EXHIBIT 10.2
FORM OF
SECURITY AGREEMENT
SECURITY AGREEMENT (U.S.) (this "AGREEMENT") dated as of May 22, 2002
by and between ________________________, (1) having its chief executive office
at 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 (the "SUBSIDIARY GUARANTOR"), and FLEET
NATIONAL BANK, as secured party and as administrative agent for itself and each
other Bank (as defined below) (the "ADMINISTRATIVE AGENT").
WHEREAS, Xxxxxx & Xxxxx, Inc. (the "BORROWER") has requested the
Administrative Agent and the lending institutions listed on the signature pages
of a certain Revolving Credit Agreement dated as of May 22, 2002 (the "LOAN
AGREEMENT") (collectively, the "BANKS") to enter into such Loan Agreement;
WHEREAS, the Borrower is the sole member of the Subsidiary Guarantor,
and the Subsidiary Guarantor has guaranteed the Borrower's obligations under the
Loan Agreement pursuant to a Subsidiary Guaranty of even date (the "GUARANTY");
and
WHEREAS, it is a condition precedent to the Banks' agreement to enter
into the Loan Agreement and extend credit to the Borrower thereunder that the
Subsidiary Guarantor execute and deliver this Agreement and grant the security
interests herein provided.
NOW, THEREFORE, in order to induce the Banks to enter into the Loan
Agreement and extend credit to the Borrower thereunder, which shall be of direct
benefit to the Subsidiary Guarantor as a subsidiary of the Borrower, and in
consideration thereof, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1. DEFINITIONS.
1.01 Generally. Capitalized terms used but not defined herein or in any
certificate, report or other document delivered pursuant hereto shall have the
meanings ascribed to such terms in the Loan Agreement. Except as otherwise
defined herein, terms defined in the NY UCC (as defined below) and used herein
shall have the meanings ascribed to such terms in the NY UCC; provided, however,
that if a term is defined in Article 9 of the NY UCC differently than in another
Article thereof, the term shall have the meaning set forth in Article 9.
1.02 Terms Defined in this Agreement. For purposes of this Agreement,
the following terms have the meanings set forth below:
"ADMINISTRATIVE AGENT" shall have the meaning set forth in the
Preamble.
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(1) See Footnote 2 on signature page.
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"AGREEMENT" shall have the meaning set forth in the Preamble.
"BANKS" shall have the meaning set forth in the Preamble.
"BLUE SKY LAWS" shall have the meaning set forth in Section 9.02(c).
"CHANGE" shall have the meaning set forth in Section 8.02.
"COLLATERAL" shall have the meaning set forth in Article 2.
"BORROWER" shall have the meaning set forth in the Preamble.
"INDEMNIFIED PARTY" shall have the meaning set forth in Article 12.
"LOAN AGREEMENT" shall have the meaning set forth in the Preamble.
"NY UCC" means the Uniform Commercial Code in effect in the State of
New York, as it may be amended from time to time, provided, that if by reason of
mandatory provisions of law, perfection, or the effect of perfection or
nonperfection, of the Security Interest in any Collateral or the availability of
any remedy hereunder is governed by the Uniform Commercial Code as in effect in
a jurisdiction other than New York, "NY UCC" means the Uniform Commercial Code
as in effect in such other jurisdiction for purposes of the provisions hereof
relating to such perfection or effect of perfection or non-perfection or
availability of such remedy, as the case may be.
"PERFECTION CERTIFICATE" means the certificate, substantially in the
form attached hereto as Exhibit A, signed by an authorized officer of the
Subsidiary Guarantor and delivered to the Administrative Agent.
"PERFECTION DOCUMENTS" shall have the meaning set forth in Section
3.01.
"SECURITIES ACT" shall have the meaning set forth in Section 9.02(c).
"SECURITY INTEREST" means the security interest and liens granted
pursuant to Article 2 hereof as well as all other security interests created or
assigned as additional security for the Obligations pursuant to this Agreement.
"SUBSIDIARY GUARANTOR" shall have the meaning set forth in the
Preamble.
"UNIFORM COMMERCIAL CODE" means, in reference to any jurisdiction, the
Uniform Commercial Code as adopted and in effect in such jurisdiction, as it may
be amended from time to time.
1.03 Terms Defined in NY UCC. For purposes of this Agreement, the terms
for which definitions are supplied by the NY UCC include, without limitation,
those set forth
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below. Term and section references contained herein are provided for convenience
only, and the omission of any term from following list is not intended to mean
that the applicable NY UCC definition does not apply to such omitted term.
"ACCOUNT" Section 9-102(a)(2)
"ACCOUNT DEBTOR" Section 9-102(a)(3)
"CERTIFICATED SECURITY" Section 8-102(a)(4)
"CONFIRMER" Section 5-102(a)(4)
"ELECTRONIC CHATTEL PAPER" Section 9-102(a)(31)
"ENTITLEMENT HOLDER" Section 8-102(a)(7)
"FILING OFFICE" Section 9-102(a)(37)
"FINANCIAL ASSET" Section 8-102(a)(9)
"FINANCING STATEMENT" Section 9-102(a)(39)
"FIXTURE FILING" Section 9-102(a)(40)
"GENERAL INTANGIBLE" Section 9-102(a)(42)
"INSTRUMENT(S)" Section 9-102(a)(47)
"INVESTMENT PROPERTY Section 9-102(a)(49)
"ISSUER" Section 8-201
"LETTER-OF-CREDIT RIGHT" Section 9-102(a)(51)
"PAYMENT INTANGIBLE" Section 9-102(a)(61)
"PROCEEDS" Section 9-102(a)(64)
"SECURITY" OR "SECURITIES" Section 8-102(a)(15)
"SUPPORTING OBLIGATION" Section 9-102(a)(77)
"TANGIBLE CHATTEL PAPER" Section 9-102(a)(78)
"UNCERTIFICATED SECURITY" Section 8-102(a)(18)
1.04 Matters of Interpretation and Construction.
(a) The language of this Agreement, having been negotiated by
the parties hereto, shall not be construed against any party hereto by reason of
the extent to which such party or its counsel participated in the drafting
hereof or by reason of the extent to which any such provision is inconsistent
with any prior draft hereof.
(b) Use of the singular shall be deemed to include the plural
and use of the plural shall be deemed to include the singular. Use of any gender
shall be deemed to include all other genders.
(c) A reference to any law, agreement or other document
includes any amendment or modification to such law, agreement or document.
(d) A reference to any Person includes its successors and
permitted assigns.
(e) Unless the context clearly requires otherwise, reference
to a particular "Article" or "Section" refers to the corresponding article or
section of this Agreement.
(f) Unless the context clearly requires otherwise, use of the
word
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"including" shall mean "including, without limitation".
