EXHIBIT 10.2
EXECUTION COPY
PRIVILEGED AND CONFIDENTIAL
================================================================================
GUARANTY AND COLLATERAL AGREEMENT
DATED AS OF AUGUST 5, 2004
BY AND AMONG
LASALLE BANK NATIONAL ASSOCIATION,
AS THE ADMINISTRATIVE AGENT,
AND
UTi, (U.S.) HOLDINGS, INC.,
UTi, UNITED STATES, INC.,
UTi BROKERAGE, INC.,
UTi, SERVICES, INC.,
AND
STANDARD CORPORATION,
AS GRANTORS
================================================================================
TABLE OF CONTENTS
SECTION 1 DEFINITIONS............................................................................................. 1
1.1 Rules of Construction................................................................................. 1
1.2 Defined Terms......................................................................................... 1
SECTION 2 GUARANTY................................................................................................ 5
2.1 Guaranty.............................................................................................. 5
2.2 Right of Contribution................................................................................. 5
2.3 No Subrogation........................................................................................ 6
2.4 Amendments, etc. with respect to the Secured Obligations.............................................. 6
2.5 Waivers............................................................................................... 7
2.6 Payments.............................................................................................. 7
SECTION 3 GRANT OF SECURITY INTEREST.............................................................................. 7
3.1 Grant................................................................................................. 7
SECTION 4 REPRESENTATIONS AND WARRANTIES.......................................................................... 8
4.1 Title; No Other Liens................................................................................. 8
4.2 Perfected First Priority Liens........................................................................ 8
4.3 Grantor Information................................................................................... 8
4.4 Collateral Locations.................................................................................. 8
4.5 Certain Property...................................................................................... 8
4.6 Investment Property................................................................................... 9
4.7 Receivables........................................................................................... 9
4.8 Intellectual Property................................................................................. 9
4.9 Depositary and Other Accounts......................................................................... 10
SECTION 5 COVENANTS............................................................................................... 10
5.1 Delivery of Instruments, Certificated Securities and Chattel Paper.................................... 10
5.2 Maintenance of Perfected Security Interest; Further Documentation..................................... 10
5.3 Changes in Locations, Name, etc....................................................................... 11
5.4 Notices............................................................................................... 11
5.5 Investment Property................................................................................... 11
5.6 Receivables........................................................................................... 13
5.7 Intellectual Property................................................................................. 13
5.8 Depositary and Other Deposit Accounts................................................................. 14
5.9 Other Matters......................................................................................... 15
SECTION 6 REMEDIAL PROVISIONS..................................................................................... 17
6.1 Certain Matters Relating to Receivables............................................................... 17
6.2 Communications with Obligors; Grantors Remain Liable.................................................. 17
6.3 Investment Property................................................................................... 18
6.4 Proceeds to be Turned Over to Administrative Agent.................................................... 19
6.5 Application of Proceeds............................................................................... 19
6.6 Code and Other Remedies............................................................................... 20
6.7 Registration Rights................................................................................... 21
-i-
6.8 Waiver; Deficiency.................................................................................... 22
SECTION 7 THE ADMINISTRATIVE AGENT................................................................................ 22
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc........................................... 22
7.2 Duty of Administrative Agent.......................................................................... 24
7.3 Authority of Administrative Agent..................................................................... 24
SECTION 8 MISCELLANEOUS........................................................................................... 24
8.1 Amendments in Writing................................................................................. 24
8.2 Notices............................................................................................... 24
8.3 Indemnification by Grantors........................................................................... 25
8.4 Enforcement Expenses.................................................................................. 25
8.5 Captions.............................................................................................. 26
8.6 Nature of Remedies.................................................................................... 26
8.7 Counterparts.......................................................................................... 26
8.8 Severability.......................................................................................... 26
8.9 Entire Agreement...................................................................................... 26
8.10 Successors; Assigns................................................................................... 26
8.11 Governing Law......................................................................................... 27
8.12 Forum Selection; Consent to Jurisdiction.............................................................. 27
8.13 Waiver of Jury Trial.................................................................................. 27
8.14 Set-off............................................................................................... 27
8.15 Acknowledgements...................................................................................... 27
8.16 Additional Grantors................................................................................... 28
8.17 Releases.............................................................................................. 28
8.18 Obligations and Liens Absolute and Unconditional...................................................... 28
8.19 Reinstatement......................................................................................... 29
-ii-
GUARANTY AND COLLATERAL AGREEMENT
THIS GUARANTY AND COLLATERAL AGREEMENT dated as of August 5, 2004 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, this "Agreement") is entered into among UTi, UNITED STATES, INC., a New
York corporation ("UTi"), UTi BROKERAGE, INC., a California corporation
("Brokerage"), STANDARD CORPORATION, a South Carolina corporation ("Standard"
and, together with UTi, Brokerage and those certain domestic Wholly-Owned
Subsidiaries (as defined below) that may hereafter become parties hereto,
collectively, the "Companies"), UTi, (U.S.) HOLDINGS, INC., a Delaware
corporation (the "Parent Guarantor"), and UTi, SERVICES, INC., a California
corporation ("Services" and, together with the Parent Guarantor and those
certain domestic Wholly-Owned Subsidiaries that may hereafter become parties
hereto, collectively, the "Guarantors" and each individually, a "Guarantor) (the
Companies and the Guarantors, collectively, the "Grantors" and each,
individually a "Grantor"), in favor of LASALLE BANK NATIONAL ASSOCIATION, as the
"Administrative Agent" for itself and all the Lenders party to the Credit
Agreement (as hereinafter defined).
The Lenders have severally agreed to extend credit to the Companies
pursuant to the Credit Agreement. The Companies are affiliated with each other
Grantor. Each Grantor will derive substantial direct and indirect benefit from
extensions of credit under the Credit Agreement. It is a condition precedent to
each Lender's obligation to extend credit under the Credit Agreement that the
Grantors shall have executed and delivered this Agreement to the Administrative
Agent for the ratable benefit of all the Lenders and itself.
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
extend credit thereunder, each Grantor hereby agrees with the Administrative
Agent, for the ratable benefit of the Lenders, as follows:
SECTION 1 DEFINITIONS.
1.1 Rules of Construction. Unless otherwise defined herein,
terms defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement, and the following terms are used herein
as defined in the UCC: Accounts, Certificated Security, Commercial Tort Claims,
Deposit Accounts, Documents, Electronic Chattel Paper, Equipment, Farm Products,
Goods, Health Care Insurance Receivables, Instruments, Inventory, Leases,
Letter-of-Credit Rights, Money, Payment Intangibles, Supporting Obligations and
Tangible Chattel Paper.
1.2 Defined Terms. When used herein the following terms shall
have the following meanings:
Agreement has the meaning set forth in the preamble hereto.
Chattel Paper means all "chattel paper" as such term is defined in
Section 9-102(a)(11) of the UCC and, in any event, including with respect to any
Grantor, all Electronic Chattel Paper and Tangible Chattel Paper.
Collateral means (a) all of the personal property now owned or at any
time hereafter acquired by any Grantor or in which any Grantor now has or at any
time in the future may acquire any right, title or interest, including all of
each Grantor's Accounts, Chattel Paper, Commercial Tort Claims, Deposit
Accounts, Documents, Equipment, Fixtures, General Intangibles, Goods,
Instruments, Intellectual Property, Inventory, Investment Property, Leases,
Letter-of-Credit Rights, Money, Supporting Obligations and Identified Claims,
(b) all books and records pertaining to any of the foregoing, (c) all Proceeds
and products of any of the foregoing, and (d) all collateral security and
guaranties given by any Person with respect to any of the foregoing. Where the
context requires, terms relating to the Collateral or any part thereof, when
used in relation to a Grantor, shall refer to such Grantor's Collateral or the
relevant part thereof. Notwithstanding anything herein to the contrary, in no
event shall the Collateral include, and no Grantor shall be deemed to have
pledged, assigned, transferred or granted a security interest in, any
Receivables created under and pursuant to the terms of the CASS Agreement to the
extent, and only to the extent, that such a grant would, under the terms of the
CASS Agreement, result in a breach of the terms of, or constitute a default
under, the CASS Agreement; provided, that immediately upon the ineffectiveness,
waiver, lapse or termination of any such provision, the Collateral shall
include, and such Grantor shall be deemed to have granted a security interest
in, all such rights and interests as if such provision had never been in effect.
Companies Obligations means all Obligations of any Loan Party under the
Credit Agreement or any other Loan Document.
Copyrights means all copyrights arising under the laws of the United
States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished, including those
listed on Schedule 5, all registrations and recordings thereof, and all
applications in connection therewith, including all registrations, recordings
and applications in the United States Copyright Office, and the right to obtain
all renewals of any of the foregoing.
Copyright Licenses means all written agreements naming any Grantor as
licensor or licensee, including those listed on Schedule 5, granting any right
under any Copyright, including the grant of rights to manufacture, distribute,
exploit and sell materials derived from any Copyright.
Credit Agreement means the Credit Agreement of even date herewith among
the Grantors, the Lenders and the Administrative Agent, as amended,
supplemented, restated or otherwise modified from time to time.
