for use
with the card, or (viii) as winnings in a lottery or other game of chance
operated or sponsored by a State, governmental unit of a State, or person
licensed or authorized to operate the game by a State or governmental unit of a
State. Without limiting the foregoing, the term "account" shall include all
Health-Care-Insurance Receivables.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Secured Party.
"Chattel Paper" shall mean "chattel paper" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York. Without limiting the foregoing, the term "Chattel Paper" shall in any
event include all Tangible Chattel Paper and all Electronic Chattel Paper.
"Collateral Accounts" shall mean any and all accounts established and
maintained by the Secured Party in the name of the Debtor to which Collateral
may be credited.
"Commercial Tort Claims" shall mean "commercial tort claims" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Contract Rights" shall mean all rights of the Debtor under each
Contract, including, without limitation, (i) any and all rights to receive and
demand payments under any or all Contracts, (ii) any and all rights to receive
and compel performance under any or all Contracts and (iii) any and all other
rights, interests and claims now existing or in the future arising in connection
with any or all Contracts.
"Contracts" shall mean all contracts between the Debtor and one or
more additional parties (including, without limitation, any licensing agreements
and any partnership agreements, joint venture agreements and limited liability
company agreements), except to the extent that the grant by the Debtor of a
security interest in its right, title and interest in any such contract is
prohibited by such contract without the consent of any other party thereto (that
has not obtained) or would give any other party to such contract the right to
terminate its obligations thereunder; PROVIDED, that the foregoing limitation
(i) shall not affect, limit, restrict or impair the grant by the Debtor of a
security interest in any Account or any money or other amount due or to become
due under any such contract and (ii) shall not apply to the extent the
provisions contained in such contract which prohibit such a grant by the Debtor
or provide such other party such a termination right would be rendered
unenforceable in accordance with applicable law (including the Uniform
Commercial Code) or principles of equity.
"Copyrights" shall mean any United States copyright now or hereafter
owned by the Debtor, including any registrations of any copyrights, in the
United States Copyright Office or any foreign equivalent office, as well as any
application for a copyright registration now or hereafter made with the United
States Copyright Office or any foreign equivalent office by the Debtor.
"Documents" shall mean "documents" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Domain Names" shall mean all Internet domain names and associated URL
addresses in or to which the Debtor now or hereafter has any right, title or
interest.
"Electronic Chattel Paper" shall mean "electronic chattel paper" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
-4-
<Page>
"Equipment" shall mean any "equipment" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by the Debtor and, in any event, shall include, but
shall not be limited to, all machinery, equipment, furnishings, fixtures and
vehicles now or hereafter owned by the Debtor and any and all additions,
substitutions and replacements of any of the foregoing and all accessions
thereto, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"Financial Asset" shall mean "financial asset" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"General Intangibles" shall mean "general intangibles" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Goods" shall mean "goods" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Health-Care-Insurance Receivable" shall mean any
"health-care-insurance receivable" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Instrument" shall mean "instruments" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof and all accessions thereto,
wherever located, together with all goods, supplies, incidentals, packaging
materials, labels, materials and any other items used or usable in
manufacturing, processing, packaging or shipping same, in all stages of
production from raw materials through work in process to finished goods, and all
products and proceeds of whatever sort and wherever located any portion thereof
which may be returned, rejected, reclaimed or repossessed by the Secured Party
from the Debtor's customers, and shall specifically include all "inventory" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Investment Property" shall mean "investment property" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Letter-of-Credit Rights" shall mean "letter-of-credit rights" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of new York.
"Limited Liability Company Interests" shall mean the entire limited
liability company membership interest at any time owned by the Debtor in any
limited liability company.
"Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held or hereafter acquired by the
Debtor, including any registration or application for registration of any
trademarks and service marks now held or hereafter acquired by the Debtor, which
are registered or filed in the United States Patent and Trademark Office or the
equivalent thereof in any state of the United States or any equivalent foreign
office or agency, as well as any unregistered trademarks and service marks used
by the Debtor and any trade dress including logos, designs, fictitious business
names and other business identifiers used by the Debtor.
"Notes" shall mean all promissory notes (including intercompany notes)
from time to time issued to, or held by, the Debtor.
"Partnership Interest" shall mean the entire general partnership
interest or limited partnership interest at any time owned by the Debtor in any
general partnership or limited partnership.
-5-
<Page>
"Patents" shall mean any United States or foreign patent in or to
which the Debtor now or hereafter has any right, title or interest therein, and
any divisions, continuations (including, but not limited to,
continuations-in-parts) and improvements thereof, as well as any application for
a United States or foreign patent now or hereafter made by the Debtor.
"Permits" shall mean, to the extent permitted to be assigned by the
terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations of or from any governmental authority or
agency.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Proceeds" shall mean all "proceeds" as such term is defined in the
Uniform Commercial Code as in effect in the State of New York on the date hereof
and, in any event, shall also include, but not be limited to, (i) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to the
Secured Party or the Debtor from time to time with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or due and
payable to the Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under color of
governmental authority) and (iii) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Security" and "Securities" shall mean "securities" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York and shall in any event also include all Stock and all Notes.
"Security Entitlement" shall mean "security entitlement" as such term
is defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Software" shall mean "software" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Stock" shall mean all of the issued and outstanding shares of capital
stock of any corporation at any time directly owned by the Debtor.
"Supporting Obligations" shall mean any "supporting obligation" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York, now or hereafter owned by the Debtor, or in
which the Debtor has any rights, and, in any event, shall include, but shall not
be limited to all of such Debtor's rights in any Letter-of-Credit Right or
secondary obligation that supports the payment or performance of, and all
security for, any Account, Chattel Paper, Document, General Intangible,
Instrument or Investment Property.
"Tangible Chattel Paper" shall mean "tangible chattel paper" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Trade Secrets" shall mean any secretly held existing engineering or
other data, information, production procedures and other know-how relating to
the design manufacture, assembly, installation, use, operation, marketing, sale
and/or servicing of any products or business of the Debtor worldwide whether
written or not.
"Trade Secret Rights" shall mean the rights of the Debtor in a Trade
Secret it holds.
-6-
<Page>
UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER [optional]
B. SEND ACKNOWLEDGMENT TO: (Name and Address)
LEXIS Document Services
PO Box 2969
Sp IL
THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name(1a or 1b) - do
not abbreviate or combine names
1a. ORGANIZATION'S NAME
PT Components, Inc.
OR
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
4701 West Greenfield Avenue MILWAUKEE WI 53214 USA
1d. TAX ID # SSN OR EIN ADD'NL. INFO RE
ORGANIZATION
DEBTOR
1e. TYPE OF ORGANIZATION
CORP
1f. JURISDICTION OF ORGANIZATION
DE
1g. ORGANIZATIONAL ID #, if any
/ / NONE
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name
(2a or 2b) - do not abbreviate or combine names
2a. ORGANIZATION'S NAME
OR
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
2d. TAX ID # SSN OR EIN ADD'NL. INFO RE
ORGANIZATION
DEBTOR
2e. TYPE OF ORGANIZATION
2f. JURISDICTION OF ORGANIZATION
2g. ORGANIZATIONAL ID #, if any
/ / NONE
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P) - insert
only one selected party name (3a or 3b)
3a. ORGANIZATION'S NAME
Deutsche Bank Trust Company Americas, as Collateral Agent
OR
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
31 West 52nd Street NEW YORK NY 10019 USA
4. This FINANCING STATEMENT covers the following collateral:
All assets of the Debtor, including, without limitation, as set forth on
Schedule I attached hereto and made a part hereof.
5. ALTERNATIVE DESIGNATION if applicable:
/ / LESSEE/LESSOR
/ / CONSIGNEE/CONSIGNOR
/ /BAILEE/BAILOR
/ /SELLER/BUYER
/ / AG LIEN
/ / NON-UCC FILING
6. /X/ The FINANCING STATEMENT is to be filed (for record) (or records) in the
REAL ESTATE RECORDS Attach Addendum (if applicable)
7. Check to REQUEST SEARCH REPORT(S) on Debtor(s) [ADDITIONAL FEE]
[optional]
/ / All Debtors
/ / Debtor 1
/ / Debtor 2
8. OPTIONAL FILER REFERENCE DATA
DE-SOS
FILING OFFICE COPY - NATIONAL UCC FINANCING STATEMENT (FORM UCC1)
(REV. 07/29/98)
LexisNexis Document Solutions
[ILLEGIBLE]
<Page>
SCHEDULE I
to UCC-1 Financing Statement
by
PT COMPONENTS, INC., as Debtor
in favor of
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent, Secured Party
1. This Financing Statement is presented to a Filing Officer for filing
pursuant to the Uniform Commercial Code.
2. This Financing Statement covers all of the rights, title and interest
of the Debtor in, to and under all assets, whether now existing or hereafter
from time to time acquired by the Debtor, including without limitation all of
the following (whether now existing or hereafter from time to time acquired by
the Debtor);
(i) each and every Account;
(ii) all cash;
(iii) the Cash Collateral Account and all monies, securities,
Instruments and other investments deposited or required to
be deposited in the Cash Collateral Account;
(iv) all Chattel Paper (including, without limitation, all
Tangible Chattel Paper and all Electronic Chattel Paper);
(v) all Commercial Tort Claims;
(vi) all computer programs of the Debtor and all intellectual
property rights therein and all other proprietary
information of the Debtor, including, but not limited to
Domain Names and Trade Secret Rights;
(vii) all Contracts, together with all Contract Rights arising
thereunder;
(viii) all Copyrights;
(ix) all Equipment;
(x) all Documents;
(xi) all General Intangibles;
(xii) all Goods;
(xiii) all Instruments;
(xiv) all Inventory;
(xv) all Investment Property;
(xvi) all Letter-of-Credit Rights (whether or not the respective
letter of credit is evidenced by a writing);
(xvii) all Marks, together with the registrations and right to all
renewals thereof, and the goodwill of the business of the
Debtor symbolized by the Marks;
(xviii) all Patents;
<Page>
(xix) all Permits;
(xx) all Software and all Software licensing rights, all
writings, plans, specifications and schematics, all
engineering drawings, customer lists, goodwill and licenses,
and all recorded data of any kind or nature, regardless of
the medium of recording;
(xxi) all Supporting Obligations;
(xxii) each of the Collateral Accounts, including any and all
assets of whatever type or kind deposited by the Debtor in
any such Collateral Account, whether now owned or hereafter
acquired, existing or arising, including, without
limitation, all Financial Assets, Investment Property,
monies, checks, drafts, Instruments, Securities or interests
therein of any type or nature deposited in such Collateral
Account, and all investments and all certificates and other
Instruments (including depository receipts, if any) from
time to time representing or evidencing the same, and all
dividends, interest, distributions, cash and other property
from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of
the foregoing;
(xxiii) all Securities owned or held by the Debtor from time to time
and all options and warrants owned by the Debtor from time
to time to purchase Securities;
(xxiv) all Limited Liability Company Interests owned by the Debtor
from time to time and all of its right, title and interest
in each limited liability company to which each such Limited
Liability Company Interest relates, whether now existing or
hereafter acquired, including, without limitation, to the
fullest extent permitted under the terms and provisions of
the documents and agreements governing such Limited
Liability Company Interests and applicable law:
(A) all its capital therein and its interest in all
profits, income, surpluses, losses and other distributions to which
the Debtor shall at any time be entitled in respect of such Limited
Liability Company Interests;
(B) all other payments due or to become due to the Debtor
in respect of Limited Liability Company Interests, whether under any
limited liability company agreement or otherwise, whether as
contractual obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any limited liability company agreement or operating agreement,
or at law or otherwise in respect of such Limited Liability Company
Interests;
(D) all present and future claims, if any, of the Debtor
against any such limited liability company for monies loaned or
advanced, for services rendered or otherwise;
(E) all of the Debtor's rights under any limited liability
company agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and privilege of
the Debtor relating to such Limited Liability Company Interests,
including any power to terminate, cancel or modify any such limited
liability company agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf of and in
the name of any of the Debtor in respect of such Limited Liability
Company Interests and any such limited liability company, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing, to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
<Page>
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxv) all Partnership Interests owned by the Debtor from time to
time and all of its right, title and interest in each
partnership to which each such Partnership Interest relates,
whether now existing or hereafter acquired, including,
without limitation, to the fullest extent permitted under
the terms and provisions of the documents and agreements
governing such Partnership Interests and applicable law:
(A) all its capital therein and its interest in all
profits, income, surpluses, losses, and other distributions to which
the Debtor shall at any time be entitled in respect of such
Partnership Interests;
(B) all other payments due or to become due to the Debtor
in respect of Partnership Interests, whether under any partnership
agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any partnership agreement or operating agreement, or at law or
otherwise in respect of such Partnership Interests;
(D) all present and future claims, if any, of the Debtor
against any such partnership for monies loaned or advanced, for
services rendered or otherwise;
(E) all of the Debtor's rights under any partnership
agreement or operating agreement or at law to exercise and enforce
every right, power, remedy, authority, option and privilege of the
Debtor relating to such Partnership Interests, including any power to
terminate, cancel or modify any partnership agreement or operating
agreement, to execute any instruments and to take any and all other
action on behalf of and in the name of the Debtor in respect of such
Partnership Interests and any such partnership, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxvi) all Financial Assets owned by the Debtor from time to time;
(xxvii) all Security Entitlements owned by the Debtor from time to
time in any and all of the foregoing; and
(xxviii) all Proceeds and products of any and all of the foregoing
(all of the above, the "Collateral").
3. For the purpose of this Financing Statement, the following terms shall
have the meanings herein specified. Such definitions shall be equally applicable
to the singular and plural forms of the terms defined.
<Page>
"Account" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, and in any event shall include but shall not be limited to, all rights to
payment of any monetary obligation, whether or not earned by performance, (i)
for property that has been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a
policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for
the use or hire of a vessel under a charter or other contract, (vii) arising out
of the use of a credit or charge card or information contained on or for use
with the card, or (viii) as winnings in a lottery or other game of chance
operated or sponsored by a State, governmental unit of a State, or person
licensed or authorized to operate the game by a State or governmental unit of a
State. Without limiting the foregoing, the term "account" shall include all
Health-Care-Insurance Receivables.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Secured Party.
"Chattel Paper" shall mean "chattel paper" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York. Without limiting the foregoing, the term "Chattel Paper" shall in any
event include all Tangible Chattel Paper and all Electronic Chattel Paper.
"Collateral Accounts" shall mean any and all accounts established and
maintained by the Secured Party in the name of the Debtor to which Collateral
may be credited.
"Commercial Tort Claims" shall mean "commercial tort claims" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Contract Rights" shall mean all rights of the Debtor under each
Contract, including, without limitation, (i) any and all rights to receive and
demand payments under any or all Contracts, (ii) any and all rights to receive
and compel performance under any or all Contracts and (iii) any and all other
rights, interests and claims now existing or in the future arising in connection
with any or all Contracts.
"Contracts" shall mean all contracts between the Debtor and one or
more additional parties (including, without limitation, any licensing agreements
and any partnership agreements, joint venture agreements and limited liability
company agreements), except to the extent that the grant by the Debtor of a
security interest in its right, title and interest in any such contract is
prohibited by such contract without the consent of any other party thereto (that
has not obtained) or would give any other party to such contract the right to
terminate its obligations thereunder; PROVIDED, that the foregoing limitation
(i) shall not affect, limit, restrict or impair the grant by the Debtor of a
security interest in any Account or any money or other amounts due or to become
due under any such contract and (ii) shall not apply to the extent the
provisions contained in such contract which prohibit such a grant by the Debtor
or provide such other party such a termination right would be rendered
unenforceable in accordance with applicable law (including the Uniform
Commercial Code) or principles of equity.
"Copyrights" shall mean any United States copyright now or hereafter
owned by the Debtor, including any registrations of any copyrights, in the
United States Copyright Office or any foreign equivalent office, as well as any
application for a copyright registration now or hereafter made with the United
States Copyright Office or any foreign equivalent office by the Debtor.
"Documents" shall mean "documents" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Domain Names" shall mean all Internet domain names and associated URL
addresses in or to which the Debtor now or hereafter has any right, title or
interest.
"Electronic Chattel Paper" shall mean "electronic chattel paper" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
<Page>
"Equipment" shall mean any "equipment" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by the Debtor and, in any event, shall include, but
shall not be limited to, all machinery, equipment, furnishings, fixtures and
vehicles now or hereafter owned by the Debtor and any and all additions,
substitutions and replacements of any of the foregoing and all accessions
thereto, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"Financial Asset" shall mean "financial asset" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"General Intangibles" shall mean "general intangibles" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Goods" shall mean "goods" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Health-Care-Insurance Receivable" shall mean any
"health-care-insurance receivable" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Instrument" shall mean "instruments" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof and all accessions thereto,
wherever located, together with all goods, supplies, incidentals, packaging
materials, labels, materials and any other items used or usable in
manufacturing, processing, packaging or shipping same, in all stages of
production from raw materials through work in process to finished goods, and all
products and proceeds of whatever sort and wherever located any portion thereof
which may be returned, rejected, reclaimed or repossessed by the Secured Party
from the Debtor's customers, and shall specifically include all "inventory" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Investment Property" shall mean "investment property" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Letter-of-Credit Rights" shall mean "letter-of-credit rights" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
Limited Liability Company Interests" shall mean the entire limited
liability company membership interest at any time owned by the Debtor in any
limited liability company.
"Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held or hereafter acquired by the
Debtor, including any registration or application for registration of any
trademarks and service marks now held or hereafter acquired by the Debtor, which
are registered or filed in the United States Patent and Trademark Office or the
equivalent thereof in any state of the United States or any equivalent foreign
office or agency, as well as any unregistered trademarks and service marks used
by the Debtor and any trade dress including logos, designs, fictitious business
names and other business identifiers used by the Debtor.
"Notes" shall mean all promissory notes (including intercompany notes)
from time to time issued to, or held by, the Debtor.
"Partnership Interest" shall mean the entire general partnership
interest or limited partnership interest at any time owned by the Debtor in any
general partnership or limited partnership.
<Page>
"Patents" shall mean any United States or foreign patent in or to
which the Debtor now or hereafter has any right, title or interest therein, and
any divisions, continuations (including, but not limited to,
continuations-in-parts) and improvements thereof, as well as any application for
a United States or foreign patent now or hereafter made by the Debtor.
"Permits" shall mean, to the extent permitted to be assigned by the
terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations of or from any governmental authority or
agency.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Proceeds" shall mean all "proceeds" as such term is defined in the
Uniform Commercial Code as in effect in the State of New York on the date hereof
and, in any event, shall also include, but not be limited to, (i) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to the
Secured Party or the Debtor from time to time with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or due and
payable to the Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under color of
governmental authority) and (iii) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Security" and "Securities" shall mean "securities" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York and shall in any event also include all Stock and all Notes.
"Security Entitlement" shall mean "security entitlement" as such term
is defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Software" shall mean "software" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Stock" shall mean all of the issued and outstanding shares of capital
stock of any corporation at any time directly owned by the Debtor.
"Supporting Obligations" shall mean any "supporting obligation" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York, now or hereafter owned by the Debtor, or in
which the Debtor has any rights, and, in any event, shall include, but shall not
be limited to all of such Debtor's rights in any Letter-of-Credit Right or
secondary obligation that supports the payment or performance of, and all
security for, any Account, Chattel Paper, Document, General Intangible,
Instrument or Investment Property.
"Tangible Chattel Paper" shall mean "tangible chattel paper" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Trade Secrets" shall mean any secretly held existing engineering or
other data, information, production procedures and other know-how relating to
the design manufacture, assembly, installation, use, operation, marketing, sale
and/or servicing of any products or business of the Debtor worldwide whether
written or not.
"Trade Secret Rights" shall mean the rights of the Debtor in a Trade
Secret it holds.
<Page>
UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER [optional]
B. SEND ACKNOWLEDGMENT TO: (Name and Address)
LexisNexis Document Solutions
PO Box 2969
Springfield, IL 62708
THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
1. DEBTOR'S EXACT FULL LEGAL NAME - Insert only one debtor name(1a or 1b) - do
not abbreviate or combine names
1a. ORGANIZATION'S NAME
Winfred Berg Licensco Inc.
OR
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
1105 North Market Street, Suite 1300 WILMINGTON DE 19801 USA
1d. TAX ID # SSN OR EIN ADD'NL. INFO RE
ORGANIZATION
DEBTOR
1e. TYPE OF ORGANIZATION
CORP
1f. JURISDICTION OF ORGANIZATION
DE
1g. ORGANIZATIONAL ID #, if any
/ / NONE
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name
(2a or 2b) - do not abbreviate or combine names
2a. ORGANIZATION'S NAME
OR
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
2d. TAX ID # SSN OR EIN ADD'NL. INFO RE
ORGANIZATION
DEBTOR
2e. TYPE OF ORGANIZATION
2f. JURISDICTION OF ORGANIZATION
2g. ORGANIZATIONAL ID #, if any
/ / NONE
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSINGNOR S/P) - insert
only one selected party name (3a or 3b)
3a. ORGANIZATION'S NAME
Deutsche Bank Trust Company Americas, as Collateral Agent
OR
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
31 West 52nd Street NEW YORK NY 10019 USA
4. This FINANCING STATEMENT covers the following collateral:
All assets of the Debtor, including, without limitation, as set forth on
Schedule I attached hereto and made a part hereof.
5. ALTERNATIVE DESIGNATION if applicable:
/ / LESSEE/LESSOR
/ / CONSIGNEE/CONSIGNOR
/ / BAILEE/BAILOR
/ / SELLER/BUYER
/ / AG LIEN
/ / NON-UCC FILING
6. / / The FINANCING STATEMENT is to be filed (for record) (or records) in the
REAL ESTATE RECORDS Attach Addendum (if applicable)
7. Check to REQUEST SEARCH REPORT(S) on Debtor(s) [ADDITIONAL FEE]
(optional)
/ / All Debtors
/ / Debtor 1
/ / Debtor 2
8. OPTIONAL FILER REFERENCE DATA
DE-SOS
FILING OFFICE COPY - NATIONAL UCC FINANCING STATEMENT (FORM UCC1)
(REV. 07/29/98)
LexisNexis Document Solutions
[ILLEGIBLE]
[ILLEGIBLE]
<Page>
SCHEDULE I
to UCC-1 Financing Statement
by
WINIFRED BERG LICENSCO INC., as Debtor
in favor of
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent, Secured Party
1. This Financing Statement is presented to a Filing Officer for filing
pursuant to the Uniform Commercial Code.
2. This Financing Statement covers all of the rights, title and interest
of the Debtor in, to and under all assets, whether now existing or hereafter
from time to time acquired by the Debtor, including without limitation all of
the following (whether now existing or hereafter from time to time acquired by
the Debtor):
(i) each and every Account;
(ii) all cash;
(iii) the Cash Collateral Account and all monies, securities,
Instruments and other investments deposited or required to
be deposited in the Cash Collateral Account;
(iv) all Chattel Paper (including, without limitation, all
Tangible Chattel Paper and all Electronic Chattel Paper);
(v) all Commercial Tort Claims;
(vi) all computer programs of the Debtor and all intellectual
property rights therein and all other proprietary
information of the Debtor, including, but not limited to
Domain Names and Trade Secret Rights;
(vii) all Contracts, together with all Contract Rights arising
thereunder;
(viii) all Copyrights;
(ix) all Equipment;
(x) all Documents;
(xi) all General Intangibles;
(xii) all Goods;
(xiii) all Instruments;
(xiv) all Inventory;
(xv) all Investment property;
(xvi) all Letter-of-Credit Rights (whether or not the respective
letter of credit is evidenced by a writing);
(xvii) all Marks, together with the registrations and right to all
renewals thereof, and the goodwill of the business of the
Debtor symbolized by the Marks;
(xviii) all Patents;
<Page>
(xix) all Permits;
(xx) all Software and all Software licensing rights, all
writings, plans, specifications and schematics, all
engineering drawings, customer lists, goodwill and
licenses, and all recorded data of any kind or nature,
regardless of the medium of recording;
(xxi) all Supporting Obligations;
(xxii) each of the Collateral Accounts, including any and all
assets of whatever type or kind deposited by the Debtor in
any such Collateral Account, whether now owned or hereafter
acquired, existing or arising, including, without
limitations, all Financial Assets, Investment Property,
monies, checks, drafts, Instruments, Securities or interests
therein of any type or nature deposited in such Collateral
Account, and all investments and all certificates and other
Instruments (including depository receipts, if any) from
time to time representing or evidencing the same, and all
dividends, interest, distributions, cash and other property
from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of
the foregoing;
(xxiii) all Securities owned or held by the Debtor from time to time
and all options and warrants owned by the Debtor from time
to time to purchase Securities;
(xxiv) all Limited Liability Company Interests owned by the Debtor
from time to time and all of its right, title and interest
in each limited liability company to which each such Limited
Liability Company Interest relates, whether now existing or
hereafter acquired, including, without limitation, to the
fullest extent permitted under the terms and provisions of
the documents and agreements governing such Limited
Liability Company Interests and applicable law;
(A) all its capital therein and its interest in all
profits, income, surpluses, losses and other distributions to which
the Debtor shall at any time be entitled in respect of such Limited
Liability Company Interests;
(B) all other payments due or to become due to the Debtor
in respect of Limited Liability Company Interests, whether under any
limited liability company agreement or otherwise, whether as
contractual obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any limited liability company agreement or operating agreement,
or at law or otherwise in respect of such Limited Liability Company
Interests;
(D) all present and future claims, if any, of the Debtor
against any such limited liability company for monies loaned or
advanced, for services rendered or otherwise;
(E) all of the Debtor's rights under any limited liability
company agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and privilege of
the Debtor relating to such Limited Liability Company Interests,
including any power to terminate, cancel or modify any such limited
liability company agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf of and in
the name of any of the Debtor in respect of such Limited Liability
Company Interests and any such limited liability company, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing, to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
<Page>
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxv) all Partnership Interests owned by the Debtor from time to
time and all of its right, title and interest in each
partnership to which each such Partnership Interest relates,
whether now existing or hereafter acquired, including,
without limitation, to the fullest extent permitted under
the terms and provisions of the documents and agreements
governing such Partnership Interests and applicable law;
(A) all its capital therein and its interests in all
profits, income, surpluses, losses, and other distributions to which
the Debtor shall at any time be entitled in respect of such
Partnership Interests;
(B) all other payments due or to become due to the Debtor
in respect of Partnership Interests, whether under any partnership
agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any partnership agreement or operating agreement, or at law or
otherwise in respect of such Partnership Interests;
(D) all present and future claims, if any, of the Debtor
against any such partnership for monies loaned or advanced, for
services rendered or otherwise;
(E) all of the Debtor's rights under any partnership
agreement or operating agreement or at law to exercise and enforce
every right, power, remedy, authority, option and privilege of the
Debtor relating to such Partnership Interests, including any power to
terminate, cancel or modify any partnership agreement or operating
agreement, to execute any instruments and to take any and all other
action on behalf of and in the name of the Debtor in respect of such
Partnership Interests and any such partnership, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing;and
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxvi) all Financial Assets owned by Debtor from time to time;
(xxvii) all Security Entitlements owned by the Debtor from time to
time in any and all of the foregoing; and
(xxviii) all Proceeds and products of any and all of the foregoing
(all of the above, the "Collateral").
3. For the purpose of this Financing Statement, the following terms
shall have the meanings herein specified. Such definitions shall be equally
applicable to the singular and plural forms of the terms defined.
<Page>
"Account" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, and in any event shall include but shall not be limited to, all rights to
payment of any monetary obligation, whether or not earned by performance, (i)
for property that has been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a
policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided,(vi) for
the use or hire of a vessel under a charter or other contract, (vii) arising out
of the use of a credit or charge card or information contained on or for use
with the card, or (viii) as winnings in a lottery or other game of chance
operated or sponsored by a State, governmental unit of a State, or person
licensed or authorized to operate the game by a State or governmental unit of a
State. Without limiting the foregoing, the term "account" shall include all
Health-Care-Insurance Receivables.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Secured Party.
"Chattel Paper" shall mean "chattel paper" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York. Without limiting the foregoing, the term "Chattel Paper" shall in any
event include all Tangible Chattel Paper and all Electronic Chattel Paper.
"Collateral Accounts" shall mean any and all accounts established and
maintained by the Secured Party in the name of the Debtor to which Collateral
may be credited.
"Commercial Tort Claims" shall mean "commercial tort claims" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Contract Rights" shall mean all rights of the Debtor under each
Contract, including, without limitation, (i) any and all rights to receive and
demand payments under any or all Contracts, (ii) any and all rights to receive
and compel performance under any or all Contracts and (iii) any and all other
rights, interests and claims now existing or in the future arising in connection
with any or all Contracts.
"Contracts" shall mean all contracts between the Debtor and one or
more additional parties (including, without limitation, any licensing agreements
and any partnership agreements, joint venture agreements and limited liability
company agreements), except to the extent that the grant by the Debtor of a
security interest in its right, title and interest in any such contract is
prohibited by such contract without the consent of any other party thereto (that
has not obtained) or would give any other party to such contract the right to
terminate its obligations thereunder; PROVIDED, that the foregoing limitation
(i) shall not affect, limit, restrict or impair the grant by the Debtor of a
security interest in any Account or any money or other amounts due or to become
due under any such contract and (ii) shall not apply to the extent the
provisions contained in such contract which prohibit such a grant by the Debtor
or provide such other party such a termination right would be rendered
unenforceable in accordance with applicable law (including the Uniform
Commercial Code) or principles of equity.
"Copyrights" shall mean any United States copyright now or hereafter
owned by the Debtor, including any registrations of any copyrights, in the
United States Copyright Office or any foreign equivalent office, as well as any
application for a copyright registration now or hereafter made with the United
States Copyright Office or any foreign equivalent office by the Debtor.
"Documents" shall mean "documents" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Domain Names" shall mean all Internet domain names and associated
URL addresses in or to which the Debtor now or hereafter has any right, title or
interest.
"Electronic Chattel Paper" shall mean "electronic chattel paper" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
<Page>
"Equipment" shall mean any "equipment" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by the Debtor and, in any event, shall include, but
shall not be limited to, all machinery, equipment, furnishings, fixtures and
vehicles now or hereafter owned by the Debtor and any and all additions,
substitutions and replacements of any of the foregoing and all accessions
thereto, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"Financial Asset" shall mean "financial asset" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"General Intangibles" shall mean "general intangibles" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Goods" shall mean "goods" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Health-Care-Insurance Receivable" shall mean any
"health-care-insurance receivable" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Instrument" shall mean "instruments" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof and all accessions thereto,
wherever located, together with all goods, supplies, incidentals, packaging
materials, labels, materials and any other items used or usable in
manufacturing, processing, packaging or shipping same, in all stages of
production from raw materials through work in process to finished goods, and all
products and proceeds of whatever sort and wherever located any portion thereof
which may be returned, rejected, reclaimed or repossessed by the Secured Party
from the Debtor's customers, and shall specifically include all "inventory" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Investment Property" shall mean "investment property" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Letter-of-Credit Rights" shall mean "letter-of-credit rights" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Limited Liability Company Interests" shall mean the entire limited
liability company membership interest at any time owned by the Debtor in any
limited liability company.
"Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held or hereafter acquired by the
Debtor, including any registration or application for registration of any
trademarks and service marks now held or hereafter acquired by the Debtor, which
are registered or filed in the United States Patent and Trademark Office or the
equivalent thereof in any state of the United States or any equivalent foreign
office or agency, as well as any unregistered trademarks and service marks used
by the Debtor and any trade dress including logos, designs, fictitious business
names and other business identifiers used by the Debtor.
"Notes" shall mean all promissory notes (including intercompany notes)
from time to time issued to, or held by, the Debtor.
"Partnership Interest" shall mean the entire general partnership
interest or limited partnership interest at any time owned by the Debtor in any
general partnership or limited partnership.
<Page>
"Patents" shall mean any United States or foreign patent in or to
which the Debtor now or hereafter has any right, title or interest therein, and
any divisions, continuations (including, but not limited to,
continuations-in-parts) and improvements thereof, as well as any application for
a United States or foreign patent now or hereafter made by the Debtor.
"Permits" shall mean, to the extent permitted to be assigned by the
terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations of or from any governmental authority or
agency.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Proceeds" shall mean all "proceeds" as such term is defined in the
Uniform Commercial Code as in effect in the State of New York on the date hereof
and, in any event, shall also include, but not be limited to, (i) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to the
Secured Party or the Debtor from time to time with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or due and
payable to the Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under color of
governmental authority) and (iii) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Security" and "Securities" shall mean "securities" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York and shall in any event also include all Stock and all Notes.
"Security Entitlement" shall mean "security entitlement" as such term
is defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Software" shall mean "software" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Stock" shall mean all of the issued and outstanding shares of capital
stock of any corporation at any time directly owned by the Debtor.
"Supporting Obligations" shall mean any "supporting obligation" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York, now or hereafter owned by the Debtor, or in
which the Debtor has any rights, and, in any event, shall include, but shall not
be limited to all of such Debtor's rights in any Letter-of-Credit Right or
secondary obligation that supports the payment or performance of, and all
security for, any Account, Chattel Paper, Document, General Intangible,
Instrument or Investment Property.
"Tangible Chattel Paper" shall mean "tangible chattel paper" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Trade Secrets" shall mean any secretly held existing engineering or
other data, information, production procedures and other know-how relating to
the design manufacture, assembly, installation, use, operation, marketing, sale
and/or servicing of any products or business of the Debtor worldwide whether
written or not.
"Trade Secret Rights" shall mean the rights of the Debtor in a Trade
Secret it holds.
<Page>
UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER [optional]
B. SEND ACKNOWLEDGMENT TO: (Name and Address)
LexisNexis Document Solutions
PO Box 2969
Springfield, IL 62708
THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
1. DEBTOR'S EXACT FULL LEGAL NAME - Insert only one debtor name (1a or 1b) - do
not abbreviate or combine names
1a. ORGANIZATION'S NAME
RBS Acquisition Corporation
OR
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
4701 West Greenfield Avenue MILWAUKEE WI 53214 USA
1d. TAX ID # SSN OR EIN ADD'NL. INFO RE
ORGANIZATION
DEBTOR
1e. TYPE OF ORGANIZATION
CORP
1f. JURISDICTION OF ORGANIZATION
DE
1g. ORGANIZATIONAL ID #, if any
/ / NONE
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - Insert only one debtor name
(2a or 2b) - do not abbreviate or combine names
2a. ORGANIZATION'S NAME
OR
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
2d. TAX ID # SSN OR EIN ADD'NL. INFO RE
ORGANIZATION
DEBTOR
2e. TYPE OF ORGANIZATION
2f. JURISDICTION OF ORGANIZATION
2g. ORGANIZATIONAL ID #, if any
/ / NONE
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSINGNOR S/P) - Insert
only one secured party name (3a or 3b)
3a. ORGANIZATION'S NAME
Deutsche Bank Trust Company Americas, as Collateral Agent
OR
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
31 West 52nd Street NEW YORK NY 10019 USA
4. This FINANCING STATEMENT covers the following collateral:
All assets of the Debtor, including, without limitation, as set forth on
Schedule I attached hereto and made a part hereof.
5. ALTERNATIVE DESIGNATION if applicable:
/ / LESSEE/LESSOR
/ / CONSIGNEE/CONSIGNOR
/ / BAILEE/BAILOR
/ / SELLER/BUYER
/ / AG LIEN
/ / NON-UCC FILING
6. / / The FINANCING STATEMENT is to be filed (for record) (or records) in the
REAL ESTATE RECORDS Attach Addendum (if applicable)
7. Check to REQUEST SEARCH REPORT(S) on Debtor(s) [ADDITIONAL FEE]
(optional)
/ / All Debtors
/ / Debtor 1
/ / Debtor 2
8. OPTIONAL FILER REFERENCE DATA
DE-SOS
FILING OFFICE COPY - NATIONAL UCC FINANCING STATEMENT (FORM UCC1)
(REV. 07/29/98)
LexisNexis Document Solutions
[ILLEGIBLE]
[ILLEGIBLE]
<Page>
SCHEDULE I
to UCC-1 Financing Statement
by
RBS ACQUISITION CORPORATION, as Debtor
in favor of
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent, Secured Party
1. This Financing Statement is presented to a Filing Officer for filing
pursuant to the Uniform Commercial Code.
2. This Financing Statement covers all of the rights, title and interest
of the Debtor in, to and under all assets, whether now existing or hereafter
from time to time acquired by the Debtor, including without limitation all of
the following (whether now existing or hereafter from time to time acquired by
the Debtor):
(i) each and every Account;
(ii) all cash;
(iii) the Cash Collateral Account and all monies, securities,
Instruments and other investments deposited or required to
be deposited in the Cash Collateral Account;
(iv) all Chattel Paper (including, without limitation, all
Tangible Chattel Paper and all Electronic Chattel Paper);
(v) all Commercial Tort Claims;
(vi) all computer programs of the Debtor and all intellectual
property rights therein and all other proprietary
information of the Debtor, including, but not limited to
Domain Names and Trade Secret Rights;
(vii) all Contracts, together with all Contract Rights arising
thereunder;
(viii) all Copyrights;
(ix) all Equipment;
(x) all Documents;
(xi) all General Intangibles;
(xii) all Goods;
(xiii) all Instruments;
(xiv) all Inventory;
(xv) all Investment Property;
(xvi) all Letter-of-Credit Rights (whether or not the respective
letter of credit is evidenced by a writing);
(xvii) all Marks, together with the registrations and right to all
renewals thereof, and the goodwill of the business of the
Debtor symbolized by the Marks;
(xviii) all Patents;
<Page>
(xix) all Permits;
(xx) all Software and all Software licensing rights, all
writings, plans, specifications and schematics, all
engineering drawings, customer lists, goodwill and licenses,
and all recorded data of any kind or nature, regardless of
the medium of recording;
(xxi) all Supporting Obligations;
(xxii) each of the Collateral Accounts, including any and all
assets of whatever type or kind deposited by the Debtor in
any such Collateral Account, whether now owned or hereafter
acquired, existing or arising, including, without
limitation, all Financial Assets, Investment Property,
monies, checks, drafts, Instruments, Securities or interests
therein of any type or nature deposited in such Collateral
Account, and all investments and all certificates and other
Instruments (including depository receipts, if any) from
time to time representing or evidencing the same, and all
dividends, interest, distributions, cash and other property
from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of
the foregoing;
(xxiii) all Securities owned or held by the Debtor from time to time
and all options and warrants owned by the Debtor from time
to time to purchase Securities;
(xxiv) all Limited Liability Company Interests owned by the Debtor
from time to time and all of its right, title and interest
in each limited liability company to which each such Limited
Liability Company Interest relates, whether now existing or
hereafter acquired, including, without limitation, to the
fullest extent permitted under the terms and provisions of
the documents and agreements governing such Limited
Liability Company Interests and applicable law:
(A) all its capital therein and its interest in all
profits, income, surpluses, losses and other distributions to which
the Debtor shall at any time be entitled in respect of such Limited
Liability Company Interests;
(B) all other payments due or to become due to the Debtor
in respect of Limited Liability Company Interests, whether under any
limited liability company agreement or otherwise, whether as
contractual obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any limited liability company agreement or operating agreement,
or at law or otherwise in respect of such Limited Liability Company
Interests;
(D) all present and future claims, if any, of the Debtor
against any such limited liability company for monies loaned or
advanced, for services rendered or otherwise;
(E) all of the Debtor's rights under any limited liability
company agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and privilege of
the Debtor relating to such Limited Liability Company Interests,
including any power to terminate, cancel or modify any such limited
liability company agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf of and in
the name of any of the Debtor in respect of such Limited Liability
Company Interests and any such limited liability company, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing, to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
<Page>
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxv) all Partnership Interests owned by the Debtor from time to
time and all of its right, title and interest in each
partnership to which each such Partnership Interest relates,
whether now existing or hereafter acquired, including,
without limitation, to the fullest extent permitted under
the terms and provisions of the documents and agreements
governing such Partnership Interests and applicable law:
(A) all its capital therein and its interest in all
profits, income, surpluses, losses, and other distributions to which
the Debtor shall at any time be entitled in respect of such
Partnership Interests;
(B) all other payments due or to become due to the Debtor
in respect of Partnership Interests, whether under any partnership
agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any partnership agreement or operating agreement, or at law or
otherwise in respect of such Partnership Interests;
(D) all present and future claims, if any, of the Debtor
against any such partnership for monies loaned or advanced, for
services rendered or otherwise;
(E) all of the Debtor's rights under any partnership
agreement or operating agreement or at law to exercise and enforce
every right, power, remedy, authority, option and privilege of the
Debtor relating to such Partnership Interests, including any power to
terminate, cancel or modify any partnership agreement or operating
agreement, to execute any instruments and to take any and all other
action on behalf of and in the name of the Debtor in respect of such
Partnership Interests and any such partnership, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxvi) all Financial Assets owned by the Debtor from time to time;
(xxvii) all Security Entitlements owned by the Debtor from time to
time in any and all of the foregoing; and
(xxviii) all Proceeds and products of any and all of the foregoing
(all of the above, the "Collateral").
3. For the purpose of this Financing Statement, the following terms shall
have the meanings herein specified. Such definitions shall be equally applicable
to the singular and plural forms of the terms defined.
<Page>
"Account" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, and in any event shall include but shall not be limited to, all rights to
payment of any monetary obligation, whether or not earned by performance, (i)
for property that has been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a
policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for
the use or hire of a vessel under a charter or other contract, (vii) arising out
of the use of a credit or charge card or information contained on or for use
with the card, or (viii) as winnings in a lottery or other game of chance
operated sponsored by a State, governmental unit of a State, or person licensed
or authorized to operate the game by a State or governmental unit of a State.
Without limiting the foregoing, the term "account" shall include all
Health-Care-Insurance Receivables.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Secured Party.
"Chattel Paper" shall mean "chattel paper" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York. Without limiting the foregoing, the term "Chattel Paper" shall in any
event include all Tangible Chattel Paper and all Electronic Chattel Paper.
"Collateral Accounts" shall mean any and all accounts established and
maintained by the Secured Party in the name of the Debtor to which Collateral
may be credited.
"Commercial Tort Claims" shall mean "commercial tort claims" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Contract Rights" shall mean all rights of the Debtor under each
Contract, including, without limitation, (i) any and all rights to receive and
demand payments under any or all Contracts, (ii) any and all rights to receive
and compel performance under any or all Contracts and (iii) any and all other
rights, interests and claims now existing or in the future arising in connection
with any or all Contracts.
"Contracts" shall mean all contracts between the Debtor and one or
more additional parties (including, without limitation, any licensing agreements
and any partnership agreements, joint venture agreements and limited liability
company agreements), except to the extent that the grant by the Debtor of a
security interest in its right, title and interest in any such contract is
prohibited by such contract without the consent of any other party thereto (that
has not obtained) or would give any other party to such contract the right to
terminate its obligations thereunder; PROVIDED, that the foregoing limitation
(i) shall not affect, limit, restrict or impair the grant by the Debtor of a
security interest in any Account or any money or other amounts due or to become
due under any such contract and (ii) shall not apply to the extent the
provisions contained in such contract which prohibit such a grant by the Debtor
or provide such other party such a termination right would be rendered
unenforceable in accordance with applicable law (including the Uniform
Commercial Code) or principles of equity.
"Copyrights" shall mean any United States copyright now or hereafter
owned by the Debtor, including any registrations of any copyrights, in the
United States Copyright Office or any foreign equivalent office, as well as any
application for a copyright registration now or hereafter made with the United
States Copyright Office or any foreign equivalent office by the Debtor.
"Documents" shall mean "documents" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Domain Names" shall mean all Internet domain names and associated URL
addresses in or to which the Debtor now or hereafter has any right, title or
interest.
"Electronic Chattel Paper" shall mean "electronic chattel paper" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
<Page>
"Equipment" shall mean any "equipment" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by the Debtor and, in any event, shall include, but
shall not be limited to, all machinery, equipment, furnishings, fixtures and
vehicles now or hereafter owned by the Debtor and any and all additions,
substitutions and replacements of any of the foregoing and all accessions
thereto, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"Financial Asset" shall mean "financial asset" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"General Intangibles" shall mean "general intangibles" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Goods" shall mean "goods" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Health-Care-Insurance Receivable" shall mean any
"health-care-insurance receivable" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Instrument" shall mean "instruments" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof and all accessions thereto,
wherever located, together with all goods, supplies, incidentals, packaging
materials, labels, materials and any other items used or usable in
manufacturing, processing, packaging or shipping same, in all stages of
production from raw materials through work in process to finished goods, and all
products and proceeds of whatever sort and wherever located any portion thereof
which may be returned, rejected, reclaimed or repossessed by the Secured Party
from the Debtor's customers, and shall specifically include all "inventory" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Investment Property" shall mean "investment property" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Letter-of-Credit Rights" shall mean "letter-of-credit rights" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Limited Liability Company Interests" shall mean the entire limited
liability company membership interest at any time owned by the Debtor in any
limited liability company.
"Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held or hereafter acquired by the
Debtor, including any registration or application for registration of any
trademarks and service marks now held or hereafter acquired by the Debtor, which
are registered or filed in the United States Patent and Trademark Office or the
equivalent thereof in any state of the United States or any equivalent foreign
office or agency, as well as any unregistered trademarks and service marks used
by the Debtor and any trade dress including logos, designs, fictitious business
names and other business identifiers used by the Debtor.
"Notes" shall mean all promissory notes (including intercompany notes)
from time to time issued to, or held by, the Debtor.
"Partnership Interest" shall mean the entire general partnership
interest or limited partnership interest at any time owned by the Debtor in any
general partnership or limited partnership.
<Page>
"Patents" shall mean any United States or foreign patent in or to
which the Debtor now or hereafter has any right, title or interest therein, and
any divisions, continuations (including, but not limited to,
continuations-in-parts) and improvements thereof, as well as any application for
a United States or foreign patent now or hereafter made by the Debtor.
"Permits" shall mean, to the extent permitted to be assigned by the
terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorization of or from any governmental authority or
agency.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentally thereof.
"Proceeds" shall mean all "proceeds" as such term is defined in the
Uniform Commercial Code as in effect in the State of New York on the date hereof
and, in any event, shall also include, but not be limited to, (i) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to the
Secured Party or the Debtor from time to time with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or due and
payable to the Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under color of
governmental authority) and (iii) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Security" and "Securities" shall mean "securities" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York and shall in any event also include all Stock and all Notes.
"Security Entitlement" shall mean "security entitlement" as such term
is defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Software" shall mean "software" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Stock" shall mean all of the issued and outstanding shares of capital
stock of any corporation at any time directly owned by the Debtor.
"Supporting Obligations" shall mean any "supporting obligation" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York, now or hereafter owned by the Debtor, or in
which the Debtor has any rights, and, in any event, shall include, but shall not
be limited to all of such Debtor's rights in any Letter-of-Credit Right or
secondary obligation that supports the payment or performance of, and all
security for, any Account, Chattel Paper, Document, General Intangible,
Instrument or Investment Property.
"Tangible Chattel Paper" shall mean "tangible chattel paper" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Trade Secrets" shall mean any secretly held existing engineering or
other data, information, production procedures and other know-how relating to
the design manufacture, assembly, installation, use, operation, marketing, sale
and/or servicing of any products or business of the Debtor worldwide whether
written or not.
"Trade Secret Rights" shall mean the rights of the Debtor in a Trade
Secret it holds.
<Page>
UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER [optional]
B. SEND ACKNOWLEDGMENT TO: (Name and Address)
LexisNexis Document Solutions
PO Box 2969
Springfield, IL 62708
THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
1. DEBTOR'S EXACT FULL LEGAL NAME - Insert only one debtor name(1a or 1b) - do
not abbreviate or combine names
1a. ORGANIZATION'S NAME
RBS Global, Inc.
OR
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
4701 West Greenfield Avenue MILWAUKEE WI 53214 USA
1d. TAX ID # SSN OR EIN ADD'NL. INFO RE
ORGANIZATION
DEBTOR
1e. TYPE OF ORGANIZATION
CORP
1f. JURISDICTION OF ORGANIZATION
DE
1g. ORGANIZATIONAL ID #, if any
/ / NONE
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name
(2a or 2b) - do not abbreviate or combine names
2a. ORGANIZATION'S NAME
OR
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
2d. TAX ID # SSN OR EIN ADD'NL. INFO RE
ORGANIZATION
DEBTOR
2e. TYPE OF ORGANIZATION
2f. JURISDICTION OF ORGANIZATION
2g. ORGANIZATIONAL ID #, if any
/ / NONE
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSINGNOR S/P) - insert
only one selected party name (3a or 3b)
3a. ORGANIZATION'S NAME
Deutsche Bank Trust Company Americas, as Collateral Agent
OR
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
31 West 52nd Street NEW YORK NY 10019 USA
4. This FINANCING STATEMENT covers the following collateral:
All assets of the Debtor, including, without limitation, as set forth on
Schedule I attached hereto and made a part hereof.
5. ALTERNATIVE DESIGNATION if applicable:
/ / LESSEE/LESSOR
/ / CONSIGNEE/CONSIGNOR
/ / BAILEE/BAILOR
/ / SELLER/BUYER
/ / AG LIEN
/ / NON-UCC FILING
6. / / The FINANCING STATEMENT is to be filed (for record) (or records) in the
REAL ESTATE RECORDS Attach Addendum [if applicable]
7. Check to REQUEST SEARCH REPORT(S) on Debtor(s) [ADDITIONAL FEE]
[optional]
/ / All Debtors
/ / Debtor 1
/ / Debtor 2
8. OPTIONAL FILER REFERENCE DATA
DE-SOS
FILING OFFICE COPY - NATIONAL UCC FINANCING STATEMENT (FORM UCC1)
(REV. 07/29/98)
LexisNexis Document Solutions
[ILLEGIBLE]
[ILLEGIBLE]
<Page>
SCHEDULE I
to UCC-I Financing Statement
by
RBS GLOBAL, INC., as Debtor
in favor of
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent, Secured Party
1. This Financing Statement is presented to a Filing Officer for filing
pursuant to the Uniform Commercial Code.
2. This Financing Statement covers all of the rights, title and interest
of the Debtor in, to and under all assets, whether now existing or hereafter
from time to time acquired by the Debtor, including without limitation all of
the following (whether now existing or hereafter from time to time acquired by
the Debtor):
(i) each and every Account;
(ii) all cash;
(iii) the Cash Collateral Account and all monies, securities,
Instruments and other investments deposited or required to
be deposited in the Cash Collateral Account;
(iv) all Chattel Paper (including, without limitation, all
Tangible Chattel Paper and all Electronic Chattel Paper);
(v) all Commercial Tort Claims;
(vi) all computer programs of the Debtor and all intellectual
property rights therein and all other proprietary
information of the Debtor, including, but not limited to
Domain Names and Trade Secret Rights;
(vii) all Contracts, together with all Contract Rights arising
thereunder;
(viii) all Copyrights;
(ix) all Equipment;
(x) all Documents;
(xi) all General Intangibles;
(xii) all Goods;
(xiii) all Instruments;
(xiv) all Inventory;
(xv) all Investment Property;
(xvi) all Letter-of-Credit Rights (whether or not the respective
letter of credit is evidenced by a writing);
(xvii) all Marks, together with the registrations and right to all
renewals thereof, and the goodwill of the business of the
Debtor symbolized by the Marks;
(xviii) all Patents;
-103-
<Page>
(xix) all Permits;
(xx) all Software and all Software licensing rights, all
writings, plans, specifications and schematics, all
engineering drawings, customer lists, goodwill and licenses,
and all recorded data of any kind or nature, regardless of
the medium of recording;
(xxi) all Supporting Obligations;
(xxii) each of the Collateral Accounts, including any and all
assets of whatever type or kind deposited by the Debtor in
any such Collateral Account, whether now owned or hereafter
acquired, existing or arising, including, without
limitation, all Financial Assets, Investment Property,
monies, checks, drafts, Instruments, Securities or interests
therein of any type or nature deposited in such Collateral
Account, and all investments and all certificates and other
Instruments (including depository receipts, if any) from
time to time representing or evidencing the same, and all
dividends, interest, distributions, cash and other property
from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of
the foregoing;
(xxiii) all Securities owned or held by the Debtor from time to time
and all options and warrants owned by the Debtor from time
to time to purchase Securities;
(xxiv) all Limited Liability Company Interests owned by the Debtor
from time to time and all of its right, title and interest
in each limited liability company to which each such Limited
Liability Company Interest relates, whether now existing or
hereafter acquired, including, without limitation, to the
fullest extent permitted under the terms and provisions of
the documents and agreements governing such Limited
Liability Company Interests and applicable law;
(A) all its capital therein and its interest in all
profits, income, surpluses, losses and other distributions to which
the Debtor shall at any time be entitled in respect of such Limited
Liability Company Interests;
(B) all other payments due or to become due to the Debtor
in respect of Limited Liability Company Interests, whether under any
limited liability company agreement or otherwise, whether as
contractual obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any limited liability company agreement or operating agreement,
or at law or otherwise in respect of such Limited Liability Company
Interests;
(D) all present and future claims, if any, of the Debtor
against any such limited liability company for monies loaned or
advanced, for services rendered or otherwise;
(E) all of the Debtor's rights under any limited liability
company agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and privilege of
the Debtor relating to such Limited Liability Company Interests,
including any power to terminate, cancel or modify any such limited
liability company agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf of and in
the name of any of the Debtor in respect of such Limited Liability
Company Interests and any such limited liability company, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing, to enforce or execute any cheeks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
<Page>
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxv) all Partnership Interests owned by the Debtor from time to
time and all of its right, title and interest in each
partnership to which each such Partnership Interest relates,
whether now existing or hereafter acquired, including,
without limitation, to the fullest extent permitted under
the terms and provisions of the documents and agreements
governing such Partnership Interests and applicable law;
(A) all its capital therein and its interest in all
profits, income, surpluses, losses, and other distributions to which
the Debtor shall at any time be entitled in respect of such
Partnership Interests;
(B) all other payments due or to become due to the Debtor
in respect of Partnership Interests, whether under any partnership
agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any partnership agreement or operating agreement, or at law or
otherwise in respect of such Partnership Interests;
(D) all present and future claims, if any, of the Debtor
against any such partnership for monies loaned or advanced, for
services rendered or otherwise;
(E) all of the Debtor's rights under any partnership
agreement or operating agreement or at law to exercise and enforce
every right, power, remedy, authority, option and privilege of the
Debtor relating to such Partnership Interests, including any power to
terminate, cancel or modify any partnership agreement or operating
agreement, to execute any instruments and to take any and all other
action on behalf of and in the name of the Debtor in respect of such
Partnership Interests and any such partnership, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxvi) all Financial Assets owned by the Debtor from time to time;
(xxvii) all Security Entitlements owned by the Debtor from time to
time in any and all of the foregoing; and
(xxviii) all Proceeds and products of any and all of the foregoing
(all of the above, the "Collateral").
3. For the purpose of this Financing Statement, the following terms shall
have the meanings herein specified. Such definitions shall be equally applicable
to the singular and plural forms of the terms defined.
<Page>
"Account" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, and in any event shall include but shall not be limited to, all rights to
payment of any monetary obligation, whether or not earned by performance, (i)
for property that has been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a
policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for
the use or hire of a vessel under a charter or other contract, (vii) arising out
of the use of a credit or charge card or information contained on or for use
with the card, or (viii) as winnings in a lottery or other game of chance
operated or sponsored by a State, governmental unit of a State, or person
licensed or authorized to operate the game by a State or governmental unit of a
State. Without limiting the foregoing, the term "account" shall include all
Health-Care-Insurance Receivables.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Secured Party.
"Chattel Paper" shall mean "chattel paper" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York. Without limiting the foregoing, the term "Chattel Paper" shall in any
event include all Tangible Chattel Paper and all Electronic Chattel Paper.
"Collateral Accounts" shall mean any and all accounts established and
maintained by the Secured Party in the name of the Debtor to which Collateral
may be credited.
"Commercial Tort Claims" shall mean "commercial tort claims" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Contract Rights" shall mean all rights of the Debtor under each
Contract, including, without limitation, (i) any and all rights to receive and
demand payments under any or all Contracts, (ii) any and all rights to receive
and compel performance under any or all Contracts and (iii) any and all other
rights, interests and claims now existing or in the future arising in connection
with any or all Contracts.
"Contracts" shall mean all contracts between the Debtor and one or
more additional parties (including, without limitation, any licensing agreements
and any partnership agreements, joint venture agreements and limited liability
company agreements), except to the extent that the grant by the Debtor of a
security interest in its right, title and interest in any such contract is
prohibited by such contract without the consent of any other party thereto (that
has not obtained) or would give any other party to such contact the right to
terminate its obligations thereunder; PROVIDED, that the foregoing limitation
(i) shall not affect, limit, restrict or impair the grant by the Debtor of a
security interest in any Account or any money or other amounts due or to become
due under any such contract and (ii) shall not apply to the extent the
provisions contained in such contract which prohibit such a grant by the Debtor
or provide such other party such a termination right would be rendered
unenforceable in accordance with applicable law (including the Uniform
Commercial Code) or principles of equity.
"Copyrights" shall mean any United States copyright now or hereafter
owned by the Debtor, including any registrations of any copyrights, in the
United States Copyright Office or any foreign equivalent office, as well as any
application for a copyright registration now or hereafter made with the United
States Copyright Office or any foreign equivalent office by the Debtor.
"Documents" shall mean "documents" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Domain Names" shall mean all Internet domain names and associated URL
addresses in or to which the Debtor now or hereafter has any right, title or
interest.
