Exhibit (b)(2)
EXECUTION COPY
SECURITY AND PLEDGE AGREEMENT
DATED AS OF AUGUST 1, 2002
BETWEEN
EACH OF
DELTA I ACQUISITION, INC., DELTA I ACQUISITION, LLC
AND THE OTHER GRANTORS PARTY HERETO
AND
BARCLAYS BANK PLC,
AS THE COLLATERAL AGENT
TABLE OF CONTENTS
PAGE
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Section 1. DEFINITIONS; GRANT OF SECURITY...................................2
1.1. General Definitions..............................................2
1.2. Definitions; Interpretation......................................8
1.3. Grant of Security................................................8
1.4. Certain Limited Exclusions.......................................9
Section 2. SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE.................9
2.1. Security for Obligations.........................................9
2.2. Grantors Remain Liable..........................................10
Section 3. REPRESENTATIONS AND WARRANTIES AND COVENANTS....................10
3.1. Generally.......................................................10
3.2. Equipment and Inventory.........................................13
3.3. Receivables.....................................................14
3.4. Investment Related Property.....................................16
3.5. Material Contracts..............................................20
3.6. Letter of Credit Rights.........................................21
3.7. Intellectual Property...........................................22
3.8. Commercial Tort Claims..........................................25
Section 4. ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES;
ADDITIONAL GRANTORS.............................................25
4.1. Access; Right of Inspection.....................................25
4.2. Further Assurances..............................................25
4.3. Additional Grantors.............................................26
Section 5. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT.....................27
5.1. Power of Attorney...............................................27
5.2. No Duty on the Part of Collateral Agent or Secured Parties......28
Section 6. REMEDIES........................................................28
6.1. Generally.......................................................28
6.2. Investment Related Property.....................................29
6.3. Intellectual Property...........................................30
6.4. Cash Proceeds...................................................31
6.5. Application of Proceeds.........................................32
Section 7. COLLATERAL AGENT................................................32
Section 8. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.................33
Section 9. STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM..................33
Section 10. MISCELLANEOUS..................................................33
(i)
This SECURITY AND PLEDGE AGREEMENT, dated as of August 1, 2002 (this
"AGREEMENT"), between EACH OF THE UNDERSIGNED, whether as an original signatory
hereto or as an Additional Grantor (as herein defined) (each, a "GRANTOR"), and
BARCLAYS BANK PLC, as collateral agent for the Secured Parties (as herein
defined) (in such capacity as collateral agent, the "COLLATERAL AGENT").
RECITALS:
WHEREAS, reference is made to that certain Senior Credit Agreement dated
August 1, 2002 (as it may be amended, restated, supplemented, novated or
otherwise modified from time to time, the "CREDIT AGREEMENT"), by and among (i)
Four Seasons Healthcare Limited, a company incorporated in England and Wales
with registered number 3782935 ("PARENT"), (ii) Four Seasons Healthcare Holdings
PLC, a company incorporated in England and Wales with registered number 3806216
("FSHC HOLDCO"), (iii) the companies listed in Schedule 3 thereto (the "INITIAL
Guarantors"), (iv) Barclays Bank PLC as mandated lead arranger (the "ARRANGER"),
(v) the financial institutions listed in Schedule 1 thereto (the "LENDERS"),
(vi) Barclays Bank PLC, in its capacity as facility agent for the Lenders under
the Senior Finance Documents (the "FACILITY AGENT"), and (vii) Barclays Bank
PLC, in its capacity as agent and trustee for the Finance Parties under the
Security Documents (the "COLLATERAL AGENT").
WHEREAS, each Grantor is an Obligor under the Credit Agreement and, among
other things, has guaranteed the obligations of the other Obligors under the
Senior Finance Documents pursuant to Clause 17 (Guarantee and Indemnity) of the
Credit Agreement; and
WHEREAS, in consideration of the extensions of credit and other
accommodations of the Finance Parties as set forth in the Credit Agreement and
the other Senior Finance Documents, respectively, each Grantor has agreed to
secure such Grantor's obligations under the Senior Finance Documents as set
forth herein; and
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, each Grantor and the Collateral Agent
agree as follows:
SECTION 1. DEFINITIONS; GRANT OF SECURITY.
1.1. GENERAL DEFINITIONS. In this Agreement, the following terms shall
have the following meanings:
"ACCOUNT DEBTOR" shall mean each Person who is obligated on a Receivable
or any Supporting Obligation related thereto.
"ACCOUNTS" shall mean all "accounts" as defined in Article 9 of the UCC.
"AGREEMENT" shall have the meaning set forth in the preamble.
"ADDITIONAL GRANTORS" shall have the meaning assigned in Section 4.3.
"ASSIGNED AGREEMENTS" shall mean, with respect to any Grantor, all
agreements and contracts to which such Grantor is a party as of the date hereof,
or to which such Grantor becomes a party after
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the date hereof, including, without limitation, each Material Contract, as each
such agreement may be amended, supplemented or otherwise modified from time to
time.
"CASH PROCEEDS" shall have the meaning assigned in Section 6.4.
"CHATTEL PAPER" shall mean all "chattel paper" as defined in Article 9 of
the UCC, including, without limitation, "electronic chattel paper" or "tangible
chattel paper", as each term is defined in Article 9 of the UCC.
"COLLATERAL" shall have the meaning assigned in Section 1.3.
"COLLATERAL AGENT" shall have the meaning set forth in the preamble.
"COLLATERAL RECORDS" shall mean books, records, ledger cards, files,
correspondence, customer lists, blueprints, technical specifications, manuals,
computer software, computer printouts, tapes, disks and related data processing
software and similar items that at any time evidence or contain information
relating to any of the Collateral or are otherwise necessary or helpful in the
collection thereof or realization thereupon.
"COLLATERAL SUPPORT" shall mean all property (real or personal) assigned,
hypothecated or otherwise securing any Collateral and shall include any security
agreement or other agreement granting a Security Interest in such real or
personal property.
"COMMERCIAL TORT CLAIMS" shall mean all "commercial tort claims" as
defined in Article 9 of the UCC, including, without limitation, all commercial
tort claims listed on Schedule 3.8 (as such schedule may be amended or
supplemented from time to time) in an amount in excess of $50,000.
"COMMODITIES ACCOUNTS" (i) shall mean all "commodity accounts" as defined
in Article 9 of the UCC and (ii) shall include, without limitation, all of the
accounts listed on Schedule 3.4 under the heading "Commodities Accounts" (as
such schedule may be amended or supplemented from time to time).
"CONTROLLED FOREIGN CORPORATION" shall mean "controlled foreign
corporation" as defined in the Tax Code.
"COPYRIGHT LICENSES" shall mean any and all agreements providing for the
granting of any right in or to Copyrights (whether such Grantor is licensee or
licensor thereunder) including, without limitation, each agreement referred to
in Schedule 3.7(B) (as such schedule may be amended or supplemented from time to
time).
"COPYRIGHTS" shall mean all United States, state and foreign copyrights,
all mask works fixed in semi-conductor chip products (as defined under 17 U.S.C.
901 of the U.S. Copyright Act), whether registered or unregistered, now or
hereafter in force throughout the world, all registrations and applications
therefor including, without limitation, the applications referred to in Schedule
3.7(A) (as such schedule may be amended or supplemented from time to time), all
rights corresponding thereto throughout the world, all extensions and renewals
of any thereof, the right to xxx for past, present and future infringements of
any of the foregoing, and all proceeds of the foregoing, including, without
limitation, licenses, royalties, income, payments, claims, damages, and proceeds
of suit.
"CREDIT AGREEMENT" shall have the meaning set forth in the recitals.
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"DEPOSIT ACCOUNTS" (i) shall mean all "deposit accounts" as defined in
Article 9 of the UCC and (ii) shall include, without limitation, all of the
accounts listed on Schedule 3.4 under the heading "Deposit Accounts" (as such
schedule may be amended or supplemented from time to time).
"DOCUMENTS" shall mean all "documents" as defined in Article 9 of the UCC.
"EQUIPMENT" shall mean: (i) all "equipment" as defined in Article 9 of the
UCC, (ii) all machinery, manufacturing equipment, data processing equipment,
computers, office equipment, furnishings, furniture, appliances, fixtures and
tools (in each case, regardless of whether characterized as equipment under the
UCC) and (iii) all accessions or additions thereto, all parts thereof, whether
or not at any time of determination incorporated or installed therein or
attached thereto, and all replacements therefor, wherever located, now or
hereafter existing, including any fixtures.
"GENERAL INTANGIBLES" (i) shall mean all "general intangibles" as defined
in Article 9 of the UCC, including "payment intangibles" also as defined in
Article 9 of the UCC and (ii) shall include, without limitation, all interest
rate or currency protection or hedging arrangements, all tax refunds, all
licenses, permits, concessions and authorizations, all Assigned Agreements and
all Intellectual Property (in each case, regardless of whether characterized as
general intangibles under the UCC).
"GOODS" (i) shall mean all "goods" as defined in Article 9 of the UCC and
(ii) shall include, without limitation, all Inventory and Equipment (in each
case, regardless of whether characterized as goods under the UCC).
"GOVERNMENTAL AUTHORITY" shall mean any governmental or regulatory
(including stock exchange) authority, agency, court, commission, body or other
governmental entity.
"GRANTORS" shall have the meaning set forth in the preamble.
"INSTRUMENTS" shall mean all "instruments" as defined in Article 9 of the
UCC.
"INSURANCE" shall mean: (i) all insurance policies covering any or all of
the Collateral (regardless of whether the Collateral Agent is the loss payee
thereof) and (ii) any key man life insurance policies.
"INTELLECTUAL PROPERTY" shall mean, collectively, the Copyrights, the
Copyright Licenses, the Patents, the Patent Licenses, the Trademarks, the
Trademark Licenses, the Trade Secrets, and the Trade Secret Licenses.
"INVENTORY" shall mean: (i) all "inventory" as defined in Article 9 of the
UCC and (ii) all goods held for sale or lease or to be furnished under contracts
of service or so leased or furnished, all raw materials, work in process,
finished goods, and materials used or consumed in the manufacture, packing,
shipping, advertising, selling, leasing, furnishing or production of such
inventory or otherwise used or consumed in any Grantor's business (in each case,
regardless of whether characterized as inventory under the UCC).
"INVESTMENT RELATED PROPERTY" shall mean: (i) all "investment property"
(as such term is defined in Article 9 of the UCC) and (ii) all of the following
(regardless of whether classified as investment property under the UCC): all
Pledged Equity Interests, Pledged Debt, Securities Accounts, Commodities
Accounts, Deposit Accounts and certificates of deposit.
"LENDER" shall have the meaning set forth in the recitals.
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"LETTER OF CREDIT RIGHT" shall mean "letter-of-credit right" as defined in
Article 9 of the UCC.
"MATERIAL CONTRACTS" shall mean all contracts listed on Schedule 3.5 (as
such schedule may be amended or supplemented from time to time).
"MONEY" shall mean "money" as defined in the UCC.
"NON-ASSIGNABLE CONTRACT" shall have the meaning assigned in Section 3.5.
"OBLIGATIONS" means all obligations of every nature from time to time owed
by any Obligor under any Senior Finance Document, whether for principal,
interest, fees, expenses, indemnification, reimbursement of a drawing under a
Bank Guarantee or otherwise.
"PATENT LICENSES" shall mean all agreements providing for the granting of
any right in or to Patents (whether such Grantor is licensee or licensor
thereunder) including, without limitation, each agreement referred to in
Schedule 3.7(D) (as such schedule may be amended or supplemented from time to
time).
"PATENTS" shall mean all United States, state and foreign patents and
applications for letters patent throughout the world, including, but not limited
to each patent and patent application referred to in Schedule 3.7(C) (as such
schedule may be amended or supplemented from time to time), all reissues,
divisions, continuations, continuations-in-part, extensions, renewals, and
reexaminations of any of the foregoing, all rights corresponding thereto
throughout the world, and all proceeds of the foregoing including, without
limitation, licenses, royalties, income, payments, claims, damages, and proceeds
of suit and the right to xxx for past, present and future infringements of any
of the foregoing.
"PAYMENT INTANGIBLE" shall have the meaning specified in Article 9 of the
UCC.
"PERMITTED SALE" shall mean those sales, transfers or assignments
permitted by Clause 20.3 (Disposals and security undertakings) of the Credit
Agreement.
"PERMITTED SECURITY INTERESTS" means Security Interests permitted under
Clause 20.3(c) (Negative Pledge) of the Credit Agreement.
"PERSON" shall mean any individual, corporation, general or limited
partnership, limited liability or unlimited liability company, joint venture,
estate, trust, association, organization, Governmental Authority or other entity
of any kind or nature.
"PLEDGED DEBT" shall mean, with respect to any Grantor, all Indebtedness
owed to such Grantor, including, without limitation, all Indebtedness described
on Schedule 3.4(A) under the heading "Pledged Debt" (as such schedule may be
amended or supplemented from time to time), issued by the obligors named
therein, the instruments evidencing such Indebtedness, and all interest, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such Indebtedness.
"PLEDGED EQUITY INTERESTS" shall mean all Pledged Stock, Pledged LLC
Interests, Pledged Partnership Interests and Pledged Trust Interests.
"PLEDGED LLC INTERESTS" shall mean, with respect to any Grantor, all
interests in any limited liability company including, without limitation, all
limited liability company interests listed on Schedule 3.4(A) under the heading
"Pledged LLC Interests" (as such schedule may be amended or
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supplemented from time to time) and the certificates, if any, representing such
limited liability company interests of such Grantor and any interest of such
Grantor on the books and records of such limited liability company or on the
books and records of any securities intermediary pertaining to such interest and
all dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of such
limited liability company interests.
"PLEDGED PARTNERSHIP INTERESTS" shall mean, with respect to any Grantor,
all interests in any general partnership, limited partnership, limited liability
partnership or other partnership including, without limitation, all partnership
interests listed on Schedule 3.4(A) under the heading "Pledged Partnership
Interests" (as such schedule may be amended or supplemented from time to time)
and the certificates, if any, representing such partnership interests of such
Grantor and any interest of such Grantor on the books and records of such
partnership or on the books and records of any securities intermediary
pertaining to such interest and all dividends, distributions, cash, warrants,
rights, options, instruments, securities and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such partnership interests.
"PLEDGED TRUST INTERESTS" shall mean, with respect to any Grantor, all
interests in a Delaware business trust or other trust including, without
limitation, all trust interests listed on Schedule 3.4(A) under the heading
"Pledged Trust Interests" (as such schedule may be amended or supplemented from
time to time) and the certificates, if any, representing such trust interests of
such Grantor and any interest of such Grantor on the books and records of such
trust or on the books and records of any securities intermediary pertaining to
such interest and all dividends, distributions, cash, warrants, rights, options,
instruments, securities and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of such trust interests.
"PLEDGED STOCK" shall mean, with respect to any Grantor, all shares of
capital stock owned by such Grantor, including, without limitation, all shares
of capital stock described on Schedule 3.4(A) under the heading "Pledged Stock"
(as such schedule may be amended or supplemented from time to time), and the
certificates, if any, representing such shares of such Grantor and any interest
of such Grantor in the entries on the books of the issuer of such shares or on
the books of any securities intermediary pertaining to such shares, and all
dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of such
shares.
"PLEDGE SUPPLEMENT" shall mean any supplement to this agreement in
substantially the form of Exhibit A.
"PROCEEDS" shall mean: (i) all "proceeds" as defined in Article 9 of the
UCC, (ii) payments or distributions made with respect to any Investment Related
Property and (iii) whatever is receivable or received when Collateral or
proceeds are sold, exchanged, collected or otherwise disposed of, whether such
disposition is voluntary or involuntary.
"RECEIVABLES" shall mean, with respect to any Grantor, all rights to
payment, whether or not earned by performance, for goods or other property sold,
leased, licensed, assigned or otherwise disposed of, or services rendered or to
be rendered, including, without limitation all such rights constituting or
evidenced by any Account, Chattel Paper, Instrument, General Intangible or
Investment Related Property of such Grantor, together with all of such Grantor's
rights, if any, in any goods or other property giving rise to such right to
payment and all Collateral Support and Supporting Obligations related thereto
and all Receivables Records.
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"RECEIVABLES RECORDS" shall mean, with respect to any Grantor, (i) all
original copies of all documents, instruments or other writings or electronic
records or other Records evidencing the Receivables of such Grantor, (ii) all
books, correspondence, credit or other files, Records, ledger sheets or cards,
invoices, and other papers relating to Receivables of such Grantor, including,
without limitation, all tapes, cards, computer tapes, computer discs, computer
runs, record keeping systems and other papers and documents relating to the
Receivables, whether in the possession or under the control of such Grantor or
any computer bureau or agent from time to time acting for such Grantor or
otherwise, (iii) all evidences of the filing of financing statements and the
registration of other instruments in connection therewith, and amendments,
supplements or other modifications thereto, notices to other creditors or
secured parties, and certificates, acknowledgments, or other writings,
including, without limitation, Security Interest search reports, from filing or
other registration officers, (iv) all credit information, reports and memoranda
relating thereto and (v) all other written or nonwritten forms of information
related in any way to the foregoing or any Receivable.
