EXECUTION COPY
EXHIBIT 10.2
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GUARANTEE AND COLLATERAL AGREEMENT
made by
XXXXXXXX PRODUCTION HOLDINGS LLC,
XXXXXXXX PRODUCTION RMT COMPANY
and certain of its Subsidiaries
in favor of
XXXXXX COMMERCIAL PAPER INC.,
as Administrative Agent
Dated as of May 30, 2003
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TABLE OF CONTENTS
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Section 1. DEFINED TERMS................................................................................. 1
1.1 Definitions................................................................................... 1
1.2 Other Definitional Provisions................................................................. 6
Section 2. GUARANTEE..................................................................................... 6
2.1 Guarantee..................................................................................... 6
2.2 Right of Contribution......................................................................... 7
2.3 No Subrogation................................................................................ 7
2.4 Amendments, Etc. With Respect to the Borrower Obligations..................................... 8
2.5 Guarantee Absolute and Unconditional.......................................................... 8
2.6 Reinstatement................................................................................. 10
2.7 Payments...................................................................................... 10
Section 3. GRANT OF SECURITY INTEREST.................................................................... 10
Section 4. REPRESENTATIONS AND WARRANTIES................................................................ 12
4.1 Representations in Term Loan Agreement........................................................ 12
4.2 Title; No Other Liens......................................................................... 12
4.3 Perfected First-Priority Liens................................................................ 12
4.4 Chief Executive Office........................................................................ 13
4.5 Inventory and Equipment....................................................................... 13
4.6 Farm Products................................................................................. 13
4.7 Pledged Securities............................................................................ 13
4.8 Receivables................................................................................... 13
4.9 Vehicles...................................................................................... 13
4.10 Intellectual Property......................................................................... 13
4.11 Contracts..................................................................................... 14
4.12 Commercial Tort Claims........................................................................ 15
Section 5. COVENANTS..................................................................................... 15
5.1 Covenants in Term Loan Agreement.............................................................. 15
5.2 Delivery of Instruments and Chattel Paper..................................................... 15
5.3 Maintenance of Insurance...................................................................... 15
5.4 Payment of Obligations........................................................................ 16
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5.5 Maintenance of Perfected Security Interest; Further Documentation............................. 16
5.6 Changes in Name, Etc.......................................................................... 16
5.7 Notices....................................................................................... 17
5.8 Investment Property........................................................................... 17
5.9 Receivables................................................................................... 18
5.10 Contracts..................................................................................... 18
5.11 Intellectual Property......................................................................... 19
5.12 Vehicles...................................................................................... 20
5.13 Notice of Commercial Tort Claims.............................................................. 20
5.14 Subordination................................................................................. 21
Section 6. REMEDIAL PROVISIONS........................................................................... 21
6.1 Certain Matters Relating to Receivables....................................................... 21
6.2 Communications with Obligors; Grantors Remain Liable.......................................... 22
6.3 Pledged Stock................................................................................. 22
6.4 Proceeds to be Turned Over To Administrative Agent............................................ 23
6.5 Application of Proceeds....................................................................... 23
6.6 Code and Other Remedies....................................................................... 24
6.7 Registration Rights........................................................................... 24
6.8 Waiver; Deficiency............................................................................ 25
Section 7. THE ADMINISTRATIVE AGENT...................................................................... 26
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc................................... 26
7.2 Duty of Administrative Agent.................................................................. 27
7.3 Execution of Financing Statements............................................................. 28
7.4 Authority of Administrative Agent............................................................. 28
Section 8. MISCELLANEOUS................................................................................. 28
8.1 Amendments in Writing......................................................................... 28
8.2 Notices....................................................................................... 28
8.3 No Waiver by Course of Conduct; Cumulative Remedies........................................... 28
8.4 Enforcement Expenses; Indemnification......................................................... 29
8.5 Successors and Assigns........................................................................ 29
8.6 Set-Off....................................................................................... 29
8.7 Counterparts.................................................................................. 30
8.8 Severability.................................................................................. 30
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8.9 Section Headings.............................................................................. 30
8.10 Integration................................................................................... 30
8.11 GOVERNING LAW................................................................................. 30
8.12 Submission To Jurisdiction; Waivers........................................................... 30
8.13 Acknowledgements.............................................................................. 31
8.14 Additional Guarantors......................................................................... 31
8.15 Releases...................................................................................... 31
8.16 WAIVER OF JURY TRIAL.......................................................................... 32
SCHEDULES:
Schedule 1 Notice Addresses of Guarantors
Schedule 2 Description of Pledged Securities
Schedule 3 Filings and Other Actions Required to Perfect
Security Interest
Schedule 4 Jurisdiction of Organization, Identification Number
and Location of Chief Executive Office
Schedule 5 Locations of Inventory and Equipment
Schedule 6 Intellectual Property
Schedule 7 Existing Prior Liens
Schedule 8 Commercial Tort Claims
ANNEXES:
Annex I Assumption Agreement
Annex II Acknowledgment and Consent
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GUARANTEE AND COLLATERAL AGREEMENT, dated as of May 30, 2003,
made by Xxxxxxxx Production RMT Company, a Delaware corporation (the
"Borrower"), and each of the other signatories hereto (together with any other
entity that may become a party hereto as provided herein, the "Guarantors" and,
together with the Borrower, the "Grantors" ) in favor of XXXXXX COMMERCIAL PAPER
INC., as Administrative Agent (in such capacity, the "Administrative Agent") for
the banks and other financial institutions (the "Lenders") from time to time
parties to the Term Loan Agreement, dated as of May 30, 2003 (as amended,
supplemented or otherwise modified from time to time, the "Term Loan
Agreement"), among XXXXXXXX PRODUCTION HOLDINGS LLC, a Delaware limited
liability company ("Holdings"), the Borrower, the Lenders, XXXXXX BROTHERS INC.
and Banc of America Securities LLC, as joint advisors, joint lead arrangers and
joint book runners, CITICORP USA, INC. and JPMORGAN CHASE BANK, as
co-syndication agents, BANK OF AMERICA, N.A., as documentation agent, and the
Administrative Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the Term Loan 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 Guarantor;
WHEREAS, certain of the Qualified Counterparties may enter
into Specified Hedge Agreements with one or more of the Borrower and the
Guarantors;
WHEREAS, the Borrower and the Guarantors are engaged in
related businesses, and each Guarantor will derive substantial direct and
indirect benefit from the making of the term loans under the Term Loan Agreement
and from the Specified Hedge Agreements; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective term loans to the Borrower under the Term Loan
Agreement that the Borrower and the Guarantors shall have executed and delivered
this Agreement to the Administrative Agent for the benefit of the Secured
Parties;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Term Loan Agreement
and to induce the Lenders to make their respective term loans to the Borrower
thereunder, the Borrower and each Guarantor hereby agrees with the
Administrative Agent, for the benefit of the Secured Parties, as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. Unless otherwise defined herein,
terms defined in the Term Loan Agreement and used herein shall have the meanings
given to them in the Term Loan Agreement and the following terms are used herein
as defined in the New York UCC: Accounts, Certificated Security, Chattel Paper,
Commercial Tort Claims, Documents, Equipment, Farm
Products, General Intangibles, Goods, Instruments, Inventory, Letter of Credit
Rights and Supporting Obligations.
