Exhibit 10.2
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GUARANTEE AND COLLATERAL AGREEMENT
dated as of
December 16, 2002,
As Amended and Restated as
of September 26, 2003,
among
XXXXX'X CORPORATION,
DENNY' HOLDINGS, INC.,
DENNY'S, INC.,
XXXXX'X REALTY, INC.,
each other Subsidiary Loan Party
and
JPMORGAN CHASE BANK,
as Collateral Agent
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Table of Contents
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Page
ARTICLE I
Definitions
SECTION 1.01. Credit Agreement...........................................1
SECTION 1.02. Other Defined Terms........................................2
ARTICLE II
Guarantee
SECTION 2.01. Guarantee..................................................6
SECTION 2.02. Guarantee of Payment.......................................6
SECTION 2.03. No Limitations, Etc........................................6
SECTION 2.04. Reinstatement..............................................9
SECTION 2.05. Agreement To Pay; Subrogation..............................9
SECTION 2.06. Information................................................9
ARTICLE II
A Subordination of Term Loan Guarantees
SECTION 2.01. A..........................................................10
SECTION 2.02. A..........................................................10
SECTION 2.03. A..........................................................10
SECTION 2.04. A..........................................................11
SECTION 2.05. A..........................................................11
SECTION 2.06. A..........................................................11
SECTION 2.07. A..........................................................11
SECTION 2.08. A..........................................................11
SECTION 2.09. A..........................................................11
SECTION 2.10. A..........................................................12
SECTION 2.11. A..........................................................12
ARTICLE III
Pledge of Securities
SECTION 3.01. Pledge.....................................................12
SECTION 3.02. Delivery of the Pledged Collateral.........................13
SECTION 3.03. Representations, Warranties and Covenants..................13
SECTION 3.04. Certification of Limited Liability Company and Limited
Partnership Interests......................................14
SECTION 3.05. Registration in Nominee Name; Denominations................15
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SECTION 3.06. Voting Rights; Dividends and Interest, etc.................15
ARTICLE IV
Security Interests in Personal Property
SECTION 4.01. Security Interest..........................................16
SECTION 4.02. Representations and Warranties.............................18
SECTION 4.03. Covenants..................................................20
SECTION 4.04. Other Actions..............................................24
SECTION 4.05. Covenants Regarding Patent, Trademark and Copyright
Collateral.................................................27
ARTICLE V
Remedies
SECTION 5.01. Remedies Upon Default......................................28
SECTION 5.02. Application of Proceeds....................................30
SECTION 5.03. Grant of License to Use Intellectual Property..............31
SECTION 5.04. Securities Act, etc........................................31
SECTION 5.05. Registration, etc..........................................32
ARTICLE VI
Indemnity, Subrogation and Subordination
SECTION 6.01. Indemnity and Subrogation..................................33
SECTION 6.02. Contribution and Subrogation...............................33
SECTION 6.03. Subordination..............................................33
ARTICLE VII
Miscellaneous
SECTION 7.01. Notices....................................................34
SECTION 7.02. Security Interest Absolute.................................34
SECTION 7.03. Survival of Agreement......................................34
SECTION 7.04. Binding Effect; Several Agreement..........................34
SECTION 7.05. Successors and Assigns.....................................35
SECTION 7.06. Collateral Agent's Fees and Expenses; Indemnification......35
SECTION 7.07. Collateral Agent Appointed Attorney-in-Fact................35
SECTION 7.08. GOVERNING LAW..............................................36
SECTION 7.09. Waivers; Amendment.........................................36
SECTION 7.10. WAIVER OF JURY TRIAL.......................................37
SECTION 7.11. Severability...............................................37
SECTION 7.12. Counterparts...............................................37
SECTION 7.13. Headings...................................................38
SECTION 7.14. Jurisdiction; Consent to Service of Process................38
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SECTION 7.15. Termination or Release.....................................38
SECTION 7.16. Additional Subsidiaries....................................39
SECTION 7.17. Right of Setoff............................................39
SECTION 7.18. Subject to Intercreditor Agreement.........................39
SECTION 7.19. Survival of Liens under the Original Guarantee and
Collateral Agreement.......................................40
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Schedules
Schedule I Subsidiary Loan Parties
Schedule II Capital Stock; Debt Securities
Schedule III Intellectual Property
Schedule IV Insurance Requirements
Exhibits
Exhibit I Form of Supplement to the Guarantee and Collateral Agreement
Exhibit II Form Of Deposit Account Control Agreement
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GUARANTEE AND COLLATERAL AGREEMENT dated as of
December 16, 2002, as amended and restated as of
September 26, 2003 (this "Agreement"), among Denny's,
Inc., a California corporation, and Xxxxx'x Realty,
Inc., a Delaware corporation (each of the foregoing
individually, a "Borrower" and collectively, the
"Borrowers"), Xxxxx'x Corporation, a Delaware
corporation ("Parent"), Xxxxx'x Holdings, Inc., a New
York corporation ("Denny's Holdings"), each other
Subsidiary Loan Party (as defined in the Credit
Agreement) and JPMORGAN CHASE BANK, a New York banking
corporation ("JPMCB"), as Collateral Agent (in such
capacity, the "Collateral Agent") for the Secured
Parties (as defined below).
Reference is made to (a) the Intercreditor Agreement dated as of
September 26, 2003 (as amended, supplemented, waived or otherwise modified from
time to time, the "Intercreditor" Agreement"), among the Borrowers and the
Collateral Agent and (b) the Credit Agreement dated as of December 16, 2002, as
amended and restated as of September 26, 2003 (as further amended, supplemented,
waived or otherwise modified from time to time, the "Credit Agreement"), among
the Borrowers, Parent, Denny's Holdings, and DFO, Inc., a Delaware corporation,
as Guarantors, the Lenders party thereto (the "Lenders"), JPMCB, as
Administrative Agent, and Xxxxx Fargo Foothill, Inc. (f/k/a Foothill Capital
Corporation), a California corporation ("Foothill"), as Syndication Agent. The
Borrowers have requested, and the Lenders have agreed (a) to amend the Original
Credit Agreement (as defined in the Credit Agreement) and (b) that the Lenders
shall extend credit to the Borrowers subject to the terms and conditions set
forth in the Credit Agreement. The obligations of the Lenders to amend the
Original Credit Agreement and to extend such credit are conditioned upon, among
other things, the execution and delivery of this Agreement. Parent and the
Subsidiary Loan Parties are affiliates of the Borrowers, will derive substantial
benefits from the amending of the Original Credit Agreement and the extension of
credit to the Borrowers pursuant to the Credit Agreement and are willing to
execute and deliver this Agreement in order to induce the Lenders to amend the
Original Credit Agreement and extend such credit. Accordingly, the parties
hereto agree as follows:
ARTICLE I
Definitions
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SECTION 1.01. Credit Agreement. (a) Capitalized terms used in
this Agreement and not otherwise defined herein have the meanings specified in
the Credit Agreement. All terms defined in the New York UCC (as defined herein)
and not defined in this Agreement have the meanings specified therein; the term
"instrument" shall have the meaning specified in Article 9 of the New York UCC.
(b) The rules of construction specified in Section 1.03 of the
Credit Agreement also apply to this Agreement.
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SECTION 1.02. Other Defined Terms. As used in this Agreement,
the following terms have the meanings specified below:
"Account Debtor" means any Person who is or who may become
obligated to any Grantor under, with respect to or on account of an Account.
"Article 9 Collateral" has the meaning assigned to such term in
Section 4.01.
"Claiming Guarantor" has the meaning assigned to such term in
Section 6.02.
"Collateral" means Article 9 Collateral and Pledged Collateral.
"Collateral Agent" has the meaning assigned to such term in the
preliminary statement of this Agreement.
"Concentration Account" means the cash collateral account
established at the office of JPMCB located at 000 Xxxx Xxxxxx, Xxx Xxxx, XX
00000, in the name of the Collateral Agent, Account No. 323-089257.
"Contributing Guarantor" has the meaning assigned to such term
in Section 6.02.
"Copyright License" means any written agreement, now or
hereafter in effect, granting any right to any third party under any copyright
now or hereafter owned by any Grantor or that any Grantor otherwise has the
right to license, or granting any right to any Grantor under any copyright now
or hereafter owned by any third party, and all rights of any Grantor under any
such agreement.
"Copyright" means all of the following now owned or hereafter
acquired by any Grantor: (a) all copyright rights in any work subject to the
copyright laws of the United States or any other country, whether as author,
assignee, transferee or otherwise; and (b) all registrations and applications
for registration of any such copyright in the United States or any other
country, including registrations, recordings, supplemental registrations and
pending applications for registration in the United States Copyright Office,
including those listed on Schedule III.
"Credit Agreement" has the meaning assigned to such term in the
preliminary statement of this Agreement.
"Deposit Account Bank" has the meaning assigned to such term in
Section 4.04(b).
"Deposit Account Control Agreement" means an agreement
substantially in the form of Exhibit II, or any other form approved by the
Collateral Agent, among a Grantor, the Collateral Agent and a Sub-Agent.
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"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person of whatever
nature and rights, warrants or options to acquire any of the foregoing.
"Federal Securities Laws" has the meaning assigned to such term
in Section 5.04.
"General Fund Account" means the general fund account
established at the office of JPMCB located at 000 Xxxx Xxxxxx, Xxx Xxxx, XX
00000, in the name of Xxxxx'x Corporation, Account No. 323-073360.
"General Intangibles" means all "General Intangibles" as defined
In the New York UCC, including all choses in action and causes of action and all
other intangible personal property of any Grantor of every kind and nature
(other than Accounts) now owned or hereafter acquired by any Grantor, including
corporate or other business records, indemnification claims, contract rights
(including rights under leases, whether entered into as lessor or lessee,
Hedging Agreements, Franchise Agreements and other agreements), Intellectual
Property, goodwill, registrations, franchises, tax refund claims and any letter
of credit, guarantee, claim, security interest or other security held by or
granted to any Grantor to secure payment by an Account Debtor of any of the
Accounts.
"Grantors" means Parent, the Borrowers and the Subsidiary Loan
Parties.
"Guarantors" means Parent, the Borrowers and the Subsidiary Loan
Parties.
"Intellectual Property" means all intellectual and similar
property of every kind and nature now owned or hereafter acquired by any
Grantor, including inventions, designs, Patents, Copyrights, Licenses,
Trademarks, trade secrets, domain names, confidential or proprietary technical
and business information, know-how, show-how or other data or information,
software and databases and all embodiments or fixations thereof and related
documentation, registrations and franchises, and all additions, improvements and
accessions to, and books and records describing or used in connection with, any
of the foregoing.
"Intercreditor Agreement" has the meaning assigned to such term
in the preliminary statement of this Agreement.
"Investment Property" means a security, whether certificated or
uncertificated, security entitlement, securities account, commodity contract or
commodity account, provided, that for purposes of this Agreement, the capital
stock of Xxxxxx Holdings, Inc. owned by Denny's Holdings and scheduled on
Schedule 6.04 to the Credit Agreement shall not be Investment Property.
"License" means any Patent License, Trademark License, Copyright
License or other license or sublicense agreement to which any Grantor is a
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party, other than those license or sublicense agreements (a) in existence on the
date hereof and listed on Schedule V and (b) entered into after the date hereof,
in each case that by their terms prohibit a grant of a security interest by such
Grantor as licensee thereunder provided, that (i) in the case of clause (b),
such Grantor has used commercially reasonable efforts to prevent the inclusion
of such a prohibition over such license or sublicense and (ii) in the case of
any licenses or sublicenses excluded pursuant to clauses (a) and (b), such
licenses or sublicenses, individually or in the aggregate, are not material to
the business of such Grantor. For the avoidance of doubt, any money or property
received in respect of any license that is not a License shall not be excluded
from the Collateral solely as a result of the exclusion of such license from the
Collateral.
"Loan Document Obligations" means (a) (i) the principal of and
interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans, when and as due, whether
at maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by the Borrowers under the
Credit Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of disbursements, interest thereon and
obligations to provide cash collateral, and (iii) all other monetary obligations
of the Borrowers to any of the Secured Parties under the Credit Agreement and
each of the other Loan Documents, including obligations to pay fees, expense and
reimbursement obligations and indemnification obligations, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), (b) all other obligations of the Borrowers under
or pursuant to the Credit Agreement and each of the other Loan Documents and
(c) all the obligations of each other Loan Party under or pursuant to this
Agreement and each of the other Loan Documents.
"New York UCC" means the Uniform Commercial Code as from time to
time in effect in the State of New York.
"Obligations" means (a) Loan Document Obligations and (b) all
obligations in respect of overdrafts and related liabilities owed to the
Administrative Agent or any of its Affiliates and arising from treasury,
depositary and cash management services in connection with any automated
clearinghouse transfers of funds.
"Original Guarantee and Collateral Agreement" shall mean the
Guarantee and Collateral Agreement dated as of December 16, 2002, among the
Borrowers, Parent, Denny's Holdings, the other Subsidiary Loan Parties and the
Collateral Agent.
"Patent License" means any written agreement, now or hereafter
in effect, granting to any third party any right to make, use or sell any
invention on which a patent, now or hereafter owned by any Grantor or that any
Grantor otherwise has the right to license, is in existence, or granting to any
Grantor any right to make, use or sell any invention on which a patent, now or
hereafter owned by any third party, is in existence, and all rights of any
Grantor under any such agreement.
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"Patents" means all of the following now owned or hereafter
acquired by any Grantor: (a) all letters patent of the United States or the
equivalent thereof in any other country, all registrations and recordings
thereof, and all applications for letters patent of the United States or the
equivalent thereof in any other country, including registrations, recordings and
pending applications in the United States Patent and Trademark Office or any
similar offices in any other country, including those listed on Schedule III;
and (b) all reissues, continuations, divisions, continuations-in-part, renewals
or extensions thereof, and the inventions disclosed or claimed therein,
including the right to make, use and/or sell the inventions disclosed or claimed
therein.
"Perfection Certificate" means a certificate substantially in
the form of Exhibit II to the Original Guarantee and Collateral Agreement,
completed and supplemented with the schedules and attachments contemplated
thereby, and duly executed by a Financial Officer and a legal officer of the
Borrowers.
"Pledged Collateral" has the meaning assigned to such term in
Section 3.01.
"Pledged Debt Securities" has the meaning assigned to such term
in Section 3.01.
"Pledged Securities" means any promissory notes, stock
certificates or other securities now or hereafter included in the Pledged
Collateral, including all certificates, instruments or other documents
representing or evidencing any Pledged Collateral.
"Pledged Stock" has the meaning assigned to such term in
Section 3.01.
"Revolving Secured Parties" means (a) the Revolving Lenders, (b)
the Swingline Lenders, (c) the Administrative Agent (and any Affiliate of the
Administrative Agent to which any obligation referred to in clause (b) of the
definition of the term "Obligations" is owed), (d) the Issuing Bank, (e) the
Collateral Agent, (f) the beneficiaries of each indemnification obligation that
does not constitute a Term Loan Obligation and is undertaken by any Loan Party
under any Loan Document and (g) the successors and assigns of each of the
foregoing.
"Secured Parties" means the (a) the Revolving Secured Parties
and (b) the Term Loan Secured Parties.
