FIRST LIEN PLEDGE AND SECURITY AGREEMENT made by GLOBAL MONITORING SYSTEMS, INC. in favor of AMERICAN CAPITAL FINANCIAL SERVICES, INC., as First Lien Agent Dated as of January 1, 2006
Exhibit 10.5
made by
GLOBAL MONITORING SYSTEMS, INC.
in favor of
AMERICAN CAPITAL FINANCIAL SERVICES, INC.,
as First Lien Agent
Dated as
of January 1, 2006
THIS FIRST LIEN PLEDGE AND SECURITY AGREEMENT (this “Agreement”) dated as of, made
by Global Monitoring Systems, Inc., a Delaware corporation (the “Grantor”), in favor of
American Capital Financial Services, Inc., a Delaware corporation (“ACFS”), as
administrative and collateral agent for the Secured Parties (as defined herein) (in such capacity,
the “First Lien Agent”).
RECITALS:
A. Reference is made to the guarantees dated as of the date hereof, made (i) by Grantor in
favor of ACFS with respect to the debt obligations of Global Dosimetry Solutions, Inc.
(“GDS”) (the “GDS Guaranty”); (ii) by Grantor in favor of ACFS with respect to the
debt obligations of Dosimetry Acquisitions (U.S.), LLC (“Dosimetry”) and Grantor (the
“Dosimetry Guaranty”), and (iii) by Grantor in favor of ACFS with respect to the debt
obligations of IST Acquisitions, Inc. (“IST,” and
together with GDS and Dosimetry, the
“Borrowers”) and Parent (the “IST
Guaranty,” and together with the Dosimetry
Guaranty and the GDS Guaranty, the “Guarantees”). Capitalized terms used in this Agreement
and not otherwise defined herein have the meanings specified in the GDS Guaranty.
B. Pursuant to the Guarantees, the Grantor has agreed to guaranty the payment and performance
of the obligations of each of the Borrowers under their respective debt instruments.
C. In order to secure its performance of the Guarantees, the Grantor has agreed to grant to
First Lien Agent, as collateral agent for the Secured Parties, a Lien on and security interest in
all of the Grantor’s assets and properties, whether now or hereafter existing, owned or acquired,
all pursuant to the terms of this Agreement.
NOW, THEREFORE, for and in consideration of the covenants and provisions set forth herein, and
for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
Grantor agrees as follows:
SECTION
1. DEFINED TERMS
1.1 Definitions. The following terms used herein shall have the meanings as defined in
the Maryland UCC: Accounts, Certificated Security, Chattel Paper, Commercial Tort Claims,
Documents, Equipment, Farm Products, General Intangibles, Goods, Instruments, Inventory,
Letter-of-Credit Rights and Supporting Obligations.
The following terms shall have the following meanings:
“Agreement” means this First Lien Pledge and Security Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
“Collateral” has the meaning assigned to such term in Section 2.
“Collateral Account” means any deposit account established by the First Lien Agent as
provided in Section 5.1.
“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 (including, without limitation, those listed in Schedule
5), all registrations and recordings thereof, and all applications in connection therewith,
including, without limitation, all registrations, recordings and applications in the United States
Copyright Office, and (b) the right to obtain all renewals thereof.
“Copyright Licenses” means any written agreement naming the Grantor as licensor or
licensee (including, without limitation, those listed in Schedule 5), granting any right
under any Copyright, including, without limitation, the grant of rights to manufacture,
distribute, exploit and sell materials derived from any Copyright.
“Deposit Account” means “deposit account” as such term is defined in the Uniform
Commercial Code of any applicable jurisdiction and, in any event, including, without limitation,
any demand, time, savings, passbook or like account maintained with a depositary institution.
“Excluded Assets” the collective reference to (i) any contract, General Intangible,
Copyright License, Patent License or Trademark License (“Intangible Assets”), in each case
to the extent the grant by the relevant Grantor of a security interest pursuant to this Agreement
in the Grantor’s right, title and interest in such Intangible Asset (A) is prohibited by legally
enforceable provisions of any contract, agreement, instrument or indenture governing such
Intangible Asset, (B) would give any other party to such contract, agreement, instrument or
indenture a legally enforceable right to terminate its obligations thereunder or (C) is permitted
only with the consent of another party, if the requirement to obtain such consent is legally
enforceable and such consent has not been obtained; provided, that in any event any
Receivable or any money or other amounts due or to become due under any such contract, agreement,
instrument or indenture shall not be Excluded Assets to the extent that any of the foregoing is
(or if it contained a provision limiting the transferability or pledge thereof would be) subject
to Section 9-406 of the Maryland UCC, and (ii) Foreign Subsidiary Voting Stock excluded from the
definition of “Pledged Stock” set forth in this Section 1.1.
“Event of Default” means an event of default under any of the Guaranteed
Obligations.
“Foreign Subsidiary” means any Subsidiary organized under the laws of any
jurisdiction outside the United States of America.
“Foreign Subsidiary Voting Stock” means the voting Capital Stock of any Foreign
Subsidiary.
“Grantor Obligations” means with respect to the Grantor, the collective reference to
all obligations and liabilities of the Grantor which may arise under or in connection with this
Agreement (including, without limitation, Section 2), the Guarantees, in each case whether on
account of guarantee obligations, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of counsel to the First
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Lien Agent or to any Secured Party that are required to be paid by the Grantor pursuant to
the terms of this Agreement).
“Guaranteed Obligations” means the collective reference to (i) the obligations
of the Grantor under the Guarantees and (ii) all other obligations and liabilities of the
Grantors, whether direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection with, this
Agreement (including, without limitation, all fees and disbursements of counsel to the First
Lien Agent or to the Secured Parties that are required to be paid by the Grantor pursuant to
the terms of this Agreement).
“Intellectual Property” means the collective reference to all rights, priorities
and privileges relating to intellectual property, whether arising under United States,
multinational or foreign laws or otherwise, including, without limitation, the Copyrights,
the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the Trademark
Licenses, 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 Grantor
to any parent entity or any of its subsidiaries.
“Investment Property” means the collective reference to (i) all “investment property” as
such term is defined in Section 9-102(a)(49) of the Maryland UCC (other than any Foreign
Subsidiary Voting Stock excluded from the definition of “Pledged Stock” in this Section 1.1)
and (ii) whether or not constituting “investment property” as so defined, all Pledged Notes and
all Pledged Stock.
“Issuers” means the collective reference to each issuer of any Investment
Property.
“Maryland UCC” means the Uniform Commercial Code as from time to time in effect
in the State of Maryland.
“Patents” means (i) all letters patent of the United States, any other country
or any political subdivision thereof, all reissues and extensions thereof and all goodwill
associated therewith, including, without limitation, any of the foregoing referred to in
Schedule 5, (ii) all applications for letters patent of the United States or any
other country and all divisions, continuations and continuations-in-part thereof, including,
without limitation, any of the foregoing referred to in Schedule 5, and (iii) all
rights to obtain any reissues or extensions of the foregoing.
