Exhibit 10.13
GUARANTY AND SECURITY AGREEMENT
CSAV, INC.
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GUARANTY, PLEDGE AND SECURITY AGREEMENT
Dated as of July 21, 2006
among
CSAV, INC.
and
Each Other Grantor
From Time to Time Party Hereto
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINED TERMS ................................................. 1
Section 1.1 Definitions ............................................. 1
Section 1.2 Certain Other Terms ..................................... 4
ARTICLE II GUARANTY ..................................................... 5
Section 2.1 Guaranty ................................................ 5
Section 2.2 Limitation of Guaranty .................................. 5
Section 2.3 Contribution ............................................ 5
Section 2.4 Authorization; Other Agreements ......................... 6
Section 2.5 Guaranty Absolute and Unconditional ..................... 6
Section 2.6 Waivers ................................................. 7
Section 2.7 Reliance ................................................ 7
ARTICLE III GRANT OF SECURITY INTEREST .................................. 8
Section 3.1 Collateral .............................................. 8
Section 3.2 Grant of Security Interest in Collateral ................ 8
ARTICLE IV REPRESENTATION AND WARRANTIES ................................ 8
Section 4.1 Title; No Other Liens ................................... 9
Section 4.2 Perfection and Priority ................................. 9
Section 4.3 Jurisdiction of Organization; Chief Executive Office .... 9
Section 4.4 Locations of Inventory, Equipment and Books and
Records ................................................. 9
Section 4.5 Pledged Collateral ...................................... 10
Section 4.6 Instruments and Tangible Chattel Paper Formerly Accounts 10
Section 4.7 Intellectual Property ................................... 10
Section 4.8 Commercial Tort Claims .................................. 11
Section 4.9 Specific Collateral ..................................... 11
Section 4.10 Enforcement ............................................. 11
Section 4.11 Representations and Warranties of the Credit Agreement .. 11
ARTICLE V COVENANTS ..................................................... 11
Section 5.1 Maintenance of Perfected Security Interest; Further
Documentation and Consents .............................. 11
Section 5.2 Changes in Locations, Name, Etc ......................... 12
Section 5.3 Pledged Collateral ...................................... 12
Section 5.4 Accounts ................................................ 13
Section 5.5 Commodity Contracts ..................................... 13
Section 5.6 Delivery of Instruments and Tangible Chattel Paper and
Control of Investment Property, Letter-of-Credit Rights
and Electronic Chattel Paper ............................ 13
Section 5.7 Intellectual Property ................................... 14
Section 5.8 Notices ................................................. 15
Section 5.9 Notice of Commercial Tort Claims ........................ 15
Section 5.10 Controlled Securities Account ........................... 15
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TABLE OF CONTENTS
(continued)
Page
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ARTICLE VI REMEDIAL PROVISIONS .......................................... 15
Section 6.1 Code and Other Remedies ................................. 15
Section 6.2 Accounts and Payments in Respect of General
Intangibles ............................................. 18
Section 6.3 Pledged Collateral ...................................... 19
Section 6.4 Proceeds to be Turned over to and Held by Agent ......... 20
Section 6.5 Sale of Pledged Collateral .............................. 20
Section 6.6 Deficiency .............................................. 21
ARTICLE VII THE AGENT ................................................... 21
Section 7.1 Agent's Appointment as Attorney-in-Fact ................. 21
Section 7.2 Authorization to File Financing Statements .............. 22
Section 7.3 Authority of Agent ...................................... 23
Section 7.4 Duty; Obligations and Liabilities ....................... 23
ARTICLE VIII MISCELLANEOUS .............................................. 23
Section 8.1 Reinstatement ........................................... 23
Section 8.2 Release of Collateral ................................... 24
Section 8.3 Independent Obligations ................................. 24
Section 8.4 No Waiver by Course of Conduct .......................... 24
Section 8.5 Amendments in Writing ................................... 25
Section 8.6 Additional Grantors; Additional Pledged Collateral ...... 25
Section 8.7 Notices ................................................. 25
Section 8.8 Successors and Assigns .................................. 25
Section 8.9 Counterparts ............................................ 25
Section 8.10 Severability ............................................ 25
Section 8.11 Governing Law ........................................... 26
Section 8.12 Waiver of Jury Trial .................................... 26
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ANNEXES AND SCHEDULES
Annex 1 Form of Pledge Amendment
Annex 2 Form of Joinder Agreement
Annex 3 Form of Intellectual Property Security Agreement
Schedule 1 Commercial Tort Claims
Schedule 2 Filings
Schedule 3 Jurisdiction of Organization; Chief Executive Office
Schedule 4 Location of Inventory and Equipment
Schedule 5 Pledged Collateral
Schedule 6 Intellectual Property
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GUARANTY, PLEDGE AND SECURITY AGREEMENT, dated as of July 21, 2006, by
CSAV, Inc. (the "Borrower"), CSAV Holding Corp. ("Holdings") and each of the
other entities listed on the signature pages hereof or that becomes a party
hereto pursuant to Section 8.6 (together with the Borrower, the "Grantors"), in
favor of General Electric Capital Corporation, a Delaware corporation ("GE
Capital"), as administrative agent (in such capacity, together with its
successors and permitted assigns, the "Agent") for the Lenders and the L/C
Issuers (each as defined in the Credit Agreement referred to below) and each
other Secured Party (as defined herein).
WITNESSETH:
WHEREAS, pursuant to the Credit Agreement dated as of July 21, 2006 (as the
same may be amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement") among the Borrower, Holdings, the other Persons
party hereto that are designated as a "Credit Party", Xxxxx Fargo Bank, National
Association, as Syndication Agent, Co-Agent, Swingline Lender and for itself as
a Lender, the L/C Issuers from time to time party thereto, GE Capital, as
Documentation Agent, as Agent for the several financial institutions from time
to time party to this Agreement (collectively, the "Lenders" and individually
each a "Lender") and for itself as a Lender, and such Lenders, the Lenders and
the L/C Issuers have severally agreed to make extensions of credit to the
Borrower upon the terms and subject to the conditions set forth therein;
WHEREAS, each Grantor (other than the Borrower) has agreed to guaranty the
Obligations (as defined in the Credit Agreement) of the Borrower;
WHEREAS, each Grantor will derive substantial direct and indirect benefits
from the making of the extensions of credit under the Credit Agreement; and
WHEREAS, it is a condition precedent to the obligation of the Lenders and
the L/C Issuers to make their respective extensions of credit to the Borrower
under the Credit Agreement that the Grantors shall have executed and delivered
this Agreement to the Agent;
NOW, THEREFORE, in consideration of the premises and to induce the Lenders,
the L/C Issuers and the Agent to enter into the Credit Agreement and to induce
the Lenders and the L/C Issuers to make their respective extensions of credit to
the Borrower thereunder, each Grantor hereby agrees with the Agent as follows:
ARTICLE I
DEFINED TERMS
Section 1.1 Definitions. (a) Capital terms used herein without definition
are used as defined in the Credit Agreement.
(b) The following terms have the meanings given to them in the UCC and
terms used herein without definition that are defined in the UCC have the
meanings given to them in the UCC (such meanings to be equally applicable to
both the singular and plural forms of the terms defined): "account", "account
debtor", "as-extracted collateral", "certificated security", "chattel paper",
"commercial tort claim", "commodity contract", "deposit account", "electronic
chattel paper", "equipment", "farm products", "fixture", "general intangible",
"goods", "health-
GUARANTY AND SECURITY AGREEMENT
[CSAV]
care-insurance receivable", "instruments", "inventory", "investment property",
"letter-of-credit right", "proceeds", "record", "securities account",
"security", "supporting obligation" and "tangible chattel paper".
(c) The following terms shall have the following meanings:
"Agreement" means this Guaranty, Pledge and Security Agreement.
"Applicable IP Office" means the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency
within or outside the United States.
"Cash Collateral Account" means a deposit account or securities
account subject, in each instance, to a Control Agreement, other than accounts
established to cash collateralize L/C Reimbursement Obligations.
"Collateral" has the meaning specified in Section 3.1.
"Controlled Securities Account" means each securities account
(including all financial assets held therein and all certificates and
instruments, if any, representing or evidencing such financial assets) that is
the subject of an effective Control Agreement.
"Excluded Equity" means any voting stock in excess of 65% of the
outstanding voting stock of any Foreign Subsidiary, which, pursuant to the terms
of the Credit Agreement, is not required to guaranty the Obligations and the
equity interests of Chief Hong Kong to the extent not required to be pledged to
Agent pursuant to the terms of Section 4.13 of the Credit Agreement. For the
purposes of this definition, "voting stock" means, with respect to any issuer,
the issued and outstanding shares of each class of Stock of such issuer entitled
to vote (within the meaning of Treasury Regulations Section 1.956-2(c)(2)).
"Excluded Property" means, collectively, (i) Excluded Equity, (ii) any
permit or license or any Contractual Obligation entered into by any Grantor (A)
that prohibits or requires the consent of any Person other than the Borrower and
its Affiliates which has not been obtained as a condition to the creation by
such Grantor of a Lien on any right, title or interest in such permit, license
or Contractual Obligation or any Stock or Stock Equivalent related thereto or
(B) to the extent that any Requirement of Law applicable thereto prohibits the
creation of a Lien thereon, but only, with respect to the prohibition in (A) and
(B), to the extent, and for as long as, such prohibition is not terminated or
rendered unenforceable or otherwise deemed ineffective by the UCC or any other
Requirement of Law, (iii) Property owned by any Grantor that is subject to a
purchase money Lien or a Capital Lease permitted under the Credit Agreement if
the Contractual Obligation pursuant to which such Lien is granted (or in the
document providing for such Capital Lease) prohibits or requires the consent of
any Person other than the Borrower and its Affiliates which has not been
obtained as a condition to the creation of any other Lien on such equipment and
(iv) any "intent to use" Trademark applications for which a statement of use has
not been filed (but only until such statement is filed); provided, however,
"Excluded Property" shall not include any proceeds, products, substitutions or
replacements of Excluded Property (unless such proceeds, products, substitutions
or replacements would otherwise constitute Excluded Property).
"Guaranteed Obligations" has the meaning set forth in Section 2.1.
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"Guarantor" means each Grantor other than the Borrower.
"Guaranty" means the guaranty of the Guaranteed Obligations made by
the Guarantors as set forth in this Agreement.
"Internet Domain Name" means all right, title and interest (and all
related IP Ancillary Rights) arising under any Requirement of Law in or relating
to Internet domain names.
"Material Intellectual Property" means Intellectual Property that is
owned by or licensed to a Grantor and material to the conduct of any Grantor's
business.