(a) 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 Term Loan Agreement Obligations": the collective
reference to the unpaid principal of and interest on the Term Loans and
all other obligations and liabilities of the Borrower (including,
without limitation, interest accruing at the then applicable rate
provided in the Term Loan Agreement after the maturity of the Term
Loans and interest accruing at the then applicable rate provided in the
Term Loan 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, 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 Term Loan Agreement, this Agreement, or the other Loan
Documents, or any other document made, delivered or given in connection
therewith, 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).
"Borrower Hedge Agreement Obligations": the collective
reference to all obligations and liabilities of the Borrower
(including, without limitation, interest accruing at the then
applicable rate provided in any Specified Hedge 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 any Qualified Counterparty,
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, any Specified Hedge Agreement or any other
document made, delivered or given in connection therewith, 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 relevant
Qualified Counterparty that are required to be paid by the Borrower
pursuant to the terms of any Specified Hedge Agreement).
"Borrower Obligations": the collective reference to (i) the
Borrower Term Loan Agreement Obligations, (ii) the Borrower Hedge
Agreement Obligations, but only to the extent that, and only so long
as, the Borrower Term Loan Agreement Obligations are secured and
guaranteed pursuant hereto and (iii) all other obligations and
liabilities of the Borrower, 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, this
Agreement (including, without limitation, all fees and disbursements of
counsel to
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the Administrative Agent or to the Secured Parties that are required to
be paid by the Borrower pursuant to the terms of this Agreement).
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by
the Administrative Agent as provided in Section 5.12, 6.1 or 6.4.
"Contracts": contracts and agreements, as the same may be
amended, supplemented or otherwise modified from time to time,
including, without limitation, (i) all rights of any Grantor to receive
moneys due and to become due to it thereunder or in connection
therewith, (ii) all rights of any Grantor to damages arising thereunder
and (iii) all rights of any Grantor to perform and to exercise all
remedies thereunder.
"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.
"Deposit Account": as defined in the Uniform Commercial Code
of any applicable jurisdiction and, in any event, including, without
limitation, any demand, time, savings, passbook or like account
maintained with a depositary institution.
"Excluded Assets": the collective reference to (i) with
respect to the Borrower, the Capital Stock owned by the Borrower in (a)
Bison Royalty LLC, (b) Piceance Production Holdings LLC, (c) Xxxxxxx
Production Company LLC or (d) any Subsidiary created or acquired after
the Closing Date, in each case to the extent the grant by the Borrower
of a security interest pursuant to this Agreement in the Borrower's
right, title and interest in such Capital Stock is prohibited, would
require the grant of security interest securing obligations or would
constitute a breach, event of default or event which with notice or
lapse of time would become an event of default under any contract,
agreement, instrument or indenture binding on Parent or any of its
Subsidiaries and in effect on the date hereof, (ii) with respect to the
(a) Bison Royalty LLC, (b) Piceance Production Holdings LLC, and (c)
Xxxxxxx Production Company LLC, any property other than Oil and Gas
Property, (iii) with respect to the Borrower, the GE Equipment securing
the obligations of the Borrower under the GE Loan, to the extent the
grant by the Borrower of a security interest pursuant to this Agreement
in the Borrower's right, title and interest in such GE Equipment is
prohibited, would require the grant of security interest securing
obligations or would constitute a breach, event of default or event
which with notice or lapse of time would become an event of default
under the GE Loan, (iv) with respect to the grant of a security
interest pursuant to this Agreement in any other
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Contract, General Intangible, Pledged Securities (other than those
issued by the Borrower or a Subsidiary), Copyright, License, Patent
License or Trademark License ("Intangible Assets") which (A) is
prohibited by legally enforceable provisions of any contract,
agreement, instrument or indenture governing such Intangible Assets,
(B) would give any other party to such contract, agreement, instrument
or indenture a legally enforceable right to terminate its obligations
thereunder or (C) is permitted only with the consent of another party,
if the requirement to obtain such consent is legally enforceable and
such consent has not been obtained; provided, that in any event any
Receivable or any money or other amounts due or to become due under any
such contract, agreement, instrument, indenture or other Collateral
shall not be Excluded Assets to the extent that any of the foregoing is
(or if it contained a provision limiting the transferability or pledge
thereof would be) subject to Section 9-406 of the New York UCC, (v) any
Property that does not constitute (A) Collateral of any Grantor under
the Existing Guarantee and Collateral Agreement or (B) an Oil and Gas
Property, in each case, to the extent that the grant of a security
interest pursuant to this Agreement in such Property is prohibited,
would require the grant of security interest securing obligations to
another or would constitute a breach, event of default or event which
with notice or lapse of time would become an event of default under any
contract, agreement, instrument or indenture binding on Parent or any
of its Subsidiaries and in effect on the date hereof or would reduce
the right of Parent or any of its Subsidiaries to grant a security
interest securing obligations to another Person under any contract,
agreement, instrument or indenture binding on Parent or any of its
Subsidiaries, (vi) any office building or related fixtures, (vii) any
property set forth on Schedules 6.5(f)(i) or 6.5(i) of the Term Loan
Agreement and (viii) Foreign Subsidiary Voting Stock excluded from the
definition of "Pledged Stock" set forth in this Section 1.1.
"Existing Guarantee and Collateral Agreement": the Guarantee
and Collateral Agreement dated as of July 31, 2002 made by the Parent,
the Borrower and certain of its Subsidiaries in favor of Xxxxxx
Commercial Paper Inc., as Administrative Agent.
"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.
"Grantor Obligations": with respect to the Borrower, the
Borrower Obligations, and with respect to any other Grantor, its
Guarantor Obligations.
"Guarantor Hedge Agreement Obligations": the collective
reference to all obligations and liabilities of a Guarantor (including,
without limitation, interest accruing at the then applicable rate
provided in any Specified Hedge Agreement after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to such Guarantor, whether
or not a claim for post-filing or post petition interest is allowed in
such proceeding) to any Qualified Counterparty, 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, any Specified Hedge Agreement or any other document made,
delivered or given in connection
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therewith, 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 relevant Qualified Counterparty that are required to be
paid by such Guarantor pursuant to the terms of any Specified Hedge
Agreement).
"Guarantor Obligations": with respect to any Guarantor, the
collective reference to (i) any Guarantor Hedge Agreement Obligations
of such Guarantor, but only to the extent that, and only so long as,
the other Obligations of such Guarantor are secured and guaranteed
pursuant hereto, and (ii) all obligations and liabilities of such
Guarantor 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 any
Secured Party that are required to be paid by such Guarantor pursuant
to the terms of this Agreement or any other Loan Document).
"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
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 Parent 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" in this Section 1.1)
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, (ii) in the case of each Guarantor, its Guarantor
Obligations, and (iii) in the case of each Grantor, its Grantor
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
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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 Securities": the collective reference to the Pledged
Notes and the Pledged Stock.
"Pledged Stock": the shares of Capital Stock listed on
Schedule 2, together with any other shares, stock certificates, options
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 65% 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 Uniform Commercial Code in effect in the State of
New York on the date hereof and, in any event, including, 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, leased,
licensed, assigned or otherwise disposed of, or for services rendered
(except for any right to payment of any Grantor from Parent or any of
its Subsidiaries), 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).
