EXHIBIT 10.5
EXECUTION COPY
GUARANTEE AND COLLATERAL AGREEMENT
dated as of
January 10, 2005,
among
XXX-XXXX CORPORATION,
XXX-XXXX SERVICES, INC.,
INTIRION CORPORATION,
THE SUBSIDIARIES OF THE BORROWERS
IDENTIFIED HEREIN
and
JPMORGAN CHASE BANK, N.A.,
as Collateral Agent
TABLE OF CONTENTS
GUARANTEE AND COLLATERAL AGREEMENT dated as of January 10, 2005,
among Xxx-Xxxx Corporation (the "PARENT BORROWER"), Xxx-Xxxx Services,
Inc. ("SERVICES"), Intirion Corporation (together with the Parent
Borrower and Services, the "BORROWERS"), the Subsidiaries of the
Borrowers identified herein and JPMORGAN CHASE BANK, N.A., as
Collateral Agent (the "COLLATERAL AGENT").
Reference is made to the Credit Agreement dated as of January 10, 2005 (as
amended, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"), among the Borrowers, the Lenders party thereto and JPMorgan Chase
Bank, N.A., as Administrative Agent. The Lenders have agreed to extend credit to
the Borrowers subject to the terms and conditions set forth in the Credit
Agreement. The obligations of the Lenders to extend such credit are conditioned
upon, among other things, the execution and delivery of this Agreement. The
Subsidiary Parties are affiliates of the Borrowers, will derive substantial
benefits from the extension of credit to the Borrowers pursuant to the Credit
Agreement and are willing to execute and deliver this Agreement in order to
induce the Lenders to extend such credit. Accordingly, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. CREDIT AGREEMENT. (a) Capitalized terms used in this
Agreement and not otherwise defined herein have the meanings specified in the
Credit Agreement. All terms defined in the
New York UCC (as defined herein) and
not defined in this Agreement have the meanings specified therein; the term
"instrument" shall have the meaning specified in Article 9 of the
New York UCC.
(b) The rules of construction specified in Section 1.03 of the Credit
Agreement also apply to this Agreement.
SECTION 1.02. OTHER DEFINED TERMS. As used in this Agreement, the following
terms have the meanings specified below:
"ACCOUNT DEBTOR" means any Person who is or who may become obligated to any
Grantor under, with respect to or on account of an Account.
"ARTICLE 9 COLLATERAL" has the meaning assigned to such term in Section
4.01.
"COLLATERAL" means Article 9 Collateral and Pledged Collateral.
"COPYRIGHT LICENSE" means any written agreement, now or hereafter in
effect, granting any right to any third party under any copyright now or
hereafter owned by any Grantor or that such Grantor otherwise has the right to
license, or granting any
right to any Grantor under any copyright now or hereafter owned by any third
party, and all rights of such Grantor under any such agreement.
"COPYRIGHTS" means all of the following now owned or hereafter acquired by
any Grantor: (a) all copyright rights in any work subject to the copyright laws
of the United States or any other country, whether as author, assignee,
transferee or otherwise, and (b) all registrations and applications for
registration of any such copyright in the United States or any other country,
including registrations, recordings, supplemental registrations and pending
applications for registration in the United States Copyright Office, including
those listed on Schedule III.
"CREDIT AGREEMENT" has the meaning assigned to such term in the preliminary
statement of this Agreement.
"DEPOSIT ACCOUNT CONTROL AGREEMENT" means an agreement substantially in the
form of Exhibit I, or any other form approved by the Collateral Agent, among the
applicable Grantor, the Collateral Agent and the applicable depositary bank.
"FEDERAL SECURITIES LAWS" has the meaning assigned to such term in Section
5.04.
"GENERAL INTANGIBLES" means all choses in action and causes of action and
all other intangible personal property of every kind and nature (other than
Accounts) now owned or hereafter acquired by any Grantor, including corporate or
other business records, indemnification claims, contract rights (including
rights under leases, whether entered into as lessor or lessee, Swap Agreements
and other agreements), Intellectual Property, goodwill, registrations,
franchises, tax refund claims and any letter of credit, guarantee, claim,
security interest or other security held by or granted to any Grantor to secure
payment by an Account Debtor of any of the Accounts.
"GRANTORS" means the Borrowers and the Subsidiary Parties.
"GUARANTORS" means the Subsidiary Parties.
"INTELLECTUAL PROPERTY" means all intellectual and similar property of
every kind and nature now owned or hereafter acquired by any Grantor, including
inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets,
confidential or proprietary technical and business information, know-how and
show-how.
"LICENSE" means any Patent License, Trademark License, Copyright License or
other license or sublicense agreement to which any Grantor is a party, including
those listed on Schedule III.
"LOAN DOCUMENT OBLIGATIONS" means (a) the due and punctual payment by the
Borrowers of (i) the principal of and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment
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or otherwise, (ii) each payment required to be made by the Borrowers under the
Credit Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of disbursements, interest thereon and
obligations to provide cash collateral and (iii) all other monetary obligations
of any of the Borrowers to any of the Secured Parties under the Credit Agreement
and each of the other Loan Documents, including obligations to pay fees, expense
reimbursement obligations and indemnification obligations, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), (b) the due and punctual performance of all other
obligations of the Borrowers under or pursuant to the Credit Agreement and each
of the other Loan Documents and (c) the due and punctual payment and performance
of all the obligations of each other Loan Party under or pursuant to this
Agreement and each of the other Loan Documents.
"
NEW YORK UCC" means the Uniform Commercial Code as from time to time in
effect in the State of
New York.
"OBLIGATIONS" means (a) Loan Document Obligations, (b) the due and punctual
payment and performance of all obligations of each Loan Party under or in
connection with each Swap Agreement that (i) is in effect on the Effective Date
with a counterparty that is a Lender or an Affiliate of a Lender as of the
Effective Date or (ii) is entered into after the Effective Date with any
counterparty that is a Lender or an Affiliate of a Lender at the time such Swap
Agreement is entered into (even if that counterparty should subsequently cease
to be a Lender (or an Affiliate of a Lender)) and (c) the due and punctual
payment and performance of all obligations in respect of overdrafts and related
liabilities owed to the Administrative Agent (in its individual capacity), any
Lender or any of their respective Affiliates and arising from treasury,
depositary and cash management services in connection with any automated
clearinghouse transfers of funds.
"PATENT LICENSE" means any written agreement, now or hereafter in effect,
granting to any third party any right to make, use or sell any invention on
which a patent, now or hereafter owned by any Grantor or that any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.
"PATENTS" means all of the following now owned or hereafter acquired by any
Grantor: (a) all letters patent of the United States or the equivalent thereof
in any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or the equivalent thereof
in any other country, including registrations, recordings and pending
applications in the United States Patent and Trademark Office or any similar
offices in any other country, including those listed on Schedule III, and (b)
all reissues, continuations, divisions, continuations-in-part, renewals or
extensions thereof, and the inventions disclosed or claimed therein, including
the right to make, use and/or sell the inventions disclosed or claimed therein.
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"PLEDGED COLLATERAL" has the meaning assigned to such term in Section 3.01.
"PLEDGED DEBT SECURITIES" has the meaning assigned to such term in Section
3.01.
"PLEDGED SECURITIES" means any promissory notes, stock certificates or
other securities now or hereafter included in the Pledged Collateral, including
all certificates, instruments or other documents representing or evidencing any
Pledged Collateral.
"PLEDGED STOCK" has the meaning assigned to such term in Section 3.01.
"PROCEEDS" has the meaning specified in Section 9-102 of the
New York UCC.
"SECURED PARTIES" means (a) the Lenders (and any Affiliate of any Lender to
which any obligation referred to in clause (c) of the definition of the term
"Obligations" is owed), (b) the Administrative Agent, (c) the Collateral Agent,
(d) the Issuing Bank, (e) each counterparty to any Swap Agreement with a Loan
Party the obligations under which constitute Obligations, (f) the beneficiaries
of each indemnification obligation undertaken by any Loan Party under any Loan
Document and (g) the successors and assigns of each of the foregoing.
"SECURITY INTEREST" has the meaning assigned to such term in Section 4.01.
"SUBSIDIARY PARTIES" means (a) the Subsidiaries identified on Schedule I
and (b) each other Subsidiary that becomes a party to this Agreement as a
Subsidiary Party after the Effective Date.
"TRADEMARK LICENSE" means any written agreement, now or hereafter in
effect, granting to any third party any right to use any trademark now or
hereafter owned by any Grantor or that any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any trademark now or
hereafter owned by any third party, and all rights of any Grantor under any such
agreement.
"TRADEMARKS" means all of the following now owned or hereafter acquired by
any Grantor: (a) all trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, trade
dress, logos, other source or business identifiers, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all registration and recording
applications filed in connection therewith, including registrations and
registration applications in the United States Patent and Trademark Office or
any similar offices in any State of the United States or any other country or
any political subdivision thereof, and all extensions or renewals thereof,
including those listed on Schedule III, (b) all goodwill associated therewith or
symbolized thereby and (c) all other assets, rights and interests that uniquely
reflect or embody such goodwill.
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ARTICLE II
GUARANTEE
SECTION 2.01. GUARANTEE. Each Guarantor unconditionally guarantees, jointly
with the other Guarantors and severally, as a primary obligor and not merely as
a surety, the due and punctual payment and performance of the Obligations. Each
of the Guarantors further agrees that the Obligations may be extended or
renewed, in whole or in part, without notice to or further assent from it, and
that it will remain bound upon its guarantee notwithstanding any extension or
renewal of any Obligation. Each of the Guarantors waives presentment to, demand
of payment from and protest to the Borrowers or any other Loan Party of any of
the Obligations, and also waives notice of acceptance of its guarantee and
notice of protest for nonpayment.
SECTION 2.02. GUARANTEE OF PAYMENT. Each of the Guarantors further agrees
that its guarantee hereunder constitutes a continuing guarantee of payment when
due and not of collection, and waives any right to require that any resort be
had by the Collateral Agent or any other Secured Party to any security held for
the payment of the Obligations or to any balance of any deposit account or
credit on the books of the Collateral Agent or any other Secured Party in favor
of the Borrowers or any other Person.
SECTION 2.03. NO LIMITATIONS. (a) Except for termination of a Guarantor's
obligations hereunder as expressly provided in Section 7.13, the obligations of
each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense or set-off, counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
each Guarantor hereunder shall not be discharged or impaired or otherwise
affected by (i) the failure of the Collateral Agent or any other Secured Party
to assert any claim or demand or to enforce any right or remedy under the
provisions of any Loan Document or otherwise; (ii) any rescission, waiver,
amendment or modification of, or any release from any of the terms or provisions
of, any Loan Document or any other agreement, including with respect to any
other Guarantor under this Agreement; (iii) the release of any security held by
the Collateral Agent or any other Secured Party for the Obligations or any of
them; (iv) any default, failure or delay, wilful or otherwise, in the
performance of the Obligations; or (v) any other act or omission that may or
might in any manner or to any extent vary the risk of any Guarantor or otherwise
operate as a discharge of any Guarantor as a matter of law or equity (other than
the indefeasible payment in full in cash of all the Obligations). Each Guarantor
expressly authorizes the Collateral Agent to take and hold security for the
payment and performance of the Obligations, to exchange, waive or release any or
all such security (with or without consideration), to enforce or apply such
security and direct the order and manner of any sale thereof in its sole
discretion or to release or substitute any one or more other guarantors or
obligors upon or in respect of the Obligations, all without affecting the
obligations of any Guarantor hereunder.
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(b) To the fullest extent permitted by applicable law, each Guarantor
waives any defense based on or arising out of any defense of the Borrowers or
any other Loan Party or the unenforceability of the Obligations or any part
thereof from any cause, or the cessation from any cause of the liability of the
Borrowers or any other Loan Party, other than the indefeasible payment in full
in cash of all the Obligations. The Collateral Agent and the other Secured
Parties may, at their election, foreclose on any security held by one or more of
them by one or more judicial or nonjudicial sales, accept an assignment of any
such security in lieu of foreclosure, compromise or adjust any part of the
Obligations, make any other accommodation with the Borrowers or any other Loan
Party or exercise any other right or remedy available to them against the
Borrowers or any other Loan Party, without affecting or impairing in any way the
liability of any Guarantor hereunder except to the extent the Obligations have
been fully and indefeasibly paid in full in cash. To the fullest extent
permitted by applicable law, each Guarantor waives any defense arising out of
any such election even though such election operates, pursuant to applicable
law, to impair or to extinguish any right of reimbursement or subrogation or
other right or remedy of such Guarantor against the Borrowers or any other Loan
Party, as the case may be, or any security.
SECTION 2.04. REINSTATEMENT. Each of the Guarantors agrees that its
guarantee hereunder shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by the Collateral Agent or any other
Secured Party upon the bankruptcy or reorganization of the Borrowers, any other
Loan Party or otherwise.