"Electronic Chattel Paper" shall mean "electronic chattel paper" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
<Page>
"Equipment" shall mean any "equipment" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of NewY
ork, now or hereafter owned by the Debtor and, in any event, shall include, but
shall not be limited to, all machinery, equipment, furnishings, fixtures and
vehicles now or hereafter owned by the Debtor and any and all additions,
substitutions and replacements of any of the foregoing and all accessions
thereto, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"Financial Asset" shall mean "financial asset" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"General Intangibles" shall mean "general intangibles" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Goods" shall mean "goods" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Health-Care-Insurance Receivable" shall mean any
"health-care-insurance receivable" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Instrument" shall mean "instruments" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof and all accessions thereto,
wherever located, together with all goods, supplies, incidentals, packaging
materials, labels, materials and any other items used or usable in
manufacturing, processing, packaging or shipping same, in all stages of
production from raw materials through work in process to finished goods, and all
products and proceeds of whatever sort and wherever located any portion thereof
which may be returned, rejected, reclaimed or repossessed by the secured Party
from the Debtor's customer, and shall specifically include all "inventory" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Investment Property" shall mean "investment property" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Letter-of-Credit Rights" shall mean "letter-of-credit rights" as such
term is defined in Uniform Commercial Code as in the effect on the date hereof
in the State of new York.
"Limited Liability Company Interests" shall mean the entire limited
liability company membership interest at any time owned by the Debtor in any
limited liability company.
"Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held or hereafter acquired by the
Debtor, including any registration or application for registration of any
trademarks and service marks now held or hereafter acquired by the Debtor, which
are registered or filed in the United States Patent and Trademark Office or the
equivalent thereof in any state of the United States or any equivalent foreign
office or agency, as well as any unregistered trademarks and service marks used
by the Debtor and any trade dress including logos, designs, fictitious business
names and other business identifiers used by the Debtor.
"Notes" shall mean all promissory notes (including intercompany notes)
from time to time issued to, or held by, the Debtor.
"Partnership Interest" shall mean the entire general partnership
interest or limited partnership interest at any time owned by the Debtor in any
general partnership or limited partnership.
<Page>
"Patents" shall mean any United States or foreign patent in or to
which the Debtor now or hereafter has any right, title or interest therein, and
any divisions, continuations (including, but not limited to,
continuations-in-parts) and improvements thereof, as well as any application for
a United States or foreign patent now or hereafter made by the Debtor.
"Permits" shall mean, to the extent permitted to be assigned by the
terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorization of or from any governmental authority or
agency.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Proceeds" shall mean all "proceeds" as such term is defined in the
Uniform Commercial Code as in effect in the State of New York on the date hereof
and, in any event, shall also include, but not be limited to, (i) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to the
Secured Party or the Debtor from time to time with respect to any of the
Collateral, (ii)any and all payments (in any form whatsoever) made or due and
payable to the Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under color of
governmental authority) and (iii) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Security and "Securities" shall mean "securities" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York and shall in any event also include all Stock and all Notes.
"Security Entitlement" shall mean "security entitlement" as such term
is defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Software" shall mean "software" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Stock" shall mean all of the issued and outstanding shares of capital
stock of any corporation at any time directly owned by the Debtor.
"Supporting Obligations" shall mean any "supporting obligation" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York, now or hereafter owned by the Debtor, or in
which the Debtor has any rights, and, in any event, shall include, but shall not
be limited to all of such Debtor's rights in any Letter-of-Credit Right or
secondary obligation that supports the payment or performance of, and all
security for, any Account, Chattel Paper, Document, General Intangible,
Instrument or Investment Property.
"Tangible Chattel Paper" shall mean "tangible chattel paper" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Trade Secrets" shall mean any secretly held existing engineering or
other data, information, production procedures and other know-how relating to
the design manufacture, assembly, installation, use, operation, marketing, sale
and/or servicing of any products or business of the Debtor worldwide whether
written or not.
"Trade Secret Rights" shall mean the rights of the Debtor in a Trade
Secret it holds.
<Page>
UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER [optional]
B. SEND ACKNOWLEDGMENT TO: (Name and Address)
LexisNexis Document Solutions
PO Box 2969
Springfield , IL 62708
THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name(1a or 1b) - do
not abbreviate or combine names
1a. ORGANIZATION'S NAME
W.M. Berg Inc.
OR
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
499 Ocean Avenue EAST ROCKAWAY NY 11518 USA
1d. TAX ID # SSN OR EIN ADD'NL INFO RE
ORGANIZATION
DEBTOR
1e. TYPE OF ORGANIZATION
CORP
1f. JURISDICTION OF ORGANIZATION
DE
1g. ORGANIZATIONAL ID #, if any
/ / NONE
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name
(2a or 2b) - do not abbreviate or combine names
2a. ORGANIZATION'S NAME
OR
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
2d. TAX ID # SSN OR EIN ADD'NL INFO RE
ORGANIZATION
DEBTOR
2e. TYPE OF ORGANIZATION
2f. JURISDICTION OF ORGANIZATION
2g. ORGANIZATIONAL ID #, if any
/ / NONE
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P) - insert
only one selected party name (3a or 3b)
3a. ORGANIZATION'S NAME
Deutsche Bank Trust Company Americas, as Collateral Agent
OR
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
31 West 52nd Street NEW YORK NY 10019 USA
4. This FINANCING STATEMENT covers the following collateral:
All assets of the Debtor, including, without limitation, as set forth on
Schedule I attached hereto and made a part hereof.
5. ALTERNATIVE DESIGNATION if applicable:
/ / LESSEE/LESSOR
/ / CONSIGNEE/CONSIGNOR
/ / BAILEE/BAILOR
/ / SELLER/BUYER
/ / AG LIEN
/ / NON-UCC FILING
6. / / The FINANCING STATEMENT is to be filed (for record) (or records) in the
REAL ESTATE RECORDS Attach Addendum (if applicable)
7. Check to REQUEST SEARCH REPORT(S) on Debtor(s) [ADDITIONAL FEE]
(optional)
/ / All Debtors
/ / Debtor 1
/ / Debtor 2
8. OPTIONAL FILER REFERENCE DATA
DE-SOS
FILING OFFICE COPY - NATIONAL UCC FINANCING STATEMENT (FORM UCC1)
(REV. 07/29/98)
LexisNexis Document Solutions
[ILLEGIBLE]
[ILLEGIBLE]
<Page>
SCHEDULE I
to UCC-1 Financing Statement
by
W.M.BERG INC., as Debtor
In favour of
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent, Secured Party
1. This Financing Statement is presented to a Filing Officer for filing
pursuant to the Uniform Commercial Code.
2. This Financing Statement covers all of the rights, title and interest
of the Debtor in, to and under all assets, whether now existing or hereafter
from time to time acquired by the Debtor, including without limitation all of
the following (whether now existing or hereafter from time to time acquired by
the Debtor):
(i) each and every Account;
(ii) all cash;
(iii) the Cash Collateral Account and all monies, securities,
Instruments and other investments deposited or required to
be deposited in the Cash Collateral Account;
(iv) all Chattel Paper (including, without limitation, all
Tangible Chattel Paper and all Electronic Chattel Paper);
(v) all Commercial Tort Claims;
(vi) all computer programs of the Debtor and all intellectual
property rights therein and all other proprietary
information of the Debtor, including, but not limited to
Domain Names and Trade Secret Rights;
(vii) all Contracts, together with all Contract Rights arising
thereunder;
(viii) all Copyrights;
(ix) all Equipment;
(x) all Documents;
(xi) all General Intangibles;
(xii) all Goods;
(xiii) all Instruments;
(xiv) all Inventory;
(xv) all Investment Property;
(xvi) all Letter-of-Credit Rights (whether or not the respective
letter of credit is evidenced by a writing);
(xvii) all Marks, together with the registration and right to all
renewals thereof, and the goodwill of the business of the
Debtor symbolized by the Marks;
(xviii) all Patents;
<Page>
(xix) all Permits;
(xx) all Software and all Software licensing rights, all
writings, plans, specifications and schematics, all
engineering drawings, customer lists, goodwill and licenses,
and all recorded data of any kind of nature, regardless of
the medium of recording;
(xxi) all Supporting Obligations;
(xxii) each of the Collateral Accounts, including any and all
assets of whatever type or kind deposited by the Debtor in
any such Collateral Account, whether now owned or hereafter
acquired, existing or arising, including, without
limitation, all Financial Assets, Investment Property,
monies checks, drafts, Instruments, Securities or interests
therein of any type or nature deposited in such Collateral
Account, and all investments and all certificates and other
Instruments (including depository receipts, if any) from
time to time representing or evidencing the same, and all
dividends, interest, distributions, cash and other property
from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of
the foregoing;
(xxiii) all Securities owned or held by the Debtor from time to time
and all options and warrants owned by the Debtor from time
to time to purchase Securities;
(xxiv) all Limited Liability Company Interests owned by the Debtor
from time to time and all of its right, title and interest
in each limited liability company to which each such Limited
Liability Company Interest relates, whether now existing or
hereafter acquired, including, without limitation, to the
fullest extent permitted under the terms and provisions of
the documents and agreements governing such Limited
Liability Company Interests and applicable law;
(A) all its capital therein and its interest in all
profits, income, surpluses, losses and other distributions to which
the Debtor shall at any time be entitled in respect of such Limited
Liability Company Interests;
(B) all other payments due or to become due to the Debtor
in respect of Limited Liability Company Interests, whether under any
limited liability company agreement or otherwise, whether as
contractual obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any limited liability company agreement or operating agreement,
or at law or otherwise in respect of such Limited Liability Company
Interests;
(D) all present and future claims, if any, of the Debtor
against any such limited liability company for monies loaned or
advanced, for services rendered or otherwise;
(E) all of the Debtor's rights under any limited liability
company agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and privilege of
the Debtor relating to such Limited Liability Company Interests,
including any power to terminate, cancel or modify any such limited
liability company agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf of and in
the name of any of the Debtor in respect of such Limited Liability
Company Interests and any such limited liability company, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing, to enforce or execute any checks, or other instruments
or orders, to file any claims and to take make any action in
connection with any of the foregoing; and
<Page>
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxv) all Partnership Interests owned by the Debtor from time to
time and all of its right, title and interest in each
partnership to which each such Partnership Interest relates,
whether now existing or hereafter acquired, including,
without limitation, to the fullest extent permitted under
the terms and provisions of the documents and agreements
governing such Partnership Interest and applicable law;
(A) all its capital therein and its interest in all
profits, income, surpluses, losses, and other distributions to which
the Debtor shall at any time be entitled in respect of such
Partnership Interests;
(B) all other payments due or to become due to the Debtor
in respect of Partnership Interests, whether under any partnership
agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any partnership agreement or operating agreement, or at law or
otherwise in respect of such Partnership Interests;
(D) all present and future claims, if any, of the Debtor
against any such partnership for monies loaned or advanced, for
services rendered or otherwise;
(E) all of the Debtor's rights under any partnership
agreement or operating agreement or at law to exercise and enforce
every right, power, remedy, authority, option and privilege of the
Debtor relating to such Partnership Interests, including any power to
terminate, cancel or modify any partnership agreement or operating
agreement, to execute any instruments and to take any and all other
action on behalf of and in the name of the Debtor in respect of such
Partnership Interests and any such partnership, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing to enforce or execute any checks, or other instruments
or orders to file any claims and to take any action in connection with
any of the foregoing; and
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxvi) all Financial Assets owned by the Debtor from time to time;
(xxvii) all Security Entitlements owned by the Debtor from time to
time in any and all of the foregoing; and
(xxviii) all Proceeds and products of any and all of the foregoing
(all of the above, the "Collateral").
3. For the purpose of this Financing Statement, the following terms shall
have the meanings herein specified. Such definitions shall be equally applicable
to the singular and plural forms of the terms defined.
<Page>
"Account" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, and in any event shall include but shall not be limited to, all rights to
payment of any monetary obligation, whether or not earned by performance, (i)
for property that has been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a
policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for
the use or hire of a vessel under a charter or other contract, (vii) arising out
of the use of a credit or charge card or information contained on or for use
with the card, or (viii) as winnings in a lottery or other game of chance
operated or sponsored by a State, governmental unit of a State, or person
licensed or authorized to operate the game by a State or governmental unit of a
State. Without limiting the foregoing, the term "account" shall include all
Health-Care-Insurance Receivables.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Secured Party.
"Chattel Paper" shall mean "chattel paper" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York. Without limiting the foregoing, the term "Chattel Paper" shall in any
event include all Tangible Chattel Paper and all Electronic Chattel Paper.
"Collateral Accounts" shall mean any and all accounts established and
maintained by the Secured Party in the name of the Debtor to which Collateral
may be credited.
"Commercial Tort Claims" shall mean "commercial tort claims" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Contract Rights" shall mean all rights of the Debtor under each
Contract, including, without limitation, (i) any and all rights to receive and
demand payments under any or all Contracts, (ii) any and all rights to receive
and compel performance under any or all contracts and (iii) any and all other
rights, interests and claims now existing or in the future arising in connection
with any or all Contracts.
"Contracts" shall mean all contracts between the Debtor and one or
more additional parties (including, without limitation, any licensing agreements
and any partnership agreements, joint venture agreements and limited liability
company agreements), except to the extent that the grant by the Debtor of a
security interest in its right, title and interest in any such contract is
prohibited by such contract without the consent of any other party thereto (that
has not obtained) or would give any other party to such contract the right to
terminate its obligations thereunder; PROVIDED that the foregoing limitation (i)
shall not affect, limit, restrict or impair the grant by the Debtor of a
security interest in any Account or any money or other amounts due or to become
due under any such contract and (ii) shall not apply to the extent the
provisions contained in such contract which prohibit such a grant by the Debtor
or provide such other party such a termination right would be rendered
unenforceable in accordance with applicable law (including the Uniform
Commercial Code) or principles of equity.
"Copyrights" shall mean any United States copyright now or hereafter
owned by the Debtor, including any registrations of any copyrights, in the
United States Copyright Office or any foreign equivalent office, as well as any
application for a copyright registration now or hereafter made with the United
States Copyright Office or any foreign equivalent office by the Debtor.
"Documents" shall mean "documents" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Domain Names" shall mean all Internet domain names and associated URL
addresses in or to which the Debtor now or hereafter has any right, title or
interest.
"Electronic Chattel Paper" shall mean "electronic chattel paper" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
<Page>
"Equipment" shall mean any "equipment" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by the Debtor and, in any event, shall include, but
shall not be limited to, all machinery, equipment, furnishings, fixtures and
vehicles now or hereafter owned by the Debtor and any and all additions,
substitutions and replacements of any of the foregoing and all accessions
thereto, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"Financial Asset" shall mean "financial asset" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"General Intangibles" shall mean "general intangibes" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Goods" shall mean "goods" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Health-Care-Insurance Receivable" shall mean any
"health-care-insurance receivable" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Instrument" shall mean "instruments" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof and all accessions thereto,
wherever located, together with all goods, supplies, incidentals, packaging
materials, labels, materials and any other items used or usable in
manufacturing, processing, packaging of shipping same, in all stages of
production from raw materials through work in process to finished goods, and all
products and proceeds of whatever sort and wherever located any portion thereof
which may be returned, rejected, reclaimed or repossessed by the Secured Party
from the Debtor's customers, and shall specifically include all "inventory" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Investment Property" shall mean "investment property" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Letter-of-Credit Rights" shall mean "letter-of-credit rights" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of new York.
"Limited Liability Company Interests" shall mean the entire limited
liability company membership interest at any time owned by the Debtor in any
limited liability company.
"Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held or hereafter acquired by the
Debtor, including any registration or application for registration of any
trademarks and service marks now held or hereafter acquired by the Debtor, which
are registered or filed in the United States Patent and Trademark Office or the
equivalent thereof in any state of the United States or any equivalent foreign
office or agency, as well as any unregistered trademarks and service marks used
by the Debtor and any trade dress including logos, designs, fictitious business
names and other business identifiers used by the Debtor.
"Notes" shall mean all promissory notes (including intercompany notes)
from time to time issued to, or held by, the Debtor.
"Partnership Interest" shall mean the entire general partnership
interest or limited partnership interest at any time owned by the Debtor in any
general partnership or limited partnership.
<Page>
"Patents" shall mean any United States or foreign patent in or to
which the Debtor now or hereafter has any right, title or interest therein, and
any divisions, continuations (including, but not limited to,
continuations-in-parts) and improvements thereof, as well as any application for
a United States or foreign patent now or hereafter made by the Debtor.
"Permits" shall mean, to the extent permitted to be assigned by the
terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations of or from any governmental authority or
agency.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Proceeds" shall mean all "proceeds" as such term is defined in the
Uniform Commercial Code as in effect in the State of New York on the date hereof
and, in any event, shall also include, but not be limited to, (i) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to the
Secured Party or the Debtor from time to time with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or due and
payable to the Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under color of
governmental authority) and (iii) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Security" and "Securities" shall mean "securities" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York and shall in any event also include all Stock and all Notes.
"Security Entitlement" shall mean "security entitlement" as such term
is defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Software" shall mean "software" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Stock" shall mean all of the issued and outstanding shares of capital
stock of any corporation at any time directly owned by the Debtor.
"Supporting Obligations" shall mean any "supporting obligation" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York, now or hereafter owned by the Debtor, or in
which the Debtor has any rights, and, in any event, shall include, but shall not
be limited to all of such Debtor's rights in any Letter-of-Credit Right or
secondary obligation that supports the payment or performance of, and all
security for, any Account, Chattel Paper, Document, General Intangible,
Instrument or Investment Property.
"Tangible Chattel Paper" shall mean "tangible chattel paper" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Trade Secrets" shall mean any secretly held existing engineering or
other, date, information, production procedures and other know-how relating to
the design manufacture, assembly, installation, use, operation, marketing, sale
and/or servicing of any products or business of the Debtor worldwide whether
written or not.
"Trade Secret Rights" shall mean the rights of the Debtor in a Trade
Secret it holds.
<Page>
LATHAM & WATKINS
Deutsche Bank Trust Company Americas
and the Lenders indentified on Exhibit A
November 25, 2002
Page 14
EXHIBIT C
NEW YORK FINANCING STATEMENT
See Attached 7 pages
<Page>
UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER [optional]
B. SEND ACKNOWLEDGMENT TO: (Name and Address)
LexisNexis Document Solutions
PO Box 2969
Springfield , IL 62708
THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name(1a or 1b) - do
not abbreviate or combine names
1a. ORGANIZATION'S NAME
OR Clarkson Industries, Inc
OR
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
380 Mountain Group Street Bridgeport CT USA
1d. TAX ID # SSN OR EIN ADD'NL INFO RE
ORGANIZATION
DEBTOR
1e. TYPE OF ORGANIZATION
CORP
1f. JURISDICTION OF ORGANIZATION
NY
1g. ORGANIZATIONAL ID #, if any
/X/ NONE
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name
(2a or 2b) - do not abbreviate or combine names
2a. ORGANIZATION'S NAME
OR
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
2d. TAX ID # SSN OR EIN ADD'NL. INFO RE
ORGANIZATION
DEBTOR
2e. TYPE OF ORGANIZATION
2f. JURISDICTION OF ORGANIZATION
2g. ORGANIZATIONAL ID #, if any
/ / NONE
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P) - insert
only one secured party name (3a or 3b)
3a. ORGANIZATION'S NAME
Deutsche Bank Trust Company Americas, as Collateral Agent
OR
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
31 West 52nd Street NEW YORK NY 10019 USA
4. This FINANCING STATEMENT covers the following collateral:
All assets of the Debtor, including, without limitation, as set forth on
Schedule I attached hereto and made a part hereof.
5. ALTERNATIVE DESIGNATION if applicable:
/ / LESSEE/LESSOR
/ / CONSIGNEE/CONSIGNOR
/ / BAILEE/BAILOR
/ / SELLER/BUYER
/ / AG LIEN
/ / NON-UCC FILING
6. / / This FINANCING STATEMENT is to be filed (for record) (or records) in the
REAL ESTATE RECORDS Attach Addendum (if applicable)
7. Check to REQUEST SEARCH REPORT(S) on Debtor(s) [ADDITIONAL FEE]
(optional)
/ / All Debtors
/ / Debtor 1
/ / Debtor 2
8. OPTIONAL FILER REFERENCE DATA
NY-SOS
FILING OFFICE COPY - NATIONAL UCC FINANCING STATEMENT (FORM UCC1)
(REV. 07/29/98)
LexisNexis Document Solutions
[ILLEGIBLE]
[ILLEGIBLE]
<Page>
SCHEDULE 1
to UCC-1 Financing Statement
by
CLARKSON INDUSTRIES, INC., as Debtor
in favor of
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent, Secured Party
1. This Financing Statement is presented to a Filing Officer for filing
pursuant to the Uniform Commercial Code.
2. This Financing Statement covers all of the rights, title and interest
of the Debtor in, to and under all assets, whether now existing or hereafter
from time to time acquired by the Debtor, including without limitation all of
the following (whether now existing or hereafter from time to time acquired by
the Debtor):
(i) each and every Account;
(ii) all cash;
(iii) the Cash Collateral Account and all monies, securities,
Instruments and other investments deposited or required to
be deposited in the Cash Collateral Account;
(iv) all Chattel Paper (including, without limitation, all
Tangible Chattel Paper and all Electronic Chattel Paper);
(v) all Commercial Tort Claims;
(vi) all computer programs of the Debtor and all intellectual
property rights therein and all other proprietary
information of the Debtor, including, but not limited to
Domain Names and Trade Secret Rights;
(vii) all Contracts, together with all Contract Rights arising
thereunder;
(viii) all Copyrights;
(ix) all Equipment;
(x) all Documents;
(xi) all General Intangibles;
(xii) all Goods;
(xiii) all Instruments;
(xiv) all Inventory;
(xv) all Investment Property;
(xvi) all Letter-of-Credit Rights (whether or not the respective
letter of credit is evidenced by a writing);
(xvii) all Marks, together with the registrations and right to all
renewals thereof, and the goodwill of the business of the
Debtor symbolized by the Marks;
(xviii) all Patents;
<Page>
(xix) all Permits;
(xx) all Software and all Software licensing rights, all
writings, plans, specifications and schematics, all
engineering drawings, customer lists, goodwill and licenses,
and all recorded data of any kind or nature, regardless of
the medium of recording;
(xxi) all Supporting Obligations;
(xxii) each of the Collateral Accounts, including any and all
assets of whatever type or kind deposited by the Debtor in
any such Collateral Account, whether now owned or hereafter
acquired, existing or arising, including, without
limitation, all Financial Assets, Investment Property,
monies, checks, drafts, Instruments, Securities or interests
therein of any type or nature deposited in such Collateral
Account, and all investments and all certificates and other
Instruments (including depository receipts, if any) from
time to time representing or evidencing the same, and all
dividends, interest, distributions, cash and other property
from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of
the foregoing;
(xxiii) all Securities owned or held by the Debtor from time to time
and all options and warrants owned by the Debtor from time
to time to purchase Securities;
(xxiv) all Limited Liability Company Interests owned by the Debtor
from time to time and all of its right, title and interest
in each limited liability company to which each such Limited
Liability Company Interest relates, whether now existing or
hereafter acquired, including, without limitation, to the
fullest extent permitted under the terms and provisions of
the documents and agreements governing such Limited
Liability Company Interests and applicable law:
(A) all its capital therein and its interest in all
profits, income, surpluses, losses and other distributions to which
the Debtor shall at any time be entitled in respect of such Limited
Liability Company Interests;
(B) all other payments due or to become due to the Debtor
in respect of Limited Liability Company Interests, whether under any
limited liability company agreement or otherwise, whether as
contractual obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any limited liability company agreement or operating agreement,
or at law or otherwise in respect of such Limited Liability Company
Interests;
(D) all present and future claims, if any, of the Debtor
against any such limited liability company for monies loaned or
advanced, for services rendered or otherwise;
(E) all of the Debtor's rights under any limited liability
company agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and privilege of
the Debtor relating to such Limited Liability Company Interests,
including any power to terminate, cancel or modify any such limited
liability company agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf of and in
the name of any of the Debtor in respect of such Limited Liability
Company Interests and any such limited liability company, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing, to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
<Page>
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxv) all Partnership Interests owned by the Debtor from time to
time and all of its right, title and interest in each
partnership to which each such Partnership Interest relates,
whether now existing or hereafter acquired, including,
without limitation, to the fullest extent permitted under
the terms and provisions of the documents and agreements
governing such Partnership Interests and applicable law:
(A) all its capital therein and its interest in all
profits, income, surpluses, losses, and other distributions to which
the Debtor shall at any time be entitled in respect of such
Partnership Interests;
(B) all other payments due or to become due to the Debtor
in respect of Partnership Interests, whether under any partnership
agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any partnership agreement or operating agreement, or at law or
otherwise in respect of such Partnership Interests;
(D) all present and future claims, if any, of the Debtor
against any such partnership for monies loaned or advanced, for
services rendered or otherwise;
(E) all of the Debtor's rights under any partnership
agreement or operating agreement or at law to exercise and enforce
every right, power, remedy, authority, option and privilege of the
Debtor relating to such Partnership Interests, including any power to
terminate, cancel or modify any partnership agreement or operating
agreement, to execute any instruments and to take any and all other
action on behalf of and in the name of the Debtor in respect of such
Partnership Interests and any such partnership, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
(F) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(xxvi) all Financial Assets owned by the Debtor from time to time;
(xxvii) all Security Entitlements owned by the Debtor from time to
time in any and all of the foregoing; and
(xxviii) all Proceeds and products of any and all of the foregoing
(all of the above, the "Collateral").
3. For the purpose of this Financing Statement, the following terms shall
have the meanings herein specified. Such definitions shall be equally applicable
to the singular and plural forms of the terms defined.
<Page>
"Account" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, and in any event shall include but shall not be limited to, all rights to
payment of any monetary obligation, whether or not earned by performance, (i)
for property that has been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a
policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for
the use or hire of a vessel under a charter or other contract, (vii) arising out
of the use of a credit or charge card or information contained on or for use
with the card, or (viii) as winnings in a lottery or other game of chance
operated or sponsored by a State, governmental unit of a State, or person
licensed or authorized to operate the game by a State or governmental unit of a
State. Without limiting the foregoing, the term "account" shall include all
Health-Care-Insurance Receivables.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Secured Party.
"Chattel Paper" shall mean "chattel paper" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York. Without limiting the foregoing, the term "Chattel Paper" shall in any
event include all Tangible Chattel Paper and all Electronic Chattel Paper.
"Collateral Accounts" shall mean any and all accounts established and
maintained by the Secured Party in the name of the Debtor to which Collateral
may be credited.
"Commercial Tort Claims" shall mean "commercial tort claims" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Contract Rights" shall mean all rights of the Debtor under each
Contract, including, without limitation, (i) any and all rights to receive and
demand payments under any or all Contracts, (ii) any and all rights to receive
and compel performance under any or all Contracts and (iii) any and all other
rights, interests and claims now existing or in the future arising in connection
with any or all Contracts.
"Contracts" shall mean all contracts between the Debtor and one or
more additional parties (including, without limitation, any licensing agreements
and any partnership agreements, joint venture agreements and limited liability
company agreements), except to the extent that the grant by the Debtor of a
security interest in its right, title and interest in any such contract is
prohibited by such contract without the consent of any other party thereto (that
has not obtained) or would give any other party to such contract the right to
terminate its obligations thereunder; PROVIDED, that the foregoing limitation
(i) shall not affect, limit, restrict or impair the grant by the Debtor of a
security interest in any Account or any money or other amounts due or to become
due under any such contract and (ii) shall not apply to the extent the
provisions contained in such contract which prohibit such a grant by the Debtor
or provide such other party such a termination right would be rendered
unenforceable in accordance with applicable law (including the Uniform
Commercial Code) or principles of equity.
"Copyrights" shall mean any United States copyright now or hereafter
owned by the Debtor, including any registrations of any copyrights, in the
United States Copyright Office or any foreign equivalent office, as well as any
application for a copyright registration now or hereafter made with the United
States Copyright Office or any foreign equivalent office by the Debtor.
"Documents" shall mean "documents" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Domain Names" shall mean all Internet domain names and associated URL
addresses in or to which the Debtor now or hereafter has any right, title or
interest.
"Electronic Chattel Paper" shall mean "electronic chattel paper" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
<Page>
"Equipment" shall mean any "equipment" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by the Debtor and, in any event, shall include, but
shall not be limited to, all machinery, equipment, furnishings, fixtures and
vehicles now or hereafter owned by the Debtor and any and all additions,
substitutions and replacements of any of the foregoing and all accessions
thereto, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"Financial Asset" shall mean "financial asset" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"General Intangibles" shall mean "general intangibles" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Goods" shall mean "goods" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Health-Care-Insurance Receivable" shall mean any
"health-care-insurance receivable" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Instrument" shall mean "instruments" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof and all accessions thereto,
wherever located, together with all goods, supplies, incidentals, packaging
materials, labels, materials and any other items used or usable in
manufacturing, processing, packaging or shipping same, in all stages of
production from raw materials through work in process to finished goods, and all
products and proceeds of whatever sort and wherever located any portion thereof
which may be returned, rejected, reclaimed or repossessed by the Secured Party
from the Debtor's customers, and shall specifically include all "inventory" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Investment Property" shall mean "investment property" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Letter-of-Credit Rights" shall mean "letter-of-credit rights" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of new York.
"Limited Liability Company Interests" shall mean the entire limited
liability company membership interest at any time owned by the Debtor in any
limited liability company.
"Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held or hereafter acquired by the
Debtor, including any registration or application for registration of any
trademarks and service marks now held or hereafter acquired by the Debtor, which
are registered or filed in the United States Patent and Trademark Office or the
equivalent thereof in any state of the United States or any equivalent foreign
office or agency, as well as any unregistered trademarks and service marks used
by the Debtor and any trade dress including logos, designs, fictitious business
names and other business identifiers used by the Debtor.
"Notes" shall mean all promissory notes (including intercompany notes)
from time to time issued to, or held by, the Debtor.
"Partnership Interest" shall mean the entire general partnership
interest or limited partnership interest at any time owned by the Debtor in any
general partnership or limited partnership.
<Page>
"Patents" shall mean any United States or foreign patent in or to
which the Debtor now or hereafter has any right, title or interest therein, and
any divisions, continuations (including, but not limited to,
continuations-in-parts) and improvements thereof, as well as any application for
a United States or foreign patent now or hereafter made by the Debtor.
"Permits" shall mean, to the extent permitted to be assigned by the
terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations of or from any governmental authority or
agency.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Proceeds" shall mean all "proceeds" as such term is defined in the
Uniform Commercial Code as in effect in the State of New York on the date hereof
and, in any event, shall also include, but not be limited to, (i) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to the
Secured Party or the Debtor from time to time with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or due and
payable to the Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under color of
governmental authority) and (iii) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Security" and "Securities" shall mean "securities" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York and shall in any event also include all Stock and all Notes.
"Security Entitlement" shall mean "security entitlement" as such term
is defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Software" shall mean "software" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Stock" shall mean all of the issued and outstanding shares of capital
stock of any corporation at any time directly owned by the Debtor.
"Supporting Obligations" shall mean any "supporting obligation" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York, now or hereafter owned by the Debtor, or in
which the Debtor has any rights, and, in any event, shall include, but shall not
be limited to all of such Debtor's rights in any Letter-of-Credit Right or
secondary obligation that supports the payment or performance of, and all
security for, any Account, Chattel Paper, Document, General Intangible,
Instrument or Investment Property.
"Tangible Chattel Paper" shall mean "tangible chattel paper" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Trade Secrets" shall mean any secretly held existing engineering or
other data, information, production procedures and other know-how relating to
the design manufacture, assembly, installation, use, operation, marketing, sale
and/or servicing of any products or business of the Debtor worldwide whether
written or not.
"Trade Secret Rights" shall mean the rights of the Debtor in a Trade
Secret it holds.
<Page>
LATHAM & WATKINS
Deutsche Bank Trust Company Americas
and the Lenders indentified on Exhibit A
November 25, 2002
Page 15
EXHIBIT D
PLEDGED SECURITIES
<Table>
<Caption>
STOCK ISSUER CLASS OF STOCK STOCK CERTIFICATE NO. NUMBER OF SHARES
------------ -------------- --------------------- ----------------
Rexnord Corporation common 1 1,000
RBS North America, common 1 1,000
Inc.
RBS Acquisition common 1 1,000
Corporation
RAC-I, Inc. common 2 1,000
Clarkson, Industries, common 3 1,000
Inc.
Prager Incorporated common 3A 50
Prager Incorporated common 3B 722.5
Rexnord North common 1 1,000
America Holdings,
Inc.
Addax, Inc. Class A common 127 9,287
Betzdorf Chain common 5 99
Company Inc.
PT Components, Inc. common 6 100
Rexnord Germany-I common 3 10,000
Inc.
Rexnord International common 6 100
Inc.
Rexnord, Ltd. common 5 1,000
</Table>
<Page>
LATHAM & WATKINS
Deutsche Bank Trust Company Americas
and the Lenders indentified on Exhibit A
November 25, 2002
Page 16
<Table>
Rexnord Puerto Rico common 3 100
Inc.
W.M.Berg Inc. common 3 20,000
Winfred Berg common 2 100
Licensco Inc.
</Table>
<Page>
UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER [optional]
B. SEND ACKNOWLEDGMENT TO: (Name and Address)
LexisNexis Document Solutions
PO Box 2969
Springfield , IL 62708
THE ABOVE SPACE IS FOR FILLING OFFICE USE ONLY
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name(1a or 1b) - do
not abbreviate or combine names
1a. ORGANIZATION'S NAME
ORRBS Global, Inc.
OR
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
4701 West Greenfield Avenue MILWAUKEE WI 53214 USA
1d. TAX ID # SSN OR EIN ADD'NL. INFO RE
ORGANIZATION
DEBTOR
1e. TYPE OF ORGANIZATION
CORP
1f. JURISDICTION OF ORGANIZATION
DE
1g. ORGANIZATIONAL ID #, if any
/ / NONE
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name
(2a or 2b) - do not abbreviate or combine names
2a. ORGANIZATION'S NAME
OR
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
2d. TAX ID # SSN OR EIN ADD'NL. INFO RE
ORGANIZATION
DEBTOR
2e. TYPE OF ORGANIZATION
2f. JURISDICTION OF ORGANIZATION
2g. ORGANIZATIONAL ID #, if any
/ / NONE
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P) - insert
only one selected party name (3a or 3b)
3a. ORGANIZATION'S NAME
Deutsche Bank Trust Company Americas, as Collateral Agent
OR 3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
31 West 52nd Street NEW YORK NY 10019 USA
4. This FINANCING STATEMENT covers the following collateral:
All assets of the Debtor, including, without limitation, as set forth on
Schedule I attached hereto and made a part hereof.
5. ALTERNATIVE DESIGNATION if applicable:
/ / LESSEE/LESSOR
/ / CONSIGNEE/CONSIGNOR
/ / BAILEE/BAILOR
/ / SELLER/BUYER
/ / AG LIEN
/ / NON-UCC FILING
6. / / The FINANCING STATEMENT is to be filed (for record) (or records) in the
REAL ESTATE RECORDS Attach Addendum (if applicable)
7. Check to REQUEST SEARCH REPORT(S) on Debtor(s) [ADDITIONAL FEE]
(optional)
/ / All Debtors
/ / Debtor 1
/ / Debtor 2
8. OPTIONAL FILER REFERENCE DATA
DE-SOS
FILING OFFICE COPY - NATIONAL UCC FINANCING STATEMENT (FORM UCC1)
(REV. 07/29/98)
LexisNexis Document Solutions
[ILLEGIBLE]
[ILLEGIBLE]
<Page>
SCHEDULE I
to UCC-1 Financing Statement
by
RBS GLOBAL, INC., as Debtor
in favor of
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent, Secured Party
1. This Financing Statement is presented to Filing Officer for filing
pursuant to the Uniform Commercial Code.
2. This Financing Statement covers all of the rights, title and interest
of the Debtor in, to and under all assets, whether now existing or hereafter
from time to time acquired by the Debtor, including without limitation all of
the following (whether now existing or hereafter from time to time acquired by
the Debtor):
(i) each and every Account;
(ii) all cash;
(iii) the Cash Collateral Account and all monies, securities,
Instruments and other investments deposited or required to
be deposited in the Cash Collateral Account;
(iv) all Chattel Paper (including, without limitation, all
Tangible Chattel Paper and all Electronic Chattel Paper);
(v) all Commercial Tort Claims;
(vi) all computer programs of the Debtor and all intellectual
property rights therein and all other proprietary
information of the Debtor, including, but not limited to
Domain Names and Trade Secret Rights;
(vii) all Contracts, together with all Contract Rights arising
thereunder;
(viii) all Copyrights;
(ix) all Equipment;
(x) all Documents;
(xi) all General Intangibles;
(xii) all Goods;
(xiii) all Instruments;
(xiv) all Inventory;
(xv) all Investment Property;
(xvi) all Letter-of-Credit Rights (whether or not the respective
letter of credit is evidenced by a writing);
(xvii) all Marks, together with the registrations and right to all
renewals thereof, and the goodwill of the business of the
Debtor symbolized by the Marks;
(xviii) all Patents;
-103-
<Page>
(xix) all Permits;
(xx) all Software and all Software licensing rights, all
writings, plans, specifications and schematics, all
engineering drawings, customer lists, goodwill and licenses,
and all recorded data of any kind or nature, regardless of
the medium of recording;
(xxi) all Supporting Obligations;
(xxii) each of the Collateral Accounts, including any and all
assets of whatever type or kind deposited by the Debtor in
any such Collateral Account, whether now owned or hereafter
acquired, existing or arising, including, without
limitation, all Financial Assets, Investment Property,
monies, checks, drafts, Instruments, Securities or interests
therein of any type or nature deposited in such Collateral
Account, and all investments and all certificates and other
Instruments (including depository receipts, if any) from
time to time representing or evidencing the name, and all
dividends, interest, distributions, cash and other property
from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of
the foregoing;
(xxiii) all Securities owned or held by the Debtor from time to time
and all options and warrants owned by the Debtor from time
to time to purchase Securities;
(xxiv) all Limited Liability Company Interests owned by the Debtor
from time to time and all of its right, title and interest
in each limited liability company to which each such Limited
Liability Company Interest relates, whether now existing or
hereafter acquired, including, without limitation, to the
fullest extent permitted under the terms and provisions of
the documents and agreements governing such Limited
Liability Company Interests and applicable law;
(A) all its capital therein and its interest in all
profits, income, surpluses, losses and other distributions to which
the Debtor shall at any time be entitled in respect of such Limited
Liability Company Interests;
(B) all other payments due or to become due to the Debtor
in respect of Limited Liability Company Interests, whether under any
limited liability company agreement or otherwise, whether as
contractual obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any,
under any limited liability company agreement or operating agreement,
or at law or otherwise in respect of such Limited Liability Company
Interests;
(D) all present and future claims, if any, of the Debtor
against any such limited liability company for monies loaned or
advanced, for services rendered or otherwise;
(E) all of the Debtor's rights under any limited liability
company agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and privilege,
of the Debtor relating to such Limited Liability Company Interests,
including any power to terminate, cancel or modify any such limited
liability company agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf of and in
the name of any of the Debtor in respect of such Limited Liability
Company Interests and any such limited liability company, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing, to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
<Page>
(F) all other property hereafter delivered in
substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such
other property and all cash, securities, interest, dividends,
rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or
in exchange for any or all thereof;
(xxv) all Partnership Interests owned by the Debtor from time
to time and all of its right, title and interest in each
partnership to which each such Partnership Interest
relates, whether now existing or hereafter acquired,
including, without limitation, to the fullest extent
permitted under the terms and provisions of the
documents and agreements governing such Partnership
Interests and applicable law;
(A) all its capital therein and its interest in all
profits, income, surpluses, losses, and other distributions to
which the Debtor shall at any time be entitled in respect of
such Partnership Interests;
(B) all other payments due or to become due to the
Debtor in respect of Partnership Interests, whether under any
partnership agreement or otherwise, whether as contractual
obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if
any, under any partnership agreement or operating agreement, or
at law or otherwise in respect of such Partnership Interests;
(D) all present and future claims, if any, of the Debtor
against any such partnership for monies loaned or advanced, for
services rendered or otherwise;
(E) all of the Debtor's rights under any partnership
agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and
privilege of the Debtor relating to such Partnership Interests,
including any power to terminate, cancel or modify any
partnership agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf of
and in the name of the Debtor in respect of such Partnership
Interests and any such partnership, to make determinations, to
exercise any election (including, but not limited to, election
of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power
and authority to demand, receive, enforce, collect or receipt
for any of the foregoing to enforce or execute any checks, or
other instruments or orders, to file any claims and to take any
action in connection with any of the foregoing; and
(F) all other property hereafter delivered in
substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such
other property and all cash, securities, interest, dividends,
rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or
in exchange for any or all thereof;
(xxvi) all Financial Assets owned by the Debtor from time to
time;
(xxvii) all Security Entitlements owned by the Debtor from time
to time in any and all of the foregoing; and
(xxviii) all Proceeds and products of any and all of the
foregoing (all of the above, the "Collateral").
3. For the purpose of this Financing Statement, the following terms
shall have the meanings herein specified. Such definitions shall be equally
applicable to the singular and plural forms of the terms defined.
<Page>
"Account" shall mean any "account" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York, and in any event shall include but shall not be limited to, all rights to
payment of any monetary obligation, whether or not earned by performance, (i)
for property that has been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a
policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for
the use or hire of a vessel under a charter or other contract, (vii) arising out
of the use of a credit or charge card or information contained on or for use
with the card, or (viii) as winnings in a lottery or other game of chance
operated or sponsored by a State, governmental unit of a State, or person
licensed or authorized to operate the game by a State or governmental unit of a
State. Without limiting the foregoing, the term "account" shall include all
Health-Care-Insurance Receivables.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Secured Party.
"Chattel Paper" shall mean "chattel paper" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York. Without limiting the foregoing, the term "Chattel Paper"
shall in any event include all Tangible Chattel Paper and all Electronic Chattel
Paper.
"Collateral Accounts" shall mean any and all accounts
established and maintained by the Secured Party in the name of the Debtor to
which Collateral may be credited.
"Commercial Tort Claims" shall mean "commercial tort claims" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Contract Rights" shall mean all rights of the Debtor under each
Contract, including, without limitation, (i) any and all rights to receive and
demand payments under any or all Contracts, (ii) any and all rights to receive
and compel performance under any or all Contracts and (iii) any and all other
rights, interests and claims now existing or in the future arising in connection
with any or all Contracts.
"Contracts" shall mean all contracts between the Debtor and one
or more additional parties (including, without limitation, any licensing
agreements and any partnership agreements, joint venture agreements and limited
liability company agreements), except to the extent that the grant by the Debtor
of a security interest in its right, title and interest in any such contract is
prohibited by such contract without the consent of any other party thereto (that
has not obtained) or would give any other party to such contract the right to
terminate its obligations thereunder; PROVIDED, that the foregoing limitation
(i) shall not affect, limit, restrict or impair the grant by the Debtor of a
security interest in any Account or any money or other amounts due or to become
due under any such contract and (ii) shall not apply to the extent the
provisions contained in such contract which prohibit such a grant by the Debtor
or provide such other party such a termination right would be rendered
unenforceable in accordance with applicable law (including the Uniform
Commercial Code) or principles of equity.
"Copyrights" shall means any United States copyright now or
hereafter owned by the Debtor, including any registrations of any copyrights, in
the United States Copyright Office or any foreign equivalent office, as well as
any application for a copyright registration now or hereafter made with the
United States Copyright Office or any foreign equivalent office by the Debtor.
"Documents" shall mean "documents" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Domain Names" shall mean all Internet domain names and
associated URL addresses in or to which the Debtor now or hereafter has any
right, title or interest.
"Electronic Chattel Paper" shall mean "electronic chattel paper"
as such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
<Page>
"Equipment" shall mean any "equipment" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York, now or hereafter owned by the Debtor and, in any event, shall include,
but shall not be limited to, all machinery, equipment, furnishings, fixtures and
vehicles now or hereafter owned by the Debtor and any and all additions,
substitutions and replacements of any of the foregoing and all accessions
thereto, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"Financial Asset" shall mean "financial asset" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"General Intangibles" shall mean "general intangibles" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Goods" shall mean "goods" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Health-Care-Insurance Receivable" shall mean any
"health-care-insurance receivable" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Instrument" shall mean "instruments" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof and all accessions thereto,
wherever located, together with all goods, supplies, incidentals, packaging
materials, labels, materials and any other items used or usable in
manufacturing, processing, packaging or shipping same, in all stages of
production from raw materials through work in process to finished goods, and all
products and proceeds of whatever sort and wherever located any portion thereof
which may be returned, rejected, reclaimed or repossessed by the Secured Party
from the Debtor's customers, and shall specifically include all "inventory" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Investment Property" shall mean "investment property" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Letter-of-Credit Rights" shall mean "letter-of-credit rights"
as such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of new York.
"Limited Liability Company Interests" shall mean the entire
limited liability company membership interest at any time owned by the Debtor in
any limited liability company.
"Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held or hereafter acquired by the
Debtor, including any registration or application for registration of any
trademarks and service marks now held or hereafter acquired by the Debtor, which
are registered or filed in the United States Patent and Trademark Office or the
equivalent thereof in any state of the United States or any equivalent foreign
office or agency, as well as any unregistered trademarks and service marks used
by the Debtor and any trade dress including logos, designs, fictitious business
names and other business identifiers used by the Debtor.
"Notes" shall mean all promissory notes (including intercompany
notes) from time to time issued to, or held by, the Debtor.
"Partnership Interest" shall mean the entire general partnership
interest or limited partnership interest at any time owned by the Debtor in any
general partnership or limited partnership.
<Page>
"Patents" shall mean any United States or foreign patent in or
to which the Debtor now or hereafter has any right, title or interest therein,
and any divisions, continuations (including, but not limited to,
continuations-in-parts) and improvements thereof, as well as any application for
a United States or foreign patent now or hereafter made by the Debtor.
"Permits" shall mean, to the extent permitted to be assigned by
the terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations of or from any governmental authority or
agency.
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, limited liability company, trust or other
enterprise or any government or political subdivision or any agency, department
or instrumentality thereof.
"Proceeds" shall mean all "proceeds" as such term is defined in
the Uniform Commercial Code as in effect in the State of New York on the date
hereof and, in any event, shall also include, but not be limited to, (i) any and
all proceeds of any insurance, indemnity, warranty or guaranty payable to the
Secured Party or the Debtor from time to time with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or due and
payable to the Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under color of
governmental authority)and (iii) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Security" and "Securities" shall mean "securities" as such term
is defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York and shall in any event also include all Stock and all Notes.
"Security Entitlement" shall mean "security entitlement" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Software" shall mean "software" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Stock" shall mean all of the issued and outstanding shares of
capital stock of any corporation at any time directly owned by the Debtor.
"Supporting Obligations" shall mean any "supporting obligation"
as such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York, now or hereafter owned by the Debtor, or in
which the Debtor has any rights, and, in any event, shall include, but shall not
be limited to all of such Debtor's rights in any Letter-of-Credit Right or
secondary obligation that supports the payment or performance of, and all
security for, any Account, Chattel Paper, Document, General Intangible,
Instrument or Investment Property.
"Tangible Chattel Paper" shall mean "tangible chattel paper" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Trade Secrets" shall mean any secretly held existing
engineering or other data, information, production procedures and other know-how
relating to the design manufacture, assembly, installation, use, operation,
marketing, sale and/or servicing of any products or business of the Debtor
worldwide whether written or not.
"Trade Secret Rights" shall mean the rights of the Debtor in a
Trade Secret it holds.
<Page>
UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER [optional]
B. SEND ACKNOWLEDGEMENT TO: (Name and Address)
LexisNexis Document Solutions
PO Box 2969
Springfield, IL 62708
THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (1a or 1b) - do
not abbreviate or combine names
1a. ORGANIZATION'S NAME
W.M. BERG INC.
OR
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
499 OCEAN AVENUE EAST ROCKAWAY NY 11518 USA
1d. TAX ID # SSN OR EIN ADD'NL. INFO RE.
ORGANIZATION
DEBTOR
1e. TYPE OF ORGANIZATION
CORP
1f. JURISDICTION OF ORGANIZATION
DE
1g. ORGANIZATIONAL ID #, if any
/ / NONE
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - Insert only one debtor name
(2a or 2b) - do not abbreviate or combine names
2a. ORGANIZATION'S NAME
OR
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
2d. TAX ID# SSN OR EIN ADD'NL. INFO RE
ORGANIZATION
DEBTOR
2e. TYPE OF ORGANIZATION
2f. JURISDICTION OF ORGANIZATION
2g. ORGANIZATIONAL ID # if any
/ / NONE
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P) - insert
only one secured party name (3a or 3b)
3a. ORGANIZATION'S NAME
Deutsche Bank Trust Company Americas, as Collateral Agent
OR
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
31 West 52nd Street NEW YORK NY 10019 USA
4. This FINANCING STATEMENT covers the following collateral: All assets of the
Debtor, including, without limitation, as set forth on Schedule I attached
hereto and made a part hereof.
5. ALTERNATIVE DESIGNATION if applicable:
/ / LESSEE/LESSOR
/ / CONSIGNEE/CONSIGNOR
/ / BAILEE/BAILOR
/ / SELLER/BUYER
/ / AG LIEN
/ / NON-UCC FILING
6. / / This FINANCING STATEMENT is to be filed (for record) (or records) in the
REAL ESTATE RECORDS Attach Addendum (if applicable)
7. Check to REQUEST SEARCH REPORT(S) ON Debtor(s)
[optional]
[ADDITIONAL FEE]
/ / All Debtors
/ / Debtor 1
/ / Debtor 2
8. OPTIONAL FILER REFERENCE DATA
DE-SOS
FILING OFFICE COPY - NATIONAL UCC FINANCING STATEMENT (FORM UCC1)(REV. 07/29/98)
LexisNexis Document Solutions
[ILLEGIBLE]
[ILLEGIBLE]
<Page>
SCHEDULE I
to UCC-1 Financing Statement
by
W.M. BERG, INC, as Debtor
in favor of
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent, Secured Party
1. This Financing Statement is presented to a Filing Officer for
filing pursuant to the Uniform Commercial Code.
2. This Financing Statement covers all of the rights, title and
interest of the Debtor in, to and under all assets, whether now existing or
hereafter from time to time acquired by the Debtor, including without limitation
all of the following (whether now existing or hereafter from time to time
acquired by the Debtor):
(i) each and every Account;
(ii) all cash;
(iii) the Cash Collateral Account and all monies, securities,
Instruments and other investments deposited or required
to be deposited in the Cash Collateral Account;
(iv) all Chattel Paper (including, without limitation, all
Tangible Chattel Paper and all Electronic Chattel
Paper);
(v) all Commercial Tort Claims;
(vi) all computer programs of the Debtor and all intellectual
property rights therein and all other proprietary
information of the Debtor, including, but not limited to
Domain Names and Trade Secret Rights;
(vii) all Contracts, together with all Contract Rights arising
thereunder;
(viii) all Copyrights;
(ix) all Equipment;
(x) all Documents;
(xi) all General Intangibles;
(xii) all Goods;
(xiii) all Instruments;
(xiv) all Inventory;
(xv) all Investment Property;
(xvi) all Letter-of-Credit Rights (whether or not the
respective letter of credit is evidenced by a writing);
(xvii) all Marks, together with the registrations and right to
all renewals thereof, and the goodwill of the business
of the Debtor symbolized by the Marks;
(xviii) all Patents;
<Page>
(xix) all Permits;
(xx) all Software and all Software licensing rights, all
writings, plans, specifications and schematics, all
engineering drawings, customer lists, goodwill and
licenses, and all recorded data of any kind or nature,
regardless of the medium of recording;
(xxi) all Supporting Obligations;
(xxii) each of the Collateral Accounts, including any and all
assets of whatever type or kind deposited by the Debtor
in any such Collateral Account, whether now owned or
hereafter acquired, existing or arising, including,
without limitation, all Financial Assets, Investment
Property, monies, checks, drafts, Instruments,
Securities or interests therein of any type or nature
deposited in such Collateral Account, and all
investments and all certificates and other Instruments
(including depository receipts, if any) from time to
time representing or evidencing the same, and all
dividends, interest, distributions, cash and other
property from time to time received, receivable or
otherwise distributed in respect of or in exchange for
any or all of the foregoing;
(xxiii) all Securities owned or held by the Debtor from time to
time and all options and warrants owned by the Debtor
from time to time to purchase Securities;
(xxiv) all Limited Liability Company Interests owned by the
Debtor from time to time and all of its right, title and
interest in each limited liability company to which each
such Limited Liability Company Interest relates, whether
now existing or hereafter acquired, including, without
limitation, to the fullest extent permitted under the
terms and provisions of the documents and agreements
governing such Limited Liability Company Interests and
applicable law:
(A) all its capital therein and its interest in all
profits income, surpluses, losses and other distributions to
which the Debtor shall at any time be entitled in respect of
such Limited Liability Company Interests;
(B) all other payments due or to become due to the
Debtor in respect of Limited Liability Company Interests,
whether under any limited liability company agreement or
otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if
any, under any limited liability company agreement or operating
agreement, or at law or otherwise in respect of such Limited
Liability Company Interests;
(D) all present and future claims, if any, of the Debtor
against any such limited liability company for monies loaned or
advanced, for services rendered or otherwise;
(E) all of the Debtor's rights under any limited
liability company agreement or operating agreement or at law to
exercise and enforce every right, power, remedy, authority,
option and privilege of the Debtor relating to such Limited
Liability Company Interests, including any power to terminate,
cancel or modify any such limited liability company agreement or
operating agreement, to execute any instruments and to take any
and all other action on behalf of and in the name of any of the
Debtor in respect of such Limited Liability Company Interests
and any such limited liability company, to make determinations,
to exercise any election (including, but not limited to,
election of remedies) or option or to give or receive any
notice, consent, amendment, waiver or approval, together with
full power and authority to demand, receive, enforce, collect or
receipt for any of the foregoing, to enforce or execute any
checks, or other instruments or orders, to file any claims and
to take any action in connection with any of the foregoing; and
<Page>
(F) all other property hereafter delivered in
substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such
other property and all cash, securities, interest, dividends,
rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or
in exchange for any or all thereof;
(xxv) all Partnership Interests owned by the Debtor from time
to time and all of its right, title and interest in each
partnership to which each such Partnership Interest
relates, whether now existing or hereafter acquired,
including, without limitation, to the fullest extent
permitted under the terms and provisions of the
documents and agreements governing such Partnership
Interests and applicable law;
(A) all its capital therein and its interest in all
profits, income, surpluses, losses, and other distributions to
which the Debtor shall at any time be entitled in respect of
such Partnership Interests;
(B) all other payments due or to become due to the
Debtor in respect of Partnership Interests, whether under any
partnership agreement or otherwise, whether as contractual
obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if
any, under any partnership agreement or operating agreement, or
at law or otherwise in respect of such Partnership Interests;
(D) all present and future claims, if any, of the Debtor
against any such partnership for monies loaned or advanced, for
services rendered or otherwise;
(E) all of the Debtor's rights under any partnership
agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and
privilege of the Debtor relating to such Partnership Interests,
including any power to terminate, cancel or modify any
partnership agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf of
and in the name of the Debtor in respect of such Partnership
Interests and any such partnership, to make determinations, to
exercise any election (including, but not limited to, election
of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power
and authority to demand, receive, enforce, collect or receipt
for any of the foregoing to enforce or execute any checks, or
other instruments or orders, to file any claims and to take any
action in connection with any of the foregoing; and
(F) all other property hereafter delivered in
substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such
other property and all cash, securities, interest, dividends,
rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or
in exchange for any or all thereof;
(xxvi) all Financial Assets owned by the Debtor from time to
time;
(xxvii) all Security Entitlements owned by the Debtor from time
to time in any and all of the foregoing; and
(xxviii) all Proceeds and products of any and all of the
foregoing (all of the above, the "Collateral")
3. For the purpose of this Financing Statement, the following terms
shall have the meanings herein specified. Such definitions shall be equally
applicable to the singular and plural forms of the terms defined.
<Page>
"Account" shall mean any "account" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York, and in any event shall include but shall not be limited to, all rights to
payment of any monetary obligation, whether or not earned by performance, (i)
for property that has been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a
policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for
the use or hire of a vessel under a charter or other contract, (vii) arising out
of the use of a credit or charge card or information contained on or for use
with the card, or (viii) as winnings in a lottery or other game of chance
operated or sponsored by a State, governmental unit of a State, or person
licensed or authorized to operate the game by a State or governmental unit of a
State. Without limiting the foregoing, the term "account" shall include all
Health-Care-Insurance Receivables.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Secured Party.
"Chattel Paper" shall mean "chattel paper" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York. Without limiting the foregoing, the term "Chattel Paper"
shall in any event include all Tangible Chattel Paper and all Electronic Chattel
Paper.
"Collateral Accounts" shall mean any and all accounts
established and maintained by the Secured Party in the name of the Debtor to
which Collateral may be credited.
"Commercial Tort Claims" shall mean "commercial tort claims" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Contract Rights" shall mean all rights of the Debtor under each
Contract, including, without limitation, (i) any and all rights to receive and
demand payments under any or all contracts, (ii) any and all rights to receive
and compel performance under any or all Contracts and (iii) any and all other
rights, interests and claims now existing or in the future arising in connection
with any or all Contracts.
"Contracts" shall mean all contracts between the Debtor and one
or more additional parties (including, without limitation, any licensing
agreements and any partnership agreements, joint venture agreements and limited
liability company agreements), except to the extent that the grant by the Debtor
of a security interest in its right, title and interest in any such contract is
prohibited by such contract without the consent of any other party thereto (that
has not obtained) or would give any other party to such contract the right to
terminate its obligations thereunder; PROVIDED, that the foregoing limitation
(i) shall not affect, limit, restrict or impair the grant by the Debtor of a
security interest in any Account or any money or other amounts due or to become
due under any such contract and (ii) shall not apply to the extent the
provisions contained in such contract which prohibit such a grant by the Debtor
or provide such other party such a termination right would be rendered
unenforceable in accordance with applicable law (including the Uniform
Commercial Code) or principles of equity.
"Copyrights" shall mean any United States copyright now or
hereafter owned by the Debtor, including any registrations of any copyrights, in
the United Sates Copyright Office or any foreign equivalent office, as well as
any application for a copyright registration now or hereafter made with the
United States Copyright Office or any foreign equivalent office by the Debtor.
"Documents" shall mean "documents" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Domain Names" shall mean all Internet domain names and
associated URL addresses in or to which the Debtor now or hereafter has any
right, title or interest.
