EXHIBIT 4.1(b)
EXECUTION COPY
PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT (as amended, supplemented, amended
and restated or otherwise modified from time to time, this "Pledge and Security
Agreement"), dated as of November 19, 2003 is made by Telex Communications,
Inc., a Delaware corporation (the "Issuer"), each Domestic Restricted Subsidiary
(as defined below) of the Issuer a signatory hereto, and each other Domestic
Restricted Subsidiary of the Issuer which may from time to time hereafter become
a party hereto pursuant to Section 7.5 (each, individually, an "Additional
Grantor", and collectively, the "Additional Grantors", and together with the
Issuer, each such Subsidiary, each, individually, a "Grantor", and collectively,
the "Grantors"), in favor of BNY Midwest Trust Company, as collateral agent
(together with its successor(s) thereto, in such capacity, the "Collateral
Agent") for each of the Secured Parties.
W I T N E S S E T H :
WHEREAS, the Issuer, the other Grantors and the Collateral Agent, as
trustee, have entered into an Indenture, dated as of November 19, 2003 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Indenture"), and in connection therewith, the Issuer has issued (the
"Notes Issuance") its 11 1/2% Senior Secured Notes due 2008 (and, if applicable,
its 11 1/2% Senior Secured Notes due 2008, Series B issued in exchange therefor)
(collectively, the "Notes");
WHEREAS, the Grantors have entered into that certain Credit Agreement,
dated as of November 19, 2003 (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "Loan Agreement") among the financial
institutions party thereto (the "Senior Lenders") as lenders and GE Capital
Corporation as the agent (the "Agent"), pursuant to which the Senior Lenders
have agreed to make certain loans and other financial accommodations to the
Grantors from time to time, which Loan Agreement is referenced as the "Senior
Credit Facility" under the Indenture, and the other Grantors hereto have each
entered into various agreements granting Liens to the Agent for the benefit of
the Senior Lenders as well;
WHEREAS, as a condition precedent to the Notes Issuance, each Grantor
is required to execute and deliver this Pledge and Security Agreement;
WHEREAS, each Grantor has duly authorized the execution, delivery and
performance of this Pledge and Security Agreement; and
WHEREAS, it is in the best interests of each Grantor to execute this
Pledge and Security Agreement inasmuch as such Grantor will derive substantial
direct and indirect benefits from proceeds of the Notes issued by the Issuer;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Holders
to acquire the Notes and maintain the Indebtedness evidenced thereby, each
Grantor agrees, for the benefit of each Secured Party, as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Pledge and Security Agreement, including its
preamble and recitals, shall have the following meanings (such definitions to be
equally applicable to the singular and plural forms thereof):
"Additional Grantor" and "Additional Grantors" are defined in the
preamble.
"Agent" is defined in the second recital.
"Capital Securities" means, with respect to any Person, all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital, whether now outstanding or
issued after the date hereof.
"Collateral" is defined in Section 2.1.
"Collateral Agent" is defined in the preamble.
"Computer Hardware and Software Collateral" means:
(a) all computer and other electronic data processing
hardware, integrated computer systems, central processing units, memory
units, display terminals, printers, features, computer elements, card
readers, tape drives, hard and soft disk drives, cables, electrical
supply hardware, generators, power equalizers, accessories and all
peripheral devices and other related computer hardware;
(b) all software programs (including both source code, object
code and all related applications and data files), whether now owned,
licensed or leased or hereafter acquired by any Grantor, designed for
use on the computers and electronic data processing hardware described
in clause (a) above;
(c)all firmware associated therewith;
(d)all documentation (including flow charts, logic diagrams,
manuals, guides and specifications) with respect to such hardware,
software and firmware described in the preceding clauses (a) through
(c); and
(e) all rights with respect to all of the foregoing, including
any and all copyrights, licenses, options, warranties, service
contracts, program services, test rights, maintenance rights, support
rights, improvement rights, renewal rights and indemnifications and any
substitutions, replacements, additions or model conversions of any of
the foregoing.
"Control Agreement" means an agreement in form and substance
satisfactory to the Collateral Agent which provides for the Collateral Agent to
have "control" (as defined in Section 8-106 of the U.C.C., as such term relates
to investment property (other than certificated
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Capital Securities or commodity contracts), or as used in Section 9-106 of the
U.C.C., as such term relates to commodity contracts).
"Copyright Collateral" means all copyrights (including all copyrights
for semiconductor chip product mask works) of each Grantor, whether statutory or
common law, registered or unregistered, now or hereafter in force throughout the
world including all of such Grantor's right, title and interest in and to all
copyrights registered in the United States Copyright Office or anywhere else in
the world and also including the copyrights referred to in Item A of Schedule V
attached hereto, and all applications for registration thereof, whether pending
or in preparation, all copyright licenses, including each copyright license
referred to in Item B of Schedule V attached hereto, the right to xxx for past,
present and future infringements of any thereof, all rights corresponding
thereto throughout the world, all extensions and renewals of any thereof and all
proceeds of the foregoing, including licenses, royalties, income, payments,
claims, damages and proceeds of suit.
"Distributions" means all non-cash dividends, paid on Capital
Securities, liquidating dividends paid on Capital Securities, shares of Capital
Securities resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Capital Securities constituting
Collateral, but shall not include Dividends.
"Dividends" means cash dividends and cash distributions with respect to
any Capital Securities constituting Collateral that are not a liquidating
dividend.
"Excluded Collateral" means the investment property constituting the
Capital Securities of (i) Saguaro Electronica, S.A. de C.V., (ii) Telex
Communications, S.A. de C.V., (iii) EVI Audio (Aust) PTY Limited, (iv) Issuer's
50% membership interest in DRF 12000 Portland LLC, a Minnesota limited liability
company and (v) 2,197 shares of Prudential Financial, Inc. owned beneficially by
Issuer.
"Grantor" and "Grantors" are defined in the preamble.
"Indenture" is defined in the first recital.
"Intellectual Property Collateral" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.
"Issuer" is defined in the preamble.
"Loan Agreement" is defined in the second recital.
"Master Deposit Account" means a deposit account of the Issuer to be
established and maintained with the Collateral Agent upon the occurrence of an
Event of Default.
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"Material Adverse Effect" means a material adverse effect on
(a)the business, operating results or condition (financial or
otherwise) of the Issuer and its Subsidiaries, taken as a whole;
(b)the ability of any Grantor to perform its obligations under
any of the Related Documents, including the payment of any principal,
interest, fees, expenses or other amounts under or in respect of any of
the Related Documents; or
(c)the validity or enforceability of any of the Related
Documents or any of the rights or remedies of the Collateral Agent or
any other Secured Party under any of the Related Documents.
"Motor Vehicles" means motor vehicles, tractors, trailers and other
like property, whether or not the title thereto is governed by a certificate of
title or ownership.
"Notes" is defined in the first recital.
"Notes Issuance" is defined in the first recital.
"Patent Collateral" means:
(a) all letters patent and applications for letters patent,
including all patent applications in preparation for filing and
including each patent and patent application referred to in Item A of
Schedule III attached hereto;
(b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any
of the items described in clause (a);
(c) all patent licenses, including each patent license
referred to in Item B of Schedule III attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the
right to xxx third parties for past, present or future infringements of
any patent or patent application, including any patent or patent
application referred to in Item A of Schedule III attached hereto, and
for breach or enforcement of any patent license, including any patent
license referred to in Item B of Schedule III attached hereto, and all
rights corresponding thereto throughout the world.
"Pledge and Security Agreement" is defined in the preamble.
"Receivables" is defined in clause (c) of Section 2.1.
"Related Contracts" is defined in clause (c) of Section 2.1.
"Related Documents" means the Indenture, the Notes, this Pledge and
Security Agreement, the Trademark Security Agreement, the Patent Security
Agreement, if any, the Copyright Security Agreement, if any, and the Mortgages.
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"Secured Obligations" is defined in Section 2.2.
"Secured Parties" means the Collateral Agent, the Trustee and the
Holders.
"Senior Lenders" is defined in the second recital.
"Trademark Collateral" means:
(a) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos, other source of
business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of a like
nature (all of the foregoing items in this clause (a) being
collectively called a "Trademark"), now existing anywhere in the world
or hereafter adopted or acquired, whether currently in use or not, all
registrations and recordings thereof and all applications in connection
therewith, whether pending or in preparation for filing, including
registrations, recordings and applications in the United States Patent
and Trademark Office or in any office or agency of the United States of
America or any State thereof or any foreign country, including those
referred to in Item A of Schedule IV attached hereto;
(b) all Trademark licenses, including each Trademark license
referred to in Item B of Schedule IV attached hereto;
(c) all reissues, extensions or renewals of any of the items
described in clause (a) and (b);
(d) all of the goodwill of the business connected with the use
of, and symbolized by the items described in, clauses (a) and (b); and
(e) all proceeds of, and rights associated with, the
foregoing, including any claim by any Grantor against third parties for
past, present or future infringement or dilution of any Trademark,
Trademark registration or Trademark license, including any Trademark,
Trademark registration or Trademark license referred to in Item A and
Item B of Schedule IV attached hereto, or for any injury to the
goodwill associated with the use of any such Trademark or for breach or
enforcement of any Trademark license.
"Trade Secrets Collateral" means all common law and statutory trade
secrets and all other confidential or proprietary or useful information and all
know-how obtained by or used in or contemplated at any time for use in the
business of any Grantor (all of the foregoing being collectively called a "Trade
Secret"), whether or not such Trade Secret has been reduced to a writing or
other tangible form, including all documents and things embodying, incorporating
or referring in any way to such Trade Secret, all Trade Secret licenses,
including each Trade Secret license referred to in Schedule VI attached hereto,
and including the right to xxx for and to enjoin and to collect damages for the
actual or threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.
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"U.C.C." means the Uniform Commercial Code as in effect from time to
time in the State of New York; provided, that if, with respect to any U.C.C.
financing statement or by reason of any provisions of law, the perfection or the
effect of perfection or non-perfection of the security interests granted to the
Collateral Agent pursuant to the applicable Related Document is governed by the
Uniform Commercial Code as in effect in a jurisdiction of the United States
other than New York, then "U.C.C." means the Uniform Commercial Code as in
effect from time to time in such other jurisdiction for purposes of the
provisions of each Related Document and any U.C.C. financing statement relating
to such perfection or effect of perfection or non-perfection.
Section 1.2. Indenture Definitions. Unless otherwise defined herein or
the context otherwise requires, terms used in this Pledge and Security
Agreement, including its preamble and recitals, have the meanings provided in
the Indenture.