SECTION 2.05. AGREEMENT TO PAY; SUBROGATION. In furtherance of the
foregoing and not in limitation of any other right that the Collateral Agent or
any other Secured Party has at law or in equity against any Guarantor by virtue
hereof, upon the failure of the Borrowers or any other Loan Party to pay any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each Guarantor hereby
promises to and will forthwith pay, or cause to be paid, to the Collateral Agent
for distribution to the applicable Secured Parties in cash the amount of such
unpaid Obligation. Upon payment by any Guarantor of any sums to the Collateral
Agent as provided above, all rights of such Guarantor against the Borrowers or
any other Loan Party arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be
subject to Article VI.
SECTION 2.06. INFORMATION. Each Guarantor assumes all responsibility for
being and keeping itself informed of the Borrowers' and each other Loan Party's
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Obligations and the nature, scope and extent of the
risks that such Guarantor assumes and incurs hereunder, and agrees that none of
the Collateral Agent or the other Secured Parties will have any duty to advise
such Guarantor of information known to it or any of them regarding such
circumstances or risks.
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ARTICLE III
PLEDGE OF SECURITIES
SECTION 3.01. PLEDGE. As security for the payment or performance, as the
case may be, in full of the Obligations, each Grantor hereby assigns and pledges
to the Collateral Agent, its successors and assigns, for the ratable benefit of
the Secured Parties, and hereby grants to the Collateral Agent, its successors
and assigns, for the ratable benefit of the Secured Parties, a security interest
in all of such Grantor's right, title and interest in, to and under (a) the
shares of capital stock and other Equity Interests owned by it and listed on
Schedule II and any other Equity Interests obtained in the future by such
Grantor and the certificates representing all such Equity Interests (the
"PLEDGEDSTOCK"); PROVIDED that the Pledged Stock shall not include (i) Equity
Interests of TLP or (ii) more than 65% of the issued and outstanding voting
Equity Interests of any Foreign Subsidiary, (b)(i) the debt securities owned by
it and listed opposite the name of such Grantor on Schedule II, (ii) any debt
securities in the future issued to such Grantor and (iii) the promissory notes
and any other instruments evidencing such debt securities (the "PLEDGED DEBT
SECURITIES"), (c) all other property that may be delivered to and held by the
Collateral Agent pursuant to the terms of this Section 3.01, (d) subject to
Section 3.06, all payments of principal or interest, dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of, in exchange for or upon the conversion of,
and all other Proceeds received in respect of, the securities referred to in
clauses (a) and (b) above, (e) subject to Section 3.06, all rights and
privileges of such Grantor with respect to the securities and other property
referred to in clauses (a), (b), (c) and (d) above and (f) all Proceeds of any
of the foregoing (the items referred to in clauses (a) through (e) above being
collectively referred to as the "PLEDGED COLLATERAL").
TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Collateral Agent, its successors and assigns, for the ratable benefit
of the Secured Parties, forever; subject, HOWEVER, to the terms, covenants and
conditions hereinafter set forth.
SECTION 3.02. DELIVERY OF THE PLEDGED COLLATERAL. (a) Each Grantor agrees
promptly to deliver or cause to be delivered to the Collateral Agent any and all
Pledged Securities.
(b) Each Grantor will cause any Indebtedness for borrowed money owed to
such Grantor by any Person to be evidenced by a duly executed promissory note
that is pledged and delivered to the Collateral Agent pursuant to the terms
hereof.
(c) Upon delivery to the Collateral Agent, (i) any Pledged Securities shall
be accompanied by stock powers duly executed in blank or other instruments of
transfer satisfactory to the Collateral Agent and by such other instruments and
documents as the Collateral Agent may reasonably request and (ii) all other
property comprising part of the Pledged Collateral shall be accompanied by
proper instruments of assignment duly executed by the applicable Grantor and
such other instruments or documents as the
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Collateral Agent may reasonably request. Each delivery of Pledged Securities
shall be accompanied by a schedule describing the securities, which schedule
shall be attached hereto as Schedule II and made a part hereof; PROVIDED that
failure to attach any such schedule hereto shall not affect the validity of such
pledge of such Pledged Securities. Each schedule so delivered shall supplement
any prior schedules so delivered.
SECTION 3.03. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Grantors
jointly and severally represent, warrant and covenant to and with the Collateral
Agent, for the benefit of the Secured Parties, that:
(a) Schedule II correctly sets forth the percentage of the issued and
outstanding units of each class of the Equity Interests of the issuer thereof
represented by the Pledged Stock and includes all Equity Interests, debt
securities and promissory notes required to be pledged hereunder in order to
satisfy the Collateral and Guarantee Requirement;
(b) the Pledged Stock and Pledged Debt Securities have been duly and
validly authorized and issued by the issuers thereof and (i) in the case of
Pledged Stock of issuers that are corporations, are fully paid and nonassessable
and (ii) in the case of Pledged Debt Securities, are legal, valid and binding
obligations of the issuers thereof; PROVIDED, HOWEVER, that to the extent the
Pledged Stock and Pledged Debt Securities are issued by Persons which are not
Subsidiaries, the representation and warranty made in clause (b) is made only to
the Grantor's knowledge;
(c) except for the security interests granted hereunder, each of the
Grantors (i) is and, subject to any transfers made in compliance with the Credit
Agreement, will continue to be the direct owner, beneficially and of record, of
the Pledged Securities indicated on Schedule II as owned by such Grantor, (ii)
holds the same free and clear of all Liens, other than Liens created by this
Agreement, Permitted Encumbrances and transfers made in compliance with the
Credit Agreement, (iii) will make no assignment, pledge, hypothecation or
transfer of, or create or permit to exist any security interest in or other Lien
on, the Pledged Collateral, other than Liens created by this Agreement,
Permitted Encumbrances and transfers made in compliance with the Credit
Agreement, and (iv) will defend its title or interest thereto or therein against
any and all Liens (other than the Lien created by this Agreement and Permitted
Encumbrances), however, arising, of all Persons whomsoever;
(d) except for restrictions and limitations imposed by the Loan Documents
or securities laws generally, the Pledged Collateral is and will continue to be
freely transferable and assignable, and none of the Pledged Collateral is or
will be subject to any option, right of first refusal, shareholders agreement,
charter or by-law provisions or contractual restriction of any nature that might
prohibit, impair, delay or otherwise affect the pledge of such Pledged
Collateral hereunder, the sale or disposition thereof pursuant hereto or the
exercise by the Collateral Agent of rights and remedies hereunder;
(e) each of the Grantors has the power and authority to pledge the Pledged
Collateral pledged by it hereunder in the manner hereby done or contemplated;
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(f) no consent or approval of any Governmental Authority, any securities
exchange or any other Person was or is necessary to the validity of the pledge
of the Pledged Collateral effected hereby (other than such as have been obtained
and are in full force and effect);
(g) by virtue of the execution and delivery by the Grantors of this
Agreement, when any Pledged Securities are delivered to the Collateral Agent in
accordance with this Agreement, the Collateral Agent will obtain a legal, valid
and perfected first priority lien upon and security interest in such Pledged
Securities as security for the payment and performance of the Obligations; and
(h) the pledge effected hereby is effective to vest in the Collateral
Agent, for the benefit of the Secured Parties, the rights of the Collateral
Agent in the Pledged Collateral as set forth herein.
SECTION 3.04. CERTIFICATION OF LIMITED LIABILITY COMPANY AND LIMITED
PARTNERSHIP INTERESTS. Each interest in any limited liability company or limited
partnership in which any Grantor holds more than a 50% interest in the voting
and total equity interests and pledged hereunder shall be represented by a
certificate, shall be a "security" within the meaning of Article 8 of the
New
York UCC and shall be governed by Article 8 of the
New York UCC.
SECTION 3.05. REGISTRATION IN NOMINEE NAME; DENOMINATIONS. The Collateral
Agent, on behalf of the Secured Parties, shall have the right (in its sole and
absolute discretion) to hold the Pledged Securities in its own name as pledgee,
the name of its nominee (as pledgee or as sub-agent) or the name of the
applicable Grantor, endorsed or assigned in blank or in favor of the Collateral
Agent. Each Grantor will promptly give to the Collateral Agent copies of any
notices or other communications received by it in its capacity as holder of and
with respect to Pledged Securities registered in the name of such Grantor. The
Collateral Agent shall at all times have the right to exchange the certificates
representing Pledged Securities for certificates of smaller or larger
denominations for any purpose consistent with this Agreement.
SECTION 3.06. VOTING RIGHTS; DIVIDENDS AND INTEREST. (a) Unless and until
an Event of Default shall have occurred and be continuing and the Collateral
Agent shall have notified the Grantors that their rights under this Section 3.06
are being suspended:
(i) Each Grantor shall be entitled to exercise any and all voting
and/or other consensual rights and powers inuring to an owner of
Pledged Securities or any part thereof for any purpose consistent with
the terms of this Agreement, the Credit Agreement and the other Loan
Documents; PROVIDED that such rights and powers shall not be exercised
in any manner that could materially and adversely affect the rights
inuring to a holder of any Pledged Securities or the rights and
remedies of any of the Collateral Agent or the other Secured Parties
under this Agreement or the Credit Agreement or any other Loan
Document or the ability of the Secured Parties to exercise the same.
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(ii) The Collateral Agent shall execute and deliver to each
Grantor, or cause to be executed and delivered to such Grantor, all
such proxies, powers of attorney and other instruments as such Grantor
may reasonably request for the purpose of enabling such Grantor to
exercise the voting and/or consensual rights and powers it is entitled
to exercise pursuant to subparagraph (i) above.
(iii) Each Grantor shall be entitled to receive and retain any
and all dividends, interest, principal and other distributions paid on
or distributed in respect of the Pledged Securities to the extent and
only to the extent that such dividends, interest, principal and other
distributions are permitted by, and otherwise paid or distributed in
accordance with, the terms and conditions of the Credit Agreement, the
other Loan Documents and applicable laws; PROVIDED that any noncash
dividends, interest, principal or other distributions that would
constitute Pledged Stock or Pledged Debt Securities, whether resulting
from a subdivision, combination or reclassification of the outstanding
Equity Interests of the issuer of any Pledged Securities or received
in exchange for Pledged Securities or any part thereof, or in
redemption thereof, or as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer may be a
party or otherwise, shall be and become part of the Pledged
Collateral, and, if received by any Grantor, shall not be commingled
by such Grantor with any of its other funds or property but shall be
held separate and apart therefrom, shall be held in trust for the
benefit of the Collateral Agent and shall be forthwith delivered to
the Collateral Agent in the same form as so received (with any
necessary endorsement).
(b) Upon the occurrence and during the continuance of an Event of Default,
after the Collateral Agent shall have notified the Grantors of the suspension of
their rights under paragraph (a)(iii) of this Section 3.06, then all rights of
any Grantor to dividends, interest, principal or other distributions that such
Grantor is authorized to receive pursuant to paragraph (a)(iii) of this Section
3.06 shall cease, and all such rights shall thereupon become vested in the
Collateral Agent, which shall have the sole and exclusive right and authority to
receive and retain such dividends, interest, principal or other distributions.
All dividends, interest, principal or other distributions received by any
Grantor contrary to the provisions of this Section 3.06 shall be held in trust
for the benefit of the Collateral Agent, shall be segregated from other property
or funds of such Grantor and shall be forthwith delivered to the Collateral
Agent upon demand in the same form as so received (with any necessary
endorsement). Any and all money and other property paid over to or received by
the Collateral Agent pursuant to the provisions of this paragraph (b) shall be
retained by the Collateral Agent in an account to be established by the
Collateral Agent upon receipt of such money or other property and shall be
applied in accordance with the provisions of Section 5.02. After all Events of
Default have been cured or waived and the Parent Borrower has delivered to the
Collateral Agent a certificate to that effect, the Collateral Agent shall
promptly repay to each Grantor (without interest) all dividends, interest,
principal or other distributions that such Grantor would otherwise be permitted
to retain pursuant to the terms of paragraph (a)(iii) of this Section 3.06 and
that remain in such account.
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(c) Upon the occurrence and during the continuance of an Event of Default,
after the Collateral Agent shall have notified the Grantors of the suspension of
their rights under paragraph (a)(i) of this Section 3.06, all rights of any
Grantor to exercise the voting and consensual rights and powers it is entitled
to exercise pursuant to paragraph (a)(i) of this Section 3.06 and the
obligations of the Collateral Agent under paragraph (a)(ii) of this Section 3.06
shall cease and all such rights shall thereupon become vested in the Collateral
Agent which shall have the sole and exclusive right and authority to exercise
such voting and consensual rights and powers; PROVIDED that, unless otherwise
directed by the Required Lenders, the Collateral Agent shall have the right from
time to time following and during the continuance of an Event of Default to
permit the Grantors to exercise such rights.
(d) Any notice given by the Collateral Agent to the Grantors suspending
their rights under paragraph (a) of this Section 3.06 (i) may be given by
telephone if promptly confirmed in writing, (ii) may be given to one or more of
the Grantors at the same or different times and (iii) may suspend the rights of
the Grantors under paragraph (a)(i) or paragraph (a)(iii) in part without
suspending all such rights (as specified by the Collateral Agent in its sole and
absolute discretion) and without waiving or otherwise affecting the Collateral
Agent's rights to give additional notices from time to time suspending other
rights so long as an Event of Default has occurred and is continuing.