Fixtures means all of the following, whether now owned or hereafter
acquired by a Grantor: plant fixtures; business fixtures; other fixtures and
storage facilities, wherever located; and all additions and accessories thereto
and replacements therefor.
General Intangibles means all "general intangibles" as such term is
defined in Section 9-102(a)(42) of the UCC and, in any event, including with
respect to any Grantor, all Payment Intangibles, all contracts, agreements,
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
from
-2-
time to time may be amended, supplemented or otherwise modified, including,
without limitation, (a) all rights of such Grantor to receive moneys due and to
become due it thereunder or in connection therewith, (b) all rights of such
Grantor to damages arising thereunder and (c) all rights of such Grantor to
perform and to exercise all remedies thereunder; 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 Payment Intangible,
contract, agreement, instrument or indenture.
Grantors means the Companies, the Parent Guarantor, any other Person
that becomes a party to this Agreement, other than the Lenders or the
Administrative Agent.
Guarantor Obligations means, collectively, with respect to each
Guarantor, all Obligations of such Guarantor.
Guarantors means the collective reference to each Grantor other than
the Companies, and Guarantor means each such Person individually.
Identified Claims means the Commercial Tort Claims described on
Schedule 7 as such schedule shall be supplemented from time to time.
Intellectual Property means the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including the
Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the
Trademarks and the Trademark Licenses, and all rights to xxx at law or in equity
for any infringement or other impairment thereof, including the right to receive
all proceeds and damages therefrom.
Intercompany Note means any promissory note evidencing any intercompany
loans made by any Grantor to any other Person under common control (directly or
indirectly) with such Grantor.
Investment Property means the collective reference to (a) all
"investment property" as such term is defined in Section 9-102(a)(49) of the UCC
(other than the equity interest of any foreign Subsidiary excluded from the
definition of Pledged Equity), (b) all "financial assets" as such term is
defined in Section 8-102(a)(9) of the UCC, and (c) whether or not constituting
"investment property" as so defined, all Pledged Notes and all Pledged Equity.
Issuers means the collective reference to each issuer of any Investment
Property.
Paid in Full means (a) the payment in full in cash and performance of
all Secured Obligations, (b) the termination of all Commitments and (c) either
(i) the expiration (so long as not giving rise to a right to draw thereon),
termination or cancellation and return to the Issuing Lender of all Letters of
Credit or (ii) the cash collateralization of all Letters of Credit in accordance
with the Credit Agreement.
Patents means (a) all letters patent of the United States, any other
country or any political subdivision thereof, all reissues and extensions
thereof and all goodwill associated therewith,
-3-
including any of the foregoing referred to in Schedule 5, (b) all applications
for letters patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof, including any of the foregoing
referred to in Schedule 5, and (c) all rights to obtain any reissues or
extensions of the foregoing.
Patent Licenses means 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 any of the
foregoing referred to in Schedule 5.
Pledged Equity means the equity interests listed on Schedule 1,
together with any other equity interests, certificates, options or rights of any
nature whatsoever in respect of the equity interests of any Person that may be
issued or granted to, or held by, any Grantor while this Agreement is in effect.
Pledged Notes means all promissory notes listed on Schedule 1, all
Intercompany Notes at any time issued to any Grantor and all other promissory
notes issued to or held by any Grantor (other than promissory notes issued in
connection with extensions of trade credit by any Grantor in the ordinary course
of business).
Proceeds means all "proceeds" as such term is defined in Section
9-102(a)(64) of the UCC and, in any event, shall include all dividends or other
income from the Investment Property, collections thereon or distributions or
payments with respect thereto.
Receivable means 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
any Accounts).
Secured Obligations means, collectively, the Companies Obligations and
Guarantor Obligations.
Securities Act means the Securities Act of 1933, as amended.
Trademarks means (a) all trademarks, trade names, corporate names, the
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 any of the foregoing referred to in Schedule
5, and (b) the right to obtain all renewals thereof.
Trademark Licenses means, collectively, each agreement, whether written
or oral, providing for the grant by or to any Grantor of any right to use any
Trademark, including any of the foregoing referred to in Schedule 5.
UCC means the Uniform Commercial Code as in effect on the date hereof
and from time to time in the State of Illinois, provided that if by reason of
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interests in any Collateral
-4-
or the availability of any remedy hereunder is governed by the Uniform
Commercial Code as in effect on or after the date hereof in any other
jurisdiction, "UCC" means the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such perfection
or effect of perfection or non-perfection or availability of such remedy.
SECTION 2 GUARANTY.
2.1 Guaranty. (a) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, as a primary obligor and not only a
surety, guaranties to the Administrative Agent, for the ratable benefit of the
Lenders and their respective successors, endorsees, transferees and assigns, the
prompt and complete payment and performance by the Companies when due (whether
at the stated maturity, by acceleration or otherwise) of the Companies
Obligations.
(b) Anything herein or in any other Loan Document to the
contrary notwithstanding, the maximum liability of each Guarantor hereunder and
under the other Loan Documents shall in no event exceed the amount which can be
guarantied by such Guarantor under applicable federal and state laws relating to
the insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(c) Each Guarantor agrees that the Companies Obligations may
at any time and from time to time exceed the amount of the liability of such
Guarantor hereunder without impairing the guaranty contained in this Section 2
or affecting the rights and remedies of the Administrative Agent or any Lender
hereunder.
(d) Subject to reinstatement pursuant to Section 8.19, the
guaranty contained in this Section 2 shall remain in full force and effect until
all of the Secured Obligations shall have been Paid in Full.
(e) No payment made by the Companies, any of the Guarantors,
any other guarantor or any other Person or received or collected by the
Administrative Agent or any Lender from the Companies, any of the Guarantors,
any other guarantor or any other Person by virtue of any action or proceeding or
any set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Secured Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of any Guarantor hereunder,
which Guarantor shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Secured Obligations or any payment
received or collected from such Guarantor in respect of the Secured
Obligations), remain liable for the Companies Obligations up to the maximum
liability of such Guarantor hereunder until the Secured Obligations are Paid in
Full, subject to reinstatement pursuant to Section 8.19.
2.2 Right of Contribution. Each Guarantor hereby agrees that
to the extent that a Guarantor shall have paid more than its proportionate share
of any payment made hereunder, such Guarantor shall be entitled to seek and
receive contribution from and against any other Guarantor hereunder which has
not paid its proportionate share of such payment. Each Guarantor's right of
contribution shall be subject to the terms and conditions of Section 2.3. The
-5-
provisions of this Section 2.2 shall in no respect limit the obligations and
liabilities of any Guarantor to the Administrative Agent and the Lenders, and
each Guarantor shall remain liable to the Administrative Agent and the Lenders
for the full amount guarantied by such Guarantor hereunder. For purposes of this
Section 2.2, the phrase "proportionate share" shall mean, in respect of any
payment, an amount equal to the amount of such referenced payment multiplied by
a fraction of which the numerator shall be the net worth on the date hereof of
the relevant Guarantor and the denominator shall be the aggregate net worth of
all Guarantors party to this Agreement on the date hereof (or, in the case of
any Guarantor becoming a party hereto pursuant to Section 8.16, the date of the
joinder agreement executed and delivered by such Guarantor).
2.3 No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Administrative Agent or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against the Companies or any other Guarantor or any collateral security or
guaranty or right of offset held by the Administrative Agent or any Lender for
the payment of the Secured Obligations, nor shall any Guarantor seek or be
entitled to seek any contribution or reimbursement from the Companies or any
other Guarantor in respect of payments made by such Guarantor hereunder, until
all of the Secured Obligations are Paid in Full. If any amount shall be paid to
any Guarantor on account of such subrogation rights at any time when all of the
Secured Obligations shall not have been Paid in Full, 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 endorsed by such Guarantor to the
Administrative Agent, if required), to be applied against the Secured
Obligations, whether matured or unmatured, in such order as is provided in
Section 6.5.
2.4 Amendments, etc. with respect to the Secured Obligations.
Each Guarantor shall remain obligated hereunder notwithstanding that, without
any reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Secured
Obligations made by the Administrative Agent or any Lender may be rescinded by
the Administrative Agent or such Lender and any of the Secured Obligations
continued, and the Secured Obligations, or the liability of any other Person
upon or for any part thereof, or any collateral security or guaranty 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, and the
Credit Agreement 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 Required
Lenders or all the Lenders, as the case may be) may deem advisable from time to
time. Neither the Administrative Agent nor any Lender shall have any obligation
to protect, secure, perfect or insure any Lien at any time held by it as
security for the Secured Obligations or for the guaranty contained in this
Section 2 or any property subject thereto.