ARTICLE 2. GRANT OF SECURITY INTEREST. The Subsidiary Guarantor hereby grants to
the Administrative Agent for the benefit of the Administrative Agent and the
Banks, to secure the full, punctual and unconditional payment and performance of
the Obligations, a security interest in all of the Subsidiary Guarantor 's
right, title and interest in and to the following properties, assets and rights
of the Subsidiary Guarantor, wherever located, whether now owned or hereafter
acquired or arising, and all Proceeds and products thereof (all of the same
being hereinafter called the "COLLATERAL"):
all (i) Accounts, (ii) General Intangibles constituting any right to
the payment of money, including, without limitation, all Payment
Intangibles and all tax refunds, (iii) Instruments (including
promissory notes and rights to payment thereunder), (iv) Chattel Paper
(whether Tangible Chattel Paper or Electronic Chattel Paper)
evidencing, representing, arising from or existing in respect of,
relating to securing or otherwise supporting the payment of any of the
foregoing described in clauses (i), (ii) or (iii) above, (v)
Letter-of-Credit Rights (whether or not the letter of credit is
evidenced by a writing) evidencing, representing, arising from or
existing in respect of, relating to securing or otherwise supporting
the payment of any of the foregoing described in clauses (i), (ii) or
(iii) above, (vi) Supporting Obligations evidencing, representing,
arising from or existing in respect of, relating to securing or
otherwise supporting the payment of any of the foregoing described in
clauses (i), (ii) or (iii) above, (vii) Investment Property
constituting Securities in Subsidiaries of the Subsidiary Guarantor and
General Intangibles constituting equity interests in Subsidiaries of
the Subsidiary Guarantor (including, without limitation, Certificated
Securities and Uncertificated Securities), (viii) any other rights to
the payment of money, (ix) sums payable under any policy of insurance
(including without limitation, any return for premiums) relating to any
of the foregoing, and (x) books, records, correspondence, credit files,
invoices and other papers, including, without limitation, all tapes,
cards, computer runs and other papers and documents in the possession
or under the control of the Subsidiary Guarantor or any computer bureau
or service company from time to time acting for the Subsidiary
Guarantor.
The Subsidiary Guarantor agrees that the security interest herein granted has
attached and shall continue until (i) the Obligations have been paid, performed
and discharged in full and (ii) the Banks are no longer committed to extend any
credit to the Borrower under the Loan Agreement or any other Loan Document. The
security interest is granted as security only and shall not subject the
Administrative Agent or the Banks to, transfer to the Administrative Agent or
the Banks, or in any way affect or modify, any obligation or liability of the
Subsidiary Guarantor with respect to any of the Collateral or any transaction in
connection therewith. Except during the existence of an Event of Default, the
Subsidiary Guarantor shall retain the right to vote any of the Securities
constituting Collateral in a manner not inconsistent with the terms of this
Agreement and the Loan Agreement.
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ARTICLE 3. DELIVERY AND FILING OF FINANCING STATEMENTS.
3.01 Delivery of Perfection Documents. Upon the execution of this
Agreement, and from time to time thereafter, the Subsidiary Guarantor shall
deliver to the Administrative Agent such Financing Statements, documentation,
notices, and assignments, including assignments under the Assignment of Claims
Act of 1940, as amended (collectively, the "PERFECTION DOCUMENTS"), as may be
deemed necessary by the Administrative Agent to perfect the Security Interest in
all Collateral.
3.02 Authorization to File Financing Statements and Take Other Action.
The Subsidiary Guarantor hereby irrevocably authorizes the Administrative Agent
at any time and from time to time to sign (if required) and file in any
appropriate Filing Office, wherever located, any Financing Statement that (a)
describes the Collateral and (b) contains any other information required by Part
5 of Article 9 of the Uniform Commercial Code of the applicable jurisdiction for
the sufficiency or Filing Office acceptance of any Financing Statement,
including whether the Subsidiary Guarantor is an organization, the type of
organization and any organization identification number issued to the Subsidiary
Guarantor. The Subsidiary Guarantor also authorizes the Administrative Agent to
file a copy of this Agreement in lieu of a Financing Statement, and to take any
and all actions required by any earlier versions of the Uniform Commercial Code
or by any other applicable law. The Subsidiary Guarantor shall provide the
Administrative Agent with any information the Administrative Agent shall
reasonably request in connection with any of the foregoing.
ARTICLE 4. [RESERVED]
ARTICLE 5. [RESERVED]
ARTICLE 6. [RESERVED]
ARTICLE 7. REPRESENTATIONS AND WARRANTIES. The Subsidiary Guarantor hereby
represents and warrants to the Administrative Agent and the Banks as follows,
each such representation and warranty to continue in full force so long as this
Agreement remains in effect:
7.01 Accuracy of Perfection Certificate. The Subsidiary Guarantor has
delivered a Perfection Certificate to the Administrative Agent on the date
hereof, which is hereby incorporated by reference as if fully set forth herein.
All of the information set forth in such Perfection Certificate is true and
correct in all material respects. The Subsidiary Guarantor has not failed to
disclose in the Perfection Certificate any information necessary for the
information contained in the Perfection Certificate not to be misleading in any
material respect.
7.02 Ownership of Collateral; Absence of Liens and Restrictions. The
Subsidiary Guarantor is, and in the case of property acquired after the date
hereof, will be, the sole legal and equitable owner of the Collateral purported
to be owned by it, holding
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good title to the same free and clear of all Encumbrances except for the
Security Interest, Encumbrances specifically permitted under the terms of the
Loan Agreement and liens set forth in Schedule 4.01 to the Patent and Trademark
Security Agreement, if any, and has good right and legal authority to pledge,
sell, assign, deliver, and create the Security Interest in such Collateral in
the manner herein contemplated. The Collateral is genuine and is what it is
purported to be. The Collateral is not subject to any restriction that would
prohibit or restrict the assignment, delivery or creation of the Security
Interest.
7.03 First Priority Security Interest. This Agreement creates a valid
and continuing lien on and security interest in the Collateral. Upon the filing
of a Financing Statement in the appropriate Filing Office for the location of
the Subsidiary Guarantor listed in the Subsidiary Guarantor's Perfection
Certificate, the Security Interest will be perfected (except to the extent a
security interest may not be perfected by filing under the Uniform Commercial
Code), prior to all other Encumbrances, and will be enforceable as such against
creditors of the Subsidiary Guarantor, any owner of the real property where any
of the Collateral is located, any purchaser of such real property and any
present or future creditor obtaining a lien on such real property.
7.04 No Conflicts. Neither the Subsidiary Guarantor nor any of its
predecessors has performed any act or is bound by any agreement which might
prevent the Administrative Agent from enforcing the Security Interest or any of
the terms of this Agreement, or which would limit the Administrative Agent in
any such enforcement. Except as specifically disclosed in the Perfection
Certificate, no Financing Statement or other document evidencing a lien that
names the Subsidiary Guarantor as debtor is on file in any jurisdiction and the
Subsidiary Guarantor has not signed any document or agreement authorizing the
filing of any such Financing Statement or document.