Section 1.3. U.C.C. Definitions. Unless otherwise defined herein or in
the Indenture or the context otherwise requires and whether or not capitalized,
terms for which meanings are provided in Article 8 or Article 9 of the U.C.C.
are used in this Pledge and Security Agreement, including its preamble and
recitals, with such meanings.
ARTICLE II
SECURITY INTEREST
Section 2.1. Grant of Security Interest. Each Grantor hereby assigns,
pledges, hypothecates, charges, mortgages, delivers, and transfers to the
Collateral Agent for its benefit and the ratable benefit of each of the Secured
Parties, and hereby grants to the Collateral Agent for its benefit and the
ratable benefit of each of the Secured Parties, a continuing security interest
in all of the following property, whether tangible or intangible, whether now or
hereafter existing, owned or acquired by such Grantor, and wherever located
(collectively the "Collateral"):
(a) (i) all investment property in which such Grantor has an
interest (including the Capital Securities of each issuer of such
Capital Securities described in Schedule I hereto) and (ii) all other
Capital Securities which are interests in limited liability companies
or partnerships in which such Grantor has an interest (including the
Capital Securities of each issuer of such Capital Securities described
in Schedule I hereto), in each case together with Dividends and
Distributions payable in respect of the Collateral described in the
foregoing clauses (a)(i) and (a)(ii) and;
(b) all goods, including all equipment and inventory; and all
accessions thereto, products thereof and documents therefor (any and
all such inventory, materials, goods, accessions, products and
documents being the "Inventory");
(c) all accounts, contracts, contract rights, chattel paper,
documents, instruments, promissory notes and general intangibles
(including tax refunds and payment intangibles), whether or not arising
out of or in connection with the sale or lease of goods or the
rendering of services, and all rights now or hereafter existing in and
to all security
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agreements, guaranties, leases and other contracts securing or
otherwise relating to any such accounts, contracts, contract rights,
chattel paper, documents, instruments, promissory notes, and general
intangibles and payment intangibles (all of the foregoing being the
"Receivables", and any and all such security agreements, guaranties,
leases and other contracts being the "Related Contracts");
(d) all deposit accounts (including the Master Deposit
Account) and all cash, checks, drafts, notes, bills of exchange, money
orders and other like instruments, if any, now owned or hereafter
acquired, held therein (or in sub-accounts thereof) and all
certificates and instruments, if any, from time to time representing or
evidencing such investments, and all interest, earnings and proceeds in
respect thereof;
(e) all Intellectual Property Collateral;
(f) all letter of credit rights;
(g) all commercial tort claims in which such Grantor has
rights (including as a plaintiff);
(h) all books, records, writings, data bases, information and
other property relating to, used or useful in connection with,
evidencing, embodying, incorporating or referring to, any of the
foregoing in this Section;
(i) all other property and rights of every kind and
description and interests therein; and
(j) all products, offspring, rents, issues, profits, returns,
income, supporting obligations and proceeds of and from any and all of
the foregoing Collateral (including proceeds which constitute property
of the types described in clauses (a) through (i), and, to the extent
not otherwise included, all payments under insurance (whether or not
the Collateral Agent is the loss payee thereof), or any indemnity,
warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral).
Notwithstanding the foregoing, "Collateral" shall not include (a) any general
intangibles or other rights arising under any contracts or licenses (other than,
in each of the foregoing cases, any right to receive payments) or other
documents described in such clause as to which the grant of a security interest
would constitute a violation of a valid and enforceable restriction in favor of
a third party on such grant, unless and until any required consents shall have
been obtained, (b) investment property consisting of Capital Securities of an
issuer that is a Foreign Subsidiary of such Grantor, in excess of 65% of the
total combined voting power of all Capital Securities of each such Foreign
Subsidiary, (c) any Excluded Collateral and (d) any property not of a type
included within the description contained in the Loan Documents (as defined in
the Loan Agreement) as of the date hereof of property constituting "Collateral"
(as such term is defined as of the date hereof in the Loan Agreement). Each
Grantor agrees to use reasonable efforts to obtain any such required consent in
respect of the general intangibles or other rights referred to above in clause
(a).
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Section 2.2. Security for Obligations. This Pledge and Security
Agreement secures the payment of all Obligations of the Issuer now or hereafter
existing under the Indenture, the Notes and each other Related Document to which
the Issuer is or may become a party, whether for principal, interest, costs,
fees, expenses or otherwise, and all Obligations of each Grantor now or
hereafter existing under its Subsidiary Guarantee, this Pledge and Security
Agreement and each other Related Document to which such Grantor is or may become
a party (all such obligations of such Grantor being the "Secured Obligations").
Section 2.3. Delivery of Certificated Securities and Intercompany
Notes. All Collateral comprised of Intercompany Notes and certificated Capital
Securities shall be delivered to and held by or on behalf of (and, in the case
of the Intercompany Notes, endorsed to the order of) the Collateral Agent
pursuant hereto, shall be in suitable form for transfer by delivery, and shall
be accompanied by all necessary instruments of transfer or assignment, duly
executed in blank.
Section 2.4. Dividends on Securities and Payments on Intercompany
Notes. In the event that any Dividend is to be paid on any Capital Security that
constitutes Collateral or any payment of principal or interest is to be made on
any Intercompany Note at a time when no Default of the nature referred to in
clause (6) of Section 6.01 of the Indenture or Event of Default has occurred and
is continuing or would result there form such Dividend or payment may be paid
directly to the applicable Grantor. If any such Default or Event of Default has
occurred and is continuing, then any such Dividend or payment shall be paid
directly to the Collateral Agent.
Section 2.5. Continuing Security Interest; Transfer of Notes. This
Pledge and Security Agreement shall create a continuing security interest in the
Collateral and shall
(a) remain in full force and effect until payment in full in
cash of all Secured Obligations,
(b) be binding upon each Grantor, its successors, transferees
and assigns, and
(c) inure, together with the rights and remedies of the
Collateral Agent hereunder, to the benefit of the Collateral Agent and
each other Secured Party.
Without limiting the generality of the foregoing clause (c), any Holder may
assign or otherwise transfer (in whole or in part) any Note held by it to any
other Person, and such other Person shall thereupon become vested with all the
rights and benefits in respect thereof granted to such Holder under any Related
Document (including this Pledge and Security Agreement) or otherwise, subject,
however, to any contrary provisions in such assignment or transfer, and to the
provisions of Sections 2.14 and 2.15 of the Indenture. Upon the payment in full
in cash of all Secured Obligations, the security interest granted herein shall
terminate and all rights to the Collateral shall revert to such Grantor. Upon
any such termination, the Collateral Agent will, at such Grantor's sole expense,
execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence such termination. Upon (i) the sale, transfer or
other disposition of Collateral in accordance with Section 4.16 of the Indenture
or (ii) the payment in full in cash of all Secured Obligations, the security
interests granted herein shall automatically terminate with respect to (x) such
Collateral (in the case of clause (i)) or (y) all Collateral (in the case of
clause (ii)). Upon any such sale, transfer, disposition or termination,
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the Collateral Agent will, at such Grantor's sole expense, deliver to such
Grantor, without any representations, warranties or recourse of any kind
whatsoever, all applicable certificated securities and all applicable
Intercompany Notes, together with all other applicable Collateral held by the
Collateral Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination
(including such documents as such Grantor shall reasonably request to remove the
notation of the Collateral Agent as lienholder on any certificate of title for
any applicable Motor Vehicle).
Section 2.6. Grantor Remains Liable. Anything herein to the contrary
notwithstanding
(a) each Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein,
and shall perform all of its duties and obligations under such
contracts and agreements to the same extent as if this Pledge and
Security Agreement had not been executed,
(b) the exercise by the Collateral Agent of any of its rights
hereunder shall not release any Grantor from any of its duties or
obligations under any such contracts or agreements included in the
Collateral, and
(c) neither the Collateral Agent nor any other Secured Party
shall have any obligation or liability under any such contracts or
agreements included in the Collateral by reason of this Pledge and
Security Agreement, nor shall the Collateral Agent or any other Secured
Party be obligated to perform any of the obligations or duties of any
Grantor thereunder or to take any action to collect or enforce any
claim for payment assigned hereunder.
Section 2.7. Security Interest Absolute. This Pledge and Security
Agreement shall in all respects be a continuing, absolute, unconditional and
irrevocable grant of security interest, and shall remain in full force and
effect until all of the Security Obligations have been paid in full. All rights
of the Collateral Agent and the security interests granted to the Collateral
Agent (for its benefit and the ratable benefit of each other Secured Party)
hereunder, and all obligations of each Grantor hereunder, shall be absolute and
unconditional and irrevocable, irrespective of
(a) any lack of validity, legality or enforceability of the
Indenture, any Note or any other Related Document;
(b) the failure of any Secured Party
(i) to assert any claim or demand or to enforce any
right or remedy against the Issuer, any other Grantor or any
other Person under the provisions of the Indenture, any Note,
any other Related Document or otherwise, or
(ii) to exercise any right or remedy against any
other guarantor of, debtor or obligor with respect to, or
collateral securing, any Secured Obligations;
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Secured Obligations or any
other extension, compromise or renewal of any Secured Obligations;
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(d) any reduction, limitation, impairment or termination of
any Secured Obligations for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject
to (and each Grantor hereby waives any right to or claim of) any
defense or setoff, counterclaim, recoupment or termination whatsoever
by reason of the invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, any Secured Obligations or otherwise;
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of
the Indenture, any Note or any other Related Document;
(f) any addition, exchange, release, surrender or
non-perfection of any collateral (including the Collateral), or any
amendment to or waiver or release of or addition to or consent to
departure from any guaranty, for any of the Secured Obligations; or
(g) any other circumstances which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the Issuer,
any other Grantor, any surety or any guarantor, debtor or obligor.
Section 2.8. Postponement of Subrogation, etc. Each Grantor hereby
agrees that it will not exercise any rights which it may acquire by reason of
any payment made hereunder, whether by way of subrogation, reimbursement or
otherwise, until the prior payment in full in cash of all Secured Obligations.
Any amount paid to any Grantor on account of any payment made hereunder prior to
the payment in full in cash of all Secured Obligations shall be held in trust
for the benefit of the Secured Parties and shall immediately be paid to the
Secured Parties and credited and applied against the Secured Obligations,
whether matured or unmatured, in accordance with the terms of the Indenture;
provided, however, that if
(a) such Grantor has made payment to the Secured Parties of
all or any part of the Secured Obligations, and
(b) all Secured Obligations have been paid in full in cash,
each Secured Party agrees that, at the requesting Grantor's request and sole
expense, the Secured Parties will execute and deliver to such Grantor
appropriate documents (without recourse and without representation or warranty)
necessary to evidence the transfer by subrogation to such Grantor of an interest
in the Secured Obligations resulting from such payment by such Grantor. In
furtherance of the foregoing, for so long as any Secured Obligations remain
outstanding, each Grantor shall refrain from taking any action or commencing any
proceeding against the Issuer or any other Grantor (or its successors or
assigns, whether in connection with a bankruptcy proceeding or otherwise) to
recover any amounts in respect of payments made under this Pledge and Security
Agreement to any Secured Party.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties. Each Grantor represents
and warrants to each Secured Party insofar as the representations and warranties
contained herein are applicable to such Grantor and its properties, as set forth
in this Article III.
