EXHIBIT 99.5
EXECUTION COPY
PLEDGE AND SECURITY AGREEMENT
DATED AS OF JUNE 3, 2003
AMONG
XXXXX LEMMERZ INTERNATIONAL, INC.
AND
HLI OPERATING COMPANY, INC.
AS GRANTORS
AND
EACH OTHER GRANTOR
FROM TIME TO TIME PARTY HERETO
AND
CITICORP NORTH AMERICA, INC.
AS ADMINISTRATIVE AGENT
AND
XXXXXX COMMERCIAL PAPER INC.
AS SYNDICATION AGENT
WEIL, GOTSHAL & XXXXXX LLP
000 XXXXX XXXXXX
XXX XXXX, XXX XXXX 00000-0000
PLEDGE AND SECURITY AGREEMENT, dated as of June 3, 2003, by
HLI OPERATING COMPANY, INC. ("Borrower"), XXXXX LEMMERZ INTERNATIONAL, INC.
("Holdings") and each of the other entities listed on the signature pages hereof
or that becomes a party hereto pursuant to Section 7.10 (Additional Grantors)
(each a "Grantor" and, collectively, the "Grantors"), in favor of Citicorp North
America, Inc. ("CNAI"), as administrative agent for the Secured Parties (as
defined in the Credit Agreement referred to below) (in such capacity, the
"Administrative Agent").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated as of June 3,
2003 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among HLI Operating Company, Inc., a
Delaware corporation (the "Borrower"), Xxxxx Lemmerz International, Inc., a
Delaware corporation ("Holdings"), the Lenders and Issuers party thereto,
Citicorp North America, Inc., as agent for the Lenders and Issuers, Xxxxxx
Commercial Paper Inc., as syndication agent, and General Electric Capital
Corporation, as documentation agent for the Lenders and Issuers, the Lenders and
the Issuers have severally agreed to make extensions of credit to the Borrower
upon the terms and subject to the conditions set forth therein;
WHEREAS, each Grantor will receive substantial direct and
indirect benefits from the making of the Loans, the issuance of the Letters of
Credit and the granting of the other financial accommodations to the Borrower
under the Credit Agreement;
WHEREAS, the Grantors other than the Borrower are party to the
Guaranty pursuant to which they have guaranteed the Obligations; and
WHEREAS, a condition precedent to the obligation of the
Lenders and the Issuers to make their respective extensions of credit to the
Borrower under the Credit Agreement is that the Grantors shall have executed and
delivered this Agreement to the Administrative Agent;
NOW, THEREFORE, in consideration of the premises and to induce
the Lenders, the Issuers and the Administrative Agent to enter into the Credit
Agreement and to induce the Lenders and the Issuers to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby agrees with
the Administrative Agent as follows:
ARTICLE I DEFINED TERMS
SECTION 1.1 DEFINITIONS
(a) Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein have the meanings given to them in the Credit
Agreement.
(b) Terms used herein that are defined in the UCC have
the meanings given to them in the UCC, including the following terms (which are
capitalized herein):
"Account Debtor"
"Account"
"Chattel Paper"
"Commercial Tort Claim"
"Commodity Account"
"Commodity Intermediary"
"Deposit Account"
"Document"
"Entitlement Holder"
"Entitlement Order"
"Equipment"
"Financial Asset"
"General Intangible"
"Instrument"
"Inventory"
"Investment Property"
"Letter-of-Credit Right"
"Proceeds"
"Securities Account"
"Securities Intermediary"
"Security"
"Security Entitlement"
(c) The following terms shall have the following
meanings:
"Additional Pledged Collateral" means all shares of, limited
or general partnership interests in, and limited liability company interests in,
and all securities convertible into, and warrants, options and other rights to
purchase or otherwise acquire, stock of, either (i) any Person that, after the
date of this Agreement, as a result of any occurrence, becomes a direct
Subsidiary of any Grantor or (ii) any issuer of Pledged Stock, any Partnership
or any LLC that is acquired by any Grantor after the date hereof; all
certificates or other instruments representing any of the foregoing; all
Security Entitlements of any Grantor in respect of any of the foregoing; all
additional indebtedness from time to time owed to any Grantor by any obligor on
the Pledged Notes and the instruments evidencing such indebtedness; and all
interest, cash, instruments and other property or Proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any of the foregoing. Additional Pledged Collateral may be General Intangibles
or Investment Property.
"Agreement" means this Pledge and Security Agreement.
"Approved Deposit Account" means a Deposit Account that is the
subject of an effective Deposit Account Control Agreement and that is maintained
by any Grantor with a Deposit Account Bank. "Approved Deposit Account" includes
all monies on deposit in a Deposit Account and all certificates and instruments,
if any, representing or evidencing such Deposit Account.
"Approved Securities Intermediary" means a Securities
Intermediary or Commodity Intermediary selected or approved by the
Administrative Agent and with respect to which a Grantor has delivered to the
Administrative Agent an executed Control Account Agreement.
"Cash Collateral Account" means any Deposit Account or
Securities Account established by the Administrative Agent as provided in
Section 2.3 (Cash Collateral Accounts) in which cash and Cash Equivalents may
from time to time be on deposit or held therein as provided
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in Section 5.2 (Accounts and Payments in Respect of General Intangibles) or 5.4
(Proceeds to be Turned Over To Administrative Agent) or the Credit Agreement.
"Collateral" has the meaning specified in Section 2.1
(Collateral).
"Control Account" means a Securities Account or Commodity
Account that is the subject of an effective Control Account Agreement and that
is maintained by any Grantor with an Approved Securities Intermediary. "Control
Account" includes all Financial Assets held in a Securities Account or a
Commodity Account and all certificates and instruments, if any, representing or
evidencing the Financial Assets contained therein.
"Control Account Agreement" means a letter agreement,
substantially in the form of Annex 2 (Form of Control Account Agreement) (with
such changes as may be agreed to by the Administrative Agent), executed by the
relevant Grantor, the Administrative Agent and the relevant Approved Securities
Intermediary.
"Copyright License" means any agreement whether written or
oral, providing for the grant by or to any Grantor of any right to use any
copyright.
"Copyrights" means (a) all copyrights arising under the laws
of the United States, any other country or any political subdivision thereof,
whether registered or unregistered and whether published or unpublished, all
registrations and recordings thereof and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any foreign counterparts thereof, and (b)
the right to obtain all renewals thereof.
"Deposit Account Bank" means a financial institution selected
or approved by the Administrative Agent and with respect to which a Grantor has
delivered to the Administrative Agent an executed Deposit Account Control
Agreement.
"Deposit Account Control Agreement" means a letter agreement,
substantially in the form of Annex 1 (Form of Deposit Account Control Agreement)
(with such changes as may be agreed to by the Administrative Agent), executed by
the Grantor, the Administrative Agent and the relevant Deposit Account Bank.
"Excluded Property" means (i) any permit, lease, license,
contract or other agreement held by any Grantor that validly prohibits the
creation by such Grantor of a Lien thereon, or any permit, lease, license
contract or other agreement held by any Grantor to the extent that any
Requirement of Law applicable thereto prohibits the creation of a Lien thereon,
but only, in each case, to the extent, and for so long as, such prohibition is
not removed, terminated or rendered unenforceable or otherwise deemed
ineffective by the UCC or any other Requirement of Law; and (ii) any Equipment
owned by any Grantor that is subject to a purchase money Lien or a Capital Lease
Obligation if the contract or other agreement in which such Lien is granted (or
the documentation providing for such Capital Lease Obligation) prohibits or
requires the consent of any Person other than the Borrower and its Subsidiaries
as a condition to the creation of any other Lien on such Equipment.
"Intellectual Property" means, collectively, all rights, title
and interest of any Grantor relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
Copyrights, Copyright Licenses, Patents, Patent Licenses,
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Trademarks, Trademark Licenses and trade secrets, and all rights to xxx at law
or in equity for any infringement or other impairment thereof, including the
right to receive all proceeds and damages therefrom.
"Intercompany Note" means any promissory note evidencing loans
made by any Grantor to any of its Subsidiaries or another Grantor.
"LLC" means each limited liability company in which a Grantor
has an interest, including those set forth on Schedule 2 (Pledged Collateral).
"LLC Agreement" means each operating agreement with respect to
an LLC, as each agreement has heretofore been, and may hereafter be, amended,
restated, supplemented or otherwise modified from time to time.
"Material Intellectual Property" means Intellectual Property
owned by or licensed to a Grantor and material to such Grantor's business.
"Partnership" means each partnership in which a Grantor has an
interest, including those set forth on Schedule 2 (Pledged Collateral).
"Partnership Agreement" means each partnership agreement
governing a Partnership, as each such agreement has heretofore been, and may
hereafter be, amended, restated, supplemented or otherwise modified.
"Patents" means (a) all letters patent of the United States,
any other country or any political subdivision thereof and all reissues and
extensions thereof, (b) all applications for letters patent of the United States
or any other country and all divisions, continuations and continuations-in-part
thereof and (c) all rights to obtain any reissues or extensions of the
foregoing.
"Patent License" means any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to manufacture, use,
import, sell or offer for sale any invention covered in whole or in part by a
Patent.
"Pledged Collateral" means, collectively, the Pledged Notes,
the Pledged Stock, the Pledged Partnership Interests, the Pledged LLC Interests,
any other Investment Property of any Grantor in excess of $300,000, all
certificates or other instruments representing any of the foregoing and all
Security Entitlements of any Grantor in respect of any of the foregoing. Pledged
Collateral may be General Intangibles (excluding Intellectual Property) or
Investment Property.
"Pledged LLC Interests" means all right, title and interest of
any Grantor as a member of any LLC and all right, title and interest of any
Grantor in, to and under any LLC Agreement to which it is a party.
"Pledged Notes" means all right, title and interest of any
Grantor in the Instruments evidencing all Indebtedness owed to such Grantor,
including all Indebtedness described on Schedule 2 (Pledged Collateral), issued
by the obligors named therein.
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"Pledged Partnership Interests" means all right, title and
interest of any Grantor as a limited or general partner in all Partnerships and
all right, title and interest of any Grantor in, to and under any Partnership
Agreements to which it is a party.
"Pledged Stock" means the shares of capital stock owned by
each Grantor, including all shares of capital stock listed on Schedule 2
(Pledged Collateral); provided, however, that only the outstanding capital stock
of a subsidiary that is not a Domestic Subsidiary possessing up to but not
exceeding 65% of the voting power of all classes of capital stock of such
controlled foreign corporation entitled to vote shall be deemed to be pledged
hereunder.
"Securities Act" means the Securities Act of 1933, as amended.
"Trademark License" means any agreement, whether written or
oral, providing for the grant by or to any Grantor of any right to use any
Trademark.
"Trademarks" means (a) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade dress,
service marks, logos and other source or business identifiers, and, in each
case, all goodwill associated therewith, whether now existing or hereafter
adopted or acquired, all registrations and recordings thereof and all
applications in connection therewith, in each case whether in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any State thereof or any other country or any political subdivision
thereof, or otherwise, and all common-law rights related thereto, and (b) the
right to obtain all renewals thereof.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the State of New York; provided, however, that, in the event that,
by reason of mandatory provisions of law, any of the attachment, perfection or
priority of the Administrative Agent's security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York, the term "UCC" shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such attachment, perfection or priority and for purposes of
definitions related to such provisions.
"Vehicles" means all vehicles covered by a certificate of
title law of any state.
SECTION 1.2 CERTAIN OTHER TERMS
(a) In this Agreement, in the computation of periods of
time from a specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" each mean "to but excluding"
and the word "through" means "to and including."
(b) The terms "herein," "hereof," "hereto" and
"hereunder" and similar terms refer to this Agreement as a whole and not to any
particular Article, Section, subsection or clause in this Agreement.
(c) References herein to an Annex, Schedule, Article,
Section, subsection or clause refer to the appropriate Annex or Schedule to, or
Article, Section, subsection or clause in this Agreement.
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(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(e) Where the context requires, provisions relating to
any Collateral, when used in relation to a Grantor, shall refer to such
Grantor's Collateral or any relevant part thereof.
(f) Any reference in this Agreement to a Loan Document
shall include all appendices, exhibits and schedules thereto, and, unless
specifically stated otherwise all amendments, restatements, supplements or other
modifications thereto, and as the same may be in effect at any time such
reference becomes operative.
(g) The term "including" means "including without
limitation" except when used in the computation of time periods.
(h) The terms "Lender," "Issuer," "Administrative Agent"
and "Secured Party" include their respective successors.
(i) References in this Agreement to any statute shall be
to such statute as amended or modified and in effect from time to time.