"Security Interest" has the meaning assigned to such term in
Section 4.01.
"Sub-Agent" means a financial institution that has delivered to
the Collateral Agent an executed Deposit Account Control Agreement.
"Term Loan Guarantee" has the meaning assigned to such term in
Section 2.01A.
"Term Loan Secured Parties" means (a) the Term Lenders, (b) the
beneficiaries of each indemnification obligation that is undertaken by any Loan
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Party under any Loan Document and relates to or arises in connection with the
Term Loans, the Term Lenders (in their capacity as Term Lenders) or the rights
or obligations of the Term Lenders (in their capacity as Term Lenders) and (c)
the successors and assigns of each of the foregoing.
"Trademark License" means any written agreement, now or
hereafter in effect, granting to any third party any right to use any trademark
now or hereafter owned by any Grantor or that any Grantor otherwise has the
right to license, or granting to any Grantor any right to use any trademark now
or hereafter owned by any third party, and all rights of any Grantor under any
such agreement.
"Trademarks" means all of the following now owned or hereafter
acquired by any Grantor: (a) all trademarks, service marks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, trade dress, logos, other source or business identifiers, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all registration and
recording applications filed in connection therewith, including registrations
and registration applications in the United States Patent and Trademark Office
or any similar offices in any State of the United States or any other country or
any political subdivision thereof, and all extensions or renewals thereof,
including those listed on Schedule III; (b) all goodwill associated therewith or
symbolized thereby; and (c) all other assets, rights and interests that uniquely
reflect or embody such goodwill.
ARTICLE II
Guarantee
---------
SECTION 2.01. Guarantee. Subject to Article IIA hereof, each
Guarantor unconditionally guarantees, jointly with the other Guarantors and
severally, as a primary obligor and not merely as a surety, the due and punctual
payment and performance of the Obligations. Each Guarantor further agrees that
the Obligations may be extended or renewed, in whole or in part, without notice
to or further assent from it, and that it will remain bound upon its guarantee
notwithstanding any extension or renewal of any Obligation. Each Guarantor
waives presentment to, demand of payment from and protest to the Borrowers or
any other Loan Party of any of the Obligations, and also waives notice of
acceptance of its guarantee and notice of protest for nonpayment.
SECTION 2.02. Guarantee of Payment. Each Guarantor further
agrees that its guarantee hereunder constitutes a guarantee of payment when due
and not of collection, and waives any right to require that any resort be had by
the Collateral Agent or any other Secured Party to any security held for the
payment of the Obligations or to any balance of any deposit account or credit on
the books of the Collateral Agent or any other Secured Party in favor of the
Borrowers or any other Person.
SECTION 2.03. No Limitations, Etc. (a) Except for termination
of a Guarantor's obligations hereunder as expressly provided in Section 7.15,
the obligations of each Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including any
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claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Guarantor hereunder shall not be discharged or impaired or
otherwise affected by (i) the failure of the Administrative Agent, the
Collateral Agent or any other Secured Party to assert any claim or demand or to
exercise or enforce any right or remedy under the provisions of any Loan
Document or otherwise; (ii) any rescission, waiver, amendment or modification
of, or any release from any of the terms or provisions of, any Loan Document or
any other agreement, including with respect to any other Guarantor under this
Agreement; (iii) the failure to perfect any security interest in, or the release
of, any security held by the Collateral Agent or any other Secured Party for the
Obligations; (iv) any default, failure or delay, wilful or otherwise, in the
performance of the Obligations; or (v) any other act or omission that may or
might in any manner or to any extent vary the risk of any Guarantor or otherwise
operate as a discharge of any Guarantor as a matter of law or equity (other than
the indefeasible payment in full in cash of all the Obligations). Each
Guarantor expressly authorizes the Secured Parties to take and hold security for
the payment and performance of the Obligations, to exchange, waive or release
any or all such security (with or without consideration), to enforce or apply
such security and direct the order and manner of any sale thereof in their sole
discretion or to release or substitute any one or more other guarantors or
obligors upon or in respect of the Obligations, all without affecting the
obligations of any Guarantor hereunder.
(b) (i) To the fullest extent permitted by applicable law, each
Guarantor waives any defense based on or arising out of any defense of the
Borrowers or any other Loan Party or the unenforceability of the Obligations or
any part thereof from any cause, or the cessation from any cause of the
liability of the Borrowers or any other Loan Party, other than the indefeasible
payment in full in cash of all the Obligations. The Collateral Agent may, at
its election, foreclose on any security held by it by one or more judicial or
nonjudicial sales, accept an assignment of any such security in lieu of
foreclosure, compromise or adjust any part of the Obligations, make any other
accommodation with the Borrowers or any other Loan Party or exercise any other
right or remedy available to them against the Borrowers or any other Loan Party,
without affecting or impairing in any way the liability of any Guarantor
hereunder except to the extent the Obligations have been fully and indefeasibly
paid in full in cash. To the fullest extent permitted by applicable law, each
Guarantor waives any defense arising out of any such election even though such
election operates, pursuant to applicable law, to impair or to extinguish any
right of reimbursement or subrogation or other right or remedy of such Guarantor
against the Borrowers or any other Loan Party, as the case may be, or any
security.
(ii) Each Guarantor waives any right it may have to require the
Collateral Agent or the Lenders to proceed against any Borrower or any
other Guarantor, proceed against or exhaust any security held from any
Borrower or any other Guarantor, or pursue any other remedy in their
respective power to pursue, as well as any defense based on any claim
that Guarantor's obligations exceed or are more burdensome than those of
any Borrower. To the extent that the laws of the State of California
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may be deemed to apply to the Guarantees, the rights which each
Guarantor hereby waives include all rights of subordination,
reimbursement, indemnification and contribution and any other rights and
defenses that are or may become available to such Guarantor by reason of
Section 2787 to 2855, inclusive, of the California Civil Code; provided
that these waivers shall not limit the express rights of the Guarantors
that are set forth in Sections 6.01 and 6.02 hereof.
(iii) Each Guarantor understands and acknowledges that if the
Collateral Agent forecloses judicially or nonjudicially against any real
property security for the Obligations, such foreclosure could impair or
destroy any right or ability that any Guarantor may have to seek
reimbursement, contribution or indemnification for any amounts paid by
such Guarantor under its Guarantee. To the extent that the laws of the
State of California may be deemed to apply to the Guarantees, each
Guarantor further understands and acknowledges that, in the absence of
this waiver, such potential impairment or destruction of the Guarantor's
rights, if any, may entitle the Guarantor to assert a defense to its
Guarantee based on California Code of Civil Procedure $580d as
interpreted in Union Bank x. Xxxxxxx, (1968) 265 CA 2d 40, 71 CR 64, on
the grounds, among others, that a lender should be estopped from
pursuing a guarantor when the lender's election to foreclose has
impaired or destroyed the guarantor's rights of subrogation,
reimbursement, contribution or indemnification rights. By execution of
this Agreement, each Guarantor intentionally, freely, irrevocably, and
unconditionally: (A) waives and relinquishes that defense and agrees
that such Guarantor will be liable under its Guarantee even though the
Collateral Agent had foreclosed judicially or nonjudicially against any
real or personal property collateral for the Obligations or any of the
Guarantees; and (B) agrees that such Guarantor will not assert that
defense in any action or proceeding which the Collateral Agent or the
Lenders may commence to enforce its Guarantee. Without limiting the
foregoing, each Guarantor waives all rights and defenses arising out of
an election of remedies by the Collateral Agent or the Lenders, even
though that election of remedies, such as nonjudicial foreclosure with
respect to security for a guaranteed obligation, has destroyed such
Guarantor's rights of subrogation and reimbursement against the
principal or another Guarantor by the operation of Section 580d of the
California Code of Civil Procedure.
(iv) To the extent that the laws of the State of California may
be deemed to apply to the Guarantees, each Guarantor intentionally,
freely, irrevocably and unconditionally waives and relinquishes all
rights which may be available to it under any provision of California
law or under any California judicial decision, including Section 580a
and 726(b) of the California Code of Civil Procedure, to seek to limit
the amount of any deficiency judgment or other judgment which may be
obtained against such Guarantor under its Guarantee to not more than the
amount by which the unpaid Obligations guaranteed hereby exceed the fair
market value or fair value of any real or personal property securing
said Obligations, including, without limitation, all rights to an
appraisement of, judicial or other hearing on, or other determination of
the value of said property.
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9
(v) To the extent that the laws of the State of California may
be deemed to apply to the Guarantees, and without limiting any of the
other waivers and provisions set forth herein, if the debt of any
Borrower or another Guarantor's Guarantee is secured by real property,
each Guarantor hereby intentionally, freely, irrevocably and
unconditionally waives all rights and defenses that Guarantor may have
because the debt of such Borrower or another Guarantor's Guarantee is
secured by real property; this means, among other things: (A) the
Collateral Agent and the Lenders may collect from that Guarantor without
first foreclosing on any real or personal property collateral pledged by
any Borrower or another Guarantor; (B) the amount of the Obligations may
be reduced only by the price for which that collateral is sold at the
foreclosure sale, even if the collateral is determined to be worth more
than the sale price; and (C) the Collateral Agent and the Lenders may
collect from that Guarantor even if the Collateral Agent, by foreclosing
on the real property collateral, has destroyed any right the Guarantor
may have to collect from such Borrower or another Guarantor. This is an
unconditional and irrevocable waiver of any rights and defenses that
such Guarantor may have under circumstances where the debt of any
Borrower or another Guarantor's Guarantee is secured by real property.
These rights and defenses include, but are not limited to, any rights or
defenses based upon Section 580a, 580b, 580d or 726 of the California
Code of Civil Procedure.
SECTION 2.04. Reinstatement. Each Guarantor agrees that its
guarantee hereunder shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by the Administrative Agent or any other
Secured Party upon the bankruptcy or reorganization of the Borrowers, any other
Loan Party or otherwise.
SECTION 2.05. Agreement To Pay; Subrogation. In furtherance of
the foregoing and not in limitation of any other right that the Collateral Agent
or any other Secured Party has at law or in equity against any Guarantor by
virtue hereof, upon the failure of the Borrowers or any other Loan Party to pay
any Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each Guarantor hereby
promises to and will forthwith pay, or cause to be paid, to the Collateral Agent
for distribution to the applicable Secured Parties in cash the amount of such
unpaid Obligation. Upon payment by any Guarantor of any sums to the Collateral
Agent as provided above, all rights of such Guarantor against the Borrowers or
any other Guarantor arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be
subject to Article VI.
SECTION 2.06. Information. Each Guarantor assumes all
responsibility for being and keeping itself informed of the Borrowers' and each
other Loan Party's financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the Obligations and the
nature, scope and extent of the risks that such Guarantor assumes and incurs
hereunder, and agrees that none of the Collateral Agent or the other Secured
Parties will have any duty to advise such Guarantor of information known to it
or any of them regarding such circumstances or risks.
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
10
ARTICLE IIA
Subordination of Term Loan Guarantees
-------------------------------------
SECTION 2.01. A. Agreement To Subordinate. The Guarantors
agree, and the Term Lenders agree, that the Guarantees of the Term Loan
Obligations (the "Term Loan Guarantees") are subordinated in right of payment,
to the extent and in the manner provided in this Article IIA, to the prior
payment in full in cash of the Revolving Obligations and that the subordination
is for the benefit of and enforceable by the holders of the Revolving
Obligations.
SECTION 2.02. A. Liquidation, Dissolution, Bankruptcy. Upon
any payment or distribution of the assets of any Guarantor to creditors upon a
total or partial liquidation or a total or partial dissolution of any Guarantor
or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to any Guarantor or its property:
(1) holders of the Revolving Obligations of such Guarantor shall
be entitled to receive payment in full in cash of the Revolving
Obligations before holders of the Term Loan Guarantees shall be entitled
to receive any payment of principal of, or premium, if any, interest or
any other amount in respect of the Term Loan Guarantees; and
(2) until the Revolving Obligations are paid in full in cash,
any payment or distribution to which holders of the Term Loan Guarantees
would be entitled but for this Article IIA shall be made to holders of
Revolving Obligations as their interests may appear.
SECTION 2.03. A. Default on Revolving Obligations. The
Guarantors may not pay the principal of, premium, if any, interest on, or any
other amount in respect of the Term Loan Guarantees or otherwise repay any Term
Loan Guarantee (collectively, "repay the Term Loan Guarantees") during the
continuance of any Default or Event of Default consisting of non-payment of any
Revolving Obligation when due. During the continuance of any Default or Event
of Default (other than a Default or Event of Default described in the
immediately preceding sentence or a Default or Event of Default resulting from
Parent, any Borrower or any Subsidiary's failure to duly observe or perform any
covenant, condition or agreement contained in Sections 5.01, 5.02, 5.03, 5.04
(other than a Default or Event of Default resulting from Parent, any Borrower or
any Subsidiary's failure to duly observe or perform any covenant, condition or
agreement contained in clauses (a), (b), (c) or (d) of Section 5.04, unless such
failure is remedied within 30 days), 5.05, 5.06, 5.07, 5.08, 5.09, 5.10 or 5.15
of the Credit Agreement), the Guarantors may not repay the Term Loan Guarantees
for a period (a "Payment Blockage Period") commencing upon the occurrence of
such Default or Event of Default and ending 89 days thereafter (or earlier if
such Payment Blockage Period is terminated (i) by written notice to the
Administrative Agent by all the Revolving Lenders, (ii) by repayment in full of
the Revolving Obligations or (iii) because the Default or Event of Default
giving rise to such Payment Blockage Period is no longer continuing).
Notwithstanding the provisions described in the immediately preceding sentence
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11
(but subject to the provisions contained in the first sentence of this Section),
unless the holders of the Revolving Obligations shall have accelerated the
maturity of such Revolving Obligations, the Guarantors may resume payment of the
Term Loan Guarantees after such Payment Blockage Period. In no event may the
total number of days during which any Payment Blockage Period or Periods is in
effect exceed 89 days in the aggregate during any 360 consecutive day period.
SECTION 2.04. A. When Distributions Must Be Paid Over. If a
distribution is made to holders of the Term Loan Guarantees that because of this
Article IIA should not have been made to them, the holders of the Term Loan
Guarantees who receive the distribution shall hold it in trust for holders of
the Revolving Obligations and pay it over to them as their interests may appear.
SECTION 2.05. A. Subrogation. After all Revolving Obligations
are paid in full and until the Term Loan Guarantees are repaid in full, the Term
Lenders shall be subrogated to the rights of holders of the Revolving
Obligations to receive distributions applicable to Revolving Obligations. A
distribution made under this Article IIA to holders of Revolving Obligations
that otherwise would have been made to holders of the Term Loan Guarantees is
not, as between any Guarantor and holders of the Term Loan Guarantees, a payment
by such Guarantor on Revolving Obligations.
SECTION 2.06. A. Relative Rights. This Article IIA defines the
relative rights of holders of the Term Loan Guarantees and holders of Revolving
Obligations. Nothing in this Agreement shall impair, as between the Guarantors
and Term Lenders, the obligation of each Guarantor, which is absolute and
unconditional, to pay principal of, premium, if any, interest or any other
amounts in respect of Term Loan Guarantees in accordance with the terms thereof.
