SECURITY AGREEMENT
EXHIBIT
99.4
Execution
Version
THIS
SECURITY AGREEMENT (this “Security
Agreement”),
dated as
of August 10, 2007, is made by and among GENIUS
PRODUCTS, LLC,
a
Delaware limited liability company (the “Borrower”),
GENIUS
PRODUCTS, INC.,
a
Delaware corporation (“GPI”),
each
of the other signatories hereto, each of the other entities which becomes a
party hereto pursuant to Section 10.15
(each of
the foregoing, including the Borrower, a “Grantor”
and
collectively, the “Grantors”),
and
SOCIÉTÉ
GÉNÉRALE,
as
Collateral Agent for the Administrative Agent, the Lenders referenced below
and
Affiliates of Lenders party to Lender Rate Contracts (in such capacity, the
“Collateral
Agent”).
RECITALS
A Pursuant
to that certain Credit Agreement, dated as of the date hereof (as amended,
supplemented, restated or otherwise modified from time to time, the
“Credit
Agreement”),
among
the Borrower, the Persons acting as lenders thereunder from time to time (the
“Lenders”),
Société Générale,
as
administrative agent
(in such
capacity, the “Administrative
Agent”)
and
the Collateral Agent, the Lenders have agreed to extend certain credit
facilities to the Borrower upon the terms and subject to the conditions set
forth therein.
B. The
Lenders’ obligations to extend the credit facilities to the Borrower under the
Credit Agreement are subject, among other conditions, to receipt by the
Collateral Agent of this Security Agreement, duly executed by the Grantors,
which Security Agreement grants the security interests hereinafter
provided.
C. Each
Grantor that is a Subsidiary of the Borrower or GPI (each, a “Subsidiary
Grantor”)
and
GPI is or shall become a party to that certain Guaranty Agreement dated as
of
even date herewith in connection with the Credit Agreement. Each Subsidiary
Grantor and GPI has obtained and will continue to obtain working capital and
loans needed for its operations from the Borrower, and the Borrower will obtain
funds to provide and lend to such Subsidiary Grantor or GPI from the Lenders
under the Credit Agreement. In addition, each Subsidiary Grantor and GPI expects
to realize direct and indirect benefits as the result of the availability of
the
aforementioned credit facilities to the Borrower and as the result of financial
or business support which will be provided to such Subsidiary Grantor or GPI
by
the Borrower.
AGREEMENT
NOW,
THEREFORE, in consideration of the above recitals and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, each of the Grantors hereby agree with the Collateral Agent as
follows:
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EXHIBIT
99.4
SECTION
1. Definitions
and Interpretation.
When
used in this Security Agreement, the following terms shall have the following
respective meanings:
“Account”
means
any “account,” as such term is defined in Section 9-102(a)(2) of the UCC (or any
other then applicable provision of the UCC) and, in any event, shall include,
without limitation, all accounts receivable, book debts and other forms of
obligations (other than forms of obligations evidenced by Chattel Paper,
Documents or Instruments) now owned or hereafter received or acquired by or
belonging or owing to any Grantor (including, without limitation, under any
trade name, style or division thereof) whether arising out of goods sold or
services rendered by such Grantor or from any other transaction, whether or
not
the same involves the sale of goods or services by such Grantor (including,
without limitation, any such obligation which may be characterized as an account
or contract right under the UCC) and all of any Grantor’s rights in, to and
under all purchase orders or receipts now owned or hereafter acquired by it
for
goods or services, and all of any Grantor’s rights to any goods represented by
any of the foregoing (including, without limitation, unpaid seller’s rights of
rescission, replevin, reclamation and stoppage in transit and rights to
returned, reclaimed or repossessed goods), and all monies due or to become
due
to any Grantor under all purchase orders and contracts for the sale of goods
or
the performance of services or both by any Grantor (whether or not yet earned
by
performance on the part of such Grantor or in connection with any other
transaction), now in existence or hereafter occurring, including, without
limitation, the right to receive the proceeds of said purchase orders and
contracts, and all collateral security and guarantees of any kind given by
any
Person with respect to any of the foregoing.
