Exhibit 10.18
BORROWER SECURITY AGREEMENT
This BORROWER SECURITY AGREEMENT (this "Agreement") is dated as of
December 21, 1998 and entered into by and among DOMINO'S, INC., a Delaware
corporation ("Company"), BLUEFENCE, INC., a Michigan corporation ("Subsidiary
Borrower" and together with Company, each, a "Grantor" and, collectively,
"Grantors"), and XXXXXX GUARANTEE TRUST COMPANY OF NEW YORK, as Collateral Agent
for and representative of (in such capacity herein called "Collateral Agent")
the Secured Parties (as hereinafter defined) and any Hedging Exchangers (as
hereinafter defined).
RECITALS
A. Grantors, TISM, INC., a Michigan corporation ("Holdings"), XX
XXXXXX SECURITIES INC., as arranger, the financial institutions from time to
time party thereto (each individually referred to therein as a "Lender" and
collectively as "Lenders"), XXXXXX GUARANTY TRUST COMPANY OF NEW YORK ("Xxxxxx
Guaranty"), as administrative agent for Lenders (in such capacity,
"Administrative Agent"), NBD BANK, as syndication agent (in such capacity,
"Syndication Agent"), and COMERICA BANK (in such capacity, "Documentation
Agent"), have entered into a Credit Agreement dated as of December 21, 1998
(said Credit Agreement, as it may hereafter be amended, restated, supplemented
or otherwise modified from time to time, being the "Credit Agreement") pursuant
to which Lenders have made certain commitments, subject to the terms and
conditions set forth in the Credit Agreement, to extend certain credit
facilities to Grantors; with Lenders, Administrative Agent, Syndication Agent
and Documentation Agent each being herein called a "Secured Party" and,
collectively, the "Secured Parties."
B. Grantors may from time to time enter, or may from time to time
have entered, into one or more Hedging Agreements (collectively, the "Lender
Hedging Agreements") with one or more Lenders or their Affiliates (collectively,
"Hedging Exchangers") in accordance with the terms of the Credit Agreement, and
it is desired that the obligations of each Grantor under the Lender Hedging
Agreements, including, without limitation, the joint and several obligations of
Grantors to make payments, if any, thereunder in the event of early termination
thereof, together with all obligations of Grantors under the Credit Agreement
and any other Loan Documents (as hereinafter defined), be secured hereunder.
C. It is a condition precedent to the initial extensions of credit by
Secured Parties under the Credit Agreement that each Grantor shall have granted
the security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and to induce (i)
Administrative Agent and Lenders to enter into the Credit Agreement, (ii)
Lenders to make their respective loans to, and issue Letters of Credit for the
joint and several account of, Grantors and (iii) to induce Hedging Exchangers to
enter into the Lender Hedging Agreements and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, each
Grantor hereby agrees with the Collateral Agent as follows:
SECTION 1. Defined Terms.
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(a) Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to such terms in the
Credit Agreement;
(b) The following terms shall have the following meanings:
"Accounts" has the meaning assigned to that term in Section 2 of this
Agreement.
"Agreement" means this Borrower Security Agreement dated as of
December 21, 1998, as it may be amended, supplemented or otherwise modified from
time to time.
"Assigned Agreement" has the meaning assigned to that term in Section
2 of this Agreement.
"Collateral" has the meaning assigned to that term in Section 2 of
this Agreement.
"Collateral Account Agreement" means the Collateral Account
Agreement, dated as of December 21, 1998, by and between Grantors and Collateral
Agent.
"Collateral Accounts" shall mean "Collateral Accounts" as defined in
the Collateral Account Agreement.
"Commitments" means the "Commitments" as defined in the Credit
Agreement.
"Credit Agreement" has the meaning assigned to that term in the
recitals to this Agreement.
"Equipment" has the meaning assigned to that term in Section 2 of
this Agreement.
"Event of Default" (i) prior to the payment in full of all Credit
Agreement Obligations and the termination of all Commitments, any "Event of
Default" as defined in the Credit Agreement and (ii) after the payment in full
of all Credit Agreement Obligations and the termination of all Commitments, a
payment default under any Lender Hedging Agreement.
"Grantor" has the meaning assigned to that term in the introduction
of this Agreement.
"Hedging Exchangers" has the meaning assigned to that term in the
recitals to this Agreement.
"Inventory" has the meaning assigned to that term in Section 2 of
this Agreement.