ARTICLE IV
SECURITY INTERESTS IN PERSONAL PROPERTY
SECTION 4.01. SECURITY INTEREST. (a) As security for the payment or
performance, as the case may be, in full of the Obligations, each Grantor hereby
assigns and pledges to the Collateral Agent, its successors and assigns, for the
ratable benefit of the Secured Parties, and hereby grants to the Collateral
Agent, its successors and assigns, for the ratable benefit of the Secured
Parties, a security interest (the "SECURITY INTEREST") in all right, title or
interest in or to any and all of the following assets and properties now owned
or at any time hereafter acquired by such Grantor or in which such Grantor now
has or at any time in the future may acquire any right, title or interest
(collectively, the "ARTICLE 9 COLLATERAL"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all cash and Deposit Accounts;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
11
(viii) all Inventory;
(ix) all Investment Property;
(x) Letter of Credit rights;
(xi) all commercial tort claims against any Grantor (as
identified on Schedule IV hereto);
(xii) all books and records pertaining to the Article 9
Collateral; and
(xiii) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral security
and guarantees given by any Person with respect to any of the
foregoing; PROVIDED, HOWEVER, that notwithstanding any of the other
provisions in this Article IV, this Agreement shall not constitute a
grant of security interest in (and the term "Collateral" shall not
include) any "Collateral" as such term is defined in Section 16 of the
Mortgage and Security Agreement dated as of March 5, 2004 (as amended,
supplemented or otherwise modified as of the date hereof), between
Services and Citizens Bank of Massachusetts ("CITIZENS") granted in
connection with the Loan Agreement dated as of March 5, 2004 (as
amended, supplemented or otherwise modified as of the date hereof),
between Services and Citizens.
(b) Each Grantor hereby irrevocably authorizes the Collateral
Agent at any time and from time to time to file in any relevant jurisdiction any
initial financing statements (including fixture filings) with respect to the
Article 9 Collateral or any part thereof and amendments thereto that (i)
indicate the Collateral as all assets of such Pledgor, and (ii) contain the
information required by Article 9 of the Uniform Commercial Code of each
applicable jurisdiction for the filing of any financing statement or amendment,
including (A) whether such Grantor is an organization, the type of organization
and any organizational identification number issued to such Grantor and (B) in
the case of a financing statement filed as a fixture filing, a sufficient
description of the real property to which such Article 9 Collateral relates.
Each Grantor agrees to provide such information to the Collateral Agent promptly
upon request. The Collateral Agent hereby agrees that it shall not file any
"fixture filings" and the Grantors shall have no obligation to provide
information required for any "fixture filings" except in respect of any fixtures
associated with any Mortgaged Property.
Each Grantor also ratifies its authorization for the
Collateral Agent to file in any relevant jurisdiction any initial financing
statements or amendments thereto if filed prior to the date hereof.
The Collateral Agent is further authorized to file with the
United States Patent and Trademark Office or United States Copyright Office (or
any successor office or any similar office in any other country) such documents
as may be necessary or advisable for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by each
Grantor, without the signature of any Grantor, and naming any Grantor or the
Grantors as debtors and the Collateral Agent as secured party.
12
(c) The Security Interest is granted as security only and shall not subject
the Collateral Agent or any other Secured Party to, or in any way alter or
modify, any obligation or liability of any Grantor with respect to or arising
out of the Article 9 Collateral.
SECTION 4.02. REPRESENTATIONS AND WARRANTIES. The Grantors jointly and
severally represent and warrant to the Collateral Agent and the Secured Parties
that:
(a) Each Grantor has good and valid rights in and title to the Article 9
Collateral with respect to which it has purported to grant a Security Interest
hereunder and has full power and authority to grant to the Collateral Agent the
Security Interest in such Article 9 Collateral pursuant hereto and to execute,
deliver and perform its obligations in accordance with the terms of this
Agreement, without the consent or approval of any other Person other than any
consent or approval that has been obtained.
(b) The Perfection Certificate has been duly prepared, completed and
executed and the information set forth therein, including the exact legal name
of each Grantor, is correct and complete as of the Effective Date. Uniform
Commercial Code financing statements (including fixture filings, if required
under Section 4.01(b)) or other appropriate filings, recordings or registrations
prepared by the Collateral Agent based upon the information provided to the
Collateral Agent in the Perfection Certificate for filing in each governmental,
municipal or other office specified in Section 2 of the Perfection Certificate
(or specified by notice from any Borrower to the Collateral Agent after the
Effective Date in the case of filings, recordings or registrations required by
Section 5.03 or Section 5.12 of the Credit Agreement), are all the filings,
recordings and registrations (other than filings required to be made in the
United States Patent and Trademark Office and the United States Copyright Office
in order to perfect the Security Interest in Article 0 Xxxxxxxxxx xxxxxxxxxx xx
Xxxxxx Xxxxxx Patents, Trademarks and Copyrights) that are necessary to publish
notice of and protect the validity of and to establish a legal, valid and
perfected security interest in favor of the Collateral Agent (for the ratable
benefit of the Secured Parties) in respect of all Article 9 Collateral in which
the Security Interest may be perfected by filing, recording or registration in
the United States (or any political subdivision thereof) and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation statements. Each
Grantor represents and warrants that a fully executed agreement in the form
hereof or in a form reasonably satisfactory to the Collateral Agent containing a
description of all Article 9 Collateral consisting of Intellectual Property with
respect to United States Patents and United States registered Trademarks (and
Trademarks for which United States registration applications are pending) and
United States registered Copyrights have been delivered to the Collateral Agent
for recording by the United States Patent and Trademark Office and the United
States Copyright Office pursuant to 35 U.S.C. Section 261, 15 U.S.C. Section
1060 or 17 U.S.C. Section 205 and the regulations thereunder, as applicable to
protect the validity of and to establish a legal, valid and perfected security
interest in favor of the Collateral Agent (for the ratable benefit of the
Secured Parties) in respect of all Article 9 Collateral consisting of Patents,
Trademarks and Copyrights in which a security interest may be perfected by
filing, recording or registration in the
13
United States (or any political subdivision thereof) and its territories and
possessions, and no further or subsequent filing, refiling, recording,
rerecording, registration or reregistration is necessary (other than such
actions as are necessary to perfect the Security Interest with respect to any
Article 9 Collateral consisting of Patents, Trademarks and Copyrights (or
registration or application for registration thereof) acquired or developed
after the date hereof).
(c) The Security Interest constitutes (i) a legal and valid security
interest in all the Article 9 Collateral securing the payment and performance of
the Obligations, (ii) subject to the filings described in Section 4.02(b), a
perfected security interest in all Article 9 Collateral in which a security
interest may be perfected by filing, recording or registering a financing
statement or analogous document in the United States (or any political
subdivision thereof) pursuant to the Uniform Commercial Code and (iii) a
security interest that shall be perfected in all Article 9 Collateral in which a
security interest may be perfected upon the receipt and recording of this
Agreement with the United States Patent and Trademark Office and the United
States Copyright Office, as applicable, within the three-month period
(commencing as of the date hereof) pursuant to 35 U.S.C. Section 261 or 15
U.S.C. Section 1060 or the one month period (commencing as of the date hereof)
pursuant to 17 U.S.C. Section 205. The Security Interest is and shall be prior
to any other Lien on any of the Article 9 Collateral, other than Permitted
Encumbrances that have priority as a matter of law and Liens expressly permitted
to be prior to the Security Interest pursuant to Section 6.02 of the Credit
Agreement.
(d) The Article 9 Collateral is owned by the Grantors free and clear of any
Lien, except for Liens expressly permitted pursuant to Section 6.02 of the
Credit Agreement. None of the Grantors has filed or consented to the filing of
(i) any financing statement or analogous document under the Uniform Commercial
Code or any other applicable laws covering any Article 9 Collateral, (ii) any
assignment in which any Grantor assigns any Collateral or any security agreement
or similar instrument covering any Article 9 Collateral with the United States
Patent and Trademark Office or the United States Copyright Office or (iii) any
assignment in which any Grantor assigns any Article 9 Collateral or any security
agreement or similar instrument covering any Article 9 Collateral with any
foreign governmental, municipal or other office, which financing statement or
analogous document, assignment, security agreement or similar instrument is
still in effect, except, in each case, for Liens expressly permitted pursuant to
Section 6.02 of the Credit Agreement.
SECTION 4.03. COVENANTS. (a) Each Grantor agrees promptly to notify the
Collateral Agent in writing of any change (i) in corporate name, (ii) in the
location of its chief executive office, its principal place of business or any
office in which it maintains books or records relating to Article 9 Collateral
owned by it, (iii) in its identity or type of organization or corporate
structure, (iv) in its Federal Taxpayer Identification Number or organizational
identification number or (v) in its jurisdiction of organization. Each Grantor
agrees to promptly provide the Collateral Agent with certified organizational
documents reflecting any of the changes described in the first sentence of this
paragraph. Each Grantor agrees not to effect or permit any change referred to in
the preceding sentence unless all filings have been made under the Uniform
Commercial
14
Code or otherwise that are required in order for the Collateral Agent to
continue at all times following such change to have a valid, legal and perfected
first priority security interest in all the Article 9 Collateral. Each Grantor
agrees promptly to notify the Collateral Agent if any material portion of the
Article 9 Collateral owned or held by such Grantor is damaged or destroyed.
(b) Each Grantor agrees to (i) maintain, at its own cost and expense, such
complete and accurate records with respect to the Article 9 Collateral owned by
it as is consistent with its current practices and in accordance with such
prudent and standard practices used in industries that are the same as or
similar to those in which such Grantor is engaged, but in any event to include
complete accounting records indicating all payments and proceeds received with
respect to any part of the Article 9 Collateral and (ii) at such time or times
as the Collateral Agent may reasonably request, promptly to prepare and deliver
to the Collateral Agent a duly certified schedule or schedules in form and
detail consistent with each Grantor's current practices showing the identity,
amount and location of any and all Article 9 Collateral; PROVIDED that upon the
occurrence and during the continuance of an Event of Default, such certified
schedules or schedules shall be prepared and delivered in form and detail
satisfactory to the Collateral Agent.
(c) Each Grantor shall, at its own expense, take any and all actions
necessary to defend title to the Article 9 Collateral against all Persons and to
defend the Security Interest of the Collateral Agent in the Article 9 Collateral
and the priority thereof against any Lien not expressly permitted pursuant to
Section 6.02 of the Credit Agreement.
(d) Each Grantor agrees, at its own expense, to execute, acknowledge,
deliver and cause to be duly filed all such further instruments and documents
and take all such actions as the Collateral Agent may from time to time
reasonably request to better assure, preserve, protect and perfect the Security
Interest and the rights and remedies created hereby, including the payment of
any fees and taxes required in connection with the execution and delivery of
this Agreement, the granting of the Security Interest and the filing of any
financing statements (including fixture filings) or other documents in
connection herewith or therewith; PROVIDED that it is understood and agreed that
such actions shall not include the requirement that any Grantor obtain any third
party consent or approval arising under any Laundry Facility Agreement. If any
amount payable under or in connection with any of the Article 9 Collateral shall
be or become evidenced by any promissory note or other instrument, such note or
instrument shall be immediately pledged and delivered to the Collateral Agent,
duly endorsed in a manner satisfactory to the Collateral Agent.
Without limiting the generality of the foregoing, each Grantor hereby
authorizes the Collateral Agent, with prompt notice thereof to the Grantors, to
supplement this Agreement by supplementing Schedule III or adding additional
schedules hereto to specifically identify any asset or item that may constitute
Copyrights, Licenses, Patents or Trademarks; PROVIDED that any Grantor shall
have the right, exercisable within 10 days after it has been notified in writing
by the Collateral Agent of the specific identification of such Collateral, to
advise the Collateral Agent in writing of any
15
inaccuracy of the representations and warranties made by such Grantor hereunder
with respect to such Collateral. Each Grantor agrees that it will use
commercially reasonable efforts to take such action as shall be necessary in
order that all representations and warranties hereunder shall be true and
correct with respect to such Collateral within 30 days after the date it has
been notified in writing by the Collateral Agent of the specific identification
of such Collateral.
(e) The Collateral Agent and such Persons as the Collateral Agent may
reasonably designate shall have the right, upon reasonable prior notice, at the
Grantors' own cost and expense, to inspect the Article 9 Collateral, all records
related thereto (and to make extracts and copies from such records) and the
premises upon which any of the Article 9 Collateral is located, to discuss the
Grantors' affairs with the officers of the Grantors and their independent
accountants and to verify under reasonable procedures the validity, amount,
quality, quantity, value, condition and status of, or any other matter relating
to, the Article 9 Collateral, including, upon the occurrence and during the
continuance of an Event of Default in the case of Accounts or Article 9
Collateral in the possession of any third person, by contacting Account Debtors
or the third person possessing such Article 9 Collateral for the purpose of
making such a verification. Subject to the provisions of Section 9.12 of the
Credit Agreement, the Collateral Agent shall have the absolute right to share
any information it gains from such inspection or verification with any Secured
Party.