"Secured Parties": the collective reference to the
Administrative Agent, the Lenders and any Qualified Counterparties.
"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
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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.
"Vehicles": all cars, trucks, trailers, construction and earth
moving equipment and other vehicles covered by a certificate of title
law of any state and all tires and other appurtenances to any of the
foregoing.
1.2 Other Definitional Provisions. 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.
(a) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(b) 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) (i) The Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantee to the Administrative
Agent and the Secured Parties, for the ratable benefit of the Secured Parties
and their respective successors, indorsees, transferees and assigns, the prompt
and complete payment and performance by the Borrower when due (whether at stated
maturity, by acceleration or otherwise) of the Borrower Obligations (other than,
in the case of each Guarantor, Borrower Obligations arising pursuant to clause
(ii) of this Section 2.1(a) in respect of Guarantor Hedge Agreement Obligations
in respect of which such Guarantor is a primary obligor).
(ii) The Borrower hereby unconditionally and irrevocably
guarantees to the Administrative Agent and the Secured Parties, for the ratable
benefit of the Secured Parties and their respective successors, endorsees,
transferees and assigns, the prompt and complete payment and performance by each
Guarantor when due (whether at stated maturity, by acceleration or otherwise) of
the Guarantor Hedge Agreement Obligations of such Guarantor.
(a) Anything herein or in any other Loan Document to the
contrary notwithstanding, (i) 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 fraudulent conveyances or transfers or the insolvency of debtors (after
giving effect to the right of contribution established in Section 2.2) and (ii)
the maximum liability of the Borrower under this Section 2 shall in no event
exceed the amount which can be guaranteed by the Borrower under applicable
federal and state laws
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relating to fraudulent conveyances or transfers or the insolvency of debtors
(after giving effect to the right of contribution established in Section 2.2).
(b) 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 of such Guarantor contained
in this Section 2 or affecting the rights and remedies of the Administrative
Agent or any Secured Party hereunder. The Borrower agrees that the Guarantor
Hedge Agreement Obligations may at any time and from time to time exceed the
amount of the liability of the Borrower under this Section 2 without impairing
the guarantee of the Borrower contained in this Section 2 or affecting the
rights and remedies of the Administrative Agent or any Secured Party hereunder.
(c) Subject to Section 8.15 hereof, the guarantee
contained in this Section 2 shall remain in full force and effect until all the
Borrower Obligations (other than Borrower Obligations arising under Section
2.1(a)(ii) hereof) and the obligations of each Guarantor under the guarantee
contained in this Section 2 (other than Guarantor Obligations in respect of
Borrower Obligations arising under Section 2.1(a)(ii) hereof) shall have been
satisfied by full and final payment in cash, notwithstanding that from time to
time during the term of the Term Loan Agreement the Borrower may be free from
any Borrower Obligations and any or all of the Guarantors may be free from their
respective Guarantor Hedge Agreement Obligations.
(d) 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 Secured Party 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 or the
Guarantor Hedge Agreement Obligations shall be deemed to modify, reduce, release
or otherwise affect the liability of the Borrower or any Guarantor under this
Section 2 which shall, notwithstanding any such payment (other than any payment
made by the Borrower or such Guarantor in respect of the Borrower Obligations or
the Guarantor Hedge Agreement Obligations or any payment received or collected
from the Borrower or such Guarantor in respect of the Borrower Obligations or
the Guarantor Hedge Agreement Obligations), remain liable for the Borrower
Obligations and the Guarantor Hedge Agreement Obligations up to the maximum
liability of the Borrower or such Guarantor hereunder until the Borrower
Obligations and the Guarantor Hedge Agreement Obligations are fully and finally
paid in cash.
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 or the Guarantor Hedge Agreement
Obligations, 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. The Borrower and each Guarantor agrees that
to the extent that the Borrower or any Guarantor shall have paid more than its
proportionate share of any payment made hereunder in respect of any Guarantor
Hedge Agreement Obligation of any other Guarantor, the Borrower or such
Guarantor, as the case may be, shall be entitled to seek and receive
contribution from and against the Borrower and any other Guarantor which has not
paid its proportionate share of such payment. The Borrower's and each
Guarantor's right of contribution under this Section 2.2 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 the
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Borrower or any Guarantor to the Administrative Agent and the Secured Parties,
and the Borrower and each Guarantor shall remain liable to the Administrative
Agent and the Secured Parties for the full amount guaranteed by the Borrower or
such Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by
the Borrower or any Guarantor hereunder or any set-off or application of funds
of the Borrower or any Guarantor by the Administrative Agent or any Secured
Party, neither the Borrower nor any Guarantor shall be entitled to be subrogated
to any of the rights of the Administrative Agent or any Secured Party against
the Borrower or any other Guarantor or any collateral security or guarantee or
right of offset held by the Administrative Agent or any Secured Party for the
payment of the Borrower Obligations or the Guarantor Hedge Agreement
Obligations, nor shall the Borrower or 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 the Borrower or such Guarantor hereunder, until all
amounts owing to the Administrative Agent and the Secured Parties by the
Borrower on account of the Borrower Obligations are fully and finally paid in
cash. If any amount shall be paid to the Borrower or any Guarantor on account of
such subrogation rights at any time when all of the Borrower Obligations shall
not have been fully and finally paid in cash, such amount shall be held by the
Borrower or such Guarantor in trust for the Administrative Agent and the Secured
Parties, segregated from other funds of the Borrower or such Guarantor, and
shall, forthwith upon receipt by the Borrower or such Guarantor, be turned over
to the Administrative Agent in the exact form received by the Borrower or such
Guarantor (duly indorsed by the Borrower or such Guarantor to the Administrative
Agent, if required), to be applied against the Borrower Obligations or the
Guarantor Hedge Agreement Obligations, whether matured or unmatured, in such
order as the Administrative Agent may determine.
2.4 Amendments, Etc. With Respect to the Borrower
Obligations. The Borrower and each Guarantor shall remain obligated hereunder
notwithstanding that, without any reservation of rights against the Borrower or
any Guarantor and without notice to or further assent by the Borrower or any
Guarantor, any demand for payment of any of the Borrower Obligations or
Guarantor Hedge Agreement Obligations made by the Administrative Agent or any
Secured Party may be rescinded by the Administrative Agent or such Secured Party
and any of the Borrower Obligations or Guarantor Hedge Agreement Obligations
continued, and the Borrower Obligations or Guarantor Hedge Agreement
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 Secured Party (with the consent of such of the
Borrower and the Guarantor as shall be required thereunder), and the Specified
Hedge Agreements, the Term Loan 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 (with the
consent of such of the Borrower and the Guarantor as shall be required
thereunder) 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
Secured Party for the payment of the Borrower Obligations or Guarantor Hedge
Agreement Obligations may (with the consent of such of the Borrower and the
Guarantor as shall be required thereunder) be sold, exchanged, waived,
surrendered or released. Neither the Administrative Agent nor any Secured Party
shall, except to
9
the extent set forth in, and for the benefit of the parties to, the agreements
and instruments governing such Lien or guarantee, have any obligation to
protect, secure, perfect or insure any Lien at any time held by it as security
for the Borrower Obligations or Guarantor Hedge Agreement Obligations or for the
guarantees contained in this Section 2 or any property subject thereto.