SECTION 2.07. A. Subordination May Not Be Impaired by
Borrowers. No right of any holder of Revolving Obligations to enforce the
subordination of the Term Loan Guarantees shall be impaired by any act or
failure to act by any Guarantor or by its failure to comply with this Agreement.
SECTION 2.08. A. Administrative Agent To Effectuate
Subordination. Each Term Lender by making Term Loans authorizes and directs the
Administrative Agent on such Term Lender's behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination between
the holders of the Term Loan Guarantees and the holders of Revolving Obligations
as provided in this Article IIA and appoints the Administrative Agent as
attorney-in-fact for any and all such purposes.
SECTION 2.09. A. Administrative Agent Not Fiduciary for Holders
of Revolving Obligations. The Administrative Agent shall not be deemed to owe
any fiduciary duty to the holders of Revolving Obligations and shall not be
liable to any such holders if it shall mistakenly pay over or distribute to the
holders of the Term Loan Guarantees or any Guarantor or any other person, money
or assets to which any holders of Revolving Obligations shall be entitled by
virtue of this Article IIA or otherwise.
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12
SECTION 2.10. A. Reliance by Holders of Revolving Obligations
on Subordination Provisions. Each Term Lender by making Term Loans acknowledges
and agrees that the foregoing subordination provisions are, and are intended to
be, an inducement and a consideration to each holder of any Revolving
Obligations, whether such Revolving Obligations were created or acquired before
or after the making of the Term Loans, to acquire and continue to hold such
Revolving Obligations and such holder of Revolving Obligations shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to hold or in continuing to hold such Revolving Obligations.
SECTION 2.11. A. Rights of Administrative Agent. Nothing in
this Article IIA shall apply to amounts due to the Administrative Agent pursuant
to other sections of this Agreement.
ARTICLE III
Pledge of Securities
--------------------
SECTION 3.01. Pledge. As security for the payment or
performance, as the case may be, in full of the Obligations, each Grantor hereby
assigns and pledges to the Collateral Agent, its successors and assigns, for the
benefit of the Secured Parties, and hereby grants to the Collateral Agent, its
successors and assigns, for the benefit of the Secured Parties, a security
interest in all of such Grantor's right, title and interest in, to and under (a)
the shares of capital stock and other Equity Interests owned by it and listed on
Schedule II and any other Equity Interests obtained in the future by such
Grantor and the certificates representing all such Equity Interests (the
"Pledged Stock"); provided that the Pledged Stock shall not include (i) more
than 65% of the issued and outstanding voting Equity Interests of any Foreign
Subsidiary to the extent the pledge of any greater percentage would result in
adverse tax consequences to Parent, (ii) to the extent applicable law requires
that a subsidiary of such Grantor issue directors' qualifying shares, such
qualifying shares or (iii) any Equity Interests received by Denny's Holdings in
respect of shares of Series A Cumulative Convertible Preferred Stock of Xxxxxx
Holdings, Inc. to the extent that on the date such Equity Interests are received
the Equity Rights Agreement entered into as of August 30, 2001, by and among
Xxxxxx Holdings, Inc. and Denny's Holdings restricts the pledge of such Equity
Interest; (b)(i) the debt securities listed opposite the name of such Grantor on
Schedule II, (ii) any debt securities in the future issued to such Grantor and
(iii) the promissory notes and any other instruments, if any, evidencing such
debt securities (the "Pledged Debt Securities"); (c) all other property that may
be delivered to and held by the Collateral Agent pursuant to the terms of this
Section 3.01; (d) subject to Section 3.06, all payments of principal or
interest, dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of, in exchange for or
upon the conversion of, and all other Proceeds received in respe ct of, the
securities referred to in clauses (a) and (b) above and the property referred to
in clause (c) above; (e) subject to Section 3.06, all rights and privileges of
such Grantor with respect to the securities and other property referred to in
clauses (a), (b), (c) and (d) above; and (f) all Proceeds of any of the
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
13
foregoing (the items referred to in clauses (a) through (f) above being
collectively referred to as the "Pledged Collateral").
TO HAVE AND TO HOLD the Pledged Collateral, together with all
right, title, interest, powers, privileges and preferences pertaining or
incidental thereto, unto the Collateral Agent, its successors and assigns, for
the benefit of the Secured Parties, forever; subject, however, to the terms,
covenants and conditions hereinafter set forth.
SECTION 3.02. Delivery of the Pledged Collateral. (a) Each
Grantor agrees promptly to deliver or cause to be delivered to the Collateral
Agent any and all Pledged Securities.
(b) Each Grantor will cause any Indebtedness for borrowed money
owed to such Grantor by any Person to be evidenced by a duly executed promissory
note that is pledged and delivered to the Collateral Agent pursuant to the terms
hereof.
(c) Upon delivery to the Collateral Agent, (i) any Pledged
Securities shall be accompanied by stock powers duly executed in blank or other
instruments of transfer satisfactory to the Collateral Agent and by such other
instruments and documents as the Collateral Agent may reasonably request and
(ii) all other property composing part of the Pledged Collateral shall be
accompanied by proper instruments of assignment duly executed by the applicable
Grantor and such other instruments or documents as the Collateral Agent may
reasonably request. Each delivery of Pledged Securities shall be accompanied by
a schedule describing the securities, which schedule shall be attached hereto as
Schedule II and made a part hereof; provided that failure to attach any such
schedule hereto shall not affect the validity of such pledge of such Pledged
Securities. Each schedule so delivered shall supplement any prior schedules so
delivered.
SECTION 3.03. Representations, Warranties and Covenants. The
Grantors jointly and severally represent, warrant and covenant to and with the
Collateral Agent, for the benefit of the Secured Parties, that:
(a) Schedule II correctly sets forth the percentage of the
issued and outstanding shares of each class of the Equity Interests of the
issuer thereof represented by such Pledged Stock and includes all Equity
Interests, debt securities and promissory notes required to be pledged hereunder
in order to satisfy the Collateral and Guarantee Requirement;
(b) the Pledged Stock and Pledged Debt Securities have been duly
and validly authorized and issued by the issuers thereof and (i) in the case of
Pledged Stock, are fully paid and nonassessable (ii) in the case of Pledged Debt
Securities other than Pledged Debt Securities issued by Parent, any Borrower or
any other Subsidiary, to the knowledge of the Grantor pledging any such Pledged
Debt Securities, are legal, valid and binding obligations of the issuers thereof
and (iii) in the case of Pledged Debt Securities issued by Parent, any Borrower
or any other Subsidiary, are legal, valid and binding obligations of the issuer
thereof;
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
14
(c) except for the security interests granted hereunder, each
Grantor (i) is and, subject to any transfers made in compliance with the Credit
Agreement, will continue to be the direct owner, beneficially and of record, of
the Pledged Securities indicated on Schedule II as owned by such Grantor, (ii)
holds the same free and clear of all Liens, other than Liens created by this
Agreement and the Original Guarantee and Collateral Agreement and Permitted
Liens, (iii) will make no assignment, pledge, hypothecation or transfer of, or
create or permit to exist any security interest in or other Lien on, the Pledged
Collateral, other than Liens created by this Agreement and the Original
Guarantee and Collateral Agreement and Permitted Liens and (iv) will defend its
title or interest hereto or therein against any and all Liens (other than Liens
created by this Agreement and the Original Guarantee and Collateral Agreement
and Permitted Liens), however arising, of all Persons;
(d) except for restrictions and limitations imposed by the Loan
Documents, the Pledged Collateral is and will continue to be freely transferable
and assignable, and none of the Pledged Collateral is or will be subject to any
option, right of first refusal, shareholders agreement, charter or by-law
provisions or contractual restriction of any nature that might prohibit, impair,
delay or otherwise affect the pledge of such Pledged Collateral hereunder, the
sale or disposition thereof pursuant hereto or the exercise by the Collateral
Agent of rights and remedies hereunder;
(e) each Grantor has the power and authority to pledge the
Pledged Collateral pledged by it hereunder in the manner hereby done or
contemplated;
(f) no consent or approval of any Governmental Authority, any
securities exchange or any other Person was or is necessary to the validity of
the pledge effected hereby (other than such as have been obtained and are in
full force and effect);
(g) by virtue of the execution and delivery by the Grantors of
this Agreement, when any Pledged Securities are delivered to the Collateral
Agent in accordance with this Agreement, the Collateral Agent will obtain a
legal, valid, perfected and, subject to the relative priorities between the
Revolving Obligations and Term Loan Obligations established by the provisions
of the Intercreditor Agreement, first priority lien upon and security interest
in such Pledged Securities as security for the payment and performance of the
Obligations; and
(h) the pledge effected hereby is effective to vest in the
Collateral Agent, for the benefit of the Secured Parties, the rights of the
Collateral Agent in the Pledged Collateral as set forth herein.
SECTION 3.04. Certification of Limited Liability Company and
Limited Partnership Interests. Each interest in any limited liability company
or limited partnership controlled by any Grantor and pledged hereunder shall be
represented by a certificate and in the organizational documents of such limited
liability company or limited partnership, the Grantor shall elect to treat such
interest as a "security" within the meaning of Article 8 of the New York UCC and
shall be governed by Article 8 of the New York UCC.
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15
SECTION 3.05. Registration in Nominee Name; Denominations. The
Collateral Agent, on behalf of the Secured Parties, shall have the right (in its
sole and absolute discretion) to hold the Pledged Securities in its own name as
pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the
applicable Grantor, endorsed or assigned in blank or in favor of the Collateral
Agent. Each Grantor will promptly give to the Collateral Agent copies of any
notices or other communications received by it with respect to Pledged
Securities registered in the name of such Grantor. The Collateral Agent shall
at all times have the right to exchange the certificates representing Pledged
Securities for certificates of smaller or larger denominations for any purpose
consistent with this Agreement.
SECTION 3.06. Voting Rights; Dividends and Interest, etc. (a)
Unless and until an Event of Default shall have occurred and be continuing:
(i) Each Grantor shall be entitled to exercise any and all
voting and/or other consensual rights and powers inuring to an owner of
Pledged Securities or any part thereof for any purpose consistent with
the terms of this Agreement, the Credit Agreement and the other Loan
Documents; provided that such rights and powers shall not be exercised
in any manner that could materially and adversely affect the rights
inuring to a holder of any Pledged Securities, the rights and remedies
of any of the Collateral Agent or the other Secured Parties under this
Agreement, the Credit Agreement or any other Loan Document or the
ability of the Secured Parties to exercise the same.
(ii) The Collateral Agent shall execute and deliver to each
Grantor, or cause to be executed and delivered to such Grantor, all such
proxies, powers of attorney and other instruments as such Grantor may
reasonably request for the purpose of enabling such Grantor to exercise
the voting and/or consensual rights and powers it is entitled to
exercise pursuant to subparagraph (i) above and to receive the cash
dividends it is entitled to receive pursuant to subparagraph (iii)
below.
(iii) Each Grantor shall be entitled to receive and retain any
and all dividends, interest, principal and other distributions paid on
or distributed in respect of the Pledged Securities to the extent and
only to the extent that such dividends, interest, principal and other
distributions are permitted by, and otherwise paid or distributed in
accordance with, the terms and conditions of the Credit Agreement, the
other Loan Documents and applicable laws; provided that any noncash
dividends, interest, principal or other distributions that would
constitute Pledged Stock or Pledged Debt Securities, whether resulting
from a subdivision, combination or reclassification of the outstanding
Equity Interests of the issuer of any Pledged Securities or received in
exchange for Pledged Securities or any part thereof, or in redemption
thereof, or as a result of any merger, consolidation, acquisition or
other exchange of assets to which such issuer may be a party or
otherwise, shall be and become part of the Pledged Collateral, and, if
received by any Grantor, shall not be commingled by such Grantor with
any of its other funds or property but shall be held separate and apart
therefrom, shall be held in trust for the benefit of the Collateral
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16
Agent and shall be forthwith delivered to the Collateral Agent in the
same form as so received (with any necessary endorsement).
(b) Upon the occurrence and during the continuance of an Event
of Default, all rights of any Grantor to dividends, interest, principal
or other distributions that such Grantor is authorized to receive
pursuant to paragraph (a)(iii) of this Section 3.06 shall cease, and all
such rights shall thereupon become vested in the Collateral Agent, which
shall have the sole and exclusive right and authority to receive and
retain such dividends, interest, principal or other distributions. All
dividends, interest, principal or other distributions received by any
Grantor contrary to the provisions of this Section 3.06 shall be held in
trust for the benefit of the Collateral Agent, shall be segregated from
other property or funds of such Grantor and shall be forthwith delivered
to the Collateral Agent in the same form as so received (with any
necessary endorsement). Any and all money and other property paid over
to or received by the Collateral Agent pursuant to the provisions of
this paragraph (b) shall be retained by the Collateral Agent in an
account to be established by the Collateral Agent upon receipt of such
money or other property and shall be applied in accordance with the
provisions of Section 5.02. After all Events of Default have been cured
or waived and the Borrowers have delivered to the Collateral Agent a
certificate to that effect, the Collateral Agent shall promptly repay
to each Grantor (without interest) all dividends, interest, principal or
other distributions that such Grantor would otherwise be permitted to
retain pursuant to the terms of paragraph (a)(iii) of this Section 3.06
and that remain in such account.
(c) Upon the occurrence and during the continuance of an Event
of Default, all rights of any Grantor to exercise the voting and
consensual rights and powers it is entitled to exercise pursuant to
paragraph (a)(i) of this Section 3.06, and the obligations of the
Collateral Agent under paragraph (a)(ii) of this Section 3.06, shall
cease, and all such rights shall thereupon become vested in the
Collateral Agent, which shall have the sole and exclusive right and
authority to exercise such voting and consensual rights and powers;
provided that, unless otherwise directed by the Required Lenders, the
Collateral Agent shall have the right from time to time following and
during the continuance of an Event of Default to permit the Grantors to
exercise such rights. After all Events of Default have been cured or
waived and the Borrowers have delivered to the Collateral Agent a
certificate to that effect, each Grantor will have the right to exercise
the voting and consensual rights and powers that such Grantor would
otherwise be entitled to exercise pursuant to the terms of paragraph (a)
(i) above.
ARTICLE IV
Security Interests in Personal Property
---------------------------------------
SECTION 4.01. Security Interest. (a) As security for the
payment or performance, as the case may be, in full of the Obligations, each
Grantor hereby assigns and pledges to the Collateral Agent, its successors and
assigns, for the benefit of the Secured Parties, and hereby grants to the
Collateral Agent, its successors and assigns, for the benefit of the Secured
Parties, a security interest (the "Security Interest") in all right, title and
interest in or to any and all of the following assets and properties now owned
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17
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 "Article 9 Collateral"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all cash and Deposit Accounts;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
(viii) all Inventory;
(ix) all Investment Property;
(x) all Letter-of-credit rights;
(xi) all books and records pertaining to the Article 9
Collateral; and
(xii) to the extent not otherwise included, all Proceeds,
Supporting Obligations and products of any and all of the foregoing and
all collateral security and guarantees given by any Person with respect
to any of the foregoing.