"RECORD" shall have the meaning specified in Article 9 of the UCC.
"SECURED OBLIGATIONS" shall have the meaning assigned in Section 2.1.
"SECURED PARTIES" means the Arranger, each Agent, each Lender, each
Ancillary Lender, each Issuing Lender and each Hedging Lender and shall include,
without limitation, all former such Persons to the extent that any Obligations
owing to such Persons have not been paid or satisfied in full.
"SECURITIES ACCOUNTS" (i) shall mean all "securities accounts" as defined
in Article 8 of the UCC and (ii) shall include, without limitation, all of the
accounts listed on Schedule 3.4(A) under the heading "Securities Accounts" (as
such schedule may be amended or supplemented from time to time).
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SUPPORTING OBLIGATION" shall mean all "supporting obligations" as defined
in Article 9 of the UCC.
"TAX CODE" shall mean the United States Internal Revenue Code of 1986, as
amended from time to time.
"TRADEMARK LICENSES" shall mean, with respect to any Grantor, any and all
agreements providing for the granting of any right in or to Trademarks (whether
such Grantor is licensee or licensor thereunder) including, without limitation,
each agreement referred to in Schedule 3.7(F) (as such schedule may be amended
or supplemented from time to time).
"TRADEMARKS" shall mean all United States, state and foreign trademarks,
trade names, corporate names, company names, business names, fictitious business
names, internet domain names, trade styles, service marks, certification marks,
collective marks, logos, other source or business identifiers, designs and
general intangibles of a like nature, all registrations and applications for any
of the foregoing including, but not limited to the registrations and
applications referred to in Schedule 3.7(E) (as such schedule may be amended or
supplemented from time to time), all extensions or renewals of any of the
foregoing, all of the goodwill of the business connected with the use of and
symbolized by the foregoing, the right to xxx for past, present and future
infringement or dilution of any of the foregoing or for any injury to goodwill,
and all proceeds of the foregoing, including, without limitation, licenses,
royalties, income, payments, claims, damages, and proceeds of suit.
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"TRADE SECRET LICENSES" shall mean, with respect to any Grantor, any and
all agreements providing for the granting of any right in or to Trade Secrets of
such Grantor (whether such Grantor is licensee or licensor thereunder)
including, without limitation, each agreement referred to in Schedule 3.7(G) (as
such schedule may be amended or supplemented from time to time).
"TRADE SECRETS" shall mean, with respect to any Grantor, all trade secrets
and all other confidential or proprietary information and know-how now or
hereafter owned or used in, or contemplated at any time for use in, the business
of such Grantor (all of the foregoing being collectively called a "Trade
Secret"), whether or not such Trade Secret has been reduced to a writing or
other tangible form, including all documents and things embodying,
incorporating, or referring in any way to such Trade Secret, the right to xxx
for past, present and future infringement of any Trade Secret, and all proceeds
of the foregoing including, without limitation, licenses, royalties, income,
payments, claims, damages, and proceeds of suit.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State of New York or, when the context implies, the Uniform
Commercial Code as in effect from time to time in any other applicable
jurisdiction.
1.2. DEFINITIONS; INTERPRETATION. All capitalized terms used herein
(including the preamble and recitals hereto) and not otherwise defined herein
shall have the meanings ascribed thereto in the Credit Agreement or, if not
defined therein, in the UCC. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect. Any of the
terms defined herein may, unless the context otherwise requires, be used in the
singular or the plural, depending on the reference. The use herein of the word
"include" or "including", when following any general statement, term or matter,
shall not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar items
or matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter. If
any conflict or inconsistency exists between this Agreement and the Credit
Agreement, the Credit Agreement shall govern. All references herein to
provisions of the UCC shall include all successor provisions under any
subsequent version or amendment to any Article of the UCC.
1.3. GRANT OF SECURITY. Each Grantor hereby grants to the Collateral Agent
for the ratable benefit of the Secured Parties a continuing Security Interest on
all of such Grantor's right, title and interest in, to and under all personal
property of such Grantor including, but not limited to the following, in each
case whether now owned or existing or hereafter acquired or arising and wherever
located (all of which being hereinafter collectively referred to as the
"COLLATERAL"):
(a) Accounts;
(b) Chattel Paper;
(c) Documents;
(d) General Intangibles;
(e) Goods;
(f) Instruments;
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(g) Insurance;
(h) Intellectual Property;
(i) Investment Related Property;
(j) Letter of Credit Rights;
(k) Money;
(l) Receivables and Receivables Records;
(m) Commercial Tort Claims;
(n) to the extent not otherwise included above, all Collateral
Records, Collateral Support and Supporting Obligations relating to any of the
foregoing; and
(o) to the extent not otherwise included above, all Proceeds,
products, accessions, rents and profits of or in respect of any of the
foregoing.
1.4. CERTAIN LIMITED EXCLUSIONS. Notwithstanding anything contained in
Section 1.3 hereof or anything else herein to the contrary, in no event shall
the Collateral include, and no Grantor shall be deemed to have granted a
security interest in, any of such Grantor's right, title or interest (a) in any
Intellectual Property if the grant of such security interest shall constitute or
result in the abandonment, invalidation or rendering unenforceable any right,
title or interest of any Grantor therein; (b) in any license, contract or
agreement to which such Grantor is a party, including, without limitation, with
respect to any Pledged Partnership Interests or any Pledged LLC Interests, to
the extent, but only to the extent, that such a grant, under the terms of such
license, contract or agreement (including, without limitation, any partnership
agreements or any limited liability company agreements), or otherwise, results
in a breach or termination of the terms of, or constitutes a default under or
termination of any such license, contract or agreement (other than to the extent
that any such term would be rendered ineffective pursuant to Sections 9-406,
9-407, 9-408 or 9-409 of the UCC of any relevant jurisdiction or any other
applicable law); provided, that each Grantor agrees to use all reasonable best
efforts to obtain all requisite consent to enable such Grantor to provide a
security interest in such asset and, in any event, immediately upon the
ineffectiveness, lapse or termination of any such provision, the Collateral
shall include, and such Grantor shall be deemed to have granted a security
interest in, all such rights and interests as if such provision had never been
in effect; or (c) in any of the outstanding capital stock of a Controlled
Foreign Corporation in excess of 65% of the voting power of all classes of
capital stock of such Controlled Foreign Corporation entitled to vote; provided
that immediately upon the amendment of the Tax Code to allow the pledge of a
greater percentage of the voting power of capital stock in a Controlled Foreign
Corporation without adverse tax consequences, the Collateral shall include, and
each Grantor shall be deemed to have granted a security interest in, such
greater percentage of capital stock of each Controlled Foreign Corporation.
SECTION 2. SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE.
2.1. SECURITY FOR OBLIGATIONS. This Agreement secures, and the Collateral
of each Grantor is collateral security for, the prompt and complete payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section
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362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a) (and any successor provision
thereof), whether or not a claim is allowed against such Grantor for such amount
in the related bankruptcy proceeding), of all Obligations with respect to such
Grantor (the "SECURED OBLIGATIONS"); PROVIDED THAT anything contained in this
Agreement to the contrary notwithstanding, the Secured Obligations of any
Grantor under this Agreement shall be limited to a maximum aggregate amount
equal to the greatest amount that would not render such Grantor's Secured
Obligations subject to avoidance as a fraudulent transfer or conveyance under
Section 548 of the US Bankruptcy Code or any applicable provisions of comparable
law of one or more of the states or Governmental Authorities comprising the
United States of America (collectively, the "FRAUDULENT TRANSFER LAWS"), in each
case after giving effect to all other liabilities of such Grantor, contingent or
otherwise, that are relevant under the Fraudulent Transfer Laws (specifically
excluding, however, any liabilities of such Grantor (a) in respect of
intercompany indebtedness to any Group Company to the extent that such
indebtedness would be discharged in an amount equal to the amount paid by such
Pledgor hereunder and (b) under any guarantee of senior unsecured indebtedness
or indebtedness subordinated in right of payment to obligations of the Obligors
outstanding under this Agreement or the Senior Finance Documents, which
guarantee contains a limitation as to maximum amount similar to that set forth
in this paragraph, pursuant to which the liability of such Grantor hereunder is
included in the liabilities taken into account in determining such maximum
amount) and after giving effect as assets to the value (as determined under the
applicable provisions of the Fraudulent Transfer Laws) of any rights to
subrogation, contribution, reimbursement, indemnity or similar right of such
Grantor pursuant to (i) applicable law or (ii) any agreement providing for an
equitable allocation among such Grantor and other Obligors or affiliates of the
Obligors of obligations arising under the Senior Finance Documents by such
parties.
2.2. GRANTORS REMAIN LIABLE. Anything contained herein to the contrary
notwithstanding, (i) each Grantor shall remain liable under any partnership
agreement or limited liability company agreement relating to any Pledged
Partnership Interest or Pledged LLC Interest, any Assigned Agreement and/or any
other contracts and agreements included in the Collateral, to the extent set
forth therein, to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed; (ii) the exercise by the
Collateral Agent of any of its rights hereunder shall not release any Grantor
from any of its duties or obligations under the contracts and agreements
included in the Collateral and (iii) neither the Collateral Agent nor any
Secured Party nor any purchaser at a foreclosure sale shall have any obligation
or liability under any partnership agreement or limited liability company
agreement relating to any Pledged Partnership Interests or Pledged LLC
Interests, any Assigned Agreement or any other contracts and agreements included
in the Collateral by reason of this Agreement, nor shall the Collateral Agent or
any Secured Party be obligated to perform any of the obligations or duties of
any Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.
SECTION 3. REPRESENTATIONS AND WARRANTIES AND COVENANTS.
3.1. GENERALLY.
(a) REPRESENTATIONS AND WARRANTIES. Each Grantor hereby represents
and warrants that:
(i) it owns the Collateral purported to be owned by it
or otherwise has the rights it purports to have in each item of
Collateral and, as to all Collateral whether now existing or
hereafter acquired, will continue to own or have such rights in each
item of the Collateral, in each case free and clear of any and all
Security Interest rights or claims of all other Persons other than
Permitted Security Interests;
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(ii) the full legal name of such Grantor is as set forth
on Schedule 3.1 (A) and it has not done in the last five (5) years,
and does not do, business under any other name (including any
trade-name or fictitious business name) except for those names set
forth on Schedule 3.1 (B) (as such schedule may be amended or
supplemented from time to time);
(iii) it has indicated on Schedule 3.1(A) (as such
schedule may be amended or supplemented from time to time): (w) the
type of organization of such Grantor, (x) the jurisdiction of
organization of such Grantor, (y) the chief executive office or sole
place of business (or the principal residence if such Grantor is a
natural person) of such Grantor and (z) the organizational
identification number, if any, of such Grantor;
(iv) except as provided on Schedule 3.1(C), it has not
changed its name, jurisdiction of organization, chief executive
office or sole place of business (or principal residence if such
Grantor is a natural person) or its corporate structure in any way
(e.g., by merger, consolidation, change in corporate form or
otherwise) within the past five (5) years;
(v) it has not within the last five (5) years become
bound (whether as a result of merger or otherwise) as debtor under a
security agreement entered into by another Person, which has not
heretofore been terminated other than the agreements identified on
Schedule 3.1 (D) hereof (as such schedule may be amended or
supplemented from time to time);
(vi) with respect to each agreement identified on
Schedule 3.1(D), it has indicated on Schedule 3.1(A) and Schedule
3.1(B) the information required pursuant to Section 3.1(a)(ii),
(iii) and (iv) with respect to the debtor under each such agreement;
(vii) upon the filing of all UCC financing statements
naming each Grantor as "debtor" and the Collateral Agent as "secured
party" and describing the Collateral in the filing offices set forth
opposite such Grantor's name on Schedule 3.1(E) hereof (as such
schedule may be amended or supplemented from time to time), the
other filings delivered by each Grantor, and compliance with the
other requirements of this Agreement, including obtaining control
agreements with respect to Deposit Accounts and Securities Accounts,
all actions and consents necessary or desirable to create, perfect
or ensure the first priority Security Interest (subject only to
Permitted Security Interests and to the rights of the United States
Government with respect to United States Government Receivables)
hereunder have been made or obtained and the security interests
granted to the Collateral Agent hereunder will constitute valid and
perfected first priority Security Interests (subject in the case of
priority only to Permitted Security Interests and to the rights of
the United States government (including any agency or department
thereof) with respect to United States Government Receivables) on
all of the Collateral, in each case to the extent that the
Collateral consists of the type of property in which a security
interest may be perfected by possession or control (within the
meaning of the UCC as in effect on the date hereof in the State of
New York), by filing a financing statement under the Uniform
Commercial Code as enacted in any relevant jurisdiction or by a
filing of a grant of security interest in the United States Patent
and Trademark Office or in the United States Copyright Office;
(viii) other than the financing statements filed in
favor of the Collateral Agent, no effective UCC financing statement,
fixture filing or other instrument similar in effect under any
applicable law covering all or any part of the Collateral is on file
in any filing or recording office except for (x) financing
statements for which proper termination statements have been
delivered to the Collateral Agent for filing and (y) financing
statements filed in connection with Permitted Security Interests;
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(ix) no authorization, approval or other action by, and
no notice to or filing with, any Governmental Authority or
regulatory body or other Person is required for either (i) the
pledge or grant by any Grantor of the Security Interest purported to
be created in favor of the Collateral Agent hereunder or (ii) the
exercise by Collateral Agent of any rights or remedies in respect of
any Collateral (whether specifically granted or created hereunder or
created or provided for by applicable law), except (A) for the
filings contemplated by clause (vii) above and (B) as may be
required, in connection with the disposition of any Investment
Related Property, by laws generally affecting the offering and sale
of Securities;
(x) all information supplied by any Grantor on any
schedule to this Agreement is accurate and complete in all material
respects;
(xi) none of the Collateral constitutes, or is the
Proceeds of, "farm products" (as defined in the UCC); and
(xii) it does not own any "as extracted collateral" (as
defined in the UCC) or any timber to be cut.
(b) COVENANTS AND AGREEMENTS. Each Grantor hereby covenants and agrees
that:
(i) except for the security interest created by this
Agreement, it shall not create or suffer to exist any Security
Interest upon or with respect to any of the Collateral, except
Permitted Security Interests, and such Grantor shall defend the
Collateral against all Persons at any time claiming any interest
therein;
(ii) it shall not produce, use or permit any Collateral
to be used unlawfully or in violation of any applicable statute,
regulation or ordinance (except any violation that has not had and
is not reasonably likely to have a Material Adverse Effect) or in
violation of any policy of insurance covering the Collateral;
(iii) it shall not change its name, type of
organization, jurisdiction of organization, chief executive office
or corporate structure in any way (e.g., by merger, consolidation,
change in corporate form or otherwise) unless it shall have (a)
notified the Collateral Agent in writing, by executing and
delivering to the Collateral Agent a completed Pledge Supplement,
substantially in the form of Exhibit A attached hereto, together
with all Supplements to Schedules thereto, at least thirty (30) days
(or such lesser time as may be agreed by the Collateral Agent) prior
to any such change or establishment, identifying such new proposed
name, type of organization, jurisdiction of organization, chief
executive office or corporate structure and providing such other
information in connection therewith as the Collateral Agent may
reasonably request and (b) taken all actions necessary or advisable
to maintain the continuous validity, perfection and the same or
better priority of the Collateral Agent's Security Interest in the
Collateral intended to be granted and agreed to hereby;
(iv) it shall pay promptly when due all property and
other taxes, assessments and governmental charges or levies imposed
upon, and all claims (including claims for labor, materials and
supplies) against, the Collateral, except to the extent the validity
thereof is being contested in good faith; provided, such Grantor
shall in any event pay such taxes, assessments, charges, levies or
claims not later than five (5) days prior to the date of any
proposed sale under any judgment, writ or warrant of attachment
entered or filed against such Grantor or any of the Collateral as a
result of the failure to make such payment;
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(v) it shall not take or permit any action which could
impair the Collateral Agent's rights in the Collateral; and
(vi) it shall not sell, transfer or assign (by operation
of law or otherwise) any Collateral except as Permitted Sales or as
otherwise permitted under the Credit Agreement.
3.2. EQUIPMENT AND INVENTORY.
(a) REPRESENTATIONS AND WARRANTIES. Each Grantor represents and
warrants, on the date of this Agreement, the date of each Drawdown Request, each
Drawdown Date and the first day of each Interest Period, that:
(i) any Goods now or hereafter produced by any Grantor
included in the Collateral have been and will be produced in
compliance with the requirements of the Fair Labor Standards Act, as
amended; and
(ii) except as set forth on Schedule 3.2 (as such
schedule may be amended or supplemented from time to time), none of
the Inventory or Equipment is in the possession of an issuer of a
negotiable document (as defined in Section 7-104 of the UCC)
therefor or otherwise in the possession of a bailee or a
warehouseman.