Section 3.2. As to Capital Securities of Subsidiaries. With respect to
any Subsidiary of any Grantor that is
(a) a corporation, business trust, joint stock company or
similar Person, all Capital Securities issued by such Subsidiary are
duly authorized and validly issued, fully paid and non-assessable, and
represented by a certificate (except for any Subsidiary organized under
the laws of Germany); and
(b) a partnership or limited liability company, no Capital
Securities issued by such Subsidiary (i) are dealt in or traded on
securities exchanges or in securities markets, (ii) expressly provide
that such Capital Securities are a security governed by Article 8 of
the U.C.C. or (iii) are held in a securities account.
The percentage of the issued and outstanding Capital Securities of each
Subsidiary pledged by any Grantor hereunder are as set forth in Schedule I
hereto.
Section 3.3. As to Intercompany Notes. In the case of each Intercompany
Note, all of such Intercompany Notes have been duly authorized, executed,
endorsed, issued and delivered, and are the legal, valid and binding obligation
of the issuers thereof, and are not in default.
Section 3.4. Grantor Name, Location, etc. The jurisdiction in which
each Grantor is located for purposes of Sections 9-301 and 9-307 of the U.C.C.
is set forth in Item A of Schedule II hereto. Set forth in Item B of Schedule II
is each location a secured party would have filed a U.C.C. financing statement
to perfect a security interest in equipment, inventory and general intangibles
owned by each Grantor in the past five years. No Grantor has any trade names
other than those set forth in Item C of Schedule II hereto. During the past five
years preceding the date hereof, no Grantor has been known by any legal name
different from the one set forth on the signature page hereto, nor has such
Grantor been the subject of any merger or other corporate reorganization, except
as set forth in Item D of Schedule II hereto. The name set forth on the
signature page is the true and correct name of such Grantor. Each Grantor's
federal taxpayer identification number is (and, during the four months preceding
the date hereof, such Grantor has not had a federal taxpayer identification
number different from that) set forth in Item E of Schedule II hereto. No
Grantor is a party to any federal, state or local government contract except as
set forth in Item F of Schedule II hereto. No Grantor maintains any deposit
accounts with any Person except as set forth in Item G of Schedule II hereto.
Section 3.5. Ownership, No Liens, etc. Such Grantor owns its Collateral
free and clear of any Lien, security interest, charge or encumbrance except for
the security interest created by this Pledge and Security Agreement except as
permitted by the Indenture. No effective financing statement or other instrument
similar in effect covering all or any part of the Collateral is on file
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in any recording office, except such as may have been filed in favor of the
Collateral Agent relating to this Pledge and Security Agreement or as have been
filed in connection with Liens permitted pursuant to Section 4.18 of the
Indenture or as to which a duly executed termination statement relating to such
financing statement or other instrument has been delivered to the Collateral
Agent on the Closing Date.
Section 3.6. Possession and Control. Each Grantor agrees that it will
maintain exclusive possession of its goods, instruments, promissory notes and
inventory, other than (a) inventory in transit in the ordinary course of
business and (b) instruments or promissory notes that have been delivered to the
Collateral Agent or the Agent, as applicable, pursuant to Section 3.7.
Section 3.7. Negotiable Documents, Instruments and Chattel Paper. Such
Grantor has, contemporaneously herewith, delivered to the Agent, in accordance
with the Intercreditor Agreement, possession of all originals of all negotiable
documents, instruments and chattel paper currently owned or held by such Grantor
(duly endorsed in blank).
Section 3.8. Intellectual Property Collateral. With respect to any
Intellectual Property Collateral the loss, impairment or infringement of which
could reasonably be expected to have a Material Adverse Effect:
(a) such Intellectual Property Collateral is subsisting and
has not been adjudged invalid or unenforceable, in whole or in part;
(b) such Intellectual Property Collateral is valid and
enforceable;
(c) such Grantor has made all necessary filings and
recordations to protect its interest in such Intellectual Property
Collateral (except with respect to Intellectual Property Collateral
that it is acquiring on the date hereof, in which case, such Grantor
agrees to promptly (and in any event within 15 Business Days of the
date hereof) deliver to the United States Patent and Trademark Office
for filing on proper forms, together with the necessary filing fees,
all necessary filings and recordations to protect its interest in such
newly-acquired Intellectual Property Collateral), including
recordations of all of its interests in the Patent Collateral, if any,
and Trademark Collateral in the United States Patent and Trademark
Office and in corresponding offices in countries in which the failure
to so file and/or record could reasonably be expected to have a
Material Adverse Effect and its claims to the Copyright Collateral, if
any, in the United States Copyright Office and in corresponding offices
in countries in which the failure to so file and/or record could
reasonably be expected to have a Material Adverse Effect;
(d) such Grantor is the exclusive owner of the entire and
unencumbered right, title and interest in and to such Intellectual
Property Collateral and no claim has been made that the use of such
Intellectual Property Collateral does or may violate the asserted
rights of any third party; and
(e) such Grantor has performed and will continue to perform
all acts and has paid and will continue to pay all required fees and
taxes to maintain each and every such item of Intellectual Property
Collateral in full force and effect throughout the world, as
applicable.
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Such Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of the foregoing
used in or necessary for the conduct of such Grantor's business.
Section 3.9. Validity, etc. This Pledge and Security Agreement creates
a valid continuing security interest in the Collateral securing the payment of
the Secured Obligations, and, subject to the Intercreditor Agreement and Liens
of the type referred to in clause (16) of the definition of "Permitted Liens" in
the Indenture:
(a) in the case of Collateral comprised of certificated
securities or instruments, upon the delivery of such Collateral to the
Agent, such security interest will be a valid first priority perfected
security interest;
(b) in the case of Collateral comprised of uncertificated
securities and other investment property (other than certificated
Securities), upon the Agent obtaining "control" (as defined in Section
8-106 of the U.C.C., as such term relates to investment property (other
than certificated securities or commodity contracts), or as used in
Section 9-106 of the U.C.C., as such term relates to commodity
contracts) of such Collateral and the filing of the Uniform Commercial
Code financing statements delivered by the Grantor having an interest
in such Collateral to the Collateral Agent with respect to such
Collateral, such security interest will be a valid first priority
perfected security interest;
(c) in the case of Collateral comprised of Motor Vehicles,
upon the recordation or notation of the Collateral Agent's Lien on the
certificates of title or ownership in respect of such Motor Vehicles
and the filing of the Uniform Commercial Code financing statements
delivered by the Grantor having an interest in such Motor Vehicles to
the Collateral Agent with respect to such Collateral, such security
interest will be a valid first priority perfected security interest;
(d) in the case of all other Collateral, upon the filing in
the jurisdiction of incorporation or formation of the applicable
Grantor Uniform Commercial Code financing statements delivered by the
Grantor to the Collateral Agent with respect to such Collateral, such
security interest will be a valid first priority perfected security
interest (except to the extent a Uniform Commercial Code financing
statement was previously filed in connection with Liens permitted
pursuant to Section 4.18 of the Indenture and such financing statement
remains effective in respect of such Collateral).
Each Grantor agrees to deliver UCC-1 and UCC-3 financing statements to a filing
agent acceptable to the Collateral Agent and make any other filings reasonably
necessary to perfect the security interests contemplated hereby at the sole
expense of such Grantor.
Section 3.10. Authorization, Approval, etc. Except as have been
obtained or made and are in full force and effect (or otherwise provided for to
the satisfaction of the Agents), no authorization, approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required either
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(a) for the grant by such Grantor of the security interest
granted hereby, the pledge by such Grantor of any Collateral pursuant
hereto or for the execution, delivery and performance of this Pledge
and Security Agreement by such Grantor,
(b) for the perfection of or the exercise by the Collateral
Agent of its rights and remedies hereunder, or
(c) for the exercise by the Collateral Agent of the voting or
other rights provided for in this Pledge and Security Agreement, or,
except with respect to any Capital Securities issued by a Subsidiary of
such Grantor, as may be required in connection with a disposition of
such Capital Securities by laws affecting the offering and sale of
securities generally, the remedies in respect of the Collateral
pursuant to this Pledge and Security Agreement.
Section 3.11. Compliance with Laws. Such Grantor is in compliance with
the requirements of all applicable laws (including the provisions of the Fair
Labor Standards Act), rules, regulations and orders of every governmental
authority, the non-compliance with which could reasonably be expected to have a
Material Adverse Effect or which could reasonably be expected to materially
adversely affect the value of the Collateral as a whole or the worth of the
Collateral as a whole as collateral security.
ARTICLE IV
COVENANTS
Section 4.1. Certain Covenants. Each Grantor covenants and agrees that,
so long as any portion of the Secured Obligations shall remain unpaid, such
Grantor will, unless the Trustee shall otherwise consent in writing, perform,
comply with and be bound by the obligations set forth in this Article IV.
Section 4.2. As to Investment Property and Intercompany Notes; Etc.
SECTION 4.2.1. Capital Securities of Subsidiaries. No Grantor will
allow any of its Subsidiaries that is
(a) a corporation, business trust, joint stock company or
similar Person, to issue uncertificated securities (except for any
Subsidiary organized under the laws of Germany); and
(b) a partnership or limited liability company, to (i) issue
Capital Securities that are to be dealt in or traded on securities
exchanges or in securities markets, (ii) expressly provide in its
organic documents that its Capital Securities are securities governed
by Article 8 of the U.C.C., or (iii) place such Subsidiary's Capital
Securities in a securities account.
SECTION 4.2.2. Investment Property (other than Certificated
Securities). With respect to any investment property (other than certificated
securities) of such Grantor, such Grantor shall
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(a) cause a Control Agreement relating to such investment property to be
executed and delivered in favor of the Collateral Agent and (b) deliver Uniform
Commercial Code financing statements which when filed will result in the
Collateral Agent having a first priority perfected security interest in such
investment property.
