EXHIBIT 10.3
SUBSIDIARY PLEDGE AND SECURITY AGREEMENT, DATED AS OF FEBRUARY 20, 2002,
MADE BY AMERICAN ACHIEVEMENT CORPORATION IN FAVOR OF THE BANK
OF NOVA SCOTIA, AS ADMINISTRATIVE AGENT FOR EACH OF THE
SECURED PARTIES (AS DEFINED THEREIN)
SUBSIDIARY PLEDGE AND SECURITY AGREEMENT
This SUBSIDIARY PLEDGE AND SECURITY AGREEMENT, dated as of February 20,
2002 (as amended, supplemented, amended and restated or otherwise modified from
time to time, this "AGREEMENT"), is made by each Subsidiary that is a U.S.
Subsidiary of the Borrower (as defined below) from time to time a party to this
Agreement (each individually a "GRANTOR" and collectively, the "GRANTORS"), in
favor of THE BANK OF NOVA SCOTIA, as administrative agent (together with its
successor(s) thereto in such capacity, the "ADMINISTRATIVE AGENT") for each of
the Secured Parties.
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of the date hereof (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among American Achievement Corporation (formerly
known as Commemorative Brands Holding Corp.), a Delaware corporation (the
"BORROWER"), the Lenders, General Electric Capital Corporation, as the
Syndication Agent for the Lenders, Bankers Trust Company, as the Documentation
Agent for the Lenders and the Administrative Agent, the Lenders and the Issuer
have extended Commitments to make Credit Extensions to the Borrower; and
WHEREAS, as a condition precedent to the making of the Credit Extensions
under the Credit Agreement, each Grantor is required to execute and deliver this
Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor agrees, for the
benefit of each Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. CERTAIN TERMS. The following terms (whether or not underscored)
when used in this Agreement, including its preamble and recitals, shall
have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
"ADMINISTRATIVE AGENT" is defined in the PREAMBLE.
"AGREEMENT" is defined in the PREAMBLE.
"BORROWER" is defined in the FIRST RECITAL.
"COLLATERAL" is defined in SECTION 2.1.
"COLLATERAL ACCOUNT" is defined in CLAUSE (b) of SECTION 4.3.
"COMPUTER HARDWARE AND SOFTWARE COLLATERAL" means:
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(a) all computer and other electronic data processing hardware, integrated
computer systems, central processing units, memory units, display
terminals, printers, features, computer elements, card readers, tape
drives, hard and soft disk drives, cables, electrical supply hardware,
generators, power equalizers, accessories and all peripheral devices and
other related computer hardware;
(b) all software programs (including both source code, object code and all
related applications and data files), whether now owned, licensed or leased
or hereafter acquired by a Grantor, designed for use on the computers and
electronic data processing hardware described in CLAUSE (a) above;
(c) all firmware associated therewith;
(d) all documentation (including flow charts, logic diagrams, manuals, guides
and specifications) with respect to such hardware, software and firmware
described in the preceding CLAUSES (a) through (c); and
(e) all rights with respect to all of the foregoing, including any and all
copyrights, licenses, options, warranties, service contracts, program
services, test rights, maintenance rights, support rights, improvement
rights, renewal rights and indemnifications and any substitutions,
replacements, additions or model conversions of any of the foregoing.
"CONTROL AGREEMENT" means an agreement in form and substance satisfactory
to the Administrative Agent which provides for the Administrative Agent to have
"control" (as defined in Section 8-106 of the UCC, as such term relates to
investment property (other than certificated securities or commodity contracts),
or as used in Section 9-106 of the UCC, as such term relates to commodity
contracts).
"COPYRIGHT COLLATERAL" means all copyrights of the Grantors, whether
statutory or common law, registered or unregistered and whether published or
unpublished, now or hereafter in force throughout the world including all of the
Grantors' rights, titles and interests in and to all copyrights registered in
the United States Copyright Office or anywhere else in the world, including the
copyrights referred to in ITEM A of SCHEDULE V hereto, and registrations and
recordings thereof and all applications for registration thereof, whether
pending or in preparation, all copyright licenses, including each copyright
license referred to in ITEM B of SCHEDULE V hereto, the right to xxx for past,
present and future infringements of any of the foregoing, all rights
corresponding thereto, all extensions and renewals of any thereof and all
proceeds of the foregoing, including licenses, royalties, income, payments,
claims, damages and proceeds of suit.
"CREDIT AGREEMENT" is defined in the FIRST RECITAL.
"DISTRIBUTIONS" means all non-cash dividends paid on Capital Securities,
liquidating dividends paid on Capital Securities, Capital Securities resulting
from (or in connection with the exercise of) stock splits, reclassifications,
warrants, options, non-cash dividends, mergers and consolidations, and all other
distributions (whether similar or dissimilar to the foregoing) on or with
respect to any Capital Securities constituting Collateral, but excluding
Dividends.
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"DIVIDENDS" means cash dividends and cash distributions with respect to any
Capital Securities constituting Collateral that are not a liquidating dividend.
"GOLD CONSIGNOR" means The Bank of Nova Scotia, in its capacity as
consignor under the Gold Consignment Agreement (or its Affiliates in such
capacity).
"GRANTOR" and "GRANTORS" are defined in the PREAMBLE.
"INTELLECTUAL PROPERTY COLLATERAL" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.
"PATENT COLLATERAL" means:
(a) all letters patent and applications for letters patent throughout
the world, including all patent applications in preparation for filing and
each patent and patent application referred to in ITEM A of SCHEDULE III
hereto;
(b) all reissues, divisions, continuations, continuations-in-part, extensions,
renewals and reexaminations of any of the items described in CLAUSE (a);
(c) all patent licenses, and other agreements providing a Grantor with the
right to use any items of the type referred to in CLAUSES (a) and (b)
above, including each patent license referred to in ITEM B of SCHEDULE III
hereto; and
(d) all proceeds of, and rights associated with, the foregoing (including
license royalties and proceeds of infringement suits), the right to xxx
third parties for past, present or future infringements of any patent or
patent application, and for breach or enforcement of any patent license.
"PLEDGED NOTE" means a promissory note payable to the Grantor, in form and
substance satisfactory to the Administrative Agent, as amended, modified or
supplemented from time to time in accordance with CLAUSE (c) of SECTION 4.7,
together with any notes delivered in extension or renewal thereof or
substitution therefor.
"RECEIVABLES" is defined in CLAUSE (c) of SECTION 2.1.
"RELATED CONTRACTS" is defined in CLAUSE (c) of SECTION 2.1.
"RESTRICTED ASSET" is defined in SECTION 2.1.
"SECURED PARTY" means, collectively, (i) each of the Secured Parties, as
such term is defined in the Credit Agreement and (ii) the Gold Consignor.
"SECURITIES ACT" is defined in CLAUSE (a) of SECTION 6.2.
"SPECIFIED EVENT" means the occurrence and continuance of a Default under
clauses (a) through (d) of Section 8.1.9 of the Credit Agreement or any other
Event of Default.
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"TERMINATION DATE" means the date on which (i) all Obligations (other than
contingent indemnification obligations to the extent no unsatisfied claim giving
rise thereto has been asserted) have been paid in full in cash, all Letters of
Credit have been terminated or expired (or been Cash Collateralized), all Rate
Protection Agreements have been terminated and all Commitments shall have
terminated and (ii) all obligations (other than contingent indemnification
obligations to the extent no unsatisfied claim giving rise thereto has been
asserted) arising under or in connection with the Gold Consignment Agreement
(and related documents and instruments) have been paid in full in cash and all
commitments of the Gold Consignor thereunder have terminated.
"TRADEMARK COLLATERAL" means:
(e) (i) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks,
certification marks, collective marks, logos and other source or business
identifiers, and all goodwill of the business associated therewith, now
existing or hereafter adopted or acquired including those referred to in
ITEM A of SCHEDULE IV hereto, whether currently in use or not, all
registrations and recordings thereof and all applications in connection
therewith, whether pending or in preparation for filing, including
registrations, recordings and applications in the United States Patent and
Trademark Office or in any office or agency of the United States of America
or any State thereof or any other country or political subdivision thereof
or otherwise, and all common-law rights relating to the foregoing, and (ii)
the right to obtain all reissues, extensions or renewals of the foregoing
(collectively referred to as the "TRADEMARK");
(f) all Trademark licenses for the grant by or to a Grantor of any right to use
any Trademark, including each Trademark license referred to in ITEM B of
SCHEDULE IV hereto;
(g) all of the goodwill of the business connected with the use of, and
symbolized by the items described in, clause (a) and, to the extent
applicable clause (b);
(h) the right to xxx third parties for past, present and future infringements
of any Trademark Collateral described in clause (a) and, to the extent
applicable, clause (b); and
(i) all proceeds of, and rights associated with, the foregoing, including any
claim by a Grantor against third parties for past, present or future
infringement or dilution of any Trademark, Trademark registration or
Trademark license, or for any injury to the goodwill associated with the
use of any such Trademark or for breach or enforcement of any Trademark
license and all rights corresponding thereto throughout the world.
"TRADE SECRETS COLLATERAL" means all common law and statutory trade secrets
and all other confidential, proprietary or useful information and all know-how
obtained by or used in or contemplated at any time for use in the business of a
Grantor (all of the foregoing being collectively called a "TRADE SECRET"),
whether or not such Trade Secret has been reduced to a writing or other tangible
form, including all documents and things embodying, incorporating or referring
in any way to such Trade Secret, all Trade Secret licenses, including each Trade
Secret license referred to in SCHEDULE VI hereto, and including the right to xxx
for and to enjoin and to
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collect damages for the actual or threatened misappropriation of any Trade
Secret and for the breach or enforcement of any such Trade Secret license.
SECTION 1.2. CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined herein or
the context otherwise requires, terms used in this Agreement, including its
preamble, recitals, schedules and exhibits, have the meanings provided in
the Credit Agreement.
SECTION 1.3. UCC DEFINITIONS. Unless otherwise defined herein or in the Credit
Agreement or the context otherwise requires, terms for which meanings are
provided in the UCC are used in this Agreement, including its preamble,
recitals, schedules and exhibits, with such meanings.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. GRANT OF SECURITY INTEREST. Each Grantor hereby assigns, pledges,
hypothecates, charges, mortgages, delivers, and transfers to the
Administrative Agent, for its benefit and the ratable benefit of each other
Secured Party, and hereby grants to the Administrative Agent, for its
benefit and the ratable benefit of each other Secured Party, a continuing
security interest in all assets, including without limitation all of the
following property, whether tangible or intangible, whether now or
hereafter existing, owned or acquired by such Grantor, and wherever located
(the "COLLATERAL"):
(a) (i) all investment property in which such Grantor has an interest
(including the Capital Securities of each issuer of such Capital Securities
described in SCHEDULE I hereto) and (ii) all other Capital Securities which
are interests in limited liability companies or partnerships in which such
Grantor has an interest (including the Capital Securities of each issuer of
such Capital Securities described in ITEM A of SCHEDULE I hereto), in each
case together with Dividends and Distributions payable in respect of the
Collateral described in the foregoing CLAUSES (a)(i) and (a)(ii);
(b) all goods, including all equipment (including any equipment that is or may
constitute a fixture) and inventory in all of its forms of such Grantor;
(c) all accounts, contracts, contract rights, chattel paper, documents,
instruments, promissory notes (including Pledged Notes described in ITEM B
of SCHEDULE I) and general intangibles (including tax refunds and all
payment intangibles) of such Grantor, whether or not arising out of or in
connection with the sale or lease of goods or the rendering of services,
and all rights of such Grantor now or hereafter existing in and to all
security agreements, guaranties, leases and other contracts securing or
otherwise relating to any such accounts, contracts, contract rights,
chattel paper, documents, instruments, promissory notes and general
intangibles (all of the foregoing collectively referred to as the
"RECEIVABLES", and any and all such security agreements, guaranties, leases
and other contracts collectively referred to as the "RELATED CONTRACTS");
(d) all Intellectual Property Collateral of such Grantor;
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(e) all deposit accounts (including the Collateral Account) of such Grantor and
all cash, checks, drafts, notes, bills of exchange, money orders, other
like instruments and all investment property held in the Collateral Account
(or in any sub-account thereof) and all interest and earnings in respect
thereof;
(f) all of such Grantor's letter of credit rights;
(g) all commercial tort claims in which such Grantor has rights (including as a
plaintiff), as set forth on ITEM F of SCHEDULE II hereto;
(h) all books, records, writings, data bases, information and other property
relating to, used or useful in connection with, evidencing, embodying,
incorporating or referring to, any of the foregoing in this Section;
(i) all of such Grantor's other property and rights of every kind and
description and interests therein; and
(j) all products, offspring, rents, issues, profits, returns, income,
supporting obligations and proceeds of and from any and all of the
foregoing Collateral (including proceeds which constitute property of the
types described in CLAUSES (a) through (i), and, to the extent not
otherwise included, all payments under insurance (whether or not the
Administrative Agent is the loss payee thereof), or any indemnity, warranty
or guaranty, payable by reason of loss or damage to or otherwise with
respect to any of the foregoing Collateral).