"Electronic Chattel Paper" shall mean "electronic chattel paper"
as such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
<Page>
"Equipment" shall mean any "equipment" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York, now or hereafter owned by the Debtor and, in any event, shall include,
but shall not be limited to, all machinery, equipment, furnishings, fixtures and
vehicles now or hereafter owned by the Debtor and any and all additions,
subsititutions and replacements of any of the foregoing and all accessions
thereto, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"Financial Asset" shall mean "financial asset " as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"General Intangibles" shall mean "general intangibles" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Goods" shall mean "goods" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Health-Care-Insurance Receivable" shall mean any
"health-care-insurance receivable" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Instrument" shall mean "instruments" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof and all accessions thereto,
wherever located, together with all goods, supplies, incidentals, packaging
materials, labels, materials and any other items used or usable in
manufacturing, processing, packaging or shipping same, in all stages of
production from raw materials through work in process to finished goods, and all
products and proceeds of whatever sort and wherever located any portion thereof
which may be returned, rejected, reclaimed or repossessed by the Secured Party
from the Debtor's customers, and shall specifically include all "inventory" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Investment Property" shall mean "investment property" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Letter-of-Credit Rights" shall mean "letter-of-credit rights"
as such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Limited Liability Company Interests" shall mean the entire
limited liability company membership interest at any time owned by the Debtor in
any limited liability company.
"Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held of hereafter acquired by the
Debtor, including any registration or application for registration of any
trademarks and service marks now held or hereafter acquired by the Debtor, which
are registered or filed in the United States Patent and Trademark Office or the
equivalent thereof in any state of the United States or any equivalent foreign
office or agency, as well as any unregistered trademarks and service marks used
by the Debtor and any trade dress including logos, designs, fictitious business
names and other business identifiers used by the Debtor.
"Notes" shall mean all promissory notes (including intercompany
notes) from time to time issued to, or held by, the Debtor.
"Partnership Interest" shall mean the entire general partnership
interest or limited partnership interest at any time owned by the Debtor in any
general partnership or limited partnership.
<Page>
"Patents" shall mean any United States or foreign patent in or
to which the Debtor now or hereafter has any right, title or interest therein,
and any divisions, continuations (including, but not limited to,
continuations-in-parts) and improvements thereof, as well as any application for
a United States or foreign patent now or hereafter made by the Debtor.
"Permits" shall mean, to the extent permitted to be assigned by
the terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations of or from any governmental authority or
agency.
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, limited liability company, trust or other
enterprise or any government or political subdivision or any agency, department
or instrumentality thereof.
"Proceeds" shall mean all "proceeds" as such term is defined in
the Uniform Commercial Code as in effect in the State of New York on the date
hereof and, in any event, shall also include, but not be limited to, (i) any and
all proceeds of any insurance, indemnity, warranty or guaranty payable to the
Secured Party or the Debtor from time to time with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or due and
payable to the Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under color of
governmental authority) and (iii) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Security" and "Securities" shall mean "securities" as such term
is defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York and shall in any event also include all Stock and all Notes.
"Security Entitlement" shall mean "security entitlement" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Software" shall mean "software" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Stock" shall mean all of the issued and outstanding shares of
capital stock of any corporation at any time directly owned by the Debtor.
"Supporting Obligations" shall mean any "supporting obligation"
as such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York, now or hereafter owned by the Debtor, or in
which the Debtor has any rights, and, in any event, shall include, but shall not
be limited to all of such Debtor's rights in any Letter-of-Credit Right or
secondary obligation that supports the payment or performance of and all
security for, any Account, Chattel Paper, Document, General Intangible,
Instrument or Investment Property.
"Tangible Chattel Paper" shall mean "tangible chattel paper" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Trade Secrets" shall mean any secretly held existing
engineering or other, data, information, production procedures and other
know-how relating to the design manufacture, assembly, installation, use,
operation, marketing, sale and/or servicing of any products or business of the
Debtor worldwide whether written or not.
"Trade Secret Right" shall mean the rights of the Debtor in a
Trade Secret it holds.
<Page>
LATHAM & WATKINS
Deutsche Bank Trust Company Americas
and the Lenders indentified on Exhibit A
November 25, 2002
Page 14
EXHIBIT C
NEW YORK FINANCING STATEMENT
SEE ATTACHED 7 PAGES
<Page>
UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER [optional]
B. SEND ACKNOWLEDGMENT TO: (Name and Address)
LexisNexis Document Solutions
PO Box 2969
Springfield, IL 62708
THE ABOVE SPACE IS FOR FILLING OFFICE USE ONLY
1. DEBTOR'S EXACT FULL LEGAL NAME - Insert only one debtor name (1a or 1b) - do
not abbreviate or combine names
1a. ORGANIZATION'S NAME
CLARKSON INDUSTRIES, INC.
OR
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
380 Mountain Group Street Bridgeport CT USA
1d. TAX ID # SSN OR EIN ADD'NL. INFO RE.
ORGANIZATION
DEBTOR
1e. TYPE OF ORGANIZATION
CORP
1f. JURISDICTION OF ORGANIZATION
NY
1g. ORGANIZATIONAL ID # if any
/X/ NONE
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name
(2a or 2b) - do not abbreviate or combine names
2a. ORGANIZATION'S NAME
OR
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
2d. TAX ID # SSN OR EIN ADD'NL. INFO RE.
ORGANIZATION
DEBTOR
2e. TYPE OF ORGANIZATION
2f. JURISDICTION OF ORGANIZATION
2g. ORGANIZATIONAL ID # if any
/ / NONE
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSINGNOR S/P) - insert
only one selected party name (3a or 3b)
3a. ORGANIZATION'S NAME
Deutsche Bank Trust Company Americas, as Collateral Agent
OR
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
31 West 52nd Street NEW YORK NY 10019 USA
4. This FINANCING STATEMENT covers the following collateral:
All assets of the Debtor, including, without limitation, as set forth on
Schedule I attached hereto and made a part hereof.
5. ALTERNATIVE DESIGNATION if applicable:
/ / LESSEE/LESSOR
/ / CONSIGNEE/CONSIGNOR
/ / BAILEE/BAILOR
/ / SELLER/BUYER
/ / AG LIEN
/ / NON-UCC FILING
6. / / The FINANCING STATEMENT is to be filed (for record) (or records) in the
REAL ESTATE RECORDS Attach Addendum (if applicable)
7. Check to REQUEST SEARCH REPORT(S) ON Debtor(s)
(optional)
[ADDITIONAL FEE]
/ / All Debtors
/ / Debtor 1
/ / Debtor 2
8. OPTIONAL FILER REFERENCE DATA
NY-SOS
LexisNexis Document Solutions
[ILLEGIBLE]
[ILLEGIBLE]
<Page>
SCHEDULE I
TO UCC-1 FINANCING STATEMENT
BY
CLARKSON INDUSTRIES, INC., AS DEBTOR
IN FAVOR OF
DEUTSCHE BANK TRUST COMPANY AMERICAS, AS COLLATERAL AGENT, SECURED PARTY
1. This Financing Statement is presented to a Filing Officer for
filing pursuant to the Uniform Commercial Code.
2. This Financing Statement covers all of the rights, title and
interest of the Debtor in, to and under all assets, whether now existing or
hereafter from time to time acquired by the Debtor, including without limitation
all of the following (whether now existing or hereafter from time to time
acquired by the Debtor):
(i) each and every Account;
(ii) all cash;
(iii) the Cash Collateral Account and all monies, securities,
Instruments and other investments deposited or required
to be deposited in the Cash Collateral Account;
(iv) all Chattel Paper (including, without limitation, all
Tangible Chattel Paper and all Electronic Chattel
Paper);
(v) all Commercial Tort Claims;
(vi) all computer programs of the Debtor and all intellectual
property rights therein and all other proprietary
information of the Debtor, including, but not limited to
Domain Names and Trade Secret Rights;
(vii) all Contracts, together with all Contract Rights arising
thereunder;
(viii) all Copyrights;
(ix) all Equipment;
(x) all Documents;
(xi) all General Intangibles;
(xii) all Goods;
(xiii) all Instruments;
(xiv) all Inventory;
(xv) all Investment Property;
(xvi) all Letter-of-Credit Rights (whether or not the
respective letter of credit is evidenced by a writing);
(xvii) all Marks, together with the registrations and right to
all renewals thereof, and the goodwill of the business
of the Debtor symbolized by the Marks;
(xviii) all Patents;
<Page>
(xix) all Permits;
(xx) all Software and all Software licensing rights, all
writings, plans, specifications and schematics, all
engineering drawings, customer lists, goodwill and
licenses, and all recorded data of any kind or nature,
regardless of the medium of recording;
(xxi) all Supporting Obligations;
(xxii) each of the Collateral Accounts, including any and all
assets of whatever type or kind deposited by the Debtor
in any such Collateral Account, whether now owned or
hereafter acquired, existing or arising, including,
without limitation, all Financial Assets, Investment
Property, monies, checks, drafts, Instruments,
Securities or interests therein of any type or nature
deposited in such Collateral Account, and all
investments and all certificates and other Instruments
(including depository receipts, if any) from time to
time representing or evidencing the same, and all
dividends, interest, distributions, cash and other
property from time to time received, receivable or
otherwise distributed in respect of or in exchange for
any or all of the foregoing;
(xxiii) all Securities owned or held by the Debtor from time to
time and all options and warrants owned by the Debtor
from time to time to purchase Securities;
(xxiv) all Limited Liability Company Interests owned by the
Debtor from time to time and all of its right, title and
interest in each limited liability company to which each
such Limited Liability Company Interest relates, whether
now existing or hereafter acquired, including, without
limitation, to the fullest extent permitted under the
terms and provisions of the documents and agreements
governing such Limited Liability Company Interests and
applicable law:
(A) all its capital therein and its interest in all
profits, income, surpluses, losses and other distributions to
which the Debtor shall at any time be entitled in respect of
such Limited Liability Company Interests;
(B) all other payments due or to become due to the
Debtor in respect of Limited Liability Company Interests,
whether under any limited liability company agreement or
otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if
any, under any limited liability company agreement or operating
agreement, or at law or otherwise in respect of such Limited
Liability Company Interests;
(D) all present and future claims, if any, of the Debtor
against any such limited liability company for monies loaned or
advanced, for services rendered or otherwise;
(E) all of the Debtor's rights under any limited
liability company agreement or operating agreement or at law to
exercise and enforce every right, power, remedy, authority,
option and privilege of the Debtor relating to such Limited
Liability Company Interests, including any power to terminate,
cancel or modify any such limited liability company agreement or
operating agreement, to execute any instruments and to take any
and all other action on behalf of and in the name of any of the
Debtor in respect of such Limited Liability Company Interests
and any such limited liability company, to make determinations,
to exercise any election (including, but not limited to,
election of remedies) or option or to give or receive any
notice, consent, amendment, waiver or approval, together with
full power and authority to demand, receive, enforce, collect or
receipt for any of the foregoing, to enforce or execute any
checks, or other instruments or orders, to file any claims and
to take any action in connection with any of the foregoing; and
<Page>
(F) all other property hereafter delivered in
substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such
other property and all cash, securities, interest, dividends,
rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or
in exchange for any or all thereof;
(xxv) all Partnership Interests owned by the Debtor from time
to time and all of its right, title and interest in each
partnership to which each such Partnership Interest
relates, whether now existing or hereafter acquired,
including, without limitation, to the fullest extent
permitted under the terms and provisions of the
documents and agreements governing such Partnership
Interests and applicable law:
(A) all its capital therein and its interest in all
profits, income, surpluses, losses, and other distributions to
which the Debtor shall at any time be entitled in respect of
such Partnership Interests;
(B) all other payments due or to become due to the
Debtor in respect of Partnership Interests, whether under any
partnership agreement or otherwise, whether as contractual
obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if
any, under any partnership agreement or operating agreement, or
at law or otherwise in respect of such Partnership Interests;
(D) all present and future claims, if any, of the Debtor
against any such partnership for monies loaned or advanced, for
services rendered or otherwise;
(E) all of the Debtor's rights under any partnership
agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and
privilege of the Debtor relating to such Partnership Interests,
including any power to terminate, cancel or modify any
partnership agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf of
and in the name of the Debtor in respect of such Partnership
Interests and any such partnership, to make determinations, to
exercise any election (including, but not limited to, election
of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power
and authority to demand, receive, enforce, collect or receipt
for any of the foregoing to enforce or execute any checks, or
other instruments or orders, to file any claims and to take any
action in connection with any of the foregoing; and
(F) all other property hereafter delivered in
substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such
other property and all cash, securities, interest, dividends,
rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or
in exchange for any or all thereof;
(xxvi) all Financial Assets owned by the Debtor from time to
time;
(xxvii) all Security Entitlements owned by the Debtor from time
to time in any and all of the foregoing; and
(xxviii)all Proceeds and products of any and all of the
foregoing (all of the above, the "Collateral").
3. For the purpose of this Financing Statement, the following terms
shall have the meanings herein specified. Such definitions shall be equally
applicable to the singular and plural forms of the terms defined.
<Page>
"Account" shall mean any "account" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York, and in any event shall include but shall not be limited to, all rights to
payment of any monetary obligation, whether or not earned by performance, (i)
for property that has been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a
policy of insurance issued or to be issued, (iv) for a secondary obligation
incurred or to be incurred, (v) for energy provided or to be provided, (vi) for
the use or hire of a vessel under a charter or other contract, (vii) arising out
of the use of a credit or charge card or information contained on or for use
with the card, or (viii) as winnings in a lottery or other game of chance
operated or sponsored by a State, governmental unit of a State, or person
licensed or authorized to operate the game by a State or governmental unit of a
State. Without limiting the foregoing, the term "account" shall include all
Health-Care-Insurance Receivables.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Secured Party.
"Chattel Paper" shall mean "chattel paper" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York. Without limiting the foregoing, the term "Chattel Paper"
shall in any event include all Tangible Chattel Paper and all Electronic Chattel
Paper.
"Collateral Accounts" shall mean any and all accounts
established and maintained by the Secured Party in the name of the Debtor to
which Collateral may be credited.
"Commercial Tort Claims" shall mean "commercial tort claims" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Contract Rights" shall mean all rights of the Debtor under each
Contract, including, without limitation, (i) any and all rights to receive and
demand payments under any or all Contracts, (ii) any and all rights to receive
and compel performance under any or all Contracts and (iii) any and all other
rights, interests and claims now existing or in the future arising in connection
with any or all Contracts.
"Contracts" shall mean all contracts between the Debtor and one
or more additional parties (including, without limitation, any licensing
agreements and any partnership agreements, joint venture agreements and limited
liability company agreements), except to the extent that the grant by the Debtor
of a security interest in its right, title and interest in any such contract is
prohibited by such contract without the consent of any other party thereto (that
has not obtained) or would give any other party to such contract the right to
terminate its obligations thereunder; PROVIDED, that the foregoing limitation
(i) shall not affect, limit, restrict or impair the grant by the Debtor of a
security interest in any Account or any money or other amounts due or to become
due under any such contract and (ii) shall not apply to the extent the
provisions contained in such contract which prohibit such a grant by the Debtor
or provide such other party such a termination right would be rendered
unenforceable in accordance with applicable law (including the Uniform
Commercial Code) or principles of equity.
"Copyrights" shall mean any United States copyright now or
hereafter owned by the Debtor, including any registrations of any copyrights, in
the United States Copyright Office or any foreign equivalent office, as well as
any application for a copyright registration now or hereafter made with the
United States Copyright Office or any foreign equivalent office by the Debtor.
"Documents" shall mean "documents" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Domain Names" shall mean all Internet domain names and
associated URL addresses in or to which the Debtor now or hereafter has any
right, title or interest.
"Electronic Chattel Paper" shall mean "electronic chattel paper"
as such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
<Page>
"Equipment" shall mean any "equipment" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York, now or hereafter owned by the Debtor and, in any event, shall include,
but shall not be limited to, all machinery, equipment, furnishings, fixtures and
vehicles now or hereafter owned by the Debtor and any and all additions,
substitutions and replacements of any of the foregoing and all accessions
thereto, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"Financial Asset" shall mean "financial asset" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"General Intangibles" shall mean "general intangibles" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Goods" shall mean "goods" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Health-Care-Insurance Receivable" shall mean any
"health-care-insurance receivable" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York
"Instrument" shall mean "instruments" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof and all accessions thereto,
wherever located, together with all goods, supplies, incidentals, packaging
materials, labels, materials and any other items used or usable in
manufacturing, processing, packaging or shipping same, in all stages of
production from raw materials through work in process to finished goods, and all
products and proceeds of whatever sort and wherever located any portion thereof
which may be returned, rejected, reclaimed or repossessed by the Secured Party
from the Debtor's customers, and shall specifically include all "inventory" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Investment Property" shall mean "investment property" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Letter-of-Credit-Rights" shall mean "letter-of-credit rights"
as such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Limited Liability Company Interests" shall mean the entire
limited liability company membership interest at any time owned by the Debtor in
any limited liability company.
"Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held or hereafter acquired by the
Debtor, including any registration or application for registration of any
trademarks and service marks now held or hereafter acquired by the Debtor, which
are registered or filed in the United States Patent and Trademark Office or the
equivalent thereof in any state of the United States or any equivalent foreign
office or agency, as well as any unregistered trademarks and service marks used
by the Debtor and any trade dress including logos, designs, fictitious business
names and other business identifiers used by the Debtor.
"Notes" shall mean all promissory notes (including intercompany
notes) from time to time issued to, or held by, the Debtor.
"Partnership Interest" shall mean the entire general partnership
interest or limited partnership interest at any time owned by the Debtor in any
general partnership or limited partnership.
<Page>
"Patents" shall mean any United States or foreign patent in or
to which the Debtor now or hereafter has any right, title or interest therein,
and any divisions, continuations (including, but not limited to,
continuations-in-parts) and improvements thereof, as well as any application for
a United States or foreign patent now or hereafter made by the Debtor.
"Permits" shall mean, to the extent permitted to be assigned by
the terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations of or from any governmental authority or
agency.
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, limited liability company, trust or other
enterprise or any government or political subdivision or any agency, department
or instrumentality thereof.
"Proceeds" shall mean all "proceeds" as such term is defined in
the Uniform Commercial Code as in effect in the State of New York on the date
hereof and, in any event, shall also include, but not be limited to, (i) any and
all proceeds of any insurance, indemnity, warranty or guaranty payable to the
Secured Party or the Debtor from time to time with respect to any of the
Collateral, (ii) any and all payments (in any from whosoever) made or due and
payable to the Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any person acting under color of
governmental authority) and(iii) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Security" and "Securities" shall mean "securities" as such term
is defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York and shall in any event also include all Stock and all Notes.
"Security Entitlement" shall mean "security entitlement" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Software" shall mean "software" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Stock" shall mean all of the issued and outstanding shares of
capital stock of any corporation at any time directly owned by the Debtor.
"Supporting Obligations" shall mean any "supporting obligation"
as such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York, now or hereafter owned by the Debtor, or in
which the Debtor has any rights, and, in any event, shall include, but shall not
be limited to all of such Debtor's rights in any Letter-of-Credit Right or
secondary obligation that supports the payment or performance of, and all
security for, any Account, Chattel Paper, Document, General Intangible,
Instrument or Investment Property.
"Tangible Chattel Paper" shall mean "tangible chattel paper" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Trade Secrets" shall mean any secretly held existing
engineering or other data, information, production procedures and other know-how
relating to the design manufacture, assembly, installation, use, operation,
marketing, sale and/or servicing of any products or business of the Debtor
worldwide whether written or not.
"Trade Secret Rights" shall mean the rights of the Debtor in a
Trade Secret it holds.
<Page>
Latham & Watkins
Deutsche Bank Trust Company Americas
and the Lenders indentified on Exhibit A
November 25, 2002
Page 15
EXHIBIT D
PLEDGED SECURITIES
<Table>
<Caption>
STOCK ISSUER CLASS OF STOCK STOCK CERTIFICATE NO. NUMBER OF SHARES
--------------------- -------------- -------------------- ----------------
Rexnord Corporation common 1 1,000
RBS North America, common 1 1,000
Inc
RBS Acquisition common 1 1,000
Corporation
RAC-I, Inc. common 2 1,000
Clarkson, Industries, common 3 1,000
Inc.
Prager Incorporated common 3A 50
Prager Incorporated common 3B 722.5
Rexnord North common 1 1,000
America Holdings,
Inc.
Addax, Inc. Class A common 127 9,287
Betzdorf Chain common 5 99
Company Inc.
PT Components, Inc. common 6 100
Rexnord Germany-I common 3 10,000
Inc.
Rexnord International common 6 100
Inc.
Rexnord, Ltd. common 5 1,000
</Table>
<Page>
LATHAM & WATKINS
Deutsche Bank Trust Company Americas
and the Lenders indentified on Exhibit A
November 25, 2002
Page 16
<Table>
Rexnord Puerto Rico common 3 100
Inc.
W.M.Berg Inc. common 3 20,000
Winfred Berg common 2 100
Licensco Inc.
</Table>
<Page>
EXHIBIT F
FORM OF OFFICERS' CERTIFICATE
I, the undersigned, [Chairman of the Board/Chief Executive
Officer/President/Vice President] of [Name of Credit Party], a corporation
organized and existing under the laws of the State of ____________ (the
"Company"), do hereby certify on behalf of the Company that:
1. This certificate is furnished pursuant to Section 5.01(c) of the
Credit Agreement, dated as of November 25, 2002, among RBS Global, Inc., Rexnord
Corporation, the lenders from time to time party thereto, Deutsche Bank Trust
Company Americas, as Administrative Agent, General Electric Capital Corporation
and Wachovia Bank, National Association, as Co-Documentation Agents, and
Deutsche Bank Securities Inc. and Credit Suisse First Boston, acting through its
Cayman Islands Branch, as Joint Lead Arrangers and Joint Book Runners (such
Credit Agreement, as in effect on the date of this Certificate, being herein
called the "Credit Agreement"). Unless otherwise defined herein, capitalized
terms used in this Certificate shall have the meanings set forth in the Credit
Agreement.
2. The following name individuals are elected officers of the
Company and each holds the office of the Company set forth opposite his or her
name and has held such office since _________, ______.(1) The signature written
opposite the name and title of each such officer is his or her genuine
signature.
<Table>
<Caption>
NAME(2) OFFICE SIGNATURE
------- ------ ---------
________________ ________________ ________________
________________ ________________ ________________
________________ ________________ ________________
</Table>
3. Attached hereto as Exhibit A is a certified copy of the
[Certificate of Incorporation] [Articles of Incorporation] of the Company, as
filed in the Office of the Secretary of the State of the State of_______________
on ________________, _________________, together with all amendments thereto
adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of the
By-Laws of the Company which were duly adopted, are in full force and effect on
the date hereof, and have been in effect since _____________, ____.
- ----------
(1) Insert a date prior to the time of any corporate action relating to the
Credit Documents or related documentation.
(2) Include name, office and signature of each officer who will sign any Credit
Document, including the officer who will sign the certification at the end
of this Certificate or related documentation.
<Page>
Exhibit F
Page 2
5. Attached hereto as Exhibit C is a true and correct copy of
resolutions which were duly adopted on _________, 2002 [by unanimous written
consent of the Board of Directors of the Company] [by a meeting of the Board of
Directors of the Company at which a quorum was present and acting throughout],
and said resolutions have not been rescinded, amended or modified. Except as
attached hereto as Exhibit C, no resolutions have been adopted by the Board of
Directors of the Company which deal with the execution, delivery or performance
of any of the Documents to which the Company is party.
[6. On the date hereof, all of the conditions set forth in Sections
5.01 (d) through (h), inclusive, (o) and 5.02 of the Credit Agreement have been
satisfied.](3)
[7. Attached hereto as Exhibit D are true and correct copies of the
Senior Subordinated Note Documents.
8. Attached hereto as Exhibit E is a true and correct copy of the
Acquisition Agreement, together with all Schedules and Exhibits thereto.
9. Attached hereto as Exhibit I are true and correct copies of all
Existing Indebtedness Agreements.
[5][10]. On the date hereof, the representations and warranties
contained in the Credit Agreement and in the other Credit Documents are true and
correct in all material respects with the same effect as though such
representations and warranties had been made on the date hereof, both before and
after giving effect to the incurrence of Loans on the date hereof and the
application of the proceeds thereof, unless stated to relate to a specific
earlier date, in which case such representations and warranties were true and
correct in all material respects as of such earlier date.
[6][11]. On the date hereof, no Default or Event of Default has
occurred and is continuing or would result from the Borrowing to occur on the
date hereof or from the application of the proceeds thereof.
[7][12]. There is no proceeding for the dissolution or liquidation of
the Company or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this _____ day of ____,
2002.
[NAME OF CREDIT PARTY]
By:
-----------------------
Name:
Title:
- ------------
(3) Insert in each of Holdings' and the Borrower's Officers' Certificate.
<Page>
Exhibit F
Page 3
I, the undersigned, [Secretary/Assistant Secretary] of the Company, do
hereby certify on behalf of the Company that:
1. [Name of Person making above certifications] is the duly elected
and qualified [Chairman of the Board/Chief Executive Officer/President/Vice
President] of the Company and the signature above is his or her genuine
signature.
2. The certifications made by [name of Person making above
certifications] on behalf of the Company in Items 2, 3, 4, 5 and [7][12] above
are true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of ____,
2002.
[NAME OF CREDIT PARTY]
By:
-----------------------
Name:
Title:
<Page>
EXHIBIT G
CONFORMED AS EXECUTED
PLEDGE AGREEMENT
PLEDGE AGREEMENT (as amended, modified, restated and/or supplemented
from time to time, this "AGREEMENT"), dated as of November 25, 2002, among each
of the undersigned pledgors (each , a "PLEDGOR" and, together with any other
entity that becomes a pledgor hereunder pursuant to Section 29 hereof, the
"PLEDGORS") and DEUTSCHE BANK TRUST COMPANY AMERICAS, as collateral agent
(together with any successor collateral agent, the "PLEDGEE"), for the benefit
of the Secured Creditors (as defined below). Except as otherwise defined herein,
all capitalized terms used herein and defined in the Credit Agreement (as
defined below) shall be used herein as therein defined.
W I T N E S S E T H:
WHEREAS, RBS Global, Inc. ("Holdings"), Rexnord Corporation (the
"Borrower"), the lenders party thereto from time to time (the "Lenders"),
Deutsche Bank Trust Company Americas, as administrative agent (together with any
successor administrative agent, the "Administrative Agent"), General Electric
Capital Corporation and Wachovia Bank, National Association, as Co-Documentation
Agents, and Deutsche Bank Securities Inc. and Credit Suisse First Boston, acting
through its Cayman Islands Branch, as Joint Lead Arrangers and Joint Book
Runners, have entered into a Credit Agreement, dated as of November 25, 2002
(as amended, modified or supplemented from time to time, the "Credit
Agreement"), providing for the making of Loans to, and the issuance of, and
participation in Letters of Credit for the account of the Borrower, all as
contemplated therein (the Lenders, each Letter of Credit Issuer, and each Agent
are herein called the "Lender Creditors");
WHEREAS, the Borrower and one or more of its Subsidiaries may at any
time and from time to time enter into one or more Interest Rate Protection
Agreements (each such Interest Rate Protection Agreement, except to the extent
expressly stated therein that the liabilities and indebtedness thereunder are
not "Obligations" for the purposes of this Agreement, a "Covered Agreement" and,
collectively, the "Covered Agreements") with one or more Lenders or any
affiliate thereof(each such Lender or affiliate party to any such Covered
Agreement, even if the respective Lender subsequently ceases to be a Lender
under the Credit Agreement for any reason, together with such Lender or
affiliate's successors and assigns, if any, collectively, the "Other Creditors"
and, together with the Lender Creditors, the "Secured Creditors");
WHEREAS, pursuant to the Subsidiaries Guaranty, each Subsidiary
Guarantor and, after the creation of same, Intermediate Holdco, has jointly and
severally guaranteed to the Secured Creditors the payment when due of all
Guaranteed Obligations as described therein;
WHEREAS, it is a condition precedent to the making of Loans to the
Borrower and the issuance of, and participation in, Letters of Credit for the
account of the Borrower under the Credit Agreement and to the Other Creditors
entering into Covered Agreements that each Pledgor shall have executed and
delivered to the Pledgee this Agreement; and
WHEREAS, each Pledgor will obtain benefits from the incurrence of Loans
by the Borrower and the issuance of, and participation in, Letters of Credit for
the account of the
<Page>
Exhibit G
Page 2
Borrower under the Credit Agreement and the entering into by the Borrower and
one or more of its Subsidiaries of Covered Agreements and, accordingly, desires
to execute this Agreement in order to satisfy the condition described in the
preceding paragraph and to induce the Lenders to make Loans to the Borrower and
issue, and/or participate in, Letters of Credit for the account of the Borrower
and the Other Creditors to enter into Covered Agreements with the Borrower
and/or one or more of its Subsidiaries;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Pledgor, the receipt and sufficiency of which are hereby
acknowledged, each Pledgor hereby makes the following representations and
warranties to the Pledgee for the benefit of the Secured Creditors and hereby
covenants and agrees with the Pledgee for the benefit of the Secured Creditors
as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by each Pledgor
for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at stated
maturity, by acceleration or otherwise) of all obligations, liabilities and
indebtedness (including, without limitation, principal, premium, interest
(including, without limitation, all interest that accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency, reorganization or similar proceeding of any Pledgor
or any Subsidiary thereof at the rate provided for in the respective
documentation, whether or not a claim for post-petition interest is allowed
in any such proceeding), reimbursement obligations under Letters of Credit,
fees, costs and indemnities) of such Pledgor owing to the Lender Creditors,
whether now existing or hereafter incurred, in each case, under, arising
out of, or in connection with, the Credit Agreement and the other Credit
Documents to which such Pledgor is a party (including, in the case of each
Pledgor that is a Guarantor, all such obligations, liabilities and
indebtedness of such Pledgor under its Guaranty) and the due performance
and compliance by such Pledgor with all of the terms, conditions and
agreements contained in the Credit Agreement and in such other Credit
Documents (all such obligations, liabilities and indebtedness under this
clause (i), except to the extent consisting of obligations, liabilities or
indebtedness with respect to Covered Agreements, entitled to the benefits
of this Agreement being herein collectively called the "CREDIT DOCUMENT
OBLIGATIONS");
(ii) the full and prompt payment when due (whether at stated
maturity, by acceleration or otherwise) of all obligations, liabilities and
indebtedness (including, without limitation, all interest that accrues
after the commencement of any case, proceeding or other action relating to
the bankruptcy, insolvency, reorganization or similar proceeding of any
Pledgor at the rate provided for in the respective documentation, whether
or not a claim for post-petition interest is allowed in any such
proceeding) owing by such Pledgor to the Other Creditors now existing or
hereafter incurred under, arising out of or in connection with any Covered
Agreement, whether such Covered Agreement is now in existence or
hereinafter arising (including, in the case of a Pledgor that is a
Guarantor, all obligations, liabilities and indebtedness of such Pledgor
under its Guaranty in respect of the Covered Agreements), and the due
performance and compliance by such Pledgor with all of the terms,
conditions and agreements contained in each such Covered
<Page>
Exhibit G
Page 3
Agreement (all such obligations, liabilities and indebtedness under this
clause (ii) being herein collectively called the "OTHER OBLIGATIONS");
(iii) any and all sums advanced by the Pledgee in order to preserve
the Collateral (as hereinafter defined) in accordance with this Agreement,
or to preserve its security interest in the Collateral;
(iv) in the event of any proceeding for the collection or enforcement
of any indebtedness, obligations or liabilities of such Pledgor referred to
in clauses (i) and (ii) above, after an Event of Default shall have
occurred and be continuing, the reasonable out-of-pocket expenses of
retaking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, or of any exercise by the
Pledgee of its rights hereunder, together with reasonable attorneys' fees
and court costs;
(v) all amounts paid by any Indemnitee as to which such Indemnitee
has the right to reimbursement under Section 11 of this Agreement; and
(vi) all amounts owing to any Agent or any of its affiliates pursuant
to any of the Credit Documents in its capacity as such;
all such obligations, liabilities, indebtedness, sums and expenses set forth in
clauses (i) through (vi) of this Section 1 being herein collectively called the
"OBLIGATIONS", it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the types described above, whether outstanding
on the date of this Agreement or extended from time to time after the date of
this Agreement.
2. DEFINITIONS. (a) Unless otherwise defined herein, all capitalized
terms used herein and defined in the Credit Agreement shall be used herein as
therein defined. Reference to singular terms shall include the plural and vice
versa.
(b) The following capitalized terms used herein shall have the
definitions specified below:
"ADMINISTRATIVE AGENT" shall have the meaning set forth in the
recitals hereto.
"ADVERSE CLAIM" shall have the meaning given such term in Section
8-102(a)(1) of the UCC.
"AGREEMENT" shall have the meaning set forth in the first paragraph
hereof.
"BORROWER" shall have the meaning set forth in the recitals hereto.
"CERTIFICATED SECURITY" shall have the meaning given such term in
Section 8-102(a)(4) of the UCC.
"CHANGE OF LAW" means (a) the adoption of any law, rule or regulation
after the date of this Agreement or (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement.
<Page>
Exhibit G
Page 4
"CLEARING CORPORATION" shall have the meaning given such term in
Section 8-102(a)(5) of the UCC.
"COLLATERAL" shall have the meaning set forth in Section 3.1 hereof.
"COLLATERAL ACCOUNTS" shall mean any and all accounts established and
maintained by the Pledgee in the name of any Pledgor to which Collateral may be
credited.
"CREDIT AGREEMENT" shall have the meaning set forth in the recitals
hereto.
"CREDIT DOCUMENT OBLIGATIONS" shall have the meaning set forth in
Section 1(i) hereof.
"DOMESTIC CORPORATION" shall have the meaning set forth in the
definition of "Stock."
"EVENT OF DEFAULT" shall mean any Event of Default under, and as
defined in, the Credit Agreement and shall in any event include, without
limitation, any payment default on any of the Obligations after the expiration
of any applicable grace period.
"EXEMPTED FOREIGN ENTITY" shall mean any Foreign Corporation and any
other entity organized under the laws of a jurisdiction other than the United
States or any State or Territory thereof that, in any such case, is treated as a
corporation or an association taxable as a corporation for U.S. Federal income
tax purposes.
"FINANCIAL ASSET" shall have the meaning given such term in Section
8-102(a)(9) of the UCC.
"FOREIGN CORPORATION" shall have the meaning set forth in the
definition of "Stock".
"HOLDINGS" shall have the meaning set forth in the recitals hereto.
"INDEMNITEES" shall have the meaning set forth in Section 11 hereof.
"INSTRUMENT" shall have the meaning given such term in Section
9-102(a)(47) of the UCC.
"INVESTMENT PROPERTY" shall have the meaning given such term in
Section 9-102(a)(49) of the UCC.
"LENDER CREDITORS" shall have the meaning set forth in the recitals
hereto.
"LENDERS" shall have the meaning set forth in the recitals hereto.
"LIMITED LIABILITY COMPANY INTERESTS" shall mean the entire limited
liability company membership interest at any time directly owned by any Pledgor
in any limited liability company.
<Page>
Exhibit G
Page 5
"NON-VOTING EQUITY INTERESTS" shall mean all Equity Interests of any
Person which are not Voting Equity Interests.
"NOTES" shall mean all promissory notes (including intercompany notes)
from time to time issued to, or held by, each Pledgor.
"NOTICED EVENT OF DEFAULT" shall mean (i) an Event of Default under
Section 9.01 or 9.05 of the Credit Agreement and (ii) any other Event of Default
in respect of which the Pledgee has given the Borrower notice that such Event of
Default constitutes a "Noticed Event of Default".
"OBLIGATIONS" shall have the meaning set forth in Section 1 hereof.
"OTHER CREDITORS" shall have the meaning set forth in the recitals
hereto.
"OTHER OBLIGATIONS" shall have the meaning set forth in Section 1(ii)
hereof.
"PARTNERSHIP INTEREST" shall mean the entire general partnership
interest or limited partnership interest at any time owned by any Pledgor in any
general partnership or limited partnership.
"PLEDGED NOTES" shall mean all Notes at any time pledged or required
to be pledged hereunder.
"PLEDGEE" shall have the meaning set forth in the first paragraph
hereof.
"PLEDGOR" shall have the meaning set forth in the first paragraph
hereof.
"PROCEEDS" shall have the meaning given such term in Section
9-102(a)(64) of the UCC.
"REQUIRED SECURED CREDITORS" shall have the meaning provided in the
Security Agreement.
"SECURED CREDITORS" shall have the meaning set forth in the recitals
hereto.
"SECURED DEBT AGREEMENTS" shall mean and include (x) this Agreement,
(y) the other Credit Documents and (z) the Covered Agreements entered into with
any Other Creditors.
"SECURITIES ACCOUNT" shall have the meaning given such term in Section
8-501(a) of the UCC.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, as
in effect from time to time.
"SECURITIES INTERMEDIARY" shall have the meaning given such term in
Section 8-102(14) of the UCC.
<Page>
Exhibit G
Page 6
"SECURITY" and "SECURITIES" shall have the meaning given such term in
Section 8-102(a)(15) of the UCC and shall in any event also include all Stock
and all Notes.
"SECURITY ENTITLEMENT" shall have the meaning given such term in
Section 8-102(a)(17) of the UCC.
"STOCK" shall mean (x) with respect to corporations incorporated under
the laws of the United States or any State or territory thereof or the District
of Columbia (each, a "Domestic Corporation"), all of the issued and outstanding
shares of capital stock of any Domestic Corporation at any time directly owned
by any Pledgor and (y) with respect to corporations not Domestic Corporations
(each, a "Foreign Corporation"), all of the issued and outstanding shares of
capital stock of any Foreign Corporation at any time directly owned by any
Pledgor.
"TERMINATION DATE" shall have the meaning set forth in Section 20
hereof.
"UCC" shall mean the Uniform Commercial Code as in effect in the State
of New York from time to time; PROVIDED that all references herein to specific
Sections or subsections of the UCC are references to such Sections or
subsections, as the case may be, of the Uniform Commercial Code as in effect in
the State of New York on the date hereof.
"UNCERTIFICATED SECURITY" shall have the meaning given such term in
Section 8-102(a)(18) of the UCC.
"VOTING EQUITY INTERESTS" of any Person shall mean all classes of
Equity Interests of such Person entitled to vote.
3. PLEDGE OF SECURITIES, ETC.
3.1 PLEDGE. To secure the Obligations now or hereafter owed or to be
performed by such Pledgor, each Pledgor does hereby grant and pledge to the
Pledgee for the benefit of the Secured Creditors, and does hereby create a
continuing security interest (subject to those Liens permitted to exist with
respect to the Collateral pursuant to the terms of all Secured Debt Agreements
then in effect) in favor of the Pledgee for the benefit of the Secured Creditors
in, all of its right, title and interest in and to the following, whether now
existing or hereafter from time to time acquired (collectively, the
"COLLATERAL"):
(a) each of the Collateral Accounts (to the extent a security
interest therein is not created pursuant to the Security Agreement),
including any and all assets of whatever type or kind deposited by such
Pledgor in any such Collateral Account, whether now owned or hereafter
acquired, existing or arising, including, without limitation, all Financial
Assets, Investment Property, monies, checks, drafts, Instruments,
Securities or interests therein of any type or nature deposited or required
by the Credit Agreement or any other Secured Debt Agreement to be deposited
in such Collateral Account, and all investments and all certificates and
other Instruments (including depository receipts, if any) from time to time
representing or evidencing the same, and all dividends, interest,
distributions, cash and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or
all of the foregoing;
<Page>
Exhibit G
Page 7
(b) all Securities owned or held by such Pledgor from time to time
and all options and warrants owned by such Pledgor from time to time to
purchase Securities;
(c) all Limited Liability Company Interests owned by such Pledgor
from time to time and all of its right, title and interest in each limited
liability company to which each such Limited Liability Company Interest
relates, whether now existing or hereafter acquired, including, without
limitation, to the fullest extent permitted under the terms and provisions
of the documents and agreements governing such Limited Liability Company
Interests and applicable law:
(A) all its capital therein and its interest in all profits,
income, surpluses, losses and other distributions to which such
Pledgor shall at any time be entitled in respect of such Limited
Liability Company Interests;
(B) all other payments due or to become due to such Pledgor in
respect of Limited Liability Company Interests, whether under any
limited liability company agreement or otherwise, whether as
contractual obligations, damages, insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges, authority,
options, security interests, liens and remedies, if any, under any
limited liability company agreement or operating agreement, or at law
or otherwise in respect of such Limited Liability Company Interests;
(D) all present and future claims, if any, of such Pledgor
against any such limited liability company for monies loaned or
advanced, for services rendered or otherwise;
(E) all of such Pledgor's rights under any limited liability
company agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and privilege of
such Pledgor relating to such Limited Liability Company Interests,
including any power to terminate, cancel or modify any such limited
liability company agreement or operating agreement, to execute any
instruments and to take any and all other action on behalf of and in
the name of any of such Pledgor in respect of such Limited Liability
Company Interests and any such limited liability company, to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of
the foregoing, to enforce or execute any checks, or other instruments,
or orders, to file any claims and to take any action in connection
with any of the foregoing; and
(F) all other property hereafter delivered in substitution for
or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and
<Page>
Exhibit G
Page 8
other property at any time and from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all
thereof;
(d) all Partnership Interests owned by such Pledgor from time to
time and all of its right, title and interest in each partnership to which
each such Partnership Interest relates, whether now existing or hereafter
acquired, including, without limitation, to the fullest extent permitted
under the terms and provisions of the documents and agreements governing
such Partnership Interests and applicable law:
(A) all its capital therein and its interest in all profits,
income, surpluses, losses, and other distributions to which such
Pledgor shall at any time be entitled in respect of such Partnership
Interests;
(B) all other payments due or to become due to such Pledgor in
respect of Partnership Interests, whether under any partnership
agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges, authority,
options, security interests, liens and remedies, if any, under any
partnership agreement or operating agreement, or at law or otherwise
in respect of such Partnership Interests;
(D) all present and future claims, if any, of such Pledgor
against any such partnership for monies loaned or advanced, for
services rendered or otherwise;
(E) all of such Pledgor's rights under any partnership agreement
or operating agreement or at law to exercise and enforce every right,
power, remedy, authority, option and privilege of such Pledgor
relating to such Partnership Interests, including any power to
terminate, cancel or modify any such partnership agreement or
operating agreement, to execute any instruments and to take any and
all other action on behalf of and in the name of such Pledgor in
respect of such Partnership Interests and any such partnership, to
make determinations, to exercise any election (including, but not
limited to, election of remedies) or option or to give or receive any
notice, consent, amendment, waiver or approval, together with full
power and authority to demand, receive, enforce, collect or receipt
for any of the foregoing, to enforce or execute any checks, or other
instruments, or orders, to file any claims and to take any action in
connection with any of the foregoing; and
(F) all other property hereafter delivered in substitution for
or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;
(e) all Financial Assets and Investment Property owned by such
Pledgor from time to time;
<Page>
Exhibit G
Page 9
(f) all Security Entitlements owned by such Pledgor from time to
time in any and all of the foregoing; and
(g) all Proceeds of any and all of the foregoing.
Notwithstanding anything to the contrary contained in this Agreement, (x) unless
there has been a Change of Law as a result of which the granting of the pledge
of more than 66-2/3% of the Voting Equity Interests of any Exempted Foreign
Entity will not give rise to adverse "deemed dividend" tax consequences to the
Borrower under Section 956 of the Code, no Pledgor shall be required to pledge
hereunder more than 65% of the Voting Equity Interests of any Exempted Foreign
Entity (and such Voting Equity Interests in excess of 65% shall not constitute
"Collateral,"), (y) each Pledgor shall be required to pledge hereunder 100% of
any Non-Voting Equity Interests at any time and from time to time acquired by
such Pledgor of any Exempted Foreign Entity and (z) the Collateral shall not
include Equity Interests in Joint Ventures that are not Subsidiaries of the
Borrower to the extent that the respective Pledgor is contractually prohibited
(after giving effect to any consents or waivers in respect of such prohibition)
from pledging such Equity Interests owned by it pursuant to the respective joint
venture agreement or similar agreement governing such Joint Venture.
3.2 PROCEDURES (a) To the extent that any Pledgor at any time or from
time to time owns, acquires or obtains any right, title or interest in any
Collateral, such Collateral shall automatically (and without the taking of any
action by such Pledgor) be pledged pursuant to Section 3.1 of this Agreement
and, in addition thereto, such Pledgor shall (to the extent provided below) take
the following actions as set forth below (as promptly as practicable and, in any
event, within 10 days after it obtains such Collateral) for the benefit of the
Pledgee and the other Secured Creditors:
(i) with respect to a Certificated Security (other than a
Certificated Security credited on the books of a Clearing Corporation or
Securities Intermediary), such Pledgor shall physically deliver such
Certificated Security to the Pledgee, endorsed to the Pledgee or endorsed
in blank, provided that no such Pledgor shall be required to deliver any
Certificated Securities held by it as a result of investment of such
Pledgor in Cash Equivalents, Foreign Cash Equivalents and Margin Stock made
in the ordinary course of business and in accordance with Section 8.06(a)
and (r) of the Credit Agreement;
(ii) with respect to an Uncertificated Security (other than an
Uncertificated Security credited on the books of a Clearing Corporation or
Securities Intermediary), such Pledgor shall cause (or in the case of any
such issuer that is not a Subsidiary of such Pledgor, use commercially
reasonable efforts to cause) the issuer of such Uncertificated Security to
duly authorize, execute, and deliver to the Pledgee, an agreement for the
benefit of the Pledgee and the other Secured Creditors substantially in the
form of Annex G hereto (appropriately completed to the reasonable
satisfaction of the Pledgee and with such modifications, if any, as shall
be reasonably satisfactory to the Pledgee) pursuant to which such issuer
agrees to comply, after the Pledgee has notified such issuer that an Event
of Default then exists, with any and all instructions originated by the
Pledgee without further consent by the registered owner and not to comply
with instructions regarding such Uncertificated Security (and any
Partnership Interests and Limited Liability
<Page>
Exhibit G
Page 10
Company Interests issued by such issuer) originated by any other Person
other than a court of competent jurisdiction;
(iii) with respect to a Certificated Security, Uncertificated
Security, Partnership Interest or Limited Liability Company Interest
credited on the books of a Clearing Corporation or Securities Intermediary
(including a Federal Reserve Bank, Participants Trust Company or The
Depository Trust Company), such Pledgor shall promptly notify the Pledgee
thereof and shall promptly take (x) (i) all actions required to comply with
the applicable rules of such Clearing Corporation or Securities
Intermediary and (ii) use commercially reasonable efforts to perfect the
security interest of the Pledgee under applicable law (including, in any
event, under Sections 9-314(a), (b) and (c), 9-106 and 8-106(d) of the UCC)
and (y) such other actions as the Pledgee deems necessary or desirable to
effect the foregoing;
(iv) with respect to a Partnership Interest or a Limited Liability
Company Interest (other than a Partnership Interest or Limited Liability
Company Interest credited on the books of a Clearing Corporation or
Securities Intermediary), (1) if such Partnership Interest or Limited
Liability Company Interest is represented by a certificate and is a
Security for purposes of the UCC, the procedure set forth in Section
3.2(a)(i) hereof, and (2) if such Partnership Interest or Limited Liability
Company Interest is not represented by a certificate or is not a Security
for purposes of the UCC, the procedure set forth in Section 3.2(a)(ii)
hereof; and
(v) with respect to any Note evidencing Indebtedness in a principal
amount equal to or greater than $2,000,000, physical delivery of such Note
to the Pledgee, endorsed to the Pledgee or endorsed in blank.
(b) In addition to the actions required to be taken pursuant to
Section 3.2(a) hereof, each Pledgor shall take the following additional actions
with respect to the Collateral:
(i) with respect to all Collateral of such Pledgor whereby or with
respect to which the Pledgee may obtain "control" thereof within the
meaning of Section 8-106 of the UCC (or under any provision of the UCC as
same may be amended or supplemented from time to time, or under the laws of
any relevant State other than the State of New York), such Pledgor shall,
subject to the qualifications set forth in preceding clauses (a)(i), (ii),
(iii) and (v), take all actions as may be requested from time to time by
the Pledgee so that "control" of such Collateral is obtained and at all
times held by the Pledgee; and
(ii) each Pledgor shall from time to time cause appropriate financing
statements (on appropriate forms) under the Uniform Commercial Code as in
effect in the various relevant States, covering all Collateral hereunder
(with the form of such financing statements to be satisfactory to the
Pledgee), to be filed in the relevant filing offices so that all times the
Pledgee's security interest in all Investment Property and other Collateral
which can be perfected by the filing of such financing statements (in each
case to the maximum extent perfection by filing may be obtained under the
laws of the relevant States, including, without limitation, Section
9-312(a) of the UCC) is so perfected.
<Page>
Exhibit G
Page 11
3.3 SUBSEQUENTLY ACQUIRED COLLATERAL. If any Pledgor shall acquire (by
purchase, stock dividend, distribution or otherwise) any additional Collateral
at any time or from time to time after the date hereof, (i) such Collateral
shall automatically (and without any further action being required to be taken)
be subject to the pledge and security interests created pursuant to Section 3.1
hereof and, furthermore, such Pledgor will thereafter take (or cause to be
taken) all action (as promptly as practicable and, in any event, within 10 days
after it obtains such Collateral) with respect to such Collateral in accordance
with the procedures set forth in Section 3.2 hereof, and will promptly
thereafter deliver to the Pledgee a certificate executed by an authorized
officer of such Pledgor describing such Collateral and certifying that the same
has been duly pledged in favor of the Pledgee (for the benefit of the Secured
Creditors) hereunder. Without limiting the foregoing, each Pledgor shall be
required to pledge hereunder the Equity Interests of any Exempted Foreign Entity
that are directly owned by such Pledgor at any time and from time to time after
the date hereof acquired by such Pledgor, PROVIDED that (x) except in the
circumstances and to the extent provided by the last paragraph of Section 3.1,
no Pledgor shall be required at any time to pledge hereunder more than 65% of
the total combined voting power of all classes of Voting Equity Interests of any
Exempted Foreign Entity and (y) each Pledgor shall be required to pledge
hereunder 100% of the Non-Voting Equity Interests of each Exempted Foreign
Entity at any time and from time to time acquired by such Pledgor.
3.4 TRANSFER TAXES. Each pledge of Collateral under Section 3.1 or
Section 3.3 hereof shall be accompanied by any transfer tax stamps required in
connection with the pledge of such Collateral.
3.5 CERTAIN REPRESENTATIONS AND WARRANTIES REGARDING THE COLLATERAL.
Each Pledgor represents and warrants that on the date hereof: (i) each direct
Subsidiary of such Pledgor, the direct ownership thereof and jurisdiction in
which such Subsidiary was organized, is listed in Annex A hereto; (ii) the Stock
(and any warrants or options to purchase Stock) held by such Pledgor consists of
the number and type of shares of the stock (or warrants or options to purchase
any stock) of the corporations as described in Annex B hereto; (iii) such Stock
referenced in clause (ii) of this paragraph constitutes that percentage of the
issued and outstanding capital stock of the issuing corporation as is set forth
in Annex B hereto; (iv) the Notes held by such Pledgor consist of the promissory
notes described in Annex C hereto where such Pledgor is listed as the lender;
(v) the Limited Liability Company Interests held by such Pledgor consist of the
number and type of interests of the Persons described in Annex D hereto; (vi)
each such Limited Liability Company Interest referenced in clause (v) of this
paragraph constitutes that percentage of the issued and outstanding Equity
Interest of the issuing Person as set forth in Annex D hereto; (vii) the
Partnership Interests held by such Pledgor consist of the number and type of
interests of the Persons described in Annex E hereto; (viii) each such
Partnership Interest referenced in clause (viii) of this paragraph constitutes
that percentage or portion of the entire partnership interest of the Partnership
as set forth in Annex E hereto; (ix) the exact address of each chief executive
office of such Pledgor is listed on Annex F hereto; (x) the Pledgor has complied
with the respective procedure set forth in Section 3.2(a) hereof with respect to
each item of Collateral described in Annexes C through F hereto; and (xi) on the
date hereof, such Pledgor owns no other Securities, Stock, Notes, Limited
Liability Company Interests or Partnership Interests (other than any such
Securities in the form of Cash Equivalents).
<Page>
Exhibit G
Page 12
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall
have the right to appoint one or more sub-agents for the purpose of retaining
physical possession of the Collateral, which may be held (in the discretion of
the Pledgee) in the name of the relevant Pledgor, endorsed or assigned in blank
or, after a Noticed Event of Default, in favor of the Pledgee or any nominee or
nominees of the Pledgee or a sub-agent appointed by the Pledgee.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until there
shall have occurred and be continuing a Noticed Event of Default, each Pledgor
shall be entitled to exercise any and all voting and other consensual rights
pertaining to the Collateral owned by it, and to give consents, waivers or
ratifications in respect thereof; PROVIDED that, in each case, no vote shall be
cast or any consent, waiver or ratification given or any action taken or omitted
to be taken which would violate or result in a breach of any covenant contained
in any Secured Debt Agreement, or which could reasonably be expected to have the
effect of materially impairing the value of the Collateral or any part thereof
or the position or interests of the Pledgee or any other Secured Creditor in the
Collateral, unless expressly permitted by the terms of the Secured Debt
Agreements. All such rights of each Pledgor to vote and to give consents,
waivers and ratifications shall cease in case a Noticed Event of Default has
occurred and is continuing, and Section 7 hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there shall
have occurred and be continuing a Noticed Event of Default, all cash dividends,
cash distributions, cash Proceeds and other cash amounts payable in respect of
the Collateral shall be paid to the respective Pledgor, PROVIDED, that all cash
dividends payable in respect of the Pledged Stock which are determined by the
Pledgee to represent in whole or in part an extraordinary, liquidating or other
distribution in return of capital shall be paid, to the extent so determined to
represent an extraordinary, liquidating or other distribution in return of
capital, to the Pledgee and retained by it as part of the Collateral (although
the respective Pledgor shall be permitted to retain cash proceeds received by it
in connection with sales or other transfers of Pledged Stock permitted under
Section 8.02 of the Credit Agreement so long as such proceeds are not otherwise
required to be applied to repay Loans pursuant to Section 4.02(A)(c) of the
Credit Agreement). The Pledgee shall be entitled to receive directly, and to
retain as part of the Collateral:
(i) all other or additional stock, notes, certificates, limited
liability company interests, partnership interests, instruments or other
securities or property (including, but not limited to, cash dividends other
than as set forth above);
(ii) all other or additional stock, notes, certificates, limited
liability company interests, partnership interests, instruments or other
securities or property (including, but not limited to, cash (although such
cash may be paid directly to the respective Pledgor so long as no Event of
Default then exists) paid or distributed in respect of the Collateral by
way of stock-split, spin-off, split-up, reclassification, combination of
shares or similar rearrangement; and
(iii) all other or additional stock, notes, certificates, limited
liability company interests, partnership interests, instruments or other
securities or property (including, but not limited to, cash) which may be
paid in respect of the Collateral by reason of any
<Page>
Exhibit G
Page 13
consolidation, merger, exchange of stock, conveyance of assets, liquidation
or similar corporate or other reorganization.
Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive the proceeds of the Collateral in any form in
accordance with Section 3 of this Agreement. Furthermore, the foregoing
provisions of this Section 6 shall not restrict the respective Pledgor's right
to receive dividends made pursuant to Sections 8.09(i), (ii), (iv), (v) and
(viii) (to the extent related to amounts that may be paid pursuant to Section
8.10(vi) of the Credit Agreement) of the Credit Agreement, provided that such
dividends are made in accordance with the applicable terms and conditions set
forth on the Credit Agreement. All dividends, distributions or other payments
which are received by any Pledgor contrary to the provisions of this Section 6
or Section 7 hereof shall be received in trust for the benefit of the Pledgee,
shall be segregated from other property or funds of such Pledgor and shall be
forthwith paid over to the Pledgee as Collateral in the same form as so received
(with any necessary endorsement).
7. REMEDIES IN CASE OF AN EVENT OF DEFAULT. If there shall have
occurred and be continuing a Noticed Event of Default, then and in every such
case, the Pledgee shall be entitled to exercise all of the rights, powers and
remedies (whether vested in it by this Agreement, any other Secured Debt
Agreement or by law) for the protection and enforcement of its rights in respect
of the Collateral, and the Pledgee shall be entitled to exercise all the rights
and remedies of a secured party under the UCC as in effect in any relevant
jurisdiction and also shall be entitled, without limitation, to exercise the
following rights, which each Pledgor hereby agrees to be commercially
reasonable:
(i) to receive all amounts payable in respect of the Collateral
otherwise payable under Section 6 hereof to the respective Pledgor;
(ii) to transfer all or any part of the Collateral into the Pledgee's
name or the name of its nominee or nominees;
(iii) to accelerate any Pledged Note which may be accelerated in
accordance with its terms, and take any other lawful action to collect upon
any Pledged Note in accordance with its terms (including, without
limitation, to make any demand for payment thereon in accordance with its
terms);
(iv) to vote all or any part of the Collateral (whether or not
transferred into the name of the Pledgee) and give all consents, waivers
and ratifications in respect of the Collateral and otherwise act with
respect thereto as though it were the outright owner thereof (each Pledgor
hereby irrevocably constituting and appointing the Pledgee the proxy and
attorney-in-fact of such Pledgor, with full power of substitution to do
so);
(v) at any time and from time to time to sell, assign and deliver,
or grant options to purchase, all or any part of the Collateral, or any
interest therein, at any public or private sale, without demand of
performance, advertisement or, notice of intention to sell or of the time
or place of sale or adjournment thereof or to redeem or otherwise purchase
or dispose (all of which are hereby waived by each Pledgor to the fullest
extent
<Page>
Exhibit G
Page 14
permitted by law), for cash, on credit or for other property, for immediate
or future delivery without any assumption of credit risk, and for such
price or prices and on such terms as the Pledgee in its absolute discretion
may determine, PROVIDED at least 10 days' written notice of the time and
place of any such sale shall be given to the respective Pledgor. The
Pledgee shall not be obligated to make any such sale of Collateral
regardless of whether any such notice of sale has theretofore been given.