7.05 Accounts. Each Account constituting Collateral (i) is and will be
a true and correct statement of the actual Indebtedness incurred by each Account
Debtor with respect thereto, (ii) arises and will arise out of or in connection
with the sale or lease of Goods or for the rendering of services by the
Subsidiary Guarantor to each Account Debtor, and (iii) is and shall be a valid,
legal and binding obligation of the party purported to be obligated thereon,
enforceable in accordance with its terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the enforcement of creditors' rights generally, or general equitable principles
(whether in a proceeding at law or in equity) and, to the Subsidiary Guarantor's
knowledge, free of material setoffs, defenses or counterclaims.
7.06 [Reserved]
7.07 Notes and Other Instruments. Pursuant to the terms of this
Agreement, the Subsidiary Guarantor has endorsed, assigned and delivered to the
Administrative Agent all promissory notes and other Instruments pledged
hereunder. Regardless of the form of such endorsement, the Subsidiary Guarantor
hereby waives presentment, demand, notice of dishonor, protest, notice of
protest and all other notices with respect thereto.
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7.08 No Authorization. No authorization, approval or other action by,
and no notice to or filing with, any domestic or foreign governmental authority
or regulatory body or consent of any other Person is required for (i) the grant
of the Security Interest, (ii) the execution, delivery or performance of this
Agreement by the Subsidiary Guarantor or (iii) the perfection of the Security
Interest or the exercise by the Administrative Agent of its rights and remedies
hereunder, other than (a) the filing of Financing Statements under the Uniform
Commercial Code, (b) the filing of UCC-3 termination statements executed by the
administrative agent of the institutional lenders of the Borrower under its
existing revolving credit facility, and the recordation of similar terminations
with the United States Patent and Trademark Office, and (c) such other filings
as have already been made.
7.09 Validity of Collateral. The Subsidiary Guarantor has no knowledge
of any fact that would impair the validity or make uncollectible any material
amount of the Collateral that is Accounts, Chattel Paper, Payment Intangibles,
General Intangibles, contract rights or Instruments, and to the best of the
Subsidiary Guarantor's knowledge, each obligor liable on such Collateral has and
will have the capacity to contract.
ARTICLE 8. COVENANTS. The Subsidiary Guarantor hereby covenants with the
Administrative Agent and the Banks that, so long as this Agreement remains in
effect:
8.01 Perfection Certificate. The Subsidiary Guarantor will supplement
the Perfection Certificate promptly upon learning of (i) the inaccuracy of any
of the information provided therein or (ii) the existence of any information
that is necessary for the information contained therein not to be misleading or
incomplete in any material respect.
8.02 Changes Relating to Subsidiary Guarantor. The Subsidiary Guarantor
will not change its name, identity or organizational structure, nature or
jurisdiction of organization, or place where its business records and records
relating to the Collateral are kept, or move any tangible Collateral (other than
Securities) to a location other than those set forth in the Perfection
Certificate, or merge into or consolidate with any other Person, without prior
notice to the Administrative Agent. With respect to any such proposed event, the
Subsidiary Guarantor shall provide the Administrative Agent at least 30 days'
prior written notice thereof and the Subsidiary Guarantor shall deliver to the
Administrative Agent such new Financing Statements or other documentation as may
be necessary or required by the Administrative Agent to ensure the continued
perfection and priority of the Security Interest. Promptly after the
consummation of any of the foregoing changes or any merger or consolidation
(each, a "CHANGE"), the Subsidiary Guarantor shall deliver to the Administrative
Agent copies of its amended organizational documents, if any, certified by the
Secretary of State (or equivalent) of its state of organization evidencing the
Change.
8.03 Protection and Defense of Security Interest; Sales and
Encumbrances. The Subsidiary Guarantor shall take all steps that are necessary
and prudent to protect the Security Interest in the Collateral, and shall defend
the Security Interest of the Administrative Agent in the Collateral against the
competing claims and demands of all
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other Persons. The Subsidiary Guarantor will not sell, grant, lease, assign or
transfer any interest in, or permit to exist any lien, security interest or
other Encumbrance on, any of the Collateral, except the Security Interest and as
specifically permitted by the Loan Agreement.
8.04 Books and Records; Notice of Security Interest. The Subsidiary
Guarantor shall keep complete and accurate books and records relating to the
Collateral at its chief executive office as listed on the Perfection
Certificate, and will not remove the same from such location without prior
notice to the Administrative Agent in accordance with Section 8.02. Upon the
request of the Administrative Agent, the Subsidiary Guarantor shall stamp or
otherwise xxxx such books and records in such manner as the Administrative Agent
may reasonably request in order to reflect the Security Interest including,
without limitation, notation of the Security Interest on any certificates of
title or other evidence of ownership outstanding with respect to the Collateral
and the posting of notices thereof upon the Collateral or in and about
designated areas where the Collateral may be used, stored or kept, from time to
time. The Subsidiary Guarantor will allow the Administrative Agent or its
designees access at any reasonable time and from time to time during the
Subsidiary Guarantor's regular business hours upon reasonable notice (and at all
times during the continuance of an Event of Default) to examine, inspect and
make extracts from or copies of the Subsidiary Guarantor's books and records,
inspect the Collateral and, during the continuance of an Event of Default,
arrange for verification of Accounts constituting Collateral directly with any
Account Debtors or by other methods or for other purposes as the Administrative
Agent may reasonably require.
8.05 Collection and Delivery of Proceeds. The Subsidiary Guarantor will
diligently collect in the ordinary course of business all of its Accounts
constituting Collateral until the Administrative Agent exercises its right to
collect the Accounts pursuant to this Agreement during the continuance of an
Event of Default. During the continuance of an Event of Default, all Proceeds of
Accounts and other Collateral received by the Subsidiary Guarantor, regardless
of the form of the Collateral or the manner of receipt, shall be held in trust
for the Administrative Agent and the Banks, and the Subsidiary Guarantor shall
deliver said Proceeds as promptly as possible to the Administrative Agent,
without commingling, in the identical form received (properly endorsed or
assigned where required to enable the Administrative Agent to collect same), for
application to the Obligations.
8.06 Lockboxes. Upon request of the Administrative Agent during the
continuance of an Event of Default, the Subsidiary Guarantor will (i) enter into
a lockbox arrangement satisfactory to the Administrative Agent with one or more
financial institutions (which may include the Banks) deemed acceptable by the
Administrative Agent for the collection of Proceeds and direct all of its
Account Debtors to make all payments on Accounts to the lockboxes established
thereunder, and/or (ii) maintain all its Deposit Accounts (other than payroll
accounts) with the Administrative Agent or at another financial institution
which has agreed to accept drafts drawn on it by the Administrative Agent under
a written depository transfer agreement or other arrangement with the
Administrative Agent and to block such Deposit Accounts and waive such
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institution's own rights as against such Deposit Accounts, and deposit all
Proceeds of Collateral (including the Proceeds received in such lockboxes) into
such Deposit Accounts. The Subsidiary Guarantor shall pay all fees, costs and
expenses associated with the establishment and maintenance of such lockboxes and
Deposit Accounts.
