AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT
Exhibit 10.2
AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, dated as of June 11, 2010 (as the
same may from time to time be further amended, restated, supplemented or otherwise modified, this
“Agreement”), is entered into among:
(i) AMERICAN GREETINGS CORPORATION, an Ohio corporation (herein, together with its successors
and assigns, the “Company”);
(ii) EACH OF THE DOMESTIC SUBSIDIARIES OF THE COMPANY identified on Schedule 1 hereto
(each such Domestic Subsidiary, together with the Company and any other Person that becomes a party
hereto as a Grantor hereunder pursuant to Section 10.15, and each of their respective successors
and assigns, collectively, the “Grantors” and, individually, “Grantor”);
and
(iii) PNC BANK, NATIONAL ASSOCIATION, as collateral agent (together with any successor
collateral agent, the “Collateral Agent”), for the benefit of the Secured Creditors (as
hereinafter defined):
RECITALS:
(1) Reference is made to that certain Pledge and Security Agreement, dated as of April 4,
2006, made by the grantors party thereto in favor of the Collateral Agent, successor to National
City Bank, as heretofore amended (as so amended, the “Existing Security Agreement”),
executed and delivered pursuant to that certain Credit Agreement, dated as of even date therewith,
among the Company, the foreign subsidiary borrowers from time to time party thereto, the lenders
from time to time party thereto, and PNC Bank, National Association, successor to National City
Bank, as the global agent thereunder, as heretofore amended (as so amended, the “Existing
Credit Agreement”).
(2) The parties desire to amend and restate the Existing Credit Agreement pursuant to that
certain Amended and Restated Credit Agreement (as the same may from time to time be further
amended, restated, supplemented or otherwise modified, the “Credit Agreement”), dated as of
even date herewith, among the Company, the Foreign Subsidiary Borrowers from time to time party
thereto (herein, together with the Company and their respective successors and assigns,
collectively, the “Borrowers”), the lenders from time to time party thereto (herein,
together with their respective successors and assigns, collectively, the “Lenders”), and
PNC Bank, National Association, successor to National City Bank, as the Global Agent (in such
capacity, the “Global Agent”).
(3) The obligation of the Global Agent and the Lenders to make loans and provide other
financial accommodations under the Credit Agreement is subject to the condition, among others, that
the Grantors amend and restate the Existing Security Agreement and secure the obligations of the
Borrowers and the other Credit Parties (as defined in the Credit Agreement) to the Global Agent and
the Lenders under the Credit Agreement, the other Loan Documents (as defined in the Credit
Agreement) and otherwise as more fully described herein in the manner set forth herein.
(4) Each Grantor will obtain benefits from the Credit Agreement and, accordingly, desires to
execute this Agreement to satisfy the conditions described in the preceding paragraph and to induce
the Lenders to extend credit pursuant to the Credit Agreement and the other Loan Documents.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing and the other benefits accruing to each
Grantor, the receipt and sufficiency of which are hereby acknowledged, each Grantor hereby (i)
amends and restates in its entirety the Existing Security Agreement, (ii) makes the following
representations and warranties to the Collateral Agent and (iii) covenants and agrees with the
Collateral Agent and the other Secured Creditors (as defined below) as follows:
1. DEFINITIONS AND TERMS
1.1 Defined Terms. Capitalized terms used in this Agreement and not otherwise defined
in Section 1.2 shall have the meanings given to such terms in the Credit Agreement. Unless
otherwise defined herein, all terms used herein and defined in the UCC shall have the same
definitions herein as specified therein; provided, however, that if a term is defined in Article 9
of the UCC differently than in another Article of the UCC, the term shall have the meaning
specified in Article 9 of the UCC.
1.2 Additional Defined Terms. The following terms shall have the meanings specified
herein unless the context otherwise requires:
“Account” means any “account,” as such term is now or hereafter defined in the UCC.
“Account Debtor” means any “account debtor,” as such term is now or hereafter defined
in the UCC.
“Accounts Receivable” means (a) all Accounts, now existing or hereafter arising; and
(b) without limitation of the foregoing, in any event includes, without limitation, (i) all right
to a payment, whether or not earned by performance, for Goods or other property (other than Money)
that has been or is to be sold, consigned, leased, licensed, assigned or otherwise disposed of, for
services rendered or to be rendered, for a policy of insurance issued or to be issued, for a
suretyship obligation incurred or to be incurred, for energy provided or to be provided, or for the
use or hire of a vessel under a charter or other contract whether due or to become due, whether or
not it has been earned by performance, and whether now existing or hereafter acquired or arising in
the future, including Accounts Receivable from employees and Affiliates of any Grantor, (ii) all
rights evidenced by an Account, invoice, purchase order, requisition, xxxx of exchange, note,
contract, security agreement, lease, chattel paper, or any evidence of indebtedness or security
related to the foregoing, (iii) all security pledged, assigned, hypothecated or granted to or held
by a Grantor to secure the foregoing, (iv) all guarantees, letters of credit, banker’s acceptances,
drafts, endorsements, credit insurance and indemnifications on, for or of, any of the foregoing,
including all rights to make drawings, claims or demands for payment thereunder, and (v) all powers
of attorney for the execution of any evidence of indebtedness, guaranty, letter of credit or
security or other writing in connection therewith.
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“Administrative Expenses” means, collectively, (a) any and all reasonable costs,
liabilities and expenses (including, without limitation, losses, damages, penalties, claims,
actions, reasonable attorneys’ fees, legal expenses, judgments, suits and disbursements) incurred
by, imposed upon, or asserted against, the Collateral Agent in the performance of its duties under
or otherwise in connection with this Agreement or the other Secured Creditor Documents, or in any
attempt by the Collateral Agent to (i) obtain, preserve, perfect or enforce any security interest
evidenced by this Agreement, any other Security Document or any other Secured Creditor Document;
(ii) obtain payment, performance or observance of any and all of the Secured Obligations; or (iii)
maintain, insure, audit, collect, preserve, repossess or dispose of any of the Collateral or any
other collateral securing the Secured Obligations, including, without limitation, costs and
expenses for appraisals, assessments, and audits of any Grantor, or any such Collateral; and (b)
all costs, liabilities and expenses incidental or related to (a) above; provided that if any such
costs, liabilities or expenses shall not be paid within five Business Days after the Collateral
Agent requests payment therefor in writing, such costs, liabilities and expenses shall accrue
interest at the Default Rate from the date of such written request until paid.
“Administrative Obligations” means, collectively, all Administrative Expenses and all
other Indebtedness or other obligations now owing or hereafter incurred by the Company or any other
Grantor to the Collateral Agent (solely in its capacity as Collateral Agent under the Security
Documents) pursuant to this Agreement or any other Secured Creditor Document.
“Agreement” has the meaning provided in the first paragraph of this Agreement.
“As-Extracted Collateral” means any “as-extracted collateral,” as such term is now or
hereafter defined in the UCC.
“Chattel Paper” means any “chattel paper,” as such term is now or hereafter defined in
the UCC.
“Collateral” has the meaning provided in Section 2.1.
“Collateral Account” means any Controlled Deposit Account or Controlled Securities
Account.
“Collateral Agent” has the meaning provided in the first paragraph of this Agreement.
“Collateral Assignment Agreement” means a Collateral Assignment of Patents, a
Collateral Assignment of Trademarks or a Collateral Assignment of Copyrights.
“Collateral Assignment of Copyrights” means a Collateral Assignment of Copyrights, in
form of and substance acceptable to the Collateral Agent, between the Grantors and the Collateral
Agent.
“Collateral Assignment of Patents” means a Collateral Assignment of Patents, in form
and substance acceptable to the Collateral Agent, between the Grantors and the Collateral Agent.
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“Collateral Assignment of Trademarks” means a Collateral Assignment of Trademarks, in
form and substance acceptable to the Collateral Agent, between the Grantors and the Collateral
Agent.
“Collateral Concentration Account” means a cash collateral Deposit Account established
in the name of the Collateral Agent, and under the sole dominion and control of the Collateral
Agent, for the benefit of the Secured Creditors, at an office of the Collateral Agent.
“Collateral Documents” shall mean the Security Documents, together with all other
documents, instrument or agreements executed in connection with the Security Documents, or in
connection with any security interest or Lien granted, or otherwise obtained, on or in connection
with the Creditor Collateral, or any part thereof.
“Commercial Tort Claim” means any “commercial tort claim,” as such term is now or
hereafter defined in the UCC.
“Company” has the meaning provided in the first paragraph of this Agreement.
“Contract Rights” means all rights of a Grantor under or in respect of a Contract,
including, without limitation, all rights to payment, damages, liquidated damages, and enforcement.
“Contracts” means all contracts, agreements or other writings between a Grantor and
one or more additional parties.
“Control” or “control” means (a) when used with respect to any Security or
Security Entitlement, the meaning specified in Section 8-106 of the UCC, and (b) when used with
respect to any Deposit Account, the meaning specified in Section 9-104 of the UCC.
“Control Agreement” means a Deposit Account Control Agreement or a Securities Account
Control Agreement.
“Controlled Deposit Account” means a Deposit Account (a) that is subject to a Deposit
Account Control Agreement or (b) as to which the Collateral Agent is the Depositary Bank’s
“customer” (as defined in Section 4-104 of the UCC).
“Controlled Securities Account” means a Securities Account that (a) is maintained in
the name of a Grantor at an office of a Securities Intermediary located in the United States of
America and (b) together with all Financial Assets credited thereto and all related Security
Entitlements, is subject to a Securities Account Control Agreement.
“Copyrights” means any U.S. copyright rights to which a Grantor now or hereafter has
title, as well as any application for a U.S. copyright hereafter made by such Grantor.
“Credit Agreement” has the meaning provided in the Recitals of this Agreement.
“Creditor Collateral” shall mean, collectively, (a) all of the Collateral, as defined
in each of the respective Security Documents executed by any Grantor, and (b) any other property,
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whether tangible or intangible, at any time securing the Secured Obligations, or any part
thereof, whether such Lien securing any of the Secured Obligations shall have been granted to, or
otherwise obtained by, the Collateral Agent or any Secured Creditor.
“Deposit Account” means any “deposit account,” as such term is now or hereafter
defined in the UCC.
“Deposit Account Control Agreement” means, with respect to a Deposit Account of a
Grantor, a Deposit Account Control Agreement substantially in the form of Exhibit A-1(or
in such other form as may have been agreed to by the Collateral Agent) among such Grantor, the
Collateral Agent and the relevant Depositary Bank.
“Depositary Bank” means a bank at which a Deposit Account is maintained.
“Designated Hedge Document” means (a) each Designated Hedge Agreement, and (b) each
confirmation, transaction statement or other document executed and delivered in connection
therewith.
“Designated Hedge Obligations” means all amounts, indemnities and reimbursement
obligations, direct or indirect, contingent or absolute, of every type or description, and at any
time existing owing by any Grantor to any Designated Hedge Creditor pursuant to any of the
Designated Hedge Documents (including, but not limited to, interest and fees that accrue after the
commencement by or against any Grantor of any insolvency proceeding regardless of whether allowed
or allowable in such proceeding or subject to an automatic stay under Section 362(a) of the
Bankruptcy Code).
“Document” means any “document,” as such term is now or hereafter defined in the UCC.
“Equipment” means any “equipment,” as such term is now or hereafter defined in the
UCC.
“Equity Interests” means (a) all of the issued and outstanding shares of all classes
of capital stock of any corporation at any time directly owned by any Grantor and the certificates
representing such capital stock, (b) all of the membership interests in a limited liability company
at any time owned or held by any Grantor, and (c) all of the equity interests in any other form of
organization at any time owned or held by any Grantor.
“Financial Assets” means any “financial asset,” as such term is now or hereafter
defined in the UCC.
“Fixtures” means any “fixtures,” as such term is now or hereafter defined in the UCC.
“General Intangibles” means any “general intangibles,” as such term is now or
hereafter defined in the UCC.
“Goods” means any “goods,” as such term is now or hereafter defined in the UCC.
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“Governing Documents” means all agreements and instruments evidencing or relating to
investments in, ownership, voting or disposition of, any of the Pledged Collateral.
“Grantor” or “Grantors” has the meaning provided in the first paragraph of
this Agreement.
“Grantor Customer” means any retail or other customer of a Grantor, together with any
subsidiary of such customer.