Each Pledgor hereby waives and releases to the fullest extent permitted by
law any right or equity of redemption with respect to the Collateral,
whether before or after sale hereunder, and all rights, if any, of
marshalling the Collateral and any other security or the Obligations or
otherwise. At any such sale, unless prohibited by applicable law, the
Pledgee on behalf of the Secured Creditors may bid for and purchase all or
any part of the Collateral so sold free from any such right or equity of
redemption. Neither the Pledgee nor any other Secured Creditor shall be
liable for failure to collect or realize upon any or all of the Collateral
or for any delay in so doing nor shall any of them be under any obligation
to take any action whatsoever with regard thereto; and
(vi) to set off any and all Collateral against any and all
Obligations, and to withdraw any and all cash or other Collateral from any
and all Collateral Accounts and to apply such cash and other Collateral to
the payment of any and all Obligations.
8. REMEDIES, CUMULATIVE, ETC. Each and every right, power and remedy
of the Pledgee provided for in this Agreement or in any other Secured Debt
Agreement, or now or hereafter existing at law or in equity or by statute shall
be cumulative and concurrent and shall be in addition to every other such right,
power or remedy. The exercise or beginning of the exercise by the Pledgee or any
other Secured Creditor of any one or more of the rights, powers or remedies
provided for in this Agreement or any other Secured Debt Agreement or now or
hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by the Pledgee or any other Secured
Creditor of all such other rights, powers or remedies, and no failure or delay
on the part of the Pledgee or any other Secured Creditor to exercise any such
right, power or remedy shall operate as a waiver thereof. No notice to or demand
on any Pledgor in any case shall entitle it to any other or further notice or
demand in similar or other circumstances or constitute a waiver of any of the
rights of the Pledgee or any other Secured Creditor to any other or further
action in any circumstances without notice or demand. The Secured Creditors
agree that this Agreement may be enforced only by the action of the Pledgee, in
each case, acting upon the instructions of the Required Secured Creditors, and
that no other Secured Creditor shall have any right individually to seek to
enforce or to enforce this Agreement or to realize upon the security to be
granted hereby, it being understood and agreed that such rights and remedies may
be exercised by the Pledgee for the benefit of the Secured Creditors upon the
terms of this Agreement.
9. APPLICATION OF PROCEEDS. (a) All monies collected by the Pledgee
upon any sale or other disposition of the Collateral pursuant to the terms of
this Agreement, together with all other monies received by the Pledgee
hereunder, shall be applied in the manner provided in the Security Agreement.
(b) It is understood and agreed that each Pledgor shall remain
jointly and severally liable with respect to its Obligations to the extent of
any deficiency between the
<Page>
Exhibit G
Page 15
amount of the proceeds of the Collateral pledged by it hereunder and the
aggregate amount of such Obligations.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the
Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making such sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or non-application thereof.
11. INDEMNITY. Each Pledgor jointly and severally agrees (i) to
indemnify, reimburse and hold harmless the Pledgee and each other Secured
Creditor and their respective successors, assigns, employees, agents and
affiliates (individually an "INDEMNITEE", and collectively, the "INDEMNITEES")
from and against any and all obligations, damages, injuries, penalties, claims,
demands, losses, judgments and liabilities (including, without limitation,
liabilities for penalties) of whatsoever kind or nature incurred by any
Indemnitee as a result of, or in any way relating to, or arising out of, or by
reason of, any investigation, litigation or other proceeding (whether or not any
Indemnitee is party thereto and whether or not such investigation, litigation or
other proceeding is between or among any Indemnitee, any Pledgor or any third
Person or otherwise) related to the entering into and/or performance of this
Agreement or any other Secured Debt Agreement, and (ii) to reimburse each
Indemnitee for all reasonable, documented, costs, expenses and disbursements in
each case arising out of or resulting the exercise by any Indemnitee of any
right or remedy granted to it hereunder or under any other Secured Debt
Agreement (including, without limitation, reasonable attorneys' fees and
expenses, PROVIDED THAT, except in the case of a bankruptcy of any Assignor, no
more than one counsel for the Indemnitees may be used in any one jurisdiction)
(but excluding any obligations, damages, injuries, penalties, claims, demands,
losses, judgments and liabilities (including, without limitation, liabilities
for penalties) or expenses of whatsoever kind or nature to the extent incurred
or arising by reason of gross negligence or willful misconduct of such
Indemnitee or an affiliate thereof (as determined by a court of competent
jurisdiction in a final and non-appealable decision)). In no event shall the
Pledgee hereunder be liable, in the absence of gross negligence or willful
misconduct on its part (as determined by a court of competent jurisdiction in a
final and non-appealable decision), for any matter or thing in connection with
this Agreement other than to account for monies or other property actually
received by it in accordance with the terms hereof. If and to the extent that
the obligations of any Pledgor under this Section 11 are unenforceable for any
reason, such Pledgor hereby agrees to make the maximum contribution to the
payment and satisfaction of such obligations which is permissible under
applicable law. The indemnity obligations of each Pledgor contained in this
Section 11 shall continue in full force and effect notwithstanding the full
payment of all the Notes issued under the Credit Agreement, the termination of
all Covered Agreements and Letters of Credit, and the payment of all other
Obligations and notwithstanding the discharge thereof.
12. PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER. (a)
Nothing herein shall be construed to make the Pledgee or any other Secured
Creditor liable as a member of any limited liability company or as a partner of
any partnership and neither the Pledgee nor any other Secured Creditor by virtue
of this Agreement or otherwise
<Page>
Exhibit G
Page 16
(except as referred to in the following sentence) shall have any of the duties,
obligations or liabilities of a member of any limited liability company or as a
partner in any partnership. The parties hereto expressly agree that, unless the
Pledgee shall become the absolute owner of Collateral consisting of a Limited
Liability Company Interest or a Partnership Interest pursuant hereto, this
Agreement shall not be construed as creating a partnership or joint venture
among the Pledgee, any other Secured Creditor, any Pledgor and/or any other
Person.
(b) Except as provided in the last sentence of paragraph (a) of this
Section 12, the Pledgee, by accepting this Agreement, did not intend to become a
member of any limited liability company or a partner of any partnership or
otherwise be deemed to be a co-venturer with respect to any Pledgor, any limited
liability company, partnership and/or any other Person either before or after an
Event of Default shall have occurred. The Pledgee shall have only those powers
set forth herein and the Secured Creditors shall assume none of the duties,
obligations or liabilities of a member of any limited liability company or as a
partner of any partnership or any Pledgor except as provided in the last
sentence of paragraph (a) of this Section 12.
(c) The Pledgee and the other Secured Creditors shall not be
obligated to perform or discharge any obligation of any Pledgor as a result of
the pledge hereby effected.
(d) The acceptance by the Pledgee of this Agreement, with all the
rights, powers, privileges and authority so created, shall not at any time or in
any event obligate the Pledgee or any other Secured Creditor to appear in or
defend any action or proceeding relating to the Collateral to which it is not a
party, or to take any action hereunder or thereunder, or to expend any money or
incur any expenses or perform or discharge any obligation, duty or liability
under the Collateral.
13. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor agrees
that it will join with the Pledgee in executing and, at such Pledgor's own
expense, file and refile under the UCC or other applicable law such financing
statements, continuation statements and other documents, in form reasonably
acceptable to the Pledgee, in such offices as the Pledgee (acting on its own or
on the instructions of the Required Secured Creditors) may reasonably deem
necessary or appropriate and wherever required or permitted by law in order to
perfect and preserve the Pledgee's security interest in the Collateral hereunder
and hereby authorizes the Pledgee to file financing statements and amendments
thereto relative to all or any part of the Collateral (including, without
limitation, (x) financing statements which list the Collateral specifically
and/or "all assets" as collateral and (y) "in lieu of" financing statements)
without the signature of such Pledgor where permitted by law, and agrees to do
such further acts and things and to execute and deliver to the Pledgee such
additional agreements and instruments as the Pledgee may reasonably require or
deem advisable to carry into effect the purposes of this Agreement or to further
assure and confirm unto the Pledgee its rights, powers and remedies hereunder or
thereunder.
(b) Each Pledgor hereby constitutes and appoints the Pledgee its
true and lawful attorney-in-fact, irrevocably, with full authority in the place
and stead of such Pledgor and in the name of such Pledgor or otherwise, from
time to time after the occurrence and during the continuance of an Event of
Default, in the Pledgee's reasonable discretion, to act, require, demand,
receive and give acquittance for any and all monies and claims for monies due or
to
<Page>
Exhibit G
Page 17
become due to such Pledgor under or arising out of the Collateral, to endorse
any checks or other instruments or orders in connection therewith and to file
any claims or take any action or institute any proceedings and to execute any
instrument which the Pledgee may reasonably deem necessary or advisable to
accomplish the purposes of this Agreement, which appointment as attorney is
coupled with an interest.
14. THE PLEDGEE AS COLLATERAL AGENT. The Pledgee will hold in
accordance with this Agreement all items of the Collateral at any time received
under this Agreement. It is expressly understood, acknowledged and agreed by
each Secured Creditor that by accepting the benefits of this Agreement each such
Secured Creditor acknowledges and agrees that the obligations of the Pledgee as
holder of the Collateral and interests therein and with respect to the
disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in this Agreement and in Section 11 of the Credit Agreement.
The Pledgee shall act hereunder on the terms and conditions set forth herein and
in Section 11 of the Credit Agreement.
15. TRANSFER BY THE PLEDGORS. Except as permitted (i) prior to the
date all Credit Document Obligations have been paid in full and all Commitments
under the Credit Agreement have been terminated, pursuant to the Credit
Agreement and the other Credit Documents, and (ii) thereafter, pursuant to the
other Secured Debt Agreements, no Pledgor will sell or otherwise dispose of,
grant any option with respect to, or mortgage, pledge or otherwise encumber any
of the Collateral or any interest therein.
16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS. (a)
Each Pledgor represents, warrants and covenants that:
(i) it is the legal, beneficial and record owner of, and has good
and marketable title to, all of its Collateral consisting of one or more
Securities, Partnership Interests and Limited Liability Company Interests
and that it has sufficient interest in all of its Collateral in which a
security interest is purported to be created hereunder for such security
interest to attach (subject, in each case, to no pledge, lien, mortgage,
hypothecation, security interest, charge, option, Adverse Claim or other
encumbrance whatsoever, except the liens and security interests created by
this Agreement or permitted under the Secured Debt Agreements);
(ii) it has full power, authority and legal right to pledge all the
Collateral pledged by it pursuant to this Agreement;
(iii) this Agreement has been duly authorized, executed and delivered
by such Pledgor and constitutes a legal, valid and binding obligation of
such Pledgor enforceable against such Pledgor in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and by general equitable
principles (regardless of whether enforcement is sought in equity or at
law);
(iv) except to the extent already obtained or made, no consent of any
other party (including, without limitation, any stockholder, partner,
member or creditor of such
<Page>
Exhibit G
Page 18
Pledgor or any of its Subsidiaries) is required to be obtained by such
Pledgor in connection with (a) the execution, delivery or performance of
this Agreement by such Pledgor, (b) the validity or enforceability of this
Agreement against such Pledgor, (c) the perfection or enforceability of the
Pledgee's security interest in such Pledgor's Collateral or (d) except for
compliance with or as may be required by applicable securities laws, the
exercise by the Pledgee of any of its rights or remedies provided herein;
(v) all of such Pledgor's Collateral (consisting of Securities,
Limited Liability Company Interests and Partnership Interests) has been
duly and validly issued, is fully paid and non-assessable and is subject to
no options to purchase or similar rights;
(vi) the pledge, collateral assignment and delivery to the Pledgee of
such Pledgor's Collateral consisting of Certificated Securities and Pledged
Notes pursuant to - this Agreement creates a valid and perfected first
priority security interest in such Certificated Securities and Pledged
Notes, and the proceeds thereof, subject to no prior Lien or encumbrance or
to any agreement purporting to grant to any third party a Lien or
encumbrance on the property or assets of such Pledgor which would include
the Securities (other than the liens and security interests permitted under
the Secured Debt Agreements then in effect) and the Pledgee is entitled to
all the rights, priorities and benefits afforded by the UCC or other
relevant law as enacted in any relevant jurisdiction to perfect security
interests in respect of such Collateral; and
(vii) "control" (as defined in Section 8-106 of the UCC) has been
obtained by the Pledgee over all of such Pledgor's Collateral consisting of
Securities (including, without limitation, Notes evidencing Indebtedness in
a principal amount equal to or greater than $2,000,000 which are Securities
but excluding (x) Securities in the form of Cash Equivalents, Foreign Cash
Equivalents and Margin Stock held by such Pledgor as a result of
investments by such Pledgor in Cash Equivalents, Foreign Cash Equivalents
and Margin Stock made in the ordinary course of business and in accordance
with Section 8.06(a) and (r) of the Credit Agreement any (y) each Note
evidencing Indebtedness of less than $2,000,000) with respect to which such
"control" may be obtained pursuant to Section 8-106 of the UCC, except to
the extent that the obligation of the applicable Pledgor to provide the
Pledgee with "control" of such Collateral has not yet arisen under this
Agreement; PROVIDED that in the case of the Pledgee obtaining "control"
over Collateral consisting of a Security Entitlement, such Pledgor shall
have taken all steps in its control so that the Pledgee obtains "control"
over such Security Entitlement.
(b) Each Pledgor covenants and agrees that it will defend the
Pledgee's right, title and security interest in and to such Pledgor's Collateral
and the proceeds thereof against the claims and demands of all persons
whomsoever; and each Pledgor covenants and agrees that it will have like title
to and right to pledge any other property at any time hereafter pledged to the
Pledgee by such Pledgor as Collateral hereunder (subject in the case of
Collateral consisting of Equity Interests in a Joint Venture that is not a
Subsidiary of such Pledgor, to restrictions on the transfer of such Equity
Interests that may appear in the organizational documents for such Joint
Venture), and will likewise defend the right thereto and security interest
therein of the Pledgee and the other Secured Creditors.
<Page>
Exhibit G
Page 19
(c) Each Pledgor covenants and agrees that it will take no action
which would violate any of the terms of any Secured Debt Agreement.
17. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of each
Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever (other than termination of this Agreement pursuant to
Section 19 hereof), including, without limitation:
(i) any renewal, extension, amendment or modification of, or
addition or supplement to or deletion from any Secured Debt Agreement
(other than this Agreement in accordance with its terms), or any other
instrument or agreement referred to therein, or any assignment or transfer
of any thereof;
(ii) any waiver, consent, extension, indulgence or other action or
inaction under or in respect of any such agreement or instrument including,
without limitation, this Agreement (other than a waiver, consent or
extension with respect to this Agreement in accordance with its terms);
(iii) any furnishing of any additional security to the Pledgee or its
assignee or any acceptance thereof or any release of any security by the
Pledgee or its assignee;
(iv) any limitation on any party's liability or obligations under any
such instrument or agreement or any invalidity or unenforceability, in
whole or in part, of any such instrument or agreement or any term thereof;
or
(v) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to
any Pledgor or any Subsidiary of any Pledgor, or any action taken with
respect to this Agreement by any trustee or receiver, or by any court, in
any such proceeding, whether or not such Pledgor shall have notice or
knowledge of any of the foregoing.
18. SALE OF COLLATERAL WITHOUT REGISTRATION. If at any time when the
Pledgee shall determine to exercise its right to sell all or any part of the
Collateral consisting of Securities, Limited Liability Company Interests or
Partnership Interests pursuant to Section 7 hereof, and such Collateral or the
part thereof to be sold shall not, for any reason whatsoever, be effectively
registered under the Securities Act, as then in effect, the Pledgee may, in its
sole and absolute discretion, sell such Collateral or part thereof by private
sale in such manner and under such circumstances as the Pledgee may deem
necessary or advisable in order that such sale may legally be effected without
such registration. Without limiting the generality of the foregoing, in any such
event the Pledgee, in its sole and absolute discretion (i) may proceed to make
such private sale notwithstanding that a registration statement for the purpose
of registering such Collateral or part thereof shall have been filed under such
Securities Act, (ii) may approach and negotiate with a single possible purchaser
to effect such sale, and (iii) may restrict such sale to a purchaser who will
represent and agree that such purchaser is purchasing for its own account, for
investment, and not with a view to the distribution or sale of such Collateral
or part thereof. In the event of any such sale, the Pledgee shall incur no
responsibility
<Page>
Exhibit G
Page 20
or liability for selling all or any part of the Collateral at a price which the
Pledgee, in its sole and absolute discretion, may in good faith deem reasonable
under the circumstances, notwithstanding the possibility that a substantially
higher price might be realized if the sale were deferred until the registration
as aforesaid.
19. TERMINATION; RELEASE. (a) On the Termination Date (as defined
below), this Agreement shall terminate (provided that all indemnities set forth
herein including, without limitation, in Section 11 hereof shall survive any
such termination) and the Pledgee, at the request and expense of such Pledgor,
will execute and deliver to such Pledgor a proper instrument or instruments
(including UCC termination statements) acknowledging the satisfaction and
termination of this Agreement (including, without limitation, UCC termination
statements and instruments of satisfaction, discharge and/or reconveyance), and
will duly release from the security interest created hereby and assign, transfer
and deliver to such Pledgor (without recourse and without any representation or
warranty) such of the Collateral as may be in the possession of the Pledgee and
as has not theretofore been sold or otherwise applied or released pursuant to
this Agreement, together with any moneys at the time held by the Pledgee or any
of its sub-agents hereunder and, with respect to any Collateral consisting of an
Uncertificated Security, a Partnership Interest or a Limited Liability Company
Interest (other than an Uncertificated Security, Partnership Interest or Limited
Liability Company Interest credited on the books of a Clearing Corporation or
Securities Intermediary), a termination of the agreement relating thereto
executed and delivered by the issuer of such Uncertificated Security pursuant to
Section 3.2(a)(ii) or by the respective partnership or limited liability company
pursuant to Section 3.2(a)(iv)(2). As used in this Agreement, "TERMINATION DATE"
shall mean the date upon which the Commitments under the Credit Agreement have
been terminated and all Covered Agreements have been terminated, no Letter of
Credit or Note (as defined in the Credit Agreement) is outstanding (and all
Loans have been paid in full), all Letters of Credit have been terminated, and
all other Obligations (other than indemnities described herein and described in
Section 12.01 of the Credit Agreement, and any other indemnities set forth in
any other Credit Documents, in each case which are not then due and payable)
then due and payable have been paid in full.
(b) In the event that any part of the Collateral is sold or
otherwise disposed of (to a Person other than a Credit Party) (x) at any time
prior to the time at which all Credit Document Obligations have been paid in
full and all Commitments and Letters of Credit under the Credit Agreement have
been terminated, in connection with a sale or disposition permitted by Section
8.02 of the Credit Agreement or is otherwise released at the direction of the
Required Lenders (or all the Lenders if required by Section 12.12 of the Credit
Agreement) or (y) at any time thereafter, to the extent permitted by the other
Secured Debt Agreements, and in the case of clauses (x) and (y), the proceeds of
such sale or disposition (or from such release) are applied in accordance with
the terms of the Credit Agreement or such other Secured Debt Agreement, as the
case may be, to the extent required to be so applied, the Pledgee, at the
request and expense of such Pledgor, will duly release from the security
interest created hereby (and will execute and deliver such documentation,
including termination or partial release statements and the like in connection
therewith) and assign, transfer and deliver to such Pledgor (without recourse
and without any representation or warranty) such of the Collateral as is then
being (or has been) so sold or released and as may be in the possession of the
Pledgee (or, in the case of Collateral held
<Page>
Exhibit G
Page 21
by any sub-agent designated pursuant to Section 4 hereto, such sub-agent) and
has not theretofore been released pursuant to this Agreement.
(c) At any time that any Pledgor desires that Collateral be released
as provided in the foregoing Section 19(a) or (b), it shall deliver to the
Pledgee (and the relevant sub-agent, if any, designated pursuant to Section 4
hereof) a certificate signed by an authorized officer of such Pledgor stating
that the release of the respective Collateral is permitted pursuant to Section
19(a) or (b) hereof.
(d) The Pledgee shall have no liability whatsoever to any other
Secured Creditor as the result of any release of Collateral by it in accordance
with (or which the Collateral Agent in the absence of gross negligence and
willful misconduct (as determined by a court of competent jurisdiction in a
final and non-appealable decision) believes to be in accordance with) this
Section 19.
20. NOTICES, ETC. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or
courier service and all such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, or cabled or sent by courier, be effective
when deposited in the mails, delivered to the telegraph company, cable company
or overnight courier, as the case may be, or sent by telex or telecopier, except
that notices and communications to the Pledgee or any Pledgor shall not be
effective until received by the Pledgee or such Pledgor, as the case may be. All
notices and other communications shall be in writing and addressed as follows:
(a) if to any Pledgor:
c/o Rexnord Corporation
4701 West Greenfield Avenue
Attention: Chief Financial Officer
Telephone No.: (414) 643-3000
Telecopier No.: (414) 643-3078;
(b) if to the Pledgee, at:
Deutsche Bank Trust Company Americas
31 West 52nd Street
New York, New York 10019
Attention: Diane F. Rolfe
Telephone No.: (646) 324-2194
Telecopier No.: (646) 324-7460;
(c) if to any Lender Creditor, either (x) to the Administrative
Agent, at the address of the Administrative Agent specified in the Credit
Agreement, or (y) at such address as such Lender Creditor shall have
specified in the Credit Agreement;
(d) if to any Other Creditor, at such address as such Other Creditor
shall have specified in writing to the Pledgors and the Pledgee;
<Page>
Exhibit G
Page 22
or at such other address or addressed to such other individual as shall have
been furnished in writing by any Person described above to the party required to
give notice hereunder.
21. WAIVER; AMENDMENT. Except as provided in Sections 29 and 31
hereof, none of the terms and conditions of this Agreement may be changed,
waived, modified or varied in any manner whatsoever except in accordance with
the requirements specified in the Security Agreement.
22. SUCCESSORS AND ASSIGNS. This Agreement shall create a continuing
security interest in the Collateral and shall (i) remain in full force and
effect, subject to release and/or termination as set forth in Section 19, (ii)
be binding upon each Pledgor, its successors and assigns; PROVIDED, HOWEVER,
that no Pledgor shall assign any of its rights or obligations hereunder without
the prior written consent of the Pledgee (with the prior written consent of the
Required Secured Creditors), and (iii) inure, together with the rights and
remedies of the Pledgee hereunder, to the benefit of the Pledgee, the other
Secured Creditors and their respective successors and permitted transferees and
assigns. All agreements, statements, representations and warranties made by each
Pledgor herein or in any certificate or other instrument delivered by such
Pledgor or on its behalf under this Agreement shall be considered to have been
relied upon by the Secured Creditors and shall survive the execution and
delivery of this Agreement and the other Secured Debt Agreements regardless of
any investigation made by the Secured Creditors or on their behalf.
23. HEADINGS DESCRIPTIVE. The headings of the several Sections of this
Agreement are inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.
24. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF
THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN
EACH CASE WHICH ARE LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH PLEDGOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS. EACH PLEDGOR HEREBY FURTHER IRREVOCABLY
WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH
PLEDGOR, AND AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE
AFORESAID COURTS THAT ANY SUCH COURT LACKS PERSONAL JURISDICTION OVER SUCH
PLEDGOR. EACH PLEDGOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT
OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
ANY SUCH PLEDGOR AT ITS ADDRESS FOR NOTICES AS
<Page>
Exhibit G
Page 23
PROVIDED IN SECTION 20 ABOVE UNLESS ANOTHER ADDRESS IS PROVIDED TO THE
COLLATERAL AGENT IN WRITING IN ACCORDANCE WITH SECTION 20, SUCH SERVICE TO
BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH PLEDGOR HEREBY IRREVOCABLY
WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES
AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER
OR UNDER ANY OTHER CREDIT DOCUMENT THAT SUCH SERVICE OF PROCESS WAS IN ANY WAY
INVALID OR INEFFECTIVE IF IN CONFORMITY WITH THE FOREGOING. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE PLEDGEE UNDER THIS AGREEMENT, OR ANY SECURED CREDITOR,
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PLEDGOR IN ANY OTHER JURISDICTION.
(b) EACH PLEDGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS
OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
25. PLEDGOR'S DUTIES. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that each Pledgor shall remain liable
to perform all of the obligations, if any, assumed by it with respect to the
Collateral and the Pledgee shall not have any obligations or liabilities with
respect to any Collateral by reason of or arising out of this Agreement, except
for the safekeeping of Collateral actually in Pledgor's possession, nor shall
the Pledgee be required or obligated in any manner to perform or fulfill any of
the obligations of any Pledgor under or with respect to any Collateral, in each
case unless the Pledgee shall become the absolute owner of such Collateral as a
result of the exercise of its remedies hereunder pursuant to Section 7 of this
Agreement.
26. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with each Pledgor and the
Pledgee.
27. 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
<Page>
Exhibit G
Page 24
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
28. RECOURSE. This Agreement is made with full recourse to each
Pledgor and pursuant to and upon all the representations, warranties, covenants
and agreements on the part of such Pledgor contained herein and in the other
Secured Debt Agreements and otherwise in writing in connection herewith or
therewith.
29. ADDITIONAL PLEDGORS. It is understood and agreed that any
Subsidiary of Holdings that is required to become a party to this Agreement
after the date hereof pursuant to the requirements of the Credit Agreement or
any other Credit Document, shall become a Pledgor hereunder by (x) executing a
counterpart hereof, or of a Joinder Agreement in the form of Exhibit L to the
Credit Agreement, and delivering same to the Pledgee and (y) delivering
supplements to Annexes A through F, hereto as are necessary to cause such
annexes to be complete and accurate with respect to such additional Pledgor on
such date. In addition, such additional Pledgor shall take actions as specified
in this Agreement as would have been taken by such Pledgor had it been an
original party to this Agreement, in each case with all documents required above
to be delivered to the Pledgee and with all documents and actions required above
to be taken to the reasonable satisfaction of the Pledgee.
30. LIMITED OBLIGATIONS. It is the desire and intent of each Pledgor
and the Secured Creditors that this Agreement shall be enforced against each
Pledgor to the fullest extent permissible under the laws applied in each
jurisdiction in which enforcement is sought. Notwithstanding anything to the
contrary contained herein, in furtherance of the foregoing, it is noted that the
obligations of each Pledgor constituting a Subsidiary Guarantor have been
limited as provided in the Subsidiaries Guaranty.
31. RELEASE OF PLEDGORS. If at any time all of the Equity Interests of
any Pledgor owned by the Borrower or any of its Subsidiaries are sold (to a
Person other than a Credit Party) in a transaction permitted pursuant to the
Credit Agreement (and which does not violate the terms of any other Secured Debt
Agreement then in effect), then, such Pledgor shall be released as a Pledgor
pursuant to this Agreement without any further action hereunder (it being
understood that the sale of all of the Equity Interests in any Person that owns,
directly or indirectly, all of the Equity Interests in any Pledgor shall be
deemed to be a sale of all of the Equity Interests in such Pledgor for purposes
of this Section), and the Pledgee is authorized and directed to execute and
deliver, at the expense of the Pledgors, such instruments of release as are
reasonably satisfactory to the applicable Pledgor and the Pledgee. At any time
that the Borrower desires that a Pledgor be released from this Agreement as
provided in this Section 31, the Borrower shall deliver to the Pledgee a
certificate signed by an Authorized Officer of the Borrower stating that the
release of such Pledgor is permitted pursuant to this Section 31. The Pledgee
shall have no liability whatsoever to any other Secured Creditor as a result of
the release of any Pledgor by it in accordance with, or which it believes to be
in accordance with, this Section 31.
* * * *
<Page>
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.
RBS GLOBAL, INC.,
as a Pledgor
By: /s/ Thomas Jansen
-----------------------------------------------
Title: Vice President & Chief Financial Officer
REXNORD CORPORATION,
as a Pledgor
By: /s/ Thomas Jansen
-----------------------------------------------
Title: Vice President & Chief Financial Officer
RBS NORTH AMERICA, INC.,
as a Pledgor
By: /s/ Thomas Jansen
-----------------------------------------------
Title: Vice President & Chief Financial Officer
RBS ACQUISITION CORPORATION,
as a Pledgor
By: /s/ Thomas Jansen
-----------------------------------------------
Title: Vice President & Chief Financial Officer
RAC - I, INC.,
as a Pledgor
By: /s/ Thomas Jansen
-----------------------------------------------
Title: Vice President & Chief Financial Officer
<Page>
RBS CHINA HOLDINGS, L.L.C.,
as a Pledgor
By: /s/ Thomas Jansen
-----------------------------------------------
Title: Vice President & Chief Financial Officer
REXNORD NORTH AMERICA HOLDINGS, INC.,
as a Pledgor
By: /s/ Thomas Jansen
-----------------------------------------------
Title: Vice President & Chief Financial Officer
ADDAX, INC.,
as a Pledgor
By: /s/ Thomas Jansen
-----------------------------------------------
Title: Vice President & Chief Financial Officer
BETZDORF CHAIN COMPANY, INC.,
as a Pledgor
By: /s/ Thomas Jansen
-----------------------------------------------
Title: Vice President & Chief Financial Officer
CLARKSON INDUSTRIES, INC.,
as a Pledgor
By: /s/ Thomas Jansen
-----------------------------------------------
Title: Vice President & Chief Financial Officer
<Page>
PT COMPONENTS, INC.,
as a Pledgor
By: /s/ Thomas Jansen
-----------------------------------------------
Title: Vice President & Chief Financial Officer
PRAGER INCORPORATED,
as a Pledgor
By: /s/ Thomas Jansen
-----------------------------------------------
Title: Vice President & Chief Financial Officer
REXNORD GERMANY - I INC.,
as a Pledgor
By: /s/ Thomas Jansen
-----------------------------------------------
Title: Vice President & Chief Financial Officer
REXNORD INTERNATIONAL INC.,
as a Pledgor
By: /s/ Thomas Jansen
-----------------------------------------------
Title: Vice President & Chief Financial Officer
REXNORD, LTD.,
as a Pledgor
By: /s/ Thomas Jansen
-----------------------------------------------
Title: Vice President & Chief Financial Officer
<Page>
REXNORD PUERTO RICO INC.,
as a Pledgor
By: /s/ Thomas Jansen
-----------------------------------------------
Title: Vice President & Chief Financial Officer
WINFRED BERG LICENSCO INC.,
as a Pledgor
By: /s/ Thomas Jansen
-----------------------------------------------
Title: Vice President & Chief Financial Officer
W.M. BERG INC.,
as a Pledgor
By: /s/ Thomas Jansen
-----------------------------------------------
Title: Vice President & Chief Financial Officer
<Page>
Accepted and Agreed to:
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Collateral Agent and Pledgee
By: /s/ Diane F. Rolfe
-------------------------
Title: Vice President
<Page>
ANNEX A
to
PLEDGE AGREEMENT
ANNEX A
SCHEDULE OF SUBSIDIARIES
<Table>
<Caption>
Jurisdiction of
Entity Ownership Organization
- ------ --------- ----------------
W.M. Berg Inc. Clarkson Industries, Inc. Delaware
Clarkson Industries, Inc. RAC-I, Inc. New York
Prager Incorporated RAC-I, Inc. Louisiana
Rexnord North America Holdings, Inc. RAC-I, Inc. Delaware
RBS China Holdings, L.L.C. RBS Acquisition Corporation Delaware
Rexnord AB RBS Acquisition Corporation Sweden
Rexnord Correntes Ltda. RBS Acquisition Corporation Brazil
Rexnord do Brasil Industrial Ltda. RBS Acquisition Corporation Brazil
Rexnord France Holdings S.A.S. RBS Acquisition Corporation France
Einhundertfunfundzwanzigste RBS Acquisition Corporation Germany
Verwaltungsgcscllschaft Dammtor mbH
Rexnord Italy Holdings S.r.l. RBS Acquisition Corporation Italy
Rexnord Netherlands Holdings B.V. RBS Acquisition Corporation The Netherlands
Changzhou Hansen Jianglang RBS China Holdings, L.L.C. China
Transmisions Company Limited
Rexnord Corporation RBS Global, Inc. Delaware
RAC-I, Inc. RBS North America, Inc. Delaware
Rexnord Finance B.V. RBS North America, Inc. The Netherlands
RBS Acquisition Corporation
RBS Acquisition Corporation Rexnord Corporation Delaware
RBS North America, Inc. Rexnord Corporation Delaware
Addax, Inc. Rexnord North America Holdings, Nebraska
Inc.
Betzdorf Chain Company Inc. Rexnord North America Holdings, Wisconsin
Inc.
</Table>
<Page>
Annex A
p.2
<Table>
<Caption>
Jurisdiction of
Entity Ownership Organization
- ------ --------- ----------------
PT Components, Inc. Rexnord North America Holdings, Delaware
Inc.
Rexnord Australia Pty Ltd. Rexnord North America Holdings, Australia
Inc.
Rexnord Canada Limited Rexnord North America Holdings, Canada
Inc.
Rexnord Export Sales Corporation Rexnord North America Holdings, Barbados
Inc.
Wuxi Rexnord Jinling Conveyor Rexnord North America Holdings, China
Products Corporation Limited Inc.
Rexnord Germany - I Inc. Rexnord North America Holdings, Delaware
Inc.
Rexnord International Inc. Rexnord North America Holdings, Delaware
Inc.
Rexnord Puerto Rico Inc. Rexnord North America Holdings, Nevada
Inc.
Rexnord, Ltd. Rexnord North America Holdings, Nevada
Inc.
Winfred Berg Licensco Inc. W.M. Berg Inc. Delaware
Rexnord Industrial, S.A. de C.V. Rexnord North America Holdings, Mexico
Inc.
PT Components, Inc.
Rexnord International Inc.
Betzdorf Chain Company Inc.
Rexnord Puerto Rico Inc.
Rexnord S.A. de C.V. Rexnord North America Holdings, Mexico
Inc.
PT Components, Inc.
Rexnord International Inc.
Betzdorf Chain Company Inc.
Rexnord Puerto Rico Inc.
</Table>
<Page>
ANNEX B
to
PLEDGE AGREEMENT
ANNEX B
SCHEDULE OF STOCK
1. RBS GLOBAL, INC.
<Table>
<Caption>
Sub-clause
of
Section
Name of 3.2(a)
Issuing Type of Number of Certificate Percentage of Pledge
Corporation Shares Shares No.(1) Owned(2) Agreement
- ----------- ------ --------- ----------- ---------- ----------
Rexnord Common 1,000 2 100% (i)
Corporation
</Table>
2. REXNORD CORPORATION
<Table>
<Caption>
Sub-clause
of
Section
Name of 3.2(a)
Issuing Type of Number of Certificate Percentage of Pledge
Corporation Shares Shares No. Owned Agreement
- ----------- ------ --------- ----------- ---------- ----------
RBS North Common 1,000 2 100% (i)
America, Inc.
RBS Common 1,000 2 100% (i)
Acquisition
Corporation
</Table>
- ----------
(1) Specify if uncertificated.
(2) Specify for each Foreign Subsidiary the percentage owned of (x) Voting
Equity Interests and (y) Non-Voting Equity Interests.
<Page>
Annex B
p. 2
3. RBS ACQUISITION CORPORATION
<Table>
<Caption>
Sub-clause
of
Section
Name of 3.2(a)
Issuing Type of Number of Certificate Percentage of Pledge
Corporation Shares Shares No. Owned Agreement
- ----------- ------ --------- ----------- ---------- ----------
Rexnord AB Common 10,000 uncertificated 100% (ii)
Shares
Rexnord Capital 4 uncertificated 10% (ii)
Finance B.V. Shares
Rexnord France Common 250,000 uncertificated 100% (ii)
Holdings S.A.S.
Einhundert- Share 1 uncertificated 100% (ii)
funfundzwa- Capital
nzigste
Verwaltungs-
gesellschaft
Dammtor mbH
Rexnord Netherlands Capital 18,152 uncertificated 100% (ii)
Holdings B.V. Shares shares
</Table>
<Page>
Annex B
p. 3
4. RBS NORTH AMERICA, INC.
<Table>
<Caption>
Sub-clause
of
Section
Name of 3.2(a)
Issuing Type of Number of Certificate Percentage of Pledge
Corporation Shares Shares No. Owned Agreement
- ----------- ------ --------- ----------- ---------- ----------
RAC-I, Inc. Common 1,000 3 100% (i)
Rexnord Capital 36 uncertificated 90% (ii)
Finance B.V. Shares
</Table>
5. RAC-I, Inc.
<Table>
<Caption>
Sub-clause
of
Section
Name of 3.2(a)
Issuing Type of Number of Certificate Percentage of Pledge
Corporation Shares Shares No. Owned Agreement
- ----------- ------ --------- ----------- ---------- ----------
Clarkson Common 20,000 3 100% (i)
Industries, Inc.
Prager Common 50 3A 100% (i)
Incorporated 722.5 3B
Rexnord North Common 1,000 8 100% (i)
America
Holdings, Inc.
</Table>
<Page>
Annex B
p. 4
6. REXNORD NORTH AMERICA HOLDINGS, INC.
<Table>
<Caption>
Sub-clause
of
Section
Name of 3.2(a)
Issuing Type of Number of Certificate Percentage of Pledge
Corporation Shares Shares No. Owned Agreement
- ----------- ------ --------- ----------- ---------- ----------
Addax, Inc. Class A Voting 9,287 128 100% (i)
Common
Betzdorf Chain Class A Voting 99 6 100% (i)
Company Inc. Common
PT Components, Common 100 6 100% (i)
Inc.
Rexnord Australia Ordinary 1,750,000 105 100% (i)
Pty Ltd.
Rexnord Canada Common 2,575 C-3 100% (i)
Limited
Wuxi Rexnord No authorized Total uncertificated 100% (ii)
Jinling Conveyor or issued; investment
Products limited by amount of US$
Corporation liability 700,000;
Limited Registered
Capital of US$
542,000
Rexnord Export Common 1,000 1 100% (i)
Sales Corporation
Rexnord Germany - Common 10,000 3 100% (i)
I Inc.
</Table>
<Page>
Annex B
p. 5
<Table>
<Caption>
Sub-clause
of
Section
Name of 3.2(a)
Issuing Type of Number of Certificate Percentage of Pledge
Corporation Shares Shares No. Owned Agreement
- ----------- ------ --------- ----------- ---------- ----------
Rexnord Series A Common 1 2-A 0.03% (i)
Industrial, S.A.
de C.V.
Series B Common 7,419,891 2-B 86.51% (i)
Rexnord Common 100 7 100% (i)
International Inc.
Rexnord, Ltd Common 1,000 5 100% (i)
Rexnord Puerto Common 100 4 100% (i)
Rico Inc.
Rexnord, S.A. de Series A Common 11,246 1-A 99.96% (i)
C.V.
Series B 34,430,694 1-B 100% (i)
Common 13,272,872 2-B 100% (i)
</Table>
7. CLARKSON INDUSTRIES, INC.
<Table>
<Caption>
Sub-clause
of
Section
Name of 3.2(a)
Issuing Type of Number of Certificate Percentage of Pledge
Corporation Shares Shares No. Owned Agreement
- ----------- ------ --------- ----------- ---------- ----------
W.M. Berg Inc. Common 1,000 2 100% (i)
</Table>
<Page>
Annex B
p. 6
8. W.M. BERG INC.
<Table>
<Caption>
Sub-clause
of
Section
Name of 3.2(a)
Issuing Type of Number of Certificate Percentage of Pledge
Corporation Shares Shares No. Owned Agreement
- ----------- ------ --------- ----------- ---------- ----------
Winfred Berg Common 100 2 100% (i)
Licensco Inc.
</Table>
9. REXNORD INTERNATIONAL INC.
<Table>
<Caption>
Sub-clause
of
Section
Name of 3.2(a)
Issuing Type of Number of Certificate Percentage of Pledge
Corporation Shares Shares No. Owned Agreement
- ----------- ------ --------- ----------- ---------- ----------
Rexnord, S.A. de Series A 1 3-A 0.01% (i)
C.V.
Rexnord Series A 1 3-A 0.03% (i)
Industrial, S.A.
de C.V.
</Table>
10. REXNORD PUERTO RICO INC.
<Table>
<Caption>
Sub-clause
of
Section
Name of 3.2(a)
Issuing Type of Number of Certificate Percentage of Pledge
Corporation Shares Shares No. Owned Agreement
- ----------- ------ --------- ----------- ---------- ----------
Rexnord, S.A. de Series A 1 2-A 0.01% (i)
C.V.
Rexnord, Series A 1 5-A 0.03% (i)
Industrial, S.A.
de C.V.
</Table>
<Page>
Annex B
p. 7
11. BETZDORF CHAIN COMPANY INC.
<Table>
<Caption>
Sub-clause
of
Section
Name of 3.2(a)
Issuing Type of Number of Certificate Percentage of Pledge
Corporation Shares Shares No. Owned Agreement
- ----------- ------ --------- ----------- ---------- ----------
Rexnord, S.A. de Series A 1 5-A 0.01% (i)
C.V.
Rexnord, Series A 1 4-A 0.03% (i)
Industrial, S.A.
de C.V.
</Table>
12. PT COMPONENTS, INC.
<Table>
<Caption>
Sub-clause
of
Section
Name of 3.2(a)
Issuing Type of Number of Certificate Percentage of Pledge
Corporation Shares Shares No. Owned Agreement
- ----------- ------ --------- ----------- ---------- ----------
Rexnord, S.A. de Series A 1 4-A 0.01% (i)
C.V.
Rexnord Series A 3,596 1-A 99.89% (i)
Industrial, S.A. Series B 1,156,935 1-B 13.49% (i)
de C.V. Series C 7,000 1-C 100% (i)
</Table>
<Page>
ANNEX C
to
PLEDGE AGREEMENT
ANNEX C
SCHEDULE OF NOTES
A. Notes Associated with Acquisition
<Table>
<Caption>
NOTE HOLDER ISSUER PRINCIPAL AMOUNT MATURITY
- ----------- ------ ---------------- --------
RBS North America, Inc. Rexnord Finance B.V. $ 1,964,250 10 years or on demand
RBS Acquisition Corporation Rexnord Finance B.V. $ 218,250 10 years or on demand
Rexnord Corporation Rexnord Finance B.V. $ 39,752,614 n/a
Rexnord Corporation Rexnord Finance B.V. $ 28,955,750 10 years
Rexnord Corporation Rexnord Finance B.V. $ 24,845,384 10 years
Rexnord Corporation Rexnord Finance B.V. $ 10,944,1167 10 years or on demand
</Table>
B. Inter-Company Note
<Table>
<Caption>
NOTE HOLDER ISSUER PRINCIPAL AMOUNT MATURITY
- ----------- ------ ---------------- --------
RAC 1, Inc. Rexnord North America $ 450,365,000 n/a
Holdings, Inc.
</Table>
<Page>
ANNEX D
to
PLEDGE AGREEMENT
ANNEX D
SCHEDULE OF LIMITED LIABILITY COMPANY INTERESTS
1. RBS ACQUISITION CORPORATION
<Table>
<Caption>
Sub-clause of
Name of Issuing Limited Type of Percentage Section 3.2(a)
Liability Company Interest Owned of Pledge Agreement
- --------------------------- -------- ---------- -------------------
RBS China Holdings, L.L.C. Membership 100 (iv)
</Table>
<Page>
ANNEX E
to
PLEDGE AGREEMENT
ANNEX E
SCHEDULE OF PARTNERSHIP INTERESTS
None
<Page>
ANNEX F
to
PLEDGE AGREEMENT
ANNEX F
SCHEDULE OF CHIEF EXECUTIVE OFFICES
<Table>
<Caption>
Name of Pledgor Address(es) of Chief Executive Office
- --------------- -------------------------------------
Addax, Inc. Addax, Inc.
6040 Fletcher Avenue
Lincoln, Nebraska 68507
Betzdorf Chain Company Inc. Betzdorf Chain Company Inc.
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
Clarkson Industries, Inc. Clarkson Industries, Inc.
380 Mountain Group Street
Bridgeport, Connecticut 06605
Prager Incorporated Prager Incorporated
472 Andrew Higgins Drive
New Orleans, Louisiana 70130
PT Components, Inc. PT Components, Inc.
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
RAC-I, Inc. RAC-I, Inc.
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
RBS Acquisition Corporation RBS Acquisition Corporation
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
RBS China Holdings, L.L.C. RBS China Holdings, L.L.C.
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
RBS Global, Inc. RBS Global, Inc.
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
RBS North America, Inc. RBS North America, Inc.
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
</Table>
<Page>
Annex F
p.2
<Table>
<Caption>
Name of Pledgor Address(es) of Chief Executive Office
- --------------- -------------------------------------
Rexnord Corporation Rexnord Corporation
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
Rexnord Germany - I Inc. Rexnord Germany - I Inc.
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
Rexnord International Inc. Rexnord International Inc.
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
Rexnord, Ltd. Rexnord, Ltd.
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
Rexnord North America Holdings, Inc. Rexnord North America Holdings, Inc.
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
Rexnord Puerto Rico Inc. Rexnord Puerto Rico Inc.
P.O. Box 1210
Coamo, Puerto Rico 00640
Winfred Berg Licensco Inc. Winfred Berg Licensco Inc.
1105 North Market Street, Suite 1300
Wilmington, Delaware 19801
W.M. Berg Inc. W.M. Berg Inc.
499 Ocean Avenue
East Rockaway, New York 11518
</Table>
<Page>
ANNEX G
to
PLEDGE AGREEMENT
FORM OF AGREEMENT REGARDING UNCERTIFICATED SECURITIES, LIMITED LIABILITY
COMPANY INTERESTS AND PARTNERSHIP INTERESTS
AGREEMENT (as amended, modified, restated and/or supplemented from
time to time, this "AGREEMENT"), dated as of [_____________, 200__], among the
undersigned pledgor (the "PLEDGOR"), [_______], not in its individual capacity
but solely as Collateral Agent (the "PLEDGEE"), and [________], as the issuer of
the Uncertificated Securities, Limited Liability Company Interests and/or
Partnership Interests (each as defined below) (the "ISSUER").
W I T N E S S E T H:
WHEREAS, the Pledgor, certain of its affiliates and the Pledgee have
entered into a Pledge Agreement, dated as of [________, 200__] (as amended,
modified, restated and/or supplemented from time to time, the "PLEDGE
AGREEMENT"), under which, among other things, in order to secure the payment of
the Obligations (as defined in the Pledge Agreement), the Pledgor has or will
pledge to the Pledgee for the benefit of the Secured Creditors (as defined in
the Pledge Agreement), and grant a security interest in favor of the Pledgee for
the benefit of the Secured Creditors in, all of the right, title and interest of
the Pledgor in and to [any and all] [65% of all outstanding](1) ["uncertificated
securities" (as defined in Section 8-102(a)(18) of the Uniform Commercial Code,
as adopted in the State of New York) ("UNCERTIFICATED SECURITIES")] [Partnership
Interests (as defined in the Pledge Agreement)] [Limited Liability Company
Interests (as defined in the Pledge Agreement)], from time to time issued by the
Issuer and owned by the Pledgor, whether now existing or hereafter from time to
time acquired by the Pledgor (with all of such [Uncertificated Securities]
[Partnership Interests] [Limited Liability Company Interests] being herein
collectively called the "ISSUER PLEDGED INTERESTS"); and
WHEREAS, the Pledgor desires the Issuer to enter into this Agreement
in order to perfect the security interest of the Pledgee under the Pledge
Agreement in the Issuer Pledged Interests, to vest in the Pledgee control of the
Issuer Pledged Interests and to provide for the rights of the parties under this
Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
promises and agreements contained herein, and for other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. The Pledgor hereby irrevocably authorizes and directs the Issuer,
and the Issuer hereby agrees, following receipt by the Issuer of a notice from
the Pledgee stating that an Event of Default exists and that the Pledgee is
exercising exclusive control of the Issuer Pledged
- ----------
(1) Use appropriate bracketed language in the case of Issuer Pledged Interests
of an Exempted Foreign Entity (as per the last paragraph of Section 3.1 of
the Pledge Agreement).
<Page>
Interests, to comply with any and all instructions and orders originated by the
Pledgee (and its successors and assigns) regarding any and all of the Issuer
Pledged Interests without the further consent by the registered owner (including
the Pledgor), and not to comply with any instructions or orders regarding any or
all of the Issuer Pledged Interests originated by any person or entity other
than the Pledgee (and its successors and assigns) or a court of competent
jurisdiction.
2. The Issuer hereby certifies that (i) no notice of any security
interest, lien or other encumbrance or claim affecting the Issuer Pledged
Interests (other than the security interest of the Pledgee) has been received by
it, and (ii) the security interest of the Pledgee in the Issuer Pledged
Interests has been registered in the books and records of the Issuer.
3. The Issuer hereby represents and warrants that (i) the pledge by
the Pledgor of, and the granting by the Pledgor of a security interest in, the
Issuer Pledged Interests to the Pledgee, for the benefit of the Secured
Creditors, does not violate the charter, by-laws, partnership agreement,
membership agreement or any other agreement governing the Issuer or the Issuer
Pledged Interests, and (ii) the Issuer Pledged Interests consisting of capital
stock of a corporation are fully paid and nonassessable.
4. All notices, statements of accounts, reports, prospectuses,
financial statements and other communications to be sent to the Pledgor by the
Issuer in respect of the Issuer will also be sent to the Pledgee at the
following address:
[_______________]
[_______________]
Attention: [_______________]
Telephone No.: [_______________]
Telecopier No.:[ _______________]
5. Following its receipt of a notice from the Pledgee stating that an
Event of Default exists and until the Pledgee shall have delivered written
notice to the Issuer that all of the Obligations have been paid in full and this
Agreement is terminated, the Issuer will send any and all redemptions,
distributions, interest or other payments in respect of the Issuer Pledged
Interests from the Issuer for the account of the Pledgee only by wire transfers
to such account as the Pledgee shall instruct.
6. Except as expressly provided otherwise in Sections 4 and 5, all
notices, instructions, orders and communications hereunder shall be sent or
delivered by mail, telegraph, telex, telecopy, cable or overnight courier
service and all such notices and communications shall, when mailed, telexed,
telecopied, cabled or sent by overnight courier, be effective when received. All
notices and other communications shall be in writing and addressed as follows:
(ii)
<Page>
(a) if to the Pledgor, at:
-----------------------
-----------------------
-----------------------
-----------------------
Attention: ________
Telephone No.:
Telecopier No.:
(b) if to the Pledgee, at the address given in Section 4 hereof;
(c) if to the Issuer, at:
-----------------------
-----------------------
-----------------------
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder. As used in this
Section 6, "BUSINESS DAY" means any day other than a Saturday, Sunday, or other
day in which banks in New York are authorized to remain closed.
7. This Agreement shall be binding upon the successors and permitted
assigns of the Pledgor and the Issuer and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns. This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which shall constitute one instrument. In the event that any provision of
this Agreement shall prove to be invalid or unenforceable, such provision shall
be deemed to be severable from the other provisions of this Agreement which
shall remain binding on all parties hereto. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever except in writing signed by the Pledgee, the Issuer and the Pledgor.
8. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to its principles of
conflict of laws.
(iii)
<Page>
IN WITNESS WHEREOF, the Pledgor, the Pledgee and the Issuer have
caused this Agreement to be executed by their duly elected officers duly
authorized as of the date first above written.
[--------------------],
as Pledgor
By
-----------------------------
Name:
Title:
[--------------------],
not in its individual capacity but solely
as Collateral Agent and Pledgee
By
-----------------------------
Name:
Title:
[--------------------],
as the Issuer
By
-----------------------------
Name:
Title:
(iv)
<Page>
EXHIBIT H
CONFORMED AS EXECUTED
================================================================================
SECURITY AGREEMENT
among
RBS GLOBAL, INC.
REXNORD CORPORATION,
CERTAIN SUBSIDIARIES OF RBS GLOBAL, INC.
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as COLLATERAL AGENT
--------------------------------
Dated as of November 25, 2002
--------------------------------
================================================================================
<Page>
TABLE OF CONTENTS
<Table>
<Caption>
Page
----
ARTICLE I SECURITY INTERESTS............................................................................2
1.1. Grant of Security Interests...............................................................2
1.2. Power of Attorney.........................................................................3
ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS............................................4
2.1. Necessary Filings.........................................................................4
2.2. No Liens..................................................................................4
2.3. Other Financing Statements................................................................4
2.4. Chief Executive Office, Record Locations..................................................5
2.5. Location of Inventory and Equipment.......................................................5
2.6. Trade Names; Etc..........................................................................5
2.7. Certain Significant Transactions..........................................................5
2.8. Collateral in the Possession of a Bailee..................................................5
2.9. Recourse..................................................................................5
ARTICLE III SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER
AND CERTAIN OTHER COLLATERAL..............................................................5
3.1. Maintenance of Records...................................................................5
3.2. Direction to Account Debtors; Contracting Parties; etc. ..................................6
3.3. Modification of Terms; etc. ..............................................................6
3.4. Collection................................................................................6
3.5. Instruments...............................................................................7
3.6. Assignors Remain Liable Under Accounts ...................................................7
3.7. Assignors Remain Liable Under Contracts...................................................7
3.8. Letter-of-Credit Rights...................................................................8
3.9. Commercial Tort Claims....................................................................8
3.10. Chattel Paper............................................................................8
3.11. Further Actions..........................................................................8
ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS AND DOMAIN NAMES....................................8
4.1. Additional Representations and Warranties.................................................8
4.2. Licenses and Assignments..................................................................9
4.3. Infringements.............................................................................9
4.4. Preservation of Marks and Domain Names....................................................9
4.5. Maintenance of Registration...............................................................9
4.6. Future Registered Marks and Domain Names.................................................10
4.7. Remedies.................................................................................10
</Table>
(i)
<Page>
<Table>
<Caption>
Page
----
ARTICLE V SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS
AND TRADE SECRETS........................................................................10
5.1. Additional Representations and Warranties................................................10
5.2. Licenses and Assignments.................................................................11
5.3. Infringements............................................................................11
5.4. Maintenance of Patents or Copyrights.....................................................11
5.5. Prosecution of Patent or Copyright Applications..........................................11
5.6. Other Patents and Copyrights.............................................................11
5.7. Remedies.................................................................................12
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL........................................................12
6.1. Protection of Collateral Agent's Security................................................12
6.2. Warehouse Receipts Non-Negotiable........................................................12
6.3. Additional Information...................................................................12
6.4. Further Actions..........................................................................13
6.5. Financing Statements.....................................................................13
ARTICLE VII REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT............................................13
7.1. Remedies; Obtaining the Collateral Upon an Event of Default..............................13
7.2. Remedies; Disposition of the Collateral..................................................14
7.3. Waiver of Claims.........................................................................15
7.4. Application of Proceeds..................................................................16
7.5. Remedies Cumulative......................................................................18
7.6. Discontinuance of Proceedings............................................................18
ARTICLE VIII INDEMNITY.................................................................................19
8.1. Indemnity................................................................................19
8.2. Indemnity Obligations Secured by Collateral; Survival....................................20
ARTICLE IX DEFINITIONS.................................................................................20
ARTICLE X MISCELLANEOUS................................................................................27
10.1. Notices.................................................................................27
10.2. Waiver; Amendment.......................................................................28
10.3. Obligations Absolute....................................................................28
10.4. Successors and Assigns..................................................................28
10.5. Headings Descriptive....................................................................28
10.6. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL....................................................................29
10.7. Assignor's Duties.......................................................................30
10.8. Termination; Release....................................................................30
10.9. Counterparts............................................................................31
10.10. Severability...........................................................................31
10.11. The Collateral Agent and the other Secured Creditors...................................31
10.12. Additional Assignors...................................................................31
</Table>
(ii)
<Page>
ANNEX A Schedule of Chief Executive Offices Address(es) of Chief Executive
Office
ANNEX B Schedule of Inventory and Equipment Locations
ANNEX C Schedule of Trade and Fictitious Names
ANNEX D Description of Certain Significant Transactions Occurring Within
One Year Prior to the Date of the Security Agreement
ANNEX E Schedule of Commercial Tort Claims
ANNEX F Schedule of Marks Applications; and Internet Domain Name Registrations
ANNEX G Schedule of Patents
ANNEX H Schedule of Copyrights
ANNEX I Grant of Security Interest in United States Trademarks
ANNEX J Grant of Security Interest in United States Patents
ANNEX K Grant of Security Interest in United States Copyrights
(iii)
<Page>
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of November 25, 2002, made by each of the
undersigned assignors (each an "Assignor" and, together with any other entity
that becomes an assignor hereunder pursuant to Section 10.12 hereof, the
"Assignors") in favor of Deutsche Bank Trust Company Americas, as collateral
agent (together with any successor collateral agent, the "Collateral Agent"),
for the benefit of the Secured Creditors (as defined below)). Certain
capitalized terms as used herein are defined in Article IX hereof. Except as
otherwise defined herein, all other capitalized terms used herein and defined in
the Credit Agreement (as defined below) shall be used herein as therein defined.