2.5 Guarantee Absolute and Unconditional. (a) Each
Guarantor waives any and all notice of the creation, renewal, extension or
accrual of any of the Borrower Obligations (other than any notice with respect
to any Guarantor Hedge Agreement Obligation with respect to which such Guarantor
is a primary obligor and to which it is entitled pursuant to the applicable
Specified Hedge Agreement) and notice of or proof of reliance by the
Administrative Agent or any Secured Party 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 Secured Parties, 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 (other than any diligence, presentment, protest, demand or notice
with respect to any Guarantor Hedge Agreement Obligation with respect to which
such Guarantor is a primary obligor and to which it is entitled pursuant to the
applicable Specified Hedge Agreement). Each Guarantor understands and agrees
that the guarantee of such Guarantor contained in this Section 2 shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (1) the validity or enforceability of the Term Loan Agreement
or any other Loan Document, any of the Borrower Obligations or any 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 Secured Party,
(2) 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 Secured
Party, or (3) 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 of such Guarantor
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 Secured Party 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 Secured Party 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 under this Section 2, 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 Secured Party against any
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Guarantor. For the purposes hereof "demand" shall include the commencement and
continuance of any legal proceedings.
(a) The Borrower waives any and all notice of the
creation, renewal, extension or accrual of any of the Guarantor Hedge Agreement
Obligations and notice of or proof of reliance by the Administrative Agent or
any Secured Party upon the guarantee by the Borrower contained in this Section 2
or acceptance of the guarantee by the Borrower contained in this Section 2; the
Guarantor Hedge Agreement Obligations, and any of them, shall conclusively be
deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon the guarantee by the Borrower 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 Secured Parties, on the
other hand, with respect to any Guarantor Hedge Agreement Obligation likewise
shall be conclusively presumed to have been had or consummated in reliance upon
the guarantee by the Borrower contained in this Section 2. The Borrower waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower with respect to the Guarantor Hedge Agreement
Obligations. The Borrower understands and agrees that the guarantee by the
Borrower contained in this Section 2 shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (1) the
validity or enforceability of the Guarantor Hedge Agreement 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
Secured Party, (2) 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
any Person against the Administrative Agent or any Secured Party, or (3) any
other circumstance whatsoever (with or without notice to or knowledge of the
Borrower or any Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the applicable Guarantor for the
applicable Guarantor Hedge Agreement Obligations, or of the Borrower under its
guarantee contained in this Section 2, in bankruptcy or in any other instance.
When making any demand under this Section 2 or otherwise pursuing its rights and
remedies under this Section 2 against the Borrower, the Administrative Agent or
any Secured Party may, but shall be under no obligation to, make a similar
demand on or otherwise pursue such rights and remedies as it may have against
any Guarantor or any other Person or against any collateral security or
guarantee for the Guarantor Hedge Agreement Obligations or any right of offset
with respect thereto, and any failure by the Administrative Agent or any Secured
Party to make any such demand, to pursue such other rights or remedies or to
collect any payments from any 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 any Guarantor or any other Person or any such
collateral security, guarantee or right of offset, shall not relieve the
Borrower of any obligation or liability under this Section 2, 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 Secured Party against the
Borrower under this Section 2. 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
or Guarantor Hedge Agreement Obligations is rescinded or must otherwise be
restored or returned by the Administrative Agent or any Secured Party upon
11
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. The Borrower and each Guarantor hereby
guarantees that payments by it hereunder will be paid to the Administrative
Agent without set-off or counterclaim (i) in the case of obligations in respect
of Borrower Obligations arising under the Term Loan Agreement or any other Loan
Document, in Dollars at the Payment Office specified in the Term Loan Agreement,
and (ii) in the case of obligations in respect of any Borrower Hedge Agreement
Obligations or any Guarantor Hedge Agreement Obligations, in the currency and at
the place specified in the applicable Specified Hedge Agreement.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the
Administrative Agent, and hereby grants to the Administrative Agent and the
Secured Parties, for the ratable benefit of the Secured Parties, 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 Contracts;
(d) all Deposit Accounts;
(e) all Documents;
(f) all Equipment;
(g) all General Intangibles;
(h) all Instruments;
(i) all Intellectual Property;
(j) all Inventory;
(k) all Investment Property;
(l) all Letter of Credit Rights;
(m) all Vehicles;
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(n) all Commercial Tort Claims described on Schedule 8 and on any
supplement thereto received by the Administrative Agent
pursuant to Section 5.10;
(o) all Goods and other property, whether tangible or intangible
and wherever located, not otherwise described above;
(p) all books and records pertaining to the Collateral; and
(q) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing, all Supporting
Obligations in respect of any of the foregoing and all
collateral security and guarantees given by any Person with
respect to any of the foregoing;
provided, that the Collateral shall not include the Excluded Assets; provided,
further, that if and when the prohibition which prevents the granting by such
Grantor to the Administrative Agent of a security interest in such Excluded
Asset is removed or otherwise terminated, the Administrative Agent will be
deemed to have, and at all times from and after the date hereof to have had, a
security interest in such Excluded Asset, as the case may be.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into the Term Loan Agreement and to induce the Lenders to make their respective
term loans to the Borrower thereunder, each Grantor, and with respect to Section
4.1, each Guarantor, hereby represents and warrants to the Administrative Agent
and each Lender that:
4.1 Representations in Term Loan Agreement. In the case
of each Guarantor, the representations and warranties set forth in Section 3 of
the Term Loan Agreement as they relate to such Guarantor or to the Loan
Documents to which such Guarantor is a party, each of which is hereby
incorporated herein by reference, are true and correct, and the Administrative
Agent and each Lender shall be entitled to rely on each of them as if they were
fully set forth herein, provided that each reference in each such representation
and warranty to the Borrower's knowledge shall, for the purposes of this Section
4.1, be deemed to be a reference to such Guarantor's knowledge.
4.2 Title; No Other Liens. Except for the security
interest granted to the Administrative Agent and the Secured Parties for the
ratable benefit of the Secured Parties pursuant to this Agreement and the other
Liens permitted to exist on the Collateral by the Term Loan 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 and the
Secured Parties, for the ratable benefit of the Secured Parties, pursuant to
this Agreement or as are permitted by the Term Loan Agreement.
4.3 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 (which, in the case of all UCC
financing statements and Mortgages referred to on said Schedule, have been
delivered to the Administrative Agent in completed and duly executed form) will
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constitute valid perfected security interests in all of the Collateral in favor
of the Administrative Agent and the Secured Parties, for the ratable benefit of
the Secured Parties, 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
and (b) in respect of Collateral consisting of Capital Stock are prior to all
other Liens in existence on the date hereof, and (c) in respect of all other
Collateral are prior to all other Liens in existence on the date hereof except
for Permitted Liens.
4.4 Jurisdiction of Organization; Chief Executive Office.
On the date hereof, such Grantor's jurisdiction of organization, identification
number from the jurisdiction of organization (if any), and the location of such
Grantor's chief executive office or sole place of business or principal
residence, as the case may be, are specified on Schedule 4. Such Grantor has
furnished to the Administrative Agent a certified charter, certificate of
incorporation or other organization document and long-form good standing
certificate as of a date which is recent to the date hereof.
