EX 10.29
EXECUTION VERSION
SECURITY AGREEMENT
By
IONICS, INCORPORATED,
as Borrower
and
THE GUARANTORS PARTY HERETO
and
UBS AG, STAMFORD BRANCH,
as Collateral Agent
----------------------
Dated as of February 13, 2004
TABLE OF CONTENTS
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PREAMBLE................................................................................................ 1
RECITALS................................................................................................ 1
AGREEMENT............................................................................................... 2
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINITIONS..................................................................... 2
SECTION 1.2. INTERPRETATION.................................................................. 11
SECTION 1.3. RESOLUTION OF DRAFTING AMBIGUITIES.............................................. 11
SECTION 1.4. PERFECTION CERTIFICATE.......................................................... 11
ARTICLE II
GRANT OF SECURITY AND SECURED OBLIGATIONS
SECTION 2.1. GRANT OF SECURITY INTEREST...................................................... 11
SECTION 2.2. FILINGS......................................................................... 13
ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF PLEDGED COLLATERAL
SECTION 3.1. DELIVERY OF CERTIFICATED SECURITIES COLLATERAL.................................. 13
SECTION 3.2. PERFECTION OF UNCERTIFICATED SECURITIES COLLATERAL.............................. 14
SECTION 3.3. FINANCING STATEMENTS AND OTHER FILINGS; MAINTENANCE OF PERFECTED SECURITY
INTEREST..................................................................... 14
SECTION 3.4. OTHER ACTIONS................................................................... 15
SECTION 3.5. JOINDER OF ADDITIONAL GUARANTORS................................................ 20
SECTION 3.6. SUPPLEMENTS; FURTHER ASSURANCES................................................. 20
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ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 4.1. TITLE........................................................................... 21
SECTION 4.2. VALIDITY OF SECURITY INTEREST................................................... 21
SECTION 4.3. DEFENSE OF CLAIMS; TRANSFERABILITY OF PLEDGED COLLATERAL........................ 22
SECTION 4.4. OTHER FINANCING STATEMENTS...................................................... 22
SECTION 4.5. CHIEF EXECUTIVE OFFICE; CHANGE OF NAME; JURISDICTION OF ORGANIZATION............ 22
SECTION 4.6. LOCATION OF INVENTORY AND EQUIPMENT............................................. 22
SECTION 4.7. DUE AUTHORIZATION AND ISSUANCE.................................................. 23
SECTION 4.8. CONSENTS, ETC. ................................................................. 23
SECTION 4.9. PLEDGED COLLATERAL.............................................................. 23
SECTION 4.10. INSURANCE....................................................................... 23
SECTION 4.11. PAYMENT OF TAXES; COMPLIANCE WITH LAWS; CONTESTING LIENS; CLAIMS................ 23
SECTION 4.12. ACCESS TO PLEDGED COLLATERAL, BOOKS AND RECORDS; OTHER INFORMATION.............. 24
ARTICLE V
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
SECTION 5.1. PLEDGE OF ADDITIONAL SECURITIES COLLATERAL...................................... 24
SECTION 5.2. VOTING RIGHTS; DISTRIBUTIONS; ETC. ............................................. 25
SECTION 5.3. DEFAULTS, ETC. ................................................................. 26
SECTION 5.4. CERTAIN AGREEMENTS OF PLEDGORS AS ISSUERS AND HOLDERS OF EQUITY INTERESTS....... 26
ARTICLE VI
CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL
SECTION 6.1. GRANT OF LICENSE................................................................ 27
SECTION 6.2. PROTECTION OF COLLATERAL AGENT'S SECURITY....................................... 27
SECTION 6.3. AFTER-ACQUIRED PROPERTY......................................................... 28
SECTION 6.4. LITIGATION...................................................................... 28
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ARTICLE VII
CERTAIN PROVISIONS CONCERNING ACCOUNTS
SECTION 7.1. MAINTENANCE OF RECORDS.......................................................... 29
SECTION 7.2. LEGEND.......................................................................... 29
SECTION 7.3. MODIFICATION OF TERMS, ETC. .................................................... 30
SECTION 7.4. COLLECTION...................................................................... 30
ARTICLE VIII
TRANSFERS
SECTION 8.1. TRANSFERS OF PLEDGED COLLATERAL................................................. 30
ARTICLE IX
REMEDIES
SECTION 9.1. REMEDIES........................................................................ 30
SECTION 9.2. NOTICE OF SALE.................................................................. 32
SECTION 9.3. WAIVER OF NOTICE AND CLAIMS..................................................... 33
SECTION 9.4. CERTAIN SALES OF PLEDGED COLLATERAL............................................. 33
SECTION 9.5. NO WAIVER; CUMULATIVE REMEDIES.................................................. 35
SECTION 9.6. CERTAIN ADDITIONAL ACTIONS REGARDING INTELLECTUAL PROPERTY...................... 35
ARTICLE X
PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS;
APPLICATION OF PROCEEDS
SECTION 10.1. PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS......................... 36
SECTION 10.2. APPLICATION OF PROCEEDS......................................................... 36
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. CONCERNING COLLATERAL AGENT..................................................... 36
SECTION 11.2. COLLATERAL AGENT MAY PERFORM; COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT....... 37
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SECTION 11.3. CONTINUING SECURITY INTEREST; ASSIGNMENT........................................ 38
SECTION 11.4. TERMINATION; RELEASE............................................................ 38
SECTION 11.5. MODIFICATION IN WRITING......................................................... 38
SECTION 11.6. NOTICES......................................................................... 38
SECTION 11.7. GOVERNING LAW, CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY
TRIAL........................................................................ 39
SECTION 11.8. SEVERABILITY OF PROVISIONS...................................................... 39
SECTION 11.9. EXECUTION IN COUNTERPARTS....................................................... 39
SECTION 11.10. BUSINESS DAYS................................................................... 39
SECTION 11.11. WAIVER OF STAY.................................................................. 39
SECTION 11.12. NO CREDIT FOR PAYMENT OF TAXES OR IMPOSITION.................................... 40
SECTION 11.13. NO CLAIMS AGAINST COLLATERAL AGENT.............................................. 40
SECTION 11.14. NO RELEASE...................................................................... 40
SECTION 11.15. OBLIGATIONS ABSOLUTE............................................................ 40
SIGNATURES.............................................................................................. S-1
Schedule 3.4(b) Deposit Accounts
Schedule 3.4(i) Third Party Agreements
EXHIBIT 1 Form of Issuer's Acknowledgment
EXHIBIT 2 Form of Securities Pledge Amendment
EXHIBIT 3 Form of Joinder Agreement
EXHIBIT 4 Form of Control Agreement Concerning Securities Accounts
EXHIBIT 5 Form of Control Agreement Concerning Deposit Accounts
EXHIBIT 6 Form of Copyright Security Agreement
EXHIBIT 7 Form of Patent Security Agreement
EXHIBIT 8 Form of Trademark Security Agreement
EXHIBIT 9 Form of Bailee's Letter
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SECURITY AGREEMENT
SECURITY AGREEMENT dated as of February 13, 2004 (as
amended, amended and restated, supplemented or otherwise modified from time to
time in accordance with the provisions hereof, the "Agreement") made by IONICS,
INCORPORATED, a Massachusetts corporation (the "Borrower") and THE GUARANTORS
LISTED ON THE SIGNATURE PAGES HERETO (the "Original Guarantors") OR FROM TIME TO
TIME PARTY HERETO BY EXECUTION OF A JOINDER AGREEMENT (the "Additional
Guarantors," and together with the Original Guarantors, the "Guarantors"), as
pledgors, assignors and debtors (the Borrower, together with the Guarantors, in
such capacities and together with any successors in such capacities, the
"Pledgors," and each, a "Pledgor"), in favor of UBS AG, STAMFORD BRANCH, in its
capacity as collateral agent pursuant to the Credit Agreement (as hereinafter
defined), as pledgee, assignee and secured party (in such capacities and
together with any successors in such capacities, the "Collateral Agent").
R E C I T A L S :
A. The Borrower, the Original Guarantors, the Collateral
Agent and the lending institutions listed therein (the "Lenders") have, in
connection with the execution and delivery of this Agreement, entered into that
certain credit agreement, dated as of February 13, 2004 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement").
B. Each Original Guarantor has, pursuant to the Credit
Agreement, unconditionally guaranteed the Obligations.
C. The Borrower and each Original Guarantor will receive
substantial benefits from the execution, delivery and performance of the
obligations under the Credit Agreement and the other Loan Documents and each is,
therefore, willing to enter into this Agreement.
D. Each Pledgor is or, as to Pledged Collateral (as
hereinafter defined) acquired by such Pledgor after the date hereof will be, the
legal and/or beneficial owner of the Pledged Collateral pledged by it hereunder.
E. This Agreement is given by each Pledgor in favor of
the Collateral Agent for the benefit of the Secured Parties (as hereinafter
defined) to secure the payment and performance of all of the Obligations (as
hereinafter defined).
F. It is a condition to the obligations of the Lenders
to make the Loans under the Credit Agreement and a condition to the Issuing Bank
issuing Letters of Credit under the Credit Agreement that each Pledgor execute
and deliver the applicable Loan Documents, including this Agreement.
A G R E E M E N T :
NOW THEREFORE, in consideration of the foregoing
premises and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, each Pledgor and the Collateral Agent hereby
agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions.
(a) Unless otherwise defined herein or in the Credit
Agreement, capitalized terms used herein that are defined in the UCC shall have
the meanings assigned to them in the UCC.
(b) Terms used but not otherwise defined herein that are
defined in the Credit Agreement shall have the meanings given to them in the
Credit Agreement. Sections 1.03 and 1.05 of the Credit Agreement shall apply
herein mutatis mutandis.
(c) The following terms shall have the following
meanings:
"Acquisition Document Rights" shall mean, with respect to each
Pledgor, collectively, all of such Pledgor's rights, title and interest in, to
and under the Acquisition Documents, including (i) all rights and remedies
relating to monetary damages, including indemnification rights and remedies, and
claims for damages or other relief pursuant to or in respect of the Acquisition
Documents, (ii) all rights and remedies relating to monetary damages, including
indemnification rights and remedies, and claims for monetary damages under or in
respect of the agreements, documents and instruments referred to in the
Acquisition Documents or related thereto and (iii) all proceeds, collections,
recoveries and rights of subrogation with respect to the foregoing.
"Additional Guarantors" shall have the meaning assigned to
such term in the Preamble hereof.
"Additional Pledged Interests" shall mean, collectively, with
respect to each Pledgor, (i) all options, warrants, rights, agreements,
additional membership, partnership or other equity interests of whatever class
of any issuer of Initial Pledged Interests or any interest in any such issuer,
together with all rights, privileges, authority and powers of such Pledgor
relating to such interests in each such issuer or under any Organizational
Document of any such issuer, and the certificates, instruments and agreements
representing such membership, partnership or other
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interests and any and all interest of such Pledgor in the entries on the books
of any financial intermediary pertaining to such membership, partnership or
other equity interests from time to time acquired by such Pledgor in any manner
and (ii) all membership, partnership or other equity interests, as applicable,
of each limited liability company, partnership or other entity (other than a
corporation) hereafter acquired or formed by such Pledgor and all options,
warrants, rights, agreements, additional membership, partnership or other equity
interests of whatever class of such limited liability company, partnership or
other entity, together with all rights, privileges, authority and powers of such
Pledgor relating to such interests or under any Organizational Document of any
such issuer, and the certificates, instruments and agreements representing such
membership, partnership or other equity interests and any and all interest of
such Pledgor in the entries on the books of any financial intermediary
pertaining to such membership, partnership or other interests, from time to time
acquired by such Pledgor in any manner.
"Additional Pledged Shares" shall mean, collectively, with
respect to each Pledgor, (i) all options, warrants, rights, agreements,
additional shares of capital stock of whatever class of any issuer of the
Initial Pledged Shares or any other equity interest in any such issuer, together
with all rights, privileges, authority and powers of such Pledgor relating to
such interests issued by any such issuer under any Organizational Document of
any such issuer, and the certificates, instruments and agreements representing
such interests and any and all interest of such Pledgor in the entries on the
books of any financial intermediary pertaining to such interests, from time to
time acquired by such Pledgor in any manner and (ii) all the issued and
outstanding shares of capital stock of each corporation hereafter acquired or
formed by such Pledgor and all options, warrants, rights, agreements or
additional shares of capital stock of whatever class of such corporation,
together with all rights, privileges, authority and powers of such Pledgor
relating to such shares or under any Organizational Document of such
corporation, and the certificates, instruments and agreements representing such
shares and any and all interest of such Pledgor in the entries on the books of
any financial intermediary pertaining to such shares, from time to time acquired
by such Pledgor in any manner.
"Agreement" shall have the meaning assigned to such term in
the Preamble hereof.
"Bailee Letter" shall be an agreement in form substantially
similar to Exhibit 9 annexed hereto.
"Borrower" shall have the meaning assigned to such term in the
Preamble hereof.
"Claims" shall mean any and all property and other taxes,
assessments and special assessments, levies, fees and all governmental charges
imposed upon or assessed against, and landlords', carriers', mechanics',
workmen's, repairmen's, laborers', materialmen's, suppliers' and warehousemen's
Liens and other claims arising by operation of law against, all or any portion
of the Pledged Collateral.
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"Collateral Account" shall mean a collateral account or
sub-account established and maintained in accordance with the provisions of
Section 9.01 of the Credit Agreement and all property from time to time on
deposit in the Collateral Account.
"Collateral Agent" shall have the meaning assigned to such
term in the Preamble hereof.
"Commodity Account Control Agreement" shall mean a commodity
account control agreement in a form that is reasonably satisfactory to the
Collateral Agent.
"Contested Liens" shall mean, collectively, any Liens incurred
in respect of any Claims to the extent that the amounts owing in respect thereof
are not yet delinquent or are being contested and otherwise comply with the
provisions of Section 4.11 hereof; provided, however, that such Liens shall in
all respects be subject and subordinate in priority to the Lien and security
interest created by this Agreement, except if and to the extent that the law or
regulation creating, permitting or authorizing such Lien provides that such Lien
must be superior to the Lien and security interest created and evidenced hereby.
"Contracts" shall mean, collectively, with respect to each
Pledgor, all sale, service, performance, equipment or property lease contracts,
licenses, agreements and grants and all other contracts, agreements or grants
(in each case, whether written or oral, or third party or intercompany), between
such Pledgor and third parties, and all assignments, amendments, restatements,
supplements, extensions, renewals, replacements or modifications thereof.
"Control" shall mean (i) in the case of each Deposit Account,
"control," as such term is defined in Section 9-104 of the UCC, and (ii) in the
case of any Security Entitlement, "control," as such term is defined in Section
8-106 of the UCC and (iii) in the case of any Commodity Contract, "control," as
such term is defined in Section 9-106 of the UCC.
"Control Agreements" shall mean, collectively, each Deposit
Account Control Agreement, each Securities Account Control Agreement and each
Commodity Account Control Agreement.
"Copyrights" shall mean, collectively, all copyrights (whether
statutory or common law, whether established or registered in the United States
or any other country or any political subdivision thereof, whether registered or
unregistered and whether published or unpublished) and all copyright
registrations and applications, together with any and all (i) rights and
privileges arising under applicable law with respect to the use of such
copyrights, (ii) renewals and extensions thereof and reversionary interests and
terminations rights with respect thereto, (iii) income, fees, royalties,
damages, claims and payments now or hereafter due and/or payable with respect
thereto, including damages and payments for past, present or future
infringements thereof, (iv) rights corresponding thereto throughout the world
and (v) rights to xxx for past, present or future infringements thereof and
accountings with respect thereto.
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"Copyright Security Agreement" shall mean an agreement
substantially in the form annexed hereto as Exhibit 6.
"Credit Agreement" shall have the meaning assigned to such
term in Recital A hereof.
"Deposit Account Control Agreement" shall mean an agreement
substantially in the form annexed hereto as Exhibit 5 or such other form that is
reasonably satisfactory to the Collateral Agent.
"Deposit Accounts" shall mean, collectively, with respect to
each Pledgor, (i) all "deposit accounts" as such term is defined in the UCC and
in any event shall include the LC Sub-Account and the Collateral Account and all
accounts and sub-accounts relating to any of the foregoing accounts and (ii) all
cash, funds, checks, notes and instruments from time to time on deposit in any
of the accounts or sub-accounts described in clause (i) of this definition.
"Distributions" shall mean, collectively, with respect to each
Pledgor, all dividends, cash, options, warrants, rights, instruments,
distributions, returns of capital or principal, income, interest, profits and
other property, interests (debt or equity) or proceeds, including as a result of
a split, revision, reclassification or other like change of the Pledged
Securities, from time to time received, receivable or otherwise distributed to
such Pledgor in respect of or in exchange for any or all of the Pledged
Securities or Intercompany Notes.
"Excluded Property" shall mean:
(a) any lease, license, contract, property right or
agreement to which any Pledgor is a party, or any license, consent,
permit, variance, certification, authorization or approval of any
Governmental Authority (or any person acting on behalf of a
Governmental Authority) of which any Pledgor is the owner or
beneficiary, or any of its rights or interests thereunder, if and for
so long as the grant of such security interest shall constitute or
result in (i) the abandonment, invalidation or unenforceability of any
right, title or interest of any Pledgor therein or (ii) in a breach or
termination pursuant to the terms of, or a default under, any such
lease, license, contract, property right or agreement or such license,
consent, permit, variance, certification, authorization or approval
(other than to the extent that any such term would be rendered
ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the
UCC (or any successor provision or provisions) of any relevant
jurisdiction or any other applicable law or principles of equity);
(b) Equipment owned by any Pledgor on the date hereof or
hereafter acquired that is subject to a Lien securing a Purchase Money
Obligation or Capital Lease Obligation permitted to be incurred
pursuant to the provisions of the Credit Agreement if the contract or
other agreement in which such Lien is granted (or the documentation
providing for such Purchase Money Obligation or Capital Lease
Obligation) validly prohibits the creation of any other Lien on such
Equipment;
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(c) any Investment Property or Pledged Securities
consisting of Equity Interests in any Foreign Subsidiary to the extent
that granting a security interest therein would constitute an
investment of earnings in United States property under Section 956 (or
a successor provision) of the Code, which investment would or could
reasonably be expected to trigger a material increase in the taxable
income of a United States shareholder of such Subsidiary pursuant to
Section 951 (or a successor provision) of the Code, as reasonably
determined by Borrower and the Collateral Agent; provided that this
exception shall not apply to (A) Voting Stock of any Subsidiary which
is a first-tier controlled foreign corporation (as defined in Section
957(a) of the Code) representing up to 65% of the total voting power of
all outstanding Voting Stock of such Subsidiary and (B) any portion of
the Equity Interests not constituting Voting Stock of any such
Subsidiary, except that any such Equity Interests constituting "stock
entitled to vote" within the meaning of Treasury Regulation Section
1.956-2(c)(2) shall be treated as Voting Stock for purposes of this
clause (c); and
(d) the Escrowed Amounts;
provided, however, that the foregoing shall cease to constitute Excluded
Property immediately at such time as the condition causing such abandonment,
invalidation or unenforceability shall be remedied and, to the extent severable,
any portion of such lease, license, contract, property right, agreement,
Equipment, Investment Property or Pledged Securities that does not result in any
of the consequences specified in clause (a), (b) or (c) shall not constitute
Excluded Property including, without limitation, any Proceeds of such lease,
license, contract, property right, agreement, Equipment, Investment Property or
Pledged Securities.