“Instrument” means any “instrument,” as such term is now or hereafter defined in the
UCC.
“Intercompany and Third Party Notes” means all Promissory Notes, Instruments,
debentures, bonds, evidences of indebtedness and similar securities from time to time issued to, or
held by, any Grantor, including, without limitation, the Master Intercompany Note.
“Intellectual Property” means (a) all Trademarks; (b) all Patents; (c) all Copyrights;
and (d) all computer programs and software applications and source code of such Grantor and all
intellectual property rights therein and all other Proprietary Information of such Grantor,
including, but not limited to, Trade Secrets.
“Inventory” means (a) any “inventory,” as such term is now or hereafter defined in the
UCC; and (b) without limitation of the foregoing, and in all cases shall include, but shall not be
limited to, all merchandise and other Goods held for sale or lease, or furnished or to be furnished
under contracts for service, including, without limitation, (i) raw materials, (ii) works in
process, (iii) finished goods, (iv) products made or processed, (v) intermediates, (vi) packing
materials, (vii) shipping materials, (viii) labels, (ix) semi-finished inventory, (x) scrap
inventory, (xi) spare parts inventory, (xii) manufacturing supplies, (xiii) consumable supplies,
(xiv) other substances commingled therewith or added thereto, and (xv) all such Goods that have
been returned, reclaimed, repossessed or exchanged.
“Investment Property” means any “investment property,” as such term is now or
hereafter defined in the UCC.
“Issuer” means the issuer of any Pledged Collateral.
“Lender” has the meaning provided in the Recitals of this Agreement.
“Letter of Credit Rights” means any “letter of credit rights,” as such term is now or
hereafter defined in the UCC.
“Master Intercompany Note” means the Master Intercompany Note, dated as of the date
hereof, by and among each of the Grantors, as the same may from time to time be amended, restated,
supplemented or otherwise modified.
“Minerals” means any “minerals,” as such term is now or hereafter defined in the UCC.
“Money” means any “money,” as such term is now or hereafter defined in the UCC.
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“Patents” means any U.S. patent to which a Grantor now or hereafter has title, as well
as any application, registrations and recordings for a U.S. patent now or hereafter made by a
Grantor.
“Payment Intangible” means any “payment intangible,” as such term is now or hereafter
defined in the UCC.
“Permits” means, to the extent permitted to be assigned, pledged or otherwise disposed
of by the terms thereof or by applicable Law, all licenses, permits, rights, orders, variances,
franchises or authorizations of or from any Governmental Authority.
“Pledged Collateral” means the Pledged Equity Interests and the Pledged Debt.
“Pledged Debt” means all of the Intercompany and Third Party Notes presently owned or
hereafter acquired from time to time by any Grantor, and all interest, cash, instruments and other
property hereafter from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the foregoing.
“Pledged Entity” means the Issuer of any Pledged Equity Interests.
“Pledged Equity Interests” means, subject to Section 2.1(b), all of the Equity
Interests now owned or hereafter acquired by each Grantor, and all of such Grantor’s other rights,
title and interests in, or in any way related to, each Pledged Entity to which any of such Equity
Interests relate, including, without limitation: (a) all additional Equity Interests hereafter from
time to time acquired by such Grantor in any manner, together with all dividends, cash, instruments
and other property hereafter from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such Equity Interests and in all profits, losses and
other distributions to which such Grantor shall at any time be entitled in respect of any such
Equity Interests; (b) all other payments due or to become due to such Grantor in respect of any
such Equity Interest, whether under any partnership agreement, limited liability company agreement,
other agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or
otherwise; (c) all of its claims, rights, powers, privileges, authority, puts, calls, options,
security interests, liens and remedies, if any, under any partnership agreement, limited liability
company agreement, other agreement or at law or otherwise in respect of any such Equity Interests;
(d) all present and future claims, if any, of such Grantor against any such Pledged Entity for
moneys loaned or advanced, for services rendered or otherwise; (e) all of such Grantor’s rights
under any partnership agreement, limited liability company agreement, other agreement or at law to
exercise and enforce every right, power, remedy, authority, option and privilege of such Grantor
relating to any such Equity Interests; (f) all other property hereafter delivered in substitution
for or in addition to any of the foregoing; (g) all certificates and instruments representing or
evidencing any of the foregoing; and (h) all cash, securities, interest, distributions, dividends,
rights and other property at any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof.
“Proceeds” means (a) any “proceeds,” as such term is now or hereafter defined in the
UCC; and (b) without limitation of the foregoing and in all cases, and includes, but is not limited
to, (i) whatever is acquired upon the sale, lease, license, exchange, or other disposition of any
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Collateral, (ii) whatever is collected on, or distributed on account of, any Collateral, (iii)
rights arising out of any Collateral, (iv) claims arising out of the loss or nonconformity of,
defects in, or damage to any Collateral, (v) claims and rights to any proceeds of any insurance,
indemnity, warranty or guaranty payable to a Grantor (or the Collateral Agent, as assignee, loss
payee or an additional insured) with respect to any of the Collateral, (vi) claims and rights to
payments (in any form whatsoever) made or due and payable to a Grantor from time to time in
connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental authority (or any Person acting under color of
governmental authority), (vii) all cash, Money, checks and negotiable instruments received or held
on behalf of the Collateral Agent pursuant to any lockbox or similar arrangement relating to the
payment of Accounts Receivable or other Collateral, and (viii) any and all other amounts from time
to time paid or payable under or in connection with any of the Collateral.
“Products” means any “products,” as such term is now or hereafter defined in the UCC.
“Promissory Notes” means any “promissory note,” as such term is now or hereafter
defined in the UCC.
“Proprietary Information” means all information and know-how worldwide, including,
without limitation, technical data; manufacturing data; research and development data; data
relating to compositions, processes and formulations, manufacturing and production know-how and
experience; management know-how; training programs; manufacturing, engineering and other drawings;
specifications; performance criteria; operating instructions; maintenance manuals; technology;
technical information; software; computer programs; engineering and computer data and databases;
design and engineering specifications; catalogs; promotional literature; financial, business and
marketing plans; and inventions and invention disclosures.
“Reporting Date” has the meaning provided in Section 4.8(a).
“Scan-Based Inventory” means all Inventory of a Grantor delivered to, or otherwise
physically located on the premises owned, leased, controlled, occupied and/or otherwise used by, a
Grantor Customer on a consignment or similar basis for the purpose of the ultimate sale of such
Inventory to the Grantor Customer or by such Grantor Customer to its customers on behalf of such
Grantor. Scan-Based Inventory shall include all Inventory sold by a Grantor to a Grantor Customer
that was repurchased by a Grantor in order to convert the relationship with such Grantor Customer
to a scan-based trading relationship where such repurchased Inventory was thereafter intended to be
held by such Grantor Customer on a consignment basis as contemplated by the immediately preceding
sentence.
“Secured Creditor Documents” means, collectively, the Loan Documents, together with
all other documents, instruments or agreements executed and delivered in connection with the
foregoing, in each case as the same may from time to time be amended, restated, supplemented or
otherwise modified.
“Secured Creditors” means, collectively, (i) the Collateral Agent, the Global Agent,
the Lenders, the Swing Line Lender and each LC Issuer, (ii) each Designated Hedge Creditor, and
(iii) the respective successors and assigns of each of the foregoing.
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“Secured Obligations” means the Obligations, the Designated Hedge Obligations and the
Administrative Obligations.
“Securities Account” means any “securities account,” as such term is now or hereafter
defined in the UCC.
“Securities Account Control Agreement” means, with respect to a Securities Account of
a Grantor, a Securities Account Control Agreement substantially in the form of Exhibit A-2
(or in such other form as may have been agreed to by the Collateral Agent) among the relevant
Securities Intermediary, such Grantor and the Collateral Agent.
“Securities Act” has the meaning provided in Section 6.10.
“Securities Intermediary” means a clearing corporation or a Person, including, without
limitation, a bank or broker, that in the ordinary course of its business maintains Securities
Accounts for others and is acting in that capacity.
“Security” means any “security,” as such term is now or hereafter defined in the UCC.
“Security Agreement Joinder” means a joinder supplement to this Agreement
substantially in the form of Exhibit B.
“Security Entitlement” means any “security entitlement,” as such term is now or
hereafter defined in the UCC.
“Security Interest” means the security interest granted by a Grantor and/or by all
Grantors, as applicable, pursuant to Section 2.1.
“Significant Intellectual Property” has the meaning provided in Section 7.4.
“Supporting Obligations” means any “supporting obligation,” as such term is now or
hereafter defined in the UCC.
“Trademarks” means any trademarks and service marks now held or hereafter acquired by
a Grantor to which a Grantor has title, which are registered in the United States Patent and
Trademark Office, as well as any unregistered marks used by a Grantor in the United States,
including logos and/or designs that are incorporated as part of any of these registered or
unregistered marks, and with the applications, registrations and recordings, together with the
goodwill of the business of any Grantor connected with or symbolized by any of the foregoing.
“Trade Secrets” means any secretly held existing engineering and other data,
information, production procedures, techniques, and other know-how or other general intangibles of
like nature relating to the design, manufacture, assembly, installation, use, operation, marketing,
sale and servicing of any products or business of a Grantor worldwide whether written or not
written.
“UCC” means, unless the context indicates otherwise, the Uniform Commercial Code, as
at any time adopted and in effect in the State of Ohio, specifically including and taking into
account all amendments, supplements, revisions and other modifications thereto.
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Section 1.3. Terms Generally. The definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The
word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the
context requires otherwise, (a) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and assigns, (c) the
words “herein,” “hereof’ and “hereunder,” and words of similar import, shall be construed to refer
to this Agreement in its entirety and not to any particular provision hereof, and (d) unless
otherwise specified, all references herein to Sections, Schedules and Exhibits shall be construed
to refer to Sections of, and Schedules and Exhibits to, this Agreement.
2. SECURITY INTERESTS
2.1 Grant of Security Interests. As security for the prompt and complete payment and
performance when due of the Secured Obligations, each Grantor does hereby pledge, collaterally
assign and transfer unto the Collateral Agent, and does hereby grant to the Collateral Agent, for
the benefit of the Secured Creditors, a continuing security interest in, all of the right, title
and interest of such Grantor in, to and under all of the following of each Grantor, whether now
existing or hereafter from time to time arising or acquired and wherever located (collectively, the
“Collateral”):
(i) all Accounts, including, without limitation, each and every Account Receivable;
(ii) all Goods;
(iii) all Inventory;
(iv) all Equipment;
(v) all Documents;
(vi) all Instruments;
(vii) all Chattel Paper;
(viii) all Money;
(ix) all Deposit Accounts, including, but not limited to, the Collateral Concentration Account
and all Controlled Deposit Accounts, together with all monies, securities and instruments at any
time deposited in any such Deposit Account or otherwise held for the credit thereof;
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(x) all Securities Accounts, together with all Financial Assets credited therein from time to
time, and all Financial Assets, monies, securities, cash and other property held therein or
credited thereto;
(xi) all Investment Property;
(xii) all Fixtures;
(xiii) all As-Extracted Collateral, including, without limitation, all Minerals;
(xiv) all General Intangibles, including, but not limited to, all Contract Rights;
(xv) all Commercial Tort Claims;
(xvi) all Intellectual Property;
(xvii) all Letter of Credit Rights;
(xviii) all Payment Intangibles;
(xix) all Promissory Notes;
(xx) all Supporting Obligations;
(xxi) all Permits;
(xxii) all other items, kinds and types of personal property, tangible or intangible, of
whatever nature, and regardless of whether the creation or perfection or effect of perfection or
non-perfection of a security interest therein is governed by the UCC of any particular jurisdiction
or by any other applicable Law;
(xxiii) all additions, modifications, alterations, improvements, upgrades, accessions,
components, parts, appurtenances, substitutions and/or replacements of, to or for any of the
foregoing; and
(xxiv) Proceeds and Products of any and all of the foregoing.