(b) COVENANTS AND AGREEMENTS. Each Grantor covenants and agrees
that:
(i) it shall keep complete and accurate records of the
Inventory as is customarily maintained under similar circumstances
by Persons of established reputation engaged in similar business,
and in any event in conformity with US gaap;
(ii) it shall not deliver any Document evidencing any
Equipment and Inventory to any Person other than the issuer of such
Document to claim the Goods evidenced therefor or the Collateral
Agent;
(iii) if any Equipment or Inventory is in possession or
control of any third party, each Grantor shall join with the
Collateral Agent in notifying the third party of the Collateral
Agent's security interest and obtaining an acknowledgment from the
third party that it is holding the Equipment and Inventory for the
benefit of the Collateral Agent; and
(iv) with respect to any item of Equipment in excess of
$50,000 individually or $100,000 in the aggregate which is covered
by a certificate of title under a statute of any jurisdiction under
the law of which indication of a security interest on such
certificate is required as a condition of perfection thereof, upon
the reasonable request of the Collateral Agent, (A) provide
information with respect to any such Equipment, (B) execute and file
with the registrar of motor vehicles or other appropriate authority
in such jurisdiction an application or other document requesting the
notation or other indication of the security interest created
hereunder on such certificate of title, and (C) deliver to the
Collateral Agent copies of all such applications or other documents
filed during such calendar quarter and copies of all such
certificates of title issued during such calendar quarter indicating
the security interest created hereunder in the items of Equipment
covered thereby.
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3.3. RECEIVABLES.
(a) REPRESENTATIONS AND WARRANTIES. Each Grantor represents and
warrants, on the date of this Agreement, the date of each Drawdown Request, each
Drawdown Date and the first day of each Interest Period, that:
(i) each Receivable (a) is and will be the legal, valid
and binding obligation of the Account Debtor in respect thereof,
representing an unsatisfied obligation of such Account Debtor, (b)
is and will be enforceable in accordance with its terms subject to
the effect of bankruptcy, insolvency, reorganization, moratorium and
other similar laws affecting rights of creditors generally and
general principles of equity and (d) is and will be in compliance
with all applicable laws in all material respects;
(ii) except as set forth on Schedule 3.3 (as such
schedule may be amended or supplemented from time to time), none of
the Account Debtors in respect of any Receivable in excess of
$50,000 individually or $100,000 in the aggregate is the Government
of the United States, any agency or instrumentality thereof, any
state or municipality or any foreign sovereign. No Receivable
requires the consent of the Account Debtor in respect thereof in
connection with the pledge hereunder, except any consent which has
been obtained; and
(iii) no Receivable in excess of $50,000 individually or
$100,000 in the aggregate is evidenced by, or constitutes, an
Instrument or Chattel Paper which has not been delivered to, or
otherwise subjected to the control of, the Collateral Agent to the
extent required by, and in accordance with Section 3.3(c).
(b) COVENANTS AND AGREEMENTS. Each Grantor hereby covenants and
agrees that:
(i) it shall keep complete and accurate records of the
Receivables, including, but not limited to, the originals of all
documentation with respect to all Receivables and records of all
payments received and all credits granted on the Receivables, all
merchandise returned and all other dealings therewith;
(ii) it shall xxxx conspicuously, in form and manner
reasonably satisfactory to the Collateral Agent, all Chattel Paper,
Instruments and other evidence of Receivables (other than any
delivered to the Collateral Agent as provided herein), as well as
the Receivables Records with an appropriate reference to the fact
that the Collateral Agent has a security interest therein;
(iii) it shall perform in all material respects all of
its obligations with respect to the Receivables;
(iv) it shall not amend, modify, terminate or waive any
provision of any Receivable in any manner which could reasonably be
expected to have a Material Adverse Effect on the value of such
Receivable as Collateral except in the ordinary course of business.
Other than in the ordinary course of business as generally conducted
by it on and prior to the date hereof, and except as otherwise
provided in subsection (v) below, following an Event of Default,
such Grantor shall not (w) grant any extension or renewal of the
time of payment of any Receivable, (x) compromise or settle any
dispute, claim or legal proceeding with respect to any Receivable
for less than the total unpaid balance thereof, (y) release, wholly
or partially, any Person liable for the payment thereof, or (z)
allow any credit or discount thereon; and
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(v) except as otherwise provided in this subsection,
each Grantor shall continue to collect all amounts due or to become
due to such Grantor under the Receivables and any Supporting
Obligation and diligently exercise each material right it may have
under any Receivable, any Supporting Obligation or Collateral
Support, in each case, at its own expense, and in connection with
such collections and exercise, such Grantor shall take such action
as such Grantor or the Collateral Agent may deem necessary or
advisable. Notwithstanding the foregoing, following the occurrence
and during the continuation of an Event of Default, the Collateral
Agent shall have the right at any time to notify, or require any
Grantor to notify, any Account Debtor of the Collateral Agent's
security interest in the Receivables and any Supporting Obligation
and, in addition, at any time following the occurrence and during
the continuation of an Event of Default, the Collateral Agent may:
(1) direct the Account Debtors under any Receivables to make payment
of all amounts due or to become due to such Grantor thereunder
directly to the Collateral Agent; (2) notify, or require any Grantor
to notify, each Person maintaining a lockbox or similar arrangement
to which Account Debtors under any Receivables have been directed to
make payment to remit all amounts representing collections on checks
and other payment items from time to time sent to or deposited in
such lockbox or other arrangement directly to the Collateral Agent;
and (3) enforce, at the expense of such Grantor, collection of any
such Receivables and to adjust, settle or compromise the amount or
payment thereof, in the same manner and to the same extent as such
Grantor might have done. If the Collateral Agent notifies any
Grantor that it has elected to collect the Receivables in accordance
with the preceding sentence, any payments of Receivables received by
such Grantor shall be forthwith (and in any event within two (2)
Business Days) deposited by such Grantor in the exact form received,
duly indorsed by such Grantor to the Collateral Agent if required,
in a Securities Account or Deposit Account maintained under the sole
dominion and control of the Collateral Agent, and until so turned
over, all amounts and proceeds (including checks and other
instruments) received by such Grantor in respect of the Receivables,
any Supporting Obligation or Collateral Support shall be received in
trust for the benefit of the Collateral Agent hereunder and shall be
segregated from other funds of such Grantor and such Grantor shall
not adjust, settle or compromise the amount or payment of any
Receivable, or release wholly or partly any Account Debtor or
obligor thereof, or allow any credit or discount thereon.
(c) DELIVERY AND CONTROL OF RECEIVABLES. With respect to any
Receivables in excess of $50,000 individually or $100,000 in the aggregate that
is evidenced by, or constitutes, Chattel Paper or Instruments, each Grantor
shall cause each originally executed copy thereof to be delivered to the
Collateral Agent (or its agent or designee) appropriately indorsed to the
Collateral Agent or indorsed in blank: (i) with respect to any such Receivables
in existence on the date hereof, on or prior to the date hereof and (ii) with
respect to any such Receivables hereafter arising, within ten (10) days of such
Grantor acquiring rights therein. With respect to any Receivables in the
aggregate which would constitute "electronic chattel paper" under Article 9 of
the UCC, each Grantor shall take all steps necessary to give the Collateral
Agent control over such Receivables (within the meaning of Section 9-105 of the
UCC): (i) with respect to any such Receivables in existence on the date hereof,
on or prior to the date hereof and (ii) with respect to any such Receivables
hereafter arising, within ten (10) days of such Grantor acquiring rights
therein. Any Receivable not otherwise required to be delivered or subjected to
the control of the Collateral Agent in accordance with this subsection (c) shall
be delivered or subjected to such control upon request of the Collateral Agent.
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3.4. INVESTMENT RELATED PROPERTY.
(a) REPRESENTATIONS AND WARRANTIES. Each Grantor hereby represents
and warrants, on the date of this Agreement, the date of each Drawdown Request,
each Drawdown Date and the first day of each Interest Period, that:
(i) Schedule 3.4(A) (as such schedule maybe amended or
supplemented from time to time) sets forth under the headings
"Pledged Stock," "Pledged LLC Interests," "Pledged Partnership
Interests" and "Pledged Trust Interests," respectively, all of the
Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests
and Pledged Trust Interests owned by any Grantor and such Pledged
Equity Interests constitute the percentage of issued and outstanding
shares of stock, percentage of membership interests, percentage of
partnership interests or percentage of beneficial interest of the
respective issuers thereof indicated on such Schedule;
(ii) it is the record and beneficial owner of the
Pledged Equity Interests free of all Security Interests, rights or
claims of other Persons other than Permitted Security Interests and
there are no outstanding warrants, options or other rights to
purchase, or shareholder, voting trust or similar agreements
outstanding with respect to, or property that is convertible into,
or that requires the issuance or sale of, any Pledged Equity
Interests;
(iii) no consent of any Person including any other
general or limited partner, any other member of a limited liability
company, any other shareholder or any other trust beneficiary is
necessary in connection with the creation, perfection or first
priority status of the security interest of the Collateral Agent in
any Pledged Equity Interests or the exercise by the Collateral Agent
of the voting or other rights provided for in this Agreement or the
exercise of remedies in respect thereof;
(iv) none of the Pledged LLC Interests nor Pledged
Partnership Interests are or represent interests in issuers that
are: (a) registered as investment companies, (b) are dealt in or
traded on securities exchanges or markets or (c) have opted to be
treated as securities under the uniform commercial code of any
jurisdiction;
(v) Schedule 3.4(A) (as such schedule may be amended or
supplemented from time to time) sets forth under the heading
"Pledged Debt" all of the Pledged Debt owned by any Grantor; such
Pledged Debt constitutes all of the issued and outstanding
inter-company Indebtedness evidenced by an instrument or
certificated security of the respective issuers thereof owing to
such Grantor;
(vi) Schedule 3.4(A) (as such schedule may be amended or
supplemented from time to time) sets forth under the headings
"Securities Accounts" and "Commodities Accounts," respectively, all
of the Securities Accounts and Commodities Accounts in which any
Grantor has an interest. Each Grantor is the sole entitlement holder
of each such respective Securities Account and Commodities Account,
and such Grantor has not consented to, and is not otherwise aware
of, any Person (other than the Collateral Agent pursuant hereto)
having "control" (within the meanings of Sections 8-106 and 9-106 of
the UCC) over, or any other interest in, any such Securities Account
or Commodity Account or any securities or other property credited
thereto;
(vii) Schedule 3.4(A) (as such schedule may be amended
or supplemented from time to time) sets forth under the heading
"Deposit Accounts" all of the Deposit Accounts in
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which each Grantor has an interest and each Grantor is the sole
account holder of each such respective Deposit Account and such
Grantor has not consented to, and is not otherwise aware of, any
Person (other than the Collateral Agent pursuant hereto) having
either sole dominion and control (within the meaning of common law)
or "control" (within the meaning of Section 9-104 of the UCC) over,
or any other interest in, any such Deposit Account or any money or
other property deposited therein; and
(viii) each Grantor has taken all actions necessary or
desirable, including those specified in Section 3.4(c), to: (a)
establish the Collateral Agent's "control" (within the meanings of
Sections 8-106 and 9-106 of the UCC) over any portion of the
Investment Related Property constituting Certificated Securities,
Uncertificated Securities, Securities Accounts or Securities
Entitlements (each as defined in the UCC); (b) establish the
Collateral Agent's "control" (within the meaning of Section 9-104 of
the UCC) over all Deposit Accounts; and (c) to deliver all
Instruments to the Collateral Agent.
(b) COVENANTS AND AGREEMENTS. Each Grantor hereby covenants and
agrees that:
(i) without the prior written consent of the Collateral
Agent, it shall not vote to enable or take any other action to: (a)
amend or terminate any partnership agreement, limited liability
company agreement, certificate of incorporation, by-laws or other
organizational documents in any way that adversely affects the
validity, perfection or priority of the Collateral Agent's security
interest, (b) waive any default under or breach of any terms of
organizational document relating to the issuer of any Pledged Equity
Interest or the terms of any Pledged Debt in any way that adversely
affects the validity, perfection or priority of the Collateral
Agent's security interest, or (c) cause any issuer of any Pledged
Partnership Interests or Pledged LLC Interests which are not
securities (for purposes of the UCC) on the date hereof to elect or
otherwise take any action to cause such Pledged Partnership
Interests or Pledged LLC Interests to be treated as securities for
purposes of the UCC; provided, however, notwithstanding the
foregoing, if any issuer of any Pledged Partnership Interests or
Pledged LLC Interests takes any such action in violation of the
foregoing in this clause (c), such Grantor shall promptly notify the
Collateral Agent in writing of any such election or action and, in
such event, shall take all steps necessary or advisable to establish
the Collateral Agent's "control" thereof;
(ii) in the event it acquires rights in any Investment
Related Property after the date hereof, it shall deliver to the
Collateral Agent a completed Pledge Supplement, substantially in the
form of Exhibit A attached hereto, together with all Supplements to
Schedules thereto, reflecting such new Investment Related Property
and all other Investment Related Property. Notwithstanding the
foregoing, it is understood and agreed that the security interest of
the Collateral Agent shall attach to all Investment Related Property
immediately upon any Grantor's acquisition of rights therein and
shall not be affected by the failure of any Grantor to deliver a
supplement to Schedule 3.4 as required hereby;
(iii) except as provided in the next sentence or in the
Credit Agreement, in the event such Grantor receives any dividends,
interest or distributions on any Investment Related Property, or any
securities or other property upon the merger, consolidation,
liquidation or dissolution of any issuer of any Investment Related
Property, then (a) such dividends, interest or distributions and
securities or other property shall be included in the definition of
Collateral without further action and (b) such Grantor shall within
10 days take all steps, if any, necessary or advisable to ensure the
validity, perfection, priority and, if applicable, control of the
Collateral Agent over such Investment Related Property (including,
without limitation, delivery thereof to
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the Collateral Agent) and pending any such action such Grantor shall
be deemed to hold such dividends, interest, distributions,
securities or other property in trust for the benefit of the
Collateral Agent. Notwithstanding the foregoing, so long as no Event
of Default shall have occurred and be continuing, the Collateral
Agent authorizes each Grantor to retain all ordinary cash dividends
and distributions and all payments of interest;
(iv) it shall comply with all of its obligations under
any partnership agreement or limited liability company agreement
relating to Pledged Partnership Interests or Pledged LLC Interests;
(v) it shall notify the Collateral Agent of any material
default under any Pledged Debt with an aggregate principal amount in
excess of $100,000;
(vi) without the prior written consent of the Collateral
Agent, it shall not permit any issuer of any Pledged Equity Interest
to merge or consolidate unless all the outstanding capital stock or
other equity interests of the surviving or resulting corporation,
limited liability company, partnership or other entity is, upon such
merger or consolidation, pledged hereunder and no cash, securities
or other property is distributed in respect of the outstanding
equity interests of any other constituent company; provided that if
the surviving or resulting company upon any such merger or
consolidation involving an issuer which is a Controlled Foreign
Corporation, then such Grantor shall only be required to pledge
equity interests in accordance with Section 1.4 hereof; and
(vii) each Grantor consents to the grant by each other
Grantor of a security interest in all Investment Related Property to
the Collateral Agent and, without limiting the foregoing, consents
to the transfer of any Pledged Partnership Interest and any Pledged
LLC Interest to the Collateral Agent or its nominee following an
Event of Default and to the substitution of the Collateral Agent or
its nominee as a partner in any partnership or as a member in any
limited liability company with all the rights and powers related
thereto.
(c) DELIVERY AND CONTROL. Each Grantor agrees that with respect to
any Investment Related Property in which it currently has rights it shall comply
with the provisions of this Section 3.4(c) on or before the date hereof and with
respect to any Investment Related Property hereafter acquired by such Grantor it
shall comply with the provisions of this Section 3.4(c) promptly upon acquiring
rights therein, in each case in form and substance satisfactory to the
Collateral Agent. With respect to any Investment Related Property that is
represented by a certificate or that is an "instrument" (other than any
Investment Related Property credited to a Securities Account) it shall cause
such certificate or instrument to be delivered to the Collateral Agent, indorsed
in blank by an "effective indorsement" (as defined in Section 8-107 of the UCC),
regardless of whether such certificate constitutes a "certificated security" for
purposes of the UCC. With respect to any Investment Related Property that is an
"uncertificated security" for purposes of the UCC (other than any
"uncertificated securities" credited to a Securities Account), it shall cause
the issuer of such uncertificated security to either (i) register the Collateral
Agent as the registered owner thereof on the books and records of the issuer or
(ii) execute an agreement substantially in the form of Exhibit B hereto,
pursuant to which such issuer agrees to comply with the Collateral Agent's
instructions with respect to such uncertificated security without further
consent by such Grantor. With respect to any Investment Related Property
consisting of Securities Accounts or Securities Entitlements, it shall cause the
securities intermediary maintaining such Securities Account or Securities
Entitlement to enter into an agreement substantially in the form of Exhibit C
hereto pursuant to which it shall agree to comply with the Collateral Agent's
"entitlement orders" without further consent by such Grantor. With respect to
any Investment Related Property that is a `Deposit Account," it shall cause the
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depositary institution maintaining such account to enter into an agreement
substantially in the form of Exhibit D hereto, pursuant to which the Collateral
Agent shall have both sole dominion and control over such Deposit Account
(within the meaning of the common law) and "control" (within the meaning of
Section 9-104 of the UCC) over such Deposit Account. Each Grantor shall have
entered into such control agreement or agreements with respect to: (i) any
Securities Accounts, Securities Entitlements or Deposit Accounts that exist on
the Closing Date, as of or prior to the Closing Date and (ii) any Securities
Accounts, Securities Entitlements or Deposit Accounts that are created or
acquired after the Closing Date, as of or prior to the deposit or transfer of
any such Securities Entitlements or funds, whether constituting moneys or
investments, into such Securities Accounts or Deposit Accounts. In addition to
the foregoing if any issuer of any Investment Related Property is located in a
jurisdiction outside of the United States, each Grantor shall take such
additional actions, including, without limitation, causing the issuer to
register the pledge on its books and records or making such filings or
recordings, in each case as may be necessary or advisable, under the laws of
such issuer's jurisdiction to insure the validity, perfection and priority of
the security interest of the Collateral Agent. Upon the occurrence and during
the continuance of an Event of Default, the Collateral Agent shall have the
right, without notice to any Grantor, to transfer all or any portion of the
Investment Related Property to its name or the name of its nominee or agent. In
addition, the Collateral Agent shall have the right at any time upon the
occurrence and during the continuance of an Event of Default, without notice to
any Grantor, to exchange any certificates or instruments representing any
Investment Related Property for certificates or instruments of smaller or larger
denominations.