W I T N E S S E T H:
WHEREAS, RBS Global, Inc. ("Holdings"), Rexnord Corporation (the
"Borrower"), the lenders party thereto from time to time (the "Lenders"),
Deutsche Bank Trust Company Americas, as administrative agent (together with any
successor administrative agent, the "Administrative Agent"), General Electric
Capital Corporation and Wachovia Bank, National Association, as Co-Documentation
Agents, and Deutsche Bank Securities Inc. and Credit Suisse First Boston, acting
through its Cayman Islands Branch, as Joint Lead Arrangers and Joint Book
Runners, have entered into a Credit Agreement, dated as of November 25, 2002 (as
amended, modified or supplemented from time to time, the "Credit Agreement"),
providing for the making of Loans to, and the issuance of, and participation in
Letters of Credit for the account of the Borrower, all as contemplated therein
(the Lenders, each Letter of Credit Issuer, and each Agent are herein called the
"Lender Creditors");
WHEREAS, the Borrower and one or more of its Subsidiaries may at any
time and from time to time enter into one or more Interest Rate Protection
Agreements (each such Interest Rate Protection Agreement, except to the extent
expressly stated therein that the liabilities and indebtedness thereunder are
not "Obligations" for the purposes of this Agreement, a "Covered Agreement" and,
collectively, the "Covered Agreements") with one or more Lenders or any
affiliate thereof (each such Lender or affiliate party to any such Covered
Agreement, even if the respective Lender subsequently ceases to be a Lender
under the Credit Agreement for any reason, together with such Lender or
affiliate's successors and assigns, if any, collectively, the "Other Creditors"
and, together with the Lender Creditors, the "Secured Creditors");
WHEREAS, pursuant to the Subsidiaries Guaranty, Intermediate Holdco
(to the extent created) and each Subsidiary Guarantor has jointly and severally
guaranteed to the Secured Creditors the payment when due of all Guaranteed
Obligations as described therein;
WHEREAS, it is a condition precedent to the making of Loans to, and
the issuance of, and participation in, Letters of Credit for the account of, the
Borrower under the Credit Agreement and to the Other Creditors entering into
Covered Agreements that each Assignor shall have executed and delivered to the
Collateral Agent this Agreement; and
WHEREAS, each Assignor will obtain benefits from the incurrence of
Loans by and the issuance of, and participation in Letters of Credit for the
account of the Borrower under
<Page>
Exhibit H
Page 2
the Credit Agreement and the entering into by the Borrower and/or one or more of
its Subsidiaries of the Covered Agreements and, accordingly, desires to execute
this Agreement in order to satisfy the condition described in the preceding
paragraph and to induce the Lenders to make Loans to the Borrower and the Other
Creditors to enter into the Covered Agreements with the Borrower and/or one or
more of its Subsidiaries;
NOW, THEREFORE, in consideration of the benefits accruing to each
Assignor, the receipt and sufficiency of which are hereby acknowledged, each
Assignor hereby makes the following representations and warranties to the
Collateral Agent for the benefit of the Secured Creditors and hereby covenants
and agrees with the Collateral Agent for the benefit of the Secured Creditors as
follows:
ARTICLE I
SECURITY INTERESTS
1.1. GRANT OF SECURITY INTERESTS. (a) As security for the prompt and
complete payment and performance when due of all of its Obligations, each
Assignor does hereby pledge and grant to the Collateral Agent, for the benefit
of the Secured Creditors, a continuing security interest (subject to those Liens
permitted to exist with respect to Collateral pursuant to the terms of all
Secured Debt Agreements then in effect) in all of the right, title and interest
of such Assignor in, to and under all of the following personal property and
fixtures (and all rights therein) of such Assignor, or in which or to which such
Assignor has any rights, in each case, whether now existing or hereafter from
time to time acquired:
(i) each and every Account;
(ii) all cash;
(iii) the Cash Collateral Account and all monies, securities,
Instruments and other investments deposited or required to be deposited in the
Cash Collateral Account;
(iv) all Chattel Paper (including, without limitation, all Tangible
Chattel Paper and all Electronic Chattel Paper);
(v) all Commercial Tort Claims (including all Commercial Tort
Claims described in Annex H hereto);
(vi) all computer programs of such Assignor and all intellectual
property rights therein and all other proprietary information of such Assignor,
including, but not limited to Domain Names and Trade Secret Rights;
(vii) all Contracts, together with all Contract Rights arising
thereunder;
(viii) all Copyrights;
(ix) all Equipment;
<Page>
Exhibit H
Page 3
(x) all Documents;
(xi) all General Intangibles;
(xii) all Goods;
(xiii) all Instruments;
(xiv) all Inventory;
(xv) all Investment Property;
(xvi) all Letter-of-Credit Rights (whether or not the respective
letter of credit is evidenced by a writing);
(xvii) all Marks, together with the registrations and right to all
renewals thereof, and the goodwill of the business of such Assignor symbolized
by the Marks;
(xviii) all Patents;
(xix) all Permits;
(xx) all Software and all Software licensing rights, all writings,
plans, specifications and schematics, all engineering drawings, customer lists,
goodwill and licenses, and all recorded data of any kind or nature, regardless
of the medium of recording;
(xxi) all Supporting Obligations; and
(xxii) all Proceeds and products of any and all of the foregoing (all
of the above, the "Collateral").
(b) The security interest of the Collateral Agent under this
Agreement extends to all Collateral which any Assignor may acquire, or with
respect to which any Assignor may obtain rights, at any time during the term of
this Agreement.
(c) Notwithstanding anything to the contrary contained herein, the
Collateral shall at no time include any items which would at such time
constitute Excluded Collateral.
1.2. POWER OF ATTORNEY. Each Assignor hereby constitutes and appoints
the Collateral Agent its true and lawful attorney, irrevocably, with full power
after the occurrence of and during the continuance of an Event of Default (in
the name of such Assignor or otherwise) to act, require, demand, receive,
compound and give acquittance for any and all moneys and claims for moneys due
or to become due to such Assignor under or arising out of the Collateral, to
endorse any checks or other instruments or orders in connection therewith and to
file any claims or take any action or institute any proceedings which the
Collateral Agent may deem to be necessary or advisable to protect the interests
of the Secured Creditors, which appointment as attorney is coupled with an
interest.
<Page>
Exhibit H
Page 4
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which representations,
warranties and covenants shall survive execution and delivery of this Agreement,
as follows:
2.1. NECESSARY FILINGS. All filings, registrations, recordings and
other actions necessary or appropriate to create, preserve and perfect the
security interest granted by such Assignor to the Collateral Agent hereby in
respect of the Collateral have been (or in the case of the filing of financing
statements, within 10 days following the Initial Borrowing Date shall have been)
accomplished and the security interest granted to the Collateral Agent pursuant
to this Agreement in and to the Collateral creates a valid, and together with
all such filings, registrations, recordings and other actions, a perfected
security interest therein prior to the rights of all other Persons therein and
subject to no other Liens (other than Permitted Liens) and is entitled to all
the rights, priorities and benefits afforded by the UCC or other relevant law as
enacted in any relevant jurisdiction to perfected security interests, in each
case to the extent that the Collateral consists of the type of property in which
a security interest may be perfected by possession or control (within the
meaning of the UCC as in effect on the date hereof in the State of New York), by
filing a financing statement under the UCC as enacted in any relevant
jurisdiction or by a filing of a Grant of Security Interest in the respective
form attached hereto in the United States Patent and Trademark Office or in the
United States Copyright Office; it being understood and agreed that this Section
2.1 shall not be breached as a result of the respective Assignor not delivering
to the Collateral Agent an Instrument not required to be so delivered pursuant
to Section 3.5 of this Agreement or not entering into a "control agreement" with
respect to any cash held by such Assignor.
2.2. NO LIENS. Such Assignor is, and as to all Collateral acquired by
it from time to time after the date hereof such Assignor will be, the owner of
all Collateral free from any Lien, security interest, encumbrance or other
right, title or interest of any Person (other than Permitted Liens), and such
Assignor shall defend the Collateral against all claims and demands of all
Persons (other than holders of Permitted Liens) at any time claiming the same or
any interest therein adverse to the Collateral Agent.
2.3. OTHER FINANCING STATEMENTS. As of the date hereof, there is no
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) covering or purporting to cover any interest of any
kind in the Collateral (other than financing statements (x) filed in respect of
Permitted Liens or (y) with respect to which the Collateral Agent shall have
received termination statements (Form UCC-3) or such other termination statement
as shall be required by local law authorized for filing)), and so long as the
Termination Date has not occurred, such Assignor will not execute or authorize
to be filed in any public office any financing statement (or similar statement
or instrument of registration under the law of any jurisdiction) or statements
relating to the Collateral, except financing statements filed or to be filed in
respect of and covering the security interests granted hereby by such Assignor
or in connection with Permitted Liens.
<Page>
Exhibit H
Page 5
2.4. CHIEF EXECUTIVE OFFICE, RECORD LOCATIONS. The chief executive
office of such Assignor is, on the date of this Agreement, located at the
address indicated on Annex A hereto for such Assignor. During the period of the
four calendar months preceding the date of this Agreement, the chief executive
office of such Assignor has not been located at any address other than that
indicated on Annex A in accordance with the immediately preceding sentence, in
each case unless each such other address is also indicated on Annex A hereto for
such Assignor.
2.5. LOCATION OF INVENTORY AND EQUIPMENT. All Inventory and Equipment
having a value in excess of $1,000,000 held on the date hereof, or held at any
time during the four calendar months prior to the date hereof, by each Assignor
is located at one of the locations shown on Annex B hereto for such Assignor.
2.6. TRADE NAMES; ETC. As of the date hereof, such Assignor has or
operates in any jurisdiction under, or in the preceding twelve months has had or
has operated in any jurisdiction under, no trade names, fictitious names or
other names except its legal name and such other trade or fictitious names as
are listed on Annex C hereto for such Assignor.
2.7. CERTAIN SIGNIFICANT TRANSACTIONS. During the one year period
preceding the date of this Agreement, no Person shall have merged or
consolidated with or into any Assignor, and no Person shall have liquidated
into, or transferred all or substantially all of its assets to, any Assignor, in
each case except as described in Annex D hereto.
2.8. COLLATERAL IN THE POSSESSION OF A BAILEE. If any Inventory or
other Goods having an aggregate value in excess of $2,000,000 are at any time in
the possession of a bailee, the such Assignor shall promptly notify the
Collateral Agent thereof and, if requested by the Collateral Agent, shall use
commercially reasonable efforts to promptly obtain an acknowledgment from such
bailee, in form and substance reasonably satisfactory to the Collateral Agent,
that the bailee holds such Collateral for the benefit of the Collateral Agent
and shall act upon the instructions of the Collateral Agent, without the further
consent of the such Assignor. The Collateral Agent agrees with such Assignor
that the Collateral Agent shall not give any such instructions unless an Event
of Default has occurred and is continuing or would occur after taking into
account any action by the respective Assignor with respect to any such bailee.
2.9. RECOURSE. This Agreement is made with full recourse to each
Assignor and pursuant to and upon all the warranties, representations, covenants
and agreements on the part of such Assignor contained herein, in the Secured
Debt Agreements and otherwise in writing in connection herewith or therewith.
ARTICLE III
SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS;
INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL
3.1. MAINTENANCE OF RECORDS. Each Assignor will keep and maintain at
its own cost and expense, and in accordance with industry practices, accurate
and complete records of its Accounts and Contracts, including records of all
payments received, all credits granted thereon,
<Page>
Exhibit H
Page 6
all merchandise returned and all other dealings therewith. Upon the occurrence
and during the continuance of an Event of Default and at the request of the
Collateral Agent, such Assignor shall, at its own cost and expense, deliver all
tangible evidence of its Accounts and Contract Rights (including, without
limitation, all documents evidencing the Accounts and all Contracts) and such
books and records to the Collateral Agent or to its representatives (copies of
which evidence and books and records may be retained by such Assignor). Upon the
occurrence and during the continuance of an Event of Default and if the
Collateral Agent so directs, such Assignor shall legend, in form and manner
reasonably satisfactory to the Collateral Agent, the Accounts and the Contracts,
as well as books, records and documents (if any) of such Assignor evidencing or
pertaining to such Accounts and Contracts with an appropriate reference to the
fact that such Accounts and Contracts have been assigned to the Collateral Agent
and that the Collateral Agent has a security interest therein.
3.2. DIRECTION TO ACCOUNT DEBTORS; CONTRACTING PARTIES; ETC. Upon the
occurrence and during the continuance of an Event of Default, if the Collateral
Agent so directs any Assignor, such Assignor agrees (x) that the Collateral
Agent may, at its option, directly notify (and upon the request of the
Collateral Agent, the respective Assignor shall notify) the obligors with
respect to any Accounts and/or under any Contracts to make payments with respect
thereto directly to the Cash Collateral Account and (y) that the Collateral
Agent may enforce collection of any such Accounts and Contracts and may adjust,
settle or compromise the amount of payment thereof, in the same manner and to
the same extent as such Assignor. Without notice to or assent by any Assignor,
the Collateral Agent may, upon the occurrence and during the continuance of an
Event of Default, apply any or all amounts then in, or thereafter deposited in,
the Cash Collateral Account toward the payment of the Obligations in the manner
provided in Section 7.4 of this Agreement. The reasonable costs and expenses of
collection (including reasonable attorneys' fees), whether incurred by an
Assignor or the Collateral Agent, shall be borne by the relevant Assignor. The
Collateral Agent shall deliver a copy of each notice referred to in the
preceding clause (x) to the relevant Assignor, PROVIDED that (x) the failure by
the Collateral Agent to so notify such Assignor shall not affect the
effectiveness of such notice or the other rights of the Collateral Agent created
by this Section 3.2 and (y) no such notice shall be required if an Event of
Default of the type described in Section 9.05 of the Credit Agreement has
occurred and is continuing.
3.3. MODIFICATION OF TERMS; ETC. Except in accordance with such
Assignor's ordinary course of business and consistent with reasonable business
judgment or as permitted by Section 3.4 or the Credit Agreement, no Assignor
shall rescind or cancel any indebtedness evidenced by any Account or under any
Contract, or modify any material term thereof or make any material adjustment
with respect thereto, or extend or renew the same, or compromise or settle any
material dispute, claim, suit or legal proceeding relating thereto, or sell any
Account or Contract, or interest therein, without the prior written consent of
the Collateral Agent. No Assignor will do anything to impair the rights of the
Collateral Agent in the Accounts or Contracts.
3.4. COLLECTION. Each Assignor shall endeavor in accordance with
reasonable business practices to cause to be collected from the account debtor
named in each of its Accounts or obligor under any Contract, as and when due
(including, without limitation, amounts which are delinquent, such amounts to be
collected in accordance with generally accepted lawful
<Page>
Exhibit H
Page 7
collection procedures) any and all amounts owing under or on account of such
Account or Contract, and apply forthwith upon receipt thereof all such amounts
as are so collected to the outstanding balance of such Account or under such
Contract. Except as otherwise directed by the Collateral Agent after the
occurrence and during the continuation of an Event of Default, any Assignor may
allow in the ordinary course of business as adjustments to amounts owing under
its Accounts and Contracts (i) an extension or renewal of the time or times of
payment, or settlement for less than the total unpaid balance, which such
Assignor finds appropriate in accordance with reasonable business judgment and
(ii) a refund or credit due as a result of returned or damaged merchandise or
improperly performed services or for other reasons which such Assignor finds
appropriate in accordance with reasonable business judgment. The reasonable
costs and expenses (including, without limitation, reasonable attorneys' fees)
of collection, whether incurred by an Assignor or the Collateral Agent, shall be
borne by the relevant Assignor.
3.5. INSTRUMENTS. If any Assignor owns or acquires any Instrument in
excess of $2,000,000 constituting Collateral (other than Cash Equivalents,
Foreign Cash Equivalents, checks and other payment instruments received and
collected in the ordinary course of business), such Assignor will within 20
Business Days notify the Collateral Agent thereof, and upon request by the
Collateral Agent will promptly deliver such Instrument to the Collateral Agent
appropriately endorsed to the order of the Collateral Agent.
3.6. ASSIGNORS REMAIN LIABLE UNDER ACCOUNTS. Anything herein to the
contrary notwithstanding, the Assignors shall remain liable under each of the
Accounts all in accordance with the terms of any agreement giving rise to such
Accounts. Neither the Collateral Agent nor any other Secured Creditor 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
Collateral Agent or any other Secured Creditor of any payment relating to such
Account pursuant hereto, nor shall the Collateral Agent or any other Secured
Creditor be obligated in any manner to perform any of the obligations of any
Assignor 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 them or as to the sufficiency of any
performance by any party under any Account (or any agreement giving rise
thereto), to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to them or to which they may be entitled at any time or times.
3.7. ASSIGNORS REMAIN LIABLE UNDER CONTRACTS. Anything herein to the
contrary notwithstanding, the Assignors shall remain liable under each of the
Contracts all in accordance with and pursuant to the terms and provisions of
each Contract. Neither the Collateral Agent nor any other Secured Creditor shall
have any obligation or liability under any Contract by reason of or arising out
of this Agreement or the receipt by the Collateral Agent or any other Secured
Creditor of any payment relating to such Contract pursuant hereto, nor shall the
Collateral Agent or any other Secured Creditor be obligated in any manner to
perform any of the obligations of any Assignor under or pursuant to any
Contract, to make any payment, to make any inquiry as to the nature or the
sufficiency of any performance by any party under any Contract, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to them or to which they may
be entitled at any time or times.
<Page>
Exhibit H
Page 8
3.8. LETTER-OF-CREDIT RIGHTS. If any Assignor is at any time a
beneficiary under a letter of credit with a stated amount of $2,000,000 or more,
such Assignor shall promptly notify the Collateral Agent thereof and, at the
request of the Collateral Agent, such Assignor shall, pursuant to an agreement
in form and substance reasonably satisfactory to the Collateral Agent, use
commercially reasonable efforts to either (i) arrange for the issuer and any
confirmer of such letter of credit to consent to an assignment to the Collateral
Agent of the proceeds of any drawing under such letter of credit or (ii) arrange
for the Collateral Agent to become the transferee beneficiary of such letter of
credit, with the Collateral Agent agreeing, in each case, that the proceeds of
any drawing under the letter of credit are to be applied as provided in this
Agreement after the occurrence and during the continuance of an Event of
Default.
3.9. COMMERCIAL TORT CLAIMS. All Commercial Tort Claims of each
Assignor in existence on the date of this Agreement are described in Annex E
hereto. If any Assignor shall at any time after the date of this Agreement
acquire a Commercial Tort Claim in an amount (calculated based on the reasonably
estimated value thereof) of $2,000,000 or more, such Assignor shall promptly
notify the Collateral Agent thereof in a writing signed by such Assignor and
describing the details thereof and shall grant to the Collateral Agent in such
writing a security interest therein and in the proceeds thereof, all upon the
terms of this Agreement, with such writing to be in form and substance
reasonably satisfactory to the Collateral Agent.
3.10. CHATTEL PAPER. Upon the request of the Collateral Agent made at
any time when an Event of Default exists and is continuing, each Assignor shall
promptly furnish to the Collateral Agent a list of all Electronic Chattel Paper
held or owned by such Assignor. Furthermore, if requested by the Collateral
Agent at any time when an Event of Default exists and is continuing, each
Assignor shall promptly take all actions which are reasonably practicable so
that the Collateral Agent has "control" of all Electronic Chattel Paper in
accordance with the requirements of Section 9-105 of the UCC. Each Assignor will
promptly (and in any event within 15 days) following any request made by the
Collateral Agent at any time when an Event of Default exists and is continuing,
deliver all of its Tangible Chattel Paper to the Collateral Agent.
3.11. FURTHER ACTIONS. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such vouchers, invoices, schedules, confirmatory assignments,
financing statements, transfer endorsements, certificates, reports and other
assurances or instruments and take such further steps (including, at any time
when an Event of Default exists and is continuing, any and all actions as may be
necessary or required under the Federal Assignment of Claims Act, but excluding
steps to establish "control" over cash of an Assignor), relating to its
Accounts, Contracts, Instruments and other property or rights covered by the
security interest hereby granted, as the Collateral Agent may reasonably
require.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS AND DOMAIN NAMES
4.1. ADDITIONAL REPRESENTATIONS AND WARRANTIES. Each Assignor
represents and warrants that, as of date hereof, it is the true and lawful owner
of or otherwise has the right to use
<Page>
Exhibit H
Page 9
the registered Marks and Domain Names listed in Annex F hereto for such Assignor
and that said listed Marks and Domain Names include all United States marks and
applications for United States marks registered in the United States Patent and
Trademark Office and all Domain Names that such Assignor owns or uses in
connection with its business as of the date hereof. Each Assignor represents and
warrants that it owns, is licensed to use or otherwise has the right to use, all
material Marks and material Domain Names that it uses. Each Assignor further
warrants that it has no knowledge of any third party claim received by it that
any aspect of such Assignor's present or contemplated business operations
infringes or will infringe any trademark, service mark or trade name of any
other Person other than is not, either individually or in the aggregate,
reasonably expected to have a Material Adverse Effect. All U.S. trademark
registrations and applications and Domain Name registrations listed in Annex F
hereto are, as of date hereof, valid, subsisting, have not been canceled, and
except as set forth on Annex F, no Assignor is aware of any third-party claim
that any of said registrations is invalid or unenforceable or is aware that
there is any reason that any of said registrations is invalid or unenforceable,
or is aware that there is any reason that any of said applications will not
mature into registrations. Each Assignor hereby grants to the Collateral Agent
an absolute power of attorney to sign, upon the occurrence and during the
continuance of an Event of Default, any document which may be required by the
United States Patent and Trademark Office or similar registrar in order to
effect an absolute assignment of all right, title and interest in each Mark
and/or Domain Name, and record the same.
4.2. LICENSES AND ASSIGNMENTS. Except as otherwise permitted by the
Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any
right under any Mark or Domain Name absent prior written approval of the
Collateral Agent.
4.3. INFRINGEMENTS. Each Assignor agrees, promptly upon learning
thereof, to notify the Collateral Agent in writing of the name and address of,
and to furnish such pertinent information that may be available with respect to,
any party who such Assignor believes is, or may be, infringing or diluting or
otherwise violating any of such Assignor's rights in and to any Mark or Domain
Name in any manner that could reasonably be expected to have a Material Adverse
Effect, or with respect to any party claiming that such Assignor's use of any
Mark or Domain Name material to such Assignor's business violates in any
material respect any property right of that party. Each Assignor further agrees
to prosecute diligently in accordance with reasonable business practices any
Person infringing any Mark or Domain Name in any manner that could reasonably be
expected to have a Material Adverse Effect.
4.4. PRESERVATION OF MARKS AND DOMAIN NAMES. Each Assignor agrees to
use its domestic Marks and Domain Names which are material to such Assignor's
business in interstate commerce during the time in which this Agreement is in
effect and to take all such other actions as are reasonably necessary to
preserve such Marks as trademarks or service marks under the laws of the United
States (other than any such Marks which are no longer used or useful in its
business or operations).
4.5. MAINTENANCE OF REGISTRATION. Except to the extent the aggregate
effect of all such failures to maintain such abandonments is not reasonably
expected to have a Material Adverse Effect, each Assignor shall, at its own
expense, diligently process all documents reasonably required to maintain all
Mark and/or Domain Name registrations, including but not limited
<Page>
Exhibit H
Page 10
to affidavits of use and applications for renewals of registration in the United
States Patent and Trademark Office for all of its material registered Marks, and
shall pay all fees and disbursements in connection therewith and shall not
abandon any such filing of affidavit of use or any such application of renewal
prior to the exhaustion of all administrative and judicial remedies without
prior written consent of the Collateral Agent (other than with respect to
registrations and applications deemed by such Assignor in its reasonable
business judgment to be no longer prudent to pursue).
4.6. FUTURE REGISTERED MARKS AND DOMAIN NAMES. If any Mark
registration is issued hereafter to any Assignor as a result of any application
now or hereafter pending before the United States Patent and Trademark Office or
any Domain Name is registered by any Assignor, within 30 days of receipt of such
certificate or similar indicia of ownership, such Assignor shall deliver to the
Collateral Agent a copy of such registration certificate or similar indicia of
ownership, and a grant of a security interest in such Mark and/or Domain Name,
to the Collateral Agent and at the expense of such Assignor, confirming the
grant of a security interest in such Mark and/or Domain Name to the Collateral
Agent hereunder, the form of such security to be substantially in the form of
Annex I hereto or in such other form as may be reasonably satisfactory to the
Collateral Agent.
4.7. REMEDIES. If an Event of Default shall occur and be continuing,
the Collateral Agent may, by written notice to the relevant Assignor, take any
or all of the following actions: (i) declare the entire right, title and
interest of such Assignor in and to each of the Marks and Domain Names, together
with all trademark rights and rights of protection to the same, vested in the
Collateral Agent for the benefit of the Secured Creditors, in which event such
rights, title and interest shall immediately vest, in the Collateral Agent for
the benefit of the Secured Creditors, and the Collateral Agent shall be entitled
to exercise the power of attorney referred to in Section 4.1 hereof to execute,
cause to be acknowledged and notarized and record said absolute assignment with
the applicable agency or registrar; (ii) take and use or sell the Marks or
Domain Names and the goodwill of such Assignor's business symbolized by the
Marks or Domain Names and the right to carry on the business and use the assets
of such Assignor in connection with which the Marks or Domain Names have been
used; and (iii) direct such Assignor to refrain, in which event such Assignor
shall refrain, from using the Marks or Domain Names in any manner whatsoever,
directly or indirectly, and such Assignor shall execute such further documents
that the Collateral Agent may reasonably request to further confirm this and to
transfer ownership of the Marks or Domain Names and registrations and any
pending trademark applications in the United States Patent and Trademark Office
or applicable Domain Name registrar to the Collateral Agent.
ARTICLE V
SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1. ADDITIONAL REPRESENTATIONS AND WARRANTIES. Each Assignor
represents and warrants that, as of the date hereof, it is the true and lawful
owner of all rights in (i) all Trade Secret Rights, (ii) the Patents listed in
Annex G hereto for such Assignor and that said Patents include all the United
States patents and applications for United States patents that such Assignor
owns as of the date hereof and (iii) the Copyrights listed in Annex H hereto for
such Assignor
<Page>
Exhibit H
Page 11
and that said Copyrights include all the United States copyrights registered
with the United States Copyright Office and applications to United States
copyrights that such Assignor owns as of the date hereof. Each Assignor further
warrants that it has no knowledge of any third party claim that any aspect of
such Assignor's present or contemplated business operations infringes or will
infringe any patent of any other Person or such Assignor has misappropriated any
trade secret or proprietary information which, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect. Each
Assignor hereby grants to the Collateral Agent an absolute power of attorney to
sign, upon the occurrence and during the continuance of any Event of Default,
any document which may be required by the United States Patent and Trademark
Office or the United States Copyright Office in order to effect an absolute
assignment of all right, title and interest in each Patent or Copyright, and to
record the same.
5.2. LICENSES AND ASSIGNMENTS. Except as otherwise permitted by the
Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any
right under any Patent or Copyright absent prior written approval of the
Collateral Agent.
5.3. INFRINGEMENTS. Each Assignor agrees, promptly upon learning
thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to any infringement,
contributing infringement or active inducement to infringe or other violation of
such Assignor's rights in any Patent or Copyright or to any claim that the
practice of any Patent or use of any Copyright violates any property right of a
third party, or with respect to any misappropriation of any Trade Secret Right
or any claim that practice of any Trade Secret Right violates any property right
of a third party, in each case, in any manner which, either individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
Each Assignor further agrees, absent direction of the Collateral Agent to the
contrary, to diligently prosecute, in accordance with its reasonable business
judgment, any Person infringing any Patent or Copyright or any Person
misappropriating any Trade Secret Right, in each case to the extent that such
infringement or misappropriation, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
5.4. MAINTENANCE OF PATENTS OR COPYRIGHTS. At its own expense, each
Assignor shall make timely payment of all post-issuance fees required to
maintain in force its rights under each Patent or Copyright, absent prior
written consent of the Collateral Agent (other than any such Patents or
Copyrights which are no longer used or are deemed by such Assignor in its
reasonable business judgment to no longer be useful in its business or
operations or to the extent that the aggregate effect of all failures to do same
is not reasonably expected to have a Material Adverse Effect).
5.5. PROSECUTION OF PATENT OR COPYRIGHT APPLICATIONS. At its own
expense, each Assignor shall diligently prosecute all material applications for
(i) United States Patents listed in Annex G hereto and (ii) Copyrights listed on
Annex H hereto, in each case for such Assignor and shall not abandon any such
application prior to exhaustion of all administrative and judicial remedies
(other than applications that are deemed by such Assignor in its reasonable
business judgment to no longer be prudent to pursue), absent written consent of
the Collateral Agent.
5.6. OTHER PATENTS AND COPYRIGHTS. Within 30 days of the acquisition
or issuance of a United States Patent, registration of a Copyright, or
acquisition of a registered Copyright, or
<Page>
Exhibit H
Page 12
of filing of an application for a United States Patent or Copyright, the
relevant Assignor shall deliver to the Collateral Agent a copy of said Copyright
or Patent, or certificate or registration of, or application therefor, as the
case may be, with a grant of a security interest as to such Patent or Copyright,
as the case may be, to the Collateral Agent and at the expense of such Assignor,
confirming the grant of a security interest, the form of such grant of a
security interest to be substantially in the form of Annex J or K hereto, as
appropriate, or in such other form as may be reasonably satisfactory to the
Collateral Agent.
5.7. REMEDIES. If an Event of Default shall occur and be continuing,
the Collateral Agent may, by written notice to the relevant Assignor, take any
or all of the following actions: (i) declare the entire right, title, and
interest of such Assignor in each of the Patents and Copyrights vested in the
Collateral Agent for the benefit of the Secured Creditors, in which event such
right, title, and interest shall immediately vest in the Collateral Agent for
the benefit of the Secured Creditors, in which case the Collateral Agent shall
be entitled to exercise the power of attorney referred to in Section 5.1 hereof
to execute, cause to be acknowledged and notarized and to record said absolute
assignment with the applicable agency; (ii) take and practice or sell the
Patents and Copyrights; and (iii) direct such Assignor to refrain, in which
event such Assignor shall refrain, from practicing the Patents and using the
Copyrights directly or indirectly, and such Assignor shall execute such further
documents as the Collateral Agent may reasonably request further to confirm this
and to transfer ownership of the Patents and Copyrights to the Collateral Agent
for the benefit of the Secured Creditors.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. PROTECTION OF COLLATERAL AGENT'S SECURITY. Except as otherwise
permitted by the Secured Debt Agreements, each Assignor will do nothing to
impair the rights of the Collateral Agent in the Collateral. Each Assignor will
at all times maintain insurance, at such Assignor's own expense to the extent
and in the manner provided in the Secured Debt Agreements. Each Assignor assumes
all liability and responsibility in connection with the Collateral acquired by
it and the liability of such Assignor to pay the Obligations shall in no way be
affected or diminished by reason of the fact that such Collateral may be lost,
destroyed, stolen, damaged or for any reason whatsoever unavailable to such
Assignor.
6.2. WAREHOUSE RECEIPTS NON-NEGOTIABLE. To the extent practicable,
each Assignor agrees that if any warehouse receipt or receipt in the nature of a
warehouse receipt is issued with respect to any of its Inventory, such Assignor
shall request that such warehouse receipt or receipt in the nature thereof shall
not be "negotiable" (as such term is used in Section 7-104 of the UCC as in
effect in any relevant jurisdiction or under other relevant law).
6.3. ADDITIONAL INFORMATION. Each Assignor will, at its own expense,
from time to time upon the reasonable request of the Collateral Agent, promptly
(and in any event within 10 days after its receipt of the respective request)
furnish to the Collateral Agent such information with respect to the Collateral
(including the identity of the Collateral or such components thereof and the
owner thereof as may have been requested by the Collateral Agent, the value and
location of such Collateral, etc.) as may be requested by the Collateral Agent.
<Page>
Exhibit H
Page 13
6.4. FURTHER ACTIONS. Each Assignor will, at its own expense and upon
the reasonable request of the Collateral Agent, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
descriptions of its Collateral, warehouse receipts, receipts in the nature of
warehouse receipts, bills of lading, documents of title, vouchers, invoices,
schedules, confirmatory assignments, financing statements, transfer
endorsements, certificates, reports and other assurances or instruments and take
such further steps (other than steps to establish "control" over cash of an
Assignor) relating to the Collateral and other property or rights covered by the
security interest hereby granted, which the Collateral Agent deems reasonably
necessary or advisable to perfect, preserve or protect its security interest in
the Collateral.
6.5. FINANCING STATEMENTS. Each Assignor agrees to authorize or
execute and deliver to the Collateral Agent such financing statements, in form
reasonably acceptable to the Collateral Agent, as the Collateral Agent may from
time to time reasonably request or as are reasonably necessary or desirable in
the opinion of the Collateral Agent to establish and maintain a valid,
enforceable, perfected security interest in the Collateral as provided herein
and the other rights and security contemplated hereby. Each Assignor will pay
any applicable filing fees, recordation taxes and related expenses relating to
its Collateral. Each Assignor hereby authorizes the Collateral Agent to file any
such financing statements without the signature of such Assignor where permitted
by law (and such authorization includes describing the Collateral as "all
assets" of such Assignor).
ARTICLE VII
REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT
7.1. REMEDIES; OBTAINING THE COLLATERAL UPON AN EVENT OF DEFAULT. Each
Assignor agrees that, if any Event of Default shall have occurred and be
continuing, then and in every such case, the Collateral Agent, in addition to
any rights now or hereafter existing under applicable law and under the other
provisions of this Agreement, shall have all rights as a secured creditor under
any UCC, and such additional rights and remedies to which a secured creditor is
entitled under the laws in effect in all relevant jurisdictions and may:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from such Assignor or any
other Person who then has possession of any part thereof with or without
notice or process of law, and for that purpose may enter upon such
Assignor's premises where any of the Collateral is located and remove the
same and use in connection with such removal any and all services,
supplies, aids and other facilities of such Assignor;
(ii) upon notice to the applicable Assignor (although no failure to
give any such notice shall affect the Collateral Agent's rights hereunder),
instruct the obligor or obligors on any agreement, instrument or other
obligation (including, without limitation, the Accounts and the Contracts)
constituting the Collateral to make any payment required by the terms of
such agreement, instrument or other obligation directly to the Collateral
Agent and may exercise any and all remedies of such Assignor in respect of
such Collateral;
<Page>
Exhibit H
Page 14
(iii) sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof in accordance with Section 7.2 hereof, or
direct such Assignor to sell, assign or otherwise liquidate any or all of
the Collateral or any part thereof, and, in each case, take possession of
the proceeds of any such sale or liquidation;
(iv) take possession of the Collateral or any part thereof, by
directing such Assignor in writing to deliver the same to the Collateral
Agent at any reasonable place or places designated by the Collateral Agent,
in which event such Assignor shall at its own expense:
(x) forthwith cause the same to be moved to the place or
places so designated by the Collateral Agent and there delivered to
the Collateral Agent;
(y) store and keep any Collateral so delivered to the
Collateral Agent at such place or places pending further action by the
Collateral Agent as provided in Section 7.2 hereof; and
(z) while the Collateral shall be so stored and kept, provide
such security and maintenance services as shall be reasonably
necessary to protect the same and to preserve and maintain it in good
condition;
(v) license or sublicense, whether on an exclusive or nonexclusive
basis, any Marks, Domain Names, Patents or Copyrights included in the
Collateral for such term and on such conditions and in such manner as the
Collateral Agent shall in its sole judgment determine;
(vi) apply any monies constituting Collateral or proceeds thereof
in accordance with the provisions of Section 7.4; and
(vii) take any other action as specified in clauses (1) through (5),
inclusive, of Section 9-607(a) of the UCC;
it being understood that each Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by such Assignor of said obligation. By
accepting the benefits of this Agreement and each other Security Document, the
Secured Creditors expressly acknowledge and agree that this Agreement and each
other Security Document may be enforced only by the action of the Collateral
Agent acting upon the instructions of the Required Secured Creditors and that no
other Secured Creditor shall have any right individually to seek to enforce or
to enforce this Agreement or to realize upon the security to be granted hereby,
it being understood and agreed that such rights and remedies may be exercised by
the Collateral Agent or the holders of at least a majority of the outstanding
Other Obligations, as the case may be, for the benefit of the Secured Creditors
upon the terms of this Agreement and the other Security Documents.
7.2. REMEDIES; DISPOSITION OF THE COLLATERAL. If any Event of Default
shall have occurred and be continuing, then any Collateral repossessed by the
Collateral Agent under or pursuant to Section 7.1 hereof and any other
Collateral whether or not so repossessed by the
<Page>
Exhibit H
Page 15
Collateral Agent, may be sold, assigned, leased or otherwise disposed of under
one or more contracts or as an entirety, and without the necessity of gathering
at the place of sale the property to be sold, and in general in such manner, at
such time or times, at such place or places and on such terms as the Collateral
Agent may, in compliance with any mandatory requirements of applicable law,
determine to be commercially reasonable. Any of the Collateral may be sold,
leased or otherwise disposed of, in the condition in which the same existed when
taken by the Collateral Agent or after any overhaul or repair at the expense of
the relevant Assignor which the Collateral Agent shall determine to be
commercially reasonable. Any such sale, lease or other disposition may be
effected by means of a public disposition or private disposition, effected in
accordance with the applicable requirements (in each case if and to the extent
applicable) of Sections 9-610 through 9-613 of the UCC and/or such other
mandatory requirements of applicable law as may apply to the respective
disposition. The Collateral Agent may, without notice or publication, adjourn
any public or private disposition or cause the same to be adjourned from time to
time by announcement at the time and place fixed for the disposition, and such
disposition may be made at any time or place to which the disposition may be so
adjourned. To the extent permitted by any such requirement of law, the
Collateral Agent may bid for and become the purchaser (and may pay all or any
portion of the purchase price by crediting Obligations against the purchase
price) of the Collateral or any item thereof, offered for disposition in
accordance with this Section 7.2 without accountability to the relevant Assignor
(except to the extent such purchase price exceeds the amount of the Obligations
with such excess to be applied in accordance with Section 7.4(v) of this
Agreement). If, under applicable law, the Collateral Agent shall be permitted to
make disposition of the Collateral within a period of time which does not permit
the giving of notice to the relevant Assignor as hereinabove specified, the
Collateral Agent need give such Assignor only such notice of disposition as
shall be required by such applicable law. Each Assignor agrees to do or cause to
be done all such other acts and things as may be reasonably necessary to make
such disposition or dispositions of all or any portion of the Collateral valid
and binding and in compliance with any and all applicable laws, regulations,
orders, writs, injunctions, decrees or awards of any and all courts, arbitrators
or governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at such Assignor's expense.
7.3. WAIVER OF CLAIMS. Except as otherwise provided in this Agreement
or the other Secured Debt Agreements, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE
COLLATERAL AGENT'S TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF
ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE
AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each Assignor hereby
further waives, to the extent permitted by law:
(i) all damages occasioned by such taking of possession or any
such disposition except any damages which are the direct result of the
Collateral Agent's (or of its officers', directors', employees', agents' or
affiliates') gross negligence or willful misconduct;
<Page>
Exhibit H
Page 16
(ii) all other requirements as to the time, place and terms of sale
or other requirements with respect to the enforcement of the Collateral
Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law
in order to prevent or delay the enforcement of this Agreement or the
absolute sale of the Collateral or any portion thereof, and each Assignor,
for itself and all who may claim under it, insofar as it or they now or
hereafter lawfully may, hereby waives the benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the relevant Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Assignor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under such Assignor.
7.4. APPLICATION OF PROCEEDS. (a) All moneys collected by the
Collateral Agent (or, to the extent the Pledge Agreement or any other Security
Document requires proceeds of collateral under such other Security Document to
be applied in accordance with the provisions of this Agreement, the Pledgee,
collateral agent, mortgagee or trustee under such other Security Document) upon
any sale or other disposition of the Collateral, together with all other moneys
received by the Collateral Agent hereunder while any Event of Default exists and
is continuing, shall be applied as follows:
(i) first, to the payment of all amounts owing the Collateral
Agent of the type described in clauses (iii), (iv) and (v) of the
definition of "Obligations";
(ii) second, to the extent proceeds remain after the application
pursuant to the preceding clause (i), to the payment of all amounts owing
to each Agent of the type described in clauses (v) (except to the extent
already applied pursuant to preceding clause (i)) and (vi) of the
definition of "Obligations";
(iii) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) and (ii), an amount equal to the
outstanding Primary Obligations shall be paid to the Secured Creditors as
provided in Section 7.4(e) hereof, with each Secured Creditor receiving an
amount equal to its outstanding Primary Obligations or, if the proceeds are
insufficient to pay in full all such Primary Obligations, its Pro Rata
Share of the amount remaining to be distributed;
(iv) fourth, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) through (iii), inclusive, an amount
equal to the outstanding Secondary Obligations shall be paid to the Secured
Creditors as provided in Section 7.4(e) hereof, with each Secured Creditor
receiving an amount equal to its outstanding Secondary Obligations or, if
the proceeds are insufficient to pay in full all such Secondary
Obligations, its Pro Rata Share of the amount remaining to be distributed;
and
<Page>
Exhibit H
Page 17
(v) fifth, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) through (iv), inclusive to the
relevant Assignor or to whomever may be lawfully entitled to receive such
surplus.
(b) For purposes of this Agreement, (x) "PRO RATA SHARE" shall
mean, when calculating a Secured Creditor's portion of any distribution or
amount, that amount (expressed as a percentage) equal to a fraction the
numerator of which is the then unpaid amount of such Secured Creditor's Primary
Obligations or Secondary Obligations, as the case may be, and the denominator of
which is the then outstanding amount of all Primary Obligations or Secondary
Obligations, as the case may be, (y) "PRIMARY OBLIGATIONS" shall mean (i) in the
case of the Credit Document Obligations, all principal of, premium, fees and
interest on, all Loans, all Unpaid Drawings, the Stated Amount of all
outstanding Letters of Credit and all Fees and (ii) in the case of the Other
Obligations, all amounts due under each Covered Agreement with an Other Creditor
(other than indemnities, fees (including, without limitation, attorneys' fees)
and similar obligations and liabilities) and (z) "SECONDARY OBLIGATIONS" shall
mean all Obligations other than Primary Obligations.
(c) When payments to Secured Creditors are based upon their
respective Pro Rata Shares, the amounts received by such Secured Creditors
hereunder shall be applied (for purposes of making determinations under this
Section 7.4 only) (i) first, to their Primary Obligations and (ii) second, to
their Secondary Obligations. If any payment to any Secured Creditor of its Pro
Rata Share of any distribution would result in overpayment to such Secured
Creditor, such excess amount shall instead be distributed in respect of the
unpaid Primary Obligations or Secondary Obligations, as the case may be, of the
other Secured Creditors, with each Secured Creditor whose Primary Obligations or
Secondary Obligations, as the case may be, have not been paid in full to receive
an amount equal to such excess amount multiplied by a fraction the numerator of
which is the unpaid Primary Obligations or Secondary Obligations, as the case
may be, of such Secured Creditor and the denominator of which is the unpaid
Primary Obligations or Secondary Obligations, as the case may be, of all Secured
Creditors entitled to such distribution.
(d) Each of the Secured Creditors, by their acceptance of the
benefits hereof and of the other Security Documents, agrees and acknowledges
that if the Lender Creditors receive a distribution on account of undrawn
amounts with respect to Letters of Credit issued under the Credit Agreement
(which shall only occur after all outstanding Revolving Loans under the Credit
Agreement and Unpaid Drawings have been paid in full), such amounts shall be
paid to the Administrative Agent under the Credit Agreement and held by it, for
the equal and ratable benefit of the Lender Creditors, as cash security for the
repayment of Obligations owing to the Lender Creditors as such. If any amounts
are held as cash security pursuant to the immediately preceding sentence, then
upon the termination of all outstanding Letters of Credit under the Credit
Agreement, and after the application of all such cash security to the repayment
of all Obligations owing to the Lender Creditors after giving effect to the
termination of all such Letters of Credit, if there remains any excess cash,
such excess cash shall be returned by the Administrative Agent to the Collateral
Agent for distribution in accordance with Section 7.4(a) hereof.
(e) All payments required to be made hereunder shall be made (x)
if to the Lender Creditors, to the Administrative Agent for the account of the
Lender Creditors and (y) if
<Page>
Exhibit H
Page 18
to the Other Creditors, to the trustee, paying agent or other similar
representative (each a "REPRESENTATIVE") for the Other Creditors or, in the
absence of such a Representative, directly to the Other Creditors.
(f) For purposes of applying payments received in accordance with
this Section 7.4, the Collateral Agent shall be entitled to rely upon (i) the
Administrative Agent and (ii) the Representative or, in the absence of such a
Representative, upon the Other Creditors for a determination (which the
Administrative Agent, each Representative and the Other Creditors agree (or
shall agree) to provide upon request of the Collateral Agent) of the outstanding
Primary Obligations and Secondary Obligations owed to the Lender Creditors or
the Other Creditors, as the case may be. Unless it has received written notice
from a Lender Creditor or an Other Creditor to the contrary, the Administrative
Agent and each Representative, in furnishing information pursuant to the
preceding sentence, and the Collateral Agent, in acting hereunder, shall be
entitled to assume that no Secondary Obligations are outstanding. Unless it has
written notice from an Other Creditor to the contrary, the Collateral Agent, in
acting hereunder, shall be entitled to assume that no Interest Rate Protection
Agreements or Other Hedging Agreements are in existence.
(g) It is understood that the Assignors shall remain jointly and
severally liable to the extent of any deficiency between the amount of the
proceeds of the Collateral and the aggregate amount of the Obligations.
7.5. REMEDIES CUMULATIVE. Each and every right, power and remedy
hereby specifically given to the Collateral Agent shall be in addition to every
other right, power and remedy specifically given to the Collateral Agent under
this Agreement, the other Secured Debt Agreements or now or hereafter existing
at law, in equity or by statute and each and every right, power and remedy
whether specifically herein given or otherwise existing may be exercised from
time to time or simultaneously and as often and in such order as may be deemed
expedient by the Collateral Agent. All such rights, powers and remedies shall be
cumulative and the exercise or the beginning of the exercise of one shall not be
deemed a waiver of the right to exercise any other or others. No delay or
omission of the Collateral Agent in the exercise of any such right, power or
remedy and no renewal or extension of any of the Obligations shall impair any
such right, power or remedy or shall be construed to be a waiver of any Default
or Event of Default or an acquiescence thereof. No notice to or demand on any
Assignor in any case shall entitle it to any other or further notice or demand
in similar or other circumstances or constitute a waiver of any of the rights of
the Collateral Agent to any other or further action in any circumstances without
notice or demand. In the event that the Collateral Agent shall bring any suit to
enforce any of its rights hereunder and shall be entitled to judgment, then in
such suit the Collateral Agent may recover reasonable expenses, including
reasonable attorneys' fees, and the amounts thereof shall be included in such
judgment.
7.6. DISCONTINUANCE OF PROCEEDINGS. In case the Collateral Agent shall
have instituted any proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall
have been discontinued or abandoned for any reason or shall have been determined
adversely to the Collateral Agent, then and in every such case the relevant
Assignor, the Collateral Agent and each holder of any of the Obligations shall
be restored to their former positions and rights hereunder with respect to the
Collateral subject to
<Page>
Exhibit H
Page 19
the security interest created under this Agreement, and all rights, remedies and
powers of the Collateral Agent shall continue as if no such proceeding had been
instituted (except to the extent of a determination adverse to the Collateral
Agent in such a proceeding).
ARTICLE VIII
INDEMNITY
8.1. INDEMNITY. (a) Each Assignor jointly and severally agrees to
indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor
and their respective successors, assigns, employees, affiliates and agents
(hereinafter in this Section 8.1 referred to individually as "INDEMNITEE," and
collectively as "INDEMNITEES") harmless from any and all liabilities,
obligations, damages, injuries, penalties, claims, demands, actions, suits,
judgments and any and all costs, expenses or disbursements (including reasonable
attorneys' fees and expenses) (for the purposes of this Section 8.1 the
foregoing are collectively called "expenses") of whatsoever kind and nature
imposed on, asserted against or incurred by any of the Indemnitees (i) as a
result of, or in any way relating to, or arising out of, or by reason of, any
investigation, litigation or other proceeding (whether or not any Indemnitee is
party thereto and whether or not such investigation, litigation or other
proceeding is between or among any Indemnitee, any Assignor or any third Person
or otherwise) in any way relating to or arising out of this Agreement, any other
Secured Debt Agreement or any other document executed in connection herewith or
therewith or (ii) in connection with (x) the administration of the transactions
contemplated hereby or thereby or (y) the enforcement of any of the terms of, or
the preservation of any rights under this Agreement, any other Secured Debt
Agreement or any other document executed in connection herewith or therewith
(including, without limitation, the reasonable fees and disbursements of counsel
for the Secured Creditors, provided that, except in the case of a bankruptcy of
any Assignor, no more than one counsel for the Indemnitees may be used in any
one jurisdiction), or (iii) in any way relating to or arising out of the
manufacture, ownership, ordering, purchase, delivery, control, acceptance,
lease, financing, possession, operation, condition, sale, return or other
disposition, or use of the Collateral (including, without limitation, latent or
other defects, whether or not discoverable), the violation of the laws of any
country, state or other governmental body or unit, any tort (including, without
limitation, claims arising or imposed under the doctrine of strict liability, or
for or on account of injury to or the death of any Person (including any
Indemnitee), or property damage), or contract claim; provided that no Indemnitee
shall be indemnified pursuant to this Section 8.1(a) for losses, damages or
liabilities to the extent caused by the gross negligence or willful misconduct
of such Indemnitee or an affiliate thereof (as determined by a court of
competent jurisdiction in a final and non-appealable decision). Each Assignor
agrees that upon written notice by any Indemnitee of the assertion of such a
liability, obligation, damage, injury, penalty, claim, demand, action, suit or
judgment, the relevant Assignor shall assume full responsibility for the defense
thereof. Each Indemnitee agrees to use its best efforts to promptly notify the
relevant Assignor of any such assertion of which such Indemnitee has knowledge.
(b) Without limiting the application of Section 8.1(a) hereof,
each Assignor agrees, jointly and severally, to pay or reimburse the Collateral
Agent for any and all reasonable fees, costs and out-of-pocket expenses of
whatever kind or nature incurred in connection with the creation, preservation
or protection of the Collateral Agent's Liens on, and security interest in,
<Page>
Exhibit H
Page 20
the Collateral (including, without limitation, (x) all fees and taxes in
connection with the recording or filing of instruments and documents in public
offices and (y) all amounts expended in connection with the payment or discharge
of any taxes or Liens upon or in respect of the Collateral or any premiums for
insurance with respect to the Collateral, in each case described in this clause
(y) paid or incurred by the Collateral Agent after the respective Assignor has
failed to comply with its obligations under the respective Credit Documents to
pay such amounts or obtain any such insurance within the respective time periods
(if any) set forth therein) and all other reasonable fees, costs and
out-of-pocket expenses in connection with protecting, maintaining or preserving
the Collateral and the Collateral Agent's interest therein, whether through
judicial proceedings or otherwise, or in defending or prosecuting any actions,
suits or proceedings arising out of or relating to the Collateral.
(c) Without limiting the application of Section 8.1(a) or (b)
hereof, each Assignor agrees, jointly and severally, to pay, indemnify and hold
each Indemnitee harmless from and against any loss, costs, damages and expenses
which such Indemnitee may suffer, expend or incur in consequence of or growing
out of any misrepresentation by any Assignor in this Agreement, any other
Secured Debt Agreement or in any writing contemplated by or made or delivered
pursuant to or in connection with this Agreement or any other Secured Debt
Agreement.
(d) If and to the extent that the obligations of any Assignor
under this Section 8.1 are unenforceable for any reason, such Assignor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
8.2. INDEMNITY OBLIGATIONS SECURED BY COLLATERAL; SURVIVAL. Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all of the
other Obligations and notwithstanding the full payment of all the Notes issued,
and Loans made, under the Credit Agreement, the termination of all Letters of
Credit issued under the Credit Agreement, the termination of all Covered
Agreements entered into with the Other Creditors and the payment of all other
Obligations and notwithstanding the discharge thereof and the occurrence of the
Termination Date.
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified. Such
definitions shall be equally applicable to the singular and plural forms of the
terms defined.
"Account" shall mean any "account" as such term is defined in the UCC
as in effect on the date hereof in the State of New York, and in any event shall
include but shall not be limited to, all rights to payment of any monetary
obligation, whether or not earned by performance, (i) for property that has been
or is to be sold, leased, licensed, assigned or otherwise disposed of, (ii) for
services rendered or to be rendered, (iii) for a policy of insurance
<Page>
Exhibit H
Page 21
issued or to be issued, (iv) for a secondary obligation incurred or to be
incurred, (v) for energy provided or to be provided, (vi) for the use or hire of
a vessel under a charter or other contract, (vii) arising out of the use of a
credit or charge card or information contained on or for use with the card, or
(viii) as winnings in a lottery or other game of chance operated or sponsored by
a State, governmental unit of a State, or person licensed or authorized to
operate the game by a State or governmental unit of a State. Without limiting
the foregoing, the term "account" shall include all Health-Care-Insurance
Receivables.
"Administrative Agent" shall have the meaning provided in the recitals
of this Agreement.
"Agreement" shall mean this Security Agreement as the same may be
amended, modified, restated and/or, supplemented or amended from time to time
in accordance with its terms.
"Assignor" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrower" shall have the meaning provided in the recitals of this
Agreement.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Collateral Agent for the benefit of the Secured Creditors.
"Chattel Paper" shall mean "chattel paper" as such term is defined in
the UCC as in effect on the date hereof in the State of New York. Without
limiting the foregoing, the term "Chattel Paper" shall in any event include all
Tangible Chattel Paper and all Electronic Chattel Paper.
"Class" shall have the meaning provided in Section 10.2 of this
Agreement.
"Collateral" shall have the meaning provided in Section 1.1(a) of
this Agreement.
"Collateral Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Commercial Tort Claims" shall mean "commercial tort claims" as such
term is defined in the UCC as in effect on the date hereof in the State of New
York.
"Contract Rights" shall mean all rights of any Assignor under each
Contract, including, without limitation, (i) any and all rights to receive and
demand payments under any or all Contracts, (ii) any and all rights to receive
and compel performance under any or all Contracts and (iii) any and all other
rights, interests and claims now existing or in the future arising in connection
with any or all Contracts.
"Contracts" shall mean all contracts between any Assignor and one or
more additional parties (including, without limitation, any Interest Rate
Protection Agreements, Other Hedging Agreements, licensing agreements and any
partnership agreements, joint venture agreements
<Page>
Exhibit H
Page 22
and limited liability company agreements), except to the extent that the grant
by an Assignor of a security interest pursuant to this Agreement in its right,
title and interest in any such contract is prohibited by such contract without
the consent of any other party thereto (that has not been obtained) or would
give any other party to such contract the right to terminate its obligations
thereunder; PROVIDED, that the foregoing limitation (i) shall not affect, limit,
restrict or impair the grant by an Assignor of a security interest pursuant to
this Agreement in any Account or any money or other amounts due or to become due
under any such contract and (ii) shall not apply to the extent the provisions
contained in such contract which prohibit such a grant by an Assignor or provide
such other party such a termination right would be rendered unenforceable in
accordance with applicable law (including the UCC) or principles of equity.
"Copyrights" shall mean any United States or foreign copyright now or
hereafter owned by any Assignor, including any registrations of any copyrights,
in the United States Copyright Office or any foreign equivalent office, as well
as any application for a copyright registration now or hereafter made with the
United States Copyright Office or any foreign equivalent office by any Assignor.
"Credit Agreement" shall have the meaning provided in the recitals of
this Agreement.
"Credit Document Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Documents" shall mean "documents" as such term is defined in the UCC
as in effect on the date hereof in the State of New York.
"Domain Names" shall mean all Internet domain names and associated URL
addresses in or to which any Assignor now or hereafter has any right, title or
interest.
"Electronic Chattel Paper" shall mean "electronic chattel paper" as
such term is defined in the UCC as in effect on the date hereof in the State of
New York.
"Equipment" shall mean any "equipment" as such term is defined in the
UCC as in effect on the date hereof in the State of New York, and in any event,
shall include, but shall not be limited to, all machinery, equipment,
furnishings, fixtures and vehicles now or hereafter owned by any Assignor and
any and all additions, substitutions and replacements of any of the foregoing
and all accessions thereto, wherever located, together with all attachments,
components, parts, equipment and accessories installed thereon or affixed
thereto.
"Event of Default" shall mean any Event of Default under, and as
defined in, the Credit Agreement and shall in any event include, without
limitation, any payment default on any of the Obligations after the expiration
of any applicable grace period.
"Excluded Collateral" shall mean assets of any Assignor subject to (i)
Liens permitted under Section 8.03(d) of the Credit Agreement, (ii) Liens
permitted under Section 8.03(l) of the Credit Agreement, (iii) Liens permitted
under Section 8.03(m) of the Credit Agreement and (iv) Liens permitted under
Section 8.03(n) of the Credit Agreement in each case of clauses (i) through (iv)
inclusive, to the extent, and only to the extent, that such Liens secure
<Page>
Exhibit H
Page 23
Capitalized Lease Obligations or purchase money Indebtedness and the instrument
evidencing the purchase money Indebtedness or Capitalized Lease Obligations, as
the case may be, secured by such Lien expressly prohibits any other Lien on such
assets and only for so long as such purchase money Indebtedness or Capitalized
Lease Obligations, as the case may be, remains or remain outstanding. Upon the
earlier of the termination of the respective prohibition contained in any such
instrument or the satisfaction of the respective Indebtedness, the assets
securing (or which secured) such respective Indebtedness shall no longer
constitute "Excluded Collateral" without any further action on the part of any
Assignor, the Collateral Agent, any other Secured Creditor or any other Person.
"General Intangibles" shall mean "general intangibles" as such term is
defined in the UCC as in effect on the date hereof in the State of New York.
"Goods" shall mean "goods" as such term is defined in the UCC as in
effect on the date hereof in the State of New York.
"Health-Care-Insurance Receivable" shall mean any
"health-care-insurance receivable" as such term is defined in the UCC as in
effect on the date hereof in the State of New York.
"Holdings" shall have the meaning provided in the recitals hereto.
"Indemnitee" shall have the meaning provided in Section 8.1(a) of this
Agreement.
"Instrument " shall mean "instruments" as such term is defined in the
UCC as in effect on the date hereof in the State of New York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof and all accessions thereto,
wherever located, together with all goods, supplies, incidentals, packaging
materials, labels, materials and any other items used or usable in
manufacturing, processing, packaging or shipping same, in all stages of
production from raw materials through work in process to finished goods, and all
products and proceeds of whatever sort and wherever located any portion thereof
which may be returned, rejected, reclaimed or repossessed by the Collateral
Agent from any Assignor's customers, and shall specifically include all
"inventory" as such term in defined in the UCC as in effect on the date hereof
in the State of New York.
"Investment Property" shall mean "investment property" as such term is
defined in the UCC as in effect on the date hereof in the State of New York but
in any event shall not include any such "investment property" which is not
required to be pledged to the "Pledgee" under and pursuant to the Pledge
Agreement by operation of the last paragraph of Section 3.1 thereof.