SECTION 4.2.3. Stock Powers, etc. Such Grantor agrees that all
certificated securities constituting Collateral delivered by such Grantor
pursuant to this Pledge and Security Agreement will be accompanied by duly
executed undated blank stock powers, or other equivalent instruments of transfer
acceptable to the Collateral Agent. Grantor will, from time to time upon the
request of the Collateral Agent, promptly deliver to the Collateral Agent such
stock powers, instruments, and similar documents, satisfactory in form and
substance to the Collateral Agent, with respect to such Collateral as the
Collateral Agent may reasonably request and will, from time to time upon the
request of the Collateral Agent after the occurrence of any Event of Default,
promptly transfer any securities constituting Collateral into the name of any
nominee designated by the Collateral Agent.
SECTION 4.2.4. Continuous Pledge. Such Grantor will, at all times, keep
pledged to the Collateral Agent pursuant hereto on a first priority perfected
basis all investment property constituting Collateral, all Dividends and
Distributions with respect thereto, all Intercompany Notes, all interest,
principal and other proceeds received by the Collateral Agent with respect to
the Intercompany Notes, and all other Collateral and other securities,
instruments, proceeds, and rights from time to time received by or distributable
to such Grantor in respect of any of the foregoing Collateral and will not
permit any Subsidiary of such Grantor to issue any securities which shall not
have been immediately duly pledged hereunder on a first priority perfected
basis.
SECTION 4.2.5. Voting Rights; Dividends, etc. Such Grantor agrees:
(a) after any Default of the nature referred to in clause (6)
of Section 6.01 of the Indenture or any Event of Default shall have
occurred and be continuing, promptly upon receipt of notice thereof by
such Grantor and without any request therefor by the Collateral Agent,
to deliver (properly endorsed where required hereby or requested by the
Collateral Agent) to the Collateral Agent all Dividends, Distributions,
all interest, all principal, all other cash payments, and all proceeds
of the Collateral, all of which shall be held by the Collateral Agent
as additional Collateral for use in accordance with clause (b) of
Section 6.1; and
(b) after any Event of Default shall have occurred and be
continuing and the Collateral Agent has notified such Grantor of the
Collateral Agent's intention to exercise its voting power under this
Section 4.2.5(b)
(i) the Collateral Agent may exercise (to the
exclusion of such Grantor) the voting power and all other
incidental rights of ownership with respect to any securities
or other investment property constituting Collateral and such
Grantor hereby grants the Collateral Agent an irrevocable
proxy, exercisable under such circumstances, to vote such
securities and such other Collateral; and
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(ii) promptly to deliver to the Collateral Agent such
additional proxies and other documents as may be necessary to
allow the Collateral Agent to exercise such voting power.
All Dividends, Distributions, interest, principal, cash payments, payment
intangibles and proceeds which may at any time and from time to time be held by
such Grantor but which such Grantor is then obligated to deliver to the
Collateral Agent, shall, until delivery to the Collateral Agent, be held by such
Grantor separate and apart from its other property in trust for the Collateral
Agent. The Collateral Agent agrees that unless an Event of Default shall have
occurred and be continuing and the Collateral Agent shall have given the notice
referred to in Section 4.2.5(b), such Grantor shall have the exclusive voting
power with respect to any securities constituting Collateral and the Collateral
Agent shall, upon the written request of such Grantor, promptly deliver such
proxies and other documents, if any, as shall be reasonably requested by such
Grantor which are necessary to allow such Grantor to exercise voting power with
respect to any such securities; provided, however, that no vote shall be cast,
or consent, waiver, or ratification given, or action taken by such Grantor that
would violate any provision of the Indenture or any other Related Document
(including this Pledge and Security Agreement).
SECTION 4.2.6. Amendment of Organic Documents. Such Grantor will not
amend, supplement or otherwise modify, or permit, consent or suffer to occur any
amendment, supplement or modification of any terms or provisions contained in,
or applicable to, any certificate of incorporation, formation, LLC agreement,
operating agreement, shareholder agreement or similar document of any issuer of
any Capital Security comprising the Collateral in which it has an equity
interest if the effect thereof is to impair, or is in any manner materially
adverse to, the rights or interests of the Collateral Agent or any other Secured
Party hereunder or under the Indenture or any other Related Document, without
the prior written consent of the Collateral Agent and the Holder or Holders of
at least a majority in aggregate principal amount of the outstanding Notes. No
Grantor will change its name or place of incorporation or organization or
federal taxpayer identification number except upon 30 days' prior written notice
to the Collateral Agent. If any Grantor is organized outside of the United
States, it will not change its "location" as determined in accordance with
Sections 9-301 and 9-307 of the U.C.C. and as set forth in Item A of Schedule II
hereto except upon 30 days' prior written notice to the Collateral Agent.
Section 4.3. As to Receivables. (a) Each Grantor shall have the right
to collect all Receivables so long as no Default of the nature set forth in
clause (6) of Section 6.01 of the Indenture nor any Event of Default shall have
occurred and be continuing; provided, however, that such Grantor agrees to
promptly deposit all payments received by such Grantor on account of the
Receivables, whether in the form of cash, checks, drafts, notes, bills of
exchange, money orders or other like instruments or otherwise, in a deposit
account in precisely the form in which received (but with any endorsements of
such Grantor necessary for deposit or collection).
(b) All proceeds of Collateral received by such Grantor shall be
deposited into a deposit account of such Grantor, unless, during the occurrence
and continuance of an Event of Default, such Grantor is otherwise notified in
writing by the Collateral Agent. Following any such notice by the Collateral
Agent to such Grantor pursuant to this Section 4.3(b), all proceeds of
Collateral received by such Grantor shall be delivered in kind to the Master
Deposit Account (which shall
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be established by the Issuer with the Collateral Agent if such Master Deposit
Account is not then existing) or any other account or accounts specified by the
Collateral Agent. Proceeds of Collateral received by such Grantor shall, prior
to deposit in the Master Deposit Account or such other account or accounts
specified by the Collateral Agent, be held separate and apart from, and not
commingled with, all other property and in express trust for the benefit of the
Collateral Agent until delivery thereof is made to the Master Deposit Account or
such other account or accounts.
(c) Following and during the continuance of an Event of Default, such
Grantor shall transfer all funds out of each of its deposit accounts that is not
the Master Deposit Account (other than, in the aggregate, cash or Cash
Equivalent Investments in all deposit accounts (other than the Master Deposit
Account) that do not exceed at any time $10,000) for deposit into the Master
Deposit Account at the close of business each day or, if not commercially
reasonable to do so, no less frequently than once every five Business Days.
(d) The Collateral Agent shall have the right to apply any amount in
each deposit account (including the Master Deposit Account) to the payment of
any Secured Obligations which are due and payable or payable upon demand or to
the payment of any Secured Obligations at any time that an Event of Default
shall have occurred and be continuing.
(e) With respect to each deposit account maintained with the Collateral
Agent (including the Master Deposit Account), it is hereby agreed that (i)
deposits in each such deposit account are subject to a security interest as
contemplated hereby, (ii) each such deposit account shall be under the sole
dominion and control of the Collateral Agent and (iii) the Collateral Agent
shall have the sole right of withdrawal over each such deposit account;
provided, however, that, unless and until the Collateral Agent shall notify the
applicable Grantors that an Event of Default shall have occurred and be
continuing and that during the continuance thereof, no such Grantor shall
withdraw any of the funds contained in any such deposit account (which notice
may be given by telephone if promptly confirmed in writing or by facsimile), any
such Grantor may at any time withdraw any of the funds contained in its deposit
account for use in any lawful manner not inconsistent with the provisions of
this Pledge and Security Agreement, the Indenture or any other Related Document.
Section 4.4. As to Collateral. (a) Until the occurrence and continuance
of a Default of the nature set forth in clause (6) of Section 6.01 of the
Indenture or an Event of Default, and such time as the Collateral Agent shall
notify such Grantor of the revocation of such power and authority such Grantor
(i) may in the ordinary course of its business (except as otherwise permitted
under the Indenture), at its own expense, sell, lease or furnish under the
contracts of service any of the Inventory normally held by such Grantor for such
purpose, and use and consume, in the ordinary course of its business (except as
otherwise permitted under the Indenture), any raw materials, work in process or
materials normally held by such Grantor for such purpose, (ii) will, at its own
expense, endeavor to collect, as and when due, all amounts due with respect to
any of the Collateral, including the taking of such action with respect to such
collection as the Collateral Agent may reasonably request following the
occurrence of a Default of the nature set forth in clause (6) of Section 6.01 of
the Indenture or an Event of Default or, in the absence of such request, as such
Grantor may deem advisable, and (iii) may grant, in the ordinary course of
business (except as otherwise prohibited under the Indenture), to any party
17
obligated on any of the Collateral, any rebate, refund or allowance to which
such party may be lawfully entitled, and may accept, in connection therewith,
the return of goods, the sale or lease of which shall have given rise to such
Collateral. The Collateral Agent, however, may, at any time following a Default
of the nature set forth in clause (6) of Section 6.01 of the Indenture or an
Event of Default, whether before or after any revocation of such power and
authority or the maturity of any of the Secured Obligations, notify any parties
obligated on any of the Collateral to make payment to the Collateral Agent of
any amounts due or to become due thereunder and enforce collection of any of the
Collateral by suit or otherwise and surrender, release, or exchange all or any
part thereof, or compromise or extend or renew for any period (whether or not
longer than the original period) any indebtedness thereunder or evidenced
thereby. Upon request of the Collateral Agent following a Default of the nature
set forth in clause (6) of Section 6.01 of the Indenture or an Event of Default,
such Grantor will, at its own expense, notify any parties obligated on any of
the Collateral to make payment to the Collateral Agent of any amounts due or to
become due thereunder.
(b) Following a Default of the nature set forth in clause (6) of
Section 6.01 of the Indenture or an Event of Default, the Collateral Agent is
authorized to endorse, in the name of such Grantor, any item, howsoever received
by the Collateral Agent, representing any payment on or other proceeds of any of
the Collateral.