(d) VOTING AND DISTRIBUTIONS.
(i) So long as no Event of Default shall have occurred
and be continuing:
(A) except as otherwise provided in Section 3.4(b)(i) of this Agreement
or elsewhere herein or in the Credit Agreement, each Grantor shall
be entitled to exercise or refrain from exercising any and all
voting and other consensual rights pertaining to the Investment
Related Property or any part thereof for any purpose not
inconsistent with the terms of this Agreement or the Credit
Agreement; provided, no Grantor shall exercise or refrain from
exercising any such right if such exercise would constitute a breach
of a representation or obligation under the Credit Agreement or
would adversely affect the validity or enforceability of this
Agreement or the Collateral Agent's rights hereunder or the
transferability of such Investment Related Property or would
adversely affect the validity, perfection or priority of the
Collateral Agent's security interest; it being understood, however,
that neither the voting by such Grantor of any Pledged Stock for, or
such Grantor's consent to, the election of directors (or similar
governing body) at a regularly scheduled annual or other meeting of
stockholders or with respect to incidental matters at any such
meeting, nor such Grantor's consent to or approval of any action
otherwise permitted under this Agreement and the Credit Agreement,
shall be deemed inconsistent with the terms of this Agreement or the
Credit Agreement within the meaning of this Section 3.4(d)(i)(A),
and no notice of any such voting or consent need be given to the
Collateral Agent; and
(B) the Collateral Agent shall promptly execute and deliver (or cause to
be executed and delivered) to each Grantor all proxies, and other
instruments as such Grantor may from time to time reasonably request
for the purpose of enabling such Grantor to exercise the voting and
other consensual rights when and to the extent which it is entitled
to exercise pursuant to clause (A) above.
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(ii) Upon the occurrence and during the continuation of
an Event of Default:
(A) all rights of each Grantor to exercise or refrain from exercising
the voting and other consensual rights which it would otherwise be
entitled to exercise pursuant hereto shall cease and all such rights
shall thereupon become vested in the Collateral Agent who shall
thereupon have the sole right to exercise such voting and other
consensual rights; and
(B) in order to permit the Collateral Agent to exercise the voting and
other consensual rights which it may be entitled to exercise
pursuant hereto and to receive all dividends and other distributions
which it may be entitled to receive hereunder: (1) each Grantor
shall promptly execute and deliver (or cause to be executed and
delivered) to the Collateral Agent all proxies, dividend payment
orders and other instruments as the Collateral Agent may from time
to time reasonably request and (2) each Grantor acknowledges that
the Collateral Agent may utilize the power of attorney set forth in
Section 5.
3.5. MATERIAL CONTRACTS.
(a) REPRESENTATIONS AND WARRANTIES. Each Grantor hereby represents
and warrants, on the date of this Agreement, the date of each Drawdown Request,
each Drawdown Date and the first day of each Interest Period, that:
(i) Schedule 3.5 (as such schedule may be amended or
supplemented from time to time) sets forth all of the Material
Contracts to which such Grantor has rights;
(ii) the Material Contracts which have been furnished to
the Collateral Agent are true and complete copies (including any
amendments or supplements thereof);
(iii) no Material Contract prohibits assignment or
requires consent of or notice to any Person in connection with the
assignment to the Collateral Agent hereunder, except such as has
been given or made or is currently sought pursuant to Section 3.5
(b)(vii) hereof.
(b) COVENANTS AND AGREEMENTS. Each Grantor hereby covenants and
agrees that:
(i) in addition to any rights under Section 3.3, the
Collateral Agent may at any time notify, or require any Grantor to
so notify, the counterparty on any Material Contract of the security
interest of the Collateral Agent therein. In addition, after the
occurrence and during the continuance of an Event of Default, the
Collateral Agent may upon written notice to the applicable Grantor,
notify, or require any Grantor to notify, the counterparty to make
all payments under the Material Contracts directly to the Collateral
Agent;
(ii) each Grantor shall deliver promptly to the
Collateral Agent a copy of each material demand, notice or document
received by it relating in any way to any Material Contract;
(iii) each Grantor shall deliver promptly to the
Collateral Agent, and in any event within ten (10) Business Days,
after (1) any Material Contract of such Grantor is terminated or
amended in a manner that is materially adverse to such Grantor or
(2) any new Material
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Contract is entered into by such Grantor, a written statement
describing such event, with copies of such material amendments or
new contracts, delivered to the Collateral Agent (to the extent such
delivery is permitted by the terms of any such Material Contract,
provided, no prohibition on delivery shall be effective if it were
bargained for by such Grantor with the intent of avoiding compliance
with this Section 3.5(b)(iii)), and an explanation of any actions
being taken with respect thereto;
(iv) it shall perform in all material respects all of
its obligations with respect to the Material Contracts;
(v) it shall promptly and diligently exercise each
material right (except the right of termination) it may have under
any Material Contract, any Supporting Obligation or Collateral
Support, in each case, at its own expense, and in connection with
such collections and exercise, such Grantor shall take such action
as such Grantor or the Collateral Agent may deem necessary or
advisable;
(vi) it shall use its best efforts to keep in full force
and effect any Supporting Obligation or Collateral Support relating
to any Material Contract;
(vii) with respect to any agreement, contract or license
to which any Grantor is a party that prevents the assignment or
granting of a security interest therein (either by its terms or by
any federal or state statutory prohibition or otherwise) (any such
agreement, contract or license, a "NON-ASSIGNABLE CONTRACT"), each
Grantor shall, within thirty (30) days of the date hereof with
respect to any Non-Assignable Contract in effect on the date hereof
and within thirty (30) days after entering into any Non-Assignable
Contract after the date hereof, request in writing the consent of
the counterparty or counterparties to the Non-Assignable Contract
pursuant to the terms of such Non-Assignable Contract or applicable
law to the assignment or granting of a security interest in such
Non-Assignable Contract to Secured Party and use its best efforts to
obtain such consent as soon as practicable thereafter; and
(viii) it shall use its best efforts, after the date
hereof, not to be a party to any agreement, contract or license that
prevents the assignment or granting of a security interest therein
(either by its terms or by any federal or state statutory).
3.6. LETTER OF CREDIT RIGHTS.
(a) REPRESENTATIONS AND WARRANTIES. Each Grantor hereby represents
and warrants, on the date of this Agreement, the date of each Drawdown Request,
each Drawdown Date and the first day of each Interest Period, that:
(i) any letter of credit in an amount of $50,000 or more
to which such Grantor has rights is listed on Schedule 3.6 (as such
schedule may be amended or supplemented from time to time) hereto;
and
(ii) it has obtained the consent of each issuer of any
material letter of credit to the assignment of the proceeds of the
letter of credit to the Collateral Agent.
(b) COVENANTS AND AGREEMENTS. Each Grantor hereby covenants and
agrees that with respect to any material letter of credit hereafter arising it
shall obtain the consent of the issuer thereof to the assignment of the proceeds
of the letter of credit to the Collateral Agent and shall deliver to the
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Collateral Agent a completed Pledge Supplement, substantially in the form of
Exhibit A attached hereto, together with all Supplements to Schedules thereto.
3.7. INTELLECTUAL PROPERTY.
(a) REPRESENTATIONS AND WARRANTIES. Except as disclosed in Schedule
3.7(H) (as such schedule may be amended or supplemented from time to time), each
Grantor hereby represents and warrants, on the date of this Agreement, the date
of each Drawdown Request, each Drawdown Date and the first day of each Interest
Period, that:
(i) Schedule 3.7 (as such schedule may be amended or
supplemented from time to time) sets forth a true and complete list
of (i) all United States, state and foreign registrations of and
applications for Patents, Trademarks, and Copyrights owned by each
Grantor and (ii) all Patent Licenses, Trademark Licenses and
Copyright Licenses material to the business of such Grantor;
(ii) it is the sole and exclusive owner of the entire
right, title, and interest in and to all Intellectual Property on
Schedule 3.7 (as such schedule may be amended or supplemented from
time to time), and owns or has the valid right to use all other
Intellectual Property used in or necessary to conduct its business,
free and clear of all Security Interests, claims, encumbrances and
licenses, except for Permitted Security Interests and the licenses
set forth on Schedule 3.7(B), (D), (F) and (G) (as each may be
amended or supplemented from time to time);
(iii) all Intellectual Property is subsisting and has
not been adjudged invalid or unenforceable, in whole or in part
except as could not reasonably be expected to have a Material
Adverse Effect, and each Grantor has performed all acts and has paid
all renewal, maintenance, and other fees and taxes required to
maintain each and every registration and application of Intellectual
Property in full force and effect;
(iv) all Intellectual Property is valid and enforceable
in all material respects; no holding, decision, or judgment has been
rendered in any action or proceeding before any court or
administrative authority challenging the validity of such Grantor's
right to register, or such Grantor's rights to own or use, any
Intellectual Property and no such action or proceeding is pending
or, to the best of such Grantor's knowledge, threatened;
(v) all registrations and applications for Copyrights,
Patents and Trademarks are standing in the name of each Grantor, and
none of the material Trademarks, Patents, Copyrights or Trade Secret
Collateral has been licensed by any Grantor to any affiliate or
third party, except as disclosed in Schedule 3.7(B), (D), (F), or
(G) (as each may be amended or supplemented from time to time);
(vi) each Grantor has been using appropriate statutory
notice of registration in connection with its use of registered
Trademarks, proper marking practices in connection with the use of
Patents, and appropriate notice of copyright in connection with the
publication of Copyrights material to the business of such Grantor;
(vii) no Grantor has any knowledge of any third party
claim that any or part of such Grantor's present or contemplated
business operations infringes or will infringe upon any trademark,
patent, copyright, trade secret or similar intellectual property
right owned or
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controlled by a third party where such claim has had or is
reasonably likely to have a Material Adverse Effect; no claim has
been made that the use of any Intellectual Property owned or used by
Grantor (or any of its respective licensees) violates the asserted
rights of any third party where such claim has had or is reasonably
likely to have a Material Adverse Effect;
(viii) no Guarantor has any knowledge of any third party
claim that any of such Grantor's present or contemplated business
operations infringes or will infringe upon any Intellectual Property
owned or used by such Grantor, or any of its respective licensees
where such claim has had or is reasonably likely to have a Material
Adverse Effect;
(ix) no settlement or consents, covenants not to xxx,
nonassertion assurances, or releases have been entered into by
Grantor or to which Grantor is bound that adversely affect Grantor's
rights to own or use any Intellectual Property where such
settlement, consent, covenant not to xxx, nonassertion assurance or
release has had or is reasonably likely to have a Material Adverse
Effect; and
(x) each Grantor has not made a previous assignment,
sale, transfer or agreement constituting a present or future
assignment, sale, transfer or agreement of any Intellectual Property
that has not been terminated or released. There is no effective
financing statement or other document or instrument now executed, or
on file or recorded in any public office, granting a security
interest in or otherwise encumbering any part of the Intellectual
Property, other than in favor of the Collateral Agent.
(b) COVENANTS AND AGREEMENTS. Each Grantor hereby covenants and
agrees as follows:
(i) it shall not do any act or omit to do any act
whereby any of the Intellectual Property which is material to the
business of Grantor may lapse, or become abandoned, dedicated to the
public, or unenforceable, or which would adversely affect the
validity, grant, or enforceability of the security interest granted
therein where such act or omission would be reasonably likely to
have a Material Adverse Effect;
(ii) it shall not, with respect to any Trademarks which
are material to the business of any Grantor, cease the use of any of
such Trademarks or fail to maintain the level of the quality of
products sold and services rendered under any of such Trademarks at
a level at least substantially consistent with the quality of such
products and services as of the date hereof, and each Grantor shall
take all steps necessary to insure that licensees of such Trademarks
use such consistent standards of quality where such cessation or
failure, or any failure to take such steps, has had or would be
reasonably likely to have a Material Adverse Effect;
(iii) it shall, within thirty (30) days of the creation
or acquisition of any copyrightable work which is material to the
business of Grantor, apply to register the Copyright in the United
States Copyright Office;
(iv) it shall promptly notify the Collateral Agent if it
knows or has reason to know that any item of the Intellectual
Property that is material to the business of any Grantor may become
(a) abandoned or dedicated to the public or placed in the public
domain, (b) invalid or unenforceable, or (c) subject to any material
adverse determination or development (including the institution of
proceedings) in any action or proceeding in the United States Patent
and Trademark
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Office, the United States Copyright Office, and state registry, any
foreign counterpart of the foregoing, or any court;
(v) it shall take all reasonable steps in the United
States Patent and Trademark Office, the United States Copyright
Office, any state registry or any foreign counterpart of the
foregoing, to pursue any application and maintain any registration
of each Trademark, Patent, and Copyright owned by any Grantor and
material to its business which is now or shall become included in
the Intellectual Property (except for such works with respect to
which such Grantor has determined in the exercise of its
commercially reasonable judgment that it shall not seek
registration) including, but not limited to, those items on Schedule
3.7(A), (C) and (E) (as each may be amended or supplemented from
time to time);
(vi) in the event that any Intellectual Property owned
by or exclusively licensed to any Grantor and material to its
business is materially infringed, misappropriated, or diluted by a
third party, such Grantor shall promptly take all reasonable actions
to stop such infringement, misappropriation, or dilution and protect
its exclusive rights in such Intellectual Property including, but
not limited to, the initiation of a suit for injunctive relief and
to recover damages;
(vii) it shall promptly (but in no event more than
thirty (30) days after any Grantor obtains knowledge thereof) report
to the Collateral Agent (i) the filing of any application to
register any Intellectual Property with the United States Patent and
Trademark Office, the United States Copyright Office, or any state
registry or foreign counterpart of the foregoing (whether such
application is filed by such Grantor or through any agent, employee,
licensee, or designee thereof) and (ii) the registration of any
Intellectual Property by any such office, in each case by executing
and delivering to the Collateral Agent a completed Pledge
Supplement, substantially in the form of Exhibit A attached hereto,
together with all Supplements to Schedules thereto;
(viii) it shall, promptly upon the reasonable request of
the Collateral Agent, execute and deliver to the Collateral Agent
any document required to acknowledge, confirm, register, record, or
perfect the Collateral Agent's interest in any part of the
Intellectual Property, whether now owned or hereafter acquired;
(ix) except with the prior consent of the Collateral
Agent or as permitted under the Credit Agreement, each Grantor shall
not execute, and there will not be on file in any public office, any
financing statement or other document or instruments, except
financing statements or other documents or instruments filed or to
be filed in favor of the Collateral Agent and each Grantor shall not
sell, assign, transfer, license, grant any option, or create or
suffer to exist any Security Interest upon or with respect to the
Intellectual Property, except for the Security Interest created by
and under this Security Agreement and the other Senior Finance
Documents;
(x) it shall hereafter use commercially reasonable
efforts so as not to permit the inclusion in any contract to which
it hereafter becomes a party of any provision that materially
impairs or prevents the creation of a security interest in, or the
assignment of, such Grantor's rights and interests in any property
included within the definitions of any Intellectual Property
acquired under such contracts;
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(xi) it shall use proper statutory notice in connection
with its use of any of the Intellectual Property; and
(xii) it shall continue to collect, at its own expense,
all amounts due or to become due to such Grantor in respect of the
Intellectual Property or any portion thereof. In connection with
such collections, each Grantor may take such action as such Grantor
may reasonably deem necessary or advisable to enforce collection of
such amounts. Notwithstanding the foregoing, following the
occurrence and during the continuation of an Event of Default, the
Collateral Agent shall have the right, at any time, to notify, or
require any Grantor to notify, any obligors with respect to any such
amounts of the existence of the security interest created hereby.