The Administrative Agent or any Lender may, from time to time, at its sole
discretion and without notice to the Guarantors (or any of them), take any or
all of the following actions without affecting any of the Secured Obligations:
(a) retain or obtain a security interest in any property to secure any of the
Secured Obligations or any obligation hereunder, (b) retain or obtain the
-6-
primary or secondary obligation of any obligor or obligors, in addition to the
Grantors, with respect to any of the Secured Obligations, (c) extend or renew
any of the Secured Obligations for one or more periods (whether or not longer
than the original period), alter or exchange any of the Secured Obligations, or
release or compromise any obligation of any of the Grantors hereunder or any
obligation of any nature of any other obligor with respect to any of the Secured
Obligations, (d) release any guaranty or right of offset or its security
interest in, or surrender, release or permit any substitution or exchange for,
all or any part of any property securing any of the Secured Obligations or any
obligation hereunder, fail to perfect or keep perfected, or impair, any such
security interest, or extend or renew for one or more periods (whether or not
longer than the original period) or release, compromise, alter or exchange any
obligations of any nature of any obligor with respect to any such property, and
(e) resort to the Grantors (or any of them) for payment of any of the Secured
Obligations when due, whether or not the Administrative Agent or such Lender
shall have resorted to any property securing any of the Secured Obligations or
any obligation hereunder or shall have proceeded against any other of the
Grantors or any other obligor primarily or secondarily obligated with respect to
any of the Secured Obligations.
2.5 Waivers. Each Guarantor waives any and all notice of the
creation, renewal, extension or accrual of any of the Secured Obligations and
notice of or proof of reliance by the Administrative Agent or any Lender upon
the guaranty contained in this Section 2 or acceptance of the guaranty contained
in this Section 2; the Secured Obligations, and any of them, shall conclusively
be deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon the guaranty contained in this Section 2,
and all dealings between the Companies 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
the guaranty contained in this Section 2. Each Guarantor waives (a) diligence,
presentment, protest, demand for payment and notice of default, dishonor or
nonpayment and all other notices whatsoever to or upon the Companies or any of
the Guarantors with respect to the Secured Obligations, (b) notice of the
existence or creation or non-payment of all or any of the Secured Obligations
and (c) all diligence in collection or protection of or realization upon any
Secured Obligations or any security for or guaranty of any Secured Obligations.
2.6 Payments. Each Guarantor hereby guaranties that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars at the office of the Administrative Agent specified in
the Credit Agreement.
SECTION 3 GRANT OF SECURITY INTEREST.
3.1 Grant. Each Grantor hereby assigns and transfers to the
Administrative Agent, and hereby grants to the Administrative Agent, in each
case, for the ratable benefit of the Lenders and (to the extent provided herein)
their Affiliates, a continuing security interest in all of its Collateral, as
collateral security for the prompt and complete payment and performance when due
(whether at the stated maturity, by acceleration or otherwise) of the Companies
Obligations or the Guarantor Obligations, as the case may be.
-7-
SECTION 4 REPRESENTATIONS AND WARRANTIES.
To induce the Administrative Agent and the Lenders to enter
into the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Companies thereunder, each Grantor jointly and
severally hereby represents and warrants to the Administrative Agent and each
Lender that:
4.1 Title; No Other Liens. Each Grantor has good and
marketable title to, or a valid leasehold interest in, each item of Collateral,
in each case, free and clear of any and all Liens other than Permitted Liens. No
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 filings
evidencing Permitted Liens and filings for which termination statements have
been delivered to the Administrative Agent.
4.2 Perfected First Priority Liens. The security interests
granted pursuant to this Agreement (a) upon completion of the filings and other
actions specified on Schedule 2 (which, in the case of all filings and other
documents referred to on Schedule 2, have been delivered to the Administrative
Agent in completed and duly executed form) will constitute valid perfected
security interests in all of the Collateral in favor of the Administrative
Agent, for the ratable benefit of the Lenders, as collateral security for each
Grantor's Secured Obligations, enforceable in accordance with the terms hereof
against all creditors of each Grantor and any Persons purporting to purchase any
Collateral from each Grantor, other than (i) Inventory sold in the ordinary
course of such Grantor's business and (ii) such other sales of Collateral with
respect to which the Administrative Agent (acting with the requisite consent of
the Lenders, if required) has provided its consent, and (b) are prior to all
other Liens on the Collateral in existence on the date hereof except for
Permitted Liens. The filings and other actions specified on Schedule 2
constitute all of the filings and other actions necessary to perfect all
security interests granted hereunder.
4.3 Grantor Information. On the date hereof, Schedule 3 sets
forth (a) each Grantor's jurisdiction of organization, (b) the location of each
Grantor's chief executive office, (c) each Grantor's exact legal name as it
appears on its organizational documents and (d) each Grantor's organizational
identification number (to the extent a Grantor is organized in a jurisdiction
which assigns such numbers) and federal employer identification number.
4.4 Collateral Locations. On the date hereof, Schedule 4 sets
forth (a) each place of business of each Grantor (including its chief executive
office), (b) all locations where all Inventory and the Equipment owned by each
Grantor is kept, and (c) whether each such Collateral location and place of
business (including each Grantor's chief executive office) is owned or leased
(and if leased, specifies the complete name and notice address of each lessor).
No Collateral is located outside the United States or in the possession of any
lessor, bailee, warehouseman or consignee, except as indicated on Schedule 4.
4.5 Certain Property. None of the Collateral constitutes, or
is the Proceeds of, (a) Farm Products, (b) Health Care Insurance Receivables or
(c) vessels, aircraft or any other property subject to any certificate of title
or other registration statute of the United States, any
-8-
State or other jurisdiction, except for vehicles owned by the Grantors and used
by the Grantors in the ordinary course of business other than Copyrights,
Patents and Trademarks.
4.6 Investment Property. (a) The Pledged Equity pledged by
each Grantor hereunder constitutes all the issued and outstanding equity
interests of each domestic Issuer owned by such Grantor (other than Immaterial
Subsidiaries).
(b) All of the Pledged Equity has been duly and validly issued
and is fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid and
binding obligation of the obligor with respect thereto, 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). No obligor with respect to any
Pledged Note has any defense, offset or counterclaim with respect to payment of
such Pledged Note.
(d) Schedule 1 lists all Investment Property owned by each
Grantor (other than the ownership interest in an Immaterial Subsidiary). Each
Grantor is the record and beneficial owner of, and has good and marketable title
to, the Investment Property pledged by it hereunder, free of any and all Liens
or options in favor of, or claims of, any other Person, except Permitted Liens.
4.7 Receivables.
(a) No material amount payable to such Grantor under or in
connection with any Receivable is evidenced by any Instrument or Chattel Paper
which has not been delivered to (and appropriately endorsed to) the
Administrative Agent.
(b) No obligor on any Eligible Receivable is a governmental
authority.
(c) The amounts represented by such Grantor to the Lenders
from time to time as owing to such Grantor in respect of the Receivables (to the
extent such representations are required by any of the Loan Documents) will, as
of the date of such representation, be accurate.
4.8 Intellectual Property.
(a) Schedule 5 lists all registered (or applications for
registration) or material unregistered Intellectual Property owned by such
Grantor in its own name or which is licensed by such Grantor on the date hereof.
(b) On the date hereof, all material Intellectual Property
owned by any Guarantor is valid, subsisting, unexpired and enforceable and has
not been abandoned.
(c) Except as set forth in Schedule 5, none of the material
Intellectual Property is the subject of any licensing or franchise agreement
pursuant to which such Grantor is the licensor or franchisor.
-9-
(d) Each Grantor owns and possesses or has a license or other
right to use all Intellectual Property as is necessary for the conduct of the
businesses of such Grantor, without any infringement by, or upon rights of,
others which could reasonably be expected to have a Material Adverse Effect and,
with respect to any licensed Intellectual Property, all such licenses are in
full force and effect and such Grantor has no knowledge of any material breach
thereof by any party thereto.
4.9 Depositary and Other Accounts. All depositary and other
accounts maintained by each Grantor are described on Schedule 6 hereto, which
description includes for each such account the name of the Grantor maintaining
such account, the name, address, telephone and fax numbers of the financial
institution at which such account is maintained, the account number and the
account officer, if any, of such account.
SECTION 5 COVENANTS.
Each Grantor covenants and agrees with the Administrative
Agent and the Lenders that, from and after the date of this Agreement until the
Secured Obligations shall have been Paid in Full:
5.1 Delivery of Instruments, Certificated Securities and
Chattel Paper. If any amount payable under or in connection with any of the
Collateral in excess of $100,000 (in the aggregate for all Grantors) shall be or
become evidenced by any Instrument, Certificated Security (other than
Certificated Securities of an Immaterial Subsidiary) or Chattel Paper, such
Instrument, Certificated Security or Chattel Paper shall be immediately
delivered to the Administrative Agent, duly endorsed in a manner satisfactory to
the Administrative Agent, to be held as Collateral pursuant to this Agreement.
5.2 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 Section 4.2 and shall defend such security interest against the
claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Administrative Agent from
time to time statements and schedules further identifying and describing the
assets and property of such Grantor and such other reports in connection
therewith as the Administrative Agent may reasonably request, all in reasonable
detail.
(c) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of such Grantor,
such Grantor will promptly and duly execute and deliver, and have recorded, such
further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including (i) filing any financing or continuation statements
under the UCC (or other similar laws) in effect in any jurisdiction with respect
to the security interests created hereby and (ii) in the case of Investment
Property and any other relevant Collateral, taking any actions
-10-
necessary to enable the Administrative Agent to obtain "control" (within the
meaning of the applicable UCC) with respect thereto.