Section 4.5. As to Intellectual Property Collateral. Each Grantor
covenants and agrees to comply with the following provisions as such provisions
relate to any Intellectual Property Collateral of such Grantor:
(a) such Grantor shall not, unless such Grantor shall either
(i) reasonably and in good faith determine (and notice of such
determination shall have been delivered to the Collateral Agent) that
any of the Patent Collateral is of negligible economic value to such
Grantor, or (ii) have a valid business purpose to do otherwise, do any
act, or omit to do any act, whereby any of the Patent Collateral may
lapse or become abandoned or dedicated to the public or unenforceable;
(b) such Grantor shall not, and such Grantor shall not permit
any of its licensees to, unless such Grantor shall either (i)
reasonably and in good faith determine (and notice of such
determination shall have been delivered to the Collateral Agent) that
any of the Trademark Collateral is of negligible economic value to such
Grantor, or (ii) have a valid business purpose to do otherwise,
(i) fail to continue to use any of the Trademark
Collateral in order to maintain all of the Trademark
Collateral in full force free from any claim of abandonment
for non-use,
(ii) fail to maintain as in the past the quality of
products and services offered under all of the Trademark
Collateral in a manner which might reasonably be expected to
cause material impairment of any such Trademark Collateral,
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(iii) fail to employ all of the Trademark Collateral
registered with any Federal or state or foreign authority with
an appropriate notice of such registration,
(iv) adopt or use any other Trademark which is
confusingly similar or a colorable imitation of any of the
Trademark Collateral,
(v) use any of the Trademark Collateral registered
with any Federal or state or foreign authority except for the
uses for which registration or application for registration of
all of the Trademark Collateral has been made, and
(vi) do or permit any act or knowingly omit to do any
act whereby any of the Trademark Collateral may lapse or
become invalid or unenforceable;
(c) such Grantor shall not, unless such Grantor shall either
(i) reasonably and in good faith determine (and notice of such
determination shall have been delivered to the Collateral Agent) that
any of the Copyright Collateral or any of the Trade Secrets Collateral
is of negligible economic value to such Grantor, or (ii) have a valid
business purpose to do otherwise, do or permit any act or knowingly
omit to do any act whereby any of the Copyright Collateral or any of
the Trade Secrets Collateral may lapse or become invalid or
unenforceable or placed in the public domain except upon expiration of
the end of an unrenewable term of a registration thereof;
(d) such Grantor shall notify the Collateral Agent immediately
if it knows, or has reason to know, that any application or
registration relating to any material item of the Intellectual Property
Collateral may become abandoned or dedicated to the public or placed in
the public domain or invalid or unenforceable, or of any adverse
determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States
Patent and Trademark Office, the United States Copyright Office or any
foreign counterpart thereof or any court) regarding such Grantor's
ownership of any of the Intellectual Property Collateral, its right to
register the same or to keep and maintain and enforce the same;
(e) in the event such Grantor or any of its agents, employees,
designees or licensees shall file an application for the registration
of any Intellectual Property Collateral 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, it shall promptly inform the Collateral Agent, and upon
request of the Collateral Agent, execute and deliver any and all
agreements, instruments, documents and papers as the Collateral Agent
may reasonably request to evidence the Collateral Agent's security
interest in such Intellectual Property Collateral and the goodwill and
general intangibles of such Grantor relating thereto or represented
thereby;
(f) such Grantor shall take all necessary steps, including in
any proceeding before 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, to maintain and
pursue any application (and to obtain the relevant registration) filed
with
19
respect to, and to maintain any registration of, the Intellectual
Property Collateral, including the filing of applications for renewal,
affidavits of use, affidavits of incontestability and opposition,
interference and cancellation proceedings and the payment of fees and
taxes (except to the extent that dedication, abandonment or
invalidation is permitted under the foregoing clauses (a), (b) and
(c)); and
(g) such Grantor shall, contemporaneously herewith, execute
and deliver to the Collateral Agent a Patent Security Agreement and a
Trademark Security Agreement in the forms of Exhibits A and B hereto,
respectively, and shall execute and deliver to the Collateral Agent any
other document required to acknowledge or register or perfect the
Collateral Agent's interest in any part of the Intellectual Property
Collateral.
Section 4.6 Insurance. Such Grantor will maintain or cause to be
maintained with responsible insurance companies insurance with respect to its
business and properties (including the Equipment and Inventory) against such
casualties and contingencies and of such types and in such amounts as is
required pursuant to the Indenture and will, upon the request of the Collateral
Agent, furnish a certificate of a reputable insurance broker setting forth the
nature and extent of all insurance maintained by such Grantor in accordance with
this Section.
Section 4.7 Further Assurances, etc. Such Grantor agrees that, from
time to time at its own expense, it will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Collateral Agent may request, in order to
perfect, preserve and protect any security interest granted or purported to be
granted hereby or to enable the Collateral Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, subject to the Intercreditor Agreement, such
Grantor will
(a) if any Receivable shall be evidenced by a promissory note
or other instrument, negotiable document or chattel paper, deliver and
pledge to the Collateral Agent hereunder such promissory note,
instrument, negotiable document or chattel paper duly endorsed and
accompanied by duly executed instruments of transfer or assignment, all
in form and substance satisfactory to the Collateral Agent;
(b) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or
notices (including any assignment of claim form under or pursuant to
the federal assignment of claims statute, 31 U.S.C. Section 3726, any
successor or amended version thereof or any regulation promulgated
under or pursuant to any version thereof), as may be necessary or
desirable, or as the Collateral Agent may request, in order to perfect
and preserve the security interests and other rights granted or
purported to be granted to the Collateral Agent hereby;
(c) promptly execute and deliver all further instruments, and
take all further action, that may be necessary or desirable, or that
the Collateral Agent may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby
or to enable the Collateral Agent to exercise and enforce its rights
and remedies hereunder with respect to any Collateral;
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(d) not take or omit to take any action the taking or the
omission of which would result in any impairment or alteration of any
obligation of the maker of any Intercompany Note or other instrument
constituting Collateral;
(e) furnish to the Collateral Agent, from time to time at the
Collateral Agent's request, statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as the Collateral Agent may reasonably
request, all in reasonable detail;
(f) do all things reasonably requested by the Collateral Agent
in order to enable the Collateral Agent to have control (as such term
is defined in Article 8 and Article 9 of any applicable Uniform
Commercial Code relevant to the creation, perfection or priority of
Collateral consisting of investment property, deposit accounts,
electronic chattel paper and letter of credit rights) over any
Collateral;
(g) notify the Collateral Agent if such Grantor reasonably
believes it is entitled to recover a commercial tort claim the value of
which is in excess of $50,000 and such Grantor take all such action
reasonably requested by the Collateral Agent to grant to the Collateral
Agent and perfect a security interest in such commercial tort claim;
and
(h) within 60 days from the date hereof, each Grantor will
cause appropriate documentation to be filed and/or delivered, to
perfect the security interest granted hereunder to the Collateral Agent
in 65% of the Capital Securities of such Grantor's Subsidiaries
organized under the laws of Singapore.
With respect to the foregoing and the grant of the security interest hereunder,
such Grantor hereby authorizes the Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of such Grantor where permitted
by law. A carbon, photographic or other reproduction of this Pledge and Security
Agreement or any financing statement covering the Collateral or any part thereof
shall be sufficient as a financing statement where permitted by law.
ARTICLE V
THE COLLATERAL AGENT
Section 5.1. Collateral Agent Appointed Attorney-in-Fact. Each Grantor
hereby irrevocably appoints the Collateral Agent such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time in the Collateral
Agent's discretion, following the occurrence and continuation of a Default of
the nature set forth in clause (6) of Section 6.01 of the Indenture or an Event
of Default, to take any action and to execute any instrument which the
Collateral Agent may deem necessary or advisable to accomplish the purposes of
this Pledge and Security Agreement, including:
21
(a) to ask, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above;
(c) to file any claims or take any action or institute any
proceedings which the Collateral Agent may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce the
rights of the Collateral Agent with respect to any of the Collateral;
and
(d) to perform the affirmative obligations of such Grantor
hereunder (including all obligations of such Grantor pursuant to
Section 4.7).
Such Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
Section 5.2. Collateral Agent May Perform. If any Grantor fails to
perform any agreement contained herein, the Collateral Agent may itself perform,
or cause performance of, such agreement, and the expenses of the Collateral
Agent incurred in connection therewith shall be payable by such Grantor pursuant
to Section 6.3.
Section 5.3. Collateral Agent Has No Duty. In addition to, and not in
limitation of, Section 2.6, the powers conferred on the Collateral Agent
hereunder are solely to protect its interest (on behalf of the Secured Parties)
in the Collateral and shall not impose any duty on it to exercise any such
powers. Except for reasonable care of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Collateral Agent
shall have no duty as to any Collateral or responsibility for
(a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative
to any Investment Property, whether or not the Collateral Agent has or
is deemed to have knowledge of such matters, or
(b) taking any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral.
Section 5.4. Reasonable Care. The Collateral Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided, however, the Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of any
of the Collateral, if it takes such action for that purpose as any Grantor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Event of Default, but failure of the Collateral
Agent to comply with any such request at any time shall not in itself be deemed
a failure to exercise reasonable care.
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ARTICLE VI
REMEDIES
Section 6.1. Certain Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Collateral Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under the U.C.C. (whether or not the U.C.C.
applies to the affected Collateral) and also may
(i) require each Grantor to, and such Grantor hereby
agrees that it will, at its expense and upon request of the
Collateral Agent forthwith, assemble all or part of the
Collateral as directed by the Collateral Agent and make it
available to the Collateral Agent at a place to be designated
by the Collateral Agent which is reasonably convenient to both
parties, and
(ii) without notice except as specified below, sell
the Collateral or any part thereof in one or more parcels at
public or private sale, at any of the Collateral Agent's
offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Collateral Agent
may deem commercially reasonable. Each Grantor agrees that, to
the extent notice of sale shall be required by law, at least
ten days' prior notice to such Grantor of the time and place
of any public sale or the time after which any private sale is
to be made shall constitute reasonable notification. The
Collateral Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The
Collateral Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made
at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Collateral Agent in
respect of any sale of, collection from, or other realization upon, all
or any part of the Collateral shall be applied by the Collateral Agent
against, all or any part of the Secured Obligations as follows:
(i) first, to the payment of any amounts payable to
the Collateral Agent pursuant to Sections 6.09 and 7.07 of the
Indenture and Section 6.3;
(ii) second, to the equal and ratable payment of
Secured Obligations, in accordance with each Secured Party's
Secured Obligations owing to it under or pursuant to the
Indenture or any other Related Document, applied
(A) first to fees and expense reimbursements
then due to such Secured Party,
(B) then to interest due to such Secured
Party, and
23
(C) then to pay the remaining outstanding
Secured Obligations; and
(iii) third, to be held as additional collateral
security until the payment in full in cash of all of the
Secured Obligations, after which such remaining cash proceeds
shall be paid over to the applicable Grantor or to whomsoever
may be lawfully entitled to receive such surplus.
(c) The Collateral Agent may,
(i) transfer all or any part of the Collateral into
the name of the Collateral Agent or its nominee, with or
without disclosing that such Collateral is subject to the lien
and security interest hereunder,
(ii) notify the parties obligated on any of the
Collateral to make payment to the Collateral Agent of any
amount due or to become due thereunder,
(iii) enforce collection of any of the Collateral by
suit or otherwise, and surrender, release or exchange all or
any part thereof, or compromise or extend or renew for any
period (whether or not longer than the original period) any
obligations of any nature of any party with respect thereto,
(iv) endorse any checks, drafts, or other writings in
such Grantor's name to allow collection of the Collateral,
(v) take control of any proceeds of the Collateral,
and
(vi) execute (in the name, place and stead of such
Grantor) endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or
any of the Collateral.