"General Intangibles" shall mean, collectively, with respect
to each Pledgor, all "general intangibles," as such term is defined in the UCC,
of such Pledgor and, in any event, shall include (i) all of such Pledgor's
rights, title and interest in, to and under all insurance policies and
Contracts, (ii) all know-how and warranties relating to any of the Pledged
Collateral or the Mortgaged Property, (iii) any and all other rights, claims,
choses-in-action and causes of action of such Pledgor against any other person
and the benefits of any and all collateral or other security given by any other
person in connection therewith, (iv) all guarantees, endorsements and
indemnifications on, or of, any of the Pledged Collateral or any of the
Mortgaged Property, (v) all lists, books, records, correspondence, ledgers,
printouts, files (whether in printed form or stored electronically), tapes and
other papers or materials containing information relating to any of the Pledged
Collateral or any of the Mortgaged Property, including all customer or tenant
lists, identification of suppliers, data, plans, blueprints, specifications,
designs, drawings, appraisals, recorded knowledge, surveys, studies, engineering
reports, test reports, manuals, standards, processing standards, performance
standards, catalogs, research data, computer and automatic machinery software
and programs and the like, field repair data, accounting information pertaining
to such Pledgor's operations or any of the Pledged Collateral or any of the
Mortgaged Property and all media in which or on which any of the information or
knowledge or data or records may be recorded or stored and all computer programs
used for the compilation or printout of such in-
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formation, knowledge, records or data, (vi) all licenses, consents, permits,
variances, certifications, authorizations and approvals, however characterized,
of any Governmental Authority (or any person acting on behalf of a Governmental
Authority) now or hereafter acquired or held by such Pledgor pertaining to
operations now or hereafter conducted by such Pledgor or any of the Pledged
Collateral or any of the Mortgaged Property including building permits,
certificates of occupancy, environmental certificates, industrial permits or
licenses and certificates of operation and (vii) all rights to reserves,
deferred payments, deposits, refunds, indemnification of claims to the extent
the foregoing relate to any Pledged Collateral or Mortgaged Property and claims
for tax or other refunds against any Governmental Authority relating to any
Pledged Collateral or any of the Mortgaged Property.
"Goodwill" shall mean, collectively, with respect to each
Pledgor, the goodwill connected with such Pledgor's business including all
goodwill connected with the use of and symbolized by (i) any Trademark or
Trademark License in which such Pledgor has any interest and (ii) all product
lines of such Pledgor's business.
"Guarantors" shall have the meaning assigned to such term in
the Preamble hereof.
"Initial Pledged Interests" shall mean, with respect to each
Pledgor, all membership, partnership or other equity interests (other than in a
corporation), as applicable, of each issuer described in Schedule 10 annexed to
the Perfection Certificate, together with all rights, privileges, authority and
powers of such Pledgor in and to each such issuer or under any Organizational
Document of each such issuer, and the certificates, instruments and agreements
representing such membership, partnership or other interests and any and all
interest of such Pledgor in the entries on the books of any financial
intermediary pertaining to such membership, partnership or other interests.
"Initial Pledged Shares" shall mean, collectively, with
respect to each Pledgor, the issued and outstanding shares of capital stock of
each issuer described in Schedule 10 annexed to the Perfection Certificate
together with all rights, privileges, authority and powers of such Pledgor
relating to such interests in each such issuer or under any Organizational
Document of each such issuer, and the certificates, instruments and agreements
representing such shares of capital stock and any and all interest of such
Pledgor in the entries on the books of any financial intermediary pertaining to
the Initial Pledged Shares.
"Instruments" shall mean, collectively, with respect to each
Pledgor, all "instruments," as such term is defined in Article 9, rather than
Article 3, of the UCC, and shall include all promissory notes, drafts, bills of
exchange or acceptances.
"Intellectual Property" shall mean, collectively, all patents,
patent applications, rights and interests in patents, trademarks, trade names,
service marks, names and likenesses, copyrights and rights under copyright,
technology, trade secrets, proprietary information, confi-
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dential information, domain names, data, software, know-how and processes,
including, without limitation, all Patents, Trade Secrets, Trademarks,
Copyrights, Licenses and Goodwill.
"Intellectual Property Collateral" shall mean all Intellectual
Property that constitutes Pledged Collateral.
"Intercompany Notes" shall mean, with respect to each Pledgor,
all intercompany notes described in Schedule 11 annexed to the Perfection
Certificate and intercompany notes hereafter acquired by such Pledgor and all
certificates, instruments or agreements evidencing such intercompany notes, and
all assignments, amendments, restatements, supplements, extensions, renewals,
replacements or modifications thereof to the extent permitted pursuant to the
terms hereof.
"Investment Property" shall mean a security, whether
certificated or uncertificated, Security Entitlement, Securities Account,
Commodity Contract or Commodity Account.
"Joinder Agreement" shall mean an agreement substantially in
the form annexed hereto as Exhibit 3.
"Lenders" shall have the meaning assigned to such term in
Recital A hereof.
"Licenses" shall mean, collectively, all license and
distribution agreements with, and covenants not to xxx, any other party with
respect to any Patent, Trade Secret, Trademark or Copyright or any other patent,
trade secret, trademark or copyright, whether a Pledgor is a licensor or
licensee, distributor or distributee under any such license or distribution
agreement, together with any and all (i) renewals, extensions, supplements and
continuations thereof, (ii) income, fees, royalties, damages, claims and
payments now and hereafter due and/or payable thereunder and with respect
thereto including damages and payments for past, present or future infringements
or violations thereof, (iii) rights to xxx for past, present and future
infringements or violations thereof and (iv) other rights to use, exploit or
practice any or all of the Patents, Trade Secrets, Trademarks or Copyrights or
any other patent, trade secret, trademark or copyright.
"Mortgaged Property" shall have the meaning assigned to such
term in the Mortgages.
"Original Guarantors" shall have the meaning assigned to such
term in the Preamble hereof.
"Patents" shall mean, collectively, all patents issued or
assigned to and all patent applications and registrations (whether established
or registered or recorded in the United States or any other country or any
political subdivision thereof), together with any and all (i) rights and
privileges arising under applicable law with respect to the use of any patents,
(ii) inventions and improvements described and claimed therein, (iii) reissues,
divisions, continuations, renewals, extensions and continuations-in-part
thereof, (iv) income, fees, royalties, damages, claims and
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payments now or hereafter due and/or payable thereunder and with respect thereto
including damages and payments for past, present or future infringements
thereof, (v) rights corresponding thereto throughout the world and (vi) rights
to xxx for past, present or future infringements thereof.
"Patent Security Agreement" shall mean an agreement
substantially in the form annexed hereto as Exhibit 7.
"Perfection Certificate" shall mean that certain perfection
certificate dated February 13, 2004 executed and delivered by each Pledgor in
favor of the Collateral Agent for the benefit of the Secured Parties, and each
other Perfection Certificate (which shall be in form and substance reasonably
acceptable to the Collateral Agent) executed and delivered by the applicable
Guarantor in favor of the Collateral Agent for the benefit of the Secured
Parties contemporaneously with the execution and delivery of each Joinder
Agreement executed in accordance with Section 3.5 hereof, in each case, as the
same may be amended, amended and restated, supplemented or otherwise modified
from time to time in accordance with the Credit Agreement or upon the request of
the Collateral Agent.
"Pledge Amendment" shall have the meaning assigned to such
term in Section 5.1 hereof.
"Pledged Collateral" shall have the meaning assigned to such
term in Section 2.1 hereof.
"Pledged Interests" shall mean, collectively, the Initial
Pledged Interests and the Additional Pledged Interests; provided, however, that
to the extent applicable, Pledged Interests shall not include any interest which
is not required to be pledged pursuant to Section 5.11(b) of the Credit
Agreement.
"Pledged Securities" shall mean, collectively, the Pledged
Interests, the Pledged Shares and the Successor Interests.
"Pledged Shares" shall mean, collectively, the Initial Pledged
Shares and the Additional Pledged Shares; provided, however, that Pledged Shares
shall not include any shares which are not required to be pledged pursuant to
Section 5.11(b) of the Credit Agreement.
"Pledgor" shall have the meaning assigned to such term in the
Preamble hereof.
"Secured Parties" shall mean, collectively, the Administrative
Agent, the Collateral Agent, each other Agent, the Lenders, the Issuing Bank and
each party to a Hedging Agreement relating to the Loans if at the date of
entering into such Hedging Agreement such person was an Agent or a Lender or an
Affiliate of an Agent or a Lender and such person executes and delivers to the
Administrative Agent a letter agreement in form and substance acceptable to the
Administrative Agent pursuant to which such person (i) appoints the Collateral
Agent as its agent
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under the applicable Loan Documents and (ii) agrees to be bound by the
provisions of Sections 9.03, 11.03 and 11.09 of the Credit Agreement.
"Securities Account Control Agreement" shall mean an agreement
substantially in the form annexed hereto as Exhibit 4 or such other form that is
reasonably satisfactory to the Collateral Agent.
"Securities Collateral" shall mean, collectively, the Pledged
Securities, the Intercompany Notes and the Distributions.
"Successor Interests" shall mean, collectively, with respect
to each Pledgor, all shares of each class of the capital stock of the successor
corporation or interests or certificates of the successor limited liability
company, partnership or other entity owned by such Pledgor (unless such
successor is such Pledgor itself) formed by or resulting from any consolidation
or merger in which any person listed in Schedule 1(a) annexed to the Perfection
Certificate is not the surviving entity; provided, however, that to the extent
applicable, Successor Interest shall not include any shares or interests which
are not required to be pledged pursuant to Section 5.11(b) of the Credit
Agreement.
"Trade Secrets" shall mean, collectively, with respect to each
Pledgor, all know-how, trade secrets, customer and supplier lists, proprietary
information, inventions, methods, procedures, formulae, descriptions,
compositions, technical data, drawings, specifications, name plates, catalogs,
confidential information and the right to limit the use or disclosure thereof by
any person, pricing and cost information, business and marketing plans and
proposals, consulting agreements, engineering contracts and such other assets
which relate to the goodwill connected with such Pledgor's business.
"Trademarks" shall mean, collectively, with respect to each
Pledgor, all trademarks (including service marks), slogans, logos, certification
marks, trade dress, uniform resource locations (URL's), domain names, corporate
names and trade names, whether registered or unregistered, owned by or assigned
and all registrations and applications for the foregoing (whether statutory or
common law and whether established or registered in the United States or any
other country or any political subdivision thereof), together with any and all
(i) rights and privileges arising under applicable law with respect to the use
of any trademarks, (ii) reinstatements, revivals, reissues, continuations,
extensions and renewals thereof and oppositions with respect thereto, (iii)
income, fees, royalties, damages and payments now and hereafter due and/or
payable thereunder and with respect thereto, including damages, claims and
payments for past, present or future infringements, misappropriation or dilution
thereof, (iv) rights corresponding thereto throughout the world and (v) rights
to xxx for past, present and future infringements, misappropriation or dilution
thereof.
"Trademark Security Agreement" shall mean an agreement
substantially in the form annexed hereto as Exhibit 8.
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"UCC" shall mean the Uniform Commercial Code as in effect on
the date hereof in the State of New York; provided, however, that if by reason
of mandatory provisions of law, any or all of the attachment, perfection or
priority of the Collateral Agent's and the Secured Parties' security interest in
any item or portion of the Pledged Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of New York,
the term "UCC" shall mean the Uniform Commercial Code as in effect on the date
hereof in such other jurisdiction for purposes of the provisions hereof relating
to such attachment, perfection or priority and for purposes of definitions
relating to such provisions.
SECTION 1.2. Interpretation. The rules of interpretation
specified in the Credit Agreement (including Section 1.03 thereof) shall be
applicable to this Agreement.
SECTION 1.3. Resolution of Drafting Ambiguities. Each Pledgor
acknowledges and agrees that it was represented by counsel in connection with
the execution and delivery hereof, that it and its counsel reviewed and
participated in the preparation and negotiation hereof and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party (i.e., the Collateral Agent) shall not be employed in the
interpretation hereof.
SECTION 1.4. Perfection Certificate. The Collateral Agent and
each Secured Party agree that the Perfection Certificate and all descriptions of
Pledged Collateral, schedules, amendments and supplements thereto are and shall
at all times remain a part of this Agreement.
ARTICLE II
GRANT OF SECURITY AND SECURED OBLIGATIONS
SECTION 2.1. Grant of Security Interest. As collateral
security for the payment and performance in full of all the Obligations, each
Pledgor hereby pledges and grants to the Collateral Agent for the benefit of the
Secured Parties, a lien on and security interest in and to all of the right,
title and interest of such Pledgor in, to and under the following property,
wherever located, whether now existing or hereafter arising or acquired from
time to time (collectively, the "Pledged Collateral"):
(i) all Accounts;
(ii) all Equipment, Goods, Inventory and Fixtures;
(iii) all Documents, Instruments and Chattel Paper;
(iv) all Letters of Credit and Letter-of-Credit Rights;
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(v) all Securities Collateral;
(vi) all Collateral Accounts;
(vii) all Investment Property;
(viii) all Intellectual Property;
(ix) the Commercial Tort Claims described on Schedule 14
to the Perfection Certificate;
(x) all General Intangibles;
(xi) all Deposit Accounts;
(xii) all Acquisition Documents and Acquisition Document
Rights;
(xiii) all Supporting Obligations;
(xiv) all books and records relating to the Pledged
Collateral; and
(xv) to the extent not covered by clauses (i) through
(xiv) of this sentence, all other personal property
of such Pledgor, whether tangible or intangible, and
all Proceeds and products of each of the foregoing
and all accessions to, substitutions and replacements
for, and rents, profits and products of, each of the
foregoing, and any and all Proceeds of any insurance,
indemnity, warranty or guaranty payable to such
Pledgor from time to time with respect to any of the
foregoing.
Notwithstanding anything to the contrary contained in clauses
(i) through (xv) above, the security interest created by this Agreement shall
not extend to, and the term "Pledged Collateral" shall not include, any Excluded
Property and (i) the Pledgors shall from time to time at the reasonable request
of the Collateral Agent give written notice to the Collateral Agent identifying
in reasonable detail the Excluded Property and shall provide to the Collateral
Agent such other information regarding the Excluded Property as the Collateral
Agent may reasonably request and (ii) from and after the Closing Date, no
Pledgor shall permit to become effective in any document creating, governing or
providing for any contract, permit, lease or license, a provision that would
prohibit the creation of a Lien on such permit, lease or license in favor of the
Collateral Agent unless such Pledgor believes, in its reasonable judgment, that
such prohibition is usual and customary in transactions of such type.
SECTION 2.2. Filings. (a) Each Pledgor hereby irrevocably
authorizes the Collateral Agent at any time and from time to time to file in any
relevant jurisdiction any initial financing statements (including fixture
filings) and amendments thereto that contain the informa-
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tion required by Article 9 of the Uniform Commercial Code of each applicable
jurisdiction for the filing of any financing statement or amendment relating to
the Pledged Collateral, including (i) whether such Pledgor is an organization,
the type of organization and any organizational identification number issued to
such Pledgor, (ii) any financing or continuation statements or other documents
without the signature of such Pledgor where permitted by law, including the
filing of a financing statement describing the Pledged Collateral as "all assets
in which the Pledgor now owns or hereafter acquires rights" and (iii) in the
case of a financing statement filed as a fixture filing or covering Pledged
Collateral constituting minerals or the like to be extracted or timber to be
cut, a sufficient description of the real property to which such Pledged
Collateral relates. Each Pledgor agrees to provide all information described in
the immediately preceding sentence to the Collateral Agent promptly upon
request.
(b) Each Pledgor hereby ratifies its authorization for
the Collateral Agent to file in any relevant jurisdiction any initial financing
statements or amendments thereto relating to the Pledged Collateral if filed
prior to the date hereof.
(c) Each Pledgor hereby further authorizes the Collateral
Agent to file filings with the United States Patent and Trademark Office or
United States Copyright Office (or any successor office or any similar office in
any other country), including this Agreement, the Copyright Security Agreement,
the Patent Security Agreement and the Trademark Security Agreement, or other
documents for the purpose of creating, perfecting, confirming, continuing,
enforcing, protecting or putting third parties on notice of the security
interest granted by such Pledgor hereunder, without the signature of such
Pledgor, and naming such Pledgor, as debtor, and the Collateral Agent, as
secured party.
ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF PLEDGED COLLATERAL
SECTION 3.1. Delivery of Certificated Securities Collateral.
Each Pledgor represents and warrants that all certificates, agreements or
instruments representing or evidencing the Securities Collateral in existence on
the date hereof have been delivered to the Collateral Agent in suitable form for
transfer by delivery or accompanied by duly executed instruments of transfer or
assignment in blank and that the Collateral Agent has a perfected first priority
security interest therein. Each Pledgor hereby agrees that all certificates,
agreements or instruments representing or evidencing Securities Collateral
acquired by such Pledgor after the date hereof shall immediately upon receipt
thereof by such Pledgor be delivered to and held by or on behalf of the
Collateral Agent pursuant hereto. All certificated Securities Collateral shall
be in suitable form for transfer by delivery or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance reasonably satisfactory to the Collateral Agent. The
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Collateral Agent shall have the right, at any time upon the occurrence and
during the continuance of any Event of Default, to endorse, assign or otherwise
transfer to or to register in the name of the Collateral Agent or any of its
nominees or endorse for negotiation any or all of the Securities Collateral,
without any indication that such Securities Collateral is subject to the
security interest hereunder. In addition, upon the occurrence and during the
continuance of an Event of Default, the Collateral Agent shall have the right at
any time to exchange certificates representing or evidencing Securities
Collateral for certificates of smaller or larger denominations.