4.5 Inventory and Equipment. On the date hereof, the
Inventory and the Equipment (other than mobile goods) are kept in the counties
listed on Schedule 5.
4.6 Farm Products. None of the Collateral constitutes, or
is the Proceeds of, Farm Products.
4.7 Investment Property. 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, 65% of the
outstanding Foreign Subsidiary Voting Stock of each relevant Issuer.
(a) All the shares of the Pledged Stock have been duly
and validly issued and are fully paid and nonassessable.
(b) Each of the Pledged Notes constitutes the legal,
valid and binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(c) Such Grantor is the record and beneficial owner of
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 Permitted Liens.
4.8 Receivables. 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 required by Section 5.2.
(a) None of the obligors on any Receivable is a
Governmental Authority, except for Receivables constituting not more than 5% of
the face amount of all Receivables.
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(b) The amounts represented by such Grantor to the
Secured Parties from time to time as owing to such Grantor in respect of the
Receivables will at such times be accurate.
4.9 Vehicles. The aggregate book value of all Vehicles
owned by all Grantors is less than $5,000,000.
4.10 Intellectual Property. Schedule 6 lists all
registered Intellectual Property owned by such Grantor in its own name on the
date hereof.
(a) On the date hereof, all material Intellectual
Property of such Grantor described on Schedule 6 is valid, subsisting, unexpired
and enforceable, has not been abandoned and does not infringe the intellectual
property rights of any other Person.
(b) Except as set forth in Schedule 6, on the date
hereof, none of the Intellectual Property is the subject of any licensing or
franchise agreement pursuant to which such Grantor is the licensor or
franchisor.
(c) No holding, decision or judgment has been rendered by
any Governmental Authority which would limit, cancel or question the validity
of, or such Grantor's rights in, any Intellectual Property in any respect that
could reasonably be expected to have a Material Adverse Effect.
(d) 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 material 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.
4.11 Contracts. Subject to 9407(b), 9408(b), 9409(b)
of the New York UCC, no consent of any party (other than such Grantor) to any
Contract is required, or purports to be required, in connection with the
execution, delivery and performance of this Agreement.
(a) No amount payable to such Grantor under or in
connection with any Contract is evidenced by any Instrument or Chattel Paper
which, to the extent required to be delivered pursuant to Section 5.2 has not
been delivered to the Administrative Agent.
SECTION 5. COVENANTS
Each Grantor, and with respect to Sections 5.1, 5.7 and 5.11,
each Guarantor, covenants and agrees with the Administrative Agent and the
Secured Parties that, from and after the date of this Agreement until the
Obligations shall have been paid in full:
5.1 Covenants in Term Loan Agreement. In the case of each
Guarantor, such Guarantor shall take, or shall refrain from taking, as the case
may be, each action that is necessary to be taken or not taken, as the case may
be, so that no Default or Event of Default is caused by the failure to take such
action or to refrain from taking such action by such Guarantor or any of its
Subsidiaries.
5.2 Delivery of Instruments and Chattel Paper. If any
amount payable under or in connection with any of the Collateral shall be or
become evidenced by any Instrument,
15
Certificated Security or Chattel Paper, such Instrument, Certificated Security
or Chattel Paper shall be promptly delivered to the Administrative Agent, duly
indorsed in a manner satisfactory to the Administrative Agent, to be held as
Collateral pursuant to this Agreement; provided that the Grantors shall not be
obligated to deliver to the Administrative Agent any Instruments or Chattel
Paper held by any Grantor at any time to the extent that the aggregate face
amount of all such Instruments and Chattel Paper held by all Grantors at such
time does not exceed $10,000,000.
5.3 Maintenance of Insurance. Such Grantor will
maintain, with financially sound and reputable companies, insurance on all its
Property (including, without limitation, all Inventory, Equipment and Vehicles)
in at least such amounts and against at least such risks as are usually insured
against by businesses of similar size and character of such Grantor, including,
without limitation, (i) property insurance against loss by fire, explosion,
theft and such other casualties as may be reasonably satisfactory to the
Administrative Agent and (ii) insurance covering such Grantor, the
Administrative Agent and the Secured Parties against liability for personal
injury and property damage relating to such Property.
(a) 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 an additional insured party under such liability insurance and loss
payee under such property insurance, (iii) if reasonably requested by the
Administrative Agent and to the extent obtainable on commercially reasonable
terms, include a breach of warranty clause and (iv) be reasonably satisfactory
in all other respects to the Administrative Agent.
(b) The Borrower shall deliver to the Administrative
Agent and the Lenders a report of a reputable insurance broker with respect to
such insurance substantially concurrently with the delivery by the Borrower to
the Administrative Agent of its audited financial statements for each fiscal
year and such supplemental reports with respect thereto as the Administrative
Agent may from time to time reasonably request.
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 4.3 and shall defend such security interest against the
claims and demands of all Persons whomsoever.
(a) 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 with the Collateral as the Administrative Agent may reasonably
request, all in reasonable detail.
(b) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of such Grantor,
such Grantor will promptly and duly execute and deliver, and have recorded, such
further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, (i) the filing of any financing
or continuation statements under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with
16
respect to the security interests created hereby and (ii) in the case of
Investment Property, Deposit Accounts and Letter of Credit Rights, 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 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 or
principal residence from that referred to in Section 4.4; or
(ii) change its name.
5.6 Notices. Such Grantor will advise the Administrative
Agent promptly, in reasonable detail, of any Lien (other than security interests
created hereby or Liens permitted under the Term Loan Agreement) on any of the
Collateral which would adversely affect the ability of the Administrative Agent
to exercise any of its remedies hereunder.
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 Secured Parties, hold the
same in trust for the Administrative Agent and the Secured Parties 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; provided, however, that any
such certificate that does not evidence securities issued by a Subsidiary of
Holdings may be held in a Securities Account included in the Collateral. Any
sums paid upon or in respect of the Investment Property upon the liquidation or
dissolution of any Issuer shall (i) unless such Issuer is a Subsidiary of
Holdings, be held or deposited in a Securities Account or a Deposit Account
included in the Collateral (until used or reinvested in the ordinary course of
business) or (ii) 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 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
17
Property shall be received by such Grantor, such Grantor shall, until such money
or property is held or deposited in a Securities Account or Deposit Account (as
permitted under clause (i) above) or paid or delivered to the Administrative
Agent, hold such money or property in trust for the Secured Parties, segregated
from other funds of such Grantor, as additional collateral security for the
Obligations. Notwithstanding the foregoing, the Grantors shall not be required
to pay over to the Administrative Agent or deliver to the Administrative Agent
as Collateral any proceeds of any liquidation or dissolution of any Issuer, or
any distribution of capital or property in respect of any Investment Property,
to the extent that (i) such liquidation, dissolution or distribution, if treated
as a Disposition of the relevant Issuer, would be permitted by the Term Loan
Agreement and (ii) the proceeds thereof are applied toward prepayment of Term
Loans to the extent required by the Term Loan Agreement.