Section 6.2. Compliance with Restrictions. Each Grantor agrees that in
any sale of any of the Collateral whenever an Event of Default shall have
occurred and be continuing, the Collateral Agent is hereby authorized to comply
with any limitation or restriction in connection with such sale as it may be
advised by counsel is necessary in order to avoid any violation of applicable
law (including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to Persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and such Grantor further agrees that such compliance shall not result in such
sale being considered or deemed not to have been made in a commercially
reasonable manner, nor shall the Collateral Agent be liable nor accountable to
such Grantor for any discount allowed by the reason of the fact that such
Collateral is sold in compliance with any such limitation or restriction.
24
Section 6.3. Indemnity and Expenses.
(a) Each Grantor jointly and severally agrees to indemnify the
Collateral Agent from and against any and all claims, losses and
liabilities arising out of or resulting from this Pledge and Security
Agreement (including enforcement of this Pledge and Security
Agreement), except claims, losses or liabilities resulting from the
Collateral Agent's gross negligence or wilful misconduct.
(b) Each Grantor will upon demand pay to the Collateral Agent
the amount of any and all reasonable expenses, including the reasonable
fees and disbursements of its counsel and of any experts and agents,
which the Collateral Agent may incur in connection with
(i) the administration of this Pledge and Security
Agreement,
(ii) the custody, preservation, use or operation of,
or the sale of, collection from, or other realization upon,
any of the Collateral,
(iii) the exercise or enforcement of any of the
rights of the Collateral Agent or the Secured Parties
hereunder, and
(iv) the failure by any Grantor to perform or observe
any of the provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.1. Related Document. This Pledge and Security Agreement is a
Related Document executed pursuant to the Indenture and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in accordance
with the provisions of Article I thereof.
Section 7.2. Amendments; etc. No amendment to or waiver of any
provision of this Pledge and Security Agreement nor consent to any departure by
any Grantor herefrom, shall in any event be effective unless the same shall be
in writing and signed by the Collateral Agent (on behalf of (x) the Holders or
(y) the Holder or Holders of at least a majority in aggregate principal amount
of the outstanding Notes, as the case may be), and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
Section 7.3. Protection of Collateral. The Collateral Agent may from
time to time, at its option, perform any act which each Grantor agrees hereunder
to perform and which such Grantor shall fail to perform after being requested in
writing so to perform (it being understood that no such request need be given
after the occurrence and during the continuance of an Event of Default) and the
Collateral Agent may from time to time take any other action which the
Collateral Agent reasonably deems necessary for the maintenance, preservation or
protection of any of the Collateral or of its security interest therein.
25
Section 7.4. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telegraphic
communication) and, if to any Grantor, mailed or telecopied or delivered to it,
addressed to it in care of the Issuer at the address of the Issuer specified in
the Indenture, if to the Collateral Agent, mailed or telecopied or delivered to
it, addressed to it at the address of the Collateral Agent specified in the
Indenture. All such notices and other communications, when mailed and properly
addressed with postage prepaid or if properly addressed and sent by pre-paid
courier service, shall be deemed given when received; any such notice or
communication, if transmitted by telecopier, shall be deemed given when
transmitted and electronically confirmed.
Section 7.5. Additional Grantors. Upon the execution and delivery by
any other Person of an instrument in the form of Annex I hereto, such Person
shall become a "Grantor" hereunder with the same force and effect as if
originally named as a Grantor herein. The execution and delivery of any such
instrument shall not require the consent of any other Grantor hereunder. The
rights and obligations of each Grantor hereunder shall remain in full force and
effect notwithstanding the addition of any new Grantor as a party to this Pledge
and Security Agreement.
Section 7.6. Section Captions. Section captions used in this Pledge and
Security Agreement are for convenience of reference only, and shall not affect
the construction of this Pledge and Security Agreement.
Section 7.7. Severability. Wherever possible each provision of this
Pledge and Security Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Pledge
and Security Agreement shall be prohibited by or invalid under such law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Pledge and Security Agreement.
Section 7.8. Counterparts. This Pledge and Security Agreement may be
executed by the parties hereto in several counterparts, each of which shall be
deemed an original and all of which shall constitute together but one and the
same agreement.
Section 7.9. Governing Law, Entire Agreement, etc. THIS PLEDGE AND
SECURITY AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT
OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK. THIS PLEDGE AND SECURITY AGREEMENT AND THE OTHER
RELATED DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO
WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ANY PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
26
Section 7.10. Intercreditor Agreement.
(a) In case of any conflict or inconsistency between this Pledge and
Security Agreement and the Intercreditor Agreement or with respect to the rights
and obligations of the parties prior to enforcement and the conditions and terms
on which security interests may be enforced, the Intercreditor Agreement shall
control; provided, however, that the terms of the Intercreditor Agreement shall
not increase the obligations of, or adversely affect any rights, of any Grantor,
in each case under this Pledge and Security Agreement.
(b) Not in limitation but in furtherance of the foregoing, any
provision of this Pledge and Security Agreement that provides for the Collateral
Agent to have "control" of any Collateral consisting of investment property for
purposes of Article 8 or 9 of the U.C.C. shall be deemed satisfied if the Agent
shall have control of such Collateral (including, in the case of any such
Collateral consisting of certificated securities by the delivery of such
Collateral to the Agent) so long as the conditions described in Section 9-314(c)
of the U.C.C. shall not be satisfied prior to the Collateral Agent obtaining
control of any such Collateral following the relinquishment of such control by
the Agent unless the Lien of the Collateral Agent in such Collateral is
terminated or released in accordance with the terms hereof or the Intercreditor
Agreement.
(c) Prior to the termination of the Loan Agreement, in the event that
any obligation of a Grantor conflicts with an obligation of such Grantor under
the Loan Documents executed pursuant to (and as defined in) the Loan Agreement,
such Grantor will first comply with its obligation under such Loan Documents,
and then, to the extent possible, comply with its obligations hereunder.
(d) Notwithstanding anything herein to the contrary, the lien and
security interest granted to the Collateral Agent pursuant to this Pledge and
Security Agreement and the exercise of any right or remedy by the Collateral
Agent hereunder, in each case in respect of any collateral constituting
Noteholder Collateral (as defined in the Intercreditor Agreement) are subject to
the provisions of the Intercreditor Agreement, including the grantor of security
interest in this Pledge and Security Agreement. In the event of any conflict
between the terms of the Intercreditor Agreement and this Pledge and Security
Agreement, the terms of the Intercreditor Agreement shall govern.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
27
IN WITNESS WHEREOF, each Grantor has caused this Pledge and Security
Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
TELEX COMMUNICATIONS, INC., a Delaware
corporation
By ______________________________
Name:
Title: Chief Executive Officer
TELEX COMMUNICATIONS
INTERNATIONAL, LTD. a Delaware corporation
By _______________________________________
Name:
Title:
Pledge and Security Agreement
BNY MIDWEST TRUST COMPANY, as
Collateral Agent
By _______________________________________
Name:
Title:
Pledge and Security Agreement
EXHIBIT A
to Pledge and Security Agreement
PATENT SECURITY AGREEMENT
This PATENT SECURITY AGREEMENT (this "Agreement"), dated as of _______,
________ is made between _____________, a ______________ (the "Grantor"), and
BNY Midwest Trust Company, as collateral agent (together with its successor(s)
thereto, in such capacity the "Collateral Agent") for each of the Secured
Parties;
W I T N E S S E T H :
WHEREAS, the Issuer, the other Grantors and the Collateral Agent, as
trustee, have entered into an Indenture, dated as of November 19, 2003, (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Indenture"), and in connection therewith, the Issuer has issued (the
"Notes Issuance") its Senior Secured Notes due 2008 (and, if applicable, its
Senior Secured Notes due 2008, Series B issued in exchange therefor)
(collectively, the "Notes");
WHEREAS, the Grantors have entered into that certain Credit Agreement,
dated as of November 19, 2003 (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "Loan Agreement") among the financial
institutions party thereto (the "Senior Lenders") as lenders and General
Electric Capital Corporation as the agent (the "Agent"), pursuant to which the
Senior Lenders have agreed to make certain loans and other financial
accommodations to the Grantors from time to time, which Loan Agreement is
referenced as the "Senior Credit Facility" under the Indenture, and the other
Grantors hereto have each entered into various agreements granting Liens to the
Agent for the benefit of the Senior Lenders as well;
WHEREAS, in connection with the Indenture, the Grantor has executed and
delivered a Pledge and Security Agreement, dated as of November 19, 2003 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Pledge and Security Agreement");
WHEREAS, as a condition precedent to the Notes Issuance, the Grantor is
required to execute and deliver this Agreement and to grant to the Collateral
Agent a continuing security interest in all of the Patent Collateral (as defined
below) to secure all Secured Obligations;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
WHEREAS, it is in the best interests of each Grantor to execute this
Agreement inasmuch as such Grantor will derive substantial direct and indirect
benefits from proceeds of the Notes issued by the Issuer;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in order to induce the Holders to acquire the
Notes and maintain the Indebtedness evidenced thereby, the Grantor agrees, for
the benefit of each Secured Party, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Pledge and Security Agreement.
SECTION 2. Grant of Security Interest. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, to
secure all of the Secured Obligations, the Grantor does hereby mortgage, pledge
and hypothecate to the Collateral Agent, and grant to the Collateral Agent a
security interest in, for its benefit and the benefit of each Secured Party, all
of the following property (the "Patent Collateral"), whether now owned or
hereafter acquired or existing by it:
(a) all letters patent and applications for letters patent
throughout the world, including all patent applications in preparation
for filing anywhere in the world and including each patent and patent
application referred to in Item A of Schedule III attached hereto;
(b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any
of the items described in clause (a);
(c) all patent licenses, including each patent license
referred to in Item B of Schedule III attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the
right to xxx third parties for past, present or future infringements of
any patent or patent application, including any patent or patent
application referred to in Item A of Schedule III attached hereto, and
for breach or enforcement of any patent license, including any patent
license referred to in Item B of Schedule III attached hereto, and all
rights corresponding thereto throughout the world.
SECTION 3. Pledge and Security Agreement. This Agreement has been
executed and delivered by the Grantor for the purpose of registering the
security interest of the Collateral Agent in the Patent Collateral with the
United States Patent and Trademark Office and corresponding offices in other
countries of the world, such registration will be completed by, and at the cost
of the Grantor. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Collateral Agent for its benefit and the benefit of each Secured Party under the
Pledge and Security Agreement. The Pledge and Security Agreement (and all rights
and remedies of the Collateral Agent and each Secured Party thereunder) shall
remain in full force and effect in accordance with its terms.