SECTION 3.2. Perfection of Uncertificated Securities
Collateral. Each Pledgor represents and warrants that the Collateral Agent has a
perfected first priority security interest in all uncertificated Pledged
Securities pledged by it hereunder that are in existence on the date hereof.
Each Pledgor hereby agrees that if any of the Pledged Securities are at any time
not evidenced by certificates of ownership, then each applicable Pledgor shall,
to the extent permitted by applicable law (i) if necessary or desirable to
perfect a security interest in such Pledged Securities, cause such pledge to be
recorded on the equityholder register or the books of the issuer, cause the
issuer to execute and deliver to the Collateral Agent an acknowledgment of the
pledge of such Pledged Securities substantially in the form of Exhibit 1 annexed
hereto, execute any customary pledge forms or other documents necessary or
appropriate to complete the pledge and give the Collateral Agent the right to
transfer such Pledged Securities under the terms hereof and, upon the Collateral
Agent's request, provide to the Collateral Agent an opinion of counsel, in form
and substance reasonably satisfactory to the Collateral Agent, confirming such
pledge and perfection thereof and (ii) use its commercially reasonable efforts
to cause such Pledged Securities to become certificated and delivered to the
Collateral Agent in accordance with the provisions of Section 3.1.
SECTION 3.3. Financing Statements and Other Filings;
Maintenance of Perfected Security Interest. Each Pledgor represents and warrants
that all filings necessary to perfect the security interest granted by it to the
Collateral Agent in respect of the Pledged Collateral have been delivered to the
Collateral Agent in completed and, to the extent necessary or appropriate, duly
executed form for filing in each governmental, municipal or other office
specified in Schedule 6 annexed to the Perfection Certificate. Each Pledgor
agrees that at the sole cost and expense of the Pledgors, (i) such Pledgor will
maintain the security interest created by this Agreement in the Pledged
Collateral as a perfected first priority security interest and shall defend such
security interest against the claims and demands of all persons except Permitted
Collateral Liens, (ii) such Pledgor shall furnish to the Collateral Agent from
time to time statements and schedules further identifying and describing the
Pledged Collateral and such other reports in connection with the Pledged
Collateral as the Collateral Agent may reasonably request, all in reasonable
detail and (iii) at any time and from time to time, upon the written request of
the Collateral Agent, such Pledgor shall promptly and duly execute and deliver,
and file and have recorded, such further instruments and documents and take such
further action as the Collateral Agent may reasonably request for the purpose of
obtaining or preserving the full benefits of this Agreement and the rights and
powers herein granted, including the filing of any financing statements,
continuation statements and other documents (including this Agreement) under the
Uni-
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form Commercial Code (or other similar laws) in effect in any jurisdiction with
respect to the security interest created hereby and the execution and delivery
of Control Agreements, all in form reasonably satisfactory to the Collateral
Agent and in such offices (including the United States Patent and Trademark
Office and the United States Copyright Office and equivalent foreign offices)
wherever required by law to perfect, continue and maintain a valid, enforceable,
first priority security interest in the Pledged Collateral as provided herein
and to preserve the other rights and interests granted to the Collateral Agent
hereunder, as against third parties, with respect to the Pledged Collateral.
SECTION 3.4. Other Actions. In order to further insure the
attachment, perfection and priority of, and the ability of the Collateral Agent
to enforce, the Collateral Agent's security interest in the Pledged Collateral,
each Pledgor represents and warrants (as to itself) as follows and agrees, in
each case at such Pledgor's own expense, to take the following actions with
respect to the following Pledged Collateral:
(a) Instruments and Tangible Chattel Paper. (i) No
amounts payable under or in connection with any of the Pledged
Collateral are evidenced by any Instrument or Tangible Chattel Paper
other than such Instruments and Tangible Chattel Paper listed in
Schedule 11 annexed to the Perfection Certificate and (ii) each
Instrument and each item of Tangible Chattel Paper listed in Schedule
11 annexed to the Perfection Certificate has been properly endorsed,
assigned and delivered to the Collateral Agent, accompanied by
instruments of transfer or assignment duly executed in blank. If any
amount then payable under or in connection with any of the Pledged
Collateral shall be evidenced by any Instrument or Tangible Chattel
Paper, and such amount, together with all amounts payable evidenced by
any Instrument or Tangible Chattel Paper not previously delivered to
the Collateral Agent exceeds $500,000 in the aggregate for all
Pledgors, the Pledgor acquiring such Instrument or Tangible Chattel
Paper shall forthwith endorse, assign and deliver the same to the
Collateral Agent, accompanied by such instruments of transfer or
assignment duly executed in blank as the Collateral Agent may from time
to time specify.
(b) Deposit Accounts. (i) Each Pledgor has neither opened
nor maintains any Deposit Accounts other than the accounts listed in
Schedule 15 annexed to the Perfection Certificate and (ii) the
Collateral Agent has a perfected first priority security interest in
each Deposit Account listed in Schedule 3.4(b) annexed hereto by
Control, other than those designated therein as "Not Subject to a
Control Agreement as of the Closing Date"; provided that the aggregate
amount on deposit in or credited to Deposit Accounts that are not
subject to a Control Agreement shall not exceed (A) prior to February
28, 2004, an amount equal to $500,000 in the aggregate for all such
Deposit Accounts at any time outstanding or (B) from and after February
28, 2004, an amount equal to $100,000 in the aggregate for all such
Deposit Accounts at any time outstanding. No Pledgor shall hereafter
establish or maintain any Deposit Account unless (1) the applicable
Pledgor shall have given the Collateral Agent 30 days' prior written
notice of its intention to establish such new Deposit Account with a
bank, (2) such bank shall be reasonably acceptable to the
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Collateral Agent and (3) such bank and such Pledgor shall have duly
executed and delivered to the Collateral Agent a Deposit Account
Control Agreement with respect to such Deposit Account. Each Pledgor
agrees that at the time it establishes any additional Deposit Accounts
it shall enter into a duly authorized, executed and delivered Deposit
Account Control Agreement with respect to such Deposit Account. The
Collateral Agent agrees with each Pledgor that the Collateral Agent
shall not give any instructions directing the disposition of funds from
time to time credited to any Deposit Account or withhold any withdrawal
rights from such Pledgor with respect to funds from time to time
credited to any Deposit Account unless an Event of Default has occurred
and is continuing. No Pledgor shall grant Control of any Deposit
Account to any person other than the Collateral Agent.
(c) Investment Property. (i) Each Pledgor (1) has no
Securities Accounts or Commodity Accounts other than those listed in
Schedule 3.4(b) annexed hereto and the Collateral Agent has a perfected
first priority security interest in such Securities Accounts and
Commodity Accounts by Control, other than those designated therein as
"Not Subject to a Control Agreement as of the Closing Date"; provided
that the aggregate amount on deposit in or credited to such Securities
Accounts and Commodity Accounts that are not subject to a Control
Agreement shall not exceed (A) prior to February 28, 2004, an amount
equal to $500,000 in the aggregate for all such Deposit Accounts at any
time outstanding or (B) from and after February 28, 2004, an amount
equal to $100,000 in the aggregate for all such Securities Accounts and
Commodity Accounts at any time outstanding, (2) does not hold, own or
have any interest in any certificated securities or uncertificated
securities other than those constituting Pledged Securities or
securities that are expressly permitted to be excluded from the Pledged
Collateral pursuant to Section 5.11(b) of the Credit Agreement and
those maintained in Securities Accounts or Commodity Accounts listed in
Schedule 15 annexed to the Perfection Certificate and (3) as of the
date hereof, has entered into a duly authorized, executed and delivered
Securities Account Control Agreement or a Commodity Account Control
Agreement, except as contemplated by clause (1) above, with respect to
each Securities Account or Commodity Account listed in Schedule 15
annexed to the Perfection Certificate, as applicable.
(ii) If any Pledgor shall at any time hold or acquire any
certificated securities constituting Investment Property other than any
certificated securities that are expressly permitted to be excluded
from the Pledged Collateral pursuant to Section 5.11(b) of the Credit
Agreement, such Pledgor shall promptly (a) endorse, assign and deliver
the same to the Collateral Agent, accompanied by such instruments of
transfer or assignment duly executed in blank, all in form and
substance reasonably satisfactory to the Collateral Agent or (b)
deliver such securities into a Securities Account with respect to which
a Control Agreement is in effect in favor of the Collateral Agent. If
any securities now or hereafter acquired by any Pledgor constituting
Investment Property other than any securities that that are expressly
permitted to be excluded from the Pledged Collateral pursuant to
Section 5.11(b) of the Credit Agreement are uncertificated and are
issued to such
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Pledgor or its nominee directly by the issuer thereof, such Pledgor
shall promptly notify the Collateral Agent thereof and pursuant to an
agreement in form and substance reasonably satisfactory to the
Collateral Agent, either (a) cause the issuer to agree to comply with
instructions from the Collateral Agent as to such securities, without
further consent of any Pledgor or such nominee, (b) cause a Security
Entitlement with respect to such uncertificated security to be held in
a Securities Account with respect to which the Collateral Agent has
Control or (c) arrange for the Collateral Agent to become the
registered owner of the securities. Pledgor shall not hereafter
establish or maintain any Securities Account or Commodity Account with
any Securities Intermediary or Commodity Intermediary unless (1) the
applicable Pledgor shall have given the Collateral Agent 30 days' prior
written notice of its intention to establish such new Securities
Account or Commodity Account with such Securities Intermediary or
Commodity Intermediary, (2) such Securities Intermediary or Commodity
Intermediary shall be reasonably acceptable to the Collateral Agent and
(3) such Securities Intermediary or Commodity Intermediary, as the case
may be, and such Pledgor shall have duly executed and delivered a
Control Agreement with respect to such Securities Account or Commodity
Account, as the case may be. Each Pledgor shall accept any cash and
Investment Property other than any that are expressly permitted to be
excluded from the Pledged Collateral pursuant to Section 5.11(b) of the
Credit Agreement in trust for the benefit of the Collateral Agent and
within one (1) Business Day of actual receipt thereof, deposit any cash
or such Investment Property and any new securities, instruments,
documents or other property by reason of ownership of such Investment
Property (other than payments of a kind described in Section 7.4
hereof) received by it into a Controlled Account. The Collateral Agent
agrees with each Pledgor that the Collateral Agent shall not give any
Entitlement Orders or instructions or directions to any issuer of
uncertificated securities, Securities Intermediary or Commodity
Intermediary, and shall not withhold its consent to the exercise of any
withdrawal or dealing rights by such Pledgor, unless an Event of
Default has occurred and is continuing, or, after giving effect to any
such investment and withdrawal rights would occur. No Pledgor shall
grant control over any Investment Property to any person other than the
Collateral Agent.
(iii) As between the Collateral Agent and the Pledgors, the
Pledgors shall bear the investment risk with respect to the Investment
Property and Pledged Securities, and the risk of loss of, damage to, or
the destruction of the Investment Property and Pledged Securities,
whether in the possession of, or maintained as a security entitlement
or deposit by, or subject to the control of, the Collateral Agent, a
Securities Intermediary, Commodity Intermediary, any Pledgor or any
other person; provided, however, that nothing contained in this Section
3.4(c) shall release or relieve any Securities Intermediary or
Commodity Intermediary of its duties and obligations to the Pledgors or
any other person under any Control Agreement or under applicable law.
Each Pledgor shall promptly pay all Claims and fees of whatever kind or
nature with respect to the Investment Property and Pledged Securities
pledged by it under this Agreement. In the event any Pledgor shall fail
to make such payment contemplated in the immediately preceding
sentence, the Col-
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lateral Agent may do so for the account of such Pledgor and the
Pledgors shall promptly reimburse and indemnify the Collateral Agent
from all costs and expenses incurred by the Collateral Agent under this
Section 3.4(c) in accordance with Section 11.03 of the Credit
Agreement.
(d) Electronic Chattel Paper and Transferable Records. No
amount under or in connection with any of the Pledged Collateral is
evidenced by any Electronic Chattel Paper or any "transferable record"
(as that term is defined in Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act, or in Section 16 of the
Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction) other than such Electronic Chattel Paper and transferable
records listed in Schedule 11 annexed to the Perfection Certificate. If
any amount payable under or in connection with any of the Pledged
Collateral shall be evidenced by any Electronic Chattel Paper or any
transferable record, the Pledgor acquiring such Electronic Chattel
Paper or transferable record shall promptly notify the Collateral Agent
thereof and shall take such action as the Collateral Agent may
reasonably request to vest in the Collateral Agent control under UCC
Section 9-105 of such Electronic Chattel Paper or control under Section
201 of the Federal Electronic Signatures in Global and National
Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, as so in effect in such jurisdiction, of
such transferable record. The requirement in the preceding sentence
shall apply to the extent that such amount, together with all amounts
payable evidenced by Electronic Chattel Paper or any transferable
record in which the Collateral Agent has not been vested control within
the meaning of the statutes described in this sentence exceeds $500,000
in the aggregate for all Pledgors. The Collateral Agent agrees with
such Pledgor that the Collateral Agent will arrange, pursuant to
procedures satisfactory to the Collateral Agent and so long as such
procedures will not result in the Collateral Agent's loss of control,
for the Pledgor to make alterations to the Electronic Chattel Paper or
transferable record permitted under UCC Section 9-105 or, as the case
may be, Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or Section 16 of the Uniform Electronic
Transactions Act for a party in control to allow without loss of
control, unless an Event of Default has occurred and is continuing or
would occur after taking into account any action by such Pledgor with
respect to such Electronic Chattel Paper or transferable record.
(e) Letter-of-Credit Rights. If any Pledgor is at any
time a beneficiary under a Letter of Credit now or hereafter issued in
favor of such Pledgor, other than a Letter of Credit issued under and
pursuant to the Credit Agreement, such Pledgor shall promptly notify
the Collateral Agent thereof and such Pledgor shall, at the request of
the Collateral Agent, pursuant to an agreement in form and substance
reasonably satisfactory to the Collateral Agent, 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
the 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
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the proceeds of any drawing under the Letter of Credit are to be
applied as provided in the Credit Agreement. The actions in the
preceding sentence shall be taken to the extent that the amount under
such Letter of Credit, together with all amounts under Letters of
Credit for which the actions described above in clause (i) and (ii)
have not been taken, exceeds $500,000 in the aggregate for all
Pledgors.
(f) Commercial Tort Claims. As of the date hereof each
Pledgor hereby represents and warrants that it holds no Commercial Tort
Claims other than those listed in Schedule 14 annexed to the Perfection
Certificate. If any Pledgor shall at any time hold or acquire a
Commercial Tort Claim having a value together with all other Commercial
Tort Claims of all Pledgors in which the Collateral Agent does not have
a security interest in excess of $500,000 in the aggregate, such
Pledgor shall immediately notify the Collateral Agent in writing signed
by such Pledgor of the brief details thereof and 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.
(g) Landlord's Access Agreements/Bailee Letters. Each
Pledgor shall use its commercially reasonable efforts to obtain as soon
as practicable after the date hereof with respect to each location set
forth in Schedule 4.01(o)(vi) annexed to the Credit Agreement, where
such Pledgor maintains Pledged Collateral, a Bailee Letter and/or
Landlord Access Agreement, as applicable, and use commercially
reasonable efforts to obtain a Bailee Letter, Landlord Access Agreement
and/or landlord's lien waiver, as applicable, from all bailees and
landlords, as applicable, who from time to time have possession of
Pledged Collateral in the ordinary course of such Pledgor's business
and if reasonably requested by the Collateral Agent; provided that the
foregoing shall not be required if the value of the Pledged Collateral
held by such bailee or landlord is less than $50,000, provided further
that the aggregate value of the Pledged Collateral held by all such
bailees and landlords who have not delivered a Bailee Letter and/or
Landlord Access Agreement, as applicable, is less than $500,000.
(h) Motor Vehicles. Upon the request of the Collateral
Agent, each Pledgor shall deliver to the Collateral Agent originals of
the certificates of title or ownership for the motor vehicles (and any
other Equipment covered by certificates of title or ownership) owned by
it with the Collateral Agent listed as lienholder therein. Such
requirement shall apply to the Pledgors if any such individual motor
vehicle (or any such other Equipment) is valued at over $50,000 and if
the aggregate value of all such motor vehicles (and such Equipment) as
to which any Pledgor has not delivered a Certificate of Title or
ownership is over $500,000.
(i) Third Party Agreements. Except as set forth on
Schedule 3.4(i) annexed hereto, neither the granting of the security
interests contemplated hereby nor the exercise of remedies in respect
thereof will constitute or result in the abandonment, invalidation or
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unenforceability of any right, title or interest of any Pledgor under,
or constitute or result in a default, breach or termination pursuant to
the terms of, or otherwise permit the termination of, any lease,
contract, property right or agreement as to which any Pledgor is party,
owner or beneficiary and with respect which such Pledgor receives or is
entitled to receive aggregate gross revenues in excess of $1,000,000 in
any 12-month period (other than to the extent that any such limitation
or restriction would be rendered ineffective pursuant to Sections
9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or
provisions)) or provides that the collateral assignment of or granting
of a lien on such lease, contract, property right or agreement is
prohibited or would be null and void without the consent of the
applicable counterparty thereto. With respect to any lease, contract,
property right or agreement set forth on Schedule 3.4(i) annexed
hereto, Borrower and the applicable Pledgor shall use their
commercially reasonable efforts to obtain within 90 days of the Closing
Date a letter agreement from the applicable counterparty under such
lease, contract, property right or agreement, in form and substance
reasonably satisfactory to the Collateral Agent, acknowledging and
agreeing to the granting of the security interest contemplated hereby.