"Lender Creditors " shall have the meaning provided in the recitals of
this Agreement.
"Lenders" shall have the meaning provided in the recitals of this
Agreement.
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Exhibit H
Page 24
"Letter-of-Credit Rights" shall mean "letter-of-credit rights" as such
term is defined in the UCC as in effect on the date hereof in the State of New
York.
"Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held or hereafter acquired by any
Assignor, including any registration or application for registration of any
trademarks and service marks now held or hereafter acquired by any Assignor,
which are registered or filed in the United States Patent and Trademark Office
or the equivalent thereof in any state of the United States or any equivalent
foreign office or agency, as well as any unregistered trademarks and service
marks used by an Assignor and any trade dress including logos, designs,
fictitious business names and other business identifiers used by any Assignor.
"Material Adverse Effect" shall mean a material adverse effect on the
business, assets, operations or condition (financial or otherwise) of Holdings
and its Subsidiaries taken as a whole.
"Obligations" shall mean and include, as to any Assignor, all of the
following:
(i) the full and prompt payment when due (whether at stated
maturity, by acceleration or otherwise) of all obligations, liabilities and
indebtedness (including, without limitation, principal, premium, interest
(including, without limitation, all interest that accrues after the commencement
of any case, proceeding or other action relating to the bankruptcy, insolvency,
reorganization or similar proceeding of any Assignor at the rate provided for in
the respective documentation, whether or not a claim for post-petition interest
is allowed in any such proceeding), reimbursement obligations under Letters of
Credit, fees, costs and indemnities) of such Assignor to the Lender Creditors,
whether now existing or hereafter incurred, in each case, under, arising out of,
or in connection with, the Credit Agreement and the other Credit Documents to
which such Assignor is a party (including, without limitation, in the event such
Assignor is a Guarantor, all such obligations, liabilities and indebtedness of
such Assignor under its Guaranty) and the due performance and compliance by such
Assignor with all of the terms, conditions and agreements contained in the
Credit Agreement and in such other Credit Documents (all such obligations,
liabilities and indebtedness under this clause (i), except to the extent
consisting of obligations or indebtedness with respect to Covered Agreements,
being herein collectively called the "Credit Document Obligations");
(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations, liabilities and
indebtedness (including, without limitation, all interest that accrues after the
commencement of any case, proceeding or other action relating to the bankruptcy,
insolvency, reorganization or similar proceeding of any Assignor at the rate
provided for in the respective documentation, whether or not a claim for
post-petition interest is allowed in any such proceeding) owing by such Assignor
to the Other Creditors, now existing or hereafter incurred, in each case, under,
arising out of or in connection with any Covered Agreement, whether such Covered
Agreement is now in existence or hereinafter arising, (including, without
limitation, in the case of an Assignor that is a Guarantor, all obligations,
liabilities and indebtedness of such Assignor under its Guaranty in respect of
the Covered Agreements), and the due performance and compliance by such Assignor
with all of the terms, conditions and agreements contained in each such Covered
Agreement (all such
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Exhibit H
Page 25
obligations, liabilities and indebtedness under this clause (ii) being herein
collectively called the "Other Obligations");
(iii) any and all sums advanced by the Collateral Agent in order to
preserve the Collateral in accordance with this Agreement, or to preserve its
security interest in the Collateral;
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities of such Assignor
referred to in clauses (i) and (ii) above, after an Event of Default shall have
occurred and be continuing, the reasonable out-of-pocket expenses of retaking,
holding, preparing for sale or lease, selling or otherwise disposing of or
realizing on the Collateral, or of any exercise by the Collateral Agent of its
rights hereunder, together with reasonable attorneys' fees and court costs;
(v) all amounts paid by any Indemnitee as to which such Indemnitee
has the right to reimbursement under Section 8.1 of this Agreement; and
(vi) all amounts owing to any Agent pursuant to any of the Credit
Documents in its capacity as such;
it being acknowledged and agreed that the "Obligations" shall include extensions
of credit of the types described above, whether outstanding on the date of this
Agreement or extended from time to time after the date of this Agreement.
"Other Creditors" shall have the meaning provided in the recitals of
this Agreement.
"Other Obligations" shall have the meaning provided in the definition
of "Obligations" in this Article IX.
"Patents" shall mean any patent in or to which any Assignor now or
hereafter has any right, title or interest therein, and any divisions,
continuations (including, but not limited to, continuations-in-parts) and
improvements thereof, as well as any application for a patent now or hereafter
made by any Assignor.
"Permits" shall mean, to the extent permitted to be assigned by the
terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations of or from any governmental authority or
agency.
"Primary Obligations" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Pro Rata Share" shall have the meaning provided in Section 7.4(b) of
this Agreement.
"Proceeds" shall mean all "proceeds" as such term is defined in the
UCC as in effect in the State of New York on the date hereof and, in any event,
shall also include, but not be limited to, (i) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to the Collateral Agent or
any Assignor from time to time with respect to any of the Collateral,
<Page>
Exhibit H
Page 26
(ii) any and all payments (in any form whatsoever) made or due and payable to
any Assignor from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Collateral by any
governmental authority (or any person acting under color of governmental
authority) and (iii) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral.
"Representative" shall have the meaning provided in Section 7.4(e) of
this Agreement.
"Required Secured Creditors" shall mean (i) at any time when any
Credit Document Obligations are outstanding or any Commitments under the Credit
Agreement exist, the Required Lenders (or, to the extent provided in Section
12.12 of the Credit Agreement, each of the Lenders) and (ii) at any time after
all of the Credit Document Obligations have been paid in full and all
Commitments and Letters of Credit under the Credit Agreement have been
terminated and no further Commitments may be provided thereunder, the holders of
a majority of the Other Obligations.
"Requisite Creditors" shall have the meaning provided in Section 10.2
of this Agreement.
"Secondary Obligations" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Secured Creditors" shall have the meaning provided in the recitals of
this Agreement.
"Secured Debt Agreements" shall mean and include this Agreement, the
other Credit Documents and the Covered Agreements entered into with an Other
Creditor.
"Software" shall mean "software" as such term is defined in the UCC as
in effect on the date hereof in the State of New York.
"Supporting Obligations" shall mean any "supporting obligations" as
such term is defined in the UCC as in effect on the date hereof in the State of
New York, now or hereafter owned by any Assignor, or in which any Assignor has
any rights, and in any event shall include, but shall not be limited to, all of
such Assignor's rights in any Letter-of-Credit Right or secondary obligation
that supports the payment or performance of, and all security for, any Account,
Chattel Paper, Document, General Intangible, Instrument or Investment Property.
"Tangible Chattel Paper" shall mean "tangible chattel paper" as such
term is defined in the UCC as in effect on the date hereof in the State of New
York.
"Termination Date" shall have the meaning provided in Section 10.8(a)
of this Agreement.
"Trade Secrets" shall mean any secretly held existing engineering or
other data, information, production procedures and other know-how relating to
the design manufacture,
<Page>
Exhibit H
Page 27
assembly, installation, use, operation, marketing, sale and/or servicing of any
products or business of an Assignor worldwide whether written or not.
"Trade Secret Rights" shall mean the rights of an Assignor in any
Trade Secret it holds.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the relevant jurisdiction.
ARTICLE X
MISCELLANEOUS
10.1. NOTICES. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or
courier service and all such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, or cabled or sent by courier, be effective
when deposited in the mails, delivered to the telegraph company, cable company
or overnight courier, as the case may be, or sent by telex or telecopier, except
that notices and communications to the Collateral Agent or any Assignor shall
not be effective until received by the Collateral Agent or such Assignor, as the
case may be. All notices and other communications shall be in writing and
addressed as follows:
(a) if to any Assignor, c/o:
Rexnord Corporation
4701 West Greenfield Avenue
Milwaukee, WI 53214
Attention: Chief Financial Officer
Telephone No.: (414) 643-3000
Telecopier No.: (414) 643-3078
(b) if to the Collateral Agent, at:
Deutsche Bank Trust Company Americas
31 West 52nd Street
New York, New York 10019
Attention: Diane F. Rolfe
Telephone No.: (646) 324-2194
Telecopier No.: (646) 324-7460
(c) if to any Lender Creditor (other than the Collateral Agent),
at such address as such Lender Creditor shall have specified in the Credit
Agreement;
(d) if to any Other Creditor, at such address as such Other
Creditor shall have specified in writing to each Assignor and the
Collateral Agent;
<Page>
Exhibit H
Page 28
or at such other address or addressed to such other individual as shall have
been furnished in writing by any Person described above to the party required to
give notice hereunder.
10.2. WAVIER; AMENDMENT. Except as provided in Sections 10.8 and
10.12, none of the terms and conditions of this Agreement or any other Security
Document may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by each Assignor directly affected thereby (it
being understood that the addition or release of any Assignor hereunder shall
not constitute a change, waiver, discharge or termination affecting any Assignor
other than the Assignor so added or released) and the Collateral Agent (with the
written consent of the Required Secured Creditors); PROVIDED HOWEVER, that any
change, waiver, modification or variance affecting the rights and benefits of a
single Class of Secured Creditors (and not all Secured Creditors in a like or
similar manner) also shall require the written consent of the Requisite
Creditors of such affected Class. For the purpose of this Agreement, the term
"Class" shall mean each class of Secured Creditors, i.e., whether (x) the Lender
Creditors as holders of the Credit Document Obligations or (y) the Other
Creditors as the holders of the Other Obligations. For the purpose of this
Agreement, the term "Requisite Creditors" of any Class shall mean each of (x)
with respect to the Credit Document Obligations, the Required Lenders (or, to
the extent provided in Section 12.12 of the Credit Agreement, each of the
Lenders), and (y) with respect to the Other Obligations, the holders of at least
a majority of all Other Obligations outstanding form time to time.
10.3. OBLIGATIONS ABSOLUTE. The obligations of each Assignor hereunder
shall remain in full force and effect without regard to, and shall not be
impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Assignor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement or any other Secured Debt
Agreement; or (c) any amendment to or modification of any Secured Debt Agreement
or any security for any of the Obligations, whether or not such Assignor shall
have notice or knowledge of any of the foregoing.
10.4. SUCCESSORS AND ASSIGNS. This Agreement shall create a continuing
security interest in the Collateral and shall (i) remain in full force and
effect, subject to release and/or termination as set forth in Section 10.8, (ii)
be binding upon each Assignor, its successors and assigns; PROVIDED, HOWEVER,
that no Assignor shall assign any of its rights or obligations hereunder without
the prior written consent of the Collateral Agent (with the prior written
consent of the Required Secured Creditors), and (iii) inure, together with the
rights and remedies of the Collateral Agent hereunder, to the benefit of the
Collateral Agent, the other Secured Creditors and their respective successors
and permitted transferees and assigns. All agreements, statements,
representations and warranties made by each Assignor herein or in any
certificate or other instrument delivered by such Assignor or on its behalf
under this Agreement shall be considered to have been relied upon by the Secured
Creditors and shall survive the execution and delivery of this Agreement and the
other Secured Debt Agreements regardless of any investigation made by the
Secured Creditors or on their behalf.
10.5. HEADINGS DESCRIPTIVE. The headings of the several sections of
this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Agreement.
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Exhibit H
Page 29
10.6. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF
THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN
EACH CASE WHICH ARE LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH ASSIGNOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS. EACH ASSIGNOR HEREBY FURTHER IRREVOCABLY
WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH
ASSIGNOR, AND AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF
THE AFORESAID COURTS THAT ANY SUCH COURT LACKS PERSONAL JURISDICTION OVER SUCH
ASSIGNOR. EACH ASSIGNOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
ANY SUCH ASSIGNOR AT ITS ADDRESS FOR NOTICES AS PROVIDED IN SECTION 10.1 ABOVE
UNLESS ANOTHER ADDRESS IS PROVIDED TO THE COLLATERAL AGENT IN WRITING IN
ACCORDANCE WITH SECTION 10.1, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. EACH ASSIGNOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH
SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT
DOCUMENT THAT SUCH SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE IF
IN CONFORMITY WITH THE FOREGOING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
COLLATERAL AGENT UNDER THIS AGREEMENT, OR ANY SECURED CREDITOR, TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST ANY ASSIGNOR IN ANY OTHER JURISDICTION.
(b) EACH ASSIGNOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS
OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE
<Page>
Exhibit H
Page 30
OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
10.7. ASSIGNOR'S DUTIES. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that each Assignor shall remain
liable to perform all of the obligations, if any, assumed by it with respect to
the Collateral and the Collateral Agent shall not have any obligations or
liabilities with respect to any Collateral by reason of or arising out of this
Agreement, nor shall the Collateral Agent be required or obligated in any manner
to perform or fulfill any of the obligations of any Assignor under or with
respect to any Collateral, in each case unless the Collateral Agent shall become
the absolute owner of such Collateral by purchasing same in connection with its
exercise of remedies pursuant to Section 7.2 of this Agreement.
10.8. TERMINATION; RELEASE. (a) After the Termination Date, this
Agreement shall terminate (provided that all indemnities set forth herein
including, without limitation, in Section 8.1 hereof shall survive such
termination) and the Collateral Agent, at the request and expense of the
respective Assignor, will promptly execute and deliver to such Assignor a proper
instrument or instruments (including UCC termination statements on form UCC-3)
acknowledging the satisfaction and termination of this Agreement, and will duly
assign, transfer and deliver to such Assignor (without recourse and without any
representation or warranty) such of the Collateral as may be in the possession
of the Collateral Agent and as has not theretofore been sold or otherwise
applied or released pursuant to this Agreement. As used in this Agreement,
"Termination Date" shall mean the date upon which the Total Commitment under the
Credit Agreement has been terminated and all Covered Agreements entered into
with any Other Creditor have been terminated, no Note under the Credit Agreement
is outstanding and all Loans thereunder have been repaid in full, all Letters of
Credit issued under the Credit Agreement have been terminated and all
Obligations (other than indemnities described herein and described in Section
12.01 of the Credit Agreement, and any other indemnities set forth in any other
Credit Documents, in each case which are not then due and payable) then due and
payable have been paid in full.
(b) In the event that any part of the Collateral is sold or
otherwise disposed of (to a Person other than a Credit Party) (x) at any time
prior to the time at which all Credit Document Obligations have been paid in
full and all Commitments and Letters of Credit under the Credit Agreement have
been terminated, in connection with a sale or disposition permitted by Section
8.02 of the Credit Agreement or is otherwise released at the direction of the
Required Lenders (or all the Lenders if required by Section 12.12 of the Credit
Agreement) or (y) at any time thereafter, to the extent permitted by the other
Secured Debt Agreements, and in the case of clauses (x) and (y), the proceeds of
such sale or disposition (or from such release) are applied in accordance with
the terms of the Credit Agreement or such other Secured Debt Agreement, as the
case may be, to the extent required to be so applied, the Collateral Agent, at
the request and expense of such Assignor, will duly release from security
interest created hereby (and will execute and deliver such documentation,
including termination or partial release statements and the like in connection
therewith) and assign, transfer and deliver to such Assignor (without recourse
and without any representation or warranty) such of the Collateral as is then
being (or has been) so sold, or otherwise disposed of, or released, and as may
be in the possession of the Collateral Agent and has not theretofore been
released pursuant to this Agreement. Furthermore, upon the release of any
Subsidiary Guarantor from the Subsidiaries Guaranty in accordance with
<Page>
Exhibit H
Page 31
the provisions thereof, such Assignor (and the Collateral at such time assigned
by the respective Assignor pursuant hereto) shall be released from this
Agreement.
(c) At any time that an Assignor desires that the Collateral Agent
take any action to acknowledge or give effect to any release of Collateral
pursuant to the foregoing Section 10.8(a) or (b), such Assignor shall deliver to
the Collateral Agent a certificate signed by an Authorized Officer of such
Assignor stating that the release of the respective Collateral is permitted
pursuant to such Section 10.8(a) or (b). At any time that the Borrower or the
respective Assignor desires that a Subsidiary of the Borrower which has been
released from the Subsidiaries Guaranty be released hereunder as provided in the
last sentence of Section 10.8(b), it shall deliver to the Collateral Agent a
certificate signed by an Authorized Officer of the Borrower and the respective
Assignor stating that the release of the respective Assignor (and its
Collateral) is permitted pursuant to such Section 10.8(b).
(d) The Collateral Agent shall have no liability whatsoever to any
other Secured Creditor as the result of any release of Collateral by it in
accordance with (or which the Collateral Agent in the absence of gross
negligence and willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable jurisdiction) believes to be in
accordance with) this Section 10.8.
10.9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Collateral Agent.
10.10. 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.
10.11. THE COLLATERAL AGENT AND THE OTHER SECURED CREDITORS. The
Collateral Agent will hold in accordance with this Agreement all items of the
Collateral at any time received under this Agreement. It is expressly understood
and agreed that the obligations of the Collateral Agent as holder of the
Collateral and interests therein and with respect to the disposition thereof,
and otherwise under this Agreement, are only those expressly set forth in this
Agreement and in Section 11 of the Credit Agreement. The Collateral Agent shall
act hereunder on the terms and conditions set forth herein and in Section 11 of
the Credit Agreement.
10.12. ADDITIONAL ASSIGNORS. It is understood and agreed that
Intermediate Holdco and any Subsidiary Guarantor that desires to become an
Assignor hereunder, or is required to execute a counterpart of this Agreement
after the date hereof pursuant to the requirements of the Credit Agreement or
any other Credit Document, shall become an Assignor hereunder by (x) executing a
counterpart hereof and delivering same to the Collateral Agent, or by executing
a Joinder Agreement substantially in the form of Exhibit L to the Credit
Agreement and (y) delivering supplements to Annexes A through H, inclusive,
hereto as are necessary to
<Page>
Exhibit H
Page 32
cause such Annexes to be complete and accurate with respect to such additional
Assignor on such date. In addition, such additional Assignor shall take all
actions as specified in this Agreement as would have been taken by such Assignor
had it been an original party to this Agreement, in each case with all documents
required above to be delivered to the Collateral Agent and with all documents
and actions required above to be taken to the reasonable satisfaction of the
Collateral Agent.
[Remainder or this page intentionally left blank; signature page follows.]
* * *
<Page>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date first
above written.
RBS GLOBAL, INC.,
as an Assignor
By: /s/ Thomas Jansen
----------------------------------------
Title: Vice President & Chief Financial
Officer
REXNORD CORPORATION,
as an Assignor
By: /s/ Thomas Jansen
----------------------------------------
Title: Vice President & Chief Financial
Officer
ADDAX, INC.,
as an Assignor
By: /s/ Thomas Jansen
----------------------------------------
Title: Vice President & Chief Financial
Officer
BETZDORF CHAIN COMPANY INC.,
as an Assignor
By: /s/ Thomas Jansen
----------------------------------------
Title: Vice President & Chief Financial
Officer
CLARKSON INDUSTRIES, INC.,
as an Assignor
By: /s/ Thomas Jansen
----------------------------------------
Title: Vice President & Chief Financial
Officer
<Page>
PRAGER INCORPORATED,
as an Assignor
By: /s/ Thomas Jansen
----------------------------------------
Title: Vice President & Chief Financial
Officer
PT COMPONENTS, INC.,
as an Assignor
By: /s/ Thomas Jansen
----------------------------------------
Title: Vice President & Chief Financial
Officer
RAC-I, INC.,
as an Assignor
By: /s/ Thomas Jansen
----------------------------------------
Title: Vice President & Chief Financial
Officer
RBS ACQUISITION CORPORATION,
as an Assignor
By: /s/ Thomas Jansen
----------------------------------------
Title: Vice President & Chief Financial
Officer
RBS CHINA HOLDINGS, L.L.C.,
as an Assignor
By: /s/ Thomas Jansen
----------------------------------------
Title: Vice President & Chief Financial
Officer
RBS NORTH AMERICA, INC.,
as an Assignor
By: /s/ Thomas Jansen
----------------------------------------
Title: Vice President & Chief Financial
Officer
<Page>
REXNORD GERMANY-I INC.,
as an Assignor
By: /s/ Thomas Jansen
----------------------------------------
Title: Vice President & Chief Financial
Officer
REXNORD INTERNATIONAL INC.,
as an Assignor
By: /s/ Thomas Jansen
----------------------------------------
Title: Vice President & Chief Financial
Officer
REXNORD, LTD.,
as an Assignor
By: /s/ Thomas Jansen
----------------------------------------
Title: Vice President & Chief Financial
Officer
REXNORD NORTH AMERICA HOLDINGS, INC.,
as an Assignor
By: /s/ Thomas Jansen
----------------------------------------
Title: Vice President & Chief Financial
Officer
REXNORD PUERTO RICO INC.,
as an Assignor
By: /s/ Thomas Jansen
----------------------------------------
Title: Vice President & Chief Financial
Officer
<Page>
WINFRED BERG LICENSCO INC.,
as an Assignor
By: /s/ Thomas Jansen
----------------------------------------
Title: Vice President & Chief Financial
Officer
W.M. BERG INC.,
as an Assignor
By: /s/ Thomas Jansen
----------------------------------------
Title: Vice President & Chief Financial
Officer
<Page>
Accepted and Agreed to:
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Assignee and Collateral
Agent
By: /s/ Diane F. Rolfe
----------------------------
Title: Vice President
<Page>
ANNEX A
to
SECURITY AGREEMENT
SCHEDULE OF CHIEF EXECUTIVE OFFICES
<Table>
<Caption>
Name of Assignor Address(es) of Chief Executive Office
- ---------------- -------------------------------------
Addax, Inc. Addax, Inc.
6040 Fletcher Avenue
Lincoln, Nebraska 68507
Betzdorf Chain Company Inc. Betzdorf Chain Company Inc.
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
Clarkson Industries, Inc. Clarkson Industries, Inc.
380 Mountain Group Street
Bridgeport, Connecticut 06605
Prager Incorporated Prager Incorporated
472 Andrew Higgins Drive
New Orleans, Louisiana 70130
PT Components, Inc. PT Components, Inc.
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
RAC-I, Inc. RAC-I Inc.
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
RBS Acquisition Corporation RBS Acquisition Corporation
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
RBS China Holdings, L.L.C. RBS China Holdings, L.L.C.
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
RBS Global, Inc. RBS Global, Inc.
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
RBS North America, Inc. RBS North America, Inc.
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
Rexnord Corporation Rexnord Corporation
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
</Table>
<Page>
Annex A
page 2
<Table>
<Caption>
Name of Assignor Address(es) of Chief Executive Office
- ---------------- -------------------------------------
Rexnord Germany - I Inc. Rexnord Germany - I Inc.
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
Rexnord International Inc. Rexnord International Inc.
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
Rexnord, Ltd. Rexnord, Ltd.
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
Rexnord North America Holdings, Inc. Rexnord North America Holdings, Inc.
4701 West Greenfield Avenue
Milwaukee, Wisconsin 53214
Rexnord Puerto Rico Inc. Rexnord Puerto Rico Inc.
P.O. Box 1210
Coamo, Puerto Rico 00640
Winfred Berg Licensco Inc. Winfred Berg Licensco Inc.
1105 North Market Street, Suite 1300
Wilmington, Delaware 19801
W.M. Berg Inc. W.M. Berg Inc.
499 Ocean Avenue
East Rockaway, New York 11518
</Table>
<Page>
ANNEX B
to
SECURITY AGREEMENT
SCHEDULE OF INVENTORY AND EQUIPMENT LOCATIONS
<Table>
<Caption>
Assignor Location
- -------- --------
Addax, Inc. 6040 Fletcher Avenue
Lincoln, Nebraska
Betzdorf Chain Company Inc. 4701 West Greenfield Avenue
Milwaukee, Wisconsin
Clarkson Industries, Inc. 380 Mountain Group Street
Bridgeport, Connecticut
Prager Incorporated 472 Andrew Higgins Drive, New Orleans, Louisiana
1020 Constance Street (Square 136, Lots 11-21),
New Orleans, Louisiana
1039 Constance Street (Square 137, Lot C), New
Orleans, Louisiana
Lot Y Camp Street (Square 159), New Orleans,
Louisiana
940 Magazine Street, New Orleans, Louisiana
1042 Magazine Street, New Orleans, Louisiana
1113 Howard Street, Deer Park, Texas
PT Components, Inc. 4701 West Greenfield Avenue
Milwaukee, Wisconsin
RAC-I, Inc. 4701 West Greenfield Avenue
Milwaukee, Wisconsin
RBS Acquisition Corporation 4701 West Greenfield Avenue
Milwaukee, Wisconsin
RBS China Holdings, L.L.C. 4701 West Greenfield Avenue
Milwaukee, Wisconsin
RBS Global, Inc. 4701 West Greenfield Avenue
Milwaukee, Wisconsin
</Table>
<Page>
Annex B
page 2
<Table>
<Caption>
Assignor Location
- -------- --------
RBS North America, Inc. 4701 West Greenfield Avenue
Milwaukee, Wisconsin
Rexnord Corporation 4701 West Greenfield Avenue
Milwaukee, Wisconsin
Rexnord Germany - I Inc. 4701 West Greenfield Avenue
Milwaukee, Wisconsin
Rexnord International Inc. 4701 West Greenfield Avenue
Milwaukee, Wisconsin
Rexnord, Ltd. 4701 West Greenfield Avenue
Milwaukee, Wisconsin
Rexnord North America Holdings, Inc. 2400 Curtiss Street, Downers Grove, Illinois
2324 Curtiss Street, Downers Grove, Illinois
634 Glenn Avenue, Wheeling, Illinois
7601 Rockville Road, Indianapolis, Indiana
6325 Morenci Trail, Indianapolis, Indiana
1000 Chain Drive, Morganton, North Carolina
304 Main Street, Warren, Pennsylvania
250 Yarnell Industrial Park, Clinton, Tennessee
Route 340 & 909LD Avenue, Stuarts Draft, Virginia
1272 Dakota Drive, Grafton, Wisconsin
4701 West Greenfield Avenue, Milwaukee,
Wisconsin
5555 South Moorland Road, New Berlin, Wisconsin
4711 East Falcon Drive, Suite 206, Mesa, Arizona
220 Second Street, Office B, Encinitas, California
</Table>
<Page>
Annex B
page 3
<Table>
<Caption>
Assignor Location
- -------- --------
1080 West Sierra, Fresno, California
17610 Beach Boulevard, Suit 53, Huntington Beach,
California
2175 Union Place, Simi Valley, California
6275 Simms Street, Suite 110, Arvada, Colorado
6700 South Florida Avenue, Unit 36, Lakeland,
Florida
7200 N.W. 19th Street, Suite 202, Miami, Florida
201-A Wharton Circle, Atlanta, Georgia
2300 Lake Park Drive, Suite 150, Smyrna, Georgia
860 Beacon, Suite 8, Boise, Idaho
2521 Allan Drive, Elk Grove Village, Illinois
520 S.W. 3rd Street, Suite A, Ankeny, Iowa
600 North Highway 190 Suite 202F, Covington,
Louisiana
888 Worcester Street, Wellesley, Massachusetts
17 N. Fourth Street, Suite 206, Grand Haven,
Michigan
4226 Park Glen Road, St. Louis Park, Minnesota
8000 Bonhomme Avenue, Suite 20, Clayton, Missouri
6040 Fletcher Avenue, Lincoln, Nebraska
123 Woodland Avenue, Office 3, Westwood, New
Jersey
181 Blackberry Road, Suite 5A, Liverpool, New
York
1868 Niagara Falls Blvd., Suite 308, Tonawanda,
</Table>
<Page>
Annex B
page 4
<Table>
<Caption>
Assignor Location
- -------- --------
New York
1400 Battleground Avenue, Suite 144 Greensboro,
North Carolina
29 North Portage Street, Doylestown, Ohio
3655 Brookham Drive, Grove City, Ohio
3110 Bardshar Road, Office 2, Sandusky, Ohio
5800 South Lewis, Suite 194, Tulsa, Oklahoma
103rd Ave., Suite 4584, Beaverton, Oregon
8305 SE Monterey, Suite 220 L, Portland, Oregon
3117 Lehigh Street, Suite 121, Allentown,
Pennsylvania
700 Progress Drive, Horsham, Pennsylvania
Lots 5 and 6 in Keith Valley Business Park,
Horsham, Pennsylvania
3671 Crescent Court East, Room 101, Whitehall,
Pennsylvania
2261 Brookhollow Plaza Drive (Centre at
Brookhollow Building), Suite No. 308, Arlington,
Texas
115 North Dixie Drive, Suite 130, Lake Jackson,
Texas
207 W. Mill Street, Livingston, Texas
6391 DeZavala Road, Suite 203E, San Antonio,
Texas
2715 Brambleton Avenue, SW, First Floor, Roanoke,
Virginia
180 West Dayton, Suite 202-I, Edmonds,
Washington
</Table>
<Page>
Annex B
page 5
<Table>
<Caption>
Assignor Location
- -------- --------
5113 Pacific Highway East, Suite 1-J, Fife,
Washington
5386 Big Tyler Road, Suite 103, Charleston, West
Virginia
5150 International Drive, Cudahy, Wisconsin
135 South 84th Street, Suite 111, Milwaukee,
Wisconsin
3100 Lorna Road, Suite 200, Birmingham, Alabama
444-448 East Huntington Drive, Suite 208, Arcadia,
California
14434 Best Avenue, Sante Fe Springs, California
1914 Beachway Road, Suite 3-P, Jacksonville,
Florida
2232 Wisconsin Avenue, Suites 101-108, Downers
Grove, Illinois
1309 N. Borden, McHenry, Illinois
3418 Frankford Avenue, Suite 215, Louisville,
Kentucky
1045 Taylor Avenue, Suite 108C, Towson, Maryland
2495 Pipestone Road (Ausco Products Inc. Building),
Benton Harbor, Michigan
9225 Ward Parkway, Suite 202, Kansas City,
Missouri
8040 Hosbrook Road, Suite 202, Cincinnati, Ohio
490 Norristown Road, Suite 150, Blue Bell,
Pennsylvania
303 W. Lancaster Avenue, PMB 133, Wayne,
Pennsylvania
</Table>
<Page>
Annex B
page 6
<Table>
<Caption>
Assignor Location
- -------- --------
17171 Park Row, Suite 150, Houston, Texas
9364 Wallisville Road, Suite 198, Houston, Texas
12810 E. Nora, Suite F, Spokane, Washington
Rexnord Puerto Rico Inc. Road 14 KM 25.3, Boulevard Los Lloanos
Coamo, Puerto Rico
Winfred Berg Licensco Inc. 1105 North Market Street, Suite 1300
Wilmington, Delaware 19801
W.M. Berg Inc. 499 Ocean Avenue
East Rockaway, New York
510 Ocean Avenue, East Rockaway, New York
</Table>
<Page>
ANNEX C
to
SECURITY AGREEMENT
SCHEDULE OF TRADE AND FICTITIOUS NAMES
<Table>
<Caption>
Name of Trade And/or
Assignor Fictitious Names
- -------- -----------------
RAC-I, Inc. Formerly known as Rexnord Acquisition
Corporation
Rexnord Corporation Formerly known as RBS Holdings, Inc.
Rexnord North America Holdings, Inc. Formerly known as Rexnord Corporation
</Table>
<Page>
ANNEX D
to
SECURITY AGREEMENT
DESCRIPTION OF CERTAIN SIGNIFICANT TRANSACTIONS OCCURRING WITHIN
ONE YEAR PRIOR TO THE DATE OF THE SECURITY AGREEMENT
<Table>
<Caption>
Description of any Transactions as required
Name of Assignor by Section 2.7 of the Security Agreement
- ---------------- --------------------------------------------
None
</Table>
<Page>
ANNEX E
to
SECURITY AGREEMENT
DESCRIPTION OF COMMERCIAL TORT CLAIMS
<Table>
<Caption>
Name of Assignor Description of Commercial Tort Claims
- ---------------- -------------------------------------
None
</Table>
<Page>
ANNEX F
to
SECURITY AGREEMENT
SCHEDULE OF MARKS AND APPLICATIONS;
INTERNET DOMAIN NAME OF REGISTRATIONS
I. MARKS AND APPLICATIONS:
ADDAX, INC.
<Table>
<Caption>
Docket No. Ctry Types Status Cur App Dt Curr App No Curr Reg D Curr Reg No Renewal Expires
- ----------------------------------------------------------------------------------------------------------------------------------
101998 USA REGISTERED 15OC1996 75/180928 13JA1998 2128511 13JA2008 13JA2008
Class & Type: IN 7
Mark: ADDAX & Design
Goods: Machinery and machine couplings produced from composite materials,
namely, pipes, couplers, drive
</Table>
CLARKSON INDUSTRIES, INC./HIGHFIELD MANUFACTURING CO.
<Table>
<Caption>
Docket No. Ctry Types Status Cur App Dt Curr App No Curr Reg D Curr Reg No Renewal Expires
- ----------------------------------------------------------------------------------------------------------------------------------
B12301 USA REGISTERED 12JE1997 75/307861 22DE1998 2212450 22DE2008 22DE2008
Class & Type: NA 11 IN 11
Mark: FIROMATIC
Goods: Fuel oil filters for home furnaces, industrial furnaces, and
B12302 USA REGISTERED 17SE1958 72/059048 24MR1959 676012 24MR2009 24MR2009
Class & Type: NA 7 IN 7
Mark: FIROMATIC
Goods: Fuel oil filters.
B12303 USA REGISTERED 24JL1997 75/329676 08DE1998 2208481 08DE2008 08DE2008
Class & Type: NA 11 IN 11
Mark: FIROMATIC and Flames device
Goods: Fuel oil filters for home furnaces, industrial furnaces, and
B12304 USA REGISTERED 28JA1937 71/388275 23MY1939 367531 23MY2009 23MY2009
Class & Type: NA 9 IN 9
Mark: FIROMATIC (stylised)
Goods: Fuel control valves.
B12305 USA REGISTERED 24JL1997 75/329993 11AU1998 2180613 11AU2008 11AU2008
Class & Type: NA 9 IN 9
Mark: FIROMATIC
Goods: Electrical thermal switches, in Class 9.
B12306 USA REGISTERED 24JL1997 75/329675 12JA1999 2217075 12JA2009 12JA2009
Class & Type: NA 6 NA 8 NA 11
Mark: HIGHFIELD
Goods: Metal ring assemblies consisting of meter rings, lock
B12307 USA FILED 24JL1997 75/329994
Class & Type: NA 9 IN 9
Mark: HIGHFIELD
Goods: Electrical thermal switches, in Class 9.
</Table>
<Page>
Annex F
Page 2
<Table>
B12308 USA REGISTERED 12JE1997 75/307638 15SE1998 2189159 15SE2008 15SE2008
Class & Type: NA 6 IN 6
Mark: REVPRO
Goods: Barrel locks, padlocks, meter guards, cabinet guards, strap
XXXXXX USA REGISTERED 12JUN1997 75/307682 17NOV1998 2203723
Class & Type: IN 6
Mark: ECON-O-LOCK
Goods: Metal ring assemblies consisting of meter rings, lock housings, studs,
back-up bars . . .
</Table>
REXNORD NORTH AMERICA HOLDINGS, INC. (FORMERLY REXNORD CORPORATION)
<Table>
<Caption>
Docket No. Ctry Types Status Cur App Dt Curr App No Curr Reg D Curr Reg No Renewal Expires
- ----------------------------------------------------------------------------------------------------------------------------------
100120 USA REGISTERED 31DE1990 74/127638 27OC1992 1727027 27OC2002 27OC2002
Class & Type: IN 7
Mark: SUPER-MOD
Goods: Clutches, brakes and shaft couplings for machinery
USA FILED 17AU2002 78/154220
Class & Type:
Mark: GVL
USA REGISTERED 73/137724 20MR1979 1115081
Class & Type:
Mark: PARALLELOGRAM WITH STROBES
100045 USA REGISTERED 21OC1930 71/171012 20MR1983 165749 20MR2003 20MR2003
Class & Type: IN 12
Mark: DUCKWORTH
Goods:
100077 USA Z REGISTERED 10JL1998 75/516959 11JL2000 2366970 11JL2010 11JL2010
Class & Type: IN 7
Mark: VIVA
Goods: Power transmission elastomeric shaft couplings for machines
100078 USA REGISTERED 20NO1998 75/592517 15AU2000 2376763 15AU2010 15AU2010
Class & Type: IN35, 42
Mark: REXLINK
Goods: Online retail services featuring power transmission components, and
allowing customers to place orders
100079 USA Z REGISTERED 11AU1998 75/534157 08MY2001 2449625 08MY2011 08MY2011
Class & Type: IN 7
Mark: REXLON 2000
Goods: Bearings, other than wheel bearings, for use in aerospace applications.
100080 USA Z REGISTERED 28MY1998 75/492075 16MY2000 2350782 16MY2010 16MY2010
Class & Type: IN 7
Mark: MAGNELINK
Goods: Magnetic power transmission couplings
100082 USA REGISTERED 02JE1997 75/301790 18MY1999 2246580 18MY2009 18MY2009
Class & Type: IN 7
Mark: PLATINUM SERIES
Goods: Roller chain for conveyor belts
</Table>
<Page>
Annex F
Page 3
<Table>
100083 USA REGISTERED 13FE1997 75/241217 30JE1998 2170426 30JE2008 30JE2008
Class & Type: IN 17
Mark: PENTAC
Goods: Non-metal contact seals for bearings
100084 USA REGISTERED 02JA1997 220668 30DE1997 2125596 30DE2007 30DE2007
Class & Type: IN 7
Mark: DTS
Goods: Non-metal conveyor chain and conveyor chain attachments for enhancing movement of products from
100085 USA REGISTERED 24JL1996 79/139179 16SE1997 2097245 16SE2007 16SE2007
Class & Type: IN 7
Mark: OMEGA
Goods: Elastromeric flexible shaft couplings, not for land vehicles
100086 USA REGISTERED 29AP1996 75/096098 29AP1997 2057218 Z9AP2007 29AP2007
Class & Type: INB, 12
Mark: SHAFER & Design
Goods :Hand tools, namely, bearing taking tools (8)
100087 USA REGISTERED 29SE1995 74/735899 06MY1997 2059994 06MY2007 06MY2007
Class & Type: IN 7
Mark: DURALON (and Design)
Goods : Machine parts, namely, ball, sleeve and socket bearings
100088 USA REGISTERED 26JL1995 74/706345 23MR1999 2234521 23MR2009 23MR2009
Class & Type: IN 7
Mark: TWISTLOCK
Goods : Conveyor chain pin retention plug
100089 USA REGISTERED 29JE1994 74/543608 11JE1996 1980161 11JE2006 11JE2006
Class & Type: IN 11
Mark: REX FLEX
Goods: Membrane type air diffusers for wastewater treatment
100090 USA REGISTERED 23MR1993 74/371171 08AU1995 1909720 08AU2005 08AU2005
Class & Type: IN 7
Mark: Design Only (Circle Logo)
Goods: Brake discs for brakes for electric motors in class 7.
100091 USA REGISTERED 18NO1992 74/361376 09AU1994 1848997 09AU2004 09AU2004
Class & Type: IN 7
Mark: PRISMGEAR & Design
for machines
Goods: Mechanical gear drives
100092 USA REGISTERED 29DE1992 74/344072 19AP1994 1831058 19AP2004 19AP2004
Class & Type: IN 6, 7
Mark: REX & Design
Goods: Metal chains; namely, elevator, flatlink, malleable ireon, noisless, pitch, roller, shackling, silen, and
100093 USA REGISTERED 16NO1992 74/331760 01NO1994 1860657 01NO2004 01NO2004
Class & Type: IN6, 17
Mark: IMPERVRON
Goods: Metal bearing seals for industrial machinery sold as a component of bearings (6)
100094 USA REGISTERED 290C1992 74/326933 08FE1994 1820446 08FE2004 08FE2004
Class & Type: IN 7
Mark: PRISMGEAR
Goods: Mechanical gear drives
</Table>
<Page>
Annex F
Page 4
<Table>
for machines
100096 USA REGISTERED 22MY1992 74/278770 23DE1992 1741090 22DE2002 22DE2002
Class & Type: IN 9
Mark: SINPAC
Goods: Solid state electronic switch circuitry and switches for electric motors
100097 USA REGISTERED 05MY1992 74/272615 22JE1993 1777651 22JE003 22JE2003
Class & Type: IN 7
Mark: MADE IN THE USA BY "PROUD AMERICANS" and Design
Goods: Machine parts; namely, metal roller chains, silent chains and bearings
100098 USA REGISTERED 26FE1992 74/249716 09JA1996 1947113 09JA2006 09JA2006
Class & Type: IN 7
Mark: LPC 279
Goods: Conveyor chain.
100099 USA REGISTERED 26FE1992 74/249689 09JA1996 1947112 09JA2006 09JA2006
Class & Type: IN 7
Mark: LPC
Goods: Conveyor chain
100100 USA REGISTERED 15FE1991 74/213030 04MY1993 1769187 04MY2003 04MY2003
Class & Type: IN 9
Mark: CADCAT
Goods: Computer programs on the subject of retrieval of information from a computer aided design library, used as
100101 USA REGISTERED 15MR1991 74/149060 14JA1992 1672258 14JA2012 14JA2012
Class & Type: IN 42
Mark: REXNORD & Design
Goods: Services in the field of material testing, material engineering and mechanical engineering.
100118 USA REGISTERED 15MR1991 74/148104 31MR1992 1681557 31MR2012 31MR2012
Class & Type: IN 42
Mark: RTS & Design
Goods : Services in the field of material testing, material engineering and mechanical engineering.
100119 USA REGISTERED 15MR1991 74/148065 24DE1991 1669191 24DE2011 24DE2011
Class & Type: IN 7
Mark: REXNORD & Design
Goods: Machine parts; namely, bearings, couplings, conveyors, elevators, elevator buckets, feeders, chains,
100120 USA REGISTERED 31DE1990 74/127638 27OC1992 1727027 27OC2002 27OC2002
Class & Type: IN 7
Mark: SUPER-MOD
Goods: Clutches, brakes and shaft couplings for machinery
100121 USA REGISTERED 23MR1990 74/041585 11DE1990 1626698 11DE2010 11DE2010
Class & Type: IN 7
Mark: PSI
Goods: Machine bearings, namely slotted entry aerospace bearings.
100122 USA REGISTERED 08FE1990 74/027218 22OC1991 1661443 22OC2011 22OC2011
Class & Type: IN 7
Mark: TUFLITE
Goods: Low-friction journal bearings.
100123 USA REGISTERED 13MR1989 73/786214 24OC1989 1561815 24OC2009 24OC2009
Class & Type: IN 7
Mark: WHISPEROL
Goods: Conveyor rollers
</Table>
<Page>
Annex F
Page 5
<Table>
100124 USA REGISTERED 30JA1989 73/778462 14NO1989 1565506 14NO2009 14NO2009
Class & Type: IN 7
Mark: STEARNS & Design
Goods : Electronic current rectifiers and controllers, and solenoids. 9
100125 USA REGISTERED 27DE1985 73/575380 11NO1986 1416422 11NO2006 11NO2006
Class & Type: IN 7
Mark: TD
Goods: Mechanical variable speed traction drives for machines and parts therefor
100126 USA REGISTERED 26NO1985 73/570535 10JE1986 1396483 10JE2006 10JE2006
Class & Type: IN 7, 9
Mark: STEARNS
Goods: Clutches and brakes for machinery (7)
100127 USA REGISTERED 19NO1984 73/509667 28MY1985 1337910 28MY2005 28MY2005
Class & Type: IN 7
Mark: SIGMA & Design
Goods: Polymeric seals used on chain joints
100128 USA REGISTERED 23SE1983 73/444965 05FE1985 1317647 05FE2005 05FE2005
Class & Type: IN 7
Mark: TOR-AC
Goods: Power transmission machinery, namely, electric drives, electromagnetic brakes, clutches, shaft couplings
100129 USA REGISTERED 17JE1983 73/430849 29JA1985 1316998 29JA2005 29JA2005
Class & Type: IN 7
Mark: MAT TOP
Goods: Plastic chains and links therefor
100130 USA REGISTERED 04MY1983 73/425454 01AP1986 1388074 01AP2006 01AP2006
Class & Type: IN 9
Mark: PT COMPONENTS, INC.
Goods: Electronic current rectifiers, controllers, solenoids and microelectronic circuitry therefor
100131 USA REGISTERED 04MY1983 73/424448 27MY1986 1394649 27MY2006 27MY2006
Class & Type: IN 7
Mark: PTC
Goods: Power transmission machinery and parts thereof namely, shafting, bearings, bearing blocks, seals, races,
100132 USA REGISTERED 09NO1981 73/336426 27SE1983 1252211 27SE2003 27SE2003
Class & Type: IN 9
Mark: DART & Design
Goods: Computer access terminals for use in product information
100134 USA REGISTERED 12MR1979 73/207012 2OMY1980 1135545 20MY2010 20MY2010
Class & Type: IN 7
Mark: CARTRISEAL
Goods: Closing collars for axles and shafts, namely, housing mounted and shaft mounted labyrinth, lip and face
100135 USA REGISTERED 11DE1948 71/114595 29JL1949 126139 29JL2009 29JL2009
Class & Type: IN 7
Mark: REX
Goods: Elevator-boots, elevator-buckets, sprocket-wheels, pulleys, shafting and gearing, shaft-hangers and
100266 USA REGISTERED 05JL1947 71/481209 12JL1949 512026 12JL2009 12JL2009
</Table>
<Page>
Annex F
Page 6
<Table>
Class & Type: IN 7
Mark: TABLE TOP (Stylized)
Goods: Conveyor sprockets and chains
100270 USA DOCKETED 126139
Class & Type: IN 7
Mark: REX
Goods: Truck mixers - namely, a truck with a concrete mixer mounted thereon, and semi-trailer mixers - namely, a
100271 USA REGISTERED 16FE1953 71/642264 120C1954 596707 120C2005 120C2005
Class & Type: IN 7
Mark: REX & Design
Goods: Concrete, mortar, plaster and glass mixing, remixing and agitating apparatus; concrete conveying,
100440 USA REGISTERED 09NO1934 71/358057 05MR1935 322473 05MR2005 05MR2005
Class & Type: IN 7
Mark: P.I.V.
Goods: Variable speed transmissions or gears.
100441 USA REGISTERED 05AP1945 71/481735 01JA1946 418526 01JA2006 01JA2006
Class & Type: IN 6
Mark: CHAMPION
Goods: Power transmission chain.
100442 USA REGISTERED 28MY1951 71/614445 15AP1952 557725 15AP2012 15AP2012
Class & Type: IN 7
Mark: FR
Goods: Drive chains and conveyor chains.
100443 USA REGISTERED 28MY1951 71/614446 15AP1952 557726 15AP2012 15AP2012
Class & Type: IN 7
Mark: LINK-BELT FR
Goods: Drive chains and conveyor chains.
100444 USA REGISTERED 24MR1952 71/626969 03FE1953 570006 03FE2003 03FE2003
Class & Type: IN 7
Mark: THOMAS (Design)
Goods: Flexible machinery couplings.
100445 USA REGISTERED 24FE1954 71/661549 22FE1955 602347 22FE2005 22FE2005
Class & Type: IN 7
Mark: SHAFER
Goods: Anti-friction bearings, take-ups, and parts for each
100446 USA REGISTERED 29JE1972 72/428725 26MR1974 980993 26MR2004 26MR2004
Class & Type: IN 7, 11
Mark: REXNORD
Goods: Anti-friction and low-friction journal bearings, ball and socket bearings; power transmission and
conveyor
100447 USA REGISTERED 08DE1975 73/071057 28SE1976 1048880 28SE2006 28SE2006
Class & Type: IN 7
Mark: DURALON
Goods: Machine parts - namely, elements for low friction journal and axial thrust berings; ball and socket bearing
100448 USA REGISTERED 11AU1997 73/137724 20MR1979 1115081 20MR2009 20MR2009
Class & Type: IN 6, 7, 11
Mark: Design Only (Apache Logo)
Goods: Spring locks, clicks, latches of metal and fastenings for metal boxes, metal panels and the like including
</Table>
<Page>
Annex F
Page 7
<Table>
100484 USA REGISTERED 09DE1968 72/313920 21AP1970 889699 21AP2010 21AP2010
Class & Type: IN 6
Mark: TRANS-FLEX
Goods: Roller chain, and parts thereof for transmitting power between a drive shaft and a driven shaft or shafts.
101216 USA REGISTERED 14JE1971 72/394813 26JE1973 961969 26JE2003 26JE2003
Class & Type: IN 7
Mark: NYLA-K
Goods: Mounted ball bearings.
101217 USA REGISTERED 27NO1978 73/194600 01NO1983 1255816 01NO2003 01NO2003
Class & Type: IN 7
Mark: K-LOK
Goods: Shaft locking device incorporated in an anti-friction bearing.
101219 USA REGISTERED 28AP1983 73/423628 16JL1985 1348898 16JL2005 16JL2005
Class & Type: IN 7
Mark: CENTRIK-LOK
Goods: Shaft locking device incorporated into an antifriction bearing in which a t be locked.
101221 USA REGISTERED 26AU1988 73/750142 28MR1989 1531667 28MR2009 28MR2009
Class & Type: IN 7
Mark: KROWN REGAL
Goods: Mounted ball bearings.
101920 USA FILED 15AP2002 76/395425
Class & Type: IN 7
Mark: SUPERSAWMILL
Goods: Industrial roller bearing unit.
101971 USA REGISTERED 29MR1930 71/229343 02NO1966 220199 02NO2006 02NO2006
Class & Type: IN 6
Mark: H
Goods: Chains
101972 USA REGISTERED 05DE1996 75/208398 27OC1996 2200320 27OC2008 27OC2008
Class & Type: IN 7
Mark: MB & Design
Goods: Mounted ball bearings and inserts
101973 USA REGISTERED 29MR1930 71/229344 02NO1966 220198 02NO2006 02NO2006
Class & Type: IN 13
Mark: RC
Goods: Chains.
</Table>
WINFRED BERG LICENSCO, INC.
<Table>
<Caption>
Date of Report: 27JE2002
Docket No. Ctry Types Status Cur App Dt Curr App No Curr Reg D Curr Reg No Renewal Expires
- ---------- ---- ------------ ---------- ----------- ---------- ----------- ------- -------
100422 USA REGISTERED 22NO1996 75/202215 12MY1998 2156328 12MY2008 12MY2008
Class & Type: IN 7
Mark: BERG
Goods: Machine parts, namely, high tolerance precision molded chains and drive belts, ball and cross roller slides,
</Table>
<Page>
Annex F
Page 8
CHALLEGES TO VALIDITY AND ENFORCEABILITY
(i) Application No.: 2,200,681
Mark: REX
Filing Date: Feb 2, 1999
Goods: Common metals and alloys (International Class 6)
County: Argentina
Registration opposed by Helametal S.A. (Argentinean subsidiary of Daewoo,
known as a manufacturer of clothes washing machines). Argentina counsel
have attempted to negotiate a withdrawal of the opposition, without
success. Rexnord Corporation has filed a lawsuit seeking to overcome
Helametal's opposition, based on the different natures of the goods in
question and the separate markets in which those goods travel.
(ii) Application No: 2,200,682
Mark: REX
Filing Date: Feb. 2, 1999
Goods: Machine parts, namely anti-friction bearings, bearings, journals,
roller bearings, low-friction sleeve, ball and socket bearings and
actuator nuts, rod ends fitted with low-friction and anti-friction ball
and socket bearings, shaft hangers and take-ups; machine parts, namely,
closing collars for axels and shafts; machine shaft couplings, namely,
disc couplings, roller cain couplings and elastomer couplings;
housing-mounted and sealed shaft mounted labyrinth, lip and face
mechanical seals; repair parts for agricultural machinery, chain
elevators and implements of the larger kind, namely, drive and conveying
chain and flights, belt conveyors, bucket elevators, endless bucket
conveyors, and structural parts thereof; conveyors of the type that
vibrate to convey the supported bulk material or articles; machine parts,
namely shaft collars, free wheel clutches, change speed gearing for
machinery, bearing, transmission and gearing and gear boxes not for land
vehicles, gear wheels for machinery; driving and power transmission
chains not for land vehicles; machine driving pulleys including sprockets
(International Class 7).
This application has been opposed by Alfredo Marietta Marmetal S.A. which
owns an Argentinean trademark registration for REX for "ball and roller
bearings" in Class 7. Argentine counsel has attempted to negotiate a
withdrawal of the opposition, without success. Rexnord Corporation has
filed a lawsuit seeking to overcome Marmetal's opposition based on its
alleged failure to use the REX mark on the goods in question.
This application has been also opposed by Helametal S.A. Helametal owns a
prior registration for REX in Class 7, for clothes washing machines. As
noted above, our associates in Argentina have attempted to negotiate a
withdrawal of the opposition, without success. Rexnord Corporation has
filed a lawsuit seeking to overcome
<Page>
Annex F
Page 9
Helametal's opposition, based on the different natures of the goods in
question and the separate markets in which those goods travel.
(iii) Appl. No.: 2,200,683
Mark: REX
Filing Date: Feb. 2, 1999
Goods: Magnetic couplings (International Class 9).
Country: Argentina
This application has been opposed by Helametal S.A. Helametal has
multiple broad trademark registrations for REX in Class 9, though the
enumerated goods are typically small household appliances such as
electric irons. Helametal has offered to sell Rexnord Corporation a
partial interest in its broad REX registration, thus permitting use of
REX for magnetic couplings. Counsel in Argentina have attempted to
negotiate a withdrawal of the opposition, without success. Rexnord
Corporation has filed a lawsuit seeking to overcome Helametal's
opposition, based on the overbreadth of Helametal's registration, the
different natures of the enumerated goods and the separate markets in
which those goods travel.
<Page>
Annex F
Page 10
2. INTERNET DOMAIN NAME REGISTRATIONS:
INTERNET DOMAIN NAMES
Aero-rexnord.com
Rexnord.com
Rexnord.net
Rexnord.biz
Rexnordlgb.com
Rexnord-canada.com
Rexnord-ce.com
Rexnord-marbett.com
Rexnordchina.com
Rexnordindia.com
Rexnordmcc.com
Rexnordplastics.com
Rexnord.dk
Rexnord.de
Rexnord.it
Rexnord.lt
Rexnord.nl
Rexnord.no
Rexnord.se
Rexnord.com.mx
<Page>
Annex F
Page 11
INTERNET DOMAIN NAMES
Rexnord.com.ar
Rexnord.com.br
Rexnord.com.tr
Rexnord-stephan.de
Rexnordmarbett.com
Rexnordmarbett.it
Rexnord-antrieb.d
Wmberg.com
Wmberg.net
Wmberg.org
<Page>
ANNEX G
to
SECURITY AGREEMENT
SCHEDULE OF PATENTS
CLARKSON INDUSTRIES, INC./HIGHFIELD MANUFACTURING COMPANY
<Table>
<Caption>
Ctry. Title Patent No. Issue Date. Application No. Filing Date
- -------------------------------------------------------------------------------------------------------------
USA Locking assembly 5161838 10 Nov 1992 794873 19 Nov 1991
USA Wrench for underground valves 5320003 14 Jun 1994 047855 15 Apr 1993
USA Lock and key shell assembly 5440909 15 Aug 1995 084416 29 Jun 1993
USA Padlock Device 507975 22 Feb 2000
</Table>
REXNORD NORTH AMERICA HOLDINGS, INC. (FORMERLY REXNORD CORPORATION)
<Table>
<Caption>
Docket No. Ctry Status Grant Dt Pat No. App No App Date
- ---------- ---- ------ -------- ------- ------ --------
XXXXXX USA GRANTED 23JA2001 6177113 495331 27JE1995
OWNER: Rexnord Corporation
TITLE: Process for Detecting Plastic or Elastometric Contaminants in Food Processing.