ARTICLE II GRANT OF SECURITY INTEREST
SECTION 2.1 COLLATERAL
For the purposes of this Agreement, all of the following
property now owned or at any time hereafter acquired by a Grantor or in which a
Grantor now has or at any time in the future may acquire any right, title or
interests is collectively referred to as the "Collateral":
(a) all Accounts;
(b) all Chattel Paper;
(c) all Deposit Accounts;
(d) all Documents;
(e) all Equipment;
(f) all General Intangibles;
(g) all Instruments;
(h) all Inventory;
(i) all Investment Property;
(j) all Letter-of-Credit Rights;
(k) all Vehicles;
(l) the Commercial Tort Claims described on Schedule 7
(Commercial Tort Claims) and on any supplement thereto received by the
Administrative Agent pursuant to Section 4.12 (Notice of Commercial Tort
Claims);
(m) all books and records pertaining to the other
property described in this Section 2.1;
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(n) all other goods and personal property of any Grantor,
whether tangible or intangible and wherever located;
(o) all property of any Grantor held by the
Administrative Agent or any other Secured Party, including all property of every
description, in the possession or custody of or in transit to the Administrative
Agent or such Secured Party for any purpose, including safekeeping, collection
or pledge, for the account of such Grantor or as to which such Grantor may have
any right or power; and
(p) to the extent not otherwise included, all Proceeds.
SECTION 2.2 GRANT OF SECURITY INTEREST IN COLLATERAL
Each Grantor, as collateral security for the full, prompt and
complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of the Secured Obligations of such Grantor, hereby
collaterally assigns, mortgages, pledges and hypothecates to the Administrative
Agent for the benefit of the Secured Parties, and grants to the Administrative
Agent for the benefit of the Secured Parties a lien on and security interest in,
all of its right, title and interest in, to and under the Collateral of such
Grantor. The foregoing grants of security interests shall not include a security
interest in Excluded Property; provided, however, such "Excluded Property" shall
not include any Proceeds, substitutions or replacements of Excluded Property
(unless such Proceeds, substitutions or replacements would constitute Excluded
Property); provided, however, that if and when any Collateral shall cease to be
Excluded Property, the Administrative Agent shall be deemed to have, and all
times after the date hereof to have had, a security interest in such Collateral.
SECTION 2.3 CASH COLLATERAL ACCOUNTS
The Administrative Agent has established a Deposit Account at
Citibank, N.A., designated as "Citicorp North America, Inc. - HLI Operating
Company, Inc. Concentration Account". The Administrative Agent may establish one
or more other Deposit Accounts and one or more Securities Accounts with such
depositaries and Securities Intermediaries as it in its sole discretion shall
determine. Each such account shall be in the name of the Administrative Agent
(but may also have words referring to the Borrower and the account's purpose).
The Borrower agrees that each such account shall be under the sole dominion and
control of the Administrative Agent. The Administrative Agent shall be the
Entitlement Holder with respect to each such Securities Account and the only
Person authorized to give Entitlement Orders with respect thereto. Without
limiting the foregoing, funds on deposit in any Cash Collateral Account may be
invested in Cash Equivalents at the direction of the Administrative Agent and,
except during the continuance of an Event of Default, the Administrative Agent
agrees with the Borrower to issue Entitlement Orders for such investments in
Cash Equivalents as requested by the Borrower; provided, however, that the
Administrative Agent shall not have any responsibility for, or bear any risk of
loss of, any such investment or income thereon. Neither the Borrower nor any
other Loan Party or Person claiming on behalf of or through the Borrower or any
other Loan Party shall have any right to demand payment of any funds held in any
Cash Collateral Account at any time prior to the termination of all outstanding
Letters of Credit and the payment in full of all then outstanding and payable
monetary Obligations. Except following notice from the Administrative Agent to
the Borrower during the continuance of an Event of Default the Administrative
Agent agrees to cause any funds on deposit in a Cash Collateral Account to be
paid at the written direction of the Borrower.
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ARTICLE III REPRESENTATIONS AND WARRANTIES
To induce the Lenders, the Issuers and the Administrative
Agent to enter into the Credit Agreement, each Grantor hereby represents and
warrants each of the following to the Administrative Agent, the Lenders, the
Issuers and the other Secured Parties:
SECTION 3.1 TITLE; NO OTHER LIENS
Except for the Lien granted to the Administrative Agent
pursuant to this Agreement and the other Liens permitted to exist on the
Collateral under the Credit Agreement, such Grantor is the record and beneficial
owner of the Pledged Collateral pledged by it hereunder constituting Instruments
or certificated securities, is the Entitlement Holder of all such Pledged
Collateral constituting Investment Property held in a Securities Account and has
rights in or the power to transfer each other item of Collateral in which a Lien
is granted by it hereunder, free and clear of any Lien.
SECTION 3.2 PERFECTION AND PRIORITY
The security interest granted pursuant to this Agreement shall
constitute a valid and continuing perfected security interest in favor of the
Administrative Agent in the Collateral for which perfection is governed by the
UCC or filing with the United States Copyright Office upon (i) the completion of
the filings and other actions specified on Schedule 3 (Filings) (which, in the
case of all filings and other documents referred to on such schedule, have been
delivered to the Administrative Agent in completed and duly executed form), (ii)
the delivery to the Administrative Agent of all Collateral consisting of
Instruments and certificated securities, in each case properly endorsed for
transfer to the Administrative Agent or in blank, (iii) the execution of Control
Account Agreements with respect to Investment Property not in certificated form,
(iv) the execution of Deposit Account Control Agreements with respect to Deposit
Accounts (other than the Cash Collateral Account) required to be subject to a
perfected security interest hereunder and (v) all appropriate filings having
been made with the United States Copyright Office. Such security interest shall
be prior to all other Liens on the Collateral except for Customary Permitted
Liens having priority over the Administrative Agent's Lien by operation of law
or otherwise as permitted under the Credit Agreement.
SECTION 3.3 NAME; JURISDICTION OF ORGANIZATION; CHIEF
EXECUTIVE OFFICE
(a) Except as set forth on Schedule 1 (State of
Incorporation; Principal Executive Office), within the five-year period
preceding the date hereof such Grantor has not had, or operated in any
jurisdiction, under any trade name, fictitious name or other name other than its
legal name.
(b) On the date hereof such Grantor's jurisdiction of
organization, organizational identification number, if any, and the location of
such Grantor's chief executive office or sole place of business is specified on
Schedule 1 (State of Incorporation; Principal Executive Office).
SECTION 3.4 INVENTORY AND EQUIPMENT
On the date hereof, such Grantor's Inventory and Equipment
(other than mobile goods and Inventory or Equipment in transit) are kept at the
locations listed on Schedule 4 (Location of Inventory and Equipment).
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SECTION 3.5 PLEDGED COLLATERAL
(a) The Pledged Stock, Pledged Partnership Interests and
Pledged LLC Interests pledged hereunder by such Grantor are listed on Schedule 2
(Pledged Collateral) and constitute that percentage of the issued and
outstanding equity of all classes of each issuer thereof as set forth on
Schedule 2 (Pledged Collateral).
(b) All of the Pledged Stock, Pledged Partnership
Interests and Pledged LLC Interests have been duly and validly issued and are
fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal,
valid and binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, and general equitable
principles (whether considered in a proceeding in equity or at law).
(d) All Pledged Collateral and, if applicable, any
Additional Pledged Collateral, consisting of certificated securities or
Instruments has been delivered to the Administrative Agent in accordance with
Section 4.4(a) (Pledged Collateral).
(e) Except as provided in Section 4.5 (Control Accounts;
Approved Deposit Accounts), all Pledged Collateral held by a Securities
Intermediary in a Securities Account is in a Control Account.
(f) Other than the Pledged Partnership Interests and the
Pledged LLC Interests that constitute General Intangibles, there is no Pledged
Collateral other than that represented by certificated securities or Instruments
in the possession of the Administrative Agent or that consisting of Financial
Assets held in a Control Account.
(g) The LLC Agreement governing any Pledged LLC Interest
and the Partnership Agreement governing any Pledged Partnership Interest provide
that, upon the occurrence and during the continuance of an Event of Default, the
Administrative Agent shall be entitled to exercise all of the rights of the
Grantor granting the security interest therein, and that a transferee or
assignee of a membership interest or partnership interest, as the case may be,
of such LLC or Partnership, as the case may be, shall become a member or
partner, as the case may be, of such LLC or Partnership, as the case may be,
entitled to participate in the management thereof and, upon the transfer of the
entire interest of such Grantor, such Grantor ceases to be a member or partner,
as the case may be.
SECTION 3.6 ACCOUNTS
No amount payable to such Grantor under or in connection with
any Account is evidenced by any Instrument or Chattel Paper that has not been
delivered to the Administrative Agent, properly endorsed for transfer, to the
extent delivery is required by Section 4.4 (Pledged Collateral).
SECTION 3.7 INTELLECTUAL PROPERTY
(a) Schedule 5 (Intellectual Property) lists all Material
Intellectual Property of such Grantor on the date hereof, separately identifying
that owned by such Grantor and that
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licensed to such Grantor. The Material Intellectual Property set forth on
Schedule 5 (Intellectual Property) for such Grantor constitutes all of the
intellectual property rights material to the conduct of its business.
(b) On the date hereof, all Material Intellectual
Property owned by such Grantor is valid, subsisting, unexpired and enforceable,
has not been adjudged invalid and has not been abandoned to the knowledge of
Grantor, and the use thereof in the business of such Grantor does not infringe
the intellectual property rights of any other Person.
(c) Except as set forth in Schedule 5 (Intellectual
Property), on the date hereof, none of the Material Intellectual Property owned
by such Grantor is the subject of any material licensing or franchise agreement
pursuant to which such Grantor is the licensor or franchisor.
(d) No holding, decision or judgment has been rendered by
any Governmental Authority naming a Grantor that would limit, cancel or question
the validity of, or such Grantor's rights in, any Material Intellectual
Property.
(e) Except as set forth in Schedule 5 (Intellectual
Property), no action or proceeding seeking to limit or cancel the validity of
any Material Intellectual Property owned by such Grantor or such Grantor's
ownership interest therein is on the date hereof pending or, to the knowledge of
such Grantor, threatened. As of the date hereof, there are no claims, judgments
or settlements to be paid by such Grantor relating to the Material Intellectual
Property.
SECTION 3.8 DEPOSIT ACCOUNTS; CONTROL ACCOUNTS
The only Deposit Accounts and Securities Accounts maintained
by any Grantor on the date hereof are those listed on Schedule 6 (Bank Accounts;
Control Accounts), which sets forth such information separately for each
Grantor.
SECTION 3.9 COMMERCIAL TORT CLAIMS
The only existing or potential Commercial Tort Claims of any
Grantor existing on the date hereof (regardless of whether the amount, defendant
or other material facts can be determined and regardless of whether such
Commercial Tort Claim has been asserted, threatened or has otherwise been made
known to the obligee thereof or whether litigation has been commenced for such
claims) are those listed on Schedule 7 (Commercial Tort Claims), which sets
forth such information separately for each Grantor.
ARTICLE IV COVENANTS
Each Grantor agrees with the Administrative Agent to the
following, as long as any Obligation or Commitment remains outstanding and, in
each case, unless the Requisite Lenders otherwise consent in writing:
SECTION 4.1 GENERALLY
Such Grantor shall (a) except for the security interest
created by this Agreement, not create or suffer to exist any Lien upon or with
respect to any Collateral, except Liens permitted under Section 8.2 (Liens,
Etc.) of the Credit Agreement, (b) not use or permit any
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Collateral to be used unlawfully or in violation of any provision of this
Agreement, any other Loan Document, any Requirement of Law or any policy of
insurance covering the Collateral, (c) not sell, transfer or assign (by
operation of law or otherwise) any Collateral except as permitted under the
Credit Agreement, (d) not enter into any agreement or undertaking restricting
the right or ability of such Grantor or the Administrative Agent to sell, assign
or transfer any Collateral if such restriction would have a Material Adverse
Effect, except as otherwise permitted under the Credit Agreement, and (e)
promptly notify the Administrative Agent of its entry into any agreement or
assumption of undertaking that restricts the ability to sell, assign or transfer
any Collateral regardless of whether or not it has a Material Adverse Effect.
SECTION 4.2 MAINTENANCE OF PERFECTED SECURITY INTEREST;
FURTHER DOCUMENTATION
(a) Such Grantor shall maintain the security interest
created by this Agreement as a perfected security interest having at least the
priority described in Section 3.2 (Perfection and Priority) and shall defend
such security interest against the claims and demands of all Persons.
(b) Such Grantor shall furnish to the Administrative
Agent from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Administrative Agent may reasonably request, all in reasonable
detail.