(b) Excluded Property. Notwithstanding anything in Section 2.1 or elsewhere in this
Agreement to the contrary, there is specifically excluded from the Security Interest, and the term
Collateral shall not include: (i) any Equipment or Goods that is subject to a “purchase money
security interest,” as such term is now or hereafter defined in the UCC, which (x) constitutes a
Permitted Lien under the Credit Agreement and (y) prohibits the creation by a Grantor of a security
interest therein, unless the holder thereof has consented to the creation of such a security
interest; (ii) any lease, license, contract, property rights or agreement to which any Grantor is a
party or any of its rights or interests thereunder, or assets related thereto, if and for so long
as the grant of such security interest or lien shall constitute or result in (A) the
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abandonment, invalidation or unenforceability of any right, title or interest of any Grantor
therein or (B) in a breach or termination pursuant to the terms of, or a default under, any such
lease, license, contract, property rights or agreement (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
(including the Bankruptcy Code) or principles of equity), provided, however, that such security
interest or lien shall attach immediately at such time as the condition causing such abandonment,
invalidation or unenforceability shall be remedied and to the extent severable, shall attach
immediately to any portion of such lease, license, contract, property rights or agreement, or such
asset related thereto, that does not result in any of the consequences specified in (A) or (B)
above; (iii) any Inventory owned by a Grantor that contains or utilizes a patent, trademark or
copyright the use of which has been licensed to such Grantor under a license described under clause
(ii), which license prohibits Liens on such Inventory, provided, however, that such security
interest or lien shall attach to such Inventory immediately at such time as the condition
prohibiting such Lien shall be waived by the licensor of such license or otherwise remedied; (iv)
any Equity Interest in any Foreign Subsidiary that is not a first tier Subsidiary of the Company or
any other Grantor; (v) the stock or other equity interest of any Foreign Subsidiary, other than the
stock or other equity interest of any first tier Foreign Subsidiary representing no more than 65%
of the total combined voting power of all classes of stock or other equity interest of such Foreign
Subsidiary entitled to vote and having total assets greater than $5,000,000; and (vi) any Equity
Interests in any Person listed on Schedule 2.1 and upon the prior written notice to,
consultation with, and written acknowledgment of. the Collateral Agent, any Equity Interests in any
Person which is not a Subsidiary of the Company, in each case, if and to the extent that the terms
of the Governing Documents of such Person do not permit the grant of a security interest in such
Equity Interests by the owner thereof or the applicable Grantor has been unable to obtain any
approval or consent to the creation of a security interest therein which is required under such
organizational documents.
2.2 No Assumption of Liability. The Security Interest of any Grantor is granted as
security only and shall not subject the Collateral Agent or any other Secured Creditor to, or in
any way alter or modify, any obligation or liability of such Grantor with respect to or arising out
of any of the Collateral.
2.3 Power of Attorney. Each Grantor hereby irrevocably constitutes and appoints the
Collateral Agent its true and lawful agent and attorney-in-fact, and in such capacity the
Collateral Agent shall have, without any further action required by or on behalf of any Grantor,
the right, with full power of substitution, in the name of such Grantor or otherwise, for the use
and benefit of the Collateral Agent and the other Secured Creditors, after the occurrence of and
during the continuance of a Event of Default: (i) to receive, endorse, present, assign, deliver
and/or otherwise deal with any and all notes, acceptances, letters of credit, checks, drafts, money
orders, or other evidences of payment relating to the Collateral of such Grantor or any part
thereof; (ii) to demand, collect, receive payment of, and give receipt for and give credits,
allowances, discounts, discharges, releases and acquittances of and for any or all of the
Collateral of such Grantor; (iii) to sign the name of such Grantor on any invoice or xxxx of lading
relating to any of the Collateral of such Grantor; (iv) to send verifications of any or all of the
Accounts Receivable of such Grantor to its Account Debtors; (v) to commence and prosecute any and
all suits, actions or proceedings at law or in equity in or before any court or other tribunal
(including
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any arbitration proceedings) to collect or otherwise realize on all or any of the Collateral
of such Grantor, or to enforce any rights of such Grantor in respect of any of its Collateral; (vi)
to settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to any
or all of the Collateral of such Grantor; (vii) to notify, or require such Grantor to notify or
cause to be notified, its Account Debtors to make payment directly to the Collateral Agent or to a
Controlled Deposit Account; or (viii) to use, sell, assign, transfer, pledge, make any agreement
with respect to or otherwise deal with any or all of the Collateral of such Grantor, and to do all
other acts and things necessary or appropriate to carry out the intent and purposes of this
Agreement, as fully and completely as though the Collateral Agent were the absolute owner of the
Collateral of such Grantor for all purposes; provided, however, that nothing herein contained shall
be construed as requiring or obligating the Collateral Agent or any other Secured Creditor to make
any commitment or to make any inquiry as to the nature or sufficiency of any payment received by
the Collateral Agent or any other Secured Creditor, or to present or file any claim or notice, or
to take any action with respect to the Collateral or any part thereof or the moneys due or to
become due in respect thereof or any property covered thereby, and no action taken or omitted to be
taken by the Collateral Agent or any other Secured Creditor with respect to the Collateral or any
part thereof shall give rise to any defense, counterclaim or offset in favor of any Grantor or to
any claim or action against the Collateral Agent or any other Secured Creditor. It is understood
and agreed that the appointment of the Collateral Agent as the agent and attorney-in-fact of each
of the Grantors for the purposes set forth above is a presently effective appointment, is coupled
with an interest sufficient at law and is irrevocable. The provisions of this Section shall in no
event relieve any Grantor of any of its obligations under this Agreement or any of the other
Secured Creditor Documents with respect to the Collateral or any part thereof or impose any
obligation on the Collateral Agent or any other Secured Creditor to proceed in any particular
manner with respect to the Collateral or any part thereof, or in any way limit the exercise by the
Collateral Agent or any other Secured Creditor of any other or further right it may have on the
date of this Agreement or hereafter, whether hereunder, under any other Secured Creditor Document,
by law or otherwise.
3. REPRESENTATIONS AND WARRANTIES
Each Grantor represents and warrants to the Collateral Agent and the other Secured Creditors,
which representations and warranties shall survive the execution and delivery of this Agreement
until the termination of this Agreement in accordance with Section 10.10, as follows:
3.1 Title and Authority. Such Grantor has (i) good, valid and unassailable title to
all tangible items owned by it and constituting any portion of the Collateral with respect to which
it has purported to grant the Security Interest, and good, valid and unassailable rights in all
other Collateral with respect to which it has purported to grant the Security Interest, in each
case, subject to Permitted Liens provided, however, that to the extent such Grantor owns Scan-Based
Inventory, such Scan-Based Inventory is subject to the rights of the applicable Grantor Customers
and their respective secured creditors (if any), and (ii) full power and authority to grant to the
Collateral Agent the Security Interest in such Collateral pursuant hereto and to execute, deliver
and perform its obligations in accordance with the terms of this Agreement, without the consent or
approval of any other Person other than any consent or approval that has been obtained.
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3.2 Absence of Other Liens.
(a) There is no financing statement (or similar statement or instrument of registration under
the Law of any jurisdiction) covering or purporting to cover any interest of any kind of such
Grantor in the Collateral, except for any filings or recordings covering any Permitted Liens.
(b) Such Grantor is, and as to any Collateral acquired by it from time to time after the date
hereof such Grantor will be, the owner of all of its Collateral free and clear of any Lien, and the
Security Interest of such Grantor in its Collateral is and will be superior and prior to any other
security interest or other Lien, except, in each case, for Permitted Liens.
3.3 Validity of Security Interest. As of the Closing Date, the Security Interest of
each Grantor in all of the Collateral of such Grantor constitutes a legal, valid and enforceable
(with respect to any licenses where a Grantor is the licensee, only as against such Grantor) first
priority security interest securing the payment and performance of the Secured Obligations, subject
only to (a) Permitted Liens, and (b) Sections 5.18(b) and (c) of the Credit Agreement.
3.4 Perfection of Security Interest under UCC. All notifications and other actions,
including, without limitation, (i) all deposits of certificates and instruments evidencing any
Collateral (duly endorsed or accompanied by appropriate instruments of transfer), (ii) all notices
to and acknowledgments of any bailee or other Person, to the extent required under this Agreement,
(iii) all acknowledgments and agreements respecting the right of the Collateral Agent to obtain
control with respect to any Collateral, to the extent required under this Agreement, and (iv) all
filings, registrations and recordings, which are (y) required by the terms of this Agreement to
have been given, made, obtained, done and accomplished, and (z) necessary to create, preserve,
protect and perfect the Security Interest granted by such Grantor to the Collateral Agent hereby in
respect of its portion of the Collateral (other than unregistered patents, trademarks and
copyrights and motor vehicles), have been given, made, obtained, done and accomplished; provided,
however, that such notices and filings necessary (A) to protect the rights of such Grantor in any
Scan-Based Inventory shall not be required, and (B) to perfect Liens on Collateral described in
Sections 5.18(b) and (c) of the Credit Agreement shall not be required.
3.5 Places of Business, Jurisdiction Where Organized, Locations of Collateral, etc.
Each Grantor represents and warrants that on the Closing Date: (a) the principal place of business
of such Grantor, or its chief executive office, if it has more than one place of business, is
located at the address indicated on Schedule 3.5; (ii) the jurisdiction of formation or
organization of such Grantor is set forth on Schedule 3.5; (iii) the U.S. Federal Tax I.D.
Number and, if applicable, the organizational I.D. Number of such Grantor is set forth on
Schedule 3.5; (iv) all Inventory (other than Scan-Based Inventory in the possession of a
Grantor Customer) and Equipment of such Grantor with an aggregate value in excess of $500,000 is
located at one of the locations set forth on Schedule 3.5; and (v) the exact legal name of
such Grantor, and each legal name that such Grantor has had in the five years preceding the Closing
Date (including, without limitation, any predecessor entities), are set forth on Schedule
3.5. Such Grantor does not, at and as of the date hereof, conduct business in any
jurisdiction, and except as set forth on Schedule 3.5, in the preceding five years, such
Grantor and any predecessors in interest have not
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conducted business in any jurisdiction, except the current legal name of such Grantor and such
other names as are listed on Schedule 3.5.
3.6 Pledged Collateral. A true and complete list of all of the Pledged Collateral
owned by each Grantor as of the Closing Date and, thereafter, the most recent Reporting Date is set
forth on Schedule 3.6.
3.7 Status of Pledged Collateral. All of the Pledged Equity Interests of each Grantor
hereunder have been duly and validly issued and are fully paid and nonassessable (solely with
respect to such nonassessability of those Pledged Equity Interests issued by Persons that are not
Subsidiaries of the Company, to such Grantor’s knowledge). All of the Pledged Debt of each Grantor
is the legal, valid and binding obligation of the Issuer thereof, enforceable in accordance with
its terms (solely with respect to Pledged Debt issued by Persons that are not Subsidiaries of the
Company, to such Grantor’s knowledge). No Grantor is in default in the payment of any portion of
any mandatory capital contribution, cash call, or other funding, if any, required to be made under
any Governing Document relating to any of the Pledged Equity Interests of such Grantor. No Grantor
is in violation or default in any material respect of any other provisions of any such Governing
Document. No Pledged Collateral of any Grantor is subject to any defense, offset or counterclaim
to each Grantor’s knowledge, nor have any of the foregoing been asserted or alleged against such
Grantor by any Person.
3.8 Intellectual Property. A true and complete list of all Patents, registered
Trademarks and registered Copyrights owned by each Grantor as of the Closing Date and, thereafter,
the most recent Reporting Date is set forth on Schedule 3.8.
4. GENERAL COVENANTS
4.1 No Other Liens; Defense of Title, etc. No Grantor will make or grant, or suffer
or permit to exist, any Lien on any of its Collateral, other than the Permitted Liens. Each
Grantor, at its sole cost and expense, will take any and all actions reasonably necessary and
appropriate to defend title to its Collateral against any and all Persons and to defend the
validity, enforceability, perfection, effectiveness and priority of the Security Interest of the
Collateral Agent therein against any Lien other than Permitted Liens.