"Pledged Certificated Stock" means all certificated securities and any
other Stock or Stock Equivalent of any Person evidenced by a certificate,
instrument or other similar document (as defined in the UCC), in each case owned
by any Grantor, and any distribution of property made on, in respect of or in
exchange for the foregoing from time to time, including all Stock and Stock
Equivalents listed on Schedule 5. Pledged Certificated Stock excludes any
Excluded Property and any Cash Equivalents that are not held in Controlled
Securities Accounts to the extent permitted by Section 5.10 hereof.
"Pledged Collateral" means, collectively, the Pledged Stock and the
Pledged Debt Instruments.
"Pledged Debt Instruments" means all right, title and interest of any
Grantor in instruments evidencing any Indebtedness owed to such Grantor or other
obligations, and any distribution of property made on, in respect of or in
exchange for the foregoing from time to time, including all Indebtedness
described on Schedule 5, issued by the obligors named therein. Pledged Debt
Instruments excludes any Cash Equivalents that are not held in Controlled
Securities Accounts to the extent permitted by Section 5.10 hereof.
"Pledged Investment Property" means any investment property of any
Grantor, and any distribution of property made on, in respect of or in exchange
for the foregoing from time to time, other than any Pledged Stock or Pledged
Debt Instruments. Pledged Investment Property excludes any Cash Equivalents that
are not held in Controlled Securities Accounts to the extent permitted by
Section 5.10 hereof.
"Pledged Stock" means all Pledged Certificated Stock and all Pledged
Uncertificated Stock.
"Pledged Uncertificated Stock" means any Stock or Stock Equivalent of
any Person that is not Pledged Certificated Stock, including all right, title
and interest of any Grantor as a limited or general partner in any partnership
not constituting Pledged Certificated Stock or as a member of any limited
liability company, all right, title and interest of any Grantor in, to and under
any Organization Document of any partnership or limited liability company to
which it is a party, and any distribution of property made on, in respect of or
in exchange for the foregoing from time to time, including in each case those
interests set forth on Schedule 5, to the extent such interests are not
certificated. Pledged Certificated Stock excludes any Excluded Property and any
Cash Equivalents that are not held in Controlled Securities Accounts to the
extent permitted by Section 5.10 hereof.
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"Secured Party" means the Agent, each Lender, each L/C Issuer, each
other Indemnitee and each other holder of any Obligation of a Credit Party
including GE Capital, as issuer of any Swap Related L/C.
"Software" means (a) all computer programs, including source code and
object code versions, (b) all data, databases and compilations of data, whether
machine readable or otherwise, and (c) all documentation, training materials and
configurations related to any of the foregoing.
"Subsidiary Guarantor" means any Guarantor that is a Subsidiary of the
Borrower.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the State of New York; provided, however, that, in the event that, by reason
of mandatory provisions of any applicable Requirement of Law, any of the
attachment, perfection or priority of the Agent's or any other Secured Party's
security interest in any Collateral is governed by the Uniform Commercial Code
of a jurisdiction other than the State of New York, "UCC" shall mean the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such attachment, perfection or priority and for
purposes of the definitions related to or otherwise used in such provisions.
"Vehicles" means all vehicles covered by a certificate of title law of
any state.
Section 1.2 Certain Other Terms.
(a) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms. The terms
"herein", "hereof' and similar terms refer to this Agreement as a whole and not
to any particular Article, Section or clause in this Agreement. References
herein to an Annex, Schedule, Article, Section or clause refer to the
appropriate Annex or Schedule to, or Article, Section or clause in this
Agreement. Where the context requires, provisions relating to any Collateral
when used in relation to a Grantor shall refer to such Grantor's Collateral or
any relevant part thereof.
(b) Other Interpretive Provisions.
(i) Defined Terms. Unless otherwise specified herein or therein,
all terms defined in this Agreement shall have the defined meanings when
used in any certificate or other document made or delivered pursuant
hereto.
(ii) The Agreement. The words "hereof, "herein", "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
(iii) Certain Common Terms. The term "including" is not limiting
and means "including without limitation."
(iv) Performance; Time. Whenever any performance obligation
hereunder (other than a payment obligation) shall be stated to be due or
required to be satisfied on a day other than a Business Day, such
performance shall be made or satisfied on the next succeeding Business Day.
In the computation of periods of time from a
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specified date to a later specified date, the word "from" means "from and
including"; the words "to" and "until" each mean "to but excluding", and
the word "through" means "to and including." If any provision of this
Agreement refers to any action taken or to be taken by any Person, or which
such Person is prohibited from taking, such provision shall be interpreted
to encompass any and all means, direct or indirect, of taking, or not
taking, such action.
(v) Contracts. Unless otherwise expressly provided herein,
references to agreements and other contractual instruments, including this
Agreement and the other Loan Documents, shall be deemed to include all
subsequent amendments, thereto, restatements and substitutions thereof and
other modifications and supplements thereto which are in effect from time
to time, but only to the extent such amendments and other modifications are
not prohibited by the terms of any Loan Document.
(vi) Laws. References to any statute or regulation are to be
construed as including all statutory and regulatory provisions related
thereto or consolidating, amending, replacing, supplementing or
interpreting the statute or regulation.
ARTICLE II
GUARANTY
Section 2.1 Guaranty. To induce the Lenders to make the Loans and the L/C
Issuers to Issue Letters of Credit, each Guarantor hereby, jointly and
severally, absolutely, unconditionally and irrevocably guarantees, as primary
obligor and not merely as surety, the full and punctual payment when due,
whether at stated maturity or earlier, by reason of acceleration, mandatory
prepayment or otherwise in accordance with any Loan Document, of all the
Obligations of the Borrower whether existing on the date hereof or hereinafter
incurred or created (the "Guaranteed Obligations"). This Guaranty by each
Guarantor hereunder constitutes a guaranty of payment and not of collection.
Section 2.2 Limitation of Guaranty. Any term or provision of this Guaranty
or any other Loan Document to the contrary notwithstanding, the maximum
aggregate amount for which any Subsidiary Guarantor shall be liable hereunder
shall not exceed the maximum amount for which such Subsidiary Guarantor can be
liable without rendering this Guaranty or any other Loan Document, as it relates
to such Subsidiary Guarantor, subject to avoidance under applicable Requirements
of Law relating to fraudulent conveyance or fraudulent transfer (including the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act and
Section 548 of title 11 of the United States Code or any applicable provisions
of comparable Requirements of Law) (collectively, "Fraudulent Transfer Laws").
Any analysis of the provisions of this Guaranty for purposes of Fraudulent
Transfer Laws shall take into account the right of contribution established in
Section 2.3 and, for purposes of such analysis, give effect to any discharge of
intercompany debt as a result of any payment made under the Guaranty.
Section 2.3 Contribution. To the extent that any Subsidiary Guarantor shall
be required hereunder to pay any portion of any Guaranteed Obligation exceeding
the greater of (a) the amount of the value actually received by such Subsidiary
Guarantor from the Loans and other Obligations and (b) the amount such
Subsidiary Guarantor would otherwise have paid if such Subsidiary Guarantor had
paid the aggregate amount of the Guaranteed Obligations (excluding the amount
thereof repaid by the Borrower and Holdings) in the same proportion as
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such Subsidiary Guarantor's net worth on the date enforcement is sought
hereunder bears to the aggregate net worth of all the Subsidiary Guarantors on
such date, then such Guarantor shall be reimbursed by such other Subsidiary
Guarantors for the amount of such excess, pro rata, based on the respective net
worth of such other Subsidiary Guarantors on such date.
Section 2.4 Authorization; Other Agreements. The Secured Parties are hereby
authorized, without notice to or demand upon any Guarantor and without
discharging or otherwise affecting the obligations of any Guarantor hereunder
and without incurring any liability hereunder, from time to time, to do each of
the following:
(a) (i) modify, amend, supplement or otherwise change, (ii) accelerate
or otherwise change the time of payment or (iii) waive or otherwise consent to
noncompliance with, any Guaranteed Obligation or any Loan Document;
(b) apply to the Guaranteed Obligations any sums by whomever paid or
however realized to any Guaranteed Obligation in such order as provided in the
Loan Documents;
(c) refund at any time any payment received by any Secured Party in
respect of any Guaranteed Obligation;
(d) (i) sell, exchange, enforce, waive, substitute, liquidate,
terminate, release, abandon, fail to perfect, subordinate, accept, substitute,
surrender, exchange, affect, impair or otherwise alter or release any Collateral
for any Guaranteed Obligation or any other guaranty therefor in any manner, (ii)
receive, take and hold additional Collateral to secure any Guaranteed
Obligation, (iii) add, release or substitute any one or more other Guarantors,
makers or endorsers of any Guaranteed Obligation or any part thereof and (iv)
otherwise deal in any manner with the Borrower and any other Guarantor, maker or
endorser of any Guaranteed Obligation or any part thereof; and
(e) settle, release, compromise, collect or otherwise liquidate the
Guaranteed Obligations.
Section 2.5 Guaranty Absolute and Unconditional. Each Guarantor hereby
waives and agrees not to assert any defense, whether arising in connection with
or in respect of any of the following or otherwise, and hereby agrees that its
obligations under this Guaranty are irrevocable, absolute and unconditional and
shall not be discharged as a result of or otherwise affected by any of the
following (which may not be pleaded and evidence of which may not be introduced
in any proceeding with respect to this Guaranty, in each case except as
otherwise agreed in writing by the Agent):
(a) the invalidity or unenforceability of any obligation of the
Borrower or any other Guarantor under any Loan Document or any other agreement
or instrument relating thereto (including any amendment, consent or waiver
thereto), or any security for, or other guaranty of, any Guaranteed Obligation
or any part thereof, or the lack of perfection or continuing perfection or
failure of priority of any security for the Guaranteed Obligations or any part
thereof;
(b) the absence of (i) any attempt to collect any Guaranteed
Obligation or any part thereof from the Borrower or any other Guarantor or other
action to enforce the same or (ii) any action to enforce any Loan Document or
any Lien thereunder;
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(c) the failure by any Person to take any steps to perfect and
maintain any Lien on, or to preserve any rights with respect to, any Collateral;
(d) any workout, insolvency, bankruptcy proceeding, reorganization,
arrangement, liquidation or dissolution by or against the Borrower, any other
Guarantor or any of the Borrower's other Subsidiaries or any procedure,
agreement, order, stipulation, election, action or omission thereunder,
including any discharge or disallowance of, or bar or stay against collecting,
any Guaranteed Obligation (or any interest thereon) in or as a result of any
such proceeding;
(e) any foreclosure, whether or not through judicial sale, and any
other Sale of any Collateral or any election following the occurrence of an
Event of Default by any Secured Party to proceed separately against any
Collateral in accordance with such Secured Party's rights under any applicable
Requirement of Law; or
(f) any other defense, setoff, counterclaim or any other circumstance
that might otherwise constitute a legal or equitable discharge of the Borrower,
any other Guarantor or any of the Borrower's other Subsidiaries, in each case
other than the payment in full of the Guaranteed Obligations.