SECTION 3.5. Joinder of Additional Guarantors. The Pledgors
shall cause each Subsidiary of the Borrower which, from time to time, after the
date hereof shall be required to pledge any assets to the Collateral Agent for
the benefit of the Secured Parties pursuant to the provisions of the Credit
Agreement, (a) to execute and deliver to the Collateral Agent (i) a Joinder
Agreement substantially in the form of Exhibit 3 annexed hereto and (ii) a
Perfection Certificate, in each case, within thirty (30) Business Days of the
date on which such Subsidiary was acquired or created or (b) in the case of a
Subsidiary organized outside of the United States required to pledge any assets
to the Collateral Agent in accordance with the terms and conditions of the
Credit Agreement, to execute and deliver such documentation as the Collateral
Agent shall reasonably request and, in each case, upon such execution and
delivery, such Subsidiary shall constitute a "Guarantor" and a "Pledgor" for all
purposes hereunder with the same force and effect as if originally named as a
Guarantor and Pledgor herein. The execution and delivery of such Joinder
Agreement shall not require the consent of any Pledgor hereunder. The rights and
obligations of each Pledgor hereunder shall remain in full force and effect
notwithstanding the addition of any new Guarantor or Pledgor as a party to this
Agreement.
SECTION 3.6. Supplements; Further Assurances. Each Pledgor
shall take such further actions, and execute and deliver to the Collateral Agent
such additional assignments, agreements, supplements, powers and instruments, as
the Collateral Agent may in its reasonable judgment deem necessary or
appropriate, wherever required by law, in order to perfect, preserve and protect
the security interest in the Pledged Collateral as provided herein and the
rights and interests granted to the Collateral Agent hereunder, to carry into
effect the purposes hereof or better to assure and confirm unto the Collateral
Agent the Pledged Collateral or permit the Collateral Agent to exercise and
enforce its rights, powers and remedies hereunder with respect to any Pledged
Collateral. Without limiting the generality of the foregoing, each Pledgor shall
make, execute, endorse, acknowledge, file or re-file and/or deliver to the
Collateral Agent from
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time to time upon reasonable request such lists, descriptions and designations
of the Pledged Collateral, copies of warehouse receipts, receipts in the nature
of warehouse receipts, bills of lading, documents of title, vouchers, invoices,
schedules, confirmatory assignments, supplements, additional security
agreements, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments as the
Collateral Agent shall reasonably request. If an Event of Default has occurred
and is continuing, the Collateral Agent may institute and maintain, in its own
name or in the name of any Pledgor, such suits and proceedings as the Collateral
Agent may be advised by counsel shall be necessary or expedient to prevent any
impairment of the security interest in or the perfection thereof in the Pledged
Collateral. All of the foregoing shall be at the sole cost and expense of the
Pledgors.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Pledgor represents, warrants and covenants as follows:
SECTION 4.1. Title. Except for the security interest granted
to the Collateral Agent for the ratable benefit of the Secured Parties pursuant
to this Agreement, such Pledgor owns and, as to Pledged Collateral acquired by
it from time to time after the date hereof, will own the rights in each item of
Pledged Collateral pledged by it hereunder free and clear of any and all Liens
or claims of others other than Permitted Collateral Liens. In addition, no Liens
or claims exist on the Securities Collateral, other than as permitted by Section
6.02 of the Credit Agreement. Such Pledgor has not filed, nor authorized any
third party to file a financing statement or other public notice with respect to
all or any part of the Pledged Collateral on file or of record in any public
office, except such as have been filed in favor of the Collateral Agent pursuant
to this Agreement or as are permitted by the Credit Agreement or financing
statements or public notices relating to the termination statements listed on
Schedule 8 to the Perfection Certificate. No person other than the Collateral
Agent has control or possession of all or any part of the Pledged Collateral,
except as permitted by the Credit Agreement.
SECTION 4.2. Validity of Security Interest. The security
interest in and Lien on the Pledged Collateral granted to the Collateral Agent
for the benefit of the Secured Parties hereunder constitutes (a) a legal and
valid security interest in all the Pledged Collateral securing the payment and
performance of the Obligations, and (b) subject to the filings and other actions
described in Schedule 6 annexed to the Perfection Certificate, a perfected
security interest in all the Pledged Collateral. The security interest and Lien
granted to the Collateral Agent for the benefit of the Secured Parties pursuant
to this Agreement in and on the Pledged Collateral will at all times constitute
a perfected, continuing security interest therein, subject only to Permitted
Collateral Liens.
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SECTION 4.3. Defense of Claims; Transferability of Pledged
Collateral. Each Pledgor shall, at its own cost and expense, defend title to the
Pledged Collateral pledged by it hereunder and the security interest therein and
Lien thereon granted to the Collateral Agent and the priority thereof against
all claims and demands of all persons, at its own cost and expense, at any time
claiming any interest therein adverse to the Collateral Agent or any other
Secured Party other than Permitted Collateral Liens (other than Contested
Liens). There is no agreement, and no Pledgor shall enter into any agreement or
take any other action, that would restrict the transferability of any of the
Pledged Collateral or otherwise not permit, impair or conflict with such
Pledgors' obligations or the rights of the Collateral Agent hereunder or under
any other Loan Document.
SECTION 4.4. Other Financing Statements. It has not filed, nor
authorized any third party to file (nor will there be any) valid or effective
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 Pledged Collateral other than financing statements and other
statements and instruments relating to Permitted Liens. So long as any of the
Obligations remain unpaid, no Pledgor shall execute, authorize or permit to be
filed in any public office any financing statement (or similar statement or
instrument of registration under the law of any jurisdiction) relating to any
Pledged Collateral, except financing statements and other statements and
instruments filed or to be filed in respect of and covering the security
interests granted by such Pledgor to the holder of the Permitted Collateral
Liens.
SECTION 4.5. Chief Executive Office; Change of Name;
Jurisdiction of Organization. (a) It shall comply with the provisions of Section
5.13(a) of the Credit Agreement.
(b) The Collateral Agent may rely on opinions of counsel
as to whether any or all UCC financing statements of the Pledgors need to be
amended as a result of any of the changes described in Section 5.13(a) of the
Credit Agreement. If any Pledgor fails to provide information to the Collateral
Agent about such changes on a timely basis, the Collateral Agent shall not be
liable or responsible to any party for any failure to maintain a perfected
security interest in such Pledgor's property constituting Pledged Collateral,
for which the Collateral Agent needed to have information relating to such
changes. The Collateral Agent shall have no duty to inquire about such changes
if any Pledgor does not inform the Collateral Agent of such changes, the parties
acknowledging and agreeing that it would not be feasible or practical for the
Collateral Agent to search for information on such changes if such information
is not provided by any Pledgor.
SECTION 4.6. Location of Inventory and Equipment. It shall not
move any Equipment or Inventory to any location other than one that is listed in
the relevant Schedules to the Perfection Certificate until (i) it shall have
given the Collateral Agent not less than 30 days' prior written notice (in the
form of an Officers' Certificate) of its intention so to do, clearly describing
such new location within the continental United States and providing such other
infor-
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mation in connection therewith as the Collateral Agent may request and (ii) with
respect to such new location, such Pledgor shall have taken all action
reasonably satisfactory to the Collateral Agent to maintain the perfection and
priority of the security interest of the Collateral Agent for the benefit of the
Secured Parties in the Pledged Collateral intended to be granted hereby,
including using commercially reasonable efforts to obtain waivers of landlord's
or warehousemen's and/or bailee's liens with respect to such new location, if
applicable, and if requested by the Collateral Agent. Such Pledgor agrees to
provide the Collateral Agent with prompt notice following the movement of any
Equipment or Inventory to any location other than one that is listed in the
relevant Schedules to the Perfection Certificate.
SECTION 4.7. Due Authorization and Issuance. All of the
Initial Pledged Shares have been, and to the extent any Pledged Shares are
hereafter issued, such Pledged Shares will be, upon such issuance, duly
authorized, validly issued and fully paid and non-assessable. All of the Initial
Pledged Interests have been fully paid for, and there is no amount or other
obligation owing by any Pledgor to any issuer of the Initial Pledged Interests
in exchange for or in connection with the issuance of the Initial Pledged
Interests or any Pledgor's status as a partner or a member of any issuer of the
Initial Pledged Interests.
SECTION 4.8. Consents, etc. In the event that the Collateral
Agent desires to exercise any remedies, voting or consensual rights or
attorney-in-fact powers set forth in this Agreement and determines it necessary
to obtain any approvals or consents of any Governmental Authority or any other
person therefor, then, upon the reasonable request of the Collateral Agent, such
Pledgor agrees to use its best efforts to assist and aid the Collateral Agent to
obtain as soon as practicable any necessary approvals or consents for the
exercise of any such remedies, rights and powers.
SECTION 4.9. Pledged Collateral. All information set forth
herein, including the schedules annexed hereto, and all information contained in
any documents, schedules and lists heretofore delivered to any Secured Party,
including the Perfection Certificate and the schedules thereto, in connection
with this Agreement, in each case, relating to the Pledged Collateral, is
accurate and complete in all material respects. The Pledged Collateral described
on the schedules annexed to the Perfection Certificate constitutes all of the
property of such type of Pledged Collateral owned or held by the Pledgors.
SECTION 4.10. Insurance. In the event that the proceeds of any
insurance claim are paid after the Collateral Agent has exercised its right to
foreclose during the continuance of an Event of Default, such Net Cash Proceeds
shall be paid to the Collateral Agent to satisfy any deficiency remaining after
such foreclosure.
SECTION 4.11. Payment of Taxes; Compliance with Laws;
Contesting Liens; Claims. Each Pledgor represents and warrants that all Claims
imposed upon or assessed against the Pledged Collateral have been paid and
discharged except to the extent such Claims constitute a Lien not yet due and
payable which is a Contested Lien or a Permitted Collateral Lien. Each
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Pledgor shall comply with all Requirements of Law applicable to the Pledged
Collateral the failure to comply with which would, individually or in the
aggregate, have a Material Adverse Effect. Each Pledgor may at its own expense
contest the validity, amount or applicability of any Claims so long as the
contest thereof shall be conducted in accordance with, and permitted pursuant to
the provisions of, the Credit Agreement. Notwithstanding the foregoing
provisions of this Section 4.11, (i) no contest of any such obligation may be
pursued by such Pledgor if such contest would expose the Collateral Agent or any
other Secured Party to (A) any possible criminal liability or (B) any additional
civil liability for failure to comply with such obligations unless such Pledgor
shall have furnished a bond or other security therefor satisfactory to the
Collateral Agent, or such Secured Party, as the case may be and (ii) if at any
time payment or performance of any obligation contested by such Pledgor pursuant
to this Section 4.11 shall become necessary to prevent the imposition of
remedies because of non-payment, such Pledgor shall pay or perform the same in
sufficient time to prevent the imposition of remedies in respect of such default
or prospective default.
SECTION 4.12. Access to Pledged Collateral, Books and Records;
Other Information. Upon reasonable request to each Pledgor, the Collateral
Agent, its agents, accountants and attorneys shall have full and free access to
visit and inspect, as applicable, during normal business hours and such other
reasonable times as may be requested by the Collateral Agent upon reasonable
prior notice all of the Pledged Collateral and Mortgaged Property including all
of the books, correspondence and records of such Pledgor relating thereto. The
Collateral Agent and its representatives may examine the same, take extracts
therefrom and make photocopies thereof, and such Pledgor agrees to render to the
Collateral Agent, at such Pledgor's cost and expense, such clerical and other
assistance as may be reasonably requested by the Collateral Agent with regard
thereto. Such Pledgor shall, at any and all times, within a reasonable time
after written request by the Collateral Agent, furnish or cause to be furnished
to the Collateral Agent, in such manner and in such detail as may be reasonably
requested by the Collateral Agent, additional information with respect to the
Pledged Collateral.
ARTICLE V
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
SECTION 5.1. Pledge of Additional Securities Collateral. Each
Pledgor shall, upon obtaining any Pledged Securities or Intercompany Notes of
any person, accept the same in trust for the benefit of the Collateral Agent and
forthwith deliver to the Collateral Agent a pledge amendment, duly executed by
such Pledgor, in substantially the form of Exhibit 2 annexed hereto (each, a
"Pledge Amendment"), and the certificates and other documents required under
Section 3.1 and Section 3.2 hereof in respect of the additional Pledged
Securities or Intercompany Notes which are to be pledged pursuant to this
Agreement, and confirming the attachment
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of the Lien hereby created on and in respect of such additional Pledged
Securities or Intercompany Notes. Each Pledgor hereby authorizes the Collateral
Agent to attach each Pledge Amendment to this Agreement and agrees that all
Pledged Securities or Intercompany Notes listed on any Pledge Amendment
delivered to the Collateral Agent shall for all purposes hereunder be considered
Pledged Collateral.
SECTION 5.2. Voting Rights; Distributions; etc.
(i) So long as no Event of Default shall have occurred
and be continuing:
(A) each Pledgor shall be entitled to exercise any and
all voting and other consensual rights pertaining to the Securities
Collateral or any part thereof for any purpose not inconsistent with
the terms or purposes hereof, the Credit Agreement or any other
document evidencing the Obligations; provided, however, that no Pledgor
shall in any event exercise such rights in any manner which could
reasonably be expected to have a Material Adverse Effect; and
(B) each Pledgor shall be entitled to receive and retain,
and to utilize free and clear of the Lien hereof, any and all
Distributions, but only if and to the extent made in accordance with
the provisions of the Credit Agreement; provided, however, that any and
all such Distributions consisting of rights or interests in the form of
securities shall be forthwith delivered to the Collateral Agent to hold
as Pledged Collateral and shall, if received by any Pledgor, be
received in trust for the benefit of the Collateral Agent, be
segregated from the other property or funds of such Pledgor and be
forthwith delivered to the Collateral Agent as Pledged Collateral in
the same form as so received (with any necessary endorsement).
(ii) The Collateral Agent shall be deemed without further
action or formality to have granted to each Pledgor all necessary consents
relating to voting rights and shall, if necessary, upon written request of any
Pledgor and at the sole cost and expense of the Pledgors, from time to time
execute and deliver (or cause to be executed and delivered) to such Pledgor all
such instruments as such Pledgor may reasonably request in order to permit such
Pledgor to exercise the voting and other rights which it is entitled to exercise
pursuant to Section 5.2(i)(A) hereof and to receive the Distributions which it
is authorized to receive and retain pursuant to Section 5.2(i)(B) hereof.
(iii) Upon the occurrence and during the continuance of any
Event of Default:
(A) all rights of each Pledgor to exercise the voting and
other consensual rights it would otherwise be entitled to exercise
pursuant to Section 5.2(i)(A) hereof shall cease, and all such rights
shall thereupon become vested in the Collateral Agent, which shall
thereupon have the sole right to exercise such voting and other
consensual rights; and
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(B) all rights of each Pledgor to receive Distributions
which it would otherwise be authorized to receive and retain pursuant
to Section 5.2(i)(B) hereof shall cease and all such rights shall
thereupon become vested in the Collateral Agent, which shall thereupon
have the sole right to receive and hold as Pledged Collateral such
Distributions.
(iv) Each Pledgor shall, at its sole cost and expense,
from time to time execute and deliver to the Collateral Agent appropriate
instruments as the Collateral Agent may request in order to permit the
Collateral Agent to exercise the voting and other rights which it may be
entitled to exercise pursuant to Section 5.2(iii)(A) hereof and to receive all
Distributions which it may be entitled to receive under Section 5.2(iii)(B)
hereof.
(v) All Distributions which are received by any Pledgor
contrary to the provisions of Section 5.2(i)(B) hereof shall be received in
trust for the benefit of the Collateral Agent, shall be segregated from other
funds of such Pledgor and shall immediately be paid over to the Collateral Agent
as Pledged Collateral in the same form as so received (with any necessary
endorsement).
SECTION 5.3. Defaults, etc. No Pledgor is in default in the
payment of any portion of any mandatory capital contribution, if any, required
to be made under any agreement to which any Pledgor is a party relating to the
Pledged Securities pledged by any of them, and no Pledgor is in violation of any
other provisions of any such agreement to which any Pledgor is a party, or
otherwise in default or violation thereunder. No Securities Collateral pledged
by any Pledgor is subject to any defense, offset or counterclaim, nor have any
of the foregoing been asserted or alleged against any Pledgor by any person with
respect thereto, and as of the date hereof, there are no certificates,
instruments, documents or other writings (other than the Organizational
Documents and certificates, if any, delivered to the Collateral Agent) which
evidence any Pledged Securities of any Pledgor.
SECTION 5.4. Certain Agreements of Pledgors As Issuers and
Holders of Equity Interests.
(i) In the case of each Pledgor which is an issuer of
Securities Collateral, such Pledgor agrees to be bound by the terms of this
Agreement relating to the Securities Collateral issued by it and will comply
with such terms insofar as such terms are applicable to it.
(ii) In the case of each Pledgor which is a partner in a
partnership, limited liability company or other entity, such Pledgor hereby
consents, to the extent required by the applicable Organizational Document, to
the pledge by each other Pledgor, pursuant to the terms hereof, of the Pledged
Interests in such partnership, limited liability company or other entity and,
upon the occurrence and during the continuance of an Event of Default, to the
transfer of such Pledged Interests to the Collateral Agent or its nominee and to
the substitution of the Collateral Agent or its nominee as a substituted partner
or member in such partnership, limited liability
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company or other entity with all the rights, powers and duties of a general
partner or a limited partner or member, as the case may be.
ARTICLE VI
CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL
SECTION 6.1. Grant of License. Each Pledgor hereby grants to
the Collateral Agent an irrevocable, non-exclusive license to use, assign,
license or sublicense any and all of the Intellectual Property Collateral now
owned or licensed or hereafter acquired or licensed by such Pledgor, wherever
the same may be located, except, in the case of Intellectual Property Collateral
licensed to such Pledgor, if and to the extent this sublicense would result in
breach of the underlying license or give rise to termination rights by the
licensor with respect thereto, in each case, for the purpose of enabling the
Collateral Agent, during the continuance of an Event of Default, to exercise
rights and remedies under Article IX hereof at such time as the Collateral Agent
shall be lawfully entitled to exercise such rights and remedies, and for no
other purpose. Such license shall include access to all media in which any of
the licensed items may be recorded or stored and to all computer programs used
for the compilation or printout hereof.
