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Exhibit 4.18
EXECUTION COPY
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MASTER SECURITY AGREEMENT
by and among
SERVICE MERCHANDISE COMPANY, INC.,
a debtor and debtor-in-possession
and
THE GUARANTORS,
each a debtor and debtor-in-possession
as Grantors
and
CITICORP USA, INC.
as Administrative Agent
Dated: as of March 29, 1999
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TABLE OF CONTENTS
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SECTION 1 DEFINED TERMS
1.1 Definitions....................................................................................2
1.2 Other Definitional Provisions..................................................................8
SECTION 2 GUARANTEE
2.1 Guarantee......................................................................................8
2.2 Deferral of Subrogation........................................................................9
2.3 Amendments, etc. with Respect to the Obligations; Waiver of Rights.............................9
2.4 Guarantee Absolute and Unconditional..........................................................10
SECTION 3 GRANT OF SECURITY INTEREST
3.1 Security......................................................................................11
3.2 Perfection of Security Interests..............................................................12
3.3 Rights of Lenders; Limitations on Lenders' Obligations........................................13
3.4 Performance by the Lenders of Grantors' Obligations...........................................14
3.5 Limitation on Lenders' Duty in Respect of Collateral..........................................14
3.6 Remedies, Rights Upon Default.................................................................14
3.7 Automatic Stay................................................................................16
3.8 Administrative Agent's Appointment as Attorney-in-Fact........................................16
3.9 Super-Priority Claims.........................................................................18
SECTION 4 INVESTMENT PROPERTY
4.1 Pledge........................................................................................18
4.2 After-Acquired Pledged Securities.............................................................19
4.3 Cash Dividends; Exercise of Rights............................................................20
4.4 Rights of the Administrative Agent and the Secured Parties....................................20
4.5 Remedies and Rights Upon Event of Default.....................................................21
4.6 Registration Rights...........................................................................22
4.7 Possession of Pledged Securities..............................................................23
4.8 Cash Equivalents..............................................................................23
SECTION 5 CASH DOMINION SYSTEM; COLLATERAL ACCOUNT; DISTRIBUTIONS
5.1 Cash Dominion System..........................................................................25
5.2 The Collateral Account........................................................................26
5.3 Control of Collateral Account.................................................................26
5.4 Investment of Funds Deposited in Collateral Account...........................................27
5.5 Application of Moneys.........................................................................27
5.6 Amounts Held for Contingent Obligations.......................................................28
5.7 Administrative Agent's Calculations...........................................................29
5.8 Pro Rata Sharing..............................................................................29
SECTION 6 POSSESSION AND USE OF COLLATERAL; PARTIAL RELEASES
6.1 Use Prior to Notice of Acceleration...........................................................29
6.2 Releases......................................................................................30
6.3 Insurance and Condemnation Proceeds; Liquidating Dividends....................................30
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SECTION 7 GRANTOR REPRESENTATIONS AND WARRANTIES REGARDING COLLATERAL
7.1 Representations in Credit Agreement...........................................................31
7.2 Title; No Other Liens.........................................................................31
7.3 Perfected First Priority Liens................................................................31
7.4 Chief Executive Office........................................................................31
7.5 Inventory and Equipment.......................................................................31
7.6 Farm Products.................................................................................31
7.7 Pledged Securities............................................................................31
7.8 Intellectual Property.........................................................................32
SECTION 8 GRANTOR COVENANTS REGARDING COLLATERAL
8.1 Covenants in Credit Agreement.................................................................32
8.2 Delivery of Instruments and Chattel Paper.....................................................32
8.3 Insurance.....................................................................................33
8.4 Maintenance of Perfected Security Interest; Further Documentation.............................33
8.5 Changes in Locations, Name, etc...............................................................33
8.6 Receivables...................................................................................33
8.7 Intellectual Property.........................................................................33
8.8 Maintenance of Records........................................................................34
8.9 Further Assurances............................................................................35
SECTION 9 CERTAIN REMEDIAL PROVISIONS
9.1 Notice of Default; Notice of Acceleration.....................................................35
9.2 Right to Initiate Judicial Proceedings........................................................36
9.3 Right to Appoint a Receiver...................................................................36
9.4 Exercise of Powers; Instructions of Majority Secured Parties..................................36
9.5 Remedies Not Exclusive, Etc...................................................................37
9.6 Waiver and Estoppel...........................................................................37
9.7 Limitation on Administrative Agent's Duty in Respect of Collateral............................38
9.8 Limitation by Law.............................................................................38
9.9 Rights of Secured Parties under Secured Instruments...........................................38
9.10 Overdrafts....................................................................................39
9.11 Set-Off.......................................................................................39
SECTION 10 THE ADMINISTRATIVE AGENT
10.1 Exculpatory Provisions........................................................................39
10.2 Delegation of Duties..........................................................................40
10.3 Reliance by Administrative Agent..............................................................40
10.4 Limitations on Duties of the Administrative Agent.............................................41
10.5 Resignation and Removal of the Administrative Agent...........................................42
10.6 Merger of the Administrative Agent............................................................42
10.7 Co-Collateral Administrative Agent; Separate Administrative Agents............................42
10.8 Treatment of Payee or Indorsee by Administrative Agent; Representatives of Secured Parties....43
10.9 Indemnification...............................................................................44
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SECTION 11 MISCELLANEOUS
11.1 Amendments, Supplements and Waivers...........................................................44
11.2 Notices.......................................................................................45
11.3 No Waiver by Course of Conduct; Cumulative Remedies...........................................45
11.4 Enforcement Expenses, Indemnification.........................................................45
11.5 Successors and Assigns........................................................................45
11.6 Counterparts..................................................................................46
11.7 Severability..................................................................................46
11.8 Integration...................................................................................46
11.9 GOVERNING LAW.................................................................................46
11.10 Certain Waivers...............................................................................46
11.11 Acknowledgments...............................................................................46
11.12 Termination...................................................................................47
11.13 WAIVER OF JURY TRIAL..........................................................................47
11.14 Section Headings..............................................................................47
11.15 Conflicts.....................................................................................47
SCHEDULES:
Schedule 1 Notice Addresses
Schedule 2 Pledged Securities and Partnership Interests
Schedule 3 Uniform Commercial Code Filings
Schedule 4 Location of Offices
Schedule 5 Locations of Inventory and Equipment
Schedule 6 Intellectual Property
EXHIBITS:
Exhibit A Form of Lockbox Agreement
Exhibit B Form of Blocked Account Agreement
Exhibit C Form of Custody and Control Agreement
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MASTER SECURITY AGREEMENT
MASTER SECURITY AGREEMENT, dated as of March 29, 1999, among
SERVICE MERCHANDISE COMPANY, INC., a Tennessee corporation and a debtor and
debtor-in-possession under chapter 11 of the Bankruptcy Code (as hereinafter
defined) (the "Borrower"), the subsidiaries of the Borrower which are listed on
the signature pages hereto under the heading "Guarantors", each a debtor and
debtor-in-possession under chapter 11 of the Bankruptcy Code (the "Guarantors"
and, together with the Borrower, the "Grantors"), and CITICORP USA, INC.
("Citicorp"), as Administrative Agent (as hereinafter defined).
W I T N E S S E T H:
WHEREAS, on March 15, 1999, an involuntary petition under
chapter 11 of the Bankruptcy Code was filed against the Borrower in the United
States Bankruptcy Court for the Middle District of Tennessee; and
WHEREAS, the Board of Directors of the Borrower authorized the
Borrower to commence a voluntary chapter 11 case and on March 27, 1999 (the
"Petition Date"), the Borrower and the Guarantors filed voluntary petitions for
under chapter 11 of the Bankruptcy Code with the United States Bankruptcy Court
for the Middle District of Tennessee; and
WHEREAS, the Borrower and the Guarantors are continuing to
operate their business and manage their property as debtors and debtors in
possession under sections 1107 and 1108 of the Bankruptcy Code; and
WHEREAS, an immediate and ongoing need exists for the Borrower
and the Guarantors to obtain additional funds in order to continue the operation
of their business as debtors and debtors in possession under the Bankruptcy Code
and, accordingly, the Borrower has requested that the Lenders extend
post-petition financing; and
WHEREAS, the Lenders are willing to make funds available to
the Borrower pursuant to sections 364(c)(1), (c)(2) and (c)(3) of the Bankruptcy
Code, but only for the purposes and upon the terms and subject to the conditions
set forth in that certain Post-Petition Credit Agreement dated as of the date
hereof, by and among the Borrower, the financial institutions and other entities
from time to time party thereto (collectively, the "Lenders" and each
individually, a "Lender"), Citicorp, as collateral agent and administrative
agent for the Lenders (in such capacity, the "Administrative Agent"), and
BankBoston, N.A., as collateral monitoring agent and documentation agent for the
Lenders (as amended, modified, supplemented, extended, renewed or refinanced
from time to time, the "Credit Agreement"); and
WHEREAS the Borrower is a member of an affiliated group of
companies that includes each Guarantor, each of which is engaged in related
businesses, and each Guarantor will derive substantial direct and indirect
benefit from the making of the extensions of credit under the Credit Agreement;
and
WHEREAS, it is a condition precedent to the effectiveness of
the Credit Agreement that the Grantors and the Administrative Agent shall have
executed and delivered this Agreement;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
to induce the Lenders to make their respective extensions of credit thereunder
to the Borrower and the Issuing Banks to issue Letters of Credit thereunder,
each Grantor hereby agrees with the Administrative Agent for the ratable benefit
of the Secured Parties, as follows:
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SECTION 1 DEFINED TERMS
1.1 DEFINITIONS.
(a) Capitalized terms used herein and not otherwise defined herein
are used herein as defined in the Credit Agreement.
(b) The following capitalized terms used herein are defined herein to
have the following respective meanings:
"Administrative Agent": as defined in the fifth recital.
"Agreement": this Master Security Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
"Blocked Account Agreement": any Blocked Account Agreement entered
into among any Grantor, a Depositary Bank and the Administrative Agent (i)
pursuant to any of the Previous Credit Agreements and in effect on the
Petition Date, (ii) pursuant to any instructions delivered by the Borrower
or a Subsidiary Guarantor to a Depositary Bank pursuant to subsection 5.1
hereof, or (iii) otherwise entered into pursuant to subsection 5.1 hereof
and substantially in the form of Exhibit B to this Agreement, with such
changes as may be agreed upon by the relevant Grantor, the Administrative
Agent and the relevant Depositary Bank, in each case as the same may be
amended, modified, supplemented, extended or renewed from time to time.
"Borrower": as defined in the introductory paragraph.
"Cash Dominion System": as defined in paragraph (a) of subsection 5.1
hereof.
"Cash Proceeds": all proceeds of Collateral consisting of cash,
checks, credit card proceeds, money orders or commercial paper of any kind
whatsoever.
"Citicorp": as defined in the introductory paragraph.
"Collateral": as defined in subsection 3.1 hereof.
"Collateral Account": as defined in subsection 5.2 hereof.
"Contract": as defined in the UCC, including all leases, contracts,
undertakings or other agreements (other than Chattel Paper, Documents or
Instruments) in or under which any Grantor may now or hereafter have any
right, title or interest, including without limitation any agreement
relating to the terms of payment or the terms of performance thereof.
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"Copyrights": (i) all copyrights, in the United States or any other
country, whether registered or unregistered, or published or unpublished
(including, without limitation, those listed in Schedule 6), all
registrations and recordings thereof, and all applications in connection
therewith, including, without limitation, all registrations, recordings and
applications in the United States Copyright Office, and (ii) the right to
obtain all renewals thereof.
"Copyright Licenses": any written agreement naming any Grantor as
licensor or licensee (including, without limitation, those listed in
Schedule 6), granting any right under any Copyright, including, without
limitation, the grant of rights to manufacture, distribute, exploit and
sell materials derived from any Copyright.
"Credit Agreement": as defined in the fifth recital.
"Creditors' Committee": a committee appointed under section 1102 of
the Bankruptcy Code.
"Custody and Control Agreement": any Custody and Control Agreement
entered into among any Grantor, an Intermediary (as therein defined) and
the Administrative Agent (i) pursuant to any of the Previous Credit
Agreements and in effect on the Petition Date, (ii) pursuant to any
instructions delivered by the Borrower or a Subsidiary Guarantor to an
Intermediary pursuant to paragraph (e) of subsection 4.8 hereof, or (iii)
entered into pursuant to paragraph (e) of subsection 4.8 hereof and
substantially in the form of Exhibit C to this Agreement with such changes
as may be agreed upon by such Grantor, the Administrative Agent and the
Intermediary, in each case as the same may be amended, modified,
supplemented, extended or renewed from time to time.
"Default": a "Default" under the Credit Agreement.
"Depositary Account": as defined in paragraph (a) of subsection 5.1
hereof.
"Depositary Bank": as defined in paragraph (a) of subsection 5.1
hereof.
"Distribution Date": each date fixed by the Administrative Agent for a
distribution to the Secured Parties of funds in the Collateral Account.
"Entitlement Holder": a person identified in the records of a
Securities Intermediary as the person having a Security Entitlement against
the Securities Intermediary. If a Person acquires a Security Entitlement by
virtue of Section 8501(b)(2) or (3) of the UCC, such Person is the
Entitlement Holder.
"Event of Default": an "Event of Default" under the Credit Agreement.
"Financial Asset": as defined in the UCC, including (a) a Security,
(b) an obligation of a Person or a share, participation or other interest
in a person or in property or an enterprise of a Person, which is, or is of
a type, dealt with in or traded on financial markets, or which is
recognized in any area in which it is issued or dealt in as a medium for
investment or (c) any property that is held by a Securities Intermediary
for another Person in a Securities Account if the Securities Intermediary
has expressly agreed with the other Person that the property is to be
treated as a Financial Asset under Article 8 of the UCC. As the context
requires, the term
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Financial Asset shall mean either the interest itself or the means by which
a person's claim to it is evidenced, including a certificated or
uncertificated Security, a certificate representing a Security or a
Security Entitlement.
"Fixtures": as defined in the UCC, including all items of Equipment,
whether now owned or hereafter acquired, of any Grantor that become so
related to particular real estate that an interest in them arises under any
real estate law applicable thereto.
"General Intangibles": as defined in the UCC, including, with respect
to any Grantor, all contracts, agreements, limited partnership interests,
limited liability company interests, instruments and indentures in any
form, and portions thereof, to which such Grantor is a party or under which
such Grantor has any right, title or interest or to which such Grantor or
any property of such Grantor is subject, as the same may from time to time
be amended, supplemented or otherwise modified, including, without
limitation, (i) all rights of such Grantor to receive moneys due and to
become due to it thereunder or in connection therewith, (ii) all rights of
such Grantor to damages arising thereunder and (iii) all rights of such
Grantor to perform and to exercise all remedies thereunder, in each case to
the extent the grant by such Grantor of a security interest pursuant to
this Agreement in its right, title and interest in such contract,
agreement, instrument or indenture is not prohibited by such contract,
agreement, instrument or indenture without the consent of any other party
thereto, would not give any other party to such contract, agreement,
instrument or indenture the right to terminate its obligations thereunder,
or is permitted with consent if all necessary consents to such grant of a
security interest have been obtained from the other parties thereto (it
being understood that the foregoing shall not be deemed to obligate such
Grantor to obtain such consents), provided that the foregoing limitation
shall not affect, limit, restrict or impair the grant by such Grantor of a
security interest pursuant to this Agreement in any Receivable or any money
or other amounts due or to become due under any such contract, agreement,
instrument or indenture.
"Grantors": as defined in the introductory paragraph.
"Guarantee": the guarantee of the Guarantors pursuant to Section 2
hereof.
"Guarantors": the collective reference to each Grantor other than the
Borrower.
"Guarantor Obligations": with respect to any Guarantor, the collective
reference to (i) the Credit Agreement Obligations and (ii) all obligations
and liabilities of such Guarantor which may arise under or in connection
with this Agreement or any other Loan Document to which such Guarantor is a
party, in each case whether on account of guarantee obligations,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to
the Administrative Agent or to the Secured Parties that are required to be
paid by such Guarantor pursuant to the terms of this Agreement or any other
Loan Document.
"Guarantors": as defined in the introductory paragraph.
"Intellectual Property": the collective reference to the Copyrights,
the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks
and the Trademark Licenses.
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"Investment Property": as defined in the UCC, including all Securities
(whether certificated or uncertificated), Security Entitlements and
Securities Accounts of any Grantor, whether now owned or hereafter acquired
by any Grantor.
"Issuers": the collective reference to each issuer of a Pledged
Security or Pledged Partnership Interest.
"Lenders": as defined in the fifth recital.
"License": any Patent License, Trademark License, Copyright License or
other license or sublicense to which any Grantor is a party, including
without limitation those listed on Schedule 6.
"Lockbox Agreement": any Lockbox Agreement entered into among any
Grantor, a Depositary Bank and the Administrative Agent (i) pursuant to any
of the Previous Credit Agreements and in effect on the Petition Date, (ii)
pursuant to any instructions delivered by the Borrower or a Subsidiary
Guarantor to a Depositary Bank pursuant to subsection 5.1 hereof, or (iii)
otherwise entered into pursuant to subsection 5.1 hereof and substantially
in the form of Exhibit A to this Agreement, with such changes as may be
agreed upon by such Grantor, the Administrative Agent and the Depositary
Bank, in each case as the same may be amended, modified, supplemented,
extended or renewed from time to time.
"Notice of Acceleration": a notice delivered by the Administrative
Agent to the Borrower stating that the Administrative Agent has declared
the Loans and other amounts owing under the Credit Agreement to be due and
payable and has terminated the Commitments pursuant to Section 9 of the
Credit Agreement and stating that such notice is a "Notice of Acceleration"
for the purposes of this Agreement.