8.07 Notification of Account Debtors. During the continuance of an
Event of Default, the Administrative Agent may, and at the request of the
Administrative Agent, the Subsidiary Guarantor shall, notify Account Debtors of
the Security Interest in any Account and that payment thereof is to be made
directly to the Administrative Agent for application to the Obligations.
8.08 [Reserved]
8.09 Insurance. The Subsidiary Guarantor will maintain insurance on the
Collateral as required by the Loan Agreement or other Loan Documents.
8.10 Maintenance and Use; Payment of Taxes. The Subsidiary Guarantor
will maintain and preserve the Collateral and prevent any waste or unusual or
unreasonable depreciation thereof; will not use the same in violation of law or
any policy of insurance thereon, and will pay promptly when due all taxes and
assessments on such Collateral or on its use, except as otherwise permitted by
the Loan Agreement. The Subsidiary Guarantor hereby grants to the Administrative
Agent, for a term commencing on the date on which the Obligations (other than
any Obligations under any Interest Rate Protection Agreement) are accelerated
under Section 7.2 of the Loan Agreement and continuing so long as any of the
Obligations remain outstanding, at a rental of $1.00 for such entire term, the
receipt and sufficiency of which are hereby acknowledged, the right to the use
of all premises or places of business which the Subsidiary Guarantor now or
hereafter may have and where any Collateral may be located for the sole purpose
of exercising its rights against the Collateral, except, in the case of leased
premises, to the extent such a grant is prohibited by the terms of the
applicable lease. With respect to any such leased premises, the Subsidiary
Guarantor hereby agrees that the Administrative Agent shall not owe to the
Subsidiary Guarantor any rent attributable to the Administrative Agent's use of
such leased premises while exercising its right under this Agreement.
8.11 General Intangibles. The Subsidiary Guarantor will apply for, and
diligently pursue applications for, registration of its ownership of the General
Intangibles constituting Collateral for which registration is appropriate, and
will use such other reasonable measures as are appropriate to preserve its
rights in its other General Intangibles constituting Collateral, except that the
Subsidiary Guarantor may abandon such rights as could not reasonably be expected
to materially adversely affect the value of such General Intangibles. The
Subsidiary Guarantor will, at the request of the Administrative Agent, retain
current copies of all materials created by or furnished to the Subsidiary
Guarantor on which is recorded then-current information about any computer
programs or data bases that the Subsidiary Guarantor has developed or otherwise
has the right to use from time to time. Such materials shall include, without
limitation, magnetic or other computer media on which object, source or other
code is recorded and documentation of
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those computer programs or data bases, in the nature of listing printouts,
narrative descriptions, flow diagrams and similar items. The Subsidiary
Guarantor will, at the reasonable request of the Administrative Agent, deliver a
set of such copies to the Administrative Agent for safekeeping and retention or
transfer in the event of foreclosure.
8.12 Securities. If the Subsidiary Guarantor shall at any time hold or
acquire any Certificated Securities, the Subsidiary Guarantor shall forthwith
endorse, assign and deliver the same to the Administrative Agent, accompanied by
such instruments of transfer or assignment duly executed in blank as the
Administrative Agent may from time to time specify, all of which thereafter
shall be held by the Administrative Agent, pursuant to the terms of this
Agreement, as part of the Collateral. If any Securities now held or hereafter
acquired by the Subsidiary Guarantor are Uncertificated Securities and are
issued to the Subsidiary Guarantor or its nominee directly by the Issuer
thereof, the Subsidiary Guarantor shall promptly notify the Administrative Agent
thereof and, at the Administrative Agent's request and option, pursuant to an
agreement in form and substance reasonably satisfactory to the Administrative
Agent, either (i) cause the Issuer to agree to comply with instructions from the
Administrative Agent as to such Securities, without further consent of the
Subsidiary Guarantor or such nominee, or (ii) arrange for the Administrative
Agent to become the registered owner of the Securities. So long as no Event of
Default shall have occurred and be continuing, (i) the Subsidiary Guarantor
shall have the right to exercise all voting, consensual and other powers or
ownership pertaining to the Securities for all purposes not inconsistent with
the terms of this Agreement, the Loan Agreement or any other instrument or
agreement referred to herein or therein; and the Administrative Agent shall
execute and deliver or cause to be executed and delivered to the Subsidiary
Guarantor all such proxies, powers of attorney, dividend and other orders, and
all such instruments, without recourse, as the Subsidiary Guarantor may
reasonably request for the purpose of enabling the Subsidiary Guarantor to
exercise the rights and powers which it is entitled to exercise pursuant hereto,
and (ii) the Subsidiary Guarantor shall be entitled to receive and retain any
dividends or other distributions on the Securities.
8.13 Proceeds. The Subsidiary Guarantor shall take all actions
necessary or requested by the Administrative Agent to maintain, preserve or
protect the rights and interest of the Administrative Agent with respect to all
Proceeds of Collateral.
8.14 Letters of Credit Rights. For each letter of credit at any time
issued to the Subsidiary Guarantor as beneficiary thereunder which is Collateral
hereunder, the Subsidiary Guarantor shall notify the Administrative Agent
thereof and, at the option and request of the Administrative Agent, the
Subsidiary Guarantor shall, pursuant to an agreement in form and substance
satisfactory to the Administrative Agent, either (i) arrange for the issuer and
any Confirmer of such letter of credit to consent to an assignment to the
Administrative Agent of the proceeds of any drawing under the letter of credit
or (ii) arrange for the Administrative Agent to become the transferee
beneficiary of the letter of credit, with the Administrative Agent agreeing, in
each case, that at any time in which an Event of Default is not continuing, the
Administrative Agent shall remit the proceeds of any such drawing to the
Subsidiary Guarantor and, during the continuance of
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an Event of Default, the proceeds of any such drawing are to be held by the
Administrative Agent as Collateral pursuant to this Agreement.
8.15 Electronic Chattel Paper and Transferable Records. If the
Subsidiary Guarantor at any time holds or acquires an interest in any Collateral
which constitutes Electronic Chattel Paper or any "transferable record," as that
term is defined in Section 201 of the federal Electronic Signatures in Global
and National Commerce Act, or in Section 16 of the Uniform Electronic
Transactions Act as in effect in any jurisdiction applicable to the Subsidiary
Guarantor, the Subsidiary Guarantor shall promptly notify the Administrative
Agent thereof and, at the request of the Administrative Agent, shall take such
action as the Administrative Agent may reasonably request to vest in the
Administrative Agent control under Section 9-105 of the Uniform Commercial Code
of such Electronic Chattel Paper or control under Section 201 of the federal
Electronic Signatures in Global and National Commerce Act or, as the case may
be, Section 16 of the Uniform Electronic Transactions Act, of such transferable
record. The Administrative Agent agrees with the Subsidiary Guarantor that the
Administrative Agent will arrange, pursuant to procedures satisfactory to the
Administrative Agent and so long as such procedures will not result in the
Administrative Agent's loss of control, for the Subsidiary Guarantor to make
alterations to the electronic chattel paper or transferable record permitted
under UCC Section 9-105 or, as the case may be, Section 201 of the federal
Electronic Signatures in Global and National Commerce Act or Section 16 of the
Uniform Electronic Transaction Act for a party in control to make without loss
of control, unless an Event of Default has occurred and is continuing or would
occur after taking into account any action by the Subsidiary Guarantor with
respect to such electronic chattel paper or transferable record.