Notwithstanding the foregoing, "Collateral" shall not include (i) such Grantor's
real property leaseholds; (ii) any general intangibles or other rights arising
under any contracts, instruments, licenses or other documents as to which the
grant of a security interest would (A) constitute a violation of a valid and
enforceable restriction in favor of a third party on such grant, unless and
until any required consents shall have been obtained or (B) give any other party
to such contract, instrument, license or other document the right to terminate
its obligations thereunder (the "RESTRICTED ASSETS"), PROVIDED that this clause
shall not limit the grant of any security interest in any proceeds of any
Restricted Asset or any Restricted Asset to the extent that the UCC or any other
applicable law provides that such grant of security interest is effective
irrespective of any prohibitions to such grant provided in the underlying
contract, instrument, license or other document; and (iii) Capital Securities of
a Foreign Subsidiary in excess of 65% of the total combined voting power of all
Capital Securities of such Foreign Subsidiary (other than a Foreign Subsidiary
that (i) is treated as a partnership under the Code or (ii) is not treated as an
entity that is separate from such Grantor); PROVIDED, that, if any change in, or
the introduction, adoption, effectiveness, interpretation, reinterpretation or
phase in of, any law or regulation, directive or guidelines of any Governmental
Authority could reasonably be expected to reduce the amount of United States
federal income tax that would otherwise be payable by such Grantor if it pledged
more than 65% of such combined voting power, then the Administrative Agent or
the Required Lenders may require such Grantor to pledge more than 65% of the
Capital Securities of such Foreign Subsidiary.
SECTION 2.2. SECURITY FOR OBLIGATIONS. This Agreement and the Collateral in
which the Administrative Agent for the benefit of the Secured Parties is
granted a security interest
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hereunder by the Grantors secures the payment of all Obligations now or
hereafter existing.
SECTION 2.3. GRANTORS REMAIN LIABLE. Anything herein to the contrary
notwithstanding
(a) the Grantors will remain liable under the contracts and agreements
included in the Collateral to the extent set forth therein, and will
perform all of their duties and obligations under such contracts and
agreements to the same extent as if this Agreement had not been executed;
(b) the exercise by the Administrative Agent of any of its rights hereunder
will not release any Grantor from any of its duties or obligations under
any such contracts or agreements included in the Collateral; and
(c) no Secured Party will have any obligation or liability (other than as a
result of such Secured Party's gross negligence or willful misconduct)
under any contracts or agreements included in the Collateral by reason of
this Agreement, nor will any Secured Party be obligated to perform any of
the obligations or duties of any Grantor thereunder or to take any action
to collect or enforce any claim for payment assigned hereunder.
SECTION 2.4. DIVIDENDS ON PLEDGED SHARES. In the event that any Dividend with
respect to any Capital Securities pledged hereunder is permitted to be paid
(in accordance with Section 7.2.6 of the Credit Agreement), such Dividend
or payment may be paid directly to the applicable Grantor. If any Dividend
or payment is paid in contravention of Section 7.2.6 of the Credit
Agreement, then such Grantor shall hold the same segregated and in trust
for the Administrative Agent until paid to the Administrative Agent in
accordance with SECTION 4.1.5 hereto.
SECTION 2.5. CBI SENIOR SUBORDINATED NOTES.
(a) Notwithstanding any other provision in this Agreement to the contrary, the
Administrative Agent shall not be entitled to exercise any rights or
remedies under this Agreement against the CBI Senior Subordinated Notes
purchased by Xxxxxx Holding Co. on or around July 27, 2000 (collectively,
the "PLEDGED CBI SENIOR SUBORDINATED NOTES"), unless and until an Event of
Default has occurred and is continuing under Section 8.1.9 of the Credit
Agreement (any such Event of Default is herein referred to as a "BANKRUPTCY
EVENT OF DEFAULT") and if any such Bankruptcy Event of Default has occurred
and is continuing, the only rights the Administrative Agent shall have with
respect to the Pledged CBI Senior Subordinated Notes shall be to exercise
voting rights pertaining to the Pledged CBI Senior Subordinated Notes (but
not to assign such rights to vote) and collect payments owing thereon for
application to the Obligations in accordance with SECTION 6.1 (but not the
right to assign such rights to collect payment). It being understood that
the Administrative Agent shall not be (x) entitled to exercise the
aforementioned voting rights unless the then acting Administrative Agent
was a party to the Credit Agreement as of the Closing Date or for at least
six months prior to the occurrence of the Bankruptcy Event of Default and
the Required Lenders directing the Administrative Agent to vote in the
exercise of the aforementioned voting rights were a
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party to the Credit Agreement as of the Closing Date or for at least six
months prior to the occurrence of the Bankruptcy Event of Default or (y)
permitted to assign such voting rights or such collection rights except to
a successor Administrative Agent under the Credit Agreement (bound as the
Administrative Agent to the terms hereof). The Administrative Agent shall
not assign, pledge, sell or otherwise transfer in any manner whatsoever the
Pledged CBI Senior Subordinated Notes to any Person at any time for any
reason. The Administrative Agent acknowledges and agrees that a breach of
any of the covenants contained in this CLAUSE (a) will cause irreparable
injury to the Obligors and that the Obligors have no adequate remedy at law
in respect of such breaches and therefore agrees that such covenants of the
Administrative Agent contained in this CLAUSE (a) shall be specifically
enforceable against the Administrative Agent.
(b) Xxxxxx Holding Co. shall not assign, pledge (except in favor of the
Administrative Agent), sell or otherwise transfer in any manner whatsoever
the Pledged CBI Senior Subordinated Notes to any Person. Xxxxxx Holding Co.
acknowledges and agrees that a breach of the covenant contained in this
CLAUSE (b) will cause irreparable injury to the Administrative Agent and
the other Secured Parties and that the Administrative Agent has no adequate
remedy at law in respect of such breaches and therefore agrees, without
limiting the right of the Administrative Agent to seek and obtain specific
performance of other obligations of any Obligor contained in this
Agreement, that such covenant of Xxxxxx Holding Co. contained in this
CLAUSE (b) shall be specifically enforceable against Xxxxxx Holding Co.
SECTION 2.6. POSTPONEMENT OF SUBROGATION. Each Grantor agrees that it will not
exercise any rights which it may acquire by way of rights of subrogation
under any Loan Document to which it is a party. No Grantor shall seek or be
entitled to seek any contribution or reimbursement from any Obligor, in
respect of any payment made under any Loan Document or otherwise, until
following the Termination Date. Any amount paid to such Grantor on account
of any such subrogation rights prior to the Termination Date shall be held
in trust for the benefit of the Secured Parties and shall immediately be
paid and turned over to the Administrative Agent for the benefit of the
Secured Parties in the exact form received by such Grantor (duly endorsed
in favor of the Administrative Agent, if required), to be credited and
applied against the Obligations, whether matured or unmatured, in
accordance with SECTION 6.1; PROVIDED that if such Grantor has made payment
to the Secured Parties of all or any part of the Obligations and the
Termination Date has occurred, then at such Grantor's request, the
Administrative Agent (on behalf of the Secured Parties) will, at the
expense of such Grantor, execute and deliver to such Grantor appropriate
documents (without recourse and without representation or warranty)
necessary to evidence the transfer by subrogation to such Grantor of an
interest in the Obligations resulting from such payment. In furtherance of
the foregoing, at all times prior to the Termination Date, such Grantor
shall refrain from taking any action or commencing any proceeding against
any Obligor (or its successors or assigns, whether in connection with a
bankruptcy proceeding or otherwise) to recover any amounts in respect of
payments made under this Agreement to any Secured Party.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
In order to induce the Secured Parties (other than the Gold Consignor) to
enter into the Credit Agreement and make Credit Extensions thereunder, to induce
Secured Parties (other than the Gold Consignor) to enter into Rate Protection
Agreements, and to induce the Gold Consignor to continue its obligations under
the Gold Consignment Agreement, the Grantors represent and warrant to each
Secured Party as set forth below.
SECTION 3.1. AS TO CAPITAL SECURITIES OF THE SUBSIDIARIES. With respect to any
Subsidiary of any Grantor that is
(a) a corporation, business trust, joint stock company or similar Person, all
Capital Securities issued by such Subsidiary are duly authorized and
validly issued, fully paid and non-assessable, and represented by a
certificate; and
(b) a partnership or limited liability company, no Capital Securities issued by
such Subsidiary (i) are dealt in or traded on securities exchanges or in
securities markets, (ii) expressly provide that such Capital Securities are
a security governed by Article 8 of the UCC, (iii) are held in a securities
account or (iv) are represented by a certificate.
The percentage of the issued and outstanding Capital Securities of each
Subsidiary pledged by any Grantor hereunder as of the Closing Date is as set
forth on SCHEDULE I hereto.
SECTION 3.2. GRANTOR NAMES, ETC. Each Grantor's jurisdiction of incorporation is
set forth on ITEM A of SCHEDULE II hereto. No Grantor has any trade names
other than those set forth in ITEM A of SCHEDULE II hereto. During the four
months preceding the date hereof, no Grantor has been known by any legal
name different from the one set forth on the signature page hereto, nor has
any Grantor been the subject of any merger or other corporate
reorganization. During the four months preceding the date hereof, each
Grantor's equipment and inventory (if any) has been located at the places
set forth in ITEM B of SCHEDULE II hereto. The Grantors' federal taxpayer
identification numbers and organizational identification numbers are (and,
during the four months preceding the date hereof, no Grantor has had a
federal taxpayer identification number or organizational identification
number different from those) set forth in ITEM C of SCHEDULE II hereto. If
the Collateral of any Grantor includes any inventory located in the State
of California, such Grantor is not a "retail merchant" within the meaning
of Section 9102 of the California UCC. No Grantor is a party to any
federal, state or local government contract which is part of the Collateral
except as set forth in ITEM D of SCHEDULE II hereto. No Grantor maintains
any deposit accounts with any Person except as set forth in ITEM E of
SCHEDULE II hereto. As of the Closing Date, each Grantor has rights with
respect to the commercial tort claims set forth on ITEM F of SCHEDULE II
hereto.
SECTION 3.3. OWNERSHIP, NO LIENS, ETC. Each Grantor owns its Collateral free and
clear of any Lien, except for Liens (a) created by this Agreement and (b)
in the case of Collateral other than any investment property (including
Capital Securities), permitted by Section 7.2.3 of the Credit Agreement. No
effective financing statement or other filing similar in
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effect covering any Collateral is on file in any recording office, except
those filed in favor of the Administrative Agent relating to this Agreement
or those filed in connection with Liens permitted by Section 7.2.3 of the
Credit Agreement or as to which a termination statement relating to such
financing statement or other instrument has been delivered to the
Administrative Agent on the Closing Date. No Grantor owns any Restricted
Assets that would impair, in any material respect, the Administrative
Agent's ability to sell or otherwise transfer such Grantor's business as a
going concern.
SECTION 3.4. POSSESSION OF INVENTORY, ETC. Each Grantor agrees that it will
maintain exclusive possession of its goods, instruments, promissory notes
and inventory, other than (a) as otherwise permitted hereunder, (b) goods
sold or otherwise disposed of in accordance with Section 7.2.11 of the
Credit Agreement, (c) goods being repaired, refurbished or overhauled in
the ordinary course of any Grantor's business, PROVIDED, that such
Collateral does not remain outside of a location specified on ITEM B of
SCHEDULE II for more than sixty (60) days, (d) goods located at any other
location within the continental United States or Canada, PROVIDED, that the
Grantors give the Administrative Agent written notice of such location at
least twenty (20) days prior to moving or locating any such Collateral at
such location, (e) inventory of CBI held by sales representatives of CBI,
with an aggregate value which does not exceed $500,000, (f) inventory of
CBI on consignment to retail sellers with an aggregate value which does not
exceed $500,000, and (g) instruments or promissory notes that have been
delivered to the Administrative Agent pursuant to SECTION 3.5. None of said
locations are leased by any Grantor as lessee except those designated as
such on ITEM G of SCHEDULE II. No Grantor sells any inventory to any
customer on approval or on any other basis which entitles the customer to
return, or which may obligate such Grantor to repurchase, such inventory
(other than inventory sold by CBI and Xxxxxx, to the extent such sales are
on terms consistent with past practices of CBI and Xxxxxx, respectively).
The completion of the manufacturing process of such inventory by a Person
other than an Obligor would be permitted under any contract to which such
Grantor is a party or to which such inventory is subject.
SECTION 3.5. NEGOTIABLE DOCUMENTS, INSTRUMENTS AND CHATTEL PAPER. Each Grantor
has delivered to the Administrative Agent possession of all originals of
all negotiable documents, instruments, promissory notes (including Pledged
Notes) and chattel paper owned or held by such Grantor on the Closing Date.
SECTION 3.6. INTELLECTUAL PROPERTY COLLATERAL. With respect to any Intellectual
Property Collateral the loss, impairment or infringement of which could
reasonably be expected to have a Material Adverse Effect:
(a) such Intellectual Property Collateral is subsisting and has not been
adjudged invalid or unenforceable, in whole or in part;
(b) such Intellectual Property Collateral is valid and enforceable;
(c) each Grantor has made all necessary filings and recordations to protect its
interest in such Intellectual Property Collateral, including recordations
of all of its interests in the Patent Collateral and Trademark Collateral
in the United States Patent and Trademark Office
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and (subject to the terms of the Credit Agreement) in corresponding offices
throughout the world, and its claims to the Copyright Collateral in the
United States Copyright Office and (subject to the terms of the Credit
Agreement) in corresponding offices throughout the world;
(d) each Grantor is the exclusive owner of the entire and unencumbered right,
title and interest in and to such Intellectual Property Collateral and no
claim has been made that the use of such Intellectual Property Collateral
does or may violate the asserted rights of any third party; and
(e) each Grantor has performed and will continue to perform all acts and has
paid and will continue to pay all required fees and Taxes to maintain each
and every such item of Intellectual Property Collateral in full force and
effect throughout the world, as applicable.