Section 2.6 Waivers. Each Guarantor hereby unconditionally and irrevocably
waives and agrees not to assert any claim, defense, setoff or counterclaim based
on diligence, promptness, presentment, requirements for any demand or notice
hereunder including any of the following: (a) any demand for payment or
performance and protest and notice of protest; (b) any notice of acceptance; (c)
any presentment, demand, protest or further notice or other requirements of any
kind with respect to any Guaranteed Obligation (including any accrued but unpaid
interest thereon) becoming immediately due and payable; and (d) any other notice
in respect of any Guaranteed Obligation or any part thereof, and any defense
arising by reason of any disability or other defense of the Borrower or any
other Guarantor. Each Guarantor further unconditionally and irrevocably agrees
not to (x) enforce or otherwise exercise any right of subrogation or any right
of reimbursement or contribution or similar right against the Borrower or any
other Guarantor by reason of any Loan Document or any payment made thereunder or
(y) assert any claim, defense, setoff or counterclaim it may have against any
other Credit Party or set off any of its obligations to such other Credit Party
against obligations of such Credit Party to such Guarantor. No obligation of any
Guarantor hereunder shall be discharged other than by complete performance.
Section 2.7 Reliance. Each Guarantor hereby assumes responsibility for
keeping itself informed of the financial condition of the Borrower, each other
Guarantor and any other guarantor, maker or endorser of any Guaranteed
Obligation or any part thereof, and of all other circumstances bearing upon the
risk of nonpayment of any Guaranteed Obligation or any part thereof that
diligent inquiry would reveal, and each Guarantor hereby agrees that no Secured
Party shall have any duty to advise any Guarantor of information known to it
regarding such condition or any such circumstances. In the event any Secured
Party, in its sole discretion, undertakes at any time or from time to time to
provide any such information to any Guarantor, such Secured Party shall be under
no obligation to (a) undertake any investigation not a part of its regular
business routine, (b) disclose any information that such Secured Party, pursuant
to accepted or reasonable commercial finance or banking practices, wishes to
maintain confidential or (c) make any future disclosures of such information or
any other information to any Guarantor.
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ARTICLE III
GRANT OF SECURITY INTEREST
Section 3.1 Collateral. For the purposes of this Agreement, all of the
following property now owned or at any time hereafter acquired by a Grantor or
in which a Grantor now has or at any time in the future may acquire any right,
title or interests is collectively referred to as the "Collateral":
(a) all accounts, chattel paper, deposit accounts, documents (as
defined in the UCC), equipment, general intangibles, instruments, inventory,
investment property, letter of credit rights and any supporting obligations
related to any of the foregoing;
(b) the commercial tort claims described on Schedule 1 and on any
supplement thereto received by the Agent pursuant to Section 5.9;
(c) all books and records pertaining to the other property described
in this Section 3.1;
(d) all property of such Grantor held by any Secured Party, including
all property of every description, in the custody of or in transit to such
Secured Party for any purpose, including safekeeping, collection or pledge, for
the account of such Grantor or as to which such Grantor may have any right or
power, including but not limited to cash;
(e) all other goods (including but not limited to fixtures) and
personal property of such Grantor, whether tangible or intangible and wherever
located; and
(f) to the extent not otherwise included, all proceeds of the
foregoing;
Section 3.2 Grant of Security Interest in Collateral. Each Grantor, as
collateral security for the prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of the Obligations of
such Grantor (the "Secured Obligations"), hereby mortgages, pledges and
hypothecates to the Agent for the benefit of the Secured Parties, and grants to
the Agent for the benefit of the Secured Parties a Lien on and security interest
in, all of its right, title and interest in, to and under the Collateral of such
Grantor; provided, however, notwithstanding the foregoing, no Lien or security
interest is hereby granted on any Excluded Property; provided, further, that if
and when any property shall cease to be Excluded Property, a Lien on and
security in such property shall be deemed granted therein. Each Grantor hereby
represents and warrants that the Excluded Property, when taken as a whole, is
not material to the business operations or financial condition of the Grantors,
taken as a whole.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders, the L/C Issuers and the Agent to enter into the Loan
Documents, each Grantor hereby represents and warrants each of the following to
the Agent, the Lenders, the L/C Issuers and the other Secured Parties:
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Section 4.1 Title; No Other Liens. Except for the Lien granted to the Agent
pursuant to this Agreement and other Permitted Liens (except for those Permitted
Liens not permitted to exist on any Collateral) under any Loan Document
(including Section 4.2 hereof), such Grantor owns each item of the Collateral
free and clear of any and all Liens or claims of others. Such Grantor (a) is the
record and beneficial owner of the Collateral pledged by it hereunder
constituting instruments or certificates and (b) has rights in or the power to
transfer each other item of Collateral in which a Lien is granted by it
hereunder, free and clear of any other Lien.
Section 4.2 Perfection and Priority. The security interest granted pursuant
to this Agreement constitutes a valid and continuing perfected security interest
in favor of the Agent in all Collateral subject, for the following Collateral,
to the occurrence of the following: (i) in the case of all Collateral in which a
security interest may be perfected by filing a financing statement under the
UCC, the completion of the filings and other actions specified on Schedule 2
(which, in the case of all filings and other documents referred to on such
schedule, have been delivered to the Agent in completed and duly authorized
form), (ii) with respect to any deposit account, the execution of Control
Agreements, (iii) in the case of all Copyrights, Trademarks and Patents for
which UCC filings are insufficient, all appropriate filings having been made
with the United States Copyright Office or the United States Patent and
Trademark Office, as applicable, (iv) in the case of letter-of-credit rights
that are not supporting obligations of Collateral, the execution of a
Contractual Obligation granting control to the Agent over such letter-of-credit
rights, (v) in the case of electronic chattel paper, the completion of all steps
necessary to grant control to the Agent over such electronic chattel paper and
(vi) in the case of Vehicles, the actions required under Section 5.1(e). Such
security interest shall be prior to all other Liens on the Collateral except for
Permitted Liens having priority over the Agent's Lien by operation of law or
permitted pursuant to subsections 5.1(e), (g), (h), (i) or (k) of the Credit
Agreement upon (i) in the case of all Pledged Certificated Stock, Pledged Debt
Instruments and Pledged Investment Property, the delivery thereof to the Agent
of such Pledged Certificated Stock, Pledged Debt Instruments and Pledged
Investment Property consisting of instruments and certificates, in each case
properly endorsed for transfer to the Agent or in blank, (ii) in the case of all
Pledged Investment Property not in certificated form, the execution of Control
Agreements with respect to such investment property and (iii) in the case of all
other instruments and tangible chattel paper that are not Pledged Certificated
Stock, Pledged Debt Instruments or Pledged Investment Property, the delivery
thereof to the Agent of such instruments and tangible chattel paper. Except as
set forth in this Section 4.2, all actions by each Grantor necessary or
desirable to protect and perfect the Lien granted hereunder on the Collateral
have been duly taken.
Section 4.3 Jurisdiction of Organization; Chief Executive Office. Such
Grantor's jurisdiction of organization, legal name and organizational
identification number, if any, and the location of such Grantor's chief
executive office or sole place of business, in each case as of the date hereof,
is specified on Schedule 3 and such Schedule 3 also lists all jurisdictions of
incorporation, legal names and locations of such Grantor's chief executive
office or sole place of business for the five years preceding the date hereof.
Section 4.4 Locations of Inventory, Equipment and Books and Records. On the
date hereof, such Grantor's inventory and equipment (other than inventory or
equipment in transit) and books and records concerning the Collateral are kept
at the locations listed on Schedule 4 and such Schedule 4 also lists the
locations of such inventory, equipment and books and records for the five years
preceding the date hereof.
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Section 4.5 Pledged Collateral. (a) The Pledged Stock pledged by such
Grantor hereunder (i) is listed on Schedule 5 and constitutes that percentage of
the issued and outstanding equity of all classes of each issuer thereof as set
forth on Schedule 5, (ii) has been duly authorized, validly issued and is fully
paid and nonassessable (other than Pledged Stock in limited liability companies
and partnerships) and (iii) constitutes the legal, valid and binding obligation
of the obligor with respect thereto, enforceable in accordance with its terms.
(b) As of the Closing Date, all Pledged Collateral (other than Pledged
Uncertificated Stock) and all Pledged Investment Property consisting of
instruments and certificates has been delivered to the Agent in accordance with
Section 5.3(a).
(c) Upon the occurrence and during the continuance of an Event of
Default, the Agent shall be entitled to exercise all of the rights of the
Grantor granting the security interest in any Pledged Stock, and a transferee or
assignee of such Pledged Stock shall become a holder of such Pledged Stock to
the same extent as such Grantor and be entitled to participate in the management
of the issuer of such Pledged Stock and, upon the transfer of the entire
interest of such Grantor, such Grantor shall, by operation of law, cease to be a
holder of such Pledged Stock.
Section 4.6 Instruments and Tangible Chattel Paper Formerly Accounts. No
amount payable to such Grantor under or in connection with any account is
evidenced by any instrument or tangible chattel paper that has not been
delivered to the Agent, properly endorsed for transfer, to the extent delivery
is required by Section 5.6(a).
Section 4.7 Intellectual Property
(a) Schedule 6 sets forth a true and complete list of the following
Intellectual Property such Grantor owns, licenses or otherwise has the right to
use: (i) Intellectual Property that is registered or subject to applications for
registration, (ii) Internet Domain Names and (iii) Material Intellectual
Property and material Software, separately identifying that owned and licensed
to such Grantor and including for each of the foregoing items (1) the owner, (2)
the title, (3) the jurisdiction in which such item has been registered or
otherwise arises or in which an application for registration has been filed, (4)
as applicable, the registration or application number and registration or
application date and (5) any IP Licenses or other rights (including franchises)
granted by the Grantor with respect thereto.
(b) On the Closing Date, all Material Intellectual Property owned by
such Grantor is valid, in full force and effect, subsisting, unexpired and
enforceable, and no Material Intellectual Property has been abandoned. No breach
or default of any material IP License shall be caused by any of the following,
and none of the following shall limit or impair the ownership, use, validity or
enforceability of, or any rights of such Grantor in, any Material Intellectual
Property: (i) the consummation of the transactions contemplated by any Loan
Document or (ii) any holding, decision, judgment or order rendered by any
Governmental Authority. Except as set forth on Schedule 6 hereof, there are no
pending (or, to the knowledge of such Grantor, threatened) actions,
investigations, suits, proceedings, audits, claims, demands, orders or disputes
challenging the ownership, use, validity, enforceability of, or such Grantor's
rights in, any Material Intellectual Property of such Grantor. To such Grantor's
knowledge, no Person has been or is infringing, misappropriating, diluting,
violating or otherwise impairing any Intellectual Property of such Grantor. Such
Grantor, and to such Grantor's knowledge each other party thereto, is not in
material breach or default of any material IP License.