8.16 Agents, Etc. If any Collateral is at any time in the possession or
control of any of the Subsidiary Guarantor's agents, the Subsidiary Guarantor
shall promptly notify the Administrative Agent thereof and, upon request of the
Administrative Agent, (i) notify such agent of the Security Interest and
instruct such agent to hold all such Collateral for the Administrative Agent's
account subject to the Administrative Agent's instructions, (ii) obtain from
such agent a written acknowledgment that such Person holds possession of the
Collateral for the Administrative Agent 's benefit and shall act upon the
Administrative Agent's instructions with respect to such Collateral without the
further consent of the Subsidiary Guarantor, (iii) deliver any negotiable
warehouse receipt, xxxx of lading or other document of title issued with regard
to the Collateral to the Administrative Agent appropriately endorsed to the
Administrative Agent's order, and/or (iv) arrange for the issuance in the name
of the Administrative Agent, in form reasonably satisfactory to the
Administrative Agent, any nonnegotiable document of title covering such
Collateral. The Administrative Agent agrees with the Subsidiary Guarantor that
the Administrative Agent shall not give any such instructions unless an Event of
Default has occurred and is continuing or would occur after taking into account
any action by the Subsidiary Guarantor with respect to such agent.
8.17 Assignment of Claims Act. If at any time any Accounts of the
Subsidiary Guarantor arise from contracts with the United States of America or
any department,
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agency or instrumentality thereof, the Subsidiary Guarantor will promptly notify
the Administrative Agent thereof and shall execute all assignments and take all
steps reasonably requested by the Administrative Agent in order that all monies
due and to become due thereunder will be assigned and paid to the Administrative
Agent and notice thereof given to the federal authorities under the Assignment
of Claims Act of 1940.
8.18 Tangible Chattel Paper, Notes and Other Instruments. If at any
time any amount payable under or in connection with any of the Collateral is
evidenced by any Tangible Chattel Paper, promissory note, trade acceptances or
other Instrument, the Subsidiary Guarantor shall promptly deliver the same to
the Administrative Agent, accompanied by such instruments of transfer or
assignment duly executed in blank as the Administrative Agent may from time to
time reasonably request.
8.19 Assembly of Collateral. Following the occurrence and during the
continuance of an Event of Default, the Subsidiary Guarantor will, upon demand,
assemble the Collateral and make it available to the Administrative Agent at a
place and time designated by the Administrative Agent that is reasonably
convenient to both parties.
8.20 Further Assurances. Upon the reasonable request of the
Administrative Agent, and at the sole expense of the Subsidiary Guarantor, the
Subsidiary Guarantor will promptly execute and deliver such further instruments
and documents and take such further actions as the Administrative Agent may deem
desirable to obtain the full benefits of this Agreement and of the rights and
powers herein granted, including, without limitation, filing of any Financing
Statement, or notice under the Uniform Commercial Code or other applicable law,
execution of assignments of General Intangibles, delivery of appropriate stock
or bond powers, and transfer of Collateral to the Administrative Agent's
possession. The Subsidiary Guarantor shall also take all actions reasonably
requested by the Administrative Agent in order to insure the continued
perfection and priority of the Security Interest in any of the Collateral and
the preservation of the rights of the Administrative Agent therein.
8.21 Notices and Reports Pertaining to Collateral. In addition to any
other notice or reporting requirement imposed on the Subsidiary Guarantor under
this Agreement, the Subsidiary Guarantor will, with respect to the Collateral:
(a) promptly furnish to the Administrative Agent, from time to
time upon reasonable request, reports in form and detail reasonably satisfactory
to the Administrative Agent;
(b) promptly notify the Administrative Agent of any
Encumbrance (except Encumbrances specifically permitted under the Loan
Agreement) asserted against the Collateral, including any attachment, levy,
execution or other legal process levied against any of the Collateral, and of
any information received by the Subsidiary Guarantor relating to the Collateral,
including the Accounts, the Account Debtors, or other Persons obligated in
connection therewith, that may in any way materially adversely affect the value
of the Collateral or the rights and remedies of the Administrative Agent with
respect
-12-
thereto, and reimburse the Administrative Agent and the Banks for any expenses
they may reasonably incur in satisfying any of the foregoing;
(c) promptly notify the Administrative Agent when it obtains
knowledge of actual or imminent bankruptcy or other insolvency proceeding of any
material Account Debtor;
(d) promptly deliver to the Administrative Agent, as the
Administrative Agent may from time to time reasonably request, originals of all
schedules, lists, invoices, delivery receipts, customers' purchase orders,
documents of the shipping instructions, bills of lading and any other evidence
of shipping arrangements, receipts, writings and other items relating to the
Collateral;
(e) promptly notify the Administrative Agent of any material
return or adjustment, rejection, repossession, or loss or damage of or to
merchandise represented by Accounts and of any material credit, adjustment or
dispute arising in connection with the goods or services represented by
Accounts;
(f) promptly after the application by the Subsidiary Guarantor
for registration of any General Intangibles, as contemplated in Section 8.12,
notify the Administrative Agent thereof;
(g) [Reserved]; and
(h) promptly notify the Administrative Agent in the event of a
material loss or damage to the Collateral, if such loss or damage is not covered
by insurance, of any reclamation or repossession of or any action by a creditor
to reclaim or repossess any material asset(s) of the Subsidiary Guarantor, of
any material adverse change in the Collateral, and of any other occurrence that
may materially adversely affect the Security Interest of the Administrative
Agent in the Collateral.
ARTICLE 9. RIGHTS AND REMEDIES OF THE ADMINISTRATIVE AGENT.
9.01 Rights and Remedies Generally. Following the occurrence and during
the continuance of an Event of Default, in addition to the rights and remedies
of a secured party under the NY UCC and the Uniform Commercial Code in effect in
any other jurisdiction in which enforcement of the rights of the Administrative
Agent is sought, the Administrative Agent may take any or all of the following
actions:
(a) The Administrative Agent may, at its option, without
notice or demand, cause all of the Obligations (other than any Obligations under
any Interest Rate Protection Agreement) to become immediately due and payable
and take immediate possession of the Collateral, and for that purpose the
Administrative Agent may, so far as the Subsidiary Guarantor can give authority
therefor, enter upon any premises on which any of the Collateral is situated and
remove the same therefrom or remain on such
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premises and in possession of such Collateral for purposes of conducting a sale
or enforcing the rights of the Administrative Agent.