(a) 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 that is a Subsidiary of Holdings to issue any
stock or other equity securities of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any stock or
other equity securities of any nature of any Issuer, unless such securities are
delivered to the Administrative Agent, concurrently with the issuance thereof,
to be held by the Administrative Agent as Collateral, (ii) sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with respect
to, the Investment Property or Proceeds thereof (except pursuant to a
transaction not prohibited by the Term Loan Agreement), or (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 except for Permitted Liens.
(b) In the case of each Grantor and each Guarantor which
is an Issuer, such Issuer agrees that (i) it will be bound by the terms of this
Agreement relating to the Pledged Securities 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 Pledged Securities 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 Pledged Securities issued by it.
(c) Each Subsidiary of Holdings that is a partnership or
a limited liability company and each Grantor (i) confirms that none of the terms
of any equity interest issued by such Issuer provides that such equity interest
is a "security" within the meaning of Sections 8-102 and 8-103 of the New York
UCC (a "Security"), (ii) agrees that it will, and cause such Issuer to, take no
action to cause or permit any such equity interest to become a Security, (iii)
agrees that it will not, and cause such Issuer to not, issue any certificate
representing any such equity interest and (iv) agrees that if, notwithstanding
the foregoing, any such equity interest shall be or become a Security, it will,
or cause such Issuer to, (and the Grantor that holds such equity interest hereby
instructs such Issuer to) comply with instructions originated by the
Administrative Agent without further consent by such Grantor.
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5.8 Receivables. 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 except to the extent that failure to comply with any or all of the
provisions of clauses (i) to (iv) (inclusive) of this Section 5.8 could not
reasonably be expected to have a Material Adverse Effect.
(a) 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. 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 request to evidence the
Administrative Agent's and the Secured Parties' security interest in any
Copyright, Patent or Trademark and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby.
5.10 Notice of Commercial Tort Claims. Such Grantor agrees
that, if it shall acquire any interest in any Commercial Tort Claim in excess of
$25,000,000 (whether from another Person or because such Commercial Tort Claim
shall have come into existence) and, if requested by the Administrative Agent,
(i) such Grantor shall, promptly upon such acquisition, deliver to the
Administrative Agent, in each case in form and substance reasonably satisfactory
to the Administrative Agent, a notice of the existence and nature of such
Commercial Tort Claim and deliver a supplement to Schedule 8 containing a
specific description of such Commercial Tort Claim, certified by such Grantor as
true, correct and complete, (ii) the provision of Section 3 shall apply to such
Commercial Tort Claim (and the Grantor authorizes the Administrative Agent to
supplement such schedule with a description of such Commercial Tort Claim if
such Grantor fails to deliver the supplement described in clause (i)) and (iii)
such Grantor shall execute and deliver to the Administrative Agent, in each case
in form and substance reasonably satisfactory to the Administrative Agent, any
certificate, agreement and other document, and take all other action, deemed by
the Administrative Agent to be reasonably necessary or appropriate for the
Administrative Agent to obtain, on behalf of the Secured Parties, a
first-priority, perfected security interest in all such Commercial Tort Claims.
Any supplement to Schedule 8 delivered pursuant to this Section 5.10 shall
become part of Schedule 8 for all purposes hereunder other than, absent a
written consent of the Administrative Agent, for purpose of the representations
and warranties set forth in Section 4.12.
5.11 Subordination. Any Indebtedness of the Borrower or
any of its Subsidiaries to Parent, Holdings or any of Parent's Subsidiaries
(other than Holdings, the
19
Borrower or any of the Borrower's Subsidiaries) shall be subordinated in right
of payment to the Obligations under the Loan Documents.
5.12 Collateral Account. The Borrower will maintain a
Collateral Account under the sole dominion and control of the Administrative
Agent for any cash or Cash Equivalents deposited therein pursuant to Section
6.16 of the Term Loan Agreement.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. The
Administrative Agent shall have the right, at any time after the occurrence and
during the continuance of an Event of Default, 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 after the occurrence and during the
continuance of an Event of Default, upon the Administrative Agent's 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.
(a) The Administrative Agent hereby authorizes each
Grantor to collect such Grantor's Receivables, subject to the Administrative
Agent's direction and control after the occurrence and during the continuance of
an Event of Default, 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 Secured Parties 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 Secured Parties, segregated from other funds of such Grantor.
(b) At the Administrative Agent's request, after the
occurrence of and during the continuance of an Event of Default, each Grantor
shall make available 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.
(c) At any time after the occurrence and during the
continuance of an Event of Default, at the Administrative Agent's request each
Grantor will cooperate with the Administrative Agent to establish a system of
lockbox accounts, under the sole dominion and control of the Administrative
Agent, into which all Receivables shall be paid and from which all collected
funds will be transferred to a Collateral Account.
6.2 Communications with Obligors; Grantors Remain Liable.
The Administrative Agent in its own name or in the name of others may at any
time after the
20
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.
(a) Upon the request of the Administrative Agent at any
time after the occurrence and during the continuance of an Event of Default,
each Grantor shall notify obligors on the Receivables and parties to the
Contracts that the Receivables and the Contracts have been assigned to the
Administrative Agent and the Secured Parties for the ratable benefit of the
Lenders and that payments in respect thereof shall be made directly to the
Administrative Agent.
(b) Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Receivables (or any agreement
giving rise thereto) 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 Secured Party 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
Secured Party of any payment relating thereto, nor shall the Administrative
Agent or any Secured Party 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. 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, in each case to the extent
permitted in the Term Loan Agreement, and to exercise all voting and corporate
rights with respect to the Pledged Securities; provided, however, that no vote
shall be cast or corporate right exercised or other action taken which, would
materially impair the Collateral (except Dispositions permitted under the Term
Loan Agreement) or which would result in any violation of any provision of the
Term Loan Agreement, this Agreement or any other Loan Document.
(a) 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 Pledged Securities and make application thereof to the
Obligations in the order set forth in Section 6.5, and (ii) any or all of the
Pledged Securities 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 Pledged
Securities 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 Pledged
Securities as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Securities upon the merger, consolidation, reorganization, recapitalization
21
or other fundamental change in the corporate structure of any Issuer, or upon
the exercise by any Grantor or the Administrative Agent of any right, privilege
or option pertaining to such Pledged Securities, and in connection therewith,
the right to deposit and deliver any and all of the Pledged Securities 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.
(b) Each Grantor hereby authorizes and instructs each
Issuer of any Pledged Securities 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 Pledged Securities 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 Secured Parties
specified in Section 6.1 with respect to payments of Receivables, if an Event of
Default shall occur and be continuing and, if required by the Administrative
Agent, all Proceeds received by any Grantor consisting of cash, checks and
Instruments shall be held by such Grantor in trust for the Administrative Agent
and the Secured Parties, 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 Secured Parties) 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. If an Event of Default shall
have occurred and be continuing and the Lenders have elected to exercise
remedies in accordance with the terms of the Term Loan Agreement, 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 Secured Parties
according to the amounts of the Obligations then due and owing and
remaining unpaid to the Secured Parties;
22
Third, to the Administrative Agent, for application by it
towards prepayment of the Obligations, pro rata among the Secured
Parties according to the amounts of the Obligations then held by the
Secured Parties; and
Fourth, any balance of such Proceeds remaining after the
Obligations shall have been paid in full 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 Secured
Parties, 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 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 Secured Party or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
The Administrative Agent or any Secured Party shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any such private
sale or sales, to purchase the whole or any part of the 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 with respect to any Grantor's Collateral, 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 of such Grantor
or in any way relating to the Collateral of such Grantor or the rights of the
Administrative Agent and the Secured Parties hereunder with respect thereto,
including, without limitation, reasonable attorneys' fees and disbursements, to
the payment in whole or in part of the Obligations of such Grantor, in the order
specified in Section 6.5, and only after such application and after the payment
by the Administrative Agent of any other amount required by any provision of
law, 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
Secured Party arising out of the exercise by them of any rights hereunder,
(except to the extent that such claims, damages and demands resulted from the
gross negligence or willful misconduct of the Administrative Agent or any
Secured Party). 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.