“Patent License” means all agreements, whether written or oral, providing for
the grant by or to the Grantor of any right to manufacture, use or sell any invention covered
in whole or in part by a Patent, including, without limitation, any of the foregoing referred
to in Schedule 5.
“Pledged Collateral” has the meaning assigned to such term in Section 2.2(a).
“Pledged Interests” means the limited liability company interests listed on
Schedule 1, together with any other certificates, options or rights of any nature
whatsoever in respect of the
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limited liability company interests of any Person that may be issued or granted to, or held by,
the Grantor while this Agreement is in effect.
“Pledged Notes” means all promissory notes listed on Schedule 1, all
Intercompany Notes at any time issued to the Grantor and all other promissory notes issued to or
held by the Grantor (other than promissory notes issued in connection with extensions of trade
credit by the Grantor in the ordinary course of business).
“Pledged Securities” means the collective reference to the Pledged Interests, Pledged
Notes and the Pledged Stock.
“Pledged Stock” means the shares of Capital Stock listed on Schedule 1,
together with any other shares, stock certificates, options or rights of any nature whatsoever in
respect of the Capital Stock of any Person that may be issued or granted to, or held by, the
Grantor while this Agreement is in effect; provided that in no event shall more than 65% of the
total outstanding Foreign Subsidiary Voting Stock of any Foreign Subsidiary be required to be
pledged hereunder.
“Proceeds” means all “proceeds” as such term is defined in Section 9-102(a)(64) of
the Maryland UCC on the date hereof and, in any event, including, without limitation, all
dividends or other income from the Investment Property, collections thereon or distributions or
payments with respect thereto.
“Receivable” means any right to payment for goods sold, leased, licensed, assigned or
otherwise disposed of, or for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned by performance (including,
without limitation, any Account).
“Secured Parties” means the First Lien Agent and its successors and assigns.
“Security Interest” has the meaning assigned to such term in Section 2.
“Securities Act” means the Securities Act of 1933, as amended.
“Trademarks” means (i) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks, logos and other source or
business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in connection therewith,
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, including, without limitation, any of the
foregoing referred to in Schedule 5, and (ii) the right to obtain all renewals thereof.
“Trademark License” means any agreement, whether written or oral, providing for the
grant by or to the Grantor of any right to use any Trademark, including, without limitation, any
of the foregoing referred to in Schedule 5.
1.2 Other Definitional Provisions. The words “hereof,” “herein,” “hereto” and
“hereunder” and words of similar import when used in this Agreement shall refer to this
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Agreement as a whole and not to any particular provision of this Agreement, and Section and
Schedule references are to this Agreement unless otherwise specified.
The meanings given to terms defined herein shall be equally applicable to both the singular
and plural forms of such terms.
Where the context requires, terms relating to the Collateral or any part thereof, when used
in relation to a Grantor, shall refer to the Grantor’s Collateral or the relevant part thereof.
SECTION 2. GRANT OF SECURITY INTEREST
2.1 Security Interest in Personal Property. The Grantor hereby mortgages, pledges,
hypothecates, assigns and transfers to the First Lien Agent, and hereby grants to the First Lien
Agent, its successors and assigns, for the ratable benefit of the Secured Parties, a lien on and a
continuing security interest (the “Security Interest”), in all of the following property
now owned or at any time hereafter acquired by the Grantor or in which the Grantor now has or at
any time in the future may acquire any right, title or interest (collectively, the
“Collateral”), as collateral security for the prompt and complete payment and performance
when due (whether at the stated maturity, by acceleration or otherwise) of the Grantor
Obligations:
| (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 Intellectual Property, together with all goodwill of the business connected with the use of, and symbolized by, each Trademark and each Trademark License; | ||
| (i) | all Inventory; | ||
| (j) | all Investment Property; | ||
| (k) | Vehicles; | ||
| (l) | all Letter-of-Credit Rights; | ||
| (m) | all Commercial Tort Claims to the extent they have been notified to the First Lien Agent pursuant to Section 4.12; |
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(n) all Goods and personal property not otherwise described above whether tangible or
intangible and wherever located;
(o) all books and records pertaining to the Collateral;
(p) to the extent not otherwise included, all Proceeds and products of any and all of the
foregoing, all Supporting Obligations in respect of any of the foregoing and all collateral
security and guarantees given by any Person with respect to any of the foregoing; and
(q) all property of the Grantor held by the First Lien Agent or any other Secured Party,
including all property of every description, in the possession or custody of or in transit to the
First Lien Agent or such Secured Party for any purpose, including safekeeping, collection or
pledge, for the account of the Grantor or as to which the Grantor may have any right or power;
provided, that the Collateral shall not include any Excluded Assets or any leasehold
interest of the Grantor.
2.2 Pledge of Pledged Collateral.
(a) The Grantor hereby assigns and pledges to the First Lien Agent, its successors and
assigns, for the ratable benefit of the Secured Parties, a security interest in, all of the
Grantor’s right, title and interest in, to and under (i) the Pledged Securities; (ii) subject to
Section 5.3, all payments of dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of, in exchange for or upon conversion
of, and all other Proceeds received in respect of the Pledged Securities; (iii) subject to
Section 5.3, all rights and privileges of the Grantor with respect to the securities and other
property referred to in clauses (i) and (ii) above; and (iv) all Proceeds of any of the foregoing
(the items in clauses (i) through (iv) above being collectively referred to as the “Pledged
Collateral”);
(b) The Grantor agrees to promptly deliver or cause to be delivered to First Lien Agent any
and all Pledged Stock. Upon delivery to the First Lien Agent, (i) any Pledged Stock shall be
accompanied by stock powers duly executed in blank or other instruments of transfer satisfactory
to First Lien Agent and by such other instruments and documents as the First Lien Agent may
reasonably request and (ii) all other property comprising part of the Pledged Collateral shall be
accompanied by proper instruments of assignment duly executed by the applicable Grantor and such
other instruments or documents as First Lien Agent may reasonably request. Each delivery of
Pledged Stock shall be accompanied by a schedule describing the securities, which schedule shall
be attached hereto as Schedule 1 and made a part hereof; provided that the failure to
attach any such schedule hereto shall not affect the validity of such pledge of such Pledged
Collateral. Each schedule so delivered shall supplement any prior schedules so delivered.
2.3 It being understood that the Security Interest is granted as security only and shall not
subject the First Lien Agent or any other Secured Party to, or in any way alter or modify, any
obligation or liability of the Grantor with respect to or arising out of the Collateral.