"Notice of Default": a notice delivered by the Administrative Agent to
the Borrower stating that an Event of Default has occurred and is
continuing and stating that such notice is a "Notice of Default" for the
purposes of this Agreement.
"Obligations": (i) in the case of the Borrower, the Secured
Obligations in respect of the Borrower, and (ii) in the case of each
Guarantor, the Secured Obligations in respect of such Guarantor.
"Opinion of Counsel": an opinion in writing signed by legal counsel
satisfactory to the Administrative Agent, who may, but need not, be an
employee of any of the Grantors or counsel regularly retained by the
Borrower or the Administrative Agent.
"Overdraft": at any time, the amount by which the aggregate amount
debited from any deposit, concentration, operating or disbursement account
maintained by the Borrower or any other Guarantor with any Lender or any
Affiliate of any Lender, as a result of processing of payment orders issued
by the Borrower or such Grantor or otherwise, exceeds the aggregate funds
on deposit in such account.
"Patents": (i) all letters patent of the United States or any other
country and all reissues and extensions thereof, including, without
limitation, any of the foregoing referred to in Schedule 6, (ii) all
applications for letters patent of the United States or any other country
and all divisions,
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continuations and continuations-in-part thereof, including, without
limitation, any of the foregoing referred to in Schedule 6, and (iii) all
rights to obtain any reissues or extensions of the foregoing.
"Patent License": all agreements, whether written or oral, providing
for the grant by or to any Grantor of any right to manufacture, use or sell
any invention covered in whole or in part by a Patent, including, without
limitation, any of the foregoing referred to in Schedule 6.
"Petition Date": as defined in the first recital.
"Pledged Collateral": collectively, the Pledged Debt Securities, the
Pledged Partnership Interests and the Pledged Stock.
"Pledged Debt Securities": (i) the debt securities listed opposite the
name of each Grantor on Schedule 2 and, (ii) any debt securities in the
future issued to any Grantor and the promissory notes and any other
instruments evidencing such debt securities.
"Pledged Partnership Interests": as defined in paragraph (a)(i) of
subsection 4.1 hereof.
"Pledged Securities": as defined in paragraph (a) of subsection 4.1
hereof.
"Pledged Stock": as defined in paragraph (a)(i) of subsection 4.1
hereof.
"Pre-Petition Collateral": the "Collateral" as defined in and as
granted to the Administrative Agent to secure the Pre-Petition Obligations.
"Pre-Petition Obligations": the obligations of each of the obligors
under the Previous Loan Documents.
"Previous Loan Documents": the "Loan Documents" as defined in the
Previous Credit Agreements.
"Proceeds": all "proceeds" as such term is defined in Section 9306(l)
of the Uniform Commercial Code in effect in the State of New York on the
date hereof and, in any event, shall include, without limitation, all
dividends or other income from the Pledged Collateral, collections thereon
or distributions or payments with respect thereto.
"Real Property": all of those plots, pieces or parcels of land now
owned or hereafter acquired by any Grantor (the "Land"), together with the
right, title and interest of such Grantor, if any, in and to the streets,
the land lying in the bed of any streets, roads or avenues, opened or
proposed, in front of, the air space and development rights pertaining to
the Land and the right to use such air space and development rights, all
rights of way, privileges, liberties, tenements, hereditaments and
appurtenances belonging or in any way appertaining thereto, all fixtures,
all easements now or hereafter benefiting the Land and all royalties and
rights appertaining to the use and enjoyment of the Land, including,
without limitation, all alley, vault, drainage, mineral, water, oil and gas
rights, together with all of the buildings and other improvements now or
hereafter erected on the Land, and any fixtures appurtenant thereto, and
including, without limitation, all leasehold interests of any Grantor under
any lease agreement ("Lease").
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"Receivable": any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an Instrument
or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account).
"Reorganization Cases": the collective reference to the cases of the
Grantors pursuant to chapter 11 of the Bankruptcy Code pending in the
Bankruptcy Court.
"Secured Instrument": at any time, the Credit Agreement and any other
agreement or instrument evidencing Obligations or under which Obligations
arise.
"Secured Parties": (a) the Lenders, (b) the Administrative Agent, (c)
the Collateral Monitoring Agent, (d) the Issuing Banks, (e) each
counterparty to any Derivative Agreement entered into with the Borrower if
such counterparty was a Lender at the time the Derivative Agreement was
entered into, (f) the beneficiaries of each indemnification obligation
undertaken by any Grantor under any Loan Document and (g) the successors
and assigns of each of the foregoing.
"Securities": as defined in the UCC, including any obligations of an
issuer or any shares, participations or other interests in an issuer or in
property or an enterprise of an issuer which (a) are represented by a
certificate representing a security in bearer or registered form, or the
transfer of which may be registered upon books maintained for that purpose
by or on behalf of the issuer, (b) are one of a class or series or by its
terms is divisible into a class or series of shares, participations,
interests or obligations and (c)(i) are, or are of a type, dealt with or
trade on securities exchanges or securities markets or (ii) are a medium
for investment and by their terms expressly provide that they are a
security governed by Article 8 of the UCC.
"Securities Account": as defined in paragraph (a) of subsection 4.8
hereof.
"Securities Act": as defined in paragraph (a) of subsection 4.6
hereof.
"Security Entitlements": the rights and property interests of an
Entitlement Holder with respect to a Financial Asset.
"Superior Lien": a lien that is a Lien permitted under subsection 8.3
of the Credit Agreement.
"Trademark License": any agreement, whether written or oral, providing
for the grant by or to any Grantor of any right to use any Trademark,
including, without limitation, any of the foregoing referred to in
Schedule 6.
"Trademarks": (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and all
goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State
thereof or any other country or any political subdivision thereof, or
otherwise, and all common-law rights related thereto, including, without
limitation, any of the foregoing referred to in Schedule 6, and (ii) the
right to obtain all renewals thereof.
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"Undelivered Instruments": any Instrument or Chattel Paper that has
not been delivered to the Administrative Agent.
1.2 OTHER DEFINITIONAL PROVISIONS.
(a) The words "hereof," "herein", "hereto" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. Section and
Schedule references are to this Agreement unless otherwise specified.
(b) Other terms contained in this Agreement shall have, when the
context so indicates, the meanings provided for by the UCC to the extent the
same are used or defined therein, including the following terms: Documents, Farm
Products.
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(d) Where the context requires, terms relating to the Collateral or
any part thereof, when used in relation to a Grantor, shall refer to the
Collateral in which such Grantor has an interest or the relevant part thereof.
(e) The word "including" shall mean "including, without limitation"
unless the context otherwise requires.
SECTION 2 GUARANTEE
2.1 GUARANTEE.
(a) Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Administrative Agent, for the
benefit of the Secured Parties, the prompt and complete payment and performance
by the Borrower when due (whether at the stated maturity, by acceleration or
otherwise) of the Credit Agreement Obligations.
(b) Each Guarantor further agrees to pay any and all reasonable
out-of-pocket expenses (including, without limitation, the reasonable fees and
disbursements of counsel) which may be paid or incurred by the Administrative
Agent (or, following the occurrence and during the continuance of a Default or
an Event of Default, any Lender) in connection with the enforcement or
preservation of any rights with respect to any or all of the Credit Agreement
Obligations and/or against such Guarantor under this Guarantee. This Guarantee
shall remain in full force and effect until the Loans, accrued interest thereon
and all other then accrued and unpaid Credit Agreement Obligations are paid in
full, the Commitments are terminated and no Letters of Credit are outstanding
(or all outstanding Letters of Credit are fully cash-collateralized in
accordance with the Credit Agreement), notwithstanding that from time to time
prior thereto the Borrower may be free from any of the Credit Agreement
Obligations.
(c) No payment or payments made by the Borrower, any of the
Guarantors, any other guarantor or any other Person or received or collected by
the Administrative Agent or any Lender from the Borrower, any of the Guarantors,
any other guarantor or any other Person by virtue of any action or proceeding or
any set-off or appropriation or application at any time or from time to time in
reduction
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of or in payment of the Credit Agreement Obligations shall be deemed
to modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment or payments other than
payments made by such Guarantor in respect of the Credit Agreement Obligations
or payments received or collected from such Guarantor in respect of the Credit
Agreement Obligations, remain liable for the Obligations up to the maximum
liability of such Guarantor hereunder until the Loans, accrued interest thereon
and all other then accrued and unpaid Credit Agreement Obligations are paid in
full, the Commitments are terminated and no Letters of Credit are outstanding
(or all outstanding Letters of Credit are fully cash-collateralized in
accordance with the Credit Agreement).
(d) Each Guarantor agrees that whenever, at any time, or from time to
time, it shall make any payment to the Administrative Agent or any Lender on
account of its liability hereunder, it will notify the Administrative Agent in
writing that such payment is made under this Guarantee for such purpose.
2.2 DEFERRAL OF SUBROGATION. Notwithstanding any payment or payments
made hereunder by any of the Guarantors or any set-off or application of funds
of any of the Guarantors by any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against the Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by the Administrative Agent or any Lender for
the payment of the Credit Agreement Obligations, nor shall any Guarantor seek or
be entitled to seek any contribution or reimbursement from the Borrower or any
other Guarantor in respect of payments made hereunder by such Guarantor, until
all amounts owing to the Administrative Agent and the Lenders by the Borrower on
account of the Loans, accrued interest thereon and all other then accrued and
unpaid Credit Agreement Obligations are paid in full, the Commitments are
terminated and no Letter of Credit is outstanding (or all outstanding Letters of
Credit are fully cash-collateralized in accordance with the Credit Agreement).
If, notwithstanding the foregoing, any amount shall be paid to any Guarantor on
account of such subrogation rights at any time prior thereto, such amount shall
be held by such Guarantor in trust for the Administrative Agent and the Lenders,
segregated from other funds of such Guarantor, and shall, forthwith upon receipt
by such Guarantor, be turned over to the Administrative Agent in the exact form
received by such Guarantor (duly indorsed by such Guarantor to the
Administrative Agent, if required), to be applied against the Credit Agreement
Obligations, whether matured or unmatured, in such order as the Administrative
Agent and the Lenders may determine.
2.3 AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS; WAIVER OF
RIGHTS. Each Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Guarantor and, to the extent
permitted by applicable law, without notice to or further assent by any
Guarantor, (a) any demand for payment of any of the Credit Agreement Obligations
made by the Administrative Agent or any Lender may be rescinded by such party
and any of the Credit Agreement Obligations continued, (b) the Credit Agreement
Obligations, or the liability of any other party upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Administrative Agent or any Lender, (c) the Credit Agreement, the Notes and
the other Loan Documents and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Administrative Agent (or the relevant Lenders, as the
case may be) may deem advisable from time to time, and (d) any collateral
security, guarantee or right of offset at any time held by the Administrative
Agent or any Lender for the payment of the Obligations may be sold, exchanged,
waived, surrendered or released. Neither the Administrative Agent nor any Lender
shall have any obligation to perfect or insure
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any Lien at any time held by it as security for the Credit Agreement Obligations
or for this Guarantee or any property subject thereto. When making any demand
hereunder against any of the Guarantors, the Administrative Agent or any Lender
may, but shall be under no obligation to, make a similar demand on the Borrower
or any other Guarantor or guarantor, and any failure by the Administrative Agent
or such Lender to make any such demand or to collect any payments from the
Borrower or any such other Guarantor or guarantor or any release of the Borrower
or such other Guarantor or guarantor shall not relieve any of the Guarantors in
respect of which a demand or collection is not made or any of the Guarantors not
so released of their several obligations or liabilities hereunder, and shall not
impair or affect the rights and remedies, express or implied, or as a matter of
law, of the Administrative Agent or any Lender against any of the Guarantors.
For the purposes hereof "demand" shall include the commencement and continuance
of any legal proceedings.
2.4 GUARANTEE ABSOLUTE AND UNCONDITIONAL. Each Guarantor waives, to
the extent permitted by applicable law, any and all notice of the creation,
renewal, extension or accrual of any of the Credit Agreement Obligations and
notice of or proof of reliance by the Administrative Agent or any Lender upon
this Guarantee or acceptance of this Guarantee, and the Credit Agreement
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon this Guarantee; and all dealings between the Borrower and any of the
Guarantors, on the one hand, and the Administrative Agent and the Lenders, on
the other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon this Guarantee. Each Guarantor waives to the extent
permitted by applicable law diligence, presentment, protest, demand for payment
and notice of default or nonpayment to or upon the Borrower or any of the
Guarantors with respect to the Obligations. Each Guarantor understands and
agrees that this Guarantee shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to:
(i) the validity, regularity or enforceability of (A) the Credit
Agreement, any Note or any other Loan Document, any of the Obligations as
to any other obligor on the Obligations, or any collateral security
therefor or other guarantee or right of offset with respect thereto at any
time or from time to time held by the Administrative Agent or any Lender;
(ii) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be
asserted by the Borrower or any other Loan Party against the Administrative
Agent or any Lender; or
(iii) any other circumstance whatsoever (with or without notice to or
knowledge of the Borrower or such Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrower
for the Credit Agreement Obligations, or of such Guarantor under this
Guarantee, in bankruptcy or in any other instance.
When pursuing its rights and remedies hereunder against any Guarantor, the
Administrative Agent or any Lender may, but shall be under no obligation to,
pursue such rights and remedies as it may have against the Borrower or any other
Person or against any collateral security or guarantee for the Credit Agreement
Obligations or any right of offset with respect thereto, and any failure by the
Administrative Agent or any Lender to pursue such other rights or remedies or to
collect any payments from the Borrower or any such other Person or to realize
upon any such collateral security or guarantee or to exercise any such right of
offset, or any release of the Borrower or any such other Person or any such
collateral security, guarantee or right of offset, shall not relieve such
Guarantor of any liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of the
Administrative
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Agent and the Lenders against such Guarantor. Except as otherwise set forth in
this Agreement, this Guarantee shall remain in full force and effect and be
binding in accordance with and to the extent of its terms upon each Guarantor
and the successors and assigns thereof, and shall inure to the benefit of the
Administrative Agent and the Lenders, and their respective successors,
indorsees, transferees and assigns, until all the Loans, accrued interest
thereon and all other then accrued and unpaid Credit Agreement Obligations and
the obligations of each Guarantor under this Guarantee shall have been satisfied
by payment in full and the Commitments shall have been terminated and no Letter
of Credit is outstanding (or all outstanding Letters of Credit shall have been
fully cash-collateralized in accordance with the Credit Agreement),
notwithstanding that from time to time during the term of the Credit Agreement
the Borrower may be free from any of the Credit Agreement Obligations.
SECTION 3 GRANT OF SECURITY INTEREST
3.1 SECURITY.
(a) To induce the Lenders to make the Loans and to incur obligations
with respect to Letters of Credit, each Grantor hereby (i) reaffirms the
validity, perfection and first priority of the Liens previously granted to the
Administrative Agent and the Lenders in the Pre-Petition Collateral under the
Previous Loan Documents and (ii) grants to the Administrative Agent, for the
benefit of the Secured Parties, to secure the due and punctual performance and
payment of each of the Obligations, howsoever created, arising or evidenced,
whether direct, indirect, absolute or contingent, now or hereafter existing or
due or to become due, in accordance with the terms thereof, a continuing first
priority lien and security interest (subject only to Permitted Expenses and
Superior Liens), in accordance with sections 364(c)(2) and (3) of the Bankruptcy
Code, in and to all of the property and assets of such Grantor and its estates,
real and personal, tangible and intangible, whether now owned or existing or
hereafter acquired or arising and regardless of where located (hereinafter
referred to as the "Collateral"), including but not limited to:
(i) all Accounts of such Grantor;
(ii) all Chattel Paper of such Grantor;
(iii) all Contracts of such Grantor;
(iv) all Documents of such Grantor;
(v) all Equipment of such Grantor;
(vi) all Fixtures of such Grantor;
(vii) all General Intangibles of such Grantor;
(viii) all Instruments of such Grantor;
(ix) all Intellectual Property of such Grantor;
(x) all Inventory of such Grantor;
(xi) all Investment Property of such Grantor;
(xii) all Leases to which such Grantor is a party;
(xiii) all Licenses of such Grantor;
(xiv) all Real Property owned by such Grantor;
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(xv) all Receivables owned by such Grantor;
(xvi) all causes of action of such Grantor;
(xvii) each Depositary Account and Collateral Account in which such
Grantor has an interest;
(xviii) all other goods, real and personal property of such Grantor,
whether tangible or intangible and whether now owned or hereafter acquired
and wherever located;
(xix) to the extent not otherwise included, all monies and other
property of any kind and nature recovered by such Grantor in accordance
with the provisions of the Bankruptcy Code, including, without limitation,
sections 542, 553, 544, 547 and 548 thereof, or other applicable law;
(xx) to the extent not otherwise included, all monies and other
property of any kind which, after the Petition Date, is received by such
Grantor in connection with any refund with respect to taxes, assessments
and governmental charges imposed on such Grantor or any of its property or
income; and
(xxi) to the extent not otherwise included, all Proceeds of each of
the foregoing and all accessions to, substitutions and replacements for,
and rents, profits and products of each of the foregoing.
(b) As further adequate protection for the use by the Grantors of
Pre-Petition Collateral and for any diminution in the value of the interest of
the Lenders in the Pre-Petition Collateral, the Administrative Agent for the
benefit of the Lenders under the Previous Credit Agreements is hereby granted,
under sections 361 and 364 of the Bankruptcy Code, a valid, binding, enforceable
and perfected security interest in and lien on the Collateral subject and
subordinate only to (i) the lien and security interest granted to the
Administrative Agent for the benefit of the Lenders under this Agreement and the
other Loan Documents securing the Obligations, (ii) Permitted Expenses and (iii)
Superior Liens. The lien and security interest granted hereunder to the
Administrative Agent for the benefit of the Lenders under the Previous Credit
Agreements shall not be subject and subordinate to any security interest or lien
that is avoided and preserved for the benefit of the estates of the Grantors
under section 551 of the Bankruptcy Code or, except as set forth in clauses (i),
(ii) and (iii) above, be made on a parity with, or subordinated to, any other
Lien under section 364(d) of the Bankruptcy Code or otherwise.