"Lender Hedging Agreement" has the meaning assigned to that term in
the recitals to this Agreement.
"Loan" means any "Loan" as defined in the Credit Agreement, and
"Loans" means all such Loans collectively.
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"Loan Document" means any "Loan Document" as defined in the Credit
Agreement, and "Loan Documents" means all such Loan Documents collectively.
"Negotiable Document of Title" has the meaning assigned to that term
in Section 2 of this Agreement.
"Potential Event of Default" means any "Potential Event of Default"
as defined in the Credit Agreement.
"Related Contracts" has the meaning assigned to that term in Section
2 of this Agreement.
"Requisite Lenders" means "Requisite Lenders" as defined in the
Credit Agreement.
"Requisite Obligees" has the meaning assigned to that term in Section
23 of this Agreement.
"Secured Obligations" has the meaning assigned to that term in
Section 2 of this Agreement.
"Secured Parties" has the meaning assigned to that term in the
recitals to this Agreement.
SECTION 2. Grant of Security.
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Each Grantor hereby assigns to Collateral Agent and hereby grants to
Collateral Agent, a security interest in, all of such Grantor's right, title and
interest in and to the following, in each case whether now or hereafter existing
or in which such Grantor now has or hereafter acquires an interest and wherever
the same may be located (the "Collateral"):
(a) all equipment in all of its forms, all parts thereof and all
accessions thereto (any and all such equipment, parts and accessions being
the "Equipment");
(b) all inventory in all of its forms (including, but not limited to,
(1) all goods held by such Grantor for sale or lease or to be furnished
under contracts of service or so leased or furnished, (ii) all raw
materials, work in process, finished goods, and materials used or consumed
in the manufacture, packing, shipping, advertising, selling, leasing,
furnishing or production of such inventory or otherwise used or consumed in
such Grantor's business, (iii) all goods in which such Grantor has an
interest in mass or a joint or other interest or right of any kind, and
(iv) all goods which are returned to or repossessed by such Grantor) and
all accessions thereto and products thereof (all such inventory, accessions
and products being the "Inventory") and all negotiable and non-negotiable
documents of title (including, without limitation, warehouse receipts, dock
receipts and bills of lading) issued by any Person covering any Inventory
(any such negotiable document of title being a "Negotiable Document of
Title");
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(c) all accounts, contract rights, chattel paper, documents,
instruments, general intangibles and other rights and obligations of any
kind and all rights in, to and under all security agreements, leases and
other contracts securing or otherwise relating to any such accounts,
contract rights, chattel paper, documents, instruments, general intangibles
or other obligations (any and all such accounts, contract rights, chattel
paper, documents, instruments, general intangibles and other obligations
being the "Accounts", and any and all such security agreements, leases and
other contracts being the "Related Contracts");
(d) all agreements and contracts to which such Grantor is a party as
of the date hereof or becomes a party after the date hereof, as each such
agreement may be amended, supplemented or otherwise modified from time to
time (said agreements, as so amended, supplemented or otherwise modified,
being referred to herein individually as an "Assigned Agreement" and
collectively as the "Assigned Agreements"), including (i) all rights of
such Grantor to receive moneys due or to become due under or pursuant to
the Assigned Agreements, (ii) all rights of such Grantor to receive
proceeds of any insurance, indemnity, warranty or guaranty with respect to
the Assigned Agreements, (iii) all claims of such Grantor for damages
arising out of any breach of or default under the Assigned Agreements, and
(iv) all rights of such Grantor to terminate, amend, supplement, modify or
exercise rights or options under the Assigned Agreements, to perform
thereunder and to compel performance and otherwise exercise all remedies
thereunder;
(e) all deposit accounts, including, without limitation, all deposit
accounts maintained with Collateral Agent;
(f) all trade secrets, licenses, copyrights, registrations and
franchise rights, and all goodwill associated with any of the foregoing;
(g) to the extent not included in any other paragraph of this Section
2, all other general intangibles (including, without limitation, tax
refunds, rights to payment or performance, choses in action and judgments
taken on any rights or claims included in the Collateral);
(h) all plant fixtures, business fixtures and other fixtures and
storage and office facilities, and all accessions thereto and products
thereof;
(i) all books, records, ledger cards, files, correspondence, computer
programs, tapes, disks and related data processing software that at any
time evidence or contain information relating to any of the Collateral or
are otherwise necessary or helpful in the collection thereof or realization
thereupon; and
(j) all proceeds, products, rents and profits of or from any and all
of the foregoing Collateral and, to the extent not otherwise included, all
payments under insurance (whether or not 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.