92703 USA GRANTED 14DE1993 5269729 994171 11SE1992
OWNER: Rexnord - Elastomer Products
TITLE: WEAR RESISTANT CHAIN JOINT SEAL
94701 USA GRANTED 31AU1999 5944611 979390 26NO1997
OWNER: Rexnod - Elastomer Products
TITLE: Convertible Coupling for Transmitting Torque
97719 USA GRANTED 12SE2000 6117015 955999 22OC1997
OWNER: Rexnord - Elastomer Products
TITLE: Elastometric Coupling with Composite Shoe
00707 USA GRANTED 28MY2002 6394656 654628 06SE2000
OWNER: Rexnod Corporation
TITLE: Retainerless Precessing Roller Bearing
00711 USA FILED 805409 13MR2001
OWNER: Rexnord Corporation
TITLE: Wrap Type Coupling with Flat Element
01444 USA FILED 033794 03JA2002
OWNER: Rexnord Corporation
TITLE: An Improved Flexible Coupling
01445 USA FILED 60/336710 06DE2001
OWNER: Rexnord Corporation
TITLE: Snap-In Bearing End Cap
01701 USA FILED 000000 13MR2001
OWNER: Rexnord Corporation
TITLE: Flexible Wrap-Type Shaft Coupling
01703P USA FILED 60/302206 29JE2001
OWNER: Rexnord Corporation
TITLE: Link Having A Twisted Side Guard
98702 USA FILED 092249 05JE1998
OWNER: Rexnord Corporation
TITLE: COMPOSITE SPHERICAL BEARING AND METHOD OF PRODUCING SAME
98702D USA FILED 389666 01SE1999
</Table>
<Page>
Annex G
Page 2
<Table>
OWNER: Rexnord Corporation
TITLE: Composite Spherical Bearing And Method of Producing Same
98709 USA FILED 106676 28JE1998
OWNER: Rexnord Corporation
TITLE: Conveyor Chain with Pusher Flights
98710 USA FILED 073995 09JE1998
OWNER: Rexnord Corporation
TITLE: Composite Bearing Structure
99706 USA GRANTED 06MAR2001 6196926 182147 29OC1998
OWNER: Rexnord Corporation
TITLE: Improved Elastomer Coupling Having Cylidrical Surface Hubs
99713 USA FILED 09/373019 11AU1999
OWNER: Rexnord Corporation
TITLE: Modular Conveyor Chain Having a Multiple Direction Low Back Line Pressure Conveying Surface
99717P USA FILED 60/175199 10JA2000
OWNER: Rexnord Corporation
TITLE: Conveyor Belt Splice Apparatus
99722 USA FILED 558177 26A92000
OWNER: Rexnord Corporation
TITLE: Drive Sprocket With Relief Areas
99722P USA FILED 60/131152 27AP1999
OWNER: Rexnord Corporation
TITLE: Drive Sprocket With Relief Areas
99724 USA FILED 324200 06JE1999
OWNER: Rexnord Corporation
TITLE: Multiple Thread Actuator
84701 USA GRANTED 16DE1986 4629063 614003 25MY1984
OWNER: Rexnord Corporation
TITLE: Chain Link for a Product Capturing Chain
82700 USA GRANTED 28JL1987 4682687 697196 01FE1985
OWNER: Rexnord Corporation
TITLE: PINTLE CHAIN INCLUDING SELF-RETAINING PIN
86702 USA GRANTED 08DE1987 4711605 869159 29MY1986
OWNER: Rexnord Corporation
TITLE: Key Apparatus
84701C USA GRANTED 07MR1989 4809846 925033 300C1986
OWNER: Rexnord Corporation
TITLE: Chain Link for a Product Capturing Chain
87704 USA GRANTED 18AP1989 4821869 123782 23NO1987
OWNER: Rexnord Corporation
TITLE: Low Backline Pressure Chain For Use with Transfer Plate
88702 USA GRANTED 20JE1989 4840269 174009 28MR1988
OWNER: Rexnord Corporation
TITLE: APRON TYPE CONVEYOR
88704 USA GRANTED 22AU1989 4858751 167648 14MR1988
OWNER: Rexnord Corporation
TITLE: Wide Chain Conveyor Assembly
87706 USA GRANTED 12SE1989 4865183 114876 300C1987
OWNER: Rexnord Corporation
TITLE: WIDE CHAIN CONVEYOR SPROCKET DRIVE
89703 USA GRANTED 19SE1989 4867580 293113 03JA1989
</Table>
<Page>
Annex G
Page 3
<Table>
OWNER: Rexnord Corporation
TITLE: BEARING TAKE-UP FRAME
88701 USA GRANTED 16JA1990 4893464 279528 02DE1988
OWNER: Rexnord Corporation
TITLE: Offset Attachment Sidebar Chain
89706 USA GRANTED 17JL1990 4941315 310240 13EE1989
OWNER: Rexnord Corporation
TITLE: WEAR RESISTANT CHAIN FOR TRENCHERS
88700C USA GRANTED 27NO1990 4972939 433420 07NO1989
OWNER: Rexnord Corporation
TITLE: End Seal for Idler Roller
89704 USA GRANTED 18JE1991 5024450 446204 05DE1989
OWNER: Rexnord Corporation
TITLE: SEAL CARTRIDGE ASSEMBLY
90701 USA GRANTED 05NO1991 5062720 479294 13FE1990
OWNER: Rexnord Corporation
TITLE: Replacement Bearing for Worn Shafts
89705C USA GRANTED 18FE1992 5088597 672543 20MR1991
OWNER: Rexnord Corporation
TITLE: TRACTION WHEEL
89702 USA GRANTED 12MY1992 5111575 315389 24FE1989
OWNER: Rexnord Corporation
TITLE: SWAGING TOOL FOR BEARING INSTALLATION
91701 USA GRANTED 30JE1992 5125504 666579 08MR1991
OWNER: Rexnord Corporation
TITLE: Modular Conveyor Chain Having Open Hinge Pin Construction
90702C USA GRANTED 27OC1992 5158505 657652 19FE1991
OWNER: Rexnord Corporation
TITLE: GUIDE RING
91704 USA GRANTED 24NO1992 5165522 705758 28MY1991
OWNER: Rexnord Corporation
TITLE: Collector Flight Attachment Link for Collector Apparatus
91703 USA GRANTED 05JA1993 5176247 743693 12AV1991
OWNER: Rexnord Corporation
TITLE: Sideflexing Conveyor Chain Including Low Centerline Hinge Pin
86701C(3) USA GRANTED 05JA1993 5176575 443796 24NO1989
OWNER: Rexnord Corporation
TITLE: FLEXIBLE COUPLING COMPRISING MODULAR COMPONENTS
88700C2 USA GRANTED 23FE1993 5188214 586558 21SE1990
OWNER: Rexnord Corporation
TITLE: End Seal for Idler Roller
92711 USA GRANTED 01JE1993 5215185 941661 08SE1992
OWNER: Rexnord Corporation
TITLE: BREAKABLE MOLDED PLASTIC LINKS FOR FORMING CONVEYOR CHAIN
84701C3 USA GRANTED 15JE1993 5219065 912018 10JL1992
OWNER: Rexnord Corporation
TITLE: Chain Link for a Product Capturing Chain
92701 USA GRANTED 190C1993 5253749 902761 23JE1992
OWNER: Rexnord Corporation
TITLE: Open Area Conveyor Assembly
92712 USA GRANTED 30NO1993 5265965 940068 02SE1992
OWNER: Rexnord Corporation
</Table>
<Page>
Annex G
Page 4
<Table>
TITLE: Composite Ball and Socket Bearing with Convex Outer Surface
92707 USA GRANTED 22FE1994 5288354 935820 26AU1992
OWNER: Rexnord Corporation
TITLE: METHOD OF BONDING SELF-LUBRICATING FIBERS TO AN EXTERNAL SURFACE OF A SUBSTRATUM
93702 USA GRANTED 09AU1994 5335768 30621 12MR1993
OWNER: Rexnord Corporation
TITLE: Conveyor Chain Assembly
93706 USA GRANTED 16AU1994 5337885 072479 04JE1993
OWNER: Rexnord Corporation
TITLE: CHAIN WITH SELF ALIGNING FLIGHT SUPPORT LINKS
92704 USA GRANTED 04OC1994 5352047 912548 13JL1992
OWNER: Rexnord Corporation
TITLE: SNAP-TAB ROLLER BEARING CAGE
92710 USA GRANTED 01NO1994 5360275 990420 15DE1992
OWNER: Rexnord Corporation
TITLE: FILAMENT WOUND THRUST BEARING
93713 USA GRANTED 06DE1994 5369833 025364 26FE1993
OWNER: Rexnord Corporation
TITLE: Offset Sidebar Flight Supporting Chain
92708 USA GRANTED 20DE1994 5373637 990421 15DE1992
OWNER: Rexnord Corporation
TITLE: PROCESS OF PRODUCING A BEARING HAVING INTERNAL LUBRICATION GROOVES AND THE BEARING MADE THEREBY
90701C USA GRANTED 27DE1994 5375934 769298 01OC1991
OWNER: Rexnord Corporation
TITLE: Replacement Bearing for Worn Shafts
89707 USA GRANTED 04AP1995 5402880 921417 27JL1992
OWNER: Rexnord Corporation
TITLE: Article Carrying Chain Having Free Tab
93709 USA GRANTED 18AP1995 5407508 131192 01OC1993
OWNER: Rexnord Corporation
TITLE: METHOD FOR PRODUCING A REPLACEABLE OUTER RACE FOR BALL AND SOCKET BEARING
93707 USA GRANTED 09MY1995 5413416 162448 03DE1993
OWNER: Rexnord Corporation
TITLE: ROLLER GUID MEMBER FOR FULL COMPLEMENT ROLLER BEARING
94705 USA GRANTED 20JE1995 5425679 245050 17MY1994
OWNER: Rexnord Corporation
TITLE: Chain with Sealed Joint and Sealed Roller
93711 USA GRANTED 04JL1995 5429226 168527 15DE1993
OWNER: Rexnord Corporation
TITLE: CONVEYOR CHAIN FOR CARRYING OBJECTS
92709 USA GRANTED 11JL1995 5431500 935881 26AU1992
OWNER: Rexnord Corporation
TITLE: BEARING WITH BEARING SURFACE OF INTEGRALLY BONDED SELF-LUBRICATING MATERIAL
93705 USA GRANTED 01AU1995 5437351 172648 23DE1993
OWNER: Rexnord Corporation
TITLE: Friction Disk Brake Mechanism for Electric Motor
93712 USA GRANTED 15AU1995 5441351 142188 26OC1993
OWNER: Rexnord Corporation
TITLE: Full Complement Self-Aligning Roller Bearing
97304C USA GRANTED 28NO1995 5470414 131023 04OC1993
OWNER: Rexnord Corporation
TITLE: Method of Making Flat Stock Having a Bearing Surface & The Flat Stock Made
</Table>
<Page>
Annex G
Page 5
<Table>
Thereby
93708 USA GRANTED 09JA1996 5482379 131072 01OC1993
OWNER: Rexnord Corporation
TITLE: BALL AND SOCKET BEARING ASSEMBLY HAVING REPLACEABLE COMPOSITE STATIONERY BALL
92706C USA GRANTED 27FE1996 5494357 326055 19OC1994
OWNER: Rexnord Corporation
TITLE: PROCESS FOR MAKING A REPLACEABLE SOCKET FOR A BALL AND SOCKET BEARING AND THE
REPLACEABLE SOCKET MADE THEREBY
93710 USA GRANTED 11JE1996 5524987 170381 20DE1993
OWNER: Rexnord Corporation
TITLE: Plugged Slotted Entry Bearing
91702 USA GRANTED 18JE1996 5527045 344811 23NO1994
OWNER: Rexnord Corporation
TITLE: Floating Labyrnth Seal Including Metal Band with Carbon Ring Engine Surface
92710D USA GRANTED 27AU1996 5549772 304356 12SE1994
OWNER: Rexnord Corporation
TITLE: FILAMENT WOUND THRUST BEARING
92709D USA GRANTED 01OC1996 5560103 445803 19MY1995
OWNER: Rexnord Corporation
TITLE: BEARING WITH BEARING SURFACE OF INTEGRALLY BONDED SELF-LUBRICATING MATERIAL
96709 USA GRANTED 12NO1996 5573106 596455 05FE1996
OWNER: Rexnord Corporation
TITLE: Modular Conveyor Chain Including Headed Hinge Pins
93707 D USA GRANTED 10DE1996 5582483 391538 21FE1995
OWNER: Rexnord Corporation
TITLE: ROLLER GUID MEMBER FOR FULL COMPLEMENT ROLLER BEARING
94706 USA GRANTED 28JA1997 5597062 301818 07SE1994
OWNER: Rexnord Corporation
TITLE: Tensioned Transfer Plate For Small Pitch Chain Conveyor
93702X USA GRANTED 03JE1997 5634550 374849 19JA1995
OWNER: Rexnord Corporation
TITLE: Direction Changing Mechanism for Transferring Articles Between Transverse Conveyors
96704 USA GRANTED 02SE1997 5662211 595465 05FE1996
OWNER: Rexnord Corporation
TITLE: Conveyor Chain with Self-Retaining Hinge Pin with Internal Barbs
93707 CIP USA GRANTED 16SE1997 5667312 361029 07DE1994
OWNER: Rexnord Corporation
TITLE: ROLLER GUID MEMBER FOR FULL COMPLEMENT ROLLER BEARING
96705 USA GRANTED 21OC1997 5678683 596588 05FE1996
OWNER: Rexnord Corporation
TITLE: Conveyor Chain with Sealed Plug Hinge Retention System
92708D(2) USA GRANTED 11NO1997 5685648 770416 20DE1996
OWNER: Rexnord Corporation
TITLE: Bearing Apparatus Having Internal Lubrication Grooves
95710 USA GRANTED 02DE1997 56927256 532106 22SE1995
OWNER: Rexnord Corporation
TITLE: REFRIGERATION COMPRESSOR AND COMPRESSOR SEAL
96710 USA GRANTED 09JE1998 5762424 725358 03OC1996
OWNER: Rexnord Corporation
TITLE: Full Perimeter Fiber Wound Bearing Construction
96706 USA GRANTED 14JL1998 5779029 599996 14FE1996
OWNER: Rexnord Corporation
</Table>
<Page>
Annex G
Page 6
<Table>
TITLE: Sideflexing Conveyor Including Lubrication Inserts
96714 USA GRANTED 06OC1998 5816390 596454 05FE1996
OWNER: Rexnord Corporation
TITLE: Conveyor Pin Retention System Using Offset Openings
96711 USA GRANTED 19JA1999 5860511 749909 15NO1996
OWNER: Rexnord Corporation
TITLE: Conveyor Guide Rail Supports
95709 USA GRANTED 02MR1999 5876127 962916 27OC1997
OWNER: Rexnord Corporation
TITLE: MOUNTING ASSEMBLY INCLUDING A TAPERED MOUNTING SLEEVE
97724 USA GRANTED 27AP1999 5896980 892498 14JL1997
OWNER: Rexnord Corporation
TITLE: Guide Rail Splice
95710C USA GRANTED 04MY1999 5899460 773673 24DE1996
OWNER: Rexnord Corporation
TITLE: REFRIGERATION COMPRESSOR AND COMPRESSOR SEAL
97713 USA GRANTED 24AU1999 5941532 878433 18JE1997
OWNER: Rexnord Corporation
TITLE: Aerospace Housing and Shaft Assembly with Noncontacting Seal
97723 USA GRANTED 05OC1999 5960937 958115 27OC1997
OWNER: Rexnord Corporation
TITLE: Conveyor with Hinge Pin Retention Plug With Snap Fit
98701 USA GRANTED 21DE1999 6004037 090115 04JE1998
OWNER: Rexnord Corporation
TITLE: Bearing Assembly with Spherical Bearing Surfaces
97717 USA GRANTED 14MR2000 6036001 856211 14MY1997
OWNER: Rexnord Corporation
TITLE: SIDE-FLEXING CONVEYOR CONSTRUCTION
96710C USA GRANTED 28MR2000 6042271 093995 09JE1998
OWNER: Rexnord Corporation
TITLE: Composite Bearing Structures
99708 USA GRANTED 30MY2000 6068405 080314 15MY1998
OWNER: Rexnord Corporation
TITLE: Diametrically Split Composite Spherical Bearing And Method of Producing Same
98708 USA GRANTED 27JE2000 6080065 120948 22JL1998
OWNER: Rexnord Corporation
TITLE: Tearing Configuration for Flexible Element of Elastomeric Coupling
99710 USA GRANTED 11JL2000 6086495 247463 09FE1999
OWNER: Rexnord Corporation
TITLE: Improved Split Sprocket Assembly
99721 USA GRANTED 19DE2000 6161685 277297 26MR1999
OWNER: Rexnord Corporation
TITLE: Thermoplastic Chain Link for a Modular Conveyor Chain
98706 USA GRANTED 26DE2000 6164439 213311 16DE1998
OWNER: Rexnord Corporation
TITLE: Thermoplastic Connecting Pin
99718 USA GRANTED 09JA2001 6170346 324200 02JE1999
OWNER: Rexnord Corporation
TITLE: Rotary-to-Linear Actuator
98705C USA GRANTED 30JA2001 6180574 571797 16MY2000
OWNER: Rexnord Corporation
</Table>
<Page>
Annex G
Page 7
<Table>
TITLE: Self-Lubricating Bearing and Coating
97718 USA GRANTED 06FE2001 6182353 614936 11MR1996
OWNER: Rexnord Corporation
TITLE: Swaging Tool for Bearing Installation
99708D USA GRANTED 03AP2001 6209206 504094 14FE2000
OWNER: Rexnord Corporation
TITLE : Method of Producing Split Composite Spherical Bearing
98707 USA GRANTED 19JE2001 6247582 217529 21DE1998
OWNER: Rexnord Corporation
TITLE: Fiber Filled Chain Link for a Modular Conveyor Chain
99711 USA GRANTED 19JE2001 6247583 420542 19OC1999
OWNER: Rexnord Corporation
TITLE: Conveyor Chain for Transporting Articles
99067 USA GRANTED 26JE2001 6250459 444935 22NO1999
OWNER: Rexnord Corporation
TITLE: Conveyor Chain
97713C USA GRANTED 10JL2001 6257589 328349 08JE1999
OWNER: Rexnord Corporation
TITLE: Aerospace Housing and Shaft Assembly with Noncontacting Seal
99715 USA GRANTED 10JL2001 6257985 411705 01OC1999
OWNER: Rexnord Corporation
TITLE: Global Shaft Coupling
98707C USA GRANTED 26MR2002 6360881 777931 06FE2001
OWNER: Rexnord Corporation
TITLE: Fiber Filled Chain Link for a Modular Conveyor Chain
00706 USA GRANTED 09AP2002 6367619 615236 13JL2000
OWNER: Rexnord Corporation
TITLE: Conveyor Nose Bar (Low Friction Support Bar with Replaceable Insert)
85705D USA GRANTED 28AP1987 D289496 690694 11JA1985
OWNER: Rexnord Corporation
TITLE:
85704D USA GRANTED 28AP1987 D289497 690921 11JA1985
OWNER: Rexnord Corporation
TITLE: CHAIN LINK
85703 USA GRANTED 12MY1987 D289734 690690 11JA1985
OWNER: Rexnord Corporation
TITLE: CHAIN LINK
85706 USA GRANTED 17JA1989 D299424 745092 17JE1985
OWNER: Rexnord Corporation
TITLE: CHAIN LINK
91706 USA GRANTED 05JA1993 D332213 701974 16MY1991
OWNER: Rexnord Corporation
TITLE: Conveyor Chain Link
02410 USA GRANTED 14AP1987 4658195 736454 21MY1985
OWNER: Rexnord Stearns Division
TITLE: Motor Control Circuit With Automatic Restart of Cut-in
02411 USA GRANTED 17MY1988 4745347 911009 24SE1986
OWNER: Rexnord Stearns Division
TITLE: Low Cost Instant Reversing Circuit
67703 USA GRANTED 01NO1988 4782278 76297 22JL1987
OWNER: Rexnord Stearns Division
TITLE: Motor Starting Circuit with Low Cost Comparator Hysteresis
</Table>
<Page>
Aneex G
Page 8
<Table>
01446 USA GRANTED 21MY1991 5017853 485952 27FE1990
OWNER: Rexnord Stearns Division
TITLE: Spikeless Motor Starting Circuit
02415 USA GRANTED 06JE1995 5421436 197733 17FE1994
OWNER: Rexnord Stearns Division
TITLE: Orientation-Free Brake Mechanism
96713 USA GRANTED 11NO1997 5685398 672248 28JE1996
OWNER: Rexnord Stearns Division
TITLE: FAST RESPONSE ADJUSTABLE BRAKE
02416 USA GRANTED 16DE1997 5697473 615416 14MR1996
OWNER: Rexnord Stearns Division
TITLE: Brake Mechanism with Simplified Separator Springs
97722 USA GRANTED 06AP1999 5892341 959911 29OC1997
OWNER: Rexnord Stearns Division
TITLE: Quick Set Electric Motor Brake Control
99719 USA GRANTED 01MY2001 6226167 377119 19AU1999
OWNER: Rexnord Stearns Division
TITLE: Proving Switch
99720 USA GRANTED 25SE2001 6293372 384360 26AU1999
OWNER: Rexnord Stearns Division
TITLE: Friction Disc with Integral Anti-Rattle Portion for Electric Motor Brake
97722R USA GRANTED 27JE2000 5892341R 005430 09AU1999
OWNER: Rexnord Stearns Division
TITLE: Quick Set Electric Motor Brake Control
00707 USA 28MY2002 6394656 654628 05SE2000
OWNER: Rexnord Corportion
TITLE: Retainerless Processing Roller Bearing
01445 USA 247447 19SE2002
OWNER: Rexnord Corportion
TITLE: Snap-In Bearing End Cap
01703 USA 174213 17JE2002
OWNER: Rexnord Corportion
TITLE: Link Having A Twisted Side Guard
01706P USA 60/402519 09AU2002
OWNER: Rexnord Corportion
TITLE: Belt Splice Tension Loss Detector
02710P USA 60/396601 18JL2002
OWNER: Rexnord Corportion
TITLE: Oven and Proofing Chain
02711P USA 60/412593 20SE2002
OWNER: Rexnord Corportion
TITLE: Sealed Chain Link Assembly
02712P USA NEW APPLICATION 27SE2002
OWNER: Rexnord Corportion
TITLE: Composite Article Having Thermoplastic Elastomer Region On T
XXXX USA 32/50459 06JE2001
OWNER: Rexnord Corportion
TITLE: U.S. Patent Application claiming Priority to EPO
</Table>
<Page>
Annex G
Page 9
<Table>
<Caption>
Docket No. Ctry Status Grant Dt. Pat No. App No App Date
- ---------- ---- ------ -------- ------- ------ --------
XXXXX USA GRANTED 6428436 06AU2002
OWNER: Rexnord Corporation
TITLE: Drive Sprocket with Relief Areas
XXXXX USA GRANTED 5779027 14JL1998
OWNER: Rexnord Corporation
TITLE: Slideflexor Conveyor
XXXXX USA GRANTED 5330045 19JL1994
OWNER: Rexnord Corporation
TITLE: Low backline pressure chain
XXXXX USA GRANTED 5222920 29JE1993
OWNER: Rexnord Corporation
TITLE: Low Backline Pressure Chain
XXXXX USA GRANTED 5096053 17MR1992
OWNER: Rexnord Corporation
TITLE: Conveyor Chain Assembly
XXXXX USA GRANTED 5096050 17MR1992
OWNER: Rexnord Corporation
TITLE: Low Backline Pressure Chain
XXXXX USA GRANTED 5020659 04JN1991
OWNER: Rexnord Corporation
TITLE: Conveyor Chain Assembly
XXXXX USA GRANTED 4909380 20MR1990
OWNER: Rexnord Corporation
TITLE: Low Backline Pressure Chain
XXXXX USA GRANTED 4858753 22AU1989
OWNER: Rexnord Corporation
TITLE: Conveyor Chain Assembly
XXXXX USA GRANTED 4664243 12MY1997
OWNER: Rexnord Corporation
TITLE: Conveyor Roller and Beating Assembly
XXXXX USA GRANTED 4586601 06MY1986
OWNER: Rexnord Corporation
TITLE: Magnetized Conveyor and Chain Links
</Table>
ADDAX, INC.
<Table>
<Caption>
Docket No. Ctry Grant Dt Pat No. App No App Date
- ---------- ---- -------- ------- ------ --------
93716 USA 10JA1995 5379964 103900 10AU1993
OWNER: Addax, Inc.
TITLE: COMPOSITE EXPANDABLE SHAFT
96716 USA 10MR1998 5724715 674472 16JE1996
OWNER: Addax, Inc.
TITLE: COMPOSITE FLANGE FOR DRIVE SHAFTS
XXXXX USA 09AP1991 5006983 406157 12SEP1989
OWNER: Addax, Inc.
TITLE: SERVICE ALLOCATION SYSTEM
XXXX USA GRANTED 30JL1996 5540621 18JE1990
OWNER: Addax, Inc.
</Table>
<Page>
Annex G
Page 10
<Table>
TITLE: Rotary Coupling Appartus Using Composite Materials
</Table>
PT COMPONENTS INC.
<Table>
<Caption>
Docket No. Ctry Grant Dt Pat No. App No App Date
- ---------- ---- -------- ------- ------ --------
02412 USA 14JE1998 4751450 910931 24SE1986
OWNER: PT COMPONENTS INC.
TITLE: Low Cost, Protective Start From Coast Circuit
</Table>
W.M. BERG INC.(1)
<Table>
<Caption>
Docket No. Ctry Grant Dt Pat No. App No App Date
- ---------- ---- -------- ------- ------ --------
USA 24MR1981 4257265 029315 12AP1979
OWNER: Winfred M. Berg, Inc.
TITLE: Lockwasher.
USA 11AU1981 4283184 034554 30AP1979
OWNER: Winfred M. Berg, Inc.
TITLE: Non-Metallic Silent Chain
USA 20MR1984 4437849 047716 12JU1979
OWNER: Winfred M. Berg, Inc.
TITLE: Replacement Drive Belt.
</Table>
THIRD PARTY OWNERS OF REXNORD BUSINESS INTELLECTUAL PROPERTY
(i) U.S. PATENT NO. 5,379,964: JOINTLY OWNED BY ADDAX, INC. AND GOLDENROD,
INC.
(ii) U.S. PATENT NO. 5,369,833: POTENTIAL COMPETING CLAIMS OF OWNERSHIP
On November 3, 1994, U.S. patent application 025,364 was assigned by Athey
Products Corporation to Rexnord Corp. (assignment recorded at USPTO on November
14, 1994). This application matured into Patent No. 5,396,833(the '833 patent)
on Decemeber 6, 1994.
On June 30, 1999, Athey Products Corporation granted Nationscredit Commercial
Corporation a Security Interest in the '833 patent (the security interest
recorded at USPTO on July 9, 1999).
On February 20, 2001, Athey Products Corporation assigned the '833 patent to
Five Star Manufacturing LLC (assignment recorded with USPTO on April 19, 2001).
- ----------
(1) The following three patents are listed by the Patent and Trademark Office
as being assigned to Winfred M. Berg, Inc., an entity whose name was
changed to W.M. Berg Inc. on September 26, 1994.
<Page>
Annex G
Page 11
THIRD PARTY INFRINGEMENT ON OR VIOLATION OF REXNORD BUSINESS INTELLECTUAL
PROPERTY
(i) JEFFREY CHAIN CORPORATION:
Infringement of Rexnord Corp.'s U.S. Patent No. 5,269,729 by Jeffrey
Chain 6875RSJ product.
Status: Rexnord wrote letter to Jeffrey Chain. Jeffrey Chain counsel sent
letter dated 6/12/02 indicating they were looking into the matter.
(ii) UNI-CHAINS, MFG.:
Infringement of Rexnord Corp.'s U.S. Pat. Nos. 4,809,846 and 5,662,211.
Status: Rexnord sent letter to Uni-chains. Counsel for Uni-chains said
company is looking into the matter and has pulled products cited by
Rexnord Corp. from U.S. market.
(iii) SOLUS INDUSTRIAL INNOVATIONS, LLC:
Infringement of Rexnord Corp.'s U.S. Pat. No. 5,896,980 by Solus #118
Rail Splice Clamp.
Status: Rexnord sent letters to Solus dated April 24, 2002 and June 5,
2002 asking Solus to look into the matter.
(iv) SPAN TECH:
Infringement of U.S. Pat. No. 5,330,045 by products Span Tech is selling.
Status: Rexnord offered Span Tech license in '045 patent. In letter dated
June 6, 2002, Span Tech requested a proposed license agreement. Proposed
agreement was sent to Span Tech. In a letter dated September 5, 2002,
Span Tech acknowledged receipt and indicated that it is considering the
license.
(v) HABASIT AG:
Infringement of U.S. Patent No. 5,253,749.
Status: Rexnord inquired as to whether any of Habasit's products are
infringing the 5,253,749 patent in a letter dated 4/15/2002, which was
sent in response to Habasit's allegations of infringement by Rexnord of
its U.S. Patent No. 6,330,941. In the same letter, Rexnord asserts that
the Habasit patent is invalid in light of Rexnord's patent.
(vi) HANGZOU DONGHUA CHAIN FACTORY:
Infringement of REXNORD mark by Hangzou, who has filed the following
marks for competing goods:
Appl. No.: 1,511,347
Mark: REXNORD
Filing Date: August 19, 1999
Country: China
Goods (sub-class): Chains for land vehicles, chains for
motocylces, chains for bicycles, driving chains for land
vehicles.
<Page>
Annex G
Page 12
Appl. No.: 1,510,736
Mark: REXNORD
Filing Date: August 19, 1999
Country: China
Goods (sub-class): Chains other than for land vehicles, driving
chains other than for land vehicles.
Status: Rexnord Corp. filed oppositions to the applications. The
matter is still pending.
(vii) PERKINELMER:
Possible infringement of U.S. Patent Nos. 5,941,532 and 6,257,589.
Status: A letter dated 8/26/2002 has been sent to PerkinElmer regarding
possible infringement of Rexnord patents. Rexnord received a letter
dated September 16, 2002 from PerkinElmer asserting that the patents at
issue are not infringed and/or are invalid.
<Page>
ANNEX H
to
SECURITY AGREEMENT
SCHEDULE OF COPYRIGHTS
None
<Page>
ANNEX I
to
SECURITY AGREEMENT
FORM OF GRANT OF SECURITY INTEREST
IN UNITED STATES TRADEMARKS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which
are hereby acknowledged, [Name of Grantor], a ____________ ____________ (the
"Grantor") with principal offices at _______________________, hereby assigns and
grants to Deutsche Bank Trust Company Americas, as Collateral Agent, with
principal offices at 31 West 52nd Street, New York, New York 10019 (the
"Grantee"), a security interest in (i) all of the Grantor's right, title and
interest in and to the United States trademarks, trademark registrations and
trademark applications (the "Marks") set forth on Schedule A attached hereto,
(ii) all Proceeds (as such term is defined in the Security Agreement referred to
below) and products of the Marks, (iii) the goodwill of the businesses with
which the Marks are associated and (iv) all causes of action arising prior to or
after the date hereof for infringement of any of the Marks or unfair competition
regarding the same.
THIS GRANT is made to secure the satisfactory performance and payment
of all the Obligations of the Grantor, as such term is defined in the Security
Agreement among the Grantor, the other assignors from time to time party thereto
and the Grantee, dated as of November 25, 2002 (as amended, modified, restated
and/or supplemented from time to time, the "Security Agreement"). At the request
and expense of the Grantor upon or after the occurrence of the Termination Date
(as defined in the Security Agreement), the Grantee shall execute, acknowledge,
and deliver to the Grantor an instrument in writing releasing the security
interest in the Marks acquired under this Grant.
This Grant has been granted in conjunction with the security interest
granted to the Grantee under the Security Agreement. The rights and remedies of
the Grantee with respect to the security interest granted herein are as set
forth in the Security Agreement, all terms and
<Page>
Annex I
Page 2
provisions of which are incorporated herein by reference. In the event that any
provisions of this Grant are deemed to conflict with the Security Agreement, the
provisions of the Security Agreement shall govern.
[Remainder of this page intentionally left blank; signature page follows.]
* * *
<Page>
Annex I
Page 3
IN WITNESS WHEREOF, the undersigned have executed this Grant as of
the _______ day of _________________, ________.
[NAME OF GRANTOR], Grantor
By: --------------------------------------
Name:
Title:
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Collateral Agent and Grantee
By: --------------------------------------
Name:
Title:
<Page>
STATE OF ______________)
) ss.:
COUNTY OF _____________)
On this ______ day of _________, _______, before me personally came
______________________ who, being by me duly sworn, did state as follows: that
[s]he is _________________ of [Name of Grantor], that [s]he is authorized to
execute the foregoing Grant on behalf of said ________ and that [s]he did so by
authority of the [Board of Directors] of said _______________.
--------------------------
Notary Public
<Page>
STATE OF ______________)
) ss:
COUNTY OF _____________)
On this ______ day of __________, _______, before me personally came
____________________________ who, being by me duly sworn, did state as follows:
that [s]he is _______________________ of Deutsche Bank Trust Company Americas,
that [s]he is authorized to execute the foregoing Grant on behalf of said
corporation and that [s]he did so by authority of the Board of Directors of said
corporation.
--------------------------
Notary Public
<Page>
SCHEDULE A
<Table>
<Caption>
MARK REG. NO. REG. DATE
---- -------- ---------
</Table>
<Page>
ANNEX J
to
SECURITY AGREEMENT
FORM OF GRANT OF SECURITY INTEREST
IN UNITED STATES PATENTS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which
are hereby acknowledged, [Name of Grantor], a _____________ ___________(the
"Grantor") with principal offices at _________________________________, hereby
assigns and grants to Deutsche Bank Trust Company Americas, as Collateral Agent,
with principal offices at 31 West 52nd Street, New York, New York 10019 (the
"Grantee"), a security interest in (i) all of the Grantor's rights, title and
interest in and to the United States patents (the "Patents") set forth on
Schedule A attached hereto, in each case together with (ii) all Proceeds (as
such term is defined in the Security Agreement referred to below) and products
of the Patents, and (iii) all causes of action arising prior to or after the
date hereof for infringement of any of the Patents or unfair competition
regarding the same.
THIS GRANT is made to secure the satisfactory performance and payment
of all the Obligations of the Grantor, as such term is defined in the Security
Agreement among the Grantor, the other assignors from time to time party thereto
and the Grantee, dated as of November 25, 2002 (as amended, modified, restated
and/or supplemented from time to time, the "Security Agreement"). At the request
and expense of the Grantor upon or after the occurrence of the Termination Date
(as defined in the Security Agreement), the Grantee shall execute, acknowledge,
and deliver to the Grantor an instrument in writing releasing the security
interest in the Patents acquired under this Grant.
<Page>
Annex J
Page 2
This Grant has been granted in conjunction with the security interest
granted to the Grantee under the Security Agreement. The rights and remedies of
the Grantee with respect to the security interest granted herein are as set
forth in the Security Agreement, all terms and provisions of which are
incorporated herein by reference. In the event that any provisions of this Grant
are deemed to conflict with the Security Agreement, the provisions of the
Security Agreement shall govern.
[Remainder of this page intentionally left blank; signature page follows.]
* * *
<Page>
Annex J
Page 3
IN WITNESS WHEREOF, the undersigned have executed this Grant as of the
___________day of _______, _________________.
[NAME OF GRANTOR], Grantor
By:--------------------------------------
Name:
Title:
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Collateral Agent and Grantee
By:--------------------------------------
Name:
Title
<Page>
STATE OF __________)
) SS:
COUNTY OF _________)
On this ________ day of _________, ____________, before me personally
came __________ who, being by me duly sworn, did state as follows: that [s]he is
__________ of [Name of Grantor], that [s]he is authorized to execute the
foregoing Grant on behalf of said _________ and that [s]he did so by authority
of the Board of Directors of said ___________.
--------------------------
Notary Public
<Page>
STATE OF __________)
) SS:
COUNTY OF _________)
On this __________ day of _________, _________, before me
personally came ________ who, being by me duly sworn, did state as follows: that
[s]he is ________ of Deutsche Bank Trust Company Americas, that [s]he is
authorized to execute the foregoing Grant on behalf of said corporation and that
[s]he did so by authority of the Board of Directors of said corporation.
--------------------------
Notary Public
<Page>
SCHEDULE A
<Table>
<Caption>
PATENT PATENT NO. ISSUE DATE
------ ---------- ----------
</Table>
<Page>
ANNEX K
to
SECURITY AGREEMENT
FORM OF GRANT OF SECURITY INTEREST
IN UNITED STATES COPYRIGHTS
WHEREAS, [Name of Grantor], a _____________ _____________ (the
"Grantor"), having its chief executive office at _____________, _____________,
is the owner of all right, title and interest in and to the United States
copyrights and associated United States copyright registrations and applications
for registration set forth in Schedule A attached hereto;
WHEREAS, DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral
Agent, having its principal offices at 31 West 52nd Street, New York, New York
10019 (the "Grantee"), desires to acquire a security interest in said copyrights
and copyright registrations and applications therefor; and
WHEREAS, the Grantor is willing to assign to the Grantee, and to
grant to the Grantee a security interest in and lien upon the copyrights and
copyright registrations and applications therefor described above.
NOW, THEREFORE, for good and valuable consideration, the receipt
of which is hereby acknowledged, and subject to the terms and conditions of the
Security Agreement, dated as of November 25, 2002, made by the Grantor, the
other assignors from time to time party thereto and the Grantee (as amended,
modified, restated and/or supplemented from time to time, the "Security
Agreement"), the Grantor hereby assigns to the Grantee as collateral security,
and grants to the Grantee a security interest in, the copyrights and copyright
registrations and applications therefor set forth in Schedule A attached hereto.
This Grant has been granted in conjunction with the security
interest granted to the Grantee under the Security Agreement. The rights and
remedies of the Grantee with respect to the security interest granted herein are
as set forth in the Security Agreement, all terms and provisions of which are
incorporated herein by reference. In the event that any provisions of this Grant
are deemed to conflict with the Security Agreement, the provisions of the
Security Agreement shall govern.
[Remainder of this page intentionally left blank; signature page follows.]
* * *
<Page>
Annex K
Page 2
IN WITNESS WHEREOF, the undersigned have executed this Grant as
of the _____________day of ________, ______________.
[NAME OF GRANTOR], as Grantor
By:---------------------------------------
Name:
Title:
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Collateral Agent and Grantee
By:---------------------------------------
Name:
Title:
<Page>
STATE OF __________)
) SS:
COUNTY OF _________)
On this __________ day of ___________, _________, before me
personally came __________, who being duly sworn, did depose and say that [s]he
is __________ of [Name of Grantor], that [s]he is authorized to execute the
foregoing Grant on behalf of said corporation and that [s]he did so by authority
of the Board of Directors of said corporation.
-----------------------
Notary Public
<Page>
STATE OF __________)
) SS.:
COUNTY OF _________)
On this ___________ day of ________, _______, before me
personally came __________ who, being by me duly sworn, did state as follows:
that [s]he is ___________ of Deutsche Bank Trust Company Americas, that [s]he is
authorized to execute the foregoing Grant on behalf of said _________ and that
[s]he did so by authority of the Board of Directors of said __________.
-----------------------
Notary Public
<Page>
SCHEDULE A
U.S. COPYRIGHTS
<Table>
<Caption>
RESIGISTRATION PUBLICATION COPYRIGHT
NUMBERS DATE TITLE
- -------------- ----------- ---------
</Table>
<Page>
EXHIBIT I
SOLVENCY CERTIFICATE
To the Administrative Agent and each of the Lenders
party to the Credit Agreement referred to below:
I, the undersigned, the Chief Financial Officer of RBS Global, Inc.
("Holdings") a Delaware corporation, in that capacity only and not in my
individual capacity (and without personal liability), do hereby certify as of
the date hereof, and based upon facts and circumstances as they exist as of the
date hereof (and disclaiming any responsibility for changes in such fact and
circumstances after the date hereof), that:
1. This Certificate is furnished to the Lenders pursuant to Section
5.01(m)(i) of the Credit Agreement, dated as of November 25, 2002 among
Holdings, Rexnord Corporation, the lenders from time to time party hereto (each,
a "Lender" and, collectively, the "Lenders"), Deutsche Bank Trust Company
Americas, as Administrative Agent, General Electric Capital Corporation and
Wachovia Bank, National Association, as Co-Documentation Agents, and Deutsche
Bank Securities Inc. and Credit Suisse First Boston, acting through its Cayman
Islands Branch, as Joint Lead Arrangers and Joint Book Runners. Unless otherwise
defined herein, capitalized terms used in this Certificate shall have the
meanings set forth in the Credit Agreement.
2. For purposes of this Certificate, the terms below shall have the
following definitions:
(a) "Fair Value"
The amount at which the assets, in their entirety, of Holdings
and its Subsidiaries taken as whole, would change hands between
a willing buyer and a willing seller, within a commercially
reasonable period of time, each having reasonable knowledge of
the relevant facts, with neither being under any compulsion to
act.
(b) "Present Fair Salable Value"
The amount that could be obtained by an independent willing
seller from an independent willing buyer if the assets of
Holdings and its Subsidiaries taken as a whole are sold with
reasonable promptness in an arm's-length transaction under
present conditions for the sale of comparable business
enterprises insofar as such conditions can be reasonably
evaluated.
(c) "New Financing"
The Indebtedness incurred or to be incurred by Holdings and its
Subsidiaries under the Credit Documents (assuming the full
utilization by the Borrower of the Total Commitments under the
Credit Agreement) and all other financings (including, without
limitation, the Senior Subordinated
<Page>
Exhibit I
Page 2
Notes) contemplated by the Credit Documents, in each case after
giving effect to the Transaction and the incurrence of all
financings in connection therewith.
(d) "Stated Liabilities"
The recorded liabilities (including contingent liabilities that
would be recorded in accordance with GAAP) of Holdings and its
Subsidiaries taken as a whole as of the date hereof after giving
effect to the consummation of the Transaction, determined in
accordance with GAAP consistently applied, together with the
amount of all New Financing.
(e) "Identified Contingent Liabilities"
The maximum estimated amount of liabilities reasonably likely to
result from pending litigation, asserted claims and assessments,
guaranties, uninsured risks and other contingent liabilities of
Holdings and its Subsidiaries taken as a whole after giving
effect to the Transaction (including all fees and expenses
related thereto but exclusive of such contingent liabilities to
the extent reflected in Stated Liabilities), as identified and
explained in terms of their nature and estimated magnitude by
responsible officers of Holdings or that have been identified as
such by an officer of Holdings.
(f) "Will be able to pay its Stated Liabilities, including
Identified Contingent Liabilities, as they mature"
For the period from the date hereof through the stated maturity
of all New Financing, Holdings and its Subsidiaries taken as a
whole will have sufficient assets and cash flow to pay their
respective Stated Liabilities and Identified Contingent
Liabilities as those liabilities mature or otherwise become
payable.
(g) "Does not have Unreasonably Small Capital"
For the period from the date hereof through the stated maturity
of all New Financing, Holdings and its Subsidiaries taken as a
whole after consummation of the Transaction and all Indebtedness
(including the Loans and the Senior Subordinated Notes) being
incurred or assumed and Liens created by Holdings and its
Subsidiaries in connection therewith, is a going concern and has
sufficient capital to ensure that it will continue to be a going
concern for such period and to remain a going concern.
3. For purposes of this Certificate, I, or officers of Holdings
under my direction and supervision, have performed the following procedures as
of and for the periods set forth below.
<Page>
Exhibit I
Page 3
(a) I have reviewed the financial statements (including the PRO
FORMA financial statements) referred to in Section 6.10 of the
Credit Agreement.
(b) I have made inquiries of certain officials of Holdings and
its Subsidiaries who have responsibility for financial and
accounting matters regarding (i) the existence and amount of
Identified Contingent Liabilities associated with the business
of Holdings and its Subsidiaries and (ii) whether the unaudited
PRO FORMA consolidated financial statements referred to in
paragraph (a) above are in conformity with GAAP applied on a
basis consistent with that of Holdings' audited financial
statements as of March 31, 2002.
(c) I have knowledge of and have reviewed to my satisfaction the
Credit Documents and the respective Annexes and Exhibits
thereto.
(d) With respect to Identified Contingent Liabilities, I:
1. inquired of certain officials of Holdings and its
Subsidiaries who have responsibility for legal, financial
and accounting matters as to the existence and estimated
liability with respect to all contingent liabilities
associated with the business of Holdings and its
Subsidiaries; and
2. confirmed with officers of Holdings and its
Subsidiaries that, to the best of such officers'
knowledge, (i) all appropriate items were included in
Stated Liabilities or Identified Contingent Liabilities
and that (ii) the amounts relating thereto were the
maximum estimated amount of liabilities reasonably likely
to result therefrom as of the date hereof.
(e) I have made inquiries of certain officers of Holdings and its
Subsidiaries who have responsibility for financial reporting
and accounting matters regarding whether they were aware of any
events or conditions that, as of the date hereof, would cause
Holdings and its Subsidiaries taken as a whole, after giving
effect to the consummation of the Transaction and the related
financing transactions (including the incurrence of the New
Financing), to (i) have assets with a Fair Value or Present Fair
Salable Value that are less than the sum of Stated Liabilities
and Identified Contingent Liabilities; (ii) have Unreasonably
Small Capital; or (iii) not be able to pay their respective
Stated Liabilities and Identified Contingent Liabilities as they
mature or otherwise become payable.
4. Based on and subject to the foregoing, I hereby certify on
behalf of Holdings that, after giving effect to the consummation of the
Transaction and the related financing transactions (including the incurrence of
the New Financing), it is my opinion that (i) the Fair Value and Present Fair
Salable Value of the assets of Holdings and its Subsidiaries, taken as a whole,
exceed their Stated Liabilities and Identified Contingent Liabilities; (ii)
Holdings and its
<Page>
Exhibit I
Page 4
Subsidiaries, taken as a whole, do not have Unreasonably Small Capital; and
(iii) Holdings and its Subsidiaries, taken as a whole, will be able to pay their
Stated Liabilities and Identified Contingent Liabilities as they mature or
otherwise become payable.
IN WITNESS WHEREOF, the undersigned has set his hand this 25th
day of November, 2002.
RBS GLOBAL, INC.
By:-------------------------------
Name:
Title:
<Page>
EXHIBIT J
CONFORMED AS EXECUTED
SUBSIDIARIES GUARANTY
SUBSIDIARIES GUARANTY, dated as of November 25, 2002, (as
amended, modified or supplemented from time to time, this "Guaranty"), made by
each of the undersigned guarantors (each a "Guarantor" and, together with any
other entity that becomes a guarantor hereunder pursuant to Section 26 hereof,
the "Guarantors"). Except as otherwise defined herein, capitalized terms used
herein and defined in the Credit Agreement (as defined below) shall be used
herein as therein defined.
W I T N E S S E T H :
WHEREAS, RBS Global, Inc. ("HOLDINGS"), Rexnord Corporation (the
"Borrower"), the lenders from time to time party thereto (the "LENDERS"),
Deutsche Bank Trust Company Americas, as Administrative Agent (together with any
successor Administrative Agent, the "Administrative Agent"), General Electric
Capital Corporation and Wachovia Bank, National Association, as Co-Documentation
Agents, and Deutsche Bank Securities Inc. and Credit Suisse First Boston, acting
through its Cayman Islands Branch, as Joint Lead Arrangers and Joint Book
Runners (the "Joint Lead Arrangers") have entered into a Credit Agreement, dated
as of November 25, 2002 (as amended, modified or supplemented from time to time,
the "Credit Agreement"), providing for the making of Loans to, and the issuance
of, and participation in, Letters of Credit for the account of, the Borrower as
contemplated therein (the Lenders, the Collateral Agent, the Letter of Credit
Issuers, the Administrative Agent and each other Agent are herein called the
"Lender Creditors");
WHEREAS, the Borrower and one or more of its Subsidiaries may at
any time and from time to time enter into one or more Interest Rate Protection
Agreements (each such Interest Rate Protection Agreement, except to the extent
expressly stated therein that the liabilities and indebtedness thereunder are
not "Obligations" for the purposes of this Agreement, a "Covered Agreement" and,
collectively the "Covered Agreements") with one or more Lenders or any affiliate
thereof (each such Lender or affiliate party to any such Covered Agreement, even
if the respective Lender subsequently ceases to be a Lender under the Credit
Agreement for any reason, together with such Lender's or affiliate's successors
and assigns, if any, collectively, the "Other Creditors" and, together with the
Lender Creditors, the "Secured Creditors");
WHEREAS, each Guarantor is a direct or indirect Subsidiary or,
in the case of Intermediate Holdco, the immediate Parent of the Borrower;
WHEREAS, it is a condition to the making of Loans to, and the
issuance of Letters of Credit for the account of, the Borrower under the Credit
Agreement that each Guarantor shall have executed and delivered this Guaranty;
and
WHEREAS, each Guarantor will obtain benefits from the incurrence
of Loans to, and the issuance of Letters of Credit for the account of, the
Borrower under the Credit Agreement and the entering into by the Borrower and
one or more of its Subsidiaries of Covered
<Page>
Exhibit J
Page 2
Agreements and, accordingly, desires to execute this Guaranty in order to
satisfy the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to each Guarantor, the receipt and sufficiency of which are
hereby acknowledged, each Guarantor hereby makes the following representations
and warranties to the Secured Creditors and hereby covenants and agrees with
each Secured Creditor as follows:
1. Each Guarantor, jointly and severally, irrevocably,
absolutely and unconditionally guarantees: (i) to the Lender Creditors the full
and prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of (x) the principal of, premium, if any, and interest on the Notes
issued by, and the Loans made to, the Borrower under the Credit Agreement, and
all reimbursement obligations and Unpaid Drawings with respect to Letters of
Credit and (y) all other obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due),
liabilities and indebtedness owing by the Borrower to the Lender Creditors under
the Credit Agreement and each other Credit Document to which the Borrower is a
party (including, without limitation, indemnities, Fees and interest thereon
(including, in each case, any interest accruing after the commencement of any
bankruptcy, insolvency, receivership or similar proceeding at the rate provided
for in the Credit Agreement, whether or not such interest is an allowed claim in
any such proceeding), whether now existing or hereafter incurred under, arising
out of or in connection with the Credit Agreement and any such other Credit
Document and the due performance and compliance by the Borrower with all of the
terms, conditions and agreements contained in all such Credit Documents (all
such principal, premium, interest, liabilities, indebtedness and obligations,
except to the extent consisting of obligations, liabilities or indebtedness with
respect to Covered Agreements, being herein collectively called the "Credit
Document Obligations"); and (ii) to each Other Creditor the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of all obligations (including obligations which, but for the automatic stay
under Section 362(a) of the Bankruptcy Code, would become due), liabilities and
indebtedness (including, in each case, any interest accruing after the
commencement of any bankruptcy, insolvency, receivership or similar proceeding
at the rate provided for in the respective Covered Agreements, whether or not
such interest is an allowed claim in any such proceeding) owing by the Borrower
and/or one or more of its Susidiaries under any Covered Agreement, whether now
in existence or hereafter arising, and the due performance and compliance by the
Borrower and such Subsidiaries with all of the terms, conditions and agreements
contained in each Covered Agreement to which it is a party (all such
obligations, liabilities and indebtedness being herein collectively called the
"Other Obligations" and, together with the Credit Document Obligations, the
"Guaranteed Obligations"). As used herein, the term "Guaranteed Party" shall
mean the Borrower and each Subsidiary thereof party to any Covered Agreement
with an Other Creditor. Each Guarantor understands, agrees and confirms that the
Secured Creditors may enforce this Guaranty up to the full amount of the
Guaranteed Obligations against such Guarantor without proceeding against any
other Guarantor, the Borrower, any other Guaranteed Party, against any security
for the Guaranteed Obligations, or under any other guaranty covering all or a
portion of the Guaranteed Obligations.
<Page>
Exhibit J
Page 3
2. Additionally, each Guarantor, jointly and severally,
unconditionally, absolutely and irrevocably, guarantees the payment of any and
all Guaranteed Obligations whether or not due or payable by the Borrower or any
other Guaranteed Party upon the occurrence in respect of the Borrower or any
such other Guaranteed Party of any of the events specified in Section 9.05 of
the Credit Agreement, and unconditionally and irrevocably, jointly and
severally, promises to pay such Guaranteed Obligations to the Secured Creditors,
or order, on demand upon or after the occurrence of the events described above.
This Guaranty shall constitute a guaranty of payment, and not of collection.
3. The liability of each Guarantor hereunder is primary,
absolute, joint and several, and unconditional and is exclusive and independent
of any security for or other guaranty of the indebtedness of the Borrower or any
other Guaranteed Party whether executed by such Guarantor, any other Guarantor,
any other guarantor or by any other party, and the liability of each Guarantor
hereunder shall not be affected or impaired by any circumstance or occurrence
whatsoever, including, without limitation: (a) any direction as to application
of payment by the Borrower or any other Guaranteed Party or by any other party,
(b) any other continuing or other guaranty, undertaking or maximum liability of
a guarantor or of any other party as to the Guaranteed Obligations, (c) any
payment on or in reduction of any such other guaranty or undertaking, (d) any
dissolution, termination or increase, decrease or change in personnel by the
Borrower or any other Guaranteed Party, (e) any payment made to any Secured
Creditor on the indebtedness which any Secured Creditor repays the Borrower or
any other Guaranteed Party pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
each Guarantor waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding, (f) any action or
inaction by the Secured Creditors as contemplated in Section 6 hereof or (g) any
invalidity, irregularity or unenforceability of all or any part of the
Guaranteed Obligations or of any security therefor.
4. The obligations of each Guarantor hereunder are
independent of the obligations of any other Guarantor, any other guarantor, the
Borrower or any other Guaranteed Party, and a separate action or actions may be
brought and prosecuted against each Guarantor whether or not action is brought
against any other Guarantor, any other guarantor, the Borrower or any other
Guaranteed Party and whether or not any other Guarantor, any other guarantor,
the Borrower or any other Guaranteed Party be joined in any such action or
actions. Each Guarantor waives, to the fullest extent permitted by law, the
benefits of any statute of limitations affecting its liability hereunder or the
enforcement thereof. Any payment by the Borrower or any other Guaranteed Party
or other circumstance which operates to toll any statute of limitations as to
the Borrower or any other Guaranteed Party shall operate to toll the statute of
limitations as to each Guarantor.
5. Each Guarantor hereby waives notice of acceptance of
this Guaranty and notice of any liability to which it may apply, and waives
promptness, diligence, presentment, demand of payment, protest, notice of
dishonor or nonpayment of any such liabilities, suit or taking of other action
by the Administrative Agent or any other Secured Creditor against, and, except
for such notice as is expressly required pursuant to the Credit Documents or the
relevant Covered Agreement, as applicable, any other notice to, any party liable
thereon (including such Guarantor, any other Guarantor, any other guarantor, the
Borrower or any other Guaranteed Party).
<Page>
Exhibit J
Page 4
6. Any Secured Creditor may at any time and from time to
time without the consent of, or notice to, any Guarantor, without incurring
responsibility to such Guarantor, without impairing or releasing the obligations
of such Guarantor hereunder, upon or without any terms or conditions and in
whole or in part:
(a) change the manner, place or terms of payment of, and/or
change, increase or extend the time of payment of, renew or alter, any of the
Guaranteed Obligations (including any increase or decrease in the rate of
interest thereon or the principal amount thereof), any security therefor, or any
liability incurred directly or indirectly in respect thereof, and the guaranty
herein made shall apply to the Guaranteed Obligations as so changed, extended,
renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, impair, realize upon or
otherwise deal with in any manner and in any order any property by whomsoever at
any time pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset there
against;
(c) exercise or refrain from exercising any rights against
the Borrower, any other Guaranteed Party, any other Credit Party, any Subsidiary
thereof or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers,
Guarantors, other guarantors, the Borrower, any other Guaranteed Party, or other
obligors;
(e) settle or compromise any of the Guaranteed Obligations,
any security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower or any other Guaranteed Party to
creditors of the Borrower or such other Guaranteed Party other than the Secured
Creditors;
(f) apply any sums in accordance with the terms of the Credit
Documents or the relevant Covered Agreement, as applicable, by whomsoever
paid or howsoever realized to any liability or liabilities of the Borrower or
any other Guaranteed Party to the Secured Creditors pursuant to the Credit
Document or the relevant Covered Agreement, as applicable, regardless of what
liabilities of the Borrower or such other Guaranteed Party remain unpaid;
(g) consent to or waive any breach of, or any act, omission
or default under, any of the Covered Agreements, the Credit Documents or any of
the instruments or agreements referred to therein, or otherwise amend, modify
or supplement any of the Covered Agreements, the Credit Documents or any of such
other instruments or agreements, in each case in accordance with the terms
thereof;
(h) act or fail to act in any manner which may deprive such
Guarantor of its right to subrogation against the Borrower or any other
Guaranteed Party to recover full indemnity for any payments made pursuant to
this Guaranty; and/or
<Page>
Exhibit J
Page 5
(i) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable discharge
of such Guarantor from its liabilities under this Guaranty.
7. This Guaranty is a continuing one and all liabilities to
which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. No failure or delay on the
part of any Secured Creditor in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein expressly specified are cumulative and not
exclusive of any rights or remedies which any Secured Creditor would otherwise
have. No notice to or demand on any Guarantor in any case shall entitle such
Guarantor to any other further notice or demand in similar or other
circumstances or constitute a waiver of the rights of any Secured Creditor to
any other or further action in any circumstances without notice or demand. It is
not necessary for any Secured Creditor to inquire into the capacity or powers of
the Borrower or any other Guaranteed Party or the officers, directors, partners
or agents acting or purporting to act on its or their behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
8. Any indebtedness of the Borrower or any other Guaranteed
Party now or hereafter held by any Guarantor is hereby subordinated to the
indebtedness of the Borrower or such other Guaranteed Party to the Secured
Creditors, and such indebtedness of the Borrower or such other Guaranteed Party
to any Guarantor, if the Administrative Agent or the Collateral Agent, after the
occurrence and during the continuance of an Event of Default, so requests, shall
be collected, enforced and received by such Guarantor as trustee for the Secured
Creditors and be paid over to the Secured Creditors on account of the
indebtedness of the Borrower or the other Guaranteed Parties to the Secured
Creditors, but without affecting or impairing in any manner the liability of
such Guarantor under the other provisions of this Guaranty. Without limiting the
generality of the foregoing, each Guarantor hereby agrees with the Secured
Creditors that it will not be exercise any right of subrogation which it may at
any time otherwise have as a result of this Guaranty (whether contractual, under
Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed
Obligations have been paid in full in cash.
9. (a) Each Guarantor waives any right (except as shall be
required by applicable law and cannot be waived) to require the Secured
Creditors to: (i) proceed against the Borrower, any other Guaranteed Party, any
other Guarantor, any other guarantor of the Guaranteed Obligations or any other
party; (ii) proceed against or exhaust any security held from the Borrower, any
other Guaranteed Party, any other Guarantor, any other guarantor of the
Guaranteed Obligations or any other party; or (iii) pursue any other remedy in
the Secured Creditors' power whatsoever. Each Guarantor waives any defense based
on or arising out of any defense of the Borrower, any other Guaranteed Party,
any other Guarantor, any other guarantor of the Guaranteed Obligations or any
other party other than payment in full of the Guaranteed Obligations, including,
without limitation, any defense based on or arising out of the disability of the
Borrower, any other Guaranteed Party, any other Guarantor, any other guarantor
of the Guaranteed Obligations or any other party, or the unenforceability of the
Guaranteed Obligations or any part thereof from any cause, or the cessation from
any cause of the liability of the Borrower or any other Guaranteed Party other
than payment in full of the Guaranteed
<Page>
Exhibit J
Page 6
Obligations in cash. The Secured Creditors may, at their election, foreclose on
any security held by the Administrative Agent, the Collateral Agent or the other
Secured Creditors by one or more judicial or nonjudicial sales, or exercise any
other right or remedy the Secured Creditors may have against the Borrower, any
other Guaranteed Party or any other party, or any security, without affecting or
impairing in any way the liability of any Guarantor hereunder except to the
extent the Guaranteed Obligations have been paid in full in cash. Each Guarantor
waives any defense arising out of any such election by the Secured Creditors,
even though such election operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of such Guarantor against
the Borrower, any other Guaranteed Party or any other party or any security.