3.2 PERFECTION OF SECURITY INTERESTS.
(a) The liens and security interests granted herein shall be deemed
valid, enforceable and perfected by entry of the Emergency Order and the
Permanent Order, as the case may be. No financing statement, notice of lien or
similar instrument in any jurisdiction or filing office need be filed or any
other action taken in order to validate or perfect the liens and security
interests granted by or pursuant to this Agreement, the Emergency Order or the
Permanent Order.
(b) The liens and security interests, lien priority, administrative
priorities and other rights and remedies granted to the Administrative Agent for
the benefit of the Secured Parties pursuant to this Agreement, the Emergency
Order and/or the Permanent Order (specifically including but not limited to the
existence, perfection and priority of the Liens and security interests provided
herein and the administrative priority provided herein) shall not be modified,
altered or impaired in any manner by any other financing or extension of credit
or incurrence of debt by the Grantors (pursuant to section 364 of the Bankruptcy
Code or otherwise), or by any dismissal or conversion of the Reorganization
Cases, or by any
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other act or omission whatever. Without limitation, notwithstanding any such
other financing, extension, incurrence, dismissal, conversion, act or omission:
(i) except for the Permitted Expenses having priority over the
Obligations, no costs or expenses of administration which have been or may
be incurred in the Reorganization Cases or any conversion of the same or in
any other proceedings related thereto, and no priority claims, are or will
be prior to or on a parity with any claim of the Administrative Agent or
the Lenders against the Grantors in respect of any Obligation;
(ii) the liens and security interests set forth in subsection 3.1
hereof shall constitute valid and perfected first priority liens and
security interests, subject only to the Permitted Expenses and Superior
Liens, and shall be prior to all other liens and security interests, other
than the Permitted Expenses and Superior Liens, now existing or hereafter
arising, in favor of any other creditor or any other Person whatever; and
(iii) the liens and security interests granted hereunder shall
continue valid and perfected without the necessity that financing
statements be filed or that any other action be taken under applicable
nonbankruptcy law.
3.3 RIGHTS OF LENDERS; LIMITATIONS ON LENDERS' OBLIGATIONS.
(a) Subject to Grantors' rights and duties under the Bankruptcy Code,
it is expressly agreed by the Grantors that, anything herein to the contrary
notwithstanding, each Grantor shall remain liable under each of its Contracts to
observe and perform all the conditions and obligations to be observed and
performed by it thereunder. Neither the Administrative Agent nor any of the
Lenders shall have any obligation or liability under any Contract by reason of
or arising out of this Agreement, the other Loan Documents, the Previous Loan
Documents or the granting to the Administrative Agent for the benefit of the
Lenders of a Lien therein or the receipt by the Administrative Agent or the
Lenders of any payment relating to any Contract pursuant hereto, nor shall the
Administrative Agent or any of the Lenders be required or obligated in any
manner to perform or fulfill any of the obligations of any Grantor under or
pursuant to any Contract, or to make any payment, or to make any inquiry as to
the nature or the sufficiency of any payment received by it or the sufficiency
of any performance by any party under any Contract, or to present or file any
claim, or to take any action to collect or enforce any performance or the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
(b) The Administrative Agent may at any time, upon the occurrence and
during the continuation of any Event of Default, after first complying with
subsection 3.7, notify Account Debtors, parties to the Contracts of the
Grantors, obligors of Instruments of the Grantors and obligors in respect of
Chattel Paper of the Grantors that the right, title and interest of the Grantors
in and under such Accounts, such Contracts, such Instruments and such Chattel
Paper have been assigned to the Administrative Agent for the benefit of the
Lenders and that payments shall be made directly to the Administrative Agent.
Upon the request of the Administrative Agent, the Grantors will so notify such
Account Debtors, such parties to Contracts, obligors of such Instruments and
obligors in respect of such Chattel Paper. During the continuation of an Event
of Default, the Administrative Agent may in its own name or in the name of
others communicate with such parties to such Accounts, such Contracts, such
Instruments and such Chattel Paper to verify with such Persons to Administrative
Agent's satisfaction the existence, amount and terms of any such Accounts,
Contracts, Instruments or Chattel Paper.
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(c) The Administrative Agent shall have the right to make test
verifications of the Accounts and physical verifications of the Inventory in any
manner and through any medium that it considers advisable, and the Grantors
agree to furnish all such assistance and information as the Administrative Agent
may require in connection therewith. The Grantors, at their expense, will cause
certified independent public accountants satisfactory to the Administrative
Agent to prepare and deliver to the Administrative Agent at any time and from
time to time, promptly upon the Administrative Agent's request, the following
reports: a reconciliation of all Accounts of the Grantors, an aging of all
Accounts of the Grantors, trial balances and a test verification of such
Accounts as the Administrative Agent may request. The Grantors, at their
expense, will cause certified independent public accountants satisfactory to the
Administrative Agent to prepare and deliver to the Administrative Agent the
results of the annual physical verification of their Inventory made or observed
by such accountants.
(d) To the extent required by the Credit Agreement, the Grantors will
keep and maintain the Equipment in good operating condition sufficient for the
continuation of the business conducted by the Grantors on a basis consistent
with past practices and the Grantors will provide all maintenance and service
and all repairs necessary for such purpose.
3.4 PERFORMANCE BY THE LENDERS OF GRANTORS' OBLIGATIONS. If the
Grantors fail to perform or comply with any of their agreements contained herein
and the Administrative Agent, as provided for by the terms of this Agreement,
shall perform or comply, or otherwise cause performance or compliance, with such
agreements, the reasonable expenses of the Administrative Agent incurred in
connection with such performance or compliance, together with interest thereon
at the rate then in effect in respect of the Revolving Loans, shall be payable
by the Grantors to the Administrative Agent on demand and shall constitute
Obligations secured by the Collateral. Performance of the Grantors' obligations
as permitted under this subsection 3.4 shall in no way constitute a violation of
the automatic stay provided by section 362 of the Bankruptcy Code and the
Grantors hereby waive applicability thereof. Moreover, neither the
Administrative Agent nor any of the Lenders shall in any way be responsible for
the payment of any costs incurred in connection with preserving or disposing of
Collateral pursuant to section 506(c) of the Bankruptcy Code and the Collateral
may not be charged for the incurrence of any such cost.
3.5 LIMITATION ON LENDERS' DUTY IN RESPECT OF COLLATERAL. Neither the
Administrative Agent nor any of the Lenders shall have any duty as to any
Collateral in its possession or control or in the possession or control of any
of its agents or nominees of or any income thereon or as to the preservation of
rights against prior parties or any other rights pertaining thereto, except that
the Administrative Agent and the Lenders shall use reasonable care with respect
to the Collateral in their possession or under their control. Upon request of
the Grantors, the Administrative Agent and the Lenders shall account for any
moneys received by them in respect of any foreclosure on or disposition of the
Collateral.
3.6 REMEDIES, RIGHTS UPON DEFAULT.
(a) If any Event of Default shall occur and be continuing, the
Administrative Agent may, and on the direction of the Majority Lenders will,
exercise in addition to all other rights and remedies granted to it in this
Agreement and in any other Loan Document, all rights and remedies of a secured
party under the UCC and other applicable law, subject in each case to compliance
with subsection 3.7. Without limiting the generality of the foregoing, each
Grantor expressly agrees that in
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any such event the Administrative Agent, without demand of performance or other
demand, advertisement or notice of any kind (except the notice specified below
of time and place of public or private sale and the notice provided in
subsection 3.7 hereof) to or upon such Grantor or any other Person (all and each
of which demands, advertisements and/or notices are hereby expressly waived to
the maximum extent permitted by the UCC or other applicable law), may forthwith
collect, receive, appropriate and realize upon the Collateral, or any part
thereof, and/or may forthwith sell, lease, assign, give an option or options to
purchase, or sell or otherwise dispose of and deliver the Collateral (or
contract to do so), or any part thereof, in one or more parcels at public or
private sale or sales, at any exchange or broker's board or at any of the
Administrative Agent's offices or elsewhere at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk. The Administrative Agent shall have the right upon any such public sale or
sales, and, to the extent permitted by law, upon any such private sale or sales,
to purchase the whole or any part of said Collateral so sold, free of any right
or equity of redemption, which equity of redemption the Grantors hereby release.
The Grantors further agree, at the Administrative Agent's request, to assemble
the Collateral and make it available at places which the Administrative Agent
shall reasonably select, whether at the Grantors' premises or elsewhere. The
Administrative Agent shall apply the proceeds of any such collection, recovery,
receipt, appropriation, realization or sale (net of all expenses incurred by the
Administrative Agent and the Lenders in connection therewith, including, without
limitation, attorney's fees), first to the Obligations in any order deemed
appropriate by the Administrative Agent and then to the Pre-Petition
Obligations, the Grantors remaining liable for any deficiency remaining unpaid
after such application, and only after so paying over such net proceeds and
after the payment by the Administrative Agent of any other amount required by
any provision of law, including Section 9504(1)(c) of the UCC, need the
Administrative Agent account for the surplus, if any, to the Grantors. To the
maximum extent permitted by applicable law, each Grantor waives all claims,
damages, and demands against the Administrative Agent and the Lenders arising
out of the repossession, retention or sale of the Collateral except such as
arise out of the gross negligence or willful misconduct of the Administrative
Agent or the Lenders. As provided in the Emergency Order and the Permanent Order
(as applicable), each Grantor agrees that the Administrative Agent and the
Lenders need not give more than five days' notice (which notification shall be
deemed given when mailed or delivered on an overnight basis, postage prepaid,
addressed to such Grantor as provided in subsection 11.2 hereof) of the time and
place of any public sale or of the time after which a private sale may take
place and that such notice is reasonable notification of such matters. The
Grantors shall remain liable for any deficiency if the proceeds of any sale or
disposition of the Collateral are insufficient to pay all Obligations and
Pre-Petition Obligations. The Grantors are also liable for the reasonable fees
of any attorneys employed by the Administrative Agent and the Lenders to collect
such deficiency.
(b) In addition to the rights granted to the Administrative Agent and
the Lenders under paragraph (a) of this subsection 3.6, if any Event of Default
shall occur and be continuing, the Administrative Agent may transfer and
register in its name or in the name of its nominee the whole or any part of the
Pledged Collateral, exercise the voting rights with respect thereto, collect and
receive all cash dividends and other distributions made thereon and otherwise
act with respect to the Pledged Collateral as though the Lenders were the
outright owner thereof, provided, that the Administrative Agent shall not have
any duty to exercise any such right or to preserve the same and shall not be
liable for any failure to do so or for any delay in doing so.
(c) Each Grantor agrees to pay all reasonable costs of the
Administrative Agent and the Lenders, including, without limitation, attorneys'
fees, incurred in connection with the enforcement of
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any of their rights and remedies hereunder to the same extent as the Borrower is
so obligated pursuant to subsection 11.5 of the Credit Agreement.
(d) Except for any presentments, demands, protests and notices
otherwise specifically provided for herein, each Grantor hereby waives
presentment, demand, protest or any notice (to the maximum extent permitted by
applicable law) of any kind in connection with this Agreement or any Collateral.
In no event shall prior recourse to any Collateral be a prerequisite to the
Administrative Agent's right to demand payment of any of the Obligations or the
Pre-Petition Obligations.
3.7 AUTOMATIC STAY. During the continuance of an Event of Default,
upon five days' notice to the Borrower, any Creditors' Committee and the United
States Trustee from the Administrative Agent to the effect that the
Administrative Agent and the Lenders intend to exercise any and all of their
rights under the Loan Documents, the automatic stay provided under section 362
of the Bankruptcy Code shall be deemed automatically vacated to permit the
Administrative Agent and the Lenders immediately to take any remedial action
permitted under this Agreement, the other Loan Documents, the Bankruptcy Code,
the UCC or other applicable law with respect to the Collateral or otherwise;
provided, that no such notice shall be required for the actions described in
subsection 9.1 hereof, each of which actions may be undertaken without such
notice.
3.8 ADMINISTRATIVE AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT.
(a) Each of the Grantors hereby irrevocably constitutes and appoints
the Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, from time to time in the Administrative Agent's
discretion, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute and deliver any and all documents
and instruments which may be necessary and desirable to accomplish the purposes
of this Agreement and the transactions contemplated hereby and, without limiting
the generality of the foregoing, hereby gives the Administrative Agent the power
and right, on behalf of such Grantor, without notice to or assent by any of the
Grantors to do the following:
(i) to ask, demand, collect, receive and give acquittances and
receipts for any and all moneys due and to become due under any Collateral
and, in the name of such Grantor or its own name or otherwise, to take
possession of and endorse and collect any checks, drafts, notes,
acceptances or other Instruments for the payment of moneys due under any
Collateral and to file any claim or to take any other action or proceeding
in any court of law or equity or otherwise deemed appropriate by the
Administrative Agent for the purpose of collecting any and all such moneys
due under any Collateral whenever payable and to file any claim or to take
any other action or proceeding in any court of law or equity or otherwise
deemed appropriate by the Administrative Agent for the purpose of
collecting any and all such moneys due under any Collateral whenever
payable;
(ii) to pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened against the Collateral, to
effect any repairs or any insurance called for by the terms of this
Agreement and to pay all or any part of the premiums therefor and the costs
thereof; and
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(iii) (A) to direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due, and to become due
thereunder, directly to the Administrative Agent or as the Administrative
Agent shall direct; (B) to receive payment of and receipt for any and all
moneys, claims and other amounts due, and to become due at any time, in
respect of or arising out of any Collateral; (C) to sign and indorse any
invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications and notices in
connection with accounts and other documents constituting or relating to
any of the Collateral; (D) to commence and prosecute any suits, actions or
proceedings at law or equity in any court of competent jurisdiction to
collect the Collateral or any part thereof and to enforce any other right
in respect of any Collateral; (E) to defend any suit, action or proceeding
brought against such Grantor with respect to any Collateral; (F) to settle,
compromise or adjust any suit, action or proceeding described above and, in
connection therewith, to give such discharges or releases as the
Administrative Agent may deem appropriate; (G) to license or, to the extent
permitted by an applicable license, sublicense, whether general, special or
otherwise, and whether on an exclusive or non-exclusive basis, any
Trademark, throughout the world for such term or terms, on such conditions,
and in such manner, as the Administrative Agent shall in its sole
discretion determine; and (H) generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral as
fully and completely as though the Administrative Agent were the absolute
owner thereof for all purposes, and to do, at the Administrative Agent's
option and the Grantors' expense, at any time, or from time to time, all
acts and things which the Administrative Agent reasonably deems necessary
to protect, preserve or realize upon the Collateral and the Administrative
Agent's liens and security interests therein in order to effect the intent
of this Agreement, all as fully and effectively as such Grantor might do.
(b) The Administrative Agent agrees that, except as otherwise provided
in this Agreement, it will forbear from exercising the power of attorney or any
rights granted to the Administrative Agent pursuant to this subsection 3.8
except upon the occurrence and during the continuation of an Event of Default
and after compliance with subsection 3.7. The Grantors hereby ratify, to the
extent permitted by law, all that said attorneys shall lawfully do or cause to
be done by virtue hereof. Subject to compliance with subsection 3.7, exercise by
the Administrative Agent or any Lender of the powers granted hereunder is not a
violation of the automatic stay provided in section 362 of the Bankruptcy Code
and the Grantors waive applicability thereof. The power of attorney granted
pursuant to this subsection 3.8 is a power coupled with an interest and shall be
irrevocable until the Obligations are indefeasibly paid in full.
(c) The powers conferred on the Administrative Agent hereunder are
solely to protect the Administrative Agent's and the Lenders' interests in the
Collateral and shall not impose any duty upon it or them to exercise any such
powers. The Administrative Agent shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers and neither it nor
the Lenders nor any of their respective officers, directors, employees or agents
shall be responsible to the Grantors for any act or failure to act, except for
their own gross negligence or willful misconduct.
(d) The Grantors also authorize the Administrative Agent, at any time
and from time to time upon the occurrence and during the continuation of any
Event of Default or as otherwise expressly permitted by this Agreement and
subject to compliance with subsection 3.7, (i) to communicate in its own name
with any party to any Contract with regard to the assignment of the right, title
and interest of the
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Grantors in and under the Contracts hereunder and other matters relating thereto
and (ii) to execute any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral.
3.9 SUPER-PRIORITY CLAIMS. The Loans, the Obligations with respect to
Letters of Credit and all other Obligations shall constitute, in accordance with
section 364(c)(1) of the Bankruptcy Code, claims against each of the Grantors in
their respective Reorganization Cases which are administrative expense claims
having priority over any and all administrative expenses of the kind specified
in sections 503(b) or 507(b) of the Bankruptcy Code, except for Permitted
Expenses.