Each Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of the foregoing
used in, necessary for or of importance to the conduct of such Grantor's
business.
SECTION 3.7. VALIDITY, ETC. This Agreement creates a valid security interest in
favor of the Administrative Agent (for the benefit of the Secured Parties)
in the Collateral as security for the Obligations. The Administrative
Agent's having possession of all instruments and cash constituting
Collateral from time to time, the recording of the Patent Security
Agreement, the Trademark Security Agreement, and the Copyright Security
Agreement, as applicable, executed pursuant hereto in the United States
Patent and Trademark Office and the United States Copyright Office, as
applicable, and the filing of the Filing Statements described in SCHEDULE
VII hereto and, with respect to Patent Collateral, Trademark Collateral and
Copyright Collateral hereafter existing and not covered by a Patent
Security Agreement, Trademark Security Agreement or Copyright Security
Agreement, as applicable, the recording in the United States Patent and
Trademark Office and the United States Copyright Office, as applicable, of
appropriate instruments of assignment, result in the perfection of such
security interests. Such security interests are, or in the case of
Collateral in which a Grantor obtains rights after the date hereof, will
be, perfected, first priority security interests, subject only to the
security interests and other Liens permitted pursuant to Section 7.2.3 of
the Credit Agreement and the recording of such instruments of assignment.
Such recordings and filings and all other action necessary or desirable to
perfect and protect such security interest have been duly taken, except for
the Administrative Agent's having possession of instruments and cash
constituting Collateral after the date hereof and the other filings and
recordations described in SECTION 3.8 hereof.
SECTION 3.8. AUTHORIZATION, APPROVAL, ETC. Except as have been obtained or made
and are in full force and effect, no authorization, approval or other
action by, and no notice to or filing with, any Governmental Authority is
required either
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(a) for the grant by the Grantors of the security interest granted hereby, the
pledge by the Grantors of any Collateral pursuant hereto or for the
execution, delivery and performance of this Agreement by the Grantors;
(b) for the perfection of or the exercise by the Administrative Agent of its
rights and remedies hereunder except (A) the filing under the UCC as in
effect in the applicable jurisdiction of the Filing Statements described in
SCHEDULE VII hereto, (B) with respect to the perfection of the security
interest created hereby in Patent Collateral, Trademark Collateral and
Copyright Collateral in the United States, for the recording of the Patent
Security Agreement, Trademark Security Agreement and Copyright Security
Agreement, as applicable, in the United States Patent and Trademark Office
and the United States Copyright Office, as applicable, (C) with respect to
the perfection of the security interest created hereby in foreign Patent
Collateral, Trademark Collateral and Copyright Collateral, for
registrations and filings in jurisdictions located outside of the United
States and covering rights in such jurisdictions relating to Patent
Collateral, Trademark Collateral and Copyright Collateral, and (D) with
respect to the perfection of the security interest created hereby in motor
vehicles for which the title to such motor vehicles is governed by a
certificate of title or ownership (collectively, the "MOTOR VEHICLES"), for
the submission of an appropriate application requesting that the Lien of
the Administrative Agent be noted on the certificate of title or ownership,
completed and authenticated by each Grantor, together with the certificate
of title, with respect to each Motor Vehicle, to the appropriate state
agency; or
(c) for the exercise by the Administrative Agent of the voting or other rights
provided for in this Agreement, or, except with respect to any securities
issued by a Subsidiary of the Grantors, as may be required in connection
with a disposition of such securities by laws affecting the offering and
sale of securities generally and the remedies in respect of the Collateral
pursuant to this Agreement.
SECTION 3.9. BEST INTERESTS. It is in the best interests of each Grantor to
execute this Agreement inasmuch as such Grantor will, as a result of being
a Subsidiary of the Borrower, derive substantial direct and indirect
benefits from the Credit Extensions made from time to time to the Borrower
by the Lenders and the Issuer pursuant to the Credit Agreement and the
execution and delivery of Rate Protection Agreements between the Borrower,
other Obligors and certain Secured Parties, and each Grantor agrees that
the Secured Parties are relying on this representation in agreeing to make
Credit Extensions to the Borrower.
ARTICLE IV
COVENANTS
Each Grantor covenants and agrees that, until the Termination Date, such
Grantor will perform, comply with and be bound by the obligations set forth
below.
SECTION 4.1. AS TO INVESTMENT PROPERTY, ETC.
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SECTION 4.1.1. CAPITAL SECURITIES OF SUBSIDIARIES. No Grantor will allow any of
its Subsidiaries that is
(a) a corporation, business trust, joint stock company or similar Person, to
issue uncertificated securities; and
(b) a partnership or limited liability company, to (i) issue Capital Securities
that are to be dealt in or traded on securities exchanges or in securities
markets, (ii) expressly provide in its Organic Documents that its Capital
Securities are securities governed by Article 8 of the UCC, (iii) place
such Subsidiaries' Capital Securities in a securities account or (iv) cause
such Subsidiaries' Capital Securities to be represented by a certificate.
SECTION 4.1.2. INVESTMENT PROPERTY (OTHER THAN CERTIFICATED SECURITIES). With
respect to any investment property (other than certificated securities)
owned by any Grantor, such Grantor will cause a Control Agreement relating
to such investment property to be executed and delivered by such Grantor
and the applicable financial intermediary in favor of the Administrative
Agent.
SECTION 4.1.3. STOCK POWERS, ETC. Each Grantor agrees that all certificated
securities delivered by such Grantor pursuant to this Agreement will be
accompanied by undated stock powers duly executed in blank, or other
equivalent instruments of transfer acceptable to the Administrative Agent.
SECTION 4.1.4. CONTINUOUS PLEDGE. Each Grantor will (subject to the terms of the
Credit Agreement) deliver to the Administrative Agent and at all times keep
pledged to the Administrative Agent pursuant hereto, on a first-priority,
perfected basis all Collateral, all payment intangibles to the extent they
are evidenced by a document, instrument, promissory note (including a
Pledged Note) or chattel paper and are, when aggregated with all other such
Collateral of the Borrower and each other Grantor, in an aggregate face
amount of more than $50,000, and all interest and principal with respect to
the payment intangibles, and all proceeds and rights from time to time
received by or distributable to such Grantor in respect of any of the
foregoing Collateral. Each Grantor agrees that it will, promptly following
receipt, deliver to the Administrative Agent possession of all originals of
negotiable documents, instruments, promissory notes (including Pledged
Notes) and chattel paper that it acquires following the Closing Date.
SECTION 4.1.5. VOTING RIGHTS; DIVIDENDS, ETC. Each Grantor agrees:
(a) promptly upon receipt of notice of the occurrence and continuance of a
Specified Event from the Administrative Agent and without any request
therefor by the Administrative Agent, so long as such Specified Event shall
continue, to deliver (properly endorsed where required hereby or requested
by the Administrative Agent) to the Administrative Agent all Dividends and
Distributions with respect to investment property, all interest, principal,
other cash payments on payment intangibles, and all proceeds of the
Collateral, in each case thereafter received by such Grantor, all of which
shall be held by the Administrative Agent as additional Collateral; and
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(b) promptly upon receipt of notice of the occurrence and continuance of a
Specified Event from the Administrative Agent and upon request therefor by
the Administrative Agent, so long as such Specified Event shall continue,
with respect to Collateral consisting of general partner interests or
limited liability company interests, cause modifications to the respective
Organic Documents to admit the Administrative Agent as a general partner or
member, respectively; and
(c) immediately upon the occurrence and continuance of a Specified Event and so
long as the Administrative Agent has notified the Grantor of the
Administrative Agent's intention to exercise its voting power under this
clause,
(i) that the Administrative Agent may exercise (to the exclusion of such
Grantor) the voting power and all other incidental rights of ownership with
respect to any investment property constituting Collateral and such Grantor
hereby grants the Administrative Agent an irrevocable proxy, exercisable
under such circumstances, to vote such investment property; and
(ii) to promptly deliver to the Administrative Agent such additional proxies and
other documents as may be necessary to allow the Administrative Agent to
exercise such voting power.
All Dividends, Distributions, interest, principal, cash payments, payment
intangibles and proceeds which may at any time and from time to time be held by
such Grantor but which such Grantor is then obligated to deliver to the
Administrative Agent, shall, until delivery to the Administrative Agent, be held
by such Grantor separate and apart from its other property in trust for the
Administrative Agent. The Administrative Agent agrees that unless a Specified
Event shall have occurred and be continuing and the Administrative Agent shall
have given the notice referred to in CLAUSE (b), such Grantor will have the
exclusive voting power with respect to any investment property constituting
Collateral and the Administrative Agent will, upon the written request of such
Grantor, promptly deliver such proxies and other documents, if any, as shall be
reasonably requested by such Grantor which are necessary to allow such Grantor
to exercise that voting power; PROVIDED that no vote shall be cast, or consent,
waiver, or ratification given, or action taken by such Grantor that would impair
any such Collateral or be inconsistent with or violate any provision of any Loan
Document.
SECTION 4.2. CHANGE OF NAME, ETC. No Grantor will change its name or place of
incorporation or organization or federal taxpayer identification number
except upon 30 days' prior written notice to the Administrative Agent. In
addition, each Grantor shall supplement the information contained in
SCHEDULE II hereto on the Compliance Certificate on each date a Compliance
Certificate is required to be delivered to the Administrative Agent under
the Credit Agreement, including any changes to the information set forth in
SECTION 3.2.
SECTION 4.3. AS TO RECEIVABLES; COLLATERAL ACCOUNT.
(a) Each Grantor shall have the right to collect all Receivables so long as no
Specified Event shall have occurred and be continuing.
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(b) Upon (i) the occurrence and continuance of a Specified Event and (ii) the
delivery of written notice by the Administrative Agent to each Grantor, all
proceeds of Collateral received by such Grantor shall be delivered in kind
to the Administrative Agent for deposit into a deposit account (the
"COLLATERAL ACCOUNT") of such Grantor maintained with the Administrative
Agent (or such other institution which has executed and delivered to the
Administrative Agent a "lockbox" agreement in form and substance and
satisfactory to the Administrative Agent), and such Grantor shall not
commingle any such proceeds, and shall hold separate and apart from all
other property, all such proceeds in express trust for the benefit of the
Administrative Agent until delivery thereof is made to the Administrative
Agent.
(c) Following the delivery of notice pursuant to CLAUSE (b)(ii), the
Administrative Agent shall have the right to apply any amount in the
Collateral Account to the payment of any Obligations which are due and
payable.
(d) With respect to the Collateral Account, it is hereby confirmed and agreed
that (i) deposits in each Collateral Account are subject to a security
interest as contemplated hereby, (ii) each such Collateral Account shall be
under the sole dominion and control of the Administrative Agent and (iii)
the Administrative Agent shall have the sole right of withdrawal over the
amounts deposited in such Collateral Account.
SECTION 4.4. AS TO COLLATERAL.
(a) Subject to CLAUSE (b), each Grantor (i) may in the ordinary course of its
business, at its own expense, sell, lease or furnish under the contracts of
service any of the inventory normally held by such Grantor for such
purpose, and use and consume, in the ordinary course of its business, any
raw materials, work in process or materials normally held by such Grantor
for such purpose, (ii) will, at its own expense, endeavor to collect, as
and when due, all amounts due with respect to any of the Collateral,
including the taking of such action with respect to such collection as the
Administrative Agent may reasonably request following the occurrence of a
Specified Event or, in the absence of such request, as such Grantor may
deem advisable, and (iii) may grant, in the ordinary course of business, to
any party obligated on any of the Collateral, any rebate, refund or
allowance to which such party may be lawfully entitled, and may accept, in
connection therewith, the return of goods, the sale or lease of which shall
have given rise to such Collateral.
(b) At any time following the occurrence and during the continuance of a
Specified Event, whether before or after the maturity of any of the
Obligations, the Administrative Agent may (i) revoke any or all of the
rights of each Grantor set forth in CLAUSE (a), (ii) notify any parties
obligated on any of the Collateral to make payment to the Administrative
Agent of any amounts due or to become due thereunder and (iii) enforce
collection of any of the Collateral by suit or otherwise and surrender,
release, or exchange all or any part thereof, or compromise or extend or
renew for any period (whether or not longer than the original period) any
indebtedness thereunder or evidenced thereby.
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(c) Upon request of the Administrative Agent following the occurrence and
during the continuance of a Specified Event, each Grantor will, at its own
expense, notify any parties obligated on any of the Collateral to make
payment to the Administrative Agent of any amounts due or to become due
thereunder.
(d) Each Grantor hereby authorizes the Administrative Agent to endorse, in the
name of such Grantor, any item, howsoever received by the Administrative
Agent, representing any payment on or other proceeds of any of the
Collateral.