4.2 Further Assurances; Filings and Recordings, etc.
(a) Each Grantor, at its sole cost and expense, will duly execute, acknowledge and deliver all
such agreements, instruments and other documents and take all such actions reasonably requested by
the Collateral Agent and not inconsistent with this Agreement or the Credit Agreement, including,
without limitation, (i) subject to Section 4.4 below, physically pledging Instruments, Documents,
Promissory Notes, Chattel Paper and certificates evidencing any Investment Property or any of the
Pledged Collateral, to the Collateral Agent, (ii) obtaining Control Agreements in accordance with
this Agreement, (iii) obtaining from other Persons such lien waivers and bailee letters, provided
that, until an Event of Default has occurred and is continuing, no such landlord lien waiver or
bailee letter shall be required from the landlord or xxxxxx of any location that is not a Material
Leased Location, (iv) obtaining from other Persons agreements evidencing the exclusive control and
dominion of the Collateral Agent over any of
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the Collateral, in instances where obtaining control over such Collateral is the only or best
method of perfection, and (v) making filings, recordings and registrations, as the Collateral Agent
may from time to time reasonably instruct to better assure, preserve, protect and perfect the
Security Interest of the Collateral Agent in the Collateral of such Grantor, and the rights and
remedies of the Collateral Agent hereunder, or otherwise to further effectuate the intent and
purposes of this Agreement and to carry out the terms hereof.
(b) Each Grantor, at its sole cost and expense, will (i) take such actions as the Collateral
Agent requests to at all times cause this Agreement (and/or proper notices, financing statements or
other registrations or filings in respect hereof, and supplemental collateral assignments or
collateral security agreements in respect of any portion of the Collateral) to be duly filed,
recorded, registered and published, and re-filed, re-recorded, re-registered and re-published in
such manner and in such places as may be required under the UCC or other applicable Law to
establish, perfect, preserve and protect the rights, remedies and Security Interest of the
Collateral Agent in or with respect to the Collateral of such Grantor, and (ii) pay all taxes, fees
and charges and comply with all statutes and regulations, applicable to such filing, recording,
registration and publishing and such re-filing, re-recording, re-registration and re-publishing.
4.3 Use and Disposition of the Collateral.
(a) Unless and until an Event of Default shall have occurred and be continuing and the
Collateral Agent shall have notified the Grantors thereof in writing that the rights of any or all
of the Grantors under this Section 4.3(a) are suspended during the continuance of such Event of
Default, each Grantor may use and dispose of its Collateral in any lawful manner not inconsistent
with the provisions of this Agreement, the Credit Agreement or any other Secured Creditor Document.
(b) No Grantor will consign any of its Inventory (other than Scan-Based Inventory) that,
individually, or in the aggregate for all such consigned Inventory, exceeds $100,000, to any Person
unless all filings of financing statements under the UCC and other actions and filings,
registrations and recordings required under other applicable Laws have been made to perfect the
rights and interests of such Grantor in the consigned Inventory against creditors of and purchasers
from the consignee.
(c) No Grantor will permit any of its Inventory or Equipment having a cost or market value
(whichever is higher), individually, or in the aggregate for all such Inventory and Equipment, in
excess of $2,000,000 (or such larger amount as shall be acceptable to the Collateral Agent, in its
discretion) to be in the possession or control of any single warehouseman, bailee, processor,
supplier or agent at any time, unless such warehouseman, bailee, processor, supplier or agent shall
have been notified of the Security Interest and shall have agreed in writing to hold such
Collateral subject to the Security Interest and the instructions of the Collateral Agent and to
waive and release any Lien held by it with respect to such Collateral, whether arising by operation
of law or otherwise.
4.4 Delivery or Marking of Chattel Paper; Assignment of Security From Account Debtors and
Consignments; etc. Without limitation of any of the provisions of Section 4.2(a):
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(a) If any amount payable to a Grantor under or in connection with any of the Collateral shall
be or become evidenced by any Document, Promissory Note or Instrument, or any Chattel Paper if in
excess of $2,000,000 individually or in the aggregate, such Grantor will cause such Document,
Promissory Note or Instrument, or such Chattel Paper, to be delivered to the Collateral Agent and
pledged as part of the Collateral hereunder, accompanied by any appropriate instruments or
endorsements of transfer. In the case of any Chattel Paper, the Collateral Agent may require, in
lieu of the delivery thereof to the Collateral Agent, that the writings evidencing the Chattel
Paper be legended to reflect the Security Interest of the Collateral Agent therein, all in a manner
acceptable to the Collateral Agent.
(b) If at any time any Grantor shall take and perfect a security interest in any property of
any Account Debtor, as security for the Accounts owed by such Account Debtor and/or any of its
Affiliates, or take and perfect a security interest arising out of the consignment to any Person of
any Inventory or other Collateral, such Grantor shall, if requested by the Collateral Agent (which
request may be made by the Collateral Agent only upon the written instructions of the Required
Lenders, issued by the Required Lenders, in their sole respective discretion), promptly execute and
deliver to the Collateral Agent a separate assignment of all financing statements and other filings
made to perfect the same. Such separate assignment need not be filed of public record unless
necessary to continue the perfected status of the security interest of such Grantor against
creditors of any transferees from the Account Debtor or consignee.
4.5 Authorization to File Financing Statements. Each Grantor irrevocably authorizes
the Collateral Agent at any time and from time to time to file in any jurisdiction any initial
financing statements and all amendments thereto and continuations thereof that (a) indicate the
Collateral (i) as “all assets” or “all personal property” of such Grantor or words of similar
effect, regardless of whether any particular asset comprised in the Collateral falls within the
scope of the UCC, or (ii) as being of an equal or lesser scope or with greater detail, and (b)
contain any other information required pursuant to the UCC for the sufficiency or filing office
acceptance of any financing statement, amendment or continuation, including, but not limited to,
(i) whether such Grantor is an organization, the type of organization and any organization
identification number, and (ii) in the case of a financing statement that is filed as a fixture
filing or indicating Collateral as As-Extracted Collateral or timber to be cut, a sufficient
description of the real property to which the Collateral relates.
4.6 Modification of Terms of Accounts and Contracts, etc. No Grantor will enter into
any material modification of the terms or provisions of any of its Accounts Receivable or
Contracts, or grant any extension of time for the payment of any of its Accounts Receivable or
Contracts, or compromise or settle the same for less than the full amount thereof, or release,
wholly or partially, any person liable for the payment thereof or any guaranty, letter of credit,
collateral or other obligation supporting or securing the payment thereof, or allow any credit or
discount whatsoever thereon, other than modifications, extensions, compromises, settlements,
credits and discounts granted or made (i) in the ordinary course of business or (ii) not otherwise
prohibited by the terms of the Credit Agreement or any other Loan Document.
4.7 Maintenance of Records, etc. Each Grantor will keep and maintain at its own cost
and expense satisfactory and complete records of its Accounts Receivable, Contracts and other
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Collateral, including, but not limited to, the originals of all documentation with respect
thereto, records of all payments received, all credits granted thereon, all merchandise returned
and all other dealings therewith. All xxxxxxxx and invoices issued by a Grantor with respect to
its Accounts Receivable will be in compliance, in all material respects, with, and conform to, the
requirements of all applicable federal, state and local Laws and any applicable Laws of any
relevant foreign jurisdiction. If an Event of Default shall have occurred and be continuing and
the Collateral Agent so directs, each Grantor shall legend, in form and manner satisfactory to the
Collateral Agent, its Accounts Receivable and Contracts, as well as books, records and documents of
such Grantor evidencing or pertaining thereto with an appropriate reference to the fact that such
Accounts Receivable and Contracts have been assigned to the Collateral Agent and that the
Collateral Agent has a security interest therein.
4.8 Schedules; Collateral Reports.
(a) Schedules. If any information contained in any Schedule to this Agreement shall
become untrue or incorrect in any material respect (other than as to any of the matters set forth
in Section 4.9 which shall be subject to the terms thereof), or if any Grantor acquires or disposes
of any of the Collateral such that any Schedule to this Agreement is no longer accurate or complete
in any material respect (other than as to any of the matters set forth in Section 4.2 which shall
be subject to the terms thereof and the Security Agreement Joinder pursuant to Section 10.15), then
on the date on which the Company is required to deliver to the Global Agent a Compliance
Certificate under the Credit Agreement (each a “Reporting Date”) immediately following the
date on which such information becomes so untrue or incorrect or after such acquisition or
disposition occurs, such Grantor shall deliver to the Collateral Agent a new Schedule or Schedules
to this Agreement without the need for any amendment to this Agreement pursuant to Section 10.17,
provided that the delivery of such new Schedule or Schedules to this Agreement after any applicable
Reporting Date shall not serve to cure, or constitute a waiver of, any Event of Default that may
have occurred as a result of such information becoming untrue, incorrect, inaccurate or incomplete
in any material respect.
(b) Collateral Reports. Whenever requested to do so by the Collateral Agent, each
Grantor will promptly, at its own sole cost and expense, deliver to the Collateral Agent, in
written hard copy form or, if available, on magnetic tape or other computer or machine readable
form, as specified by the Collateral Agent, such listings, agings, descriptions, schedules and
other reports with respect to its Accounts Receivable, Inventory, Equipment and other Collateral as
the Collateral Agent may reasonably instruct, all of the same to be in such scope, categories and
detail as the Collateral Agent may have reasonably instructed and to be accompanied by copies of
invoices and other documentation as and to the extent reasonably instructed by the Collateral
Agent.
4.9 Legal Status; Location of Inventory and Equipment. Each Grantor agrees that (a)
it will not change its name, place of business, type of organization, jurisdiction of organization
or other legal structure, or, if more than one, chief executive office, or its mailing address or
organizational identification number, if it has one, in each case without providing the Collateral
Agent at least 30 days’ prior written notice thereof and, if and as required by the Credit
Agreement, the consent of the Collateral Agent, (b) if such Grantor does not have an organizational
identification number and later obtains one, it will promptly notify the Collateral
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Agent of such organizational identification number, and (c) it will not maintain any of its
Inventory or Equipment with an aggregate value in excess of $500,000 at a location other than a
location set forth on Schedule 3.5, unless it shall have provided the Collateral Agent
prompt written notice thereof.
4.10 Inspections and Verification. The Collateral Agent and such Persons as the
Collateral Agent may designate shall have the right, at any Grantor’s own cost and expense, at any
time or from time to time, on not less than two Business Day’s prior notice to the Company (on
behalf of any applicable Grantor), to inspect the Collateral of such Grantor, all books and records
related thereto (and to make extracts and copies thereof) and the premises upon which any of such
Collateral is located, to discuss such Grantor’s affairs with the officers of such Grantor and its
independent accountants, and to verify under reasonable procedures the validity, amount, quality,
quantity, value, condition and status of, or any other matter relating to, such Collateral,
including, in the case of Accounts or other Collateral in the possession of any third Person, by
contacting Account Debtors or the third Person possessing such Collateral (after not less than two
days’ prior notice to the applicable Grantor) for the purpose of making such verification, provided
that, unless an Event of Default has occurred and is continuing, Grantors shall not be required to
pay for more than one such inspection in any calendar year. Any procedures or actions taken, prior
to the occurrence and continuance of an Event of Default, to verify Accounts by contacting Account
Debtors, shall be effected by the Company’s independent accountants, acting at the direction of the
Collateral Agent, in such manner (consistent with their normal auditing procedures) so as not to
reveal the identity of the Collateral Agent or the existence of the Security Interest to the
Account Debtors. The Company will instruct its independent accountants to undertake any such
verification when and as requested by the Collateral Agent, but no more than once in any calendar
year, so long as no Event of Default has occurred and is continuing. The results of any such
verification by independent accountants shall be reported by such independent accountants to both
the Collateral Agent and the Company. The Collateral Agent shall have the absolute right to share
any information it gains from any such inspection or verification or from collateral reports
furnished to it by a Grantor with the other Secured Creditors (it being understood that any such
information shall be subject to the confidentiality provisions of the Credit Agreement).
4.11 Condition of Collateral. Each Grantor will maintain (a) its Equipment in good
condition, ordinary wear and tear excepted (excluding obsolete, excess or abandoned Equipment) and
(b) all other tangible items of its Collateral, taken as an entirety, in such condition as is
consistent with generally accepted business practices, ordinary wear and tear excepted.
4.12 Insurance. Each Grantor will at all times keep its business and its Collateral
insured in accordance with Section 6.03 of the Credit Agreement.
4.13 Proceeds of Casualty Insurance, Condemnation or Taking.
(a) All amounts recoverable under any policy of casualty insurance or any award for the
condemnation or taking by any governmental authority of any portion of the Collateral are hereby
assigned to the Collateral Agent.