(b) The Administrative Agent may collect and receive all
income and Proceeds in respect of any Collateral and exercise all rights of the
Subsidiary Guarantor with respect thereto, including without limitation the
right to exercise all voting and corporate rights at any meeting of the
shareholders of the Issuer of any Securities and to exercise any and all rights
of conversion, exchange, subscription or any other rights, privileges or options
pertaining to any Securities as if the Administrative Agent was the absolute
owner thereof, including the right to exchange, at its discretion, any and all
of any Securities upon the merger, consolidation, reorganization,
recapitalization or other readjustment of the Issuer thereof, all without
liability except to account for property actually received (but the
Administrative Agent shall have no duty to exercise any of the aforesaid rights,
privileges or options and shall not be responsible for any failure to do so or
delay in so doing).
(c) The Administrative Agent may, upon such notice as is
required by Section 9.02 or by applicable statute, sell, lease or otherwise
dispose of any Collateral at a public or private sale, with or without having
such Collateral at the place of sale, and upon such terms and in such manner as
the Administrative Agent may determine, and the Administrative Agent may
purchase any Collateral at any such sale. The Subsidiary Guarantor agrees that
upon any such sale the Collateral sold shall be held by the purchaser free from
all claims or rights of every kind and nature, including any equity of
redemption or similar rights, and all such equity of redemption and similar
rights are hereby expressly waived and released by the Subsidiary Guarantor. In
the event any consent, approval or authorization of any governmental agency is
necessary to effectuate any such sale, the Subsidiary Guarantor agrees to
execute all applications or other instruments as may be required.
(d) With respect to any Collateral consisting of Accounts, the
Administrative Agent may (i) demand, collect, and receive any amounts relating
thereto, as the Administrative Agent may determine; (ii) commence and prosecute
any actions in any court for the purposes of collecting any such Accounts and
enforcing any other rights in respect thereof, (iii) defend, settle or
compromise any action brought and, in connection therewith, give such discharges
or releases as the Administrative Agent may reasonably deem appropriate; (iv)
receive, open and dispose of mail addressed to the Subsidiary Guarantor and
endorse checks, notes, drafts, acceptances, money orders, bills of lading,
warehouse receipts or other instruments or documents evidencing payment,
shipment or storage of the goods giving rise to such Accounts or securing or
relating to such Accounts, on behalf of and in the name of the Subsidiary
Guarantor; and (v) sell, assign, transfer, make any agreement in respect of, or
otherwise deal with or exercise rights in respect of, any such Accounts or the
goods or services which have given rise thereto, as fully and completely as
though the Administrative Agent were the absolute owner thereof for all
purposes.
(e) [RESERVED]
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(f) With respect to any Collateral consisting of Securities,
the Administrative Agent may (i) transfer such Collateral at any time to itself,
or to its nominee, and receive the income thereon and hold the same as
Collateral hereunder or apply it to the Obligations in the manner described in
clause (h) below; and (ii) demand, xxx for, collect or make any compromise or
settlement it deems desirable.
(g) The Administrative Agent may perform any covenant or
agreement of the Subsidiary Guarantor contained herein that the Subsidiary
Guarantor has failed to perform and in so doing the Administrative Agent may
expend such sums as it may reasonably deem advisable in the performance thereof,
including, without limitation, the payment of any taxes or insurance premiums,
payment to obtain a release of an Encumbrance or potential Encumbrance,
expenditures made in defending against any adverse claim and all other
expenditures which the Administrative Agent may make for the protection of any
Collateral or which it may be compelled to make by operation of law. All such
sums and amounts so expended shall be repaid by the Subsidiary Guarantor upon
demand, shall constitute additional Obligations and shall bear interest from the
date said amounts are expended at the rate per annum provided in the Loan
Agreement to be paid on Base Rate Loans after the occurrence of an Event of
Default. No such performance of any covenant or agreement by the Administrative
Agent on behalf of the Subsidiary Guarantor, and no such advance or expenditure
therefor, shall relieve the Subsidiary Guarantor of any Event of Default.
(h) The Administrative Agent may retain and apply the Proceeds
of any disposition of Collateral, first, to the payment of its reasonable
expenses of retaking, holding, protecting and maintaining, and preparing for
disposition and disposing of, the Collateral, including reasonable attorneys'
fees and other legal expenses incurred by it in connection therewith; second, to
the payment of fees then due and payable to the Administrative Agent and any
Issuing Bank; third, to all unreimbursed draws under outstanding Letters of
Credit; fourth, to the payment fees then due and payable to the Banks; fifth, to
accrued and unpaid interest on any outstanding Swingline Loans; sixth, to the
principal amount of any outstanding Swingline Loans; seventh, to accrued and
unpaid interest on the Revolving Credit Loans; eighth, to the principal amount
of any outstanding Revolving Credit Loans; and ninth, to unpaid amounts under
any Interest Rate Protection Agreements (pro rata to each Bank that is due any
such amounts based upon the ratio of the amounts due to such Bank to the total
obligations under Interest Rate Protection Agreements due to all the Banks). Any
surplus remaining after such application shall be paid to the Subsidiary
Guarantor or to whomever may be legally entitled thereto, provided that in no
event shall the Subsidiary Guarantor be credited with any part of the Proceeds
of the disposition of the Collateral until such Proceeds shall have been
received in cash by the Banks. The Subsidiary Guarantor shall remain liable for
any deficiency.
9.02 Disposition of Collateral.
(a) Prior to any disposition of Collateral pursuant to this
Agreement, the Administrative Agent may, at its option, cause any of the
Collateral to be repaired or
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reconditioned in such manner and to such extent as to make it saleable. Unless
such Collateral threatens to decline rapidly in value or is of the type
customarily sold on a recognized market, the Administrative Agent shall send to
the Subsidiary Guarantor prior written notice (which, if given within ten (10)
Business Days of any sale, shall be deemed to be reasonable) of the time and
place of any public sale of such Collateral or of the time after which any
private sale or other disposition thereof is to be made.
(b) The Subsidiary Guarantor hereby grants to the
Administrative Agent, effective upon acceleration of the Obligations under
Section 7.2 of the Loan Agreement, a license or other right to use, without
charge, the Subsidiary Guarantor's labels, patents, copyrights, rights of use of
any name, trade secrets, trade names, trademarks and advertising matter, or any
property of a similar nature, relating to the Collateral, in completing
production of , advertising for sale and selling any Collateral; and the
Subsidiary Guarantor's rights under all licenses and all franchise agreements
shall inure to the Administrative Agent's benefit.