SECTION 4.5. AS TO INTELLECTUAL PROPERTY COLLATERAL. Each Grantor covenants and
agrees to comply with the following provisions as such provisions relate to
any Intellectual Property Collateral of such Grantor:
(a) such Grantor will not (i) do or fail to perform any act whereby any of the
Patent Collateral may lapse or become abandoned or dedicated to the public
or unenforceable, (ii) permit any of its licensees to (A) fail to continue
to use any of the Trademark Collateral in order to maintain all of the
Trademark Collateral in full force free from any claim of abandonment for
non-use, (B) fail to maintain as in the past the quality of products and
services offered under all of the Trademark Collateral, (C) fail to employ
all of the Trademark Collateral registered with any federal or state or
foreign authority with an appropriate notice of such registration, (D)
adopt or use any other Trademark which is confusingly similar or a
colorable imitation of any of the Trademark Collateral, (E) use any of the
Trademark Collateral registered with any federal, state or foreign
authority except for the uses for which registration or application for
registration of all of the Trademark Collateral has been made or (F) do or
permit any act or knowingly omit to do any act whereby any of the Trademark
Collateral may lapse or become invalid or unenforceable, or (iii) do or
permit any act or knowingly omit to do any act whereby any of the Copyright
Collateral or any of the Trade Secrets Collateral may lapse or become
invalid or unenforceable or placed in the public domain except upon
expiration of the end of an unrenewable term of a registration thereof,
unless, in the case of any of the foregoing requirements in CLAUSES (i),
(ii) and (iii), such Grantor shall either (x) reasonably and in good faith
determine that any of such Intellectual Property Collateral is of
negligible economic value to such Grantor, or (y) have a valid business
purpose to do otherwise;
(b) such Grantor shall promptly notify the Administrative Agent if it knows, or
has reason to know, that any application or registration relating to any
material item of the Intellectual Property Collateral may become abandoned
or dedicated to the public or placed in the public domain or invalid or
unenforceable, or of any adverse determination or development (including
the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the United
States Copyright Office or any foreign counterpart thereof or any court)
regarding such Grantor's ownership of any of the Intellectual Property
Collateral, its right to register the same or to keep and maintain and
enforce the same;
(c) in no event will such Grantor or any of its agents, employees, designees or
licensees file an application for the registration of any Intellectual
Property Collateral with the United
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States Patent and Trademark Office, the United States Copyright Office or
any similar office or agency in any other country or any political
subdivision thereof, unless it promptly informs the Administrative Agent,
and upon request of the Administrative Agent (subject to Section 7.1.8 of
the Credit Agreement), executes and delivers all agreements, instruments
and documents as the Administrative Agent may reasonably request to
evidence the Administrative Agent's security interest in such Intellectual
Property Collateral;
(d) such Grantor will take all necessary steps, including in any proceeding
before the United States Patent and Trademark Office, the United States
Copyright Office or (subject to Section 7.1.8 of the Credit Agreement) any
similar office or agency in any other country or any political subdivision
thereof, to maintain and pursue any application (and to obtain the relevant
registration) filed with respect to, and to maintain any registration of,
the Intellectual Property Collateral, including the filing of applications
for renewal, affidavits of use, affidavits of incontestability and
opposition, interference and cancellation proceedings and the payment of
fees and taxes (except to the extent that dedication, abandonment or
invalidation is permitted under the foregoing CLAUSE (a) or (b)); and
(e) such Grantor will promptly (but no less than quarterly) execute and deliver
to the Administrative Agent (as applicable) a Patent Security Agreement,
Trademark Security Agreement and/or Copyright Security Agreement, as the
case may be, in the forms of EXHIBIT A, EXHIBIT B and EXHIBIT C hereto
following its obtaining an interest in any such Intellectual Property, and
shall execute and deliver to the Administrative Agent any other document
required to acknowledge or register or perfect the Administrative Agent's
interest in any part of such item of Intellectual Property Collateral.
SECTION 4.6. BAILEES. With respect to Collateral that is in the possession of
any landlord, refinery, consignee, warehouseman, bailee, agent or
processor, upon the request of the Administrative Agent, any Grantor so
requested shall promptly upon such request use its best efforts to enter
into a landlord, refinery, consignee, warehouseman, bailee, agent or
processor arrangement (including but not limited to a waiver of any Lien
held by such Person against such Collateral) in form and substance
reasonably satisfactory to the Administrative Agent. Upon the request of
the Administrative Agent, such Grantor shall provide warehouse receipts or
bailee letters reasonably satisfactory to the Administrative Agent prior to
the commencement of such storage with any such Person. The applicable
Grantor shall, upon the request of the Administrative Agent, notify any
such landlord, refinery, consignee, warehouseman, bailee, agent, processor
or other Person of the security interest created hereby and shall instruct
such Person to hold all such Collateral for the account of the
Administrative Agent subject to the instructions of the Administrative
Agent.
SECTION 4.7. FURTHER ASSURANCES, ETC. Each Grantor agrees that, from time to
time at its own expense, it will promptly execute and deliver all further
instruments and documents, and take all further action, that may be
necessary or that the Administrative Agent may reasonably request, in order
to perfect, preserve and protect any security interest granted or purported
to be granted hereby or to enable the Administrative Agent to exercise and
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enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, such Grantor will
(a) from time to time upon the request of the Administrative Agent, promptly
deliver to the Administrative Agent such stock powers, instruments and
similar documents, satisfactory in form and substance to the Administrative
Agent, with respect to such Collateral as the Administrative Agent may
reasonably request and will, from time to time upon the request of the
Administrative Agent after the occurrence and during the continuance of any
Specified Event promptly transfer any securities constituting Collateral
into the name of any nominee designated by the Administrative Agent; if any
Account or Receivable shall be evidenced by an instrument, negotiable
document, promissory note or chattel paper, deliver and pledge to the
Administrative Agent hereunder such instrument, negotiable document,
promissory note or chattel paper duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to the Administrative Agent;
(b) file (or cause to be filed) such Filing Statements or continuation
statements, or amendments thereto, and such other instruments or notices
(including any assignment of claim form under or pursuant to the federal
assignment of claims statute, 31 U.S.C. Section 3726, any successor or
amended version thereof or any regulation promulgated under or pursuant to
any version thereof), as may be necessary or that the Administrative Agent
may reasonably request in order to perfect and preserve the security
interests and other rights granted or purported to be granted to the
Administrative Agent hereby;
(c) deliver to the Administrative Agent and at all times keep pledged to the
Administrative Agent pursuant hereto, on a first-priority, perfected basis,
at the reasonable request of the Administrative Agent, all investment
property constituting Collateral, all Dividends and Distributions with
respect thereto, and all interest and principal with respect to promissory
notes (including Pledged Notes), and all proceeds and rights from time to
time received by or distributable to such Grantor in respect of any of the
foregoing Collateral;
(d) except as permitted by the terms of the Credit Agreement, not take or omit
to take any action the taking or the omission of which would result in any
impairment or alteration of any obligation of the maker of any payment
intangible or other instrument constituting Collateral;
(e) not acquire any Restricted Assets (or acquire a series of related
Restricted Assets) if such acquisition (or series of related acquisitions)
would impair, in any material respect, the Administrative Agent's ability
to sell or otherwise transfer such Grantor's business as a going concern;
(f) furnish to the Administrative Agent, from time to time at the
Administrative Agent's request, statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as the Administrative Agent may reasonably
request, all in reasonable detail;
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(g) not permit any items of equipment to become fixtures to real estate other
than real estate subject to a Mortgage or real estate owned by a landlord
that has signed a landlord's waiver in form and substance satisfactory to
the Administrative Agent (for its own benefit and on behalf of the Secured
Parties);
(h) not adjust, settle or compromise any account, or release wholly or partly
any party or obligation thereof, or allow any credit or discount thereon
(collectively an "Adjustment"), unless (i) the Administrative Agent grants
its consent prior to any such Adjustment which consent shall not be
unreasonably withheld or delayed or (ii) such Adjustment is made in the
ordinary course of business of such Grantor and is for an amount not in
excess of $50,000 (provided that no such Adjustment may be made without the
prior written consent of the Administrative Agent during the continuance of
a Specified Event);
(i) do all things reasonably requested by the Administrative Agent in order to
enable the Administrative Agent to have control (as such term is defined in
Article 8 and Article 9 of any applicable Uniform Commercial Code relevant
to the creation, perfection or priority of Collateral consisting of deposit
accounts, accounts and letter of credit rights) over any Collateral; and
(j) promptly notify the Administrative Agent if such Grantor believes it has
rights in respect of any amounts in a commercial tort claim and such
Grantor shall take all such action reasonably requested by the
Administrative Agent perfect the Administrative Agent's security interest
in such commercial tort claim.
With respect to the foregoing and the grant of the security interest hereunder,
each Grantor hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of such Grantor where permitted
by law. Each Grantor agrees that a carbon, photographic or other reproduction of
this Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by law.
SECTION 4.8. FILING REQUIREMENTS. None of the Collateral (other than motor
vehicles not having a market value in excess of $75,000 in the aggregate)
is covered by any certificate of title. Upon request of the Administrative
Agent, each Grantor shall promptly deliver to the Administrative Agent any
and all certificates of title, applications for title or similar evidence
of ownership of such Collateral and shall cause the Administrative Agent to
be named as lienholder on any such certificate of title or other evidence
of ownership. None of the Collateral is of a type in which security
interests or liens may be registered, recorded or filed under, or notice
thereof given under, any federal statute or regulation except for
Collateral described on the schedules to any Copyright Security Agreement,
Patent Security Agreement or Trademark Security Agreement. Each Grantor
shall promptly notify the Administrative Agent in writing upon acquiring
any interest hereafter in any property which constitutes "Collateral" under
this Agreement and which is of a type where a security interest or lien may
be registered, recorded or filed under, or notice thereof given under, any
federal statute or regulation.
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SECTION 4.9. COLLATERAL REQUIREMENTS. Xxxxxx Holding Co. hereby agrees that it
will not maintain any assets or other property (other than CBI Senior
Subordinated Notes held by it as of the Closing Date or thereafter) with
State Street Bank and Trust Company or any of its affiliates.
ARTICLE V
THE ADMINISTRATIVE AGENT
SECTION 5.1. ADMINISTRATIVE AGENT APPOINTED ATTORNEY-IN-FACT. Each Grantor
hereby irrevocably appoints the Administrative Agent its attorney-in-fact,
with full authority in the place and stead of such Grantor and in the name
of such Grantor or otherwise, from time to time in the Administrative
Agent's discretion, following the occurrence and during the continuance of
a Specified Event, to take any action and to execute any instrument which
the Administrative Agent may deem necessary or advisable to accomplish the
purposes of this Agreement, including:
(a) to ask, demand, collect, xxx for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other instruments, documents
and chattel paper, in connection with CLAUSE (a) above;
(c) to file any claims or take any action or institute any proceedings which
the Administrative Agent may deem necessary or desirable for the collection
of any of the Collateral or otherwise to enforce the rights of the
Administrative Agent with respect to any of the Collateral; and
(d) to perform the affirmative obligations of such Grantor hereunder (including
all obligations of such Grantor pursuant to SECTION 4.6).
Each Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. ADMINISTRATIVE AGENT MAY PERFORM. If any Grantor fails to perform
any agreement contained herein, the Administrative Agent may itself
perform, or cause performance of, such agreement, and the expenses of the
Administrative Agent incurred in connection therewith shall be payable by
such Grantor pursuant to SECTION 6.4.
SECTION 5.3. ADMINISTRATIVE AGENT HAS NO DUTY. The powers conferred on the
Administrative Agent hereunder are solely to protect its interest (on
behalf of the Secured Parties) in the Collateral and shall not impose any
duty on it to exercise any such powers. Except for reasonable care of any
Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Administrative Agent shall have no duty as to
any Collateral or responsibility for
(a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any investment
property, whether or not the Administrative Agent has or is deemed to have
knowledge of such matters, or
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(b) taking any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral.
SECTION 5.4. REASONABLE CARE. The Administrative Agent is required to exercise
reasonable care in the custody and preservation of any of the Collateral in
its possession; PROVIDED, that the Administrative Agent shall be deemed to
have exercised reasonable care in the custody and preservation of any of
the Collateral, if it takes such action for that purpose as each Grantor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Specified Event, but failure of the
Administrative Agent to comply with any such request at any time shall not
in itself be deemed a failure to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. CERTAIN REMEDIES. If any Specified Event shall have occurred and be
continuing:
(a) The Administrative Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the UCC (whether or not the UCC applies to the affected Collateral)
and also may
(i) require each Grantor to, and each Grantor hereby agrees that it will, at
its expense and upon request of the Administrative Agent forthwith,
assemble all or part of the Collateral as directed by the Administrative
Agent and make it available to the Administrative Agent at a place to be
designated by the Administrative Agent which is reasonably convenient to
both parties, and
(ii) without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of the
Administrative Agent's offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as the Administrative Agent may
deem commercially reasonable. Each Grantor agrees that, to the extent
notice of sale shall be required by law, at least ten days prior notice to
such Grantor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification. The Administrative Agent shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given. The
Administrative Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was
so adjourned.