(f) At its option, the Collateral Agent may, after notice and demand to the
Grantors to do so, discharge past due taxes, assessments, charges, fees, Liens,
security interests or other encumbrances at any time levied or placed on the
Article 9 Collateral and not permitted pursuant to Section 6.02 of the Credit
Agreement, and, after notice and demand to the Grantors to do so, may pay for
the maintenance and preservation of the Article 9 Collateral to the extent any
Grantor fails to do so as required by the Credit Agreement or this Agreement,
and each Grantor jointly and severally agrees to reimburse the Collateral Agent
on demand for any payment made or any expense incurred by the Collateral Agent
pursuant to the foregoing authorization; PROVIDED that nothing in this paragraph
shall be interpreted as excusing any Grantor from the performance of, or
imposing any obligation on the Collateral Agent or any Secured Party to cure or
perform, any covenants or other promises of any Grantor with respect to taxes,
assessments, charges, fees, Liens, security interests or other encumbrances and
maintenance as set forth herein or in the other Loan Documents.
(g) If at any time any Grantor shall take a security interest in any
property of an Account Debtor or any other Person to secure payment and
performance of an Account, such Grantor shall promptly assign such security
interest to the Collateral Agent. Such assignment need not be filed of public
record unless necessary to continue the perfected status of the security
interest against creditors of and transferees from the Account Debtor or other
Person granting the security interest.
(h) Each Grantor shall remain liable to observe and perform all the
conditions and obligations to be observed and performed by it under each
contract, agreement or instrument relating to the Article 9 Collateral, all in
accordance with the
16
terms and conditions thereof, and each Grantor jointly and severally agrees to
indemnify and hold harmless the Collateral Agent and the Secured Parties from
and against any and all liability for such performance.
(i) None of the Grantors shall make or permit to be made an assignment,
pledge or hypothecation of the Article 9 Collateral or shall grant any other
Lien in respect of the Article 9 Collateral, except as permitted by the Credit
Agreement. None of the Grantors shall make or permit to be made any transfer of
the Article 9 Collateral and each Grantor shall remain at all times in
possession of the Article 9 Collateral owned by it, except that unless and until
the Collateral Agent shall notify the Grantors that an Event of Default shall
have occurred and be continuing and that during the continuance thereof the
Grantors shall not sell, convey, lease, assign, transfer or otherwise dispose of
any Article 9 Collateral (which notice may be given by telephone if promptly
confirmed in writing), the Grantors may use and dispose of the Article 9
Collateral in any lawful manner not inconsistent with the provisions of this
Agreement, the Credit Agreement or any other Loan Document. Without limiting the
generality of the foregoing, each Grantor agrees that it shall not permit any
Inventory to be in the possession or control of any warehouseman, agent, bailee,
or processor at any time unless such warehouseman, bailee, agent or processor
shall have been notified of the Security Interest and shall have acknowledged in
writing, in form and substance reasonably satisfactory to the Collateral Agent,
that such warehouseman, agent, bailee or processor holds the Inventory for the
benefit of the Collateral Agent subject to the Security Interest and shall act
upon the instructions of the Collateral Agent without further consent from the
Grantor, and that such warehouseman, agent, bailee or processor further agrees
to waive and release any Lien held by it with respect to such Inventory, whether
arising by operation of law or otherwise.
(j) None of the Grantors will, without the Collateral Agent's prior written
consent, grant any extension of the time of payment of any Accounts included in
the Article 9 Collateral, compromise, compound or settle the same for less than
the full amount thereof, release, wholly or partly, any Person liable for the
payment thereof or allow any credit or discount whatsoever thereon, other than
extensions, compromises, settlements, releases, credits or discounts granted or
made in the ordinary course of business and consistent with its current
practices.
(k) The Grantors, at their own expense, shall maintain or cause to be
maintained insurance covering physical loss or damage to the Inventory and
Equipment in accordance with the requirements set forth in Schedule V hereto and
Section 5.07 of the Credit Agreement. Each Grantor irrevocably makes,
constitutes and appoints the Collateral Agent (and all officers, employees or
agents designated by the Collateral Agent) as such Grantor's true and lawful
agent (and attorney-in-fact) for the purpose, upon the occurrence and during the
continuance of an Event of Default, of making, settling and adjusting claims in
respect of Article 9 Collateral under policies of insurance, endorsing the name
of such Grantor on any check, draft, instrument or other item of payment for the
proceeds of such policies of insurance and for making all determinations and
decisions with respect thereto. In the event that any Grantor at any time or
times shall fail to obtain or maintain any of the policies of insurance required
hereby or under
17
the Credit Agreement or to pay any premium in whole or part relating thereto,
the Collateral Agent may, without waiving or releasing any obligation or
liability of the Grantors hereunder or any Event of Default, in its sole
discretion, obtain and maintain such policies of insurance and pay such premium
and take any other actions with respect thereto as the Collateral Agent deems
advisable. All sums disbursed by the Collateral Agent in connection with this
paragraph, including reasonable attorneys' fees, court costs, expenses and other
charges relating thereto, shall be payable, upon demand, by the Grantors to the
Collateral Agent and shall be additional Obligations secured hereby.
(l) Each Grantor shall maintain, in form and manner reasonably satisfactory
to the Collateral Agent, records of its Chattel Paper and its books, records and
documents evidencing or pertaining thereto.
SECTION 4.04. OTHER ACTIONS. In order to further insure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
the Security Interest, each Grantor agrees, in each case at such Grantor's own
expense, to take the following actions with respect to the following Article 9
Collateral:
(a) INSTRUMENTS. If any Grantor shall at any time hold or acquire any
Instruments, such Grantor shall forthwith endorse, assign and deliver the same
to the Collateral Agent, accompanied by such instruments of transfer or
assignment duly executed in blank as the Collateral Agent may from time to time
reasonably request.
(b) DEPOSIT ACCOUNTS. Schedule VI identifies each deposit account of the
Grantors as of the date hereof. In accordance with Section 5.15(b) of the Credit
Agreement, for each deposit account held by any Grantor at Citizens Bank of
Massachusetts marked with an asterisk on Schedule VI and for each deposit
account that any Grantor at any time opens or maintains after the date hereof as
the Collateral Agent may require, such Grantor shall, in accordance with Section
5.15(b) of the Credit Agreement, either (i) cause the depositary bank to agree
to comply with instructions from the Collateral Agent to such depositary bank
directing the disposition of funds from time to time credited to such deposit
account, without further consent of such Grantor or any other Person, pursuant a
Deposit Account Control Agreement, or (ii) arrange for the Collateral Agent to
become the customer of the depositary bank with respect to the deposit account,
with the Grantor being permitted, only with the consent of the Collateral Agent,
to exercise rights to withdraw funds from such deposit account. The Collateral
Agent agrees with each Grantor that the Collateral Agent shall not give any such
instructions or withhold any withdrawal rights from any Grantor unless an Event
of Default has occurred and is continuing. The provisions of this paragraph
shall not apply to deposit accounts for which the Collateral Agent is the
depositary. Each Grantor agrees to use its best efforts to cause any amounts in
any deposit account for which a Deposit Account Control Agreement is not
required to be executed and delivered pursuant to the provisions of this
paragraph to be remitted on a regular basis in a manner consistent with its past
practice to a deposit account for which a Deposit Account Control Agreement has
been executed and delivered.
18
(c) INVESTMENT PROPERTY. Except to the extent otherwise provided in
Article III, if any Grantor shall at any time hold or acquire any certificated
securities, such Grantor shall forthwith endorse, assign and deliver the same to
the Collateral Agent, accompanied by such instruments of transfer or assignment
duly executed in blank as the Collateral Agent may from time to time specify. If
any securities now or hereafter acquired by any Grantor are uncertificated and
are issued to such Grantor or its nominee directly by the issuer thereof, such
Grantor shall immediately notify the Collateral Agent thereof and, at the
Collateral Agent's request and option, pursuant to an agreement in form and
substance reasonably satisfactory to the Collateral Agent, either (i) cause the
issuer to agree to comply with instructions from the Collateral Agent as to such
securities, without further consent of any Grantor or such nominee, or (ii)
arrange for the Collateral Agent to become the registered owner of the
securities. If any securities, whether certificated or uncertificated, or other
investment property now or hereafter acquired by any Grantor are held by such
Grantor or its nominee through a securities intermediary or commodity
intermediary, such Grantor shall immediately notify the Collateral Agent thereof
and, at the Collateral Agent's request and option, pursuant to an agreement in
form and substance reasonably satisfactory to the Collateral Agent, either (i)
cause such securities intermediary or (as the case may be) commodity
intermediary to agree to comply with entitlement orders or other instructions
from the Collateral Agent to such securities intermediary as to such security
entitlements, or (as the case may be) to apply any value distributed on account
of any commodity contract as directed by the Collateral Agent to such commodity
intermediary, in each case without further consent of any Grantor or such
nominee, or (ii) in the case of Financial Assets or other Investment Property
held through a securities intermediary, arrange for the Collateral Agent to
become the entitlement holder with respect to such investment property, with the
Grantor being permitted, only with the consent of the Collateral Agent, to
exercise rights to withdraw or otherwise deal with such investment property. The
Collateral Agent agrees with each of the Grantors that the Collateral Agent
shall not give any such entitlement orders or instructions or directions to any
such issuer, securities intermediary or commodity intermediary, and shall not
withhold its consent to the exercise of any withdrawal or dealing rights by any
Grantor, unless an Event of Default has occurred and is continuing, or, after
giving effect to any such investment and withdrawal rights would occur. The
provisions of this paragraph shall not apply to any financial assets credited to
a securities account for which the Collateral Agent is the securities
intermediary.
(d) ELECTRONIC CHATTEL PAPER AND TRANSFERABLE RECORDS. If any Grantor at
any time holds or acquires an interest in any electronic chattel paper or any
"transferable record," as that term is defined in Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act, or in Section 16 of
the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, such Grantor shall promptly notify the Collateral Agent thereof
and, at the request of the Collateral Agent, shall take such action as the
Collateral Agent may reasonably request to vest in the Collateral Agent control
under
New York UCC Section 9-105 of such electronic chattel paper or control
under Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act or, as the case may be, Section 16 of the Uniform Electronic
Transactions Act, as so in effect in such jurisdiction, of such transferable
record. The Collateral Agent agrees with such Grantor that the Collateral Agent
will arrange, pursuant to procedures
19
reasonably satisfactory to the Collateral Agent and so long as such procedures
will not result in the Collateral Agent's loss of control, for the Grantor to
make alterations to the electronic chattel paper or transferable record
permitted under UCC Section 9-105 or, as the case may be, Section 201 of the
Federal Electronic Signatures in Global and National Commerce Act or Section 16
of the Uniform Electronic Transactions Act for a party in control to allow
without loss of control, unless an Event of Default has occurred and is
continuing or would occur after taking into account any action by such Grantor
with respect to such electronic chattel paper or transferable record.
(e) LETTER-OF-CREDIT RIGHTS. If any Grantor is at any time a beneficiary
under a letter of credit now or hereafter issued in favor of such Grantor, such
Grantor shall promptly notify the Collateral Agent thereof and, at the request
and option of the Collateral Agent, such Grantor shall, pursuant to an agreement
in form and substance reasonably satisfactory to the Collateral Agent, either
(i) arrange for the issuer and any confirmer of such letter of credit to consent
to an assignment to the Collateral Agent of the proceeds of any drawing under
the letter of credit or (ii) arrange for the Collateral Agent to become the
transferee beneficiary of the letter of credit, with the Collateral Agent
agreeing, in each case, that the proceeds of any drawing under the letter of
credit are to be paid to the applicable Grantor unless an Event of Default has
occurred or is continuing.
(f) COMMERCIAL TORT CLAIMS. If any Grantor shall at any time hold or
acquire a commercial tort claim in an amount reasonably estimated to exceed
$250,000, the Grantor shall promptly notify the Collateral Agent thereof in a
writing signed by such Grantor including a summary description of such claim and
grant to the Collateral Agent in such writing a security interest therein and in
the proceeds thereof, all upon the terms of this Agreement, with such writing to
be in form and substance reasonably satisfactory to the Collateral Agent.
SECTION 4.05. COVENANTS REGARDING PATENT, TRADEMARK AND COPYRIGHT
COLLATERAL. (a) Each Grantor agrees that it will not, do any act or omit do to
any act (and will exercise commercially reasonable efforts to prevent its
licensees from doing any act or omitting to do any act) whereby any Patent that
is material to the conduct of such Grantor's business, as determined by such
Grantor in its reasonable business judgment, may lapse or become dedicated to
the public prior to such Patent's natural expiration, and agrees that it shall
continue to xxxx any products covered by such Patent with the relevant patent
number as necessary and sufficient to establish and preserve its maximum rights
under applicable patent laws.
(b) Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such Grantor's
business as determined by such Grantor in its reasonable business judgment, (i)
maintain such Trademark in full force free from any claim of abandonment or
invalidity for non-use, (ii) maintain the quality of products and services
offered under such Trademark, (iii) display such Trademark with notice of
Federal or foreign registration to the extent necessary and sufficient to
establish and preserve its maximum rights under applicable
20
law and (iv) not knowingly use or knowingly permit the use of such Trademark in
violation of any third party rights.
(c) Each Grantor (either itself or through its licensees or sublicensees)
will, for each work covered by a Copyright material to the conduct of such
Grantor's business, as determined by such Grantor in its reasonable business
judgment, continue to publish, reproduce, display, adopt and distribute such
work with appropriate copyright notice as necessary and sufficient to establish
and preserve its rights under applicable copyright laws.
