Exhibit 10.3
EXECUTION COPY
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GUARANTEE AND COLLATERAL AGREEMENT
made by
ANR HOLDINGS, LLC,
ALPHA NATURAL RESOURCES, LLC
and certain Subsidiaries of Alpha Natural Resources, LLC
in favor of
CITICORP NORTH AMERICA, INC., as Collateral Agent
Dated as of May 28, 2004
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TABLE OF CONTENTS
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SECTION 1. DEFINED TERMS....................................................................... 2
1.1. Definitions ........................................................................ 2
1.2. Other Definitional Provisions....................................................... 10
SECTION 2. GUARANTEE........................................................................... 11
2.1. Guarantee .......................................................................... 11
2.2. Rights of Reimbursement, Contribution and Subrogation............................... 12
2.3. Amendments, etc. with respect to the Borrower Obligations........................... 13
2.4. Guarantee Absolute and Unconditional................................................ 14
2.5. Reinstatement ...................................................................... 14
2.6. Payments ........................................................................... 15
SECTION 3. GRANT OF SECURITY INTEREST; CONTINUING LIABILITY UNDER COLLATERAL.................. 15
SECTION 4. REPRESENTATIONS AND WARRANTIES...................................................... 17
4.1. Representations in Credit Agreement................................................. 17
4.2. Title; No Other Liens............................................................... 17
4.3. Perfected First Priority Liens...................................................... 17
4.4. Name; Jurisdiction of Organization, etc............................................. 18
4.5. Inventory and Equipment............................................................. 18
4.6. Farm Products ...................................................................... 19
4.7. Investment Property................................................................. 19
4.8. Receivables ........................................................................ 20
4.9. Intellectual Property............................................................... 21
4.10. Letters of Credit and Letter of Credit Rights....................................... 23
4.11. Commercial Tort Claims.............................................................. 23
4.12. Contracts .......................................................................... 23
SECTION 5. COVENANTS........................................................................... 24
5.1. Covenants in Credit Agreement....................................................... 24
5.2. Delivery and Control of Instruments, Chattel Paper, Negotiable Documents,
Investment Property and Deposit Accounts............................................ 24
5.3. Maintenance of Insurance............................................................ 26
5.4. Payment of Obligations.............................................................. 27
5.5. Maintenance of Perfected Security Interest; Further Documentation................... 27
5.6. Changes in Locations, Name, Jurisdiction of Incorporation, etc...................... 27
5.7. Notices ............................................................................ 28
5.8. Investment Property................................................................. 28
5.9. Receivables ........................................................................ 30
5.10. Intellectual Property............................................................... 30
5.11. Contracts .......................................................................... 32
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5.12. Commercial Tort Claims.............................................................. 33
SECTION 6. REMEDIAL PROVISIONS................................................................. 33
6.1. Certain Matters Relating to Receivables............................................. 33
6.2. Communications with Obligors; Grantors Remain Liable................................ 34
6.3. Pledged Securities.................................................................. 34
6.4. Proceeds to be Turned Over To Collateral Agent...................................... 35
6.5. Application of Proceeds............................................................. 36
6.6. Code and Other Remedies............................................................. 36
6.7. Registration Rights................................................................. 38
6.8. Deficiency 38
SECTION 7. THE COLLATERAL AGENT................................................................ 38
7.1. Collateral Agent's Appointment as Attorney-in-Fact, etc............................. 38
7.2. Duty of Collateral Agent............................................................ 40
7.3. Execution of Financing Statements................................................... 41
7.4. Authority of Collateral Agent....................................................... 41
7.5. Appointment of Co-Collateral Agents................................................. 41
SECTION 8. MISCELLANEOUS....................................................................... 41
8.1. Amendments in Writing............................................................... 41
8.2. Notices ............................................................................ 41
8.3. No Waiver by Course of Conduct; Cumulative Remedies................................. 42
8.4. Enforcement Expenses; Indemnification............................................... 42
8.5. Successors and Assigns.............................................................. 42
8.6. Set-Off ............................................................................ 42
8.7. Counterparts ....................................................................... 43
8.8. Severability ....................................................................... 43
8.9. Section Headings ................................................................... 43
8.10. Integration ........................................................................ 43
8.11. APPLICABLE LAW ..................................................................... 43
8.12. Submission to Jurisdiction; Waivers................................................. 43
8.13. Acknowledgments .................................................................... 44
8.14. Additional Grantors................................................................. 44
8.15. Releases ........................................................................... 44
8.16. WAIVER OF JURY TRIAL................................................................ 45
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GUARANTEE AND COLLATERAL AGREEMENT, dated as of May 28, 2004, made
by each of the signatories hereto (together with any other entity that may
become a party hereto as provided herein, the "Grantors"), in favor of CITICORP
NORTH AMERICA, INC., as administrative agent (in such capacity and together with
its successors, the "Administrative Agent") and as collateral agent (in such
capacity and together with its successors, the "Collateral Agent") for (i) the
banks and other financial institutions or entities (the "Lenders") from time to
time parties to the Credit Agreement, dated as of May 28, 2004 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among ANR Holdings, LLC, a Delaware limited liability company ("Holdings"),
Alpha Natural Resources, LLC, a Delaware limited liability company (the
"Borrower"), the Lenders party thereto, the Administrative Agent, Credit Suisse
First Boston, acting through its Cayman Islands Branch, as syndication agent (in
such capacity, the "Syndication Agent"), UBS Securities LLC, as documentation
agent (in such capacity, the "Documentation Agent"), Credit Suisse First Boston,
acting through its Cayman Islands Branch, UBS Securities LLC and Citigroup
Global Markets Inc., as joint lead arrangers (collectively, in such capacity,
the "Arrangers"), and Credit Suisse First Boston, acting through its Cayman
Islands Branch, and UBS Securities LLC, as joint bookrunners, and (ii) the other
Secured Parties (as hereinafter defined).
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrower upon the terms and
subject to the conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of
companies that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the Credit
Agreement will be used in part to enable the Borrower to make valuable transfers
to one or more of the other Grantors in connection with the operation of their
respective businesses;
WHEREAS, the Borrower and the other Grantors are engaged in related
businesses, and each Grantor will derive substantial direct and indirect benefit
from the making of the extensions of credit under the Credit Agreement; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrower under the
Credit Agreement that the Grantors shall have executed and delivered this
Agreement to the Collateral Agent for the ratable benefit of the Secured
Parties;
NOW, THEREFORE, in consideration of the premises and to induce the
Arrangers, the Administrative Agent, the Collateral Agent and the Lenders to
enter into the Credit Agreement and to induce the Lenders to make their
respective extensions of credit to the Borrower thereunder, each Grantor hereby
agrees with the Collateral Agent, for the ratable benefit of the Secured
Parties, as follows:
SECTION 1. DEFINED TERMS
1.1. Definitions. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement, and the following terms are used herein as defined in the
New York UCC (and if defined in more than one Article of the New York UCC, such
terms shall have the meanings given in Article 9 thereof): Accounts, Account
Debtor, As-Extracted Collateral, Certificated Security, Chattel Paper,
Commercial Tort Claim, Commodity Account, Commodity Contract, Commodity
Intermediary, Documents, Deposit Account, Electronic Chattel Paper, Equipment,
Farm Products, Financial Asset, Fixtures, Goods, Instruments, Inventory, Letter
of Credit, Letter of Credit Rights, Money, Payment Intangibles, Securities
Account, Securities Intermediary, Security, Security Entitlement, Supporting
Obligations, Tangible Chattel Paper and Uncertificated Security.
(b) The following terms shall have the following meanings:
"Administrative Agent" shall have the meaning assigned to such term
in the preamble and shall include for all purposes herein the
Administrative Agent acting in its capacity as the Collateral Agent.
"Agents" shall mean the Administrative Agent, the Collateral Agent,
the Documentation Agent and the Syndication Agent.
"Agreement" shall mean this Guarantee and Collateral Agreement, as
the same may be amended, supplemented, replaced or otherwise modified from
time to time.
"Arrangers" shall have the meaning assigned to such term in the
preamble.
"Borrower" shall have the meaning assigned to such term in the
preamble.
"Borrower Obligations" shall mean the collective reference to the
unpaid principal of and interest on (including interest accruing after the
maturity of the Loans and reimbursement obligations in respect of amounts
drawn under Letters of Credit and interest accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Grantor, whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding) the Loans and all other obligations and liabilities of the
Grantors to the Arrangers, to any Agent or to any Lender (or, in case of
Specified Hedge Agreements, any Affiliate of any Lender or any Agent or
any Affiliate of any Agent), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with the Credit Agreement,
any other Loan Document, the Letters of Credit, any Specified Hedge
Agreement or any other document made, delivered or given in connection
herewith or therewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including
all fees, charges and disbursements of counsel to the Arrangers, to any
Agent or to any Lender that are required to be paid by any Grantor
pursuant to the Credit Agreement or any other Loan Document) or otherwise;
provided, that (i) obligations of Holdings, the Borrower or any other Loan
Party under any Specified Hedge Agreement shall be secured and
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guaranteed pursuant to the Security Documents only to the extent that, and
for so long as the other obligations under the Loan Documents are so
secured and guaranteed, (ii) any release of collateral or guarantors
effected in the manner permitted by the Credit Agreement or any other Loan
Document shall not require the consent of holders of obligations under
Specified Hedge Agreements and (iii) the amount of secured obligations
under any Specified Hedge Agreements shall not exceed the net amount,
including any net termination payments, that would be required to be paid
to the counterparty to such Specified Hedge Agreement on the date of
termination of such Specified Hedge Agreement.
"Business Day" shall mean any day other than a Saturday, Sunday or
day on which commercial banks in New York City are authorized or required
by law to close.
"Closing Date" shall mean the date hereof.
"Collateral" shall have the meaning assigned to such term in Section
3.
"Collateral Account" shall mean (i) any collateral account
established by the Collateral Agent as provided in Section 6.1 or 6.4 or
(ii) any cash collateral account established as provided in Section
2.22(j) of the Credit Agreement.
"Collateral Account Funds" shall mean, collectively, the following:
all funds (including all trust monies), investments (including all
Permitted Investments) credited to, or purchased with funds from, any
Collateral Account and all certificates and instruments from time to time
representing or evidencing such investments; all notes, certificates of
deposit, checks and other instruments from time to time hereafter
delivered to or otherwise possessed by the Collateral Agent for or on
behalf of any Grantor in substitution for, or in addition to, any or all
of the Collateral; and all interest, dividends, cash, instruments and
other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the items
constituting Collateral.
"Collateral Agent" shall have the meaning assigned to such term in
the preamble.
"Contracts" shall mean all contracts and agreements between any
Grantor and any other person (in each case, whether written or oral, or
third party or intercompany) as the same may be amended, assigned,
extended, restated, supplemented, replaced or otherwise modified from time
to time including (i) all rights of any Grantor to receive moneys due and
to become due to it thereunder or in connection therewith, (ii) all rights
of any Grantor to receive proceeds of any insurance, indemnity, warranty
or guaranty with respect thereto, (iii) all rights of any Grantor to
damages arising thereunder and (iv) all rights of any Grantor to
terminate, and to perform and compel performance of, such Contracts and to
exercise all remedies thereunder.
"Copyright Licenses" shall mean any Contract naming any Grantor as
licensor or licensee (including those listed in Schedule 4.9(a) (as such
schedule may be amended or supplemented from time to time)), granting any
right in, to or under any Copyright, including the grant of rights to
manufacture, print, publish, copy, import, export, distribute, exploit and
sell materials derived from any Copyright.
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"Copyrights" shall mean (i) all copyrights arising under the laws of
the United States, any other country, or union of countries, or any
political subdivision of any of the foregoing, whether registered or
unregistered and whether published or unpublished (including those listed
in Schedule 4.9(a) (as such schedule may be amended or supplemented from
time to time)), all registrations and recordings thereof, and all
applications in connection therewith and rights corresponding thereto
throughout the world, including all registrations, recordings and
applications in the United States Copyright Office, (ii) the right to, and
to obtain, all extensions and renewals thereof, and the right to xxx for
past, present and future infringements of any of the foregoing, (iii) all
proceeds of the foregoing, including license, royalties, income, payments,
claims, damages, and proceeds of suit and (iv) all other rights of any
kind whatsoever accruing thereunder or pertaining thereto.
"Credit Agreement" shall have the meaning assigned to such term in
the preamble.
"Documentation Agent" shall have the meaning assigned to such term
in the preamble.
"Dollars" or "$" shall mean lawful money of the United States of
America.
"Excluded Assets" shall mean any lease, license, contract, property
right or agreement to which any Grantor is a party or any of its rights or
interests thereunder if and only for so long as the grant of a security
interest hereunder shall constitute or result in a breach, termination or
default under any such lease, license, contract, property right 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 or principles of
equity); provided, however, that such security interest shall attach
immediately to any portion of such lease, license, contract, property
rights or agreement that does not result in any of the consequences
specified above.
"Excluded Foreign Subsidiary Voting Stock" shall mean the voting
Equity Interests in any Excluded Foreign Subsidiary.
"General Intangibles" shall mean all "general intangibles" as such
term is defined in Section 9-102(a)(42) of the New York UCC and, in any
event, including with respect to any Grantor, all rights of such Grantor
to receive any tax refunds, all Hedging Agreements and all contracts,
agreements, instruments and indentures and all licenses, permits,
concessions, franchises and authorizations issued by Governmental
Authorities in any form, and portions thereof, to which such Grantor is a
party or under which such Grantor has any right, title or interest or to
which such Grantor or any property of such Grantor is subject, as the same
may from time to time be amended, supplemented, replaced or otherwise
modified, including (i) all rights of such Grantor to receive moneys due
and to become due to it thereunder or in connection therewith, (ii) all
rights of such Grantor to receive proceeds of any insurance, indemnity,
warranty or guaranty with respect thereto, (iii) all rights of such
Grantor to damages arising thereunder and (iv) all
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rights of such Grantor to terminate and to perform and compel performance
and to exercise all remedies thereunder.