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6.7 Registration Rights. 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, with respect to any
Issuer that is a Subsidiary of Holdings, the relevant Grantor will cause the
Issuer thereof to (i) execute and deliver, and cause the directors and officers
of such Issuer to execute and deliver, all such instruments and documents, and
do or cause to be done all such other acts as may be, in the opinion of the
Administrative Agent, necessary or advisable to register the Pledged 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 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.
(a) 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 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.
(b) Each Grantor agrees to use its best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of 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 Secured Parties, that the Administrative Agent and
the Secured Parties 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 Term Loan Agreement.
24
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 fees and disbursements of any
attorneys employed by the Administrative Agent or any Secured Party to collect
such deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as
Attorney-in-Fact, etc. 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 carry out
any obligation imposed on such Grantor under this Agreement or to enable the
Administrative Agent or any Lender and any officer or agent thereof, to exercise
any of the rights, remedies, powers and authorities conferred on them under or
by 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 Secured Parties' security
interest in such Intellectual Property and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on
or threatened against 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) 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; 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; sign and indorse any invoices, freight or
express bills, bills of lading, storage or
25
warehouse receipts, drafts against debtors, assignments, verifications,
notices and other documents in connection with any of the Collateral;
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; defend any suit, action or proceeding brought against such
Grantor with respect to any Collateral; 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; 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 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
Secured Parties' security interests therein and to effect the intent
of this Agreement, all as fully and effectively as such Grantor might
do; and license or sublicense whether on an exclusive or non-exclusive
basis, any Intellectual Property for such term and on such conditions
and in such manner as the Administrative Agent shall in its sole
judgment determine and, in connection therewith, such Grantor hereby
grants to the Administrative Agent for the benefit of the Secured
Parties a royalty-free, world-wide irrevocable license of its
Intellectual Property.
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 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 rate per annum at which
interest would then be payable on past due Base Rate Loans under the Term Loan
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.
(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,
26
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 Secured Party 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 Secured Parties
hereunder are solely to protect the Administrative Agent's and the Secured
Parties' interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any Secured Party to exercise any such powers. The
Administrative Agent and the Secured Parties shall be accountable only for
amounts that they actually receive as a result of the exercise of such powers,
and neither they nor any of their 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 Execution 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 (other than the Bison Entities and each Grantor
that becomes a party hereto after the date hereof) authorizes the Administrative
Agent to use the collateral description "all assets" in any such financing
statements. Each of the Bison Entities and each Grantor that becomes a party
hereto after the date hereof authorizes the Administrative Agent to use the
collateral description "Oil and Gas Properties" in any such financing statements
(as well as a description of any other Collateral provided to the Lenders by
such Grantor pursuant to the terms hereof). 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 Secured Parties, be governed by the Term Loan 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 Secured Parties with full and valid authority so to act or refrain from
acting, and no Grantor shall be under any obligation, or entitlement, to make
any inquiry respecting such authority. Notwithstanding any other provision
herein or in any Loan Document, the only duty or responsibility of the
Administrative Agent to any Qualified Counterparty under this Agreement is the
duty to remit to such Qualified Counterparty any amounts to which it is entitled
pursuant to Section 6.5.
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
27
with Section 9.1 of the Term Loan Agreement. No consent of any Qualified
Counterparty shall be required for any waiver, amendment, supplement or other
modification to this Agreement.
8.2 Notices. All notices, requests and demands to or upon
the Administrative Agent, the Borrower or any Guarantor hereunder shall be
effected in the manner provided for in Section 9.2 of the Term Loan 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.
8.3 No Waiver by Course of Conduct; Cumulative Remedies.
Neither the Administrative Agent nor any Secured Party shall by any act (except
by a written instrument pursuant to 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 Secured
Party, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent or
any Secured Party of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy which the Administrative Agent or
such Secured Party would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or concurrently
and are not exclusive of any other rights or remedies provided by law.
8.4 Enforcement Expenses; Indemnification. The
Borrower and each Guarantor agree to pay, or reimburse each Secured Party and
the Administrative Agent for, all its costs and expenses incurred in collecting
against the Borrower or such Guarantor under the guarantee contained in Section
2 or otherwise enforcing any rights under this Agreement and the other Loan
Documents to which the Borrower or such Guarantor is a party, including, without
limitation, the fees and disbursements of outside counsel to each Secured Party
and of counsel to the Administrative Agent.
(a) The Borrower and each Guarantor agree to pay, and to
save the Administrative Agent and the Secured Parties harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
stamp, excise, sales or other taxes 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.
(b) The Borrower and each Guarantor agree to pay, and to
save the Administrative Agent and the Secured Parties harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement to the extent the Borrower would be required to do so pursuant to
Section 9.5 of the Term Loan Agreement.
(c) The agreements in this Section shall survive
repayment of the Obligations and all other amounts payable under the Term Loan
Agreement and the other Loan Documents.
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8.5 Successors and Assigns. This Agreement shall be
binding upon the successors and assigns of the Borrower and each Guarantor and
shall inure to the benefit of the Administrative Agent and the Secured Parties
and their successors and assigns; provided that except pursuant to mergers and
consolidations permitted under the Term Loan Agreement, neither the Borrower nor
any Guarantor 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. The Borrower and each Guarantor hereby
irrevocably authorize the Administrative Agent and each Secured Party at any
time and from time to time upon the election of the Required Lenders following
the occurrence and during the continuance of an Event of Default, without notice
to the Borrower or such Guarantor or any other Guarantor, any such notice being
expressly waived by the Borrower and each Guarantor, 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 Secured Party to or for the credit or the account of the Borrower or such
Guarantor, or any part thereof in such amounts as the Administrative Agent or
such Secured Party may elect, against and on account of the obligations and
liabilities of the Borrower or such Guarantor to the Administrative Agent or
such Secured Party hereunder and claims of every nature and description of the
Administrative Agent or such Secured Party against the Borrower or such
Guarantor, in any currency, whether arising hereunder, under the Term Loan
Agreement, any other Loan Document or otherwise, as the Administrative Agent or
such Secured Party may elect, whether or not the Administrative Agent or any
Secured Party has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. The Administrative Agent
and each Secured Party shall notify the Borrower or such Guarantor promptly of
any such set-off and the application made by the Administrative Agent or such
Secured Party 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 Secured Party under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Administrative Agent or such Secured Party 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 Borrower, the Guarantors, the
Administrative Agent and the Secured Parties
29
with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Secured Party 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. The Borrower and
each Guarantor 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;
(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 the
Borrower or such Guarantor 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. The Borrower and each Guarantor
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 Secured
Party has any fiduciary relationship with or duty to the Borrower or any
Guarantor arising out of or in connection with this Agreement or any of the
other Loan Documents, and the relationship between the Borrower and the
Guarantors, on the one hand, and the Administrative Agent and Secured Parties,
on the other hand, in connection herewith or therewith is solely that of debtor
and creditor; and
30
(c) no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Secured Parties or among the Borrower, the Guarantors and the
Secured Parties.