SECTION 3. REPRESENTATIONS AND WARRANTIES
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3.1 Title; No Other Liens. The Grantor owns each item of the Collateral free and
clear of any and all Liens or claims of others. No financing statement or other public notice with
respect to all or any part of the Collateral is on file or of record in any public office, except
such as have been filed in favor of the First Lien Agent, for the ratable benefit of the Secured
Parties, pursuant to this Agreement. It is understood and agreed that the Grantor may, as part of
its business, grant licenses to third parties to use Intellectual Property owned or developed by
the Grantor. For purposes of this Agreement and the other Transaction Documents, such licensing
activity shall not constitute a “Lien” on such Intellectual Property. Each of the First Lien Agent
and each Secured Party understands that any such licenses may be exclusive to the applicable
licensees, and such exclusivity provisions may limit the ability of the First Lien Agent to
utilize, sell, lease or transfer the related Intellectual Property or otherwise realize value from
such Intellectual Property pursuant hereto.
3.2 Perfected First Priority Liens. The security interests granted pursuant to this
Agreement (a) will constitute valid perfected security interests in all of the Collateral in favor
of the First Lien Agent, for the ratable benefit of the Secured Parties, as collateral security
for the Grantor’s Obligations, enforceable in accordance with the terms hereof against all
creditors of the Grantor and any Persons purporting to purchase any Collateral from the Grantor
and (b) except as aforesaid, are prior to all other Liens on the Collateral in existence on the
date hereof.
3.3 Jurisdiction of Organization; Chief Executive Office. On the date hereof, the
Grantor’s jurisdiction of organization, identification number from the jurisdiction of
organization (if any), and the location of the Grantor’s chief executive office or sole place of
business or principal residence, as the case may be, are specified on Schedule 2. The
Grantor has furnished to the First Lien Agent a certified charter, certificate of incorporation or
other organization document and good standing certificate as of a date which is recent to the date
hereof.
3.4 Inventory and Equipment. On the date hereof, the Inventory and the Equipment
(other than mobile goods) are kept at the locations listed on Schedule 3.
3.5 Farm Products. None of the Collateral constitutes, or is the Proceeds of, Farm
Products.
3.6 Investment Property.
(a) The shares of Pledged Stock pledged by the Grantor hereunder constitute all the issued
and outstanding shares of all classes of the Capital Stock of each Issuer owned by the Grantor
or, in the case of Foreign Subsidiary Voting Stock, if less, 65% of the outstanding Foreign
Subsidiary Voting Stock of each relevant Issuer.
(b) All the shares of the Pledged Stock have been duly and validly issued and are fully
paid and nonassessable.
(c) The Pledged Interests constitute all the issued and outstanding limited liability
company interests of each Issuer owned by the Grantor.
(d) 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
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to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors’ rights generally, general
equitable principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(e) Schedule 1 correctly sets forth the percentage of the issued and
outstanding shares of each class of Capital Stock of the Issuer thereof represented by such
Pledged Stock.
(f) The Grantor is the record and beneficial owner of, and has good and marketable
title to, the Investment Property pledged by it hereunder, free of any and all Liens or
options in favor of, or claims of, any other Person.
(g) By virtue of the execution and delivery by the Grantor of this Agreement, when any
Pledged Stock is delivered to the First Lien Agent in accordance with this Agreement, the
First Lien Agent will obtain a legal, valid and perfected first priority lien upon and
security interest in such Pledged Stock as security for the payment and performance of the
Obligations; and
(h) The pledge affected hereby is effective to vest in the First Lien Agent, for the
benefit of the Secured Parties, the rights of the First Lien Agent in the Pledged
Collateral as set forth herein.
3.7 Receivables.
(a) No material amount payable to the Grantor under or in connection with any
Receivable is evidenced by any Instrument or Chattel Paper which has not been delivered to
the First Lien Agent to the extent required by Section 4.2.
(b) The amounts represented by the Grantor to the Secured Parties from time to time as
owing to the Grantor in respect of the Receivables will at such times be accurate in all
material respects.
3.8 Intellectual Property.
(a) On the date hereof, all material Intellectual Property of the Grantor described on
Schedule 4 is valid, subsisting, unexpired and enforceable in accordance with its
terms and applicable law, has not been abandoned and to Grantor’s knowledge, does not
infringe the intellectual property rights of any other Person, except as would not be
reasonably expected to have a Material Adverse Effect.
(b) Except as set forth in Schedule 4, on the date hereof, none of the
Intellectual Property is the subject of any licensing or franchise agreement pursuant to
which the Grantor is the licensor or franchisor, except as would not be reasonably expected
to have a Material Adverse Effect.
(c) No holding, decision or judgment has been rendered by any Governmental Authority which
would limit, cancel or question the validity of, or the Grantor’s rights in, any
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Intellectual Property in any respect that could reasonably be expected to have a Material
Adverse Effect
(d) No action or proceeding is pending, or, to the knowledge of the Grantor, threatened,
on the date hereof which, if adversely determined, would have a Material Adverse Effect.
SECTION 4. COVENANTS
The Grantor covenants and agrees with the First Lien Agent that, from and after the date
of this Agreement until the Guaranteed Obligations shall have been paid in full:
4.1 Delivery of Instruments and Chattel Paper. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any Instrument,
Certificated Security or Chattel Paper, such Instrument, Certificated Security or Chattel
Paper shall be immediately delivered to the First Lien Agent, duly indorsed in a manner
satisfactory to the First Lien Agent, to be held as Collateral pursuant to this Agreement;
provided that the Grantor shall not be obligated to deliver to the First Lien Agent
any Instruments or Chattel Paper held by the Grantor at any time to the extent that the
aggregate face amount of all such Instruments and Chattel Paper held by the Grantor at such
time does not exceed $100,000.
4.2 Maintenance of Insurance.
(a) The Grantor will maintain, with financially sound and reputable companies,
insurance policies (i) insuring the Inventory and Equipment against loss by fire, explosion, theft
and such other casualties as may be reasonably satisfactory to the First Lien Agent and (ii)
insuring the Grantor, the First Lien Agent and the Secured Parties against liability for personal
injury and property damage relating to such Inventory and Equipment, such policies to be in such
form and amounts and having such coverage as may be reasonably satisfactory to the First Lien Agent
and the Lenders.
(b) All such insurance shall (i) provide that no cancellation, material reduction in
amount or material change in coverage thereof shall be effective until at least 30 days
after receipt by the First Lien Agent of written notice thereof, (ii) name the First Lien
Agent as insured party or loss payee, (iii) if reasonably requested by the First Lien Agent,
include a breach of warranty clause and (iv) be reasonably satisfactory in all other
respects to the First Lien Agent.
4.3 Payment of Obligations. The Grantor will 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, without limitation,
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 the 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.
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4.4 Maintenance of Perfected Security Interest; Further Documentation.
(a) The 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 and shall
defend such security interest against the claims and demands of all Persons whomsoever.
(b) The Grantor will furnish to the First Lien Agent from time to time statements and
schedules further identifying and describing the assets and property of the Grantor and such
other reports in connection with the Collateral as the First Lien Agent may reasonably request,
all in reasonable detail.