(d) Each Grantor shall notify the Collateral Agent promptly if it knows or
has reason to know that any Patent, Trademark or Copyright material to the
conduct of its business, as determined by such Grantor in its reasonable
business judgment, may become abandoned, lost or dedicated to the public, or of
any materially adverse determination or development (including the institution
of, or any such determination or development in, any proceeding in the United
States Patent and Trademark Office, United States Copyright Office or any court
or similar office of any country) regarding such Grantor's ownership of any such
Patent, Trademark or Copyright, its right to register the same, or its right to
keep and maintain the same.
(e) In no event shall any Grantor, either itself or through any agent,
employee, licensee or designee, file an application for any Patent, Trademark or
Copyright (or for the registration of any Trademark or Copyright) with the
United States Patent and Trademark Office, United States Copyright Office or any
office or agency in any political subdivision of the United States or in any
other country or any political subdivision thereof, unless it promptly informs
the Collateral Agent, and, upon request of the Collateral Agent, executes and
delivers any and all agreements, instruments, documents and papers as the
Collateral Agent may reasonably request to evidence the Collateral Agent's
security interest in such Patent, Trademark or Copyright, and each Grantor
hereby appoints the Collateral Agent as its attorney-in-fact to execute and file
such requested writings for the foregoing purposes, all acts of such attorney
being hereby ratified and confirmed; such power, being coupled with an interest,
is irrevocable.
(f) Each Grantor will take all necessary steps that are consistent with the
practice in any proceeding before the United States Patent and Trademark Office,
United States Copyright Office or any office or agency in any political
subdivision of the United States or in any other country or any political
subdivision thereof (i) to maintain and pursue each material application
relating to the Patents, Trademarks and/or Copyrights (and to obtain the
relevant grant or registration) and (ii) to maintain each issued Patent and each
registration of the Trademarks and Copyrights, in each case, that is material to
the conduct of any Grantor's business, as determined by such Grantor in its
reasonable business judgment, including timely filings of applications for
renewal, affidavits of use, affidavits of incontestability and payment of
maintenance fees, and, if consistent with such Grantor's reasonable business
judgment, to initiate opposition, interference and cancelation proceedings
against third parties.
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(g) In the event that any Grantor knows or has reason to believe that any
Article 9 Collateral consisting of a Patent, Trademark or Copyright material to
the conduct of any Grantor's business, as determined by such Grantor in its
reasonable business judgment, has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall notify
the Collateral Agent and shall, if consistent with such Grantor's reasonable
business judgment, promptly xxx for infringement, misappropriation or dilution
and to recover any and all damages for such infringement, misappropriation or
dilution, and take such other actions as are appropriate under the circumstances
to protect such Article 9 Collateral.
(h) Upon the occurrence and during the continuance of an Event of Default,
each Grantor shall use commercially reasonable efforts to obtain all requisite
consents or approvals by the licensor of each Copyright License, Patent License
or Trademark License to effect the assignment of all such Grantor's right, title
and interest thereunder to the Collateral Agent or its designee.
ARTICLE V
REMEDIES
SECTION 5.01. REMEDIES UPON DEFAULT. Upon the occurrence and during the
continuance of an Event of Default, each Grantor agrees to deliver each item of
Collateral to the Collateral Agent on demand, and it is agreed that the
Collateral Agent shall have the right to take any of or all the following
actions at the same or different times: (a) with respect to any Article 9
Collateral consisting of Intellectual Property, on demand, to cause the Security
Interest to become an assignment, transfer and conveyance of any of or all such
Article 9 Collateral by the applicable Grantors to the Collateral Agent, or to
license or sublicense, whether general, special or otherwise, and whether on an
exclusive or nonexclusive basis, any such Article 9 Collateral throughout the
world on such terms and conditions and in such manner as the Collateral Agent
shall determine (other than in violation of any then-existing licensing
arrangements to the extent that waivers cannot be obtained), and (b) with or
without legal process and with or without prior notice or demand for
performance, to take possession of the Article 9 Collateral and without
liability to any Grantor for trespass to enter any premises where the Article 9
Collateral may be located for the purpose of taking possession of or removing
the Article 9 Collateral and, generally, to exercise any and all rights afforded
to a secured party under the Uniform Commercial Code or other applicable law.
Without limiting the generality of the foregoing, each Grantor agrees that the
Collateral Agent shall have the right, subject to the mandatory requirements of
applicable law, to sell or otherwise dispose of all or any part of the
Collateral at a public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as the
Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized at any such sale of securities (if it deems it advisable to do so) to
restrict the prospective bidders or purchasers to Persons who will represent and
agree that they are purchasing the Collateral for their own account for
investment and not with a view to the distribution or sale thereof, and upon
consummation of any such sale the Collateral Agent shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral
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so sold. Each such purchaser at any such sale of Collateral shall hold the
property sold absolutely, free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by law) all
rights of redemption, stay and appraisal which such Grantor now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted.
The Collateral Agent shall give the applicable Grantors 10 days' written
notice (which each Grantor agrees is reasonable notice within the meaning of
Section 9-611 of the
New York UCC or its equivalent in other jurisdictions) of
the Collateral Agent's intention to make any sale of Collateral. Such notice, in
the case of a public sale, shall state the time and place for such sale and, in
the case of a sale at a broker's board or on a securities exchange, shall state
the board or exchange at which such sale is to be made and the day on which the
Collateral, or portion thereof, will first be offered for sale at such board or
exchange. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Collateral Agent may
fix and state in the notice (if any) of such sale. At any such sale, the
Collateral, or portion thereof, to be sold may be sold in one lot as an entirety
or in separate parcels, as the Collateral Agent may (in its sole and absolute
discretion) determine. The Collateral Agent shall not be obligated to make any
sale of any Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of such Collateral shall have been given. The
Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for sale, and such sale may, without further notice,
be made at the time and place to which the same was so adjourned. In case any
sale of all or any part of the Collateral is made on credit or for future
delivery, the Collateral so sold may be retained by the Collateral Agent until
the sale price is paid by the purchaser or purchasers thereof, but the
Collateral Agent shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Collateral so sold and, in case
of any such failure, such Collateral may be sold again upon like notice. At any
public (or, to the extent permitted by law, private) sale made pursuant to this
Agreement, any Secured Party may bid for or purchase, free (to the extent
permitted by law) from any right of redemption, stay, valuation or appraisal on
the part of any Grantor (all said rights being also hereby waived and released
to the extent permitted by law), the Collateral or any part thereof offered for
sale and may make payment on account thereof by using any claim then due and
payable to such Secured Party from any Grantor as a credit against the purchase
price, and such Secured Party may, upon compliance with the terms of sale, hold,
retain and dispose of such property without further accountability to any
Grantor therefor. For purposes hereof, a written agreement to purchase the
Collateral or any portion thereof shall be treated as a sale thereof; the
Collateral Agent shall be free to carry out such sale pursuant to such agreement
and no Grantor shall be entitled to the return of the Collateral or any portion
thereof subject thereto, notwithstanding the fact that after the Collateral
Agent shall have entered into such an agreement all Events of Default shall have
been remedied and the Obligations paid in full. As an alternative to exercising
the power of sale herein conferred upon it, the Collateral Agent may proceed by
a suit or suits at law or in equity to foreclose this Agreement and to sell the
Collateral or any portion thereof pursuant to a judgment or decree of a court or
courts having competent jurisdiction or pursuant to a
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proceeding by a court-appointed receiver. Any sale pursuant to the provisions of
this Section 5.01 shall be deemed to conform to the commercially reasonable
standards as provided in Section 9-610(b) of the
New York UCC or its equivalent
in other jurisdictions.
SECTION 5.02. APPLICATION OF PROCEEDS. The Collateral Agent shall apply the
proceeds of any collection or sale of or foreclosure or other realization upon
any Collateral, including any Collateral consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by the
Collateral Agent and Administrative Agent in connection with such
collection or sale or otherwise in connection with this Agreement, any
other Loan Document or any of the Obligations, including all court costs
and the fees and expenses of its agents and legal counsel, the repayment of
all advances made by the Collateral Agent or Administrative Agent hereunder
or under any other Loan Document on behalf of any Grantor and any other
costs or expenses incurred in connection with the exercise of any right or
remedy hereunder or under any other Loan Document;
SECOND, to the payment in full of the Obligations (the amounts so
applied to be distributed among the Secured Parties pro rata in accordance
with the amounts of the Obligations owed to them on the date of any such
distribution); and
THIRD, to the Grantors, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.
SECTION 5.03. GRANT OF LICENSE TO USE INTELLECTUAL PROPERTY. For the
purpose of enabling the Collateral Agent to exercise rights and remedies under
this Agreement at such time as the Collateral Agent shall be lawfully entitled
to exercise such rights and remedies upon the occurrence and during the
continuation of an Event of Default, each Grantor hereby grants to the
Collateral Agent an irrevocable, nonexclusive license (exercisable without
payment of royalty or other compensation to the Grantors) to use, license or
sublicense any of the Article 9 Collateral consisting of Intellectual Property
now owned or hereafter acquired by such Grantor, and wherever the same may be
located, and including in such license access to all media in which any of the
licensed items may be recorded or stored and to all computer software and
programs used for the compilation or printout thereof. The use of such license
by the Collateral Agent may be exercised, at the option of the Collateral Agent,
only upon the occurrence and only during
24
the continuation of an Event of Default; PROVIDED that any license, sublicense
or other transaction entered into by the Collateral Agent in accordance herewith
shall be binding upon the Grantors notwithstanding any subsequent cure of an
Event of Default.
SECTION 5.04. SECURITIES ACT. In view of the position of the Grantors in
relation to the Pledged Collateral, or because of other current or future
circumstances, a question may arise under the Securities Act of 1933, as now or
hereafter in effect, or any similar statute hereafter enacted analogous in
purpose or effect (such Act and any such similar statute as from time to time in
effect being called the "FEDERAL SECURITIES LAWS") with respect to any
disposition of the Pledged Collateral permitted hereunder. Each Grantor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were
to attempt to dispose of all or any part of the Pledged Collateral, and might
also limit the extent to which or the manner in which any subsequent transferee
of any Pledged Collateral could dispose of the same. Similarly, there may be
other legal restrictions or limitations affecting the Collateral Agent in any
attempt to dispose of all or part of the Pledged Collateral under applicable
"blue sky" or other state securities laws or similar laws analogous in purpose
or effect. Each Grantor recognizes that in light of such restrictions and
limitations the Collateral Agent may, with respect to any sale of the Pledged
Collateral, limit the purchasers to those who will agree, among other things, to
acquire such Pledged Collateral for their own account, for investment, and not
with a view to the distribution or resale thereof. Each Grantor acknowledges and
agrees that in light of such restrictions and limitations, the Collateral Agent,
in its sole and absolute discretion (a) may proceed to make such a sale whether
or not a registration statement for the purpose of registering such Pledged
Collateral or part thereof shall have been filed under the Federal Securities
Laws and (b) may approach and negotiate with a single potential purchaser to
effect such sale. Each Grantor acknowledges and agrees that any such sale might
result in prices and other terms less favorable to the seller than if such sale
were a public sale without such restrictions. In the event of any such sale, the
Collateral Agent shall incur no responsibility or liability for selling all or
any part of the Pledged Collateral at a price that the Collateral Agent, in its
sole and absolute discretion, may in good xxxxx xxxx reasonable under the
circumstances, notwithstanding the possibility that a substantially higher price
might have been realized if the sale were deferred until after registration as
aforesaid or if more than a single purchaser were approached. The provisions of
this Section 5.04 will apply notwithstanding the existence of a public or
private market upon which the quotations or sales prices may exceed
substantially the price at which the Collateral Agent sells.
SECTION 5.05. REGISTRATION. Each Grantor agrees that, upon the occurrence
and during the continuance of an Event of Default, if for any reason the
Collateral Agent desires to sell any of the Pledged Collateral at a public sale,
it will, at any time and from time to time, upon the written request of the
Collateral Agent, use its best efforts to take or to cause the issuer of such
Pledged Collateral to take such action and prepare, distribute and/or file such
documents, as are required or advisable in the reasonable opinion of counsel for
the Collateral Agent to permit the public sale of such Pledged Collateral. Each
Grantor further agrees to indemnify, defend and hold harmless the Collateral
Agent, each other Secured Party, any underwriter and their respective
25
officers, directors, affiliates and controlling persons from and against all
loss, liability, expenses, costs of counsel (including, without limitation,
reasonable fees and expenses of legal counsel to the Collateral Agent), and
claims (including the costs of investigation) that they may incur insofar as
such loss, liability, expense or claim arises out of or is based upon any
alleged untrue statement of a material fact contained in any prospectus (or any
amendment or supplement thereto) or in any notification or offering circular, or
arises out of or is based upon any alleged omission to state a material fact
required to be stated therein or necessary to make the statements in any thereof
not misleading, except insofar as the same may have been caused by any untrue
statement or omission based upon information furnished in writing to such
Grantor or the issuer of such Pledged Collateral by the Collateral Agent or any
other Secured Party expressly for use therein. Each Grantor further agrees, upon
such written request referred to above, to use its best efforts to qualify, file
or register, or cause the issuer of such Pledged Collateral to qualify, file or
register, any of the Pledged Collateral under the "blue sky" or other securities
laws of such states as may be requested by the Collateral Agent and keep
effective, or cause to be kept effective, all such qualifications, filings or
registrations. Each Grantor will bear all costs and expenses of carrying out its
obligations under this Section 5.05. Each Grantor acknowledges that there is no
adequate remedy at law for failure by it to comply with the provisions of this
Section 5.05 and that such failure would not be adequately compensable in
damages, and therefore agrees that its agreements contained in this Section 5.05
may be specifically enforced.