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Section 4.8 Commercial Tort Claims. The only commercial tort claims of any
Grantor existing on the date hereof (regardless of whether the amount, defendant
or other material facts can be determined and regardless of whether such
commercial tort claim has been asserted, threatened or has otherwise been made
known to the obligee thereof or whether litigation has been commenced for such
claims) are those listed on Schedule 1, which sets forth such information
separately for each Grantor.
Section 4.9 Specific Collateral. None of the Collateral is or is proceeds
or products of farm products, as-extracted collateral, health-care-insurance
receivables or timber to be cut.
Section 4.10 Enforcement. No Permit, notice to or filing with any
Governmental Authority or any other Person or any consent from any Person is
required for the exercise by the Agent of its rights (including voting rights)
provided for in this Agreement or the enforcement of remedies in respect of the
Collateral pursuant to this Agreement, including the transfer of any Collateral,
except as may be required in connection with the disposition of any portion of
the Pledged Collateral by laws affecting the offering and sale of securities
generally or any approvals that may be required to be obtained from any bailees
or landlords to collect the Collateral.
Section 4.11 Representations and Warranties of the Credit Agreement. The
representations and warranties as to such Grantor and its Subsidiaries made in
Article III (Representations and Warranties) of the Credit Agreement are true
and correct on each date as required by Section 2.2 of the Credit Agreement.
ARTICLE V
COVENANTS
Each Grantor agrees with the Agent to the following, as long as any
Obligation or Commitment remains outstanding (other than contingent
indemnification Obligations to the extent no claim giving rise thereto has been
asserted):
Section 5.1 Maintenance of Perfected Security Interest; Further
Documentation and Consents. (a) Generally. Such Grantor shall (i) not use or
permit any Collateral to be used unlawfully or in violation of any provision of
any Loan Document, any Related Agreement, any Requirement of Law or any policy
of insurance covering the Collateral and (ii) not enter into any Contractual
Obligation or undertaking restricting the right or ability of such Grantor or
the Agent to sell, assign, convey or transfer any Collateral if such restriction
would reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
(b) 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 and such
priority against the claims and demands of all Persons.
(c) Such Grantor shall furnish to the Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other documents in connection with the Collateral as the Agent may
reasonably request, all in reasonable detail and in form and substance
satisfactory to the Agent.
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(d) At any time and from time to time, upon the written request of the
Agent, such Grantor shall, for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted, (i)
promptly and duly execute and deliver, and have recorded, such further
documents, including an authorization to file (or, as applicable, the filing) of
any financing statement or amendment under the UCC (or other filings under
similar Requirements of Law) in effect in any jurisdiction with respect to the
security interest created hereby and (ii) take such further action as the Agent
may reasonably request, including (A) using its best efforts to secure all
approvals necessary or appropriate for the assignment to or for the benefit of
the Agent of any Contractual Obligation, including any IP License, held by such
Grantor and to enforce the security interests granted hereunder and (B)
executing and delivering any Control Agreements with respect to deposit accounts
and securities accounts.
(e) If requested by the Agent, the Grantor shall arrange for the
Agent's first priority security interest to be noted on the certificate of title
of each Vehicle and shall file any other necessary documentation in each
jurisdiction that the Agent shall deem advisable to perfect its security
interests in any Vehicle.
(f) To ensure that any of the Excluded Property set forth in clause
(ii) of the definition of "Excluded Property" becomes part of the Collateral,
such Grantor shall use its reasonable best efforts to obtain any required
consents from any Person other than the Borrower and its Affiliates with respect
to any permit or license or any Contractual Obligation with such Person entered
into by such Grantor that requires such consent as a condition to the creation
by such Grantor of a Lien on any right, title or interest in such permit,
license or Contractual Obligation or any Stock or Stock Equivalent related
thereto.
Section 5.2 Changes in Locations, Name, Etc. Except upon thirty (30) days'
prior written notice to the Agent and delivery to the Agent of (a) all documents
reasonably requested by the Agent to maintain 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 locations at which
inventory or equipment shall be kept, such Grantor shall not do any of the
following:
(i) permit any inventory or equipment to be kept at a location
other than those listed on Schedule 4, except for inventory or equipment in
transit;
(ii) change its jurisdiction of organization or its location, in
each case from that referred to in Section 4.3; or
(iii) change its legal name or organizational identification
number, if any, or corporation, limited liability company, partnership or
other organizational structure to such an extent that any financing
statement filed in connection with this Agreement would become misleading.
Section 5.3 Pledged Collateral. (a) Delivery of Pledged Collateral. Such
Grantor shall (i) deliver to the Agent, in suitable form for transfer and in
form and substance satisfactory to the Agent, (A) all Pledged Certificated
Stock, (B) all Pledged Debt Instruments and (C) all certificates and instruments
evidencing Pledged Investment Property and (ii) maintain all other Pledged
Investment Property in a Controlled Securities Account.
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(b) Event of Default. During the continuance of an Event of Default,
the Agent shall have the right, at any time in its discretion and without notice
to the Grantor, to (i) transfer to or to register in its name or in the name of
its nominees any Pledged Collateral or any Pledged Investment Property and (ii)
exchange any certificate or instrument representing or evidencing any Pledged
Collateral or any Pledged Investment Property for certificates or instruments of
smaller or larger denominations.
(c) Cash Distributions with respect to Pledged Collateral. Except as
provided in Article VI and subject to the limitations set forth in the Credit
Agreement, such Grantor shall be entitled to receive all cash distributions paid
in respect of the Pledged Collateral.
(d) Voting Rights. Except as provided in Article VI, such Grantor
shall be entitled to exercise all voting, consent and corporate, partnership,
limited liability company and similar rights with respect to the Pledged
Collateral; provided, however, that no vote shall be cast, consent given or
right exercised or other action taken by such Grantor that would impair the
Collateral or be inconsistent with or result in any violation of any provision
of any Loan Document.
Section 5.4 Accounts.
(a) Such Grantor shall not, other than in the ordinary course of
business, (i) grant any extension of the time of payment of any account, (ii)
compromise or settle any account for less than the full amount thereof, (iii)
release, wholly or partially, any Person liable for the payment of any account,
(iv) allow any credit or discount on any account or (v) amend, supplement or
modify any account in any manner that could adversely affect the value thereof.
(b) So long as an Event of Default is continuing, the Agent shall have
the right to make test verifications of the Accounts in any manner and through
any medium that it reasonably considers advisable, and such Grantor shall
furnish all such assistance and information as the Agent may reasonably require
in connection therewith. At any time and from time to time, upon the Agent's
reasonable request, such Grantor shall cause independent public accountants or
others satisfactory to the Agent to furnish to the Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
accounts.
Section 5.5 Commodity Contracts. Such Grantor shall not have any commodity
contract unless subject to a Control Agreement.
Section 5.6 Delivery of Instruments and Tangible Chattel Paper and Control
of Investment Property, Letter-of-Credit Rights and Electronic Chattel Paper.
(a) If any amount in excess of $100,000 payable under or in connection with any
Collateral owned by such Grantor shall be or become evidenced by an instrument
or tangible chattel paper other than such instrument delivered in accordance
with Section 5.3(a) and in the possession of the Agent, such Grantor shall xxxx
all such instruments and tangible chattel paper with the following legend: "This
writing and the obligations evidenced or secured hereby are subject to the
security interest of General Electric Capital Corporation, as Agent" and, at the
request of the Agent, shall immediately deliver such instrument or tangible
chattel paper to the Agent, duly indorsed in a manner satisfactory to the Agent.
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(b) Such Grantor shall not grant "control" (within the meaning of such
term under Article 9-106 of the UCC) over any investment property to any Person
other than the Agent.
(c) If such Grantor is or becomes the beneficiary of a letter of
credit that is (i) not a supporting obligation of any Collateral and (ii) in
excess of $100,000, such Grantor shall promptly, and in any event within two (2)
Business Days after becoming a beneficiary, notify the Agent thereof and enter
into a Contractual Obligation with the Agent, the issuer of such letter of
credit or any nominated person with respect to the letter-of-credit rights under
such letter of credit. Such Contractual Obligation shall assign such
letter-of-credit rights to the Agent and such assignment shall be sufficient to
grant control for the purposes of Section 9-107 of the UCC (or any similar
section under any equivalent UCC). Such Contractual Obligation shall also direct
all payments thereunder to a Cash Collateral Account. The provisions of the
Contractual Obligation shall be in form and substance reasonably satisfactory to
the Agent.
(d) If any amount in excess of $100,000 payable under or in connection
with any Collateral owned by such Grantor shall be or become evidenced by
electronic chattel paper, such Grantor shall take all steps necessary to grant
the Agent control of all such electronic chattel paper for the purposes of
Section 9-105 of the UCC (or any similar section under any equivalent UCC) and
all "transferable records" as defined in each of the Uniform Electronic
Transactions Act and the Electronic Signatures in Global and National Commerce
Act.
Section 5.7 Intellectual Property. (a) Within thirty (30) days after any
change to Schedule 6 for such Grantor, such Grantor shall provide the Agent
notification thereof and the short-form intellectual property agreements and
assignments as described in this Section 5.7 and other documents that the Agent
reasonably requests with respect thereto.
(b) Such Grantor shall (and shall cause all its licensees to) (i) (1)
continue to use each Trademark included in the Material Intellectual Property in
order to maintain such Trademark in full force and effect with respect to each
class of goods for which such Trademark is currently used, free from any claim
of abandonment for non-use, (2) maintain at least the same standards of quality
of products and services offered under such Trademark as are currently
maintained, (3) use such Trademark with the appropriate notice of registration
and all other notices and legends required by applicable Requirements of Law,
(4) not adopt or use any other Trademark that is confusingly similar or a
colorable imitation of such Trademark unless the Agent shall obtain a perfected
security interest in such other Trademark pursuant to this Agreement and (ii)
not do any act or omit to do any act whereby (w) such Trademark (or any goodwill
associated therewith) may become destroyed, invalidated, impaired or harmed in
any way, (x) any Patent included in the Material Intellectual Property may
become forfeited, misused, unenforceable, abandoned or dedicated to the public,
(y) any portion of the Copyrights included in the Material Intellectual Property
may become invalidated, otherwise impaired or fall into the public domain or (z)
any Trade Secret that is Material Intellectual Property may become publicly
available or otherwise unprotectable.