For purposes of this Agreement, the term "proceeds" includes
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whatever is receivable or received when Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary.
Notwithstanding anything herein to the contrary, in no event shall
the Collateral include, and each Grantor shall not be deemed to have granted a
security interest in, any of such Grantor's rights or interests in any license,
contract or agreement to which such Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under any license,
contract or agreement to which such Grantor is a party (other than to the extent
that any such term would be rendered ineffective pursuant to Section 9-318(4) of
the Uniform Commercial Code of any relevant jurisdiction or any other applicable
law (including the Bankruptcy Code) or principles of equity); provided, that
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immediately upon the ineffectiveness, lapse or termination of any such
provision, the Collateral shall include, and such Grantor shall be deemed to
have granted a security interest in, all such rights and interests as if such
provision had never been in effect.
SECTION 3. Security for Obligations.
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This Agreement secures, and the Collateral is collateral security
for, the prompt payment or performance in full when due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including the payment of amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code, 1 U.S.C. (S)
362(a)), of all obligations and liabilities of every nature, of Grantors now or
hereafter existing under or arising out of or in connection with the Credit
Agreement and any other Loan Documents and the Lender Hedging Agreements and all
extensions or renewals thereof, whether for principal, interest (including,
without limitation, interest that, but for the filing of a petition in
bankruptcy with respect to any Grantor, would accrue on such obligations whether
or not a claim is allowed against such Grantor for such interest in the related
bankruptcy proceeding), reimbursement of amounts drawn under Letters of Credit,
payments for early termination of Lender Hedging Agreements, fees, expenses,
indemnities or otherwise, whether voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such obligations
or liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from Collateral Agent or any Secured
Party or Interest Rate Exchanger as a preference, fraudulent transfer or
otherwise and all obligations of every nature of Grantors now or hereafter
existing under this Agreement (all such obligations of Grantors being the
"Secured Obligations").
SECTION 4. Grantors Remain Liable.
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Anything contained herein to the contrary notwithstanding, (a) each
Grantor shall remain liable under any contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Collateral Agent of any of its rights hereunder
shall not release Grantors from any of their joint and several duties or
obligations under the contracts and agreements included in the Collateral, and
(c) Collateral Agent shall not have
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any obligation or liability under any contracts and agreements included in the
Collateral by reason of this Agreement, nor shall Collateral Agent 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 5. Representations and Warranties. Each Grantor represents and
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warrants as follows:
(a) Ownership of Collateral. Except for the security interest created
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by this Agreement, such Grantor owns the Collateral free and clear of any
Lien, except for Liens permitted by the Credit Agreement.
(b) Location of Equipment and Inventory. All of the Equipment and
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Inventory of such Grantor is, as of the date hereof, located at the places
specified in Schedule 5(b) annexed hereto.
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(c) Negotiable Documents of Title. No Negotiable Documents of Title
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are outstanding with respect to any of the Inventory (other than in respect
of (i) Inventory with an aggregate value not in excess of $1,000,000 or
(ii) Inventory which, in the ordinary course of business, is in transit
either (A) from a supplier to such Grantor, (B) between the locations
specified in Schedule 5(b) hereto, or (C) to customers of such Grantor).
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(d) Office Locations: Other Names. The chief place of business, the
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chief executive office and the office where such Grantor keeps its records
regarding the Accounts and all originals of all chattel paper that evidence
Accounts is, and has been for the four month period preceding the date
hereof, located at the places indicated on Schedule 5d. Such Grantor has
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not in the past done, and does not now do, business under any other name
(including any trade-name or fictitious business name) except for those
names set forth on Schedule 5d.
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SECTION 6. Further Assurances.