SECTION 4 INVESTMENT PROPERTY
4.1 PLEDGE.
(a) Without limiting any of the provisions of subsection 3.1 hereof,
to secure the due and punctual payment of all of the Obligations, howsoever
created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing or due or to become due, in accordance
with the terms thereof, each Grantor hereby pledges to the Administrative Agent
for the benefit of the Secured Parties, and hereby grants to the Administrative
Agent for the benefit of the Secured Parties a security interest in, all of such
Grantor's right, title and interest in and to the following:
(i) the shares of capital stock and partnership interests set forth on
Schedule 2 hereto and other shares of capital stock and partnership
interests pledged hereunder from time to time hereafter pursuant to
paragraph (d) of subsection 4.2 hereof (all such shares being herein
collectively called the "Pledged Stock"; and all of such partnership
interests being herein collectively called the "Pledged Partnership
Interests");
(ii) all Investment Securities;
(iii) all Cash Equivalents (including any Permitted Book-Entry
Securities) and all funds held or on deposit from time to time in any
Securities Accounts(as defined below); and
(iv) all Proceeds, except as provided for in subsection 4.3 hereof,
of any and all of the foregoing items described in clauses (i) through
(iii) above.
The items described in clauses (i) through (iv) above are herein collectively
called the "Pledged Securities."
(b) Each Grantor hereby delivers or causes to be delivered to the
Administrative Agent the stock certificates representing the Pledged Stock
pledged by it as set forth on Schedule 2, together with related undated stock
powers duly executed in blank. Each Grantor agrees to deliver or cause to be
delivered to the Administrative Agent related undated stock powers or bond
powers, as appropriate, duly executed in blank for the Pledged Securities (other
than checks, Permitted Book Entry Securities, any Pledged Securities in a
Securities Account and any Excepted Cash Equivalents (as defined below)) pledged
by it hereunder from time to time hereafter.
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4.2 AFTER-ACQUIRED PLEDGED SECURITIES.
(a) If, after the date hereof, any Grantor shall become entitled to
receive or shall receive any Investment Securities, such Grantor agrees to
accept the same as the Administrative Agent's agent and to hold the same in
trust on behalf of and for the benefit of the Administrative Agent and to
deliver the same (except for Investment Securities not required to be delivered
pursuant to paragraph (c) of subsection 7.11 of the Credit Agreement) forthwith
to the Administrative Agent in the exact form received, with the appropriate
undated powers as provided in paragraph (b) of subsection 4.1 hereof, to be held
by the Administrative Agent as Pledged Securities, subject to the terms of this
Agreement, as additional collateral security for the Obligations.
(b) If, while this Agreement is in effect, any Grantor shall become
entitled to receive or shall receive any stock certificate (including any
certificate representing a stock dividend or a distribution in connection with
any reclassification, increase or reduction of capital, or issued in connection
with any reorganization), or any instrument, certificate or other writing
representing or constituting an option or right to acquire securities, whether
as an addition to, in substitution of, or in exchange for, any shares of any
Pledged Stock (other than shares of stock or instruments or other property of
third parties delivered to such Grantor as collateral for the obligations of
such third parties), such Grantor agrees to accept the same as the
Administrative Agent's agent and to hold the same in trust on behalf of and for
the benefit of the Administrative Agent and to deliver the same forthwith to the
Administrative Agent in the exact form received, with appropriate undated powers
as provided in paragraph (b) of subsection 4.1 hereof, to be held by the
Administrative Agent as Pledged Securities, subject to the terms of this
Agreement, as additional collateral security for the Obligations, and the same
shall constitute "Pledged Stock" for all purposes of this Agreement.
(c) If, while this Agreement is in effect, any Grantor shall become
entitled to receive any note, bond, debenture, instrument, stock certificate or
any instrument, certificate or other writing representing or constituting an
option or right to acquire securities (other than any of the foregoing
constituting property of third parties which is delivered to such Grantor as
collateral for the obligations of such third parties), whether as an addition
to, in substitution of or in exchange for any Investment Securities, or in
payment of the principal of any Investment Securities, such Grantor agrees to
accept the same on behalf of and for the benefit of the Administrative Agent and
to deliver the same (except for Investment Securities not required to be
delivered pursuant to paragraph (c) of subsection 7.11 of the Credit Agreement)
forthwith to the Administrative Agent in the exact form received, with
appropriate undated powers as provided in paragraph (b) of subsection 4.1
hereof, to be held by the Administrative Agent as Pledged Securities, subject to
the terms of this Agreement, as additional collateral security for the
Obligations, and the same shall constitute "Investment Securities" for all
purposes of this Agreement.
(d) If, after the Effective Date, any Grantor shall be required to
pledge the shares of a Subsidiary which have not previously been pledged
hereunder, such Grantor shall pledge such shares to the Administrative Agent and
shall deliver to the Administrative Agent stock certificates representing all of
such shares of capital stock of such Subsidiary, together with appropriate
undated powers as provided in paragraph (b) of subsection 4.1 hereof, to be held
by the Administrative Agent as Pledged Securities, subject to the terms of this
Agreement, as additional collateral security for the Obligations.
(e) Notwithstanding anything to the contrary herein, no Grantor shall
be required to pledge (i) any stock or other equity securities issued by any
Person if the stock of such Person does not constitute Pledged Stock on the
Effective Date (except to the extent required by the Credit Agreement) or
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if in respect of a Foreign Subsidiary or Foreign Holding Company, the aggregate
portion of stock of such Person that is Pledged Stock would exceed 65% of the
outstanding Capital Stock of such Person or (ii) any note, debenture, bond or
other instrument delivered to any Grantor by any Subsidiary that is not a Loan
Party evidencing indebtedness of such Subsidiary to such Grantor.
(f) Notwithstanding anything to the contrary contained herein or in
the Credit Agreement, the Grantors shall not be required to pledge any Excepted
Cash Equivalents and may utilize such Excepted Cash Equivalents in accordance
with the terms of the Credit Agreement.
4.3 CASH DIVIDENDS; EXERCISE OF RIGHTS.
(a) Unless a Notice of Acceleration is in effect, each Grantor shall
be entitled, except as provided in subsection 4.5 or 4.8 hereof, to receive all
distributions (including dividends and interest payments) in respect of the
Pledged Securities (as long as such distributions are promptly transferred to
the Administrative Agent for deposit in the Collateral Account pursuant to
subsection 5.2 hereof) and to vote the Pledged Securities and to exercise any
and all rights and options included in the Pledged Securities and to give
consents, waivers and ratifications in respect of the Pledged Securities,
provided that (i) no vote shall be cast or consent, waiver or ratification given
or action taken which would materially impair the value of the Pledged
Securities or be inconsistent with or violate any provision of this Agreement
and (ii) all cash distributions shall be immediately deposited into the
Collateral Account or one or more Depositary Accounts in accordance with this
Agreement.
(b) In order to permit each Grantor to exercise the powers of voting
and/or consent retained by such Grantor under paragraph (a) of subsection 4.3
hereof, the Administrative Agent shall, if necessary, upon the written request
of such Grantor, from time to time execute and deliver to such Grantor
appropriate proxies. The Administrative Agent shall have no responsibilities for
the manner in which any such proxy is exercised. In order to permit the
Administrative Agent to receive all distributions to which it is entitled under
this Agreement, each Grantor shall, if necessary, from time to time execute and
deliver to the Administrative Agent, upon its request, appropriate dividend or
payment orders. If any Grantor shall not have executed and delivered any such
dividend or payment order within three Business Days after it receives a written
request from the Administrative Agent to do so, the Administrative Agent may
execute the same on behalf of such Grantor . Each Grantor hereby appoints the
Administrative Agent as its agent and attorney to act for it as provided in the
preceding sentence.
4.4 RIGHTS OF THE ADMINISTRATIVE AGENT AND THE SECURED PARTIES. While
a Notice of Acceleration is in effect, without notice except as provided in
subsection 3.7 hereof, the Administrative Agent may transfer or register or have
registered in the name of the Administrative Agent or its nominee any and all of
the Pledged Securities which are in registerable form. If a Notice of
Acceleration is in effect and the Administrative Agent has complied with the
provision of subsection 3.7, the Administrative Agent or its nominee may
thereafter, after delivery of notice to the relevant Grantor, exercise all
voting and corporate rights at any meeting of any corporation or other entity
issuing any of the Pledged Securities and any and all rights of conversion,
exchange, subscription or any other rights, privileges or options pertaining to
any shares of the Pledged Securities as if it were the absolute owner thereof,
including the rights to exchange at its discretion any and all of the Pledged
Securities upon the merger, consolidation, reorganization, recapitalization or
other readjustment of any corporation or other entity issuing any of such shares
or upon the exercise by any such issuer or the Administrative Agent or any
right, privilege or option pertaining to any of the Pledged Securities, and in
connection therewith, to deposit and deliver any and all of the Pledged
Securities with any committee, depositary, transfer agent,
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registrar or other designated agency upon such terms and conditions as it may
determine, all without liability except to account for property actually
received by it, but the Administrative Agent shall have no duty to exercise and
neither the Administrative Agent nor any Secured Party shall have any duty to
request the exercise of any of the aforesaid rights, privileges or options, and
neither the Administrative Agent nor any Secured Party shall be responsible for
any failure to do so or delay in so doing.
4.5 REMEDIES AND RIGHTS UPON EVENT OF DEFAULT.
(a) As long as a Notice of Default is in effect, the Administrative
Agent may at any time, without notice to any Grantor except as provided in
subsection 3.7 hereof, notify Persons whose obligations to any Grantor have been
assigned hereunder that such obligations have been assigned to the
Administrative Agent and that payments thereunder or in respect thereof shall be
made directly to the Administrative Agent. If requested by the Administrative
Agent the relevant Grantor will (at such Grantor's own expense) so notify such
Persons. The Administrative Agent may in its own name or in the name of others
communicate with such Persons.
(b) As long as a Notice of Acceleration is in effect:
(i) All payments received by any Grantor under or in connection with
any of the Pledged Securities shall be held by such Grantor in trust for
the Administrative Agent, shall be segregated from other funds of such
Grantor and shall, forthwith upon receipt by such Grantor, be turned over
to the Administrative Agent, in the same form as received by such Grantor
(duly indorsed to the Administrative Agent, if required) for deposit in the
Collateral Account.
(ii) Any and all such payments so received by the Administrative Agent
(whether from any Grantor or otherwise) shall be deposited by the
Administrative Agent in the Collateral Account and shall be held by the
Administrative Agent as part of the Collateral. Any Proceeds which are
Pledged Securities, when collected, whether consisting of checks, notes,
drafts, bills of exchange, money orders, or commercial paper of any kind
whatsoever shall be held or deposited in the Collateral Account and held as
part of the Collateral subject to withdrawal or application as provided in
this Agreement.
(c) If a Notice of Acceleration is in effect, the Administrative Agent
may exercise, in addition to all other rights and remedies granted to it in this
Agreement, all rights and remedies of a secured party under the UCC, subject in
each case to compliance with subsection 3.7. Without limiting the generality of
the foregoing, each Grantor expressly agrees that in any such event the
Administrative Agent, without demand of performance or other demand,
advertisement or notice of any kind (except the notice specified below of time
and place of public or private sale and as provided in subsection 3.7 hereof) to
or upon any Grantor or any other Person (all and each of which demands,
advertisements and/or notices are hereby expressly waived), may forthwith
collect, receive, appropriate and realize upon the Pledged Securities, or any
part thereof, and/or may forthwith sell, assign, give option or options to
purchase, or sell or otherwise dispose of and deliver said Pledged Securities
(or contract to do so), or any part thereof, in one or more parcels at public or
private sale or sales, at any exchange, broker's board or at any of the
Administrative Agent's offices or elsewhere at such prices as they may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. The Administrative Agent or any Secured Party shall have the right
upon any such public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the Pledged
Securities so sold, free of any right or equity of redemption in any Grantor,
which right or equity is hereby expressly waived
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and released. The Administrative Agent shall deposit the net proceeds of any
such collection, recovery, receipt, appropriation, realization or sale in the
Collateral Account. To the extent permitted by applicable law, each Grantor
waives all claims, damages and demands against the Agents or any other Secured
Party arising out of the repossession, retention or sale of the Pledged
Securities. Each Grantor agrees that the Administrative Agent need not give any
notice of any sale on a recognized public market or give more than 10 Business
Days' notice (which notification shall be deemed given when mailed, postage
prepaid, addressed to such Grantor at its address determined pursuant to
subsection 11.2 hereof) specifying the time and place of any other public sale
or of the time after which a private sale may take place and that such notice is
reasonable notification of such matters.
4.6 REGISTRATION RIGHTS.
(a) If the Administrative Agent shall reasonably determine to exercise
its right to sell any or all of the Pledged Securities (other than Investment
Securities) pursuant to subsection 4.5 hereof, and if in the opinion of counsel
for the Administrative Agent it is necessary, or if in the reasonable opinion of
the Administrative Agent under applicable law it is advisable, to have the
Pledged Securities or that portion thereof to be sold, registered under the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the "Securities Act"), each relevant Grantor
will use its best efforts to cause the issuers of the Pledged Securities
contemplated to be sold, to execute and deliver, and cause the directors and
officers of each thereof to execute and deliver, all at such Grantor 's expense,
all such instruments and documents, and to do or cause to be done all such other
acts and things as may be reasonably necessary or, in the opinion of the
Administrative Agent, advisable to register the Pledged Securities or that
portion thereof to be sold, under the provisions of the Securities Act and to
cause the registration statement relating thereto to become effective and to
remain effective for such period as the Administrative Agent may reasonably deem
appropriate to facilitate the sale or other disposition of such Pledged
Securities from the date of the first public offering of the Pledged Securities
or that portion thereof to be sold, and to make all amendments thereto and/or to
the related prospectus which, in the opinion of the Administrative Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act. Each relevant Grantor agrees to use its best efforts to cause
each such issuer to comply with the provisions of the securities or "Blue Sky"
laws of any jurisdiction which the Administrative Agent shall designate and to
cause each such issuer to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited) which will
satisfy the provisions of Section 11(a) of the Securities Act.
(b) Each Grantor recognizes that the Administrative Agent may be
unable to effect a public sale of any or all the Pledged Securities by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws, but may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers who will be obliged to agree, among
other things, to acquire such securities for their own account for investment
and not with a view to the distribution or resale thereof. Each Grantor
acknowledges and agrees that any such private sale may result in prices and
other terms less favorable to the seller than if such sale were a public sale
and, notwithstanding such circumstances, agrees that any such private sale shall
not for such reason alone be deemed to have been made in a commercially
unreasonable manner. Neither the Administrative Agent nor any of the Secured
Parties shall be under any obligation to delay a sale of any of the Pledged
Securities for the period of time necessary to permit the issuer of such
securities to register such securities for public sale under the Securities Act,
or under applicable state securities laws, even if the issuer would agree to do
so.
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(c) Each Grantor further agrees to use its best efforts to do or cause
to be done all such other acts and things as may be reasonably necessary to make
such sale or resales of any portion or all of the Pledged Securities valid and
binding and in compliance with any and all applicable laws, regulations, orders,
writs, injunctions, decrees or awards of any and all courts, arbitrators or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or resales, all at such Grantor's expense.
(d) If the Administrative Agent determines to exercise its right to
sell all or any of the Pledged Securities, upon written request, each Grantor
shall from time to time furnish to the Administrative Agent all such information
as the Administrative Agent may reasonably request in order to determine the
Pledged Securities which may be sold by such Grantor as exempt transactions
under the Securities Act.
(e) At the request of the Administrative Agent, each Grantor agrees to
indemnify and hold harmless, and each relevant Grantor agrees to use its best
efforts to cause the issuer or issuers whose stock or securities are to be sold
pursuant to subsection 4.5 hereof to agree to indemnify and hold harmless, the
Administrative Agent and each Secured Party (and any Person controlling any
thereof) from and against any loss, liability, claim, damage and reasonable
expense (and reasonable counsel fees incurred in connection therewith) under the
Securities Act or otherwise insofar as such loss, liability, claim, damage or
expense arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in any registration statement, prospectus
or offering memorandum or in any preliminary prospectus or preliminary offering
memorandum or any amendment or supplement to any thereof, or arises out of or is
based upon any omission or alleged omission to state therein a material fact
required to be stated or necessary to make the statements therein not
misleading, such indemnification to remain operative regardless of any
investigation made by or on behalf of the Administrative Agent or any Secured
Party (or any Person controlling any thereof), provided that such Grantor and
any such issuer shall not be liable in any case to the extent that any such
loss, liability, claim, damage or expense arises out of or is based on an untrue
statement or alleged untrue statement or an omission or an alleged omission made
by, or in reliance upon and in conformity with written information furnished by,
the Administrative Agent, any Secured Party or any other Person not under the
control of such Grantor.
4.7 POSSESSION OF PLEDGED SECURITIES. The Administrative Agent shall
be entitled to hold in its possession or under its control all Pledged
Securities pledged, assigned or transferred hereunder and from time to time
constituting a portion of the Collateral, except for any documents or
instruments which from time to time are certified by the relevant Grantor to be
required for recordation or for the purpose of enforcing or realizing upon any
right or value thereby represented or for the purpose of substituting new
Pledged Securities evidencing Pledged Securities then in possession of the
Administrative Agent or as may be required in the administration of a Grantor's
business in the ordinary course (subject to such requirements as the
Administrative Agent or any custodian shall reasonably request) and except as
otherwise permitted by the Credit Agreement or this Agreement. The
Administrative Agent may, from time to time, in its sole discretion, appoint one
or more agents or nominees (which in no case shall be a Grantor or an affiliate,
employee or agent of a Grantor ) to hold physical custody, for the account of
the Administrative Agent, of any or all Pledged Securities.
4.8 CASH EQUIVALENTS.
(a) The Administrative Agent shall establish, in the Administrative
Agent's name, one or more accounts (individually, a "Securities Account") which
may be maintained with the
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Administrative Agent or any agent thereof in accordance with paragraph (e) of
this subsection 4.8 and in each of which the Administrative Agent shall have a
perfected first priority security interest. As long as no Notice of Acceleration
is in effect and except as otherwise permitted by the Credit Agreement or this
Agreement, all Pledged Securities which are Cash Equivalents (other than
Excepted Cash Equivalents) shall be held by the Administrative Agent or a
custodian or other agent of the Administrative Agent in a Securities Account
subject to release upon request by the relevant Grantor strictly in accordance
with paragraph (c) of this subsection 4.8. As long as a Notice of Acceleration
is in effect, the Administrative Agent may transfer or cause to be transferred
for deposit in the Collateral Account all Cash Equivalents and all funds in the
Securities Accounts, subject to compliance with subsection 3.7.