(c) At any time and from time to time, upon the written request of the First Lien Agent, and
at the sole expense of the Grantor, the Grantor will promptly and duly execute and deliver, and
have recorded, such further instruments and documents and take such further actions as the First
Lien 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, without limitation, (i)
the filing of any financing or continuation statements under the Uniform Commercial Code (or
other similar laws) in effect in any jurisdiction with respect to the Security Interests and (ii)
in the case of Investment Property, Deposit Accounts and Letter of Credit Rights, taking any
actions necessary to enable the First Lien Agent to obtain “control” (within the meaning of the
applicable Uniform Commercial Code) with respect thereto.
(d) The Grantor shall have possession of the Collateral, except where as expressly otherwise
provided in this Agreement or where the First Lien Agent chooses to perfect its security interest
by possession in addition to the filing of a financing statement and other filing or recording
documents or instruments with respect to the Collateral.
(e) Except for statutory landlord liens regarding existing leases entered into by the
Grantor, the Grantor agrees that it shall not permit any Collateral to be in the possession or
control of any warehouseman, bailee, agent, landlord or processor at any time unless such
warehouseman, bailee, agent, landlord or processor shall have been notified of the Security
Interest and shall have acknowledged in writing, in form and substance satisfactory to the First
Lien Agent, that such warehouseman, bailee, agent, landlord or processor holds the Collateral for
the benefit of the First Lien Agent subject to the Security Interest and shall act upon the
instructions of the First Lien Agent without further consent from the Grantor, and that such
warehouseman, bailee, agent, landlord or processor further agrees to waive and release any Lien
held by it with respect to such Collateral, whether arising by operation of law or otherwise.
4.5 Changes in Name, etc. The Grantor will not, except upon 10 days’ prior written
notice to the First Lien Agent and delivery to the First Lien Agent of all additional executed
financing statements and other documents reasonably requested by the First Lien Agent to maintain
the validity, perfection and priority of the Security Interest:
(a) change its jurisdiction of organization or the location of its chief executive office
or sole place of business or principal residence from that referred to in Section 3.3; or
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(b) change its name.
4.6 Notices. The Grantor will advise the First Lien Agent and the Lenders promptly, in
reasonable detail, of:
(a) any Lien (other than security interests created hereby) on any of the Collateral which
would adversely affect the ability of the First Lien Agent to exercise any of its remedies
hereunder; and
(b) the occurrence of any other event which could reasonably be expected to have a material
adverse effect on the aggregate value of the Collateral or on the Security Interest.
4.7 Investment Property.
(a) If the Grantor shall become entitled to receive or shall receive any certificate
(including, without limitation, any certificate representing a dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any certificate issued
in connection with any reorganization), option or rights in respect of the Capital Stock of any
Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any
of the Pledged Securities, or otherwise in respect thereof, the Grantor shall accept the same as
the agent of the First Lien Agent and the Secured Parties, hold the same in trust for the First
Lien Agent and the Secured Parties and deliver the same forthwith to the First Lien Agent in the
exact form received, duly indorsed by the Grantor to the First Lien Agent, if required, together
with an undated stock power covering such certificate duly executed in blank by the Grantor and
with, if the First Lien Agent so requests, signature guaranteed, to be held by the First Lien
Agent, subject to the terms hereof, as additional collateral security for the Grantor
Obligations. Any sums paid upon or in respect of the Investment Property upon the liquidation or
dissolution of any Issuer shall be paid over to the First Lien Agent to be held by it hereunder
as additional collateral security for the Grantor Obligations, and in case any distribution of
capital shall be made on or in respect of the Investment Property, or any property shall be
distributed upon or with respect to the Investment Property pursuant to the recapitalization or
reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the
property so distributed shall, unless otherwise subject to a perfected security interest in favor
of the First Lien Agent, be delivered to the First Lien Agent to be held by it hereunder as
additional collateral security for the Grantor Obligations. If any sums of money or property so
paid or distributed in respect of the Investment Property shall be received by the Grantor, the
Grantor shall, until such money or property is paid or delivered to the First Lien Agent, hold
such money or property in trust for the Secured Parties, segregated from other funds of the
Grantor, as additional collateral security for the Grantor Obligations.
(b) Without the prior written consent of the First Lien Agent, the Grantor will not (i) vote
to enable, or take any other action to permit, any Issuer to issue any 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,
unless such securities are delivered to the First Lien Agent, concurrently with the issuance
thereof, to be held by the First Lien Agent as Collateral, (ii) sell, assign, transfer, exchange,
or otherwise dispose of, or grant any option with respect to, the Investment Property
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or Proceeds thereof, (iii) create, incur or permit to exist any Lien or option in favor of, or
any claim of any Person with respect to, any of the Investment Property or Proceeds thereof, or
any interest therein, except for the Security Interest or (iv) enter into any agreement or
undertaking restricting the right or ability of the Grantor or the First Lien Agent to sell,
assign or transfer any of the Pledged Securities or Proceeds thereof.
(c) The Grantor shall cause such Issuer to execute and deliver to the First Lien Agent a
signed instrument in the form of Annex I hereto.
(d) The Grantor (i) confirms that none of the terms of any equity interest issued by an
Issuer that is a partnership or a limited liability company provides that such equity interest is
a “security” within the meaning of Sections 8-102 and
8-103 of the Maryland UCC (a
“Security”), (ii) agrees that it will cause such Issuer to take no action to cause or
permit any such equity interest to become a Security, (iii) agrees that it will cause such Issuer
not to issue any certificate representing any such equity interest and (iv) agrees that if,
notwithstanding the foregoing, any such equity interest shall be or become a Security, the
Grantor will instruct such Issuer to comply with instructions originated by the First Lien Agent
without further consent by the Grantor.
4.8 Receivables.
(a) Other than in the ordinary course of business consistent with its past practice, the
Grantor will not (i) grant any extension of the time of payment of any Receivable, (ii)
compromise or settle any Receivable for less than the full amount thereof, (iii) release, wholly
or partially, any Person liable for the payment of any Receivable, (iv) allow any credit or
discount whatsoever on any Receivable or (v) amend, supplement or modify any Receivable in any
manner that could adversely affect the value thereof.
(b) The Grantor will deliver to the First Lien Agent a copy of each material demand, notice
or document received by it that questions or calls into doubt the validity or enforceability of
more than 5% of the aggregate amount of the then outstanding Receivables.
4.9 Intellectual Property.
(a) The Grantor (either itself or through licensees) will (i) continue to maintain and
preserve each Trademark material to its business, (ii) maintain 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 Laws and (iv) not (and not
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.
(b) The Grantor (either itself or through licensees) will not do any act, or omit to do any
act, whereby any Patent material to its business may become forfeited, abandoned or dedicated to
the public.
(c)
The Grantor (either itself or through licensees) (i) will employ each material Copyright
and (ii) will not (and will not permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby any material portion of the Copyrights
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may become invalidated or otherwise impaired. The Grantor will not (either itself or through
licensees) do any act whereby any material portion of such Copyright may fall into the public
domain.