"Grantors" shall have the meaning assigned to such term in the
preamble.
"Guarantor Obligations" shall mean with respect to any Guarantor,
all obligations and liabilities of such Guarantor which may arise under or
in connection with this Agreement (including Section 2) or any other Loan
Document to which such Guarantor is a party, in each case whether on
account of guarantee obligations, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including all fees and
disbursements of counsel to any Secured Party that are required to be paid
by such Guarantor pursuant to the terms of this Agreement or any other
Loan Document).
"Guarantors" shall mean the collective reference to each Grantor
other than the Borrower.
"Holdings" shall have the meaning assigned to such term in the
preamble.
"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 the collective reference to all
rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or
otherwise, including the Copyrights, the Copyright Licenses, the Patents,
the Patent Licenses, the Trademarks, the Trademark Licenses, the Trade
Secrets and the Trade Secret Licenses, and all rights to xxx at law or in
equity for any past, present and future infringement or other impairment
thereof, including the right to receive all proceeds and damages
therefrom.
"Intellectual Property Collateral" shall mean that portion of the
Collateral that constitutes Intellectual Property.
"Intercompany Note" shall mean any promissory note evidencing loans
made by any Grantor to Holdings, the Borrower or any of the Subsidiaries,
including the subordinated intercompany note entered into in connection
with the Affiliate Subordination Agreement.
"Investment Property" shall mean the collective reference to (i) all
"investment property" as such term is defined in Section 9-102(a)(49) of
the New York UCC (other than any Excluded Foreign Subsidiary Voting Stock
excluded from the definition of "Pledged Equity Interests") including all
Certificated Securities and Uncertificated Securities, all Security
Entitlements, all Securities Accounts, all Commodity Contracts and all
Commodity Accounts, (ii) security entitlements, in the case of any United
States Treasury book-entry securities, as defined in 31 C.F.R. section
357.2, or, in the case of any United States federal agency book-entry
securities, as defined in the corresponding United States federal
regulations governing such book-entry securities, and (iii) whether
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or not otherwise constituting "investment property", all Pledged Notes,
all Pledged Equity Interests, all Pledged Security Entitlements and all
Pledged Commodity Contracts.
"Issuers" shall mean the collective reference to each issuer of a
Pledged Security.
"Lenders" shall have the meaning assigned to such term in the
preamble.
"Licensed Intellectual Property" shall have the meaning assigned to
such term in Section 4.9(a).
"Material Contract" shall mean any Contract or other arrangement to
which any Grantor is a party that is material to all of the Grantors and
their subsidiaries, taken as a whole, and for which breach,
nonperformance, cancellation or failure to renew could reasonably be
expected to have a Material Adverse Effect.
"New York UCC" shall mean the Uniform Commercial Code as from time
to time in effect in the State of New York.
"Non-Assignable Contract" shall mean any Contract that by its terms
purports to restrict or prevent the assignment thereof or granting of a
security interest therein (either by its terms or by any federal or state
statutory prohibition or otherwise, irrespective of whether such
prohibition or restriction is enforceable under Sections 9-407 through 409
of the New York UCC).
"Obligations" shall mean (i) in the case of the Borrower, the
Borrower Obligations, and (ii) in the case of each Guarantor, its
Guarantor Obligations.
"Owned Intellectual Property" shall have the meaning assigned to
such term in Section 4.9(a).
"Patent License" shall mean any Contract providing for the grant by
or to any Grantor of any right to manufacture, use, import, export,
distribute or sell any invention covered in whole or in part by a Patent,
including any of the foregoing listed in Schedule 4.9(a) (as such schedule
may be amended or supplemented from time to time).
"Patents" shall mean (i) all letters of patent of the United States,
any other country, union of countries or any political subdivision of any
of the foregoing, all reissues and extensions thereof and all goodwill
associated therewith, including any of the foregoing listed in Schedule
4.9(a) (as such schedule may be amended or supplemented from time to
time), (ii) all applications for letters of patent of the United States or
any other country or union of countries or any political subdivision of
any of the foregoing and all divisions, continuations and
continuations-in-part thereof, all improvements thereof, including any of
the foregoing listed in Schedule 4.9(a) (as such schedule may be amended
or supplemented from time to time), (iii) all rights to, and to obtain,
any reissues or extensions of the foregoing and (iv) all proceeds of the
foregoing, including licenses, royalties, income, payments, claims,
damages and proceeds of suit.
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"person" shall mean any natural person, corporation, trust, business
trust, joint venture, joint stock company, association company, limited
liability company, partnership, Governmental Authority or other entity.
"Pledged Alternative Equity Interests" shall mean all interests of
any Grantor in participation or other interests in any equity or profits
of any business entity and the certificates, if any, representing such
interests 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 interests and any other warrant, right or
option to acquire any of the foregoing; provided, however, that Pledged
Alternative Equity Interests shall not include any Pledged Stock, Pledged
Partnership Interests, Pledged LLC Interests or Pledged Trust Interests.
"Pledged Collateral" shall mean the collective reference to the
Pledged Commodity Contracts, the Pledged Securities and the Pledged
Security Entitlements.
"Pledged Commodity Contracts" shall mean all commodity contracts
listed on Schedule 4.7(c) (as such schedule may be amended from time to
time) and all other commodity contracts to which any Grantor is party from
time to time.
"Pledged Debt Securities" shall mean all debt securities now owned
or hereafter acquired by any Grantor, including the debt securities listed
on Schedule 4.7(b), (as such schedule may be amended or supplemented from
time to time), together with any other certificates, options, rights or
security entitlements of any nature whatsoever in respect of the debt
securities of any person that may be issued or granted to, or held by, any
Grantor while this Agreement is in effect.
"Pledged Equity Interests" shall mean all Pledged Stock, Pledged LLC
Interests, Pledged Partnership Interests, Pledged Trust Interests and
Pledged Alternative Equity Interests.
"Pledged LLC Interests" shall mean all interests of any Grantor now
owned or hereafter acquired in any limited liability company, including
all limited liability company interests listed on Schedule 4.7(a) hereto
under the heading "Pledged LLC Interests" (as such schedule may be amended
or supplemented from time to time) and the certificates, if any,
representing such limited liability company interests and any interest of
such Grantor on the books and records of such limited liability company
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 and any other
warrant, right or option to acquire any of the foregoing.
"Pledged Notes" shall mean all promissory notes now owned or
hereafter acquired by any Grantor, including those listed on Schedule
4.7(b) (as such schedule may be amended or supplemented from time to time)
and all Intercompany Notes at any time issued to or held by any Grantor.
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"Pledged Partnership Interests" shall mean all interests of any
Grantor now owned or hereafter acquired in any general partnership,
limited partnership, limited liability partnership or other partnership,
including all partnership interests listed on Schedule 4.7(a) hereto 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 and any interest of such Grantor
on the books and records of such partnership 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 and any other warrant, right or option to acquire
any of the foregoing.
"Pledged Securities" shall mean the collective reference to the
Pledged Debt Securities, the Pledged Notes and the Pledged Equity
Interests.
"Pledged Security Entitlements" shall mean all security entitlements
with respect to the financial assets listed on Schedule 4.7(c) (as such
schedule may be amended from time to time) and all other security
entitlements of any Grantor.
"Pledged Stock" shall mean all shares of capital stock now owned or
hereafter acquired by any Grantor, including all shares of capital stock
listed on Schedule 4.7(a) hereto 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 and any interest of such
Grantor in the entries on the books of the issuer of 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 and any other warrant, right or option to acquire
any of the foregoing; provided, however, that in no event shall more than
65% of the total outstanding Excluded Foreign Subsidiary Voting Stock be
required to be pledged hereunder.
"Pledged Trust Interests" shall mean all interests of any Grantor
now owned or hereafter acquired in a Delaware business trust or other
trust, including all trust interests listed on Schedule 4.7(a) hereto
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 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 and any other warrant, right or option to acquire any of
the foregoing.
"Proceeds" shall mean all "proceeds" as such term is defined in
Section 9-102(a)(64) of the New York UCC and, in any event, shall include
all dividends or other income from the Investment Property, collections
thereon or distributions or payments with respect thereto.
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"Qualified Counterparty" shall mean, with respect to any Specified
Hedge Agreement, any counterparty thereto that, at the time such Specified
Hedge Agreement was entered into, was a Lender, an Agent or an Affiliate
of a Lender or an Agent.
"Receivable" shall mean all Accounts and any other right to payment
for goods or other property sold, leased, licensed or otherwise disposed
of or for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper or classified as a Payment Intangible and
whether or not it has been earned by performance. References herein to
Receivables shall include any Supporting Obligation or collateral securing
such Receivable.
"Secured Parties" shall mean, collectively, the Arrangers, the
Agents, the Lenders and, with respect to any Specified Hedge Agreement,
any Qualified Counterparty that has agreed to be bound by the provisions
of Article VIII of the Credit Agreement as if it were a Lender party
thereto; provided that no Qualified Counterparty shall have any rights in
connection with the management or release of any Collateral or the
obligations of any Guarantor under this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Specified Hedge Agreement" shall mean any Hedging Agreement (a)
entered into by (i) Holdings, the Borrower or any of the Subsidiaries and
(ii) any Lender or any Affiliate thereof or any Agent or any Affiliate
thereof, or any person that was a Lender or an Affiliate thereof or an
Agent or Affiliate thereof when such Hedging Agreement was entered into as
counterparty and (b) which has been designated by such Lender or Agent and
the Borrower, by notice to the Administrative Agent not later than 90 days
after the execution and delivery thereof by Holdings, the Borrower or such
Subsidiary, as a Specified Hedge Agreement; provided that the designation
of any Hedging Agreement as a Specified Hedge Agreement shall not create
in favor of any Lender or Affiliate thereof or any Agent or any Affiliate
thereof that is a party thereto any rights in connection with the
management or release of any Collateral or of the obligations of any
Guarantor under this Agreement.
"Subsidiary" shall mean any subsidiary of the Borrower.
"Syndication Agent" shall have the meaning assigned to such term in
the preamble.
"Trademark License" shall mean any Contract providing for the grant
by or to any Grantor of any right in, to or under any Trademark, including
any of the foregoing referred to in Schedule 4.9(a) (as such schedule may
be amended or supplemented from time to time).
"Trademarks" shall mean (i) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers, and
all goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications
in connection therewith, whether in the United States Patent and Trademark
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Office or in any similar office or agency of the United States, any State
thereof or any other country, union of countries, or any political
subdivision of any of the foregoing, or otherwise, and all common-law
rights related thereto, including any of the foregoing listed in Schedule
4.9(a) (as such schedule may be amended or supplemented from time to
time), (ii) the right to, and to obtain, all renewals thereof, (iii) the
goodwill of the business symbolized by the foregoing, (iv) other source or
business identifiers, designs and general intangibles of a like nature and
(v) the right to xxx for past, present and future infringements or
dilution of any of the foregoing or for any injury to goodwill, and all
proceeds of the foregoing, including royalties, income, payments, claims,
damages and proceeds of suit.
"Trade Secret License" shall mean any Contract providing for the
grant by or to any Grantor of any right in, to or under any Trade Secret,
including any of the foregoing listed in Schedule 4.9(a) (as such schedule
may be amended or supplemented from time to time).
"Trade Secrets" shall mean all trade secrets and all other
confidential or proprietary information and know-how (all of the foregoing
being collectively called a "Trade Secret"), whether or not reduced to a
writing or other tangible form, including all documents and things
embodying, incorporating or describing such Trade Secret, the right to xxx
for past, present and future infringements of any Trade Secret and all
proceeds of the foregoing, including royalties, income, payments, claims,
damages and proceeds of suit.
1.2. Other Definitional Provisions. (a) The words "hereof",
"herein", "hereto" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section and Schedule references are to the
specific provisions of this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral or
any part thereof, when used in relation to a Grantor, shall refer to the
property or assets such Grantor has granted as Collateral or the relevant part
thereof.
(d) The expressions "payment in full," "paid in full" and any other
similar terms or phrases when used herein with respect to the Borrower
Obligations or the Guarantor Obligations shall mean the unconditional, final and
irrevocable payment in full, in immediately available funds, of all of the
Borrower Obligations or the Guarantor Obligations, as the case may be, in each
case, unless otherwise specified, other than indemnification and other
contingent obligations not then due and payable.
(e) The words "include", "includes" and "including", and words of
similar import, shall not be limiting and shall be deemed to be followed by the
phrase "without limitation".
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(f) All references to the Lenders herein shall, where appropriate,
include any Lender, any Agent or any Arranger or, in the case of any Lender or
Agent, any Affiliate thereof that is a party to a Specified Hedge Agreement.
SECTION 2. GUARANTEE
2.1. Guarantee.
(a) Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Administrative Agent, for the
ratable benefit of the Secured Parties and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations.