(b) Unless a Notice of Acceleration is in effect, the purchase, sale
or presentation for payment of Cash Equivalents in a Securities Account, the
receipt by any Grantor of the proceeds of the sale or collection thereof and any
interest paid thereon and the release upon request by any Grantor of funds or
Cash Equivalents on deposit therein shall all occur as provided in this
paragraph (b) and in paragraph (c) of this subsection 4.8. To initiate the
purchase of Cash Equivalents with funds from time to time on deposit in a
Securities Account under the control of the Administrative Agent or a custodian
or other agent of the Administrative Agent, the relevant Grantor will instruct
the Administrative Agent or such custodian or agent, as the case may be, as to
the particulars of such purchase. The Administrative Agent or such custodian or
agent will make arrangements (either directly or through one or more agents) for
the purchase of such Cash Equivalents, including the payment of the purchase
price thereof in accordance with such instructions. Except as otherwise
permitted by the Credit Agreement, all Cash Equivalents (other than Permitted
Book-Entry Securities and, at the Borrower's option, Excepted Cash Equivalents)
purchased by the Administrative Agent or such custodian or agent, as the case
may be, as aforesaid (and all securities (other than Permitted Book-Entry
Securities and, at the Borrower's option, Excepted Cash Equivalents) subject to,
together with all confirmations relating to, repurchase agreements) will be
delivered to (or, in the case of eurodollar deposits, made in the name of) the
Administrative Agent or such custodian or agent and, subject to the following
sentence, held in the Securities Accounts. To initiate the sale or presentation
for payment of Cash Equivalents, the relevant Grantor will instruct the
Administrative Agent or such custodian or agent as to the particulars of such
sale or presentation, whereupon the Administrative Agent or such custodian or
agent will make arrangements (either directly or through the appropriate agents)
for the sale or presentation of such Cash Equivalents in accordance with such
instructions. Funds received by the Administrative Agent or such custodian or
agent on the sale or collection of Cash Equivalents (including interest payable
in respect thereof) which are not released pursuant to a request by a Grantor in
accordance with paragraph(c) of this subsection 4.8 shall be reinvested by the
Administrative Agent or such custodian or agent in Cash Equivalents in
accordance with the instructions of the relevant Grantor. While a Notice of
Acceleration is in effect, no Grantor shall have the right to give instructions
to the Administrative Agent or such custodian or agent pursuant to this
paragraph(b). Instructions to the Administrative Agent or such custodian or
agent pursuant to this paragraph(b) may be given in writing, by facsimile, by
computer transmission or orally (confirmed in writing).
(c) As long as no Notice of Acceleration is in effect, each Grantor
may obtain the release of funds in any Securities Account for transfer to the
Administrative Agent for deposit in the Collateral Account on the same terms and
conditions as apply to the release of funds from the Collateral Account and, for
this purpose, such funds on deposit in the Securities Account shall be deemed to
be on deposit in the Collateral Account, it being understood that each request
by such Grantor for such a release of funds shall be made to the Administrative
Agent.
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(d) Any written or oral request or instructions by any Grantor
pursuant to paragraph (b) or (c) of this subsection 4.8 shall be full authority
for the Administrative Agent or applicable custodian or agent of the
Administrative Agent to make the requested release or investment, as the case
may be.
(e) The Administrative Agent shall from time to time appoint, as its
agent or agents, one or more Persons (which in no case shall be a Grantor or an
affiliate, employee or agent of a Grantor ) designated by a Grantor and
reasonably acceptable to the Administrative Agent, located in New York (or such
other jurisdictions within the United States (other than Florida) as may be
designated by a Grantor ) with whom a Securities Account shall be established
and maintained. Prior to establishing such a Securities Account, the Person so
appointed shall deliver to the Administrative Agent a Custody and Control
Agreement acknowledging that (i) in opening such Securities Accounts and holding
Cash Equivalents therein, such Person is acting as agent of the Administrative
Agent and will conduct transactions in Cash Equivalents in such account in the
name of the Administrative Agent (with any confirmations of such transactions
sent by such Person to reflect that fact) and (ii) such Person shall in no event
deliver any Cash Equivalents (other than Excepted Cash Equivalents) held in such
Securities Account to any Grantor or any affiliate, employee or agent of any
Grantor . The provisions of clause (ii) of this paragraph (e) shall also apply
to any Securities Account maintained with the Administrative Agent.
(f) Upon the sale or disposition of any Cash Equivalents pursuant to
this Section other than a transfer thereof to the Collateral Account, the
Administrative Agent's security interest therein (but not in the Proceeds
arising from such sale or disposition) shall, without any further action on the
part of the Administrative Agent, be released.
SECTION 5 CASH DOMINION SYSTEM; COLLATERAL ACCOUNT; DISTRIBUTIONS
5.1 CASH DOMINION SYSTEM.
(a) Each Grantor has established a system of depositary accounts
(together with accounts opened from time to time pursuant to paragraph (b) below
of this subsection 5.1 ("Depositary Accounts") into which each such Grantor
promptly deposits or causes to be deposited (and shall continue promptly to
deposit or cause to be deposited) all Cash Proceeds received by it or any other
Person on its behalf, other than Cash Proceeds in a Securities Account, pursuant
to which such funds are remitted promptly to the Administrative Agent for
deposit in the Collateral Account referred to in subsection 5.2 hereof (the
"Cash Dominion System"). The Grantor represent that Schedule 5.23 to the Credit
Agreement contains a true and complete list of all depositary accounts
maintained by any Grantor with any bank or financial institution as of the
Closing Date into which Cash Proceeds are currently deposited (collectively, the
"Depositary Banks"). Each Grantor further agrees that (x) all amounts received
by it from any Credit Card Subsidiary (whether as a dividend, loan or otherwise)
shall be deposited directly into a Depositary Account and (y) it shall (and
shall cause the relevant Credit Card Subsidiary to) execute and deliver such
notices and agreements as the Administrative Agent may reasonably require (and
which, in the case of the Credit Card Subsidiaries, do not violate the terms of
the relevant Credit Card Program) with respect to such amounts. Each Grantor
shall, within 30 days after the entry of the Emergency Order, deliver to each
Depositary Bank instructions reasonably satisfactory to the Administrative Agent
(i) informing each such Depositary Bank of the Reorganization Cases and (ii)
informing each such Depositary Bank of the Bankruptcy Court's directing that all
of the Grantors' cash continue to be sent to the Administrative Agent pursuant
to the existing arrangements.
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(b) Subject to paragraph (f) below of this subsection 5.1, each
Grantor agrees that it shall not open or maintain a bank or similar account into
which Cash Proceeds are deposited unless the relevant Depositary Bank and such
Grantor shall have executed and delivered a Blocked Account Agreement or Lockbox
Agreement, as appropriate, with respect to such Depositary Account.
(c) Each Grantor agrees that it has instructed and will continue to
instruct all Account Debtors in respect of Accounts owed to such Grantor to make
payments in respect of such Accounts to one or more Depositary Accounts to be
subject to the Blocked Account Agreements or Lockbox Agreements executed and
delivered pursuant to paragraph (a) or (b) above of this subsection 5.1
(d) Without prejudice to paragraph (a), (b) or (c) above or paragraph
(f) below, whether or not an Event of Default has occurred, each Grantor agrees
that any Cash Proceeds (including Cash Proceeds received in payment of any
Account or in payment for any Inventory or otherwise but excluding any Cash
Proceeds in a Securities Account) that are not deposited directly into a
Depositary Account, when collected by such Grantor, shall be promptly deposited
by such Grantor in a Depositary Account, in precisely the form received, except
for its endorsement when required, and until so turned over, shall be deemed to
be held in trust by such Grantor for and as the Administrative Agent's property,
and shall be held separately from such Grantor's other funds.
(e) The Administrative Agent shall credit to the Collateral Account
the proceeds of Depositary Accounts which have been received through the Cash
Dominion System, which amounts shall then be applied in accordance with
subsection 5.5 hereof.
(f) Notwithstanding anything to the contrary contained herein or in
any other Loan Document: (i) cash and Cash Equivalents of up to $15,000,000 at
any one time outstanding (including cash at stores) and cash in transit in the
ordinary course of business, (ii) cash consisting of cash in the Consignment
Inventory Account and (iii) cash which is subject to a Lien or deposit
arrangement permitted under paragraph (s) of subsection 8.3 of the Credit
Agreement shall not be required to be subject to the Cash Dominion System.
5.2 THE COLLATERAL ACCOUNT. On the Effective Date there shall be
established and, at all times thereafter until repayment in full of all the
Obligations, there shall be maintained with the Administrative Agent at the
office of the Administrative Agent located in New York an account which shall be
entitled the "Citicorp USA, Inc. - as Administrative Agent: Service Merchandise
Company, Inc., debtor and debtor-in-possession - Collateral Account" (the
"Collateral Account"). All moneys which are required by this Agreement or any
other Security Document to be delivered to the Administrative Agent or which are
received by the Administrative Agent or any agent or nominee of the
Administrative Agent in respect of the Collateral, including without limitation
in connection with the exercise of the remedies provided in this Agreement or
any Security Document, shall be deposited in the Collateral Account and applied
in accordance with the terms of this Agreement.
5.3 CONTROL OF COLLATERAL ACCOUNT. All right, title and interest in
and to the Collateral Account shall be vested in the Administrative Agent. Funds
on deposit in the Collateral Account shall be under the sole dominion and
control of the Administrative Agent. The Grantors' rights to payments from the
Collateral Account are part of the Collateral.
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5.4 INVESTMENT OF FUNDS DEPOSITED IN COLLATERAL ACCOUNT. The
Administrative Agent shall invest and reinvest moneys on deposit in the
Collateral Account at any time in any of the following:
(i) marketable obligations of the United States having a maturity of
not more than three months from the date of acquisition;
(ii) marketable obligations directly and fully guaranteed by the
United States having a maturity of not more than three months from the date
of acquisition;
(iii) bankers' acceptances and certificates of deposit and other
interest-bearing obligations issued by Citibank N.A., or any bank organized
under the laws of the United States or any state thereof with capital,
surplus and undivided profits aggregating at least $125,000,000, in each
case having a maturity of not more than three months from the date of
acquisition;
(iv) repurchase obligations with a term of not more than one day for
underlying securities of the types described in clauses (i), (ii) and (iii)
above entered into with Citibank N.A., or any bank meeting the
qualifications specified in clause (iii) above; and
(v) commercial paper (except commercial paper issued by the Borrower
or its affiliates) rated at least A-1 or P-1 by at least one nationally
recognized rating organization and maturing within three months after the
date of acquisition;
provided, that the aggregate amount invested in obligations of the types
described in clauses (iii), (iv) and (v) above of any one issuer shall not
exceed $50,000,000 at any time and provided, further, that, unless a Notice of
Acceleration is in effect, the Administrative Agent shall not make any such
investment except at the direction of the Borrower. All such investments and the
interest and income received thereon and the net proceeds realized on the sale
or redemption thereof shall be held in the Collateral Account as part of the
Collateral and shall be under the sole dominion and control of the
Administrative Agent.
5.5 APPLICATION OF MONEYS.
(a) Unless a Notice of Acceleration is in effect, all money held by
the Administrative Agent in the Collateral Account shall be applied or disbursed
as set forth in paragraph (d) of subsection 4.1 of the Credit Agreement.
(b) While a Notice of Acceleration is in effect, all moneys held by
the Administrative Agent in the Collateral Account or received by the
Administrative Agent shall, to the extent available for distribution (it being
understood that the Administrative Agent may, subject to compliance with
subsection 3.7, liquidate investments prior to maturity in order to make a
distribution pursuant to this subsection 5.5), be distributed by the
Administrative Agent on each Distribution Date in the following order of
priority:
First: to the payment of all unpaid fees and expenses of the Agents
payable under this Agreement, the Credit Agreement or any other Loan
Document;
Second: subject to subsection 5.6 hereof, to the Secured Parties in an
amount equal to (i) the unpaid principal amount of, and unpaid interest on,
and premium or fees, if any, in respect of, the Obligations then
outstanding whether or not then due and payable, including the aggregate
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undrawn amounts available to be drawn (assuming compliance with all
conditions to drawing) under all bonds, guarantees, letters of credit,
acceptances, insurance, reimbursement and indemnity agreements or similar
obligations with respect to which the Borrower is obligated to reimburse
the issuer thereof for any drawings thereunder, (ii) the aggregate
estimated amount of payment liabilities of the Borrower under Derivative
Agreements assuming immediate termination of all such agreements and (iii)
the outstanding amount of any Overdrafts; and, if such moneys shall be
insufficient to pay the amounts specified in clauses (i), (ii) and (iii) in
full, then ratably (without priority of any one over any other) to the
Secured Parties in proportion to the unpaid amounts thereof on such
Distribution Date;
Third: to the Secured Parties, amounts equal to all other sums which
constitute Obligations, including the costs and expenses of the Secured
Parties and their representatives which are due and payable under the
relevant Secured Instruments and which constitute Obligations as of such
Distribution Date, and, if such moneys shall be insufficient to pay such
sums in full, then ratably to the Secured Parties in proportion to such
sums; and
Fourth: any surplus then remaining shall be paid to the Grantors or
their successors or assigns or to whomsoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may direct.
(c) The term "unpaid" as used in clause Second of paragraph (b) of
this subsection 5.5 refers to all amounts allowed by the Bankruptcy Court in
respect of Obligations as a basis for distribution (including estimated amounts,
if any, allowed in respect of contingent claims), to the extent that prior
distributions (whether actually distributed or set aside pursuant to subsection
5.6 hereof) have not been made in respect thereof.
(d) The Administrative Agent shall make all payments and distributions
under this subsection 5.5: on account of Credit Agreement Obligations in
accordance with the provisions of the Credit Agreement, on account of any other
Obligation (other than Overdrafts), to the relevant Secured Party based on the
information supplied to the Administrative Agent by the Borrower pursuant to
paragraph (a) of subsection 9.1 hereof, and on account of Overdrafts, to the
relevant Lender based on information supplied to the Administrative Agent by
such Lender.
5.6 AMOUNTS HELD FOR CONTINGENT OBLIGATIONS. In the event any Secured
Party shall be entitled to receive any moneys pursuant to clause Second of
paragraph (b) of subsection 5.5 hereof in respect of the unliquidated unmatured
or contingent portion of the outstanding Obligations (including obligations
under then outstanding letters of credit, guarantees and termination liabilities
with respect to Derivative Agreements and obligations which are not determinable
or are unmatured), then the Administrative Agent shall invest such moneys in
obligations of the kinds referred to in clauses (i) and (ii) of subsection 5.4
hereof maturing within three months after they are acquired by the
Administrative Agent and shall hold all such amounts so distributable, and all
such investments and the net proceeds thereof, solely for such Secured Party and
for no other purpose until (i) such Secured Party shall have notified the
Administrative Agent that all or part of such unliquidated, unmatured or
contingent claim shall have become matured or fixed, in which case the
Administrative Agent shall distribute from such investments and the proceeds
thereof an amount equal to such matured or fixed claim to such Secured Party for
application to the payment of such matured or fixed claim, and shall promptly
give notice thereof to the Borrower or (ii) all or part of such unliquidated
unmatured or contingent claim shall have been extinguished, whether as the
result of an expiration without drawing of any letter of credit, payment
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of amounts secured or covered by any letter of credit other than by drawing
thereunder, payment of amounts covered by any guarantee or otherwise, in which
case (x) such Secured Party shall, as soon as practicable thereafter, notify the
Borrower and the Administrative Agent and (y) such investments, and the proceeds
thereof, shall be held in the Collateral Account, in trust for all Secured
Parties pending application in accordance with the provisions of subsection 5.5
hereof.
5.7 ADMINISTRATIVE AGENT'S CALCULATIONS. In making the determinations
and allocations required by subsection 5.5 hereof, the Administrative Agent may
conclusively rely upon information supplied by the holder of any Obligation or
the Borrower as to the amounts payable with respect to any Obligation, and the
Administrative Agent shall have no liability to any of the Secured Parties for
actions taken in reliance on any such information, provided that nothing in this
sentence shall prevent any Grantor from contesting in good faith, subject to the
terms of the relevant Secured Instrument, any amount claimed by any Secured
Party in any information so supplied. All distributions made by the
Administrative Agent pursuant to subsection 5.5 hereof shall be (subject to any
decree of any court of competent jurisdiction) final (absent manifest error),
and the Administrative Agent shall have no duty to inquire as to the application
by any Person of any amounts distributed to it.
5.8 PRO RATA SHARING. If, in connection with or as a result of the
Reorganization Cases or otherwise, the Administrative Agent's security interest
hereunder and under the Security Documents is enforced with respect to some, but
not all, of the Obligations then outstanding, the Administrative Agent shall
nonetheless apply the proceeds of the Collateral for the benefit of the holders
of all Obligations in the proportions and subject to the priorities specified
herein. To the extent that the Administrative Agent distributes Proceeds
collected with respect to Obligations held by one holder to or on behalf of
Obligations held by a second holder, the first holder shall be deemed to have
purchased a participation in the Obligations held by the second holder, or shall
be subrogated to the rights of the second holder to receive any subsequent
payments and distributions made with respect to the portion thereof paid or to
be paid by the application of such Proceeds.