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(a) Each Grantor agrees that from time to time, at the expense of
Grantors, such Grantor will promptly execute and deliver all further instruments
and documents, and take all further action, that Collateral Agent may reasonably
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable Collateral Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, each Grantor will: (i) upon
the reasonable request of the Collateral Agent, xxxx conspicuously each item of
chattel paper included in the Accounts, each Related Contract and, at the
reasonable request of Collateral Agent, each of its records pertaining to the
Collateral, with a legend, in form and substance reasonably satisfactory to
Collateral Agent, indicating that such Collateral is subject to the security
interest granted hereby, (ii) at the reasonable request of Collateral Agent,
deliver and pledge to Collateral Agent hereunder all promissory notes and other
instruments (excluding checks) and all original counterparts of chattel paper
constituting Collateral, duly indorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance reasonably
satisfactory to Collateral Agent, (iii) execute and file such financing or
continuation statements, or amendments thereto, and such
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other instruments or notices, as Collateral Agent may reasonably request, in
order to perfect and preserve the security interests granted or purported to be
granted hereby, (iv) upon the reasonable request of the Collateral Agent, after
the acquisition by such Grantor of any item of Equipment which is covered by a
certificate of title under a statute of any jurisdiction under the law of which
indication of a security interest on such certificate is required as a condition
of perfection thereof, upon the reasonable request of Collateral Agent, execute
and file with the registrar of motor vehicles or other appropriate authority in
such jurisdiction an application or other document requesting the notation or
other indication of the security interest created hereunder on such certificate
of title, (v) upon the reasonable request of Collateral Agent, deliver to
Collateral Agent copies of all such applications or other documents filed during
such calendar quarter and copies of all such certificates of title issued during
such calendar quarter indicating the security interest created hereunder in the
items of Equipment covered thereby, and (vi) at Collateral Agent's reasonable
request, appear in and defend any action or proceeding that may affect such
Grantor's title to or Collateral Agent's security interest in all or any part of
the Collateral.
(b) Each Grantor hereby authorizes 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 to the
extent permitted by applicable law. Each Grantor agrees that a carbon,
photographic or other reproduction of this Agreement or of a financing statement
signed by such Grantor shall be sufficient as a financing statement and may be
filed as a financing statement in any and all jurisdictions.
SECTION 7. Certain Covenants of Grantors. Each Grantor shall:
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(a) notify Collateral Agent of any change in such Grantor's name,
identity or corporate structure within 30 days of such change.
(b) give Collateral Agent 30 days' written notice following any
change in such Grantor's chief place of business, chief executive office or
residence or the office where such Grantor keeps its records regarding the
Accounts and all originals of all chattel paper that evidence Accounts;
(c) pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims (including
claims for labor, materials and supplies) against, the Collateral, except
to the extent the validity thereof is being contested in good faith.
SECTION 8. Special Covenants With Respect to Equipment and Inventory. Each
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Grantor shall:
(a) keep the Equipment and Inventory at the places therefor specified
on Schedule 5(b) annexed hereto or, upon 30 days' written notice to
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Collateral Agent following any change in location, at such other places in
jurisdictions where all action that Collateral Agent may reasonably
request, in order to perfect and protect any security interest granted or
purported to be granted hereby, or to enable Collateral Agent to exercise
and enforce its rights and remedies hereunder, with respect to such
Equipment and
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Inventory shall have been taken, provided that such Grantor may keep
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Equipment and Inventory at new corporate stores without giving such notice
so long as the aggregate fair market value of all Equipment and Inventory
with respect to which such notice has not been provided to the Collateral
Agent does not exceed $1,000,000 in the aggregate for Holdings and its
Subsidiaries (other than Foreign Subsidiaries) taken as a whole;
(b) cause the Equipment to be maintained and preserved as provided
in subsection 6.4 of the Credit Agreement;
(c) keep correct and accurate records of the Inventory, itemizing
and describing the kind, type and quantity of Inventory, such Grantor's
cost therefor and (where applicable) the current list prices for the
Inventory;
(d) if any Inventory is in possession or control of any of such
Grantor's agents or processors, upon the occurrence of an Event of Default,
instruct such agent or processor to hold all such Inventory for the account
of Collateral Agent and subject to the instructions of Collateral Agent;
and
(e) promptly upon the issuance and delivery to such Grantor of any
Negotiable Document of Title (other than any one or more Negotiable
Documents of Title covering (i) Inventory with an aggregate value not in
excess of $ 1,000,000 or (ii) Inventory which, in the ordinary course of
business, is in transit either (A) from a supplier to such Grantor, (B)
between the locations specified in Schedule 5(b) hereto, or (C) to
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customers of such Grantor), deliver such Negotiable Document of Title to
Collateral Agent.
SECTION 9. Insurance.
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Each Grantor shall, at its own expense, maintain insurance with
respect to the Equipment and Inventory in accordance with the terms of the
Credit Agreement.
SECTION 10. Special Covenants with respect to Accounts and Related Contracts.