(c) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of such Grantor,
such Grantor shall promptly and duly execute and deliver, and have recorded,
such further instruments and documents and take such further action as the
Administrative Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including any authorization for the filing of any financing or
continuation statement under the UCC (or other similar laws) in effect in any
jurisdiction with respect to the security interest created hereby and the
execution and delivery of Deposit Account Control Agreements and Control Account
Agreements.
SECTION 4.3 CHANGES IN LOCATIONS, NAME, ETC.
(a) Except upon 15 days' prior written notice to the
Administrative Agent and delivery to the Administrative Agent of (i) all
additional executed financing statements and other documents reasonably
requested by the Administrative Agent to maintain the validity, perfection and
priority of the security interests provided for herein and (ii) if applicable, a
written supplement to Schedule 4 (Location of Inventory and Equipment) showing
any additional location at which Inventory or Equipment shall be kept, such
Grantor shall not do any of the following:
(i) permit any Inventory or Equipment to be kept at a
location other than those listed on Schedule 4 (Location of Inventory
and Equipment);
(ii) change its jurisdiction of organization or the
location of its chief executive office or sole place of business from
that referred to in Section 3.3 (Name; Jurisdiction of Organization;
Chief Executive Office); or
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(iii) change its name, identity or corporate structure to
such an extent that any financing statement filed in connection with
this Agreement would become misleading.
(b) Such Grantor shall keep and maintain at its own cost
and expense satisfactory and complete records of the Collateral, including a
record of all payments received and all credits granted with respect to the
Collateral and all other dealings with the Collateral. If requested by the
Administrative Agent, the security interest of the Administrative Agent shall be
noted on the certificate of title of each Vehicle.
SECTION 4.4 PLEDGED COLLATERAL
(a) Such Grantor shall (i) deliver to the Administrative
Agent, all certificates and Instruments representing or evidencing any Pledged
Collateral (including Additional Pledged Collateral), and, at the Collateral
Agent's request, all Instruments, whether now existing or hereafter acquired, in
suitable form for transfer by delivery or, as applicable, accompanied by such
Grantor's endorsement, where necessary, or duly executed instruments of transfer
or assignment in blank, all in form and substance satisfactory to the
Administrative Agent, together, in respect of any Additional Pledged Collateral,
with a Pledge Amendment, duly executed by the Grantor, in substantially the form
of Annex 3 (Form of Pledge Amendment) or such other documentation acceptable to
the Administrative Agent and (ii) except as provided in Section 4.5 (Control
Accounts; Approved Deposit Accounts), maintain all other Pledged Collateral
constituting Investment Property in a Control Account. Such Grantor authorizes
the Administrative Agent to attach each Pledge Amendment to this Agreement. The
Administrative Agent shall have the right, at any time in its discretion and
without notice to the Grantor, to transfer to or to register in its name or in
the name of its nominees any Pledged Collateral. The Administrative Agent shall
have the right at any time after the occurrence of an Event of Default to
exchange any certificate or instrument representing or evidencing any Pledged
Collateral for certificates or instruments of smaller or larger denominations.
(b) Except as provided in Article V (Remedial
Provisions), such Grantor shall be entitled to receive all cash dividends paid
in respect of the Pledged Collateral (other than liquidating or distributing
dividends) with respect to the Pledged Collateral. Any sums paid upon or in
respect of any Pledged Collateral upon the liquidation or dissolution of any
issuer of any Pledged Collateral, any distribution of capital made on or in
respect of any Pledged Collateral or any property distributed upon or with
respect to any Pledged Collateral pursuant to the recapitalization or
reclassification of the capital of any issuer of Pledged Collateral or pursuant
to the reorganization thereof shall, unless otherwise subject to a perfected
security interest in favor of the Administrative Agent, be delivered to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Secured Obligations. If any sum of money or property so paid or
distributed in respect of any Pledged Collateral shall be received by such
Grantor, such Grantor shall, until such money or property is paid or delivered
to the Administrative Agent, hold such money or property in trust for the
Administrative Agent, segregated from other funds of such Grantor, as additional
security for the Secured Obligations.
(c) Except as provided in Article V (Remedial
Provisions), such Grantor shall be entitled to exercise all voting, consent and
corporate rights with respect to the Pledged Collateral; provided, however, that
no vote shall be cast, consent given or right exercised or other action taken by
such Grantor that would impair the Collateral, result in any violation of any
provision of the Credit Agreement, this Agreement or any other Loan Document or,
without prior notice to the Administrative Agent, enable or permit any issuer of
Pledged Collateral to issue any
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stock or other equity securities of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any stock or
other equity securities of any nature of any issuer of Pledged Collateral.
(d) Such Grantor shall not grant control over any
Investment Property to any Person other than the Administrative Agent.
(e) In the case of each Grantor that is an issuer of
Pledged Collateral, such Grantor agrees to be bound by the terms of this
Agreement relating to the Pledged Collateral issued by it and shall comply with
such terms insofar as such terms are applicable to it. In the case of each
Grantor that is a partner in a Partnership, such Grantor hereby consents to the
extent required by the applicable Partnership Agreement to the pledge by each
other Grantor, pursuant to the terms hereof, of the Pledged Partnership
Interests in such Partnership and to the transfer of such Pledged Partnership
Interests to the Administrative Agent or its nominee and to the substitution of
the Administrative Agent or its nominee as a substituted partner in such
Partnership with all the rights, powers and duties of a general partner or a
limited partner, as the case may be. In the case of each Grantor member of an
LLC, such Grantor hereby consents to the extent required by the applicable LLC
Agreement to the pledge by each other Grantor, pursuant to the terms hereof, of
the Pledged LLC Interests in such LLC and to the transfer of such Pledged LLC
Interests to the Administrative Agent or its nominee and to the substitution of
the Administrative Agent or its nominee as a substituted member of the LLC with
all the rights, powers and duties of a member of the LLC in question.
(f) Such Grantor shall not agree to any amendment of an
LLC Agreement or Partnership Agreement that in any way adversely affects the
perfection of the security interest of the Administrative Agent in the Pledged
Partnership Interests or Pledged LLC Interests pledged by such Grantor
hereunder, including any amendment electing to treat the membership interest or
partnership interest of such Grantor as a security under Section 8-103 of the
UCC.
SECTION 4.5 CONTROL ACCOUNTS; APPROVED DEPOSIT ACCOUNTS
(a) Such Grantor shall (i) deposit in an Approved Deposit
Account all cash received by such Grantor, (ii) not establish or maintain any
Securities Account that is not a Control Account and (iii) not establish or
maintain any Deposit Account other than with a Deposit Account Bank, a Lender or
an Affiliate of a Lender; provided, however, that any Grantor may (i) maintain
payroll, withholding tax and other fiduciary accounts and (ii) maintain other
accounts so long as the aggregate balance in all such accounts does not exceed
$5,000,000.
(b) Such Grantor shall instruct each Account Debtor or
other Person obligated to make a payment to such Grantor under a General
Intangible to make payment, or to continue to make payment, as the case may be,
to an Approved Deposit Account and shall deposit in an Approved Deposit Account
all Proceeds of such Accounts and General Intangibles received by such Grantor
from any other Person immediately upon receipt.
(c) In the event (i) such Grantor or any Approved
Securities Intermediary or Deposit Account Bank shall, after the date hereof,
terminate an agreement with respect to the maintenance of a Control Account or
Approved Deposit Account for any reason, (ii) the Administrative Agent shall
demand such termination as a result of the failure of an Approved Securities
Intermediary or Deposit Account Bank to comply with the terms of the applicable
Control Account Agreement or Deposit Account Control Agreement, or (iii) the
Administrative
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Agent determines in its sole discretion that the financial condition of an
Approved Securities Intermediary or Deposit Account Bank, as the case may be,
has materially deteriorated, such Grantor agrees to notify all of its obligors
that were making payments to such terminated Control Account or Approved Deposit
Account, as the case may be, to make all future payments to another Control
Account or Approved Deposit Account, as the case may be.
SECTION 4.6 ACCOUNTS
(a) Such Grantor shall not, other than in the ordinary
course of business consistent with its past practice, (i) grant any extension of
the time of payment of any Account, (ii) compromise or settle any Account for
less than the full amount thereof, (iii) release, wholly or partially, any
Person liable for the payment of any Account, (iv) allow any credit or discount
on any Account or (v) amend, supplement or modify any Account in any manner that
could adversely affect the value thereof.
(b) The Administrative Agent shall have the right to make
test verifications of the Accounts in any manner and through any medium that it
reasonably considers advisable, and such Grantor shall furnish all such
assistance and information as the Administrative Agent may reasonably require in
connection therewith. At any time and from time to time, upon the Administrative
Agent's reasonable request and at the expense of the relevant Grantor, such
Grantor shall cause independent public accountants or others satisfactory to the
Administrative Agent to furnish to the Administrative Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Accounts; provided, however, that unless a Default or Event of Default shall be
continuing, the Administrative Agent shall request no more than four such
reports during any calendar year.
SECTION 4.7 DELIVERY OF INSTRUMENTS AND CHATTEL PAPER
If any amount in excess of $300,000 payable under or in
connection with any Collateral owned by such Grantor shall be or become
evidenced by an Instrument or Chattel Paper, such Grantor shall immediately
deliver such Instrument or Chattel Paper to the Administrative Agent, duly
indorsed in a manner satisfactory to the Administrative Agent, or, if consented
to by the Administrative Agent, shall xxxx all such Instruments and Chattel
Paper with the following legend: "This writing and the obligations evidenced or
secured hereby are subject to the security interest of Citicorp North America,
Inc., as Administrative Agent".
SECTION 4.8 INTELLECTUAL PROPERTY
(a) Such Grantor (either itself or through licensees)
shall (i) continue to use each Trademark that is Material Intellectual Property
in order to maintain such Trademark in full force and effect with respect to
each class of goods for which such Trademark is currently used, free from any
claim of abandonment for non-use, (ii) maintain as in the past the quality of
products and services offered under such Trademark, (iii) use such Trademark
with the appropriate notice of registration and all other notices and legends
required by applicable Requirements of Law, (iv) not adopt or use any xxxx that
is confusingly similar to such Trademark unless the Administrative Agent shall
obtain a perfected security interest in such xxxx pursuant to this Agreement and
(v) not (and not knowingly permit any licensee or sublicensee thereof to) do any
act or knowingly omit to do any act whereby such Trademark may become
invalidated or impaired in any way.
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(b) Such Grantor shall not (and not knowingly permit any
licensee or sublicensee thereof to) do any act, or omit to do any act, whereby
any Patent that is Material Intellectual Property may become forfeited,
abandoned or dedicated to the public.
(c) Such Grantor (i) shall not (and shall not knowingly
permit any licensee or sublicensee thereof to) do any act or omit to do any act
whereby any portion of the Copyrights that is Material Intellectual Property may
become invalidated or otherwise impaired and (ii) shall not (and not knowingly
permit any licensee or sublicensee thereof to) do any act whereby any portion of
the Copyrights that is Material Intellectual Property may fall into the public
domain.
(d) Such Grantor shall not (and not knowingly permit any
licensee or sublicensee thereof to) do any act, or omit to do any act, whereby
any trade secret that is Material Intellectual Property may become publicly
available or otherwise unprotectable.
(e) Such Grantor (either itself or through licensees)
shall not knowingly do any act that uses any Material Intellectual Property to
infringe the intellectual property rights of any other Person.
(f) Such Grantor shall notify the Administrative Agent
promptly if it knows that any application or registration relating to any
Material Intellectual Property may become forfeited, abandoned or dedicated to
the public, or of any material adverse determination or development (including
the institution of, or any such determination or development in, any proceeding
in the United States Patent and Trademark Office, the United States Copyright
Office or any court or tribunal in any country) regarding such Grantor's
ownership of, right to use, interest in, or the validity of, any Material
Intellectual Property.
(g) Whenever such Grantor, either by itself or through
any agent, licensee or designee, shall file an application for the registration
of any Intellectual Property with the United States Patent and Trademark Office,
the United States Copyright Office or any similar office or agency within or
outside the United States, such Grantor shall report such filing to the
Administrative Agent within five Business Days after such Grantor receives
official confirmation of such filing. Upon request of the Administrative Agent,
such Grantor shall execute and deliver, and have recorded, all agreements,
instruments, documents and papers as the Administrative Agent may request to
evidence the Administrative Agent's security interest in such Copyright, Patent
or Trademark and the goodwill of such Grantor relating thereto or represented
thereby.
(h) Such Grantor shall take all reasonable actions
necessary or requested by the Administrative Agent, including in any proceeding
before the United States Patent and Trademark Office, the United States
Copyright Office or any similar office or agency, to maintain and pursue each
application (and to obtain the relevant registration) and to maintain each
registration of any Copyright, Trademark or Patent that is Material Intellectual
Property, including filing of applications for renewal, affidavits of use,
affidavits of incontestability and opposition and interference and cancellation
proceedings.