(d) The Grantor (either itself or through licensees) will not do any act that knowingly
causes any material Intellectual Property to infringe the intellectual property rights of any
other Person.
(e) The Grantor will notify the First Lien Agent immediately if it knows, or has reason to
know, that any application or registration relating to any Intellectual Property material to its
business may become forfeited, abandoned or dedicated to the public, or of any adverse
determination or development (including, without limitation, 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 the
Grantor’s ownership of, or the validity of, any Intellectual Property material to its business or
the Grantor’s right to register the same or to own and maintain the same.
(f) Whenever the Grantor, either by itself or through any agent, employee, 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 in any other country or any political subdivision thereof, the Grantor shall
report such filing to the First Lien Agent within five Business Days after the last day of the
fiscal quarter in which such filing occurs. Upon request of the First Lien Agent, the Grantor
shall execute and deliver, and have recorded, any and all agreements, instruments, documents, and
papers as the First Lien Agent may request to evidence the First Lien Agent’s and the Secured
Parties’ security interest in any Copyright, Patent or Trademark and the goodwill and general
intangibles of the Grantor relating thereto or represented thereby.
(g) In the event that any material Intellectual Property is infringed, misappropriated or
diluted by a third party and such action could reasonably be expected to have a Material Adverse
Effect, the Grantor shall (i) take such actions as the Grantor shall reasonably deem appropriate
under the circumstances to protect such Intellectual Property and (ii) notify the First Lien
Agent after it learns thereof.
4.10
Vehicles. (a) No Vehicle shall be removed from the state that has issued the
certificate of title and/or ownership therefor for a period in excess of four (4) months.
(b) Within 30 days after the date hereof, and, with respect to any Vehicles acquired by the
Grantor subsequent to the date hereof, within thirty (30) days after the date of acquisition
thereof, all applications for certificates of title and/or ownership indicating the Agent’s first
priority security interest in the Vehicle covered by such certificate, and any other necessary
documentation, shall be filed in each office in each jurisdiction which the Agent shall deem
advisable to perfect its security interests in the Vehicles.
4.11 Commercial Tort Claims. If the Grantor shall at any time commence a suit, action
or proceeding with respect to any Commercial Tort Claim held by it with a value that the Grantor
reasonably believes to be of $500,000 or more, the Grantor shall promptly notify the First Lien
Agent thereof in a writing signed by the Grantor and describing the details thereof and shall
grant
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to the First Lien Agent for the benefit of the Secured Parties in such writing a security interest
therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be
in form and substance reasonably satisfactory to the First Lien Agent.
SECTION 5. REMEDIAL PROVISIONS
5.1 Certain Matters Relating to Receivables.
(a) The First Lien Agent shall have the right, at any time after the occurrence and during
the continuance of an Event of Default, to make test verifications of the Receivables in any
manner and through any medium that it reasonably considers advisable, and the Grantor shall
furnish all such assistance and information as the First Lien Agent may require in connection
with such test verifications. At any time and from time to time after the occurrence and during
the continuance of an Event of Default, upon the First Lien Agent’s request and at the expense of
the Grantor, the Grantor shall cause independent public accountants or others satisfactory to the
First Lien Agent to furnish to the First Lien Agent reports showing reconciliations, aging and
test verifications of, and trial balances for, the Receivables.
(b) Subject to Section 4.4, the First Lien Agent hereby authorizes the Grantor to collect
the Grantor’s Receivables, subject to the First Lien Agent’s direction and control after the
occurrence and during the continuance of an Event of Default, and the First Lien Agent may
curtail or terminate said authority at any time after the occurrence and during the continuance
of an Event of Default. If required by the First Lien Agent at any time after the occurrence and
during the continuance of an Event of Default, any payments of Receivables, when collected by the
Grantor, (i) shall be forthwith (and, in any event, within two Business Days) deposited by the
Grantor in the exact form received, duly indorsed by the Grantor to the First Lien Agent if
required, in a Collateral Account maintained under the sole dominion and control of the First
Lien Agent, subject to withdrawal by the First Lien Agent for the account of the Secured Parties
only as provided in Section 5.4, and (ii) until so turned over, shall be held by the Grantor in
trust for the First Lien Agent and the Secured Parties, segregated from other funds of the
Grantor. Each such deposit of Proceeds of Receivables shall be accompanied by a report
identifying in reasonable detail the nature and source of the payments included in the deposit.
(c) At the First Lien Agent’s request, the Grantor shall deliver to the First Lien Agent all
original and other documents evidencing, and relating to, the agreements and transactions which
gave rise to the Receivables, including, without limitation, all original orders, invoices and
shipping receipts.
(d) At any time after the occurrence and during the continuance of an Event of Default, the
Grantor will cooperate with the First Lien Agent to establish a system of lockbox accounts, under
the sole dominion and control of the First Lien Agent, into which all Receivables shall be paid
and from which all collected funds will be transferred to a Collateral Account.
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5.2 Communications with Obligors: Grantors Remain Liable.
(a) The First Lien Agent in its own name or in the name of others may at any time after the
occurrence and during the continuance of an Event of Default communicate with obligors under the
Receivables to verify with them to the First Lien Agent’s satisfaction the existence, amount and
terms of any Receivables.
(b) Upon the request of the First Lien Agent at any time after the occurrence and during the
continuance of an Event of Default, the Grantor shall notify obligors on the Receivables that the
Receivables have been assigned to the First Lien Agent for the ratable benefit of the Secured
Parties and that payments in respect thereof shall be made directly to the First Lien Agent.
(c) Anything herein to the contrary notwithstanding, the Grantor shall remain liable under
each of the Receivables (or any agreement giving rise thereto) 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 First Lien Agent nor any Secured
Party shall have any obligation or liability under any Receivable (or any agreement giving rise
thereto) by reason of or arising out of this Agreement or the receipt by the First Lien Agent or
any Secured Party of any payment relating thereto, nor shall the First Lien Agent or any Secured
Party be obligated in any manner to perform any of the obligations of the Grantor under or
pursuant to any Receivable (or any agreement giving rise thereto), 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.
5.3 Pledged Stock
(a) Unless an Event of Default shall have occurred and be continuing and the First Lien Agent
shall have given notice to the relevant Grantor of the First Lien Agent’s intent to exercise its
corresponding rights pursuant to Section 5.3(b), the Grantor shall be permitted to receive all
cash dividends paid in respect of the Pledged Stock and all payments made in respect of the
Pledged Notes, in each case paid in the normal course of business of the relevant Issuer and
consistent with past practice and to exercise all voting and corporate rights with respect to the
Pledged Securities; provided, however, that no vote shall be cast or corporate right
exercised or other action taken which, in the First Lien Agent’s reasonable judgment, would impair
the Collateral or which would be inconsistent with or result in any violation of any provision of
the Guaranty or this Agreement.