SECTION 6.2. Protection of Collateral Agent's Security. On a
continuing basis, each Pledgor shall, at its sole cost and expense, (i) promptly
following its becoming aware thereof, notify the Collateral Agent of (A) any
materially adverse determination in any proceeding in the United States Patent
and Trademark Office or the United States Copyright Office or equivalent foreign
office with respect to any material Intellectual Property Collateral or (B) the
institution of any proceeding or any adverse determination in any federal,
state, local or foreign court or administrative body regarding such Pledgor's
claim of ownership in or right to use any material Intellectual Property
Collateral, its right to register such Intellectual Property Collateral or its
right to keep and maintain such registration in full force and effect, (ii)
maintain and protect material Intellectual Property Collateral, (iii) not permit
to lapse or become abandoned any material Intellectual Property Collateral, and
not settle or compromise any pending or future litigation or administrative
proceeding with respect to such Intellectual Property Collateral, in each case
except as shall be consistent with commercially reasonable business judgment,
(iv) upon such Pledgor obtaining knowledge thereof, promptly notify the
Collateral Agent in writing of any event which may be reasonably expected to
materially and adversely affect the value or utility of any material
Intellectual Property Collateral, the ability of such Pledgor or the Collateral
Agent to use, exploit, license or dispose of such Intellectual Property
Collateral or any portion thereof or the rights and remedies of the Collateral
Agent in relation thereto including a levy or threat of levy or any legal
process against such Intellectual Property Collateral or any portion thereof,
(v) not license any material Intellectual Property Collateral other than
licenses entered
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into by such Pledgor in, or incidental to, the ordinary course of business, or
amend or permit the amendment of any of the licenses in a manner that materially
and adversely affects the right to receive payments thereunder, or in any manner
that would materially impair the value of the Intellectual Property Collateral
or the Lien on and security interest in such Intellectual Property Collateral
intended to be granted to the Collateral Agent for the benefit of the Secured
Parties, without the consent of the Collateral Agent, (vi) diligently keep
adequate records respecting the Intellectual Property Collateral and (vii)
furnish to the Collateral Agent from time to time upon the Collateral Agent's
request therefor reasonably detailed statements and amended schedules further
identifying and describing the Intellectual Property Collateral and such other
materials evidencing or reports pertaining to the Intellectual Property
Collateral as the Collateral Agent may from time to time reasonably request.
SECTION 6.3. After-Acquired Property. If any Pledgor shall, at
any time before the Obligations have been paid in full (other than contingent
indemnification obligations which, pursuant to the provisions of the Credit
Agreement or the Security Documents, survive the termination thereof), the
Commitments have been terminated and all Letters of Credit have been canceled or
have expired, (i) obtain any rights to any additional Intellectual Property or
(ii) become entitled to the benefit of any additional Intellectual Property or
any renewal or extension thereof, including any reissue, division, continuation,
or continuation-in-part of any Intellectual Property, or any improvement on any
Intellectual Property, the provisions hereof shall automatically apply thereto
and any such item enumerated in clause (i) or (ii) of this Section 6.3 with
respect to such Pledgor shall automatically constitute Intellectual Property
Collateral if such would have constituted Intellectual Property Collateral at
the time of execution hereof and be subject to the Lien and security interest
created by this Agreement without further action by any party. Each Pledgor
shall promptly (i) provide to the Collateral Agent written notice of any of the
foregoing and (ii) confirm the attachment of the Lien and security interest
created by this Agreement to any rights described in clauses (i) and (ii) of the
immediately preceding sentence of this Section 6.3 by execution of an instrument
in form reasonably acceptable to the Collateral Agent and the filing of any
instruments or statements as shall be reasonably necessary to preserve, protect
or perfect the Collateral Agent's security interest in such Intellectual
Property. Further, each Pledgor authorizes the Collateral Agent to modify this
Agreement by amending Schedules 13(c) and 13(d) annexed to the Perfection
Certificate to include any Intellectual Property acquired or arising after the
date hereof of such Pledgor.
SECTION 6.4. Litigation. Unless there shall occur and be
continuing any Event of Default, each Pledgor shall have the right to commence
and prosecute in its own name, as the party in interest, for its own benefit and
at the sole cost and expense of the Pledgors, such applications for protection
of the Intellectual Property Collateral and suits, proceedings or other actions
to prevent the infringement, misappropriation, invalidation, abandonment,
counterfeiting, unfair competition, dilution, diminution in value or other
damage as are necessary to preserve and protect the Intellectual Property
Collateral. Upon the occurrence and during the continuance of any Event of
Default, the Collateral Agent shall have the right but shall in no way be
obligated to file applications for preservation and protection of the
Intellectual Property Collateral and/or
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bring suit in the name of any Pledgor, the Collateral Agent or the Secured
Parties to enforce the Intellectual Property Collateral. In the event of such
suit, each Pledgor shall, at the reasonable request of the Collateral Agent, do
any and all lawful acts and execute any and all documents requested by the
Collateral Agent in aid of such enforcement and the Pledgors shall promptly
reimburse and indemnify the Collateral Agent for all costs and expenses incurred
by the Collateral Agent in the exercise of its rights under this Section 6.4 in
accordance with Section 11.03 of the Credit Agreement. In the event that the
Collateral Agent shall elect not to bring suit to enforce the Intellectual
Property Collateral, each Pledgor agrees, at the reasonable request of the
Collateral Agent, to take all commercially reasonable actions necessary, whether
by suit, proceeding or other action, to prevent the infringement,
misappropriation, invalidation, abandonment, counterfeiting, unfair competition,
dilution, diminution in value of or other damage to any of the Intellectual
Property Collateral by others and for that purpose agrees to diligently maintain
any suit, proceeding or other action necessary to prevent such infringement.
ARTICLE VII
CERTAIN PROVISIONS CONCERNING ACCOUNTS
SECTION 7.1. Maintenance of Records. Each Pledgor shall keep
and maintain at its own cost and expense complete records of each Account, in a
manner consistent with prudent business practice, including records of all
payments received, all credits granted thereon, all merchandise returned and all
other documentation relating thereto. Each Pledgor shall, at such Pledgor's sole
cost and expense, upon the Collateral Agent's demand made at any time after the
occurrence and during the continuance of any Event of Default, deliver all
tangible evidence of Accounts, including all documents evidencing Accounts and
any books and records relating thereto to the Collateral Agent or to its
representatives (copies of which evidence and books and records may be retained
by such Pledgor). Upon the occurrence and during the continuance of any Event of
Default, the Collateral Agent may transfer a full and complete copy of any
Pledgor's books, records, credit information, reports, memoranda and all other
writings relating to the Accounts to and for the use by any person that has
acquired or is contemplating acquisition of an interest in the Accounts or the
Collateral Agent's security interest therein without the consent of any Pledgor.
SECTION 7.2. Legend. Each Pledgor shall legend, at the request
of the Collateral Agent and in form and manner reasonably satisfactory to the
Collateral Agent, the Accounts and the other books, records and documents of
such Pledgor evidencing or pertaining to the Accounts with an appropriate
reference to the fact that the Accounts have been collaterally assigned to the
Collateral Agent for the benefit of the Secured Parties and that the Collateral
Agent has a security interest therein.
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SECTION 7.3. Modification of Terms, etc. No Pledgor shall
rescind or cancel any obligations evidenced by any Account or modify any term
thereof or make any adjustment with respect thereto except in the ordinary
course of business consistent with prudent business practice, or extend or renew
any such obligations except in the ordinary course of business consistent with
prudent business practice or compromise or settle any dispute, claim, suit or
legal proceeding relating thereto or sell any Account or interest therein except
in the ordinary course of business consistent with prudent business practice
without the prior written consent of the Collateral Agent. Each Pledgor shall
timely fulfill all obligations on its part to be fulfilled under or in
connection with the Accounts.
SECTION 7.4. Collection. Each Pledgor shall cause to be
collected from the Account Debtor of each of the Accounts, as and when due in
the ordinary course of business and consistent with prudent business practice
(including Accounts that are delinquent, such Accounts to be collected in
accordance with generally accepted commercial collection procedures), any and
all amounts owing under or on account of such Account, and apply forthwith upon
receipt thereof all such amounts as are so collected to the outstanding balance
of such Account, except that any Pledgor may, with respect to an Account, allow
in the ordinary course of business (i) a refund or credit due as a result of
returned or damaged or defective merchandise and (ii) such extensions of time to
pay amounts due in respect of Accounts and such other modifications of payment
terms or settlements in respect of Accounts as shall be commercially reasonable
in the circumstances, all in accordance with such Pledgor's ordinary course of
business consistent with its collection practices as in effect from time to
time. The costs and expenses (including attorneys' fees) of collection, in any
case, whether incurred by any Pledgor, the Collateral Agent or any Secured
Party, shall be paid by the Pledgors.
ARTICLE VIII
TRANSFERS
SECTION 8.1. Transfers of Pledged Collateral. No Pledgor shall
sell, convey, assign or otherwise dispose of, or grant any option with respect
to, any of the Pledged Collateral pledged by it hereunder except as permitted by
the Credit Agreement.
ARTICLE IX
REMEDIES
SECTION 9.1. Remedies. Upon the occurrence and during the
continuance of any Event of Default the Collateral Agent may from time to time
exercise in respect of the
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Pledged Collateral, in addition to the other rights and remedies provided for
herein or otherwise available to it, the following remedies, in accordance with
applicable law:
(i) personally, or by agents or attorneys, immediately
take possession of the Pledged Collateral or any part thereof, from any Pledgor
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 any Pledgor's
premises where any of the Pledged Collateral is located, remove such Pledged
Collateral, remain present at such premises to receive copies of all
communications and remittances relating to the Pledged Collateral and use in
connection with such removal and possession any and all services, supplies, aids
and other facilities of any Pledgor;
(ii) demand, xxx for, collect or receive any money or
property at any time payable or receivable in respect of the Pledged Collateral
including instructing the obligor or obligors on any agreement, instrument or
other obligation constituting part of the Pledged Collateral to make any payment
required by the terms of such agreement, instrument or other obligation directly
to the Collateral Agent, and in connection with any of the foregoing,
compromise, settle, extend the time for payment and make other modifications
with respect thereto; provided, however, that in the event that any such
payments are made directly to any Pledgor, prior to receipt by any such obligor
of such instruction, such Pledgor shall segregate all amounts received pursuant
thereto in trust for the benefit of the Collateral Agent and shall promptly (but
in no event later than one (1) Business Day after receipt thereof) pay such
amounts to the Collateral Agent;
(iii) sell, assign, grant a license to use or otherwise
liquidate, or direct any Pledgor to sell, assign, grant a license to use or
otherwise liquidate, any and all investments made in whole or in part with the
Pledged Collateral or any part thereof, and take possession of the proceeds of
any such sale, assignment, license or liquidation;
(iv) take possession of the Pledged Collateral or any part
thereof, by directing any Pledgor in writing to deliver the same to the
Collateral Agent at any place or places so designated by the Collateral Agent,
in which event such Pledgor shall at its own expense: (A) forthwith cause the
same to be moved to the place or places designated by the Collateral Agent and
therewith delivered to the Collateral Agent, (B) store and keep any Pledged
Collateral so delivered to the Collateral Agent at such place or places pending
further action by the Collateral Agent and (C) while the Pledged Collateral
shall be so stored and kept, provide such security and maintenance services as
shall be necessary to protect the same and to preserve and maintain them in good
condition. Each Pledgor's obligation to deliver the Pledged Collateral as
contemplated in this Section 9.1(iv) is of the essence hereof. Upon application
to a court of equity having jurisdiction, the Collateral Agent shall be entitled
to a decree requiring specific performance by any Pledgor of such obligation;
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(v) withdraw all moneys, instruments, securities and
other property in any bank, financial securities, deposit or other account of
any Pledgor constituting Pledged Collateral for application to the Obligations
as provided in Article X hereof;
(vi) retain and apply the Distributions to the Obligations
as provided in Article X hereof;
(vii) exercise any and all rights as beneficial and legal
owner of the Pledged Collateral, including perfecting assignment of and
exercising any and all voting, consensual and other rights and powers with
respect to any Pledged Collateral; and
(viii) exercise any and all the rights and remedies of a
secured party on default under the UCC, and the Collateral Agent may also in its
sole discretion, without notice except as specified in Section 9.2 hereof, sell,
assign or grant a license to use the Pledged Collateral or any part thereof in
one or more parcels at public or private sale, at any exchange, broker's board
or at any of the Collateral Agent's offices or elsewhere, for cash, on credit or
for future delivery, and at such price or prices and upon such other terms as
the Collateral Agent may deem commercially reasonable. The Collateral Agent or
any other Secured Party or any of their respective Affiliates may be the
purchaser, licensee, assignee or recipient of any or all of the Pledged
Collateral at any such sale and shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Pledged Collateral sold, assigned or licensed at such sale, to use and apply
any of the Obligations owed to such person as a credit on account of the
purchase price of any Pledged Collateral payable by such person at such sale.
Each purchaser, assignee, licensee or recipient at any such sale shall acquire
the property sold, assigned or licensed absolutely free from any claim or right
on the part of any Pledgor, and each Pledgor hereby waives, to the fullest
extent permitted by law, all rights of redemption, stay and/or appraisal which
it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. The Collateral Agent shall not be
obligated to make any sale of Pledged Collateral regardless of notice of sale
having been given. The Collateral Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was
so adjourned. Each Pledgor hereby waives, to the fullest extent permitted by
law, any claims against the Collateral Agent arising by reason of the fact that
the price at which any Pledged Collateral may have been sold, assigned or
licensed at such a private sale was less than the price which might have been
obtained at a public sale, even if the Collateral Agent accepts the first offer
received and does not offer such Pledged Collateral to more than one offeree.
SECTION 9.2. Notice of Sale. Each Pledgor acknowledges and
agrees that, to the extent notice of sale or other disposition of Pledged
Collateral shall be required by law, ten (10) days' prior notice to such Pledgor
of the time and place of any public sale or of the time after which any private
sale or other intended disposition is to take place shall be commercially
reasonable notification of such matters. No notification need be given to any
Pledgor if it has
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signed, in accordance with applicable law, after the occurrence of an Event of
Default, a statement renouncing or modifying any right to notification of sale
or other intended disposition.
SECTION 9.3. Waiver of Notice and Claims. Each Pledgor hereby
waives, to the fullest extent permitted by applicable law, notice or judicial
hearing in connection with the Collateral Agent's taking possession or the
Collateral Agent's disposition of any of the Pledged Collateral, including any
and all prior notice and hearing for any prejudgment remedy or remedies and any
such right which such Pledgor would otherwise have under law, and each Pledgor
hereby further waives, to the fullest extent permitted by applicable law: (i)
all damages occasioned by such taking of possession, (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, appraisal, valuation, stay, extension or moratorium now or
hereafter in force under any applicable law. The Collateral Agent shall not be
liable for any incorrect or improper payment made pursuant to this Article IX in
the absence of gross negligence or willful misconduct. Any sale of, or the grant
of options to purchase, or any other realization upon, any Pledged Collateral
shall operate to divest all right, title, interest, claim and demand, either at
law or in equity, of the applicable Pledgor therein and thereto, and shall be a
perpetual bar both at law and in equity against such Pledgor and against any and
all persons claiming or attempting to claim the Pledged Collateral so sold,
optioned or realized upon, or any part thereof, from, through or under such
Pledgor.
SECTION 9.4. Certain Sales of Pledged Collateral.
(i) Each Pledgor recognizes that, by reason of certain
prohibitions contained in law, rules, regulations or orders of any Governmental
Authority, the Collateral Agent may be compelled, with respect to any sale of
all or any part of the Pledged Collateral, to limit purchasers to those who meet
the requirements of such Governmental Authority. Each Pledgor acknowledges that
any such sales may be at prices and on terms less favorable to the Collateral
Agent than those obtainable through a public sale without such restrictions,
and, notwithstanding such circumstances, agrees that any such restricted sale
shall be deemed to have been made in a commercially reasonable manner and that,
except as may be required by applicable law, the Collateral Agent shall have no
obligation to engage in public sales in respect of such Pledged Collateral.
(ii) Each Pledgor recognizes that, by reason of certain
prohibitions contained in the Securities Act, and applicable state securities
laws, the Collateral Agent may be compelled, with respect to any sale of all or
any part of the Securities Collateral and Investment Property, to limit
purchasers to persons who will agree, among other things, to acquire such
Securities Collateral or Investment Property for their own account, for
investment and not with a view to the distribution or resale thereof. Each
Pledgor acknowledges that any such private sales may be at prices and on terms
less favorable to the Collateral Agent than those obtainable through a public
sale without such restrictions (including a public offering made pursuant to a
registration statement under the Securities Act) and, notwithstanding such
circumstances, agrees
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that any such private sale shall be deemed to have been made in a commercially
reasonable manner and that the Collateral Agent shall have no obligation to
engage in public sales and no obligation to delay the sale of any Securities
Collateral or Investment Property for the period of time necessary to permit the
issuer thereof to register it for a form of public sale requiring registration
under the Securities Act or under applicable state securities laws, even if such
issuer would agree to do so.
(iii) Notwithstanding the foregoing, each Pledgor shall,
upon the occurrence and during the continuance of any Event of Default, at the
reasonable request of the Collateral Agent, for the benefit of the Collateral
Agent, cause any registration, qualification under or compliance with any
Federal or state securities law or laws to be effected with respect to all or
any part of the Securities Collateral as soon as practicable and at the sole
cost and expense of the Pledgors. Each Pledgor will use its commercially
reasonable efforts to cause such registration to be effected (and be kept
effective) and will use its commercially reasonable efforts to cause such
qualification and compliance to be effected (and be kept effective) as may be so
requested and as would permit or facilitate the sale and distribution of such
Securities Collateral including registration under the Securities Act (or any
similar statute then in effect), appropriate qualifications under applicable
blue sky or other state securities laws and appropriate compliance with all
other requirements of any Governmental Authority. Each Pledgor shall use its
commercially reasonable efforts to cause the Collateral Agent to be kept advised
in writing as to the progress of each such registration, qualification or
compliance and as to the completion thereof, shall furnish to the Collateral
Agent such number of prospectuses, offering circulars or other documents
incident thereto as the Collateral Agent from time to time may request, and
shall indemnify and shall cause the issuer of the Securities Collateral to
indemnify the Collateral Agent and all others participating in the distribution
of such Securities Collateral against all claims, losses, damages and
liabilities caused by any untrue statement (or alleged untrue statement) of a
material fact contained therein (or in any related registration statement,
notification or the like) or by any omission (or alleged omission) to state
therein (or in any related registration statement, notification or the like) a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
(iv) If the Collateral Agent determines to exercise its
right to sell any or all of the Securities Collateral or Investment Property,
upon written request, the applicable Pledgor shall from time to time furnish to
the Collateral Agent all such information as the Collateral Agent may reasonably
request in order to determine the number of securities included in the
Securities Collateral or Investment Property which may be sold by the Collateral
Agent as exempt transactions under the Securities Act and the rules of the
Securities and Exchange Commission thereunder, as the same are from time to time
in effect.