(i) In the event that any Material Intellectual Property
is infringed upon or misappropriated or diluted by a third party, such Grantor
shall notify the Administrative Agent promptly after such Grantor learns
thereof. Such Grantor shall take appropriate action in response to such
infringement, misappropriation of dilution, including promptly bringing suit for
infringement, misappropriation or dilution and to recover all damages for such
infringement,
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misappropriation or dilution, and shall take such other actions as may be
appropriate in its reasonable judgment under the circumstances to protect such
Material Intellectual Property.
(j) Unless otherwise agreed to by the Administrative
Agent, such Grantor shall execute and deliver to the Administrative Agent for
filing in (i) the United States Copyright Office a short-form copyright security
agreement in the form attached hereto as Annex 5 (Form of Short Form Copyright
Security Agreement), (ii) in the United States Patent and Trademark Office a
short-form patent security agreement in the form attached hereto as Annex 6
(Form of Short Form Patent Security Agreement) and (iii) the United States
Patent and Trademark Office a short-form trademark security agreement in form
attached hereto as Annex 7 (Form of Short Form Trademark Security Agreement).
SECTION 4.9 VEHICLES
Upon the reasonable request of the Administrative Agent,
within 30 days after the date of such request and, with respect to any Vehicle
acquired by such Grantor subsequent to the date of any such request, within 30
days after the date of acquisition thereof, such Grantor shall file all
applications for certificates of title or ownership indicating the
Administrative Agent's first priority security interest in the Vehicle covered
by such certificate and any other necessary documentation, in each office in
each jurisdiction that the Administrative Agent shall deem advisable to perfect
its security interests in the Vehicles.
SECTION 4.10 PAYMENT OF OBLIGATIONS
Such Grantor shall pay and discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all
taxes, assessments and governmental charges or levies imposed upon the
Collateral or in respect of income or profits therefrom, as well as all claims
of any kind (including claims for labor, materials and supplies) against or with
respect to the Collateral, except that no such charge need be paid if the amount
or validity thereof is currently being contested in good faith by appropriate
proceedings, reserves in conformity with GAAP with respect thereto have been
provided on the books of such Grantor and such proceedings could not reasonably
be expected to result in the sale, forfeiture or loss of any material portion of
the Collateral or any interest therein.
SECTION 4.11 INSURANCE
Such Grantor shall (i) maintain, and cause to be maintained
for each of its Subsidiaries insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which such Grantor or such Subsidiary operates, and
such other insurance as may be reasonably requested by the Requisite Lenders,
and, in any event, all insurance required by any Collateral Documents and (ii)
cause all such insurance that is material to name the Administrative Agent on
behalf of the Secured Parties as additional insured or loss payee, as
appropriate, and to provide that no cancellation, material addition in amount or
material change in coverage shall be effective until after 30 days' written
notice thereof to the Administrative Agent.
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SECTION 4.12 NOTICE OF COMMERCIAL TORT CLAIMS
Such Grantor agrees that, if it shall acquire any interest in
any Commercial Tort Claim (whether from another Person or because such
Commercial Tort Claim shall have come into existence), (i) such Grantor shall,
immediately upon such acquisition, deliver to the Administrative Agent, in each
case in form and substance satisfactory to the Administrative Agent, a notice of
the existence and nature of such Commercial Tort Claim and deliver a supplement
to Schedule 7 (Commercial Tort Claims) containing a specific description of such
Commercial Tort Claim, certified by such Grantor as true, correct and complete,
(ii) the provision of Section 2.1 (Collateral) shall apply to such Commercial
Tort Claim (and the Grantor authorizes the Administrative Agent to supplement
such schedule with a description of such Commercial Tort Claim if such Grantor
fails to deliver the supplement described in clause (i)) and (iii) such Grantor
shall execute and deliver to the Administrative Agent, in each case in form and
substance satisfactory to the Administrative Agent, any certificate, agreement
and other document, and take all other action, deemed by the Administrative
Agent to be reasonably necessary or appropriate for the Administrative Agent to
obtain, on behalf of the Lenders, a first-priority, perfected security interest
in all such Commercial Tort Claims. Any supplement to Schedule 7 (Commercial
Tort Claims) delivered pursuant to this Section 4.12 (Notice of Commercial Tort
Claims) shall become part of Schedule 7 (Commercial Tort Claims) for all
purposes hereunder other than, absent a written consent of the Administrative
Agent, for purpose of the representations and warranties set forth in Section
3.9 (Commercial Tort Claims).
ARTICLE V REMEDIAL PROVISIONS
SECTION 5.1 CODE AND OTHER REMEDIES
During the continuance of an Event of Default, the
Administrative Agent may exercise, in addition to all other rights and remedies
granted to it in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Secured Obligations, all rights and
remedies of a secured party under the UCC or any other applicable law. Without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon any Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon any Collateral, and may
forthwith sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver any Collateral (or contract to do any of the foregoing),
in one or more parcels at public or private sale or sales, at any exchange,
broker's board or office of the Administrative Agent or any Lender or elsewhere
upon such terms and conditions as it may deem advisable and at such prices as it
may deem best, for cash or on credit or for future delivery without assumption
of any credit risk. The Administrative Agent shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any such private
sale or sales, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption in any Grantor, which right or equity is
hereby waived and released. Each Grantor further agrees, at the Administrative
Agent's request, to assemble the Collateral and make it available to the
Administrative Agent at places that the Administrative Agent shall reasonably
select, whether at such Grantor's premises or elsewhere. The Administrative
Agent shall apply the net proceeds of any action taken by it pursuant to this
Section 5.1, after deducting all reasonable costs and expenses of every kind
incurred in connection therewith or incidental to the care or safekeeping of any
Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and any other Secured
17
Party hereunder, including reasonable attorneys' fees and disbursements, to the
payment in whole or in part of the Secured Obligations, in such order as the
Credit Agreement shall prescribe, and only after such application and after the
payment by the Administrative Agent of any other amount required by any
provision of law, need the Administrative Agent account for the surplus, if any,
to any Grantor. To the extent permitted by applicable law, each Grantor waives
all claims, damages and demands it may acquire against the Administrative Agent
or any other Secured Party arising out of the exercise by them of any rights
hereunder. If any notice of a proposed sale or other disposition of Collateral
shall be required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition.
SECTION 5.2 ACCOUNTS AND PAYMENTS IN RESPECT OF GENERAL
INTANGIBLES
(a) If required by the Administrative Agent at any time
during the continuance of an Event of Default, any payment of Accounts or
payment in respect of General Intangibles, when collected by any Grantor, shall
be forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly indorsed by such Grantor to the
Administrative Agent if required, in a Cash Collateral Account, subject to
withdrawal by the Administrative Agent as provided in Section 5.4 (Proceeds to
be Turned Over To Administrative Agent). Until so turned over, such payment
shall be held by such Grantor in trust for the Administrative Agent, segregated
from other funds of such Grantor. Each such deposit of Proceeds of Accounts and
payments in respect of General Intangibles shall be accompanied by a report
identifying in reasonable detail the nature and source of the payments included
in the deposit.
(b) At the Administrative Agent's request, during the
continuance of an Event of Default, each Grantor shall deliver to the
Administrative Agent all original and other documents evidencing, and relating
to, the agreements and transactions that gave rise to the Accounts or payments
in respect of General Intangibles, including all original orders, invoices and
shipping receipts.
(c) The Administrative Agent may, without notice, at any
time during the continuance of an Event of Default, limit or terminate the
authority of a Grantor to collect its Accounts or amounts due under General
Intangibles or any thereof.
(d) The Administrative Agent in its own name or in the
name of others may at any time during the continuance of an Event of Default
communicate with Account Debtors to verify with them to the Administrative
Agent's satisfaction the existence, amount and terms of any Account or amounts
due under any General Intangible.
(e) Upon the request of the Administrative Agent at any
time during the continuance of an Event of Default, each Grantor shall notify
Account Debtors that the Accounts or General Intangibles have been collaterally
assigned to the Administrative Agent and that payments in respect thereof shall
be made directly to the Administrative Agent. In addition, the Administrative
Agent may at any time during the continuance of an Event of Default enforce such
Grantor's rights against such Account Debtors and obligors of General
Intangibles.
(f) Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Accounts and payments in respect
of General Intangibles to observe and perform all the conditions and obligations
to be observed and performed by it thereunder, all in accordance with the terms
of any agreement giving rise thereto. Neither the
18
Administrative Agent nor any other Secured Party shall have any obligation or
liability under any agreement giving rise to an Account or a payment in respect
of a General Intangible by reason of or arising out of this Agreement or the
receipt by the Administrative Agent nor any other Secured Party of any payment
relating thereto, nor shall the Administrative Agent nor any other Secured Party
be obligated in any manner to perform any obligation of any Grantor under or
pursuant to any agreement giving rise to an Account or a payment in respect of a
General Intangible, to make any payment, to make any inquiry as to the nature or
the sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts that
may have been assigned to it or to which it may be entitled at any time or
times.
SECTION 5.3 PLEDGED COLLATERAL
(a) During the continuance of an Event of Default, upon
notice by the Administrative Agent to the relevant Grantor or Grantors, (i) the
Administrative Agent shall have the right to receive any Proceeds of the Pledged
Collateral and make application thereof to the Obligations in the order set
forth in the Credit Agreement and (ii) the Administrative Agent or its nominee
may exercise (A) any voting, consent, corporate and other right pertaining to
the Pledged Collateral at any meeting of shareholders, partners or members, as
the case may be, of the relevant issuer or issuers of Pledged Collateral or
otherwise and (B) any right of conversion, exchange and subscription and any
other right, privilege or option pertaining to the Pledged Collateral as if it
were the absolute owner thereof (including the right to exchange at its
discretion any of the Pledged Collateral upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of any issuer of Pledged Securities, the right to deposit and deliver
any Pledged Collateral with any committee, depositary, transfer agent, registrar
or other designated agency upon such terms and conditions as the Administrative
Agent may determine), all without liability except to account for property
actually received by it; provided, however, that the Administrative Agent shall
have no duty to any Grantor to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing.
(b) In order to permit the Administrative Agent to
exercise the voting and other consensual rights that it may be entitled to
exercise pursuant hereto and to receive all dividends and other distributions
that it may be entitled to receive hereunder, (i) each Grantor shall promptly
execute and deliver (or cause to be executed and delivered) to the
Administrative Agent all such proxies, dividend payment orders and other
instruments as the Administrative Agent may from time to time reasonably request
and (ii) without limiting the effect of clause (i) above, such Grantor hereby
grants to the Administrative Agent an irrevocable proxy to vote all or any part
of the Pledged Collateral and to exercise all other rights, powers, privileges
and remedies to which a holder of the Pledged Collateral would be entitled
(including giving or withholding written consents of shareholders, partners or
members, as the case may be, calling special meetings of shareholders, partners
or members, as the case may be, and voting at such meetings), which proxy shall
be effective, automatically and without the necessity of any action (including
any transfer of any Pledged Collateral on the record books of the issuer
thereof) by any other person (including the issuer of such Pledged Collateral or
any officer or agent thereof) during the continuance of an Event of Default and
which proxy shall only terminate upon the payment in full of the Secured
Obligations.
(c) Each Grantor hereby expressly authorizes and
instructs each issuer of any Pledged Collateral pledged hereunder by such
Grantor to (i) comply with any instruction
19
received by it from the Administrative Agent in writing that (A) states that an
Event of Default has occurred and is continuing and (B) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that such issuer shall
be fully protected in so complying and (ii) unless otherwise expressly permitted
hereby, pay any dividend or other payment with respect to the Pledged Collateral
directly to the Administrative Agent.
(d) It is hereby acknowledged and agreed that the
Administrative Agent shall not deliver any blockage notice or similar document
pursuant to any Deposit Account Control Agreement or Control Account Agreement
unless an Event of Default shall have occurred and be continuing.
SECTION 5.4 PROCEEDS TO BE TURNED OVER TO ADMINISTRATIVE
AGENT
All Proceeds received by the Administrative Agent hereunder
shall be held by the Administrative Agent in a Cash Collateral Account. All
Proceeds while held by the Administrative Agent in a Cash Collateral Account (or
by such Grantor in trust for the Administrative Agent) shall continue to be held
as collateral security for the Secured Obligations and shall not constitute
payment thereof until applied as provided in the Credit Agreement.