(b) If an Event of Default shall occur and be continuing and the First Lien Agent shall give
notice of its intent to exercise such rights to the Grantor (i) the First Lien Agent shall have
the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the
Pledged Securities and make application thereof to the Grantor Obligations in the order set forth
in Section 5.5, and (ii) any or all of the Pledged Securities shall be registered in the name of
the First Lien Agent or its nominee, and the First Lien Agent or its nominee may thereafter
exercise (x) all voting, corporate and other rights pertaining to such Pledged Securities at any
meeting of shareholders of the relevant Issuer or Issuers or
15
otherwise and (y) any and all rights of conversion, exchange and subscription and any other
rights, privileges or options pertaining to such Pledged Securities as if it were the absolute
owner thereof (including, without limitation, the right to exchange at its discretion any and all
of the Pledged Securities upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the corporate structure of any Issuer, or upon the exercise by the
Grantor or the First Lien Agent of any right, privilege or option pertaining to such Pledged
Securities, and in connection therewith, the right to deposit and deliver any and all of the
Pledged Securities with any committee, depositary, transfer agent, registrar or other designated
agency upon such terms and conditions as the First Lien Agent may determine), all without
liability except to account for property actually received by it, but the First Lien Agent shall
have no duty to the 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.
(c) The Grantor hereby authorizes and instructs each Issuer of any Pledged Securities
pledged by the Grantor hereunder to (i) comply with any instruction received by it from the First
Lien Agent in writing that (x) states that an Event of Default has occurred and is continuing and
(y) is otherwise in accordance with the terms of this Agreement, without any other or further
instructions from the Grantor, and the Grantor agrees that each Issuer shall be fully protected
in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends or other
payments with respect to the Pledged Securities directly to the First Lien Agent.
5.4 Proceeds to be Turned Over to First Lien Agent. In addition to the rights of the
First Lien Agent and the Secured Parties specified in Section 5.1 with respect to payments of
Receivables, if an Event of Default shall occur and be continuing, all Proceeds received by the
Grantor consisting of cash, checks and Instruments shall be held by the Grantor in trust for the
First Lien Agent and the Secured Parties, segregated from other funds of the Grantor, and shall,
forthwith upon receipt by the Grantor, be turned over to the First Lien Agent in the exact form
received by the Grantor (duly indorsed by the Grantor to the First Lien Agent, if required). All
Proceeds received by the First Lien Agent hereunder shall be held by the First Lien Agent in a
Collateral Account maintained under its sole dominion and control. All Proceeds while held by the
First Lien Agent in a Collateral Account (or by the Grantor in trust for the First Lien Agent and
the Secured Parties) shall continue to be held as collateral security for all the Obligations and
shall not constitute payment thereof until applied as provided in Section 5.5.
5.5 Application of Proceeds. If an Event of Default shall have occurred and be
continuing, at any time at the First Lien Agent’s election, the First Lien Agent may apply all or
any part of Proceeds constituting Collateral, whether or not held in any Collateral Account, in
payment of the Grantor Obligations as follows:
First, pro rata based on the aggregate principal amount outstanding
among the Guaranteed Obligations.
Second, to the Grantor or to such other Person as a court of competent
jurisdiction may direct.
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5.6 Code and Other Remedies. If an Event of Default shall occur and be continuing, the
First Lien Agent, on behalf of the Secured Parties, may exercise, in addition to all other rights
and remedies granted to them in this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Grantor Obligations, all rights and remedies of a secured party under
the Maryland UCC or any other applicable law. Without limiting the generality of the foregoing, the
First Lien 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 the 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 the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (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 First Lien Agent or any Secured Party 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 First
Lien Agent or any Secured Party 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 the Grantor, which right or
equity is hereby waived and released. The Grantor further agrees, at the First Lien Agent’s
request, to assemble the Collateral and make it available to the First Lien Agent at places which
the First Lien Agent shall reasonably select, whether at the Grantor’s premises or elsewhere. The
First Lien Agent shall apply the net proceeds of any action taken by it pursuant to this Section
5.6 with respect to the Grantor’s Collateral, after deducting all reasonable costs and expenses of
every kind incurred in connection therewith or incidental to the care or safekeeping of any of the
Collateral of the Grantor or in any way relating to the Collateral of the Grantor or the rights of
the First Lien Agent and the Secured Parties hereunder with respect thereto, including, without
limitation, reasonable attorneys’ fees and disbursements, to the payment in whole or in part of the
Obligations of the Grantor, in the order specified in Section 5.5, and only after such application
and after the payment by the First Lien Agent of any other amount required by any provision of law,
including, without limitation, Section 9-615(a)(3) of the Maryland UCC, need the First Lien Agent
account for the surplus, if any, to the Grantor. To the extent permitted by applicable law, the
Grantor waives all claims, damages and demands it may acquire against the First Lien Agent or any
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 ten (10) days before such sale or other disposition.
5.7 Registration Rights.
(a) If the First Lien Agent shall determine to exercise its right to sell any or all of the
Pledged Stock pursuant to Section 5.6, and if in the opinion of the First Lien Agent it is
necessary or advisable to have the Pledged Stock, or that portion thereof to be sold, registered
under the provisions of the Securities Act, the Grantor will 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 First Lien Agent, necessary or advisable to register the Pledged Stock, or
that portion thereof to be sold, under the provisions of the Securities Act, (ii) use its best
efforts
17
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 Stock, or that
portion thereof to be sold, and (iii) make all amendments thereto and/or to the related prospectus
which, in the opinion of the First Lien 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. The Grantor agrees to cause such Issuer to comply with
the provisions of the securities or “Blue Sky” laws of any and all jurisdictions which the First
Lien Agent shall designate and to make available to its security holders, as soon as practicable,
an earnings statement (which need not be audited) which will satisfy the provisions of Section
11(a) of the Securities Act.
(b) The Grantor recognizes that the First Lien Agent may be unable to effect a public sale
of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities
Act and applicable state securities laws or otherwise, and may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers that will 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. The 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 been made in a commercially reasonable manner. The First Lien Agent shall be under no
obligation to delay a sale of any of the Pledged Stock 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) The 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 Stock
pursuant to this Section 5.7 valid and binding and in compliance with any and all other
applicable Laws. The Grantor further agrees that a breach of any of the covenants contained in
this Section 5.7 will cause irreparable injury to the First Lien Agent and the Secured Parties,
that the First Lien Agent and the 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 5.7
shall be specifically enforceable against the Grantor, and the Grantor hereby waives and agrees
not to assert any defenses against an action for specific performance of such covenants except
for a defense that no Event of Default has occurred.
5.8 Deficiency. The Grantor shall remain liable for any deficiency if the proceeds of
any sale or other disposition of the Collateral are insufficient to pay the Grantor Obligations
and the fees and disbursements of any attorneys employed by the First Lien Agent or any Secured
Party to collect such deficiency.