(c) Such Grantor shall notify the Agent immediately if it knows, or
has reason to know, that any application or registration relating to any
Material Intellectual Property may become forfeited, misused, unenforceable,
abandoned or dedicated to the public, or of any adverse determination or
development regarding the validity or enforceability or such Grantor's ownership
of, interest in, right to use, register, own or maintain any Material
Intellectual Property (including the institution of, or any such determination
or development in, any proceeding
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relating to the foregoing in any Applicable IP Office). Such Grantor shall take
all actions that are necessary or reasonably requested by the Agent to maintain
and pursue each application (and to obtain the relevant registration or
recordation) and to maintain each registration and recordation included in the
Material Intellectual Property.
(d) Such Grantor shall not knowingly do any act or omit to do any act
to infringe, misappropriate, dilute, violate or otherwise impair the
Intellectual Property of any other Person. In the event that any Material
Intellectual Property of such Grantor is or has been infringed, misappropriated,
violated, diluted or otherwise impaired by a third party, such Grantor shall
take such action as it reasonably deems appropriate under the circumstances in
response thereto, including promptly bringing suit and recovering all damages
therefor.
(e) Such Grantor shall execute and deliver to the Agent in form and
substance reasonably acceptable to the Agent and suitable for (i) filing in the
Applicable IP Office the short-form intellectual property security agreements in
the form attached hereto as Annex 3 for all Copyrights, Trademarks, Patents and
IP Licenses of such Grantor and (ii) recording with the appropriate Internet
domain name registrar, a duly executed form of assignment for all Internet
Domain Names of such Grantor (together with appropriate supporting documentation
as may be requested by the Agent).
Section 5.8 Notices. Such Grantor shall promptly notify the Agent in
writing of its acquisition of any interest hereafter in property that is of a
type where a security interest or lien must be or may be registered, recorded or
filed under, or notice thereof given under, any federal statute or regulation.
Section 5.9 Notice of Commercial Tort Claims. Such Grantor agrees that, if
it shall acquire any interest in any commercial tort claim (whether from another
Person or because such commercial tort claim shall have come into existence),
(i) such Grantor shall, immediately upon such acquisition, deliver to the Agent,
in each case in form and substance satisfactory to the Agent, a notice of the
existence and nature of such commercial tort claim and a supplement to Schedule
1 containing a specific description of such commercial tort claim, (ii) Section
3.1 shall apply to such commercial tort claim and (iii) such Grantor shall
execute and deliver to the Agent, in each case in form and substance
satisfactory to the Agent, any document, and take all other action, deemed by
the Agent to be reasonably necessary or appropriate for the Agent to obtain, on
behalf of the Lenders, a perfected security interest having at least the
priority set forth in Section 4.2 in all such commercial tort claims. Any
supplement to Schedule 1 delivered pursuant to this Section 5.9 shall, after the
receipt thereof by the Agent, become part of Schedule 1 for all purposes
hereunder other than in respect of representations and warranties made prior to
the date of such receipt.
Section 5.10 Controlled Securities Account. Each Grantor shall deposit all
of its Cash Equivalents in securities accounts that are Controlled Securities
Accounts except for Cash Equivalents the aggregate value of which does not
exceed $25,000.
ARTICLE VI
REMEDIAL PROVISIONS
Section 6.1 Code and Other Remedies. (a) UCC Remedies. During the
continuance of an Event of Default, the Agent may exercise, in addition to all
other rights and remedies
15
granted to it in this Agreement and in any other instrument or agreement
securing, evidencing or relating to any Secured Obligation, all rights and
remedies of a secured party under the UCC or any other applicable law.
(b) Disposition of Collateral. Without limiting the generality of the
foregoing, the Agent may, 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), during the continuance of any Event of Default (personally or through
its agents or attorneys), (i) enter upon the premises where any Collateral is
located, without any obligation to pay rent, through self-help, without judicial
process, without first obtaining a final judgment or giving any Grantor or any
other Person notice or opportunity for a hearing on the Agent's claim or action,
(ii) collect, receive, appropriate and realize upon any Collateral and (iii)
sell, assign, convey, transfer, grant option or options to purchase and deliver
any Collateral (enter into Contractual Obligations 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 any Secured Party 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 of any credit risk.
The Agent shall have the right, upon any such public sale or sales and, to the
extent permitted by the UCC and other applicable Requirements of Law, upon any
such private sale, to purchase the whole or any part of the Collateral so sold,
free of any right or equity of redemption of any Grantor, which right or equity
is hereby waived and released.
(c) Management of the Collateral. Each Grantor further agrees, that,
during the continuance of any Event of Default, (i) at the Agent's request, it
shall assemble the Collateral and make it available to the Agent at places that
the Agent shall reasonably select, whether at such Grantor's premises or
elsewhere, (ii) without limiting the foregoing, the Agent also has the right to
require that each Grantor store and keep any Collateral pending further action
by the Agent and, while any such Collateral is so stored or kept, provide such
guards and maintenance services as shall be necessary to protect the same and to
preserve and maintain such Collateral in good condition, (iii) until the Agent
is able to sell, assign, convey or transfer any Collateral, the Agent shall have
the right to hold or use such Collateral to the extent that it deems appropriate
for the purpose of preserving the Collateral or its value or for any other
purpose deemed appropriate by the Agent and (iv) the Agent may, if it so elects,
seek the appointment of a receiver or keeper to take possession of any
Collateral and to enforce any of the Agent's remedies (for the benefit of the
Secured Parties), with respect to such appointment without prior notice or
hearing as to such appointment. The Agent shall not have any obligation to any
Grantor to maintain or preserve the rights of any Grantor as against third
parties with respect to any Collateral while such Collateral is in the
possession of the Agent.
(d) Application of Proceeds. The Agent shall apply the cash proceeds
of any action taken by it pursuant to this Section 6.1, after deducting all
reasonable costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping of any Collateral or in any way relating
to the Collateral or the rights of the Agent and any other Secured Party
hereunder, including reasonable attorneys' fees and disbursements, to the
payment in whole or in part of the Secured Obligations, as set forth in the
Credit Agreement, and only after such application and after the payment by the
Agent of any other amount required by any Requirement of Law, need the Agent
account for the surplus, if any, to any Grantor.
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(e) Direct Obligation. Neither the Agent nor any other Secured Party
shall be required to make any demand upon, or pursue or exhaust any right or
remedy against, any Grantor, any other Credit Party or any other Person with
respect to the payment of the Obligations or to pursue or exhaust any right or
remedy with respect to any Collateral therefor or any direct or indirect
guaranty thereof. All of the rights and remedies of the Agent and any other
Secured Party under any Loan Document shall be cumulative, may be exercised
individually or concurrently and not exclusive of any other rights or remedies
provided by any Requirement of Law. To the extent it may lawfully do so, each
Grantor absolutely and irrevocably waives and relinquishes the benefit and
advantage of, and covenants not to assert against the Agent or any Lender, any
valuation, stay, appraisement, extension, redemption or similar laws and any and
all rights or defenses it may have as a surety, now or hereafter existing,
arising out of the exercise by them of any rights hereunder. If any notice of a
proposed sale or other disposition of any Collateral shall be required by law,
such notice shall be deemed reasonable and proper if given at least ten (10)
days before such sale or other disposition.
(f) Commercially Reasonable. To the extent that applicable
Requirements of Law impose duties on the Agent to exercise remedies in a
commercially reasonable manner, each Grantor acknowledges and agrees that it is
not commercially unreasonable for the Agent to do any of the following:
(i) fail to incur significant costs, expenses or other
Liabilities reasonably deemed as such by the Agent to prepare any
Collateral for disposition or otherwise to complete raw material or work in
process into finished goods or other finished products for disposition;
(ii) fail to obtain Permits, or other consents, for access to any
Collateral to sell or for the collection or sale of any Collateral, or, if
not required by other Requirements of Law, fail to obtain Permits or other
consents for the collection or disposition of any Collateral;
(iii) fail to exercise remedies against account debtors or other
Persons obligated on any Collateral or to remove Liens on any Collateral or
to remove any adverse claims against any Collateral;
(iv) advertise dispositions of any Collateral through
publications or media of general circulation, whether or not such
Collateral is of a specialized nature, or to contact other Persons, whether
or not in the same business as any Grantor, for expressions of interest in
acquiring any such Collateral;
(v) exercise collection remedies against account debtors and
other Persons obligated on any Collateral, directly or through the use of
collection agencies or other collection specialists, hire one or more
professional auctioneers to assist in the disposition of any Collateral,
whether or not such Collateral is of a specialized nature, or, to the
extent deemed appropriate by the Agent, obtain the services of other
brokers, investment bankers, consultants and other professionals to assist
the Agent in the collection or disposition of any Collateral, or utilize
Internet sites that provide for the auction of assets of the types included
in the Collateral or that have the reasonable capacity of doing so, or that
match buyers and sellers of assets to dispose of any Collateral;
17
(vi) dispose of assets in wholesale rather than retail markets;
(vii) disclaim disposition warranties, such as title, possession
or quiet enjoyment; or
(viii) purchase insurance or credit enhancements to insure the
Agent against risks of loss, collection or disposition of any Collateral or
to provide to the Agent a guaranteed return from the collection or
disposition of any Collateral.
Each Grantor acknowledges that the purpose of this Section 6.1(f) is to provide
a non-exhaustive list of actions or omissions that are commercially reasonable
when exercising remedies against any Collateral and that other actions or
omissions by the Secured Parties shall not be deemed commercially unreasonable
solely on account of not being indicated in this Section 6.1(f). Without
limitation upon the foregoing, nothing contained in this Section 6.1(f) shall be
construed to grant any rights to any Grantor or to impose any duties on the
Agent that would not have been granted or imposed by this Agreement or by
applicable Requirements of Law in the absence of this Section 6.1(f).
(g) IP Licenses. For the purpose of enabling the Agent to exercise
rights and remedies under this Section 6.1 (including in order to take
possession of, collect, receive, assemble, process, appropriate, remove, realize
upon, sell, assign, convey, transfer or grant options to purchase any
Collateral) at such time as the Agent shall be lawfully entitled to exercise
such rights and remedies, each Grantor hereby grants to the Agent, for the
benefit of the Secured Parties, (i) an irrevocable, nonexclusive, worldwide
license (exercisable without payment of royalty or other compensation to such
Grantor), including in such license the right to sublicense, use and practice
any Intellectual Property now owned or hereafter acquired by such Grantor and
access to all media in which any of the licensed items may be recorded or stored
and to all Software and programs used for the compilation or printout thereof
and (ii) an irrevocable license (without payment of rent or other compensation
to such Grantor) to use, operate and occupy all real Property owned, operated,
leased, subleased or otherwise occupied by such Grantor.
Section 6.2 Accounts and Payments in Respect of General Intangibles. (a) In
addition to, and not in substitution for, any similar requirement in the Credit
Agreement, if required by the Agent at any time during the continuance of an
Event of Default, any payment of accounts or payment in respect of general
intangibles, when collected by any Grantor, shall be promptly (and, in any
event, within two (2) Business Days) deposited by such Grantor in the exact form
received, duly indorsed by such Grantor to the Agent, in a Cash Collateral
Account, subject to withdrawal by the Agent as provided in Section 6.4. Until so
turned over, such payment shall be held by such Grantor in trust for the Agent,
segregated from other funds of such Grantor. Each such deposit of proceeds of
accounts and payments in respect of general intangibles shall be accompanied by
a report identifying in reasonable detail the nature and source of the payments
included in the deposit.
(b) At any time during the continuance of an Event of Default:
(i) each Grantor shall, upon the Agent's request, deliver to the
Agent all original and other documents evidencing, and relating to, the
Contractual Obligations and transactions that gave rise to any account or
any payment in respect of general intangibles, including all original
orders, invoices and shipping receipts and notify account debtors that the
accounts or general intangibles have been collaterally
18
assigned to the Agent and that payments in respect thereof shall be made
directly to the Agent;
(ii) the Agent may, without notice, at any time during the
continuance of an Event of Default, limit or terminate the authority of a
Grantor to collect its accounts or amounts due under general intangibles or
any thereof and, in its own name or in the name of others, communicate with
account debtors to verify with them to the Agent's satisfaction the
existence, amount and terms of any account or amounts due under any general
intangible. In addition, the Agent may at any time enforce such Grantor's
rights against such account debtors and obligors of general intangibles;
and
(iii) each Grantor shall take all actions, deliver all documents
and provide all information necessary or reasonably requested by the Agent
to ensure any Internet Domain Name is registered.
(c) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each account and each payment in respect of general
intangibles 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. No Secured Party shall have any obligation or
liability under any agreement giving rise to an account or a payment in respect
of a general intangible by reason of or arising out of any Loan Document or the
receipt by any Secured Party of any payment relating thereto, nor shall any
Secured Party be obligated in any manner to perform any obligation of any
Grantor under or pursuant to any agreement giving rise to an account or a
payment in respect of a general intangible, 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 that may have been assigned to it or to which it may be
entitled at any time or times.
Section 6.3 Pledged Collateral. (a) Voting Rights. During the continuance
of an Event of Default, upon notice by the Agent to the relevant Grantor or
Grantors, the Agent or its nominee may exercise (A) any voting, consent,
corporate and other right pertaining to the Pledged Collateral at any meeting of
shareholders, partners or members, as the case may be, of the relevant issuer or
issuers of Pledged Collateral or otherwise and (B) any right of conversion,
exchange and subscription and any other right, privilege or option pertaining to
the Pledged Collateral as if it were the absolute owner thereof (including the
right to exchange at its discretion any Pledged Collateral upon the merger,
amalgamation, consolidation, reorganization, recapitalization or other
fundamental change in the corporate or equivalent structure of any issuer of
Pledged Stock, the right to deposit and deliver any Pledged Collateral with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Agent may determine), all without liability
except to account for property actually received by it; provided, however, that
the 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.
(b) Proxies. In order to permit the Agent to exercise the voting and
other consensual rights that it may be entitled to exercise pursuant hereto and
to receive all dividends and other distributions that it may be entitled to
receive hereunder, (i) each Grantor shall promptly execute and deliver (or cause
to be executed and delivered) to the Agent all such proxies, dividend payment
orders and other instruments as the Agent may from time to time reasonably
request and (ii) without limiting the effect of clause (i) above, such Grantor
hereby
19
grants to the Agent an irrevocable proxy to vote all or any part of the Pledged
Collateral and to exercise all other rights, powers, privileges and remedies to
which a holder of the Pledged Collateral would be entitled (including giving or
withholding written consents of shareholders, partners or members, as the case
may be, calling special meetings of shareholders, partners or members, as the
case may be, and voting at such meetings), which proxy shall be effective,
automatically and without the necessity of any action (including any transfer of
any Pledged Collateral on the record books of the issuer thereof) by any other
person (including the issuer of such Pledged Collateral or any officer or agent
thereof) during the continuance of an Event of Default and which proxy shall
only terminate upon the payment in full of the Secured Obligations (other than
contingent indemnification obligations to the extent no claim giving rise
thereto has been asserted).
(c) Authorization of Issuers. Each Grantor hereby expressly
irrevocably authorizes and instructs, without any further instructions from such
Grantor, each issuer of any Pledged Collateral pledged hereunder by such Grantor
to (i) comply with any instruction received by it from the Agent in writing that
states that an Event of Default is continuing and is otherwise in accordance
with the terms of this Agreement and each Grantor agrees that such issuer shall
be fully protected from Liabilities to such Grantor in so complying and (ii)
unless otherwise expressly permitted hereby or the Credit Agreement, pay any
dividend or make any other payment with respect to the Pledged Collateral
directly to the Agent.
Section 6.4 Proceeds to be Turned over to and Held by Agent. Unless
otherwise expressly provided in the Credit Agreement or this Agreement, all
proceeds of any Collateral received by any Grantor hereunder in cash or Cash
Equivalents shall be held by such Grantor in trust for the Agent and the other
Secured Parties, segregated from other funds of such Grantor, and shall,
promptly upon receipt by any Grantor, be turned over to the Agent in the exact
form received (with any necessary endorsement). All such proceeds of Collateral
and any other proceeds of any Collateral received by the Agent in cash or Cash
Equivalents shall be held by the Agent in a Cash Collateral Account. All
proceeds being held by the Agent in a Cash Collateral Account (or by such
Grantor in trust for the Agent) shall continue to be held as collateral security
for the Secured Obligations and shall not constitute payment thereof until
applied as provided in the Credit Agreement.
Section 6.5 Sale of Pledged Collateral. (a) Each Grantor recognizes that
the Agent may be unable to effect a public sale of any Pledged Collateral by
reason of certain prohibitions contained in the Securities Act and applicable
state or foreign securities laws or otherwise or may determine that a public
sale is impracticable, not desirable or not commercially reasonable and,
accordingly, may resort to one or more private sales thereof to a restricted
group of purchasers that shall be obliged to agree, among other things, to
acquire such securities for their own account for investment and not with a view
to the distribution or resale thereof. Each Grantor acknowledges and agrees that
any such private sale may result in prices and other terms less favorable 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 Agent shall be under no obligation to delay a sale of any
Pledged Collateral for the period of time necessary to permit the issuer thereof
to register such securities for public sale under the Securities Act or under
applicable state securities laws even if such issuer would agree to do so.
(b) 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 any
portion of the Pledged
20
Collateral pursuant to Section 6.1 and this Section 6.5 valid and binding and in
compliance with all applicable Requirements of Law. Each Grantor further agrees
that a breach of any covenant contained herein will cause irreparable injury to
the Agent and other Secured Parties, that the Agent and the other Secured
Parties have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained herein shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defense against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under the
Credit Agreement. Each Grantor waives any and all rights of contribution or
subrogation upon the sale or disposition of all or any portion of the Pledged
Collateral by Agent.
Section 6.6 Deficiency. Each Grantor shall remain liable for any deficiency
if the proceeds of any sale or other disposition of any Collateral are
insufficient to pay the Secured Obligations and the fees and disbursements of
any attorney employed by the Agent or any other Secured Party to collect such
deficiency.
ARTICLE VII
THE AGENT
Section 7.1 Agent's Appointment as Attorney-in-Fact. (a) Each Grantor
hereby irrevocably constitutes and appoints the Agent and any Related Person
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 the Loan Documents, to take any
appropriate action and to execute any document or instrument that may be
necessary or desirable to accomplish the purposes of the Loan Documents, and,
without limiting the generality of the foregoing, each Grantor hereby gives the
Agent and its Related Persons the power and right, on behalf of such Grantor,
without notice to or assent by such Grantor, to do any of the following when an
Event of Default shall be continuing:
(i) in the name of such Grantor, in its own name or otherwise,
take possession of and indorse and collect any check, draft, note,
acceptance or other instrument for the payment of moneys due under any
account or general intangible 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 Agent for the purpose of
collecting any such moneys due under any account or general intangible or
with respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property owned by or
licensed to the Grantors, execute, deliver and have recorded any document
that the Agent may request to evidence, effect, publicize or record the
Agent's security interest in such Intellectual Property and the goodwill
and general intangibles of such Grantor relating thereto or represented
thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against any Collateral, effect any repair or pay any insurance
called for by the terms of the Credit Agreement (including all or any part
of the premiums therefor and the costs thereof);
21
(iv) execute, in connection with any sale provided for in Section
6.1 or Section 6.5, any document to effect or otherwise necessary or
appropriate in relation to evidence the Sale of any Collateral; or
(v) (A) direct any party liable for any payment under any
Collateral to make payment of any moneys due or to become due thereunder
directly to the Agent or as the Agent shall direct, (B) ask or demand for,
and collect and receive payment of and receipt for, any moneys, claims and
other amounts due or to become due at any time in respect of or arising out
of any Collateral, (C) sign and indorse any invoice, freight or express
xxxx, xxxx of lading, storage or warehouse receipt, draft against debtors,
assignment, verification, notice and other document in connection with any
Collateral, (D) commence and prosecute any suit, action or proceeding at
law or in equity in any court of competent jurisdiction to collect any
Collateral and to enforce any other right in respect of any Collateral, (E)
defend any actions, suits, proceedings, audits, claims, demands, orders or
disputes brought against such Grantor with respect to any Collateral, (F)
settle, compromise or adjust any such actions, suits, proceedings, audits,
claims, demands, orders or disputes and, in connection therewith, give such
discharges or releases as the Agent may deem appropriate, (G) assign any
Intellectual Property owned by the Grantors or any IP Licenses of the
Grantors throughout the world on such terms and conditions and in such
manner as the Agent shall in its sole discretion determine, including the
execution and filing of any document necessary to effectuate or record such
assignment and (H) generally, sell, assign, convey, transfer or xxxxx x
Xxxx on, make any Contractual Obligation with respect to and otherwise deal
with, any Collateral as fully and completely as though the Agent were the
absolute owner thereof for all purposes and do, at the Agent's option, at
any time or from time to time, all acts and things that the Agent deems
necessary to protect, preserve or realize upon any Collateral and the
Secured Parties' security interests therein and to effect the intent of the
Loan Documents, all as fully and effectively as such Grantor might do.
(vi) If any Grantor fails to perform or comply with any
Contractual Obligation contained herein, the Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such Contractual Obligation.
(b) The expenses of the Agent incurred in connection with actions
undertaken as provided in this Section 7.1, together with interest thereon at a
rate set forth in subsection 1.3(c) of the Credit Agreement, from the date of
payment by the Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the Agent on demand.
(c) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue of this Section 7.1. 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.
Section 7.2 Authorization to File Financing Statements. Each Grantor
authorizes the Agent and its Related Persons, at any time and from time to time,
to file or record financing statements, amendments thereto, and other filing or
recording documents or instruments with respect to any Collateral in such form
and in such offices as the Agent reasonably determines appropriate to perfect
the security interests of the Agent under this Agreement, and such financing
statements and amendments may described the Collateral covered thereby as "all
assets
22
of the debtor". A photographic or other reproduction of this Agreement shall be
sufficient as a financing statement or other filing or recording document or
instrument for filing or recording in any jurisdiction. Such Grantor also hereby
ratifies its authorization for the Agent to have filed any initial financing
statement or amendment thereto under the UCC (or other similar laws) in effect
in any jurisdiction if filed prior to the date hereof.
Section 7.3 Authority of Agent. Each Grantor acknowledges that the rights
and responsibilities of the Agent under this Agreement with respect to any
action taken by the Agent or the exercise or non-exercise by the 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 Agent
and the other Secured Parties, 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 Agent and the Grantors, the Agent shall be conclusively
presumed to be acting as agent for the Secured Parties 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 7.4 Duty; Obligations and Liabilities. (a) Duty of Agent. The
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 Agent deals with similar property for its own account. The
powers conferred on the Agent hereunder are solely to protect the Agent's
interest in the Collateral and shall not impose any duty upon the Agent to
exercise any such powers. The Agent shall be accountable only for amounts that
it receives as a result of the exercise of such powers, and neither it nor any
of its Related Persons shall be responsible to any Grantor for any act or
failure to act hereunder, except for their own gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction. In
addition, the Agent shall not be liable or responsible for any loss or damage to
any Collateral, or for any diminution in the value thereof, by reason of the act
or omission of any warehousemen, carrier, forwarding agency, consignee or other
bailee if such Person has been selected by the Agent in good faith.
(b) Obligations and Liabilities with respect to Collateral. No Secured
Party and no Related Person thereof shall be liable for failure to demand,
collect or realize upon any 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 any Collateral. The powers conferred on the Agent
hereunder shall not impose any duty upon any other Secured Party to exercise any
such powers. The other Secured Parties 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 respective officers, directors, employees or
agents shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Reinstatement. Each Grantor agrees that, if any payment made by
any Credit Party or other Person and applied to the Secured Obligations is at
any time annulled, avoided, set aside, rescinded, invalidated, declared to be
fraudulent or preferential or otherwise required to be refunded or repaid, or
the proceeds of any Collateral are required to be returned by
23
any Secured Party to such Credit Party, its estate, trustee, receiver or any
other party, including any Grantor, under any bankruptcy law, state or federal
law, common law or equitable cause, then, to the extent of such payment or
repayment, any Lien or other Collateral securing such liability shall be and
remain in full force and effect, as fully as if such payment had never been
made. If, prior to any of the foregoing, (a) any Lien or other Collateral
securing such Grantor's liability hereunder shall have been released or
terminated by virtue of the foregoing or (b) any provision of the Guaranty
hereunder shall have been terminated, cancelled or surrendered, such Lien, other
Collateral or provision shall be reinstated in full force and effect and such
prior release, termination, cancellation or surrender shall not diminish,
release, discharge, impair or otherwise affect the obligations of any such
Grantor in respect of any Lien or other Collateral securing such obligation or
the amount of such payment.
Section 8.2 Release of Collateral. (a) At the time provided in subsection
8.10(b)(iii) of the Credit Agreement, the Collateral shall be released from the
Lien created hereby and this Agreement and all obligations (other than those
expressly stated to survive such termination) of the 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. Each Grantor is hereby authorized to file UCC amendments at such time
evidencing the termination of the Liens so released. At the request of any
Grantor following any such termination, the Agent shall deliver to such Grantor
any Collateral of such Grantor held by the Agent hereunder and execute and
deliver to such Grantor such documents as such Grantor shall reasonably request
to evidence such termination.
(b) If the Agent shall be directed or permitted pursuant to subsection
8.10(b) of the Credit Agreement to release any Lien or any Collateral, such
Collateral shall be released from the Lien created hereby to the extent provided
under, and subject to the terms and conditions set forth in, such subsection. In
connection therewith, the Agent, at the request of any Grantor, shall execute
and deliver to such Grantor such documents as such Grantor shall reasonably
request to evidence such release.
(c) At the time provided in subsection 8.10(a) of the Credit Agreement
and at the request of the Borrower, a Grantor shall be released from its
obligations hereunder in the event that all the Stock and Stock Equivalents of
such Grantor shall be sold to any Person that is not an Affiliate of Holdings,
the Borrower and the Subsidiaries of the Borrower in a transaction permitted by
the Loan Documents.
Section 8.3 Independent Obligations. The obligations of each Grantor
hereunder are independent of and separate from the Secured Obligations and the
Guaranteed Obligations. If any Secured Obligation or Guaranteed Obligation is
not paid when due, or upon any Event of Default, the Agent may, at its sole
election, proceed directly and at once, without notice, against any Grantor and
any Collateral to collect and recover the full amount of any Secured Obligation
or Guaranteed Obligation then due, without first proceeding against any other
Grantor, any other Credit Party or any other Collateral and without first
joining any other Grantor or any other Credit Party in any proceeding.
Section 8.4 No Waiver by Course of Conduct. No Secured Party shall by any
act (except by a written instrument pursuant to Section 8.6), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default. No failure to exercise,
nor any delay in exercising, on the part of any Secured Party, any right, power
or privilege hereunder shall operate as a waiver thereof. No single or
24
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by any Secured Party of any right or remedy hereunder on any
one occasion shall not be construed as a bar to any right or remedy that such
Secured Party would otherwise have on any future occasion.
Section 8.5 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 9.1 of the Credit Agreement; provided, however, that
annexes to this Agreement may be supplemented (but no existing provisions may be
modified and no Collateral may be released) through Pledge Amendments and
Joinder Agreements, in substantially the form of Annex 1 and Annex 2,
respectively, in each case duly executed by the Agent and each Grantor directly
affected thereby.
Section 8.6 Additional Grantors; Additional Pledged Collateral. (a) Joinder
Agreements. If, at the option of the Borrower or as required pursuant to Section
4.13(b) of the Credit Agreement, the Borrower shall cause any Subsidiary that is
not a Grantor to become a Grantor hereunder, such Subsidiary shall execute and
deliver to the Agent a Joinder Agreement substantially in the form of Annex 2
and shall thereafter for all purposes be a party hereto and have the same
rights, benefits and obligations as a Grantor party hereto on the Closing Date.
(b) Pledge Amendments. To the extent any Pledged Collateral has not
been delivered as of the Closing Date, such Grantor shall deliver a pledge
amendment duly executed by the Grantor in substantially the form of Annex 1
(each, a "Pledge Amendment"). Such Grantor authorizes the Agent to attach each
Pledge Amendment to this Agreement.
Section 8.7 Notices. All notices, requests and demands to or upon the Agent
or any Grantor hereunder shall be effected in the manner provided for in Section
9.2 of the Credit Agreement; provided, however, that any such notice, request or
demand to or upon any Grantor shall be addressed to the Borrower's notice
address set forth in such Section 9.2.
Section 8.8 Successors and Assigns. This Agreement shall be binding upon
the successors and assigns of each Grantor and shall inure to the benefit of
each Secured Party and their successors and assigns; provided, however, that no
Grantor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Agent.
Section 8.9 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Signature pages may be
detached from multiple separate counterparts and attached to a single
counterpart. Delivery of an executed signature page of this Agreement by
facsimile transmission or by Electronic Transmission shall be as effective as
delivery of a manually executed counterpart hereof.
Section 8.10 Severability. Any provision of this Agreement being held
illegal, invalid or unenforceable in any jurisdiction shall not affect any part
of such provision not held illegal, invalid or unenforceable, any other
provision of this Agreement or any part of such provision in any other
jurisdiction.
25
Section 8.11 Governing Law. This Agreement and the rights and obligations
of the parties hereto shall be governed by, and construed and interpreted in
accordance with, the law of the State of New York.
Section 8.12 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO, OR
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, ANY LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREIN OR RELATED THERETO (WHETHER
FOUNDED IN CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO OTHER PARTY AND NO RELATED PERSON OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.12.
EACH GRANTOR AGREES TO BE BOUND BY THE PROVISIONS OF SUBSECTION 9.18(b) AND
(c) OF THE CREDIT AGREEMENT.
[SIGNATURE PAGE FOLLOWS]
26
IN WITNESS WHEREOF, each of the undersigned has caused this Guaranty and
Security Agreement to be duly executed and delivered as of the date first above
written.
CSAV, INC., a Massachusetts corporation,
as a Grantor
By: /s/ XXXXX XXXXXXX
------------------------------------
Name: XXXXX XXXXXXX
Title: CFO
CSAV HOLDING CORP., a Delaware
corporation, as a Grantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
DECADE INDUSTRIES, INC., a Minnesota
corporation, as a Grantor
By: /s/ XXXXX XXXXXXX
------------------------------------
Name: XXXXX XXXXXXX
Title: CFO
ACCEPTED AND AGREED
as of the date first above written:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Guaranty, Pledge and Security Agreement-First Lien
IN WITNESS WHEREOF, each of the undersigned has caused this Guaranty and
Security Agreement to be duly executed and delivered as of the date first above
written.
CSAV, INC., a Massachusetts corporation,
as a Grantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
CSAV HOLDING CORP., a Delaware
corporation, as a Grantor
By: /s/ Xxxxx X. Money
------------------------------------
Name: Xxxxx X. Money
Title: TREASURER & SECRETARY
DECADE INDUSTRIES, INC., a Minnesota
corporation, as a Grantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ACCEPTED AND AGREED
as of the date first above written:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Guaranty, Pledge and Security Agreement-First Lien
IN WITNESS WHEREOF, each of the undersigned has caused this Guaranty and
Security Agreement to be duly executed and delivered as of the date first above
written.
CSAV, INC., a Massachusetts corporation,
as Grantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
CSAV HOLDING CORP., a Delaware
corporation, as Grantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
DECADE INDUSTRIES, INC., a Minnesota
corporation, as Grantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ACCEPTED AND AGREED
as of the date first above written:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent
By: /s/ Xxxxx Xxxxxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Duly Authorized Signatory
Guaranty, Pledge and Security Agreement-First Lien
ANNEX 1
TO
GUARANTY, PLEDGE AND SECURITY AGREEMENT(1)
FORM OF PLEDGE AMENDMENT
This Pledge Amendment, dated as of ____________________ ____, 20___, is
delivered pursuant to Section 8.6 of the Guaranty, Pledge and Security
Agreement, dated as of July 21, 2006, by CSAV, Inc. (the "Borrower"), the
undersigned Grantor and the other Affiliates of the Borrower from time to time
party thereto as Grantors in favor of General Electric Capital Corporation, as
Agent for the Secured Parties referred to therein (the "Guaranty and Security
Agreement"). Capitalized terms used herein without definition are used as
defined in the Guaranty and Security Agreement.
The undersigned hereby agrees that this Pledge Amendment may be attached to
the Guaranty and Security Agreement and that the Pledged Collateral listed on
Annex 1-A to this Pledge Amendment shall be and become part of the Collateral
referred to in the Guaranty and Security Agreement and shall secure all
Obligations of the undersigned.
The undersigned hereby represents and warrants that each of the
representations and warranties contained in Sections 4.1, 4.2, 4.5 and 4.10 of
the Guaranty, Pledge and Security Agreement is true and correct and as of the
date hereof as if made on and as of such date.
[GRANTOR]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
----------
To be used for pledge of Additional Pledged Collateral by existing Grantor.
GUARANTY AND SECURITY AGREEMENT
CSAV, INC.
X0-0
Xxxxx 0-X
XXXXXXX XXXXX
NUMBER OF
SHARES,
UNITS OR
ISSUER CLASS CERTIFICATE NO(S). PAR VALUE INTERESTS
------ ----- ------------------ --------- ---------
PLEDGED DEBT INSTRUMENTS
CERTIFICATE FINAL PRINCIPAL
ISSUER DESCRIPTION OF DEBT NO(S). MATURITY AMOUNT
------ ------------------- ----------- -------- ---------
GUARANTY AND SECURITY AGREEMENT
CSAV, INC.
A1-2
ACKNOWLEDGED AND AGREED
as of the date first above written:
GENERAL ELECTRIC CAPITAL CORPORATION
as Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
GUARANTY AND SECURITY AGREEMENT
CSAV, INC.
X0-0
XXXXX 0
XX
XXXXXXXX, XXXXXX XXX SECURITY AGREEMENT
FORM OF JOINDER AGREEMENT
This JOINDER AGREEMENT, dated as of __________ __, 20__, is delivered
pursuant to Section 8.6 of the Guaranty, Pledge and Security Agreement, dated as
of July 21, 2006, by CSAV, Inc. (the "Borrower") and the Affiliates of the
Borrower from time to time party thereto as Grantors in favor of the General
Electric Capital Corporation, as Agent for the Secured Parties referred to
therein (the "Guaranty and Security Agreement"). Capitalized terms used herein
without definition are used as defined in the Guaranty and Security Agreement.
By executing and delivering this Joinder Agreement, the undersigned, as
provided in Section 8.6 of the Guaranty and Security Agreement, hereby becomes a
party to the Guaranty and Security Agreement as a Grantor thereunder with the
same force and effect as if originally named as a Grantor therein and, without
limiting the generality of the foregoing, as collateral security for the prompt
and complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of the Secured Obligations of the undersigned, hereby
mortgages, pledges and hypothecates to the Agent for the benefit of the Secured
Parties, and grants to the Agent for the benefit of the Secured Parties a lien
on and security interest in, all of its right, title and interest in, to and
under the Collateral of the undersigned and expressly assumes all obligations
and liabilities of a Grantor thereunder. The undersigned hereby agrees to be
bound as a Grantor for the purposes of the Guaranty and Security Agreement.
The information set forth in Annex 1-A is hereby added to the information
set forth in Schedules 1 through 6 to the Guaranty and Security Agreement. By
acknowledging and agreeing to this Joinder Agreement, the undersigned hereby
agree that this Joinder Agreement may be attached to the Guaranty and Security
Agreement and that the Pledged Collateral listed on Annex 1-A to this Joinder
Amendment shall be and become part of the Collateral referred to in the Guaranty
and Security Agreement and shall secure all Secured Obligations of the
undersigned.
The undersigned hereby represents and warrants that each of the
representations and warranties contained in Article IV of the Guaranty and
Security Agreement applicable to it is true and correct on and as the date
hereof as if made on and as of such date.
IN WITNESS WHEREOF, THE UNDERSIGNED HAS CAUSED THIS JOINDER AGREEMENT TO BE
DULY EXECUTED AND DELIVERED AS OF THE DATE FIRST ABOVE WRITTEN.
[Additional Grantor]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
GUARANTY AND SECURITY AGREEMENT
CSAV, INC.
A2-1
ACKNOWLEDGED AND AGREED
as of the date first above written:
[EACH GRANTOR PLEDGING
ADDITIONAL COLLATERAL]
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
GENERAL ELECTRIC CAPITAL CORPORATION
as Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
GUARANTY AND SECURITY AGREEMENT
CSAV, INC.
X0-0
XXXXX 0
XX
XXXXXXXX, XXXXXX XXX SECURITY AGREEMENT
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT(1)
THIS [COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT, dated as of
_________________, 20___, is made by each of the entities listed on the
signature pages hereof (each a "Grantor" and, collectively, the "Grantors"), in
favor of General Electric Capital Corporation ("GE Capital"), as administrative
agent (in such capacity, together with its successors and permitted assigns, the
"Agent") for the Lenders and the L/C Issuers (as defined in the Credit Agreement
referred to below) and the other Secured Parties.
WITNESSETH:
WHEREAS, pursuant to the Credit Agreement, dated as of July 21, 2006 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among the CSAV, Inc., a Massachusetts
corporation ("Borrower"), CSAV Holding Corp., a Delaware corporation
("Holdings"), the other Persons party hereto that are designated as a "Credit
Party", Xxxxx Fargo Bank, National Association, as Syndication Agent, Co-Agent,
Swingline Lender and for itself as a Lender, the L/C Issuers from time to time
party thereto, GE Capital, as Documentation Agent, as Agent for the several
financial institutions from time to time party to this Agreement (collectively,
the "Lenders" and individually each a "Lender") and for itself as a Lender, and
such Lenders, the Lenders and the L/C Issuers have severally agreed to make
extensions of credit to the Borrower upon the terms and subject to the
conditions set forth therein;
WHEREAS, each Grantor (other than the Borrower) has agreed, pursuant to a
Guaranty and Security Agreement of even date herewith in favor of the Agent (the
"Guaranty and Security Agreement"), to guarantee the Obligations (as defined in
the Credit Agreement) of the Borrower; and
WHEREAS, all of the Grantors are party to the Guaranty and Security
Agreement pursuant to which the Grantors are required to execute and deliver
this [Copyright] [Patent] [Trademark] Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce the Lenders,
the L/C Issuers and the Agent to enter into the Credit Agreement and to induce
the Lenders and the L/C Issuers to make their respective extensions of credit to
the Borrower thereunder, each Grantor hereby agrees with the Agent as follows:
Section 1. Defined Terms. Capitalized terms used herein without definition
are used as defined in the Guaranty and Security Agreement.
Section 2. Grant of Security Interest in [Copyright] [Trademark] [Patent]
Collateral. Each Grantor, as collateral security for the prompt and complete
payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations of such Grantor, hereby mortgages, pledges
and hypothecates to the Agent for the benefit of the Secured Parties, and grants
to the Agent for the benefit of the Secured Parties a Lien on and security
interest in, all of its right, title and interest in, to and under the following
Collateral of such Grantor (the "[Copyright] [Patent] [Trademark] Collateral"):
----------
(1) Separate agreements should be executed relating to each Grantor's
respective Copyrights, Patents, and Trademarks.
A3-1
(a) [all of its Copyrights and all IP Licenses providing for the grant
by or to such Grantor of any right under any Copyright, including, without
limitation, those referred to on Schedule 1 hereto;
(b) all renewals, reversions and extensions of the foregoing; and
(c) all income, royalties, proceeds and Liabilities at any time due or
payable or asserted under and with respect to any of the foregoing, including,
without limitation, all rights to xxx and recover at law or in equity for any
past, present and future infringement, misappropriation, dilution, violation or
other impairment thereof.]
or
(a) [all of its Patents and all IP Licenses providing for the grant by
or to such Grantor of any right under any Patent, including, without limitation,
those referred to on Schedule 1 hereto;
(b) all reissues, reexaminations, continuations,
continuations-in-part, divisionals, renewals and extensions of the foregoing;
and
(c) all income, royalties, proceeds and Liabilities at any time due or
payable or asserted under and with respect to any of the foregoing, including,
without limitation, all rights to xxx and recover at law or in equity for any
past, present and future infringement, misappropriation, dilution, violation or
other impairment thereof.]
or
(a) [all of its Trademarks and all IP Licenses providing for the grant
by or to such Grantor of any right under any Trademark, including, without
limitation, those referred to on Schedule 1 hereto;
(b) all renewals and extensions of the foregoing;
(c) all goodwill of the business connected with the use of, and
symbolized by, each such Trademark; and
(d) all income, royalties, proceeds and Liabilities at any time due or
payable or asserted under and with respect to any of the foregoing, including,
without limitation, all rights to xxx and recover at law or in equity for any
past, present and future infringement, misappropriation, dilution, violation or
other impairment thereof.]
Section 3. Guaranty and Security Agreement. The security interest granted
pursuant to this [Copyright] [Patent] [Trademark] Security Agreement is granted
in conjunction with the security interest granted to the Agent pursuant to the
Guaranty and Security Agreement and each Grantor hereby acknowledges and agrees
that the rights and remedies of the Agent with respect to the security interest
in the [Copyright] [Patent] [Trademark] Collateral made and granted hereby are
more fully set forth in the Guaranty and Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth
herein.
A3-2
Section 4. Grantor Remains Liable. Each Grantor hereby agrees that,
anything herein to the contrary notwithstanding, such Grantor shall assume full
and complete responsibility for the prosecution, defense, enforcement or any
other necessary or desirable actions in connection with their [Copyrights]
[Patents] [Trademarks] and IP Licenses subject to a security interest hereunder.
Section 5. Counterparts. This [Copyright] [Patent] [Trademark] Security
Agreement may be executed in any number of counterparts and by different parties
in separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same
agreement. Signature pages may be detached from multiple separate counterparts
and attached to a single counterpart.
Section 6. Governing Law. This [Copyright] [Patent] [Trademark] Security
Agreement and the rights and obligations of the parties hereto shall be governed
by, and construed and interpreted in accordance with, the law of the State of
New York.
[SIGNATURE PAGES FOLLOW]
A3-3
IN WITNESS WHEREOF, each Grantor has caused this [Copyright] [Patent]
[Trademark] Security Agreement to be executed and delivered by its duly
authorized officer as of the date first set forth above.
Very truly yours,
[GRANTOR]
as Grantor
By:
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Name:
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Title:
---------------------------------