5.3 Changes in Locations, Name, etc.
(a) Such Grantor shall not, except upon 5 Business Days' prior
written notice to the Administrative Agent and delivery to the Administrative
Agent of (a) all additional financing statements, landlord waivers (if required
pursuant to Section 5.9(a)) and other documents reasonably requested by the
Administrative Agent as to the validity, perfection and priority of the security
interests provided for herein and (b) if applicable, a written supplement to
Schedule 4 showing any additional location at which Inventory or Equipment shall
be kept:
(i) change its jurisdiction of organization or the location of
its chief executive office from that specified on Schedule 3 or in any
subsequent notice delivered pursuant to this Section 5.3; or
(ii) change its name, organization identification number or
organizational type.
(b) Such Grantor shall not, except upon 5 Business Days' prior
written notice to the Administrative Agent and delivery to the Administrative
Agent of (a) all additional financing statements, landlord waivers (if required
pursuant to Section 5.9(a)) and other documents reasonably requested by the
Administrative Agent as to the validity, perfection and priority of the security
interests provided for herein and (b) if applicable, a written supplement to
Schedule 4 showing any additional location at which Inventory or Equipment shall
be kept, move the location of its primary offices or headquarters (e.g.,
Melville, NY or, after the Closing Date, any other site used in a similar manner
or for a similar purpose as such sites).
(c) Such Grantor shall, concurrent with delivery of each
Borrowing Base Certificate required pursuant to Section 10.1.6 of the Credit
Agreement, provide the Administrative Agent with (i) a written supplement to
Schedule 4 showing any additional locations at which Inventory and Equipment are
kept and (ii) all additional financing statements, landlord waivers (if required
pursuant to Section 5.9(a)) and other documents reasonably requested by the
Administrative Agent as to the validity, perfection and priority of the security
interests provided for herein.
5.4 Notices. Such Grantor will advise the Administrative Agent
promptly, in reasonable detail, of:
(a) any Lien (other than Permitted Liens) on any of the
Collateral which would adversely affect the ability of the Administrative Agent
to exercise any of its remedies hereunder; and
(b) the occurrence of any other event which could reasonably
be expected to have a material adverse effect on the aggregate value of the
Collateral or on the Liens created hereby.
5.5 Investment Property.
-11-
(a) If such Grantor shall become entitled to receive or shall
receive any certificate, option or rights in respect of the equity interests of
any Issuer, whether in addition to, in substitution for, as a conversion of, or
in exchange for, any of the Pledged Equity, or otherwise in respect thereof,
such Grantor shall accept the same as the agent of the Administrative Agent and
the Lenders, hold the same in trust for the Administrative Agent and the Lenders
and deliver the same forthwith to the Administrative Agent in the exact form
received, duly endorsed by such Grantor to the Administrative Agent, if
required, together with an undated instrument of transfer covering such
certificate duly executed in blank by such Grantor and with, if the
Administrative Agent so requests, signature guarantied, to be held by the
Administrative Agent, subject to the terms hereof, as additional Collateral for
the Secured Obligations. Except as otherwise provided in Section 11.4(d) of the
Credit Agreement, any sums paid upon or in respect of the Investment Property
upon the liquidation or dissolution of any Issuer shall be paid over to the
Administrative Agent to be held by it hereunder as additional Collateral for the
Secured Obligations, and in case any distribution of capital shall be made on or
in respect of the Investment Property or any property shall be distributed upon
or with respect to the Investment Property pursuant to the recapitalization or
reclassification of the capital of any Issuer or pursuant to the reorganization
thereof, the property so distributed shall, unless otherwise subject to a
perfected Lien in favor of the Administrative Agent for the ratable benefit of
the Lenders, be delivered to the Administrative Agent to be held by it hereunder
as additional Collateral for the Secured Obligations. If any such sums of money
or property so paid or distributed in respect of the Investment Property shall
be received by such Grantor, such Grantor shall, until such money or property is
paid or delivered to the Administrative Agent, hold such money or property in
trust for the Lenders, segregated from other funds of such Grantor, as
additional Collateral for the Secured Obligations.
(b) Without the prior written consent of the Administrative
Agent, such Grantor will not (i) vote to enable, or take any other action to
permit, any Issuer to issue any equity interests of any nature or to issue any
other securities or interests convertible into or granting the right to purchase
or exchange for any equity interests of any nature of any Issuer, except, in
each case, as permitted by the Credit Agreement, (ii) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to, the
Investment Property or Proceeds thereof (except pursuant to a transaction
expressly permitted by the Credit Agreement) other than, with respect to
Investment Property not constituting Pledged Equity or Pledged Notes, any such
action which is not prohibited by the Credit Agreement, (iii) create, incur or
permit to exist any Lien or option in favor of, or any claim of any Person with
respect to, any of the Investment Property or Proceeds thereof, or any interest
therein, except for Permitted Liens, or (iv) enter into any agreement or
undertaking restricting the right or ability of such Grantor or the
Administrative Agent to sell, assign or transfer any of the Investment Property
or Proceeds thereof, except, with respect to such Investment Property,
shareholders' agreements entered into by such Grantor with respect to Persons in
which such Grantor maintains an ownership interest of 50% or less in accordance
with the Credit Agreement.
(c) In the case of each Grantor which is an Issuer, such
Issuer agrees that (i) it will be bound by the terms of this Agreement relating
to the Investment Property issued by it and will comply with such terms insofar
as such terms are applicable to it, (ii) it will notify the Administrative Agent
promptly in writing of the occurrence of any of the events described in Section
5.5(a) with respect to the Investment Property issued by it and (iii) the terms
of Sections
-12-
6.3(c) and 6.7 shall apply to such Grantor with respect to all actions that may
be required of it pursuant to Section 6.3(c) or 6.7 regarding the Investment
Property issued by it.
5.6 Receivables.
(a) Other than in the ordinary course of business consistent
with its past practice and in amounts which are not material to such Grantor, or
at any time after the occurrence and during the continuance of an Event of
Default, 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 adversely affect the value thereof.
(b) Such Grantor will deliver to the Administrative Agent a
copy of each material demand, notice or document received by it that questions
or calls into doubt the validity or enforceability of more than 5% of the
aggregate amount of the then outstanding Eligible Receivables for all Grantors.
5.7 Intellectual Property.
(a) Such Grantor (either itself or through licensees) will (i)
continue to use each Trademark material to its business in order to maintain
such Trademark in full force free from any claim of abandonment for non-use,
(ii) maintain as in the past the quality of products and services offered under
such Trademark, (iii) use such Trademark with the appropriate notice of
registration and all other notices and legends required by applicable law, (iv)
not adopt or use any xxxx which is confusingly similar or a colorable imitation
of such Trademark unless the Administrative Agent, for the ratable benefit of
the Lenders, shall obtain a perfected security interest in such xxxx pursuant to
this Agreement, and (v) not (and not permit any licensee or sublicensee thereof
to) do any act or knowingly omit to do any act whereby such Trademark may become
invalidated or impaired in any way.
(b) Such Grantor (either itself or through licensees) will not
do any act, or omit to do any act, whereby any Patent material to its business
may become forfeited, abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) (i) will
employ each Copyright material to its business and (ii) will not (and will not
permit any licensee or sublicensee thereof to) do any act or knowingly omit to
do any act whereby any material portion of such Copyrights may become
invalidated or otherwise impaired. Such Grantor will not (either itself or
through licensees) do any act whereby any material portion of such Copyrights
may fall into the public domain.
(d) Such Grantor (either itself or through licensees) will not
do any act that knowingly uses any Intellectual Property material to its
business to infringe the intellectual property rights of any other Person.
-13-
(e) Such Grantor will notify the Administrative Agent
immediately if it knows, or has reason to know, that any application or
registration relating to any material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse determination
or development (including the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark Office,
the United States 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 the
registration of any Intellectual Property with the United States Patent and
Trademark Office, the United States 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 concurrently with the next
delivery of financial statements of the Companies pursuant to Section 10.1 of
the Credit Agreement. Upon the request of the Administrative Agent, such Grantor
shall execute and deliver, and have recorded, any and all agreements,
instruments, documents, and papers as the Administrative Agent may request to
evidence the Administrative Agent's and the Lenders' security interest in any
Copyright, Patent or Trademark and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby.
(g) Such Grantor will take all reasonable and necessary steps
to maintain and pursue each application (and to obtain the relevant
registration) and to maintain each registration of all material Intellectual
Property owned by it.
(h) In the event that any material Intellectual Property is
infringed upon or misappropriated or diluted by a third party, such Grantor
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 after it learns thereof (and the Administrative Agent
shall, in turn, notify each of the Lenders promptly) and, to the extent, in its
reasonable judgment, such Grantor determines it appropriate under the
circumstances, xxx for infringement, misappropriation or dilution, to seek
injunctive relief where appropriate and to recover any and all damages for such
infringement, misappropriation or dilution.