SECTION 5.5 REGISTRATION RIGHTS
(a) If the Administrative Agent shall determine to
exercise its right to sell any the Pledged Collateral pursuant to Section 5.1
(Code and Other Remedies), and if in the opinion of the Administrative Agent it
is necessary or advisable to have the Pledged Collateral, or any portion thereof
to be registered under the provisions of the Securities Act, the relevant
Grantor shall cause the issuer thereof to (i) execute and deliver, and cause the
directors and officers of such issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the Administrative Agent, necessary or advisable to
register the Pledged Collateral, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering of
the Pledged Collateral, or that portion thereof to be sold and (iii) make all
amendments thereto or to the related prospectus that, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Each Grantor agrees to
cause such issuer to comply with the provisions of the securities or "Blue Sky"
laws of any jurisdiction that the Administrative Agent shall designate and to
make available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) satisfying the provisions of Section 11(a)
of the Securities Act.
(b) Each Grantor recognizes that the Administrative Agent
may be unable to effect a public sale of any Pledged Collateral by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise or may determine that a public sale is
impracticable or not commercially reasonable and, accordingly, may resort to one
or more private sales thereof to a restricted group of purchasers that shall be
obliged to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have
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been made in a commercially reasonable manner. The Administrative Agent shall be
under no obligation to delay a sale of any Pledged Collateral for the period of
time necessary to permit the issuer thereof to register such securities for
public sale under the Securities Act, or under applicable state securities laws,
even if such issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Collateral pursuant to this Section
5.5 valid and binding and in compliance with all other applicable Requirements
of Law. Each Grantor further agrees that a breach of any covenant contained in
this Section 5.5 will cause irreparable injury to the Administrative Agent and
other Secured Parties, that the Administrative Agent and the other Secured
Parties have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 5.5 shall be
specifically enforceable against such Grantor, and such Grantor hereby waives
and agrees not to assert any defense against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred
under the Credit Agreement.
SECTION 5.6 DEFICIENCY
Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay the Secured Obligations and the fees and disbursements of any attorney
employed by the Administrative Agent or any other Secured Party to collect such
deficiency.
ARTICLE VI THE ADMINISTRATIVE AGENT
SECTION 6.1 ADMINISTRATIVE AGENT'S APPOINTMENT AS
ATTORNEY-IN-FACT
(a) Each Grantor hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Grantor and in
the name of such Grantor or in its own name, for the purpose of carrying out the
terms of this Agreement, to take any appropriate action and to execute any
document or instrument that may be necessary or desirable to accomplish the
purposes of this Agreement, and, without limiting the generality of the
foregoing, each Grantor hereby gives the Administrative Agent the power and
right, on behalf of such Grantor, without notice to or assent by such Grantor,
to do any of the following:
(i) in the name of such Grantor or its own name, or
otherwise, take possession of and indorse and collect any check, draft,
note, acceptance or other instrument for the payment of moneys due
under any Account or General Intangible or with respect to any other
Collateral and file any claim or take any other action or proceeding in
any court of law or equity or otherwise deemed appropriate by the
Administrative Agent for the purpose of collecting any such moneys due
under any Account or General Intangible or with respect to any other
Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and
deliver, and have recorded, any agreement, instrument, document or
paper as the Administrative Agent may request to evidence the
Administrative Agent's security interest in such Intellectual
21
Property and the goodwill and General Intangibles of such Grantor
relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on
or threatened against the Collateral, effect any repair or pay or
discharge any insurance called for by the terms of this Agreement
(including all or any part of the premiums therefor and the costs
thereof);
(iv) execute, in connection with any sale provided for in
Section 5.1 (Code and Other Remedies) or 5.5 (Registration Rights), any
endorsement, assignment or other instrument of conveyance or transfer
with respect to the Collateral; or
(v) (A) direct any party liable for any payment under any
Collateral to make payment of any moneys due or to become due
thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct, (B) ask or demand for, collect, and
receive payment of and receipt for, any moneys, claims and other
amounts due or to become due at any time in respect of or arising out
of any Collateral, (C) sign and indorse any invoice, freight or express
xxxx, xxxx of lading, storage or warehouse receipt, draft against
debtors, assignment, verification, notice and other document in
connection with any Collateral, (D) commence and prosecute any suit,
action or proceeding at law or in equity in any court of competent
jurisdiction to collect any Collateral and to enforce any other right
in respect of any Collateral, (E) defend any suit, action or proceeding
brought against such Grantor with respect to any Collateral, (F)
settle, compromise or adjust any such suit, action or proceeding and,
in connection therewith, give such discharges or releases as the
Administrative Agent may deem appropriate, (G) assign any Copyright,
Patent or Trademark (along with the goodwill of the business to which
any such Trademark pertains) throughout the world for such term or
terms, on such conditions, and in such manner as the Administrative
Agent shall in its sole discretion determine, including the execution
and filing of any document necessary to effectuate or record such
assignment and (H) generally, sell, transfer, pledge and make any
agreement with respect to or otherwise deal with any Collateral as
fully and completely as though the Administrative Agent were the
absolute owner thereof for all purposes, and do, at the Administrative
Agent's option and such Grantor's expense, at any time, or from time to
time, all acts and things that the Administrative Agent deems necessary
to protect, preserve or realize upon the Collateral and the
Administrative Agent's and the other Secured Parties' security
interests therein and to effect the intent of this Agreement, all as
fully and effectively as such Grantor might do.
Anything in this clause (a) to the contrary notwithstanding, the Administrative
Agent agrees that it shall not exercise any right under the power of attorney
provided for in this clause (a) unless an Event of Default shall be continuing.
(b) If any Grantor fails to perform or comply with any of
its agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section 6.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due Revolving Loans that are Base Rate
Loans under the Credit Agreement, from the date of payment by the
22
Administrative Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys
shall lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the security
interests created hereby are released.
SECTION 6.2 DUTY OF ADMINISTRATIVE AGENT
The Administrative Agent's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account. Neither the
Administrative Agent, any other Secured Party nor any of their respective
officers, directors, employees or agents shall be liable for failure to demand,
collect or realize upon any Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or any other Person or to take any other action
whatsoever with regard to any Collateral. The powers conferred on the
Administrative Agent hereunder are solely to protect the Administrative Agent's
interest in the Collateral and shall not impose any duty upon the Administrative
Agent or any other Secured Party to exercise any such powers. The Administrative
Agent and the other Secured Parties shall be accountable only for amounts that
they actually receive as a result of the exercise of such powers, and neither
they nor any of their respective 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 willful misconduct.
SECTION 6.3 AUTHORIZATION OF FINANCING STATEMENTS
Each Grantor hereby authorizes the filing of any financing
statements or continuation statements, and amendments to financing statements or
continuation statements, in any jurisdictions and with any filing offices as the
Administrative Agent may determine, in its sole discretion, are necessary or
advisable to perfect the security interest granted to the Administrative Agent
in connection herewith. Such financing statements may describe the collateral in
the same manner as described in any security agreement or pledge agreement
entered into by the parties in connection herewith or may contain an indication
or description of collateral that describes such property in any other manner as
the Administrative Agent may determine, in its sole discretion, in necessary,
advisable or prudent to ensure the perfection of the security interest in the
collateral granted to the Administrative Agent in connection herewith,
including, without limitation, describing such property as "all assets" or "all
personal property" whether now owned or hereafter acquired.
SECTION 6.4 AUTHORITY OF ADMINISTRATIVE AGENT
Each Grantor acknowledges that the rights and responsibilities
of the Administrative Agent under this Agreement with respect to any action
taken by the Administrative Agent or the exercise or non-exercise by the
Administrative Agent of any option, voting right, request, judgment or other
right or remedy provided for herein or resulting or arising out of this
Agreement shall, as between the Administrative Agent and the other Secured
Parties, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Grantors,
23
the Administrative Agent shall be conclusively presumed to be acting as agent
for the Administrative Agent and the other Secured Parties with full and valid
authority so to act or refrain from acting, and no Grantor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.
ARTICLE VII MISCELLANEOUS
SECTION 7.1 AMENDMENTS IN WRITING
None of the terms or provisions of this Agreement may be
waived, amended, supplemented or otherwise modified except in accordance with
Section 11.1 (Amendments, Waivers, Etc.) of the Credit Agreement.
SECTION 7.2 NOTICES
All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 11.8 (Notices, Etc.) of the Credit Agreement; provided,
however, that any such notice, request or demand to or upon any Grantor shall be
addressed to the Borrower's notice address set forth in such Section 11.8.
SECTION 7.3 NO WAIVER BY COURSE OF CONDUCT; CUMULATIVE
REMEDIES
Neither the Administrative Agent nor any other Secured Party
shall by any act (except by a written instrument pursuant to Section 7.1
(Amendments in Writing)), delay, indulgence, omission or otherwise be deemed to
have waived any right or remedy hereunder or to have acquiesced in any Default
or Event of Default. No failure to exercise, nor any delay in exercising, on the
part of the Administrative Agent or any other Secured Party, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Administrative Agent or any other Secured Party of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy that the Administrative Agent or such other Secured Party would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.
SECTION 7.4 SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon the successors and
assigns of each Grantor and shall inure to the benefit of the Administrative
Agent and each other Secured Party and their successors and assigns; provided,
however, that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent.
SECTION 7.5 COUNTERPARTS
This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts (including by
telecopy), each of which when so executed shall be deemed to be an original and
all of which taken together shall constitute one and the same agreement.
Signature pages may be detached from multiple counterparts and attached to a
24
single counterpart so that all signature pages are attached to the same
document. Delivery of an executed counterpart by telecopy shall be effective as
delivery of a manually executed counterpart.
SECTION 7.6 SEVERABILITY
Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 7.7 SECTION HEADINGS
The Article and Section titles contained in this Agreement
are, and shall be, without substantive meaning or content of any kind whatsoever
and are not part of the agreement of the parties hereto.
SECTION 7.8 ENTIRE AGREEMENT
This Agreement together with the other Loan Documents
represents the entire agreement of the parties and supersedes all prior
agreements and understandings relating to the subject matter hereof.
SECTION 7.9 GOVERNING LAW
This agreement and the rights and obligations of the parties
hereto shall be governed by, and construed and interpreted in accordance with,
the law of the State of New York.
SECTION 7.10 ADDITIONAL GRANTORS
If, pursuant to Section 7.11 (Additional Collateral and
Guaranties) of the Credit Agreement, the Borrower shall be required to cause any
Subsidiary that is not a Grantor to become a Grantor hereunder, such Subsidiary
shall execute and deliver to the Administrative Agent a Joinder Agreement in the
form of Annex 4 (Form of Joinder Agreement) and shall thereafter for all
purposes be a party hereto and have the same rights, benefits and obligations as
a Grantor party hereto on the Closing Date.
SECTION 7.11 RELEASE OF COLLATERAL
(a) At the time provided in Section 10.8(b)(i)
(Concerning the Collateral and the Collateral Documents) of the Credit
Agreement, the Collateral shall be released from the Lien created hereby and
this Agreement and all obligations (other than those expressly stated to survive
such termination) of the Administrative Agent and each Grantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Grantors. At the
request and sole expense of any Grantor following any such termination, the
Administrative Agent shall deliver to such Grantor any Collateral of such
Grantor held by the Administrative Agent hereunder and execute and deliver to
such Grantor such documents as such Grantor shall reasonably request to evidence
such termination.
25
(b) If the Administrative Agent shall be directed
pursuant to Section 10.8(b)(ii) or (iii) (Concerning the Collateral and the
Collateral Documents) of the Credit Agreement to release any Lien created hereby
upon any Collateral (including any Collateral sold or disposed of by any Grantor
in a transaction permitted by the Credit Agreement), such Collateral shall be
released from the Lien created hereby to the extent provided, and subject to the
terms and conditions set forth, in Section 10.8(b)(ii) or (iii) (Concerning the
Collateral and the Collateral Documents) of the Credit Agreement and, in
connection therewith, the Administrative Agent, at the request and sole expense
of the Borrower, shall execute and deliver to the Borrower all releases or other
documents reasonably necessary or desirable for the release of the Lien created
hereby on such Collateral. At the request and sole expense of the Borrower, a
Grantor shall be released from its obligations hereunder in the event that all
the capital stock of such Grantor shall be so sold or disposed; provided,
however, that the Borrower shall have delivered to the Administrative Agent, at
least ten Business Days prior to the date of the proposed release, a written
request for release identifying the relevant Grantor and the terms of the sale
or other disposition in reasonable detail, including the price thereof and any
expenses in connection therewith, together with a certification by the Borrower
in form and substance satisfactory to the Administrative Agent stating that such
transaction is in compliance with the Credit Agreement and the other Loan
Documents.
SECTION 7.12 REINSTATEMENT
Each Grantor further agrees that, if any payment made by any
Loan Party or other Person and applied to the Obligations is at any time
annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent
or preferential or otherwise required to be refunded or repaid, or the proceeds
of Collateral are required to be returned by any Secured Party to such Loan
Party, its estate, trustee, receiver or any other party, including any Grantor,
under any bankruptcy law, state or federal law, common law or equitable cause,
then, to the extent of such payment or repayment, any Lien or other Collateral
securing such liability shall be and remain in full force and effect, as fully
as if such payment had never been made or, if prior thereto the Lien granted
hereby or other Collateral securing such liability hereunder shall have been
released or terminated by virtue of such cancellation or surrender), such Lien
or other Collateral shall be reinstated in full force and effect, and such prior
cancellation or surrender shall not diminish, release, discharge, impair or
otherwise affect any Lien or other Collateral securing the obligations of any
Grantor in respect of the amount of such payment.