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(b) In the event any portion of the Collateral suffers a casualty loss or is involved in any
proceeding for condemnation or taking by any governmental authority, then, if an Event of Default
has occurred and is continuing, the Collateral Agent is authorized and empowered, at its option, to
participate in, control, direct, adjust, settle and/or compromise any such loss or proceeding, to
collect and receive the proceeds therefrom and, after deducting from such proceeds any expenses
incurred by it in connection with the collection or handling thereof, to apply the net proceeds
thereof to the Secured Obligations in accordance with Section 8.4.
(c) If any proceeds are received by the Collateral Agent as a result of a casualty,
condemnation or taking involving the Collateral and no Event of Default has occurred and is
continuing, then the Collateral Agent will promptly release such proceeds to the applicable
Grantor, unless the Credit Agreement provides otherwise.
4.14 Protective Advances by the Collateral Agent. At its option, but without being
obligated to do so, the Collateral Agent may, upon prior notice to any applicable Grantor, after
the occurrence and during the continuance of an Event of Default, (a) pay and discharge past due
taxes, assessments and governmental charges, at any time levied on or with respect to any of the
Collateral of such Grantor which such Grantor has failed to pay and discharge in accordance with
the requirements of this Agreement or any of the other Secured Creditor Documents, (b) pay and
discharge any claims of other creditors of such Grantor which are secured by any Lien on any
Collateral, other than a Permitted Lien, (c) pay for the maintenance, repair, restoration and
preservation of the Collateral to the extent such Grantor fails to comply with its obligations in
regard thereto under this Agreement and the other Secured Creditor Documents or the Collateral
Agent reasonably believes payment of the same is necessary or appropriate to avoid a material loss
or material diminution in value of the Collateral, and/or (d) obtain and pay the premiums on
insurance for the Collateral which such Grantor fails to maintain in accordance with the
requirements of this Agreement and the other Secured Creditor Documents, and each Grantor agrees to
reimburse the Collateral Agent on demand for all payments and expenses incurred by the Collateral
Agent with respect to such Grantor or any of its Collateral pursuant to the foregoing
authorization, provided, however, that nothing in this Section shall be construed as excusing any
Grantor from the performance of, or imposing any obligation on the Collateral Agent or any other
Secured Creditor to cure or perform, any covenants or other agreements of any Grantor with respect
to any of the foregoing matters as set forth herein or in any of the other Loan Documents.
4.15 Commercial Tort Claims. If any Grantor shall at any time hold or acquire a
Commercial Tort Claim, the recovery from which could reasonably be expected to exceed $500,000,
such Grantor shall promptly notify the Collateral Agent thereof in a writing signed by such
Grantor, which sets forth the details thereof and grants to the Collateral Agent (for the benefit
of the Secured Creditors) a Lien thereon and on 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.
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5. SPECIAL PROVISIONS CONCERNING
ACCOUNTS AND COLLECTION OF ACCOUNTS, ETC.
ACCOUNTS AND COLLECTION OF ACCOUNTS, ETC.
5.1 Deposit Accounts.
(a) The Grantors shall cause all deposit accounts to be subject at all times (subject to
Section 4.04(i) of the Credit Agreement) to a fully effective Deposit Account Control Agreement
except (i) any payroll account used exclusively for funding the payroll obligations of the Grantors
in the ordinary course of business or (ii) any other deposit account (other than a deposit account
listed on Schedule 4.01(iv) of the Credit Agreement) so long as at any date of
determination the aggregate average monthly balance for the 12 months ending on such date in any
such deposit account is not in excess of $5,000,000 and the aggregate average monthly balance for
the 12 months ending on such date of all deposit accounts that are not subject to Deposit Account
Control Agreements is not in excess of $10,000,000 (any deposit account that is not required to be
subject to a Deposit Account Control Agreement pursuant to this Section shall be referred to as an
“Excluded Deposit Account”).
(b) Immediately upon the creation or acquisition of any new deposit account (other than any
deposit account that would qualify as an Excluded Deposit Account) or any interest therein by any
Grantor, such Grantor shall cause to be in full force and effect, prior to the deposit of any funds
therein, a Deposit Account Control Agreement duly executed by such Grantor, the Collateral Agent
and the applicable Depositary Bank.
5.2 Securities Accounts.
(a) The Grantors shall cause all securities accounts to be subject at all times (subject to
Section 4.04(i) of the Credit Agreement) to a fully effective Securities Account Control Agreement
except so long as at any date of determination the aggregate average monthly balance for the 12
months ending on such date in any such securities account is not in excess of $5,000,000 and the
aggregate average monthly balance for the 12 months ending on such date of all securities accounts
that are not subject to Securities Account Control Agreements is not in excess of $10,000,000 (any
securities account that is not required to be subject to a Securities Account Control Agreement
pursuant to this Section shall be referred to as an “Excluded Securities Account”).
(b) Immediately upon the creation or acquisition of any new Securities Account (other than any
securities account that would qualify as an Excluded Securities Account) or any interest therein by
any Grantor, such Grantor shall cause to be in full force and effect, prior to the crediting of any
Financial Asset with respect to which any Grantor is an Entitlement Holder, a Securities Account
Control Agreement duly executed by such Grantor, the Collateral Agent and the applicable Securities
Intermediary.
5.3 Operation of Collateral Accounts. Except as expressly permitted pursuant to this
Agreement or the Credit Agreement, the Grantors shall cause all cash and Cash Equivalents and all
securities entitlements to be maintained in Collateral Accounts. Prior to the occurrence and
continuance of an Event of Default, the Grantors may withdraw, or direct the disposition of, funds
and other investments or financial assets held in the Collateral Accounts. Upon the
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occurrence and during the continuance of an Event of Default, upon written notice to any
Grantor, the Collateral Agent shall be permitted to (i) retain, or instruct the relevant Securities
Intermediary or Depositary Bank to retain, all cash and investments held in any Collateral Account,
(ii) liquidate or issue Entitlement Orders with respect to, or instruct the relevant Securities
Intermediary or Depositary Bank to liquidate, any or all investments or Financial Assets held in
any Collateral Account, (iii) issue a “notice of exclusive control” or other similar instructions
with respect to any Collateral Account and instruct the Depositary Bank or Securities Intermediary
to follow the instructions of the Collateral Agent, and (iv) withdraw any amounts held in any
Collateral Account and apply such amounts in accordance with the terms of this Agreement.
5.4 Collection of Accounts.
(a) Each Grantor shall, in a manner consistent with the provisions of this Section 5, endeavor
to cause to be collected from the Account Debtor named in each of its Accounts, as and when due
(including, without limitation, amounts which are delinquent, such amounts to be collected in
accordance with generally accepted lawful collection procedures), any and all amounts owing under
or on account of such Accounts and shall cause such collections to deposited or held in a
Collateral Account.
(b) Each Grantor shall, and the Collateral Agent hereby authorizes each Grantor to, enforce
and collect all amounts owing to it on its Inventory and Accounts, for the benefit and on behalf of
the Collateral Agent and the other Secured Creditors; provided, however, that such privilege may at
the sole option of the Collateral Agent, by notice to the Company (on behalf of all Grantors), be
terminated upon the occurrence and during the continuance of any Event of Default.
5.5 Collateral Concentration Account.
(a) After the occurrence and during the continuance of an Event of Default, the Collateral
Agent shall have the right, upon written notice to the Company, to establish the Collateral
Concentration Account pursuant to which, among other things, the Collateral Agent shall have sole
dominion and control over all funds held to the credit of, and all disbursements from, the
Collateral Concentration Account.
(b) Upon the establishment of the Collateral Concentration Account, (i) all of the funds on
deposit in or credited to any Controlled Deposit Account shall, upon the instruction of the
Collateral Agent to the appropriate Depositary Banks after the issuance of a “notice of exclusive
control,” be transferred to the Collateral Concentration Account on a daily or other basis
specified by the Collateral Agent, (ii) no Grantor will have the right of withdrawal from the
Collateral Concentration Account or any of the Collateral Accounts, (iii) the Collateral Agent
shall have the right to liquidate any investments held in any Securities Account and have the
proceeds thereof deposited in the Collateral Concentration Account, and (iv) all amounts held in
the Collateral Concentration Account or any of the Collateral Accounts may be applied, in the
Collateral Agent’s discretion, towards payment of the Secured Obligations in accordance with the
terms of this Agreement.
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(c) Upon the establishment of the Collateral Concentration Account and at all times
thereafter, each Grantor agrees (i) to cause all payments by its Account Debtors to be immediately
deposited in a Controlled Deposit Account, if such Account Debtors have not already been instructed
to do so, and (ii) to deposit promptly all payments received by it from any other sale of any of
its Collateral, whether in the form of cash, checks, notes, drafts, bills of exchange, money orders
or otherwise, in a Controlled Deposit Account in precisely the form received (but with any
endorsements of such Grantor necessary for deposit or collection). Until any such payments are so
deposited, such payments shall be held in trust by such Grantor for and as the property of the
Collateral Agent, for the benefit of the Secured Creditors.
6. SPECIAL PROVISIONS CONCERNING PLEDGED COLLATERAL
6.1 Delivery of Certificates and Instruments for Pledged Collateral.
(a) On or prior to the Closing Date, each Grantor shall pledge and deposit with the Collateral
Agent all certificates or instruments, if any, representing any of the Pledged Collateral at the
time owned by such Grantor and subject to the Security Interest hereof, duly endorsed in blank in
the case of any instrument, and accompanied by undated stock powers duly executed in blank by such
Grantor or such other instruments of transfer as are acceptable to the Collateral Agent, in the
case of Pledged Equity Interests, unless any such instrument is a Promissory Note excluded from the
term Collateral under Section 2.1(b).
(b) If a Grantor shall acquire (by purchase, conversion, exchange, stock dividend or
otherwise) any additional Pledged Collateral, at any time or from time to time after the date
hereof which is or are intended to be subjected to the Security Interest hereof and which is or are
represented by certificates or instruments, such Grantor shall (i) promptly pledge and deposit with
the Collateral Agent all such certificates or instruments, duly endorsed in blank in the case of
Intercompany and Third Party Notes, and accompanied by undated stock powers duly executed in blank
by such Grantor or such other instruments of transfer as are acceptable to the Collateral Agent, in
the case of Equity Interests, and (ii) promptly thereafter deliver to the Collateral Agent a
certificate executed by an authorized officer of such Grantor describing such additional Pledged
Collateral and certifying that the same have been duly pledged with the Collateral Agent hereunder.
(c) Perfection under Foreign Law. Without limitation of any other provision of this
Agreement but subject to Section 2.1(b), if any of the Equity Interests owned by a Grantor (whether
or not now owned or hereafter acquired) that are intended to be subjected to the Security Interest
hereof are issued by an Issuer that is a Foreign Subsidiary or Person organized under the Laws
other than under the Laws of the United States, any State thereof or the District of Columbia, at
the written request of the Collateral Agent, such Grantor shall promptly execute and deliver to the
Collateral Agent a separate pledge document covering such Equity Interests, conforming to the
requirements of the Law of the jurisdiction in which such Foreign Subsidiary or other Person is
organized and satisfactory in form and substance to the Collateral Agent, together with an opinion
of local counsel as to the perfection of the security interest provided for therein. Each Grantor
further agrees to take such actions as the Collateral Agent deems reasonably necessary or desirable
to effect the foregoing and to permit the Collateral Agent to
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exercise any of its rights and remedies hereunder in respect thereof or under such separate
pledge agreement.
6.2 No Assumption of Liability, etc.
(a) The Security Interest granted by the Grantors herein is granted as security only and shall
not subject the Collateral Agent or any other Secured Creditor to, or in any way alter or modify,
any obligation or liability of such Grantor with respect to or arising out of, any of the Pledged
Collateral.
(b) Nothing herein shall be construed to make the Collateral Agent liable as a general partner
or limited partner of any Pledged Entity or a shareholder of any corporation, and the Collateral
Agent by virtue of this Agreement or any actions taken as contemplated hereby (except as referred
to in the following sentence) shall not have any of the duties, obligations or liabilities of a
general partner or limited partner of any Pledged Entity or a stockholder of any corporation. The
parties hereto expressly agree that, unless the Collateral Agent shall become the absolute owner of
an Equity Interest pursuant hereto, this Agreement shall not be construed as creating a partnership
or joint venture among the Collateral Agent and/or a Grantor or any other Person.