(c) The Subsidiary Guarantor recognizes (i) that the
Administrative Agent may be unable to effect a public sale of all or a part of
the Securities by reason of certain prohibitions contained in the Securities Act
of 1933 (as amended from time to time, the "SECURITIES ACT") or the Securities
laws of various states (the "BLUE SKY LAWS"), but may be compelled to resort to
one or more private sales to a restricted group of purchasers who will be
obliged to agree, among other things, to acquire the Securities for their own
account, for investment and not with a view to the distribution or resale
thereof, (ii) that private sales so made may be at prices and upon other terms
less favorable to the seller than if the Securities were sold at public sales,
(iii) that neither the Administrative Agent nor the Banks has any obligation to
delay sale of any of the Securities for the period of time necessary to permit
the Securities to be registered for public sale under the Securities Act or the
Blue Sky Laws, and (iv) that private sales made under the foregoing
circumstances shall be deemed to have been made in a commercially reasonable
manner.
9.03 Appointment as Attorney-in-Fact. The Subsidiary Guarantor hereby
appoints the Administrative Agent and the Administrative Agent's designees or
agents as attorney-in-fact of the Subsidiary Guarantor, irrevocably and with
power of substitution, with full authority in the name of the Subsidiary
Guarantor, for sole use and benefit of the Banks, but at the Subsidiary
Guarantor's expense, so long as an Event of Default is continuing, to take any
and all of the actions specified above in this section and elsewhere in this
Agreement. This power of attorney is coupled with an interest and shall be
irrevocable for so long as any of the Obligations remain outstanding.
9.04 Duties regarding Collateral. Except as otherwise provided herein,
and as may be mandated by applicable law despite an agreement by the Subsidiary
Guarantor and the Administrative Agent to the contrary, the Administrative Agent
shall have no duty as to the collection or protection of any Collateral nor as
to the preservation of any rights pertaining thereto, beyond the safe custody of
any Collateral in its possession.
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9.05 Destruction of Documents and Records. The Subsidiary Guarantor
authorizes the Administrative Agent and the Banks to destroy all invoices,
delivery receipts, reports and other types of documents and records delivered to
the Administrative Agent and/or the Banks in connection with the transactions
contemplated herein at any time subsequent to 12 months following such delivery.
ARTICLE 10. SET-OFF. Any deposits, balances or other sums credited by or due
from any Bank or any of its branch or affiliate offices to the Subsidiary
Guarantor may, at any time and from time to time upon the occurrence and during
the continuance of an Event of Default, without demand or notice (any such
demand or notice being expressly waived hereby) and to the fullest extent
permitted by law and without regard to any source of payment whatsoever, be set
off, appropriated, and applied against Obligations on which the Subsidiary
Guarantor is liable, and advice thereof shall thereafter be given to the
Subsidiary Guarantor's chief financial officer.
ARTICLE 11. WAIVERS. To the extent permitted by applicable law, the Subsidiary
Guarantor irrevocably waives (i) presentment, demand, notice, protest, notice of
acceptance of this Agreement, notice of any loans made, credit or other
extensions granted, Collateral received or delivered and any other action taken
in reliance hereon and all other demands and notices of any description, except
for such demands and notices as are expressly required to be provided to the
Subsidiary Guarantor under this Agreement or any other document evidencing the
Obligations and (ii) to the full extent permitted by law, the benefit of all
appraisement, valuation, stay, extension and redemption laws now or hereafter in
force and all rights of marshaling in the event of any sale or disposition of
any of the Collateral. To the extent that it lawfully may do so, the Subsidiary
Guarantor hereby agrees that it will not invoke any law relating to the
marshaling of collateral which might cause delay in or impede the enforcement of
the rights of the Administrative Agent or the Banks under this Agreement or
under any other instrument evidencing any of the Obligations or under which any
of the Obligations is outstanding or by which any of the Obligations is secured
or guaranteed, and to the extent that it lawfully may do so the Subsidiary
Guarantor hereby irrevocably waives the benefits of all such laws. With respect
to both the Obligations and any Collateral, the Subsidiary Guarantor assents to
any extension or postponement of the time of payment or any other forgiveness or
indulgence, to any substitution, exchange or release of Collateral, to the
addition or release of any party or Person primarily or secondarily liable, to
the acceptance of partial payment thereon and the settlement, compromise or
adjustment of any thereof, all in such manner and at such time or times as the
Administrative Agent may deem advisable. The Administrative Agent may exercise
its rights with respect to the Collateral without resorting, or regard, to other
collateral or sources of reimbursement for Obligations. The Administrative Agent
and the Banks shall not be deemed to have waived any of their rights with
respect to the Obligations or the Collateral unless such waiver is in writing
and signed by the Administrative Agent and the Banks. No delay or omission on
the part of the Administrative Agent or the Banks in exercising any right and no
course of dealing shall operate as a waiver of such right or any other right. A
waiver on any one occasion shall not bar or waive the exercise of any right on
any future occasion. All rights and remedies of the Administrative Agent and the
Banks with the respect to the Obligations or the
-17-
Collateral, whether evidenced hereby or by any other instrument or papers, are
cumulative and not exclusive of any remedies provided by law or any other
agreement, and may be exercised separately or concurrently.
ARTICLE 12. INDEMNIFICATION AND EXPENSES. The Subsidiary Guarantor agrees to
indemnify and hold the Administrative Agent and the Banks, and their respective
officers, directors, trustees, agents, servants and employees (each, an
"INDEMNIFIED PARTY") harmless from and against any taxes, liabilities, claims
and damages, including reasonable attorneys' fees and disbursements, and other
reasonable expenses incurred or arising by reason of the taking or the failure
to take action by the Indemnified Party under this Agreement and in respect of
any transactions effected in connection with this Agreement, except those
arising from the gross negligence or willful misconduct of the Indemnified
Party. The Subsidiary Guarantor promises to reimburse the Administrative Agent
and the Banks on demand for all reasonable out-of-pocket fees and disbursements
(including all reasonable attorneys' fees and collateral evaluation costs)
incurred or expended in protecting, preserving or enforcing the rights of the
Administrative Agent and the Banks under or in respect of the Obligations or any
of the Collateral. The amount of all such costs and expenses shall, from and
after the third Business Day following demand therefor until paid, bear interest
at the rate applicable to Base Rate Loans and shall be an Obligation secured by
the Collateral.
ARTICLE 13. NOTICES. All notices, approvals, requests, demands and other
communications hereunder expressly required by this Agreement to be in writing,
to any party hereto shall be deemed to have been given when delivered in the
manner provided in the Loan Agreement. Any notice, unless otherwise specified,
may be given orally or in writing.
ARTICLE 14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the Subsidiary Guarantor and its successors and assigns,
and shall be binding upon and inure to the benefit of and be enforceable by the
Administrative Agent and its successors and assigns permitted under the Loan
Agreement, whether or not an express assignment of rights hereunder is made;
provided that the Subsidiary Guarantor may not assign or transfer its rights or
obligations hereunder. Without limiting the generality of the foregoing
sentence, any Bank may, in the manner and to the extent set forth in the Loan
Agreement, assign or otherwise transfer any Note or other document held by it
evidencing, securing or otherwise executed in connection with the Obligations,
or sell participations in any interest therein, to any other Person, and such
other Person shall thereupon become vested, to the extent set forth in the
agreement evidencing such assignment, transfer or participation, with all the
rights in respect thereof granted to such Bank under the terms of the Loan
Documents.