(v) Each Pledgor further agrees that a breach of any of the
covenants contained in this Section 9.4 will cause irreparable injury to the
Collateral Agent and other Secured Parties, that the Collateral Agent and the
other Secured Parties have no adequate remedy at law in respect of such breach
and, as a consequence, that each and every covenant contained in this
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Section 9.4 shall be specifically enforceable against such Pledgor, and such
Pledgor hereby waives and agrees not to assert any defenses against an action
for specific performance of such covenants except for a defense that no Event of
Default has occurred and is continuing.
SECTION 9.5. No Waiver; Cumulative Remedies.
(i) No failure on the part of the Collateral Agent to
exercise, no course of dealing with respect to, and no delay on the part of the
Collateral Agent 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 hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy; nor shall the
Collateral Agent be required to look first to, enforce or exhaust any other
security, collateral or guaranties. The remedies herein provided are cumulative
and are not exclusive of any remedies provided by law.
(ii) In the event that 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 Pledgors,
the Collateral Agent and each other Secured Party shall be restored to their
respective former positions and rights hereunder with respect to the Pledged
Collateral, and all rights, remedies and powers of the Collateral Agent and the
other Secured Parties shall continue as if no such proceeding had been
instituted.
SECTION 9.6. Certain Additional Actions Regarding Intellectual
Property. If any Event of Default shall have occurred and be continuing, upon
the written demand of the Collateral Agent, each Pledgor shall execute and
deliver to the Collateral Agent an assignment or further license of the
Intellectual Property Collateral, in whole or in part as the Collateral Agent
determines, and such other documents as are necessary or appropriate to carry
out the intent and purposes hereof. Within five (5) Business Days of written
notice thereafter from the Collateral Agent, each Pledgor shall make available
to the Collateral Agent, to the extent within such Pledgor's power and
authority, such personnel in such Pledgor's employ on the date of the Event of
Default as the Collateral Agent may reasonably designate to permit such Pledgor
to continue, directly or indirectly, to produce, advertise and sell the products
and services sold by such Pledgor under the Intellectual Property Collateral,
and such persons shall be available to perform their prior functions on the
Collateral Agent's behalf.
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ARTICLE X
PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS;
APPLICATION OF PROCEEDS
SECTION 10.1. Proceeds of Casualty Events and Collateral
Dispositions. The Pledgors shall take all actions required by the Credit
Agreement with respect to any Net Cash Proceeds of any Casualty Event or from
the sale or disposition of any Pledged Collateral.
SECTION 10.2. Application of Proceeds. The proceeds received
by the Collateral Agent in respect of any sale of, collection from or other
realization upon all or any part of the Collateral pursuant to the exercise by
the Collateral Agent of its remedies shall be applied, together with any other
sums then held by the Collateral Agent pursuant to this Agreement, in accordance
with the Credit Agreement.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Concerning Collateral Agent.
(i) The Collateral Agent has been appointed as collateral
agent pursuant to the Credit Agreement. The actions of the Collateral Agent
hereunder are subject to the provisions of the Credit Agreement. The Collateral
Agent shall have the right hereunder to make demands, to give notices, to
exercise or refrain from exercising any rights, and to take or refrain from
taking action (including the release or substitution of the Pledged Collateral),
in accordance with this Agreement and the Credit Agreement. The Collateral Agent
may employ agents and attorneys-in-fact in connection herewith and shall not be
liable for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it in good faith. The Collateral Agent may resign and a successor
Collateral Agent may be appointed in the manner provided in the Credit
Agreement. Upon the acceptance of any appointment as the Collateral Agent by a
successor Collateral Agent, that successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Collateral Agent under this Agreement, and the retiring
Collateral Agent shall thereupon be discharged from its duties and obligations
under this Agreement. After any retiring Collateral Agent's resignation, the
provisions hereof shall inure to its benefit as to any actions taken or omitted
to be taken by it under this Agreement while it was the Collateral Agent.
(ii) The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if such Pledged Collat-
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eral is accorded treatment substantially equivalent to that which the Collateral
Agent, in its individual capacity, accords its own property consisting of
similar instruments or interests, it being understood that neither the
Collateral Agent nor any of the Secured Parties shall have responsibility for
(i) ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Securities Collateral,
whether or not the Collateral Agent or any other Secured Party has or is deemed
to have knowledge of such matters or (ii) taking any necessary steps to preserve
rights against any person with respect to any Pledged Collateral.
(iii) The Collateral Agent shall be entitled to rely upon
any written notice, statement, certificate, order or other document or any
telephone message believed by it to be genuine and correct and to have been
signed, sent or made by the proper person, and, with respect to all matters
pertaining to this Agreement and its duties hereunder, upon advice of counsel
selected by it.
(iv) If any item of Pledged Collateral also constitutes
collateral granted to the Collateral Agent under any other deed of trust,
mortgage, security agreement, pledge or instrument of any type, in the event of
any conflict between the provisions hereof and the provisions of such other deed
of trust, mortgage, security agreement, pledge or instrument of any type in
respect of such collateral, the Collateral Agent, in its sole discretion, shall
select which provision or provisions shall control.
SECTION 11.2. Collateral Agent May Perform; Collateral Agent
Appointed Attorney-in-Fact. If any Pledgor shall fail to perform any covenants
contained in this Agreement (including such Pledgor's covenants to (i) pay the
premiums in respect of all required insurance policies hereunder, (ii) pay
Claims, (iii) make repairs, (iv) discharge Liens or (v) pay or perform any
obligations of such Pledgor under any Pledged Collateral) or if any
representation or warranty on the part of any Pledgor contained herein shall be
breached, the Collateral Agent may (but shall not be obligated to) do the same
or cause it to be done or remedy any such breach, and may expend funds for such
purpose; provided, however, that the Collateral Agent shall in no event be bound
to inquire into the validity of any tax, lien, imposition or other obligation
which such Pledgor fails to pay or perform as and when required hereby and which
such Pledgor does not contest in accordance with the provisions of Section 4.11
hereof. Any and all amounts so expended by the Collateral Agent shall be paid by
the Pledgors in accordance with the provisions of Section 11.03 of the Credit
Agreement. Neither the provisions of this Section 11.2 nor any action taken by
the Collateral Agent pursuant to the provisions of this Section 11.2 shall
prevent any such failure to observe any covenant contained in this Agreement nor
any breach of representation or warranty from constituting an Event of Default.
Each Pledgor hereby appoints the Collateral Agent its attorney-in-fact, with
full authority in the place and stead of such Pledgor and in the name of such
Pledgor, or otherwise, from time to time in the Collateral Agent's discretion to
take any action and to execute any instrument consistent with the terms of the
Credit Agreement, this Agreement and the other Security Documents which the
Collateral Agent may deem necessary or advisable to accomplish the purposes
hereof. The foregoing grant of author-
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ity is a power of attorney coupled with an interest and such appointment shall
be irrevocable for the term hereof. Each Pledgor hereby ratifies all that such
attorney shall lawfully do or cause to be done by virtue hereof.
SECTION 11.3. Continuing Security Interest; Assignment. This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (i) be binding upon the Pledgors, their respective successors and
assigns and (ii) inure, together with the rights and remedies of the Collateral
Agent hereunder, to the benefit of the Collateral Agent and the other Secured
Parties and each of their respective successors, transferees and assigns. No
other persons (including any other creditor of any Pledgor) shall have any
interest herein or any right or benefit with respect hereto. Without limiting
the generality of the foregoing clause (ii), any Secured Party may assign or
otherwise transfer any indebtedness held by it secured by this Agreement to any
other person, and such other person shall thereupon become vested with all the
benefits in respect thereof granted to such Secured Party, herein or otherwise,
subject however, to the provisions of the Credit Agreement and any Hedging
Agreement.
SECTION 11.4. Termination; Release. The Pledged Collateral
shall be released from the Lien of this Agreement in accordance with the
provisions of the Credit Agreement. Upon termination hereof or any release of
Pledged Collateral in accordance with the provisions of the Credit Agreement,
the Collateral Agent shall, upon the request and at the sole cost and expense of
the Pledgors, assign, transfer and deliver to Pledgor, against receipt and
without recourse to or warranty by the Collateral Agent except as to the fact
that the Collateral Agent has not encumbered the released assets, such of the
Pledged Collateral to be released (in the case of a release) as may be in
possession of the Collateral Agent and as shall not have been sold or otherwise
applied pursuant to the terms hereof, and, with respect to any other Pledged
Collateral, proper documents and instruments (including UCC-3 termination
statements or releases) acknowledging the termination hereof or the release of
such Pledged Collateral, as the case may be.
SECTION 11.5. Modification in Writing. No amendment,
modification, supplement, termination or waiver of or to any provision hereof,
nor consent to any departure by any Pledgor therefrom, shall be effective unless
the same shall be made in accordance with the terms of the Credit Agreement and
unless in writing and signed by the Collateral Agent. Any amendment,
modification or supplement of or to any provision hereof, any waiver of any
provision hereof and any consent to any departure by any Pledgor from the terms
of any provision hereof shall be effective only in the specific instance and for
the specific purpose for which made or given. Except where notice is
specifically required by this Agreement or any other document evidencing the
Obligations, no notice to or demand on any Pledgor in any case shall entitle any
Pledgor to any other or further notice or demand in similar or other
circumstances.
SECTION 11.6. Notices. Unless otherwise provided herein or in
the Credit Agreement, any notice or other communication herein required or
permitted to be given shall be given in the manner and become effective as set
forth in the Credit Agreement, as to any Pledgor, addressed to it at the address
of the Borrower set forth in the Credit Agreement and as
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to the Collateral Agent, addressed to it at the address set forth in the Credit
Agreement, or in each case at such other address as shall be designated by such
party in a written notice to the other party complying as to delivery with the
terms of this Section 11.6.
SECTION 11.7. Governing Law, Consent to Jurisdiction and
Service of Process; Waiver of Jury Trial. Sections 11.09 and 11.10 of the Credit
Agreement are incorporated herein, mutatis mutandis, as if a part hereof.
SECTION 11.8. Severability of Provisions. Any provision hereof
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 or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 11.9. Execution in Counterparts. This Agreement and
any amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 11.10. Business Days. In the event any time period or
any date provided in this Agreement ends or falls on a day other than a Business
Day, then such time period shall be deemed to end and such date shall be deemed
to fall on the next succeeding Business Day, and performance herein may be made
on such Business Day, with the same force and effect as if made on such other
day.
SECTION 11.11. Waiver of Stay. Each Pledgor covenants (to the
extent it may lawfully do so) that in the event that such Pledgor or any
property or assets of such Pledgor shall hereafter become the subject of a
voluntary or involuntary proceeding under Title 11 of the United States Code or
such Pledgor shall otherwise be a party to any federal or state bankruptcy,
insolvency, moratorium or similar proceeding to which the provisions relating to
the automatic stay under Section 362 of Title 11 of the United States Code or
any similar provision in any such law is applicable, then, in any such case,
whether or not the Collateral Agent has commenced foreclosure proceedings under
this Agreement, such Pledgor shall not, and each Pledgor hereby expressly waives
their right to (to the extent it may lawfully do so) at any time insist upon,
plead or in any manner whatsoever, claim or take the benefit or advantage of any
such automatic stay or such similar provision as it relates to the exercise of
any of the rights and remedies (including any foreclosure proceedings) available
to the Collateral Agent as provided in this Agreement, in any other Security
Document or any other document evidencing the Obligations. Each Pledgor further
covenants (to the extent it may lawfully do so) that it will not hinder, delay
or impede the execution of any power granted herein to the Collateral Agent, but
will suffer and permit the
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execution of every such power as though no law relating to any stay or similar
provision had been enacted.
SECTION 11.12. No Credit for Payment of Taxes or Imposition.
No Pledgor shall be entitled to any credit against the principal, premium, if
any, or interest payable under the Credit Agreement, and no Pledgor shall be
entitled to any credit against any other sums which may become payable under the
terms thereof or hereof, by reason of the payment of any Tax on the Pledged
Collateral or any part thereof.
SECTION 11.13. No Claims Against Collateral Agent. Nothing
contained in this Agreement shall constitute any consent or request by the
Collateral Agent, express or implied, for the performance of any labor or
services or the furnishing of any materials or other property in respect of the
Pledged Collateral or any part thereof, nor as giving any Pledgor any right,
power or authority to contract for or permit the performance of any labor or
services or the furnishing of any materials or other property in such fashion as
would permit the making of any claim against the Collateral Agent in respect
thereof or any claim that any Lien based on the performance of such labor or
services or the furnishing of any such materials or other property is prior to
the Lien hereof.
SECTION 11.14. No Release. Nothing set forth in this Agreement
shall relieve any Pledgor from the performance of any term, covenant, condition
or agreement on such Pledgor's part to be performed or observed under or in
respect of any of the Pledged Collateral at any time prior to the sale,
assignment or transfer of such Pledged Collateral in accordance with the terms
of this Agreement or from any liability to any person under or in respect of any
of the Pledged Collateral or shall impose any obligation on the Collateral Agent
or any other Secured Party to perform or observe any such term, covenant,
condition or agreement on such Pledgor's part to be so performed or observed or
shall impose any liability on the Collateral Agent or any other Secured Party
for any act or omission on the part of such Pledgor relating thereto or for any
breach of any representation or warranty on the part of such Pledgor contained
in this Agreement, the Credit Agreement or the other Loan Documents, or under or
in respect of the Pledged Collateral or made in connection herewith or
therewith. The obligations of each Pledgor contained in this Section 11.14 shall
survive the termination hereof and the discharge of such Pledgor's other
obligations under this Agreement, the Credit Agreement and the other Loan
Documents.
SECTION 11.15. Obligations Absolute. All obligations of each
Pledgor hereunder shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of any
Pledgor;
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(ii) any lack of validity or enforceability of the Credit
Agreement, any Hedging Agreement or any other Loan Document, or any other
agreement or instrument relating thereto;
(iii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Credit Agreement, any Hedging
Agreement or any other Loan Document or any other agreement or instrument
relating thereto;
(iv) any pledge, exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to any departure
from any guarantee, for all or any of the Obligations;
(v) any exercise, non-exercise or waiver of any right, remedy,
power or privilege under or in respect hereof, the Credit Agreement, any Hedging
Agreement or any other Loan Document except as specifically set forth in a
waiver granted pursuant to the provisions of Section 11.5 hereof; or
(vi) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, any Pledgor.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the Pledgors and the Collateral Agent have
caused this Agreement to be duly executed and delivered by their duly authorized
officers as of the date first above written.
IONICS, INCORPORATED
as Pledgor
By: /s/ Xxxxxxx Xxxx
------------------------------------
Name: Xxxxxxx Xxxx
Title: Vice President, General Counsel and Clerk
GUARANTORS,
as Pledgor
AQUA DESIGN, INC.
FIDELITY PUREWATER, INC.
FIDELITY WATER SYSTEMS, INC.
IONICS KOREA, INC.
IONICS LIFE SCIENCES, INC.
IONICS SECURITIES CORPORATION
IONICS ULTRAPURE WATER CORPORATION
RESOURCES CONSERVATION CO. INTERNATIONAL
SEPARATION TECHNOLOGY, INC.
XXXXXXX INSTRUMENTS, INC.
ECOLOCHEM, INC.
ECOLOCHEM HOLDINGS, INC.
ECOLOCHEM INTERNATIONAL, INC.
ECOLOCHEM JV HOLDINGS, INC.
By: /s/ Xxxxxxx Xxxx
------------------------------------
Name: Xxxxxxx Xxxx
Title: Secretary
ECOLOCHEM SERVICES - MEXICO, LLC
MOSON HOLDINGS, L.L.C.
By: Ionics, Incorporated, as Managing Member
By: /s/ Xxxxxxx Xxxx
--------------------------------
Name: Xxxxxxx Xxxx
Title: Vice President,
General Counsel and Clerk
[Signature Page for Ionics Security Agreement]
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: /s/ Xxxxxxx X. Saint
------------------------------------
Name: Xxxxxxx X. Saint
Title: Associate Director Banking
Products Services, U.S.
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
Title: Associate Director Banking
Products Services, US
[Signature Page for Ionics Security Agreement]
EXHIBIT 1
[Form of]
ISSUER'S ACKNOWLEDGMENT
The undersigned hereby (i) acknowledges receipt of a copy of
that certain security agreement (as amended, amended and restated, supplemented
or otherwise modified from time to time, the "Security Agreement;" capitalized
terms used but not otherwise defined herein shall have the meanings assigned to
such terms in the Security Agreement), dated as of February 13, 2004, made by
IONICS, INCORPORATED, a Massachusetts corporation (the "Borrower"), the
Guarantors party thereto and UBS AG, STAMFORD BRANCH, as collateral agent (in
such capacity and together with any successors in such capacity, the "Collateral
Agent"), (ii) agrees promptly to note on its books the security interests
granted to the Collateral Agent and confirmed under the Security Agreement,
(iii) agrees that it will comply with instructions of the Collateral Agent with
respect to the applicable Securities Collateral without further consent by the
applicable Pledgor, (iv) agrees to notify the Collateral Agent upon obtaining
knowledge of any interest in favor of any person in the applicable Securities
Collateral that is adverse to the interest of the Collateral Agent therein and
(v) waives any right or requirement at any time hereafter to receive a copy of
the Security Agreement in connection with the registration of any Securities
Collateral thereunder in the name of the Collateral Agent or its nominee or the
exercise of voting rights by the Collateral Agent or its nominee.
[ ]
By: ____________________________________
Name:
Title:
EXHIBIT 2
[Form of]
SECURITIES PLEDGE AMENDMENT
This Security Pledge Amendment, dated as of [ ], is delivered
pursuant to Section 5.1 of that certain security agreement (as amended, amended
and restated, supplemented or otherwise modified from time to time, the
"Security Agreement;" capitalized terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Security Agreement), dated
as of February 13, 2004, made by IONICS, INCORPORATED, a Massachusetts
corporation (the "Borrower"), the Guarantors party thereto and UBS AG, STAMFORD
BRANCH, as collateral agent (in such capacity and together with any successors
in such capacity, the "Collateral Agent"). The undersigned hereby agrees that
this Pledge Amendment may be attached to the Security Agreement and that the
Pledged Securities and/or Intercompany Notes listed on this Pledge Amendment
shall be deemed to be and shall become part of the Pledged Collateral and shall
secure all Obligations.