ARTICLE VI
INDEMNITY, SUBROGATION AND SUBORDINATION
SECTION 6.01. INDEMNITY AND SUBROGATION. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 6.03), the Borrowers agree that (a) in the event a payment
shall be made by any Guarantor under this Agreement, the Borrowers shall,
jointly and severally, indemnify such Guarantor for the full amount of such
payment and such Guarantor shall be subrogated to the rights of the Person to
whom such payment shall have been made to the extent of such payment and (b) in
the event any assets of any Grantor shall be sold pursuant to this Agreement or
any other Security Document to satisfy in whole or in part an obligation owed to
any Secured Party, the Borrowers shall, jointly and severally, indemnify such
Grantor in an amount equal to the greater of the book value or the fair market
value of the assets so sold.
SECTION 6.02. CONTRIBUTION AND SUBROGATION. Each Guarantor and Grantor (a
"CONTRIBUTING PARTY") agrees (subject to Section 6.03) that, in the event a
payment shall be made by any other Guarantor hereunder in respect of any
Obligation or assets of any other Grantor shall be sold pursuant to any Security
Document to satisfy any Obligation owed to any Secured Party and such other
Guarantor or Grantor (the "CLAIMING PARTY") shall not have been fully
indemnified by the Borrowers as provided in Section 6.01, the Contributing Party
shall indemnify the Claiming Party in an amount equal to the amount of such
payment or the greater of the book value or the fair market value of such
assets, as the case may be, in each case multiplied by a fraction of which
26
the numerator shall be the net worth of the Contributing Party on the date
hereof and the denominator shall be the aggregate net worth of all the
Guarantors and Grantors on the date hereof (or, in the case of any Guarantor or
Grantor becoming a party hereto pursuant to Section 7.14, the date of the
supplement hereto executed and delivered by such Guarantor or Grantor). Any
Contributing Party making any payment to a Claiming Party pursuant to this
Section 6.02 shall be subrogated to the rights of such Claiming Party under
Section 6.01 to the extent of such payment.
SECTION 6.03. SUBORDINATION. (a) Notwithstanding any provision
of this Agreement to the contrary, all rights of the Guarantors and Grantors
under Sections 6.01 and 6.02 and all other rights of indemnity, contribution or
subrogation under applicable law or otherwise shall be fully subordinated to the
indefeasible payment in full in cash of the Obligations. No failure on the part
of any Borrower or any Guarantor or Grantor to make the payments required by
Sections 6.01 and 6.02 (or any other payments required under applicable law or
otherwise) shall in any respect limit the obligations and liabilities of any
Guarantor or Grantor with respect to its obligations hereunder, and each
Guarantor and Grantor shall remain liable for the full amount of the obligations
of such Guarantor or Grantor hereunder.
(b) Each Guarantor and Grantor hereby agrees that all Indebtedness and
other monetary obligations owed by it to any other Guarantor, Grantor or any
other Subsidiary shall be fully subordinated to the indefeasible payment in full
in cash of the Obligations, except as otherwise permitted under the Credit
Agreement.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. NOTICES. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and given as
provided in Section 9.01 of the Credit Agreement. All communications and notices
hereunder to any Subsidiary Party shall be given to it in care of the Parent
Borrower as provided in Section 9.01 of the Credit Agreement.
SECTION 7.02. WAIVERS; AMENDMENT. (a) No failure or delay by the Collateral
Agent, the Issuing Bank or any Lender in exercising any right or power hereunder
or under any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Collateral Agent, the Issuing Bank and the Lenders hereunder
and under the other Loan Documents are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of
this Agreement or consent to any departure by any Loan Party therefrom shall in
any event be effective unless the same shall be permitted by paragraph (b) of
this Section 7.02, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan or issuance of a
27
Letter of Credit shall not be construed as a waiver of any Default, regardless
of whether the Collateral Agent, any Lender or the Issuing Bank may have had
notice or knowledge of such Default at the time. No notice or demand on any Loan
Party in any case shall entitle any Loan Party to any other or further notice or
demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Collateral Agent and the Loan Party or Loan Parties with respect to
which such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 9.02 of the Credit Agreement.
SECTION 7.03. COLLATERAL AGENT'S FEES AND EXPENSES; INDEMNIFICATION.
(a) The parties hereto agree that the Collateral Agent shall be entitled to
reimbursement of its expenses incurred hereunder as provided in Section 9.03 of
the Credit Agreement.
(b) The parties hereto agree that the Collateral Agent and the other
Indemnitees (as defined in Section 9.03 of the Credit Agreement) shall be
entitled to indemnification as provided in Section 9.03 of the Credit Agreement.
(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 7.03 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, or any investigation made by or on
behalf of the Collateral Agent or any other Secured Party. All amounts due under
this Section 7.03 shall be payable on written demand therefor.
SECTION 7.04. SUCCESSORS AND ASSIGNS. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Guarantor, Grantor or the Collateral Agent
that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.
SECTION 7.05. SURVIVAL OF AGREEMENT. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the Lenders and the other Secured Parties
and shall survive the execution and delivery of the Loan Documents and the
making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any Lender or other Secured Party or on its behalf and
notwithstanding that the Collateral Agent, the Issuing Bank or any Lender may
have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended under the Credit Agreement, and
shall
28
continue in full force and effect as long as the principal of or any accrued
interest on any Loan or any fee or any other amount payable under any Loan
Document is outstanding and unpaid or any Letter of Credit is outstanding and so
long as the Commitments have not expired or terminated.
SECTION 7.06. COUNTERPARTS; EFFECTIVENESS; SEVERAL AGREEMENT.
This Agreement may be executed in counterparts, each of which shall constitute
an original but all of which when taken together shall constitute a single
contract. Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement. This Agreement shall become effective as to any Loan Party
when a counterpart hereof executed on behalf of such Loan Party shall have been
delivered to the Collateral Agent and a counterpart hereof shall have been
executed on behalf of the Collateral Agent, and thereafter shall be binding upon
such Loan Party and the Collateral Agent and their respective permitted
successors and assigns, and shall inure to the benefit of such Loan Party, the
Collateral Agent and the other Secured Parties and their respective successors
and assigns, except that no Loan Party shall have the right to assign or
transfer its rights or obligations hereunder or any interest herein or in the
Collateral (and any such assignment or transfer shall be void) except as
expressly contemplated by this Agreement or the Credit Agreement. This Agreement
shall be construed as a separate agreement with respect to each Loan Party and
may be amended, modified, supplemented, waived or released with respect to any
Loan Party without the approval of any other Loan Party and without affecting
the obligations of any other Loan Party hereunder.
SECTION 7.07. SEVERABILITY. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
uneforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction. The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 7.08. RIGHT OF SET-OFF. If an Event of Default shall have occurred
and be continuing, each Lender and each of its Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by such Lender or Affiliate to or for the credit or the account of any
Subsidiary Party against any of and all the obligations of such Subsidiary Party
now or hereafter existing under this agreement owed to such Lender, irrespective
of whether or not such Lender shall have made any demand under this Agreement
and although such obligations may be unmatured. The rights of each Lender under
this Section 7.08 are in addition to other rights and remedies (including other
rights of set-off) which such Lender may have.
29
SECTION 7.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.
(b) Each of the Loan Parties hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any other Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Collateral Agent, the Issuing Bank or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Loan Document against any Grantor or Guarantor, or its properties in
the courts of any jurisdiction.
(c) Each of the Loan Parties hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (b) of this Section 7.09. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 7.01. Nothing
in this Agreement or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
SECTION 7.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 7.10.
30
SECTION 7.11. HEADINGS. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 7.12. SECURITY INTEREST ABSOLUTE. All rights of the Collateral
Agent hereunder, the Security Interest, the grant of a security interest in the
Pledged Collateral and all obligations of each Grantor and Guarantor hereunder
shall be absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Credit Agreement, any other Loan Document, any agreement
with respect to any of the Obligations or any other agreement or instrument
relating to any of the foregoing, (b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, any other Loan Document or any other agreement or instrument, (c) any
exchange, release or non-perfection of any Lien on other collateral, or any
release or amendment or waiver of or consent under or departure from any
guarantee, securing or guaranteeing all or any of the Obligations, or (d) any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, any Grantor or Guarantor in respect of the Obligations or this
Agreement.
SECTION 7.13. TERMINATION OR RELEASE. (a) This Agreement, the Guarantees
made herein, the Security Interest and all other security interests granted
hereby shall terminate when all the Loan Document Obligations have been paid in
full and the Lenders have no further commitment to lend under the Credit
Agreement, the LC Exposure has been reduced to zero and the Issuing Bank has no
further obligations to issue Letters of Credit under the Credit Agreement.
(b) A Subsidiary Party shall automatically be released from its obligations
hereunder and the Security Interest in the Collateral of such Subsidiary Party
shall be automatically released upon the consummation of any transaction
permitted by the Credit Agreement as a result of which such Subsidiary Party
ceases to be a Subsidiary of any Borrower; PROVIDED that the Required Lenders
shall have consented to such transaction (to the extent required by the Credit
Agreement) and the terms of such consent did not provide otherwise.
(c) Upon any sale or other transfer by any Grantor of any Collateral that
is permitted under the Credit Agreement, or upon the effectiveness of any
written consent to the release of the security interest granted hereby in any
Collateral pursuant to Section 9.02 of the Credit Agreement, the security
interest in such Collateral shall be automatically released.
(d) In connection with any termination or release pursuant to paragraph
(a), (b) or (c), the Collateral Agent shall execute and deliver to any Grantor,
at such Grantor's expense, all documents that such Grantor shall reasonably
request to evidence such termination or release. Any execution and delivery of
documents pursuant to this Section 7.13 shall be without recourse to or warranty
by the Collateral Agent.
31
SECTION 7.14. ADDITIONAL SUBSIDIARIES. Pursuant to Section 5.12 of the
Credit Agreement, each Subsidiary of a Loan Party that was not in existence or
not a Subsidiary on the date of the Credit Agreement and is not a Foreign
Subsidiary is required to enter in this Agreement as a Subsidiary Party upon
becoming such a Subsidiary. Upon execution and delivery by the Collateral Agent
and a Subsidiary of an instrument in the form of Exhibit II hereto, such
Subsidiary shall become a Subsidiary Party hereunder with the same force and
effect as if originally named as a Subsidiary Party herein. The execution and
delivery of any such instrument shall not require the consent of any other Loan
Party hereunder. The rights and obligations of each Loan Party hereunder shall
remain in full force and effect notwithstanding the addition of any new Loan
Party as a party to this Agreement.
SECTION 7.15. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT. Each Grantor
hereby appoints the Collateral Agent the attorney-in-fact of such Grantor for
the purpose of carrying out the provisions of this Agreement and taking any
action and executing any instrument that the Collateral Agent may deem necessary
or advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. Without limiting the generality of the foregoing,
the Collateral Agent shall have the right, upon the occurrence and during the
continuance of an Event of Default, with full power of substitution either in
the Collateral Agent's name or in the name of such Grantor (a) to receive,
endorse, assign and/or deliver any and all notes, acceptances, checks, drafts,
money orders or other evidences of payment relating to the Collateral or any
part thereof, (b) to demand, collect, receive payment of, give receipt for and
give discharges and releases of all or any of the Collateral, (c) to sign the
name of any Grantor on any invoice or xxxx of lading relating to any of the
Collateral, (d) to send verifications of Accounts Receivable to any Account
Debtor, (e) to commence and prosecute any and all suits, actions or proceedings
at law or in equity in any court of competent jurisdiction to collect or
otherwise realize on all or any of the Collateral or to enforce any rights in
respect of any Collateral, (f) to settle, compromise, compound, adjust or defend
any actions, suits or proceedings relating to all or any of the Collateral, (g)
to notify, or to require any Grantor to notify, Account Debtors to make payment
directly to the Collateral Agent and (h) to use, sell, assign, transfer, pledge,
make any agreement with respect to or otherwise deal with all or any of the
Collateral, and to do all other acts and things necessary to carry out the
purposes of this Agreement, as fully and completely as though the Collateral
Agent were the absolute owner of the Collateral for all purposes; PROVIDED that
nothing herein contained shall be construed as requiring or obligating the
Collateral Agent to make any commitment or to make any inquiry as to the nature
or sufficiency of any payment received by the Collateral Agent, or to present or
file any claim or notice, or to take any action with respect to the Collateral
or any part thereof or the moneys due or to become due in respect thereof or any
property covered thereby. The Collateral Agent and the other Secured Parties
shall be accountable only for amounts actually received as a result of the
exercise of the powers granted to them herein, and neither they nor their
officers, directors, employees or agents shall be responsible to any Grantor for
any act or failure to act hereunder, except for their own gross negligence or
wilful misconduct.