(b) If and to the extent required in order for the Obligations of
any Guarantor to be enforceable under applicable federal, state and other laws
relating to the insolvency of debtors, the maximum liability of such Guarantor
hereunder shall be limited to the greatest amount which can lawfully be
guaranteed by such Guarantor under such laws, after giving effect to any rights
of contribution, reimbursement and subrogation arising under Section 2.2. Each
Guarantor acknowledges and agrees that, to the extent not prohibited by
applicable law, (i) such Guarantor (as opposed to its creditors, representatives
of creditors or bankruptcy trustee, including such Guarantor in its capacity as
debtor in possession exercising any powers of a bankruptcy trustee) has no
personal right under such laws to reduce, or request any judicial relief that
has the effect of reducing, the amount of its liability under this Agreement,
(ii) such Guarantor (as opposed to its creditors, representatives of creditors
or bankruptcy trustee, including such Guarantor in its capacity as debtor in
possession exercising any powers of a bankruptcy trustee) has no personal right
to enforce the limitation set forth in this Section 2.1(b) or to reduce, or
request judicial relief reducing, the amount of its liability under this
Agreement, and (iii) the limitation set forth in this Section 2.1(b) may be
enforced only to the extent required under such laws in order for the
obligations of such Guarantor under this Agreement to be enforceable under such
laws and only by or for the benefit of a creditor, representative of creditors
or bankruptcy trustee of such Guarantor or other person entitled, under such
laws, to enforce the provisions thereof.
(c) Each Guarantor agrees that the Borrower Obligations may at any
time and from time to time be incurred or permitted in an amount exceeding the
maximum liability of such Guarantor under Section 2.1(b) without impairing the
guarantee contained in this Section 2 or affecting the rights and remedies of
any Secured Party hereunder.
(d) The guarantee contained in this Section 2 shall remain in full
force and effect until payment in full of the Obligations, notwithstanding that
from time to time during the term of the Credit Agreement the Borrower may be
free from any Borrower Obligations.
(e) No payment made by the Borrower, any of the Guarantors, any
other guarantor or any other person or received or collected by any Secured
Party from the Borrower, any of the Guarantors, any other guarantor or any other
person by virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in
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reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the Borrower Obligations (other than
Obligations in respect of any Specified Hedge Agreement) are paid in full, no
letter of credit shall be outstanding under the Credit Agreement and all
commitments to extend credit under the Credit Agreement shall have been
terminated or have expired.
2.2. Rights of Reimbursement, Contribution and Subrogation. In case
any payment is made on account of the Obligations by any Grantor or is received
or collected on account of the Obligations from any Grantor or its property:
(a) If such payment is made by the Borrower or from its property,
then, if and to the extent such payment is made on account of Obligations
arising from or relating to a Loan or other extension of credit made to the
Borrower or a letter of credit issued for the account of the Borrower, the
Borrower shall not be entitled (i) to demand or enforce reimbursement or
contribution in respect of such payment from any other Grantor or (ii) to be
subrogated to any claim, interest, right or remedy of any Secured Party against
any other person, including any other Grantor or its property.
(b) If such payment is made by a Guarantor or from its property,
such Guarantor shall be entitled, subject to and upon payment in full of the
Obligations, (i) to demand and enforce reimbursement for the full amount of such
payment from the Borrower and (ii) to demand and enforce contribution in respect
of such payment from each other Guarantor that has not paid its fair share of
such payment, as necessary to ensure that (after giving effect to any
enforcement of reimbursement rights provided hereby) each Guarantor pays its
fair share of the unreimbursed portion of such payment. For this purpose, the
fair share of each Guarantor as to any unreimbursed payment shall be determined
based on an equitable apportionment of such unreimbursed payment among all
Guarantors based on the relative value of their assets and any other equitable
considerations deemed appropriate by a court of competent jurisdiction.
(c) If and whenever (after payment in full of the Obligations) any
right of reimbursement or contribution becomes enforceable by any Grantor
against any other Grantor under Sections 2.2(a) and 2.2(b), such Grantor shall
be entitled, subject to and upon payment in full of the Obligations, to be
subrogated (equally and ratably with all other Grantors entitled to
reimbursement or contribution from any other Grantor as set forth in this
Section 2.2) to any security interest that may then be held by the
Administrative Agent or the Collateral Agent upon any Collateral granted to it
in this Agreement. Such right of subrogation shall be enforceable solely against
the Grantors, and not against the Secured Parties, and neither the
Administrative Agent nor any other Secured Party shall have any duty whatsoever
to warrant, ensure or protect any such right of subrogation or to obtain,
perfect, maintain, hold, enforce or retain any Collateral for any purpose
related to any such right of subrogation. If subrogation is demanded by any
Grantor, then (after payment in full of the Obligations) the Administrative
Agent shall deliver to the Grantors making such demand, or to a representative
of such Grantors or of the Grantors generally, an instrument satisfactory to the
Administrative Agent transferring, on a
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quitclaim basis without any recourse, representation, warranty or obligation
whatsoever, whatever security interest the Administrative Agent or the
Collateral Agent then may hold in whatever Collateral may then exist that was
not previously released or disposed of by the Administrative Agent or the
Collateral Agent.
(d) All rights and claims arising under this Section 2.2 or based
upon or relating to any other right of reimbursement, indemnification,
contribution or subrogation that may at any time arise or exist in favor of any
Grantor as to any payment on account of the Obligations made by it or received
or collected from its property shall be fully subordinated in all respects to
the prior payment in full of all of the Obligations. Until payment in full of
the Obligations, no Grantor shall demand or receive any collateral security,
payment or distribution whatsoever (whether in cash, property or securities or
otherwise) on account of any such right or claim. If any such payment or
distribution is made or becomes available to any Grantor in any bankruptcy case
or receivership, insolvency or liquidation proceeding, such payment or
distribution shall be delivered by the person making such payment or
distribution directly to the Administrative Agent, for application to the
payment of the Obligations. If any such payment or distribution is received by
any Grantor, it shall be held by such Grantor in trust, as trustee of an express
trust for the benefit of the Secured Parties, and shall forthwith be transferred
and delivered by such Grantor to the Administrative Agent, in the exact form
received and, if necessary, duly endorsed.
(e) The obligations of the Grantors under the Loan Documents,
including their liability for the Obligations and the enforceability of the
security interests granted thereby, are not contingent upon the validity,
legality, enforceability, collectibility or sufficiency of any right of
reimbursement, contribution or subrogation arising under this Section 2.2. The
invalidity, insufficiency, unenforceability or uncollectibility of any such
right shall not in any respect diminish, affect or impair any such obligation or
any other claim, interest, right or remedy at any time held by any Secured Party
against any Guarantor or its property. The Secured Parties make no
representations or warranties in respect of any such right and shall have no
duty to assure, protect, enforce or ensure any such right or otherwise relating
to any such right.
(f) Each Grantor reserves any and all other rights of reimbursement,
contribution or subrogation at any time available to it as against any other
Grantor, but (i) the exercise and enforcement of such rights shall be subject to
Section 2.2(d) and (ii) neither the Administrative Agent nor any other Secured
Party shall ever have any duty or liability whatsoever in respect of any such
right, except as provided in Section 2.2(c).
2.3. Amendments, etc. with respect to the Borrower Obligations. Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by any Secured Party may be rescinded by such Secured Party and
any of the Borrower Obligations continued, and the Borrower Obligations, or the
liability of any other person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, increased, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
any Secured Party, and the Credit Agreement and the other Loan Documents and any
other documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the
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parties thereto may deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by any Secured Party for
the payment of the Borrower Obligations may be sold, exchanged, waived,
surrendered or released. No Secured Party shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Borrower Obligations or for the guarantee contained in this Section 2 or any
property subject thereto.
2.4. Guarantee Absolute and Unconditional. Each Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Borrower Obligations and notice of or proof of reliance by any Secured Party
upon the guarantee contained in this Section 2 or acceptance of the guarantee
contained in this Section 2; the Borrower Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee contained in this
Section 2; and all dealings between the Borrower and any of the Guarantors, on
the one hand, and the Secured Parties, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or any of the Guarantors with respect to the Borrower
Obligations. Each Guarantor understands and agrees that the guarantee contained
in this Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment and performance without regard to (a) the validity or
enforceability of the Credit Agreement or any other Loan Document, any of the
Borrower Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
any Secured Party, (b) any defense, set-off or counterclaim (other than a
defense of payment or performance hereunder) which may at any time be available
to or be asserted by the Borrower or any other person against any Secured Party,
or (c) any other circumstance whatsoever (with or without notice to or knowledge
of the Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Borrower
Obligations, or of such Guarantor under the guarantee contained in this Section
2, in bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any Guarantor, any
Secured Party may, but shall be under no obligation to, make a similar demand on
or otherwise pursue such rights and remedies as it may have against the
Borrower, any other Guarantor or any other person or against any collateral
security or guarantee for the Borrower Obligations or any right of offset with
respect thereto, and any failure by any Secured Party to make any such demand,
to pursue such other rights or remedies or to collect any payments from the
Borrower, any other Guarantor or any other person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of the Borrower, any other Guarantor or any other person or any such
collateral security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of any Secured Party against any Guarantor. For the purposes
hereof "demand" shall include the commencement and continuance of any legal
proceedings.
2.5. Reinstatement. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations is rescinded or
must otherwise be restored or returned by any Secured Party upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the
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Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
2.6. Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars in immediately available funds at the office of the
Administrative Agent as specified in the Credit Agreement.
SECTION 3. GRANT OF SECURITY INTEREST;
CONTINUING LIABILITY UNDER COLLATERAL
(a) Each Grantor hereby assigns and transfers to the Collateral
Agent, and hereby grants to the Collateral Agent, for the ratable benefit of the
Secured Parties, a security interest in all of the personal property of such
Grantor, including the following property, in each case, wherever located and
now owned or at any time hereafter acquired by such Grantor or in which such
Grantor now has or at any time in the future may acquire any right, title or
interest (collectively, the "Collateral"), as collateral security for the prompt
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of such Grantor's Obligations:
(i) all Accounts;
(ii) all As-Extracted Collateral
(iii) all Chattel Paper;
(iv) all Collateral Accounts and all Collateral Account Funds;
(v) all Commercial Tort Claims from time specifically
described on Schedule 4.11;
(vi) all Contracts;
(vii) all Deposit Accounts;
(viii) all Documents;
(ix) all Equipment;
(x) all Fixtures;
(xi) all General Intangibles;
(xii) all Goods;
(xiii) all Instruments;
(xiv) all Insurance;
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(xv) all Intellectual Property;
(xvi) all Inventory;
(xvii) all Investment Property;
(xviii) all Letters of Credit and Letter of Credit Rights;
(xix) all Money;
(xx) all Securities Accounts;
(xxi) to the extent not otherwise included in clause (ii)
above, all coal and other minerals severed or extracted from the ground of
the Grantor (including all severed or extracted coal purchased, acquired
or obtained from other persons), and all Accounts, General Intangibles and
products and Proceeds thereof or related thereto, regardless of whether
any such coal or other minerals are in raw form or processed for sale and
regardless of whether or not any Grantor had an interest in the coal or
other minerals before extraction or severance;
(xxii) all books, records, ledger cards, files,
correspondence, customer lists, blueprints, technical specifications,
manuals, computer software, computer printouts, tapes, disks and other
electronic storage media and related data processing software and similar
items that at any time pertain to or evidence or contain information
relating to any of the Collateral or are otherwise necessary or helpful in
the collection thereof or realization thereupon; and
(xxiii) to the extent not otherwise included, all other
property, whether tangible or intangible, of the Grantor and all Proceeds,
products, accessions, rents and profits of any and all of the foregoing
and all collateral security, Supporting Obligations and guarantees given
by any person with respect to any of the foregoing;
provided that, notwithstanding any other provision set forth in this
Section 3, this Agreement shall not, at any time, constitute a grant of a
security interest in any property that is, at such time, an Excluded Asset.
(b) Notwithstanding anything herein to the contrary, (i) each
Grantor shall remain liable for all obligations under and in respect of the
Collateral and nothing contained herein is intended or shall be a delegation of
duties to the Collateral Agent or any other Secured Party, (ii) each Grantor
shall remain liable under each of the contracts and agreements included in the
Collateral, including any Receivables, any Contracts and any agreements relating
to Pledged Partnership Interests or Pledged LLC Interests, to perform all of the
obligations undertaken by it thereunder all in accordance with and pursuant to
the terms and provisions thereof and neither the Collateral Agent nor any other
Secured Party shall have any obligation or liability under any of such
agreements by reason of or arising out of this Agreement or any other document
related hereto nor shall the Collateral Agent nor any other Secured Party have
any obligation to make any inquiry as to the nature or sufficiency of any
payment received by it or have any obligation to take any action to collect or
enforce any rights under any agreement
16
included in the Collateral, including any agreements relating to any
Receivables, any Contracts or any agreements relating to Pledged Partnership
Interests or Pledged LLC Interests and (iii) 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, including any agreements relating to any Receivables, any Contracts
and any agreements relating to Pledged Partnership Interests or Pledged LLC
Interests.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Arrangers, the Agents and the Lenders to enter into
the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby represents
and warrants to the Secured Parties that:
4.1. Representations in Credit Agreement. In the case of each
Guarantor (other than Holdings), the representations and warranties set forth in
Article III of the Credit Agreement as they relate to such Guarantor or to the
Loan Documents to which such Guarantor is a party, each of which is hereby
incorporated herein by reference, are true and correct, in all material
respects, except for representations and warranties expressly stated to relate
to a specific earlier date, in which case such representations and warranties
shall be true and correct in all material respects as of such earlier date, and
the Secured Parties shall be entitled to rely on each of them as if they were
fully set forth herein, provided that each reference in each such representation
and warranty to the Borrower's or Holdings' knowledge shall, for the purposes of
this Section 4.l, be deemed to be a reference to such Guarantor's knowledge.
4.2. Title; No Other Liens. Such Grantor owns each item of the
Collateral free and clear of any and all Liens or claims, including Liens
arising as a result of such Grantor becoming bound (as a result of merger or
otherwise) as grantor under a security agreement entered into by another person,
except for (i) Liens expressly permitted by Section 6.02 of the Credit Agreement
and (ii) Liens with respect to which termination statements (or similar release
documents) have been delivered to the Collateral Agent for termination or
release on the Closing Date. No financing statement, mortgage or other public
notice with respect to all or any part of the Collateral is on file or of record
in any public office, except (i) such as have been filed in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, pursuant to
this Agreement or as are expressly permitted by the Credit Agreement and (ii)
filings in respect of which termination statements (or similar release
documents) have been delivered to the Collateral Agent for termination or
release on the Closing Date.