-2-
SECTION 4. Release of Security Interest. Upon payment in full in cash
of all Secured Obligations, and upon delivery to the Collateral Agent of an
Officer's Certificate and an Opinion of Counsel, the Collateral Agent shall, at
the Grantor's expense, execute and deliver to the Grantor all instruments and
other documents as may be necessary or proper to release the lien on and
security interest in the Patent Collateral which has been granted hereunder.
SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge
and affirm that the rights and remedies of the Collateral Agent with respect to
the security interest in the Patent Collateral granted hereby are more fully set
forth in the Pledge and Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein.
SECTION 6. Related Document, etc. This Agreement is a Related Document
executed pursuant to the Indenture and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Indenture.
SECTION 7. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
SECTION 8. Intercreditor Agreement. Notwithstanding anything herein to
the contrary, the lien and security interest granted to the Collateral Agent
pursuant to the Pledge and Security Agreement and the exercise of any right or
remedy by the Collateral Agent hereunder, in each case in respect of any
collateral constituting Noteholder Collateral (as defined in the Intercreditor
Agreement) are subject to the provisions of the Intercreditor Agreement,
including the grantor of security interest in this Agreement. In the event of
any conflict between the terms of the Intercreditor Agreement and this
Agreement, the terms of the Intercreditor Agreement shall govern.
-3-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF GRANTOR], a __________
__________
By ________________________________
Name:
Title:
BNY MIDWEST TRUST COMPANY, as
Collateral Agent
By ________________________________
Name:
Title:
-4-
EXHIBIT B
to Pledge and Security Agreement
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT (this "Agreement"), dated as of
_________, ___________ is made between _____________________, a ___________
__________ (the "Grantor"), and BNY Midwest Trust Company, collateral agent
(together with its successor(s) thereto, in such capacity the "Collateral
Agent") for each of the Secured Parties;
W I T N E S S E T H :
WHEREAS, the Issuer, the other Grantors and the Collateral Agent, as
trustee, have entered into an Indenture, dated as of November 19, 2003 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Indenture"), and in connection therewith, the Issuer has issued (the
"Notes Issuance") its Senior Secured Notes due 2008 (and, if applicable, its
Senior Secured Notes due 2008, Series B issued in exchange therefor)
(collectively, the "Notes");
WHEREAS, the Grantors have entered into that certain Credit Agreement,
dated as of November 19, 2003 (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "Loan Agreement") among the financial
institutions party thereto (the "Senior Lenders") as lenders and General
Electric Capital Corporation as the agent (the "Agent"), pursuant to which the
Senior Lenders have agreed to make certain loans and other financial
accommodations to the Grantors from time to time, which Loan Agreement is
referenced as the "Senior Credit Facility" under the Indenture, and the other
Grantors hereto have each entered into various agreements granting Liens to the
Agent for the benefit of the Senior Lenders as well;
WHEREAS, in connection with the Indenture, the Grantor has executed and
delivered a Pledge and Security Agreement, dated as of November 19, 2003 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Pledge and Security Agreement");
WHEREAS, as a condition precedent to the Notes Issuance, the Grantor is
required to execute and deliver this Agreement and to grant to the Collateral
Agent a continuing security interest in all of the Trademark Collateral (as
defined below) to secure all Secured Obligations;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
WHEREAS, it is in the best interests of each Grantor to execute this
Agreement inasmuch as such Grantor will derive substantial direct and indirect
benefits from proceeds of the Notes issued by the Issuer;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in order to induce the Holders to acquire the
Notes and maintain the Indebtedness evidenced thereby, the Grantor agrees, for
the benefit of each Secured Party, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Pledge and Security Agreement.
SECTION 2. Grant of Security Interest. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, to
secure all of the Secured Obligations, the Grantor does hereby mortgage, pledge
and hypothecate to the Collateral Agent, and grant to the Collateral Agent a
security interest in, for its benefit and the benefit of each Secured Party, all
of the following property (the "Trademark Collateral"), whether now owned or
hereafter acquired or existing by it:
(a) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos, other source of
business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of a like
nature (all of the foregoing items in this clause (a) being
collectively called a "Trademark"), now existing anywhere in the world
or hereafter adopted or acquired, whether currently in use or not, all
registrations and recordings thereof and all applications in connection
therewith, whether pending or in preparation for filing, including
registrations, recordings and applications in the United States Patent
and Trademark Office or in any office or agency of the United States of
America or any State thereof or any foreign country, including those
referred to in Item A of Schedule IV attached hereto;
(b) all Trademark licenses, including each Trademark license
referred to in Item B of Schedule IV attached hereto;
(c) all reissues, extensions or renewals of any of the items
described in clause (a) and (b);
(d) all of the goodwill of the business connected with the use
of, and symbolized by the items described in, clauses (a) and (b); and
(e) all proceeds of, and rights associated with, the
foregoing, including any claim by the Grantor against third parties for
past, present or future infringement or dilution of
-2-
any Trademark, Trademark registration or Trademark license, including
any Trademark, Trademark registration or Trademark license referred to
in Item A and Item B of Schedule IV attached hereto, or for any injury
to the goodwill associated with the use of any such Trademark or for
breach or enforcement of any Trademark license.
SECTION 3. Pledge and Security Agreement. This Agreement has been
executed and delivered by the Grantor for the purpose of registering the
security interest of the Collateral Agent in the Trademark Collateral with the
United States Patent and Trademark Office and corresponding offices in other
countries of the world, such registration will be completed by, and at the cost
of the Grantor. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Collateral Agent for its benefit and the benefit of each Secured Party under the
Pledge and Security Agreement. The Pledge and Security Agreement (and all rights
and remedies of the Collateral Agent and each Secured Party thereunder) shall
remain in full force and effect in accordance with its terms.
SECTION 4. Release of Security Interest. Upon payment in full in cash
of all Secured Obligations, and upon delivery to the Collateral Agent of an
Officer's Certificate and an Opinion of Counsel, the Collateral Agent shall, at
the Grantor's expense, execute and deliver to the Grantor all instruments and
other documents as may be necessary or proper to release the lien on and
security interest in the Trademark Collateral which has been granted hereunder.
SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge
and affirm that the rights and remedies of the Collateral Agent with respect to
the security interest in the Trademark Collateral granted hereby are more fully
set forth in the Pledge and Security Agreement, the terms and provisions of
which (including the remedies provided for therein) are incorporated by
reference herein as if fully set forth herein.
SECTION 6. Related Document, etc. This Agreement is a Related Document
executed pursuant to the Indenture and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Indenture.
SECTION 7. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
SECTION 8. Intercreditor Agreement. Notwithstanding anything herein to
the contrary, the lien and security interest granted to the Collateral Agent
pursuant to the Pledge and Security Agreement and the exercise of any right or
remedy by the Collateral Agent hereunder, in each case in respect of any
collateral constituting Noteholder Collateral (as defined in the Intercreditor
Agreement) are subject to the provisions of the Intercreditor Agreement,
including the grantor of security interest in this Agreement. In the event of
any conflict between the terms of the Intercreditor Agreement and this
Agreement, the terms of the Intercreditor Agreement shall govern.
-3-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF GRANTOR], a ____________
_____________
By ______________________________
Name:
Title:
BNY MIDWEST TRUST COMPANY, as
Collateral Agent
By ______________________________
Name:
Title:
-4-
EXHIBIT C
to Pledge and Security Agreement
COPYRIGHT SECURITY AGREEMENT
This COPYRIGHT SECURITY AGREEMENT (this "Agreement"), dated as of
_________, _____________, is made between _____________________, a __________
(the "Grantor"), and BNY Midwest Trust Company as collateral agent (together
with its successor(s) thereto, in such capacity the "Collateral Agent") for each
of the Secured Parties;
W I T N E S S E T H :
WHEREAS, the Issuer, the other Grantors and the Collateral Agent, as
trustee, have entered into an Indenture, dated as of November 19, 2003 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Indenture"), and in connection therewith, the Issuer has issued (the
"Notes Issuance") its Senior Secured Notes due 2008 (and, if applicable, its
Senior Secured Notes due 2008, Series B issued in exchange therefor)
(collectively, the "Notes");
WHEREAS, the Grantors have entered into that certain Credit Agreement,
dated as of November 19, 2003 (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "Loan Agreement") among the financial
institutions party thereto (the "Senior Lenders") as lenders and General
Electric Capital Corporation as the agent (the "Agent"), pursuant to which the
Senior Lenders have agreed to make certain loans and other financial
accommodations to the Grantors from time to time, which Loan Agreement is
referenced as the "Senior Credit Facility" under the Indenture, and the other
Grantors hereto have each entered into various agreements granting Liens to the
Agent for the benefit of the Senior Lenders as well;
WHEREAS, in connection with the Indenture, the Grantor has executed and
delivered a Pledge and Security Agreement, dated as of November 19, 2003, 2003
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "Pledge and Security Agreement");
WHEREAS, as a condition precedent to the Notes Issuance, the Grantor is
required to execute and deliver this Agreement and to grant to the Collateral
Agent a continuing security interest in all of the Copyright Collateral (as
defined below) to secure all Secured Obligations;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
WHEREAS, it is in the best interests of each Grantor to execute this
Agreement inasmuch as such Grantor will derive substantial direct and indirect
benefits from proceeds of the Notes issued by the Issuer;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in order to induce the Holders to acquire the
Notes and maintain the Indebtedness evidenced thereby, the Grantor agrees, for
the benefit of each Secured Party, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Pledge and Security Agreement.
SECTION 2. Grant of Security Interest. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, to
secure all of the Secured Obligations, the Grantor does hereby mortgage, pledge
and hypothecate to the Collateral Agent, and grant to the Collateral Agent a
security interest in, for its benefit and the benefit of each Secured Party, all
of the following property (the "Copyright Collateral"), whether now owned or
hereafter acquired or existing by it, being all copyrights (including all
copyrights for semi-conductor chip product mask works) of the Grantor, whether
statutory or common law, registered or unregistered, now or hereafter in force
throughout the world including all of the Grantor's right, title and interest in
and to all copyrights registered in the United States Copyright Office or
anywhere else in the world and also including the copyrights referred to in Item
A of Schedule V attached hereto, and all applications for registration thereof,
whether pending or in preparation, all copyright licenses, including each
copyright license referred to in Item B of Schedule V attached hereto, the right
to xxx for past, present and future infringements of any thereof, all rights
corresponding thereto throughout the world, all extensions and renewals of any
thereof and all proceeds of the foregoing, including licenses, royalties,
income, payments, claims, damages and proceeds of suit.