(b) Each Grantor hereby irrevocably authorizes the Collateral
Agent at any time and from time to time to file in any relevant jurisdiction any
initial financing statements (including fixture filings) with respect to the
Article 9 Collateral or any part thereof and amendments thereto that contain the
information required by Article 9 of the Uniform Commercial Code of each
applicable jurisdiction for the filing of any financing statement or amendment,
including (i) whether such Grantor is an organization, the type of organization
and any organizational identification number issued to such Grantor, (ii) in the
case of a financing statement filed as a fixture filing, a sufficient
description of the real property to which such Article 9 Collateral relates and
(iii) a description of collateral that describes such property in any other
manner as the Collateral Agent may reasonably determine is necessary or
advisable to ensure the perfection of the security interest in the Article 9
Collateral granted to the Collateral Agent, including describing such property
as "all assets" or "all property". Each Grantor agrees to provide such
information to the Collateral Agent promptly upon request.
Each Grantor also ratifies its authorization for the Collateral
Agent to file in any relevant jurisdiction any initial financing statements or
amendments thereto if filed prior to the date hereof.
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18
The Collateral Agent is further authorized to file with the
United States Patent and Trademark Office or United States Copyright Office (or
any successor office or any similar office in any other country) such documents
as may be necessary or advisable for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by each
Grantor, without the signature of any Grantor, and naming any Grantor or the
Grantors as debtors and the Collateral Agent as secured party.
(c) The Security Interest is granted as security only and shall
not subject the Collateral Agent or any other Secured Party to, or in any way
alter or modify, any obligation or liability of any Grantor with respect to or
arising out of the Article 9 Collateral.
SECTION 4.02. Representations and Warranties. The Grantors
jointly and severally represent and warrant to the Collateral Agent and the
Secured Parties that:
(a) Each Grantor has good and valid rights in and title to the
Article 9 Collateral with respect to which it has purported to grant a Security
Interest hereunder and has full power and authority to grant to the Collateral
Agent the Security Interest in such Article 9 Collateral pursuant hereto and to
execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other person other than
any consent or approval that has been obtained and is in full force and effect.
(b) The Perfection Certificate has been duly prepared, completed
and executed and the information set forth therein, including the exact legal
name of each Grantor, is correct and complete as of the Effective Date. Uniform
Commercial Code financing statements (including fixture filings, as applicable)
or other appropriate filings, recordings or registrations containing a
description of the Article 9 Collateral have been prepared by the Collateral
Agent based upon the information provided to the Collateral Agent in the
Perfection Certificate for filing in each governmental, municipal or other
office specified in Schedule 6 to the Perfection Certificate (or specified by
notice from the Borrowers to the Collateral Agent after the Closing Date in the
case of filings, recordings or registrations required by Section 5.12 or 5.14 of
the Credit Agreement), and constitute all the filings, recordings and
registrations (other than filings required to be made in the United States
Patent and Trademark Office and the United States Copyright Office in order to
perfect the Security Interest in Article 0 Xxxxxxxxxx xxxxxxxxxx xx Xxxxxx
Xxxxxx Patents, Trademarks and Copyrights) that are necessary to publish notice
of and protect the validity of and to establish a legal, valid and perfected
security interest in favor of the Collateral Agent (for the benefit of the
Secured Parties) in respect of all Article 9 Collateral in which the Security
Interest may be perfected by filing, recording or registration in the United
States (or any political subdivision thereof) and its territories and
possessions, and no further or subsequent filing, refiling, recording,
rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the filing
of continuation statements or amendments. Each Grantor represents and warrants
that a fully executed agreement in the form hereof or in a form reasonably
satisfactory to the Collateral Agent containing a description of all Article 9
Collateral consisting of Intellectual Property with respect to United States
registered Patents (and Patents for which United States registration
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
19
applications are pending), United States registered Trademarks (and Trademarks
for which United States registration applications are pending) and United States
registered Copyrights (and Copyrights for which United States registration
applications are pending) has been delivered to the Collateral Agent for
recording with the United States Patent and Trademark Office and the United
States Copyright Office pursuant to 35 U.S.C. Section 261, 15 U.S.C. Section
1060 or 17 U.S.C. Section 205 and the regulations thereunder, as applicable, and
otherwise as may be required pursuant to the laws of any other applicable
jurisdiction and reasonably requested by the Collateral Agent, to protect the
validity of and to establish a legal, valid and perfected security interest in
favor of the Collateral Agent (for the benefit of the Secured Parties) in
respect of all Article 9 Collateral consisting of such Intellectual Property in
which a security interest may be perfected by recording with the United States
Patent and Trademark Office and the United States Copyright Office, and no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary (other than such actions as are necessary to perfect
the Security Interest with respect to any Article 9 Collateral consisting of
Patents, Trademarks and Copyrights (or registration or application for
registration thereof) acquired or developed after the date hereof).
(c) The Security Interest constitutes (i) a legal and valid
security interest in all the Article 9 Collateral securing the payment and
performance of the Obligations, (ii) subject to the filings described in Section
4.02(b), a perfected security interest in all Article 9 Collateral in which a
security interest may be perfected by filing, recording or registering a
financing statement or analogous document in the United States (or any political
subdivision thereof) and its territories and possessions pursuant to the Uniform
Commercial Code or other applicable law in such jurisdictions and (iii) a
security interest that shall be perfected in all Article 9 Collateral in which a
security interest may be perfected upon the receipt and recording of this
Agreement with the United States Patent and Trademark Office and the United
States Copyright Office, as applicable, and otherwise as may be required
pursuant to the laws of any other applicable jurisdiction. The Security
Interest is and shall be prior to any other Lien on any of the Article 9
Collateral, other than Liens expressly permitted to be prior to the Security
Interest pursuant to Section 6.02 of the Credit Agreement.
(d) The Article 9 Collateral is owned by the Grantors free and
clear of any Lien, other than Liens expressly permitted pursuant to Section 6.02
of the Credit Agreement and Liens created by the Original Guarantee and
Collateral Agreement. None of the Grantors has filed or consented to the filing
of (i) any financing statement or analogous document under the Uniform
Commercial Code or any other applicable laws covering any Article 9 Collateral,
(ii) any assignment in which any Grantor assigns any Article 9 Collateral or any
security agreement or similar instrument covering any Article 9 Collateral with
the United States Patent and Trademark Office or the United States Copyright
Office or (iii) any assignment in which any Grantor assigns any Article 9
Collateral or any security agreement or similar instrument covering any Article
9 Collateral with any foreign governmental, municipal or other office, which
financing statement or analogous document, assignment, security agreement or
similar instrument is still in effect, except, in each case, for Liens expressly
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20
permitted pursuant to Section 6.02 of the Credit Agreement and Liens created by
the Original Guarantee and Collateral Agreement.
(e) None of the Grantors holds any Commercial Tort Claim as of
the Effective Date except as indicated on the Perfection Certificate.
(f) All Accounts have been originated by the Grantors and all
Inventory has been acquired by the Grantors in the ordinary course of business.
SECTION 4.03. Covenants. (a) Each Grantor agrees promptly to
notify the Collateral Agent in writing of any change (i) in its corporate name,
(ii) in the location of any office in which it maintains books or records
relating to Article 9 Collateral owned by it or any office or facility at which
Article 9 Collateral owned by it is located (including the establishment of any
new such office or facility), (iii) in its identity or type of organization or
corporate structure, (iv) in its Federal Taxpayer Identification Number or
organizational identification number or (v) in its jurisdiction of organization.
Each Grantor agrees promptly to provide the Collateral Agent with certified
organizational documents reflecting any of the changes described in the
immediately preceding sentence. Each Grantor agrees not to effect or permit any
change referred to in the first sentence of this paragraph (a) unless all
filings have been made under the Uniform Commercial Code or otherwise that are
required in order for the Collateral Agent to continue at all times following
such change to have a valid, legal, perfected and, subject to the relative
priorities between the Revolving Obligations and Term Loan Obligations
established by the provisions of the Intercreditor Agreement, first priority
security interest in all the Article 9 Collateral. Each Grantor agrees promptly
to notify the Collateral Agent if any material portion of the Article 9
Collateral owned or held by such Grantor is damaged or destroyed.
(b) Each Grantor agrees to maintain, at its own cost and
expense, such complete and accurate records with respect to the Article 9
Collateral owned by it as is consistent with its current practices and in
accordance with reasonably prudent and standard practices used in industries
that are the same as or similar to those in which such Grantor is engaged, but
in any event to include complete accounting records indicating all payments and
proceeds received with respect to any part of the Article 9 Collateral, and, at
such time or times as the Collateral Agent may reasonably request, promptly to
prepare and deliver to the Collateral Agent a duly certified schedule or
schedules in form and detail satisfactory to the Collateral Agent showing the
identity, amount and location of any and all Article 9 Collateral.
(c) Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to Section 5.04(a)
of the Credit Agreement, the Borrowers shall deliver to the Collateral Agent a
certificate executed by a Financial Officer and a legal officer of the Borrowers
(i) setting forth the information required pursuant to Schedule 6 of the
Perfection Certificate or confirming that there has been no change in such
information since the date of such certificate or the date of the most recent
certificate delivered pursuant to this Section 4.03(c) and (ii) certifying that
all Uniform Commercial Code financing statements (including fixture filings, as
applicable) or other appropriate filings, recordings or registrations, including
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21
all refilings, rerecordings and reregistrations, containing a description of the
Collateral have been filed of record in each governmental, municipal or other
appropriate office in each jurisdiction identified pursuant to clause (i) of
this Section 4.03(c) to the extent necessary to protect and perfect the Security
Interest for a period of not less than 18 months after the date of such
certificate (except as noted therein with respect to any continuation statements
to be filed within such period). Each certificate delivered pursuant to this
Section 4.03(c) shall identify in the format of Schedule III to this Agreement
all Intellectual Property of any Grantor in existence on the date thereof and
not then listed on such Schedules or previously so identified to the Collateral
Agent.
(d) Each Grantor shall, at its own expense, take any and all
actions necessary to defend title to the Article 9 Collateral against all
Persons and to defend the Security Interest of the Collateral Agent in the
Article 9 Collateral and the priority thereof against any Lien not expressly
permitted to be prior to the Security Interest pursuant to Section 6.02 of the
Credit Agreement.
(e) Each Grantor agrees, at its own expense, to execute,
acknowledge, deliver and cause to be duly filed all such further instruments and
documents and take all such actions as the Collateral Agent may from time to
time request to better assure, preserve, protect and perfect the Security
Interest and the rights and remedies created hereby, including the payment of
any fees and taxes required in connection with the execution and delivery of
this Agreement, the granting of the Security Interest and the filing of any
financing statements (including fixture filings) or other documents in
connection herewith or therewith. If any amount payable under or in connection
with any of the Article 9 Collateral shall be or become evidenced by any
promissory note or other instrument, such note or instrument shall be
immediately pledged and delivered to the Collateral Agent, duly endorsed in a
manner satisfactory to the Collateral Agent.
Without limiting the generality of the foregoing, each Grantor
hereby authorizes the Collateral Agent, with prompt notice thereof to the
Grantors, to supplement this Agreement by supplementing Schedule III or adding
additional schedules hereto to specifically identify any asset or item that may
constitute Copyrights, Licenses, Patents or Trademarks; provided that any
Grantor shall have the right, exercisable within 10 days after it has been
notified by the Collateral Agent of the specific identification of such Article
9 Collateral, to advise the Collateral Agent in writing of any inaccuracy of the
representations and warranties made by such Grantor hereunder with respect to
such Article 9 Collateral. Each Grantor agrees that it will use its
commercially reasonable efforts to take such action as shall be necessary in
order that all representations and warranties hereunder shall be true and
correct with respect to such Article 9 Collateral within 30 days after the date
it has been notified by the Collateral Agent of the specific identification of
such Article 9 Collateral.
(f) The Collateral Agent and such Persons as the Collateral
Agent may reasonably designate shall have the right, at the Grantors' own cost
and expense, to inspect the Article 9 Collateral, all records related thereto
(and to make extracts and copies from such records) and the premises upon which
any of the Article 9 Collateral is located, at reasonable times and intervals
during normal business hours upon reasonable advance notice to the respective
Grantor, to discuss the Grantors' affairs with the officers of the Grantors and
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22
their independent accountants and to verify under reasonable procedures, in
accordance with Section 5.07 of the Credit Agreement, the validity, amount,
quality, quantity, value, condition and status of, or any other matter relating
to, the Article 9 Collateral, including, in the case of Accounts or Article 9
Collateral in the possession of any third person, by contacting Account Debtors
or the third person possessing such Article 9 Collateral for the purpose of
making such a verification. Subject to Section 9.12 of the Credit Agreement,
the Collateral Agent shall have the right to share any information it gains from
such inspection or verification with any Secured Party.
(g) At its option, the Collateral Agent may discharge past due
taxes, assessments, charges, fees, Liens, security interests or other
encumbrances at any time levied or placed on the Article 9 Collateral and not
permitted pursuant to Section 6.02 of the Credit Agreement, and may pay for the
maintenance and preservation of the Article 9 Collateral to the extent any
Grantor fails to do so as required by the Credit Agreement or this Agreement,
and each Grantor jointly and severally agrees to reimburse the Collateral Agent
on demand for any payment made or any expense incurred by the Collateral Agent
pursuant to the foregoing authorization; provided, however, that nothing in this
Section 4.03(g) shall be interpreted as excusing any Grantor from the
performance of, or imposing any obligation on the Collateral Agent or any
Secured Party to cure or perform, any covenants or other promises of any Grantor
with respect to taxes, assessments, charges, fees, Liens, security interests or
other encumbrances and maintenance as set forth herein or in the other Loan
Documents.
(h) If at any time any Grantor shall take a security interest in
any property of an Account Debtor or any other Person to secure payment and
performance of an Account, such Grantor shall promptly assign such security
interest to the Collateral Agent to the extent permitted by any contracts or
arrangements to which such property is subject. Such assignment need not be
filed of public record unless necessary to continue the perfected status of the
security interest against creditors of and transferees from the Account Debtor
or other Person granting the security interest.
(i) Each Grantor shall remain liable to observe and perform all
the conditions and obligations to be observed and performed by it under each
contract, agreement or instrument relating to the Article 9 Collateral, all in
accordance with the terms and conditions thereof, and each Grantor jointly and
severally agrees to indemnify and hold harmless the Collateral Agent and the
Secured Parties from and against any and all liability for such performance.
(j) None of the Grantors shall make or permit to be made an
assignment, pledge or hypothecation of the Article 9 Collateral or shall grant
any other Lien in respect of the Article 9 Collateral, except as expressly
permitted by the Credit Agreement. None of the Grantors shall make or permit
to be made any transfer of the Article 9 Collateral and each Grantor shall
remain at all times in possession of the Article 9 Collateral owned by it,
except that (i) Inventory may be sold in the ordinary course of business and
(ii) unless and until the Collateral Agent shall notify the Grantors that an
Event of Default shall have occurred and be continuing and that during the
continuance thereof the Grantors shall not sell, convey, lease, assign, transfer
or otherwise dispose of any Article 9 Collateral (which notice may be given by
telephone if promptly confirmed in writing), the Grantors may use and dispose of
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23
the Article 9 Collateral in any lawful manner not inconsistent with the
provisions of this Agreement, the Credit Agreement or any other Loan Document.