32
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
XXX-XXXX CORPORATION,
by
-----------------------------------
Name:
Title:
XXX-XXXX SERVICES, INC.,
by
-----------------------------------
Name:
Title:
INTIRION CORPORATION,
by
-----------------------------------
Name:
Title:
JPMORGAN CHASE BANK, N.A., AS
COLLATERAL AGENT,
by
-----------------------------------
Name:
Title:
Schedule I to
the
Guarantee and
Collateral Agreement
SUBSIDIARY PARTIES
Schedule II to
the
Guarantee and
Collateral Agreement
EQUITY INTERESTS
Number and
Number of Registered Class of Percentage
Issuer Certificate Owner Equity Interest of Equity Interests
------ ----------- ---------- --------------- -------------------
DEBT SECURITIES
Principal
Issuer Amount Date of Note Maturity Date
------ --------- ------------ -------------
Schedule III to
the
Guarantee and
Collateral Agreement
U.S. COPYRIGHTS OWNED BY [NAME OR GRANTOR]
[Make a separate page of Schedule III for each Grantor and state if no
copyrights are owned. List in numerical order by Registration No.]
U.S. COPYRIGHT REGISTRATIONS
Title Reg. No. Author
----- -------- ------
PENDING U.S. COPYRIGHT APPLICATIONS FOR REGISTRATION
Title Author Class Date Filed
----- ------ ----- ----------
NON-U.S. COPYRIGHT REGISTRATIONS
[List in alphabetical order by country/numerical order by Registration No.
within each country]
NON-U.S. PENDING COPYRIGHT APPLICATIONS FOR REGISTRATION
[List in alphabetical order by country.]
Country Title Author Class Date Filed
------- ----- ------ ----- ----------
2
LICENSES
[Make a separate page of Schedule III for each Grantor, and state if any Grantor
is not a party to a license/sublicense.]
I. LICENSES/SUBLICENSEES OF [NAME OF GRANTOR] AS LICENSOR ON DATE HEREOF
A. COPYRIGHTS
[List U.S. copyrights in numerical order by Registration No. List non-U.S.
copyrights by country in alphabetical order with Registration Nos. within each
country in numerical order.]
U.S. COPYRIGHTS
Title of
Licensee Name Date of License/ U.S.
and Address Sublicense Copyright Author Reg. No.
------------- ---------------- --------- ------ --------
NON-U.S. COPYRIGHTS
Date of Title of
Licensee Name License/ Non-U.S.
Country and Address Sublicensee Copyrights Author Reg. No.
------- ------------- ----------- ---------- ------ --------
B. PATENTS
[List U.S. patent nos. and U.S. patent application nos. in numerical order. List
non-U.S. patent nos. and non-U.S. application in alphabetical order by country,
with numbers within each country in numerical order.]
U.S. PATENTS
Licensee Name Date of License/
and Address Sublicense Issue Date Patent No.
------------- ---------------- ---------- ----------
U.S. PATENT APPLICATIONS
Licensee Name Date of License/
and Address Sublicense Date Filed Application No.
------------- --------------- ---------- ---------------
NON-U.S. PATENTS
Licensee Name Date of License/ Issue Non-U.S.
Country and Address Sublicense Date Patent No.
------- ------------- --------------- ----- ----------
NON-U.S. PATENT APPLICATIONS
Licensee Name Date of License/ Date Application
Country and Address Sublicense Filed No.
------- ------------- --------------- ----- -----------
C. TRADEMARKS
[List U.S. trademark nos. and U.S. trademark application nos. in numerical
order. List non-U.S. trademark nos. and non-U.S. application nos. with trademark
nos. within each country in numerical order.]
U.S. TRADEMARKS
Licensee Name Date of License/
and Address Sublicense U.S. Xxxx Reg. Date Reg. No.
------------- ---------------- --------- --------- --------
U.S. TRADEMARK APPLICATIONS
Licensee Name Date of License/ Application
and Address Sublicense U.S. Xxxx Date Filed No.
------------- ---------------- --------- ---------- ------------
NON-U.S. TRADEMARKS
Licensee Name Date of License/ Non-U.S.
Country and Address Sublicense Xxxx Reg. Date Reg. No.
------- ------------- ---------------- -------- --------- --------
NON-U.S. TRADEMARK APPLICATIONS
Licensee Name Date of License/ Non-U.S. Date Application
Country and Address Sublicense Xxxx Filed No.
------- ------------- ---------------- ------- ----- -----------
D. OTHERS
Licensee Name Date of License/ Subject
and Address Sublicense Matter
------------- ---------------- -------
II. LICENSEES/SUBLICENSES OF [NAME OF GRANTOR] AS LICENSEE ON DATE HEREOF
A. COPYRIGHTS
[List U.S. copyrights in numerical order by Registration No. List non-U.S.
copyrights by country in alphabetical order, with Registration Nos. within each
country in numerical order.]
U.S. COPYRIGHTS
Licensor Name and Date of License/ Title of
Address Sublicense U.S. Copyright Author Reg. No.
----------------- ---------------- -------------- ------ --------
NON-U.S. COPYRIGHTS
Date of Title of
Licensor Name License/ Non-U.S.
Country and Address Sublicensee Copyrights Author Reg. No.
------- ------------- ----------- ---------- ------ --------
B. PATENTS
[List U.S. patent nos. and U.S. patent application nos. in numerical order. List
non-U.S. patent nos. and non-U.S. application nos. in alphabetical order by
country with patent nos. within each country in numerical order.]
U.S. PATENTS
Date of
Licensor Name License/
and Address Sublicense Issue Date Patent No.
---------------------- ---------- ---------- ----------
U.S. PATENT APPLICATIONS
Licensor Name Date of License/
and Address Sublicense Date Filed Application No.
------------- ---------------- ----------- ---------------
NON-U.S. PATENTS
Licensor Name Date of License/ Issue Non-U.S.
Country and Address Sublicense Date Patent No.
------- ------------- ---------------- ----- ----------
NON-U.S. PATENT APPLICATIONS
Licensor Name Date of License/ Date Application
Country and Address Sublicense Filed No.
------- ------------- ---------------- ----- -----------
C. TRADEMARKS
[List U.S. trademark nos. and U.S. trademark application nos. in numerical
order. List non-U.S. trademark nos. and non-U.S. application nos. with trademark
nos. within each country in numerical order.]
U.S. TRADEMARKS
Licensor Name Date of License/
and Address Sublicense U.S. Xxxx Reg. Date Reg. No.
------------- ---------------- --------- --------- --------
U.S. TRADEMARK APPLICATIONS
Licensor Name Date of License/ Date Application
and Address Sublicense U.S. Xxxx Filed No.
------------- ---------------- --------- ----- -----------
NON-U.S. TRADEMARKS
Licensor Name Date of License/ Non-U.S.
Country and Address Sublicense Xxxx Reg. Date Reg. No.
------- ------------- ---------------- -------- --------- --------
NON-U.S. TRADEMARK APPLICATIONS
Licensor Name Date of License/ Non-U.S. Date Application
Country and Address Sublicense Xxxx Filed No.
------- ------------- ---------------- ------- ----- -----------
D. OTHERS
Date of License/
Licensor Name and Address Sublicense Subject Matter
------------------------- ---------------- --------------
PATENTS OWNED BY [NAME OF GRANTOR]
[Make a separate page of Schedule III for each Grantor and state if no patents
are owned. List in numerical order by Patent No./Patent Application No.]
U.S. PATENT REGISTRATIONS
Patent Numbers Issue Date
-------------- -----------
U.S. PATENT APPLICATIONS
Patent Application No. Filing Date
--------------------- -----------
NON-U.S. PATENT REGISTRATIONS
[List in alphabetical order by country/numerical order by Patent No. within each
country]
Country Issue Date Patent No.
------- ---------- -----------
NON-U.S. PATENT REGISTRATIONS
[List in alphabetical order by country/numerical order by Application No. within
each country]
Country Filing Date Patent Application No.
------- ----------- ----------------------
TRADEMARK/TRADE NAMES OWNED BY [NAME OF GRANTOR]
[Make a separate page of Schedule III for each Grantor and state if no
trademarks/trade names are owned. List in numerical order by trademark
registration/application no.]
U.S. TRADEMARK REGISTRATIONS
Xxxx Reg. Date Reg. No.
------- --------- --------
U.S. TRADEMARK APPLICATIONS
Xxxx Filing Date Application No.
------- --------- ---------------
STATE TRADEMARK REGISTRATIONS
[List in alphabetical order by state/numerical order by trademark no. within
each state]
State Xxxx Filing Date Application No.
----- ---- ----------- ---------------
NON-U.S. TRADEMARK REGISTRATIONS
[List in alphabetical order by country/numerical order by trademark no. within
each country]
NON-U.S. TRADEMARK APPLICATIONS
[List in alphabetical order by country/numerical order by application no.]
Country Xxxx Application Date Application No.
------- ---- ---------------- ---------------
TRADE NAMES
Country(s) Where Used Trade Names
--------------------- -----------
Schedule IV to
the
Guarantee and
Collateral Agreement
COMMERCIAL TORT CLAIMS
Schedule V to
the
Guarantee and
Collateral Agreement
INSURANCE REQUIREMENTS
(a) The Borrowers will, and will cause each Subsidiary Party to, maintain
(or cause to be maintained on its behalf), with financially sound and reputable
insurance companies:
(i) fire, boiler and machinery and extended coverage insurance, on a
replacement cost basis, with respect to all personal property and
improvements to real property (in each case constituting Collateral), in
such amounts as are customarily maintained by companies in the same or
similar business operating in the same or similar locations;
(ii) commercial general liability insurance against claims for bodily
injury, death or property damage occurring upon, about or in connection
with the use of any properties owned, occupied or controlled by it,
providing coverage on an occurrence basis with a combined single limit of
not less than $[ ] and including the broad form CGL endorsement;
(iii) business interruption insurance, insuring against loss of gross
earnings for a period of not less than 12 months arising from any risks or
occurrences required to be covered by insurance pursuant to clause (i)
above; and
(iv) such other insurance as may be required by law.
Deductibles or self-insured retention shall not exceed $[ ] for fire, boiler and
machinery and extended coverage policies, $[ ] for commercial general liability
policies or [ ] days for business interruption policies.
(b) Fire, boiler and machinery and extended coverage policies maintained
with respect to any Collateral shall be endorsed or otherwise amended to include
(i) a lenders' loss payable clause in favor of the Collateral Agent and
providing for losses thereunder to be payable to the Collateral Agent or its
designee, (ii) a provision to the effect that neither any Loan Party, the
Collateral Agent nor any other party shall be a coinsurer and (iii) such other
provisions as the Collateral Agent may reasonably require from time to time to
protect the interests of the Lenders. Commercial general liability policies
shall be endorsed to name the Collateral Agent as an additional insured.
Business interruption policies shall name the Collateral Agent as loss payee.
Each such policy referred to in this paragraph also shall provide that it shall
not be canceled, modified or not renewed (i) by reason of nonpayment of premium
except upon not less than 10 days' prior written notice thereof by the insurer
to the Collateral Agent (giving the Collateral Agent the right to cure defaults
in the payment of premiums) or (ii) for any other reason except upon not less
than 30 days' prior written notice thereof by the insurer to the Collateral
Agent. The Parent Borrower shall deliver to the Collateral Agent, prior to the
cancellation, modification or nonrenewal of any such policy of insurance, a copy
of a renewal or replacement policy (or other evidence of renewal of a policy
previously
delivered to the Collateral Agent) together with evidence reasonably
satisfactory to the Collateral Agent of payment of the premium therefor.
2
Schedule VI to
the
Guarantee and
Collateral Agreement
DEPOSIT ACCOUNTS
Exhibit I to the
Guarantee and
Collateral Agreement
DEPOSIT ACCOUNT CONTROL AGREEMENT dated as of [ ], (this "AGREEMENT"),
among [GRANTOR], a [ ] corporation (the "GRANTOR"), JPMORGAN CHASE BANK,
N.A ("JPMCB"), as collateral agent (in such capacity, the "COLLATERAL
AGENT"), and [ ] a [ ] banking corporation (the "BANK").
A. Reference is made to (a) the Credit Agreement dated as of January 10,
2005 (as amended, supplemented, restated or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among Xxx-Xxxx Corporation, Inc., Xxx-Xxxx
Services, Inc., Intirion Corporation (each of the foregoing, individually, a
"BORROWER" and collectively, the "BORROWERS"), the lenders from time to time
party thereto and JPMCB, as Administrative Agent, and (b) the
Guarantee and
Collateral Agreement dated as of January 10, 2005 (as amended, supplemented,
restated or otherwise modified from time to time, the "GUARANTEE AND COLLATERAL
AGREEMENT"), among the Borrowers, the subsidiaries of the Borrowers identified
therein and JPMCB, as Collateral Agent.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement and the
Guarantee and Collateral Agreement.
C. The Bank has established the following deposit accounts in the name of
and for the benefit of the Grantor (the "ACCOUNTS"):
Account Number Account Name
-------------- ------------
D. The Grantor has granted to the Collateral Agent for the benefit of the
Secured Parties a security interest in the Accounts.