SECTION 6 POSSESSION AND USE OF COLLATERAL; PARTIAL RELEASES
6.1 USE PRIOR TO NOTICE OF ACCELERATION.
(a) As long as no Notice of Acceleration is in effect, the Grantors
shall have the right: (i) to remain in possession and retain exclusive control
of the Collateral (except the Pledged Securities and the Collateral Account and
except as otherwise provided in subsection 5.1 hereof) with power freely and
without hindrance on the part of the Administrative Agent or the Secured Parties
to operate, manage, develop, use, apply, liquidate and enjoy the Collateral and
to receive and use the rents, issues, tolls, profits, royalties, revenues and
other income thereof; (ii) to sell or otherwise dispose of, free and clear of
the lien and security interest created by the Security Documents, or encumber
any Collateral if such sale or other disposition is not prohibited by the Credit
Agreement or has been expressly approved in accordance with the terms of the
Credit Agreement or if any Person is legally empowered to take any Collateral
under the power of condemnation or eminent domain; and (iii) to require the
release of any Lien created pursuant to the Security Documents in connection
with a transaction permitted under paragraphs (k) or (q) of subsection 8.3 of
the Credit Agreement. The Administrative Agent shall have no duty to monitor the
exercise by the Grantors of their rights under this subsection 6.1.
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(b) Cash Proceeds received by the Administrative Agent or any Grantor
in connection with the sale or other disposition of Collateral shall be
deposited in the Collateral Account. Any such Proceeds received by any Grantor
shall be held by such Grantor in trust for the Administrative Agent, shall be
segregated from other funds of such Grantor and shall, forthwith upon receipt by
such Grantor, be turned over to the Administrative Agent, in the same form as
received by such Grantor (duly indorsed to the Administrative Agent, if
required) for deposit in the Collateral Account.
6.2 RELEASES.
(a) Releases of Collateral which is sold or otherwise disposed of as
permitted by paragraph (c) of subsection 4.8 hereof or by subsection 6.1 hereof,
and releases, consents and subordinations pursuant to subsection 6.1 hereof
shall be automatic and shall not require any affirmative action on the part of
the Administrative Agent. Nevertheless, any Grantor may request that the
Administrative Agent execute and deliver to it or any purchaser, transferee or
assignee of Collateral or any such real property, or other affected party, a
written consent, release, discharge, disclaimer, quitclaim or subordination, as
applicable, in recordable form if necessary, of the Administrative Agent's
interest in any Collateral under the Security Documents, and such purchaser,
transferee, assignee or other affected party shall be entitled to rely
conclusively on such consent, release, discharge, disclaimer, quitclaim or
subordination. Such request shall be in writing, shall describe the subject
property in reasonable detail, and, except in the case of releases of funds
pursuant to paragraph (c) of subsection 4.8 hereof, shall state that such action
is or will be in accordance with the Credit Agreement. Promptly following any
such request, the Administrative Agent shall execute such requested documents,
provided that the transaction giving rise to such request is permitted by
subsection 6.1 hereof.
(b) If any Collateral which is being sold or otherwise disposed of
pursuant to this Section 6 is in the possession of the Administrative Agent or
any agent or nominee thereof, the Administrative Agent or such agent or nominee
shall promptly (and in any event within two Business Days after the request
therefor) release such Collateral to the relevant Grantor in connection with
such sale or disposition.
(c) The notices, statements, directions and certificates requested
under or required by this subsection 6.2 shall be full authority for the
Administrative Agent to execute and deliver the releases, disclaimers,
quitclaims and other instruments referred to in this subsection 6.2. The
Administrative Agent in so doing shall have no liability to any Person.
6.3 INSURANCE AND CONDEMNATION PROCEEDS; LIQUIDATING DIVIDENDS. Any
insurance proceeds in respect of any Collateral, any Proceeds from the exercise
of rights of eminent domain or condemnation in respect of any Collateral and any
liquidating dividends paid in respect of Pledged Stock received by any of the
Grantors or the Administrative Agent shall be deposited in the Collateral
Account to be held therein and applied in accordance with Section 5. If for any
reason any Grantor shall receive or hold any insurance proceeds, condemnation
proceeds or liquidating dividends that are required to be held by the
Administrative Agent pursuant to this subsection 6.3, such Grantor shall hold
such proceeds or dividends in trust for the Administrative Agent and the Secured
Parties and shall, as promptly as practicable, deliver such proceeds or
dividends to the Administrative Agent to be held in the Collateral Account and
applied in accordance with Section 5.
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SECTION 7 GRANTOR REPRESENTATIONS AND WARRANTIES REGARDING COLLATERAL
To induce the Administrative Agent and the other Secured Parties to
enter into the Credit Agreement and to induce the Lenders to make their
respective extensions of credit thereunder to the Borrower, each Grantor hereby
represents and warrants to the Administrative Agent and each other Secured Party
that:
7.1 REPRESENTATIONS IN CREDIT AGREEMENT. In the case of each Grantor,
the representations and warranties set forth in Section 5 of the Credit
Agreement as they relate to such Grantor or to the Loan Documents to which such
Grantor is a party, each of which is hereby incorporated herein by reference,
are true and correct, and the Administrative Agent and each Secured Party shall
be entitled to rely on each of them as if they were fully set forth herein,
provided that each reference in each such representation and warranty to the
Borrower's knowledge shall, for the purposes of this subsection 7.1, be deemed
to be reference to such Grantor's knowledge.
7.2 TITLE; NO OTHER LIENS. Except for the security interest granted to
the Administrative Agent for the ratable benefit of the Secured Parties pursuant
to this Agreement, the Permitted Expenses and the Superior Liens, such Grantor
owns each item of the Collateral free and clear of any and all Liens or claims
of others. No effective financing statement or other public notice with respect
to all or any part of the Collateral is on file or of record in any public
office, except such as have been filed (i) in favor of the Administrative Agent,
for the benefit of the Secured Parties pursuant to this Agreement or (ii)
pursuant to the Superior Liens.
7.3 PERFECTED FIRST PRIORITY LIENS. The security interests granted
pursuant to this Agreement are prior to all other Liens on the Collateral in
existence on the date hereof except for Permitted Expenses and Superior Liens.
7.4 CHIEF EXECUTIVE OFFICE. On the date hereof, each Grantor's
jurisdiction of organization and the location of such Grantor's chief executive
office is specified on Schedule 4.
7.5 INVENTORY AND EQUIPMENT. On the date hereof, each Grantor's
Inventory and Equipment (other than mobile goods) are kept at the locations
listed on Schedule 5.
7.6 FARM PRODUCTS. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
7.7 PLEDGED SECURITIES.
(a) The shares of Pledged Stock pledged by such Grantor hereunder and
delivered to the Administrative Agent on the Closing Date constitute all the
issued and outstanding shares of all classes of the Capital Stock of each Issuer
as of such date.
(b) All the shares of the Pledged Stock have been duly and validly
issued and are fully paid and nonassessable.
(c) The Pledged Debt Securities pledged hereunder by such Grantor, the
Instruments or certificates of which have been delivered to the Administrative
Agent on the Closing Date, constitute all of the Pledged Debt Securities held by
such Grantor as of such date.
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(d) The Pledged Debt Securities in existence on the date hereof are
set forth in Schedule 2.
(e) Each of the Pledged Debt Securities constitutes, to the knowledge
of such Grantor if such Grantor is the payee thereof, the legal, valid and
binding obligation of such Grantor if such Grantor to, enforceable in accordance
with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(f) The Pledged Partnership Interests pledged by such Grantor
hereunder constitutes all the outstanding Capital Stock of each Issuer of such
Pledged Partnership Interests.
7.8 INTELLECTUAL PROPERTY.
(a) Schedule 6 lists all material Intellectual Property owned or
licensed by such Grantor in its own name on the date hereof.
(b) To such Grantor's knowledge, all material Intellectual Property is
on the date hereof valid, subsisting, unexpired, enforceable and has not been
abandoned.
(c) Except as set forth in Schedule 6, none of the material
Intellectual Property is on the date hereof the subject of any licensing or
franchise agreement pursuant to which such Grantor is the licensor or
franchisor.
(d) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of, or
such Grantor's rights in, any Intellectual Property in any respect that could
reasonably be expected to have a Material Adverse Effect.
(e) No action or proceeding is pending on the date hereof seeking to
limit, cancel or question the validity, or such Grantor's ownership, of any
Intellectual Property which, if adversely determined, would have a Material
Adverse Effect.
SECTION 8 GRANTOR COVENANTS REGARDING COLLATERAL
Each Grantor covenants and agrees with the Administrative Agent and
the other Secured Parties that, from and after the date of this Agreement until
the Obligations shall have been paid in full, no Letter of Credit shall be
outstanding (or all outstanding Letters of Credit shall have been fully cash
collateralized in accordance with the Credit Agreement) and the Commitments
shall have terminated:
8.1 COVENANTS IN CREDIT AGREEMENT. Such Grantor shall take, or shall
refrain from taking, and shall cause its Subsidiaries to take or refrain from
taking, each action that is necessary to be taken or not taken, as the case may
be, so that no Default or Event of Default is caused by the failure to take such
action or to refrain from taking such action by such Grantor or any of its
Subsidiaries.
8.2 DELIVERY OF INSTRUMENTS AND CHATTEL PAPER. If the aggregate of all
amounts payable to the Grantors pursuant to Undelivered Instruments shall exceed
$200,000, such Undelivered Instruments, to the extent necessary to eliminate
such excess, shall be immediately delivered to the
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Administrative Agent duly indorsed in a manner satisfactory to the
Administrative Agent to be held as Collateral pursuant to this Agreement.
8.3 INSURANCE. Each Grantor shall maintain insurance policies
insuring Inventory and Equipment pursuant to and in accordance with subsection
7.5 of the Credit Agreement.
8.4 MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER
DOCUMENTATION.
(a) Such Grantor shall maintain the security interest created by this
Agreement as a perfected security interest having at least the priority
described in subsection 7.3 hereof and shall defend such security interest
against the claims and demands of all Persons whomsoever.
(b) Upon reasonable written request of the Administrative Agent, such
Grantor will furnish to the Administrative Agent and the Lenders from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as the Administrative
Agent may reasonably request, all in reasonable detail.
8.5 CHANGES IN LOCATIONS, NAME, ETC. Such Grantor will not, except
upon not less than 15 days' prior written notice to the Administrative Agent.
(a) permit any of the Inventory or Equipment (other than (i)
immaterial Inventory and Equipment and (ii) Inventory and Equipment in transit
in the ordinary course of business) to be kept at a location other than those
listed on Schedule 5;
(b) change the location of its chief executive office or sole place of
business from that referred to in subsection 7.4 hereof; or
(c) change its name, identity or corporate structure to such an extent
that any financing statement filed by the Administrative Agent in connection
with this Agreement would become misleading.
8.6 RECEIVABLES.
(a) Other than in the ordinary course of business or as otherwise
permitted by the Loan Documents, such Grantor will not (i) grant any extension
of the time of payment of any Receivable, (ii) compromise or settle any
Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable in any manner that could materially and adversely affect
the value thereof.
(b) Such Grantor will take all actions necessary to give notice
pursuant to the United States Assignment of Claims Act of 1940, as amended, or
such other analogous law if a material portion of the total amount of the
Receivables is owing from Governmental Authorities.
8.7 INTELLECTUAL PROPERTY.
(a) Such Grantor (either itself or through licensees or agents) will
continue to use each material Trademark on each and every trademark class of
goods applicable to its current line as reflected in its then-current catalogs,
brochures and price lists in order to maintain such Trademark in full
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force free from any claim of abandonment for non-use, (ii) maintain as in the
past the quality of products and services offered under each material Trademark,
(iii) use such Trademark with all appropriate notices of registration and (iv)
not (and not permit any licensee or sublicensee thereof or agent to) do any act
or knowingly omit to do any act whereby any material Trademark may become
invalidated or impaired in any way.
(b) Such Grantor (either itself or through licensees or agents) will
not do any act, or omit to do any act, whereby any material Patent may become
forfeited, abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees or agents) will
not (and will not permit any licensee or sublicensee thereof or agent to) do any
act or knowingly omit to do any act whereby any material portion of the
Copyrights may become invalidated. Such Grantor will not (either itself or
through licensees or agents) do any act whereby any material portion of the
Copyrights may fall into the public domain.
(d) Such Grantor (either itself or through licensees or agents) will
not do any act that knowingly uses a material Intellectual Property to infringe
the Intellectual Property rights of a third party.
(e) Such Grantor will notify the Administrative Agent and the other
Secured Parties immediately if it knows, or has reason to know, that any
application or registration relating to any material Patent, Copyright or
Trademark may become abandoned or dedicated to the public, or of any adverse
determination or development (including, without limitation, the institution of,
or any such determination or development in, any proceeding in the United States
Patent and Trademark Office, the U.S. Copyright Office or any court or tribunal
in any country) regarding such Grantor's ownership of, or the validity of, any
material Intellectual Property or such Grantor's right to register the same or
to own and maintain the same.
(f) Whenever such Grantor, either by itself or through any agent
employee, licensee or designee, shall file an application for any Patent or
Trademark with the United States Patent and Trademark Office or any Copyright in
the U.S. Copyright Office or any similar office or agency in any other country
or any political subdivision thereof, such Grantor shall report such filing to
the Administrative Agent within five Business Days after the last day of the
fiscal quarter in which such filing occurs.
(g) Such Grantor (either itself or through licensees or agents) will
take all reasonable and necessary steps, including, without limitation, in any
proceeding before the United States Patent and Trademark Office, the U.S.
Copyright Office or any similar office or agency in any other country or any
political subdivision thereof, to maintain each registration of the material
Intellectual Property, including, without limitation, filing of applications for
renewal, affidavits of use and affidavits of incontestability.
(h) In the event that any material Intellectual Property is infringed,
misappropriated or diluted by a third party, such Grantor (either itself or
through licensees or agents) shall (i) take such actions as such Grantor shall
reasonably deem appropriate under the circumstances to protect such Intellectual
Property and (ii) if such Intellectual Property is of material economic value,
promptly notify the Administrative Agent and the Secured Parties after it learns
thereof.
8.8. MAINTENANCE OF RECORDS. Such Grantors will keep and maintain, at
its own cost and expense, satisfactory and complete records of the Collateral,
in all material respects, including,
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without limitation, a record of all payments received and all credits granted
with respect to the Collateral and all other dealings concerning the Collateral.
Upon the Administrative Agent's request such Grantors will xxxx its books and
records pertaining to the Collateral to evidence this Agreement and the security
interests granted hereby and all Chattel Paper will be marked with the following
legend: "This writing and the obligations evidenced or secured hereby are
subject to the security interest granted to Citicorp USA, Inc., as
Administrative Agent under that certain Post-Petition Credit Agreement dated as
of March 29, 1999." For the Administrative Agent's further security, such
Grantor agrees that the Administrative Agent shall have a property interest in
all of such Grantor's books and records pertaining to the Collateral and, upon
the occurrence and during the continuation of an Event of Default, such Grantor
shall deliver and turn over any such books and records to the Administrative
Agent or to its representatives at any time on demand of the Administrative
Agent.
8.9 FURTHER ASSURANCES. At any time and from time to time, upon the
written request of the Administrative Agent, and at the expense of the Grantors,
each Grantor will promptly execute and deliver any and all such further
instruments and documents and take such further action as is necessary or
reasonably requested to obtain the full benefits of this Agreement and the other
Security Documents and of the rights and powers herein and therein granted
(consistent with any exclusions or time periods provided for taking such action,
as contemplated by the Credit Agreement or the Security Documents).
SECTION 9 CERTAIN REMEDIAL PROVISIONS
9.1 NOTICE OF DEFAULT; NOTICE OF ACCELERATION.
(a) At any time after the occurrence and during the continuation of an
Event of Default, the Administrative Agent may and, at the request of the
Majority Lenders, shall deliver a Notice of Default to the Borrower. At any time
after the Loans and other amounts owing under the Credit Agreement shall have
been declared due and payable and the Commitments shall have been terminated
pursuant to Section 9 of the Credit Agreement, the Administrative Agent may and,
at the request of the Majority Lenders, shall deliver a Notice of Acceleration
to the Borrower.
(b) A Notice of Default and a Notice of Acceleration shall become
effective upon delivery thereof to the Borrower. A Notice of Default and a
Notice of Acceleration, once effective, shall remain in effect unless and until
it is cancelled as provided in paragraph (c) of this subsection 9.1 or, in the
case of a Notice of Default only, the Event of Default giving rise to the
delivery of the same has been waived or is otherwise no longer continuing.
(c) The Administrative Agent shall be entitled, with the consent of
the Majority Lenders, to cancel any Notice of Default or Notice of Acceleration
by delivering a written notice of cancellation to the Borrower at any time.
(d) Upon the occurrence and during the continuation of any Event of
Default the automatic stay under section 362 of the Bankruptcy Code shall be
deemed vacated so as to permit the Administrative Agent to take the actions
permitted under this subsection 9.1, and the Grantors hereby acknowledge and
agree that any actions taken by the Administrative Agent hereunder shall not
constitute a violation of the automatic stay provided by section 362 of the
Bankruptcy Code and the Grantors hereby waive the automatic stay to the extent
applicable.
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(e) The Borrower shall deliver to the Administrative Agent from time
to time while a Notice of Default is in effect, upon request of the
Administrative Agent, a list setting forth as of a date not more than 30 days
prior to the date of such delivery (i) the aggregate unpaid principal or face
amount of the Extensions of Credit and (ii) the aggregate unpaid or notional
amount of each other Obligation (other than Overdrafts) and the name and address
of each Secured Party thereunder.