ARTICLE 15. GOVERNING LAW. This Agreement shall be governed by, and interpreted
and determined in accordance with, the laws of the State of New York (without
regard to its principles relating to choice and conflicts of law).
ARTICLE 16. CONSENT TO JURISDICTION. THE SUBSIDIARY GUARANTOR AND THE
ADMINISTRATIVE AGENT EACH HEREBY CONSENTS TO THE
-18-
JURISDICTION OF ANY OF THE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK
COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK SITTING IN NEW YORK, NEW YORK IN CONNECTION WITH ANY ACTION TO ENFORCE THE
RIGHTS OF THE ADMINISTRATIVE AGENT OR THE BANKS UNDER THIS AGREEMENT. THE
SUBSIDIARY GUARANTOR AND THE ADMINISTRATIVE AGENT EACH IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE EXERCISE OF JURISDICTION BY
SAID COURTS IN CONNECTION WITH ANY SUCH ACTION AND AGREES NOT TO ASSERT IN ANY
SUCH ACTION THAT SUCH ACTION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
ARTICLE 17. WAIVER OF JURY TRIAL. THE SUBSIDIARY GUARANTOR AND THE
ADMINISTRATIVE AGENT MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM, COUNTERCLAIM OR
DEFENSE BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS
AND OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, THE SUBSIDIARY GUARANTOR AND THE
ADMINISTRATIVE AGENT EACH HEREBY WAIVES ANY RIGHTS WHICH IT MAY HAVE TO CLAIM OR
RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN ACTUAL
DAMAGES. THE SUBSIDIARY GUARANTOR (A) CERTIFIES THAT NO REPRESENTATIVE,
ADMINISTRATIVE AGENT OR ATTORNEY OF THE ADMINISTRATIVE AGENT OR THE BANKS HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE ADMINISTRATIVE AGENT OR THE BANKS
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND
(B) ACKNOWLEDGES THAT, IN ENTERING INTO THE LOAN AGREEMENT AND THE OTHER LOAN
DOCUMENTS TO WHICH THE BANKS OR THE ADMINISTRATIVE AGENT ARE A PARTY, THE BANKS
AND THE ADMINISTRATIVE AGENT ARE RELYING UPON, AMONG OTHER THINGS, THE
SUBSIDIARY GUARANTOR'S WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
ARTICLE 18. CONTINUING OBLIGATIONS. The Subsidiary Guarantor acknowledges that
the Administrative Agent and the Banks, in determining to enter into the Loan
Agreement, have relied upon the fact that the Security Interest granted herein
constitutes the continuing and irrevocable agreement of the Subsidiary
Guarantor, and the Subsidiary Guarantor agrees that its obligations hereunder
may not be revoked in whole or in part. The obligations of the Subsidiary
Guarantor hereunder shall terminate when the commitment of the Banks to extend
credit under the Loan Agreement shall have terminated and all of the Obligations
have been paid in full in cash and discharged; provided, however, that:
-19-
(a) if a claim is made upon the Administrative Agent or the
Banks at any time for repayment or recovery of any amounts or any property
received by the Administrative Agent or the Banks from any source on account of
any of the Subsidiary Guarantor's Obligations and the Administrative Agent or
the Banks repay or return any amounts or property so received (including
interest thereon to the extent required to be paid by the Administrative Agent
or the Banks) or
(b) if the Administrative Agent or the Banks become liable for
any part of such claim by reason of (i) any judgment or order of any court or
administrative authority having competent jurisdiction, or (ii) any settlement
or compromise of any such claim, then the Subsidiary Guarantor shall remain
obligated under this Agreement with respect to the amounts so repaid or property
so returned and the amounts for which the Administrative Agent or the Banks
become liable (such amounts being deemed part of the Obligations), and the
Security Interest granted herein shall apply with full force and effect to such
Obligations, to the same extent as if such amounts or property had never been
received by the Administrative Agent or the Banks, notwithstanding any
termination hereof or the cancellation of any instrument or agreement evidencing
any such Obligations.
ARTICLE 19. GENERAL.
19.01 Amendment, Etc. This Agreement may not be amended, modified or
supplemented except by a writing signed by the parties hereto.
19.02 Counterparts. This Agreement and any amendment hereof may be
signed in any number of counterparts with the same effect as if the signatures
hereto and thereto were upon the same instrument. All such counterparts shall
together constitute one and the same agreement.
19.03 Captions. Captions and headings in this Agreement are for
convenience only and in no way define, limit, expand or describe the scope or
intent of the provisions hereof.
19.04 Survival. All representations, warranties, covenants and
agreements contained in this Agreement, including without limitation the
agreement of the Subsidiary Guarantor to indemnify the Administrative Agent and
the Banks set forth in Article 12, shall survive the execution and delivery of
the Loan Documents and shall continue for so long as this Agreement shall remain
in effect.
19.05 Severability. If any provision of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, that holding
shall not invalidate or render unenforceable any other provision hereof.
(signatures on next page)
-20-
IN WITNESS WHEREOF, the Subsidiary Guarantor has caused this Agreement
to be executed by its duly authorized officer as of the day and year first above
written.
SUBSIDIARY GUARANTOR:
XXXXXX & XXXXX ENTITY(2)
By: /s/ Xxxxxxx X'Xxxxxxx
------------------------------
Name: Xxxxxxx X'Xxxxxxx
Title: Chief Financial Officer
Hereunto Duly Authorized
Accepted as of the day and
year first above written.
ADMINISTRATIVE AGENT:
FLEET NATIONAL BANK,
as Administrative Agent
-------------
(2) Xxxxxxx X'Xxxxxxx executed separate Security Agreements for Xxxxxx &
Xxxxx, Inc. and the following direct and indirect subsidiaries of Xxxxxx &
Noble, Inc.:
Xxxxxxx Xxxxxxxx Publishing Group, Inc.
X.Xxxxxx Bookseller, Inc.
Doubleday Book Shops, Inc.
Xxxxxx & Xxxxx Booksellers, Inc.
B&X.xxx Holding Corp.
Xxxxxx & Noble Publishing, Inc.
X.X. Fairfax, Inc.
B&N General Partner (Texas) Corp.
B&N Limited Partner (Texas) Corp.
B&N General Partner (Georgia) Corp.
B&N Limited Partner (Georgia) Corp.
B&N General Partner (Pennsylvania) Corp. I
B&N General Partner (Pennsylvania) Corp. II
Xxxxxx & Noble Booksellers (Georgia), X.X.
Xxxxxx & Xxxxx Booksellers (Pennsylvania), X.X.
Xxxxxx & Noble Booksellers (Texas), L.P.
SparkNotes LLC
B&N Gamestop Holding Corp.
CCI Holdings, Inc.
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By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
Hereunto Duly Authorized
-22-