SECTION 6. THE AGENT
6.1 First Lien Agent’s Appointment as Attorney-in-Fact, etc.
(a) The Grantor hereby irrevocably constitutes and appoints the First Lien 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 the Grantor
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and in the name of the Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and all documents and
instruments that may be necessary or desirable to accomplish the purposes of this Agreement and,
without limiting the generality of the foregoing, the Grantor hereby gives the First Lien Agent
the power and right, on behalf of the Grantor, without notice to or assent by the Grantor, to do
any or all of the following:
(i) in the name of the Grantor or its own name, or otherwise, take possession of and indorse
and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys
due under any Receivable 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
First Lien Agent for the purpose of collecting any and all such moneys due under any Receivable or
with respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and deliver, and have recorded, any
and all agreements, instruments, documents and papers as the First Lien Agent may request to
evidence the First Lien Agent’s and the Secured Parties’ security interest in such Intellectual
Property and the goodwill and general intangibles of the Grantor relating thereto or represented
thereby;
(iii) pay or discharge taxes and Liens levied or placed on or threatened against the
Collateral, effect any repairs or any insurance called for by the terms of this Agreement and pay
all or any part of the premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in Section 5.6 or 5.7, any
indorsements, assignments or other instruments of conveyance or transfer with respect to the
Collateral;
(v) direct any party liable for any payment under any of the Collateral to make payment of
any and all moneys due or to become due thereunder directly to the First Lien Agent or as the
First Lien Agent shall direct;
(vi) ask or demand for, collect, and receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect of or arising out of any
Collateral;
(vii) sign and indorse any invoices, freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral;
(viii) commence and prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any portion thereof and to enforce any
other right in respect of any Collateral;
(ix) defend any suit, action or proceeding brought against the Grantor with respect to any
Collateral;
19
(x) settle, compromise or adjust any such suit, action or proceeding and, in connection
therewith, give such discharges or releases as the First Lien Agent may deem appropriate;
(xi) assign any Copyright, Patent or Trademark (along with the goodwill of the business to
which any such Copyright, Patent or Trademark pertains), throughout the world for such term or
terms, on such conditions, and in such manner, as the First Lien Agent shall in its sole
discretion determine;
(xii) generally, sell, transfer, pledge and make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as though the First Lien Agent were the
absolute owner thereof for all purposes, and do, at the First Lien Agent’s option and the
Grantor’s expense, at any time, or from time to time, all acts and things that the First Lien
Agent deems necessary to protect, preserve or realize upon the Collateral and the First Lien
Agent’s and the Secured Parties’ security interests therein and to effect the intent of this
Agreement, all as fully and effectively as the Grantor might do; and
(xiii) license or sublicense whether on an exclusive or non-exclusive basis, any Intellectual
Property for such term and on such conditions and in such manner as the First Lien Agent shall in
its sole judgment determine and, in connection therewith, the Grantor hereby grants to the First
Lien Agent for the benefit of the Secured Parties a royalty-free,
world-wide irrevocable license of
its Intellectual Property.
Notwithstanding anything in this Section 6.1(a) to the contrary, the First Lien Agent agrees
that it will not exercise any rights under the power of attorney provided for in this Section
6.1(a) unless an Event of Default shall have occurred and be continuing.
(b) If the Grantor fails to perform or comply with any of its agreements contained herein,
the First Lien 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 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
Interest is released.
(d) Notwithstanding anything to the contrary in this Section 6, the First Lien Agent agrees
that it will not exercise any rights under the power of attorney provided for in this Section 6
unless it does so in accordance with, and to the extent consistent with, the terms of the
Intercreditor Agreement.
6.2 Duty of First Lien Agent. The First Lien Agent’s sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its possession, under Section
9-207 of the Maryland UCC or otherwise, shall be to deal with it in the same manner as the First
Lien Agent deals with similar property for its own account. Neither the First Lien Agent, any
Secured Party nor any of their respective officers, directors, employees or agents shall be liable
for failure to demand, collect or realize upon any of the 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
20
the Grantor or any other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the First Lien Agent and the Secured
Parties hereunder are solely to protect the First Lien Agent’s and the Secured Parties’
interests in the Collateral and shall not impose any duty upon the First Lien Agent or any
Secured Party to exercise any such powers. The First Lien Agent and the 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 officers, directors, employees or agents shall be
responsible to the Grantor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.
6.3 Authorization of Financing Statements. Pursuant to any applicable law, the Grantor
authorizes the First Lien Agent to file or record financing statements and other filing or recording documents or instruments with respect to the Collateral without the signature of
the Grantor in such form and in such offices as the First Lien Agent determines appropriate to
perfect the Security Interests. The Grantor authorizes the First Lien Agent to use the collateral
description “all personal property,” other than the Excluded Assets, or “all assets,” other than
the Excluded Assets, in any such financing statements. The Grantor hereby ratifies and authorizes
the filing by the First Lien Agent of any financing statement with respect to the Collateral made
prior to the date hereof.
6.4 Authority of First Lien Agent. The Grantor acknowledges that the rights and
responsibilities of the First Lien Agent under this Agreement with respect to any action taken by
the First Lien Agent or the exercise or non-exercise by the First Lien Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or resulting or
arising out of this Agreement, as between the First Lien Agent and the Grantors, the First Lien
Agent shall be conclusively presumed to be acting as agent for the 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.
SECTION 7. MISCELLANEOUS
7.1 Amendments in Writing. None of the terms or provisions of this Agreement may be
waived, amended, supplemented or otherwise modified except by a written instrument executed by
the Grantor and the First Lien Agent.
7.2 Notices. All notices, requests and demands to or upon the First Lien Agent or
the Grantor hereunder shall be effected in the manner provided for in Section 11 of the
applicable Guaranty.
7.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the First Lien
Agent nor any Secured Party shall by any act (except by a written instrument pursuant to Section
7.1), 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 First Lien Agent or any 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 First Lien Agent or any
Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a
bar to
21
any right or remedy which the First Lien Agent or such 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.
7.4 Enforcement Expenses; Indemnification.
(a) The Grantor agrees to pay, or reimburse each Secured Party and the First Lien Agent for,
all its costs and expenses incurred in collecting against the Grantor under the guarantee
contained in Section 2 or otherwise enforcing or preserving any rights under this Agreement or
the Guarantees.
(b) The Grantor agrees to pay, and to save the First Lien Agent and the Secured Parties
harmless from, any and all liabilities with respect to, or resulting from any delay in paying,
any and all stamp, excise, sales or other taxes which may be payable or determined to be payable
with respect to any of the Collateral or in connection with any of the transactions contemplated
by this Agreement.
(c) The Grantor agrees to pay, and to save the First Lien Agent and the Secured Parties
harmless from, any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this Agreement.
(d) The agreements in this Section shall survive repayment of the Guaranteed Obligations
and all other amounts payable under the Guarantees.