[SIGNATURE PAGES FOLLOW]
26
IN WITNESS WHEREOF, each of the undersigned has caused this
Pledge and Security Agreement to be duly executed and delivered as of the date
first above written.
GRANTORS
[___________________]
By: __________________________________
Name
Title
ACCEPTED AND AGREED
as of the date first above written:
CITICORP NORTH AMERICA, INC.,
as Administrative Agent
By: ____________________________________
Name:
Title:
1
ANNEX 1
TO
PLEDGE AND SECURITY AGREEMENT
FORM OF DEPOSIT ACCOUNT CONTROL AGREEMENT
_____________ __, _____
[Deposit Account Bank]
[Address]
Ladies and Gentlemen:
Reference is made to account no. [__________] maintained with
you (the "Bank") by [ ] (the "Company") into which funds are deposited
from time to time (the "Account"). The Company has entered into a Credit
Agreement, dated as of June 3, 20 (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among the Company, the Lenders and Issuers party thereto and Citicorp North
America, Inc., as agent for the Lenders and Issuers (in such capacity the
"Administrative Agent").
Pursuant to the Credit Agreement and related documents, the
Company has granted to the Administrative Agent, for the benefit of the Secured
Parties, a security interest in certain property of the Company, including,
among other things, accounts, inventory, equipment, instruments, general
intangibles and all proceeds thereof (the "Collateral"). Payments with respect
to the Collateral are or hereafter may be made to the Account.
The Company hereby transfers to the Administrative Agent
exclusive control of the Account and all funds and other property on deposit
therein. By your execution of this letter agreement, you (i) agree that you
shall comply with instructions originated by the Administrative Agent directing
disposition of the funds and other property on deposit in the Account without
further consent of the Company and (ii) acknowledge that the Administrative
Agent now has exclusive control of the Account, that all funds in the Account
shall be transferred to the Administrative Agent as provided herein, that the
Account is being maintained by you for the benefit of the Administrative Agent
and that all amounts and other property therein are held by you as custodian for
the Administrative Agent.
Except as provided in clauses (b)(iii) and (e) below, the
Account shall not be subject to deduction, set-off, banker's lien, counterclaim,
defense, recoupment or any other right in favor of any person or entity other
than the Administrative Agent. By your execution of this letter agreement you
also acknowledge that, as of the date hereof, you have received no notice of any
other pledge or assignment of the Account and have not executed any agreements
with third parties covering the disposition of funds in the Account. You agree
with the Administrative Agent as follows:
(a) Notwithstanding anything to the contrary or any other
agreement relating to the Account, the Account is and shall be
maintained for the benefit of the Administrative Agent, shall be
entitled "Citicorp North America, Inc. [name of Company] Account" and
shall be subject to written instructions only from an authorized
officer of the Administrative Agent.
A1-1
(b) [A post office box (the "Lockbox") has been rented in
the name of the Company at the [___________] post office and the
address to be used for such Lockbox is:
[Insert address]
Your authorized representatives shall have access to the Lockbox under
the authority given by the Company to the post office and shall make
regular pick-ups from the Lockbox timed to gain maximum benefit of
early presentation and availability of funds. You shall endorse process
all checks received in the Lockbox and deposit such checks (to the
extent eligible) in the Account in accordance with the procedures set
forth below .
(i) You shall follow your usual operating
procedures for the handling of any checks received from the
Lockbox or other remittance received in the Account that
contains restrictive endorsements, irregularities (such as a
variance between the written and numerical amounts), undated
or postdated items, missing signatures, incorrect payees and
the like.
(ii) You shall endorse and process all eligible
checks and other remittance items not covered by clause (iii)
below and deposit such checks and remittance items in the
Account.
(iii) You shall mail all checks returned unpaid
because of uncollected or insufficient funds under appropriate
advice to the Company (with a copy of the notification of
return to the Administrative Agent). You may charge the
Account for the amounts of any returned check that has been
previously credited to the Account. To the extent insufficient
funds remain in the Account to cover any such returned check,
the Company shall indemnify you for the uncollected amount of
such returned check upon your demand.
(iv) You shall maintain a record of all checks
and other remittance items received in the Account and, in
addition to providing the Company with photostatic copies
thereof, vouchers, enclosures and the like of such checks and
remittance items on a daily basis, furnish to the
Administrative Agent a monthly statement of the Account to
Citicorp North America, Inc., as Administrative Agent at the
following address: 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: [____________], with a copy to the Company.]
[CONFIRM IF ACCOUNT IS TIED TO A PARTICULAR LOCKBOX]
(c) Prior to the delivery to you of a written notice from
the Administrative Agent in the form of Exhibit A hereto (a "Blockage
Notice"), you are authorized to transfer to the Company, in same day
funds, on each business day, the entire balance in the Account to the
following account:
ABA Number: _______________________
[name and address of Company's bank]
Account Name:____________________________
Concentration Account
Account Number:__________________________
A1-2
Reference:________________________________
Attn:_____________________________________
or to such other account as the Company may from time
to time designate in writing.
(d) From and after the delivery to you of a Blockage
Notice, you shall transfer (by wire transfer or other method of
transfer mutually acceptable to you and the Administrative Agent) to
the Agent, in same day funds, on each business day, the entire balance
in the Account to the following account:
ABA Number: _______________________________
Citibank, N.A.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Account Name:______________________________
Concentration Account
Account Number:____________________________
Reference:_________________________________
Attn:______________________________________
or to such other account as the Administrative Agent may from time to
time designate in writing (the "Administrative Agent Concentration
Account").
(e) All customary service charges and fees with respect
to the Account shall be debited to the Account. In the event
insufficient funds remain in the Account to cover such customary
service charges and fees, the Company shall pay and indemnify you for
the amounts of such customary service charges and fees.
This letter agreement shall be binding upon and shall inure to
the benefit of you, the Company, the Administrative Agent, the Secured Parties
referred to in the Credit Agreement and the respective successors, transferees
and assigns of any of the foregoing. This letter agreement may not be modified
except upon the mutual consent of the Administrative Agent, the Company and you.
Your obligations to the Administrative Agent pursuant to this letter agreement
shall continue in effect until the security interest of the Administrative Agent
in the Account has been terminated pursuant to the terms of the Credit Agreement
and related documents and the Administrative Agent has notified you of such
termination in writing. The Administrative Agent agrees to provide notice of
such termination to you upon the request of the Company on or after the
termination of the Administrative Agent's security interest in the Account
pursuant to the terms of the Credit Agreement and related documents. The
termination of this letter agreement shall not terminate the Account or alter
your obligations to the Company pursuant to any other agreement with respect to
the Account.
This letter agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which when
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this letter agreement by telecopier
shall be effective as delivery of a manually executed counterpart of this letter
agreement.
A1-3
This letter agreement supersedes all prior agreements, oral or
written, with respect to the subject matter hereof and may not be amended,
modified or supplemented except by a writing signed by the Administrative Agent,
the Company and you.
This letter agreement shall be governed by, and construed in
accordance with, the law of the State of New York.
A1-4
Upon acceptance of this letter agreement it shall be the valid
and binding obligation of the Company, the Administrative Agent, and you, in
accordance with its terms.
Very truly yours,
[NAME OF GRANTOR]
By: ________________________________
Name:
Title:
CITICORP NORTH AMERICA, INC.,
as Administrative Agent
By: ________________________________
Name:
Title:
ACKNOWLEDGED AND AGREED
as of the date first above written:
[DEPOSIT ACCOUNT BANK]
By: _____________________________
Name:
Title:
[SIGNATURE PAGE TO DEPOSIT ACCOUNT CONTROL ACCOUNT AGREEMENT]
EXHIBIT A
TO
DEPOSIT ACCOUNT CONTROL AGREEMENT
FORM OF ADMINISTRATIVE AGENT BLOCKAGE NOTICE
[Deposit Account Bank]
[Address]
Re: Account No. ____________________ (the "Account")
Ladies and Gentlemen:
Reference is made to the Account and that certain Deposit
Account Control Agreement dated __________ __, 200__ among you, Citicorp North
America, Inc., as Administrative Agent (the "Administrative Agent"), and
[_____________] (the "Deposit Account Control Agreement"). Capitalized terms
used herein shall have the meanings given to them in the Deposit Account Control
Agreement.
The Administrative Agent hereby notifies you that, from and
after the date of this notice, you are hereby directed to transfer (by wire
transfer or other method of transfer mutually acceptable to you and the
Administrative Agent) to the Administrative Agent, in same day funds, on each
business day, the entire balance in the Account to the Administrative Agent
Concentration Account specified in clause (d) of the Deposit Account Control
Agreement or to such other account as the Administrative Agent may from time to
time designate in writing.
Very truly yours,
CITICORP NORTH AMERICA, INC,
as Administrative Agent
By: _________________________________
Name:
Title:
A1-6
ANNEX 2
TO
PLEDGE AND SECURITY AGREEMENT
FORM OF CONTROL ACCOUNT AGREEMENT
[Name and Address
of Approved Securities
Intermediary]
_____________ __, 200__
Ladies and Gentlemen:
The undersigned ___________________ (the "Pledgor") together
with certain of its affiliates are party to a Pledge and Security Agreement
dated June 3, 2003 in favor of Citicorp North America, Inc., as agent for the
Secured Parties referred to therein (the "Pledgee" and such agreement the
"Pledge and Security Agreement") pursuant to which a security interest is
granted by the Pledgor in all present and future Assets (hereinafter defined) in
Account No. _______ of the Pledgor (the "Pledge").
In connection therewith, the Pledgor hereby instructs you (the
"Approved Securities Intermediary") to do all of the following:
1. maintain the Account, as "______- Citicorp North America, Inc.
Control Account";
2. hold in the Account the assets, including, without limitation,
all financial assets, securities, security entitlements and
all other property and rights now or hereafter received in
such Account (collectively the "Assets"), including, without
limitation, those assets listed on Schedule A (List of Assets)
attached hereto and made a part hereof;
3. provide to the Pledgee, with a duplicate copy to the Pledgor,
a monthly statement of Assets and a confirmation statement of
each transaction effected in the Account after such
transaction is effected; and
4. honor only the instructions or Entitlement Orders in regard to
or in connection with the Account given by an Authorized
Officer of the Pledgee, except that until such time as the
Pledgee gives a written notice to the Approved Securities
Intermediary that the Pledgor's rights under this sentence
have been terminated (on which notice the Approved Securities
Intermediary may rely exclusively), the Pledgor acting through
an Authorized Officer may (a) exercise any voting right that
it may have with respect to any Asset, (b) give instructions
to enter into purchase or sale transactions in the Account and
(c) withdraw and receive for its own use all regularly
scheduled interest and dividends paid with respect to the
Assets and all cash proceeds of any sale of Assets ("Permitted
Withdrawals"); provided, however, that, unless the Pledgee has
consented to the specific transaction, the Pledgor shall not
instruct the Approved Securities Intermediary
A2-1
to deliver and, except as may be required by law or by court
order, the Approved Securities Intermediary shall not deliver,
cash, securities, or proceeds from the sale of, or
distributions on, such securities out of the Account to the
Pledgor or to any other person or entity other than Permitted
Withdrawals.
By its signature below, the Approved Securities Intermediary
agrees to comply with the Entitlement Orders and instructions of an Authorized
Officer of the Pledgee (including, without limitation, any instruction with
respect to sales, trades, transfers and withdrawals of cash or other of the
Assets) without the consent of the Pledgor or any other person (it being
understood and agreed by the Pledgor that the Approved Securities Intermediary
shall have no duty or obligation whatsoever of any kind or character to have
knowledge of the terms of the Pledge and Security Agreement or to determine
whether or not an event of default exists thereunder). The Pledgor hereby agrees
to indemnify and hold harmless the Approved Securities Intermediary, its
affiliates, officers and employees from and against all claims, causes of
action, liabilities, lawsuits, demands and damages, including, without
limitation, all court costs and reasonable attorney's fees, that may result by
reason of the Approved Securities Intermediary complying with such instructions
of the Pledgee.
The Authorized Officer of the Pledgee who shall give oral
instructions hereunder shall confirm the same in writing to the Approved
Securities Intermediary within five days after such oral instructions are given.