(c) Except as provided in the last sentence of Section 6.2(b), the Collateral Agent, by
accepting this Agreement, did not intend to become a general partner, limited partner or member of
any Pledged Entity or a shareholder of any corporation or otherwise be deemed to be a co-venturer
with respect to any Grantor or any Pledged Entity or a shareholder of any corporation either before
or after an Event of Default shall have occurred. The Collateral Agent shall have only those
powers set forth herein and shall assume none of the duties, obligations or liabilities of a
general partner, or limited partner or member of any Pledged Entity or of a Grantor.
6.3 Registration of Collateral in the Name of the Collateral Agent, etc. The
Collateral Agent shall have the right, at any time after the occurrence and continuation of an
Event of Default, in its discretion and without notice to any Grantor, to transfer to or to
register in the name of the Collateral Agent or any of its nominees any or all of the Pledged
Collateral, subject only to the revocable voting and similar rights specified in this Article VI.
In addition, the Collateral Agent shall have the right at any time to exchange certificates or
instruments representing or evidencing any Pledged Collateral for certificates or instruments of
smaller or larger denominations.
6.4 Appointment of Sub-agents; Endorsements, etc. The Collateral Agent shall have the
right to appoint one or more sub-agents for the purpose of retaining physical possession of the
instruments and certificates evidencing any of the Pledged Collateral, which may be held (in the
sole discretion of the Collateral Agent) in the name of the relevant Grantor, endorsed or assigned
in blank or in favor of the Collateral Agent or any nominee or nominees of the Collateral Agent or
a sub-agent appointed by the Collateral Agent.
6.5 Voting Rights. Unless and until an Event of Default shall have occurred and be
continuing, each Grantor shall be entitled to exercise all voting rights attaching to any and all
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Pledged Collateral owned by it, and to give consents, waivers or ratifications in respect
thereof, provided that no vote shall be cast or any consent, waiver or ratification given or any
action taken which would violate, result in the breach of any covenant contained in or be
inconsistent with, any of the terms of this Agreement, any other Secured Creditor Document or any
Designated Hedge Document, or which would have the effect of materially impairing the position or
interests of the Collateral Agent or any Secured Creditor therein. All such rights of such Grantor
to vote and to give consents, waivers and ratifications shall cease in case an Event of Default
shall occur and be continuing.
6.6 Entitlement of Grantors to Cash Dividends and Distributions. A Grantor shall be
entitled to receive all cash dividends or distributions payable in respect of its Pledged
Collateral, except as otherwise provided in this Article VI.
6.7 Entitlement of Collateral Agent to Dividends and Distributions. The Collateral
Agent shall be entitled to receive, and to retain as part of the Pledged Collateral:
(a) all cash dividends and distributions payable in respect of the Pledged Collateral at any
time when an Event of Default shall have occurred and be continuing; and
(b) regardless of whether or not an Event of Default shall have occurred and be continuing at
the time of payment or distribution thereof:
(i) all cash dividends and distributions in respect of the Pledged Collateral that are
reasonably determined by the Collateral Agent to represent in whole or in part an extraordinary,
liquidating or other similar distribution in return of capital to the extent not otherwise a
distribution described in Section 6.7(a);
(ii) all other or additional stock, other securities, partnership interests, membership
interests or property (other than cash to which a Grantor is entitled under Section 6.6) paid or
distributed by way of dividend (including, without limitation, any payment in kind dividend) or
otherwise in respect of the Pledged Collateral;
(iii) all other or additional stock, other securities, partnership interests, membership
interests or property (including cash) paid or distributed in respect of the Pledged Collateral by
way of stock-split, spin-off, split-up, reclassification, combination of shares or similar
rearrangement; and
(iv) all other or additional stock, other securities, partnership interests or membership
interests that may be paid in respect of the Pledged Collateral by reason of any consolidation,
merger, exchange of stock, conveyance of assets, liquidation or similar corporate, partnership or
limited liability company reorganization.
6.8 Application of Dividends and Distributions. If no Event of Default shall have
occurred and be continuing at such time, the Collateral Agent will, at the request of the Company
(on behalf of any applicable Grantor or Grantors), pay over to the Global Agent, for application to
the payment or prepayment of any of the Secured Obligations, any cash held by it as Pledged
Collateral which is attributable to dividends or distributions received by it and then held as part
of the Collateral pursuant to this Article VI. If an Event of Default shall have occurred and be
25
continuing, all dividends and distributions received by the Collateral Agent and then held by
it pursuant to this Article VI as part of the Pledged Collateral will be applied as provided in
Section 8.4.
6.9 Turnover by Grantors. All dividends, distributions or other payments that are
received by any Grantor contrary to the provisions of this Agreement shall be received in trust for
the benefit of the Collateral Agent, shall be segregated from other property or funds of such
Grantor and shall be forthwith paid over to the Collateral Agent as Collateral in the same form as
so received (with any necessary endorsement).
6.10 Registration under 1933 Act, etc. If an Event of Default shall have occurred and
be continuing and a Grantor shall have received from the Collateral Agent a written request or
requests that such Grantor cause any registration, qualification or compliance under any Federal or
state securities Law or Laws to be effected with respect to all or any part of the Pledged Equity
Interests of its Subsidiaries, such Grantor as soon as practicable and at its sole expense will use
its best efforts to cause such registration to be effected (and be kept effective) and will use its
best 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 stock,
including, without limitation, registration under the Securities Act of 1933, as then in effect
(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 any other
governmental requirements, provided that the Collateral Agent shall furnish to such Grantor such
information regarding the Collateral Agent as such Grantor may request in writing and as shall be
required in connection with any such registration, qualification or compliance. The relevant
Grantor will advise the Collateral Agent in writing as to the progress of each such registration,
qualification or compliance and as to the completion thereof, will furnish to the Collateral Agent
such number of prospectuses, offering circulars and other documents incident thereto as the
Collateral Agent from time to time may reasonably request, and will indemnify the Collateral Agent
and all others participating in the distribution of such Pledged Equity Interests against all
claims, losses, damages or 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, except insofar as the same may have been caused by an
untrue statement or omission based upon information furnished in writing to such Grantor by the
Collateral Agent expressly for use therein.
6.11 Sale of Pledged Equity Interests in Connection with Enforcement. If at any time
when the Collateral Agent shall determine to exercise its right to sell all or any part of the
Pledged Equity Interests pursuant to Section 8.1, and such Pledged Equity Interests or the part
thereof to be sold shall not, for any reason whatsoever, be effectively registered under the
Securities Act, the Collateral Agent may, in its sole and absolute discretion and to the fullest
extent permitted by applicable Law now or hereafter in effect, sell such Pledged Equity Interests
or part thereof by private sale in such manner and under such circumstances as the Collateral Agent
may deem necessary or advisable in order that such sale may legally be effected without such
registration, provided that at least 10 days’ prior notice of the time and place of any such sale
shall be given to the relevant Grantor. Without limiting the generality of the foregoing, in
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any such event the Collateral Agent, in its sole and absolute discretion, (a) may proceed to
make such private sale notwithstanding that a registration statement for the purpose of registering
such Pledged Equity Interests or part thereof shall have been filed under such Securities Act, (b)
may approach and negotiate with a single possible purchaser to effect such sale and (c) may
restrict such sale to a purchaser who will represent and agree that such purchaser is purchasing
for its own account, for investment, and not with a view to the distribution or sale of such
Pledged Equity Interests or part thereof. In the event of any such sale, the Collateral Agent
shall incur no responsibility or liability to any Grantor for selling all or any part of the
Pledged Equity Interests at a price which the Collateral Agent may in good xxxxx xxxx reasonable
under the circumstances, notwithstanding the possibility that a substantially higher price might be
realized if the sale were deferred until the registration as aforesaid.
7. SPECIAL PROVISIONS CONCERNING INTELLECTUAL PROPERTY.
7.1 Intellectual Property. Each Grantor represents and warrants that as of the
Closing Date and, thereafter, as of the most recent Reporting Date: (i) it is the true and lawful
owner of the Trademarks listed on Schedule 3.8 and that said listed Trademarks constitute
all the marks registered in the United States Patent and Trademark Office that such Grantor now
owns; (ii) it is the true and lawful owner of all rights in the Patents listed on Schedule
3.8 and said Patents constitute all the United States patents and applications for United
States patents that such Grantor now owns; and (iii) it is the true and lawful owner of all rights
in the Copyrights listed on Schedule 3.8 and said Copyrights constitute all the registered
United States copyrights that such Grantor now owns. Each Grantor further warrants that it is
aware of no third party claim that any aspect of such Grantor’s present or contemplated business
operations infringes or will infringe any Trademark, Patent or Copyright in a manner that could
reasonably be expected to have a Material Adverse Effect.
7.2 Collateral Assignments; Further Assurances. Upon request of the Collateral Agent
whenever made, any Grantor shall promptly execute and deliver to the Collateral Agent such
Collateral Assignment Agreements as the Collateral Agent shall request in connection with such
Grantor’s owned Intellectual Property. Each Grantor agrees that it will take such action, and
deliver such documents or instruments, as the Collateral Agent shall request in connection with the
preparation, filing or registration and enforcement of any Collateral Assignment Agreement.
7.3 Assignments. Each Grantor hereby agrees not to divest itself of any material
right under or with respect to any Intellectual Property or Permit material to its business other
than in the ordinary course of business, or if, in its reasonable business judgment, maintenance of
such Intellectual Property or Permit is no longer desirable in the conduct of its business or as
expressly permitted pursuant to the Credit Agreement absent prior written approval of the
Collateral Agent.
7.4 Infringements. Each Grantor agrees, promptly upon learning thereof, to notify the
Collateral Agent in writing of the name and address of, and to furnish such pertinent information
that may be available with respect to, any party who may be infringing or otherwise violating any
of such Grantor’s rights in and to any Intellectual Property and such infringement or other
violation could reasonably be expected to have a Material Adverse Effect (any such Intellectual
27
Property, “Significant Intellectual Property”), or with respect to any party claiming
that such Grantor’s use of any Significant Intellectual Property violates any property right of
that party, to the extent that such infringement or violation could reasonably be expected to have
a Material Adverse Effect. Each Grantor further agrees, unless otherwise directed by the
Collateral Agent, diligently to prosecute any Person infringing any Significant Intellectual
Property in a manner consistent with its past practice and in the ordinary course of business.
7.5 Trademarks.
(a) Preservation of Trademarks. Each Grantor agrees to use or license the use of its
owned Trademarks in interstate commerce during the time in which this Agreement is in effect,
sufficiently to preserve such Trademarks as trademarks or service marks registered under the Laws
of the United States, provided that such Grantor shall not be obligated to preserve any Trademark
in the event such Grantor determines, in its reasonable business judgment, that the preservation of
such Trademark is no longer desirable in the conduct of its business.
(b) Maintenance of Registration. Each Grantor shall, at its own expense, diligently
process all documents required by the Trademark Act of 1946, 15 U.S.C. §§ 1051, et seq. to maintain
trademark registrations with respect to Trademarks owned by it the failure of which to maintain
could reasonably be expected to have a Material Adverse Effect, including but not limited to,
affidavits of use and applications for renewals of registration in the United States Patent and
Trademark Office for all of its owned Trademarks pursuant to 15 U.S.C. §§ 1058(a), 1059 and 1065,
and shall pay all fees and disbursements in connection therewith, and shall not abandon any such
filing of affidavit of use or any such application of renewal prior to the exhaustion of all
administrative and judicial remedies without prior written consent of the Collateral Agent, which
consent shall not be unreasonably withheld or delayed, except if, in such Grantor’s reasonable
business judgment, such maintenance of such Trademark is no longer desirable in the conduct of its
business.
(c) Future Registered Trademarks. If any Trademark registration issues hereafter to a
Grantor as a result of any application now or hereafter pending before the United States Patent and
Trademark Office, then, in accordance with Section 4.8(a), such Grantor shall deliver to the
Collateral Agent an updated Schedule 3.8, and a grant of security in such Trademark or to
the Collateral Agent, confirming the grant thereof hereunder, the form of such confirmatory grant
to be substantially the same as the form hereof.
7.6 Patents.
(a) Maintenance of Patents. At its own expense, each Grantor shall make timely
payment of all post-issuance fees required pursuant to 35 U.S.C. § 41 to maintain in force rights
under each Patent except if, in its reasonable judgment, such maintenance of such Patent is no
longer desirable in the conduct of its business.