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(a) Each Grantor shall keep its chief place of business and chief
executive office and the office where it keeps its records concerning the
Accounts and Related Contracts, and all originals of all chattel paper that
evidence Accounts, at the location therefor specified in Section 5 or, upon 30
days' written notice to Collateral Agent following any change in location, at
such other location in a jurisdiction where all action that Collateral Agent may
request, in order to perfect and protect any security interest granted or
purported to be granted hereby, or to enable Collateral Agent to exercise and
enforce its rights and remedies hereunder, with respect to such Accounts and
Related Contracts shall have been taken. Promptly upon the reasonable request
of Collateral Agent, Grantors shall deliver to Collateral Agent complete and
correct copies of each Related Contract.
(b) Grantors shall maintain (i) complete records of each Account,
including records of all payments received, credits granted and merchandise
returned, and (ii) all documentation relating thereto in accordance with prudent
business practices.
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(c) Except as otherwise provided in this subsection (c), each
Grantor shall continue to collect, at its own expense, all amounts due or to
become due to such Grantor under the Accounts and Related Contracts. In
connection with such collections, such Grantor shall take such action as Grantor
or Collateral Agent may deem necessary or advisable to enforce collection of
amounts due or to become due under the Accounts; provided, however, that
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Collateral Agent shall have the right at any time, upon the occurrence and
during the continuation of an Event of Default and upon written notice to such
Grantor of its intention to do so, to notify the account debtors or obligors
under any Accounts of the assignment of such Accounts to Collateral Agent and to
direct such account debtors or obligors to make payment of all amounts due or to
become due to such Grantor thereunder directly to Collateral Agent, to notify
each Person maintaining a lockbox or similar arrangement to which account
debtors or obligors under any Accounts have been directed to make payment to
remit all amounts representing collections on checks and other payment items
from time to time sent to or deposited in such lockbox or other arrangement
directly to Collateral Agent and, upon such notification and at the expense of
Grantors, to enforce collection of any such Accounts and to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done. After receipt by a Grantor of the notice
from Collateral Agent referred to in the proviso to the preceding sentence, (i)
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any payments of Accounts, received by such Grantor shall be forthwith (and in
any event within two Business Days) deposited by such Grantor in the exact form
received, duly indorsed by such Grantor to the Collateral Agent if required, in
a Collateral Account maintained under the sole dominion and control of the
Collateral Agent, subject to withdrawal by the Collateral Agent for the account
of the Secured Parties only as provided in Section 21, (ii) until so turned over
in accordance with the preceding subsection (i), all amounts and proceeds
(including checks and other instruments) received by such Grantor in respect of
the Accounts and the Related Contracts shall be received for the benefit of
Collateral Agent hereunder and shall not be segregated from other funds of such
Grantor and (iii) such Grantor shall not adjust, settle or compromise the amount
or payment of any Account, or release wholly or partly any account debtor or
obligor thereof, or allow any credit or discount thereon other than in the
ordinary course of business consistent with past practices.
SECTION 11. Deposit Accounts.
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Upon the occurrence and during the continuation of an Event of
Default, Collateral Agent may exercise dominion and control over, and refuse to
permit further withdrawals (whether of money, securities, instruments or other
property) from any deposit accounts maintained with Collateral Agent
constituting part of the Collateral.
SECTION 12. License of Copyrights, etc.
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Each Grantor hereby assigns, transfers and conveys to Collateral
Agent, effective upon the occurrence and during the continuance of any Event of
Default, the nonexclusive right and license to use all copyrights or technical
processes owned or used by such Grantor that relate to the Collateral and any
other collateral granted by such Grantor as security for the Secured
Obligations, together with any goodwill associated therewith, all to the extent
necessary to enable Collateral Agent to use, possess and realize on the
Collateral and to enable any successor or assign to enjoy the benefits of the
Collateral. This right and license shall inure to the benefit of all
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successors, assigns and transferees of Collateral Agent and its successors,
assigns and transferees, whether by voluntary conveyance, operation of law,
assignment, transfer, foreclosure, deed in lieu of foreclosure or otherwise.
Such right and license is granted free of charge, without requirement that any
monetary payment whatsoever be made to any Grantor.
SECTION 13. Transfers and Other Liens. No Grantor shall at any time during the
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term of this Agreement:
(a) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except as permitted by the Credit
Agreement; or
(b) except for the security interest created by this Agreement and
Liens permitted by the Credit Agreement, create or suffer to exist any Lien
upon or with respect to any of the Collateral to secure the indebtedness or
other obligations of any Person.