(b) Each Guarantor waives all presentments, demands for
performance, protests and, except as is expressly required under the Credit
Documents or the relevant Covered Agreement, notices, including, without
limitation, notices of nonperformance, notices of protest, notices of dishonor,
notices of acceptance of this Guaranty, and notices of the existence, creation
or incurring of new or additional indebtedness. Each Guarantor assumes all
responsibility for being and keeping itself informed of the Borrower's and each
other Guaranteed Party's financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations
and the nature, scope and extent of the risks which such Guarantor assumes and
incurs hereunder, and agrees that the Secured Creditors shall have no duty to
advise any Guarantor of information known to them regarding such circumstances
or risks.
10. The Secured Creditors agree that this Guaranty may be
enforced only by the action of the Administrative Agent or the Collateral Agent,
in each case acting upon the instructions of the Required Lenders (or, after the
date on which all Credit Document Obligations have been paid in full, the
holders of at least a majority of the outstanding Other Obligations) and that no
other Secured Creditors shall have any right individually to seek to enforce or
to enforce this Guaranty, it being understood and agreed that such rights and
remedies may be exercised by the Administrative Agent or the Collateral Agent
or, after all the Credit Document Obligations have been paid in full, by the
holders of at least a majority of the outstanding Other Obligations, as the case
may be, for the benefit of the Secured Creditors upon the terms of this
Guaranty. The Secured Creditors further agree that this Guaranty may not be
enforced against any director, officer, employee, partner, member or stockholder
of any Guarantor (except to the extent such partner, member or stockholder is
also a Guarantor hereunder).
11. In order to induce the Lenders to make Loans to, and
issue Letters of Credit for the account of, the Borrower pursuant to the Credit
Agreement, and in order to induce the Other Creditors to execute, deliver and
perform the Covered Agreements, each Guarantor represents, warrants and
covenants that:
(a) Such Guarantor (i) is a duly organized and validly
existing corporation, partnership or limited liability company, as the case may
be, in good standing under the laws of the jurisdiction of its organization,
(ii) has the corporate, partnership or limited liability company power and
authority, as the case may be, to own its property and assets and to transact
the business in which it is engaged and presently proposes to engage and (iii)
is duly qualified and is authorized to do business and is in good standing in
each jurisdiction where the conduct of its
<Page>
Exhibit J
Page 7
business requires such qualification except for failures to be so qualified
which, either individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect.
(b) Such Guarantor has the corporate, partnership or limited
liability company power and authority, as the case may be, to execute, deliver
and perform the terms and provisions of this Guaranty and each other Credit
Document to which it is a party and has taken all necessary corporate,
partnership or limited liability company action, as the case may be, to
authorize the execution, delivery and performance by it of this Guaranty and
each such other Credit Document. Such Guarantor has duly executed and delivered
this Guaranty and each other Credit Document to which it is a party, and this
Guaranty and each such other Credit Document constitutes the legal, valid and
binding obligation of such Guarantor enforceable in accordance with its terms,
except to the extent that the enforceability hereof or thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).
(c) Neither the execution, delivery or performance by such
Guarantor of this Guaranty or any other Credit Document to which it is a party,
nor compliance by it with the terms and provisions hereof and thereof, will (i)
contravene any provision of any applicable law, statute, rule or regulation or
any applicable order, writ, injunction or decree of any court or governmental
instrumentality, (ii) conflict with or result in any breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien (except pursuant to the Security Documents) upon any of the property or
assets of such Guarantor or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, loan agreement, credit agreement, or any
other material agreement, contract or instrument to which such Guarantor or any
of its Subsidiaries is a party or by which it or any of its property or assets
is bound or to which it may be subject or (iii) violate any provision of the
certificate or articles of incorporation or by-laws (or equivalent
organizational documents) of such Guarantor or any of its Subsidiaries.
(d) No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except as have been
obtained or made), or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required to authorize, or is required
for, (i) the execution, delivery and performance of this Guaranty by such
Guarantor or any other Credit Document to which such Guarantor is a party or
(ii) the legality, validity, binding effect or enforceability of this Guaranty
or any other Credit Document to which such Guarantor is a party.
(e) There are no actions, suits or proceedings pending or, to
such Guarantor's knowledge, threatened (i) with respect to this Guaranty or any
other Credit Document to which such Guarantor is a party or (ii) with respect to
such Guarantor or any of its Subsidiaries that, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
12. Each Guarantor covenants and agrees that on and after the
Effective Date and until the termination of the Total Commitment and all Covered
Agreements and until such time as no Note or Letter of Credit remains
outstanding and all Guaranteed Obligations have
<Page>
Exhibit J
Page 8
been paid in full, such Guarantor will comply, and will cause each of its
Subsidiaries to comply, with all of the applicable provisions, covenants and
agreements contained in Sections 7 and 8 of the Credit Agreement, and will take,
or will refrain from taking, as the case may be, all actions that are necessary
to be taken or not taken so that it is not in violation of any provision,
covenant or agreement contained in Section 7 or 8 of the Credit Agreement, and
so that no Default or Event of Default is caused by the actions of such
Guarantor or any of its Subsidiaries.
13. The Guarantors hereby jointly and severally agree to pay (to the
extent such amounts are not paid by the Borrower pursuant to Section 12.01 of
the Credit Agreement) all reasonable out-of-pocket costs and expenses of each
Secured Creditor actually incurred in connection with the enforcement of this
Guaranty and of the Administrative Agent in connection with any amendment,
waiver or consent relating hereto (including, in each case, without limitation,
the reasonable fees and disbursements of White & Case LLP).
14. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Secured Creditors
and their successors and permitted assigns.
15. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated except with the written consent of each
Guarantor directly affected thereby and with the written consent of either (x)
the Required Lenders (or, to the extent required by Section 12.12 of the Credit
Agreement, with the written consent of each Lender) at all times prior to the
time on which all Credit Document Obligations have been paid in full or (y) the
holders of at least a majority of the outstanding Other Obligations at all times
after the time on which all Credit Document Obligations have been paid in full;
PROVIDED, that any change, waiver, modification or variance affecting the rights
and benefits of a single Class (as defined below) of Secured Creditors (and not
all Secured Creditors in a like or similar manner) shall also require the
written consent of the Requisite Creditors (as defined below) of such Class of
Secured Creditors (it being understood that the addition or release of any
Guarantor hereunder in accordance with the terms hereof or the Credit Agreement
shall not constitute a change, waiver, discharge or termination affecting any
Guarantor other than the Guarantor so added or released and shall not require
the consent of any Secured Creditor other than the Administrative Agent). For
the purpose of this Guaranty, the term "Class" shall mean each class of Secured
Creditors, i.e., whether (x) the Lender Creditors as holders of the Credit
Document Obligations or (y) the Other Creditors as the holders of the Other
Obligations. For the purpose of this Guaranty, the term "Requisite Creditors" of
any Class shall mean (x) with respect to the Credit Document Obligations, the
Required Lenders (or, to the extent required by Section 12.12 of the Credit
Agreement, each Lender) and (y) with respect to the Other Obligations, the
holders of at least a majority of all obligations outstanding from time to time
under the Covered Agreements.
16. Each Guarantor acknowledges that an executed (or conformed) copy
of each of the Credit Documents and Covered Agreements (if any) has been made
available to a senior officer of such Guarantor and such officer is familiar
with the contents thereof.
17. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Secured Creditor Law) and not by way of limitation of any such
rights, upon the occurrence and during the continuance
<Page>
Exhibit J
Page 9
of (i) an Event of Default, each Lender Creditor and (ii) any payment default
under any Covered Agreement continuing after any applicable grace period, each
Other Creditor party thereto), in each case, is hereby authorized, at any time
or from time to time, without notice to any Guarantor or to any other Person,
any such notice being expressly waived, to set off and to appropriate and apply
any and all deposits (general or special but not trust accounts) and any other
indebtedness at any time held or owing by such Lender Creditor or Other
Creditor, as the case may be, to or for the credit or the account of such
Guarantor, against and on account of the obligations and liabilities of such
Guarantor to such Lender Creditor or Other Creditor, as the case may be, under
this Guaranty, irrespective of whether or not such Lender Creditor or Other
Creditor, as the case may be, shall have made any demand hereunder and although
said obligations, liabilities, deposits or claims, or any of them, shall be
contingent or unmatured. Each Secured Creditor agrees to promptly notify the
relevant Guarantor after any such setoff and application, provided that the
failure to give such notice shall not affect the validity of such setoff and
application.
18. All notices, requests, demands or other communications pursuant
hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or
courier service and all such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be
effective when deposited in the mails, delivered to the telegraph company, cable
company or overnight courier, as the case may be, or sent by telex or
telecopier, except that notices and communications to the Administrative Agent
or any Guarantor shall not be effective until received by the Administrative
Agent or such Guarantor, as the case may be. All notices and other
communications shall be in writing and addressed to such party (i) in the case
of any Lender Creditor, as provided in the Credit Agreement, (ii) in the case of
any Guarantor, Rexnord Corporation, 4701 West Greenfield Avenue, Milwaukee, WI
53214, Attention: Chief Financial Officer, Telephone No.: (414)643-3000,
Facsimile No.: (414)643-3078, and (iii) in the case of any Other Creditor, at
such address as such Other Creditor shall have specified in writing to the
Guarantors; or in any case at such other address as any of the Persons listed
above may hereafter notify the others in writing.
19. If claim is ever made upon any Secured Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the Borrower or any other Guaranteed Party)
then and in such event each Guarantor agrees that any such judgment, decree,
order, settlement or compromise shall be binding upon such Guarantor,
notwithstanding any revocation hereof or other instrument evidencing any
liability of the Borrower or any other Guaranteed Party, and such Guarantor
shall be and remain liable to the aforesaid payees hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by any such payee.
20. (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE SECURED
CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Guaranty or any other Credit Document to which any
Guarantor is a party may be brought in the courts of the State of
<Page>
Exhibit J
Page 10
New York or of the United States of America for the Southern District of New
York in each case which are located in the County of New York, and, by execution
and delivery of this Guaranty, each Guarantor hereby irrevocably accepts for
itself and in respect of its property, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts. Each Guarantor hereby
further irrevocably waives any claim that any such court lacks personal
jurisdiction over such Guarantor, and agrees not to plead or claim in any legal
action or proceeding with respect to this Guaranty or any other Credit Document
to which such Guarantor is a party brought in any of the aforesaid courts that
any such court lacks personal jurisdiction over such Guarantor. Each Guarantor
further irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to such Guarantor at
its address set forth in Section 18 hereof or subsequently noticed in accordance
therewith, such service to become effective 30 days after such mailing. Each
Guarantor hereby irrevocably waives any objection to such service of process and
further irrevocably waives and agrees not to plead or claim in any action or
proceeding commenced hereunder or under any other Credit Document to which such
Guarantor is a party that such service of process was in any way invalid or
ineffective. Nothing herein shall affect the right of any of the Secured
Creditors to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against each Guarantor in any other
jurisdiction.
(b) Each Guarantor hereby irrevocably waives (to the fullest extent
permitted by applicable law) any objection which it may now or hereafter have to
the laying of venue of any of the aforesaid actions or proceedings arising out
of or in connection with this Guaranty or any other Credit Document to which
such Guarantor is a party brought in the courts referred to in clause (a) above
and hereby further irrevocably waives and agrees not to plead or claim in any
such court that such action or proceeding brought in any such court has been
brought in an inconvenient forum.
(c) EACH GUARANTOR AND EACH SECURED CREDITOR (BY ITS ACCEPTANCE OF THE
BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS GUARANTY, THE OTHER CREDIT DOCUMENTS TO WHICH SUCH GUARANTOR IS A PARTY OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
21. In the event that all of the Equity Interests of one or more
Guarantors is sold or otherwise disposed of or liquidated in compliance with the
requirements of Section 8.02 of the Credit Agreement (or such sale or other
disposition has been approved in writing by the Required Lenders (or all the
Lenders if required by Section 12.12 of the Credit Agreement)) and the proceeds
of such sale, disposition or liquidation are applied in accordance with the
provisions of the Credit Agreement, to the extent applicable, such Guarantor
shall upon consummation of such sale or other disposition (except to the extent
that such sale or disposition is to Holdings or another Subsidiary thereof) be
released from this Guaranty automatically and without further action and this
Guaranty shall, as to each such Guarantor or Guarantors, terminate, and have no
further force or effect (it being understood and agreed that the sale of one or
more Persons that own, directly or indirectly, all of the Equity Interests of
any Guarantor shall be deemed to be a sale of such Guarantor for the purposes of
this Section 21).
<Page>
Exhibit J
Page 11
22. At any time a payment in respect of the Guaranteed Obligations is
made under this Guaranty, the right of contribution of each Guarantor against
each other Guarantor shall be determined as provided in the immediately
following sentence, with the right of contribution of each Guarantor to be
revised and restated as of each date on which a payment (a "Relevant Payment")
is made on the Guaranteed Obligations under this Guaranty. At any time that a
Relevant Payment is made by a Guarantor that results in the aggregate payments
made by such Guarantor in respect of the Guaranteed Obligations to and including
the date of the Relevant Payment exceeding such Guarantor's Contribution
Percentage (as defined below) of the aggregate payments made by all Guarantors
in respect of the Guaranteed Obligations to and including the date of the
Relevant Payment (such excess, the "Aggregate Excess Amount"), each such
Guarantor shall have a right of contribution against each other Guarantor who
has made payments in respect of the Guaranteed Obligations to and including the
date of the Relevant Payment in an aggregate amount less than such other
Guarantor's Contribution Percentage of the aggregate payments made to and
including the date of the Relevant Payment by all Guarantors in respect of the
Guaranteed Obligations (the aggregate amount of such deficit, the "Aggregate
Deficit Amount") in an amount equal to (x) a fraction the numerator of which is
the Aggregate Excess Amount of such Guarantor and the denominator of which is
the Aggregate Excess Amount of all Guarantors multiplied by (y) the Aggregate
Deficit Amount of such other Guarantor. A Guarantor's right of contribution
pursuant to the preceding sentences shall arise at the time of each computation,
subject to adjustment to the time of each computation; PROVIDED that no
Guarantor may take any action to enforce such right until the Guaranteed
Obligations have been irrevocably paid in full in cash, it being expressly
recognized and agreed by all parties hereto that any Guarantor's right of
contribution arising pursuant to this Section 22 against any other Guarantor
shall be expressly junior and subordinate to such other Guarantor's obligations
and liabilities in respect of the Guaranteed Obligations and any other
obligations owing under this Guaranty. As used in this Section 22: (i) each
Guarantor's "Contribution Percentage" shall mean the percentage obtained by
dividing (x) the Adjusted Net Worth (as defined below) of such Guarantor by (y)
the aggregate Adjusted Net Worth of all Guarantors; (ii) the "Adjusted Net
Worth" of each Guarantor shall mean the greater of (x) the Net Worth (as defined
below) of such Guarantor and (y) zero; and (iii) the "Net Worth" of each
Guarantor shall mean the amount by which the fair saleable value of such
Guarantor's assets on the date of any Relevant Payment exceeds its existing
debts and other liabilities (including contingent liabilities, but without
giving effect to any Guaranteed Obligations arising under this Guaranty or any
guaranteed obligations arising under any guaranty of the Senior Subordinated
Notes) on such date. Notwithstanding anything to the contrary contained above,
(A) any Guarantor that is released from this Guaranty pursuant to Section 21
hereof shall thereafter have no contribution obligations, or rights, pursuant to
this Section 22, and at the time of any such release, if the released Guarantor
had an Aggregate Excess Amount or an Aggregate Deficit Amount, same shall be
deemed reduced to $0, and the contribution rights and obligations of the
remaining Guarantors shall be recalculated on the respective date of release (as
otherwise provided above) based on the payments made hereunder by the remaining
Guarantors and (B) for purposes of this Section 22 only, Intermediate Holdco (if
at any time same is a Guarantor) shall be deemed to not constitute a Guarantor
for purposes of this Section 22, as a result of which it shall have no
contribution rights or obligations pursuant to this Section 22. All parties
hereto recognize and agree that, except for any right of contribution arising
pursuant to this Section 22, each Guarantor who makes any payment in respect of
the Guaranteed Obligations shall have no right of contribution or
<Page>
Exhibit J
Page 12
subrogation against any other Guarantor in respect of such payment until all of
the Guaranteed Obligations have been paid in full in cash. Each of the
Guarantors recognizes and acknowledges that the rights to contribution arising
hereunder shall constitute an asset in favor of the party entitled to such
contribution. In this connection, each Guarantor has the right to waive its
contribution right against any Guarantor to the extent that after giving effect
to such waiver such Guarantor would remain solvent, in the determination of the
Required Lenders.
23. Each Guarantor and each Secured Creditor (by its acceptance of the
benefits of this Guaranty) hereby confirms that it is its intention that this
Guaranty not constitute a fraudulent transfer or conveyance for purposes of the
Bankruptcy Code, the Uniform Fraudulent Conveyance Act or any similar Federal or
state law. To effectuate the foregoing intention, each Guarantor and each
Secured Creditor (by its acceptance of the benefits of this Guaranty) hereby
irrevocably agrees that the Guaranteed Obligations guaranteed by such Guarantor
shall be limited to such amount as will, after giving effect to such maximum
amount and all other (contingent or otherwise) liabilities of such Guarantor
that are relevant under such laws (it being understood that it is the intention
of the parties to this Guaranty and the parties to, and the beneficiaries of,
any guaranty of the Senior Subordinated Notes that, to the maximum extent
permitted under applicable law, the liabilities in respect of the guarantees of
the Senior Subordinated Notes shall not be included for the foregoing purposes
and that, if any reduction is required to the amount guaranteed by any Guarantor
hereunder and with respect to the Senior Subordinated Notes that its guarantee
of amounts owing in respect of the Senior Subordinated Notes shall first be
reduced) and after giving effect to any rights to contribution pursuant to any
agreement providing for an equitable contribution among such Guarantor and the
other Guarantors, result in the Guaranteed Obligations of such Guarantor in
respect of such maximum amount not constituting a fraudulent transfer or
conveyance. Notwithstanding the provisions of the two preceding sentences, as
between the Secured Creditors and the holders of the Senior Subordinated Notes,
it is agreed (and the provisions of the Senior Subordinated Note Indenture so
provide) that any diminution (whether pursuant to court decree or otherwise) of
any Guarantor's obligation to make any distribution or payment pursuant to this
Guaranty shall have no force or effect for purposes of the subordination
provisions contained in the Senior Subordinated Note Indenture, and that any
payments received in respect of a Guarantor's obligations with respect to the
Senior Subordinated Notes shall be turned over to the holders of the Senior
Indebtedness (as defined in the Senior Subordinated Note Indenture) (or
obligations which would have constituted Senior Indebtedness if same had not
been reduced or disallowed) of such Guarantor (which Senior Indebtedness shall
be calculated as if there were no diminution thereto pursuant to this Section 23
or for any other reason other than the irrevocable payment in full in cash of
the respective obligations which would otherwise have constituted Senior
Indebtedness) until all such Senior Indebtedness (or obligations which would
have constituted Senior Indebtedness if same had not been reduced or disallowed)
has been irrevocably paid in full in cash.
24. This Guaranty may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Guarantors and the Administrative
Agent.
<Page>
Exhibit J
Page 13
25. All payments made by any Guarantor hereunder will be made without
setoff, counterclaim or other defense and on the same basis as payments are made
by the Borrower under Sections 4.03 and 4.04 of the Credit Agreement.
26. It is understood and agreed that Intermediate Holdco and any
Subsidiary of the Borrower that is required to execute a counterpart of this
Guaranty after the date hereof pursuant to the Credit Agreement shall become a
Guarantor hereunder by (x) executing and delivering a counterpart hereof to the
Administrative Agent or (y) executing a Joinder Agreement substantially in the
form of Exhibit L of the Credit Agreement and delivering same to the
Administrative Agent.
* * *
<Page>
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
ADDAX, INC.,
as a Guarantor
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
BETZDORF CHAIN COMPANY INC.,
as a Guarantor
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
CLARKSON INDUSTRIES, INC.,
as a Guarantor
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
PRAGER INCORPORATED,
as a Guarantor
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
PT COMPONENTS, INC.,
as a Guarantor
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
<Page>
RAC-I, INC.,
as a Guarantor
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
RBS ACQUISITION CORPORATION,
as a Guarantor
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
RBS CHINA HOLDINGS, L.L.C.,
as a Guarantor
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
RBS NORTH AMERICA, INC.,
as a Guarantor
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
REXNORD GERMANY-I INC.,
as a Guarantor
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
REXNORD INTERNATIONAL INC.,
as a Guarantor
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
<Page>
REXNORD, LTD.,
as a Guarantor
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
REXNORD NORTH AMERICA HOLDINGS, INC.,
as a Guarantor
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
REXNORD PUERTO RICO INC.,
as a Guarantor
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
WINFRED BERG LICENSCO INC.,
as a Guarantor
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
W. M. BERG INC.,
as a Guarantor
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
<Page>
Accepted and Agreed to:
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Administrative Agent
By: /s/ Diane F. Rolfe
---------------------------
Title: Vice President
<Page>
EXHIBIT K
CONFORMED AS EXECUTED
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (as amended, modified or supplemented
from time to time, this "AGREEMENT"), dated as of November 25, 2002 made by each
of the Borrower and each of its Subsidiaries party hereto (each, a "PARTY" and,
together with any additional Subsidiary that becomes a Party to this Agreement
pursuant to Section 7 hereof, the "PARTIES") and DEUTSCHE BANK TRUST COMPANY
AMERICAS, as collateral agent (together with any successor collateral agent, the
"COLLATERAL AGENT"), for the benefit of the Senior Creditors (as defined below).
Unless otherwise defined herein, all capitalized terms used herein shall have
the meanings ascribed to them in the Credit Agreement referred to below.
W I T N E S S E T H:
WHEREAS, RBS Global, Inc. ("HOLDINGS"), Rexnord Corporation (the
"BORROWER"), the lenders party thereto from time to time (the "LENDERS"),
Deutsche Bank Trust Company Americas, as Administrative Agent, General Electric
Capital Corporation and Wachovia Bank, National Association, as Co-Documentation
Agents, and Deutsche Bank Securities Inc. and Credit Suisse First Boston, acting
through its Cayman Islands Branch, as Joint Lead Arrangers and Joint Book
Runners (the "Joint Lead Arrangers") (the Administrative Agent, together with
the Collateral Agent, each other Agent and their respective successors and
assigns, the "LENDER CREDITORS") have entered into a Credit Agreement, dated as
of November 25, 2002, providing for the making of Loans to the Borrower, all as
contemplated therein (as used herein, the term "CREDIT AGREEMENT" means the
Credit Agreement described above in this paragraph, as the same may be amended,
modified, extended, renewed, replaced, restated, supplemented or refinanced from
time to time, and including any agreement extending the maturity of, or
refinancing or restructuring (including, but not limited to, the inclusion of
additional borrowers or guarantors thereunder or any increase in the amount
borrowed) all or any portion of, the indebtedness under such agreement or any
successor agreement, whether or not with the same agent, trustee,
representative, lenders or holders, PROVIDED that, with respect to any agreement
providing for the refinancing or replacement of the indebtedness under the
Credit Agreement, such agreement shall only be treated as, or as part of, the
Credit Agreement hereunder if either (A) all obligations under the Credit
Agreement being refinanced or replaced shall be paid in full at the time of such
refinancing or replacement, and all commitments and letters of credit issued
pursuant to the refinanced or replaced Credit Agreement shall have terminated in
accordance with their terms or (B) the Required Lenders shall have consented in
writing to the refinancing or replacement indebtedness being treated as
indebtedness pursuant to the Credit Agreement);
WHEREAS, the Borrower and one or more of its Subsidiaries may at any
time and from time to time enter into one or more Interest Rate Protection
Agreements (each such Interest Rate Protection Agreement, except to the extent
expressly stated therein that the liabilities and indebtedness thereunder are
not "Obligations" for the purposes of this Agreement, a "Covered Agreement" and,
collectively, the "Covered Agreements") with one or more Lenders or any
affiliate thereof (each such Lender or affiliate party to such a Covered
Agreement, even if the respective Lender subsequently ceases to be a Lender
under the Credit Agreement for any
<Page>
Exhibit K
Page 2
reason, together with such Lender's or affiliate's successors and assigns, if
any, collectively, the "OTHER CREDITORS" and, together with the Lender
Creditors, the "SECURED CREDITORS");
WHEREAS, pursuant to the Subsidiaries Guaranty, the Guarantors have
jointly and severally guaranteed to the Secured Creditors the payment when due
of all obligations and liabilities of the Borrower under or with respect to (x)
the Credit Documents (as used herein, the term "CREDIT DOCUMENTS" shall have the
meaning provided in the Credit Agreement and shall include any documentation
executed and delivered in connection with any replacement or refinancing Credit
Agreement), and (y) each Interest Rate Protection Agreement with one or more
Other Creditors;
WHEREAS, for certain extensions of Indebtedness to the Borrower and
its Domestic Subsidiaries to be permitted under the Credit Agreement, this
Agreement must be executed and delivered by the Parties hereto on the date
hereof, and additional Subsidiaries after the date hereof;
WHEREAS, pursuant to the Senior Subordinated Note Documents, the
Borrower has issued the Senior Subordinated Notes and the Guarantors have
guaranteed same on a senior subordinated basis;
WHEREAS, each of the Parties hereto desires to execute this Agreement
to satisfy the conditions described in the immediately preceding paragraph.
NOW, THEREFORE, in consideration of the mutual premises contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged by the parties hereto, the Parties and the
Collateral Agent (for the benefit of the holders from time to time of Senior
Indebtedness (as defined in Section 5 hereof)) hereby agree as follows:
1. All Subordinated Debt (as defined in Section 5 hereof), is, and
shall continue to be, subject and subordinate in right of payment to the prior
payment in full, in cash, of all Senior Indebtedness to the extent, and in the
manner, set forth herein. The foregoing shall apply, notwithstanding the
availability of other collateral to the Senior Creditors (as defined in Section
5 hereof) or the actual date and time of execution, delivery, recordation,
filing or perfection of any security interests granted with respect to the
Senior Indebtedness, or the lien or priority of payment thereof, and in any
instance wherein the Senior Indebtedness or any claim for the Senior
Indebtedness is subordinated, avoided or disallowed, in whole or in part, under
Title 11 of the United States Code (the "BANKRUPTCY CODE") or other applicable
federal, foreign, state or local law. In the event of a proceeding, whether
voluntary or involuntary, for insolvency, liquidation, reorganization,
dissolution, bankruptcy or other similar proceeding pursuant to the Bankruptcy
Code or other applicable federal, foreign, state or local law (each, a
"BANKRUPTCY PROCEEDING"), the Senior Indebtedness shall include all interest
accrued on the Senior Indebtedness, in accordance with and at the rates
specified in the Senior Indebtedness, both for periods before and for periods
after the commencement of any of such proceeding, even if the claim for such
interest is not allowed pursuant to the Bankruptcy Code or other applicable law.
<Page>
Exhibit K
Page 3
2. Each Party (as a lender of any Subordinated Debt) hereby agrees
that until all Senior Indebtedness has been repaid in full in cash:
(a) (a) Such Party shall not, without the prior written consent of the
Required Senior Creditors (as defined in Section 5 hereof), which consent may be
withheld or conditioned in the Required Senior Creditors' sole discretion,
commence, or join or participate in, any Enforcement Action (as defined in
Section 5 hereof);
(b) (b) in the event that (i) all or any portion of any Senior
Indebtedness becomes due (whether at stated maturity, by acceleration or
otherwise), (ii) any Event of Default under the Credit Agreement or any event of
default under, and as defined in, any other Senior Indebtedness, then exists or
would result from such payment on the Subordinated Debt, (iii) any Party
receives any payment or prepayment of principal or interest, in whole or in
part, of (or with respect to) the Subordinated Debt contrary to the terms of the
Subordinated Debt or in violation of the terms of the Credit Agreement or any
other Senior Indebtedness or (iv) any distribution, division or application,
partial or complete, voluntary or involuntary, by operation of law or otherwise,
is made of all or any part of the property, assets or business of the Borrower
or any of its Subsidiaries or the proceeds thereof, in whatever form, to any
creditor or creditors of the Borrower or any of its Subsidiaries or to any
holder of indebtedness of the Borrower, any of its Subsidiaries or by reason of
any liquidation, dissolution or other winding up of the Borrower, any of its
Subsidiaries or their respective business, or of any receivership or
custodianship for the Borrower or any of its Subsidiaries or of all or
substantially all of their respective property, or assignment for the benefit of
creditors or of any Bankruptcy Proceeding, then, and in any such event, any
payment or distribution of any kind or character, whether in cash, property or
securities which shall be payable or deliverable with respect to any or all of
the Subordinated Debt or which has been received by any Party shall be held in
trust by such Party for the benefit of the Senior Creditors and shall forthwith
be paid or delivered directly to the Senior Creditors for application to the
payment of the Senior Indebtedness to the extent necessary to make payment in
full in cash of all sums due under the Senior Creditors, provided that any such
payment or distribution may be made to any Qualified Credit Party during an
event described in clause (ii) or (iv) above to the extent same is expressly
permitted under the Credit Agreement and, in event, only if no Default under
Section 9.01 or 9.05 or Event of Default under Section 9.01 or 9.05 exists at
the time of such payment or distribution. In any such event, the Senior
Creditors may, but shall not be obligated to, demand, claim and collect any such
payment or distribution that would, but for these subordination provisions, be
payable or deliverable with respect to the Subordinated Debt. In the event of
the occurrence of any event referred to in clauses (i), (ii), (iii) or (iv)
above and until the Senior Indebtedness shall have been fully paid in cash and
satisfied and all of the obligations of the Borrower to the Senior Creditors
have been performed in full, no payment of any kind or character (whether in
cash, property, securities or otherwise) shall be made to or accepted by any
Party in respect of the Subordinated Debt, except as otherwise permitted in the
proviso contained in the second preceding sentence;
(c) (c) if any Party shall acquire by indemnification, subrogation or
otherwise, any lien, estate, right or other interest in any of the assets or
properties of the Borrower or any of its Subsidiaries, that lien, estate, right
or other interest shall be subordinate in right of payment to the Senior
Indebtedness and the lien of the Senior Indebtedness as provided
<Page>
Exhibit K
Page 4
herein, and any Party hereby waives any and all rights it may acquire by
subrogation or otherwise to any lien of the Senior Indebtedness or any portion
thereof until such time as all Senior Indebtedness has been repaid in full in
cash;
(d) (d) no party shall pledge, assign, hypothecate, transfer, convey
or sell any Subordinated Debt or any interest in any Subordinated Debt to any
entity (other than pursuant to the Security Documents or to a Subsidiary of the
Borrower that is a party hereto or who agrees in a writing delivered to the
Administrative Agent to be subject to the terms hereof) without the prior
written consent of the Administrative Agent (with the prior written consent of
the Required Senior Creditors);
(e) (e) after request by the Administrative Agent or the Required
Senior Creditors, each Party shall within ten (10) Business Days furnish the
Senior Creditors with a statement, duly acknowledged and certified setting forth
the original principal amount of the loans evidencing the indebtedness of the
Subordinated Debt, the unpaid principal balance, all accrued but unpaid interest
and any other sums due and owing in connection therewith, the rate of interest,
the monthly payments and that to the best knowledge of the lender of the
respective Subordinated Debt there exists no defaults under the Subordinated
Debt, or if any such defaults exist, specifying the defaults and the nature
thereof;
(f) (f) in the case any Bankruptcy Proceeding is commenced by or
against the Borrower or any of its Subsidiaries, the Required Senior Creditors
shall have the exclusive right to exercise any voting rights in respect of the
claims of any Party against the Borrower or any of its Subsidiaries;
(g) (g) if, at any time, all or part of any payment with respect to
Senior Indebtedness theretofore made (whether by the Borrower or any other
Person or by enforcement of any right of setoff or otherwise) is rescinded or
must otherwise be returned by the holders of Senior Indebtedness for any reason
whatsoever (including, without limitation, the insolvency, bankruptcy or
reorganization of the Borrower or such other Persons), the subordination
provisions set forth herein shall continue to be effective or be reinstated, as
the case may be, all as though such payment had not been made;
(h) (h) no Party shall object to the entry of any order or orders
approving any cash collateral stipulations, adequate protection stipulations or
similar stipulations executed by the Senior Creditors in any Bankruptcy
Proceeding or any other proceeding under the Bankruptcy Code; and
(i) (i) each Party waives any marshalling rights with respect to the
Senior Creditors in any Bankruptcy proceeding or any other proceeding under the
Bankruptcy Code.
3. Any payments made to, or received by, any Party in respect of any
guaranty or security in support of the Subordinated Debt shall be subject to the
terms of this Subordination Agreement and applied on the same basis as payments
made directly by the obligor under such Subordinated Debt. To the extent that
any Subsidiary of the Borrower (other than the respective obligor or obligors
which are already Parties hereto) provides a guaranty or any security in support
of any Subordinated Debt, the Party which is the lender of the respective
<Page>
Exhibit K
Page 5
Subordinated Debt will cause each such Person to become a Party hereto (if such
Person is not already a Party hereto) not later than the date of the execution
and delivery of the respective guarantee or security documentation, PROVIDED
that any failure to comply with the foregoing requirements of this Section 3
will have no effect whatsoever on the subordination provisions contained herein
(which shall apply to all payments received with respect to any guarantee or
security for any Subordinated Debt, whether or not the Person furnishing such
guarantee or security is a Party hereto).
4. Each Party hereby acknowledges and agrees that no payments will be
accepted by it in respect of the Subordinated Debt (unless promptly turned over
to the holders of Senior Indebtedness as contemplated by Section 2 above) to the
extent such payments would be prohibited under any Senior Indebtedness.
5. DEFINITIONS. As and in this Agreement, the terms set forth below
shall have the respective meanings provided below:
"BORROWER DEBT" shall mean all loans, advances and other Indebtedness
owed by the Borrower to any Subsidiary of the Borrower.
"CREDIT DOCUMENT OBLIGATIONS TERMINATION DATE" shall mean the first
date after the Effective Date upon which all Commitments pursuant to the
Credit Agreement have terminated (and no further Commitments can be
provided pursuant to the terms thereof) and all Credit Document Obligations
(as defined below) have been paid in full in cash.
"ENFORCEMENT ACTION" shall mean any acceleration of all or any part of
the Subordinated Debt, any foreclosure proceeding, the exercise of any
power of sale, the obtaining of a receiver, the seeking of default
interest, the suing on, or otherwise taking action to enforce the
obligation of the Borrower or any of its Subsidiaries to pay any amounts
relating to any Subordinated Debt, the exercising of any banker's lien or
rights of set-off or recoupment, the institution of a Bankruptcy Proceeding
against the Borrower or any of its Subsidiaries, or the taking of any other
enforcement action against any asset or property of the Borrower or its
Subsidiaries.
"GUARANTOR DEBT" shall mean all loans, advances and other Indebtedness
owed by any Guarantor to any Subsidiary of the Borrower.
"OBLIGATION" shall mean any principal, interest, premium, penalties,
fees, indemnities and other liabilities and obligations payable under the
documentation governing any Senior Indebtedness (including, without
limitation, all interest after the commencement of any bankruptcy,
insolvency, receivership or similar proceeding at the rate provided in the
governing documentation, whether or not such interest is an allowed claim
in such proceeding).
"REQUIRED SENIOR CREDITORS" shall mean (i) the Required Lenders at all
times prior to the Credit Document Obligations Termination Date and (ii)
after the Credit Document Obligations Termination Date, the holders of a
majority of the outstanding Senior Indebtedness.
<Page>
Exhibit K
Page 6
"SENIOR CREDITORS" shall mean all holders from time to time of any
Senior Indebtedness and shall include, without limitation, the Lender
Creditors, the Other Creditors and the holders of the Senior Subordinated
Notes.
"SENIOR INDEBTEDNESS" shall mean:
(i) all obligations, liabilities and indebtedness (including,
without limitation, principal, premium, interest (including, without
limitation, all interest that accrues after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency,
reorganization or similar proceeding of any Credit Party at the rate
provided for in the respective documentation, whether or not a claim for
post-petition interest is allowed in any such proceeding), reimbursement
obligations under Letters of Credit, fees, costs and indemnities) of each
Credit Party to the Lender Creditors, whether now existing or hereafter
incurred under, arising out of, or in connection with, the Credit Agreement
and the other Credit Documents to which each Credit Party is a party
(including, without limitation, in the event each Credit Party is a
Guarantor, all such obligations, liabilities and indebtedness of each
Credit Party under its Guaranty) and the due performance and compliance by
each Credit Party with all of the terms, conditions and agreements
contained in the Credit Agreement and in such other Credit Documents (all
such obligations, liabilities and indebtedness under this clause (i),
except to the extent consisting of obligations or indebtedness with respect
to Covered Agreements, being herein collectively called the "Credit
Document Obligations");
(ii) all obligations, liabilities and indebtedness (including,
without limitation, all interest that accrues after the commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency,
reorganization or similar proceeding of any Credit Party at the rate
provided for in the respective documentation, whether or not a claim for
post-petition interest is allowed in any such proceeding) owing by such
Credit Party to the Other Creditors, now existing or hereafter incurred
under, arising out of or in connection with any Covered Agreement, whether
such Covered Agreement is now in existence or hereinafter arising
(including, without limitation, in the case of a Credit Party that is a
Guarantor, all obligations, liabilities and indebtedness of such Credit
Party under its Guaranty in respect of the Covered Agreements), and the due
performance and compliance by such Credit Party with all of the terms,
conditions and agreements contained in each such Covered Agreement (all
such obligations, liabilities and indebtedness under this clause (ii) being
herein collectively called the "Other Obligations"); and
(iii) all obligations, liabilities and indebtedness (including,
without limitation, all interest that accrues after the commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency,
reorganization or similar proceeding of any Credit Party at the rate
provided for in the respective documentation, whether or not a claim for
post-petition interest is allowed in any such proceeding) owing by such
Credit Party to the holders from time to time of the Senior Subordinated
Notes, now existing or hereafter incurred under, arising out of or in
connection with any Senior Subordinated Note Documents (including, without
limitation, all such obligations and liabilities under any
<Page>
Exhibit K
Page 7
guarantees relating thereto) and the due performance and compliance by each
Credit Party with the terms of each such Senior Subordinated Note Document.
"SUBORDINATED DEBT" shall mean the principal of, interest on, and all
other amounts owing from time to time in respect of all Borrower Debt and
all Guarantor Debt (in each case, including without limitation pursuant to
guarantees thereof or security therefor) at any time outstanding.
6. Each Party agrees to be fully bound by all terms and provisions
contained in this Agreement, both with respect to any Subordinated Debt
(including any guarantees thereof and security therefor) owed to it, and with
respect to all Subordinated Debt (including all guarantees thereof and security
therefor) owing by it.
7. It is understood and agreed that any Credit Party or any
Subsidiary of the Borrower that is required to execute a counterpart of this
Agreement after the date hereof pursuant to the requirements of any Credit
Agreement or other Senior Indebtedness shall become a Party hereunder by
executing a counterpart hereof (or an assumption agreement in form and substance
satisfactory to the Collateral Agent) and delivering same to the Collateral
Agent.
8. No failure or delay on the part of any party hereto or any holder
of Senior Indebtedness in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder.
9. Each Party hereto acknowledges that to the extent that no adequate
remedy at law exists for breach of its obligations under this Agreement, in the
event any Party fails to comply with its obligations hereunder, the Collateral
Agent, the Administrative Agent or the holders of Senior Indebtedness shall have
the right to obtain specific performance of the obligations of such defaulting
Party, injunctive relief or such other equitable relief as may be available.
10. Any notice to be given under this Agreement shall be in writing
and shall be sent in accordance with the provisions of the Security Agreement.
11. In the event of any conflict between the provisions of this
Agreement and the provisions of the Subordinated Debt, the provisions of this
Agreement shall prevail.
12. No person other than the parties hereto, the Senior Creditors from
time to time and their permitted successors and assigns as holders of the Senior
Indebtedness shall have any rights under this Agreement.
13. This Agreement may be executed in any number of counterparts each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument.
14. No amendment, supplement, modification, waiver or termination of
this Agreement shall be effective unless such amendment, supplement,
modification, waiver or
<Page>
Exhibit K
Page 8
termination was made in a writing signed by the Parties hereto and the
Collateral Agent (with the written consent of the Required Senior Creditors).
15. In case any one or more of the provisions contained in this
Agreement, or any application thereof, shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein, and any other application thereof, shall
not in any way be affected or impaired thereby.
16. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK.
17. This Agreement shall bind and inure to the benefit of the
Collateral Agent, the Senior Creditors and each Party and their respective
successors, permitted transferees and assigns.
* * *
<Page>
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the day and year first above written.
RBS GLOBAL, INC.,
as a Party
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
REXNORD CORPORATION,
as a Party
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
RBS NORTH AMERICA, Inc.,
as a Party
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
RBS ACQUISITION CORPORATION,
as a Party
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
RAC - I, INC.,
as a Party
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
<Page>
RBS CHINA HOLDINGS, L.L.C.,
as a Party
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
REXNORD NORTH AMERICA HOLDINGS, INC.,
as a Party
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
ADDAX, INC.,
as a Party
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
BETZDORF CHAIN COMPANY, INC.,
as a Party
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
CLARKSON INDUSTRIES, INC.,
as a Party
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
<Page>
PT COMPONENTS, INC.,
as a Party
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
PRAGER INCORPORATED,
as a Party
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
REXNORD GERMANY - I INC.,
as a Party
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
REXNORD INTERNATIONAL INC.,
as a Party
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
REXNORD, LTD.,
as a Party
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
REXNORD PUERTO RICO INC.,
as a Party
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
<Page>
WINFRED BERG LICENSCO INC.,
as a Party
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
W. M. BERG INC.,
as a Party
By: /s/ Thomas Jansen
---------------------------------------
Title: Vice President & Chief Financial
Officer
<Page>
Accepted and Agreed to:
DEUTSCHE BANK TRUST COMPANY
AMERICAS,
as Collateral Agent
By: /s/ Diane F. Rolfe
---------------------------
Title: Vice President
<Page>
EXHIBIT L
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (this "JOINDER") is executed as of [DATE] by
[NAME OF NEW SUBSIDIARY OR INTERMEDIATE HOLDCO], a __________ [corporation]
[limited liability company] [partnership] ("JOINING PARTY"), and delivered to
Deutsche Bank Trust Company Americas, as Administrative Agent and as Collateral
Agent, for the benefit of the Secured Creditors (as defined below). Except as
otherwise defined herein, terms used herein and defined in the Credit Agreement
(as defined below) shall be used herein as therein defined.
W I T N E S S E T H:
WHEREAS, RBS Global, Inc. ("HOLDINGS"), Rexnord Corporation (the
"BORROWER"), the lenders party thereto from time to time (the "LENDERS"),
Deutsche Bank Trust Company Americas, as Administrative Agent, General Electric
Capital Corporation and Wachovia Bank, National Association, as Co-Documentation
Agents, and Deutsche Bank Securities Inc. and Credit Suisse First Boston, acting
through its Cayman Islands Branch, as Joint Lead Arrangers and Joint Book
Runners, have entered into a Credit Agreement, dated as of November 25, 2002 (as
amended, modified or supplemented from time to time, the "CREDIT AGREEMENT"),
providing for the making of Loans to, and the issuance of, and participation in
Letters of Credit for the account of the Borrower, all as contemplated therein
(the Lenders, each Letter of Credit Issuer, the Administrative Agent, the
Collateral Agent and each other Agent are herein called the "LENDER CREDITORS");
WHEREAS, the Borrower and one or more of its Subsidiaries may at any
time and from time to time enter into one or more Interest Rate Protection
Agreements with one or more Lenders or any affiliate thereof (each such Interest
Rate Protection Agreement, except to the extent expressly stated therein that
the liabilities and indebtedness thereunder are not "Obligations" for the
purposes of this Agreement, a "Covered Agreement" and, collectively, the
"Covered Agreements") (each such Lender or affiliate, even if the respective
Lender subsequently ceases to be a Lender under the Credit Agreement for any
reason, together with such Lender's or affiliate's successors and assigns, if
any, collectively, the "OTHER CREDITORS" and, together with the Lender
Creditors, the "SECURED CREDITORS");
WHEREAS, the Joining Party is a direct or indirect Subsidiary of
Holdings and desires, or is required pursuant to the provisions of the Credit
Agreement, to become a Guarantor under the Subsidiaries Guaranty, an Assignor
under the Security Agreement and a Pledgor under the Pledge Agreement; and
WHEREAS, the Joining Party will obtain benefits from the incurrence of
Loans by, and the issuance of (and participation in) Letters of Credit for the
account of, the Borrower, in each case pursuant to the Credit Agreement and,
accordingly, desires to execute this Joinder in order to (i) satisfy the
requirements described in the preceding paragraph and (ii) induce the Lenders to
continue to make Loans to the Borrower to issue, and/or participate in, Letters
of Credit for the account of the Borrower;
<Page>
Exhibit L
Page2
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to the Joining Party, the receipt and sufficiency of which are hereby
acknowledged, the Joining Party hereby makes the following representations and
warranties to the Secured Creditors and hereby covenants and agrees with each
Secured Creditor as follows:
NOW, THEREFORE, the Joining Party agrees as follows:
1. By this Joinder, the Joining Party becomes (i) a Guarantor for all
purposes under the Subsidiaries Guaranty, pursuant to Section 26 thereof and
(ii) an Assignor for all purposes under the Security Agreement, pursuant to
Section 10.12 thereof, (iii) a Pledgor for all purposes under the Pledge
Agreement, pursuant to Section 30 thereof.
2. The Joining Party agrees that, upon its execution hereof, it will
become a Guarantor under, and as defined in, the Subsidiaries Guaranty with
respect to all Guaranteed Obligations (as defined in the Subsidiaries Guaranty),
and will be bound by all terms, conditions and duties applicable to a Guarantor
under the Subsidiaries Guaranty and the other Credit Documents. Without
limitation of the foregoing, and in furtherance thereof, the Joining Party
unconditionally and irrevocably, guarantees the due and punctual payment and
performance of all Guaranteed Obligations (on the same basis as the other
Guarantors under the Subsidiaries Guaranty).
3. The Joining Party agrees that, upon its execution hereof, it will
become a Pledgor under, and as defined in, the Pledge Agreement, and will be
bound by all terms, conditions and duties applicable to a Pledgor under the
Pledge Agreement. Without limitation of the foregoing and in furtherance
thereof, as security for the due and punctual payment of the Obligations (as
defined in the Pledge Agreement), the Joining Party hereby pledges,
hypothecates, transfers, sets over and delivers to the Collateral Agent for the
benefit of the Secured Creditors and grants to the Collateral Agent for the
benefit of the Secured Creditors a security interest in all its right, title and
interest in and to all Collateral (as defined in the Pledge Agreement), whether
now existing or hereafter acquired by it.
4. The Joining Party agrees that, upon its execution hereof, it will
become an Assignor under, and as defined in, the Security Agreement, and will be
bound by all terms, conditions and duties applicable to an Assignor under the
Security Agreement. Without limitation of the foregoing and in furtherance
thereof, as security for the due and punctual payment of the Obligations (as
defined in the Security Agreement), the Joining Party hereby pledges,
hypothecates, transfers, sets over and delivers to the Collateral Agent for the
benefit of the Secured Creditors and grants to the Collateral Agent for the
benefit of the Secured Creditors a security interest in all its right, title and
interest in and to all Collateral (as defined in the Security Agreement),
whether now existing or hereafter acquired by it.
5. In connection with the grant by the Joining Party, pursuant to
paragraph 3 above, of a security interest in all of its right, title and
interest in all Collateral (as defined in the Pledge Agreement) in favor of the
Collateral Agent, the Joining Party agrees to deliver to the Collateral Agent
for the benefit of the Secured Creditors, together with the delivery of this
Joinder, each of the items specified in Section 3.1 of the Pledge Agreement
which would have
<Page>
Exhibit L
Page 3
been required to be delivered to the Collateral Agent by the Joining Party if it
was an original party to the Pledge Agreement.
6. Without limiting the foregoing, the Joining Party hereby makes and
undertakes, as the case may be, each covenant, representation and warranty made
by, and as (i) each Subsidiary Guarantor pursuant to Section 11 of the
Subsidiaries Guaranty, (ii) each Assignor pursuant to Articles II, III, IV, V
and VI of the Security Agreement and (iii) each Pledgor pursuant to Section 16
of the Pledge Agreement, in each case as of the date hereof (except to the
extent any such representation or warranty relates solely to an earlier date in
which case such representation and warranty shall be true and correct as of such
earlier date), and agrees to be bound by all covenants, agreements and
obligations of a Subsidiary Guarantor, Assignor and Pledgor pursuant to the
Subsidiaries Guaranty, Security Agreement, Pledge Agreement, respectively, and
all other Credit Documents to which it is or becomes a party.
7. Annexes A, B, C, D, E, and F to the Pledge Agreement are hereby
amended by supplementing such Annexes with the information for the Joining Party
contained on Annexes A, B, C, D, E, and F attached hereto as Annex I. In
addition, Annexes A, B, C, D, E, F, G and H to the Security Agreement are hereby
amended by supplementing such Annexes with the information for the Joining Party
contained on Annexes A, B, C, D, E, F, G and H attached hereto as Annex II.
8. This Joinder shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of and be
enforceable by each of the parties hereto and its successors and assigns,
PROVIDED, HOWEVER, the Joining Party may not assign any of its rights,
obligations or interest hereunder or under any other Credit Document without the
prior written consent of the Required Secured Creditors (as defined in the
Security Agreement). THIS JOINDER SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. This Joinder may be
executed in any number of counterparts, each of which shall be an original, but
all of which shall constitute one instrument. In the event that any provision of
this Joinder shall prove to be invalid or unenforceable, such provision shall be
deemed to be severable from the other provisions of this Joinder which shall
remain binding on all parties hereto.
9. From and after the execution and delivery hereof by the parties
hereto, this Joinder shall constitute a "Credit Document" for all purposes of
the Credit Agreement and the other Credit Documents.
10. The effective date of this Joinder is [DATE].
* * *
<Page>
Exhibit L
Page 4
IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be
duly executed as of the date first above written.
[NAME OF NEW SUBSIDIARY OR INTERMEDIATE
HOLDCO]
By:
----------------------------------------
Name:
Title:
Accepted and Acknowledged by:
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Administrative Agent and as
Collateral Agent
By:
----------------------------------
Name:
Title:
<Page>
EXHIBIT M
FORM OF ASSIGNMENT AGREEMENT(1)
This Assignment Agreement (the "Assignment"), is dated as of the Effective
Date set forth below and is entered into by and between [the] [each] Assignor
identified in item [1] [3] below (the "Assignor") and [the] [each] Assignee
identified in item [2] [5] below ([the] [each an] "Assignee"). [It is understood
and agreed that the rights and obligations of such Assignee [Assignor] hereunder
are several and not joint.] Capitalized terms used herein but not defined herein
shall have the meanings given to them in the Credit Agreement identified below
(as amended, restated, supplemented or otherwise modified from time to time).
The Standard Terms and Conditions set forth in Annex 1 hereto (the "Standard
Terms and Conditions") are hereby agreed to and incorporated herein by reference
and made a part of this Assignment as if set forth herein in full.
For an agreed consideration, [the] [each] Assignor hereby irrevocably sells
and assigns to [the] [each] Assignee, and [the] [each] Assignee hereby
irrevocably purchases and assumes from [the] [each] Assignor, subject to and in
accordance with the Standard Terms and Conditions and the Credit Agreement, as
of the Effective Date inserted by the Administrative Agent as contemplated
below, the interest in and to all of the Assignor's rights and obligations under
the Credit Agreement and any other documents or instruments delivered pursuant
thereto that represents the amount and percentage interest identified below of
all of [the] [each] Assignor's outstanding rights and obligations under the
respective facilities identified below (including, to the extent included in any
such facilities, Letters of Credit and Swingline Loans) (the "Assigned
Interest"). [Each] [Such] sale and assignment is without recourse to [the]
[each] Assignor and, except as expressly provided in this Assignment, without
representation or warranty by [the] [each] Assignor.
1. Assignor:
[2. Assignee: ____________________]
[2][3].Credit Credit Agreement, dated as of November 25, 2002, among RBS
Agreement: Global, Inc., Rexnord Corporation (the "Borrower"), the
Lenders from time to time party thereto, Deutsche Bank Trust
Company Americas, as Administrative Agent, General Electric
Capital Corporation and Wachovia Bank, National Association,
as Co-Documentation Agents, and Deutsche Bank Securities
Inc. and Credit Suisse First Boston, acting through its
Cayman Islands Branch, as a Joint Lead Arrangers and Joint
Book Runners (such Credit Agreement as in effect on the date
of this Agreement, the "Credit Agreement").
- ----------
(1) This Form of Assignment Agreement should be used by Lenders for an
assignment to a single Assignee or to funds managed by the same investment
managers.
<Page>
Exhibit M
Page 2
[4. Assigned Interest:(2)
<Table>
<Caption>
Aggregate
Amount of Amount of Percentage
Commitment / Commitment Assigned of
Facility Loans for all / Loans Commitment /
Assigned Lenders Assigned Loans(3)
-------------- ------------------ ------------------ ------------------
[Name of Assignee] $________ $________ %________
[Name of Assignee] $________ $________ %________]
</Table>
[4. Assigned Interest:(4)
<Table>
<Caption>
Aggregate Amount of Percentage
Amount of Commitment / Assigned of
Facility Commitment / Loans Loans Commitment /
Assigned for all Lenders Assigned Loans(5)
------------------ -------------------- ------------------ --------------------
Revolving Loan Commitment / $ $ %
Revolving Loans
Term Loans $ $ %
</Table>
5. Effective Date: _______, 200_
- ----------
(2) Insert this chart if this Form of Assignment Agreement is being used for
assignment to funds managed by the same or related investment managers.
(3) Set forth, to at least 9 decimals, as a percentage of the Assignor's
interest in the aggregate Commitment/Loans thereunder.
(4) Insert this chart if this Form of Assignment Agreement is being used by a
Lender for an assignment to a single Assignee.
(5) Set forth, to at least 9 decimals, as a percentage of the Assignor's
interest in the aggregate Commitment/Loans thereunder.
<Page>
Exhibit M
Page 3
ASSIGNOR INFORMATION
Payment Instructions:
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
Reference:
Notice Instructions:
---------------------------------------
---------------------------------------
---------------------------------------
Reference:
ASSIGNEE INFORMATION
Payment Instructions:
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
Reference:
Notice Instructions:
---------------------------------------
---------------------------------------
---------------------------------------
Reference:
<Page>
Exhibit M
Page 4
The terms set forth in this Assignment are hereby agreed to:
ASSIGNOR ASSIGNEE
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE](6)
By: By:
----------------------- ----------------------
Name: Name:
Title: Title:
- ----------
(6) Add additional signature blocks, as needed, if this Form of Assignment
Agreement is being used by funds managed by the same or related investment
managers.
<Page>
Exhibit M
Page 5
[Consented to and](7) Accepted:
[DEUTSCHE BANK TRUST COMPANY AMERICAS],
as Administrative Agent
By:
----------------------------------
Name:
Title:
REXNORD CORPORATION
By:
----------------------------------
Name:
Tilte:](8)
[[NAME OF EACH LETTER OF CREDIT ISSUER],
as Letter of Credit Issuer
By:
----------------------------------
Name:
Title:](9)
- ----------
(7) Insert only if assignment is being made pursuant to Section 12.04(b)(y) of
the Agreement.
(8) Insert only if (i) no Default or Event of Default under is then in
existence, (ii) assignment is being made pursuant to 12.04(b)(y) of the
Credit Agreement and (iii) assignment is not being made on or prior to the
earlier of (x) 60 days following the Initial Borrowing Date and (y) the
Syndication Date.
(9) Insert for any assignment of a Revolving Loan Commitment pursuant to clause
(x) or (y) of Section 12.04(b) of the Credit Agreement.
<Page>
ANNEX I TO
EXHIBIT M
Rexnord Corporation
CREDIT AGREEMENT
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AGREEMENT
1. REPRESENTATIONS AND WARRANTIES.
1.1. ASSIGNOR. [The] [each] Assignor (a) represents and warrants that
(i) it is the legal and beneficial owner of the Assigned Interest, (ii) the
Assigned Interest is free and clear of any lien, encumbrance or other adverse
claim and (iii) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with any Credit Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement, any
other Credit Document or any other instrument or document delivered pursuant
thereto, other than this Assignment, or any collateral thereunder, (iii) the
financial condition of Holdings or any of its Subsidiaries or Affiliates or any
other Person obligated in respect of any Credit Document or (iv) the performance
or observance by Holdings or any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Credit Documents.
1.2. ASSIGNEE. [The] [Each] Assignee (a) represents and warrants that
(i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements of an Eligible Transferee under the Credit Agreement,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section [7.01] thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and to purchase the Assigned
Interest on the basis of which it has made such analysis and decision and (v) if
it is organized under the laws of a jurisdiction outside the United States,
attached to this Assignment is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
[the] [each such] Assignee; (b) agrees that it will, independently and without
reliance upon the Administrative Agent, [the] [each] Assignor, or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement; (c) appoints and authorizes each of the
Administrative Agent and the Collateral Agent to take such action as agent on
its behalf and to exercise such powers under the Credit Agreement and the other
Credit Documents as are delegated to or otherwise conferred upon the
Administrative Agent or the Collateral Agent, as the case may be, by the terms
thereof, together with such powers as are reasonably incidental thereto; and
(d) agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Documents are required to be
performed by it as a Lender.
<Page>
Annex I
Page 2
2. PAYMENT. From and after the Effective Date, the Administrative
Agent shall make all payments in respect to the Assigned Interest (including
payments of principal, interest, fees and other amounts) to [the] [each]
Assignor for amounts which have accrued to but excluding the Effective Date and
to [the] [each] Assignee for amounts which have accrued from and after the
Effective Date.
3. GENERAL PROVISIONS. This Assignment shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment may be executed in any number of counterparts, which
together shall constitute one instrument. Delivery of an executed counterpart of
a signature page of this Assignment by telecopy shall be effective as delivery
of a manually executed counterpart of the Assignment. THIS ASSIGNMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS).