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GUARANTEE AND COLLATERAL AGREEMENT
made by
FLAVORS HOLDINGS INC.,
MAFCO WORLDWIDE CORPORATION
and certain of its Subsidiaries
in favor of
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
Dated as of December 8, 2005
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TABLE OF CONTENTS
Page
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SECTION 1. DEFINED TERMS.....................................................1
1.1 Definitions.......................................................1
1.2 Other Definitional Provisions.....................................4
SECTION 2. GUARANTEE.........................................................4
2.1 Guarantee.........................................................4
2.2 Right of Contribution.............................................5
2.3 No Subrogation....................................................5
2.4 Amendments, etc. with respect to the Borrower Obligations.........5
2.5 Guarantee Absolute and Unconditional..............................6
2.6 Reinstatement.....................................................6
2.7 Payments..........................................................6
SECTION 3. GRANT OF SECURITY INTEREST........................................6
SECTION 4. REPRESENTATIONS AND WARRANTIES....................................8
4.1 Title; No Other Liens.............................................8
4.2 Perfected First Priority Liens....................................8
4.3 Jurisdiction of Organization; Chief Executive Office..............8
4.4 Inventory and Equipment...........................................8
4.5 Farm Products.....................................................8
4.6 Investment Property...............................................8
4.7 Receivables.......................................................9
4.8 Intellectual Property.............................................9
SECTION 5. COVENANTS.........................................................9
5.1 Delivery of Instruments, Certificated Securities and
Chattel Paper...................................................9
5.2 Maintenance of Insurance.........................................10
5.3 Payment of Obligations...........................................10
5.4 Maintenance of Perfected Security Interest; Further
Documentation..................................................10
5.5 Changes in Locations, Name, etc..................................11
5.6 Notices..........................................................11
5.7 Investment Property..............................................11
5.8 Receivables......................................................12
5.9 Intellectual Property............................................12
SECTION 6. REMEDIAL PROVISIONS..............................................14
6.1 Certain Matters Relating to Receivables..........................14
6.2 Communications with Obligors; Grantors Remain Liable.............14
6.3 Pledged Stock....................................................15
6.4 Proceeds to be Turned Over To Administrative Agent...............16
6.5 Application of Proceeds..........................................16
6.6 Code and Other Remedies..........................................16
6.7 Registration Rights..............................................17
6.8 Waiver; Deficiency...............................................18
SECTION 7. THE ADMINISTRATIVE AGENT.........................................18
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7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc......18
7.2 Duty of Administrative Agent.....................................20
7.3 Execution of Financing Statements................................20
7.4 Authority of Administrative Agent................................20
SECTION 8. MISCELLANEOUS....................................................20
8.1 Amendments in Writing............................................20
8.2 Notices..........................................................20
8.3 No Waiver by Course of Conduct; Cumulative Remedies..............21
8.4 Enforcement Expenses; Indemnification............................21
8.5 Successors and Assigns...........................................21
8.6 Set-Off..........................................................21
8.7 Counterparts.....................................................22
8.8 Severability.....................................................22
8.9 Section Headings.................................................22
8.10 Integration......................................................22
8.11 GOVERNING LAW....................................................22
8.12 Submission To Jurisdiction; Waivers..............................22
8.13 Acknowledgements.................................................23
8.14 Additional Grantors..............................................23
8.15 Releases.........................................................23
8.16 WAIVER OF JURY TRIAL.............................................24
SCHEDULES
Schedule 1 Notice Addresses
Schedule 2 Investment Property
Schedule 3 Perfection Matters
Schedule 4 Jurisdictions of Organization and Chief Executive Offices
Schedule 5 Inventory and Equipment Locations
Schedule 6 Intellectual Property
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GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of December 8, 2005,
made by each of the signatories hereto (together with any other entity that may
become a party hereto as provided herein, the "Grantors"), in favor of JPMORGAN
CHASE BANK, N.A., as administrative agent (in such capacity, the "Administrative
Agent") for the banks and other financial institutions or entities (the
"Lenders") from time to time parties to the Credit Agreement, dated as of
December 8, 2005 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among FLAVORS HOLDINGS INC., a Delaware
corporation ("Holdings"), MAFCO WORLDWIDE CORPORATION, a Delaware corporation
(the "Borrower"), BEAR XXXXXXX CORPORATE LENDING INC., as syndication agent, and
the Administrative Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrower upon the terms and
subject to the conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of
companies that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the Credit
Agreement will be used in part to enable the Borrower to make valuable transfers
to one or more of the other Grantors in connection with the operation of their
respective businesses;
WHEREAS, the Borrower and the other Grantors are engaged in related
businesses, and each Grantor will derive substantial direct and indirect benefit
from the making of the extensions of credit under the Credit Agreement; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders 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 Administrative Agent for the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Lenders, as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a)Unless otherwise defined herein, terms defined in
the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement, and the following terms are used herein as defined in the
New York UCC: Accounts, Certificated Security, Deposit Accounts, Chattel Paper,
Documents, Equipment, Farm Products, General Intangibles, Instruments,
Inventory, Letter of Credit Rights and Supporting Obligations.
(b) The following terms shall have the following meanings:
"Agreement": this Guarantee and Collateral Agreement, as the same
may be amended, supplemented or otherwise modified from time to time.
"Borrower Obligations": the collective reference to the unpaid
principal of and interest on the Loans and Reimbursement Obligations and all
other obligations and liabilities of the Borrower (including, without
limitation, interest accruing at the then applicable rate provided in the Credit
Agreement after the maturity of the Loans and Reimbursement Obligations and
interest accruing at the then applicable rate provided in the Credit Agreement
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Borrower, whether
or not a claim for post-filing or post-petition interest is allowed in such
proceeding) to the Administrative Agent or any Lender (or, in the case of any
Specified Hedge Agreement or Specified Cash Management Agreement, any Lender
Affiliate), whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred, which may arise under, out of, or in
connection with, the Credit Agreement, this Agreement, the other Loan Documents,
any Letter of Credit, any Specified Hedge Agreement, any Specified Cash
Management Agreement or any other document made, delivered or given in
connection with any of the foregoing, in each case whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and disbursements
of counsel to the Administrative Agent or to the Lenders that are required to be
paid by the Borrower pursuant to the terms of any of the foregoing agreements).
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by the
Administrative Agent as provided in Section 6.1 or 6.4.
"Copyrights": (i) all copyrights arising under the laws of the
United States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished (including,
without limitation, those listed in Schedule 6), all registrations and
recordings thereof, and all applications in connection therewith, including,
without limitation, all registrations, recordings and applications in the United
States Copyright Office, and (ii) the right to obtain all renewals thereof.
"Copyright Licenses": any written agreement naming any Grantor as
licensor or licensee (including, without limitation, those listed in Schedule
6), granting any right under any Copyright, including, without limitation, the
grant of rights to manufacture, distribute, exploit and sell materials derived
from any Copyright.
"Foreign Subsidiary": any Subsidiary organized under the laws of any
jurisdiction outside the United States of America.
"Foreign Subsidiary Voting Stock": the voting Capital Stock of any
Foreign Subsidiary.
"Guarantor Obligations": with respect to any Guarantor, all
obligations and liabilities of such Guarantor owed to the Administrative Agent
or any Lender, which may arise under or in connection with this Agreement
(including, without limitation, Section 2) or any other Loan Document, to which
such Guarantor is a party, in each case whether on account of guarantee
obligations, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of counsel
to the Administrative Agent or to the Lenders that are required to be paid by
such Guarantor pursuant to the terms of this Agreement or any other Loan
Document).
"Guarantors": the collective reference to each Grantor other than
the Borrower.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or
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otherwise, including, without limitation, the Copyrights, the Copyright
Licenses, the Patents, the Patent Licenses, the Trademarks and the Trademark
Licenses, and all rights to xxx at law or in equity for any infringement or
other impairment thereof, including the right to receive all proceeds and
damages therefrom.
"Intercompany Note": any promissory note evidencing loans made by
any Grantor to Holdings or any of its Subsidiaries.
"Investment Property": the collective reference to (i) all
"investment property" as such term is defined in Section 9-102(a)(49) of the New
York UCC (other than any Foreign Subsidiary Voting Stock excluded from the
definition of "Pledged Stock") and (ii) whether or not constituting "investment
property" as so defined, all Pledged Notes and all Pledged Stock.
"Issuers": the collective reference to each issuer of any Investment
Property.
"New York UCC": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Obligations": (i) in the case of the Borrower, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor Obligations.
"Patents": (i) all letters patent of the United States, any other
country or any political subdivision thereof, all reissues and extensions
thereof and all goodwill associated therewith, including, without limitation,
any of the foregoing referred to in Schedule 6, (ii) all applications for
letters patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof, including, without limitation,
any of the foregoing referred to in Schedule 6, and (iii) all rights to obtain
any reissues or extensions of the foregoing.
"Patent License": all agreements, whether written or oral, providing
for the grant by or to any Grantor of any right to manufacture, use or sell any
invention covered in whole or in part by a Patent, including, without
limitation, any of the foregoing referred to in Schedule 6.
"Pledged Notes": all promissory notes listed on Schedule 2, all
Intercompany Notes at any time issued to any Grantor and all other promissory
notes issued to or held by any Grantor (other than promissory notes issued in
connection with extensions of trade credit by any Grantor in the ordinary course
of business).
"Pledged Stock": the shares of Capital Stock listed on Schedule 2,
together with any other shares, stock certificates, options, interests or rights
of any nature whatsoever in respect of the Capital Stock of any Person that may
be issued or granted to, or held by, any Grantor while this Agreement is in
effect; provided that in no event shall more than 66% of the total outstanding
Foreign Subsidiary Voting Stock of any Foreign Subsidiary be required to be
pledged hereunder.
"Proceeds": all "proceeds" as such term is defined in Section
9-102(a)(64) of the New York UCC and, in any event, shall include, without
limitation, all dividends or other income from the Investment Property,
collections thereon or distributions or payments with respect thereto.
"Receivable": any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an Instrument or
Chattel Paper and whether or not it has been earned by performance (including,
without limitation, any Account).
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"Securities Act": the Securities Act of 1933, as amended.
"Trademarks": (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos and other source or business identifiers, and all goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, and all common-law
rights related thereto, including, without limitation, any of the foregoing
referred to in Schedule 6, and (ii) the right to obtain all renewals thereof.
"Trademark License": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any Trademark,
including, without limitation, any of the foregoing referred to in Schedule 6.
1.2 Other Definitional Provisions. (a) The words "hereof," "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall
refer to such Grantor's Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Administrative Agent, for the
ratable benefit of the Lenders and their respective successors, indorsees,
transferees and assigns, the prompt and complete payment and performance by the
Borrower when due (whether at the stated maturity, by acceleration or otherwise)
of the Borrower Obligations.
(b) Anything herein or in any other Loan Document to the
contrary notwithstanding, the maximum liability of each Guarantor
hereunder and under the other Loan Documents shall in no event exceed the
amount which can be guaranteed by such Guarantor under applicable federal
and state laws relating to the insolvency of debtors (after giving effect
to the right of contribution established in Section 2.2).
(c) Each Guarantor agrees that the Borrower Obligations may
at any time and from time to time exceed the amount of the liability of
such Guarantor hereunder without impairing the guarantee contained in this
Section 2 or affecting the rights and remedies of the Administrative Agent
or any Lender hereunder.
(d) The guarantee contained in this Section 2 shall remain
in full force and effect until all the Borrower Obligations and the
obligations of each Guarantor under the guarantee contained in this
Section 2 shall have been Fully Satisfied, notwithstanding that from time
to time during the term of the Credit Agreement the Borrower may be free
from any Borrower Obligations.
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(e) No payment made by the Borrower, any of the Guarantors,
any other guarantor or any other Person or received or collected by the
Administrative Agent or any Lender from the Borrower, any of the
Guarantors, any other guarantor or any other Person by virtue of any
action or proceeding or any set-off or appropriation or application at any
time or from time to time in reduction of or in payment of the Borrower
Obligations shall be deemed to modify, reduce, release or otherwise affect
the liability of any Guarantor hereunder which shall, notwithstanding any
such payment (other than any payment made by such Guarantor in respect of
the Borrower Obligations or any payment received or collected from such
Guarantor in respect of the Borrower Obligations), remain liable for the
Borrower Obligations up to the maximum liability of such Guarantor
hereunder until the Borrower Obligations are Fully Satisfied.
2.2 Right of Contribution. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 2.3. The provisions of
this Section 2.2 shall in no respect limit the obligations and liabilities of
any Guarantor to the Administrative Agent and the Lenders, and each Guarantor
shall remain liable to the Administrative Agent and the Lenders for the full
amount guaranteed by such Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the
Administrative Agent or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against the Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by the Administrative Agent or any Lender for
the payment of the Borrower Obligations, nor shall any Guarantor seek or be
entitled to seek any contribution or reimbursement from the Borrower or any
other Guarantor in respect of payments made by such Guarantor hereunder, until
all amounts owing to the Administrative Agent and the Lenders by the Borrower on
account of the Borrower Obligations are Fully Satisfied. If any amount shall be
paid to any Guarantor on account of such subrogation rights at any time when all
of the Borrower Obligations shall not have been Fully Satisfied, such amount
shall be held by such Guarantor in trust for the Administrative Agent and the
Lenders, segregated from other funds of such Guarantor, and shall, forthwith
upon receipt by such Guarantor, be turned over to the Administrative Agent in
the exact form received by such Guarantor (duly indorsed by such Guarantor to
the Administrative Agent, if required), to be applied against the Borrower
Obligations, whether matured or unmatured, in such order as the Administrative
Agent may determine.
2.4 Amendments, etc. with respect to the Borrower Obligations. Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by the Administrative Agent or any Lender may be rescinded by
the Administrative Agent or such Lender and any of the Borrower Obligations
continued, and the Borrower Obligations, or the liability of any other Person
upon or for any part thereof, or any collateral security or guarantee therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any Lender, and the
Credit Agreement and the other Loan Documents and any other documents executed
and delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders or all Lenders, as the case may be) may deem advisable from time to
time, and any collateral security, guarantee or right of offset at any time held
by the Administrative Agent or any Lender for the payment of the Borrower
Obligations may be sold, exchanged, waived, surrendered or released. Neither the
Administrative Agent nor any Lender shall have any obligation to protect,
secure, perfect or insure any
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Lien at any time held by it as security for the Borrower Obligations or for the
guarantee contained in this Section 2 or any property subject thereto.
2.5 Guarantee Absolute and Unconditional. Each Guarantor waives any and
all notice of the creation, renewal, extension or accrual of any of the Borrower
Obligations and notice of or proof of reliance by the Administrative Agent or
any Lender upon the guarantee contained in this Section 2 or acceptance of the
guarantee contained in this Section 2; the Borrower Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 2; and all dealings between the Borrower and any of
the Guarantors, on the one hand, and the Administrative Agent and the Lenders,
on the other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon the guarantee contained in this Section 2. Each
Guarantor waives diligence, presentment, protest, demand for payment and notice
of default or nonpayment to or upon the Borrower or any of the Guarantors with
respect to the Borrower Obligations. Each Guarantor understands and agrees that
the guarantee contained in this Section 2 shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of the Credit Agreement or any other Loan Document,
any of the Borrower Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by the Administrative Agent or any Lender, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Borrower or any other Person against
the Administrative Agent or any Lender, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of the Borrower or such Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrower for the Borrower Obligations, or of such Guarantor
under the guarantee contained in this Section 2, in bankruptcy or in any other
instance. When making any demand hereunder or otherwise pursuing its rights and
remedies hereunder against any Guarantor, the Administrative Agent or any Lender
may, but shall be under no obligation to, make a similar demand on or otherwise
pursue such rights and remedies as it may have against the Borrower, any other
Guarantor or any other Person or against any collateral security or guarantee
for the Borrower Obligations or any right of offset with respect thereto, and
any failure by the Administrative Agent or any Lender to make any such demand,
to pursue such other rights or remedies or to collect any payments from the
Borrower, any other Guarantor or any other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of the Borrower, any other Guarantor or any other Person or any such
collateral security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Administrative Agent or any Lender against any Guarantor.