(b) All cash proceeds received by the Administrative Agent in respect of any
sale of, collection from, or other realization upon, all or any part of the
Collateral may, in the discretion of the Administrative Agent, be held by
the Administrative Agent as collateral for, and/or then or at any time
thereafter applied by the Administrative Agent against all or any part of
the Obligations as follows:
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(i) FIRST, to the payment of any amounts payable to the Administrative Agent,
in its capacity as Administrative Agent, pursuant to Section 10.3 of the
Credit Agreement and SECTION 6.4;
(ii) SECOND, to the equal and ratable payment of the Obligations, applied as to
each Secured Party: (A) first to fees then due to such Secured Party, (B)
then to interest due to such Secured Party, (C) then to the Cash
Collateralization of all Letter of Credit Outstandings, (D) then to
principal amounts owing to, or to reduce the "credit exposure" of, such
Secured Party with respect to the Loans or the Gold Consignment Agreement,
or under such Rate Protection Agreement, as the case may be, and (E) then
to the remaining outstanding Obligations, including, without duplication
of any amounts paid pursuant to this clause, to the amounts owing pursuant
to Section 10.4 of the Credit Agreement and Sections 26 and 33 of the Gold
Consignment Agreement; and
(iii) THIRD, to the applicable Grantor or to whomsoever may be lawfully entitled
to receive such surplus.
For purposes of this Agreement, the "credit exposure" at any time of any Secured
Party with respect to a Rate Protection Agreement to which such Secured Party is
a party shall be determined at such time in accordance with the customary
methods of calculating credit exposure under similar arrangements by the
counterparty to such arrangements, taking into account potential interest rate
movements and the respective termination provisions and notional principal
amount and term of such Rate Protection Agreement.
(c) The Administrative Agent may
(i) transfer all or any part of the Collateral into the name of
the Administrative Agent or its nominee, with or without disclosing
that such Collateral is subject to the Lien hereunder,
(ii) notify the parties obligated on any of the Collateral to make payment to
the Administrative Agent of any amount due or to become due thereunder,
(iii) enforce collection of any of the Collateral by suit or otherwise, and
surrender, release or exchange all or any part thereof, or compromise or
extend or renew for any period (whether or not longer than the original
period) any obligations of any nature of any party with respect thereto,
(iv) endorse any checks, drafts, or other writings in any Grantor's name to
allow collection of the Collateral,
(v) take control of any proceeds of the Collateral, and
(vi) execute (in the name, place and stead of any Grantor) endorsements,
assignments, stock powers and other instruments of conveyance or transfer
with respect to all or any of the Collateral.
-23-
SECTION 6.2. SECURITIES LAWS. If the Administrative Agent shall determine to
exercise its right to sell all or any of the Collateral pursuant to SECTION
6.1, each Grantor agrees that, upon request of the Administrative Agent,
such Grantor will, at its own expense:
(a) execute and deliver, and cause (or, with respect to any issuer which is not
a Subsidiary of the Grantor, use its best efforts to cause) each issuer of
the Capital Securities contemplated to be sold and the directors and
officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as
may be necessary or, in the opinion of the Administrative Agent, advisable
to register such Capital Securities under the provisions of the Securities
Act of 1933, as from time to time amended (the "Securities Act"), and cause
the registration statement relating thereto to become effective and to
remain effective for such period as prospectuses are required by law to be
furnished, and to make all amendments and supplements thereto and to the
related prospectus which, in the reasonable opinion of the Administrative
Agent, are necessary or advisable, all in conformity with the requirements
of the Securities Act and the rules and regulations of the SEC applicable
thereto;
(b) use its best efforts to exempt such Capital Securities under the state
securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of such Capital Securities, as requested by the
Administrative Agent;
(c) cause (or, with respect to any issuer which is not a Subsidiary of the
Grantor, use its best efforts to cause) each such issuer to make available
to its security holders, as soon as practicable, an earnings statement that
will satisfy the provisions of Section 11(a) of the Securities Act; and
(d) do or cause to be done all such other acts and things as may be necessary
to make such sale of such Collateral or any part thereof valid and binding
and in compliance with applicable law.
Each Grantor further acknowledges the impossibility of ascertaining the amount
of damages that would be suffered by the Administrative Agent or the Secured
Parties by reason of the failure by such Grantor to perform any of the covenants
contained in this Section and consequently agrees that, if such Grantor shall
fail to perform any of such covenants, it shall pay, as liquidated damages and
not as a penalty, an amount equal to the value (as determined by the
Administrative Agent) of such Collateral on the date the Administrative Agent
shall demand compliance with this Section.
SECTION 6.3. COMPLIANCE WITH RESTRICTIONS. Each Grantor agrees that in any sale
of any of the Collateral whenever a Specified Event shall have occurred and
be continuing, the Administrative Agent is hereby authorized to comply with
any limitation or restriction in connection with such sale as it may be
advised by counsel is necessary in order to avoid any violation of
applicable law (including compliance with such procedures as may restrict
the number of prospective bidders and purchasers, require that such
prospective bidders and purchasers have certain qualifications, and
restrict such prospective bidders and purchasers to Persons who will
represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or resale of such
-24-
Collateral), or in order to obtain any required approval of the sale or of
the purchaser by any Governmental Authority or official, and such Grantor
further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable
manner, nor shall the Administrative Agent be liable nor accountable to
such Grantor for any discount allowed by the reason of the fact that such
Collateral is sold in compliance with any such limitation or restriction.
SECTION 6.4. INDEMNITY AND EXPENSES.
(a) Each Grantor agrees to indemnify the Administrative Agent from and against
any and all claims, losses and liabilities arising out of or resulting from
this Agreement (including enforcement of this Agreement), except claims,
losses or liabilities resulting from the Administrative Agent's gross
negligence or wilful misconduct.
(b) Each Grantor will, upon demand, pay to the Administrative Agent the amount
of any and all reasonable expenses, including the reasonable fees and
disbursements of its counsel and of any experts and agents, which the
Administrative Agent may incur in connection with:
(i) the administration of each Loan Document,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from, or other realization upon, any of the Collateral,
(iii) the exercise or enforcement of any of the rights of the Administrative
Agent or the Secured Parties hereunder, and
(iv) the failure by such Grantor to perform or observe any of the provisions
hereof.
SECTION 6.5. PROTECTION OF COLLATERAL. The Administrative Agent may from time to
time, at its option, perform any act which any Grantor fails to perform
after being requested in writing so to perform (it being understood that no
such request need be given after the occurrence and during the continuance
of a Specified Event) and the Administrative Agent may from time to time
take any other action which the Administrative Agent reasonably deems
necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest therein.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. LOAN DOCUMENT. This Agreement is a Loan Document executed pursuant
to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms
and provisions thereof, including Article X thereof.
SECTION 7.2. BINDING ON SUCCESSORS, TRANSFEREES AND ASSIGNS; ASSIGNMENT. This
Agreement shall remain in full force and effect until the Termination Date
has occurred, shall be binding upon the Grantors and their successors,
transferees and assigns and shall inure to
-25-
the benefit of and be enforceable by each Secured Party and its successors,
transferees and assigns; PROVIDED that no Grantor may (unless otherwise
permitted under the terms of the Credit Agreement) assign any of its
obligations hereunder without the prior written consent of all Lenders.
SECTION 7.3. AMENDMENTS, ETC. No amendment to or waiver of any provision of this
Agreement, nor consent to any departure by any Grantor from its obligations
under this Agreement, shall in any event be effective unless the same shall
be in writing and signed by the Administrative Agent (on behalf of the
Lenders or the Required Lenders, as the case may be, pursuant to Section
10.1 of the Credit Agreement) and by the Gold Consignor and the Grantors
and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 7.4. NOTICES. All notices and other communications provided for
hereunder shall be in writing or by facsimile and addressed, delivered or
transmitted to the appropriate party at the address or facsimile number of
such party specified in the Credit Agreement, or if to the Gold Consignor
to the address or facsimile number set forth in the Gold Consignment
Agreement or at such other address or facsimile number as may be designated
by such Person in a notice to the other party (and to the Gold Consignor).
Any notice or other communication, if mailed and properly addressed with
postage prepaid or if properly addressed and sent by pre-paid courier
service, shall be deemed given when received; any such notice or other
communication, if transmitted by facsimile, shall be deemed given when
transmitted and electronically confirmed.
SECTION 7.5. RELEASE OF LIENS. Upon (a) the Disposition of Collateral in
accordance with the Credit Agreement or (b) the occurrence of the
Termination Date, the security interests granted herein shall automatically
terminate with respect to (i) such Collateral (in the case of CLAUSE (a))
or (ii) all Collateral (in the case of CLAUSE (b)). Upon any such
Disposition or termination, the Administrative Agent will, at the
applicable Grantor's sole expense, deliver to such Grantor, without any
representations, warranties or recourse of any kind whatsoever, such
Collateral (in the case of clause (a)) or all Collateral (in the case of
CLAUSE (b)) held by the Administrative Agent hereunder, and execute and
deliver to such Grantor such documents as such Grantor shall reasonably
request to evidence such termination. For the avoidance of doubt, upon the
retirement, cancellation or other termination of the CBI Senior
Subordinated Notes held by Xxxxxx Holding Co. in accordance with the Credit
Agreement, the Administrative Agent shall release such CBI Senior
Subordinated Notes to Xxxxxx Holding Co. contemporaneously with such
retirement, cancellation or termination.
SECTION 7.6. ADDITIONAL GRANTORS. Upon the execution and delivery by any other
Person of a supplement in the form of ANNEX I hereto, such Person shall
become a "Grantor" hereunder with the same force and effect as if it were
originally a party to this Agreement and named as a "Grantor" hereunder.
The execution and delivery of such supplement shall not require the consent
of any other Grantor hereunder, and the rights and obligations of each
Grantor hereunder shall remain in full force and effect notwithstanding the
addition of any new Grantor as a party to this Agreement.
-26-
SECTION 7.7. NO WAIVER; REMEDIES. No failure on the part of any Secured Party to
exercise, and no delay in exercising, any right hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 7.8. HEADINGS. The various headings of this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement or any provisions thereof.
SECTION 7.9. SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such provision and such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement or affecting the validity or enforceability of such provision in
any other jurisdiction.
SECTION 7.10. GOVERNING LAW, ENTIRE AGREEMENT, ETC. THIS AGREEMENT SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), EXCEPT TO THE EXTENT
THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR
REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY
THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. This Agreement
and the other Loan Documents constitute the entire understanding among the
parties hereto with respect to the subject matter hereof and thereof and
supersede any prior agreements, written or oral, with respect thereto.
SECTION 7.11. COUNTERPARTS. This Agreement may be executed by the parties hereto
in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement
by facsimile shall be effective as delivery of manually executed
counterpart of this Agreement.
-27-
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed and delivered by its Authorized Officer as of the date first
above written.
COMMEMORATIVE BRANDS, INC.
By: /s/ Xxxxxxx X. Bench
-------------------------------------
Name: Xxxxxxx X. Bench
Title: Chief Financial Officer
TP HOLDING CORP.
By: /s/ Xxxxxxx X. Bench
-------------------------------------
Name: Xxxxxxx X. Bench
Title: Chief Financial Officer
XXXXXX PUBLISHING COMPANY
By: /s/ Xxxxxxx X. Bench
-------------------------------------
Name: Xxxxxxx X. Bench
Title: Chief Financial Officer
XXXXXX PRODUCTION SERVICES
COMPANY, L.P.
By: XXXXXX PUBLISHING COMPANY,
Its general partner
By: /s/ Xxxxxxx X. Bench
-------------------------------------
Name: Xxxxxxx X. Bench
Title: Chief Financial Officer
-28-
EDUCATIONAL COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Bench
----------------------
Name: Xxxxxxx X. Bench
Title: Chief Financial Officer
XXXXXX SENIOR HOLDINGS CORP.
By: /s/ Xxxxxxx X. Bench
----------------------
Name: Xxxxxxx X. Bench
Title: Chief Financial Officer
CBI NORTH AMERICA, INC.