4.3. Perfected First Priority Liens. The security interests granted
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 4.3 (all of which, in the case of all filings and other
documents referred to on said Schedule, have been delivered to the Collateral
Agent, or an agent or representative on its behalf, in duly completed and duly
executed form (which shall include the name of the record owner of all real
estate if other than such Grantor and real estate descriptions sufficient to
enable the Collateral Agent to record financing statements in the real property
records, in such jurisdictions identified on Schedule 4.3, sufficient to perfect
a security interest in all As-Extracted Collateral arising from any Grantor's
mining activities), as applicable, and may be filed by the Collateral Agent at
any time) and payment of all filing fees, will constitute valid fully perfected
security interests in
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all of the Collateral in favor of the Collateral Agent, for the ratable benefit
of the Secured Parties, as collateral security for such Grantor's Obligations,
enforceable in accordance with the terms hereof and (b) are prior to all other
Liens on the Collateral, except for Liens expressly permitted by Section 6.02 of
the Credit Agreement. Without limiting the foregoing, (a) each Grantor has taken
all actions necessary or desirable, including those specified in Section 5.2 to
(i) establish the Collateral Agent's "control" (within the meanings of Sections
8-106 and 9-106 of the New York UCC) over any portion of the Investment Property
constituting Certificated Securities (as defined in the New York UCC), (ii)
establish the Collateral Agent's "control" (within the meaning of Section 9-107
of the New York UCC) over all Letter of Credit Rights, (iii) establish the
Collateral Agent's control (within the meaning of Section 9-105 of the New York
UCC) over all Electronic Chattel Paper and (iv) establish the Collateral Agent's
"control" (within the meaning of Section 16 of the Uniform Electronic
Transaction Act as in effect in the applicable jurisdiction "UETA") over all
"transferable records" (as defined in UETA) and (b) each Grantor will use
reasonable best efforts to take all actions necessary or desirable, including
those specified in Section 5.2, as promptly as is reasonably practicable to (i)
establish the Collateral Agent's "control" (within the meanings of Sections
8-106 and 9-106 of the New York UCC) over any portion of the Investment Property
constituting Uncertificated Securities, Securities Accounts, Securities
Entitlements or Commodity Accounts (each as defined in the New York UCC) which
in each case have a value in excess of $500,000 and (ii) establish the
Collateral Agent's "control" (within the meaning of Section 9-104 of the New
York UCC) over all Deposit Accounts which in each case have a value in excess of
$500,000.
4.4. Name; Jurisdiction of Organization, etc. On the date of this
Agreement, such Grantor's exact legal name (as indicated on the public record of
such Grantor's jurisdiction of formation or organization), jurisdiction of
organization, organizational identification number, if any, and the location of
such Grantor's chief executive office or sole place of business are specified on
Schedule 4.4. Each Grantor is organized solely under the law of the jurisdiction
so specified and has not filed any certificates of domestication, transfer or
continuance in any other jurisdiction. Except as otherwise indicated on Schedule
4.4, the jurisdiction of each such Grantor's organization of formation is
required to maintain a public record showing the Grantor to have been organized
or formed. Except as specified on Schedule 4.4 (as such schedule may be amended
or supplemented from time to time), no such Grantor has changed its name,
jurisdiction of organization, chief executive office or sole place of business
or its corporate structure in any way (e.g. by merger, consolidation, change in
corporate form or otherwise) since the later of its formation or acquisition by
the Borrower or, to the knowledge of the Borrower, within the five-year period
prior to its formation or acquisition by the Borrower and has not within the
last five years become bound (whether as a result of merger or otherwise) as a
grantor under a security agreement entered into by another person, which has not
heretofore been terminated (or on the date of this Agreement will be
terminated).
4.5. Inventory and Equipment.(a) On the date of this Agreement, the
locations of the Inventory and the Equipment (other than mobile goods) that is
included in the Collateral are listed on Schedule 4.5(a). Within the four months
preceding execution of this Agreement, such Grantor has not changed the location
where a material portion of its Equipment and Inventory is located that is
included in the Collateral except as otherwise disclosed on Schedule 4.5(a).
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(b) Except for those locations listed on Schedule 4.5(a) (as such
schedule may be amended or supplemented from time to time) where (i) mining
equipment may be, from time to time, in the possession of a third party in order
to be repaired or rebuilt or (ii) coal inventory may be, from time to time,
stored on a temporary basis prior to being transported to customers, none of the
Inventory or Equipment that is included in the Collateral is in the possession
of an issuer of a negotiable document (as defined in Section 7-104 of the New
York UCC) therefor or is otherwise in the possession of any bailee or
warehouseman.
(c) Schedule 4.5(b) (as such schedule may be amended or supplemented
from time to time) identifies the location of (i) any active mine portal site or
preparation plant in which any Grantor has any interest and (ii) any
As-Extracted Collateral of such Grantor.
4.6. Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
4.7. Investment Property. (a) Schedule 4.7(a) hereto (as such
schedule may be 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. Schedule
4.7(b) (as such schedule may be amended or supplemented from time to time) sets
forth under the heading "Pledged Debt Securities" or "Pledged Notes" each of the
Pledged Debt Securities and Pledged Notes owned by any Grantor with a value in
excess of $200,000 and, in the case of Pledged Debt Securities and Pledged Notes
issued by any Grantor (or, in the case of any other Pledged Debt Securities and
Pledged Notes, to the knowledge of the Borrower) all of such Pledged Debt
Securities and Pledged Notes have been duly authorized, authenticated or issued,
and delivered and is the legal, valid and binding obligation of the issuers
thereof enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principals of equity,
regardless of whether considered in a proceeding in equity or at law, and is not
in default and 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. Schedule 4.7(c) hereto (as
such schedule may be amended from time to time) sets forth under the headings
"Securities Accounts," "Commodities Accounts," and "Deposit Accounts"
respectively, all of the Securities Accounts, Commodities Accounts and Deposit
Accounts in which each Grantor has an interest and in which the value of each
such account is in excess of $500,000. Each Grantor is the sole entitlement
holder or customer of each such account and no Grantor has consented to or is
otherwise aware of any person having "control" (within the meanings of Sections
8-106, 9-106 and 9-104 of the New York UCC) over, or any other interest in, any
Securities Account, Commodity Account, Deposit Account, in each case in which
such Grantor has an interest, or any securities, commodities or other property
credited thereto.
(b) The Pledged Equity Interests pledged by such Grantor hereunder
constitute all of the classes of Equity Interests in each Issuer owned by such
Grantor or, in the case of
19
Excluded Foreign Subsidiary Voting Stock, if less, 65% of the outstanding
Excluded Foreign Subsidiary Voting Stock of each relevant Issuer.
(c) The Pledged Stock issued by a Grantor (or, to the knowledge of
the Borrower, the Pledged Stock issued by any other person) has been duly and
validly issued and is fully paid and non-assessable, and all other Pledged
Equity Interests are owned by such Grantor free and clear of all Liens (other
than Liens created hereunder).
(d) The terms of all Pledged LLC Interests in the Borrower expressly
provide that they are securities governed by Article 8 of the Uniform Commercial
Code as from time to time in effect in the State of Delaware.
(e) The terms of any uncertificated Pledged LLC Interests and
Pledged Partnership Interests do not provide that they are securities governed
by Article 8 of the Uniform Commercial Code in effect from time to time in the
"issuer's jurisdiction" of each Issuer thereof (as such term is defined in the
Uniform Commercial Code in effect in such jurisdiction). There shall be no
certificated Pledged LLC Interests or Pledged Partnership Interests which
provide that they are securities governed by Article 8 of the Uniform Commercial
Code in effect from time to time in the "issuer's jurisdiction" of each Issuer
thereof, unless all certificates relating thereto have been delivered to the
Collateral Agent pursuant to the terms hereof.
(f) Such Grantor is the record and beneficial owner of, and has good
and marketable title to, the Investment Property and Deposit Accounts pledged by
it hereunder, free of any and all Liens or options in favor of, or claims of,
any other person, except Liens expressly permitted by Section 6.02 of the Credit
Agreement, 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.
(g) Each Issuer that is a Subsidiary that is not a Grantor hereunder
has executed and delivered (and, in the case of each other Issuer that is not a
Grantor hereunder, commercially reasonable efforts have been made to cause such
Issuer to execute and deliver) to the Collateral Agent an Acknowledgment and
Consent, in substantially the form of Exhibit A, to the pledge of the Pledged
Securities pursuant to this Agreement.
4.8. Receivables(a) . (a) No amount payable to such Grantor under or
in connection with any Receivable with a value in excess of $200,000 is
evidenced by any Instrument or Tangible Chattel Paper which has not been
delivered to the Collateral Agent or constitutes Electronic Chattel Paper that
has not been subjected to the control (within the meaning of Section 9-105 of
the New York UCC) of the Collateral Agent.
(b) None of the obligors on any Receivables with a value in excess
of $100,000 that are included in the Collateral is a Governmental Authority,
except as set forth on Schedule 4.8(b) (as such schedule may be amended or
supplemented from time to time).
(c) Each Receivable that is included in the Collateral (i) to such
Grantor's knowledge, 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, (ii) to such
20
Grantor's knowledge, is and will be enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law, (iii) is not and will not be subject to any setoffs, defenses, taxes,
counterclaims (except with respect to refunds, returns, setoffs and allowances
in the ordinary course of business with respect to nonconforming products) and
(iv) to such Grantor's knowledge, is and will be in compliance with all
applicable laws and regulations.
4.9. Intellectual Property. (a) Schedule 4.9(a) (as such schedule
may be amended or supplemented from time to time) lists all Intellectual
Property which is registered with a Governmental Authority or is the subject of
an application for registration and all material unregistered Intellectual
Property, in each case which is owned by such Grantor in its own name on the
date hereof (collectively, the "Owned Intellectual Property"). Except as set
forth in Schedule 4.9(a) (as such schedule may be amended or supplemented from
time to time), such Grantor owns such Owned Intellectual Property and is
otherwise entitled to use, and grant to others the right to use, all such Owned
Intellectual Property subject only to the license terms of the licensing or
franchise agreements referred to in paragraph (c) below. Such Grantor has a
valid and enforceable right to use all Intellectual Property material to its
business, but which it does not own (collectively, the "Licensed Intellectual
Property").
(b) On the date hereof, all Owned Intellectual Property and, to such
Grantor's knowledge, all Licensed Intellectual Property, in each case, which is
material to the Borrower and its Subsidiaries, taken as a whole (collectively,
the "Material Intellectual Property"), is valid, subsisting, unexpired and
enforceable and has not been abandoned. Neither the operation of such Grantor's
business as currently conducted or as contemplated to be conducted nor the use
of the Intellectual Property in connection therewith materially conflicts with,
infringes, misappropriates, dilutes, misuses or otherwise materially violates
the intellectual property rights of any other person.
(c) Except as set forth in Schedule 4.9(c) (as such schedule may be
amended or supplemented from time to time), on the date hereof (i) none of the
Material Intellectual Property is the subject of any licensing or franchise
agreement pursuant to which such Grantor is the licensor or franchisor and (ii)
there are no other agreements, obligations, orders or judgments which impair the
use of any Material Intellectual Property.
(d) Such Grantor is not aware of any uses of any item of Material
Intellectual Property that could reasonably be expected to lead to such item
becoming invalid or unenforceable including unauthorized uses by third parties
and uses which were not supported by the goodwill of the business connected with
Trademarks and Trademark Licenses.
(e) No action or proceeding is pending, or, to such Grantor's
knowledge, threatened, on the date hereof (i) seeking to limit, cancel or
question the validity of any Owned Intellectual Property, (ii) alleging that any
services provided by, processes used by, or products manufactured or sold by
such Grantor infringe any patent, trademark, copyright, or any other right of
any other person, (iii) alleging that any Material Intellectual Property is
being licensed, sublicensed or used in violation of any intellectual property or
any other right of any other person, or (iv) which, if adversely determined,
would have a Material Adverse Effect on the
21
value of any Material Intellectual Property. To such Grantor's knowledge, no
person is engaging in any activity that infringes upon, or is otherwise an
unauthorized use of, any Material Intellectual Property or upon the rights of
such Grantor therein. Except as set forth in Schedule 4.9(e) (as such schedule
may be amended or supplemented from time to time), such Grantor has not granted
any license, release, covenant not to xxx, non-assertion assurance, or other
right to any person with respect to any part of the Material Intellectual
Property. The consummation of the transactions contemplated by this Agreement
(including the enforcement of remedies) will not result in the termination or
impairment of any of the Material Intellectual Property.
(f) With respect to each Copyright License, Trademark License, Trade
Secret License and Patent License which is included within the Material
Intellectual Property: (i) such license is valid and binding and in full force
and effect and represents the entire agreement between the respective licensor
and licensee with respect to the subject matter of such license; (ii) such
license will not cease to be valid and binding and in full force and effect on
terms identical to those currently in effect as a result of the rights and
interests granted herein, nor will the grant of such rights and interests
constitute a breach or default under such license or otherwise give the licensor
or licensee a right to terminate such license; (iii) such Grantor has not
received any notice of termination or cancellation under such license; (iv) such
Grantor has not received any notice of a breach or default under such license,
which breach or default has not been cured; (v) such Grantor has not granted to
any other person any rights, adverse or otherwise, under such license; and (vi)
such Grantor is not in breach or default in any material respect, and no event
has occurred that, with notice and/or lapse of time, would constitute such a
breach or default or permit termination, modification or acceleration under such
license.