For the purpose of this Agreement, the term "Authorized
Officer of the Pledgor" shall refer in the singular to ___________________ or
___________________ (each of whom is, on the date hereof, an officer or director
of the Pledgor) and "Authorized Officer of the Pledgee" shall refer in the
singular to any person who is a vice president or managing director of the
Pledgee. In the event that the Pledgor shall find it advisable to designate a
replacement for any of its Authorized Officers, written notice of any such
replacement shall be given to the Approved Securities Intermediary and the
Pledgee.
Except with respect to the obligations and duties as set forth
herein, this Agreement shall not impose or create any obligation or duty upon
the Approved Securities Intermediary greater than or in addition to the
customary and usual obligations and duties of the Approved Securities
Intermediary to the Pledgor.
As long as the Assets are pledged to the Pledgee, (i) the
Approved Securities Intermediary shall not invade the Assets to cover margin
debits or calls in any other account of the Pledgor and (ii) the Approved
Securities Intermediary agrees that, except for liens resulting from customary
commissions, fees, or charges based upon transactions in the Account, it
subordinates in favor of the Pledgee any security interest, lien or right of
setoff the Approved Securities Intermediary may have. The Approved Securities
Intermediary acknowledges that it has not received notice of any other security
interest in the Account or the Assets. In the event any such notice is received,
the Approved Securities Intermediary shall promptly notify the Pledgee. The
Pledgor herein represents that the Assets are free and clear of any lien or
encumbrance and agrees that, with the exception of the security interest granted
to the Pledgee, no lien or encumbrance shall be placed by it on the Assets
without the express written consent of both the Pledgee and the Approved
Securities Intermediary.
This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns and it and the
rights and obligations of the
A2-2
parties hereto shall be governed by, and construed and interpreted in accordance
with, and the law of the Approved Securities Intermediary's jurisdiction for the
purposes of Section 8-110 of the Uniform Commercial Code in effect in the State
of New York (the "UCC") shall be, the law of the State of New York.
The Approved Securities Intermediary shall treat all property
at any time held by the Approved Securities Intermediary in the Account as
financial assets within the meaning of the UCC. The Approved Securities
Intermediary acknowledges that this Agreement constitutes written notification
to the Approved Securities Intermediary, pursuant to the UCC and any applicable
federal regulation for the Federal Reserve Book Entry System, of the Pledgee's
security interest in the Assets. The Pledgor, Pledgee and Approved Securities
Intermediary are entering into this Agreement to provide for the Pledgee's
control of the Assets and to confirm the first priority of the Pledgee's
security interest in the Assets. The Approved Securities Intermediary agrees to
promptly make and thereafter maintain all necessary entries or notations in its
books and records to reflect the Pledgee's security interest in the Assets.
If any term or provision of this Agreement is determined to be
invalid or unenforceable, the remainder of this Agreement shall be construed in
all respects as if the invalid or unenforceable term or provision were omitted.
This Agreement may not be altered or amended in any manner without the express
written consent of the Pledgor, the Pledgee and the Approved Securities
Intermediary. This Agreement may be executed in any number of counterparts, all
of which shall constitute one original agreement.
This Agreement may be terminated by the Approved Securities
Intermediary upon 30 day's prior written notice to the Pledgor and the Pledgee.
Upon expiration of such 30-day period, the Approved Securities Intermediary
shall be under no further obligation except to hold the Assets in accordance
with the terms of this Agreement, pending receipt of written instructions from
the Pledgor and the Pledgee, jointly, regarding the further disposition of the
pledged Assets.
The Pledgor acknowledges that this Agreement supplements any
existing agreement of the Pledgor with the Approved Securities Intermediary and,
except as expressly provided herein, is in no way intended to abridge any right
that the Approved Securities Intermediary might otherwise have.
A2-3
IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused
this Agreement to be executed by their duly authorized officers all as of the
date first above written.
[NAME OF PLEDGOR]
By: _______________________________
Name:
Title:
CITICORP NORTH AMERICA, INC.,
as Administrative Agent
By: _______________________________
Name:
Title:
ACCEPTED AND AGREED
as of the date first above written:
[APPROVED FINANCIAL INTERMEDIARY]
By: ______________________________
Name:
Title:
[SIGNATURE PAGE TO CONTROL ACCOUNT AGREEMENT]
SCHEDULE A
TO
CONTROL AGREEMENT
LIST OF ASSETS FOR PLEDGED COLLATERAL ACCOUNT NUMBER: ____________
A2-5
ANNEX 3
TO
PLEDGE AND SECURITY AGREEMENT
FORM OF PLEDGE AMENDMENT
This PLEDGE AMENDMENT, dated as of __________ __, 200__, is
delivered pursuant to Section 4.4(a) (Pledged Collateral) of the Pledge and
Security Agreement, dated as of June 3, 20, by HLI Operating Company, Inc. (the
"Borrower"), Xxxxx Lemmerz International, Inc. ("Holdings"), the undersigned
Grantor and the other Subsidiaries of the Borrower from time to time party
thereto as Grantors in favor of Citicorp North America, Inc., as agent for the
Secured Parties referred to therein (the "Pledge and Security Agreement") and
the undersigned hereby agrees that this Pledge Amendment may be attached to the
Pledge and Security Agreement and that the Pledged Collateral listed on this
Pledge Amendment shall be and become part of the Collateral referred to in the
Pledge and Security Agreement and shall secure all Secured Obligations of the
undersigned. Capitalized terms used herein but not defined herein are used
herein with the meaning given them in the Pledge and Security Agreement.
[GRANTOR]
By: ________________________________________
Name:
Title:
Pledged Stock
NUMBER OF
SHARES,
UNITS OR
ISSUER CLASS CERTIFICATE NO(S). PAR VALUE INTERESTS
------------ ---------- ------------------ ------------------- ---------
Pledged Debt
PRINCIPAL
ISSUER ESCRIPTION OF DEBT CERTIFICATE NO(S). FINAL MATURITY AMOUNT
-------- ------------------ ------------------ --------------- ---------
A3-1
ACKNOWLEDGED AND AGREED
as of the date first above written:
CITICORP NORTH AMERICA, INC.,
as Administrative Agent
By: _________________________________
Name:
Title:
A3-2
ANNEX 4
TO
PLEDGE AND SECURITY AGREEMENT
FORM OF JOINDER AGREEMENT
This JOINDER AGREEMENT, dated as of _________ __, 20__, is
delivered pursuant to Section 7.10 (Additional Grantors) of the Pledge and
Security Agreement, dated as of June 3, 20, by HLI Operating Company, Inc. (the
"Borrower"), Xxxxx Lemmerz International, Inc. ("Holdings"), and the
Subsidiaries of the Borrower listed on the signature pages thereof in favor of
the Citicorp North America, Inc., as agent for the Secured Parties referred to
therein (the "Pledge and Security Agreement"). Capitalized terms used herein but
not defined herein are used with the meanings given them in the Pledge and
Security Agreement.
By executing and delivering this Joinder Agreement, the
undersigned, as provided in Section 7.10 (Additional Grantors) of the Pledge and
Security Agreement, hereby becomes a party to the Pledge and Security Agreement
as a Grantor thereunder with the same force and effect as if originally named as
a Grantor therein and, without limiting the generality of the foregoing, hereby
grants to the Administrative Agent, as collateral security for the full, prompt
and complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of the Secured Obligations of the undersigned, hereby
collaterally assigns, conveys, mortgages, pledges, hypothecates and transfers to
the Administrative Agent and grants to the Administrative Agent a Lien on and
security interest in, all of its right, title and interest in, to and under the
Collateral and expressly assumes all obligations and liabilities of a Grantor
thereunder.
The information set forth in Annex 1-A is hereby added to the
information set forth in Schedules 1 through 6 to the Pledge and Security
Agreement.
The undersigned hereby represents and warrants that each of
the representations and warranties contained in Article III (Representations and
Warranties) of the Pledge and Security Agreement applicable to it is true and
correct on and as the date hereof as if made on and as of such date.
IN WITNESS WHEREOF, the undersigned has caused this Joinder
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By: ___________________________________
Name:
Title:
A4-1
ACKNOWLEDGED AND AGREED
as of the date first above written:
CITICORP NORTH AMERICA, INC.,
as Administrative Agent
By: ____________________________________
Name:
Title:
A5-2
ANNEX 5
TO
PLEDGE AND SECURITY AGREEMENT
FORM OF SHORT FORM COPYRIGHT SECURITY AGREEMENT
COPYRIGHT SECURITY AGREEMENT, dated as of _________ __, 200__,
by HLI OPERATING COMPANY, INC. (the "Borrower") and each of the other entities
listed on the signature pages hereof or that becomes a party hereto pursuant to
Section 7.10 (Additional Grantors) of the Security Agreement referred to below
(each a "Grantor" and, collectively, the "Grantors"), in favor of Citicorp North
America, Inc. ("CNAI"), as agent for the Secured Parties (as defined in the
Credit Agreement referred to below) (in such capacity, the "Administrative
Agent").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated as of June 3,
2003 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among the Borrower, Holdings, the
Lenders and Issuers party thereto and CNAI, as agent for the Lenders and
Issuers, the Lenders and the Issuers have severally agreed to make extensions of
credit to the Borrower upon the terms and subject to the conditions set forth
therein;
WHEREAS, the Grantors other than the Borrower are party to the
Guaranty pursuant to which they have guaranteed the Obligations; and
WHEREAS, all the Grantors are party to a Pledge and Security
Agreement of even date herewith in favor of the Administrative Agent (the
"Security Agreement") pursuant to which the Grantors are required to execute and
deliver this Copyright Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce
the Lenders, the Issuers and the Administrative Agent to enter into the Credit
Agreement and to induce the Lenders and the Issuers to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby agrees with
the Administrative Agent as follows:
SECTION 1. DEFINED TERMS
Unless otherwise defined herein, terms defined in the Credit
Agreement or in the Security Agreement and used herein have the meaning given to
them in the Credit Agreement or the Security Agreement.
SECTION 2. GRANT OF SECURITY INTEREST IN COPYRIGHT
COLLATERAL
Each Grantor, as collateral security for the full, prompt and
complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of the Secured Obligations of such Grantor, hereby
collaterally assigns, conveys, mortgages, pledges, hypothecates and transfers to
the Administrative Agent for the benefit of the Secured Parties, and grants to
the Administrative Agent for the benefit of the Secured Parties a lien on and
security interest in, all of its right, title and interest in, to and under the
following Collateral of such Grantor (the "Copyright Collateral"):
A5-1
(a) all of its Copyrights, including, without limitation,
those referred to on Schedule I hereto; and
(b) all rights to xxx at law or in equity for any
infringement or other impairment of the foregoing, including the right to
receive all proceeds and damages thereof.
SECTION 3. SECURITY AGREEMENT
The security interest granted pursuant to this Copyright
Security Agreement is granted in conjunction with the security interest granted
to the Administrative Agent pursuant to the Security Agreement and each Grantor
hereby acknowledges and affirms that the rights and remedies of the
Administrative Agent with respect to the security interest in the Copyright
Collateral made and granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.
[SIGNATURE PAGES FOLLOW]
A5-2
IN WITNESS WHEREOF, each Grantor has caused this Copyright
Security Agreement to be executed and delivered by its duly authorized offer as
of the date first set forth above.
Very truly yours,
HLI OPERATING COMPANY, INC.,
as Borrower and Grantor
By: ___________________________________
Name:
Title:
[GRANTOR],
as Grantor
By: ___________________________________
Name:
Title:
ACCEPTED AND AGREED
as of the date first above written:
CITICORP NORTH AMERICA, INC.,
as Administrative Agent
By: _____________________________
Name:
Title:
[SIGNATURE PAGE TO COPYRIGHT SECURITY AGREEMENT]
ACKNOWLEDGMENT OF GRANTOR
STATE OF _______________)
) ss.
COUNTY OF ______________)
On this ___ day of ________ __, 20__ before me personally
appeared ______________________, proved to me on the basis of satisfactory
evidence to be the person who executed the foregoing instrument on behalf
of ________________, who being by me duly sworn did depose and say that he is an
authorized officer of said corporation, that the said instrument was signed on
behalf of said corporation as authorized by its Board of Directors and that he
acknowledged said instrument to be the free act and deed of said corporation.