By: /s/ Xxxxxxx X. Bench
----------------------
Name: Xxxxxxx X. Bench
Title: Chief Financial Officer
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By: /s/ Xxxxxx Xxxx
----------------
Name: Xxxxxx Xxxx
Title: Director
-29-
SCHEDULE I
to Subsidiary Pledge and Security Agreement
ITEM A. CAPITAL SECURITIES
STOCK CERTIFICATE AUTHORIZED OUTSTANDING NUMBER OF % OF SHARES
ISSUER (CORPORATE) CLASS OF STOCK NUMBER SHARES SHARES SHARES PLEDGED
------------------ -------------- ---------------- --------- ---------- --------- -----------
1. XXXXXX SENIOR HOLDING CORP.
TP Holding Corp. Preferred 2 50,000 30,000 30,000 100%
TP Holding Corp. Common 3 50,000 30,000 30,000 100%
2. XXXXXX HOLDING CORP.
Xxxxxx Publishing Common 2 1,000 10 10 100%
Company
Limited
Xxxxxx Production Partnership
Services Company, L.P. Interest None 1%
3. COMMEMORATIVE BRANDS, INC.
CBI North America, Inc. Common 1 3,000 1,000 1,000 100%
4. XXXXXX PUBLISHING COMPANY
Limited
Xxxxxx Production Partnership
Services Company L.P. Interest None 99%
30
ITEM B. PLEDGED NOTES
1. Xxxxxx Senior Holding Corp.
[None]
2. Xxxxxx Holding Corp.
Original
Principal
Name of Issuer Description Amount
TP Holding Corp. Intercompany Term Note (Bond 2007) $______________
Xxxxxx Publishing Company Intercompany Term Note (Bond 2007) $______________
Commemorative Brands, Inc. Intercompany Term Note (Bond 2007) $______________
Educational Communications, Inc. Intercompany Term Note (Bond 2007) $______________
Commemorative Brands, Inc. 11% Senior Subordinated Notes due 2007
pursuant to the Indenture dated December 16,
1996, as amended by the first supplemental
indenture thereto, dated as of July 21, 2000, and
as further amended or modified in accordance
with Section 7.2.12 $ 90,000,000
3. Commemorative Brands, Inc.
[None]
4. Xxxxxx Publishing Company
[None]
5. Xxxxxx Production Services, L.P.
[None]
-31-
6. CBI North America, Inc.
[None]
-32-
SCHEDULE II
to
Subsidiary Pledge and Security Agreement
ITEM A. JURISDICATION OF INCORPORATION; TRADE NAMES
(i) Jurisdictions of Incorporation
GRANTOR JURISDICTIONAL
------- INCORPORATION/FOUNDATION
------------------------
Xxxxxx Senior Holding Corp. Delaware
Xxxxxx Holding Corp. Delaware
Commemorative Brands, Inc. Delaware
Xxxxxx Publishing Company Delaware
Educational Communications, Inc. Illinois
Xxxxxx Production ServicesCompany, L.P. Delaware
CBI North America, Inc. Delaware
(ii) TRADENAMES
1. Xxxxxx Reunion Services, a tradename of Xxxxxx General Partner
(No longer actively used.)
2. Newsfoto Publishing, a tradename of Xxxxxx General Partner
3. Balfour, a tradename of Commemorative Brands, Inc.
4. ArtCarved, a tradename of Commemorative Brands, Inc.
5. Keystone, a tradename of Commemoratiave Brands, Inc.
6. Master, a tradename of Commemorative Brands, Inc.
7. Namesake, a tradename of Commemorative Brands, Inc.
8. Class Rings, Ltd., a tradename of Commemorative Brands, Inc.
-33-
9. X. Xxxxx, Ltd., a tradename of Commemorative Brands, Inc.
10. Generations of Love, a tradename of Commemorative Brands, Inc.
11. Xxxx Xxxxxxx, Inc., a tradename of Commemorative Brands, Inc.
12. Balfour Sports, a tradename of Commemorative Brands, Inc.
ITEM B. LOCATION OF INVENTORY, EQUIPMENT
TP HOLDING CORP.
Office Location: 0000 X. Xxxxxxxxxxx Xxxx, Xxxxxx, XX
XXXXXX SENIOR HOLDING CORP.
Office Location: 0000 X. Xxxxxxxxxxx Xxxx, Xxxxxx, XX
COMMEMORATIVE BRANDS, INC. AND CBI NORTH AMERICA, INC.
OWNED PROPERTY:
1. 0000 Xxxxxx X. Xxxx, Xxxxxx, XX 00000
MANUFACTURER AND REFINERS:
1. Xxxxx Xxxxx, Inc., 00 Xxxxx Xxxxx, Xxxxxxxxx, XX; Refiner
2. Xxxxx and Curren, Inc., 00 Xxxxxxxxxxxx Xxxxxx, Xxxxxxx, XX;
Refiner
3. Hereaus PPM, Inc., 00 Xxxxxx Xxxxxx, Xxxxxx, XX; Refiner
4. Metalor USA Refining Corporation, 000 Xxxx Xxxxxxx Xxxxxxxxx,
Xxxxx Xxxxxxxxx, XX; Refiner
5. OK Casting, 0000 Xxxxxxxxxx Xxxx, Xxxxxx, XX; Contract
Manufacturer
6. AuraFin Corporation, 000 Xxxxxxxxxxxxx Xxxxxxx, Xxxxxxx, XX;
Contract Manufacturer
-34-
7. Dunhams Jewelry Manufacturing, 0000 Xxxxxx, Xxxxx 0000, Xx Xxxx,
XX; Contract Manufacturer
8. Xxxxxxxx and West, Inc., 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxx, XX;
Contract Manufacturer
9. Xxxxxxx Xxxxxxx, Xxxxxxxxxxxx 000 Xxxx-Xxxxxxxxx Xxxxxxx; Contract
Manufacturer (manufactures synthetic stones and holds
approximately $70,000 worth of stones belonging to CBI)
10. Metech International, Inc., 000 Xxxxxxxxxx Xxxx Xxxxxx, X.X. Xxx
000, Xxxxxxxxxx, XX; Refiner
11. Technic Inc., 0 Xxxxxxxxx Xxxxxx, Xxxxxxxx, XX; Fabricator
12. Xxxxxx, Inc. 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx, XX;
Contract Manufacturer
13. Sippi Metals, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxx, XX; Refiner
14. Emporesa Plat-Mex, S.A., Xxxxx Xxxxxx #68 Col. San Xxxxxx, X.X.
00000 Xxxxxx, X.X. Xxxxxx; Contract Manufacturer
15. AMC Company, 0000 Xxxxxxxxx Xxxxxxx, Xxxxxx, XX; Refiner
16. Carriage Casting, 0000 Xxxxx Xxxxx, Xx Xxxx, XX; Contract
Manufacturer
17. Xxxxx Xxxxxxxxx Jewelry Shop, 0000 Xxxxxxx Xxxxxx, Xx Xxxx, XX;
Contract Manufacturer
18. CBC Jewelry Shop, 0000 Xxxxxxxx Xxxxx, Xxxxx 0, Xx Xxxx, XX;
Contract Manufacturer
19. American Mullion, Inc. 000 Xxxxxxxx Xxxx, Xxxxxx,
XX; Fabricator
-35-
XXXXXX PUBLISHING COMPANY
OWNED PROPERTY:
1. 0000 X. Xxxxxxxxxxx Xxxx, Xxxxxx, XX
WAREHOUSES:
6. Grand Logistics Services (Owner, Xxxxxx Xxxxxx), 00000 Xxxx Xxxxxxx
Xxxxx, Xxxxxx, XX
XXXXXX PRODUCTION SERVICES COMPANY, L.P.
OFFICE LOCATION:
0000 X. Xxxxxxxxxxx Xxxx, Xxxxxx, XX
EDUCATIONAL COMMUNICATIONS, INC.
OFFICE LOCATION:
000 X. XxXxxxxx Xxxx, Xxxx Xxxxxx, Xxxxxxxx 00000
PRINTERS, MAILING AND FULFILLMENT HOUSES:
1. Quebecor World, 0000 Xxxxxx Xxxx, Xxxxxxx, XX 00000; Printer
2. RR Xxxxxxxx, 0000 Xxxxxxx Xxx., Xxxxxxx XX 00000; Printer
3. RUF Enterprises, 7544 Xxxxxx, Xxxxx, XX 00000; Plaque, Jewelry, Patch
order fulfillment.
4. International Decal, 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000; Mugs
and Ornaments order fulfillment.
5. Total Promotions; 0000 Xxx Xxxxxx Xxxx, Xxxxxxxx Xxxx, XX 00000;
Portfolios, Pens, Tote Bags fulfillment.
-36-
6. Mailways Enterprises, 0000 Xxxxxxx Xxxx, Xxxxxxx Xxxx, XX 00000;
Printed Materials.
7. Midwest Compuservice, 0000 X. Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000;
Printed Materials.
8. XL Marketing, 000 Xxxxxx Xxxx, Xxx Xxxxx Xxxxxxx, XX 00000; Printed
Materials
ITEM C. FEDERAL TAXPAYER IDENTIFICATION NUMBER
GRANTOR FEIN ORGANIZATIONAL NUMBER
------- ---- ---------------------
Xxxxxx Senior Holding Corp. 00-0000000 3171031
Xxxxxx Holding Corp. 00-0000000 3132882
Commemorative Brands, Inc. 00-0000000 2607410
Xxxxxx Publishing Company 00-0000000 0659915
CBI North America, Inc. 00-0000000 2687796
Xxxxxx Production Services, L.P. 00-0000000 2831121
Educational Communications, Inc. 00-0000000 47656931
ITEM D. GOVERNMENT CONTRACTS
[None]
-37-
ITEM E. DEPOSIT ACCOUNTS
GRANTOR BANK NAME AND ADDRESS ACCOUNT NUMBER
------- --------------------- --------------
Xxxxxx Senior Holding Corp. None
Xxxxxx Holding Corp. None
Commemorative Brands, Inc. Chase Bank of Texas, N.A. 09922274690
Xxxxxx, XX 00000
Xxxxxx Publishing Company Chase Bank of Texas, N.A. 08806264527
Xxxxxx, XX 00000-0000
Educational Communications, Inc. Northern Trust Bank 1901225701
The Northern Trust Company
000 Xxxxxxxx Xxxx
Xxxx Xxxxxx, XX 00000
Xxxxxx Production ServicesCompany, None
L.P.
CBI North America, Inc. None
ITEM F. COMMERCIAL TORT CLAIMS. [None.]
-38-
ITEM G. LEASED LOCATIONS
GRANTOR
-------
Xxxxxx Senior Holding Corp. None
Xxxxxx Holding Corp. None
Commemorative Brands, Inc. 1. 0000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, XX
2. 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxx, XX
3. 0000 Xxxxxx, Xx Xxxx, XX
4. Xxxxxx #820, Parqu Instrial Xxxxxxx X. Bermudez,
Juarez, Chihuahua, Mexico
Xxxxxx Publishing Company 1. 00 Xxxxx Xxxxxx Xxxxxxx, Xxxxxxx, XX
2. 0000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxx, XX
3. 0000 Xxxxxxxxxxxxx Xxxx, Xxx Xxxxxx, XX
4. 0000 X Xxxxxxxxx Xxxxx, Xxx Xxxxxx, XX
5. 00000 Xxxxxxxx Xxxxx, Xx Xxxx, XX
Educational Communications, Inc. 1. 000 X. XxXxxxxx Xxxx, Xxxx Xxxxxx, XX
2. 0000 X. Xxxxxxxx Xxxx, Xxxx Xxxxxx, XX
3. Acorn Self-Storage, Storage Room #5243,
0000 Xxxx Xxxx Xxxx, Xxxxxxxxx, XX 00000
Xxxxxx Production ServicesCompany, None
L.P.
-39-
CBI North America, Inc. 1. 0000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, XX
2. 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxx, XX
3. 0000 Xxxxxx, Xx Xxxx, XX
4. Xxxxxx #820, Parqu Instrial Xxxxxxx X. Bermudez,
Juarez, Chihuahua, Mexico
-40-
SCHEDULE III
to
Subsidiary Pledge and Security Agreement
Item A. PATENTS
ISSUED PATENTS
COUNTRY PATENT NO. ISSUE DATE INVENTOR(S) TITLE
------- --------- ---------- ---------- -----
PENDING PATENT APPLICATIONS
---------------------------
COUNTRY SERIAL NO. FILING DATE INVENTOR(S) TITLE
------- --------- ---------- ---------- -----
PATENT APPLICATIONS IN PREPARATION
----------------------------------
EXPECTED
COUNTRY DOCKET NO. FILING DATE INVENTOR(S) TITLE
------- --------- ----------- ----------- -----
Item B. PATENT LICENSES
COUNTRY OR EFFECTIVE EXPIRATION SUBJECT
TERRITORY LICENSOR LICENSEE DATE DATE MATTER
--------- -------- -------- --------- ---------- -------
-41-
SCHEDULE IV
to
Subsidiary Pledge and Security Agreement
Item A. TRADEMARKS
REGISTERED TRADEMARKS
COUNTRY TRADEMARK REGISTRATION NO. REGISTRATION DATE
------- --------- ---------------- ------------------
PENDING TRADEMARK APPLICATIONS
COUNTRY TRADEMARK SERIAL NO. FILING DATE
------- --------- ---------- -----------
TRADEMARK APPLICATIONS IN PREPARATION
EXPECTED PRODUCTS/
COUNTRY TRADEMARK DOCKET NO. FILING DATE SERVICES
------- --------- ---------- ----------- --------
Item B. TRADEMARK LICENSES
COUNTRY OR EFFECTIVE EXPIRATION
TERRITORY TRADEMARK LICENSOR LICENSEE DATE DATE
---------- --------- -------- -------- --------- ----------
-42-
SCHEDULE V
to
Subsidiary Pledge and Security Agreement
Item A. COPYRIGHTS/MASK WORKS
REGISTERED COPYRIGHTS/MASK WORKS
COUNTRY REGISTRATION NO. REGISTRATION DATE AUTHOR(S) TITLE
------- ---------------- ----------------- --------- -----
COPYRIGHT/MASK WORK PENDING REGISTRATION APPLICATIONS
COUNTRY SERIAL NO. FILING DATE AUTHOR(S) TITLE
------- ---------- ----------- --------- -----
COPYRIGHT/MASK WORK REGISTRATION APPLICATIONS IN PREPARATION
EXPECTED
COUNTRY DOCKET NO. FILING DATE AUTHOR(S) TITLE
------- ---------- ----------- --------- -----
Item B. COPYRIGHT/MASK WORK LICENSES
COUNTRY OR EFFECTIVE EXPIRATION SUBJECT
TERRITORY LICENSOR LICENSEE DATE DATE MATTER
--------- -------- -------- --------- ---------- ------
-43-
SCHEDULE VI
to
Subsidiary Pledge and Security Agreement
TRADE SECRET OR KNOW-HOW LICENSES
-44-
SCHEDULE VII
to
Subsidiary Pledge and Security Agreement
FINANCING STATEMENTS
-45-
EXHIBIT A
to Subsidiary Pledge and Security Agreement
PATENT SECURITY AGREEMENT
This PATENT SECURITY AGREEMENT, dated as of ____ __, 200_ (this "SECURITY
AGREEMENT"), is made by [NAME OF GRANTOR] (the "GRANTOR") in favor of THE BANK
OF NOVA SCOTIA, as administrative agent (together with its successor(s) thereto
in such capacity, the "ADMINISTRATIVE AGENT") for each of the Secured Parties.