9.2 RIGHT TO INITIATE JUDICIAL PROCEEDINGS. As long as a Notice of
Default (and, to the extent required by this Agreement or any Security Document,
a Notice of Acceleration) is in effect and subject to compliance with subsection
3.7, the Administrative Agent shall have the right and power to institute and
maintain such suits and proceedings as it may deem appropriate to protect and
enforce the rights vested in it by this Agreement and each Security Document. As
long as a Notice of Acceleration is in effect and subject to compliance with
subsection 3.7, the Administrative Agent may either after entry, or without
entry, proceed by suit or suits at law or in equity to enforce such rights and
to foreclose upon the Collateral and to sell all or, from time to time, any of
the Collateral under the judgment or decree of a court of competent
jurisdiction.
9.3 RIGHT TO APPOINT A RECEIVER. As long as a Notice of Acceleration
is in effect and subject to compliance with subsection 3.7, upon the filing of a
xxxx in equity or other commencement of judicial proceedings to enforce the
rights of the Administrative Agent under this Agreement or any Security
Document, the Administrative Agent shall, to the extent permitted by law, with
notice to the Borrower but without notice to any party claiming through the
Grantors, without regard to the solvency or insolvency at the time of any Person
then liable for the payment of any of the Obligations, without regard to the
then value of the Collateral, and without requiring any bond from any
complainant in such proceedings, be entitled as a matter of right to the
appointment of a receiver or receivers (who may be the Administrative Agent) of
the Collateral, or any part thereof, and of the rents, issues, tolls, profits,
royalties, revenues and other income thereof, pending such proceedings, with
such powers as the court making such appointment shall confer, and to the entry
of an order directing that the rents, issues, tolls, profits, royalties,
revenues and other income of the property constituting the whole or any part of
the Collateral be segregated, sequestered and impounded for the benefit of the
Administrative Agent and the other Secured Parties, and each Grantor irrevocably
consents to the appointments of such receiver or receivers and to the entry of
such order, provided that, notwithstanding the appointment of any receiver, the
Administrative Agent shall be entitled to retain possession and control of all
cash and Cash Equivalents held by or deposited with it pursuant to this
Agreement or any Security Document.
9.4 EXERCISE OF POWERS; INSTRUCTIONS OF MAJORITY SECURED PARTIES.
(a) All of the powers, remedies and rights of the Administrative Agent
as set forth in this Agreement may be exercised by the Administrative Agent in
respect of any Security Document as though set forth in full therein and all of
the powers, remedies and rights of the Administrative Agent and the other
Secured Parties as set forth in any Security Document may be exercised from time
to time as herein and therein provided.
(b) The Majority Lenders shall have the right, by one or more
instruments in writing executed and delivered to the Administrative Agent, to
direct the time, method and place of conducting any proceeding for any right or
remedy available to the Administrative Agent, or of exercising any trust or
power conferred on the Administrative Agent, or for the appointment of a
receiver, or to direct the taking or the refraining from taking of any action
authorized by this Agreement or any Security Document, provided that (i) such
direction shall not conflict with the provisions of law, this Agreement,
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any Security Document or any other Loan Document and (ii) the Administrative
Agent shall be adequately indemnified to its satisfaction in the exercise of
reasonable judgment. Nothing in this paragraph (b) shall impair the right of the
Administrative Agent in its discretion to take any action which it deems proper
and which is not inconsistent with such direction by the Majority Lenders. In
the absence of such direction, the Administrative Agent shall have no duty to
take or refrain from taking any action unless explicitly required herein.
(c) Subject to compliance with subsection 3.7, exercise by the
Administrative Agent of the powers granted hereunder is not a violation of the
automatic stay provided by section 362 of the Bankruptcy Code and the Grantors
waive applicability thereof.
9.5 REMEDIES NOT EXCLUSIVE, ETC.
(a) No remedy conferred upon or reserved to the Administrative Agent
herein or in the Security Documents is intended to be exclusive of any other
remedy or remedies, but every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or in any Security Document or
now or hereafter existing at law or in equity or by statute.
(b) No delay or omission by the Administrative Agent to exercise any
right, remedy or power hereunder or under any Security Document shall impair any
such right, remedy or power or shall be construed to be a waiver thereof, and
every right, power and remedy given by this Agreement or any Security Document
to the Administrative Agent may be exercised from time to time and as often as
may be deemed expedient by the Administrative Agent.
(c) If the Administrative Agent shall have proceeded to enforce any
right, remedy or power under this Agreement or any Security Document and the
proceeding for the enforcement thereof shall have been discontinued or abandoned
for any reason or shall have been determined adversely to the Administrative
Agent, then the Grantors, the Administrative Agent and the Secured Parties
shall, subject to any determination in such proceeding, severally and
respectively be restored to their former positions and rights hereunder or
thereunder with respect to the Collateral and in all other respects, and
thereafter all rights, remedies and powers of the Administrative Agent shall
continue as though no such proceeding had been taken.
(d) To the extent permitted by applicable law, all rights of action
and of asserting claims upon or under this Agreement and the Security Documents
may be enforced by the Administrative Agent without the possession of any
Secured Instrument or instrument evidencing any Obligation or the production
thereof at any trial or other proceeding relative thereto, and any suit or
proceeding instituted by the Administrative Agent shall be, subject to clause
(ii) of paragraph (b) of subsection 10.7 hereof, brought in its name as
Administrative Agent and any recovery of judgment shall be held as part of the
Collateral.
9.6 WAIVER AND ESTOPPEL.
(a) Each Grantor agrees, to the extent it may lawfully do so, that it
will not at any time in any manner whatsoever claim or take the benefit or
advantage of any appraisement, valuation, stay of execution, extension,
moratorium, turnover or redemption law, or any law permitting it to direct the
order in which the Collateral shall be sold, now or at any time hereafter in
force, which may delay, prevent or otherwise affect the performance or
enforcement of this Agreement or any Security Document and hereby waives all
benefit or advantage of all such laws and covenants that it will not hinder,
delay or
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impede the execution of any power granted to the Administrative Agent in this
Agreement or any Security Document but will suffer and permit the execution of
every such power as though no such law were in force.
(b) Each Grantor, to the extent it may lawfully do so, on behalf of
itself and all who may claim through or under it, waives and releases all rights
to demand or to have any marshalling of the Collateral upon any sale, whether
made under any power of sale granted herein or in any Security Document or
pursuant to judicial proceedings or upon any foreclosure or any enforcement of
this Agreement or any Security Document and consents and agrees that all the
Collateral may at any such sale be offered and sold as an entirety.
(c) Each Grantor waives, to the extent permitted by applicable law,
presentment, demand, protest and any notice of any kind (except notices
explicitly required hereunder or under the Credit Agreement or any Security
Document) in connection with this Agreement and the Security Documents and any
action taken by the Administrative Agent with respect to the Collateral.
9.7 LIMITATION ON ADMINISTRATIVE AGENT'S DUTY IN RESPECT OF
COLLATERAL. Beyond its duties as to the custody thereof expressly provided
herein or in any other Security Document and to account to the other Secured
Parties and the Grantors for moneys and other property received by it hereunder
or under any Security Document, the Administrative Agent shall not have any duty
to the Grantors or to the other Secured Parties as to any Collateral in its
possession or control or in the possession or control of any of its agents or
nominees, or any income thereon or as to the preservation of rights against
prior parties or any other rights pertaining thereto except to treat such
Collateral in its possession and control with the same degree of care as it
accords its own property and as may be required by applicable law.
Notwithstanding the foregoing, the Administrative Agent shall be responsible and
accountable for damages occasioned by such taking of possession or control which
are the direct result of the Administrative Agent's gross negligence or willful
misconduct.
9.8 LIMITATION BY LAW. All rights, remedies and powers provided in
this Agreement or any Security Document may be exercised only to the extent that
the exercise thereof does not violate any applicable provision of law (including
the Bankruptcy Code), and all the provisions hereof and of the Security
Documents are intended to be subject to all applicable mandatory provisions of
law which may be controlling and (subject to subsection 11.7 hereof) to be
limited to the extent necessary so that they will not render this Agreement
invalid, unenforceable in whole or in part or not entitled to be recorded,
registered or filed under the provisions of any applicable law.
9.9 RIGHTS OF SECURED PARTIES UNDER SECURED INSTRUMENTS.
Notwithstanding any other provision of this Agreement or any Security Document,
the right of each Secured Party to receive payment of the Obligations held by
such Secured Party when due (whether at the stated maturity thereof, by
acceleration or otherwise) as expressed in the related Secured Instrument or
other instrument evidencing or agreement governing a Obligation or to institute
suit for the enforcement of such payment on or after such due date, and the
obligation of the relevant Grantor to pay such Obligation when due, shall not be
impaired or affected without the consent of such Secured Party. Notwithstanding
the foregoing, no Secured Party shall institute or commence any proceeding in
the State of Alaska, Arizona, California, Nevada, Utah or Washington to collect
any Obligations owed to it or shall otherwise exercise any remedies against the
Collateral with respect to the Obligations owed to it or exercise any right of
setoff unless such Secured Party shall have first obtained the consent of the
Majority Lenders.
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9.10 OVERDRAFTS. Each Grantor agrees to repay any such Grantor's
Overdrafts in accordance with the terms of the relevant Secured Instrument.
9.11 SET-OFF. In addition to any rights and remedies of the
Administrative Agent and the other Secured Parties provided by law, the
Administrative Agent, each other Secured Party and each affiliate of a Secured
Party shall have the right, without prior notice to any Grantor other than the
notice provided for in subsection 3.7 hereof (but subject to the prior consent
of the Administrative Agent and the Majority Lenders), upon any Obligation
becoming due and payable by any Grantor (whether at the stated maturity, by
acceleration or otherwise) to set off and appropriate and apply against the
amount of such Obligations any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Secured Party or any branch or agency or affiliate thereof to or
for the credit or the account of such Grantor. The Administrative Agent and each
Secured Party agrees promptly to notify such Grantor and (if applicable) the
Administrative Agent after any such set off and application, provided that the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of each Secured Party under this subsection 9.11 are in
addition to the other rights and remedies (including, without limitation, other
rights of set-off) which such Secured Party may have.
SECTION 10 THE ADMINISTRATIVE AGENT
10.1 EXCULPATORY PROVISIONS.
(a) The Administrative Agent shall not be responsible in any manner
whatsoever for the correctness of any recitals, statements, representations or
warranties herein, all of which are made solely by the Grantors. The
Administrative Agent makes no representations as to the value or condition of
the Collateral or any part thereof, or as to the title of the Grantors thereto
or as to the security or perfection afforded by this Agreement or any Security
Document, or as to the validity, execution (except its own execution),
enforceability, legality or sufficiency of this Agreement, the other Security
Documents or the Obligations, and the Administrative Agent shall incur no
liability or responsibility in respect of any such matters. The Administrative
Agent shall not be responsible for insuring the Collateral or for the payment of
taxes, charges or assessments or discharging of liens upon the Collateral or
otherwise as to the maintenance of the Collateral, except that if the
Administrative Agent takes possession of any Collateral, the Administrative
Agent shall use the care accorded its own assets in the preservation of the
Collateral in its possession and as required by any applicable law.
Notwithstanding the foregoing, the Administrative Agent shall be responsible and
accountable for damages occasioned by such taking of possession or control which
are the direct result of the Administrative Agent's gross negligence or willful
misconduct.
(b) The Administrative Agent shall not be required to ascertain or
inquire as to the performance by any Grantor of any of the covenants or
agreements contained herein or in any Security Document or Secured Instrument.
Whenever it is necessary, or in the opinion of the Administrative Agent
advisable, for the Administrative Agent to ascertain the amount of Obligations
then held by any Secured Party, the Administrative Agent may conclusively rely
on a certificate of such Secured Party, in the case of any Obligations and, if
such Secured Party shall not give such information to the Administrative Agent,
such Person shall not be entitled to receive distributions hereunder (in which
case distributions to those Persons who have supplied such information to the
Administrative Agent shall be
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calculated by the Administrative Agent using, for those Persons who have not
supplied such information, the list then most recently delivered by the Borrower
pursuant to paragraph (e) of subsection 9.1 hereof, and the amount so calculated
to be distributed to the Person who fails to give such information shall be held
in trust for such Person until such Person does supply such information to the
Administrative Agent, whereupon on the next Distribution Date the amount
distributable to such Person shall be recalculated using such information and
distributed to it. Nothing in the preceding sentence shall prevent any Grantor
from contesting amounts claimed by any Secured Party in any certificate so
supplied.
(c) The Administrative Agent. shall be obligated to perform such
duties and only such duties as are specifically set forth in this Agreement and
the other Security Documents, and no implied covenants or obligations shall be
read into this Agreement or any other Security Document against the
Administrative Agent except as may be required by applicable law.
(d) Notwithstanding any other provision of this Agreement (other than
those relating to the care of the Collateral in its possession), the
Administrative Agent shall not be personally liable for any action taken or
omitted to be taken by it in accordance with this Agreement or the Security
Documents except for its own gross negligence or willful misconduct.
(e) The Lender which is the Administrative Agent shall have the same
rights with respect to any Obligation held by it as any other Secured Party and
may exercise such rights as though it were not the Administrative Agent
hereunder, and it and its affiliates may accept deposits from, lend money to,
and generally engage in any kind of banking or trust business with, any of the
Grantors as if it were not the Administrative Agent.
10.2 DELEGATION OF DUTIES. The Administrative Agent may execute any
of the powers granted to it herein and perform any duty hereunder either
directly or by or through agents or attorneys-in-fact, who may include officers
and employees of any of the Grantors. The Administrative Agent shall be entitled
to advice of counsel concerning all matters pertaining to such powers and
duties. The Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact selected by it with reasonable care.
The Administrative Agent may enter into agreements with such agents or
attorneys-in-fact in such form as it may reasonably deem necessary or advisable,
and shall be entitled to amend, modify, or waive the provisions of such
agreements from time to time, provided that no amendment, modification or waiver
to any bailment, custodial or similar agreement executed in connection herewith
affecting the Borrower or any other Grantor shall be effective unless consented
to in writing by the Borrower, which consent shall not be unreasonably withheld.
10.3 RELIANCE BY ADMINISTRATIVE AGENT.
(a) Whenever in the administration of this Agreement or the other
Security Documents the Administrative Agent shall deem it necessary or desirable
that a factual matter be proved or established in connection with the
Administrative Agent taking, suffering or omitting any action hereunder or
thereunder, such matter (unless other evidence in respect thereof is herein
specifically prescribed) may be deemed to be conclusively proved or established
by a certificate of a Responsible Officer delivered to the Administrative Agent,
and such certificate shall be full warrant to the Administrative Agent for any
action taken, suffered or omitted in reliance thereon.
(b) The Administrative Agent may consult with counsel, and any Opinion
of Counsel shall be full and complete authorization and protection in respect of
any action taken or suffered by it
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hereunder or under any Security Document in accordance therewith. The
Administrative Agent shall have the right at any time to seek instructions
concerning the administration of this Agreement and the Security Documents from
any court of competent jurisdiction.
(e) The Administrative Agent may rely, and shall be fully protected in
acting, upon any resolution, statement, certificate, instrument, opinion,
report, notice, request, consent, order, bond or other paper or document which
it has no reason to believe to be other than genuine and to have been signed or
presented by the proper party or parties or, in the case of cables, facsimiles
and telexes, to have been sent by the proper party or parties. In the absence of
its gross negligence or willful misconduct, the Administrative Agent may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished to the
Administrative Agent and conforming to the requirements of this Agreement.
(d) The Administrative Agent shall not be under any obligation to
exercise any of the rights or powers vested in the Administrative Agent by this
Agreement and the Security Documents, at the request or direction of the
Majority Lenders pursuant to this Agreement or otherwise, unless the
Administrative Agent shall have been provided adequate security and indemnity
against the costs, expenses and liabilities which may be incurred by it in
compliance with such request or direction, including such reasonable advances as
may be requested by the Administrative Agent.
(e) Upon any application or demand by any of the Grantors (except any
such application or demand which is expressly permitted to be made orally) to
the Administrative Agent to take or permit any action under any of the
provisions of this Agreement or any other Security Document, the Borrower shall
furnish to the Administrative Agent a certificate of a Responsible Officer
stating that all conditions precedent, if any, provided for in this Agreement,
in any relevant Security Document or in the Credit Agreement or any other
Secured Instrument relating to the proposed action have been or will be (in the
case of application of proceeds from sales of assets) complied with, and in the
case of any such application or demand as to which the furnishing of any
document is specifically required by any provision of this Agreement or other
Security Document relating to such particular application or demand, such
additional document shall also be furnished.
(f) Any Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate of a Responsible Officer or representations
made by a Responsible Officer in a writing attached to such Opinion of Counsel
or filed with the Administrative Agent.
10.4 LIMITATIONS ON DUTIES OF THE ADMINISTRATIVE AGENT.
(a) The Administrative Agent shall be obligated to perform such duties
and only such duties as are specifically set forth in this Agreement and the
other Security Documents, and no implied covenants or obligations shall be read
into this Agreement or any other Security Document against the Administrative
Agent except as may be required by applicable law.
(b) No provision of this Agreement or of any other Security Document
shall be deemed to impose any duty or obligation on the Administrative Agent to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it, in any jurisdiction in which it shall be illegal, or
in which the Administrative Agent shall be unqualified or incompetent, to
perform any such act or acts or to exercise any such right, power, duty or
obligation or if such performance or exercise
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would constitute doing business by the Administrative Agent in such jurisdiction
or imposes a tax on the Administrative Agent by reason thereof.
10.5 RESIGNATION AND REMOVAL OF THE ADMINISTRATIVE AGENT. The
Administrative Agent may resign and a successor Administrative Agent may be
appointed in accordance with the terms of the Credit Agreement applicable to
resignations of the Administrative Agent.