(b) Prosecution of Patent Applications. At its own expense, each Grantor shall
diligently prosecute all applications for United States patents, and shall not abandon any such
application, except in favor of a continuation application based on such application, prior to
exhaustion of all reasonable administrative and judicial remedies, absent written consent of the
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Collateral Agent, which such consent shall not be unreasonably withheld or delayed, provided
that such Grantor shall not be obligated to prosecute any application in the event such Grantor
determines, in its reasonable business judgment that the prosecuting of such application is no
longer necessary or desirable in the conduct of its business.
7.7 Other Patents and Copyrights. If any Grantor acquires title to a United States
Patent or Copyright, or files an application for a United States Patent or Copyright, such Grantor
shall deliver to the Collateral Agent an updated Schedule 3.8, in accordance with Section
4.8(a) and a grant of security as to such Patent or Copyright, as the case may be, confirming the
grant thereof hereunder, the form of such confirmatory grant to be substantially the same as the
form hereof.
7.8 Remedies Relating to Intellectual Property. If an Event of Default shall occur
and be continuing, the Collateral Agent may, by written notice to the relevant Grantor, take any or
all of the following actions: (a) declare the entire right, title and interest of such Grantor in
and to each of the owned Copyrights, Patents and Trademarks, together with all trademark rights and
rights of protection to the same, vested, in which event such rights, title and interest shall
immediately vest, in the Collateral Agent for the benefit of the Secured Creditors, in which case
such Grantor agrees to execute an assignment in form and substance reasonably satisfactory to the
Collateral Agent, of all its rights, title and interest in and to the Copyrights, Patents and
Trademarks to the Collateral Agent for the benefit of the Secured Creditors; (b) take and practice
or sell the Copyrights or Patents and take and use or sell the Trademarks owned by such Grantor and
the goodwill of such Grantor’s business symbolized by the Trademarks and the right to carry on the
business and use the assets of the Grantor in connection with which the Trademarks have been used;
and (c) direct such Grantor to refrain, in which event such Grantor shall refrain, from using the
Copyrights, Patents and Trademarks owned by such Grantor in any manner whatsoever, directly or
indirectly, and, if requested by the Collateral Agent, execute such other and further documents
that the Collateral Agent may request to further confirm the foregoing and to transfer ownership of
the Copyrights, Patents and Trademarks, and registrations, and any pending trademark application,
to the Collateral Agent for the benefit of the Secured Creditors.
8. REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
8.1 Remedies Generally; Obtaining of the Collateral. Each Grantor agrees that, if an
Event of Default shall have occurred and be continuing, then and in every such case, subject to
applicable Law then in effect, the Collateral Agent, in addition to any rights now or hereafter
existing under applicable Law, shall have all rights as a secured creditor under the UCC in all
relevant jurisdictions and may exercise any or all of the following rights (all of which each
Grantor hereby agrees is commercially reasonable to the fullest extent permitted under applicable
Law now or hereafter in effect):
(a) personally, or by agents’ attorneys or other authorized representatives, immediately take
possession of the Collateral or any part thereof, from such Grantor or any other Person who then
has possession of any part thereof with or without notice or process of law, and for that purpose
may enter upon such Grantor’s or such other Person’s premises where any of the Collateral is
located and remove the same and use in connection with such removal any and all services, supplies,
aids and other facilities of such Grantor;
29
(b) instruct the obligor or obligors on any Account, agreement, instrument or other obligation
(including, without limitation, Account Debtors) constituting the Collateral to make any payment
required by the terms of such Account, agreement, instrument or other obligation directly to the
Collateral Agent and/or directly to a lockbox under the sole dominion and control of the Collateral
Agent or to the Collateral Concentration Account;
(c) sell, assign or otherwise liquidate, or direct such Grantor to sell, assign or otherwise
liquidate, any or all of the Collateral or any part thereof, and take possession of the proceeds of
any such sale or liquidation;
(d) issue a “notice of exclusive control” with respect to any or all of the Controlled Deposit
Accounts and issue instructions with respect thereto;
(e) withdraw any or all monies, securities and/or instruments in the Collateral Concentration
Account or any Collateral Account for application to the Secured Obligations in accordance with
Section 8.4;
(f) pay and discharge taxes, Liens or claims on or against any of the Collateral;
(g) pay, perform or satisfy, or cause to be paid, performed or satisfied, for the benefit of
any Grantor, any of the obligations, terms, covenants, provisions or conditions to be paid,
observed, performed or satisfied by such Grantor under any contract, agreement or instrument
relating to its Collateral, all in accordance with the terms, covenants, provisions and conditions
thereof, as and to the extent that such Grantor fails or refuses to perform or satisfy the same;
(h) enter into any extension of, or any other agreement in any way relating to, any of the
Collateral;
(i) make any compromise or settlement the Collateral Agent deems desirable or necessary with
respect to any of the Collateral; and/or
(j) take possession of the Collateral or any part thereof, by directing such Grantor or any
other Person in possession thereof in writing to deliver the same to the Collateral Agent at any
place or places reasonably designated by the Collateral Agent, in which event such Grantor shall at
its own expense:
(i) forthwith cause the same to be moved to the place or places so designated by the
Collateral Agent and there delivered to the Collateral Agent,
(ii) store and keep any Collateral so delivered to the Collateral Agent at such place or
places pending further action by the Collateral Agent as provided in Section 8.2, and
(iii) while the Collateral shall be so stored and kept, provide such guards and maintenance
services as shall be necessary to protect the same and to preserve and maintain them in
substantially the same condition prior to such action;
30
it being understood that such Grantor’s obligation so to deliver the Collateral is of the essence
of this Agreement and that, accordingly, upon application to a court of equity having jurisdiction,
the Collateral Agent shall be entitled to a decree requiring specific performance by such Grantor
of said obligation.
8.2 Disposition of the Collateral. Upon the occurrence and continuance of an Event of
Default, any Collateral repossessed by the Collateral Agent under or pursuant to Section 8.1 and
any other Collateral whether or not so repossessed by the Collateral Agent, may be sold, assigned,
leased or otherwise disposed of under one or more contracts or as an entirety, and without the
necessity of gathering at the place of sale of the property to be sold, and in general in such
manner, at such time or times, at such place or places and on such terms as the Collateral Agent
may, in compliance with any mandatory requirements of applicable Law, determine to be commercially
reasonable. Any of the Collateral may be sold, leased or otherwise disposed of, in the condition
in which the same existed when taken by the Collateral Agent or after any overhaul or repair which
the Collateral Agent shall determine to be commercially reasonable. Except in the case of any
Collateral that is perishable or threatens to decline speedily in value or is a of a type
customarily sold on a recognized market, (a) in the case of any such disposition which shall be a
private sale or other private proceedings permitted by such requirements, such sale shall be made
upon not less than 10 days’ prior written notice to such Grantor specifying the time at which such
disposition is to be made and the intended sale price or other consideration therefor, and shall be
subject, for the 10 days after the giving of such notice, to the right of the relevant Grantor or
any nominee of the relevant Grantor to acquire the Collateral involved at a price or for such other
consideration at least equal to the intended sale price or other consideration so specified, and
(b) in the case of any such disposition which shall be a public sale permitted by such
requirements, such sale shall be made upon not less than 10 days’ prior written notice to the
relevant Grantor specifying the time and place of such sale and, in the absence of applicable
requirements of Law, shall be by public auction (which may, at the Collateral Agent’s sole option,
be subject to reserve), after publication of notice of such auction not less than 10 days prior
thereto in two newspapers in general circulation in the city where such Collateral is located. To
the extent permitted by any such requirement of Law, the Collateral Agent on behalf of the Secured
Creditors (or certain of them) may bid for and become the purchaser (by bidding in Secured
Obligations or otherwise) of the Collateral or any item thereof, offered for sale in accordance
with this Section without accountability to the relevant Grantor (except to the extent of surplus
money received as provided in Section 8.4). Unless so obligated under mandatory requirements of
applicable Law, the Collateral Agent shall not be required to make disposition of the Collateral
within a period of time which does not permit the giving of notice to the relevant Grantor as
hereinabove specified. The Collateral Agent need give the relevant Grantor only such notice of
disposition as the Collateral Agent shall deem to be reasonably practicable in view of such
mandatory requirements of applicable Law.
8.3 Waiver of Claims. Except as otherwise provided in this Agreement, EACH GRANTOR
HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION
WITH THE COLLATERAL AGENT’S TAKING POSSESSION OR THE COLLATERAL AGENT’S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT
REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH THE GRANTOR WOULD OTHERWISE HAVE UNDER
31
THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and each Grantor hereby
further waives, to the extent permitted by Law: (i) all damages occasioned by such taking of
possession except any damages which are the direct result of the Collateral Agent’s gross
negligence or willful misconduct, as determined by a final non-appealable judgment of a court of
competent jurisdiction; (ii) all other requirements as to the time, place and terms of sale or
other requirements with respect to the enforcement of the Collateral Agent’s rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay, extension or moratorium now or
hereafter in force under any applicable Law in order to prevent or delay the enforcement of this
Agreement or the absolute sale of the Collateral or any portion thereof, and each Grantor, for
itself and all who may claim under it, insofar as it or they now or hereafter lawfully may, hereby
waives the benefit of all such Laws to the fullest extent permitted by applicable Law now or
hereafter in effect. Any sale of, or the grant of options to purchase, or any other realization
upon, any Collateral shall operate to divest all right, title, interest, claim and demand, either
at law or in equity, of the relevant Grantor therein and thereto, and shall be a perpetual bar both
at law and in equity against the relevant Grantor and against any and all Persons claiming or
attempting to claim the Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under the relevant Grantor.
8.4 Application of Proceeds. All Collateral and proceeds of Collateral obtained and
realized by the Collateral Agent in connection with the enforcement of this Agreement pursuant to
this Article 8 shall be applied as set forth in the Credit Agreement.
8.5 Remedies Cumulative, etc. Each and every right, power and remedy hereby
specifically given to the Collateral Agent shall be in addition to every other right, power and
remedy specifically given under this Agreement, any Designated Hedge Agreement or the other Secured
Creditor Documents or now or hereafter existing at law or in equity, or by statute and each and
every right, power and remedy whether specifically herein given or otherwise existing may be
exercised from time to time or simultaneously and as often and in such order as may be deemed
expedient by the Collateral Agent. All such rights, powers and remedies shall be cumulative and
the exercise or the beginning of exercise of one shall not be deemed a waiver of the right to
exercise of any other or others. No delay or omission of the Collateral Agent in the exercise of
any such right, power or remedy, or partial or single exercise thereof, and no renewal or extension
of any of the Secured Obligations, shall impair or constitute a waiver of any such right, power or
remedy or shall be construed to be a waiver of any Default or Event of Default or an acquiescence
therein. No notice to or demand on any Grantor in any case shall entitle it to any other or
further notice or demand in similar or other circumstances or constitute a waiver of any of the
rights of the Collateral Agent to any other or further action in any circumstances without notice
or demand. In the event that the Collateral Agent shall bring any suit to enforce any of its
rights hereunder and shall be entitled to judgment, then in such suit the Collateral Agent may
recover reasonable expenses, including attorneys’ fees, and the amounts thereof shall be included
in such judgment.
8.6 Discontinuance of Proceedings. In case the Collateral Agent shall have instituted
any proceeding to enforce any right, power or remedy under this Agreement by foreclosure, sale,
entry or otherwise, and such proceeding shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Collateral Agent, then and in every such case the
relevant Grantor, the Collateral Agent and each holder of any of the Secured Obligations
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shall be restored to their former positions and rights hereunder with respect to the
Collateral subject to the security interest created under this Agreement, and all rights, remedies
and powers of the Collateral Agent shall continue as if no such proceeding had been instituted.
8.7 Purchasers of Collateral. Upon any sale of any of the Collateral by the
Collateral Agent hereunder (whether by virtue of the power of sale herein granted, pursuant to
judicial process or otherwise), the receipt of the Collateral Agent or the officer making the sale
shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold, and such
purchaser or purchasers shall not be obligated to see to the application of any part of the
purchase money paid over to the Collateral Agent or such officer or be answerable in any way for
the misapplication or nonapplication thereof.