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of February 20, 2002 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among American Achievement Corporation (formerly
known as Commemorative Brands Holding Corp.), a Delaware corporation (the
"BORROWER"), the Lenders, General Electric Capital Corporation, as the
Syndication Agent for the Lenders, Bankers Trust Company, as the Documentation
Agent for the Lenders and the Administrative Agent, the Lenders and the Issuer
have extended Commitments to make Credit Extensions to the Borrower;
WHEREAS, in connection with the Credit Agreement, the Grantor has executed
and delivered a Subsidiary Pledge and Security Agreement, dated as of February
20, 2002 (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "AGREEMENT");
WHEREAS, pursuant to the Credit Agreement and the Agreement, the Grantor is
required to execute and deliver this Security Agreement and to grant to the
Administrative Agent a continuing security interest in all of the Patent
Collateral (as defined below) to secure all Obligations; and
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Security Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of each Secured Party, as follows:
SECTION 1. DEFINITIONS. Unless otherwise defined herein or the context
otherwise requires, terms used in this Security Agreement, including its
preamble and recitals, have the meanings provided in the Agreement.
SECTION 2. GRANT OF SECURITY INTEREST. The Grantor hereby assigns, pledges,
hypothecates, charges, mortgages, delivers, and transfers to the Administrative
Agent, for its benefit and the ratable benefit of each other Secured Party, and
hereby grants to the Administrative Agent, for its benefit and the ratable
benefit of each other Secured Party, a
continuing security interest in all of the following property, whether now or
hereafter existing or acquired by the Grantor (the "PATENT COLLATERAL"):
(a) all of its letters patent and applications for letters patent throughout
the world, including all patent applications in preparation for filing and
each patent and patent application referred to in ITEM A of SCHEDULE I
attached hereto;
(b) all reissues, divisions, continuations, continuations-in-part, extensions,
renewals and reexaminations of any of the items described in CLAUSE (a);
(c) all of its patent licenses, and other agreements providing the Grantor
with the right to use any items of the type referred to in clauses (a) and
(b) above, including each patent license referred to in ITEM B of SCHEDULE
I attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing (including
license royalties and proceeds of infringement suits), the right to xxx
third parties for past, present or future infringements of any patent or
patent application, and for breach or enforcement of any patent license.
SECTION 3. SECURITY AGREEMENT. This Security Agreement has been executed
and delivered by the Grantor for the purpose of registering the security
interest of the Administrative Agent in the Patent Collateral with the United
States Patent and Trademark Office and corresponding offices in other countries
of the world. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Administrative Agent for its benefit and the ratable benefit of each other
Secured Party under the Agreement. The Agreement (and all rights and remedies of
the Administrative Agent and each Secured Party thereunder) shall remain in full
force and effect in accordance with its terms.
SECTION 4. RELEASE OF LIENS. Upon (i) the Disposition of Patent Collateral
in accordance with the Credit Agreement or (ii) the occurrence of the
Termination Date, the security interests granted herein shall automatically
terminate with respect to (A) such Patent Collateral (in the case of CLAUSE (i))
or (B) all Patent Collateral (in the case of CLAUSE (ii)). Upon any such
Disposition or termination, the Administrative Agent will, at the Grantor's sole
expense, deliver to the Grantor, without any representations, warranties or
recourse of any kind whatsoever, all Patent Collateral held by the
Administrative Agent hereunder, and execute and deliver to the Grantor such
documents as the Grantor shall reasonably request to evidence such termination.
SECTION 5. ACKNOWLEDGMENT. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Administrative Agent with respect to
the security interest in the Patent Collateral granted hereby are more fully set
forth in the Agreement, the terms and provisions of which (including the
remedies provided for therein) are incorporated by reference herein as if fully
set forth herein.
SECTION 6. LOAN DOCUMENT. This Security Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
EXHIBIT A
-2-
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof, including Article_X thereof.
SECTION 7. COUNTERPARTS. This Security Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
* * * * *
EXHIBIT A
-3-
IN WITNESS WHEREOF, each of the parties hereto has caused this Security
Agreement to be duly executed and delivered by its Authorized Officer as of the
date first above written.
[NAME OF GRANTOR]
By:
-------------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By:
-------------------------------------
Name:
Title:
EXHIBIT A
-4-
SCHEDULE I
to Patent Security Agreement
Item A. PATENTS
ISSUED PATENTS
COUNTRY PATENT NO. ISSUE DATE INVENTOR(S) TITLE
------- ---------- ---------- ----------- -----
PENDING PATENT APPLICATIONS
COUNTRY SERIAL NO. FILING DATE INVENTOR(S) TITLE
------- ---------- ----------- ----------- -----
PATENT APPLICATIONS IN PREPARATION
EXPECTED
COUNTRY DOCKET NO. FILING DATE INVENTOR(S) TITLE
------- ---------- ----------- ----------- -----
Item B. PATENT LICENSES
COUNTRY OR EFFECTIVE EXPIRATION SUBJECT
TERRITORY LICENSOR LICENSEE DATE DATE MATTER
--------- -------- -------- ---- ---- ------
EXHIBIT A
-5-
EXHIBIT B
to Subsidiary Pledge and Security Agreement
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT, dated as of _______, 200_ (this
"SECURITY AGREEMENT"), is made by [NAME OF GRANTOR] (the "GRANTOR") in favor of
THE BANK OF NOVA SCOTIA, as administrative agent (together with its successor(s)
thereto in such capacity, the "ADMINISTRATIVE AGENT") for each of the Secured
Parties.
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of February 20, 2002 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among American Achievement Corporation (formerly
known as Commemorative Brands Holding Corp.), a Delaware corporation (the
"BORROWER"), the Lenders, General Electric Capital Corporation, as the
Syndication Agent for the Lenders, Bankers Trust Company, as the Documentation
Agent for the Lenders and the Administrative Agent, the Lenders and the Issuer
have extended Commitments to make Credit Extensions to the Borrower;
WHEREAS, in connection with the Credit Agreement, the Grantor has executed
and delivered a Subsidiary Pledge and Security Agreement, dated as of February
20, 2002 (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "AGREEMENT");
WHEREAS, pursuant to the Credit Agreement and the Agreement, the Grantor is
required to execute and deliver this Security Agreement and to grant to the
Administrative Agent a continuing security interest in all of the Trademark
Collateral (as defined below) to secure all Obligations; and
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Security Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of each Secured Party, as follows:
SECTION 1. DEFINITIONS. Unless otherwise defined herein or the context
otherwise requires, terms used in this Security Agreement, including its
preamble and recitals, have the meanings provided in the Agreement.
SECTION 2. GRANT OF SECURITY INTEREST. The Grantor hereby assigns, pledges,
hypothecates, charges, mortgages, delivers, and transfers to the Administrative
Agent, for its benefit and the ratable benefit of each other Secured Party, and
hereby grants to the Administrative Agent, for its benefit and the ratable
benefit of each other Secured Party, a continuing security interest in all of
the following property, whether now or hereafter existing or acquired by the
Grantor (the "TRADEMARK COLLATERAL"):
EXHIBIT B
-1-
(a) (i) all of its trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks,
certification marks, collective marks, logos and other source or business
identifiers, and all goodwill of the business associated therewith, now
existing or hereafter adopted or acquired including those referred to in
ITEM A of SCHEDULE I hereto, whether currently in use or not, all
registrations and recordings thereof and all applications in connection
therewith, whether pending or in preparation for filing, including
registrations, recordings and applications in the United States Patent
and Trademark Office or in any office or agency of the United States of
America or any State thereof or any other country or political
subdivision thereof or otherwise, and all common-law rights relating to
the foregoing, and (ii) the right to obtain all reissues, extensions or
renewals of the foregoing (collectively referred to as the "TRADEMARK");
(b) all of the goodwill of the business connected with the use of, and
symbolized by the items described in, clause (a), and to the extent
applicable clause (b);
(c) the right to xxx third parties for past, present and future infringements
of any Trademark Collateral described in clause (a) and, to the extent
applicable, clause (b); and
(d) all proceeds of, and rights associated with, the foregoing, including any
claim by the Grantor against third parties for past, present or future
infringement or dilution of any Trademark, Trademark registration or
Trademark license, or for any injury to the goodwill associated with the
use of any such Trademark or for breach or enforcement of any Trademark
license and all rights corresponding thereto throughout the world.
SECTION 3. SECURITY AGREEMENT. This Security Agreement has been executed
and delivered by the Grantor for the purpose of registering the security
interest of the Administrative Agent in the Trademark Collateral with the United
States Patent and Trademark Office and corresponding offices in other countries
of the world. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Administrative Agent for its benefit and the ratable benefit of each other
Secured Party under the Agreement. The Agreement (and all rights and remedies of
the Administrative Agent and each Secured Party thereunder) shall remain in full
force and effect in accordance with its terms.
SECTION 4. RELEASE OF LIENS. Upon (i) the Disposition of Trademark
Collateral in accordance with the Credit Agreement or (ii) the occurrence of the
Termination Date, the security interests granted herein shall automatically
terminate with respect to (A) such Trademark Collateral (in the case of CLAUSE
(i)) or (B) all Trademark Collateral (in the case of CLAUSE (ii)). Upon any such
Disposition or termination, the Administrative Agent will, at the Grantor's sole
expense, deliver to the Grantor, without any representations, warranties or
recourse of any kind whatsoever, all Trademark Collateral held by the
Administrative Agent hereunder, and execute and deliver to the Grantor such
documents as the Grantor shall reasonably request to evidence such termination.
SECTION 5. ACKNOWLEDGMENT. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Administrative Agent with respect to
the security interest in the Trademark Collateral granted hereby are more fully
set forth in the Agreement, the
EXHIBIT B
-2-
terms and provisions of which (including the remedies provided for therein) are
incorporated by reference herein as if fully set forth herein.
SECTION 6. LOAN DOCUMENT. This Security Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof, including Article X thereof.
SECTION 7. COUNTERPARTS. This Security Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
* * * * *
EXHIBIT B
-3-
IN WITNESS WHEREOF, each of the parties hereto has caused this Security
Agreement to be duly executed and delivered by its Authorized Officer as of the
date first above written.
[NAME OF GRANTOR]
By:
-------------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By:
-------------------------------------
Name:
Title:
EXHIBIT B
-4-
SCHEDULE I
to Trademark Security Agreement
Item A. TRADEMARKS
REGISTERED TRADEMARKS
COUNTRY TRADEMARK REGISTRATION NO. REGISTRATION DATE
------- --------- ---------------- -----------------
PENDING TRADEMARK APPLICATIONS
COUNTRY TRADEMARK SERIAL NO. FILING DATE
------- --------- ---------- -----------
TRADEMARK APPLICATIONS IN PREPARATION
EXPECTED PRODUCTS/
COUNTRY TRADEMARK DOCKET NO. FILING DATE SERVICES
------- --------- ---------- ----------- --------
Item B. TRADEMARK LICENSES
COUNTRY OR EFFECTIVE EXPIRATION
TERRITORY TRADEMARK LICENSOR LICENSEE DATE DATE
--------- --------- -------- -------- ---- ----
EXHIBIT B
-5-
EXHIBIT C
to Subsidiary Pledge and Security Agreement
COPYRIGHT SECURITY AGREEMENT
This COPYRIGHT SECURITY AGREEMENT, dated as of ____ __, 200_ (this
"SECURITY AGREEMENT"), is made by [NAME OF GRANTOR] (the "GRANTOR") in favor of
THE BANK OF NOVA SCOTIA, as administrative agent (together with its successor(s)
thereto in such capacity, the "ADMINISTRATIVE AGENT") for each of the Secured
Parties.
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of February 20, 2002 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among American Achievement Corporation (formerly
known as Commemorative Brands Holding Corp.), a Delaware corporation (the
"BORROWER"), the Lenders, General Electric Capital Corporation, as the
Syndication Agent for the Lenders, Bankers Trust Company, as the Documentation
Agent for the Lenders and the Administrative Agent, the Lenders and the Issuer
have extended Commitments to make Credit Extensions to the Borrower;
WHEREAS, in connection with the Credit Agreement, the Grantor has executed
and delivered a Subsidiary Pledge and Security Agreement, dated as of February
20, 2002 (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "AGREEMENT");
WHEREAS, pursuant to the Credit Agreement and the Agreement, the Grantor is
required to execute and deliver this Security Agreement and to grant to the
Administrative Agent a continuing security interest in all of the Copyright
Collateral (as defined below) to secure all Obligations; and
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Security Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of each Secured Party, as follows:
SECTION 8. DEFINITIONS. Unless otherwise defined herein or the context
otherwise requires, terms used in this Security Agreement, including its
preamble and recitals, have the meanings provided in the Agreement.