8.14 Additional Guarantors and/or Grantors. Each
Subsidiary of the Borrower (other than an Excluded Foreign Subsidiary) created
or acquired after the Closing Date (which, for purposes of this paragraph, shall
include any Subsidiary that ceases to be an Excluded Foreign Subsidiary), by
Holdings, the Borrower or any of its Subsidiaries, shall become a Guarantor and
Grantor under this Agreement, by execution and delivery by such Subsidiary of an
Assumption Agreement in the form of Annex I hereto.
8.15 Releases. At such time as the Term Loans and the
other Obligations (other than Borrower Hedge Agreement Obligations and Guarantor
Hedge Agreement Obligations and contingent obligations under general
indemnification provisions as to which no claim is pending or reasonably
forseeable) shall have been paid in full, the Collateral shall be released from
the Liens created hereby, and this Agreement and all obligations (other than
those expressly stated to survive such termination) of the Administrative Agent
and each Grantor hereunder shall terminate, all without delivery of any
instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the Grantors. At the request and sole expense of any
Grantor following any such termination, the Administrative Agent shall deliver
to 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.
(a) If any of the Collateral shall be sold, transferred
or otherwise disposed of by any Grantor in a transaction permitted by the Term
Loan 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 Term Loan
Agreement; provided that the Borrower shall have delivered to the Administrative
Agent, at least ten Business Days (or such shorter period agreed to by the
Administrative Agent) prior to the date of the proposed release, a written
request for release identifying the relevant Subsidiary Guarantor and the terms
of the sale or other disposition in reasonable detail, including the price
thereof and any expenses in connection therewith, together with a certification
by the Borrower stating that such transaction is in compliance with the Term
Loan Agreement and the other Loan Documents.
No consent of any Qualified Counterparty shall be required for
any release of Collateral or Guarantors pursuant to this Section.
8.16 WAIVER OF JURY TRIAL. THE BORROWER AND EACH GUARANTOR
AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH AGENT AND EACH SECURED PARTY,
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.
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[SIGNATURE PAGES FOLLOW]
32
IN WITNESS WHEREOF, each of the undersigned has caused this
Agreement to be duly executed and delivered as of the date first above written.
XXXXXXXX PRODUCTION HOLDINGS LLC
By: /s/ Xxxxx X. Xxxx
-----------------
Name: Xxxxx X. Xxxx
Title: Treasurer
XXXXXXXX PRODUCTION RMT COMPANY
By: /s/ Xxxxx X. Xxxx
-----------------
Name: Xxxxx X. Xxxx
Title: Treasurer
XXXXXXX RESOURCES INTERNATIONAL
CORPORATION
By: /s/ Xxxxx X. Xxxx
-----------------
Name: Xxxxx X. Xxxx
Title: Treasurer
BARGATH INC.
By: /s/ Xxxxx X. Xxxx
-----------------
Name: Xxxxx X. Xxxx
Title: Treasurer
XXXXXXX FUELS CORPORATION
By: /s/ Xxxxx X. Xxxx
-----------------
Name: Xxxxx X. Xxxx
Title: Treasurer
XXXXXXX GAS COMPANY, LLC
By: /s/ Xxxxx X. Xxxx
-----------------
Name: Xxxxx X. Xxxx
Title: Treasurer
BISON ROYALTY LLC
By: /s/ Xxxxx X. Xxxx
-----------------
Name: Xxxxx X. Xxxx
Title: Treasurer
PICEANCE PRODUCTION HOLDINGS, LLC
By: /s/ Xxxxx X. Xxxx
-----------------
Name: Xxxxx X. Xxxx
Title: Treasurer
XXXXXXX PRODUCTION COMPANY LLC
By: /s/ Xxxxx X. Xxxx
-----------------
Name: Xxxxx X. Xxxx
Title: Treasurer
Annex I to
Guarantee and Collateral Agreement
ASSUMPTION AGREEMENT, dated as of ________________, 200__,
made by ______________________________, a ______________ corporation (the
"Additional Guarantor"), in favor of XXXXXX COMMERCIAL PAPER INC. ("LCPI"), as
administrative agent (in such capacity, the "Administrative Agent") for the
financial institutions (the "Lenders") party to the Term Loan Agreement referred
to below. All capitalized terms not defined herein shall have the meaning
ascribed to them in such Term Loan Agreement.
W I T N E S S E T H :
WHEREAS, Xxxxxxxx Production Holdings LLC ("Holdings"),
Xxxxxxxx Production RMT Company (the "Borrower"), the Lenders, Xxxxxx Brothers
Inc. and Banc of America Securities LLC, as joint advisors, joint lead arrangers
and joint book runners, Citicorp USA, Inc. and JPMorgan Chase Bank, as
co-syndication agents, Bank of America, N.A., as documentation agent, and the
Administrative Agent, have entered into a Term Loan Agreement, dated as of May
30, 2003 (as amended, supplemented or otherwise modified from time to time, the
"Term Loan Agreement");
WHEREAS, in connection with the Term Loan Agreement, Holdings,
the Borrower and certain of its Subsidiaries (other than the Additional
Guarantor) have entered into a Guarantee and Collateral Agreement, dated as of
May 30, 2003 (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 Secured Parties;
WHEREAS, the Term Loan Agreement requires the Additional
Guarantor to become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Guarantor 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 Guarantor, as provided in
Section 8.14 of the Guarantee and Collateral Agreement, hereby becomes a party
to the Guarantee and Collateral Agreement as a Guarantor and a Grantor
thereunder with the same force and effect as if originally named therein as a
Guarantor and a Grantor and, without limiting the generality of the foregoing,
hereby expressly assumes all obligations and liabilities of a Guarantor and a
Grantor thereunder. The information set forth in Annex 1-A hereto is hereby
added to the information set forth in Schedules _______* to the Guarantee and
Collateral Agreement. The Additional Guarantor hereby represents and warrants
that each of the representations and warranties contained in
--------------------
* Refer to each Schedule which needs to be supplemented.
Section 4 of the Guarantee and Collateral Agreement is true and correct 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.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GUARANTOR/GRANTOR]
By: ____________________________
Name:
Title:
I-2
Annex II
to
Guarantee and Collateral Agreement
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Guarantee
and Collateral Agreement, dated as of May 30, 2003 (the "Agreement"), made by
the Borrower and the Guarantors parties thereto for the benefit of XXXXXX
COMMERCIAL PAPER INC., as Administrative Agent (in such capacity, the
"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 5.7, 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, or prohibited, pursuant to Section 5.7, 6.3(c) or 6.7 of the
Agreement.
[NAME OF ISSUER]
By: ________________________________
Name:
Title:
Address for Notices:
____________________________________
____________________________________
____________________________________
Fax: _______________________________