SECTION 14. Collateral Agent Appointed Attorney-in-Fact. Each Grantor hereby
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irrevocably appoints Collateral Agent as such Grantor's attorney-in-fact, with
full authority in the place and stead of such Grantor and in the name of such
Grantor, Collateral Agent or otherwise, from time to time, upon the occurrence
and during the continuance of an Event of Default, in Collateral Agent's
reasonable discretion to take any action and to execute any instrument that
Collateral Agent may reasonably deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation:
(a) to obtain and adjust insurance required to be maintained by such
Grantor or paid to Collateral Agent pursuant to Section 9;
(b) to ask for, demand, collect, xxx for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under or
in respect of any of the Collateral;
(c) to receive, indorse and collect any drafts or other instruments,
documents and chattel paper in connection with clauses (a) and (b) above;
(d) to file any claims or take any action or institute any
proceedings that Collateral Agent may reasonably deem necessary or
desirable for the collection of any of the Collateral or otherwise to
enforce the rights of Collateral Agent with respect to any of the
Collateral;
(e) to pay or discharge taxes or Liens (other than Liens permitted
under this Agreement or the Credit Agreement) levied or placed upon or
threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by Collateral
Agent in its reasonable discretion, any such payments made by Collateral
Agent to become obligations of such Grantor to Collateral Agent, due and
payable immediately without demand;
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(f) to sign and indorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with Accounts and
other documents relating to the Collateral; and
(g) upon the occurrence and during the continuation of an Event of
Default, generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though Collateral Agent were the absolute owner thereof for
all purposes, and to do, at Collateral Agent's option and Grantors'
expense, at any time or from time to time, all acts and things that
Collateral Agent reasonably deems necessary to protect, preserve or realize
upon the Collateral and Collateral Agent's security interest therein in
order to effect the intent of this Agreement, all as fully and effectively
as any Grantor might do.
SECTION 15. Collateral Agent May Perform.
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If any Grantor fails to perform any agreement contained herein,
Collateral Agent may itself perform, or cause performance of, such agreement,
and the reasonable expenses of Collateral Agent incurred in connection therewith
shall be payable by Grantors under Section 16.
SECTION 16. Indemnity and Expenses.
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(a) Grantors jointly and severally agree to indemnify Collateral
Agent, each Secured Party and each Interest Rate Exchanger from and against any
and all claims, losses and liabilities in any way relating to, growing out of or
resulting from this Agreement and the transactions contemplated hereby
(including, without limitation, enforcement of this Agreement), except to the
extent such claims, losses or liabilities result from Collateral Agent's or such
Secured Party's or Interest Rate Exchanger's gross negligence or willful
misconduct.
(b) Grantors jointly and severally agree to pay to Collateral Agent
promptly following written demand the amount of any and all reasonable costs and
reasonable expenses, including the reasonable fees and expenses of its counsel
and of any experts and agents, that Collateral Agent may incur in connection
with (i) the administration of this 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
Collateral Agent hereunder, or (iv) the failure by any Grantor to perform or
observe any of the provisions hereof.
(c) The obligations of each Grantor in this Section 16 shall survive
the termination of this Agreement and the discharge of such Grantor's other
obligations under this Agreement, the Lender Hedging Agreements, the Credit
Agreements and any other Loan Documents.
SECTION 17. Standard of Care.
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The powers conferred on Collateral Agent hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Collateral in its possession and
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the accounting for moneys actually received by it hereunder, Collateral Agent
shall have no duty as to any Collateral or as to the taking of any necessary
steps to preserve rights against prior parties or any other rights pertaining to
any Collateral. Collateral Agent shall be deemed to have exercised reasonable
care in the custody and preservation of Collateral in its possession if such
Collateral is accorded treatment substantially equal to that which Collateral
Agent accords its own property.
SECTION 18. Remedies.