(g) Except as set forth in Schedule 4.9(h), such Grantor has
performed all acts and has paid all required fees and taxes to maintain each and
every item of Material Intellectual Property in full force and effect and to
protect and maintain its interest therein. Such Grantor has used proper
statutory notice in connection with its use of each Patent, Trademark and
Copyright that is included in the Material Intellectual Property.
(h) None of the Trade Secrets that are included within the Material
Intellectual Property have been used, divulged, disclosed or appropriated to the
detriment of such Grantor for the benefit of any other person; (ii) no employee,
independent contractor or agent of such Grantor has misappropriated any trade
secrets of any other person in the course of the performance of his or her
duties as an employee, independent contractor or agent of such Grantor; and
(iii) no employee, independent contractor or agent of such Grantor is in default
or breach of any term of any employment agreement, non-disclosure agreement,
assignment of inventions agreement or similar agreement or contract relating in
any way to the protection, ownership, development, use or transfer of such
Grantor's Intellectual Property.
(i) Such Grantor has made all filings and recordations necessary to
adequately protect its interest in its Material Intellectual Property, including
recordation of its interests in the Patents and Trademarks included within the
Material Intellectual Property with the United States Patent and Trademark
Office and in corresponding national and international patent offices, and
recordation of any of its interests in the Copyrights included within the
Material Intellectual Property with the United States Copyright Office and in
corresponding national and international copyright offices.
22
(j) Such Grantor has taken all commercially reasonable steps to use
consistent standards of quality in the manufacture, distribution and sale of all
products sold and provision of all services provided under or in connection with
any item of Material Intellectual Property and has taken all steps to ensure
that all licensed users of any kind of Material Intellectual Property use such
consistent standards of quality.
4.10. Letters of Credit and Letter of Credit Rights. No Grantor is a
beneficiary or assignee under any Letter of Credit other than the Letters of
Credit described on Schedule 4.10 (as such schedule may be amended or
supplemented from time to time). With respect to any Letters of Credit that are
by their terms transferable, each Grantor has caused (or, in the case of the
Letters of Credit that are specified on Schedule 4.10 on the date hereof, will
use commercially reasonable efforts to cause) all issuers and nominated persons
under Letters of Credit in which the Grantor is the beneficiary or assignee to
consent to the assignment of such Letter of Credit to the Collateral Agent and
has agreed that upon the occurrence of a an Event of Default it shall cause all
payments thereunder to be made to the Collateral Account. With respect to any
Letters of Credit that are not transferable, each Grantor shall obtain (or, in
the case of the Letters of Credit that are specified on Schedule 4.10 on the
date hereof, use commercially reasonable efforts to obtain) the consent of the
issuer thereof and any nominated person thereon to the assignment of the
proceeds of the released Letter of Credit to the Collateral Agent in accordance
with Section 5-114(c) of the New York UCC.
4.11. Commercial Tort Claims. No Grantor has any Commercial Tort
Claims as of the date hereof individually or in the aggregate in excess of
$100,000 and, except as specifically described on Schedule 4.11 (as such
schedule may be amended or supplemented from time to time), no Grantor has any
Commercial Tort Claims after the date hereof individually or in the aggregate in
excess of $100,000.
4.12. Contracts.
(a) Schedule 4.12(a) (as such schedule may be amended or
supplemented from time to time) sets forth all of the Material Contracts in
which such Grantor has any right or interest.
(b) Except as set forth on Schedule 4.12(b) (as such schedule may be
amended or supplemented from time to time), no Material Contract prohibits
collateral assignment or encumbrance by such Grantor or requires or purports to
require consent of, or notice to, any party (other than such Grantor) to any
Material Contract in connection with the execution, delivery and performance of
this Agreement, including the exercise of remedies by the Collateral Agent with
respect to such Material Contract, except for such consents that have been
obtained and such notices that have been given.
(c) Each Material Contract is in full force and effect and
constitutes a valid and legally enforceable obligation of the Grantor party
thereto and (to the best of such Grantor's knowledge) each other party thereto,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
23
(d) The right, title and interest of such Grantor in, to and under
the Material Contracts are not subject to any valid defenses, rights of
recoupment or claims.
(e) Neither such Grantor nor (to the best of such Grantor's
knowledge) any of the other parties to the Material Contracts is in material
default in the performance or observance of any of the material terms thereof.
(f) Such Grantor has delivered or made available to the Collateral
Agent or its representatives a complete and correct copy of each Material
Contract, including all amendments, supplements and other modifications thereto.
(g) No amount payable to such Grantor under or in connection with
any Contract which has a value in excess of $200,000 is evidenced by any
Instrument or Tangible Chattel Paper which has not been delivered to the
Collateral Agent or constitutes Electronic Chattel Paper that is not under the
control (within the meaning of Section 9-105 of the New York UCC) of the
Collateral Agent.
(h) None of the parties to any Material Contract is a Governmental
Authority, except as set forth on Schedule 4.12(h) (as such schedule may be
amended or supplemented from time to time).
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Secured Parties that,
from and after the date of this Agreement until the Obligations (other than
Obligations in respect of any Specified Hedge Agreement) shall have been paid in
full, no letter of credit issued under the Credit Agreement shall be
outstanding, and all commitments to extend credit under the Credit Agreement
shall have expired or been terminated:
5.1. Covenants in Credit Agreement. Each Grantor shall take, or
shall refrain from taking, as the case may be, each action that is necessary to
be taken or not taken, as the case may be, so that no Default or Event of
Default is caused by the failure to take such action or to refrain from taking
such action by such Grantor or any of its Subsidiaries.
5.2. Delivery and Control of Instruments, Chattel Paper, Negotiable
Documents, Investment Property and Deposit Accounts(a) . (a) If any of the
Collateral is or shall become evidenced or represented by any Certificated
Security or any Instrument, Negotiable Document or Tangible Chattel Paper (with
a value in excess of $200,000), such Certificated Security, Negotiable Document,
Tangible Chattel Paper or such Instrument (other than checks received in the
ordinary course of business), shall be promptly delivered to the Collateral
Agent, duly endorsed in a manner satisfactory to the Collateral Agent, to be
held as Collateral pursuant to this Agreement, and all of such property owned by
any Grantor as of the Closing Date shall be delivered on the Closing Date.
(b) If any of the Collateral is or shall become "Electronic Chattel
Paper" such Grantor shall ensure that (i) a single authoritative copy exists
which is unique, identifiable, unalterable (except as provided in clauses (iii),
(iv) and (v) of this paragraph), (ii) such authoritative copy identifies the
Collateral Agent as the assignee and is communicated to and
24
maintained by the Collateral Agent or its designee, (iii) copies or revisions
that add or change the assignee of the authoritative copy can only be made with
the participation of the Collateral Agent, (iv) each copy of the authoritative
copy and any copy of a copy is readily identifiable as a copy and not the
authoritative copy and (v) any revision of the authoritative copy is readily
identifiable as an authorized or unauthorized revision.
(c) If any Collateral is or shall become evidenced or represented by
an Uncertificated Security of an Issuer that is a Subsidiary, such Grantor shall
cause the Issuer thereof, or, if any Collateral is or shall become evidenced or
represented by an Uncertificated Security of any other person, such Grantor
shall use commercially reasonable efforts to cause such person, either (i) to
register the Collateral Agent as the registered owner of such Uncertificated
Security, upon original issue or registration of transfer or (ii) to agree in
writing with such Grantor and the Collateral Agent that such Issuer will comply
with instructions with respect to such Uncertificated Security originated by the
Collateral Agent without further consent of such Grantor, such agreement to be
in substantially the form of Exhibit A, and such actions shall be taken on or
prior to the Closing Date with respect to any Uncertificated Securities owned as
of the Closing Date by any Grantor.
(d) Each Grantor shall use reasonable best efforts to ensure that it
maintains Securities Entitlements, Securities Accounts and Deposit Accounts, in
each case with a value in excess of $500,000, only with financial institutions
that have agreed to comply with entitlement orders and instructions issued or
originated by the Collateral Agent without further consent of such Grantor, such
agreement to be substantially in the form of Exhibit C or such other agreement
that is reasonably acceptable to the Collateral Agent.
(e) If any of the Collateral is or shall become evidenced or
represented by a Commodity Contract, such Grantor shall use reasonable best
efforts to cause the Commodity Intermediary with respect to such Commodity
Contract to as promptly as is reasonably practicable to agree in writing with
such Grantor and the Collateral Agent that such Commodity Intermediary will
apply any value distributed on account of such Commodity Contract as directed by
the Collateral Agent without further consent of such Grantor, such agreement to
be in substantially the form of Exhibit D or such other agreement that is
reasonably acceptable to the Collateral Agent.
(f) In addition to and not in lieu of the foregoing, if any Issuer
of any Investment Property is organized under the law of, or has its chief
executive office in, a jurisdiction outside of the United States, each Grantor
shall take such additional actions, including causing the issuer to register the
pledge on its books and records, as may be reasonably necessary or advisable or
as may otherwise be reasonably requested by the Collateral Agent, under the laws
of such jurisdiction to insure the validity, perfection and priority of the
security interest of the Collateral Agent.
(g) In the case of any transferable Letters of Credit in excess of
$100,000 individually or in the aggregate, each Grantor shall use commercially
reasonable efforts to obtain the consent of any issuer thereof to the transfer
of such Letter of Credit to the Collateral Agent. In the case of any other
Letter of Credit Rights in excess of $100,000 individually or in the aggregate
each Grantor shall use commercially reasonable efforts to obtain the consent of
the
25
issuer thereof and any nominated person thereon to the assignment of the
proceeds of the related Letter of Credit in accordance with Section 5-114(c) of
the New York UCC.
5.3. Maintenance of Insurance. (a) Such Grantor will maintain, with
financially sound and reputable insurance companies, insurance on all its
insurable property (including all Equipment and Vehicles) in at least such
amounts and against at least such risks as are usually insured against in the
same general area by similarly-sized companies engaged in the same or a similar
business; and furnish to the Collateral Agent with copies for each Secured
Party, upon written request, full information as to the insurance carried;
provided that in any event such Grantor will maintain, to the extent obtainable
on commercially reasonable terms, (i) property and casualty insurance on all
real and personal property on an all risks basis (including the perils of flood
and quake and loss by fire, explosion and theft), covering the repair or
replacement cost of all such property and consequential loss coverage for
business interruption and extra expense (which shall be limited to fixed
construction expenses and such other business interruption expenses as are
otherwise generally available to similarly-sized companies in similar
businesses), and (ii) public liability insurance. All such insurance with
respect to such Grantor shall be provided by insurers or reinsurers which (x) in
the case of United States insurers and reinsurers, have an A.M. Best
policyholders rating of not less than A- with respect to primary insurance and
B+ with respect to excess insurance and (y) in the case of non-United States
insurers or reinsurers, the providers of at least 80% of such insurance have
either an ISI policyholders rating of not less than A, an A.M. Best
policyholders rating of not less than A- or a surplus of not less than
$500,000,000 with respect to primary insurance, and an ISI policyholders rating
of not less than BBB with respect to excess insurance, or, if the relevant
insurance is not available from such insurers, such other insurers as the
Collateral Agent may reasonably approve in writing. All insurance shall (i)
provide that no cancellation, material reduction in amount or material change in
coverage thereof shall be effective until at least 30 days after receipt by the
Collateral Agent of written notice thereof (or, in the case of the failure to
pay premiums with respect to such insurance policies, ten days prior written
notice thereof), (ii) if reasonably requested by the Collateral Agent, include a
breach of warranty clause and (iii) be reasonably satisfactory in all other
respects to the Collateral Agent.
(b) Such Grantor will deliver to the Collateral Agent on behalf of
the Secured Parties, (i) on the Closing Date, a certificate dated such date
showing the amount and types of insurance coverage as of such date, (ii) upon
request of any Secured Party from time to time, full information as to the
insurance carried, (iii) promptly following receipt of notice from any insurer,
a copy of any notice of cancellation or material change in coverage from that
existing on the Closing Date, (iv) promptly, notice of any cancellation or
nonrenewal of coverage by such Grantor and (v) promptly after such information
is available to such Grantor, full information as to any claim for an amount in
excess of $200,000 with respect to any property and casualty insurance policy
maintained by such Grantor. Each Secured Party shall be named as additional
insured on all such liability insurance policies of such Grantor and the
Collateral Agent shall be named as loss payee on all property and casualty
insurance policies of such Grantor.
(c) Upon the request of the Collateral Agent (but no more than one
time each fiscal year unless an Event of Default has occurred and is
continuing), the Borrower shall deliver to the Secured Parties a report of a
reputable insurance broker with respect to such insurance and
26
such supplemental reports with respect thereto as the Collateral Agent may from
time to time reasonably request.
5.4. Payment of Obligations. Such Grantor shall pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as all
claims of any kind (including claims for labor, materials and supplies) against
or with respect to the Collateral, except that no such charge need be paid if
the amount or validity thereof is currently being contested in good faith by
appropriate proceedings, any reserves in conformity with GAAP with respect
thereto have been provided on the books of such Grantor and such proceedings
could not reasonably be expected to result in the sale, forfeiture or loss of
any material portion of the Collateral or any material interest therein.
5.5. Maintenance of Perfected Security Interest; Further
Documentation. (a)
(a) Such Grantor shall maintain each of the security interests
created by this Agreement as a perfected security interest to the extent
required hereby having at least the priority described in Section 4.3 and shall
defend such security interest against the claims and demands of all persons
whomsoever, subject to the provisions of Section 8.15.
(b) Such Grantor shall furnish to the Secured Parties from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the assets and property of such
Grantor as the Collateral Agent may reasonably request, all in reasonable
detail.