5.8 Depositary and Other Deposit Accounts. No Grantor shall
open any depositary or other deposit accounts unless such Grantor shall have
given the Administrative Agent 10 days' prior written notice of its intention to
open any such new deposit accounts. The Grantors shall deliver to the
Administrative Agent a revised version of Schedule 6 showing any changes thereto
within 5 days of any such change. Each Grantor hereby authorizes the financial
institutions at which such Grantor maintains a deposit account to provide the
Administrative Agent with such information with respect to such deposit account
as the Administrative Agent may from time to time reasonably request, and each
Grantor hereby consents to such information being provided to the Administrative
Agent. Each Grantor will, upon the Administrative Agent's request, cause each
financial institution at which such Grantor maintains a depositary or other
deposit account (other than xxxxx cash and payroll accounts with balances in
excess of $25,000 in the aggregate for all such accounts) to enter into a bank
agency or other similar
-14-
agreement with the Administrative Agent and such Grantor, in form and substance
reasonably satisfactory to the Administrative Agent, in order to give the
Administrative Agent "control" (as defined in the UCC) of such account. Each
Grantor shall direct all Account Debtors to make all payments on the Accounts
directly to a bank account maintained with the Administrative Agent (an "Agent
Account"). If any Grantor or any director, officer, employee, agent of such
Grantor, or any other Person acting for or in concert with such Grantor shall
receive any monies, checks, notes, drafts or other payments relating to or as
proceeds of Accounts or other Collateral, such Grantor and each such Person
shall receive all such items in trust for, and as the sole and exclusive
property of, the Administrative Agent and the Lenders and, immediately upon
receipt thereof, shall remit the same (or cause the same to be remitted) in kind
to the Agent Account. The Grantors, jointly and severally, agree to pay all
fees, costs and expenses which the Administrative Agent incurs in connection
with opening and maintaining the Agent Account and depositing for collection by
the Administrative Agent any check or other item of payment received by the
Administrative Agent on account of the Obligations. All of such fees, costs and
expenses shall constitute Secured Obligations hereunder and shall be payable to
the Administrative Agent by the Grantors upon demand. All checks, drafts,
instruments and other items of payment or proceeds of Collateral shall be
endorsed by the applicable Grantor to the Administrative Agent, and, if that
endorsement of any such item shall not be made for any reason, the
Administrative Agent is hereby irrevocably authorized to endorse the same on
such Grantor's behalf. For the purpose of this section, each Grantor irrevocably
hereby makes, constitutes and appoints the Administrative Agent (and all Persons
designated by the Administrative Agent for that purpose) as such Grantor's true
and lawful attorney and agent-in-fact (a) to endorse such Grantor's name upon
said items of payment and/or proceeds of Collateral and upon any Chattel Paper,
document, Instrument, invoice or similar document or agreement relating to any
Account of such Grantor or goods pertaining thereto; (b) to take control in any
manner of any item of payment or proceeds thereof; and (c) to have access to any
lock box or postal box into which any of such Grantor's mail is deposited, and
open and process all mail addressed to the such Grantor and deposited therein.
All amounts received in an Agent Account shall be deemed received by the
Administrative Agent in accordance with Section 7.2 of the Credit Agreement and
applied to Revolving Outstandings. In no event shall any amount be applied
unless and until such amount shall have been credited in immediately available
funds to an Agent Account.
5.9 Other Matters.
(a) If any Grantor shall lease any real property or facilities
after the Closing Date (other than facilities leased for the purpose of storage
of assets and property of its customers in the ordinary course of such Grantor's
business), such Grantor shall use reasonable efforts to cause the landlord in
respect of such leased property or facilities to sign a Collateral Access
Agreement; provided, however, that until a fully-executed Collateral Access
Agreement with respect to such property or facility is delivered to the
Administrative Agent, a Rent Reserve with respect to such property or facility
will be imposed against the Borrowing Base; it being agreed that this sentence
shall not impose any requirement in addition to that set forth in Section 12.1.7
of the Credit Agreement for a Rent Reserve with respect to any facilities leased
by any Grantor as of the Closing Date. Such requirement may be waived at the
option of the Administrative Agent.
-15-
(b) Each Grantor authorizes the Administrative Agent to, at
any time and from time to time, file financing statements, continuation
statements, and amendments thereto that describe the Collateral as "all assets"
of each Grantor, or words of similar effect, and which contain any other
information required pursuant to the UCC for the sufficiency of filing office
acceptance of any financing statement, continuation statement, or amendment, and
each Grantor agrees to furnish any such information to the Administrative Agent
promptly upon request. Any such financing statement, continuation statement, or
amendment may be signed by the Administrative Agent on behalf of any Grantor and
may be filed at any time in any jurisdiction.
(c) Each Grantor shall, at any time and from time and to time,
take such steps as the Administrative Agent may reasonably request for the
Administrative Agent (i) after the occurrence and during the continuance of an
Event of Default, to obtain an acknowledgement, in form and substance reasonably
satisfactory to the Administrative Agent, of any bailee having possession of any
of the Collateral, stating that such bailee holds such Collateral for the
Administrative Agent, (ii) to obtain "control" of any letter-of-credit rights,
or electronic chattel paper (as such terms are defined by the UCC with
corresponding provisions thereof defining what constitutes "control" for such
items of Collateral), with any agreements establishing control to be in form and
substance reasonably satisfactory to the Administrative Agent, and (iii)
otherwise to insure the continued perfection and priority of the Administrative
Agent's security interest in any of the Collateral and of the preservation of
its rights therein. If any Grantor shall at any time, acquire a "commercial tort
claim" (as such term is defined in the UCC) in excess of $25,000, such Grantor
shall promptly notify the Administrative Agent thereof in writing and supplement
Schedule 7, therein providing a reasonable description and summary thereof, and
upon delivery thereof to the Administrative Agent, such Grantor shall be deemed
to thereby grant to the Administrative Agent (and such Grantor hereby grants to
the Administrative Agent, in each case, for the ratable benefit of the Lenders)
a security interest and lien in and to such commercial tort claim and all
proceeds thereof, all upon the terms of and governed by this Agreement.
(d) Without limiting the generality of the foregoing, if any
Grantor at any time holds or acquires an interest in any electronic chattel
paper or any "transferable record", as that term is defined in Section 201 of
the federal Electronic Signatures in Global and National Commerce Act, or in
Section 16 of the Uniform Electronic Transactions Act as in effect in any
relevant jurisdiction, such Grantor shall promptly notify the Administrative
Agent thereof and, at the request of the Administrative Agent, shall take such
action as the Administrative Agent may reasonably request to vest in the
Administrative Agent "control" under Section 9-105 of the UCC of such electronic
chattel paper or control under Section 201 of the federal Electronic Signatures
in Global and National Commerce Act or, as the case may be, Section 16 of the
Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of
such transferable record. The Administrative Agent agrees with the Grantors that
the Administrative Agent will arrange, pursuant to procedures satisfactory to
the Administrative Agent and so long as such procedures will not result in the
Administrative Agent's loss of control, for the Grantors to make alterations to
the electronic chattel paper or transferable record permitted under Section
9-105 of the UCC or, as the case may be, Section 201 of the federal Electronic
Signatures in Global and National Commerce Act or Section 16 of the Uniform
Electronic Transactions Act for a party in control to make without loss of
control, unless an Event of Default has occurred and is continuing or would
occur
-16-
after taking into account any action by any Grantor with respect to such
electronic chattel paper or transferable record.
SECTION 6 REMEDIAL PROVISIONS.
6.1 Certain Matters Relating to Receivables.
(a) At any time and from time to time, the Administrative
Agent in such Grantor's name or, following the occurrence and during the
continuance of an Event of Default, in its own name or in the name of others,
shall have the right to make test verifications of the existence, amount and
terms of any Receivables or otherwise communicate with obligors under the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as
the Administrative Agent may require in connection with such test verifications
and other communications. At any time and from time to time, upon the
Administrative Agent's request and at the expense of the relevant Grantor, such
Grantor shall cause independent public accountants or others reasonably
satisfactory to the Administrative Agent to furnish to the Administrative Agent
reports showing reconciliations, agings and test verifications of, and trial
balances for, the Receivables.
(b) The Administrative Agent hereby authorizes each Grantor to
collect such Grantor's Receivables, and the Administrative Agent may curtail or
terminate such authority at any time after the occurrence and during the
continuance of an Event of Default. Any payments of Receivables, when collected
by any Grantor, (i) shall be forthwith (and, in any event, within 2 Business
Days) deposited by such Grantor in the exact form received, duly endorsed by
such Grantor to the Administrative Agent if required into the Agent Account, and
(ii) until so turned over, shall be held by such Grantor in trust for the
Administrative Agent and the Lenders, segregated from other funds of such
Grantor.
(c) At any time and from time to time after the occurrence and
during the continuance of an Event of Default, at the Administrative Agent's
request, each Grantor shall deliver to the Administrative Agent all original and
other documents evidencing, and relating to, the agreements and transactions
which gave rise to the Receivables, including all original orders, invoices and
shipping receipts.
6.2 Communications with Obligors; Grantors Remain Liable;
Intellectual Property Rights.
(a) Upon the request of the Administrative Agent at any time
after the occurrence and during the continuance of an Event of Default, each
Grantor shall notify obligors on the Receivables that the Receivables have been
assigned to the Administrative Agent for the ratable benefit of the Lenders and
that payments in respect thereof shall be made directly to the Administrative
Agent.