3.8. COMMERCIAL TORT CLAIMS.
(a) REPRESENTATIONS AND WARRANTIES. Each Grantor hereby represents
and warrants, on the date of this Agreement, the date of each Drawdown Request,
each Drawdown Date and the first day of each Interest Period, that Schedule 3.8
(as such schedule may be amended or supplemented from time to time) sets forth
all Commercial Tort Claims of each Grantor; and
(b) COVENANTS AND AGREEMENTS. Each Grantor hereby covenants and
agrees that with respect to any Commercial Tort Claim hereafter arising it shall
deliver to the Collateral Agent a completed Pledge Supplement, substantially in
the form of Exhibit A attached hereto, together with all Supplements to
Schedules thereto, identifying such new Commercial Tort Claims.
SECTION 4. ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES; ADDITIONAL
GRANTORS.
4.1. ACCESS; RIGHT OF INSPECTION. The Collateral Agent shall at all times
have full and free access during normal business hours and upon reasonable prior
written notice to all the books, correspondence and records of each Grantor, and
the Collateral Agent and its representatives may examine the same, take extracts
therefrom and make photocopies thereof, and each Grantor agrees to render to the
Collateral Agent, at such Grantor's cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto. The Collateral
Agent and its representatives shall at all times during normal business hours
upon reasonable prior written notice also have the right to enter any premises
of each Grantor and inspect any property of each Grantor where any of the
Collateral of such Grantor granted pursuant to this Agreement is located for the
purpose of inspecting the same, observing its use or otherwise protecting its
interests therein.
4.2. FURTHER ASSURANCES.
(a) Each Grantor agrees that from time to time, at the expense of
such Grantor, that it shall promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that the Collateral Agent may reasonably request, in order to create and/or
maintain the validity, perfection or priority of and protect any security
interest granted or purported to be granted hereby or to enable the Collateral
Agent to exercise and enforce its rights and remedies hereunder with respect to
any Collateral. Without limiting the generality of the foregoing, each Grantor
shall:
(i) file such financing or continuation statements, or
amendments thereto, and execute and deliver such other agreements,
instruments, endorsements, powers of attorney or
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notices, as may be necessary or desirable, or as the Collateral
Agent may reasonably request, in order to perfect and preserve the
security interests granted or purported to be granted hereby;
(ii) take all actions necessary to ensure the
recordation of appropriate evidence of the Secured Parties and
security interest granted hereunder in the Intellectual Property
with any intellectual property registry in which said Intellectual
Property is registered or in which an application for registration
is pending including without limitation, the United States Patent
and Trademark Office, the United States Copyright Office, the
various Secretaries of State, and the foreign counterparts on any of
the foregoing; and
(iii) at the Collateral Agent's request, appear in and
defend any action or proceeding that may affect such Grantor's title
to or the Collateral Agent's security interest in all or any part of
the Collateral.
(b) Each Grantor hereby authorizes the Collateral Agent to file a
Record or Records, including, without limitation, financing or continuation
statements, and amendments thereto, in all jurisdictions and with all filing
offices as the Collateral Agent may reasonably determine, are necessary or
advisable to perfect the security interest granted to the Collateral Agent
herein. Such financing statements may describe the Collateral in the same manner
as described herein or may contain an indication or description of collateral
that describes such property in any other manner as the Collateral Agent may
determine, in its sole discretion, is necessary, advisable or prudent to ensure
the perfection of the security interest in the Collateral granted to the
Collateral Agent herein, including, without limitation, describing such property
as "all assets" or "all personal property." Each Grantor shall furnish to the
Collateral Agent from time to time statements and schedules further identifying
and describing the Collateral and such other reports in connection with the
Collateral as the Collateral Agent may reasonably request, all in reasonable
detail.
(c) Each Grantor hereby authorizes the Collateral Agent to modify
this Agreement after obtaining such Grantor's approval of or signature to such
modification by amending Schedule 3.7 (as such schedule may be amended or
supplemented from time to time) to include reference to any right, title or
interest in any existing Intellectual Property or any Intellectual Property
acquired or developed by any Grantor after the execution hereof or to delete any
reference to any right, title or interest in any Intellectual Property in which
any Grantor no longer has or claims any right, title or interest.
4.3. ADDITIONAL GRANTORS. From time to time subsequent to the date hereof,
additional Persons may become parties hereto as additional Grantors (each, an
"ADDITIONAL GRANTOR"), and each Grantor shall cause each of its domestic
Subsidiaries from time to time formed or acquired after the date hereof to
become parties hereto as additional Grantors by executing a counterpart to this
agreement by which it agrees to be bound hereby as though it were an original
signatory hereto and provides supplements to the schedules hereto with respect
to itself and its Collateral. Upon delivery of any such Counterpart Agreement to
the Collateral Agent, notice of which is hereby waived by Grantors, each
Additional Grantor shall be a Grantor and shall be as fully a party hereto as if
Additional Grantor were an original signatory hereto. Each Grantor expressly
agrees that its obligations arising hereunder shall not be affected or
diminished by the addition or release of any other Grantor hereunder, nor by any
election of Collateral Agent not to cause any Subsidiary of any Borrower to
become an Additional Grantor hereunder. This Agreement shall be fully effective
as to any Grantor that is or becomes a party hereto regardless of whether any
other Person becomes or fails to become or ceases to be a Grantor hereunder.
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SECTION 5. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT.
5.1. POWER OF ATTORNEY. Each Grantor hereby irrevocably appoints the
Collateral Agent (such appointment being coupled with an interest) as such
Grantor's attorney-in-fact, with full authority in the place and stead of such
Grantor and in the name of such Grantor, the Collateral Agent or otherwise, from
time to time in the Collateral Agent's discretion to take any action and to
execute any instrument that the Collateral Agent may deem reasonably necessary
or advisable to accomplish the purposes of this Agreement, including, without
limitation, the following:
(a) upon the occurrence and during the continuance of any Event of
Default, to obtain and adjust insurance required to be maintained by such
Grantor or paid to the Collateral Agent pursuant to the Credit Agreement;
(b) upon the occurrence and during the continuance of any Event of
Default, to ask for, demand, collect, xxx for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(c) upon the occurrence and during the continuance of any Event of
Default, to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (b) above;
(d) upon the occurrence and during the continuance of any Event of
Default, to file any claims or take any action or institute any proceedings that
the Collateral Agent may deem necessary or desirable for the collection of any
of the Collateral or otherwise to enforce the rights of the Collateral Agent
with respect to any of the Collateral;
(e) to prepare and file any UCC financing statements against such
Grantor as debtor;
(f) to prepare, sign, and file for recordation in any intellectual
property registry, appropriate evidence of the Security Interest granted herein
in the Intellectual Property in the name of such Grantor as assignor;
(g) to take or cause to be taken all actions necessary to perform or
comply or cause performance or compliance with the terms of this Agreement,
including, without limitation, access to pay or discharge taxes or Security
Interest (other than Permitted Security Interests) levied or placed upon or
threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by the Collateral Agent
in its sole discretion, any such payments made by the Collateral Agent to become
obligations of such Grantor to the Collateral Agent, due and payable immediately
without demand;
(h) upon the occurrence and during the continuance of an Event of
Default, generally to sell, transfer, pledge, make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as though
the Collateral Agent were the absolute owner thereof for all purposes; and
(i) to do, at the Collateral Agent's option and such Grantor's
expense, at any time or from time to time, all acts and things that the
Collateral Agent deems reasonably necessary to protect, preserve or realize upon
the Collateral and the Collateral Agent's security interest therein in order to
effect the intent of this Agreement, all as fully and effectively as such
Grantor might do.
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5.2. NO DUTY ON THE PART OF COLLATERAL AGENT OR SECURED PARTIES. The
powers conferred on the Collateral Agent hereunder are solely to protect the
interests of the Secured Parties in the Collateral and shall not impose any duty
upon the Collateral Agent or any Secured Party to exercise any such powers. The
Collateral 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 or their affiliates' 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.
SECTION 6. REMEDIES.
6.1. GENERALLY.
(a) If any Event of Default shall have occurred and be continuing,
the Collateral Agent may exercise in respect of the Collateral, in addition to
all other rights and remedies provided for herein or otherwise available to it
at law or in equity, all the rights and remedies of a secured party on default
under the UCC (whether or not the UCC applies to the affected Collateral) to
collect, enforce or satisfy any Secured Obligations then owing, whether by
acceleration or otherwise, and also may pursue any of the following separately,
successively or simultaneously:
(i) require any Grantor to, and each Grantor hereby
agrees that it shall at its expense and promptly upon request of the
Collateral Agent forthwith, assemble all or part of the Collateral
as directed by the Collateral Agent and make it available to the
Collateral Agent at a place to be designated by the Collateral Agent
that is reasonably convenient to both parties;
(ii) enter onto the property where any Collateral is
located and take possession thereof with or without judicial
process;
(iii) prior to the disposition of the Collateral, store,
process, repair or recondition the Collateral or otherwise prepare
the Collateral for disposition in any manner to the extent the
Collateral Agent deems appropriate; and
(iv) without notice except as specified below or
required under the UCC, sell, assign, lease, license (on an
exclusive or nonexclusive basis) or otherwise dispose of the
Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Collateral Agent's offices or elsewhere,
for cash, on credit or for future delivery, at such time or times
and at such price or prices and upon such other terms as the
Collateral Agent may deem commercially reasonable.
(b) The Collateral Agent or any Secured Party may be the purchaser
of any or all of the Collateral at any public or private sale in accordance with
the UCC and the Collateral Agent, as collateral agent for and representative of
the Secured Parties, shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such sale made in accordance with the UCC, to use and
apply any of the Secured Obligations as a credit on account of the purchase
price for any Collateral payable by the Collateral Agent at such sale. Each
purchaser at any such sale shall hold the property sold absolutely free from any
claim or right on the part of any Grantor, and each Grantor hereby waives (to
the extent permitted by applicable law) all rights of redemption, stay and/or
appraisal which it now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted. Each Grantor agrees that,
to the extent notice of sale shall be required by law, at least ten (10) days
notice to such Grantor of the time and place of any public
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sale or the time after which any private sale is to be made shall constitute
reasonable notification. The Collateral Agent shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given. The
Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. Each
Grantor agrees that it would not be commercially unreasonable for the Collateral
Agent to dispose of the Collateral or any portion thereof by using Internet
sites that provide for the auction of assets of the types included in the
Collateral or that have the reasonable capability of doing so, or that match
buyers and sellers of assets. Each Grantor hereby waives any claims against the
Collateral Agent and the Secured Parties arising by reason of the fact that the
price at which any Collateral may have been sold at such a private sale was less
than the price which might have been obtained at a public sale, even if the
Collateral Agent accepts the first offer received and does not offer such
Collateral to more than one offeree. If the proceeds of any sale or other
disposition of the Collateral are insufficient to pay all the Secured
Obligations, Grantors shall be liable for the deficiency and the fees of any
attorneys employed by the Collateral Agent to collect such deficiency. Each
Grantor further agrees that a breach of any of the covenants contained in this
Section will cause irreparable injury to the Collateral Agent, that the
Collateral Agent has no adequate remedy at law in respect of such breach and, as
a consequence, that each and every covenant contained in this Section 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 default has occurred giving rise
to the Secured Obligations becoming due and payable prior to their stated
maturities. Nothing in this Section shall in any way alter the rights of the
Collateral Agent hereunder.
(c) The Collateral Agent may sell the Collateral without giving any
warranties as to the Collateral. The Collateral Agent may specifically disclaim
or modify any warranties of title or the like. This procedure will not be
considered to adversely effect the commercial reasonableness of any sale of the
Collateral.
(d) If the Collateral Agent sells any of the Collateral on credit,
the Secured Obligations will be credited only with payments actually made by the
purchaser and received by the Collateral Agent and applied to the indebtedness
of the purchaser. In the event the purchaser fails to pay for the Collateral,
the Collateral Agent may resell the Collateral.
(e) The Collateral Agent shall have no obligation to xxxxxxxx any of
the Collateral.
6.2. INVESTMENT RELATED PROPERTY.
(a) Each Grantor recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws, the
Collateral Agent may be compelled, with respect to any sale of all or any part
of the Investment Related Property conducted without prior registration or
qualification of such Investment Related Property under the Securities Act
and/or such state securities laws, to limit purchasers to those who will agree,
among other things, to acquire the Investment Related Property for their own
account, for investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges that any such private sale may be at prices
and on terms less favorable than those obtainable through a public sale without
such restrictions (including a public offering made pursuant to a registration
statement under the Securities Act) and, notwithstanding such circumstances,
each Grantor agrees that any such private sale shall be deemed to have been made
in a commercially reasonable manner and that the Collateral Agent shall have no
obligation to engage in public sales and no obligation to delay the sale of any
Investment Related Property for the period of time necessary to permit the
issuer thereof to register it for a form of public sale requiring registration
under the Securities Act or under applicable state securities laws, even if such
issuer would, or should, agree to so register it. If the
-29-
Collateral Agent determines to exercise its right to sell any or all of the
Investment Related Property, upon written request, each Grantor shall and shall
cause each issuer of any Pledged Stock to be sold hereunder, each partnership
and each limited liability company from time to time to furnish to the
Collateral Agent all such information as the Collateral Agent may request in
order to determine the number and nature of interest, shares or other
instruments included in the Investment Related Property which may be sold by the
Collateral Agent in exempt transactions under the Securities Act and the rules
and regulations of the Securities and Exchange Commission thereunder, as the
same are from time to time in effect.
(b) Upon the occurrence and during the continuation of an Event of
Default, the Collateral Agent shall have the right to apply the balance from any
Deposit Account or instruct the bank at which any Deposit Account is maintained
to pay the balance of any Deposit Account to or for the benefit of the
Collateral Agent.
6.3. INTELLECTUAL PROPERTY.
(a) Anything contained herein to the contrary notwithstanding, upon
the occurrence and during the continuation of an Event of Default:
(i) the Collateral Agent shall have the right (but not
the obligation) to bring suit or otherwise commence any action or
proceeding in the name of any Grantor, the Collateral Agent or
otherwise, in the Collateral Agent's sole discretion, to enforce any
Intellectual Property, in which event such Grantor shall, at the
request of the Collateral Agent, do any and all lawful acts and
execute any and all documents required by the Collateral Agent in
aid of such enforcement and such Grantor shall promptly, upon
demand, reimburse and indemnify the Collateral Agent and the Secured
Parties in connection with the exercise of its rights under this
Section, and, to the extent that the Collateral Agent shall elect
not to bring suit to enforce any Intellectual Property as provided
in this Section, each Grantor agrees to use all reasonable measures,
whether by action, suit, proceeding or otherwise, to prevent the
infringement of any of the Intellectual Property by others and for
that purpose agrees to diligently maintain any action, suit or
proceeding against any Person so infringing as shall be necessary to
prevent such infringement;
(ii) upon written demand from the Collateral Agent, each
Grantor shall grant, assign, convey or otherwise transfer to the
Collateral Agent all of such Grantor's right, title and interest in
and to the Intellectual Property and shall execute and deliver to
the Collateral Agent such documents as are necessary or appropriate
to carry out the intent and purposes of this Agreement;
(iii) each Grantor agrees that such an assignment and/or
recording shall be applied to reduce the Secured Obligations
outstanding only to the extent that the Collateral Agent (or any
Secured Party) receives cash proceeds in respect of the sale of, or
other realization upon, the Intellectual Property;
(iv) within five (5) Business Days after written notice
from the Collateral Agent, each Grantor shall make available to the
Collateral Agent, to the extent within such Grantor's power and
authority, such personnel in such Grantor's employ on the date of
such Event of Default as the Collateral Agent may reasonably
designate, by name, title or job responsibility, to permit such
Grantor to continue, directly or indirectly, to produce, advertise
and sell the products and services sold or delivered by such Grantor
under or in connection with the
-30-
Trademarks and Trademark Licenses, such persons to be available to
perform their prior functions on the Collateral Agent's behalf and
to be compensated by the Collateral Agent at such Grantor's expense
on a per diem, pro-rata basis consistent with the salary and benefit
structure applicable to each as of the date of such Event of
Default; and
(v) the Collateral Agent shall have the right to notify,
or require each Grantor to notify, any obligors with respect to
amounts due or to become due to such Grantor in respect of the
Intellectual Property, of the existence of the security interest
created herein, to direct such obligors to make payment of all such
amounts directly to the Collateral Agent, and, upon such
notification and at the expense of such Grantor, to enforce
collection of any such amounts and to adjust, settle or compromise
the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done;
(1) all amounts and proceeds (including
checks and other instruments) received by Grantor in
respect of amounts due to such Grantor in respect of the
Collateral or any portion thereof shall be received in
trust for the benefit of the Collateral Agent hereunder,
shall be segregated from other funds of such Grantor and
shall be forthwith paid over or delivered to the
Collateral Agent in the same form as so received (with
any necessary endorsement) to be held as cash Collateral
and applied as provided by Section 6.5 hereof; and
(2) Grantor shall not adjust, settle or
compromise the amount or payment of any such amount or
release wholly or partly any obligor with respect
thereto or allow any credit or discount thereon.