7.5 Successors and Assigns. This Agreement shall be binding upon the successors and
assigns of the Grantor and shall inure to the benefit of the First Lien Agent and the Secured
Parties and their successors and assigns; provided that the Grantor may not assign,
transfer or delegate any of its rights or obligations under this Agreement without the prior
written consent of the First Lien Agent.
7.6 Set-Off. The Grantor hereby irrevocably authorizes the First Lien Agent and each
Secured Party at any time and from time to time while an Event of Default shall have occurred and
be continuing, without notice to the Grantor, any such notice being expressly waived by the
Grantor, to set-off and appropriate and apply any and all deposits
(general or special, time or
demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in
any currency, in each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the First Lien Agent or such Secured Party to or for the
credit or the account of the Grantor, or any part thereof in such amounts as the First Lien Agent
or such Secured Party may elect, against and on account of the obligations and liabilities of the
Grantor to the First Lien Agent or such Secured Party hereunder and claims of every nature and
description of the First Lien Agent or such Secured Party against the Grantor, in any currency, as
the First Lien Agent or such Secured Party may elect, whether or not the First Lien Agent or any
Secured Party has made any demand for payment and although such obligations, liabilities and claims
may be contingent or unmatured. The First Lien Agent and each Secured Party shall notify the
Grantor promptly of any such set-off and the application made by the First Lien Agent or such
Secured Party of the proceeds thereof, provided that the failure to give such notice shall
22
not affect the validity of such set-off and application. The rights of the First Lien Agent and
each Secured Party under this Section are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which the First Lien Agent or such Secured Party may
have.
7.7 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), and all of said
counterparts taken together shall be deemed to constitute one and the same instrument.
7.8 Severability. Any provision of this Agreement which 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.
7.9 Section Headings. The Section headings used in this Agreement are for convenience
of reference only and are not to affect the construction hereof or be taken into consideration in
the interpretation hereof.
7.10 Integration. This Agreement and the Guarantees represent the agreement of the
Grantors, the First Lien Agent and the Secured Parties with respect to the subject matter hereof
and thereof, and there are no promises, undertakings, representations or warranties by the First
Lien Agent or any Secured Party relative to subject matter hereof and thereof not expressly set
forth or referred to herein or in the Guarantees.
7.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MARYLAND.
7.12 Submission To Jurisdiction; Waivers. The Grantor hereby irrevocably and
unconditionally:
(a) submits for itself and its property in any legal action or proceeding relating to this
Agreement and the other Transaction Documents to which it is a party, or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of Maryland, the courts of the United States of America sitting in the State
of Maryland, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(c) agrees that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially similar form of
mail), postage prepaid, to the Grantor at the notice address provided in the Guaranty;
23
(d) agrees that nothing herein shall affect the right to effect service of process in any
other manner permitted by law or shall limit the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this Section any special, exemplary,
punitive or consequential damages.
7.13 Acknowledgements. The Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and delivery of this
Agreement and the Guarantees;
(b) neither the First Lien Agent nor any Secured Party has any fiduciary relationship with
or duty to the Grantor arising out of or in connection with this Agreement or any of the other
Transaction Documents, and the relationship between the Grantors, on the one hand, and the First
Lien Agent and Secured Parties, on the other hand, in connection herewith or therewith is solely
that of debtor and creditor; and
(c) no joint venture is created hereby or by the Guarantees or otherwise exists by virtue of
the transactions contemplated hereby among the Secured Parties or among the Grantors and the
Secured Parties.
7.14 Releases.
(a) At such time as the Guaranteed Obligations shall have been paid in full, the Collateral
shall be released from the Liens created hereby, and this Agreement and all obligations (other
than those expressly stated to survive such termination) of the First Lien 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 payment and termination, the First Lien Agent shall
deliver to such Grantor any Collateral held by the First Lien Agent hereunder, and execute and
deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such
termination.
(b) If any of the Collateral shall be sold, transferred or otherwise disposed of by the
Grantor in a transaction permitted by the Guaranty, then the First Lien Agent, at the request and
sole expense of the Grantor, shall execute and deliver to the Grantor all releases or other
documents reasonably necessary or desirable for the release of the Liens created hereby on such
Collateral.
7.15 WAIVER OF JURY TRIAL. THE GRANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, THE
AGENT AND EACH SECURED PARTY, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
* * *
24
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be duly executed and delivered as
of the date first above written.
| GLOBAL MONITORING SYSTEMS, INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | ||||
GMS Pledge and Security Agreement Signature Page
DESCRIPTION OF PLEDGED SECURITIES
Pledged Stock:
| No. of | % of Issued and | |||||||||
| Authorized | Outstanding | |||||||||
| Grantor | Issuer | Class of Stock | Shares | Shares | ||||||
Global Monitoring
Systems, Inc.
|
Global Dosimetry Solutions, Inc. | 100 | % | |||||||
Pledged Interests:
| % of | ||||||
| Outstanding | ||||||
| Grantor | Issuer | Interests | ||||
Global Monitoring Systems,
Inc.
|
Dosimetry Acquisitions (U.S.), LLC | 100 | % | |||
Global Monitoring Systems,
Inc.
|
IST LLC | 100 | % | |||
Pledged Notes:
None
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform
Commercial Code Filings:
| § | Global Monitoring Systems, Inc.: Delaware Secretary of State |
Copyright, Patent and Trademark Filings:
Filing of the Trademark Security Agreement with the U.S. Patent and Trademark Office.
Other actions with respect to perfection:
Delivery to the Agent of the original certificates representing the Pledged Stock.
JURISDICTION OF ORGANIZATION, IDENTIFICATION NUMBER AND
LOCATION OF CHIEF EXECUTIVE OFFICE
LOCATION OF CHIEF EXECUTIVE OFFICE
| Jurisdiction of | Location of Chief | |||||
| Grantor | Organization | Identification No. | Executive Office | |||
Global Monitoring
Systems, Inc.
|
Delaware | [there isn’t one yet] |
Annex I
to
First Lien Pledge and Security Agreement
to
First Lien Pledge and Security Agreement
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the First Lien Pledge and
Security Agreement dated as of January 1, 2006 (the “Agreement”), made by the
Grantor party thereto for the benefit of American Capital Financial Services, Inc., as
agent (the “First Lien Agent”). The undersigned agrees for the benefit of the
First Lien Agent and the Lenders as follows:
1. The undersigned will be bound by the terms of the Agreement and will comply with
such terms insofar as such terms are applicable to the undersigned.
2. The undersigned will notify the First Lien Agent promptly in writing of the
occurrence of any of the events described in Section 4.8(a) of the Agreement.
3. The terms of Sections 4.8, 5.3(a) and 5.7 of the Agreement shall apply to it,
mutatis mutandis, with respect to all actions that may be required of it, or
prohibited, pursuant to Section 4.8, 5.3 or 5.7 of the Agreement.
| [NAME OF ISSUER] | ||||||
| By | ||||||
| Name: | ||||||
| Title: | ||||||