Without limiting the generality of the foregoing, each Grantor agrees that it
shall not permit any Inventory to be in the possession or control of any
warehouseman, bailee, agent or processor at any time unless such warehouseman,
bailee, agent or processor shall have been notified of the Security Interest and
shall have acknowledged in writing, in form and substance reasonably
satisfactory to the Collateral Agent, that such warehouseman, agent, bailee or
processor holds the Inventory for the benefit of the Collateral Agent subject to
the Security Interest and shall act upon the instructions of the Collateral
Agent without further consent from the Grantor, and that such warehouseman,
bailee, agent or processor further agrees to waive and release any Lien held by
it with respect to such Inventory, whether arising by operation of law or
otherwise; provided that such written acknowledgment shall not be required until
the fair market value of all Inventory in such possession or under such control
exceeds $1,000,000 in aggregate amount.
(k) None of the Grantors will, without the Collateral Agent's
prior written consent, grant any extension of the time of payment of any
Accounts included in the Article 9 Collateral, compromise, compound or settle
the same for less than the full amount thereof, release, wholly or partly, any
Person liable for the payment thereof or allow any credit or discount whatsoever
thereon, other than extensions, credits, discounts, compromises or settlements
granted or made in the ordinary course of business and consistent with its
current practices and in accordance with reasonably prudent and standard
practice used in industries that are the same as or similar to those in which
such Grantor is engaged.
(l) The Grantors, at their own expense, shall maintain or cause
to be maintained insurance covering physical loss or damage to the Inventory and
Equipment in accordance with the requirements set forth in Schedule IV hereto
and Section 5.02 of the Credit Agreement. Each Grantor irrevocably makes,
constitutes and appoints the Collateral Agent (and all officers, employees or
agents designated by the Collateral Agent) as such Grantor's true and lawful
agent (and attorney-in-fact) for the purpose, during the continuance of an Event
of Default, of making, settling and adjusting claims in respect of Article 9
Collateral under policies of insurance, endorsing the name of such Grantor on
any check, draft, instrument or other item of payment for the proceeds of such
policies of insurance and for making all determinations and decisions with
respect thereto. In the event that any Grantor at any time or times shall fail
to obtain or maintain any of the policies of insurance required hereby or to pay
any premium in whole or part relating thereto, the Collateral Agent may, without
waiving or releasing any obligation or liability of the Grantors hereunder or
any Event of Default, in its sole discretion, obtain and maintain such policies
of insurance and pay such premium and take any other actions with respect
thereto as the Collateral Agent deems advisable. All sums disbursed by the
Collateral Agent in connection with this Section 4.03(l), including reasonable
attorneys' fees, court costs, expenses and other charges relating thereto, shall
be payable, upon demand, by the Grantors to the Collateral Agent and shall be
additional Obligations secured hereby.
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24
(m) Each Grantor shall maintain, in form and manner reasonably
satisfactory to the Collateral Agent, its Chattel Paper and its books, records
and documents evidencing or pertaining thereto with an appropriate reference to
the fact that such Chattel Paper has been assigned to the Collateral Agent for
the benefit of the Secured Parties and that the Collateral Agent has a security
interest therein.
SECTION 4.04. Other Actions. In order to further insure the
attachment, perfection and priority of, and the ability of the Collateral Agent
to enforce, the Collateral Agent's security interest in the Article 9
Collateral, each Grantor agrees, in each case at such Grantor's own expense, to
take the following actions with respect to the following Article 9 Collateral:
(a) Instruments and Tangible Chattel Paper. If any Grantor shall
at any time hold or acquire any Instruments or Tangible Chattel Paper, such
Grantor shall forthwith endorse, assign and deliver the same to the Collateral
Agent, accompanied by such instruments of transfer or assignment duly executed
in blank as the Collateral Agent may from time to time reasonably request.
(b) Deposit Accounts. (i) Each Grantor shall pay or cause to be
paid, at or prior to the end of each Business Day, (x) to the Collateral Agent
for deposit in a Concentration Account or (y) to a bank with which such Grantor
maintains a deposit account (a "Deposit Account Bank") for deposit in such
deposit account (A) all Proceeds of Collateral in which a security interest is
granted hereunder and (B) all other cash of such Grantor.
(ii) (x) For deposit accounts holding in the aggregate at least
80% of all amounts held by all Grantors in all deposit accounts that are
maintained as of the Closing Date, the applicable Grantors shall execute
and deliver, and cause the Deposit Account Bank in which any such
deposit account is maintained to execute and deliver, Deposit Account
Control Agreements and (y) for all deposit accounts that the Grantors at
any time open after the Closing Date, the applicable Grantors shall
execute and deliver, and use their best efforts to cause the Deposit
Account Bank in which any such deposit account is maintained to execute
and deliver, a Deposit Account Control Agreement, provided, that the
Grantors shall not permit the aggregate amount held in any deposit
account opened after the Closing Date for which the Deposit Account Bank
has not executed and delivered a Deposit Account Control Agreement to
exceed $10,000. The Grantors shall not permit the aggregate amounts
held in accounts for which no Control Agreement has been executed by the
Deposit Account Bank and delivered to the Administrative Agent to exceed
$500,000. The provisions of this clause (ii) shall not apply to (A) any
Concentration Account and (B) any Deposit Account Bank for which the
Collateral Agent is the depositary bank.
(iii) Each Grantor shall instruct the Deposit Account Banks with
which such Grantor maintains deposit accounts (whether or not any such
Deposit Account Bank has a Deposit Account Control Agreement) to pay to
the Collateral Agent for deposit in a Concentration Account, at the end
of each Business Day, in same day funds, an amount equal to the balance
of such deposit accounts.
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25
(iv) The Concentration Account shall be under the sole dominion
and control of the Collateral Agent. Each Grantor acknowledges and
agrees that such Grantor has no right of withdrawal from the
Concentration Account. So long as no Event of Default has occurred and
is continuing, the Collateral Agent shall promptly remit any funds on
deposit in the Concentration Account to the General Fund Account and
Parent shall have the right, at any time and from time to time, to
withdraw such amounts from the General Fund Account that, in the
exercise of its prudent business judgment, it shall deem to be necessary
or advisable for the conduct of its business operations in the ordinary
course.
(v) Effective upon notice to the Grantors from the Collateral
Agent after the occurrence and during the continuance of an Event of
Default (which notice may be given by telephone if promptly confirmed in
writing), the Concentration Account will, without any further action on
the part of any Grantor or the Collateral Agent, convert into a closed
lockbox account under the sole dominion and control of the Collateral
Agent in which funds are held subject to the rights of the Collateral
Agent hereunder.
(vi) Each Grantor acknowledges and agrees that (x) the funds on
deposit in the deposit accounts (including in the Concentration Account)
shall continue to be collateral security for all the Obligations and (y)
upon the occurrence and during the continuance of an Event of Default
and if expressly consented to in writing by the Required Lenders (which
consent may not be unreasonably withheld), the funds on deposit in such
deposit accounts (including in the Concentration Account) shall be
applied as provided in Section 5.02. Each Grantor irrevocably authorizes
the Collateral Agent to (A) notify each Sub-Agent of the occurrence of
an Event of Default and (B) following the occurrence of an Event of
Default and if expressly consented to in writing by the Required Lenders
(which consent may not be unreasonably withheld), instruct each
Sub-Agent to apply the funds on deposit in such deposit account in
accordance with Section 5.02. Each Grantor hereby agrees to irrevocably
direct each Sub-Agent to comply with the instructions of the Collateral
Agent with respect to the relevant deposit account without further
consent from the Grantor or any other Person.
(c) Investment Property. Except to the extent otherwise provided
in Article III, if any Grantor shall at any time hold or acquire any
Certificated Securities, such Grantor shall forthwith endorse, assign and
deliver the same to the Collateral Agent, accompanied by such instruments of
transfer or assignment duly executed in blank as the Collateral Agent may from
time to time specify. If any securities now or hereafter acquired by any
Grantor are uncertificated and are issued to such Grantor or its nominee
directly by the issuer thereof, such Grantor shall immediately notify the
Collateral Agent thereof and, at the Collateral Agent's request and option,
pursuant to an agreement in form and substance reasonably satisfactory to the
Collateral Agent, either (i) cause the issuer to agree to comply with
instructions from the Collateral Agent as to such securities, without further
consent of any Grantor or such nominee, or (ii) arrange for the Collateral Agent
to become the registered owner of the securities. If any securities, whether
certificated or uncertificated, or other investment property now or hereafter
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26
acquired by any Grantor are held by such Grantor or its nominee through a
securities intermediary or commodity intermediary, such Grantor shall
immediately notify the Collateral Agent thereof and, at the Collateral Agent's
request and option, pursuant to an agreement in form and substance reasonably
satisfactory to the Collateral Agent, either (A) cause such securities
intermediary or (as the case may be) commodity intermediary to agree to comply
with entitlement orders or other instructions from the Collateral Agent to such
securities intermediary as to such securities or other investment property or
(as the case may be) to apply any value distributed on account of any commodity
contract as directed by the Collateral Agent to such commodity intermediary, in
each case without further consent of any Grantor or such nominee, or (B) in the
case of Financial Assets or other Investment Property held through a securities
intermediary, arrange for the Collateral Agent to become the entitlement holder
with respect to such investment property, with the Grantor being permitted, only
with the consent of the Collateral Agent, to exercise rights to withdraw or
otherwise deal with such investment property. The Collateral Agent agrees with
each of the Grantors that the Collateral Agent shall not give any such
entitlement orders or instructions or directions to any such issuer, securities
intermediary or commodity intermediary, and shall not withhold its consent to
the exercise of any withdrawal or dealing rights by any Grantor, unless an Event
of Default has occurred and is continuing or, after giving effect to any such
investment and withdrawal rights, would occur. The provisions of this paragraph
(c) shall not apply to any financial assets credited to a securities account for
which the Collateral Agent is the securities intermediary.
(d) Electronic Chattel Paper and Transferable Records. If any
Grantor at any time holds or acquires an interest in any 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
relevant jurisdiction, such Grantor shall promptly notify the Collateral Agent
thereof and, at the request of the Collateral Agent, shall take such action as
the Collateral Agent may reasonably request to vest in the Collateral Agent
control under New York UCC Section 9-105 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, as so in effect in such jurisdiction, of such
transferable record. The Collateral Agent agrees with such Grantor that the
Collateral Agent will arrange, pursuant to procedures reasonably satisfactory to
the Collateral Agent and so long as such procedures will not result in the
Collateral Agent's loss of control, for the Grantor 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
Transactions Act for a party in control to allow without loss of control, unless
an Event of Default has occurred and is continuing or would occur after taking
into account any action by such Grantor with respect to such Electronic Chattel
Paper or transferable record.
(e) Letter-of-Credit Rights. If any Grantor is at any time a
beneficiary under a letter of credit now or hereafter issued in favor of such
Grantor, such Grantor shall promptly notify the Collateral Agent thereof and,
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27
at the request and option of the Collateral Agent, such Grantor shall, pursuant
to an agreement in form and substance satisfactory to the Collateral Agent,
either (i) arrange for the issuer and any confirmer of such letter of credit to
consent to an assignment to the Collateral Agent of the proceeds of any drawing
under the letter of credit or (ii) arrange for the Collateral Agent to become
the transferee beneficiary of the letter of credit, with the Collateral Agent
agreeing, in each case, that the proceeds of any drawing under the letter of
credit are to be paid to the applicable Grantor unless an Event of Default has
occurred or is continuing.
(f) Commercial Tort Claims. If any Grantor shall at any time
hold or acquire a Commercial Tort Claim in an amount reasonably estimated to
exceed $1,000,000, the Grantor shall promptly notify the Collateral Agent
thereof in a writing signed by such Grantor, including a summary description of
such claim, and grant to the Collateral Agent in writing a security interest
therein and in the proceeds thereof, all upon the terms of this Agreement, with
such writing to be in form and substance reasonably satisfactory to the
Collateral Agent.
SECTION 4.05. Covenants Regarding Patent, Trademark and
Copyright Collateral. (a) Each Grantor agrees that it will not do any act or
omit to do any act (and will exercise commercially reasonable efforts to prevent
its licensees from doing any act or omitting to do any act) whereby any Patent
that is material to the conduct of such Grantor's business may become
invalidated or dedicated to the public, and agrees that it shall continue to
xxxx any products covered by a Patent with the relevant patent number as
necessary and sufficient to establish and preserve its maximum rights under
applicable patent laws.
(b) Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such Grantor's
business, (i) maintain such Trademark in full force free from any claim of
abandonment or invalidity for non-use, (ii) maintain the quality of products and
services offered under such Trademark, (iii) display such Trademark with notice
of Federal or foreign registration to the extent necessary and sufficient to
establish and preserve its maximum rights under applicable law and (iv) not
knowingly use or knowingly permit the use of such Trademark in violation of any
third-party rights.
(c) Each Grantor (either itself or through its licensees or its
sublicensees) will, for each work covered by a Copyright material to the conduct
of such Grantor's business, continue to publish, reproduce, display, adopt and
distribute the work with appropriate copyright notice as necessary and
sufficient to establish and preserve its maximum rights under applicable
copyright laws.
(d) Each Grantor shall notify the Collateral Agent immediately
if it knows or has reason to know that any Patent, Trademark or Copyright
material to the conduct of such Grantor's business may become abandoned, lost or
dedicated to the public, or of any materially 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,
United States Copyright Office or any court or similar office of any country)
regarding such Grantor's ownership of any such Patent, Trademark or Copyright,
its right to register the same or its right to keep and maintain the same.
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28
(e) In no event shall any Grantor, either itself or through any
agent, employee, licensee or designee, file an application for any Patent or for
the registration of any Trademark or Copyright with the United States Patent and
Trademark Office, the United States Copyright Office or any office or agency in
any political subdivision of the United States or in any other country or any
political subdivision thereof, unless it promptly informs the Collateral Agent
thereof, and, upon the request of the Collateral Agent, executes and delivers
any and all agreements, instruments, documents and papers as the Collateral
Agent may reasonably request to evidence the Collateral Agent's security
interest in such Patent, Trademark or Copyright, and each Grantor hereby
appoints the Collateral Agent as its attorney-in-fact to execute and file such
writings for the foregoing purposes, all acts of such attorney being hereby
ratified and confirmed; such power, being coupled with an interest, is
irrevocable.
(f) Each Grantor will take all necessary steps that are
consistent with the practice in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any office or agency
in any political subdivision of the United States or in any other country or any
political subdivision thereof to maintain and pursue each material application
relating to the Patents, Trademarks and/or Copyrights (and to obtain the
relevant grant or registration) and to maintain each issued Patent and each
registration of the Trademarks and Copyrights that is material to the conduct of
such Grantor's business, including timely filings of applications for renewal,
affidavits of use, affidavits of incontestability and payment of maintenance
fees, and, if consistent with good business judgment, to initiate opposition,
interference and cancelation proceedings against third parties.
(g) In the event that any Grantor has reason to believe that any
Article 9 Collateral consisting of a material Patent, Trademark or Copyright has
been or is about to be infringed, misappropriated or diluted by a third party,
such Grantor shall promptly notify the Collateral Agent and shall, if consistent
with good business judgment, promptly xxx for infringement, misappropriation or
dilution and to recover any and all damages for such infringement,
misappropriation or dilution, and take such other actions as are appropriate
under the circumstances to protect such Article 9 Collateral.