______________________________
Notary Public
[ACKNOWLEDGEMENT OF GRANTOR FOR COPYRIGHT SECURITY AGREEMENT]
SCHEDULE I
TO
COPYRIGHT SECURITY AGREEMENT
COPYRIGHT REGISTRATIONS
A. REGISTERED COPYRIGHTS
[Include Copyright Registration Number and Date]
B. COPYRIGHT APPLICATIONS
A5-5
ANNEX 6
TO
PLEDGE AND SECURITY AGREEMENT
FORM OF SHORT FORM PATENT SECURITY AGREEMENT
PATENT SECURITY AGREEMENT, dated as of _________ __, 200_, by
HLI Operating Company, Inc. (the "Borrower") and each of the other entities
listed on the signature pages hereof or which becomes a party hereto pursuant to
Section 7.10 (Additional Grantors) of the Security Agreement referred to below
(each a "Grantor" and, collectively, the "Grantors"), in favor of Citicorp North
America, Inc. ("CNAI"), as agent for the Secured Parties (as defined in the
Credit Agreement referred to below) (in such capacity, the "Administrative
Agent").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated as of June 3,
2003 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among the Borrower, Holdings, the
Lenders and Issuers party thereto and CNAI, as agent for the Lenders and
Issuers, the Lenders and the Issuers have severally agreed to make extensions of
credit to the Borrower upon the terms and subject to the conditions set forth
therein;
WHEREAS, the Grantors other than the Borrower are party to the
Guaranty pursuant to which they have guaranteed the Obligations; and
WHEREAS, all the Grantors are party to a Pledge and Security
Agreement of even date herewith in favor of the Administrative Agent (the
"Security Agreement") pursuant to which the Grantors are required to execute and
deliver this Patent Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce
the Lenders, the Issuers and the Administrative Agent to enter into the Credit
Agreement and to induce the Lenders and the Issuers to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby agrees with
the Administrative Agent as follows:
SECTION 4. DEFINED TERMS
Unless otherwise defined herein, terms defined in the Credit
Agreement or in the Security Agreement and used herein have the meaning given to
them in the Credit Agreement or the Security Agreement.
SECTION 5. GRANT OF SECURITY INTEREST IN PATENT COLLATERAL
Each Grantor, as collateral security for the full, prompt and
complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of the Secured Obligations of such Grantor, hereby
collaterally assigns, conveys, mortgages, pledges, hypothecates and transfers to
the Administrative Agent for the benefit of the Secured Parties, and grants to
the Administrative Agent for the benefit of the Secured Parties a lien on and
security interest in, all of its right, title and interest in, to and under the
following Collateral of such Grantor (the "Patent Collateral"):
(a) all of its Patents, including, without limitation,
those referred to on Schedule I hereto;
A6-1
(b) all reissues and continuations of the foregoing; and
(c) all rights to xxx at law or in equity for any
infringement or other impairment of the foregoing, including the right to
receive all proceeds and damages thereof.
SECTION 6. SECURITY AGREEMENT
The security interest granted pursuant to this Patent Security
Agreement is granted in conjunction with the security interest granted to the
Administrative Agent pursuant to the Security Agreement and each Grantor hereby
acknowledges and affirms that the rights and remedies of the Administrative
Agent with respect to the security interest in the Patent Collateral made and
granted hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth
herein.
[SIGNATURE PAGES FOLLOW]
A6-2
IN WITNESS WHEREOF, each Grantor has caused this Patent
Security Agreement to be executed and delivered by its duly authorized offer as
of the date first set forth above.
Very truly yours,
HLI OPERATING COMPANY, INC.
as Borrower and Grantor
By: ____________________________________
Name:
Title:
[GRANTOR],
as Grantor
By: ____________________________________
Name:
Title:
ACCEPTED AND AGREED
as of the date first above written:
CITICORP NORTH AMERICA, INC.,
as Administrative Agent
By: ____________________________________
Name:
Title:
[SIGNATURE PAGE TO PATENT SECURITY AGREEMENT]
ACKNOWLEDGEMENT OF GRANTOR
STATE OF ________________)
) ss.
COUNTY OF _______________)
On this ___ day of ________, 20__ before me personally
appeared ______________________, proved to me on the basis of satisfactory
evidence to be the person who executed the foregoing instrument on behalf of
________________, who being by me duly sworn did depose and say that he is an
authorized officer of said corporation, that the said instrument was signed on
behalf of said corporation as authorized by its Board of Directors and that he
acknowledged said instrument to be the free act and deed of said corporation.
____________________________
Notary Public
[ACKNOWLEDGEMENT OF GRANTOR FOR PATENT SECURITY AGREEMENT]
SCHEDULE I
TO
PATENT SECURITY AGREEMENT
PATENT REGISTRATIONS
A. REGISTERED PATENTS
[Include Patent Registration Number and Date]
B. PATENT APPLICATIONS
A6-5
ANNEX 7
TO
PLEDGE AND SECURITY AGREEMENT
FORM OF SHORT FORM TRADEMARK SECURITY AGREEMENT
TRADEMARK SECURITY AGREEMENT, dated as of _________ __, 200__,
by HLI Operating Company, Inc. ("Borrower") and each of the other entities
listed on the signature pages hereof or which becomes a party hereto pursuant to
Section 7.10 (Additional Grantors) of the Security Agreement referred to below
(each a "Grantor" and, collectively, the "Grantors"), in favor of Citicorp North
America, Inc. ("CNAI"), as agent for the Secured Parties (as defined in the
Credit Agreement referred to below) (in such capacity, the "Administrative
Agent").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated as of June 3,
2003 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among the Borrower, Holdings, the
Lenders and Issuers party thereto and CNAI, as agent for the Lenders and
Issuers, the Lenders and the Issuers have severally agreed to make extensions of
credit to the Borrower upon the terms and subject to the conditions set forth
therein;
WHEREAS, the Grantors other than the Borrower are party to the
Guaranty pursuant to which they have guaranteed the Obligations; and
WHEREAS, all the Grantors are party to a Pledge and Security
Agreement of even date herewith in favor of the Administrative Agent (the
"Security Agreement") pursuant to which the Grantors are required to execute and
deliver this Trademark Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce
the Lenders, the Issuers and the Administrative Agent to enter into the Credit
Agreement and to induce the Lenders and the Issuers to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby agrees with
the Administrative Agent as follows:
SECTION 7. DEFINED TERMS
Unless otherwise defined herein, terms defined in the Credit
Agreement or in the Security Agreement and used herein have the meaning given to
them in the Credit Agreement or the Security Agreement.
SECTION 8. GRANT OF SECURITY INTEREST IN TRADEMARK COLLATERAL
Each Grantor, as collateral security for the full, prompt and
complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of the Secured Obligations of such Grantor, hereby
collaterally assigns, conveys, mortgages, pledges, hypothecates and transfers to
the Administrative Agent for the benefit of the Secured Parties, and grants to
the Administrative Agent for the benefit of the Secured Parties a lien on and
security interest in, all of its right, title and interest in, to and under the
following Collateral of such Grantor (the "Trademark Collateral"):
(a) all of its Trademarks, including, without limitation,those
referred to on Schedule I hereto;
A7-1
(b) all goodwill of the business connected with the use of,
and symbolized by, each Trademark and each Trademark License; and
(c) all rights to xxx at law or in equity for any infringement
or other impairment of the foregoing, including the right to receive all
proceeds and damages thereof.
SECTION 9. SECURITY AGREEMENT
The security interest granted pursuant to this Trademark
Security Agreement is granted in conjunction with the security interest granted
to the Administrative Agent pursuant to the Security Agreement and each Grantor
hereby acknowledges and affirms that the rights and remedies of the
Administrative Agent with respect to the security interest in the Trademark
Collateral made and granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.
[SIGNATURE PAGES FOLLOW]
A7-2
IN WITNESS WHEREOF, each Grantor has caused this Trademark
Security Agreement to be executed and delivered by its duly authorized offer as
of the date first set forth above.
Very truly yours,
HLI OPERATING COMPANY, INC.,
as Borrower and Grantor
By: ____________________________________
Name:
Title:
[GRANTOR],
as Grantor
By: ___________________________________
Name:
Title:
ACCEPTED AND AGREED
as of the date first above written:
CITICORP NORTH AMERICA, INC.,
as Administrative Agent
By: ___________________________________
Name:
Title:
[SIGNATURE PAGE TO TRADEMARK SECURITY AGREEMENT]
ACKNOWLEDGEMENT OF GRANTOR
STATE OF ________________)
) ss.
COUNTY OF _______________)
On this ___ day of ________, 20__ before me personally
appeared ______________________, proved to me on the basis of satisfactory
evidence to be the person who executed the foregoing instrument on behalf of
________________, who being by me duly sworn did depose and say that he is an
authorized officer of said corporation, that the said instrument was signed on
behalf of said corporation as authorized by its Board of Directors and that he
acknowledged said instrument to be the free act and deed of said corporation.
______________________________
Notary Public
[ACKNOWLEDGEMENT OF GRANTOR FOR TRADEMARK SECURITY AGREEMENT]
SCHEDULE I
TO
TRADEMARK SECURITY AGREEMENT
TRADEMARK REGISTRATIONS
A. REGISTERED TRADEMARKS
[Include trademark registration number and date of registration]
B. TRADEMARK APPLICATIONS
A7-5
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINED TERMS..................................................................... 1
Section 1.1 Definitions.............................................................. 1
Section 1.2 Certain Other Terms...................................................... 5
ARTICLE II GRANT OF SECURITY INTEREST........................................................ 6
Section 2.1 Collateral............................................................... 6
Section 2.2 Grant of Security Interest in Collateral................................. 7
Section 2.3 Cash Collateral Accounts................................................. 7
ARTICLE III REPRESENTATIONS AND WARRANTIES.................................................... 8
Section 3.1 Title; No Other Liens.................................................... 8
Section 3.2 Perfection and Priority.................................................. 8
Section 3.3 Name; Jurisdiction of Organization; Chief Executive Office............... 8
Section 3.4 Inventory and Equipment.................................................. 8
Section 3.5 Pledged Collateral....................................................... 9
Section 3.6 Accounts................................................................. 9
Section 3.7 Intellectual Property.................................................... 9
Section 3.8 Deposit Accounts; Control Accounts....................................... 10
Section 3.9 Commercial Tort Claims................................................... 10
ARTICLE IV COVENANTS......................................................................... 10
Section 4.1 Generally................................................................ 10
Section 4.2 Maintenance of Perfected Security Interest; Further Documentation........ 11
Section 4.3 Changes in Locations, Name, Etc.......................................... 11
Section 4.4 Pledged Collateral....................................................... 12
Section 4.5 Control Accounts; Approved Deposit Accounts.............................. 13
Section 4.6 Accounts................................................................. 14
Section 4.7 Delivery of Instruments and Chattel Paper................................ 14
Section 4.8 Intellectual Property.................................................... 14
Section 4.9 Vehicles................................................................. 16
Section 4.10 Payment of Obligations................................................... 16
Section 4.11 Insurance................................................................ 16
Section 4.12 Notice of Commercial Tort Claims......................................... 17
ARTICLE V REMEDIAL PROVISIONS............................................................... 17
Section 5.1 Code and Other Remedies.................................................. 17
Section 5.2 Accounts and Payments in Respect of General Intangibles.................. 18
i
TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 5.3 Pledged Collateral....................................................... 19
Section 5.4 Proceeds to be Turned Over To Administrative Agent....................... 20
Section 5.5 Registration Rights...................................................... 20
Section 5.6 Deficiency............................................................... 21
ARTICLE VI THE ADMINISTRATIVE AGENT.......................................................... 21
Section 6.1 Administrative Agent's Appointment as Attorney-in-Fact................... 21
Section 6.2 Duty of Administrative Agent............................................. 23
Section 6.3 Authorization of Financing Statements.................................... 23
Section 6.4 Authority of Administrative Agent........................................ 23
ARTICLE VII MISCELLANEOUS..................................................................... 24
Section 7.1 Amendments in Writing.................................................... 24
Section 7.2 Notices.................................................................. 24
Section 7.3 No Waiver by Course of Conduct; Cumulative Remedies...................... 24
Section 7.4 Successors and Assigns................................................... 24
Section 7.5 Counterparts............................................................. 24
Section 7.6 Severability............................................................. 25
Section 7.7 Section Headings......................................................... 25
Section 7.8 Entire Agreement......................................................... 25
Section 7.9 Governing Law............................................................ 25
Section 7.10 Additional Grantors...................................................... 25
Section 7.11 Release of Collateral.................................................... 25
Section 7.12 Reinstatement............................................................ 26
ii
TABLE OF CONTENTS
(CONTINUED)
ANNEXES AND SCHEDULES
Annex 1 Form of Deposit Account Control Agreement
Annex 2 Form of Control Account Agreement
Annex 3 Form of Pledge Amendment
Annex 4 Form of Joinder Agreement
Annex 5 Form of Short Form Copyright Security Agreement
Annex 6 Form of Short Form Patent Security Agreement
Annex 7 Form of Short Form Trademark Security Agreement
Schedule 1 State of Incorporation; Principal Executive Office
Schedule 2 Pledged Collateral
Schedule 3 Filings
Schedule 4 Location of Inventory and Equipment
Schedule 5 Intellectual Property
Schedule 6 Bank Accounts; Control Accounts
Schedule 7 Commercial Tort Claims
iii