10.6 MERGER OF THE ADMINISTRATIVE AGENT. Any corporation into which
the Administrative Agent may be merged, or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the
Administrative Agent shall be a party, shall be Administrative Agent under this
Agreement and the other Security Documents without the execution or filing of
any paper or any further act on the part of the parties hereto.
10.7 CO-COLLATERAL ADMINISTRATIVE AGENT; SEPARATE ADMINISTRATIVE
AGENTS.
(a) If at any time or times it shall be necessary or prudent in order
to conform to any law of any jurisdiction in which any of the Collateral shall
be located, or to avoid any violation of law or imposition on the Administrative
Agent of taxes by such jurisdiction not otherwise imposed on the Administrative
Agent, or the Administrative Agent shall be advised by counsel, satisfactory to
it, that it is necessary or prudent in the interest of the Secured Parties, or
the Administrative Agent shall reasonably deem it desirable for its own
protection in the performance of its duties hereunder or under any other
Security Document, the Administrative Agent and each of the Grantors shall
execute and deliver all instruments and agreements necessary or proper to
constitute another bank or trust company, or one or more persons approved by the
Administrative Agent and the Grantors, either to act as co-collateral agent or
co-collateral agents of all or any of the Collateral under this Agreement or
under any of the Security Documents, jointly with the Administrative Agent
originally named herein or therein or any successor Administrative Agent, or to
act as separate collateral agent or collateral agents of any of the Collateral.
If any of the Grantors shall not have joined in the execution of such
instruments and agreements within 20 Business Days (or, if a Notice of Default
is in effect, 10 Business Days) after it receives a written request from the
Administrative Agent to do so, or if a Notice of Acceleration is in effect, the
Administrative Agent may act under the foregoing provisions of this paragraph
(a) without the concurrence of such Grantors and execute and deliver such
instruments and agreements on behalf of such Grantors. Each of the Grantors
hereby appoints the Administrative Agent as its agent and attorney to act for it
under the foregoing provisions of this paragraph (a) in either of such
contingencies.
(b) Every separate collateral agent and every cocollateral agent,
other than any successor Administrative Agent appointed pursuant to the Credit
Agreement, shall, to the extent permitted by law, be appointed and act and be
such, subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred upon the
Administrative Agent in respect of the custody, control and management of
moneys, papers, Chattel Paper, Instruments, or securities shall be
exercised solely by the Administrative Agent or any agent appointed by the
Administrative Agent;
(ii) all rights, powers, duties and obligations conferred or
imposed upon the Administrative Agent hereunder and under the relevant
Security Document or Documents shall be conferred or imposed and exercised
or performed by the Administrative Agent and such separate collateral agent
or separate collateral agents or co-collateral agent or co-collateral
agents,
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jointly, as shall be provided in the instrument appointing such separate
collateral agent or separate collateral agents or co-collateral agent or
co-collateral agents, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed the
Administrative Agent shall be incompetent or unqualified to perform such
act or acts, or unless the performance of such act or acts would result in
the imposition of any tax on the Administrative Agent which would not be
imposed absent such joint act or acts, in which event such rights, powers,
duties and obligations shall be exercised and performed by such separate
collateral agent or separate collateral agents or co-collateral agent or
co-collateral agents at the direction of the Administrative Agent;
(iii) no power given hereby or by the relevant Security Documents
to, or which it is provided herein or therein may be exercised by, any such
co-collateral agent or co-collateral agents or separate collateral agent or
separate collateral agents, shall be exercised hereunder or there by such
co-collateral agent or co-collateral agents or separate collateral agent or
separate collateral agents except jointly with, or with the consent or
direction in writing of, the Administrative Agent anything contained herein
to the contrary notwithstanding;
(iv) no collateral agent hereunder shall be personally liable by
reason of any act or omission of any other collateral agent hereunder,
except in connection with its own gross negligence or willful misconduct;
and
(v) the Borrower and the Administrative Agent, at any time by an
instrument in writing executed by them jointly, may accept the resignation
of or remove any such separate collateral agent or co-collateral agent and,
in that case by an instrument in writing executed by them jointly, may
appoint a successor to such separate collateral agent or co-collateral
agent, as the case may be, anything contained herein to the contrary
notwithstanding. If the Borrower shall not have joined in the execution of
any such instrument within 20 Business Days (or, if a Notice of Default is
in effect, 10 Business Days) after it receives a written request from the
Administrative Agent to do so, or if a Notice of Acceleration is in effect,
the Administrative Agent shall have the power to accept the resignation of
or remove any such separate collateral agent or co-collateral agent and to
appoint a successor without the concurrence of the Borrower, the Borrower
hereby appointing the Administrative Agent its agent and attorney to act
for it in such connection in such contingency. If the Administrative Agent
shall have appointed a separate collateral agent or separate collateral
agents or co-collateral agent or co-collateral agents as above provided,
the Administrative Agent may at any time, by an instrument in writing,
accept the resignation of or remove any such separate collateral agent or
co-collateral agent and the successor to any such separate collateral agent
or co-collateral agent shall be appointed by the Borrower and the
Administrative Agent, or by the Administrative Agent alone pursuant to this
paragraph (b).
10.8 TREATMENT OF PAYEE OR INDORSEE BY ADMINISTRATIVE AGENT;
REPRESENTATIVES OF SECURED PARTIES.
(a) The Administrative Agent may treat the registered holder or, if
none, the payee or indorsee of any promissory note or debenture evidencing a
Extension of Credit as the absolute owner thereof for all purposes and shall not
be affected by any notice to the contrary, whether such promissory note or
debenture shall be past due or not.
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(b) Any Person (other than the Administrative Agent), which shall be
designated as the duly authorized representative of one or more Secured Parties
to act as such in connection with any matters pertaining to this Agreement or
the Collateral shall present to the Administrative Agent such documents,
including Opinions of Counsel, as the Administrative Agent may reasonably
require, in order to demonstrate to the Administrative Agent the authority of
such Person to act as the representative of such Secured Parties (it being
understood that the holders of Credit Agreement Obligations are represented
hereunder by the Administrative Agent).
10.9 INDEMNIFICATION. The Grantors agree to pay, indemnify, and hold
the Administrative Agent harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits and
reasonable out-of-pocket costs, expenses (including the reasonable fees of
counsel) or disbursements of any kind or nature whatsoever with respect to the
enforcement of this Agreement and the Security Documents, except to the extent
arising from the gross negligence or willful misconduct of any indemnified
party. The Grantors agree to pay, indemnify, and hold the Administrative Agent
harmless from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits and reasonable out-of-pocket costs,
expenses (including the reasonable fees of counsel and other professional
advisors) or disbursements of any kind or nature whatsoever with respect to the
violation by any Grantor of, noncompliance with or remediation obligations under
any laws, rules or regulations regulating, relating to or imposing liabilities
or standards of conduct concerning environmental protection matters directly
relating to the Grantors or their real property (except to the extent that the
same results from the gross negligence or willful misconduct of the
Administrative Agent or its employees, officers or agents). The agreements in
this subsection 10.9 shall survive the termination of the other provisions of
this Agreement.
SECTION 11 MISCELLANEOUS
11.1 AMENDMENTS, SUPPLEMENTS AND WAIVERS.
(a) Subject to subsection 11.1 of the Credit Agreement, the
Administrative Agent and each of the Grantors may, from time to time, enter into
written agreements supplemental hereto or to any other Security Document for the
purpose of adding to, or waiving any provisions of, this Agreement or any such
other Security Document or changing in any manner the rights or obligations of
the Administrative Agent, the Secured Parties or the Grantors hereunder or
thereunder, provided that no such supplemental agreement shall (i) amend, modify
or waive any provision of subsection 3.5 hereof or the definition of Obligations
or any of the defined terms contained in such definition without the written
consent of each Secured Party whose rights would be adversely affected thereby
or (ii) amend, modify or waive any provision of Section 10 or alter the duties,
rights or obligations of the Administrative Agent hereunder or under the other
Security Documents without the written consent of the Administrative Agent. Any
such supplemental agreement shall be binding upon the Grantors, the
Administrative Agent and the Secured Parties and their respective successors and
assigns.
(b) Without the consent of any Secured Party, the Administrative Agent
and any of the Grantors, at any time and from time to time, may enter into one
or more agreements supplemental hereto or to any Security Document, in form
satisfactory to the Administrative Agent, to mortgage or pledge to the
Administrative Agent, or grant a security interest in favor of the
Administrative Agent in, any property or assets as additional security for the
Secured Obligations.
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11.2 NOTICES. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in subsection 11.2 of the Credit Agreement, provided that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 1.
11.3 NO WAIVER BY COURSE OF CONDUCT; CUMULATIVE REMEDIES. Neither the
Administrative Agent nor any Secured Party shall by any act (except by a written
instrument pursuant to subsection 11.1 hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default. No failure to exercise, nor any
delay in exercising, on the part of the Administrative Agent or any Secured
Party, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent or
any Secured Party of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy which the Administrative Agent or
such Secured Party would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or concurrently
and are not exclusive of any other rights or remedies provided by law.
11.4 ENFORCEMENT EXPENSES, INDEMNIFICATION.
(a) Each Guarantor agrees to pay or reimburse the Administrative Agent
and each other Secured Party for all its costs and expenses incurred in
collecting against such Guarantor under the guarantee contained in Section 2 or
otherwise enforcing or preserving any rights under this Agreement and the other
Loan Documents to which such Guarantor is a party, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent, to the same extent the Borrower would be required to do so
pursuant to subsection 11.5 of the Credit Agreement, mutatis mutandis.
(b) Each Grantor agrees to pay, and to save the Administrative Agent
and the Secured Parties harmless from, any and all liabilities with respect to,
or resulting from any delay in paying, any and all stamp, excise, sales or other
taxes and recording and registration fees which may be payable or determined to
be payable with respect to any of the Collateral, any Security Document, any
Secured Instrument or any of the transactions contemplated by this Agreement.
(c) Each Grantor agrees to pay, and to save the Administrative Agent
and the Secured Parties harmless from any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement to the
same extent the Borrower would be required to do so pursuant to subsection 10.7
of the Credit Agreement.
(d) The agreements in this subsection 11.4 shall survive repayment of
the Obligations and termination of the other provisions of this Agreement.
11.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Administrative Agent and the other Secured Parties and their respective
successors and assigns; provided that no Grantor may assign, transfer or
delegate any of its rights or obligations under this Agreement without the prior
written consent of the Administrative Agent.
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11.6 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
11.7 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.
11.8 INTEGRATION. This Agreement and the other Loan Documents
represent the entire agreement of the Grantors, the Administrative Agent and the
other Secured Parties with respect to the subject matter hereof and thereof, and
there are no promises, undertakings, representations or warranties of the
Administrative Agent or any other Secured Party relative to subject matter
hereof and thereof not expressly set forth or referred to herein or in the other
Loan Documents.
11.9 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
11.10 CERTAIN WAIVERS. The Borrower and each Guarantor hereby
irrevocably and unconditionally:
(a) agrees that service of process in any legal action or proceeding
relating to this Agreement or other Security Documents may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to such party at its address referred to
in subsection 11.2 hereof or at such other address of which the Administrative
Agent shall have been notified pursuant thereto;
(b) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law; and
(c) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this subsection 11.10 any special, exemplary, punitive or consequential damages.
11.11 ACKNOWLEDGMENTS. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any other Secured Party has
any fiduciary relationship with or duty to the Grantors arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent and other Secured Parties, on one
hand, and the Grantors, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor; and
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(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among the
Secured Parties or among the Grantors and the Secured Parties.
11.12 TERMINATION. (a) Upon the (i) release of the Liens on the
Collateral in accordance with the Credit Agreement or (ii) the termination of
the Credit Agreement in accordance with subsection 11.12 of the Credit
Agreement, the Administrative Agent will promptly, at the Borrower's written
request and expense, terminate all Lockbox Agreements and Blocked Account
Agreements and (x) execute and deliver to the Grantors such documents and other
instruments as the Borrower shall reasonably request to evidence the release of
Liens on the Collateral, (y) deliver or cause to be delivered to the Grantors
all property of such Grantors then held by the Administrative Agent or any agent
thereof and (z) transfer all amounts on deposit in the Collateral Account to an
account designated by the Person lawfully entitled to receive the same.
Concurrently with any such release or termination, this Agreement and each of
the other Security Documents shall automatically terminate. The provisions of
this paragraph (a) of subsection 11.12 shall survive the termination of this
Agreement.
(b) Upon the sale of all or a portion of the Capital Stock of a
Grantor to a third party in accordance with and as permitted under the Credit
Agreement such that such Grantor ceases to be a Subsidiary, (i) such Grantor and
each Subsidiary of such Grantor which is included in such sale (such Grantor and
each such Subsidiary being referred to herein as "Included Grantors") shall
cease to be a Grantor hereunder or a party to any Security Document and shall be
released from its obligations pursuant hereto and thereto, (ii) the Liens
created by the Security Documents entered into by such Included Grantors in all
right, title and interest of such Included Grantors in the Collateral shall
terminate, in each case only with respect to such Included Grantors, (iii) all
right, title and interest of the Administrative Agent in and to the Collateral
subject to such Liens shall revert to such Included Grantors, their successors
and assigns and (iv) any obligations of such Included Grantors shall, unless
otherwise expressly notified by the Borrower to the Administrative Agent in
writing, cease to be Obligations. Upon any such termination, the Administrative
Agent will promptly, at the Borrower's written request, (x) execute and deliver
to such Included Grantors such documents and other instruments as the Borrower
shall reasonably request to evidence the release of the Liens on such Collateral
and (y) deliver or cause to be delivered to such Included Grantors all property
of such Included Grantors then held by the Administrative Agent or any agent
thereof.
11.13 WAIVER OF JURY TRIAL. THE GRANTORS AND THE SECURED PARTIES
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
11.14 SECTION HEADINGS. The Section and subsection headings used in
this Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
11.15 CONFLICTS. In the event of a conflict between the terms and
conditions of this Agreement and the terms and conditions of the Credit
Agreement, the terms and conditions of the Credit Agreement shall control.
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IN WITNESS WHEREOF, each of the undersigned has caused this Master
Security Agreement to be duly executed and delivered as of the date first above
written.
SERVICE MERCHANDISE COMPANY, INC.,
as the Borrower
By: /s/ C. Xxxxxx Xxxxx
-----------------------------------
Name:
Title:
SIGNATURE PAGE TO
MASTER SECURITY AGREEMENT
53
X.X. XXXXX, INC.
X.X. XXXXXX CO., INC.
X.X. XXXXXX CO. REALTY, INC.
HOMEOWNERS WAREHOUSE, INC.
SERVICE MERCHANDISE CO. BROAD, INC.
SERVICE MERCHANDISE COMPANY OF IOWA, INC.
SERVICE MERCHANDISE COMPANY OF KANSAS, INC.
SERVICE MERCHANDISE CO. NO 30, INC.
SERVICE MERCHANDISE CO. NO 34, INC.
SERVICE MERCHANDISE CO. NO 35, INC.
SERVICE MERCHANDISE CO. NO 51, INC.
SERVICE MERCHANDISE CO. NO 93, INC.
SERVICE MERCHANDISE CO. NO 99, INC.
SERVICE MERCHANDISE FINANCIAL CO., INC.
SERVICE MERCHANDISE INDIANA PARTNERS (by its Partners,
Service Merchandise Co. No. 34, Inc., and Service Merchandise Co.
No. 35, Inc.)
SERVICE MERCHANDISE OF TENNESSEE LIMITED PARTNERSHIP
(by its General Partner, Service Merchandise Company, Inc.)
SERVICE MERCHANDISE OF TEXAS LIMITED PARTNERSHIP
(by its General Partner, Service Merchandise Company, Inc.)
SMC-HC, INC.
THE TOY STORE, INC.
WHOLESALE SUPPLY COMPANY, INC.
A.F.S. MARKETING SERVICES, INC.
SERVICE MERCHANDISE CO. OF NEW YORK, INC.
SERVICE MERCHANDISE OFFICE SUPPLY, INC.
SERVICE MERCHANDISE SHOWROOMS, INC.
SERVICE MERCHANDISE RM, INC.
THE XxXXXXX SUPPLY COMPANY
TRAVEL MANAGEMENT CONSULTANTS, INC.
PROMOTABLES, INC.
as the Guarantors
By: /s/ C. Xxxxxx Xxxxx
---------------------------------
Name:
Title:
SIGNATURE PAGE TO
MASTER SECURITY AGREEMENT
54
CITICORP USA, INC.,
as Administrative Agent
By:
---------------------------------
Xxxxxxx Xxxxxx
Vice President
SIGNATURE PAGE TO
MASTER SECURITY AGREEMENT
55
Schedule 1
NOTICE ADDRESS OF EACH GRANTOR
SCHEDULE 1 TO
MASTER SECURITY AGREEMENT
56
Schedule 2
DESCRIPTION OF PLEDGED STOCK
DESCRIPTION OF PLEDGED DEBT SECURITIES
PLEDGED PARTNERSHIP INTERESTS
SCHEDULE 3 TO
MASTER SECURITY AGREEMENT
57
Schedule 4
JURISDICTION OF ORGANIZATION
AND LOCATION OF CHIEF EXECUTIVE OFFICE
Grantor Jurisdiction
Location for all Grantors:
SCHEDULE 4 TO
MASTER SECURITY AGREEMENT
58
Schedule 5
LOCATION OF INVENTORY AND EQUIPMENT
Grantor Locations
SCHEDULE 5 TO
MASTER SECURITY AGREEMENT
59
Schedule 6
COPYRIGHTS AND COPYRIGHT LICENSES
PATENTS AND PATENT LICENSES
TRADEMARK AND TRADEMARK LICENSES
SCHEDULE 6 TO
MASTER SECURITY AGREEMENT