(c) At any time and from time to time, upon the written request of
the Collateral Agent, and at the sole expense of such Grantor, such Grantor
shall (i) promptly and duly authorize, execute and deliver, and have recorded,
such further instruments and documents and take such further actions as the
Collateral Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, the filing of any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby and
(ii) in the case of Investment Property, Deposit Accounts and any other relevant
Collateral, in each case with a value in excess of $500,000, use reasonable best
efforts to take any actions necessary to enable the Collateral Agent to obtain
"control" (within the meaning of the applicable Uniform Commercial Code) with
respect thereto, including executing and delivering and causing the relevant
depositary bank or securities intermediary to execute and deliver a Control
Agreement substantially in the form attached hereto as Exhibit C or such other
agreement that is reasonably acceptable to the Collateral Agent.
5.6. Changes in Locations, Name, Jurisdiction of Incorporation, etc.
Such Grantor shall not, except upon 15 days' prior written notice (or, in the
case of clause (i) below, with 30 days' subsequent written notice) to the
Collateral Agent and delivery to the Collateral Agent of duly authorized and,
where required, executed copies of (a) all additional financing statements and
other documents reasonably requested by the Collateral Agent to maintain the
validity, perfection and priority of the security interests provided for herein
and (b) if applicable, a written supplement to Schedule 4.5(a):
27
(i) permit any of the Inventory or Equipment (other than mobile
goods) with a value in excess of $100,000 to be kept at a location other
than those listed on Schedule 4.5(a);
(ii) change its legal name, jurisdiction of organization or the
location of its chief executive office or sole place of business from that
referred to in Section 4.4; or
(iii) change its legal name, identity or structure to such an extent
that any financing statement filed by the Collateral Agent in connection
with this Agreement would become misleading.
If a Grantor shall acquire any interest in any active mine portal or any
preparation plant or any As-Extracted Collateral then in each case unless (a)
such mine portal site or preparation plant is included on Schedule 4.5(b)
hereto, such Grantor shall (i) provide notice thereof to the Collateral Agent
within 30 days of such acquisition, together with a supplement to Schedule
4.5(b) reflecting such acquisition, (ii) deliver to the Collateral Agent a fully
completed financing statement in appropriate form for filing covering such
As-Extracted Collateral (which financing statements shall include the name of
the record owner of the real estate if other than the Grantor and real estate
descriptions sufficient to enable the Collateral Agent to record the financing
statements in the appropriate real property records) and (iii) reimburse the
Collateral Agent for all related filing fees and any recording or stamp taxes
due in connection with such filings.
5.7. Notices. Such Grantor shall advise the Collateral Agent
promptly, in reasonable detail, of:
(a) any Lien (other than any Lien expressly permitted by Section
6.02 of the Credit Agreement) on any of the Collateral which would adversely
affect the ability of the Collateral Agent to exercise any of its remedies
hereunder; and
(b) of the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby.
5.8. Investment Property. (a) If such Grantor shall become entitled
to receive or shall receive any stock or other ownership certificate (including
any certificate representing a stock dividend or a distribution in connection
with any reclassification, increase or reduction of capital or any certificate
issued in connection with any reorganization), option or rights in respect of
the Equity Interests in any Issuer, whether in addition to, in substitution of,
as a conversion of, or in exchange for, any shares of or other ownership
interests in the Pledged Securities, or otherwise in respect thereof, such
Grantor shall accept the same as the agent of the Secured Parties, hold the same
in trust for the Secured Parties and deliver the same forthwith to the
Collateral Agent in the exact form received, duly endorsed by such Grantor to
the Collateral Agent, if required, together with an undated stock power or
similar instrument of transfer covering such certificate duly executed in blank
by such Grantor and with, if the Collateral Agent so requests, signature
guaranteed, to be held by the Collateral Agent, subject to the terms hereof, as
additional collateral security for the Obligations. Any sums paid upon or in
respect of the Pledged Securities upon the liquidation or dissolution of any
Issuer shall be paid over to the
28
Collateral Agent to be held by it hereunder as additional collateral security
for the Obligations, and in case any distribution of capital shall be made on or
in respect of the Pledged Securities or any property shall be distributed upon
or with respect to the Pledged Securities pursuant to the recapitalization or
reclassification of the capital of any Issuer or pursuant to the reorganization
thereof, the property so distributed shall, unless otherwise subject to a
perfected security interest in favor of the Collateral Agent, be delivered to
the Collateral Agent to be held by it hereunder as additional collateral
security for the Obligations. If any sums of money or property so paid or
distributed in respect of the Pledged Securities shall be received by such
Grantor, such Grantor shall, until such money or property is paid or delivered
to the Collateral Agent, hold such money or property in trust for the Secured
Parties, segregated from other funds of such Grantor, as additional collateral
security for the Obligations.
(b) Without the prior written consent of the Collateral Agent, such
Grantor shall not, except, in each case, as expressly permitted by the Credit
Agreement (i) vote to enable, or take any other action to permit, any Issuer to
issue any stock, partnership interests, limited liability company interests or
other equity securities of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any stock,
partnership interests, limited liability company interests or other equity
securities of any nature of any Issuer, (ii) sell, assign, transfer, exchange,
or otherwise dispose of, or grant any option with respect to, any of the
Investment Property or Proceeds thereof or any interest therein, (iii) create,
incur or permit to exist any Lien or option in favor of, or any claim of any
person with respect to, any of the Investment Property or Proceeds thereof, or
any interest therein, except for the security interests created by this
Agreement, (iv) enter into any agreement or undertaking restricting the right or
ability of such Grantor or the Collateral Agent to sell, assign or transfer any
of the Investment Property or Proceeds thereof or any interest therein or (v)
cause or permit any Issuer of any Pledged Partnership Interests or Pledged LLC
Interests which are not securities (for purposes of the New York UCC) on the
date of this Agreement 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 New York 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 provisions in this clause
(v), 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; and provided,
further, that the certification of any of the Pledged Equity shall not
constitute a violation of this clause (v), if the certificates are delivered to
the Collateral Agent.
(c) In the case of each Grantor which is an Issuer, such Issuer
agrees that (i) it shall be bound by the terms of this Agreement relating to the
Pledged Securities issued by it and shall comply with such terms insofar as such
terms are applicable to it, (ii) it shall notify the Collateral Agent promptly
in writing of the occurrence of any of the events described in Section 5.8(a)
with respect to the Pledged Securities issued by it and (iii) the terms of
Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to all
actions that may be required of it pursuant to Section 6.3(c) or 6.7 with
respect to the Pledged Securities issued by it. In addition, each Grantor which
is either an Issuer or an owner of any Pledged Security hereby consents to the
grant by each other Grantor of the security interest hereunder in favor of the
Collateral Agent and to the transfer of any Pledged Security to the Collateral
Agent or its nominee following an
29
Event of Default and to the substitution of the Collateral Agent or its nominee
as a partner, member or shareholder of the Issuer of the related Pledged
Security.
5.9. Receivables. (a) Other than in the ordinary course of business
consistent with its past practice or standard industry practice, such Grantor
shall not (i) grant any extension of the time of payment of any Receivable, (ii)
compromise or settle any Receivable for less than the full amount thereof, (iii)
release, wholly or partially, any person liable for the payment of any
Receivable, (iv) allow any credit or discount whatsoever on any Receivable or
(v) amend, supplement or modify any Receivable in any manner that could
materially adversely affect the value thereof.
(b) Such Grantor shall deliver to the Collateral Agent a copy of
each material demand, notice or document received by it that questions or calls
into doubt the validity or enforceability of more than 5% of the aggregate
amount of the then outstanding Receivables that are included in the Collateral.
(c) Each Grantor shall perform and comply in all material respects
with all of its obligations with respect to the Receivables.
5.10. Intellectual Property. (a) Such Grantor (either itself or
through licensees) shall, with respect to each Trademark that is in included
within the Material Intellectual Property, (i) continue to use such Trademark as
appropriate in order to maintain such Trademark in full force free from any
claim of abandonment for non-use, (ii) maintain as in the past the quality of
products and services offered under such Trademark and take all necessary steps
to ensure that all licensed users of such Trademark maintain as in the past such
quality, (iii) use such Trademark with the appropriate notice of registration
and all other notices and legends required by applicable requirements of law,
(iv) not adopt or use any xxxx which is confusingly similar or a colorable
imitation of such Trademark unless the Collateral Agent, for the ratable benefit
of the Secured Parties, shall obtain a perfected security interest in such xxxx
pursuant to this Agreement and the Intellectual Property Security Agreement, and
(v) not (and not permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby such Trademark may become invalidated or
impaired in any way.
(b) Such Grantor (either itself or through licensees) shall not do
any act, or omit to do any act, whereby any Patent owned by such Grantor that is
included within the Material Intellectual Property shall become forfeited,
abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) (i) shall
employ each Copyright that is included within the Material Intellectual Property
and (ii) shall not (and shall not permit any licensee or sublicensee thereof to)
do any act or knowingly omit to do any act whereby any material portion of such
Copyrights may become invalidated or otherwise impaired. Such Grantor shall not
(either itself or through licensees) do any act whereby any material portion of
such Copyrights may fall into the public domain.
(d) Such Grantor (either itself or through licensees) shall not do
any act that uses any Material Intellectual Property to materially infringe,
misappropriate or violate the intellectual property rights of any other person.
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(e) Such Grantor (either itself or through licensees) shall use
proper statutory notice in connection with the use of the Material Intellectual
Property.
(f) Such Grantor shall notify the Collateral Agent promptly if it
knows, or has reason to know, that any application or registration relating to
any Material Intellectual Property may become forfeited, abandoned or dedicated
to the public, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, the United States Copyright
Office or any court or tribunal in any country) regarding such Grantor's
ownership of, or the validity of, any Material Intellectual Property or such
Grantor's right to register the same or to own and maintain the same.
(g) Promptly upon such Grantor's acquisition or creation of any
copyrightable work, invention, trademark or other similar property that is
material to the business of the Borrower and its Subsidiaries, taken as a whole,
apply for registration thereof with the United states Copyright Office, the
United States Patent and Trademark Office and any other appropriate office.
Whenever such Grantor, either by itself or through any agent, employee, licensee
or designee, shall file an application for the registration of any Intellectual
Property that is material to the business of the Borrower and its Subsidiaries,
taken as a whole, with the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in any other country or
any political subdivision thereof, such Grantor shall report such filing to the
Collateral Agent within five Business Days after the last day of the fiscal
quarter in which such filing occurs. Upon request of the Collateral Agent, such
Grantor shall execute and deliver, and have recorded, any and all agreements,
instruments, documents, and papers as the Collateral Agent may reasonably
request to evidence the Secured Parties' security interest in any such
Copyright, Patent, Trademark or other Intellectual Property of such Grantor and
the goodwill and general intangibles of such Grantor relating thereto or
represented thereby.
(h) Such Grantor shall take all reasonable and necessary steps,
including in any proceeding before the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency in
any other country or any political subdivision thereof, to maintain and pursue
each application (and to obtain the relevant registration) and to maintain each
registration of Intellectual Property material to the business of the Borrower
and its Subsidiaries, taken as a whole, including the payment of required fees
and taxes, the filing of responses to office actions issued by the United States
Patent and Trademark Office and the United States Copyright Office, the filing
of applications for renewal or extension, the filing of affidavits of use and
affidavits of incontestability, the filing of divisional, continuation,
continuation-in-part, reissue, and renewal applications or extensions, the
payment of maintenance fees, and the participation in interference,
reexamination, opposition, cancellation, infringement and misappropriation
proceedings.
(i) Such Grantor (either itself or through licensees) shall not,
without the prior written consent of the Collateral Agent, discontinue use of or
otherwise abandon any of the Material Intellectual Property, or abandon any
application or any right to file an application for letters patent, trademark,
or copyright, unless such Grantor shall have previously determined that such use
or the pursuit or maintenance of such Material Intellectual Property is no
longer desirable in the conduct of such Grantor's business and that the loss
thereof could not reasonably
31
be expected to have a Material Adverse Effect and, in which case, such Grantor
shall give prompt notice of any such abandonment to the Collateral Agent in
accordance herewith.
(j) In the event that any Material Intellectual Property is
infringed, misappropriated or diluted by a third party, such Grantor shall (i)
take such actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Material Intellectual Property and (ii) if such
Material Intellectual Property is of material economic value, promptly notify
the Collateral Agent after it learns thereof and xxx for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution.
(k) Such Grantor agrees that, should it obtain an ownership interest
in any item of intellectual property that is material to the business of the
Borrower and its Subsidiaries, taken as a whole, but which is not, as of the
Closing Date, a part of the Intellectual Property Collateral (the
"After-Acquired Intellectual Property"), (i) the provisions of Section 3 shall
automatically apply thereto, (ii) any such After-Acquired Intellectual Property,
and in the case of trademarks, the goodwill of the business connected therewith
or symbolized thereby, shall automatically become part of the Intellectual
Property Collateral, (iii) it shall give prompt (and, in any event within five
Business Days after the last day of the fiscal quarter in which such Grantor
acquires such ownership interest) written notice thereof to the Collateral Agent
in accordance herewith, and (iv) it shall provide the Collateral Agent promptly
(and, in any event within five Business Days after the last day of the fiscal
quarter in which such Grantor acquires such ownership interest) with an amended
Schedule 4.9(a) and take the actions specified in 5.9(m).
(l) Such Grantor agrees to execute an Intellectual Property Security
Agreement with respect to its Intellectual Property in substantially the form of
Exhibit B-1 in order to record the security interest granted herein to the
Collateral Agent for the ratable benefit of the Secured Parties with the United
States Patent and Trademark Office, the United States Copyright Office, and any
other applicable Governmental Authority.