PLEDGED SECURITIES
CLASS NUMBER OF PERCENTAGE OF
OF STOCK SHARES ALL ISSUED CAPITAL
OR PAR CERTIFICATE OR OR OTHER EQUITY
ISSUER INTERESTS VALUE NO(S). INTERESTS INTERESTS OF ISSUER
------ --------- ----- ------ --------- -------------------
INTERCOMPANY NOTES
PRINCIPAL DATE OF INTEREST MATURITY
ISSUER AMOUNT ISSUANCE RATE DATE
------ ------ -------- ---- ----
[ ],
as Pledgor
By: ____________________________________
Name:
Title:
AGREED TO AND ACCEPTED:
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: ____________________________________
Name:
Title:
By: ____________________________________
Name:
Title:
-2-
EXHIBIT 3
[Form of]
JOINDER AGREEMENT
[Name of New Pledgor]
[Address of New Pledgor]
[Date]
___________________________
___________________________
___________________________
___________________________
Ladies and Gentlemen:
Reference is made to that certain security agreement (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Security Agreement;" capitalized terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Security
Agreement), dated as of February 13, 2004, made by IONICS, INCORPORATED, a
Massachusetts corporation (the "Borrower"), the Guarantors party thereto and UBS
AG, STAMFORD BRANCH, as collateral agent (in such capacity and together with any
successors in such capacity, the "Collateral Agent").
This letter supplements the Security Agreement and is
delivered by the undersigned, [ ] (the "New Pledgor"), pursuant to Section 3.5
of the Security Agreement. The New Pledgor hereby agrees to be bound as a
Guarantor and as a Pledgor by all of the terms, covenants and conditions set
forth in the Security Agreement to the same extent that it would have been bound
if it had been a signatory to the Security Agreement on the execution date of
the Security Agreement. The New Pledgor also hereby agrees to be bound as a
party by all of the terms, covenants and conditions applicable to it set forth
in Articles V, VI and VII of the Credit Agreement to the same extent that it
would have been bound if it had been a signatory to the Credit Agreement on the
execution date of the Credit Agreement. Without limiting the generality of the
foregoing, the New Pledgor hereby grants and pledges to the Collateral Agent, as
collateral security for the full, prompt and complete payment and performance
when due (whether at stated maturity, by acceleration or otherwise) of the
Obligations, a Lien on and secu-
rity interest in, all of its right, title and interest in, to and under the
Pledged Collateral and expressly assumes all obligations and liabilities of a
Guarantor and Pledgor thereunder. The New Pledgor hereby makes each of the
representations and warranties and agrees to each of the covenants applicable to
the Pledgors contained in the Security Agreement and Article III of the Credit
Agreement.
Annexed hereto are supplements to each of the schedules to the
Security Agreement and the Credit Agreement, as applicable, with respect to the
New Pledgor. Such supplements shall be deemed to be part of the Security
Agreement or the Credit Agreement, as applicable.
This agreement and any amendments, waivers, consents or
supplements hereto may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original, but all such
counterparts together shall constitute one and the same agreement. Delivery of
an executed counterpart of a signature page of this agreement by telecopy shall
be effective as delivery of a manually executed counterpart of this agreement.
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
-2-
IN WITNESS WHEREOF, the New Pledgor has caused this letter
agreement to be executed and delivered by its duly authorized officer as of the
date first above written.
[NEW PLEDGOR]
By: ____________________________________
Name:
Title:
AGREED TO AND ACCEPTED:
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: ____________________________________
Name:
Title:
By: ____________________________________
Name:
Title:
[Schedules to be attached]
-3-
EXHIBIT 4
[Form of]
CONTROL AGREEMENT CONCERNING SECURITIES ACCOUNTS
This Control Agreement Concerning Securities Accounts (this
"Control Agreement"), dated as of [ ], by and among [ ] (the "Pledgor"), UBS
AG, Stamford Branch (the "Collateral Agent") and [ ] (the "Securities
Intermediary"), is delivered pursuant to Section 3.4(c) of that certain security
agreement (as amended, amended and restated, supplemented or otherwise modified
from time to time, the "Security Agreement"), dated as of February 13, 2004,
made by the Pledgor and each of the Guarantors listed on the signature pages
thereto in favor of UBS AG, Stamford Branch, as collateral agent, as pledgee,
assignee and secured party (the "Collateral Agent"). This Control Agreement is
for the purpose of perfecting the security interests of the Secured Parties
granted by the Pledgor in the Designated Accounts described below. All
references herein to the "UCC" shall mean the Uniform Commercial Code as in
effect from time to time in the State of New York. Capitalized terms used but
not defined herein shall have the meanings assigned to such terms in the
Security Agreement.
Section 1. Confirmation of Establishment and Maintenance of
Designated Accounts. The Securities Intermediary hereby confirms and agrees that
(i) the Securities Intermediary has established for the Pledgor and maintains
the account(s) listed in Schedule I annexed hereto (such account(s), together
with each such other securities account maintained by the Pledgor with the
Securities Intermediary collectively, the "Designated Accounts" and each a
"Designated Account"), (ii) each Designated Account will be maintained in the
manner set forth herein until termination of this Control Agreement, (iii) this
Control Agreement is the valid and legally binding obligation of the Securities
Intermediary, (iv) the Securities Intermediary is a "securities intermediary" as
defined in Article 8-102(a)(14) of the UCC, (v) each of the Designated Accounts
is a "securities account" as such term is defined in Section 8-501(a) of the UCC
and (vi) all securities or other property underlying any financial assets which
are credited to any Designated Account shall be registered in the name of the
Securities Intermediary, endorsed to the Securities Intermediary or in blank or
credited to another securities account maintained in the name of the Securities
Intermediary and in no case will any financial asset credited to any Designated
Account be registered in the name of the Pledgor, payable to the order of the
Pledgor or specially endorsed to the Pledgor, except to the extent the foregoing
have been specially endorsed to the Securities Intermediary or in blank.
Section 2. "Financial Assets" Election. The Securities
Intermediary hereby agrees that each item of Investment Property credited to any
Designated Account shall be treated as a "financial asset" within the meaning of
Section 8-102(a)(9) of the UCC.
Section 3. Entitlement Order. If at any time the Securities
Intermediary shall receive an "entitlement order" (within the meaning of Section
8-102(a)(8) of the UCC) issued by the Collateral Agent and relating to any
financial asset maintained in one or more of the Designated Accounts, the
Securities Intermediary shall comply with such entitlement order without further
consent by the Pledgor or any other person. The Securities Intermediary shall
also comply with instructions directing the Securities Intermediary with respect
to the sale, exchange or transfer of financial assets held in each Designated
Account originated by a Pledgor, or any representative of, or investment manager
appointed by, a Pledgor until such time as the Collateral Agent delivers a
Notice of Sole Control pursuant to Section 9(i) to the Securities Intermediary.
Section 4. Subordination of Lien; Waiver of Set-Off. The
Securities Intermediary hereby agrees that any security interest in any
Designated Account it now has or subsequently obtains shall be subordinate to
the security interest of the Collateral Agent. The financial assets and other
items deposited to any Designated Account will not be subject to deduction,
set-off, banker's lien, or any other right in favor of any person other than the
Secured Parties (except that the Securities Intermediary may set off all amounts
due to the Securities Intermediary in respect of its customary fees and expenses
for the routine maintenance and operation of the Designated Accounts, including
overdraft fees and amounts advanced to settle authorized transactions.
Section 5. Choice of Law. Both this Control Agreement and the
Designated Accounts shall be governed by the laws of the State of New York.
Regardless of any provision in any other agreement, for purposes of the UCC, New
York shall be deemed to be the Securities Intermediary's location and the
Designated Accounts (as well as the security entitlements related thereto) shall
be governed by the laws of the State of New York.
Section 6. Conflict with Other Agreements; Amendments. As of
the date hereof, there are no other agreements entered into between the
Securities Intermediary and the Pledgor with respect to any Designated Account
or any security entitlements or other financial assets credited thereto (other
than standard and customary documentation with respect to the establishment and
maintenance of such Designated Accounts). The Securities Intermediary and the
Pledgor will not enter into any other agreement with respect to any Designated
Account unless the Collateral Agent shall have received prior written notice
thereof. The Securities Intermediary and the Pledgor have not and will not enter
into any other agreement with respect to (i) creation or perfection of any
security interest in or (ii) control of security entitlements maintained in any
of the Designated Accounts or purporting to limit or condition the obligation of
the Securities Intermediary to comply with entitlement orders with respect to
financial assets credited to any Designated Account as set forth in Section 3
hereof without the prior written consent of the Collateral Agent acting in its
sole discretion. In the event of any conflict with respect to control over any
Designated Account between this Control Agreement (or any portion hereof) and
any other agreement now existing or hereafter entered into, the terms of this
Control Agreement shall prevail. No amendment or modification of this Control
Agreement or waiver of any rights here-
-2-
under shall be binding on any party hereto unless it is in writing and is signed
by all the parties hereto.
Section 7. Certain Agreements.
(i) The Securities Intermediary has furnished to the
Collateral Agent the most recent account statement issued by the Securities
Intermediary with respect to each of the Designated Accounts and the financial
assets and cash balances held therein, identifying the financial assets held
therein in a manner reasonably acceptable to the Collateral Agent. Each such
statement accurately reflects the assets held in such Designated Account as of
the date thereof.
(ii) The Securities Intermediary will, upon its receipt of
each supplement to the Security Agreement signed by the Pledgor and identifying
one or more financial assets as "Pledged Collateral," enter into its records,
including computer records, with respect to each Designated Account a notation
with respect to any such financial asset so that such records and reports
generated with respect thereto identify such financial asset as "Pledged."
(iii) The Collateral Agent has delivered to the Securities
Intermediary a list, signed by an authorized representative of the officers of
the Collateral Agent authorized to give approvals or instructions under this
Control Agreement (the "Authorized Representatives") and the Securities
Intermediary shall be entitled to rely on communications from any such
authorized officers until the earlier of the termination of this Control
Agreement in accordance with the terms hereof and notification by an Authorized
Representative of a change in such list at any time.
Section 8. Notice of Adverse Claims. Except for the claims and
interest of the Collateral Agent and of the Pledgor in the financial assets
maintained in the Designated Account(s), the Securities Intermediary on the date
hereof does not know of any claim to, or security interest in, any Designated
Account or in any financial asset credited thereto and does not know of any
claim that any person other than the Collateral Agent has been given "control"
(within the meaning of Section 8-106 of the UCC) of any Designated Account or
any such financial asset. If the Securities Intermediary becomes aware that any
person is asserting any lien, encumbrance or adverse claim (including any writ,
garnishment, judgment, warrant of attachment, execution or similar process or
any claim of control) against any of the financial assets maintained in any
Designated Account, the Securities Intermediary promptly notify the Collateral
Agent and the Pledgor thereof.
Section 9. Maintenance of Designated Accounts. In addition to
the obligations of the Securities Intermediary in Section 3 hereof, the
Securities Intermediary agrees to maintain the Designated Accounts as follows:
-3-
(i) Notice of Sole Control. If at any time the Collateral
Agent delivers to the Securities Intermediary a notice of sole control
in substantially the form set forth in Exhibit A attached hereto (the
"Notice of Sole Control") with respect to any Designated Account, the
Securities Intermediary agrees that, after receipt of such notice, it
will take all instructions with respect to such Designated Account
solely from the Collateral Agent and cease taking instructions from
Pledgor, including, without limitation, instructions for investment,
distribution or transfer of any financial asset maintained in any
Designated Account. Permitting settlement of trades pending at the time
of receipt of such notice shall not constitute a violation of the
immediately preceding sentence.
(ii) Voting Rights. Until such time as the Securities
Intermediary receives a Notice of Sole Control, the Pledgor, or an
investment manager on behalf of the Pledgor, shall direct the
Securities Intermediary with respect to the voting of any financial
assets credited to any Designated Account.
(iii) Statements and Confirmations. The Securities
Intermediary will send copies of all statements and other
correspondence (excluding routine confirmations) concerning any
Designated Account or any financial assets credited thereto
simultaneously to each of the Pledgor and the Collateral Agent at the
address set forth in Section 11 hereof. The Securities Intermediary
will provide to the Collateral Agent, upon the Collateral Agent's
request therefor from time to time and, in any event, as of the last
business day of each calendar month, a statement of the market value of
each financial asset maintained in each Designated Account. The
Securities Intermediary shall not change the name or account number of
any Designated Account without the prior written consent of the
Collateral Agent.
(iv) Bailee for Perfection. The Securities Intermediary
acknowledges that, in the event that it should come into possession of
any certificate representing any security or other assets held as
financial assets in any of the Designated Accounts, the Securities
Intermediary shall retain possession of the same for the benefit of the
Collateral Agent and such act shall cause the Securities Intermediary
to be deemed a bailee for the Collateral Agent, if necessary to perfect
the Collateral Agent's security interest in such securities or assets.
The Securities Intermediary hereby acknowledges its receipt of a copy
of the Security Agreement, which shall also serve as notice to the
Securities Intermediary of a security interest in collateral held by a
bailee.
Section 10. Successors; Assignment. The terms of this Control
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their respective corporate successors and permitted assignees.
Section 11. Notices. Any notice, request or other
communication required or permitted to be given under this Control Agreement
shall be in writing and deemed to have been
-4-
properly given when delivered in person, or when sent by telecopy or other
electronic means and electronic confirmation of error free receipt is received
or two (2) days after being sent by certified or registered United States mail,
return receipt requested, postage prepaid, addressed to the party at the address
set forth below.
Pledgor: [ ]
00 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Vice President and General Counsel
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with copy to:
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000]
Securities
Intermediary: [ ]
[Address]
Attention:
Telecopy:
Telephone:
Collateral
Agent: UBS AG, Stamford Branch
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention:
Telecopy:
Telephone:
-5-
with a copy to:
Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Any party may change its address for notices in the manner set
forth above.
Section 12. Termination. The rights and powers granted herein
to the Collateral Agent are powers coupled with an interest and will be affected
neither by the bankruptcy of the Pledgor nor by the lapse of time. The
obligations of the Securities Intermediary hereunder shall continue in effect
until (i) the security interests of the Secured Parties with respect to the
financial assets maintained in the Designated Account(s) have been terminated
and an Authorized Representative has notified the Securities Intermediary of
such termination in writing or (ii) thirty days following the Securities
Intermediary's delivery of written notice of such termination to the Pledgor and
the Collateral Agent.
Section 13. Severability. If any term or provision set forth
in this Agreement shall be invalid or unenforceable, the remainder of this
Agreement, other than those provisions held invalid or unenforceable, shall be
construed in all respects as if such invalid or unenforceable term or provision
were omitted.
Section 14. Counterparts. This Control Agreement may be
executed in any number of counterparts, all of which shall constitute one and
the same instrument, and any party hereto may execute this Control Agreement by
signing and delivering one or more counterparts.
-6-
[ ],
as Pledgor
By: ____________________________________
Name:
Title:
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: ____________________________________
Name:
Title:
By: ____________________________________
Name:
Title:
[ ],
as Securities Intermediary
By: ____________________________________
Name:
Title:
S-1
SCHEDULE I
Designated Account(s)
EXHIBIT A
[Letterhead of UBS AG, Stamford Branch]
[Date]
[Securities Intermediary]
[Address]
Attention:
Re: Notice of Sole Control
Ladies and Gentlemen:
As referenced in Section 9(i) of the Control Agreement
Concerning Designated Accounts dated as of [ ], by and among [ ], us and you
(the "Control Agreement") (a copy of which is attached) we hereby give you
notice of our sole control over the financial assets maintained in the
Designated Account(s) referred to in the Control Agreement, account numbers:
________________ (the "Specified Designated Accounts"). You are hereby
instructed not to accept any direction, instruction or entitlement order with
respect to financial assets maintained in the Specified Designated Accounts from
any person other than the undersigned.
You are instructed to deliver a copy of this notice by
facsimile transmission to Ionics, Incorporated.
Very truly yours,
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: ____________________________________
Name:
Title:
By: ____________________________________
Name:
Title:
cc: Ionics, Incorporated
-2-
EXHIBIT 5
[Form of]
CONTROL AGREEMENT CONCERNING DEPOSIT ACCOUNTS
This CONTROL AGREEMENT CONCERNING DEPOSIT ACCOUNTS (this
"Control Agreement"), dated as of [ ], by and among [ ] (the "Pledgor"), UBS
AG, STAMFORD BRANCH (the "Collateral Agent") and [ ] (the "Bank"), is
delivered pursuant to Section 3.4(b) of that certain security agreement (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Security Agreement"), dated as of February 13, 2004, made by the
Pledgor and each of the Guarantors listed on the signature pages thereto in
favor of UBS AG, STAMFORD BRANCH, as collateral agent, as pledgee, assignee and
secured party (the "Collateral Agent"). This Control Agreement is for the
purpose of perfecting the security interests of the Secured Parties granted by
the Pledgor in the Designated Accounts described below. All references herein to
the "UCC" shall mean the Uniform Commercial Code as in effect from time to time
in the State of New York. Capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the Security Agreement.
Section 1. Confirmation of Establishment and Maintenance of
Designated Accounts. The Bank hereby confirms and agrees that (i) the Bank has
established for the Pledgor and maintains the deposit account(s) listed in
Schedule 1 annexed hereto (such account(s), together with each such other
deposit account maintained by the Pledgor with the Bank collectively, the
"Designated Accounts" and each a "Designated Account"), (ii) each Designated
Account will be maintained in the manner set forth herein until termination of
this Control Agreement, (iii) the Bank is a "bank," as such term is defined in
the UCC, (iv) this Control Agreement is the valid and legally binding obligation
of the Bank and (v) each Designated Account is a "deposit account" as such term
is defined in Article 9 of the UCC.
Section 2. Control. The Bank shall comply with instructions
originated by the Collateral Agent without further consent of the Pledgor or any
person acting or purporting to act for the Pledgor being required, including,
without limitation, directing disposition of the funds in each Designated
Account. The Bank shall also comply with instructions directing the disposition
of funds in each Designated Account originated by the Pledgor or its authorized
representatives until such time as the Collateral Agent delivers a Notice of
Sole Control pursuant to Section 8(i) hereof to the Bank.
Section 3. Subordination of Lien; Waiver of Set-Off. The Bank
hereby agrees that any security interest in any Designated Account it now has or
subsequently obtains
shall be subordinate to the security interest of the Collateral Agent. The funds
deposited into any Designated Account will not be subject to deduction, set-off,
banker's lien, or any other right in favor of any person other than the Secured
Parties (except that the Bank may set off (i) all amounts due to the Bank in
respect of its customary fees and expenses for the routine maintenance and
operation of the Designated Accounts, including overdraft fees, and (ii) the
face amount of any checks or other items which have been credited to any
Designated Account but are subsequently returned unpaid because of uncollected
or insufficient funds).