(b) If (i) an Event of Default shall have occurred and, by reason of
cure, waiver, modification, amendment or otherwise, no longer be continuing,
(ii) no other Event of Default shall have occurred and be continuing, (iii) an
assignment or other transfer to the Collateral Agent of any rights, title and
interests in and to the Intellectual Property shall have been previously made
and shall have become absolute and effective, and (iv) the Secured Obligations
shall not have become immediately due and payable, upon the written request of
any Grantor, the Collateral Agent shall promptly execute and deliver to such
Grantor, at such Grantor's sole cost and expense, such assignments or other
transfer as may be necessary to reassign to such Grantor any such rights, title
and interests as may have been assigned to the Collateral Agent as aforesaid,
subject to any disposition thereof that may have been made by the Collateral
Agent; provided, after giving effect to such reassignment, the Collateral
Agent's security interest granted pursuant hereto, as well as all other rights
and remedies of the Collateral Agent granted hereunder, shall continue to be in
full force and effect; and provided further, the rights, title and interests so
reassigned shall be free and clear of any Security Interests granted by or on
behalf of the Collateral Agent and the Secured Parties.
(c) Solely for the purpose of enabling the Collateral Agent to
exercise rights and remedies under this Section 6 and at such time as the
Collateral Agent shall be lawfully entitled to exercise such rights and
remedies, each Grantor hereby grants to the Collateral Agent, to the extent it
has the right to do so, an irrevocable, nonexclusive license (exercisable
without payment of royalty or other compensation to such Grantor), subject, in
the case of Trademarks, to sufficient rights to quality control and inspection
in favor of such Grantor to avoid the risk of invalidation of said Trademarks,
to use, operate under, license, or sublicense any Intellectual Property now
owned or hereafter acquired by such Grantor, and wherever the same may be
located.
6.4. CASH PROCEEDS. In addition to the rights of the Collateral Agent
specified in Section 3.3 with respect to payments of Receivables, all proceeds
of any Collateral received by any Grantor
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consisting of cash, checks and other near-cash items (collectively, "CASH
PROCEEDS") following the occurrence and during the continuance of an Event of
Default shall be held by such Grantor in trust for the Collateral Agent,
segregated from other funds of such Grantor, and shall, forthwith upon receipt
by such Grantor, unless otherwise provided pursuant to Section 3.4(b)(iii), be
turned over to the Collateral Agent in the exact form received by such Grantor
(duly indorsed by such Grantor to the Collateral Agent, if required) and held by
the Collateral Agent.
6.5. APPLICATION OF PROCEEDS. Except as expressly provided elsewhere in
this Agreement, all proceeds received by the Collateral Agent in respect of any
sale, any collection from, or other realization upon all or any part of the
Collateral shall be applied in full or in part by the Collateral Agent against,
the Secured Obligations in the following order of priority: FIRST, to the
payment of all costs and expenses of such sale, collection or other realization,
including reasonable compensation to the Collateral Agent and its agents and
counsel, and all other expenses, liabilities and advances made or incurred by
the Collateral Agent in connection therewith, and all amounts for which the
Collateral Agent is entitled to indemnification hereunder (in its capacity as
the Collateral Agent and not as a Lender) and all advances made by the
Collateral Agent hereunder for the account of the applicable Grantor, and to the
payment of all costs and expenses paid or incurred by the Collateral Agent in
connection with the exercise of any right or remedy hereunder or under the
Credit Agreement, all in accordance with the terms hereof or thereof; SECOND, to
the extent of any excess of such proceeds, to the payment of all other Secured
Obligations for the ratable benefit of the Secured Parties; and THIRD, to the
extent of any excess of such proceeds, to the payment to or upon the order of
such Grantor or to whosoever may be lawfully entitled to receive the same or as
a court of competent jurisdiction may direct.
SECTION 7. COLLATERAL AGENT.
The Collateral Agent has been appointed to act as Collateral Agent
hereunder by the Lenders and, by their acceptance of the benefits hereof, the
other Secured Parties. The Collateral Agent shall be obligated, and shall have
the right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action
(including, without limitation, the release or substitution of Collateral),
solely in accordance with this Agreement and the Credit Agreement; provided, the
Collateral Agent shall, after payment in full of all Obligations under the
Credit Agreement and the other Senior Finance Documents, exercise, or refrain
from exercising, any remedies provided for herein in accordance with the
instructions of the holders of a majority of the aggregate notional amount (or,
with respect to any Hedging Agreement that has been terminated in accordance
with its terms, the amount then due and payable (exclusive of expenses and
similar payments but including any early termination payments then due) under
such Hedging Agreement) under all Hedging Agreements. In furtherance of the
foregoing provisions of this Section, each Hedging Lender and Ancillary Lender,
by its acceptance of the benefits hereof, agrees that it shall have no right
individually to realize upon any of the Collateral hereunder, it being
understood and agreed by such Hedging Lender or Ancillary Lender that all rights
and remedies hereunder may be exercised solely by the Collateral Agent for the
benefit of Secured Parties in accordance with the terms of this Section.
Collateral Agent may resign or be removed and a successor Collateral Agent may
be appointed, all in accordance with Clause 22.9 of the Credit Agreement. After
any retiring or removed Collateral Agent's resignation or removal as the
Collateral Agent, the provisions of this Agreement shall inure to its benefit as
to any actions taken or omitted to be taken by it under this Agreement while it
was the Collateral Agent hereunder.
-32-
SECTION 8. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the
Collateral and shall remain in full force and effect until the payment in full
of all Secured Obligations, the cancellation or termination of the Commitments
and the cancellation or expiration of all outstanding Bank Guarantees, be
binding upon each Grantor, its successors and assigns, and inure, together with
the rights and remedies of the Collateral Agent hereunder, to the benefit of the
Collateral Agent and its successors, transferees and assigns for the benefit and
on behalf of the Secured Parties. Without limiting the generality of the
foregoing, but subject to the terms of the Credit Agreement, any Secured Party
may assign or otherwise transfer any Advances held by it to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to the Secured Parties herein or otherwise. Upon the
payment in full of all Secured Obligations, the cancellation or termination of
the Commitments and the cancellation or expiration of all outstanding Bank
Guarantees, the security interest granted hereby shall terminate hereunder and
of record and all rights to the Collateral shall revert to Grantors. Upon any
such termination the Collateral Agent shall, at Grantors' expense, execute and
deliver to Grantors such documents as Grantors shall reasonably request to
evidence such termination.
SECTION 9. STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM.
The powers conferred on the Collateral Agent hereunder are solely to
protect its interest, for the benefit and on behalf of the Secured Parties, in
the Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Collateral Agent shall have no duty as to any Collateral or as
to the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral. The Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which the Collateral Agent accords its own property.
Neither the Collateral Agent nor any of its directors, officers, employees or
agents shall be liable for failure to demand, collect or realize upon all or any
part 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 otherwise. If any Grantor fails to perform any agreement
contained herein, the Collateral Agent may itself perform, or cause performance
of, such agreement, and the expenses of the Collateral Agent incurred in
connection therewith shall be payable by each Grantor.
SECTION 10. MISCELLANEOUS.
Any notice required or permitted to be given under this Agreement shall be
given in accordance with Section 25 of the Credit Agreement. No failure or delay
on the pact of the Collateral Agent in the exercise of any power, right or
privilege hereunder or under any other Senior Finance Document shall impair such
power, right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of any
other power, right or privilege. All rights and remedies existing under this
Agreement and the other Senior Finance Documents are cumulative to, and not
exclusive of, any rights or remedies otherwise available. In case any provision
in or obligation under this Agreement shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby. All
covenants hereunder shall be given independent effect so that if a particular
action or condition is not permitted by any of such covenants,
-33-
the fact that it would be permitted by an exception to, or would otherwise be
within the limitations of, another covenant shall not avoid the occurrence of a
Default or an Event of Default if such action is taken or condition exists. This
Agreement shall be binding upon and inure to the benefit of the Collateral Agent
and Grantors and their respective successors and assigns. No Grantor shall,
without the prior written consent of the Collateral Agent given in accordance
with the Credit Agreement, assign any right, duty or obligation hereunder.
Subject to the terms of the Credit Agreement, any Secured Party may assign or
grant participations in its Secured Obligations without affecting the validity
of this Agreement. This Agreement and the other Senior Finance Documents embody
the entire agreement and understanding between Grantors and the Collateral Agent
and supersede all prior agreements and understandings between such parties
relating to the subject matter hereof and thereof. Accordingly, the Senior
Finance Documents may not be contradicted by evidence of prior, contemporaneous
or subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties. This Agreement may be executed in one or more
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Agreement may be amended only in writing signed by the
Grantors and the Collateral Agent. The Grantors and the Collateral Agent hereby
irrevocably waive all rights to a trial by jury in any action, proceeding, or
counterclaim arising out of or relating to this Agreement or the transactions
contemplated hereby.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
[Remainder of page intentionally left blank]
-34-
IN WITNESS WHEREOF, each Grantor and the Collateral Agent have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
DELTA I ACQUISITION, INC.
By: /s/ XXXX XXXXXXXX
------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
DELTA I ACQUISITION, LLC
By: /s/ XXXXXXXX XXXXXXX
------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Director
BARCLAYS BANK PLC, as the Collateral Agent
By: /s/ XXXXXX XXXXXXX
------------------------------
Name: Xxxxxx Xxxxxxx
Title: Director
-35-
SCHEDULE 3.1
TO SECURITY AND PLEDGE AGREEMENT
GENERAL INFORMATION
(A) Full Legal Name, Type of Organization, Jurisdiction of Organization,
Chief Executive Office (or Residence if Grantor is a Natural Person)
and Organizational Identification Number of each Grantor:
Chief Executive Office (or
Jurisdiction of Residence if Grantor is a Organization
Full Legal Name Type of Organization Organization Natural Person) I.D. #
--------------- -------------------- --------------- ------------------------- -----------------
Delta I Acquisition, Inc. Corporation Delaware Xxxxxxxx House N/A
St. Julian's Avenue, St. Xxxxx
Port, Guernsey
Limited Liability Delaware Xxxxxxx Xxxxx, Xxxxxxxx Xxxx, X/X
Delta I Acquisition, LLC Company Wilmslow, Cheshire
(B) Other Names (including any Trade-Name or Fictitious Business Name)
under which each Grantor has conducted business for the past five (5)
years:
NAME OF GRANTOR DESCRIPTION OF AGREEMENT
--------------- ------------------------
Delta I Acquisition, Inc. N/A
(f/k/a ESG 2001-2)
(C) Changes in Name, Jurisdiction of Organization, Chief Executive Office
or Sole Place of Business (or Principal Residence if Grantor is a
Natural Person) and Corporate Structure within past five (5) years:
FULL LEGAL NAME TRADE NAME OR FICTITIOUS BUSINESS NAME
--------------- --------------------------------------
Delta I Acquisition, Inc. ESG 2001-2 (former name)
(D) Agreements pursuant to which any Grantor is found as debtor within past
five (5) years:
NAME OF GRANTOR DATE OF CHANGE DESCRIPTION OF CHANGE
--------------- -------------- ---------------------
N/A N/A N/A
(E) Financing Statements:
NAME OF GRANTOR FILING JURISDICTION(S)
--------------- ----------------------
N/A N/A
SCHEDULE 3.1-1
SCHEDULE 3.2
TO SECURITY AND PLEDGE AGREEMENT
NAME OF GRANTOR LOCATION OF EQUIPMENT AND INVENTORY
--------------- -----------------------------------
N/A
SCHEDULE 3.2-1
SCHEDULE 3.3
TO SECURITY AND PLEDGE AGREEMENT
GOVERNMENT RECEIVABLES
None.
SCHEDULE 3.4-1
SCHEDULE 3.4
TO SECURITY AND PLEDGE AGREEMENT
INVESTMENT RELATED PROPERTY
(A)
Pledged Stock:
% OF OUTSTANDING
CERTIFICATED STOCK CERTIFICATE NO. OF PLEDGED STOCK OF THE
GRANTOR STOCK ISSUER CLASS OF STOCK (Y/N) NO. PAR VALUE STOCK STOCK ISSUER
------------------------------------------------------------------------------------------------------------------------------------
Delta I Delta I Common Yes 1 $0.01 1 100%
Acquisition, Acquisition,
LLC Inc.
------------------------------------------------------------------------------------------------------------------------------------
Pledged LLC Interests:
% OF OUTSTANDING LLC
INTERESTS OF THE
LIMITED LIABILITY LIMITED LIABILITY
GRANTOR COMPANY CERTIFICATED (Y/N) CERTIFICATE NO. (IF ANY) NO. OF PLEDGED UNITS COMPANY
------------------------------------------------------------------------------------------------------------------------------------
X/X X/X X/X X/X X/X X/X
------------------------------------------------------------------------------------------------------------------------------------
Pledged Partnership Interests:
TYPE OF PARTNERSHIP % OF OUTSTANDING
INTERESTS (E.G., PARTNERSHIP INTERESTS
GRANTOR PARTNERSHIP GENERAL OR LIMITED) CERTIFICATED (Y/N) CERTIFICATE NO. (IF ANY) OF THE PARTNERSHIP
------------------------------------------------------------------------------------------------------------------------------------
X/X X/X X/X X/X X/X X/X
------------------------------------------------------------------------------------------------------------------------------------
Pledged Trust Interests:
% OF OUTSTANDING TRUST
GRANTOR TRUST CLASS OF TRUST INTERESTS CERTIFICATED (Y/N) CERTIFICATE NO. (IF ANY) INTERESTS OF THE TRUST
------------------------------------------------------------------------------------------------------------------------------------
X/X X/X X/X X/X X/X X/X
------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE 3.4-1
Pledged Debt:
ORIGINAL PRINCIPAL OUTSTANDING PRINCIPAL
GRANTOR ISSUER AMOUNT BALANCE ISSUE DATE MATURITY DATE
------------------------------------------------------------------------------------------------------------------------------------
X/X X/X X/X X/X X/X X/X
------------------------------------------------------------------------------------------------------------------------------------
Securities Account:
GRANTOR SHARE OF SECURITIES INTERMEDIARY ACCOUNT NUMBER ACCOUNT NAME
------------------------------------------------------------------------------------------------------------------------------------
N/A N/A N/A N/A
------------------------------------------------------------------------------------------------------------------------------------
Commodities Accounts:
GRANTOR NAME OF COMMODITIES INTERMEDIARY ACCOUNT NUMBER ACCOUNT NAME
------------------------------------------------------------------------------------------------------------------------------------
N/A N/A N/A N/A
------------------------------------------------------------------------------------------------------------------------------------
Deposit Accounts:
NAME OF
GRANTOR DEPOSITORY BANK ACCOUNT NUMBER ACCOUNT NAME
------------------------------------------------------------------------------------------------------------------------------------
N/A N/A N/A N/A
------------------------------------------------------------------------------------------------------------------------------------
(B)
NAME OF GRANTOR DATE OF ACQUISITION DESCRIPTION OF ACQUISITION
--------------- ------------------- --------------------------
N/A
SCHEDULE 3.4-2
SCHEDULE 3.5
TO SECURITY AND PLEDGE AGREEMENT
NAME OF GRANTOR DESCRIPTION OF MATERIAL CONTRACT
--------------- --------------------------------
Delta I Acquisition, Inc. Agreement and Plan of Merger, dated as of
August 1, 2002, by and among Four Seasons
Health Care Limited, Delta I Acquisition,
Inc. and Omega Worldwide, Inc.
Stock Purchase Agreement, dated as of
August 1, 2002, by and among Four Seasons
Health Care Limited, Delta I Acquisition,
Inc. and Omega Healthcare Investors Inc.
SCHEDULE 3.5-1
SCHEDULE 3.6
TO SECURITY AND PLEDGE AGREEMENT
NAME OF GRANTOR DESCRIPTION OF LETTERS OF CREDIT
--------------- --------------------------------
None.
SCHEDULE 3.6-1
SCHEDULE 3.7
TO SECURITY AND PLEDGE AGREEMENT
INTELLECTUAL PROPERTY
(A) Copyrights
None.
(B) Copyright Licenses
None.
(C) Patents
None.
(D) Patent Licenses
None.
(E) Trademarks
None.
(F) Trademark Licenses
None.
(G) Trade Secret Licenses
None.
(H) Intellectual Property Matters
None.
SCHEDULE 3.7-1
SCHEDULE 3.8
TO SECURITY AND PLEDGE AGREEMENT
NAME OF GRANTOR COMMERCIAL TORT CLAIMS
--------------- ----------------------
None.
SCHEDULE 3.8-1
EXHIBIT A
TO SECURITY AND PLEDGE AGREEMENT
PLEDGE SUPPLEMENT
This PLEDGE SUPPLEMENT, dated _____________, is delivered pursuant to
the Security and Pledge Agreement, dated as of July __, 2002 (as it may be from
time to time amended, restated, modified or supplemented, the "SECURITY
AGREEMENT"), among [NAME OF GRANTOR], the other Grantors named therein, and
Barclays Bank PLC as the Collateral Agent. Capitalized terms used herein not
otherwise defined herein shall have the meanings ascribed thereto in the
Security Agreement.