(b) Anything herein to the contrary notwithstanding, each
Grantor shall remain liable in respect of each of the Receivables to observe and
perform all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. Neither the Administrative Agent nor any Lender shall have any
obligation or liability under any Receivable (or any agreement giving rise
thereto) by reason
-17-
of or arising out of this Agreement or the receipt by the Administrative Agent
or any Lender of any payment relating thereto, nor shall the Administrative
Agent or any Lender be obligated in any manner to perform any of the obligations
of any Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto), to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.
(c) For the purpose of enabling the Administrative Agent to
exercise rights and remedies under this Agreement, each Grantor hereby grants to
the Administrative Agent, for the benefit of the Administrative Agent and the
Lenders, an irrevocable, nonexclusive license (exercisable without payment of
royalty or other compensation to such Grantor) to, at any time after the
occurrence and during the continuance of an Event of Default, use, license or
sublicense, any Intellectual Property now owned or hereafter acquired by such
Grantor, and wherever the same may be located, and including in such license
access to all media in which any of the licensed items may be recorded or stored
and to all computer software and programs used for the compilation or printout
thereof.
6.3 Investment Property.
(a) Unless an Event of Default shall have occurred and be
continuing and the Administrative Agent shall have given notice to the relevant
Grantor of the Administrative Agent's intent to exercise its corresponding
rights pursuant to Section 6.3(b), each Grantor shall be permitted to receive
all cash dividends and distributions paid in respect of the Pledged Equity and
all payments made in respect of the Pledged Notes, to the extent permitted in
the Credit Agreement, and to exercise all voting and other rights with respect
to the Investment Property; provided, that no vote shall be cast or other right
exercised or action taken which could reasonably be expected to impair the
Collateral or which would be inconsistent with or result in any violation of any
provision of the Credit Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and
the Administrative Agent shall give notice of its intent to exercise such rights
to the relevant Grantor or Grantors, (i) the Administrative Agent shall have the
right to receive any and all cash dividends and distributions, payments or other
Proceeds paid in respect of the Investment Property and make application thereof
to the Obligations in such order as is provided in Section 6.5, and (ii) any or
all of the Investment Property shall upon the direction of the Administrative
Agent be registered in the name of the Administrative Agent or its nominee, and
the Administrative Agent or its nominee may thereafter exercise (x) all voting
and other rights pertaining to such Investment Property at any meeting of
holders of the equity interests of the relevant Issuer or Issuers or otherwise
and (y) any and all rights of conversion, exchange and subscription and any
other rights, privileges or options pertaining to such Investment Property as if
it were the absolute owner thereof (including the right to exchange at its
discretion any and all of the Investment Property upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate or other structure of any Issuer, or upon the exercise by any
Grantor or the Administrative Agent of any right, privilege or option pertaining
to such
-18-
Investment Property, and in connection therewith, the right to deposit and
deliver any and all of the Investment Property with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Administrative Agent may determine), all without liability
except to account for property actually received by it, but the Administrative
Agent shall have no duty to any Grantor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so
doing.
(c) Each Grantor hereby authorizes and instructs each Issuer
of any Investment Property pledged by such Grantor hereunder to (i) comply with
any instruction received by it from the Administrative Agent in writing that (x)
states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each Issuer
shall be fully protected in so complying and (ii) unless otherwise expressly
permitted hereby, pay any dividends, distributions or other payments with
respect to the Investment Property directly to the Administrative Agent.
6.4 Proceeds to be Turned Over to Administrative Agent. In
addition to the rights of the Administrative Agent and the Lenders specified in
Section 6.1 with respect to payments of Receivables, if an Event of Default
shall occur and be continuing and after receipt of notice from the
Administrative Agent, all Proceeds received by any Grantor consisting of cash,
checks and other cash equivalent items shall be held by such Grantor in trust
for the Administrative Agent and the Lenders, segregated from other funds of
such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over
to the Administrative Agent in the exact form received by such Grantor (duly
endorsed by such Grantor to the Administrative Agent, if required). All Proceeds
received by the Administrative Agent hereunder shall be held by the
Administrative Agent in a collateral account maintained under its sole dominion
and control. All Proceeds, while held by the Administrative Agent in any
collateral account (or by such Grantor in trust for the Administrative Agent and
the Lenders) established pursuant hereto, shall continue to be held as
collateral security for the Secured Obligations and shall not constitute payment
thereof until applied as provided in Section 6.5.
6.5 Application of Proceeds. At such intervals as may be
agreed upon by the Companies and the Administrative Agent, if an Event of
Default shall not have occurred and be continuing, at any time at the
Administrative Agent's election, the Administrative Agent may apply all or any
part of Proceeds from the sale of, or other realization upon, all or any part of
the Collateral in payment of the Secured Obligations in such order as the
Administrative Agent shall determine in its discretion; provided that any
application of any such Proceeds to the principal amount of or interest on the
Revolving Loans or to any fees payable under Section 5.1 and/or Section 5.2(a)
of the Credit Agreement shall be allocated among the Lenders pro rata based on
their respective Pro Rata Shares. Any part of such funds which the
Administrative Agent determines in accordance with the terms hereof and of the
other Loan Documents not to so apply and deems not required as collateral
security for the Secured Obligations shall be paid over from time to time by the
Administrative Agent to the applicable Grantor or to whomsoever may be lawfully
entitled to receive the same. Any balance of such Proceeds remaining after the
Secured Obligations shall have been Paid in Full shall be paid over to the
applicable Grantor or to whomsoever may be lawfully entitled to receive the
same. If an Event of Default shall have
-19-
occurred and is continuing, the Proceeds from the sale of, or other realization
upon, all or any part of the Collateral shall be applied in the following order:
FIRST, to the payment of all fees, costs, expenses and
indemnities of the Administrative Agent (in its capacity as such),
including Attorney Costs, and any other Secured Obligations owing to
the Administrative Agent in respect of sums advanced by the
Administrative Agent to preserve the Collateral or to preserve its
security interest in the Collateral, until paid in full;
SECOND, to the payment of all fees, costs, expenses and
indemnities of the Lenders, pro rata, until paid in full;
THIRD, to the payment of all of the Secured Obligations (other
than Bank Product Obligations) consisting of accrued and unpaid
interest owing to any Lender, pro-rata, until paid in full;
FOURTH, to the payment of all Secured Obligations (other than
Bank Product Obligations) consisting of principal owing to any Lender,
pro-rata, until paid in full;
FIFTH, to the payment of the Administrative Agent an amount
equal to all Secured Obligations in respect of outstanding Letters of
Credit to be held as cash collateral in respect of such obligations;
SIXTH, to the payment of all Bank Products Obligations owing
to any Lender or its Affiliates, pro-rata, until paid in full;
SEVENTH, to the payment of all other Secured Obligations owing
to each Lender, pro-rata, until paid in full; and
EIGHTH, to the payment of any remaining Proceeds, if any, to
whomever may be lawfully entitled to receive such amounts.
6.6 Code and Other Remedies. If an Event of Default shall
occur and be continuing, the Administrative Agent, on behalf of the Lenders, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Secured Obligations, all rights and remedies of a secured party
under the UCC or any other applicable law. Without limiting the generality of
the foregoing, the Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give options to purchase, or otherwise dispose of
and deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker's board or office of the Administrative Agent or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption by the Administrative Agent or any Lender of any credit risk. The
Administrative Agent or any
-20-
Lender 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 Collateral so sold, free of any right or equity of
redemption in any Grantor, which right or equity is hereby waived and released.
Each Grantor further agrees, at the Administrative Agent's request, to assemble
the Collateral and make it available to the Administrative Agent at places which
the Administrative Agent shall reasonably select, whether at such Grantor's
premises or elsewhere. The Administrative Agent shall apply the proceeds of any
action taken by it pursuant to this Section 6.6, after deducting all reasonable
costs and expenses of every kind incurred in connection therewith or incidental
to the care or safekeeping of any of the Collateral or in any way relating to
the Collateral or the rights of the Administrative Agent and the Lenders
hereunder, including Attorney Costs to the payment in whole or in part of the
Secured Obligations, in such order as is provided in Section 6.5, and only after
such application and after the payment by the Administrative Agent of any other
amount required by any provision of law, need the Administrative Agent account
for the surplus, if any, to any Grantor. To the extent permitted by applicable
law, each Grantor waives all claims, damages and demands it may acquire against
the Administrative Agent or any Lender arising out of the exercise by them of
any rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition.