9. [RESERVED]
10. MISCELLANEOUS
10.1 Notices. Except as otherwise expressly provided herein, all notices and other
communications provided for hereunder shall be in writing and delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as follows: (a) if to
the Company, as set forth, and at its address specified, in or pursuant to the Credit Agreement;
(b) if to any Grantor, to it c/o the Company as set forth, and at its address specified, in or
pursuant to the Credit Agreement; (c) if to the Collateral Agent, to it at the Notice Office; (d)
if to any Lender or any Affiliate thereof, as set forth, and at such Lender’s address specified, in
or pursuant to the Credit Agreement; and (e) if to any Designated Hedge Creditor, at such address
as such Designated Hedge Creditor shall have specified in writing to each Grantor and the
Collateral Agent; or in any case at such other address as any of the Persons listed above may
hereafter notify the others in writing. All such notices and communications shall be mailed,
telecopied, sent by overnight courier or delivered, and shall be effective when received.
10.2 Entire Agreement. This Agreement, the other Secured Creditor Documents and any
Designated Hedge Documents represent the final agreement among the parties with respect to the
subject matter hereof and thereof, supersede any and all prior agreements and understandings, oral
or written, relating to the subject matter hereof and thereof, and may not be contradicted by
evidence of prior, contemporaneous or subsequent oral agreements among the parties. There are no
unwritten oral agreements among the parties.
10.3 Obligations Absolute. The obligations of each Grantor under this Agreement shall
be absolute and unconditional and shall remain in full force and effect without regard to, and
shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance
or occurrence whatsoever, other than indefeasible payment in full of, and complete performance of,
all of the Secured Obligations, including, without limitation:
(a) any renewal, extension, amendment or modification of, or addition or supplement to or
deletion from other Secured Creditor Documents or any Designated Hedge Document, or any other
instrument or agreement referred to therein, or any assignment or transfer of any thereof;
33
(b) any waiver, consent, extension, indulgence or other action or inaction under or in respect
of any such agreement or instrument or this Agreement except as expressly provided in such renewal,
extension, amendment, modification, addition, supplement, assignment or transfer;
(c) any furnishing of any additional security to the Collateral Agent or its assignee or any
acceptance thereof or any release of any security by the Collateral Agent or its assignee;
(d) any limitation on any other Person’s liability or obligations under any such instrument or
agreement or any invalidity or unenforceability, in whole or in part, of any such instrument or
agreement or any term thereof;
(e) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to any other Grantor or any Subsidiary of a Grantor,
or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in
any such proceeding, whether or not a Grantor shall have notice or knowledge of any of the
foregoing; or
(f) to the fullest extent permitted by applicable Law now or hereafter in effect, any other
event or circumstance which, but for this provision, might release or discharge a guarantor or
other surety from its obligations as such.
10.4 Successors and Assigns. This Agreement shall be binding upon each Grantor and
its successors and assigns and shall inure to the benefit of the Collateral Agent and each other
Secured Creditor and their respective successors and assigns, provided that no Grantor may transfer
or assign any or all of its rights or obligations hereunder without the written consent of the
Collateral Agent. All agreements, statements, representations and warranties made by each Grantor
herein or in any certificate or other instrument delivered by such Grantor or on its behalf under
this Agreement shall be considered to have been relied upon by the Secured Creditors and shall
survive the execution and delivery of this Agreement, the other Secured Creditor Documents and any
Designated Hedge Document regardless of any investigation made by the Secured Creditors on their
behalf.
10.5 Headings Descriptive. The headings of the several Sections of this Agreement are
inserted for convenience only and shall not in any way affect the meaning or construction of any
provision of this Agreement.
10.6 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.7 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF OHIO WITHOUT REGARD TO ITS CONFLICT OF LAWS PRINCIPLES.
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10.8
Enforcement Expenses, etc. The Grantors hereby jointly and severally agree to
pay, to the extent not paid pursuant to Section 11.02 of the Credit Agreement, all reasonable
out-of-pocket costs and expenses of the Collateral Agent and each other Secured Creditor in
connection with the enforcement of this Agreement, the preservation of the Collateral, the
perfection of the Security Interest, and any amendment, waiver or consent relating hereto
(including, without limitation, the reasonable fees and disbursements of counsel employed by the
Collateral Agent or any of the other Secured Creditors).
10.9 Release of Portions of Collateral.
(a) So long as no Event of Default is in existence or would exist after the application of
proceeds as provided below, the Collateral Agent shall, at the request of a Grantor, release any or
all of the Collateral of such Grantor, provided that such release is permitted by the terms of the
Credit Agreement (it being agreed for such purposes that a release will be deemed “permitted by the
terms of the Credit Agreement” if (i) the proposed transaction constitutes an exception contained
in Section 7.02 of the Credit Agreement or (ii) such release is permitted by and made in accordance
with Section 2.20 of the Credit Agreement) or otherwise has been approved in writing by the
Required Lenders (or, to the extent required by Section 11.11 of the Credit Agreement, all of the
Lenders, or all of the Lenders (other than any Defaulting Lender), as applicable).
(b) At any time that a Grantor desires that the Collateral Agent take any action to give
effect to any release of Collateral pursuant to the foregoing Section 10.9(a), it shall deliver to
the Collateral Agent a certificate signed by a principal executive officer stating that the release
of the respective Collateral is permitted pursuant to Section 10.9(a). In the event that any part
of the Collateral is released as provided in Section 10.9(a), the Collateral Agent, at the request
and expense of the applicable Grantor, will duly release such Collateral and assign, transfer and
deliver to such Grantor (without recourse and without any representation or warranty) such of the
Collateral as is then being (or has been) so sold and as may be in the possession of the Collateral
Agent and has not theretofore been released pursuant to this Agreement. The Collateral Agent shall
have no liability whatsoever to any Secured Creditor as the result of any release of Collateral by
it as permitted by this Section 10.9.
10.10 Termination. This Agreement shall terminate upon the earlier to occur of (a)
the Collateral Release Date in accordance with Section 2.20 of the Credit Agreement, and (b) the
date upon which (i) the Commitments, the Credit Agreement, all other Loan Documents, and all
Designated Hedge Documents have been terminated, (ii) no Note or Letter of Credit is outstanding,
and (iii) all Loans and other Secured Obligations (other than unasserted indemnity obligations),
owing to the Lenders have been indefeasibly paid in full. Upon such termination, the Collateral
Agent, at the request and expense of the Grantors, will execute and deliver to the relevant Grantor
a proper instrument or instruments (including UCC termination statements on form UCC-3)
acknowledging the satisfaction and termination of this Agreement, and will duly assign, transfer
and deliver to the relevant Grantor (without recourse and without any representation or warranty)
such of the Collateral as may be in the possession of the Collateral Agent and as has not
theretofore been sold or otherwise applied or released pursuant to this Agreement.
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10.11 Collateral Agent. The Collateral Agent will hold in accordance with this
Agreement all items of the Collateral at any time received under this Agreement. The acceptance by
the Collateral Agent of this Agreement, with all the rights, powers, privileges and authority so
created, shall not at any time or in any event obligate the Collateral Agent to appear in or defend
any action or proceeding relating to the Collateral to which it is not a party, or to take any
action hereunder or thereunder, or to expend any money or incur any expenses or perform or
discharge any obligation, duty or liability under the Collateral. Notwithstanding anything to the
contrary contained in Section 10.17 of this Agreement or Section 11.11 of the Credit Agreement,
this Section 10.11, and the duties and obligations of the Collateral Agent set forth in this
Section 10.11, may not be amended or modified without the consent of the Collateral Agent.
10.12 Only Collateral Agent to Enforce on Behalf of Secured Creditors. The Secured
Creditors agree by their acceptance of the benefits hereof that this Agreement may be enforced on
their behalf only by the action of the Collateral Agent, acting upon the instructions of the
Required Lenders (or, after all Obligations have been paid in full, instructions of the holders of
at least 51% of the outstanding Designated Hedge Obligations) and that no other Secured Creditor
shall have any right individually to seek to enforce or to enforce this Agreement or to realize
upon the security to be granted hereby, it being understood and agreed that such rights and
remedies may be exercised by the Collateral Agent, for the benefit of the Secured Creditors, upon
the terms of this Agreement.
10.13 Other Creditors, etc. Not Third Party Beneficiaries. No creditor of any Grantor
or any of its Affiliates, or other Person claiming by, through or under any Grantor or any of its
Affiliates, other than the Collateral Agent and the other Secured Creditors, and their respective
successors and assigns, shall be a beneficiary or third party beneficiary of this Agreement or
otherwise shall derive any right or benefit here from.
10.14 Counterparts. This Agreement may be executed in any number of counterparts and
by different parties hereto on separate counterparts, including via facsimile transmission or other
electronic transmission capable of authentication, each of which when so executed and delivered
shall be an original, but all of which shall together constitute one and the same agreement. A set
of counterparts executed by all the parties hereto shall be lodged with the Company and the
Collateral Agent.
10.15 Additional Grantors. Additional Grantors may become a party to this Agreement
by execution of a Security Agreement Joinder.
10.16 Effectiveness. This Agreement shall be effective as to any Grantor upon its
execution and delivery to the Collateral Agent of a counterpart of this Agreement manually executed
on behalf of such Grantor, regardless of the date of this Agreement or the date this Agreement is
executed and delivered by any other party hereto.
10.17 Amendments and Waivers. Neither this Agreement nor any provision hereof may be
changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by (a)
the Collateral Agent and (b) the Grantor or Grantors with respect to which such change,
36
waiver, modification or variance is to apply, subject to any consent required in accordance
with Section 11.11 of the Credit Agreement.
10.18 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL
BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH GRANTOR HEREBY
AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY
COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART
OR A COPY OF THIS SECTION 10.18 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
10.19 Amendment and Restatement; No Novation. The Existing Security Agreement is
hereby amended and restated in its entirety as provided herein, and this Agreement is not intended
to constitute, nor does it constitute, an interruption, suspension of continuity, satisfaction,
discharge of prior duties, novation, or termination of the liens, security interests, indebtedness,
loans, liabilities, expenses, or obligations under the Credit Agreement or the Existing Security
Agreement. Each Grantor and the Collateral Agent acknowledge and agree that the Existing Security
Agreement has continued to secure the indebtedness, loans, liabilities, expenses, and obligations
under the Credit Agreement since the date of execution of the Existing Security Agreement; and that
this Agreement is entitled to all rights and benefits originally pertaining to the Existing
Security Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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[SIGNATURE PAGE TO AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered
by their duly authorized officers as of the date first above written.
GRANTORS: AMERICAN GREETINGS CORPORATION AGC HOLDINGS, LLC AGC, LLC A.G.C. INVESTMENTS, INC. A.G. EUROPE, INC. A.G. INDUSTRIES, INC. AG INTERACTIVE, INC. A.G. (UK), INC. AGP KIDS, INC. CARLTON CARDS RETAIL, INC. CLOUDCO, INC. CREATACARD, INC. CREATACARD INTERNATIONAL LEASING INC. CUSTOM HOLDINGS, INC. XXXXXX GREETINGS INTERNATIONAL LIMITED XXXX XXXXX (AUSTRALIA) LTD. XXXX XXXXX (N.Z.) LTD. XXXX XXXXX HOLDING CORP. MEMPHIS PROPERTY CORPORATION PAPYRUS-RECYCLED GREETINGS, INC. PLUS XXXX, INC. RPG HOLDINGS, INC. THOSE CHARACTERS FROM CLEVELAND, INC. |
||||
By: | /s/ Xxxxxxx X. Xxxxxxxxx | |||
Name: | Xxxxxxx X. Xxxxxxxxx | |||
Title: | Treasurer of each of the foregoing Grantors |
[SIGNATURE PAGE TO AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT]
AGCM, INC. MIDIRINGTONES, LLC PHOTOWORKS, INC. |
||||
By: | /s/ Xxxxxxx X. Xxxxxxxxx | |||
Name: | Xxxxxxx X. Xxxxxxxxx | |||
Title: | Assistant Treasurer | |||
COLLATERAL AGENT: PNC BANK, NATIONAL ASSOCIATION, as Collateral Agent |
||||
By: | /s/ Xxxxxxxxx X. Xxxxx | |||
Name: | Xxxxxxxxx X. Xxxxx | |||
Title: | Senior Vice President | |||