For the purposes hereof "demand" shall include the commencement and continuance
of any legal proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations is rescinded or
must otherwise be restored or returned by the Administrative Agent or any Lender
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments hereunder
will be paid to the Administrative Agent without set-off or counterclaim in
Dollars at the Funding Office.
SECTION 3. GRANT OF SECURITY INTEREST
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Each Grantor hereby assigns and transfers to the Administrative
Agent, and hereby grants to the Administrative Agent, for the ratable benefit of
the Lenders, a security interest in, all of the following property now owned or
at any time hereafter acquired by such Grantor or in which such Grantor now has
or at any time in the future may acquire any right, title or interest
(collectively, the "Collateral"), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of such Grantor's Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Deposit Accounts;
(d) all Documents;
(e) all Equipment;
(f) all General Intangibles;
(g) all Instruments;
(h) all Intellectual Property;
(i) all Inventory;
(j) all Investment Property
(k) all Letter of Credit Rights
(l) all other personal property not otherwise described
above;
(m) all books and records pertaining to the Collateral; and
(n) to the extent not otherwise included, all Proceeds,
Supporting Obligations and products of any and all of the foregoing and
all collateral security and guarantees given by any Person with respect to
any of the foregoing.
provided, however, that notwithstanding any of the other provisions
set forth in this Section 3, this Agreement shall not constitute a grant of a
security interest in (1) any property to the extent that such grant of a
security interest (i) is prohibited by any Requirement of Law of a Governmental
Authority or requires a consent not obtained of any Governmental Authority
pursuant to such Requirement of Law, or (ii) is prohibited by, or constitutes a
breach or default under or results in the termination of or requires any consent
not obtained under, any contract, license, agreement, instrument or other
document or in the case of any Investment Property, Pledged Stock or Pledged
Note, any applicable shareholder or similar agreement, or (iii) constitutes or
results in the abandonment, invalidation or unenforceability of any right, title
or interest of any Grantor under any contract, license, agreement, instrument or
other document (including, to the extent applicable, any trademark applications
filed in the United States Patent and Trademark Office on the basis of any
Grantor's "intent-to-use" such trademark), except to the extent that (x) such
Requirement of Law or the term in such contract, license, agreement, instrument
or other document or shareholder or similar agreement providing for such
prohibition, breach, default or termination or requiring such consent is
ineffective under applicable law, or (y) any such
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prohibition, default or other term would be rendered ineffective pursuant to
Section 9-406, 9-407, 9-408 or 9-409 of the UCC of any relevant jurisdiction or
any other applicable law or principles of equity, and provided that the security
interest created hereby shall attach immediately to any portion of such property
that does not result in any of the consequences specified above, or (2) more
than 66% of the total outstanding Foreign Subsidiary Voting Stock of any
Excluded Foreign Subsidiary.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective extensions
of credit to the Borrower thereunder, each Grantor hereby represents and
warrants to the Administrative Agent and each Lender that:
4.1 Title; No Other Liens. Except for the security interest granted to
the Administrative Agent for the ratable benefit of the Lenders pursuant to this
Agreement and the other Liens permitted to exist on the Collateral by the Credit
Agreement, such Grantor owns each item of the Collateral free and clear of any
and all Liens or claims of others. No financing statement or other public notice
with respect to all or any part of the Collateral is on file or of record in any
public office, except such as have been filed in favor of the Administrative
Agent, for the ratable benefit of the Lenders, pursuant to this Agreement or as
are permitted by the Credit Agreement.
4.2 Perfected First Priority Liens. The security interests granted
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 3 will constitute valid perfected security interests in
all of the Collateral in favor of the Administrative Agent, for the ratable
benefit of the Lenders, as collateral security for such Grantor's Obligations,
enforceable in accordance with the terms hereof against all creditors of such
Grantor and any Persons purporting to purchase any Collateral from such Grantor
(except purchases of Inventory in the ordinary course of business), except as
enforceability is affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other laws relating to or affecting creditors'
rights generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith and fair
dealing, and (b) are prior to all other Liens on the Collateral in existence on
the date hereof except for unrecorded Liens permitted by the Credit Agreement
which have priority over the Liens on the Collateral by operation of law.
4.3 Jurisdiction of Organization; Chief Executive Office. On the date
hereof, such Grantor's jurisdiction of organization and the location of such
Grantor's chief executive office or sole place of business are specified on
Schedule 4.
4.4 Inventory and Equipment. On the date hereof, the Inventory and the
Equipment (other than mobile goods) are kept at the locations listed on Schedule
5.
4.5 Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
4.6 Investment Property. (a) The shares of Pledged Stock pledged by such
Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor or, in the
case of Foreign Subsidiary Voting Stock, if less, 66% of the outstanding Foreign
Subsidiary Voting Stock of each relevant Issuer.
(b) All the shares of the Pledged Stock have been duly and
validly issued and are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid
and binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to
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the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of, and
has good and marketable title to, the Investment Property pledged by it
hereunder, free of any and all Liens or options in favor of, or claims of,
any other Person, except the security interest created by this Agreement
and non-consensual Liens permitted by Section 7.2 of the Credit Agreement.
4.7 Receivables. (a) No amount payable to such Grantor under or in
connection with any Receivable is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Administrative Agent to the extent such
delivery is required by Section 5.1.
(b) None of the obligors on any Receivables is a
Governmental Authority.
(c) The amounts represented by such Grantor to the Lenders
from time to time as owing to such Grantor in respect of the Receivables
will at such times be accurate in all material respects.
4.8 Intellectual Property. (a) Schedule 6 lists all Intellectual
Property owned by such Grantor in its own name on the date hereof that has been
registered in or filed with the U.S. Patent and Trademark Office or the U.S.
Copyright Office, as applicable.
(b) On the date hereof, all material Intellectual Property
that has been registered in the U.S. Patent and Trademark Office or the
U.S. Copyright Office, as applicable, is valid, subsisting, unexpired and
enforceable, has not been abandoned, other than in the ordinary course of
business, and to the knowledge of such Grantor, does not infringe the
intellectual property rights of any other Person.
(c) Except as set forth in Schedule 6, on the date hereof,
none of the material Intellectual Property owned by such Grantor in its
own name is the subject of any written licensing or franchise agreement
pursuant to which such Grantor is the licensor or franchisor.
(d) No final holding, decision or judgment has been rendered
by any Governmental Authority which would limit, cancel or question the
validity of, or such Grantor's rights in, any Intellectual Property in any
respect that could reasonably be expected to have a Material Adverse
Effect.
(e) No action or proceeding is pending, or, to the knowledge
of such Grantor, threatened, on the date hereof (i) seeking to limit,
cancel or question the validity of any Intellectual Property or such
Grantor's ownership interest therein, or (ii) which could reasonably be
expected to have a material adverse effect on the value of any
Intellectual Property.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Administrative Agent and
the Lenders that, from and after the date of this Agreement until the
Obligations shall have been Fully Satisfied:
5.1 Delivery of Instruments, Certificated Securities and Chattel Paper.
If any amount in excess of $500,000 payable under or in connection with any of
the Collateral shall be or become
9
evidenced by any Instrument, Certificated Security or Chattel Paper, such
Instrument, Certificated Security or Chattel Paper shall be immediately
delivered to the Administrative Agent, duly indorsed in a manner reasonably
satisfactory to the Administrative Agent, to be held as Collateral pursuant to
this Agreement.
5.2 Maintenance of Insurance. (a) Such Grantor will maintain, with
financially sound and reputable companies, insurance policies (i) insuring the
Inventory and Equipment against loss by fire, explosion, theft and such other
casualties as may be reasonably satisfactory to the Administrative Agent and
(ii) to the extent requested by the Administrative Agent insuring such Grantor,
the Administrative Agent and the Lenders against liability for personal injury
and property damage relating to such Inventory and Equipment, such policies to
be in such form and amounts and having such coverage as may be reasonably
satisfactory to the Administrative Agent and the Lenders.
(b) All such insurance shall (i) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 30 days after receipt by the
Administrative Agent of written notice thereof, (ii) name the
Administrative Agent as insured party or loss payee and (iii) be
reasonably satisfactory in all other respects to the Administrative Agent.
(c) If requested by the Administrative Agent, the Borrower
shall deliver to the Administrative Agent and the Lenders information
regarding such insurance coverage substantially concurrently with each
delivery of the Borrower's audited annual financial statements and such
supplemental reports with respect thereto as the Administrative Agent may
from time to time reasonably request.
5.3 Payment of Obligations. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials
and supplies) against or with respect to the Collateral, except that no such
charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein. Notwithstanding anything to the contrary in the foregoing sentence, no
Grantor shall be in default under this Section unless the aggregate amount of
non-contested Indebtedness or obligations which the Grantors, in the aggregate,
have so failed to pay, discharge or satisfy before they become delinquent and
which remain delinquent at the time of determination is more than $2,000,000 in
the aggregate.
5.4 Maintenance of Perfected Security Interest; Further Documentation.
(a) Such Grantor shall maintain the security interest created by this Agreement
as a perfected security interest having at least the priority described in
Section 4.2 and shall defend such security interest against the claims and
demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Administrative Agent
and the Lenders from time to time statements and schedules further
identifying and describing the assets and property of such Grantor and
such other reports in connection therewith as the Administrative Agent may
reasonably request, all in reasonable detail.
(c) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of such
Grantor, such Grantor will promptly and
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duly execute and deliver, and have recorded, such further instruments and
documents and take such further actions as the Administrative Agent may
reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, (i) filing any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in
effect in any jurisdiction with respect to the security interests created
hereby and (ii) in the case of Investment Property, Deposit Accounts and
any other relevant Collateral, taking any actions necessary to enable the
Administrative Agent to obtain "control" (within the meaning of the
applicable Uniform Commercial Code) with respect thereto.
5.5 Changes in Locations, Name, etc. Such Grantor will not, except upon
15 days' prior written notice to the Administrative Agent and delivery to the
Administrative Agent of all additional executed financing statements and other
documents reasonably requested by the Administrative Agent to maintain the
validity, perfection and priority of the security interests provided for herein:
(i) change its jurisdiction of organization or the
location of its chief executive office or sole place of business
from that referred to in Section 4.3; or
(ii) change its name, identity or corporate or other
organizational structure to such an extent that any financing
statement filed by the Administrative Agent in connection with this
Agreement would become misleading.
5.6 Notices. Such Grantor will advise the Administrative Agent and the
Lenders promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby
or Liens permitted under the Credit Agreement) on any of the Collateral
which would adversely affect the ability of the Administrative Agent to
exercise any of its remedies hereunder; and
(b) of the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the aggregate
value of the Collateral or on the security interests created hereby.
5.7 Investment Property. (a) If such Grantor shall become entitled to
receive or shall receive any certificate (including, without limitation, any
certificate representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the Capital
Stock of any Issuer, whether in addition to, in substitution of, as a conversion
of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect
thereof, such Grantor shall accept the same as the agent of the Administrative
Agent and the Lenders, hold the same in trust for the Administrative Agent and
the Lenders and deliver the same forthwith to the Administrative Agent in the
exact form received, duly indorsed by such Grantor to the Administrative Agent,
if required, together with an undated stock power covering such certificate duly
executed in blank by such Grantor and with, if the Administrative Agent so
requests, signature guaranteed, to be held by the Administrative Agent, subject
to the terms hereof, as additional collateral security for the Obligations. Any
sums paid upon or in respect of the Investment Property upon the liquidation or
dissolution of any Issuer shall be paid over to the Administrative Agent to be
held by it hereunder as additional collateral security for the Obligations, and
in case any distribution of capital shall be made on or in respect of the
Investment Property or any property shall be distributed upon or with respect to
the Investment Property pursuant to the recapitalization or reclassification of
the capital of any Issuer or pursuant to the reorganization thereof, the
property so distributed shall, unless otherwise subject to a perfected security
interest in favor of the Administrative Agent, be delivered to the
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Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations. If any sums of money or property so paid or
distributed in respect of the Investment Property shall be received by such
Grantor, such Grantor shall, until such money or property is paid or delivered
to the Administrative Agent, hold such money or property in trust for the
Administrative Agent and the Lenders, segregated from other funds of such
Grantor, as additional collateral security for the Obligations.
Notwithstanding the foregoing provisions of this Section 5.7(a) or
any other provision of this Agreement, in no event shall more than 66% of the
total outstanding Foreign Subsidiary Voting Stock be required to be pledged
hereunder.
(b) Without the prior written consent of the Administrative
Agent, such Grantor will not (i) vote to enable, or take any other action
to permit, any Issuer to issue any Capital Stock of any nature or to issue
any other securities convertible into or granting the right to purchase or
exchange for any Capital Stock of any nature of any Issuer, (ii) sell,
assign, transfer, exchange, or otherwise dispose of, or grant any option
with respect to, the Investment Property or Proceeds thereof (except for
any such transaction consummated by the Borrower or any of its
Subsidiaries that is expressly permitted by the Credit Agreement), (iii)
create, incur or permit to exist any Lien or option in favor of, or any
claim of any Person with respect to, any of the Investment Property or
Proceeds thereof, or any interest therein, except for the security
interests created by this Agreement and nonconsensual Liens permitted by
Section 7.2 of the Credit Agreement or (iv) enter into any agreement or
undertaking restricting the right or ability of such Grantor or the
Administrative Agent to sell, assign or transfer any of the Investment
Property or Proceeds thereof.
(c) In the case of each Grantor which is an Issuer, such
Issuer agrees that (i) it will be bound by the terms of this Agreement
relating to the Investment Property issued by it and will comply with such
terms insofar as such terms are applicable to it, (ii) it will notify the
Administrative Agent promptly in writing of the occurrence of any of the
events described in Section 5.7(a) with respect to the Investment Property
issued by it and (iii) the terms of Sections 6.3(c) and 6.7 shall apply to
it, mutatis mutandis, with respect to all actions that may be required of
it pursuant to Section 6.3(c) or 6.7 with respect to the Investment
Property issued by it.
5.8 Receivables. (a) Other than in the ordinary course of business
consistent with its past practice, such Grantor will not (i) grant any extension
of the time of payment of any Receivable, (ii) compromise or settle any
Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable in any manner that could adversely affect the value
thereof.
(b) Such Grantor will deliver to the Administrative Agent a
copy of each material demand, notice or document received by it that
questions or calls into doubt the validity or enforceability of more than
5% of the aggregate amount of the then outstanding Receivables.
5.9 Intellectual Property. (a) Such Grantor (either itself or through
licensees) will (i) continue to use each material Trademark on each and every
trademark class of goods applicable to its current line as reflected in its
current catalogs, brochures and price lists in order to maintain such Trademark
in full force free from any claim of abandonment for non-use (unless such
Grantor determines that it is not commercially reasonable to do so, (ii)
maintain the quality of products and services offered under such Trademark
sufficient to maintain the goodwill of the business, (iii) use such Trademark
with the appropriate notice of registration and all other notices and legends
required by applicable Requirements of Law, (iv) not intentionally adopt or use
any xxxx which is confusingly similar or a
12
colorable imitation of such Trademark unless the Administrative Agent, for the
ratable benefit of the Lenders, shall obtain a perfected security interest in
such xxxx pursuant to this Agreement, and (v) not (and not knowingly permit any
licensee or sublicensee thereof to) do any commercially reasonable act or
knowingly omit to do any act whereby such Trademark may become invalidated or
impaired in any way.
(b) Such Grantor (either itself or through licensees) will
not do any act, or omit to do any act, whereby any material Patent may
become forfeited, abandoned or dedicated to the public (unless such
Grantor determines it is commercially reasonable to do so).
(c) Such Grantor (either itself or through licensees) will
not (and will not permit any licensee or sublicensee thereof to) do any
act or knowingly omit to do any act whereby any material portion of the
material Copyrights may become invalidated or otherwise impaired. Such
Grantor will not (either itself or through licensees) do any act whereby
any material portion of the material Copyrights may fall into the public
domain.
(d) Such Grantor (either itself or through licensees) will
not do any act that knowingly uses any material Intellectual Property to
infringe the intellectual property rights of any other Person.
(e) Such Grantor will notify the Administrative Agent and
the Lenders immediately if it knows, or has reason to know, that any
application or registration relating to any material Intellectual Property
could reasonably be expected to become forfeited, abandoned or dedicated
to the public, or of any adverse determination or development (including,
without limitation, the institution of any proceeding in the United States
Patent and Trademark Office, the United States Copyright Office or any
court or tribunal in any country, but excluding non-final office actions
received from the United States Patent and Trademark Office in the
ordinary course, or equivalent notifications form the United States
Copyright Office) regarding such Grantor's ownership of, or the validity
of, any material Intellectual Property or such Grantor's right to register
the same or to own and maintain the same.
(f) Whenever such Grantor, either by itself or through any
agent, employee, licensee or designee, shall file an application for the
registration of any Intellectual Property with the United States Patent
and Trademark Office, the United States Copyright Office or any similar
office or agency in any other country or any political subdivision
thereof, such Grantor shall report such filing to the Administrative Agent
within five Business Days after the last day of the fiscal quarter in
which such filing occurs. Upon request of the Administrative Agent, such
Grantor shall execute and deliver, and have recorded, any and all
agreements, instruments, documents, and papers as the Administrative Agent
may reasonably request to evidence the Administrative Agent's and the
Lenders' security interest in any Copyright, Patent or Trademark and the
goodwill and general intangibles of such Grantor relating thereto or
represented thereby.
(g) Such Grantor will take all commercially reasonable
steps, including, without limitation, in any proceeding before the United
States Patent and Trademark Office, the United States Copyright Office or
any similar office or agency in any other country or any political
subdivision thereof, to maintain and pursue each application (and to
obtain the relevant registration) and to maintain each registration of the
material Intellectual Property, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of
incontestability extent to the extent such Grantor determines that it is
not commercially reasonable to do so.
13
(h) In the event that any material Intellectual Property is
infringed, misappropriated or diluted by a third party, such Grantor shall
(i) take such actions as such Grantor shall reasonably deem appropriate
under the circumstances to protect such Intellectual Property and (ii) if
such Intellectual Property is of material economic value, promptly notify
the Administrative Agent after it learns thereof and, if reasonably
requested by the Administrative Agent, xxx for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate
and to recover any and all damages for such infringement, misappropriation
or dilution. Grantor shall not be required to take any such actions which
would in any way jeopardize or bring into question the validity of the
Intellectual Property.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) Subject to Section 6.2
with respect to communications with obligors under the Receivables, the
Administrative Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as
the Administrative Agent may require in connection with such test verifications.
At any time and from time to time, upon the Administrative Agent's reasonable
request and at the expense of the relevant Grantor, such Grantor shall cause
independent public accountants or others satisfactory to the Administrative
Agent to furnish to the Administrative Agent reports showing reconciliations,
aging and test verifications of, and trial balances for, the Receivables.
(b) The Administrative Agent hereby authorizes each Grantor
to collect such Grantor's Receivables, subject to the Administrative
Agent's direction and control, and the Administrative Agent may curtail or
terminate said authority at any time after the occurrence and during the
continuance of an Event of Default. If required by the Administrative
Agent at any time after the occurrence and during the continuance of an
Event of Default, any payments of Receivables, when collected by any
Grantor, (i) shall be forthwith (and, in any event, within two Business
Days) deposited by such Grantor in the exact form received, duly indorsed
by such Grantor to the Administrative Agent if required, in a Collateral
Account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent
for the account of the Lenders only as provided in Section 6.5, and (ii)
until so turned over, shall be held by such Grantor in trust for the
Administrative Agent and the Lenders, segregated from other funds of such
Grantor. Each such deposit of Proceeds of Receivables shall be accompanied
by a report identifying in reasonable detail the nature and source of the
payments included in the deposit.
(c) At the Administrative Agent's request at any time after
the occurrence, and during the continuance, of an Event of Default, each
Grantor shall deliver to the Administrative Agent all original and other
documents evidencing, and relating to, the agreements and transactions
which gave rise to the Receivables, including, without limitation, all
original orders, invoices and shipping receipts.
6.2 Communications with Obligors; Grantors Remain Liable. (a) The
Administrative Agent in its own name or in the name of others may at any time
after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Receivables and parties to the Contracts to
verify with them to the Administrative Agent's satisfaction the existence,
amount and terms of any Receivables or Contracts.
(b) Upon the request of the Administrative Agent at any time
after the occurrence and during the continuance of an Event of Default,
each Grantor shall notify obligors
14
on the Receivables and parties to the Contracts that the Receivables and
the Contracts have been assigned to the Administrative Agent for the
ratable benefit of the Lenders and that payments in respect thereof shall
be made directly to the Administrative Agent.
(c) Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Receivables and Contracts to
observe and perform all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any
agreement giving rise thereto. Neither the Administrative Agent nor any
Lender shall have any obligation or liability under any Receivable (or any
agreement giving rise thereto) or Contract by reason of or arising out of
this Agreement or the receipt by the Administrative Agent or any Lender of
any payment relating thereto, nor shall the Administrative Agent or any
Lender be obligated in any manner to perform any of the obligations of any
Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto) or Contract, to make any payment, to make any inquiry as to the
nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party thereunder, to present or file
any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it
may be entitled at any time or times.
6.3 Pledged Stock. (a) Unless an Event of Default shall have occurred
and be continuing and the Administrative Agent shall have given notice to the
relevant Grantor of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted
to receive all cash dividends paid in respect of the Pledged Stock and all
payments made in respect of the Pledged Notes to the extent permitted in the
Credit Agreement, and to exercise all voting and corporate or other
organizational rights with respect to the Investment Property; provided,
however, that no vote shall be cast or corporate or other organizational right
exercised or other action taken which, in the Administrative Agent's reasonable
judgment, would impair the Collateral or which would be inconsistent with or
result in any violation of any provision of the Credit Agreement, this Agreement
or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and
the Administrative Agent shall give notice of its intent to exercise such
rights to the relevant Grantor or Grantors, (i) the Administrative Agent
shall have the right to receive any and all cash dividends, payments or
other Proceeds paid in respect of the Investment Property and make
application thereof to the Obligations in such order as the Administrative
Agent may determine, and (ii) any or all of the Investment Property shall
be registered in the name of the Administrative Agent or its nominee, and
the Administrative Agent or its nominee may thereafter exercise (x) all
voting, corporate and other rights pertaining to such Investment Property
at any meeting of shareholders of the relevant Issuer or Issuers or
otherwise and (y) any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining to
such Investment Property as if it were the absolute owner thereof
(including, without limitation, the right to exchange at its discretion
any and all of the Investment Property upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the
corporate or other organizational structure of any Issuer, or upon the
exercise by any Grantor or the Administrative Agent of any right,
privilege or option pertaining to such Investment Property, and in
connection therewith, the right to deposit and deliver any and all of the
Investment Property with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as the
Administrative Agent may determine), all without liability except to
account for property actually received by it, but the Administrative Agent
shall have no duty to any Grantor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in
so doing.
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(c) Each Grantor hereby authorizes and instructs each Issuer
of any Investment Property pledged by such Grantor hereunder to (i) comply
with any instruction received by it from the Administrative Agent in
writing that (x) states that an Event of Default has occurred and is
continuing and (y) is otherwise in accordance with the terms of this
Agreement, without any other or further instructions from such Grantor,
and each Grantor agrees that each Issuer shall be fully protected in so
complying, and (ii) unless otherwise expressly permitted hereby, pay any
dividends or other payments with respect to the Investment Property
directly to the Administrative Agent.
6.4 Proceeds to be Turned Over To Administrative Agent. In addition to
the rights of the Administrative Agent and the Lenders specified in Section 6.1
with respect to payments of Receivables, if an Event of Default shall occur and
be continuing, all Proceeds received by any Grantor consisting of cash, checks
and other near-cash items shall be held by such Grantor in trust for the
Administrative Agent and the Lenders, segregated from other funds of such
Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to
the Administrative Agent in the exact form received by such Grantor (duly
indorsed by such Grantor to the Administrative Agent, if required). All Proceeds
received by the Administrative Agent hereunder shall be held by the
Administrative Agent in a Collateral Account maintained under its sole dominion
and control. All Proceeds while held by the Administrative Agent in a Collateral
Account (or by such Grantor in trust for the Administrative Agent and the
Lenders) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.5.
6.5 Application of Proceeds. At such intervals as may be agreed upon by
the Borrower and the Administrative Agent, or, if an Event of Default shall have
occurred and be continuing, at any time at the Administrative Agent's election,
the Administrative Agent may apply all or any part of Proceeds constituting
Collateral, whether or not held in any Collateral Account, and any proceeds of
the guarantee set forth in Section 2, in payment of the Obligations in the
following order:
First, to pay incurred and unpaid fees and expenses of the
Administrative Agent under the Loan Documents;
Second, to the Administrative Agent, for application by it towards
payment of amounts then due and owing and remaining unpaid in respect of
the Obligations, pro rata among the Lenders according to the amounts of
the Obligations then due and owing and remaining unpaid to the Lenders;
Third, to the Administrative Agent, for application by it towards
prepayment of the Obligations, pro rata among the Lenders according to the
amounts of the Obligations then held by the Lenders; and
Fourth, any balance remaining after the Obligations shall have been
Fully Satisfied shall be paid over to the Borrower or to whomsoever may be
lawfully entitled to receive the same.
6.6 Code and Other Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may exercise, in
addition to all other rights and remedies granted to them in this Agreement and
in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the New York UCC
or any other applicable law. Without limiting the generality of the foregoing,
the Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such
16
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or office of the Administrative Agent or any Lender or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. The Administrative Agent or any Lender shall have the right upon
any such public sale or sales, and, to the extent permitted by law, upon any
such private sale or sales, to purchase the whole or any part of the Collateral
so sold, free of any right or equity of redemption in any Grantor, which right
or equity is hereby waived and released. Each Grantor further agrees, at the
Administrative Agent's request, to assemble the Collateral and make it available
to the Administrative Agent at places which the Administrative Agent shall
reasonably select, whether at such Grantor's premises or elsewhere. The
Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 6.6, after deducting all reasonable costs and expenses
of every kind incurred in connection therewith or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or
the rights of the Administrative Agent and the Lenders hereunder, including,
without limitation, reasonable attorneys' fees and disbursements, to the payment
in whole or in part of the Obligations, in such order as the Administrative
Agent may elect, and only after such application and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-615(a)(3) of the New York UCC, need the
Administrative Agent account for the surplus, if any, to any Grantor. To the
extent permitted by applicable law, each Grantor waives all claims, damages and
demands it may acquire against the Administrative Agent or any Lender arising
out of the exercise by them of any rights hereunder. If any notice of a proposed
sale or other disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least 10 days before such sale
or other disposition.
6.7 Registration Rights. (a) If the Administrative Agent shall determine
to exercise its right to sell any or all of the Pledged Stock pursuant to
Section 6.6, and if in the opinion of the Administrative Agent it is necessary
or advisable to have the Pledged Stock, or that portion thereof to be sold,
registered under the provisions of the Securities Act, the relevant Grantor will
cause the Issuer thereof to (i) execute and deliver, and cause the directors and
officers of such Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
reasonable opinion of the Administrative Agent, necessary or advisable to
register the Pledged Stock, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering of
the Pledged Stock, or that portion thereof to be sold, and (iii) make all
amendments thereto and/or to the related prospectus which, in the reasonable
opinion of the Administrative Agent, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto. Each
Grantor agrees to cause such Issuer to comply with the provisions of the
securities or "Blue Sky" laws of any and all jurisdictions which the
Administrative Agent shall designate and to make available to its security
holders, as soon as practicable, an earnings statement (which need not be
audited) which will satisfy the provisions of Section 11(a) of the Securities
Act.
(b) Each Grantor recognizes that the Administrative Agent
may be unable to effect a public sale of any or all the Pledged Stock, by
reason of certain prohibitions contained in the Securities Act and
applicable state securities laws or otherwise, and may be compelled to
resort to one or more private sales thereof to a restricted group of
purchasers which will be obliged to agree, among other things, to acquire
such securities for their own account for investment and not with a view
to the distribution or resale thereof. Each Grantor acknowledges and
agrees that any such private sale may result in prices and other terms
less favorable than if
17
such sale were a public sale and, notwithstanding such circumstances,
agrees that any such private sale shall be deemed to have been made in a
commercially reasonable manner. The Administrative Agent shall be under no
obligation to delay a sale of any of the Pledged Stock 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.
(c) Each Grantor agrees to use its commercially reasonable
efforts to do or cause to be done all such other acts as may be necessary
to make such sale or sales of all or any portion of the Pledged Stock
pursuant to this Section 6.7 valid and binding and in compliance with any
and all other applicable Requirements of Law. Each Grantor further agrees
that a breach of any of the covenants contained in this Section 6.7 will
cause irreparable injury to the Administrative Agent and the Lenders, that
the Administrative Agent and the Lenders have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section 6.7 shall be specifically enforceable against
such Grantor, and such Grantor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants
except for a defense that no Event of Default has occurred under the
Credit Agreement.
6.8 Deficiency. Each Grantor shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Collateral are insufficient
to pay its Obligations and the reasonable fees and disbursements of any
attorneys employed by the Administrative Agent or any Lender to collect such
deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. (a)
Each Grantor hereby irrevocably constitutes and appoints the Administrative
Agent and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Agreement, and, without limiting the generality of the foregoing, each
Grantor hereby gives the Administrative Agent the power and right, on behalf of
such Grantor, without notice to or assent by such Grantor, to do any or all of
the following:
(i) in the name of such Grantor or its own name, or
otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of
moneys due under any Receivable or Contract or with respect to any
other Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of
collecting any and all such moneys due under any Receivable or
Contract or with respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute
and deliver, and have recorded, any and all agreements, instruments,
documents and papers as the Administrative Agent may request to
evidence the Administrative Agent's and the Lenders' security
interest in such Intellectual Property and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby;
18
(iii) pay or discharge taxes and Liens levied or placed
on or threatened against the Collateral, effect any repairs or any
insurance called for by the terms of this Agreement and pay all or
any part of the premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for
in Section 6.6 or 6.7, any indorsements, assignments or other
instruments of conveyance or transfer with respect to the
Collateral; and
(v) (1) direct any party liable for any payment under
any of the Collateral to make payment of any and all moneys due or
to become due thereunder directly to the Administrative Agent or as
the Administrative Agent shall direct; (2) ask or demand for,
collect, and receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect
of or arising out of any Collateral; (3) sign and indorse any
invoices, freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of
the Collateral; (4) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any portion thereof and to
enforce any other right in respect of any Collateral; (5) defend any
suit, action or proceeding brought against such Grantor with respect
to any Collateral; (6) settle, compromise or adjust any such suit,
action or proceeding and, in connection therewith, give such
discharges or releases as the Administrative Agent may deem
appropriate; (7) assign any Copyright, Patent or Trademark (along
with the goodwill of the business to which any such Copyright,
Patent or Trademark pertains), throughout the world for such term or
terms, on such conditions, and in such manner, as the Administrative
Agent shall in its sole discretion determine; and (8) generally,
sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as
though the Administrative Agent were the absolute owner thereof for
all purposes, and do, at the Administrative Agent's option and such
Grantor's expense, at any time, or from time to time, all acts and
things which the Administrative Agent deems necessary to protect,
preserve or realize upon the Collateral and the Administrative
Agent's and the Lenders' security interests therein and to effect
the intent of this Agreement, all as fully and effectively as such
Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of
its agreements contained herein, the Administrative Agent, at its option,
but without any obligation so to do, may perform or comply, or otherwise
cause performance or compliance, with such agreement.
(c) The reasonable expenses of the Administrative Agent
incurred in connection with actions undertaken as provided in this Section
7.1, together with interest thereon at a rate per annum equal to the
highest rate per annum at which interest would then be payable on any
category of past due ABR Loans under the Credit Agreement, from the date
of payment by the Administrative Agent to the date reimbursed by the
relevant Grantor, shall be payable by such Grantor to the Administrative
Agent on demand.
19
(d) Each Grantor hereby ratifies all that said attorneys
shall lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with
an interest and are irrevocable until this Agreement is terminated and the
security interests created hereby are released.
7.2 Duty of Administrative Agent. The Administrative Agent's sole duty
with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account. Neither the
Administrative Agent, any Lender nor any of their respective officers,
directors, employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Administrative Agent and the Lenders hereunder are solely to
protect the Administrative Agent's and the Lenders' interests in the Collateral
and shall not impose any duty upon the Administrative Agent or any Lender to
exercise any such powers. The Administrative Agent and the Lenders shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct.
7.3 Authorization of Financing Statements. Pursuant to any applicable
law, each Grantor authorizes the Administrative Agent to file or record
financing statements and other filing or recording documents or instruments with
respect to the Collateral without the signature of such Grantor in such form and
in such offices as the Administrative Agent determines appropriate to perfect
the security interests of the Administrative Agent under this Agreement. Each
Grantor authorizes the Administrative Agent to use the collateral description
"all personal property" in any such financing statements. Each Grantor hereby
ratifies and authorizes the filing by the Administrative Agent of any financing
statement with respect to the Collateral made prior to the date hereof.
7.4 Authority of Administrative Agent. Each Grantor acknowledges that
the rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Administrative Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Grantors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and no Grantor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 10.1 of the Credit Agreement.
8.2 Notices. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 10.2 of the Credit Agreement; provided that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 1.
20
8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor agrees to
pay or reimburse each Lender and the Administrative Agent for all its reasonable
and documented costs and expenses incurred in collecting against such Guarantor
under the guarantee contained in Section 2 or otherwise enforcing or preserving
any rights under this Agreement and the other Loan Documents to which such
Guarantor is a party, including, without limitation, the reasonable fees and
disbursements of counsel to each Lender and of counsel to the Administrative
Agent.
(b) Each Guarantor agrees to pay, and to save the
Administrative Agent and the Lenders harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any
and all stamp, excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the Collateral or in
connection with any of the transactions contemplated by this Agreement.
(c) Each Guarantor agrees to pay, and to save the
Administrative Agent and the Lenders harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
with respect to the execution, delivery, enforcement, performance and
administration of this Agreement to the extent the Borrower would be
required to do so pursuant to Section 10.5 of the Credit Agreement.
(d) The agreements in this Section 8.4 shall survive
repayment of the Obligations and all other amounts payable under the
Credit Agreement and the other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Administrative Agent and the Lenders and their successors and assigns; provided
that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent.
8.6 Set-Off. Each Grantor hereby irrevocably authorizes the
Administrative Agent and each Lender at any time and from time to time while an
Event of Default pursuant to Section 8.1(a) of the Credit Agreement shall have
occurred and be continuing, without notice to such Grantor or any other Grantor,
any such notice being expressly waived by each Grantor, to set-off and
appropriate and apply any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the
Administrative Agent or such Lender to or for the credit or the account of such
Grantor, or any part thereof in such amounts as the Administrative Agent or such
Lender may elect, against and on account of the obligations and liabilities of
such Grantor to the Administrative Agent or such Lender hereunder and claims of
every nature and description of the Administrative Agent or such Lender against
such Grantor, in any currency, whether
21
arising hereunder, under the Credit Agreement, any other Loan Document or
otherwise, as the Administrative Agent or such Lender may elect, whether or not
the Administrative Agent or any Lender has made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured. The Administrative Agent and each Lender shall notify such Grantor
promptly of any such set-off and the application made by the Administrative
Agent or such Lender of the proceeds thereof, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of the Administrative Agent and each Lender under this Section 8.6 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Administrative Agent or such Lender may have.
8.7 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
8.8 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.9 Section Headings. The Section headings used in this Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
8.10 Integration
This Agreement and the other Loan Documents represent the agreement of the
Grantors, the Administrative Agent and the Lenders with respect to the subject
matter hereof and thereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent or any Lender relative
to subject matter hereof and thereof not expressly set forth or referred to
herein or in the other Loan Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 Submission To Jurisdiction; Waivers. Each Grantor hereby irrevocably
and unconditionally:
(a) submits for itself and its property in any legal action
or proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts
of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;
22
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Grantor at its address referred to in Section 8.2 or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
8.13 Acknowledgements. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents to
which it is a party;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to any Grantor arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Grantors, on the one hand, and the Administrative
Agent and Lenders, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Grantors and the Lenders.
8.14 Additional Grantors. Each Subsidiary of the Borrower that is
required to become a party to this Agreement pursuant to Section 6.9 of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the form
of Annex 1 hereto.
8.15 Releases. (a) At such time as the Obligations shall have been Fully
Satisfied, the Collateral shall be released from the Liens created hereby, and
this Agreement and all obligations (other than those expressly stated to survive
such termination) of the Administrative Agent and each Grantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Grantors. At the
request and sole expense of any Grantor following any such termination, the
Administrative Agent shall deliver to such Grantor any Collateral held by the
Administrative Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Grantor in a transaction permitted by the
Credit Agreement, then the Administrative Agent, at the request and sole
expense of such Grantor, shall execute and deliver to such Grantor all
releases or other documents reasonably necessary or desirable for the
release of the Liens created hereby on such Collateral. At the request and
sole expense of the Borrower, a Subsidiary Guarantor shall be released
from its obligations hereunder in the event that all the Capital Stock of
such Subsidiary Guarantor shall be sold, transferred or otherwise disposed
of in a transaction permitted by the Credit Agreement.
23
8.16 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
[Rest of page left intentionally blank]
24
IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.
MAFCO WORLDWIDE CORPORATION
By: /s/ Xxxxxxx X. Xxxx
______________________________
Name: Xxxxxxx X. Xxxx
Title: President and Chief
Executive Officer
FLAVORS HOLDINGS INC.
By: /s/ Xxxxxxx X. Xxxx
______________________________
Name: Xxxxxxx X. Xxxx
Title: President and Chief
Operating Officer
EVD HOLDINGS INC.
By: /s/ Xxxxxxx X. Xxxx
______________________________
Name: Xxxxxxx X. Xxxx
Title: President and Chief
Executive Officer
MAFCO SHANGHAI CORPORATION
By: /s/ Xxxxxxx X. Xxxx
______________________________
Name: Xxxxxxx X. Xxxx
Title: President
Schedule 1 to the
Guarantee and Collateral Agreement
----------------------------------
NOTICE OF ADDRESSES OF GUARANTORS
1. Mafco Worldwide Corporation
Third Street and Xxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
2. Flavors Holdings Inc.
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
3. Mafco Shanghai Corporation
Third Street and Xxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
4. EVD Holdings Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
SCHEDULE 1
Schedule 2 to the
Guarantee and Collateral Agreement
----------------------------------
DESCRIPTION OF INVESTMENT PROPERTY
PLEDGED STOCK:
STOCK
CLASS OF CERTIFICATE NO. OF SHARES % OF
GRANTOR ISSUER STOCK NO. EQUITY INTERESTS
------- ------ ----- --- ----------------
Flavor Holdings Mafco Worldwide Common Stock 2 1,000/100%
Inc. Corporation
Mafco Worldwide Mafco Shanghai Common Stock 002 1,000/100%
Corporation Corporation
EVD Holdings Inc. Common Stock 003 1,000/100%
EVD Holdings Inc. EVD Holdings S.A. N/A 66% of
outstanding
equity interests
SCHEDULE 2
Schedule 3 to the
Guarantee and Collateral Agreement
----------------------------------
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
UNIFORM COMMERCIAL CODE FILINGS
-------------------------------
JURISDICTION OF
SECURED PARTY DEBTOR FILING OFFICE
------------- ------ -------------
JPMorgan Chase Bank, N.A., Flavors Holdings, Inc. Delaware Secretary of
as Administrative Agent State
JPMorgan Chase Bank, as Mafco Worldwide Delaware Secretary of
Administrative Agent Corporation State
JPMorgan Chase Bank, as Mafco Shanghai Corporation Delaware Secretary of
Administrative Agent State
JPMorgan Chase Bank, as EVD Holdings Inc. Delaware Secretary of
Administrative Agent State
Filing the appropriate documents with the United States Patent and Trademark
Office and the United States Copyright Office.
Possession by the Administrative Agent of Collateral in which the security
interest may only be perfected by possession.
With respect to Deposit Accounts, execution and delivery of Deposit Account
Control Agreements.
Compliance with applicable certificate of title statutues with respect to
Vehicles covered by a certificate of title.
With respect to Letter of Credit Rights, obtain the consent to the assignment of
proceeds of the letter of credit by the issuer or any nominated person in
respect thereof.
Compliance with the laws of jurisdictions other than the United States with
respect to Collateral as to which perfection of the Adminstrative Agent's lien
thereon is not not subject to the laws of the United States
SCHEDULE 3
Schedule 4 to the
Guarantee and Collateral Agreement
----------------------------------
LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
JURISDICTION OF LOCATION OF
GRANTOR ORGANIZATION CHIEF EXECUTIVE OFFICE
------- ------------ ----------------------
Mafco Worldwide Corporation Delaware Third Street and Xxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Flavors Holdings Inc. Delaware Third Street and Xxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
EVD Holdings Inc. Delaware 00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Mafco Shanghai Corporation Delaware Third Street and Xxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
SCHEDULE 4
Schedule 5 to the
Guarantee and Collateral Agreement
----------------------------------
LOCATIONS OF INVENTORY AND EQUIPMENT
GRANTOR LOCATION
------- --------
Mafco Worldwide Corporation Third Street and Xxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
0000 Xxxxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Uncommon Carrier Inc.
Port Kearny - Buildings # 3
S. Xxxxxx, Xxx Xxxxxx 00000
Barthco International
000 Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
ETO Sterilization
0000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Southern Cold Storage
0000 Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
American Tobacco Warehouses
000 Xxxxxxxxx Xxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
SteriGenics
0000 Xxxxxx Xxxxxx
Xxx Xxxxx, Xxxxx Xxxxxxx 00000
Malaco KS
Xxxxxxxxxxxxxx 00X
Xxxxxx, Xxxxxxx
DK 2605
SCHEDULE 5
GRANTOR LOCATION
------- --------
Xxxx & Xxxxxxxxx GmbH
Xxxxxxxxxx Xxx. 0
Xxxxxx 00000 Xxxxxxx
Mafco Shanghai Corporation None.
EVD Holdings Inc. None.
Flavors Holdings Inc. None.
SCHEDULE 5
Schedule 6 to the
Guarantee and Collateral Agreement
----------------------------------
COPYRIGHTS AND COPYRIGHT LICENSES
---------------------------------
None.
PATENTS AND PATENT LICENSES
---------------------------
None.
SCHEDULE 6
Schedule 6 to the
Guarantee and Collateral Agreement
----------------------------------
MAFCO WORLDWIDE CORPORATION.
TRADEMARKS REGISTERED OR FILED WITH THE UNITED STATES PATENT AND
TRADEMARK OFFICE
---------------------------------------------------------------------------------------------
XXXX REG NO. REG. DATE APP. NO. FILING DATE TYPE/STATUS JURIS.
---- ------- --------- -------- ----------- ----------- ------
---------------------------------------------------------------------------------------------
TRADE XXXX and design 0084018 10/31/1911 71/056173 5/4/1911 Renewed US
---------------------------------------------------------------------------------------------
MAFCO and design 0612290 9/13/1955 71/676815 9/13/1955 Renewed US
---------------------------------------------------------------------------------------------
BVB and design 0625539 4/17/1956 71/676122 11/5/1954 Renewed US
---------------------------------------------------------------------------------------------
S 0635021 10/2/1956 71/699812 12/12/1955 Renewed US
---------------------------------------------------------------------------------------------
SHIP BRAND 0753563 7/30/1963 72/144621 5/15/1962 Renewed US
---------------------------------------------------------------------------------------------
SHIP BRAND 0753608 7/30/1963 72/144622 5/15/1962 Renewed US
---------------------------------------------------------------------------------------------
SHIP BRAND 0753781 7/30/1963 72/144623 5/15/1962 Renewed US
---------------------------------------------------------------------------------------------
RIGHT DRESS and design 0764149 2/4/1964 72/163953 3/5/1963 Renewed US
---------------------------------------------------------------------------------------------
BEAUTY BLANKET 0836186 10/3/1967 72/255712 10/4/1966 Renewed US
---------------------------------------------------------------------------------------------
MAFCO and design 0856843 9/17/1968 72/291465 2/19/1968 Renewed US
---------------------------------------------------------------------------------------------
MAFCO and design 0864099 1/28/1969 72/291463 2/19/1968 Renewed US
---------------------------------------------------------------------------------------------
MAFCO-MAGNASWEET 0997652 11/5/1974 72/462129 7/5/1973 Renewed US
---------------------------------------------------------------------------------------------
SME 1017526 8/5/1975 73/027317 7/22/1974 Renewed US
---------------------------------------------------------------------------------------------
COCOA DRESS and design 1060456 3/1/1977 73/080188 3/15/1976 Renewed US
---------------------------------------------------------------------------------------------
RIGHTDRESS 1278230 5/15/1984 73/368993 6/10/1982 Renewed US
---------------------------------------------------------------------------------------------
MAG 1469567 12/22/1987 73/619470 9/12/1986 Registered US
---------------------------------------------------------------------------------------------
MAGNASWEET and design 2331742 3/21/2000 75/605727 12/15/1998 Registered US
---------------------------------------------------------------------------------------------
TRADEMARK LICENSES
------------------
None.
SCHEDULE 6
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the
Guarantee and Collateral Agreement dated as of December [__], 2005 (the
"Agreement"), made by the Grantors parties thereto for the benefit of JPMorgan
Chase Bank, N.A., as Administrative Agent. The undersigned agrees for the
benefit of the Administrative Agent and the Lenders as follows:
1. The undersigned will be bound by the terms of the Agreement
and will comply with such terms insofar as such terms are applicable to the
undersigned.
2. The undersigned will notify the Administrative Agent promptly
in writing of the occurrence of any of the events described in Section [5.7(a)]
of the Agreement.
3. The terms of Sections [6.3(c)] and [6.7] of the Agreement
shall apply to it, mutatis mutandis, with respect to all actions that may be
required of it pursuant to Section [6.3(c)] or [6.7] of the Agreement.
[NAME OF ISSUER]
By:________________________________
Name:
Title:
Address for Notices:
___________________________________
___________________________________
___________________________________
Fax:
Annex 1 to
Guarantee and Collateral Agreement
ASSUMPTION AGREEMENT, dated as of December [__], 2005 made by
[_________] (the "Additional Grantor"), in favor of JPMorgan Chase Bank, N.A.,
as Administrative Agent (in such capacity, the "Administrative Agent") for the
banks and other financial institutions or entities (the "Lenders") parties to
the Credit Agreement referred to below. All capitalized terms not defined herein
shall have the meaning ascribed to them in such Credit Agreement.
W I T N E S S E T H :
WHEREAS, FLAVORS HOLDINGS INC. ("Holdings"), MAFCO WORLDWIDE
CORPORATION (the "Borrower"), the Lenders, the Documentation Agent named therein
and the Administrative Agent have entered into a Credit Agreement, dated as of
December [__] (as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement");
WHEREAS, in connection with the Credit Agreement, the Borrower and
certain of its Affiliates (other than the Additional Grantor) have entered into
the Guarantee and Collateral Agreement, dated as of December [__], 2005 (as
amended, supplemented or otherwise modified from time to time, the "Guarantee
and Collateral Agreement") in favor of the Administrative Agent for the benefit
of the Lenders;
WHEREAS, the Credit Agreement requires the Additional Grantor to
become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and deliver
this Assumption Agreement in order to become a party to the Guarantee and
Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and
delivering this Assumption Agreement, the Additional Grantor, as provided in
Section 8.14 of the Guarantee and Collateral Agreement, hereby becomes a party
to the Guarantee and Collateral Agreement as a Grantor thereunder with the same
force and effect as if originally named therein as a Grantor and, without
limiting the generality of the foregoing, hereby expressly assumes all
obligations and liabilities of a Grantor thereunder. The information set forth
in Annex 1-A hereto is hereby added to the information set forth in the
Schedules to the Guarantee and Collateral Agreement. The Additional Grantor
hereby represents and warrants that each of the representations and warranties
contained in Section 4 of the Guarantee and Collateral Agreement is true and
correct in all material respects on and as the date hereof (after giving effect
to this Assumption Agreement) as if made on and as of such date.
2 GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
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IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:________________________________
Name:
Title:
Annex 1-A to
Assumption Agreement
Supplement to Schedule 1
Supplement to Schedule 2
Supplement to Schedule 3
Supplement to Schedule 4
Supplement to Schedule 5
Supplement to Schedule 6