E. The Collateral Agent, the Grantor and the Bank are entering into this
Agreement to perfect the security interest of the Collateral Agent in the
Accounts and to provide for certain additional rights and obligations with
respect thereto.
Accordingly, the Collateral Agent, the Bank and the Grantor agree as
follows:
SECTION 1. THE ACCOUNTS. All parties agree that the Accounts are "deposit
accounts" within the meaning of Article 9 of the Uniform Commercial Code of the
State of New York (the "NEW YORK UCC"). All funds at any time on deposit in the
Accounts shall be held by the Bank subject to the terms of this Agreement. The
Bank has not and will not agree with any third party to comply with instructions
or other directions concerning the Accounts or the disposition of funds in the
Accounts originated by such third party without the prior written consent of the
Collateral Agent.
SECTION 2. SUBORDINATION OF SETOFF, ETC. Except as otherwise
provided in the Credit Agreement with respect to rights of set off available to
the Bank in its capacity as a Lender (if and so long as the Bank is a Lender
thereunder), the Bank waives all banker's liens, security interests,
encumbrances, claims and rights of setoff it may have, now or in the future,
against the Accounts or any funds in the Accounts other than in connection with
the payment of the Bank's customary fees and charges with respect to the
maintenance of the Accounts and for the reversal of provisional credits.
SECTION 3. CONTROL. If no Default Notice (as defined below) is
in effect, the Bank may comply with instructions directing the disposition of
funds in the Accounts originated by the Grantor or its authorized
representatives. Immediately following an Event of Default and the delivery by
the Collateral Agent of a written notice to the Bank that the Collateral Agent
is thereby exercising exclusive control over the Accounts (such notice referred
to herein as a "DEFAULT NOTICE"), (a) the Accounts shall, without further action
on the part of the Grantor, the Collateral Agent or the Bank, be placed under
the sole dominion and control of the Collateral Agent, who shall possess all
right, title and interest in all of the items from time to time in the Accounts,
(b) neither the Grantor nor any person or entity claiming by, through or under
the Grantor shall have any right, title or interest in, or control over the use
of, or any right to withdraw any amount from, the Accounts, (c) the Bank shall
be entitled to rely on, and shall act in accordance with, all instructions given
to it by the Collateral Agent with respect to the Accounts and without further
consent by the Grantor or any other person and (d) the Bank will not (i) deliver
to the Grantor or any affiliate, employee or agent of the Grantor or permit the
Grantor or any affiliate, employee or agent of the Grantor to withdraw or
transfer any cash, proceeds or other items held in the Accounts or (ii) take any
instruction from the Grantor or any affiliate, employee or agent of the Grantor
with respect to the Accounts or any cash, proceeds or other item held therein.
The Collateral Agent hereby agrees not to deliver a Default Notice unless an
Event of Default has occurred and is continuing.
SECTION 4. STATEMENTS, CONFIRMATIONS AND NOTICES OF ADVERSE
CLAIMS. The Bank will send copies of all statements concerning the Accounts to
each of the Grantor and the Collateral Agent at its address for notices set
forth below its signature hereto. Upon receipt of written notice of any lien,
encumbrance or adverse claim against an Account or any funds credited thereto,
the Bank will promptly notify the Collateral Agent and the Grantor thereof.
SECTION 5. LIMITED RESPONSIBILITY OF THE BANK. Except for
acting on the Grantor's instructions in violation of Section 3 above, the Bank
shall have no responsibility or liability to the Collateral Agent for complying
with instructions concerning the Accounts from the Grantor or the Grantor's
authorized representatives which are received by the Bank before the Bank
receives a Default Notice. The Bank shall have no responsibility or liability to
the Grantor for complying with a Default Notice or complying with instructions
concerning the Accounts originated by the Collateral Agent, and shall have no
responsibility to investigate the appropriateness of any such instruction or
Default Notice, even if the Grantor notifies the Bank that the Collateral Agent
is not legally entitled to originate any such instruction or Default Notice.
2
SECTION 6. INDEMNIFICATION OF THE BANK. The Grantor agrees to indemnify
against, and to hold the Bank, its directors, officers, agents and employees
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable counsel fees, charges and disbursements, incurred
by or asserted against the Bank, its directors, officers, agents and employees
arising out of, in any way connected with, or as a result of (i) the execution
or delivery of this Agreement, the performance by the parties hereto of their
respective obligations hereunder or the consummation of the transactions
contemplated hereby, or (ii) any claim, litigation, investigation or proceeding
relating to any of the foregoing, whether or not the Bank, its directors,
officers, agents or employees are a party thereto; PROVIDED that such indemnity
shall not be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of the Bank.
SECTION 7. CUSTOMER AGREEMENT. In the event of a conflict between this
Agreement and any other agreement between the Bank and the Grantor, the terms of
this Agreement will prevail.
SECTION 8. TERMINATION. This Agreement shall continue in effect until the
Collateral Agent has notified the Bank in writing that this Agreement, or the
Collateral Agent's security interest in the Accounts, is terminated. Upon
receipt of such notice, the obligations of the Bank hereunder with respect to
the operation and maintenance of the Accounts after the receipt of such notice
shall terminate, the Collateral Agent shall have no further right to originate
instructions concerning the Accounts and any previous Default Notice delivered
by the Collateral Agent shall be deemed to be of no further force and effect.
SECTION 9. COMPLETE AGREEMENT. This Agreement and the instructions and
notices required or permitted to be executed and delivered hereunder set forth
the entire agreement of the parties with respect to the subject matter hereof,
and, subject to Section 7 above, supersede any prior agreement and
contemporaneous oral agreements of the parties concerning its subject matter.
SECTION 10. WAIVERS; AMENDMENT. (a) No failure or delay by the Collateral
Agent in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy, or any abandonment or discontinuance of steps to enforce such a
right, power or remedy, preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. The rights, powers and remedies of
the Collateral Agent are cumulative and are not exclusive of any rights, powers
or remedies it would otherwise have. No waiver of any provision of this
Agreement or consent to any departure therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) of this Section 10, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice or demand on any Bank in any case shall
entitle any Banks to any other or further notice or demand in similar or other
circumstances.
3
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Grantor, the Bank and the Collateral Agent with respect to which
such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 9.02 of the Credit Agreement.
SECTION 11. SEVERABILITY. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability in
such jurisdiction of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction. The parties hereto shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 12. SUCCESSORS AND ASSIGNS. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party, and all covenants, promises and
agreements by or on behalf of the Grantor, the Bank or the Collateral Agent that
are contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.
SECTION 13. NOTICES. All communications and notices hereunder shall (except
as otherwise expressly permitted herein) be in writing and given as provided in
Section 9.01 of the Credit Agreement.
SECTION 14. COUNTERPARTS. This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract. Delivery of an executed signature page to this Agreement by
facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Agreement.
SECTION 15. ORGANIZATION; POWERS. (a)(i) The Grantor hereby represents and
warrants that it is a [corporation] duly organized, validly existing and in good
standing under the laws of [ ] and has full corporate power and authority
under such laws to execute, deliver and perform its obligations under this
Agreement, (ii) the Bank hereby represents and warrants that it is a
[corporation] duly organized, validly existing and in good standing under the
laws of [ ] and has full corporate power and authority under such laws to
execute, deliver and perform its obligations under this Agreement and (iii) the
Collateral Agent hereby represents and warrants that it is a national banking
association duly organized, validly existing and in good standing under the laws
of The United States of America and has full corporate power and authority under
such laws to execute, deliver and perform its obligations under this Agreement
and (b) each of the Grantor, the Bank and the Collateral Agent hereby represents
and warrants that (i) its execution, delivery and performance of its obligations
under this Agreement
4
have been duly and effectively authorized by all necessary corporate action and
(ii) this Agreement has been duly executed and delivered by it and constitutes
its valid and binding obligation, enforceable in accordance with its terms.
SECTION 16. INDEPENDENCE. The Bank shall be an independent contractor. This
Agreement does not give rise to any partnership, joint venture or fiduciary
relationship.
SECTION 17. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 18. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 18.
5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first written above.
[GRANTOR]
by
----------------------------------
Name:
Title:
Address for Notices:
JPMORGAN CHASE BANK, N.A,
as Collateral Agent,
by
----------------------------------
Name:
Title:
Address for Notices:
[BANK]
by
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Name:
Title:
Address for Notices:
Exhibit II to the
Guarantee and
Collateral Agreement
SUPPLEMENT NO. __ dated as of, to the Guarantee and Collateral
Agreement dated as of January 10, 2005, among XXX-XXXX CORPORATION, a
Delaware corporation (the "PARENT BORROWER"), XXX-XXXX SERVICES, INC.
("SERVICES") and INTIRION CORPORATION (together with the Parent
Borrower and Services, the "BORROWERS"), the subsidiaries of the
Borrowers identified therein (each such subsidiary individually a
"SUBSIDIARY GUARANTOR" and collectively, the "SUBSIDIARY GUARANTORS";
the Subsidiary Guarantors and the Borrowers are referred to
collectively herein as the "GRANTORS") and JPMORGAN CHASE BANK, N.A.
("JPMCB"), as Collateral Agent (in such capacity, the "COLLATERAL
AGENT").
A. Reference is made to the Credit Agreement dated as of January 10, 2005
(as amended, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"), among the Borrowers, the lenders from time to time party thereto
and JPMCB, as Administrative Agent.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement and the
Collateral Agreement referred to therein.
C. The Grantors have entered into the Collateral Agreement in order to
induce the Lenders to make Loans and the Issuing Bank to issue Letters of
Credit. Section 7.14 of Collateral Agreement provides that additional
Subsidiaries of any Borrower may become Subsidiary Parties under the Collateral
Agreement by execution and delivery of an instrument in the form of this
Supplement. The undersigned Subsidiary (the "NEW SUBSIDIARY") is executing this
Supplement in accordance with the requirements of the Credit Agreement to become
a Subsidiary Party under the Collateral Agreement in order to induce the Lenders
to make additional Loans and the Issuing Bank to issue additional Letters of
Credit and as consideration for Loans previously made and Letters of Credit
previously issued.
Accordingly, the Collateral Agent and the New Subsidiary agree as follows:
SECTION 1. In accordance with Section 7.14 of the Collateral Agreement, the
New Subsidiary by its signature below becomes a Subsidiary Party (and
accordingly, becomes a Guarantor and a Grantor), Grantor and Guarantor under the
Collateral Agreement with the same force and effect as if originally named
therein as a Subsidiary Party and the New Subsidiary hereby (a) agrees to all
the terms and provisions of the Collateral Agreement applicable to it as a
Subsidiary Party, Grantor and Guarantor thereunder and (b) represents and
warrants that the representations and warranties made by it as a Grantor and
Guarantor thereunder are true and correct on and as of the date
hereof. In furtherance of the foregoing, the New Subsidiary, as security for the
payment and performance in full of the Obligations (as defined in the Collateral
Agreement), does hereby create and grant to the Collateral Agent, its successors
and assigns, for the benefit of the Secured Parties, their successors and
assigns, a security interest in and lien on all of the New Subsidiary's right,
title and interest in and to the Collateral (as defined in the Collateral
Agreement) of the New Subsidiary. Each reference to a "Guarantor" or "Grantor"
in the Collateral Agreement shall be deemed to include the New Subsidiary. The
Collateral Agreement is hereby incorporated herein by reference.
SECTION 2. The New Subsidiary represents and warrants to the Collateral
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received a counterpart of this Supplement that bears the
signature of the New Subsidiary and the Collateral Agent has executed a
counterpart hereof. Delivery of an executed signature page to this Supplement by
facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Supplement.
SECTION 4. The New Subsidiary hereby represents and warrants that (a) set
forth on Schedule I attached hereto is a true and correct schedule of the
location of any and all Collateral of the New Subsidiary and (b) set forth under
its signature hereto, is the true and correct legal name of the New Subsidiary,
its jurisdiction of formation and the location of its chief executive office.
SECTION 5. Except as expressly supplemented hereby, the Collateral
Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Collateral Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
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SECTION 8. All communications and notices hereunder shall be in writing and
given as provided in Section 7.01 of the Collateral Agreement.
SECTION 9. The New Subsidiary agrees to reimburse the Collateral Agent for
its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent.
IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly
executed this Supplement to the Collateral Agreement as of the day and year
first above written.
[NAME OF NEW SUBSIDIARY],
by
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Name:
Title:
Legal Name:
Jurisdiction of Formation:
Location of Chief Executive office:
JPMORGAN CHASE BANK, N.A.,
AS COLLATERAL AGENT
by
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Name:
Title:
Schedule I
to the Supplement No _ to the
Guarantee and
Collateral Agreement
LOCATION OF COLLATERAL
Description Location
----------- --------
EQUITY INTERESTS
Number and
Number of Registered Class of Percentage
Issuer Certificate Owner Equity Interests of Equity Interests
------ ----------- ---------- ---------------- -------------------
DEBT SECURITIES
Principal
Issuer Amount Date of Note Maturity Date
------ --------- ------------ -------------
INTELLECTUAL PROPERTY