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If any Event of Default shall have occurred and be continuing,
Collateral Agent may exercise in respect of the Collateral, in addition to all
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 Uniform
Commercial Code as in effect in any relevant jurisdiction (the "Code") (whether
or not the Code applies to the affected Collateral), and also may (a) enter onto
the property where any Collateral is located and take possession thereof with or
without judicial process, (b) prior to the disposition of the Collateral, store,
process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent Collateral Agent deems
appropriate, (b) take possession of any Grantor's premises or place custodians
in exclusive control thereof, remain on such premises and use the same and any
of such Grantor's equipment for the purpose of completing any work in process,
taking any actions described in the preceding clause (b) and collecting any
Secured Obligation, and (d) 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 Collateral Agent's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and upon such
other terms as Collateral Agent may deem commercially reasonable. Collateral
Agent or any Secured Party or Interest Rate Exchanger may be the purchaser of
any or all of the Collateral at any such sale and Collateral Agent, as agent for
and representative of Secured Parties and Hedging Exchangers (but not any
Secured Party or Secured Parties or Interest Rate Exchanger or Hedging
Exchangers in its or their respective individual capacities unless Requisite
Obligees shall otherwise agree in writing), shall be entitled, for the purpose
of bidding and making settlement or payment of the purchase price for all or any
portion of the Collateral sold at any such public sale, to use and apply any of
the Secured Obligations as a credit on account of the purchase price for any
Collateral payable by Collateral Agent at such sale. Each purchaser at any such
sale shall hold the property sold absolutely free from any claim or right on the
part of any Grantor, and each Grantor hereby waives (to the extent permitted by
applicable law) all rights of redemption, stay and/or appraisal which it now has
or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Each Grantor agrees that, to the extent notice
of sale shall be required by law, at least ten days' 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. Collateral Agent shall
not be obligated to make any sale of Collateral regardless of notice of sale
having been given. 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. Each Grantor hereby waives any claims against Collateral Agent
arising by reason of the fact that the price at which any Collateral may have
been sold at such a private sale was less than the price which might have been
obtained at a public sale, even if Collateral Agent accepts the first offer
received and does not offer such Collateral to more than
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one offeree. If the proceeds of any sale or other disposition of the Collateral
are insufficient to pay all the Secured Obligations, Grantors shall be jointly
and severally liable for the deficiency and the reasonable fees of any attorneys
employed by Collateral Agent to collect such deficiency.
SECTION 19. Proceeds to be Turned Over to Collateral Agent.
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In addition to the rights of the Collateral Agent and the Secured
Parties specified in Section 10 with respect to payments of Accounts, if an
Event of Default shall occur and be continuing, upon request of the Collateral
Agent, all proceeds received by the applicable Grantor consisting of cash,
checks and other near-cash items shall be held by such Grantor in trust for the
Collateral Agent and the Secured Parties, segregated from other funds of such
Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to
the Collateral Agent in the exact form received by such Grantor (duly indorsed
by such Grantor to the Collateral Agent, if required) and held by the Collateral
Agent in a Collateral Account maintained under the Collateral Account Agreement.
All proceeds while held by the Collateral Agent in a Collateral Account (or by
Grantors for the Collateral Agent and the Secured Parties) shall continue to be
held as collateral security for all the Obligations and shall not constitute
payment thereof until applied as provided in Section 20.
SECTION 20. Application of Proceeds.
-----------------------
Except as expressly provided elsewhere in this Agreement, all
proceeds held in any Collateral Account and all other proceeds received by
Collateral Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied as provided
in subsection 2.4D of the Credit Agreement.
SECTION 21. Continuing Security Interest; Transfer of Loans.
-----------------------------------------------
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of the Secured Obligations (other than inchoate indemnification obligations
with respect to claims, losses or liabilities which have not yet arisen and are
not yet due and payable), the cancellation or termination of the Commitments and
the cancellation or expiration of all outstanding Letters of Credit, (b) be
binding upon each Grantor, its successors and assigns, and (c) inure, together
with the rights and remedies of Collateral Agent hereunder, to the benefit of
Collateral Agent and its successors, transferees and assigns. Without limiting
the generality of the foregoing clause (c), but subject to the provisions of
subsection 10.1 of the Credit Agreement, any Secured Party may assign or
otherwise transfer any Loans held by it to any other Person, and such other
Person shall thereupon become vested with all the benefits in respect thereof
granted to Secured Parties herein or otherwise. Upon the payment in full of all
Secured Obligations (other than inchoate indemnification obligations with
respect to claims, losses or liabilities which have not yet arisen and are not
yet due and payable), the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the applicable Grantors. Upon any such termination Collateral Agent
will, at the joint and several expense of Grantors, execute and deliver to the
applicable Grantors such documents as Grantors shall reasonably request to
evidence such termination.
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SECTION 22. Administrative Agent as Collateral Agent.