(m) Such Grantor agrees to execute an After-Acquired Intellectual
Property Security Agreement with respect to its After-Acquired Intellectual
Property in substantially the form of Exhibit B-2 in order to record the
security interest granted herein to the Collateral Agent for the ratable benefit
of the Secured Parties with the United States Patent and Trademark Office, the
United States Copyright Office and any other applicable Governmental Authority.
(n) Such Grantor shall take all steps reasonably necessary to
protect the secrecy of all Trade Secrets that are included in the Material
Intellectual Property.
5.11. Contracts. (a) Such Grantor shall perform and comply in all
material respects with of all its obligations under the Material Contracts.
(b) Such Grantor shall not amend, modify, terminate, waive or fail
to enforce any provision of any Contract in any manner which could reasonably be
expected to materially adversely affect the value of the Collateral, taken as a
whole, or otherwise have a Material Adverse Effect.
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(c) Such Grantor shall exercise promptly and diligently each and
every material right which it may have under each Material Contract (other than
any right of termination), except to the extent that the board of directors of
such Grantor determines that it is in the best interests of such Grantor not to
do so.
(d) Such Grantor shall deliver to the Collateral Agent a copy of
each material demand, notice or document received by it relating in any way to
any Material Contract and shall also deliver to the Collateral Agent a copy of
all new Material Contracts entered into after the date of this Agreement.
(e) Such Grantor shall not permit to become effective in any
document creating, governing or providing for any Material Contract, or any
permit, lease or license material to the business of the Borrower and its
Subsidiaries, taken as a whole, a provision that would prohibit the creation or
perfection of, or exercise of remedies in connection with, a Lien on such
material permit, lease, license or Material Contract in favor of the of the
Collateral Agent for the ratable benefit of the Secured Parties unless such
Grantor believes, in its reasonable judgment, that such prohibition is usual and
customary in transactions of such type.
5.12. Commercial Tort Claims. Such Grantor shall advise the
Collateral Agent promptly of any Commercial Tort Claim held by such Grantor
individually or in the aggregate in excess of $100,000 and shall promptly
execute a supplement to this Agreement in form and substance reasonably
satisfactory to the Collateral Agent to grant a security interest in such
Commercial Tort Claim to the Collateral Agent for the ratable benefit of the
Secured Parties.
SECTION 6. REMEDIAL PROVISIONS
6.1. Certain Matters Relating to Receivables. (a) The Collateral
Agent shall have the right (but shall in no way be obligated) to make test
verifications of the Receivables that are included in the Collateral in any
manner and through any medium that it reasonably considers advisable, and each
Grantor shall furnish all such assistance and information as the Collateral
Agent may reasonably require in connection with such test verifications;
provided, however, that the Collateral Agent shall not conduct more than one
such verification procedure for each fiscal year unless an Event of Default has
occurred and is continuing. At any time upon the occurrence and during the
continuation of an Event of Default, upon the Collateral Agent's reasonable
request and at the expense of the relevant Grantor, such Grantor shall cause
independent public accountants or others satisfactory to the Collateral Agent to
furnish to the Collateral Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Receivables.
(b) The Collateral Agent hereby authorizes each Grantor to collect
such Grantor's Receivables, subject to the Collateral Agent's direction and
control, and each Grantor hereby agrees to continue to collect all amounts due
or to become due to such Grantor under the Receivables and any Supporting
Obligation and diligently exercise in its commercial judgment each material
right it may have under any Receivable and any Supporting Obligation, in each
case, at its own expense; provided, however, that the Collateral Agent may
curtail or terminate said authority at any time after the occurrence and during
the continuance of
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an Event of Default. If required by the Collateral Agent at any time after the
occurrence and during the continuance of an Event of Default, any payments of
Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any
event, within two Business Days) deposited by such Grantor in the exact form
received, duly endorsed by such Grantor to the Collateral Agent if required, in
a Collateral Account maintained under the sole dominion and control of the
Collateral Agent, subject to withdrawal by the Collateral Agent for the account
of the Secured Parties only as provided in Section 6.5, and (ii) until so turned
over, shall be held by such Grantor in trust for the Secured Parties, segregated
from other funds of such Grantor. Each such deposit of Proceeds of Receivables
shall be accompanied by a report identifying in reasonable detail the nature and
source of the payments included in the deposit.
(c) After the occurrence and during the continuance of an Event of
Default, at the Collateral Agent's request, each Grantor shall deliver to the
Collateral Agent all original and other documents evidencing, and relating to,
the agreements and transactions which gave rise to the Receivables that are
included in the Collateral, including all original orders, invoices and shipping
receipts.
6.2. Communications with Obligors; Grantors Remain Liable.
(a) The Collateral Agent in its own name or in the name of others
may at any time after the occurrence and during the continuance of an Event of
Default communicate with obligors under the Receivables and parties to the
Contracts to verify with them to the Collateral Agent's satisfaction the
existence, amount and terms of any Receivables or Contracts.
(b) The Collateral Agent may at any time notify, or require any
Grantor to so notify, the Account Debtor or counterparty on any Receivable or
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 Account Debtor or counterparty to make all
payments under the Receivables and/or Contracts directly to the Collateral
Agent;
(c) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of the Receivables and Contracts to observe and
perform in its commercial judgment all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise thereto. No Secured Party shall have any obligation or
liability under any Receivable (or any agreement giving rise thereto) or
Contract by reason of or arising out of this Agreement or the receipt by any
Secured Party of any payment relating thereto, nor shall any Secured Party be
obligated in any manner to perform any of the obligations of any Grantor under
or pursuant to any Receivable (or any agreement giving rise thereto) or
Contract, to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.
6.3. Pledged Securities. (a) Unless an Event of Default shall have
occurred and be continuing and the Collateral Agent shall have given notice to
the relevant Grantor of the Collateral Agent's intent to exercise its
corresponding rights pursuant to Section 6.3(b), each
34
Grantor shall be permitted to receive all cash dividends paid in respect of the
Pledged Equity Interests and all payments made in respect of the Pledged Notes,
in each case paid in the normal course of business of the relevant Issuer and
consistent with past practice, to the extent permitted in the Credit Agreement,
and to exercise all voting and corporate rights with respect to the Pledged
Securities; provided, however, that such Grantor will not exercise or will
refrain from exercising any such voting and other consensual right pertaining to
the Pledged Equity Interests, if such action would have a material adverse
effect on the value of any Pledged Equity Interests or would be inconsistent
with or result in any violation of any provision of the Credit Agreement, this
Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing: (i) 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, but shall be under
no obligation, to exercise or refrain from exercising such voting and other
consensual rights and (ii) the Collateral Agent shall have the right, without
notice to any Grantor, to transfer all or any portion of the Investment Property
to its name or the name of its nominee or agent. In addition, the Collateral
Agent shall have the right at any time, without notice to any Grantor, to
exchange any certificates or instruments representing any Investment Property
for certificates or instruments of smaller or larger denominations. 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,
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 in connection with the exercise of such rights and each Grantor
acknowledges that the Collateral Agent may utilize the power of attorney set
forth herein for such purpose.
(c) Each Grantor hereby authorizes and instructs each Issuer of any
Pledged Securities pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the Collateral Agent in writing that (x) states
that an Event of Default has occurred and is continuing and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying, and (ii) upon any such instruction following
the occurrence and during the continuance of an Event of Default, pay any
dividends or other payments with respect to the Investment Property, including
Pledged Securities, directly to the Collateral Agent.
6.4. Proceeds to be Turned Over To Collateral Agent. In addition to
the rights of the Secured Parties specified in Section 6.1 with respect to
payments of Receivables, if an Event of Default shall occur and be continuing,
all Proceeds received by any Grantor consisting of cash, Permitted Investments,
checks and other near-cash items shall be held by such Grantor in trust for the
Secured Parties, segregated from other funds of such Grantor, and shall,
following notice to the Borrower from the Collateral Agent forthwith upon
receipt by such Grantor, be turned over to the Collateral Agent in the exact
form received by such Grantor (duly endorsed by such Grantor to the Collateral
Agent, if required). All Proceeds received by the Collateral Agent hereunder
shall be held by the Collateral Agent in a Collateral Account maintained under
its sole dominion and control. All Proceeds while held by the Collateral Agent
in a Collateral Account
35
(or by such Grantor in trust for the Secured Parties) shall continue to be held
as collateral security for all the Obligations and shall not constitute payment
thereof until applied as provided in Section 6.5.
6.5. Application of Proceeds. If an Event of Default shall have
occurred and be continuing, at any time at the Collateral Agent's election, the
Collateral Agent may apply all or any part of the net Proceeds (after deducting
fees and expenses as provided in Section 6.6) constituting Collateral realized
through the exercise by the Collateral Agent of its remedies hereunder, whether
or not held in any Collateral Account, and any proceeds of the guarantee set
forth in Section 2, in payment of the Obligations in the following order:
First, to the Collateral Agent, to pay incurred and unpaid fees and
expenses of the Secured Parties under the Loan Documents;
Second, to the Collateral Agent, for application by it towards
payment of amounts then due and owing and remaining unpaid in respect of
the Obligations, pro rata among the Secured Parties according to the
amounts of the Obligations then due and owing and remaining unpaid to the
Secured Parties;
Third, to the Collateral Agent, for application by it towards
prepayment of the Obligations, pro rata among the Lenders according to the
amounts of the Obligations then held by the Lenders; and
Fourth, any balance of such Proceeds remaining after the Obligations
shall have been paid in full, no letters of credit issued under the Credit
Agreement shall be outstanding and the Commitments under the Credit
Agreement shall have terminated or expired shall be paid over to the
Borrower or to whomsoever may be lawfully entitled to receive the same.
6.6. Code and Other Remedies. (a) If an Event of Default shall occur
and be continuing, the Collateral Agent, on behalf of the Secured Parties, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the New York UCC (whether or not the New York UCC applies to the affected
Collateral) or its rights under any other applicable law or in equity. Without
limiting the generality of the foregoing, the Collateral Agent, without demand
of performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon any
Grantor or any other person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, license, assign, give option or
options to purchase, or otherwise dispose of and deliver the Collateral or any
part thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker's board or office of
any Secured Party or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. Each Secured Party shall
have the right upon any such public sale or sales, and, to the extent permitted
by law, upon any such private sale or sales, to purchase the whole or any
36
part of the Collateral so sold, free of any right or equity of redemption in any
Grantor, which right or equity is hereby waived and released. Each 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 days notice to such
Grantor of the time and place of any public 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. 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. 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 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. Each Grantor further
agrees, at the Collateral Agent's request, to assemble the Collateral and make
it available to the Collateral Agent at places which the Collateral Agent shall
reasonably select, whether at such Grantor's premises or elsewhere. The
Collateral Agent shall have the right to enter onto the property where any
Collateral is located and take possession thereof with or without judicial
process.
(b) The Collateral Agent shall apply the net proceeds of any action
taken by it pursuant to this Section 6.6, after deducting all reasonable costs
and expenses of every kind incurred in connection therewith or incidental to the
care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Secured Parties hereunder, including reasonable
attorneys' fees and disbursements, to the payment in whole or in part of the
Obligations and only after such application and after the payment by the
Collateral Agent of any other amount required by any provision of law, including
Section 9-615(a) of the New York UCC, need the Collateral Agent account for the
surplus, if any, to any Grantor. If the Collateral Agent sells any of the
Collateral upon credit, the Grantor will be credited only with payments actually
made by the purchaser and received by the Collateral Agent and applied to
indebtedness of the purchaser. In the event the purchaser fails to pay for the
Collateral, the Collateral Agent may resell the Collateral and the Grantor shall
be credited with proceeds of the sale. To the extent permitted by applicable
law, each Grantor waives all claims, damages and demands it may acquire against
any Secured Party arising out of the exercise by them of any rights hereunder.
(c) In the event of any disposition of any of the Intellectual
Property, the goodwill of the business connected with and symbolized by any
Trademarks subject to such Disposition shall be included, and the applicable
Grantor shall supply the Collateral Agent or its
37
designee with such Grantor's know-how and expertise, and with documents and
things embodying the same, relating to the manufacture, distribution,
advertising and sale of products or the provision of services relating to any
Intellectual Property subject to such disposition, and such Grantor's customer
lists and other records and documents relating to such Intellectual Property and
to the manufacture, distribution, advertising and sale of such products and
services.
6.7. Registration Rights. (a) Each Grantor recognizes that the
Collateral Agent may be unable to effect a public sale of any or all the Pledged
Equity Interests or the Pledged Debt Securities, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise, and may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers which will be obliged to agree,
among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Collateral
Agent shall be under no obligation to delay a sale of any of the Pledged Equity
Interests or the Pledged Debt Securities for the period of time necessary to
permit the Issuer thereof to register such securities for public sale under the
Securities Act, or under applicable state securities laws, even if such Issuer
would agree to do so.
(b) Each Grantor agrees to use its commercially reasonable efforts
to do or cause to be done all such other acts as may be necessary to make such
sale or sales of all or any portion of the Pledged Equity Interests or the
Pledged Debt Securities pursuant to this Section 6.7 valid and binding and in
compliance with any and all other applicable requirements of law. Each Grantor
further agrees that a breach of any of the covenants contained in this Section
6.7 will cause irreparable injury to the Secured Parties, that the Secured
Parties have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 6.7 shall be
specifically enforceable against such Grantor, and such Grantor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred and
is continuing under the Credit Agreement or a defense of payment.
6.8. Deficiency. Each Grantor shall remain liable for any deficiency
if the proceeds of any sale or other disposition of the Collateral are
insufficient to pay its Obligations and the fees and disbursements of any
attorneys employed by any Secured Party to collect such deficiency.