SECTION 9. GRANT OF SECURITY INTEREST. The Grantor hereby assigns, pledges,
hypothecates, charges, mortgages, delivers, and transfers to the Administrative
Agent, for its benefit and the ratable benefit of each other Secured Party, and
hereby grants to the Administrative Agent, for its benefit and the ratable
benefit of each other Secured Party, a continuing security interest in all of
the following Copyright Collateral (as defined below), whether now or hereafter
existing or acquired by the Grantor.
"COPYRIGHT COLLATERAL" means all copyrights of the Grantor, whether
statutory or common law, registered or unregistered and whether published or
unpublished, now or hereafter in force throughout the world including all of the
Grantor's right, title and interest in and to all copyrights registered in the
United States Copyright Office or anywhere else in the world and also including
the copyrights referred to in ITEM A of SCHEDULE I attached hereto, and
registrations and recordings thereof and all applications for registration
thereof, whether pending or in preparation, all copyright licenses, including
each copyright license referred to in ITEM B of SCHEDULE I attached hereto, the
right to xxx for past, present and future infringements of any of the foregoing,
all rights corresponding thereto, all extensions and renewals of any thereof and
all proceeds of the foregoing, including licenses, royalties, income, payments,
claims, damages and proceeds of suit.
SECTION 10. SECURITY AGREEMENT. This Security Agreement has been executed
and delivered by the Grantor for the purpose of registering the security
interest of the Administrative Agent in the Copyright Collateral with the United
States Copyright Office and corresponding offices in other countries of the
world. The security interest granted hereby has been granted as a supplement to,
and not in limitation of, the security interest granted to the Administrative
Agent for its benefit and the ratable benefit of each other Secured Party under
the Agreement. The Agreement (and all rights and remedies of the Administrative
Agent and each Secured Party thereunder) shall remain in full force and effect
in accordance with its terms.
SECTION 11. RELEASE OF LIENS. Upon (i) the Disposition of Copyright
Collateral in accordance with the Credit Agreement or (ii) the occurrence of the
Termination Date, the security interests granted herein shall automatically
terminate with respect to (A) such Copyright Collateral (in the case of CLAUSE
(i)) or (B) all Copyright Collateral (in the case of CLAUSE (ii)). Upon any such
Disposition or termination, the Administrative Agent will, at the Grantor's sole
expense, deliver to the Grantor, without any representations, warranties or
recourse of any kind whatsoever, all Copyright Collateral held by the
Administrative Agent hereunder, and execute and deliver to the Grantor such
documents as the Grantor shall reasonably request to evidence such termination.
SECTION 12. ACKNOWLEDGMENT. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Administrative Agent with respect to
the security interest in the Copyright Collateral granted hereby are more fully
set forth in the Agreement, the terms and provisions of which (including the
remedies provided for therein) are incorporated by reference herein as if fully
set forth herein.
SECTION 13. LOAN DOCUMENT. This Security Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof, including Article X thereof.
SECTION 14. COUNTERPARTS. This Security Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
* * * * *
EXHIBIT C
-2-
IN WITNESS WHEREOF, each of the parties hereto has caused this Security
Agreement to be duly executed and delivered by its Authorized Officer as of the
date first above written.
[NAME OF GRANTOR]
By:
-------------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By:
-------------------------------------
Name:
Title:
EXHIBIT C
-3-
SCHEDULE I
to Copyright Security Agreement
Item A. COPYRIGHTS/MASK WORKS
REGISTERED COPYRIGHTS/MASK WORKS
COUNTRY REGISTRATION NO. REGISTRATION DATEAUTHOR(S) TITLE
------- ---------------- ------------ ------------- -----
COPYRIGHT/MASK WORK PENDING REGISTRATION APPLICATIONS
COUNTRY SERIAL NO. FILING DATE AUTHOR(S) TITLE
------- ---------- ----------- --------- -----
COPYRIGHT/MASK WORK REGISTRATION APPLICATIONS IN PREPARATION
EXPECTED
COUNTRY DOCKET NO. FILING DATE AUTHOR(S) TITLE
------- ---------- ----------- --------- -----
Item B. COPYRIGHT/MASK WORK LICENSES
COUNTRY OR EFFECTIVE EXPIRATION
TERRITORY LICENSOR LICENSEE DATE DATE
--------- -------- -------- -------- ---------
EXHIBIT C
-4-
ANNEX I
to the Subsidiary Pledge and Security Agreement
SUPPLEMENT TO SUBSIDIARY
PLEDGE AND SECURITY AGREMENT
This SUPPLEMENT, dated as of ________________, _____ (this "SUPPLEMENT"),
is to the Subsidiary Pledge and Security Agreement, dated as of February 20,
2002 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "SUBSIDIARY PLEDGE AND SECURITY AGREEMENT"), among the
Grantors (such capitalized term, and other terms used in this Supplement, to
have the meanings set forth in Article I of the Subsidiary Pledge and Security
Agreement) from time to time party thereto, in favor of THE BANK OF NOVA SCOTIA,
as administrative agent (together with its successor(s) thereto in such
capacity, the "ADMINISTRATIVE AGENT") for each of the Secured Parties.
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of February 20, 2002 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among American Achievement Corporation (formerly
known as Commemorative Brands Holding Corp.), a Delaware corporation (the
"BORROWER"), the Lenders, General Electric Capital Corporation, as the
Syndication Agent for the Lenders, Bankers Trust Company, as the Documentation
Agent for the Lenders and the Administrative Agent, the Lenders and the Issuer
have extended Commitments to make Credit Extensions to the Borrower;
WHEREAS, pursuant to the provisions of Section 7.6 of the Subsidiary Pledge
and Security Agreement, each of the undersigned is becoming a Grantor under the
Subsidiary Pledge and Security Agreement; and
WHEREAS, each of the undersigned desires to become a "Grantor" under the
Subsidiary Pledge and Security Agreement in order to induce the Secured Parties
to continue to extend Credit Extensions under the Credit Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each of the undersigned agrees, for
the benefit of each Secured Party, as follows.
SECTION 15. PARTY TO SUBSIDIARY PLEDGE AND SECURITY AGREEMENT, ETC. In
accordance with the terms of the Subsidiary Pledge and Security Agreement, by
its signature below each of the undersigned hereby irrevocably agrees to become
a Grantor under the Subsidiary Pledge and Security Agreement with the same force
and effect as if it were an original signatory thereto and each of the
undersigned hereby (a) agrees to be bound by and comply with all of the terms
and provisions of the Subsidiary Pledge and Security Agreement applicable to it
as a Grantor and (b) represents and warrants that the representations and
warranties made by it as a Grantor thereunder are true and correct as of the
date hereof, unless stated to relate solely to an earlier date, in which case
such representations and warranties shall be true and correct as of such
earlier date. In furtherance of the foregoing, each reference to a "Grantor"
and/or "Grantors" in the Subsidiary Pledge and Security Agreement shall be
deemed to include each of the undersigned.
SECTION 16. REPRESENTATIONS. Each of the undersigned Grantor hereby
represents and warrants that this Supplement has been duly authorized, executed
and delivered by it and that this Supplement and the Subsidiary Pledge and
Security Agreement constitute the legal, valid and binding obligation of each of
the undersigned, enforceable against it in accordance with its terms.
SECTION 17. FULL FORCE OF SUBSIDIARY PLEDGE AND SECURITY AGREEMENT. Except
as expressly supplemented hereby, the Subsidiary Pledge and Security Agreement
shall remain in full force and effect in accordance with its terms.
SECTION 18. SEVERABILITY. Wherever possible each provision of this
Supplement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Supplement shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Supplement or the
Subsidiary Pledge and Security Agreement.
SECTION 19. GOVERNING LAW, ENTIRE AGREEMENT, ETC. THIS SUPPLEMENT SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF
NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK). This Supplement and the other
Loan Documents constitute the entire understanding among the parties hereto with
respect to the subject matter thereof and supersede any prior agreements,
written or oral, with respect thereto.
SECTION 20. COUNTERPARTS. This Supplement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
* * * * *
IN WITNESS WHEREOF, each of the parties hereto has caused this Supplement
to be duly executed and delivered by its Authorized Officer as of the date first
above written.
[NAME OF ADDITIONAL SUBSIDIARY]
By:
-------------------------------------
Name:
Title:
[NAME OF ADDITIONAL SUBSIDIARY]
By:
-------------------------------------
Name:
Title:
ACCEPTED AND AGREED FOR ITSELF
AND ON BEHALF OF THE SECURED PARTIES:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By:
-----------------------------
Name:
Title:
SCHEDULE I
to Supplement No.___
to Subsidiary Pledge and Security Agreement
([Name of Additional Subsidiary])
CORPORATION
COMMON STOCK
NUMBER
ISSUER (CORPORATE) OF AUTHORIZED OUTSTANDING % OF SHARES
------------------ CERT. # SHARES SHARES SHARES PLEDGED
------- ------ ------ ------ -------
LIMITED LIABILITY COMPANY INTERESTS
ISSUER (LIMITED LIABILITY % OF LIMITED LIABILITY TYPE OF LIMITED LIABILITY
COMPANY) COMPANY INTERESTS PLEDGED COMPANY INTERESTS PLEDGED
-------- ------------------------- -------------------------
PARTNERSHIP INTERESTS
% OF PARTNERSHIP % OF PARTNERSHIP
ISSUER (PARTNERSHIP) INTERESTS OWNED INTERESTS PLEDGED
-------------------- --------------- -----------------
SCHEDULE II
to Supplement No.___
to Subsidiary Pledge and Security Agreement
([Name of Additional Subsidiary])
Item A. Jurisdiction of Incorporation; Trade Names
Item B. Location of Inventory, Equipment
Item C. Federal Taxpayer Identification Number
Item D. Government Contracts
SCHEDULE III
to Supplement No.___
to Subsidiary Pledge and Security Agreement
([Name of Additional Subsidiary])
Item A. PATENTS
ISSUED PATENTS
COUNTRY PATENT NO. ISSUE DATE INVENTOR(S) TITLE
------- ---------- ---------- ----------- -----
PENDING PATENT APPLICATIONS
COUNTRY SERIAL NO FILING DATE INVENTOR(S) TITLE
------- --------- ----------- ----------- -----
PATENT APPLICATIONS IN PREPARATION
EXPECTED
COUNTRY DOCKET NO. FILING DATE INVENTOR(S) TITLE
------- ---------- ----------- ----------- -----
Item B. PATENT LICENSES
COUNTRY OR EFFECTIVE EXPIRATION SUBJECT
TERRITORY LICENSOR LICENSEE DATE DATE MATTER
--------- -------- -------- --------- ---------- ------
SCHEDULE IV
to Supplement No.___
to Subsidiary Pledge and Security Agreement
([Name of Additional Subsidiary])
Item A. TRADEMARKS
REGISTERED TRADEMARKS
Country Trademark Registration No. Registration Date
------- --------- ---------------- -----------------
PENDING TRADEMARK APPLICATIONS
COUNTRY TRADEMARK SERIAL NO. FILING DATE
------- --------- ---------- -----------
TRADEMARK APPLICATIONS IN PREPARATION
EXPECTED PRODUCTS/
COUNTRY TRADEMARK DOCKET NO. FILING DATE SERVICES
------- --------- ---------- ----------- --------
Item B. TRADEMARK LICENSES
COUNTRY OR EFFECTIVE EXPIRATION
TERRITORY TRADEMARK LICENSOR LICENSEE DATE DATE
--------- --------- -------- -------- -------- ---------
SCHEDULE V
to Supplement No. ___
to Subsidiary Pledge and Security Agreement
([Name of Additional Subsidiary])
Item A. COPYRIGHTS/MASK WORKS
REGISTERED COPYRIGHTS/MASK WORKS
COUNTRY REGISTRATION NO. REGISTRATION DATE AUTHOR(S) TITLE
------- ---------------- ----------------- --------- -----
COPYRIGHT/MASK WORK PENDING REGISTRATION APPLICATIONS
COUNTRY SERIAL NO. FILING DATE AUTHOR(S) TITLE
------- ---------- ----------- --------- -----
COPYRIGHT/MASK WORK REGISTRATION APPLICATIONS IN PREPARATION
EXPECTED
COUNTRY DOCKET NO. FILING DATE AUTHOR(S) TITLE
------- ---------- ----------- --------- -----
Item B. COPYRIGHT/MASK WORK LICENSES
COUNTRY OR EFFECTIVE EXPIRATION SUBJECT
TERRITORY LICENSOR LICENSEE DATE DATE MATTER
--------- -------- -------- --------- ---------- ------
SCHEDULE VI
to Supplement No.___
to Subsidiary Pledge and Security Agreement
([Name of Additional Subsidiary])
TRADE SECRET OR KNOW-HOW LICENSES
COUNTRY OR EFFECTIVE EXPIRATION SUBJECT
TERRITORY LICENSOR LICENSEE DATE DATE MATTER
--------- -------- -------- --------- ---------- ------