----------------------------------------
(a) Administrative Agent has been appointed to act as Collateral
Agent hereunder by Lenders and, by their acceptance of the benefits hereof,
Hedging Exchangers. Collateral Agent shall be obligated, and shall have the
right hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided that
--------
Collateral Agent shall exercise, or refrain from exercising, any remedies
provided for in Section 18 in accordance with the instructions of (i) Requisite
Lenders or (ii) after payment in full of all Credit Agreement Obligations under
the Credit Agreements and any other Loan Documents, the holders of a majority of
the aggregate notional amount (or, with respect to any Lender Hedging Agreement
that has been terminated in accordance with its terms, the amount then due and
payable (exclusive of expenses and similar payments but including any early
termination payments then due) under such Lender Hedging Agreement) under all
Lender Hedging Agreements (Requisite Lenders or, if applicable, such holders
being referred to herein as "Requisite Obligees"). In furtherance of the
foregoing provisions of this Section 22(a), each Interest Rate Exchanger, by its
acceptance of the benefits hereof, agrees that it shall have no right
individually to realize upon any of the Collateral hereunder, it being
understood and agreed by such Interest Rate Exchanger that all rights and
remedies hereunder may be exercised solely by Collateral Agent for the benefit
of Secured Parties and Hedging Exchangers in accordance with the terms of this
Section 22(a).
(b) Collateral Agent shall at all times be the same Person that is
appointed Administrative Agent under the Credit Agreement. The Collateral Agent
may resign and a successor Collateral Agent may be appointed in the manner
provided in the Collateral Account Agreement. Written notice of resignation by
Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Collateral Agent under this Agreement;
removal of Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Collateral Agent under this
Agreement; and appointment of a successor Administrative Agent pursuant to
subsection 9.5 of the Credit Agreement shall also constitute appointment of a
successor Collateral Agent under this Agreement and the retiring or removed
Collateral Agent under this Agreement shall promptly (i) transfer to such
successor Collateral Agent all sums, securities and other items of Collateral
held hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Collateral Agent under this Agreement, and (ii) execute and deliver to such
successor Collateral Agent such amendments to financing statements, and take
such other actions, as may be necessary or appropriate in connection with the
assignment to such successor Collateral Agent of the security interests created
hereunder, whereupon such retiring or removed Collateral Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring or removed Collateral Agent's resignation or removal hereunder as
Collateral Agent, the provisions of this Agreement shall inure to its benefit as
to any actions taken or omitted to be taken by it under this Agreement while it
was Collateral Agent hereunder.
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SECTION 23. Amendments; Etc.
---------------
No amendment, modification, termination or waiver of any provision
of this Agreement, and no consent to any departure by any Grantor therefrom,
shall in any event be effective unless the same shall be in writing and signed
by Collateral Agent and, in the case of any such amendment or modification, by
Grantors. Any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given.
SECTION 24. Notices.
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Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile or telex (with received answerback), or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Collateral Agent and any Grantor shall not
--------
be effective until received. For the purposes hereof, the address of each party
hereto shall be as provided in subsection 10.8 of the Credit Agreement or as set
forth under such party's name on the signature pages hereof or such other
address as shall be designated by such party in a written notice delivered to
the other parties hereto.
SECTION 25. Failure or Indulgence Not Waiver; Remedies Cumulative.
-----------------------------------------------------
No failure or delay on the part of Collateral Agent in the exercise
of any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available.
SECTION 26. Severability.
------------
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 27. Headings.
--------
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
SECTION 28. Governing Law; Terms.
--------------------
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
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AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT
TO THE EXTENT THAT THE CODE PROVIDES THAT THE 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. Unless otherwise defined herein or in the Credit Agreement, terms used
in Articles 8 and 9 of the Uniform Commercial Code in the State of New York are
used herein as therein defined.
SECTION 29. Counterparts.
------------
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Pledgors and Collateral Agent have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
DOMINO'S, INC.
By: /s/ Xxxxx Xxxxxxxxx
----------------------------
Name: Xxxxx Xxxxxxxxx
Title: Vice President
BLUEFENCE, INC.
By: /s/ Xxxxx Xxxxxxxxx
----------------------------
Name: Xxxxx Xxxxxxxxx
Title: President
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK, as Collateral Agent
By: /s/ Xxxxxxx Xxxxx
----------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
SCHEDULE 5(B)
TO BORROWER SECURITY AGREEMENT
Locations of Equipment:
Locations of Inventory:
SCHEDULE 5(D)
TO BORROWER SECURITY AGREEMENT
Office Locations, Other Names