6.7 Registration Rights.
(a) If the Administrative Agent shall determine to exercise
its right to sell any or all of the Pledged Equity pursuant to Section 6.6, and
if in the opinion of the Administrative Agent it is necessary or advisable to
have the Pledged Equity, or that portion thereof to be sold, registered under
the provisions of the Securities Act, the relevant Grantor will cause the Issuer
thereof to (i) execute and deliver, and cause the directors and officers of such
Issuer to execute and deliver, all such instruments and documents, and do or
cause to be done all such other acts as may be, in the opinion of the
Administrative Agent, necessary or advisable to register the Pledged Equity, or
that portion thereof to be sold, under the provisions of the Securities Act,
(ii) use its best efforts to cause the registration statement relating thereto
to become effective and to remain effective for a period of one year from the
date of the first public offering of the Pledged Equity, or that portion thereof
to be sold, and (iii) 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 and the
rules and regulations of the Securities and Exchange Commission applicable
thereto. Each Grantor agrees to cause such Issuer to comply with the provisions
of the securities or "Blue Sky" laws of any and all jurisdictions which the
Administrative Agent shall designate and 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 Equity, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges
-21-
and agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Administrative Agent shall be
under no obligation to delay a sale of any of the Pledged Equity for the period
of time necessary to permit the Issuer thereof to register such securities or
other interests for public sale under the Securities Act, or under applicable
state securities laws, even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Equity pursuant to this Section 6.7 valid and
binding and in compliance with applicable law. Each Grantor further agrees that
a breach of any of the covenants contained in this Section 6.7 will cause
irreparable injury to the Administrative Agent and the Lenders, that the
Administrative Agent and the Lenders have no adequate remedy at law in respect
of such breach and, as a consequence, that each and every covenant contained in
this Section 6.7 shall be specifically enforceable against such Grantor, and
such Grantor hereby waives and agrees not to assert any defenses against an
action for specific performance of such covenants except for a defense that no
Event of Default has occurred.
6.8 Waiver; Deficiency. Each Grantor shall remain liable for
any deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay the Secured Obligations in full and the fees
and disbursements of any attorneys employed by the Administrative Agent or any
Lender to collect such deficiency.
SECTION 7 THE ADMINISTRATIVE AGENT.
7.1 Administrative Agent's Appointment as Attorney-in-Fact,
etc.
(a) Each Grantor 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, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement, and, without limiting the generality of the
foregoing, each Grantor hereby gives the Administrative Agent the power and
right, on behalf of and at the expense of such Grantor, without notice to or
assent by such Grantor, to do any or all of the following:
(i) in the name of such Grantor or its own name, or otherwise,
take possession of and endorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under
any Receivable or with respect to any other Collateral and file any
claim or 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
Receivable or with respect to any other Collateral whenever payable;
-22-
(ii) in the case of any Intellectual Property, execute and
deliver, and have recorded, any and all agreements, instruments,
documents and papers as the Administrative Agent may request to
evidence the Administrative Agent's security interest hereunder in such
Intellectual Property and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby;
(iii) discharge Liens levied or placed on or threatened
against the Collateral, and effect any repairs or insurance called for
by the terms of this Agreement and pay all or any part of the premiums
therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in
Section 6.6 or 6.7, any endorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of
the Collateral to make payment of any and all moneys due or to become
due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (2) ask or demand for, collect, and
receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising
out of any Collateral; (3) sign and endorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (4) commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any
portion thereof and to enforce any other right in respect of any
Collateral; (5) defend any suit, action or proceeding brought against
such Grantor with respect to any Collateral; (6) settle, compromise or
adjust any such suit, action or proceeding and, in connection
therewith, give such discharges or releases as the Administrative Agent
may deem appropriate; (7) assign any Copyright, Patent or 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; (8) vote any right or interest with respect to any
Investment Property; (9) order good standing certificates and conduct
lien searches in respect of such jurisdictions or offices as the
Administrative Agent may deem appropriate; and (10) generally sell,
transfer, pledge and 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 do, at the Administrative Agent's option and such Grantor's
expense, at any time, or from time to time, all acts and things which
the Administrative Agent deems necessary to protect, preserve or
realize upon the Collateral and the Administrative Agent's security
interests therein and to effect the intent of this Agreement, all as
fully and effectively as such Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.
-23-
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) Each Grantor hereby ratifies all that such attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.
7.2 Duty of Administrative Agent. The Administrative Agent's
sole duty with respect to the custody, safekeeping and physical preservation of
the Collateral in its possession shall be to deal with it in the same manner as
the Administrative Agent deals with similar property for its own account.
Neither the Administrative Agent or any Lender nor any of their respective
officers, directors, employees or agents shall be liable for any failure to
demand, collect or realize upon any of the Collateral or for any delay in doing
so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of any Grantor or any other Person or to take any
other action whatsoever with regard to the Collateral or any part thereof. The
powers conferred on the Administrative Agent and the Lenders hereunder are
solely to protect the Administrative Agent's and the Lenders' interests in the
Collateral and shall not impose any duty upon the Administrative Agent or any
Lender to exercise any such powers. The Administrative Agent and the Lenders
shall be accountable only for amounts that they actually receive as a result of
the exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to any Grantor for any act
or failure to act hereunder.
7.3 Authority of Administrative Agent. Each Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Grantors, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Lenders with full
and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.
SECTION 8 MISCELLANEOUS.
8.1 Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified except
in accordance with Section 15.1 of the Credit Agreement.
8.2 Notices. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be addressed to the
Companies and effected in the manner provided for in Section 15.3 of the Credit
Agreement and each Grantor hereby appoints the Company Representative as its
agent to receive notices hereunder.
-24-
8.3 Indemnification by Grantors. THE GRANTORS, JOINTLY AND
SEVERALLY, HEREBY AGREE TO INDEMNIFY, EXONERATE AND HOLD EACH LENDER PARTY FREE
AND HARMLESS FROM AND AGAINST ANY AND ALL INDEMNIFIED LIABILITIES, INCURRED BY
THE LENDER PARTIES OR ANY OF THEM AS A RESULT OF, OR ARISING OUT OF, OR RELATING
TO (A) ANY TENDER OFFER, MERGER, PURCHASE OF EQUITY INTERESTS, PURCHASE OF
ASSETS (INCLUDING THE RELATED TRANSACTIONS) OR OTHER SIMILAR TRANSACTION
FINANCED OR PROPOSED TO BE FINANCED IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY,
WITH THE PROCEEDS OF ANY OF THE LOANS, (B) THE USE, HANDLING, RELEASE, EMISSION,
DISCHARGE, TRANSPORTATION, STORAGE, TREATMENT OR DISPOSAL OF ANY HAZARDOUS
SUBSTANCE AT ANY PROPERTY OWNED OR LEASED BY ANY GRANTOR, (C) ANY VIOLATION OF
ANY ENVIRONMENTAL LAWS WITH RESPECT TO CONDITIONS AT ANY PROPERTY OWNED OR
LEASED BY ANY GRANTOR OR THE OPERATIONS CONDUCTED THEREON, (D) THE
INVESTIGATION, CLEANUP OR REMEDIATION OF OFFSITE LOCATIONS AT WHICH ANY LOAN
PARTY OR THEIR RESPECTIVE PREDECESSORS ARE ALLEGED TO HAVE DIRECTLY OR
INDIRECTLY DISPOSED OF HAZARDOUS SUBSTANCES OR (E) THE EXECUTION, DELIVERY,
PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT BY ANY
OF THE LENDER PARTIES, EXCEPT FOR ANY SUCH INDEMNIFIED LIABILITIES ARISING ON
ACCOUNT OF THE APPLICABLE LENDER PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
AS DETERMINED BY A FINAL, NONAPPEALABLE JUDGMENT BY A COURT OF COMPETENT
JURISDICTION. IF AND TO THE EXTENT THAT THE FOREGOING UNDERTAKING MAY BE
UNENFORCEABLE FOR ANY REASON, EACH GRANTOR HEREBY AGREES TO MAKE THE MAXIMUM
CONTRIBUTION TO THE PAYMENT AND SATISFACTION OF EACH OF THE INDEMNIFIED
LIABILITIES WHICH IS PERMISSIBLE UNDER APPLICABLE LAW. ALL OBLIGATIONS PROVIDED
FOR IN THIS SECTION 8.3 SHALL SURVIVE REPAYMENT OF ALL (AND SHALL BE) SECURED
OBLIGATIONS (AND TERMINATION OF ALL COMMITMENTS UNDER THE CREDIT AGREEMENT), ANY
FORECLOSURE UNDER, OR ANY MODIFICATION, RELEASE OR DISCHARGE OF, ANY OR ALL OF
THE COLLATERAL DOCUMENTS AND TERMINATION OF THIS AGREEMENT.
8.4 Enforcement Expenses.
(a) Each Grantor agrees, on a joint and several basis, to pay
or reimburse on demand each Lender and the Administrative Agent for all
reasonable out-of-pocket costs and expenses (including Attorney Costs) incurred
in collecting against any Guarantor under the guaranty contained in Section 2 or
otherwise enforcing or preserving any rights under this Agreement and the other
Loan Documents.
(b) Each Grantor agrees to pay, and to save the Administrative
Agent and the Lenders 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 which may be payable or determined to be
-25-
payable with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement.
(c) The agreements in this Section 8.4 shall survive repayment
of all (and shall be) Secured Obligations (and termination of all commitments
under the Credit Agreement), any foreclosure under, or any modification, release
or discharge of, any or all of the Collateral Documents and termination of this
Agreement.