(h) Upon and during the continuance of an Event of Default, each
Grantor shall use commercially reasonable efforts to obtain all requisite
consents or approvals from the licensor under each Copyright License, Patent
License or Trademark License to effect the assignment of all such Grantor's
right, title and interest thereunder to the Collateral Agent or its designee.
ARTICLE V
Remedies
--------
SECTION 5.01. Remedies Upon Default. Upon the occurrence and
during the continuance of an Event of Default, each Grantor agrees to deliver
each item of Collateral to the Collateral Agent on demand, and it is agreed that
the Collateral Agent shall have the right to take any of or all the following
actions at the same or different times: (a) with respect to any Article 9
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29
Collateral consisting of Intellectual Property, on demand, to cause the Security
Interest to become an assignment, transfer and conveyance of any of or all such
Article 9 Collateral by the applicable Grantors to the Collateral Agent or to
license or sublicense, whether general, special or otherwise, and whether on an
exclusive or nonexclusive basis, any such Article 9 Collateral throughout the
world on such terms and conditions and in such manner as the Collateral Agent
shall determine (other than in violation of any then-existing licensing
arrangements to the extent that waivers cannot be obtained); and (b) with or
without legal process and with or without prior notice or demand for
performance, to take possession of the Article 9 Collateral and without
liability for trespass to enter any premises where the Article 9 Collateral may
be located for the purpose of taking possession of or removing the Article 9
Collateral and, generally, to exercise any and all rights afforded to a secured
party under the Uniform Commercial Code or other applicable law. Without
limiting the generality of the foregoing, each Grantor agrees that the
Collateral Agent shall have the right, subject to the mandatory requirements of
applicable law, to sell or otherwise dispose of all or any part of the
Collateral at a public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as the
Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized at any such sale of securities (if it deems it advisable to do so) to
restrict the prospective bidders or purchasers to Persons who will represent and
agree that they are purchasing the Collateral for their own account for
investment and not with a view to the distribution or sale thereof, and upon
consummation of any such sale of Collateral the Collateral Agent shall have the
right to assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such 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 and releases (to the extent permitted by
law) all rights of redemption, stay, valuation and appraisal that such Grantor
now has or may at any time in the future have under any rule of law or statute
now existing or hereafter enacted.
The Collateral Agent shall give the applicable Grantors 10 days'
written notice (which each Grantor agrees is reasonable notice within the
meaning of Section 9-611 of the New York UCC or its equivalent in other
jurisdictions) of the Collateral Agent's intention to make any sale of
Collateral. Such notice, in the case of a public sale, shall state the time and
place for such sale and, in the case of a sale at a broker's board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or portion thereof, will first be
offered for sale at such board or exchange. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as the Collateral Agent may fix and state in the notice (if any) of such sale.
At any such sale, the Collateral, or portion thereof, to be sold may be sold in
one lot as an entirety or in separate parcels, as the Collateral Agent may (in
its sole and absolute discretion) determine. The Collateral Agent shall not be
obligated to make any sale of any Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of such Collateral shall have been
given. The Collateral Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
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credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Collateral Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral so sold
and, in case of any such failure, such Collateral may be sold again upon like
notice. At any public (or, to the extent permitted by law, private) sale made
pursuant to this Section 5.01, any Secured Party may bid for or purchase for
cash, free (to the extent permitted by law) from any right of redemption, stay,
valuation or appraisal on the part of any Grantor (all said rights being also
hereby waived and released to the extent permitted by law), the Collateral or
any part thereof offered for sale and such Secured Party may, upon compliance
with the terms of sale, hold, retain and dispose of such property without
further accountability to any Grantor therefor. For purposes hereof, a written
agreement to purchase the Collateral or any portion thereof shall be treated as
a sale thereof; the Collateral Agent shall be free to carry out such sale
pursuant to such agreement and no Grantor shall be entitled to the return of the
Collateral or any portion thereof subject thereto, notwithstanding the fact that
after the Collateral Agent shall have entered into such an agreement all Events
of Default shall have been remedied and the Obligations paid in full. As an
alternative to exercising the power of sale herein conferred upon it, the
Collateral Agent may proceed by a suit or suits at law or in equity to foreclose
this Agreement and to sell the Collateral or any portion thereof pursuant to a
judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to
the provisions of this Section 5.01 shall be deemed to conform to the
commercially reasonable standards as provided in Section 9-610(b) of the New
York UCC or its equivalent in other jurisdictions.
SECTION 5.02. Application of Proceeds. The Collateral Agent
shall apply the proceeds of any collection or sale of Collateral, as well as any
Collateral consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by the
Administrative Agent and the Collateral Agent in connection with such
collection or sale or otherwise in connection with this Agreement, any
other Loan Document or any of the Obligations, including all court costs
and the fees and expenses of its agents and legal counsel, the repayment
of all advances made by the Administrative Agent or the Collateral Agent
hereunder or under any other Loan Document on behalf of any Grantor and
any other costs or expenses incurred in connection with the exercise of
any right or remedy hereunder or under any other Loan Document;
SECOND, to the Collateral Agent for distribution to the Secured
Parties as provided in Section 4.01 of the Intercreditor Agreement for
the payment in full of the Obligations owed to the Secured Parties.
THIRD, to the Grantors, their successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
Subject to the terms of the Intercreditor Agreement, the Collateral Agent shall
have absolute discretion as to the time of application of any such proceeds,
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31
moneys or balances in accordance with this Agreement. Upon any sale of
Collateral by the Collateral Agent (including pursuant to a power of sale
granted by statute or under a judicial proceeding), the receipt of the purchase
money by the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.
SECTION 5.03. Grant of License to Use Intellectual Property.
For the purpose of enabling the Collateral Agent to exercise rights and remedies
under this Agreement at such time as the Collateral Agent shall be lawfully
entitled to exercise such rights and remedies, each Grantor hereby grants to the
Collateral Agent an irrevocable, nonexclusive license (exercisable without
payment of royalty or other compensation to the Grantors) to use, license or
sublicense any of the Article 9 Collateral consisting of Intellectual Property
now owned or hereafter acquired by such Grantor, wherever the same may be
located, and including in such license reasonable access to all media in which
any of the licensed items may be recorded or stored and to all computer software
and programs used for the compilation or printout thereof. The use of such
license by the Collateral Agent may be exercised, at the option of the
Collateral Agent, upon the occurrence and during the continuation of an Event of
Default; provided that any license, sublicense or other transaction entered into
by the Collateral Agent in accordance herewith shall be binding upon the
Grantors notwithstanding any subsequent cure of an Event of Default.
SECTION 5.04. Securities Act, etc. In view of the position of
the Grantors in relation to the Pledged Collateral, or because of other current
or future circumstances, a question may arise under the Securities Act of 1933,
as now or hereafter in effect, or any similar statute hereafter enacted
analogous in purpose or effect (such Act and any such similar statute as from
time to time in effect being called the "Federal Securities Laws") with respect
to any disposition of the Pledged Collateral permitted hereunder. Each Grantor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were
to attempt to dispose of all or any part of the Pledged Collateral, and might
also limit the extent to which or the manner in which any subsequent transferee
of any Pledged Collateral could dispose of the same. Similarly, there may be
other legal restrictions or limitations affecting the Collateral Agent in any
attempt to dispose of all or part of the Pledged Collateral under applicable
Blue Sky or other state securities laws or similar laws analogous in purpose or
effect. Each Grantor recognizes that in light of such restrictions and
limitations the Collateral Agent may, with respect to any sale of the Pledged
Collateral, limit the purchasers to those who will agree, among other things,
to acquire such Pledged Collateral for their own account, for investment, and
not with a view to the distribution or resale thereof. Each Grantor
acknowledges and agrees that in light of such restrictions and limitations, the
Collateral Agent, in its sole and absolute discretion, (a) may proceed to make
such a sale whether or not a registration statement for the purpose of
registering such Pledged Collateral or part thereof shall have been filed under
the Federal Securities Laws and (b) may approach and negotiate with a single
potential purchaser to effect such sale. Each Grantor acknowledges and agrees
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32
that any such sale might result in prices and other terms less favorable to the
seller than if such sale were a public sale without such restrictions. In the
event of any such sale, the Collateral Agent shall incur no responsibility or
liability for selling all or any part of the Pledged Collateral at a price that
the Collateral Agent, in its sole and absolute discretion, may in good xxxxx
xxxx reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might have been realized if the sale were deferred
until after registration as aforesaid or if more than a single purchaser were
approached. The provisions of this Section 5.04 will apply notwithstanding the
existence of a public or private market upon which the quotations or sales
prices may exceed substantially the price at which the Collateral Agent sells.
SECTION 5.05. Registration, etc. Each Grantor agrees that, upon
the occurrence and during the continuance of an Event of Default, if for any
reason the Collateral Agent desires to sell any of the Pledged Collateral at a
public sale, it will, at any time and from time to time, upon the written
request of the Collateral Agent, use its commercially reasonable efforts to take
or to cause the issuer of such Pledged Collateral to take such action and
prepare, distribute and/or file such documents, as are required or advisable in
the reasonable opinion of counsel for the Collateral Agent to permit the public
sale of such Pledged Collateral. Each Grantor further agrees to indemnify,
defend and hold harmless the Administrative Agent, the Collateral Agent, each
other Secured Party, any underwriter and their respective officers, directors,
affiliates and controlling persons from and against all loss, liability,
expenses, costs of counsel (including, without limitation, reasonable fees and
expenses to the Collateral Agent of legal counsel), and claims (including the
costs of investigation) that they may incur insofar as such loss, liability,
expense or claim arises out of or is based upon any alleged untrue statement of
a material fact contained in any prospectus (or any amendment or supplement
thereto) or in any notification or offering circular, or arises out of or is
based upon any alleged omission to state a material fact required to be stated
therein or necessary to make the statements in any thereof not misleading,
except insofar as the same may have been caused by any untrue statement or
omission based upon information furnished in writing to such Grantor or the
issuer of such Pledged Collateral by the Collateral Agent or any other Secured
Party expressly for use therein. Each Grantor further agrees, upon such written
request referred to above, to use its commercially reasonable efforts to
qualify, file or register, or cause the issuer of such Pledged Collateral to
qualify, file or register, any of the Pledged Collateral under the Blue Sky or
other securities laws of such states as may be requested by the Collateral Agent
and keep effective, or cause to be kept effective, all such qualifications,
filings or registrations. Each Grantor will bear all costs and expenses of
carrying out its obligations under this Section 5.05. Each Grantor acknowledges
that there is no adequate remedy at law for failure by it to comply with the
provisions of this Section 5.05 and that such failure would not be adequately
compensable in damages, and therefore agrees that its agreements contained in
this Section 5.05 may be specifically enforced.
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33
ARTICLE VI
Indemnity, Subrogation and Subordination
----------------------------------------
SECTION 6.01. Indemnity and Subrogation. In addition to all
such rights of indemnity and subrogation as the Guarantors may have under
applicable law (but subject to Section 6.03), the Borrowers agree that (a) in
the event a payment shall be made by any Guarantor under this Agreement in
respect of any Obligation, the Borrowers shall, jointly and severally, indemnify
such Guarantor for the full amount of such payment and such Guarantor shall be
subrogated to the rights of the Person to whom such payment shall have been made
to the extent of such payment and (b) in the event any assets of any Guarantor
shall be sold pursuant to this Agreement or any other Security Document to
satisfy in whole or in part an Obligation, the Borrowers shall, jointly and
severally, indemnify such Guarantor in an amount equal to the greater of the
book value or the fair market value of the assets so sold.
SECTION 6.02. Contribution and Subrogation. Each Guarantor (a
"Contributing Guarantor") agrees (subject to Section 6.03) that, in the event a
payment shall be made by any other Guarantor hereunder in respect of any
Obligation or assets of any other Guarantor shall be sold pursuant to any
Security Document to satisfy any Obligation owed to any Secured Party and such
other Guarantor (the "Claiming Guarantor") shall not have been fully indemnified
by the Borrowers as provided in Section 6.01, the Contributing Guarantor shall
indemnify the Claiming Guarantor in an amount equal to the amount of such
payment or the greater of the book value or the fair market value of such
assets, as the case may be, in each case multiplied by a fraction of which the
numerator shall be the net worth of the Contributing Guarantor on the date
hereof and the denominator shall be the aggregate net worth of all the
Guarantors on the date hereof (or, in the case of any Guarantor becoming a party
hereto pursuant to Section 7.16, the date of the supplement hereto executed and
delivered by such Guarantor). Any Contributing Guarantor making any payment to
a Claiming Guarantor pursuant to this Section 6.02 shall be subrogated to the
rights of such Claiming Guarantor under Section 6.01 to the extent of such
payment.
SECTION 6.03. Subordination. (a) Notwithstanding any provision
of this Agreement to the contrary, all rights of the Guarantors under Sections
6.01 and 6.02 and all other rights of indemnity, contribution or subrogation
under applicable law or otherwise shall be fully subordinated to the
indefeasible payment in full in cash of the Obligations. No failure on the part
of any Borrower or any Guarantor to make the payments required by Sections 6.01
and 6.02 (or any other payments required under applicable law or otherwise)
shall in any respect limit the obligations and liabilities of any Guarantor with
respect to its obligations hereunder, and each Guarantor shall remain liable for
the full amount of the obligations of such Guarantor hereunder.
(b) Each Guarantor hereby agrees that all Indebtedness and other
monetary obligations owed by it to any other Guarantor or any Subsidiary shall
be fully subordinated to the indefeasible payment in full in cash of the
Obligations.
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34
ARTICLE VII
Miscellaneous
-------------
SECTION 7.01. Notices. All communications and notices hereunder
shall (except as otherwise expressly permitted herein) be in writing and given
as provided in Section 9.01 of the Credit Agreement. All communications and
notices hereunder to any Subsidiary Loan Party shall be given to it in care of
the Borrowers as provided in Section 9.01 of the Credit Agreement.
SECTION 7.02. Security Interest Absolute. All rights of the
Collateral Agent hereunder, the Security Interest, the security interest in the
Pledged Collateral and all obligations of each Grantor and Guarantor hereunder
shall be absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Credit Agreement, any other Loan Document, any agreement
with respect to any of the Obligations or any other agreement or instrument
relating to any of the foregoing, (b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, any other Loan Document or any other agreement or instrument, (c) any
exchange, release or non-perfection of any Lien on other collateral, or any
release or amendment or waiver of or consent under or departure from any
guarantee, securing or guaranteeing all or any of the Obligations, or (d) any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, any Grantor or Guarantor in respect of the Obligations or this
Agreement.
SECTION 7.03. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the Lenders and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and the
issuance of any Letters of Credit, regardless of any investigation made by any
Lender or on its behalf and notwithstanding that the Administrative Agent, the
Collateral Agent, the Issuing Bank or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended under the Credit Agreement, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under any Loan Document is outstanding and
unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not expired or terminated.