Section 4. Choice of Law. Both this Control Agreement and the
Designated Account(s) shall be governed by the laws of the State of New York.
Regardless of any provision in any other agreement, for purposes of the UCC, New
York shall be deemed to be the Bank's jurisdiction and the Designated Account(s)
shall be governed by the law of the State of New York.
Section 5. Conflict with Other Agreements; Amendments. As of
the date hereof, there are no other agreements entered into between the Bank and
the Pledgor with respect to any Designated Account or any funds credited thereto
(other than standard and customary documentation with respect to the
establishment and maintenance of such Designated Accounts). The Bank and the
Pledgor will not enter into any other agreement with respect to any Designated
Account unless the Collateral Agent shall have received prior written notice
thereof. The Bank and the Pledgor have not and will not enter into any other
agreement with respect to control of the Designated Accounts or purporting to
limit or condition the obligation of the Bank to comply with any orders or
instructions with respect to any Designated Account as set forth in Section 2
hereof without the prior written consent of the Collateral Agent acting in its
sole discretion. In the event of any conflict with respect to control over any
Designated Account between this Control Agreement (or any portion hereof) and
any other agreement now existing or hereafter entered into, the terms of this
Control Agreement shall prevail. No amendment or modification of this Control
Agreement or waiver of any right hereunder shall be binding on any party hereto
unless it is in writing and is signed by all the parties hereto.
Section 6. Certain Agreements.
(i) The Bank has furnished to the Collateral Agent the
most recent account statement issued by the Bank with respect to each
of the Designated Accounts and the cash balances held therein. Each
such statement accurately reflects the assets held in such Designated
Account as of the date thereof.
(ii) The Collateral Agent has delivered to the Bank a list,
signed by an authorized representative, of the officers of the
Collateral Agent authorized to give approvals or instructions under
this Control Agreement (the "Authorized Representatives") and the Bank
shall be entitled to rely on communications from any such authorized
officers until the earlier of the termination of this Control Agreement
in accordance with the terms
-2-
hereof and notification by an Authorized Representative of a change in
such list at any time.
Section 7. Notice of Adverse Claims. Except for the claims and
interest of the Secured Parties and of the Pledgor in the Designated Account(s),
the Bank on the date hereof does not know of any claim to, or security interest
in, any Designated Account or in any funds credited thereto and does not know of
any claim that any person other than the Collateral Agent has been given control
(within the meaning of Section 8-106 of the UCC) of any Designated Account or
any such funds. If the Bank becomes aware that any person is asserting any lien,
encumbrance or adverse claim (including any writ, garnishment, judgment, warrant
of attachment, execution or similar process or any claim of control) against any
funds in any Designated Account, the Bank will promptly notify the Collateral
Agent and the Pledgor thereof.
Section 8. Maintenance of Designated Accounts. In addition to
the obligations of the Bank in Section 2 hereof, the Bank agrees to maintain the
Designated Accounts as follows:
(i) Notice of Sole Control. If at any time the Collateral
Agent delivers to the Bank a notice of sole control in substantially
the form set forth in Exhibit A attached hereto (the "Notice of Sole
Control") with respect to any Designated Account, the Bank agrees that,
after receipt of such notice, it will take all instruction with respect
to such Designated Account solely from the Collateral Agent and cease
taking instructions from the Pledgor, including, without limitation,
instructions for distribution or transfer of any funds in any
Designated Account.
(ii) Statements and Confirmations. The Bank will send copies of
all statements and other correspondence (excluding routine
confirmations) concerning any Designated Account simultaneously to the
Pledgor and the Collateral Agent at the address set forth in Section 10
hereof. The Bank will promptly provide to the Collateral Agent, upon
request therefor from time to time and, in any event, as of the last
business day of each calendar month, a statement of the cash balance in
each Designated Account. The Bank shall not change the name or account
number of any Designated Account without the prior written consent of
the Collateral Agent.
Section 9. Successors; Assignment. The terms of this Control
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their respective corporate successors and permitted assignees.
Section 10. Notices. Any notice, request or other
communication required or permitted to be given under this Control Agreement
shall be in writing and deemed to have been properly given when delivered in
person, or when sent by telecopy or other electronic means and electronic
confirmation of error free receipt is received or two (2) days after being sent
by certi-
-3-
fied or registered United States mail, return receipt requested, postage
prepaid, addressed to the party at the address set forth below.
Pledgor: [ ]
00 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Vice President and General Counsel
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with copy to:
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000]
Bank: [ ]
[ ]
[ ]
Attention:
Telecopy:
Telephone:
Collateral
Agent: UBS AG, Stamford Branch
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention:
Telecopy:
Telephone:
with a copy to:
Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
-4-
Any party may change its address for notices in the manner set
forth above.
Section 11. Termination. The rights and powers granted herein
to the Collateral Agent are powers coupled with an interest and will be affected
neither by the bankruptcy of the Pledgor nor by the lapse of time. The
obligations of the Bank hereunder shall continue in effect until (i) the
security interests of the Secured Parties with respect to the Designated
Account(s) have been terminated and an Authorized Representative has notified
the Bank of such termination in writing or (ii) thirty days following the Bank's
delivery of written notice of such termination to the Collateral Agent and
Pledgor.
Section 12. Severability. If any term or provision set forth
in this Agreement shall be invalid or unenforceable, the remainder of this
Agreement, other than those provisions held invalid or unenforceable, shall be
construed in all respects as if such invalid or unenforceable term or provision
were omitted.
Section 13. Counterparts. This Control Agreement may be
executed in any number of counterparts, all of which shall constitute one and
the same instrument, and any party hereto may execute this Control Agreement by
signing and delivering one or more counterparts.
-5-
[ ]
By: _______________________
Name:
Title:
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: _______________________
Name:
Title:
By: _______________________
Name:
Title:
[ ],
as Bank
By: _______________________
Name:
Title:
-1-
SCHEDULE 1
Designated Account(s)
EXHIBIT A
[Letterhead of UBS AG, Stamford Branch]
[Date]
[Bank]
[Address]
Attention: _______________
Re: Notice of Sole Control
Ladies and Gentlemen:
As referenced in Section 8(i) of the Control Agreement
Concerning Designated Accounts dated as of [ ], by and among [ ], us and you
(the "Control Agreement") (a copy of which is attached) we hereby give you
notice of our sole control over the Designated Account(s) referred to in the
Control Agreement, having account number(s): ___________________________________
(the "Specified Designated Accounts"). You are hereby instructed not to accept
any direction or instructions with respect to the Specified Designated Accounts
or any funds credited thereto from any person other than the undersigned, unless
otherwise ordered by a court of competent jurisdiction.
You are instructed to deliver a copy of this notice by
facsimile transmission to Ionics, Incorporated.
Very truly yours,
UBS AG, Stamford Branch,
as Collateral Agent
By: _______________________
Name:
Title:
By: _______________________
Name:
Title:
cc: Ionics, Incorporated
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EXHIBIT 6
[Form of]
Copyright Security Agreement
Copyright Security Agreement, dated as of February 13, 2004,
by Ionics, Incorporated (the "Borrower") and each Guarantor listed on Schedule
II hereto (collectively, the "Original Guarantors," together with the Borrower,
the "Pledgors"), in favor of UBS AG, STAMFORD BRANCH, in its capacity as
collateral agent pursuant to the Credit Agreement (in such capacity, the
"Collateral Agent").
W I T N E S S E T H:
WHEREAS, Pledgors are party to a Security Agreement of even
date herewith (the "Security Agreement") in favor of the Collateral Agent
pursuant to which the Pledgors are required to execute and deliver this
Copyright Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce
the Collateral Agent, for the benefit of the Secured Parties, to enter into
Credit Agreement, the Pledgors hereby agree with the Collateral Agent as
follows:
SECTION 1. Defined Terms. Unless otherwise defined herein,
terms defined in the Security Agreement and used herein have the meaning given
to them in the Security Agreement.
SECTION 2. Grant of Security Interest in Copyright Collateral.
Each Pledgor hereby pledges and grants to the Collateral Agent for the benefit
of the Secured Parties a lien on and security interest in and to all of its
right, title and interest in, to and under all:
(a) Copyrights for which registrations or applications for
registration are listed on Schedule I attached hereto; and
(b) Proceeds of any and all of the foregoing (other than
Excluded Property).
SECTION 3. Security Agreement. The security interest granted
pursuant to this Copyright Security Agreement is granted in conjunction with the
security interest granted to the Collateral Agent pursuant to the Security
Agreement and Pledgors hereby acknowledge and affirm that the rights and
remedies of the Collateral Agent with respect to the security interest in the
Copyrights made and granted hereby are more fully set forth in the Security
Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein. In the event that any provision of this Copyright Security
Agreement is deemed to conflict with the Security Agreement, the provisions of
the Security Agreement shall control unless the Collateral Agent shall otherwise
determine.
SECTION 4. Termination. Upon the full performance of the
Obligations, the Collateral Agent shall execute, acknowledge, and deliver to the
Pledgor an instrument in writing in recordable form releasing security interest
in the Copyrights under the Security Agreement and this Copyright Security
Agreement.
[signature page follows]
-2-
IN WITNESS WHEREOF, each Pledgor has caused this Copyright
Security Agreement to be executed and delivered by its duly authorized offer as
of the date first set forth above.
Very truly yours,
IONICS, INCORPORATED
By: _______________________
Name:
Title:
[ORIGINAL GUARANTORS]
By: _______________________
Name:
Title:
Accepted and Agreed:
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: _______________________
Name:
Title:
By: _______________________
Name:
Title:
-3-
SCHEDULE I
TO
COPYRIGHT SECURITY AGREEMENT
COPYRIGHT REGISTRATIONS AND COPYRIGHT APPLICATIONS
COPYRIGHT REGISTRATIONS:
REGISTRATION
OWNER NUMBER TITLE
-------------------------------
-------------------------------
COPYRIGHT APPLICATIONS:
OWNER TITLE
--------------
--------------
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SCHEDULE II
TO
COPYRIGHT SECURITY AGREEMENT
ORIGINAL GUARANTORS
NAME ADDRESS
-------------------------------------------------------------
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-5-
EXHIBIT 7
[Form of]
Patent Security Agreement
Patent Security Agreement, dated as of February 13, 2004, by
Ionics, Incorporated (the "Borrower") and each Guarantor listed on Schedule II
hereto (collectively, the "Original Guarantors," and together with the Borrower,
the "Pledgors"), in favor of UBS AG, STAMFORD BRANCH, in its capacity as
collateral agent pursuant to the Credit Agreement (in such capacity, the
"Collateral Agent").
W I T N E S S E T H:
WHEREAS, Pledgors are party to a Security Agreement of even
date herewith (the "Security Agreement") in favor of the Collateral Agent
pursuant to which the Pledgors are required to execute and deliver this Patent
Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce
the Collateral Agent, for the benefit of the Secured Parties, to enter into
Credit Agreement, the Pledgors hereby agree with the Collateral Agent as
follows:
SECTION 1. Defined Terms. Unless otherwise defined herein,
terms defined in the Security Agreement and used herein have the meaning given
to them in the Security Agreement.
SECTION 2. Grant of Security Interest in Patent Collateral.
Each Pledgor hereby pledges and grants to the Collateral Agent for the benefit
of the Secured Parties a lien on and security interest in and to all of its
right, title and interest in, to and under all:
(a) Patents for which registration or applications for
registration are listed on Schedule I attached hereto; and
(b) Proceeds of any and all of the foregoing (other than
Excluded Property).
SECTION 3. Security Agreement. The security interest granted
pursuant to this Patent Security Agreement is granted in conjunction with the
security interest granted to the Collateral Agent pursuant to the Security
Agreement and Pledgors hereby acknowledge and affirm that the rights and
remedies of the Collateral Agent with respect to the security interest in the
Patents made and granted hereby are more fully set forth in the Security
Agreement, the terms
and provisions of which are incorporated by reference herein as if fully set
forth herein. In the event that any provision of this Patent Security Agreement
is deemed to conflict with the Security Agreement, the provisions of the
Security Agreement shall control unless the Collateral Agent shall otherwise
determine.
SECTION 4. Termination. Upon the full performance of the
Obligations, the Collateral Agent shall execute, acknowledge, and deliver to the
Pledgor an instrument in writing in recordable form releasing the security
interest in the Patents under the Security Agreement and this Patent Security
Agreement.
[signature page follows]
-2-
IN WITNESS WHEREOF, each Pledgor has caused this Patent
Security Agreement to be executed and delivered by its duly authorized offer as
of the date first set forth above.
Very truly yours,
IONICS, INCORPORATED
By: _______________________
Name:
Title:
[ORIGINAL GUARANTORS]
By: _______________________
Name:
Title:
Accepted and Agreed:
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: _______________________
Name:
Title:
By: _______________________
Name:
Title:
-3-
SCHEDULE I
TO
PATENT SECURITY AGREEMENT
PATENT REGISTRATIONS AND PATENT APPLICATIONS
PATENT REGISTRATIONS:
REGISTRATION
OWNER NUMBER NAME COUNTRY
----------------------------------------------
----------------------------------------------
PATENT APPLICATIONS:
APPLICATION
OWNER NUMBER NAME COUNTRY
---------------------------------------
---------------------------------------
-4-
SCHEDULE II
TO
PATENT SECURITY AGREEMENT
ORIGINAL GUARANTORS
NAME ADDRESS
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
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EXHIBIT 8
[Form of]
Trademark Security Agreement
Trademark Security Agreement, dated as of February 13, 2004,
by Ionics, Incorporated (the "Borrower") and each Guarantor listed on Schedule
II hereto (collectively, the "Original Guarantors," together with the Borrower,
the "Pledgors"), in favor of UBS AG, STAMFORD BRANCH, in its capacity as
collateral agent pursuant to the Credit Agreement (in such capacity, the
"Collateral Agent").
W I T N E S S E T H:
WHEREAS, Pledgors are party to a Security Agreement of even
date herewith (the "Security Agreement") in favor of the Collateral Agent
pursuant to which the Pledgors are required to execute and deliver this
Trademark Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce
the Collateral Agent, for the benefit of the Secured Parties, to enter into
Credit Agreement, the Pledgors hereby agree with the Collateral Agent as
follows:
SECTION 1. Defined Terms. Unless otherwise defined herein,
terms defined in the Security Agreement and used herein have the meaning given
to them in the Security Agreement.
SECTION 2. Grant of Security Interest in Trademark Collateral.
Each Pledgor hereby pledges and grants to the Collateral Agent for the benefit
of the Secured Parties a lien on and security interest in and to all of its
right, title and interest in, to and under all:
(a) Trademarks for which registrations or applications for
registration are listed on Schedule I attached hereto;
(b) Goodwill associated with such Trademarks; and
(c) Proceeds of any and all of the foregoing (other than
Excluded Property).
SECTION 3. Security Agreement. The security interest granted
pursuant to this Trademark Security Agreement is granted in conjunction with the
security interest granted to the Collateral Agent pursuant to the Security
Agreement and Pledgors hereby acknowledge and af-
firm that the rights and remedies of the Trustee with respect to the security
interest in the Trademarks made and granted hereby are more fully set forth in
the Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein. In the event that any provision
of this Trademark Security Agreement is deemed to conflict with the Security
Agreement, the provisions of the Security Agreement shall control unless the
Collateral Agent shall otherwise determine.
SECTION 4. Termination. Upon the full performance of the
Obligations, the Collateral Agent shall execute, acknowledge, and deliver to the
Pledgor an instrument in writing in recordable form releasing the security
interest in the Trademarks under the Security Agreement and this Trademark
Security Agreement.
[signature page follows]
-2-
IN WITNESS WHEREOF, each Pledgor has caused this Trademark
Security Agreement to be executed and delivered by its duly authorized offer as
of the date first set forth above.
Very truly yours,
IONICS, INCORPORATED
By: _______________________
Name:
Title:
[ORIGINAL GUARANTORS]
By: _______________________
Name:
Title:
Accepted and Agreed:
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: ________________________
Name:
Title:
By: ________________________
Name:
Title:
-3-
SCHEDULE I
TO
TRADEMARK SECURITY AGREEMENT
TRADEMARK REGISTRATIONS AND TRADEMARK APPLICATIONS
TRADEMARK REGISTRATIONS:
REGISTRATION
OWNER NUMBER TRADEMARK COUNTRY
------------------------------------------
------------------------------------------
TRADEMARK APPLICATIONS:
REGISTRATION
OWNER NUMBER TRADEMARK COUNTRY
------------------------------------------
------------------------------------------
-4-
SCHEDULE II
TO
TRADEMARK SECURITY AGREEMENT
ORIGINAL GUARANTORS
NAME ADDRESS
-------------------------------------------------------------
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-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
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-5-
EXHIBIT 9
FORM OF NOTICE TO BAILEE OF SECURITY INTEREST IN INVENTORY
CERTIFIED MAIL -- RETURN RECEIPT REQUESTED
[ ], 200[ ]
TO: [Bailee's Name]
[Bailee's Address]
Re: Ionics, Incorporated
Ladies and Gentlemen:
In connection with that certain Security Agreement, dated as
of February 13, 2004 (the "Security Agreement"), made by Ionics, Incorporated,
the Guarantors party thereto and UBS AG, Stamford Branch ("UBS") as Collateral
Agent, we have granted to UBS a security interest in substantially all of our
personal property, including our inventory.
This letter constitutes notice to you, and your signature
below will constitute your acknowledgment, of UBS's continuing first priority
security interest in all goods with respect to which you are acting as bailee.
Until you are notified in writing to the contrary by UBS, however, you may
continue to accept instructions from us regarding the delivery of goods stored
by you.
Your acknowledgment also constitutes a waiver and release, for
UBS's benefit, of any and all claims, liens, including bailee's liens, and
demands of every kind which you have or may later have against such property
(including any right to include such property in any secured financing to which
you may become party).
In order to complete our records, kindly have a duplicate of
this letter signed by an officer of your company and return same to us at your
earliest convenience.
Receipt acknowledged, confirmed and Very truly yours,
approved:
[BAILEE] [APPLICABLE PLEDGOR]
By: _______________________ By: _______________________
Name: Name:
Title: Title:
cc: UBS AG, Stamford Branch
-2-