SECTION 3. Pledge and Security Agreement. This Agreement has been
executed and delivered by the Grantor for the purpose of registering the
security interest of the Collateral Agent in the Copyright Collateral with the
United States Copyright Office and corresponding offices in other countries of
the world. The security interest granted hereby has been granted as a supplement
to, and not in limitation of, the security interest granted to the Collateral
Agent for its benefit and the benefit of each Secured Party under the Pledge and
Security Agreement. The Pledge and Security Agreement (and all rights and
remedies of the Collateral Agent and each Secured Party thereunder) shall remain
in full force and effect in accordance with its terms.
SECTION 4. Release of Security Interest. Upon payment in full in cash
of all Secured Obligations, the Collateral Agent shall, at the Grantor's
expense, execute and deliver to the Grantor all instruments and other documents
as may be necessary or proper to release the lien on and security interest in
the Copyright Collateral which has been granted hereunder.
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SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge
and affirm that the rights and remedies of the Collateral Agent with respect to
the security interest in the Copyright Collateral granted hereby are more fully
set forth in the Pledge and Security Agreement, the terms and provisions of
which (including the remedies provided for therein) are incorporated by
reference herein as if fully set forth herein.
SECTION 6. Related Document, etc. This Agreement is a Related Document
executed pursuant to the Indenture and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Indenture.
SECTION 7. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
SECTION 8. Intercreditor Agreement. Notwithstanding anything herein to
the contrary, the lien and security interest granted to the Collateral Agent
pursuant to the Pledge and Security Agreement and the exercise of any right or
remedy by the Collateral Agent hereunder, in each case in respect of any
collateral constituting Noteholder Collateral (as defined in the Intercreditor
Agreement) are subject to the provisions of the Intercreditor Agreement,
including the grant of security interest in this Agreement. In the event of any
conflict between the terms of the Intercreditor Agreement and this Agreement,
the terms of the Intercreditor Agreement shall govern.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF GRANTOR], a ____________
_____________
By ______________________________
Name:
Title:
BNY MIDWEST TRUST COMPANY, as
Collateral Agent
By ______________________________
Name:
Title:
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ANNEX I
to Pledge and Security Agreement
SUPPLEMENT TO PLEDGE AND SECURITY AGREEMENT
This SUPPLEMENT NO. ___, dated as of ________ __, ____ (this
"Supplement"), to the Pledge and Security Agreement, dated as of ________,
__________ (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "Pledge and Security Agreement"), among the initial
signatories thereto and each other Person which from time to time thereafter
became a party thereto pursuant to Section 7.5 thereof (each, individually, a
"Grantor", and, collectively, the "Grantors"), in favor of BNY Midwest Trust
Company, as collateral agent (together with its successor(s) thereto, in such
capacity the "Collateral Agent") for each of the Secured Parties (such and other
capitalized terms being used herein with the meanings provided, or incorporated
by reference, in the Pledge and Security Agreement), is made by the undersigned.
W I T N E S S E T H:
WHEREAS, the Issuer, the other Grantors and the Collateral Agent, as
trustee, have entered into an Indenture, dated as of November 19, 2003 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Indenture"), and in connection therewith, the Issuer has issued (the
"Notes Issuance") its Senior Secured Notes due 2008 (and, if applicable, its
Senior Secured Notes due 2008, Series B issued in exchange therefor)
(collectively, the "Notes");
WHEREAS, the Grantors have entered into that certain Credit Agreement,
dated as of November 19, 2003 (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "Loan Agreement") among the financial
institutions party thereto (the "Senior Lenders") as lenders and General
Electric Capital Corporation as the agent (the "Agent"), pursuant to which the
Senior Lenders have agreed to make certain loans and other financial
accommodations to the Grantors from time to time, which Loan Agreement is
referenced as the "Senior Credit Facility" under the Indenture, and the other
Grantors hereto have each entered into various agreements granting Liens to the
Agent for the benefit of the Senior Lenders as well;
WHEREAS, pursuant to the Pledge and Security Agreement, the undersigned
is required to execute and deliver this Supplement;
WHEREAS, the undersigned has duly authorized the execution, delivery
and performance of this Supplement and the Pledge and Security Agreement;
WHEREAS, the Pledge and Security Agreement provides that additional
parties may become Grantors under the Pledge and Security Agreement by execution
and delivery of an instrument in the form of this Supplement;
WHEREAS, pursuant to the provisions of Section 7.5 of the Pledge and
Security Agreement, the undersigned is becoming an Additional Grantor under the
Pledge and Security Agreement; and
WHEREAS, the undersigned desires to become a Grantor under the Pledge
and Security Agreement in order to induce the Holders to acquire the Notes and
maintain the Indebtedness evidenced thereby as consideration therefor;
NOW, THEREFORE, the undersigned agrees, for the benefit of each Secured
Party, as follows:
SECTION 1. In accordance with the Pledge and Security Agreement, the
undersigned by its signature below becomes a Grantor under the Pledge and
Security Agreement with the same force and effect as if it were an original
signatory thereto as a Grantor and the undersigned hereby
(a) agrees to all the terms and provisions of the Pledge and
Security Agreement applicable to it as a Grantor thereunder;
(b) assigns and pledges to the Collateral Agent for its
benefit and the ratable benefit of each of the Secured Parties, and
grants to the Collateral Agent for its benefit and the ratable benefit
of each of the Secured Parties, a security interest in all of the
following, whether now or hereafter existing or acquired by the
undersigned (its "Collateral"):
(i) (A) all investment property in which the
undersigned has an interest (including the Capital Securities
of each issuer of such Capital Securities described in
Schedule I hereto the undersigned) and (B) all other Capital
Securities which are interests in limited liability companies
or partnerships in which the undersigned has an interest
(including the Capital Securities of each issuer of such
Capital Securities described in Schedule I hereto), in each
case together with Dividends and Distributions payable in
respect of the Collateral described in the foregoing clauses
(b)(i) and (b)(ii);
(ii) all goods, including equipment and inventory;
(iii) all accounts, contracts, contract rights,
chattel paper, documents, instruments, promissory notes and
general intangibles (including tax refunds and payment
intangibles) of the undersigned, whether or not arising out of
or in connection with the sale or lease of goods or the
rendering of services, and all
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rights of the undersigned now or hereafter existing in and to
all security agreements, guaranties, leases and other
contracts securing or otherwise relating to any such accounts,
contracts, contract rights, chattel paper, documents,
instruments, promissory notes, general intangibles and payment
intangibles (any and all such accounts, contracts, contract
rights, chattel paper, documents, instruments, promissory
notes and general intangibles being the "Receivables", and any
and all such security agreements, guaranties, leases and other
contracts being the "Related Contracts");
(iv) all deposit accounts of the undersigned and all
cash, checks, drafts, notes, bills of exchange, money orders
and other like instruments, if any, now owned or hereafter
acquired, held therein (or in sub-accounts thereof) and all
certificates and instruments, if any, from time to time
representing or evidencing such investments, and all interest,
earnings and proceeds in respect thereof;
(v) all Intellectual Property Collateral of the
undersigned;
(vi) letter of credit rights;
(vii) all commercial tort claims in which such
Grantor has rights (including as a plaintiff);
(viii) all books, records, writings, data bases,
information and other property relating to, used or useful in
connection with, evidencing, embodying, incorporating or
referring to, any of the foregoing in this Section;
(ix) all of the undersigned's other property and
rights of every kind and description and interests therein;
and
(x) all products, offspring, rents, issues, profits,
returns, income, supporting obligations and proceeds of and
from any and all of the foregoing Collateral (including
proceeds which constitute property of the types described in
subclauses (b)(i) through (b)(x), proceeds deposited from time
to time in any lock box or deposit account of the undersigned,
and, to the extent not otherwise included, all payments under
insurance (whether or not the Collateral Agent is the loss
payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with
respect to any of the foregoing Collateral);
provided, however, that "Collateral" shall not include (a) any general
intangibles or other rights arising under any contracts or licenses
(other than, in each of the foregoing cases, any right to receive
payments) or other documents described in such clause as to which the
grant of a security interest would constitute a violation of a valid
and enforceable restriction in favor of a third party on such grant,
unless and until any required consents shall have been obtained, (b)
investment property consisting of Capital Securities of an
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issuer that is a Foreign Subsidiary of such Grantor, in excess of 65%
of the total combined voting power of all Capital Securities of each
such Foreign Subsidiary, (c) any Excluded Collateral and (d) any
property not of a type included within the description contained in the
Loan Documents (as defined in the Loan Agreement) as of November 19,
2003 of property constituting "Collateral" (as such term is defined as
of November 19, 2003 in the Loan Agreement).
(c) agrees that each of the Schedules attached hereto shall be
deemed to be a Schedule thereto; and
(d) represents and warrants that the representations and
warranties made by it as a Grantor thereunder are true and correct on
and as of the date hereof.
In furtherance of the foregoing, each reference to a "Grantor" or "Additional
Grantor" in the Pledge and Security Agreement shall be deemed to include the
undersigned.
SECTION 2. The undersigned hereby represents and warrants that this
Supplement has been duly authorized, executed and delivered by the undersigned
and constitutes a legal, valid and binding obligation of the undersigned,
enforceable against it in accordance with its terms.
SECTION 3. Except as expressly supplemented hereby, the Pledge and
Security Agreement shall remain in full force and effect in accordance with its
terms.
SECTION 4. In the event any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and in the Pledge and Security Agreement shall not in any way be affected
or impaired.
SECTION 5. Without limiting the provisions of the Indenture (or any
other Related Document, including the Pledge and Security Agreement), the
undersigned agrees to reimburse the Collateral Agent for its reasonable
out-of-pocket expenses in connection with this Supplement, including reasonable
attorneys' fees and expenses of the Collateral Agent.
SECTION 6. THIS SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. THIS SUPPLEMENT, THE PLEDGE
AND SECURITY AGREEMENT AND THE OTHER RELATED DOCUMENTS CONSTITUTE THE ENTIRE
UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF
AND THEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.
SECTION 7. This Supplement hereby incorporates by reference the
provisions of the Pledge and Security Agreement, which provisions are deemed to
be a part hereof, and this Supplement shall be deemed to be a part of the Pledge
and Security Agreement. Unless
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otherwise defined herein or the context otherwise requires, terms used in this
Supplement, including its preamble and recitals, have the meanings provided (or
incorporated by reference) in the Pledge and Security Agreement.
SECTION 8. This Supplement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.
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IN WITNESS WHEREOF, the undersigned has caused this Supplement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
[NAME OF ADDITIONAL GRANTOR], a
____________ _____________
By: ___________________________________
Name:
Title:
ACKNOWLEDGED AND ACCEPTED BY:
BNY MIDWEST TRUST COMPANY, as Collateral Agent
By:_________________________________
Name:
Title:
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