Grantor hereby confirms the grant to the Collateral Agent set forth in
the Security Agreement of, and does hereby grant to the Collateral Agent, a
security interest in all of Grantor's right, title and interest in and to all
Collateral to secure the Secured Obligations, in each case whether now or
hereafter existing or in which Grantor now has or hereafter acquires an interest
and wherever the same may be located [and hereby agrees to be bound by the terms
of the Security Agreement as a Grantor and as an Additional Grantor thereunder
as though it had been an original signatory thereto]. Grantor represents and
warrants that the attached Supplements to Schedules accurately and completely
set forth all additional information required pursuant to the Security Agreement
and hereby agrees that such Supplements to Schedules shall constitute part of
the Schedules to the Security Agreement.
IN WITNESS WHEREOF, Grantor has caused this Pledge Supplement to be
duly executed and delivered by its duly authorized officer as of the date first
above written
[NAME OF GRANTOR]
By:
-------------------------------------
Name:
Title:
EXHIBIT A-1
SUPPLEMENT TO SCHEDULE 3.1
TO SECURITY AND PLEDGE AGREEMENT
Additional Information
(A) Full Legal Name, Type of Organization, Jurisdiction of Organization,
Chief Executive Office (or Residence if Grantor is a Natural Person)
and Organizational Identification Number of each Grantor:
Chief Executive
Office (or
Residence if
Type of Jurisdiction of Grantor is a
Full Legal Name Organization Organization Natural Person) Organization I.D. #
--------------- ------------ --------------- --------------- -------------------
(B) Other Names (including any Trade-Name or Fictitious Business Name)
under which each Grantor has conducted business for the past five (5)
years:
NAME OF GRANTOR DESCRIPTION OF AGREEMENT
--------------- ------------------------
(C) Changes in Name, Jurisdiction of Organization, Chief Executive Office
or Sole Place of Business (or Principal Residence if Grantor is a
Natural Person) and Corporate Structure within past five (5) years:
FULL LEGAL NAME TRADE NAME OR FICTITIOUS BUSINESS NAME
--------------- --------------------------------------
(D) Agreements pursuant to which any Grantor is found as debtor within past
five (5) years:
NAME OF GRANTOR DATE OF CHANGE DESCRIPTION OF CHANGE
--------------- -------------- ---------------------
(E) Financing Statements:
NAME OF GRANTOR FILING JURISDICTION(S)
--------------- ----------------------
EXHIBIT A-2
SUPPLEMENT TO SCHEDULE 3.2
TO SECURITY AND PLEDGE AGREEMENT
Additional Information:
NAME OF GRANTOR LOCATION OF EQUIPMENT AND INVENTORY
--------------- -----------------------------------
EXHIBIT A-3
SUPPLEMENT TO SCHEDULE 3.3
TO SECURITY AND PLEDGE AGREEMENT
Additional Information:
Government Receivables:
EXHIBIT A-4
SUPPLEMENT TO SCHEDULE 3.4
TO SECURITY AND PLEDGE AGREEMENT
Additional Information:
(A)
Pledged Stock:
Pledged Partnership Interests:
Pledged LLC Interests:
Pledged Trust Interests:
Pledged Debt:
Securities Account:
Deposit Accounts:
(B)
NAME OF GRANTOR DATE OF ACQUISITION DESCRIPTION OF ACQUISITION
--------------- ------------------- --------------------------
EXHIBIT A-5
SUPPLEMENT TO SCHEDULE 3.5
TO SECUITY AND PLEGE AGREEMENT
Additional Information:
NAME OF GRANTOR DESCRIPTION OF MATERIAL CONTRACT
--------------- --------------------------------
EXHIBIT A-6
SUPPLEMENT TO SCHEDULE 3.6
TO SECURITY AND PLEDGE AGREEMENT
Additional Information:
NAME OF GRANTOR DESCRIPTION OF LETTERS OF CREDIT
--------------- --------------------------------
EXHIBIT A-7
SUPPLEMENT TO SCHEDULE 3.7
TO SECURITY AND PLEDGE AGREEMENT
Additional Information:
(A) Copyrights
(B) Copyright Licenses
(C) Patents
(D) Patent Licenses
(E) Trademarks
(F) Trademark Licenses
(G) Trade Secret Licenses
(H) Intellectual Property Matters
EXHIBIT A-8
SUPPLEMENT TO SCHEDULE 3.8
TO SECURITY AND PLEDGE AGREEMENT
Additional Information:
NAME OF GRANTOR COMMERCIAL TORT CLAIMS
--------------- ----------------------
EXHIBIT A-9
EXHIBIT B
TO SECURITY AND PLEDGE AGREEMENT
UNCERTIFICATED SECURITIES CONTROL AGREEMENT
This Uncertificated Securities Control Agreement (this "Agreement")
dated as of _________, 2002 among __________________ (the "PLEDGOR"), Barclays
Bank PLC, as collateral agent for the Secured Parties, (the "COLLATERAL AGENT")
and ______________, a _________________ corporation (the "ISSUER"). Capitalized
terms used but not defined herein shall have the meaning assigned in the
Security and Pledge Agreement dated [as of the date hereof], among the Pledgor,
the other Grantors party thereto and the Collateral Agent (the "SECURITY
Agreement"). All references herein to the "UCC" shall mean the Uniform
Commercial Code as in effect in the State of New York.
SECTION 1. REGISTERED OWNERSHIP OF SHARES. The Issuer hereby confirms
and agrees that as of the date hereof the Pledgor is the registered owner of
___________ shares of the Issuer's [common] stock (the "PLEDGED SHARES") and the
Issuer shall not change the registered owner of the Pledged Shares without the
prior written consent of the Collateral Agent.
SECTION 2. INSTRUCTIONS. If at any time the Issuer shall receive
instructions originated by the Collateral Agent relating to the Pledged Shares,
the Issuer shall comply with such instructions without further consent by the
Pledgor or any other person.
SECTION 3. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE ISSUER. The
Issuer hereby represents and warrants to the Collateral Agent:
(a) It has not entered into, and until the termination of this
Agreement will not enter into, any agreement with any other person relating the
Pledged Shares pursuant to which it has agreed to comply with instructions
issued by such other person; and
(b) It has not entered into, and until the termination of this
Agreement will not enter into, any agreement with the Pledgor or the Collateral
Agent purporting to limit or condition the obligation of the Issuer to comply
with Instructions as set forth in Section 2 hereof.
(c) Except for the claims and interest of the Collateral Agent and of
the Pledgor in the Pledged Shares, the Issuer does not know of any claim to, or
interest in, the Pledged Shares. If any person asserts any Security Interest,
encumbrance or adverse claim (including any writ, garnishment, judgment, warrant
of attachment, execution or similar process) against the Pledged Shares, the
Issuer will promptly notify the Collateral Agent and the Pledgor thereof.
(d) This Agreement is the valid and legally binding obligation of the
Issuer.
SECTION 4. CHOICE OF LAW. This Agreement shall be governed by the laws
of the State of [New York].
SECTION 5. CONFLICT WITH OTHER AGREEMENTS. In the event of any conflict
between this Agreement (or any portion thereof) and any other agreement now
existing or hereafter entered into, the terms of this Agreement shall prevail.
No amendment or modification of this Agreement or waiver of any right hereunder
shall be binding on any party hereto unless it is in writing and is signed by
all of the parties hereto.
EXHIBIT B-1
SECTION 6. VOTING RIGHTS. Until such time as the Collateral Agent shall
otherwise instruct the Issuer in writing, the Pledgor shall have the right to
vote the Pledged Shares.
SECTION 7. SUCCESSORS; ASSIGNMENT. The terms of this Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors or heirs and personal representatives who obtain
such rights solely by operation of law. The Collateral Agent may assign its
rights hereunder only with the express written consent of the Issuer and by
sending written notice of such assignment to the Pledgor.
SECTION 8. INDEMNIFICATION OF ISSUER. The Pledgor and the Collateral
Agent hereby agree that (a) the Issuer is released from any and all liabilities
to the Pledgor and the Collateral Agent arising from the terms of this Agreement
and the compliance of the Issuer with the terms hereof, except to the extent
that such liabilities arise from the Issuer's negligence and (b) the Pledgor,
its successors and assigns shall at all times indemnify and save harmless the
Issuer from and against any and all claims, actions and suits of others arising
out of the terms of this Agreement or the compliance of the Issuer with the
terms hereof, except to the extent that such arises from the Issuer's
negligence, and from and against any and all liabilities, losses, damages,
costs, charges, counsel fees and other expenses of every nature and character
arising by reason of the same, until the termination of this Agreement.
SECTION 9. NOTICES. Any notice, request or other communication required
or permitted to be given under this Agreement shall be in writing and deemed to
have been properly given when delivered in person, or when sent by telecopy or
other electronic means and electronic confirmation of error free receipt is
received or two (2) days after being sent by certified or registered United
States mail, return receipt requested, postage prepaid, addressed to the party
at the address set forth below.
Pledgor: [INSERT ADDRESS]
Attention:
Telecopier:
Collateral Agent: [INSERT ADDRESS]
Attention:
Telecopier:
Issuer: [INSERT ADDRESS]
Attention:
Telecopier:
Any party may change its address for notices in the manner set forth
above.
SECTION 10. TERMINATION. The obligations of the Issuer to the
Collateral Agent pursuant to this Control Agreement shall continue in effect
until the security interests of the Collateral Agent in the Pledged Shares have
been terminated pursuant to the terms of the Security Agreement and the
Collateral Agent has notified the Issuer of such termination in writing. The
Collateral Agent agrees to provide Notice of Termination in substantially the
form of Exhibit A hereto to the Issuer upon the request of the Pledgor on or
after the termination of the Collateral Agent's security interest in the Pledged
Shares pursuant to the terms of the Security Agreement. The termination of this
Agreement shall not terminate
EXHIBIT B-2
the Pledged Shares or alter the obligations of the Issuer to the Pledgor
pursuant to any other agreement with respect to the Pledged Shares.
EXHIBIT B-3
SECTION 11. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, all of which shall constitute one and the same instrument, and
any party hereto may execute this Agreement by signing and delivering one or
more counterparts.
[NAME OF PLEDGOR]
By:
-------------------------------------------
Name:
Title:
BARCLAYS BANK PLC,
as Collateral Agent
By:
-------------------------------------------
Name:
Title:
[NAME OF ISSUER]
By:
-------------------------------------------
Name:
Title:
EXHIBIT B-4
EXHIBIT A
TO UNCERTIFICATED SECURITIES CONTROL AGREEMENT
[Letterhead of Collateral Agent]
[Date]
[Name and Address of Issuer]
Attention:
---------------------------------------
Re: TERMINATION OF CONTROL AGREEMENT
--------------------------------
You are hereby notified that the Uncertificated Securities Control
Agreement between you, [THE PLEDGOR] and the undersigned (a copy of which is
attached) is terminated and you have no further obligations to the undersigned
pursuant to such Agreement. Notwithstanding any previous instructions to you,
you are hereby instructed to accept all future directions with respect to
Pledged Shares (as defined in the Uncertificated Control Agreement) from [THE
PLEDGOR]. This notice terminates any obligations you may have to the undersigned
with respect to the Pledged Shares, however nothing contained in this notice
shall alter any obligations which you may otherwise owe to [THE PLEDGOR]
pursuant to any other agreement.
You are instructed to deliver a copy of this notice by facsimile
transmission to [insert name of Pledgor].
Very truly yours,
BARCLAYS BANK PLC,
as Collateral Agent
By:
--------------------------------
Name:
Title:
EXHIBIT B-A-1
EXHIBIT C
TO SECURITY AND PLEDGE AGREEMENT
SECURITIES ACCOUNT CONTROL AGREEMENT
This Securities Account Control Agreement dated as of _______ (this
"AGREEMENT") among ___________________________ (the "DEBTOR"), Barclays Bank
PLC, as collateral agent for the Secured Parties (the "COLLATERAL AGENT") and
_____________, in its capacity as a "securities intermediary" as defined in
Section 8-102 of the UCC (in such capacity, the "SECURITIES INTERMEDIARY").
Capitalized terms used but not defined herein shall have the meaning assigned
thereto in the Pledge and Security Agreement, dated [as of the date hereof],
among the Debtor, the other Grantors party thereto and the Collateral Agent (as
amended, restated, supplemented or otherwise modified from time to time, the
"SECURITY AGREEMENT"). All references herein to the "UCC" shall mean the Uniform
Commercial Code as in effect in the State of New York.
SECTION 1. ESTABLISHMENT OF SECURITIES ACCOUNT. The Securities
Intermediary hereby confirms and agrees that:
(a) The Securities Intermediary has established account number
[IDENTIFY ACCOUNT NUMBER] in the name "[IDENTIFY EXACT TITLE OF ACCOUNT]" (such
account and any successor account, the "SECURITIES ACCOUNT") and the Securities
Intermediary shall not change the name or account number of the Securities
Account without the prior written consent of the Collateral Agent;
(b) All securities or other property underlying any financial assets
credited to the Securities Account shall be registered in the name of the
Securities Intermediary, indorsed to the Securities Intermediary or in blank or
credited to another securities account maintained in the name of the Securities
Intermediary and in no case will any financial asset credited to the Securities
Account be registered in the name of the Debtor, payable to the order of the
Debtor or specially indorsed to the Debtor except to the extent the foregoing
have been specially indorsed to the Securities Intermediary or in blank;
(c) All property delivered to the Securities Intermediary pursuant to
the Security Agreement will be promptly credited to the Securities Account; and
(d) The Securities Account is a "securities account" within the meaning
of Section 8-501 of the UCC.
SECTION 2. "FINANCIAL ASSETS" ELECTION. The Securities Intermediary
hereby agrees that each item of property (including, without limitation, any
investment property, financial asset, security, instrument, general intangible
or cash) credited to the Securities Account shall be treated as a "financial
asset" within the meaning of Section 8-102(a)(9) of the UCC.
SECTION 3. CONTROL OF THE SECURITIES ACCOUNT. If at any time the
Securities Intermediary shall receive any order from the Collateral Agent
directing transfer or redemption of any financial asset relating to the
Securities Account, the Securities Intermediary shall comply with such
entitlement order without further consent by the Debtor or any other person. If
the Debtor is otherwise
EXHIBIT C-1
entitled to issue entitlement orders and such orders conflict with any
entitlement order issued by the Collateral Agent, the Securities Intermediary
shall follow the orders issued by the Collateral Agent.
SECTION 4. SUBORDINATION OF SECURED PARTY; WAIVER OF SET-OFF. In the
event that the Securities Intermediary has or subsequently obtains by agreement,
by operation of law or otherwise a security interest in the Securities Account
or any security entitlement credited thereto, the Securities Intermediary hereby
agrees that such security interest shall be subordinate to the security interest
of the Collateral Agent. The financial assets and other items deposited to the
Securities Account will not be subject to deduction, set-off, banker's Security
Interest, or any other right in favor of any person other than the Collateral
Agent (except that the Securities Intermediary may set off (i) all amounts due
to the Securities Intermediary in respect of customary fees and expenses for the
routine maintenance and operation of the Securities Account and (ii) the face
amount of any checks which have been credited to such Securities Account but are
subsequently returned unpaid because of uncollected or insufficient funds).
SECTION 5. CHOICE OF LAW. This Agreement and the Securities Account
shall each be governed by the laws of the State of [New York]. Regardless of any
provision in any other agreement, for purposes of the UCC, [New York] shall be
deemed to be the Securities Intermediary's jurisdiction (within the meaning of
Section 8-110 of the UCC) and the Securities Account (as well as the [Securities
Entitlements] related thereto) shall be governed by the laws of the State of
[New York].
SECTION 6. CONFLICT WITH OTHER AGREEMENTS.
(a) In the event of any conflict between this Agreement (or any portion
thereof) and any other agreement now existing or hereafter entered into, the
terms of this Agreement shall prevail;
(b) No amendment or modification of this Agreement or waiver of any
right hereunder shall be binding on any party hereto unless it is in writing and
is signed by all of the parties hereto;
(c) The Securities Intermediary hereby confirms and agrees that:
(i) There are no other agreements entered into between the
Securities Intermediary and the Debtor with respect to the Securities
Account;
(ii) It has not entered into, and until the termination of
this Agreement, will not enter into, any agreement with any other
person relating to the Securities Account and/or any financial assets
credited thereto pursuant to which it has agreed to comply with
entitlement orders (as defined in Section 8-102(a)(8) of the UCC) of
such other person; and
(iii) It has not entered into, and until the termination of
this Agreement, will not enter into, any agreement with the Debtor or
the Collateral Agent purporting to limit or condition the obligation of
the Securities Intermediary to comply with entitlement orders as set
forth in Section 3 hereof.
SECTION 7. ADVERSE CLAIMS. Except for the claims and interest of the
Collateral Agent and of the Debtor in the Securities Account, the Securities
Intermediary does not know of any claim to, or interest in, the Securities
Account or in any "financial asset" (as defined in Section 8-102(a) of the UCC)
credited thereto. If any person asserts any Security Interest, encumbrance or
adverse claim (including any writ, garnishment, judgment, warrant of attachment,
execution or similar process) against the Securities Account or in any financial
asset carried therein, the Securities Intermediary will promptly notify the
Collateral Agent and the Debtor thereof.