SECTION 7. THE COLLATERAL AGENT
7.1. Collateral Agent's Appointment as Attorney-in-Fact, etc. (a)
Each Grantor hereby irrevocably constitutes and appoints the Collateral Agent
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of such Grantor and in the name of such Grantor or in its own
name, for the purpose of carrying out the terms of this Agreement, to take any
and all appropriate action and to execute any and all documents and instruments
which may be necessary or desirable to accomplish the purposes of this
Agreement, and, without limiting the
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generality of the foregoing, each Grantor hereby gives the Collateral Agent the
power and right, on behalf of such Grantor, without notice to or assent by such
Grantor, to do any or all of the following:
(i) in the name of such Grantor or its own name, or otherwise,
take possession of and endorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Receivable or Contract or with respect to any other Collateral and file
any claim or take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Collateral Agent for the
purpose of collecting any and all such moneys due under any Receivable or
Contract or with respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and
deliver, and have recorded, any and all agreements, instruments, documents
and papers as the Collateral Agent may request to evidence the Secured
Parties' security interest in such Intellectual Property and the goodwill
and general intangibles of such Grantor relating thereto or represented
thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in
Section 6.7 or 6.8, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of
the Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Collateral Agent or as the Collateral Agent
shall direct; (2) ask or demand for, collect, and receive payment of and
receipt for, any and all moneys, claims and other amounts due or to become
due at any time in respect of or arising out of any Collateral; (3) sign
and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral; (4) commence and prosecute any suits, actions or proceedings
at law or in equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in
respect of any Collateral; (5) defend any suit, action or proceeding
brought against such Grantor with respect to any Collateral; (6) settle,
compromise or adjust any such suit, action or proceeding and, in
connection therewith, give such discharges or releases as the Collateral
Agent may deem appropriate; (7) assign any Copyright, Patent or Trademark
(along with the goodwill of the business to which any such Copyright,
Patent or Trademark pertains), throughout the world for such term or
terms, on such conditions, and in such manner, as the Collateral Agent
shall in its sole discretion determine; and (8) generally, sell, transfer,
pledge and make any agreement with respect to or otherwise deal with any
of the Collateral as fully and completely as though the Collateral Agent
were the absolute owner thereof for all purposes, and do, at the
Collateral Agent's option and such Grantor's expense, at any time, or from
time to time, all acts and things which the
39
Collateral Agent deems necessary to protect, preserve or realize upon the
Collateral and the Secured Parties' security interests therein and to
effect the intent of this Agreement, all as fully and effectively as such
Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Collateral Agent agrees that, except as provided in Section 7.1(b), it will not
exercise any rights under the power of attorney provided for in this Section
7.1(a) unless an Event of Default shall have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Collateral Agent, at its option, but without
any obligation so to do, may perform or comply, or otherwise cause performance
or compliance, with such agreement; provided, however, that unless and Event of
Default has occurred and is continuing or time is of the essence, the Collateral
Agent shall not exercise this power without first making written demand on the
Grantor and the Grantor failing to immediately comply therewith.
(c) The expenses of the Collateral Agent incurred in connection with
actions undertaken as provided in this Section 7.1, together with interest
thereon at a rate per annum equal to the rate per annum at which interest would
then be payable on past due Revolving Loans that are ABR Loans under the Credit
Agreement, from the date of payment by the Collateral Agent to the date
reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Collateral Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.
7.2. Duty of Collateral Agent. The Collateral Agent's sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the New York UCC or otherwise, shall
be to deal with it in the same manner as the Collateral Agent deals with similar
property for its own account. Neither the Collateral Agent, nor any other
Secured Party nor any of their respective officers, directors, partners,
employees, agents, attorneys and other advisors, attorneys-in-fact or affiliates
shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Grantor or any
other person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Secured Parties
hereunder are solely to protect the Secured Parties' interests in the Collateral
and shall not impose any duty upon any Secured Party to exercise any such
powers. The Secured Parties shall be accountable only for amounts that they
actually receive as a result of the exercise of such powers, and neither they
nor any of their officers, directors, partners, employees, agents, attorneys and
other advisors, attorneys-in-fact or affiliates shall be responsible to any
Grantor for any act or failure to act hereunder, except to the extent that any
such act or failure to act is found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted primarily from their own gross
negligence or willful misconduct in breach of a duty owed to such Grantor.
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7.3. Execution of Financing Statements. Each Grantor acknowledges
that pursuant to Section 9-509(b) of the New York UCC and any other applicable
law, each Grantor authorizes the Collateral Agent to file or record financing or
continuation statements, and amendments thereto, and other filing or recording
documents or instruments with respect to the Collateral, without the signature
of such Grantor, in such form and in such offices as the Collateral Agent
reasonably determines appropriate to perfect or maintain the perfection of the
security interests of the Collateral Agent under this Agreement. Each Grantor
agrees that such financing statements may describe the collateral in the same
manner as described in the Security documents or as "all assets" or "all
personal property," whether now owned or hereafter existing or acquired or such
other description as the Collateral Agent, in its sole judgment, determines is
necessary or advisable. A photographic or other reproduction of this Agreement
shall be sufficient as a financing statement or other filing or recording
document or instrument for filing or recording in any jurisdiction.
7.4. Authority of Collateral Agent. Each Grantor acknowledges that
the rights and responsibilities of the Collateral Agent under this Agreement
with respect to any action taken by the Collateral Agent or the exercise or
non-exercise by the Collateral Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Collateral Agent and the other
Secured Parties, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Collateral Agent and the Grantors, the Collateral Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.
7.5. Appointment of Co-Collateral Agents. At any time or from time
to time, in order to comply with any applicable requirement of law, the
Collateral Agent may appoint another bank or trust company or one of more other
persons, either to act as co-agent or agents on behalf of the Secured Parties
with such power and authority as may be necessary for the effectual operation of
the provisions hereof and which may be specified in the instrument of
appointment (which may, in the discretion of the Collateral Agent, include
provisions for indemnification and similar protections of such co-agent or
separate agent).
SECTION 8. MISCELLANEOUS
8.1. Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except by a
written instrument executed by each affected Grantor and the Collateral Agent,
subject to any consents required under Section 9.08 of the Credit Agreement;
provided that any provision of this Agreement imposing obligations on any
Grantor may be waived by the Collateral Agent in a written instrument executed
by the Collateral Agent.
8.2. Notices. All notices, requests and demands to or upon the
Collateral Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 9.01 of the Credit Agreement; provided that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 8.2.
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8.3. No Waiver by Course of Conduct; Cumulative Remedies. No Secured
Party shall by any act (except by a written instrument pursuant to Section 8.1),
delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default. No
failure to exercise, nor any delay in exercising, on the part of any Secured
Party, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by any Secured Party of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which such Secured Party would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
8.4. Enforcement Expenses; Indemnification. (a) Each Grantor
agrees to pay or reimburse each Secured Party for all its costs and expenses
incurred in collecting against such Grantor under the guarantee contained in
Section 2 or otherwise enforcing or preserving any rights under this Agreement
and the other Loan Documents to which such Grantor is a party, including the
reasonable fees and disbursements of counsel to each Secured Party and of
counsel to the Collateral Agent.
(b) Each Grantor agrees to pay, and to hold the Secured Parties
harmless from, any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to, or resulting from any delay in paying, any
and all stamp, excise, sales or other taxes which may be payable or determined
to be payable with respect to any of the Collateral or in connection with any of
the transactions contemplated by this Agreement.
(c) Each Grantor agrees to pay, and to hold the Secured Parties
harmless from, any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement to the extent the Borrower
would be required to do so pursuant to Section 9.05 of the Credit Agreement.
(d) The agreements in this Section shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
8.5. Successors and Assigns. This Agreement shall be binding upon
the successors and assigns of each Grantor and shall inure to the benefit of the
Secured Parties and their successors and assigns; provided that no Grantor may
assign, transfer or delegate any of its rights or obligations under this
Agreement without the prior written consent of the Collateral Agent, and any
attempted assignment without such consent shall be null and void.
8.6. Set-Off. Each Grantor hereby irrevocably authorizes each
Secured Party at any time and from time to time, while an Event of Default shall
have occurred and be continuing, without notice to such Grantor or any other
Grantor, any such notice being expressly waived by each Grantor, to set-off and
appropriate and apply any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits,
42
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Secured Party to or for the credit or the account of such Grantor,
or any part thereof in such amounts as such Secured Party may elect, against and
on account of the obligations and liabilities of such Grantor to such Secured
Party hereunder and claims of every nature and description of such Secured Party
against such Grantor, in any currency, whether arising hereunder, under the
Credit Agreement, any other Loan Document or otherwise, as such Secured Party
may elect, whether or not any Secured Party has made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured. Each Secured Party shall notify such Grantor promptly of any such
set-off and the application made by such Secured Party of the proceeds thereof,
provided that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Secured Party under this
Section are in addition to other rights and remedies (including other rights of
set-off) which such Secured Party may have.
8.7. Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by facsimile), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
8.8. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.9. Section Headings. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
8.10. Integration. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Collateral Agent and the other
Secured Parties with respect to the subject matter hereof and thereof, and there
are no promises, undertakings, representations or warranties by any Secured
Party relative to subject matter hereof and thereof not expressly set forth or
referred to herein or in the other Loan Documents.
8.11. APPLICABLE LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
8.12. Submission to Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts
of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;
43
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such
Grantor at its address referred to in Section 8.2 or at such other address
of which the Collateral Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred
to in this Section any special, exemplary, punitive or consequential
damages.
8.13. Acknowledgments. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a
party;
(b) no Secured Party has any fiduciary relationship with or duty to
any Grantor arising out of or in connection with this Agreement or any of
the other Loan Documents, and the relationship between the Grantors, on
the one hand, and the Secured Parties, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Secured Parties or among the Grantors and the Secured
Parties.
8.14. Additional Grantors. Each Subsidiary of the Borrower that is
required to become a party to this Agreement pursuant to Section 5.09 of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the form
of Annex 1 hereto.
8.15. Releases. (a) At such time as the Loans and the other
Obligations (other than Obligations in respect of any Specified Hedge Agreement)
shall have been paid in full, the commitments under the Credit Agreement have
been terminated or expired and no letter of credit issued under the Credit
Agreement shall be outstanding, the Collateral shall be released from the Liens
created hereby, and this Agreement and all obligations (other than those
expressly stated to survive such termination) of the Collateral Agent and each
Grantor hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party, and all rights to the Collateral shall
revert to the Grantors. At the request and sole expense of any Grantor following
any such termination, the Collateral Agent shall deliver to such Grantor any
Collateral held by
44
the Collateral Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold or otherwise disposed of
by any Grantor in a transaction permitted by the Credit Agreement (including any
distribution of membership interests owned by the Borrower in Holdings or Alpha
Coal Management, LLC to employees of the Borrower and its Subsidiaries pursuant
to the Management Incentive Program), then the Collateral Agent, at the request
and sole expense of such Grantor, shall execute and deliver to such Grantor all
releases or other documents reasonably necessary or desirable for the release of
the Liens created hereby on such Collateral. At the request and sole expense of
the Borrower, a Guarantor (other than Holdings) shall be released from its
obligations hereunder in the event that all the Equity Interests in such
Guarantor shall be sold or otherwise disposed of in a transaction permitted by
the Credit Agreement; provided that the Borrower shall have delivered to the
Collateral Agent, at least five Business Days prior to the date of the proposed
release, a written request for such release identifying the relevant Guarantor
and the terms of the relevant sale or other disposition in reasonable detail,
including the price thereof and any expenses incurred in connection therewith,
together with a certification by the Borrower stating that such transaction is
in compliance with the Credit Agreement and the other Loan Documents.
(c) Each Grantor acknowledges that it is not authorized to file any
financing statement or amendment or termination statement with respect to any
financing statement originally filed in connection herewith without the prior
written consent of the Collateral Agent, subject to such Grantor's rights under
Section 9-509(d)(2) of the New York UCC.
8.16. WAIVER OF JURY TRIAL. EACH GRANTOR AND THE COLLATERAL AGENT
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
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IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.
ALPHA NATURAL RESOURCES, LLC
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President
ANR HOLDINGS, LLC
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President
ALPHA LAND AND RESERVES, LLC
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: President
46
ALPHA NATURAL RESOURCES CAPITAL CORP.
ALPHA COAL SALES CO., LLC
ALPHA ENERGY GLOBAL MARKETING, LLC
ALPHA NATURAL RESOURCES SERVICES, LLC
ALPHA TERMINAL COMPANY, LLC
AMFIRE, LLC
AMFIRE HOLDINGS, INC.
AMFIRE MINING COMPANY, LLC
AMFIRE WV, X.X.
XXXXXX RUN MINING COMPANY, LLC
XXXXXXXXX-XXXXXXX COAL COMPANY, LLC
ENTERPRISE MINING COMPANY, LLC
XXXXXXXXX COAL CO., LLC
GALLUP TRANSPORTATION AND TRANSLOADING
COMPANY, LLC
XXXXXXX PROCESSING COMPANY, LLC
XXXXXX PROCESSING COMPANY, LLC
KINGWOOD MINING COMPANY, LLC
LITWAR PROCESSING COMPANY, LLC
MAXXIM REBUILD CO., LLC
MAXXIM SHARED SERVICES, LLC
MAXXUM CARBON RESOURCES, LLC
XXXXXXXX-WYOMING COAL COMPANY, LLC
NATIONAL KING COAL LLC
NEWHALL MINING COMPANY, LLC
PARAMONT COAL COMPANY VIRGINIA, LLC
RIVERSIDE ENERGY COMPANY, LLC
SOLOMONS MINING COMPANY
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President
00
XXXXXXXX XXXXX XXXXXXX, INC.,
as Administrative Agent and Collateral
Agent
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Vice President
48