SECTION 7.04. Binding Effect; Several Agreement. This Agreement
shall become effective as to any Loan Party when a counterpart hereof executed
on behalf of such Loan Party shall have been delivered to the Administrative
Agent and a counterpart hereof shall have been executed on behalf of the
Collateral Agent, and thereafter shall be binding upon such Loan Party and the
Collateral Agent and their respective permitted successors and assigns, and
shall inure to the benefit of such Loan Party, the Collateral Agent and the
other Secured Parties and their respective permitted successors and assigns,
except that no Loan Party shall have the right to assign or transfer its rights
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35
or obligations hereunder or any interest herein or in the Collateral (and any
such assignment or transfer shall be void) except as expressly contemplated by
this Agreement, the Intercreditor Agreement or the Credit Agreement. This
Agreement shall be construed as a separate agreement with respect to each Loan
Party and may be amended, modified, supplemented, waived or released with
respect to any Loan Party without the approval of any other Loan Party and
without affecting the obligations of any other Loan Party hereunder.
SECTION 7.05. Successors and Assigns. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the permitted successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of any Grantor or the
Collateral Agent that are contained in this Agreement shall bind and inure to
the benefit of their respective permitted successors and assigns.
SECTION 7.06. Collateral Agent's Fees and Expenses;
Indemnification. (a) The parties hereto agree that the Collateral Agent shall be
entitled to reimbursement of its expenses incurred hereunder as provided in
Section 9.03 of the Credit Agreement.
(b) Without limitation of its indemnification obligations under
the other Loan Documents, each Grantor jointly and severally agrees to indemnify
the Collateral Agent and the other Indemnitees (as defined in Section 9.03 of
the Credit Agreement) against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses, including the
reasonable fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of, the execution, delivery or performance of this
Agreement or any claim, litigation, investigation or proceeding relating hereto,
or to the Collateral, whether or not any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee.
(c) Any such amounts payable as provided hereunder shall be
additional Obligations secured hereby and by the other Security Documents. The
provisions of this Section 7.06 shall remain operative and in full force and
effect regardless of the termination of this Agreement or any other Loan
Document, the consummation of the transactions contemplated hereby, the
repayment of any of the Obligations, the invalidity or unenforceability of any
term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Collateral Agent or any other Secured
Party. All amounts due under this Section 7.06 shall be payable on written
demand therefor.
SECTION 7.07. Collateral Agent Appointed Attorney-in-Fact.
Each Grantor hereby appoints the Collateral Agent the attorney-in-fact of such
Grantor for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instrument that the Collateral Agent may
deem necessary or advisable to accomplish the purposes hereof, which appointment
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36
is irrevocable and coupled with an interest. Without limiting the generality of
the foregoing, the Collateral Agent shall have the right, upon the occurrence
and during the continuance of an Event of Default, with full power of
substitution either in the Collateral Agent's name or in the name of such
Grantor: (a) to receive, endorse, assign and/or deliver any and all notes,
acceptances, checks, drafts, money orders or other evidences of payment relating
to the Collateral or any part thereof; (b) to demand, collect, receive payment
of, give receipt for and give discharges and releases of all or any of the
Collateral; (c) to ask for, demand, xxx for, collect, receive and give
acquittance for any and all moneys due or to become due under and by virtue of
any Collateral; (d) to sign the name of any Grantor on any invoice or xxxx of
lading relating to any of the Collateral; (e) to send verifications of Accounts
to any Account Debtor; (f) to commence and prosecute any and all suits, actions
or proceedings at law or in equity in any court of competent jurisdiction to
collect or otherwise realize on all or any of the Collateral or to enforce any
rights in respect of any Collateral; (g) to settle, compromise, compound, adjust
or defend any actions, suits or proceedings relating to all or any of the
Collateral; (h) to notify, or to require any Grantor to notify, Account Debtors
to make payment directly to the Collateral Agent; and (i) to use, sell, assign,
transfer, pledge, make any agreement with respect to or otherwise deal with all
or any of the Collateral, and to do all other acts and things necessary to carry
out the purposes of this Agreement, as fully and completely as though the
Collateral Agent were the absolute owner of the Collateral for all purposes;
provided, that nothing herein contained shall be construed as requiring or
obligating the Collateral Agent to make any commitment or to make any inquiry as
to the nature or sufficiency of any payment received by the Collateral Agent, or
to present or file any claim or notice, or to take any action with respect to
the Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby. The Collateral Agent and the other
Secured Parties shall be accountable only for amounts actually received as a
result of the exercise of the powers granted to them herein, and neither they
nor their officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for their own gross
negligence or wilful misconduct.
SECTION 7.08. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 7.09. Waivers; Amendment. (a) No failure or delay by
the Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender
in exercising any right, power or remedy hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy, or any abandonment or
discontinuance of steps to enforce such a right, power or remedy, preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. The rights, powers and remedies of the Administrative Agent, the
Collateral Agent, the Issuing Bank and the Lenders hereunder and under the other
Loan Documents are cumulative and are not exclusive of any rights, powers or
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37
remedies that they would otherwise have. No waiver of any provision of this
Agreement or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section 7.09, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan or the issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether
the Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank
may have had notice or knowledge of such Default at the time. No notice or
demand on any Loan Party in any case shall entitle any Loan Party to any other
or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Collateral Agent and the Loan Party or Loan Parties
with respect to which such waiver, amendment or modification is to apply,
subject to any consent required in accordance with the Intercreditor Agreement
and Section 9.02 of the Credit Agreement.
SECTION 7.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 7.10.
SECTION 7.11. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
in such jurisdiction of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction. The parties hereto shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 7.12. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which, when taken together,
shall constitute a single contract, and shall become effective as provided in
Section 7.04. Delivery of an executed signature page to this Agreement by
facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Agreement.
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
38
SECTION 7.13. Headings. Article and Section headings used
herein are for the purpose of reference only, are not part of this Agreement and
are not to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.
SECTION 7.14. Jurisdiction; Consent to Service of Process. (a)
Each of the Loan Parties hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Loan Document shall affect any right that
the Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
or any other Loan Document against any Grantor or Guarantor, or its properties,
in the courts of any jurisdiction.
(b) Each of the Loan Parties hereby irrevocably and
unconditionally waives, to the fullest extent permitted by law, any objection
that it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (a) of this Section 7.14. Each
of the parties hereto hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 7.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 7.15. Termination or Release. (a) This Agreement, the
guarantees made herein, the Security Interest and all other security interests
granted hereby shall terminate when all the Loan Document Obligations have been
indefeasibly paid in full and the Lenders have no further commitment to lend
under the Credit Agreement, the LC Exposure has been reduced to zero and the
Issuing Bank has no further obligations to issue Letters of Credit under the
Credit Agreement.
(b) A Subsidiary Loan Party shall automatically be released from
its obligations hereunder and the security interests in the Collateral of such
Subsidiary Loan Party shall be automatically released upon the consummation of
any transaction permitted by the Credit Agreement as a result of which such
Subsidiary Loan Party ceases to be a Subsidiary of the Parent; provided that the
Required Lenders shall have consented to such transaction (to the extent
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
39
required by the Credit Agreement) and the terms of such consent did not provide
otherwise.
(c) Upon any sale or other transfer by any Grantor of any
Collateral that is permitted under the Credit Agreement to any Person that is
not a Grantor, or upon the effectiveness of any written consent to the release
of the security interest granted hereby in any Collateral pursuant to Section
9.02 of the Credit Agreement, the security interest in such Collateral shall be
automatically released, provided that the Proceeds resulting from such sale or
other transfer shall be included in the Collateral.
(d) In connection with any termination or release pursuant to
paragraph (a), (b) or (c) of this Section 7.15, the Collateral Agent shall
execute and deliver to any Grantor at such Grantor's expense all documents that
such Grantor shall reasonably request to evidence such termination or release.
Any execution and delivery of documents pursuant to this Section 7.15 shall be
without recourse to or warranty by the Collateral Agent.
SECTION 7.16. Additional Subsidiaries. Pursuant to Section 5.11
of the Credit Agreement, each Subsidiary of a Loan Party that was not in
existence or not a Subsidiary on the date of the Credit Agreement and is not a
Foreign Subsidiary is required to enter into this Agreement as a Subsidiary Loan
Party upon becoming such a Subsidiary. Upon execution and delivery by the
Collateral Agent and a Subsidiary of an instrument in the form of Exhibit I
hereto, such Subsidiary shall become a Subsidiary Loan Party hereunder with the
same force and effect as if originally named as a Subsidiary Loan Party herein.
The execution and delivery of any such instrument shall not require the consent
of any other Loan Party hereunder. The rights and obligations of each Loan
Party hereunder shall remain in full force and effect notwithstanding the
addition of any new Loan Party as a party to this Agreement.
SECTION 7.17. Right of Setoff. Subject to Section 9.08 of the
Credit Agreement and to the extent permitted by the Intercreditor Agreement, if
an Event of Default shall have occurred and be continuing, each Lender and each
of its Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other obligations at any time owing by such Lender or Affiliate to or for the
credit or the account of any Subsidiary Loan Party against any of and all the
obligations of such Subsidiary Loan Party now or hereafter existing under this
Agreement owed to such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement and although such obligations may be
unmatured.
SECTION 7.18. Subject to Intercreditor Agreement.
Notwithstanding anything herein to the contrary, the Lien and security interest
granted to the Collateral Agent pursuant to this Agreement and the exercise of
any right or remedy by the Collateral Agent hereunder are subject to the
provisions of the Intercreditor Agreement. In the event of any conflict between
the terms of the Intercreditor Agreement and this Agreement, the terms of the
Intercreditor Agreement shall govern.
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
40
SECTION 7.19. Survival of Liens under the Original Guarantee
and Collateral Agreement. This Agreement shall not extinguish or modify the
Liens created pursuant to the Original Guarantee and Collateral Agreement, which
Liens shall continue to be effective after the Effective Date.
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
41
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
DENNY'S, INC.,
by /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President and Treasurer
XXXXX'X REALTY, INC.,
by /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President and Treasurer
XXXXX'X CORPORATION,
by /s/ Xxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President and Treasurer
XXXXX'X HOLDINGS, INC.,
by /s/ Xxxxx X. Xxxxx
--------------------------------
Name:
Title:
DFO, INC.,
by /s/ Xxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President and Treasurer
JPMORGAN CHASE BANK, as
Collateral Agent,
by /s/ Xxxxx Xxxxxxx
---------------------------------
Name:
Title:
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
Schedule I to
the Guarantee and
Collateral Agreement
Subsidiary Loan Parties
Subsidiary Jurisdiction of Organization
---------- ----------------------------
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
Schedule II to
the Guarantee and
Collateral Agreement
EQUITY INTERESTS
Number
of Issuer Registered Number and Class Percentage of
Certificate Owner of Equity Interests Equity Interests
----------- ---------- ------------------- ----------------
DEBT SECURITIES
Principal
Issuer Amount Date of Note Maturity Date
----------- ---------- ------------------ ----------------
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
Schedule III to
Guarantee and
Collateral Agreement
OWNED COPYRIGHTS
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
Schedule III
to Guarantee and
Collateral Agreement
OWNED PATENTS
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
Schedule III
to Guarantee and
Collateral Agreement
OWNED TRADEMARK/TRADE NAMES
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
Schedule IV
to Guarantee and
Collateral Agreement
Insurance Requirements
----------------------
(a) Parent and the Borrowers will, and will cause each
Subsidiary Loan Party to, maintain (or cause to be maintained on its behalf)
with financially sound and reputable insurance companies:
(i) fire, boiler and machinery, and extended coverage insurance,
on a replacement cost basis, with respect to all personal property and
improvements to real property (in each case constituting Collateral), in
such amounts as are customarily maintained by companies in the same or
similar business operating in the same or similar locations;
(ii) commercial general liability insurance against claims for
bodily injury, death or property damage occurring upon, about or in
connection with the use of any properties owned, occupied or controlled
by it, providing coverage on an occurrence basis with a combined single
limit of not less than $1,000,000 and including the broad form CGL
endorsement; and
(iii) such other insurance as may be required by law.
Deductibles or self-insured retention shall not exceed $100,000
for fire, boiler and machinery and extended coverage policies or $500,000 for
commercial general liability policies.
(b) Fire, boiler and machinery and extended coverage policies
maintained with respect to any Collateral shall be endorsed or otherwise amended
to include (i) a lenders' loss payable clause in favor of the Collateral Agent
and providing for losses thereunder to be payable to the Collateral Agent or its
designee, (ii) a provision to the effect that neither any Loan Party, the
Collateral Agent nor any other party shall be a coinsurer and (iii) such other
provisions as the Collateral Agent may reasonably require from time to time to
protect the interests of the Lenders. Commercial general liability policies
shall be endorsed to name the Collateral Agent as an additional insured.
Business interruption policies shall name the Collateral Agent as loss payee.
Each such policy referred to in this paragraph also shall provide that it shall
not be canceled, modified or not renewed (i) by reason of nonpayment of premium
except upon not less than 10 days' prior written notice thereof by the insurer
to the Collateral Agent (giving the Collateral Agent the right to cure defaults
in the payment of premiums) or (ii) for any other reason except upon not less
than 30 days' prior written notice thereof by the insurer to the Collateral
Agent. The Borrowers shall deliver to the Collateral Agent, prior to the
cancelation, modification or nonrenewal of any such policy of insurance, a copy
of a renewal or replacement policy (or other evidence of renewal of a policy
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
2
previously delivered to the Collateral Agent) together with evidence reasonably
satisfactory to the Collateral Agent of payment of the premium therefor.
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
Exhibit I
to Guarantee and
Collateral Agreement
SUPPLEMENT NO. __ dated as of [ ] this
"Supplement '), to the Guarantee and Collateral
Agreement dated as of December 16, 2002, as amended and
restated as of September 26, 2003 (as further amended,
supplemented, waived or otherwise modified from time to
time, the "Guarantee and Collateral Agreement"), among
Denny's, Inc., a California corporation and Xxxxx'x
Realty, Inc., a Delaware corporation (each of the
foregoing, individually, a "Borrower" and collectively,
the "Borrowers"), Xxxxx'x Corporation, a Delaware
corporation ("Parent"), Xxxxx'x Holdings, Inc., a New
York corporation ("Denny's Holdings"), the other
Subsidiary Loan Parties listed on Schedule I thereto;
and JPMORGAN CHASE BANK, a New York banking corporation
("JPMCB"), as Collateral Agent (in such capacity, the
"Collateral Agent") for the Secured Parties (as defined
herein).
A. Reference is made to the Credit Agreement dated as of
December 16, 2002, as amended and restated as of September 26, 2003 (as further
amended, supplemented, waived or otherwise modified from time to time, the
"Credit Agreement"), among the Borrowers, Parent, Denny's Holdings, DFO, Inc.,
a Delaware corporation, the Lenders party thereto (the "Lenders"), JPMCB, as
Administrative Agent, and Xxxxx Fargo Foothill, Inc. (f/k/a Foothill Capital
Corporation), a California corporation, as Syndication Agent.
B. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement
and the Guarantee and Collateral Agreement referred to therein.