8.5 Captions. Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
8.6 Nature of Remedies. All Secured Obligations of each
Grantor and rights of the Administrative Agent and the Lenders expressed herein
or in any other Loan Document shall be in addition to and not in limitation of
those provided by applicable law. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege.
8.7 Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement. Receipt
by telecopy of any executed signature page to this Agreement or any other Loan
Document shall constitute effective delivery of such signature page.
8.8 Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
8.9 Entire Agreement. This Agreement, together with the other
Loan Documents, embodies the entire agreement and understanding among the
parties hereto and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof and any prior arrangements made with respect to the
payment by any Grantor of (or any indemnification for) any fees, costs or
expenses payable to or incurred (or to be incurred) by or on behalf of the
Administrative Agent or the Lenders.
8.10 Successors; Assigns. This Agreement shall be binding upon
Grantors, the Lenders and the Administrative Agent and their respective
successors and assigns, and shall inure to the benefit of Grantors, Lenders and
the Administrative Agent and the successors and assigns of the Lenders and the
Administrative Agent. No other Person shall be a direct or indirect legal
beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this Agreement or any of the other Loan Documents. No Grantor
may assign or transfer any of its rights or Obligations under this Agreement
without the prior written consent of the
-26-
Administrative Agent and each Lender (and any attempted such assignment or
transfer without such consent shall be null and void).
8.11 Governing Law. THIS AGREEMENT SHALL BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES.
8.12 Forum Selection; Consent to Jurisdiction. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT
SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF
ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS; PROVIDED THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE THE ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL
ACTION IN ANY OTHER JURISDICTION. EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH GRANTOR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. EACH
GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM
THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
8.13 Waiver of Jury Trial. EACH GRANTOR, THE ADMINISTRATIVE
AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION
OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT AND ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
8.14 Set-off. Each Grantor agrees that the Administrative
Agent and each Lender have all rights of set-off and bankers' lien provided by
applicable law, and in addition thereto, each Grantor agrees that at any time
any Event of Default exists, the Administrative Agent and each Lender may apply
to the payment of any Secured Obligations, whether or not then due, any and all
balances, credits, deposits, accounts or moneys of such Grantor then or
thereafter with the Administrative Agent or such Lender.
8.15 Acknowledgements. 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
to which it is a party;
-27-
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to any Grantor arising out of or in
connection with this Agreement or any of the other Loan Documents, and
the relationship between the Grantors, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Grantors and the
Lenders.
8.16 Additional Grantors. Each Loan Party that is required to
become a party to this Agreement pursuant to Section 10.9 of the Credit
Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Loan Party of a joinder agreement in the form of
Exhibit G to the Credit Agreement.
8.17 Releases.
(a) At such time as the Secured Obligations have been Paid in
Full, the Collateral shall be released from the Liens created hereby, and this
Agreement and all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent and each Grantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Grantors. At the
request and sole expense of any Grantor following any such termination, the
Administrative Agent shall deliver to the Grantors any Collateral held by the
Administrative Agent hereunder, and execute and deliver to the Grantors such
documents as the Grantors shall reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, then the Administrative Agent, at the request and sole expense of
such Grantor, shall execute and deliver to such Grantor all releases or other
documents reasonably necessary or desirable for the release of the Liens created
hereby on such Collateral. At the request and sole expense of the Companies, a
Guarantor shall be released from its obligations hereunder in the event that all
the equity interests of such Guarantor shall be sold, transferred or otherwise
disposed of in a transaction permitted by the Credit Agreement; provided that
the Companies shall have delivered to the Administrative Agent, with reasonable
notice prior to the date of the proposed release, a written request for release
identifying the relevant Guarantor and the terms of the sale or other
disposition in reasonable detail, including the price thereof and any expenses
in connection therewith, together with a certification by the Companies stating
that such transaction is in compliance with the Credit Agreement and the other
Loan Documents.
8.18 Obligations and Liens Absolute and Unconditional. Each
Grantor understands and agrees that the obligations of each Grantor under this
Agreement shall be construed as a continuing, absolute and unconditional without
regard to (a) the validity or enforceability of any Loan Document, any of the
Secured Obligations or any other collateral security therefor or guaranty or
right of offset with respect thereto at any time or from time to time held by
the Administrative Agent or any Lender, (b) any defense, set-off or counterclaim
-28-
(other than a defense of payment or performance) which may at any time be
available to or be asserted by any Grantor or any other Person against the
Administrative Agent or any Lender, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of any Grantor) which constitutes, or
might be construed to constitute, an equitable or legal discharge of any Grantor
for the Secured Obligations, in bankruptcy or in any other instance. When making
any demand hereunder or otherwise pursuing its rights and remedies hereunder
against any Grantor, the Administrative Agent or any Lender may, but shall be
under no obligation to, make a similar demand on or otherwise pursue such rights
and remedies as it may have against any other Grantor or any other Person or
against any collateral security or guaranty for the Secured Obligations or any
right of offset with respect thereto, and any failure by the Administrative
Agent or any Lender to make any such demand, to pursue such other rights or
remedies or to collect any payments from any other Grantor or any other Person
or to realize upon any such collateral security or guaranty or to exercise any
such right of offset, or any release of any other Grantor or any other Person or
any such collateral security, guaranty or right of offset, shall not relieve any
Grantor of any obligation or liability hereunder, and shall not impair or affect
the rights and remedies, whether express, implied or available as a matter of
law, of the Administrative Agent or any Lender against any Grantor. For the
purposes hereof "demand" shall include the commencement and continuance of any
legal proceedings.
8.19 Reinstatement. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
Grantor or any Issuer for liquidation or reorganization, should Grantor or any
Issuer become insolvent or make an assignment for the benefit of creditors or
should a receiver or trustee be appointed for all or any significant part of
Grantor's or any Issuer's assets, and shall continue to be effective or be
reinstated, as the case may be, if at any time payment and performance of the
Secured Obligations, or any part thereof, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or returned by any
obligee of the Secured Obligations, whether as a "voidable preference",
"fraudulent conveyance", or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Secured Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
[signature pages follow]
-29-
Each of the undersigned has caused this Guaranty and Collateral
Agreement to be duly executed and delivered as of the date first above written.
COMPANIES:
UTi, UNITED STATES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------------
Title: Secretary
UTi BROKERAGE, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------------
Title: Secretary
STANDARD CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------------
Title: Secretary
GUARANTORS:
UTi, (U.S.) HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------------
Title: Secretary
UTi, SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------------
Title: Secretary
ADMINISTRATIVE AGENT:
LASALLE BANK NATIONAL ASSOCIATION, as
Administrative Agent
By: /s/ Xxxx Xxxxxxxx
-------------------------------------------
Title: First Vice President
SCHEDULE 1
INVESTMENT PROPERTY
A. PLEDGED EQUITY
GRANTOR (OWNER OF RECORD OF ISSUER PLEDGED EQUITY PERCENTAGE OF CERTIFICATE
SUCH PLEDGED EQUITY) DESCRIPTION ISSUER (INDICATE NO.)
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
B. PLEDGED NOTES
GRANTOR (OWNER OF RECORD OF SUCH
PLEDGED NOTES) ISSUER PLEDGED NOTES DESCRIPTION
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
C. OTHER INVESTMENT PROPERTY
GRANTOR INVESTMENT PROPERTY DESCRIPTION
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
SCHEDULE 2
FILINGS AND PERFECTION
FILING REQUIREMENT
GRANTOR OR OTHER ACTION FILING OFFICE
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
SCHEDULE 3
GRANTOR INFORMATION
STATE ORG.
GRANTOR OF FEIN ID CHIEF EXECUTIVE
(EXACT LEGAL NAME) ORG. # OFFICE
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
SCHEDULE 4
A. COLLATERAL LOCATIONS
COLLATERAL
LOCATION
OR PLACE OF BUSINESS
(INCLUDING CHIEF OWNER/LESSOR
GRANTOR COLLATERAL EXECUTIVE OFFICE) (IF LEASED)
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
B. COLLATERAL IN POSSESSION OF LESSOR,
BAILEE, CONSIGNEE OR WAREHOUSEMAN
LESSOR/BAILEE/CONSIGNEE/
GRANTOR COLLATERAL WAREHOUSEMAN
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
SCHEDULE 5
INTELLECTUAL PROPERTY
PATENTS AND PATENT LICENSES
DATE DATE
PATENT APPLICATION PATENT PATENT
GRANTOR PATENT NUMBER NUMBER ISSUED APPLIED
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
TRADEMARKS AND TRADEMARK LICENSES
TRADEMARK TRADEMARK
TRADEMARK APPLICATION REGISTRATION DATE OF DATE OF
GRANTOR NUMBER NUMBER NUMBER APPLICATION REGISTRATION
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
COPYRIGHTS
COPYRIGHT COPYRIGHT
COPYRIGHT COPYRIGHT REGISTRATION APPLICATION
GRANTOR TITLE APPLICATION NUMBER NUMBER
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
SCHEDULE 6
DEPOSITARY AND OTHER DEPOSIT ACCOUNTS
FINANCIAL ACCOUNT CONTACT
GRANTOR INSTITUTION NUMBER INFORMATION
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
SCHEDULE 7
COMMERCIAL TORT CLAIMS