EXHIBIT C-2
SECTION 8. MAINTENANCE OF SECURITIES ACCOUNT. In addition to, and not
in lieu of, the obligation of the Securities Intermediary to honor entitlement
orders as agreed in Section 3 hereof, the Securities Intermediary agrees to
maintain the Securities Account as follows:
(a) NOTICE OF SOLE CONTROL. If at any time the Collateral Agent
delivers to the Securities Intermediary a Notice of Sole Control in
substantially the form set forth in Exhibit A hereto, the Securities
Intermediary agrees that after receipt of such notice, it will take all
instruction with respect to the Securities Account solely from the Collateral
Agent.
(b) VOTING RIGHTS. Until such time as the Securities Intermediary
receives a Notice of Sole Control pursuant to subsection (a) of this Section 8,
the Debtor shall direct the Securities Intermediary with respect to the voting
of any financial assets credited to the Securities Account.
(c) PERMITTED INVESTMENTS. Until such time as the Securities
Intermediary receives a Notice of Sole Control signed by the Collateral Agent,
the Debtor shall direct the Securities Intermediary with respect to the
selection of investments to be made for the Securities Account; provided,
however, that the Securities Intermediary shall not honor any instruction to
purchase any investments other than investments of a type described on Exhibit B
hereto.
(d) STATEMENTS AND CONFIRMATIONS. The Securities Intermediary will
promptly send copies of all statements, confirmations and other correspondence
concerning the Securities Account and/or any financial assets credited thereto
simultaneously to each of the Debtor and the Collateral Agent at the address for
each set forth in Section 12 of this Agreement.
(e) TAX REPORTING. All items of income, gain, expense and loss
recognized in the Securities Account shall be reported to the Internal Revenue
Service and all state and local taxing authorities under the name and taxpayer
identification number of the Debtor.
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SECURITIES
INTERMEDIARY. The Securities Intermediary hereby makes the following
representations, warranties and covenants:
(a) The Securities Account has been established as set forth in Section
1 above and such Securities Account will be maintained in the manner set forth
herein until termination of this Agreement; and
(b) This Agreement is the valid and legally binding obligation of the
Securities Intermediary.
SECTION 10. INDEMNIFICATION OF SECURITIES INTERMEDIARY. The Debtor and
the Collateral Agent hereby agree that (a) the Securities Intermediary is
released from any and all liabilities to the Debtor and the Collateral Agent
arising from the terms of this Agreement and the compliance of the Securities
Intermediary with the terms hereof, except to the extent that such liabilities
arise from the Securities Intermediary's negligence and (b) the Debtor, its
successors and assigns shall at all times indemnify and save harmless the
Securities Intermediary from and against any and all claims, actions and suits
of others arising out of the terms of this Agreement or the compliance of the
Securities Intermediary with the terms hereof, except to the extent that such
arises from the Securities Intermediary's negligence, and from and against any
and all liabilities, losses, damages, costs, charges, counsel fees and other
expenses of every nature and character arising by reason of the same, until the
termination of this Agreement.
EXHIBIT C-3
SECTION 11. SUCCESSORS; ASSIGNMENT. The terms of this Agreement shall
be binding upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors or heirs and personal representatives who obtain
such rights solely by operation of law. The Collateral Agent may assign its
rights hereunder only with the express written consent of the Securities
Intermediary and by sending written notice of such assignment to the Debtor.
SECTION 12. NOTICES. Any notice, request or other communication
required or permitted to be given under this Agreement shall be in writing and
deemed to have been properly given when delivered in person, or when sent by
telecopy or other electronic means and
electronic confirmation of error free receipt is received or two (2) days after
being sent by certified or registered United States mail, return receipt
requested, postage prepaid, addressed to the party at the address set forth
below.
Debtor: [INSERT ADDRESS]
Attention:
Telecopier:
Collateral Agent: [INSERT ADDRESS]
Attention:
Telecopier:
Securities Intermediary: [INSERT ADDRESS]
Attention:
Telecopier:
Any party may change its address for notices in the manner set forth
above.
SECTION 13. TERMINATION. The obligations of the Securities Intermediary
to the Collateral Agent pursuant to this Agreement shall continue in effect
until the security interest of the Collateral Agent in the Securities Account
has been terminated pursuant to the terms of the Security Agreement and the
Collateral Agent has notified the Securities Intermediary of such termination in
writing. The Collateral Agent agrees to provide Notice of Termination in
substantially the form of Exhibit C hereto to the Securities Intermediary upon
the request of the Debtor on or after the termination of the Collateral Agent's
security interest in the Securities Account pursuant to the terms of the
Security Agreement. The termination of this Agreement shall not terminate the
Securities Account or alter the obligations of the Securities Intermediary to
the Debtor pursuant to any other agreement with respect to the Securities
Account.
SECTION 14. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, all of which shall constitute one and the same instrument, and
any party hereto may execute this Agreement by signing and delivering one or
more counterparts.
EXHIBIT C-4
IN WITNESS WHEREOF, the parties hereto have caused this Securities
Account Control Agreement to be executed as of the date first above written by
their respective officers thereunto duly authorized.
[DEBTOR]
By:
--------------------------------------------
Name:
Title:
BARCLAYS BANK PLC,
as Collateral Agent
By:
--------------------------------------------
Name:
Title:
[NAME OF SECURITIES INTERMEDIARY],
as Securities Intermediary
By:
--------------------------------------------
Name:
Title:
EXHIBIT C-5
EXHIBIT A
TO SECURITIES ACCOUNT CONTROL AGREEMENT
[Letterhead of Collateral Agent]
[Date]
[Name and Address of Securities Intermediary]
Attention:
Re: NOTICE OF SOLE CONTROL
----------------------
Ladies and Gentlemen:
As referenced in the Securities Account Control Agreement dated as
of__________ among [NAME OF THE DEBTOR], you and the undersigned (a copy of
which is attached), we hereby give you notice of our sole control over
securities account number ________________________, (the "SECURITIES ACCOUNT")
and all financial assets credited thereto. You are hereby instructed not to
accept any direction, instructions or entitlement orders with respect to the
Securities Account or the financial assets credited thereto from any person
other than the undersigned, unless otherwise ordered by a court of competent
jurisdiction.
You are instructed to deliver a copy of this notice by facsimile
transmission to [NAME OF THE DEBTOR].
Very truly yours,
BARCLAYS BANK PLC,
as Collateral Agent
By:
---------------------------------
Name:
Title:
cc: [NAME OF THE DEBTOR].
C-A-1
EXHIBIT B
TO SECURITIES ACCOUNT CONTROL AGREEMENT
PERMITTED INVESTMENTS
[TO COME]
B-1
EXHIBIT C
TO SECURITIES ACCOUNT CONTROL AGREEMENT
[Letterhead of the Collateral Agent]
[Date]
[Name and Address of Securities Intermediary]
Attention:
Re: TERMINATION OF SECURITIES ACCOUNT CONTROL AGREEMENT
---------------------------------------------------
You are hereby notified that the Securities Account Control Agreement
dated as of among you, [NAME OF THE DEBTOR] and the undersigned (a copy of which
is attached) is terminated and you have no further obligations to the
undersigned pursuant to such Agreement. Notwithstanding any previous
instructions to you, you are hereby instructed to accept all future directions
with respect to account number(s) from [NAME OF THE DEBTOR]. This notice
terminates any obligations you may have to the undersigned with respect to such
account, however nothing contained in this notice shall alter any obligations
which you may otherwise owe to [NAME OF THE DEBTOR] pursuant to any other
agreement.
You are instructed to deliver a copy of this notice by facsimile
transmission to [NAME OF THE DEBTOR].
Very truly yours,
BARCLAYS BANK PLC,
as Collateral Agent
By:
--------------------------------
Name:
Title:
C-1
EXHIBIT D
TO SECURITY AND PLEDGE AGREEMENT
DEPOSIT ACCOUNT CONTROL AGREEMENT
This Deposit Account Control Agreement dated as of __________ (this
"AGREEMENT") among _______________________ (the "DEBTOR"), ___________, as
collateral agent for the Secured Parties (the "COLLATERAL AGENT") and _________,
in its capacity as a "bank" as defined in Section 9-102 of the UCC (in such
capacity, the "FINANCIAL INSTITUTION"). Capitalized terms used but not defined
herein shall have the meaning assigned thereto in the Pledge and Security
Agreement, dated [as of the date hereof], between the Debtor, the other Grantors
party thereto and the Collateral Agent (as amended, restated, supplemented or
otherwise modified from time to time, the "SECURITY AGREEMENT"). All references
herein to the "UCC" shall mean the Uniform Commercial Code as in effect in the
State of [New York].
SECTION 1. ESTABLISHMENT OF DEPOSIT ACCOUNT. The Financial Institution
hereby confirms and agrees that:
(a) The Financial Institution has established account number [IDENTIFY
ACCOUNT NUMBER] in the name "[IDENTIFY EXACT TITLE OF ACCOUNT]" (such account
and any successor account, the "DEPOSIT ACCOUNT") and the Financial Institution
shall not change the name or account number of the Deposit Account without the
prior written consent of the Collateral Agent; and
(b) The Deposit Account is a "deposit account" within the meaning of
Section 9-102(a)(29) of the UCC.
SECTION 2. CONTROL OF THE DEPOSIT ACCOUNT. If at any time the Financial
Institution shall receive any instructions originated by the Collateral Agent
directing the disposition of funds in the Deposit Account, the Financial
Institution shall comply with such instructions without further consent by the
Debtor or any other person. The Financial Institution hereby acknowledges that
it has received notice of the Security Interest of the Collateral Agent in the
Deposit Account and hereby acknowledges and consents to such Security Interest.
SECTION 3. SUBORDINATION OF SECURED PARTY; WAIVER OF SET-OFF. In the
event that the Financial Institution has or subsequently obtains by agreement,
by operation of law or otherwise a security interest in the Deposit Account or
any funds credited thereto, the Financial Institution hereby agrees that such
security interest shall be subordinate to the security interest of the
Collateral Agent. Money and other items credited to the Deposit Account will not
be subject to deduction, set-off, banker's Security Interest, or any other right
in favor of any person other than the Collateral Agent (except that the
Financial Institution may set off (i) all amounts due to the Financial
Institution in respect of customary fees and expenses for the routine
maintenance and operation of the Deposit Account and (ii) the face amount of any
checks which have been credited to such Deposit Account but are subsequently
returned unpaid because of uncollected or insufficient funds).
SECTION 4. CHOICE OF LAW. This Agreement and the Deposit Account shall
each be governed by the laws of the State of [New York]. Regardless of any
provision in any other agreement, for purposes of the UCC, [New York] shall be
deemed to be the Financial Institution's jurisdiction (within the meaning of
Section 9-304 of the UCC) and the Deposit Account shall be governed by the laws
of the State of [New York].
D-1
SECTION 5. CONFLICT WITH OTHER AGREEMENTS.
(a) In the event of any conflict between this Agreement (or any portion
thereof) and any other agreement now existing or hereafter entered into, the
terms of this Agreement shall prevail;
(b) No amendment or modification of this Agreement or waiver of any
right hereunder shall be binding on any party hereto unless it is in writing and
is signed by all of the parties hereto; and
(c) The Financial Institution hereby confirms and agrees that:
(i) There are no other agreements entered into between the
Financial Institution and the Debtor with respect to the Deposit
Account; and
(ii) It has not entered into, and until the termination of
this Agreement, will not enter into, any agreement with any other
person relating the Deposit Account and/or any funds credited thereto
pursuant to which it has agreed to comply with instructions originated
by such persons as contemplated by Section 9-104 of the UCC.
SECTION 6. ADVERSE CLAIMS. The Financial Institution does not know of
any Security Interests, claims or encumbrances relating to the Deposit Account.
If any person asserts any Security Interest, encumbrance or adverse claim
(including any writ, garnishment, judgment, warrant of attachment, execution or
similar process) against the Deposit Account, the Financial Institution will
promptly notify the Collateral Agent and the Debtor thereof.
SECTION 7. MAINTENANCE OF DEPOSIT ACCOUNT. In addition to, and not in
lieu of, the obligation of the Financial Institution to honor instructions as
set forth in Section 2 hereof, the Financial Institution agrees to maintain the
Deposit Account as follows:
(a) STATEMENTS AND CONFIRMATIONS. The Financial Institution will
promptly send copies of all statements, confirmations and other correspondence
concerning the Deposit Account simultaneously to each of the Debtor and the
Collateral Agent at the address for each set forth in Section 11 of this
Agreement; and
(b) TAX REPORTING. All interest, if any, relating to the Deposit
Account, shall be reported to the Internal Revenue Service and all state and
local taxing authorities under the name and taxpayer identification number of
the Debtor.
SECTION 8. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE FINANCIAL
INSTITUTION. The Financial Institution hereby makes the following
representations, warranties and covenants:
(a) The Deposit Account has been established as set forth in Section 1
and such Deposit Account will be maintained in the manner set forth herein until
termination of this Agreement; and
(b) This Agreement is the valid and legally binding obligation of the
Financial Institution.
SECTION 9. INDEMNIFICATION OF FINANCIAL INSTITUTION. The Debtor and the
Collateral Agent hereby agree that (a) the Financial Institution is released
from any and all liabilities to the Debtor and the Collateral Agent arising from
the terms of this Agreement and the compliance of the Financial
D-2
Institution with the terms hereof, except to the extent that such liabilities
arise from the Financial Institution's negligence and (b) the Debtor, its
successors and assigns shall at all times indemnify and save harmless the
Financial Institution from and against any and all claims, actions and suits of
others arising out of the terms of this Agreement or the compliance of the
Financial Institution with the terms hereof, except to the extent that such
arises from the Financial Institution's negligence, and from and against any and
all liabilities, losses, damages, costs, charges, counsel fees and other
expenses of every nature and character arising by reason of the same, until the
termination of this Agreement.
SECTION 10. SUCCESSORS; ASSIGNMENT. The terms of this Agreement shall
be binding upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors or heirs and personal representatives who obtain
such rights solely by operation of law. The Collateral Agent may assign its
rights hereunder only with the express written consent of the Financial
Institution and by sending written notice of such assignment to the Debtor.
SECTION 11. NOTICES. Any notice, request or other communication
required or permitted to be given under this Agreement shall be in writing and
deemed to have been properly given when delivered in person, or when sent by
telecopy or other electronic means and electronic confirmation of error free
receipt is received or two (2) days after being sent by certified or registered
United States mail, return receipt requested, postage prepaid, addressed to the
party at the address set forth below.
Debtor: [INSERT ADDRESS]
Attention:
Telecopier:
Collateral Agent: [INSERT ADDRESS]
Attention:
Telecopier:
Financial Institution: [INSERT ADDRESS]
Attention:
Telecopier:
Any party may change its address for notices in the manner set forth
above.
SECTION 12. TERMINATION. The obligations of the Financial Institution
to the Collateral Agent pursuant to this Agreement shall continue in effect
until the security interest of the Collateral Agent in the Deposit Account has
been terminated pursuant to the terms of the Security Agreement and the
Collateral Agent has notified the Financial Institution of such termination in
writing. The Collateral Agent agrees to provide Notice of Termination in
substantially the form of Exhibit A hereto to the Financial Institution upon the
request of the Debtor on or after the termination of the Collateral Agent's
security interest in the Deposit Account pursuant to the terms of the Security
Agreement. The termination of this Agreement shall not terminate the Deposit
Account or alter the obligations of the Financial Institution to the Debtor
pursuant to any other agreement with respect to the Deposit Account.
SECTION 13. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, all of which shall constitute one and the same instrument, and
any party hereto may execute this Agreement by signing and delivering one or
more counterparts.
D-3
IN WITNESS WHEREOF, the parties hereto have caused this Deposit Account
Control Agreement to be executed as of the date first above written by their
respective officers thereunto duly authorized.
[DEBTOR]
By:
--------------------------------
Name:
Title:
BARCLAYS BANK PLC,
as Collateral Agent
By:
--------------------------------
Name:
Title:
[NAME OF FINANCIAL INSTITUTION],
as Financial Institution
By:
--------------------------------
Name:
Title:
D-4
EXHIBIT A
TO DEPOSIT ACCOUNT CONTROL AGREEMENT
[Letterhead of the Collateral Agent]
[Date]
[Name and Address of Financial Institution]
Attention:
Re: TERMINATION OF DEPOSIT ACCOUNT CONTROL AGREEMENT
------------------------------------------------
You are hereby notified that the Deposit Account Control Agreement
dated as of ______, 2000 among [NAME OF THE DEBTOR], you and the undersigned (a
copy of which is attached) is terminated and you have no further obligations to
the undersigned pursuant to such Agreement. Notwithstanding any previous
instructions to you, you are hereby instructed to accept all future directions
with respect to account number(s) __________ from [NAME OF THE DEBTOR]. This
notice terminates any obligations you may have to the undersigned with respect
to such account, however nothing contained in this notice shall alter any
obligations which you may otherwise owe to [NAME OF THE DEBTOR] pursuant to any
other agreement.
You are instructed to deliver a copy of this notice by facsimile
transmission to [NAME OF THE DEBTOR].
Very truly yours,
BARCLAYS BANK PLC,
as Collateral Agent
By:
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Name:
Title:
D-A-1