C. The Grantors have entered into the Guarantee and Collateral
Agreement in order to induce the Lenders to make Loans and the Issuing Bank to
issue Letters of Credit. Section 7.16 of Collateral Agreement provides that
additional Subsidiaries may become Subsidiary Loan Parties under the Guarantee
and Collateral Agreement by execution and delivery of an instrument in the form
of this Supplement. The undersigned Subsidiary (the "New Subsidiary") is
executing this Supplement in accordance with the requirements of the Credit
Agreement to become a Subsidiary Loan Party under the Guarantee and Collateral
Agreement in order to induce the Lenders to make additional Loans and the
Issuing Bank to issue additional Letters of Credit and as consideration for
Loans previously made and Letters of Credit previously issued.
Accordingly, the Collateral Agent and the New Subsidiary agree
as follows:
SECTION 1. In accordance with Section 7.16 of the Guarantee and
Collateral Agreement, the New Subsidiary by its signature below becomes a
Subsidiary Loan Party, a Grantor and a Guarantor under the Guarantee and
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
2
Collateral Agreement with the same force and effect as if originally named
therein as a Subsidiary Loan Party, a Grantor and a Guarantor, and the New
Subsidiary hereby (a) agrees to all the terms and provisions of the Guarantee
and Collateral Agreement applicable to it as a Subsidiary Loan Party, Grantor
and Guarantor thereunder and (b) represents and warrants that the
representations and warranties made by it as a Grantor and Guarantor thereunder
are true and correct on and as of the date hereof. In furtherance of the
foregoing, the New Subsidiary, as security for the payment and performance in
full of the Obligations (as defined in the Guarantee and Collateral Agreement),
does hereby create and grant to the Collateral Agent, its successors and
assigns, for the benefit of the Secured Parties and their successors and
assigns, a security interest in and lien on all of the New Subsidiary's right,
title and interest in and to the Collateral (as defined in the Guarantee
and Collateral Agreement) of the New Subsidiary. Each reference to a
"Subsidiary Loan Party", a "Grantor" or a "Guarantor" in the Guarantee and
Collateral Agreement shall be deemed to include the New Subsidiary. Each of the
Guarantee and Collateral Agreement and the Intercreditor Agreement is hereby
incorporated herein by reference.
SECTION 2. The New Subsidiary represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts (and
by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which, when taken together, shall constitute
a single contract. This Supplement shall become effective when (a) the
Collateral Agent shall have received a counterpart of this Supplement that bears
the signature of the New Subsidiary and (b) the Collateral Agent has executed a
counterpart hereof. Delivery of an executed signature page to this Supplement
by facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Supplement.
SECTION 4. The New Subsidiary hereby represents and warrants
that (a) set forth on Schedule I attached hereto is a true and correct schedule
of the location of any and all Article 9 Collateral of the New Subsidiary, (b)
set forth on Schedule II attached hereto is a true and correct schedule of all
the Pledged Securities of the New Subsidiary and (c) set forth under its
signature hereto, is the true and correct legal name of the New Subsidiary, its
jurisdiction of formation and the location of its chief executive office.
SECTION 5. Except as expressly supplemented hereby, the
Guarantee and Collateral Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE PRINCIPLES
THEREOF RELATING TO CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE
LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
3
SECTION 7. Any provision of this Supplement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability in such jurisdiction
of the remaining provisions hereof and of the Guarantee and Collateral
Agreement; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction. The
parties hereto shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 8. All communications and notices hereunder shall be in
writing and given as provided in Section 7.01 of the Guarantee and Collateral
Agreement.
SECTION 9. The New Subsidiary agrees to reimburse the Collateral
Agent for its reasonable out-of-pocket expenses in connection with this
Supplement, including the reasonable fees, disbursements and other charges of
counsel for the Collateral Agent.
SECTION 10. Notwithstanding anything herein to the contrary, the
Lien and security interest granted to the Collateral Agent pursuant to this
Supplement and the exercise of any right or remedy by the Collateral Agent
hereunder are subject to the provisions of the Intercreditor Agreement. In the
event of any conflict between the terms of the Intercreditor Agreement and this
Supplement, the terms of the Intercreditor Agreement shall govern.
IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent
have duly executed this Supplement to the Guarantee and Collateral Agreement as
of the day and year first above written.
[Name of New Subsidiary],
by
-------------------------------
Name:
Title:
Legal Name:
Jurisdiction of
Formation:
Location of Chief
Executive Office:
JPMORGAN CHASE BANK, as,
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
4
Collateral Agent,
by
------------------------------
Name:
Title:
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
Schedule I
to Supplement No.___ to the
Guarantee and
Collateral Agreement
LOCATION OF ARTICLE 9 COLLATERAL
Description Location
----------- --------
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
Schedule II to
Supplement No. __
to the Guarantee and
Collateral Agreement
Pledged Securities of the New Subsidiary
----------------------------------------
EQUITY INTERESTS
Number
of Issuer Registered Number and Class Percentage of
Certificates Owner of Equity Interests Equity Interests
------------ ---------- ------------------- ----------------
DEBT SECURITIES
Principal
Issuer Amount Date of Note Maturity Date
------------ ----------- ------------------ ----------------
-------------------------------------------------------------------------------
OTHER PROPERTY
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
EXHIBIT II to
Guarantee and
Collateral Agreement
[FORM OF]
DEPOSIT ACCOUNT CONTROL AGREEMENT
DEPOSIT ACCOUNT CONTROL AGREEMENT dated as of [ ],
2003 (this "Agreement"), among [GRANTOR], a [ ]
corporation (the "Grantor"), JPMORGAN CHASE BANK ("JPMCB"), as
ollateral agent (in such capacity, the "Collateral Agent"), and
[ ] a [ ] banking corporation (the "Bank").
A. Reference is made to (a) the Credit Agreement dated as of
December 16, 2002, as amended and restated as of September 26, 2003 (as further
amended, supplemented, restated or otherwise modified from time to time, the
"Credit Agreement"), among Denny's, Inc., a California corporation and Xxxxx'x
Realty, Inc., a Delaware corporation (each of the foregoing, individually, a
"Borrower" and collectively, the "Borrowers"), Xxxxx'x Corporation, a Delaware
corporation ("Parent"), Xxxxx'x Holdings, Inc., a New York corporation ("Denny's
Holdings"), DFO, Inc., a Delaware corporation, the Lenders named therein, JPMCB
as Administrative Agent and Xxxxx Fargo Foothill, Inc. (f/k/a Foothill Capital
Corporation), a California corporation, as Syndication Agent, and (b) the
Guarantee and Collateral Agreement dated as of December 16, 2002, as amended and
restated as of September 26, 2003 (as further amended, supplemented, restated or
otherwise modified from time to time, the "Guarantee and Collateral Agreement"),
among the Borrowers, Parent, Denny's Holdings, the other Subsidiary Loan Parties
and JPMCB as Collateral Agent.
B. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement
and the Guarantee and Collateral Agreement.
C. The Bank has established the following deposit accounts in
the name of and for the benefit of the Grantor (the "Accounts"):
Account Number Account Name
-------------- ------------
D. The Grantor has granted to the Collateral Agent for the
benefit of the Secured Parties a security interest in the Accounts.
E. The Collateral Agent, the Grantor and the Bank are entering
into this Agreement to perfect the security interest of the Collateral Agent in
the Accounts and to provide for certain additional rights and obligations with
respect thereto.
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
2
Accordingly, the Collateral Agent, the Bank and the Grantor
agree as follows:
SECTION 1. The Accounts. All parties agree that the Accounts are
"deposit accounts" within the meaning of Article 9 of the Uniform Commercial
Code of the State of New York (the "New York UCC"). All funds at any time on
deposit in the Accounts shall be held by the Bank subject to the terms of this
Agreement. The Bank has not and will not agree with any third party to comply
with instructions or other directions concerning the Accounts or the disposition
of funds in the Accounts originated by such third party without the prior
written consent of the Collateral Agent.
SECTION 2. Subordination of Setoff, etc. Except as otherwise
provided in the Credit Agreement with respect to rights of set off available to
the Bank in its capacity as a Lender (if and so long as the Bank is a Lender
thereunder), the Bank waives all banker's liens, security interests,
encumbrances, claims and rights of setoff it may have, now or in the future,
against the Accounts or any funds in the Accounts other than in connection with
the payment of the Bank's customary fees and charges with respect to the
maintenance of the Accounts and for the reversal of provisional credits.
SECTION 3. Control. If no Default Notice (as defined below) is
in effect, the Bank may comply with instructions directing the disposition of
funds in the Accounts originated by the Grantor or its authorized
representatives. Immediately following an Event of Default and the delivery by
the Collateral Agent of a written notice to the Bank that the Collateral Agent
is thereby exercising exclusive control over the Accounts (such notice referred
to herein as a "Default Notice"), (a) the Accounts shall, without further action
on the part of the Grantor, the Collateral Agent or the Bank, be placed under
the sole dominion and control of the Collateral Agent, who shall possess all
right, title and interest in all of the items from time to time in the Accounts,
(b) neither the Grantor nor any person or entity claiming by, through or under
the Grantor shall have any right, title or interest in, or control over the use
of, or any right to withdraw any amount from, the Accounts, (c) the Bank shall
be entitled to rely on, and shall act in accordance with, all instructions given
to it by the Collateral Agent with respect to the Accounts and without further
consent by the Grantor or any other person and (d) the Bank will not (i) deliver
to the Grantor or any affiliate, employee or agent of the Grantor or permit the
Grantor or any affiliate, employee or agent of the Grantor to withdraw or
transfer any cash, proceeds or other items held in the Accounts or (ii) take any
instruction from the Grantor or any affiliate, employee or agent of the Grantor
with respect to the Accounts or any cash, proceeds or other item held therein.
The Collateral Agent hereby agrees not to deliver a Default Notice unless an
Event of Default has occurred and is continuing.
SECTION 4. Statements, Confirmations and Notices of Adverse
Claims. The Bank will send copies of all statements concerning the Accounts to
each of the Grantor and the Collateral Agent at its address for notices set
forth below its signature hereto. Upon receipt of written notice of any lien,
encumbrance or adverse claim against an Account or any funds credited thereto,
the Bank will promptly notify the Collateral Agent and the Grantor thereof.
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
3
SECTION 5. Limited Responsibility of the Bank. Except for acting
on the Grantor's instructions in violation of Section 3 above, the Bank shall
have no responsibility or liability to the Collateral Agent for complying with
instructions concerning the Accounts from the Grantor or the Grantor's
authorized representatives which are received by the Bank before the Bank
receives a Default Notice. The Bank shall have no responsibility or liability
to the Grantor for complying with a Default Notice or complying with
instructions concerning the Accounts originated by the Collateral Agent, and
shall have no responsibility to investigate the appropriateness of any such
instruction or Default Notice, even if the Grantor notifies the Bank that the
Collateral Agent is not legally entitled to originate any such instruction or
Default Notice.
SECTION 6. Indemnification of the Bank. The Grantor agrees to
indemnify against, and to hold the Bank, its directors, officers, agents and
employees harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable counsel fees, charges and disbursements,
incurred by or asserted against the Bank, its directors, officers, agents and
employees arising out of, in any way connected with, or as a result of (i) the
execution or delivery of this Agreement, the performance by the parties hereto
of their respective obligations hereunder or the consummation of the
transactions contemplated hereby, or (ii) any claim, litigation, investigation
or proceeding relating to any of the foregoing, whether or not the Bank, its
directors, officers, agents or employees are a party thereto, provided that
such indemnity shall not be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of the Bank.
SECTION 7. Customer Agreement. In the event of a conflict
between this Agreement and any other agreement between the Bank and the Grantor,
the terms of this Agreement will prevail.
SECTION 8. Termination. This Agreement shall continue in effect
until the Collateral Agent has notified the Bank in writing that this Agreement,
or the Collateral Agent's security interest in the Accounts, is terminated. Upon
receipt of such notice, the obligations of the Bank hereunder with respect to
the operation and maintenance of the Accounts after the receipt of such notice
shall terminate, the Collateral Agent shall have no further right to originate
instructions concerning the Accounts and any previous Default Notice delivered
by the Collateral Agent shall be deemed to be of no further force and effect.
SECTION 9. Complete Agreement. This Agreement and the
instructions and notices required or permitted to be executed and delivered
hereunder set forth the entire agreement of the parties with respect to the
subject matter hereof, and, subject to Section 7 above, supersede any prior
agreement and contemporaneous oral agreements of the parties concerning its
subject matter.
SECTION 10. Waivers; Amendment. (a) No failure or delay by the
Collateral Agent in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy, or any abandonment or discontinuance of steps to
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
4
enforce such a right, power or remedy, preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The rights, powers
and remedies of the Collateral Agent are cumulative and are not exclusive of any
rights, powers or remedies it would otherwise have. No waiver of any provision
of this Agreement or consent to any departure therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section
10, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice or demand on any Bank
in any case shall entitle any Banks to any other or further notice or demand in
similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Grantor, the Bank and the Collateral Agent with
respect to which such waiver, amendment or modification is to apply, subject to
any consent required in accordance with Section 9.02 of the Credit Agreement.
SECTION 11. Severability. Any provision of this Agreement held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability in
such jurisdiction of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction. The parties hereto shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 12. Successors and Assigns. Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the permitted successors and assigns of such party, and all covenants,
promises and agreements by or on behalf of the Grantor, the Bank or the
Collateral Agent that are contained in this Agreement shall bind and inure to
the benefit of their respective successors and assigns.
SECTION 13. Notices. All communications and notices hereunder
shall (except as otherwise expressly permitted herein) be in writing and given
as provided in Section 9.01 of the Credit Agreement.
SECTION 14. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which when taken together shall
constitute a single contract. Delivery of an executed signature page to this
Agreement by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Agreement.
SECTION 15. Organization; Powers. (a)(i) The Grantor hereby
represents and warrants that it is a [corporation] duly organized, validly
existing and in good standing under the laws of [ ] and has full
corporate power and authority under such laws to execute, deliver and perform
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
5
its obligations under this Agreement, (ii) the Bank hereby represents and
warrants that it is a [corporation] duly organized, validly existing and in good
standing under the laws of [ ] and has full corporate power and
authority under such laws to execute, deliver and perform its obligations under
this Agreement and (iii) the Collateral Agent hereby represents and warrants
that it is a banking corporation duly organized, validly existing and in good
standing under the laws of New York and has full corporate power and authority
under such laws to execute, deliver and perform its obligations under this
Agreement and (b) each of the Grantor, the Bank and the Collateral Agent hereby
represents and warrants that (i) its execution, delivery and performance of its
obligations under this Agreement have been duly and effectively authorized by
all necessary corporate action and (ii) this Agreement has been duly executed
and delivered by it and constitutes its valid and binding obligation,
enforceable in accordance with its terms.
SECTION 16. Independence. The Bank shall be an independent
contractor. This Agreement does not give rise to any partnership, joint venture
or fiduciary relationship.
SECTION 17. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 18. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 18.
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
6
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first written above.
[GRANTOR]
by
-----------------------------------
Name:
Title:
Address for Notices:
JPMORGAN CHASE BANK,
as Collateral Agent,
by
-----------------------------------
Name:
Title:
Address for Notices:
[BANK]
by
-----------------------------------
Name:
Title:
Address for Notices:
[[NYCORP:2304021v10:4272D:09/26/03--03:05 p]]