“Account
Debtor”
means
any “account debtor,” as such term is defined in Section 9-102(a)(3) of the
UCC (or any other then applicable provision of the UCC).
“Bankruptcy
Code”
means
Title 11 of the United States Code, as amended.
“Borrower”
shall
have the meaning given to that term in the introductory paragraph
hereof.
“Chattel
Paper”
means
any “chattel paper,” as such term is defined in Section 9-102(a)(11) of the
UCC (or any other then applicable provision of the UCC), including, without
limitation, electronic chattel paper and tangible chattel paper.
“Collateral”
has
the
meaning assigned to such term in Section
2
of this
Security Agreement.
“Commercial
Tort Claim”
means
any “commercial tort claim,” as such term is defined in
Section 9-102(a)(13) of the UCC (or any other then applicable provision of
the UCC).
“Contracts”
means
all contracts, undertakings, franchise agreements or other agreements (other
than rights evidenced by Chattel Paper, Documents or Instruments) in or under
which a Grantor may now or hereafter have any right, title or interest,
including, without limitation, any distribution agreement, license agreement,
agreement to receive royalties or similar agreement and with respect to an
Account, any agreement relating to the terms of payment or the terms of
performance thereof.
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EXHIBIT
99.4
“Deposit
Account”
means
any “deposit account” as such term is defined in Section 9-102(a)(29) of
the UCC (or any other then applicable provision of the UCC), including, without
limitation, any demand, time, savings passbook or like account, now or hereafter
maintained by or for the benefit of a Grantor, or in which a Grantor now holds
or hereafter acquires any interest, with a bank, savings and loan association,
credit union or like organization (including the Collateral Agent, the
Administrative Agent or any Lender) and all funds and amounts therein, whether
or not restricted or designated for a particular purpose.
“Documents”
means
any “documents,” as such term is defined in Section 9-102(a)(30) of the UCC (or
any other then applicable provision of the UCC).
“Electronic
Chattel Paper”
means
any “electronic chattel paper” as such term is defined in Section 9-102(a)(31)
of the UCC (or any other then applicable provision of the UCC).
“Equipment”
means
any “equipment,” as such term is defined in Section 9-102(a)(33) of the UCC (or
any other then applicable provision of the UCC), now or hereafter owned or
acquired by a Grantor or in which a Grantor now holds or hereafter acquires
any
interest and, in any event, shall include, without limitation, all machinery,
equipment, fixtures, furniture, furnishings, trade fixtures, vehicles, trucks,
mainframe, personal and other computers, terminals and printers and related
components and accessories, all copiers, telephonic, video, electronic
data-processing, data storage equipment and other equipment of any nature
whatsoever, and any and all additions, substitutions and replacements of any
of
the foregoing, wherever located, together with all attachments, components,
parts, equipment and accessories installed thereon or affixed
thereto.
“Event
of Default”
means
the occurrence or existence of any “Event of Default” under and as defined in
the Credit Agreement.
“General
Intangible”
means
any “general intangible,” as such term is defined in Section 9-102(a)(42)
of the UCC (or any other then applicable provision of the UCC) and, in any
event, shall include, without limitation, all right, title and interest which
a
Grantor may now or hereafter have in or under any Contract, all customer lists,
all proprietary or confidential information, inventions (whether or not patented
or patentable), interests in partnerships, joint ventures and other business
associations, permits, books and records, goodwill, claims in or under insurance
policies, including unearned premiums, Payment Intangibles, Software,
uncertificated securities, cash and other forms of money or currency, rights
to
receive tax refunds and other payments and rights of
indemnification.
“Instruments”
means
any “instrument,” as such term is defined in Section 9-102(a)(47) of the UCC (or
any other then applicable provision of the UCC) including, without limitation,
all notes, certificated securities and all other evidences of Indebtedness,
other than instruments that constitute, or are a part of a group of writings
that constitute, Chattel Paper.
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EXHIBIT
99.4
“Inventory”
means
any “inventory,” as such term is defined in Section 9-102(a)(48) of the UCC (or
any other then applicable provision of the UCC), wherever located, now or
hereafter owned or acquired by a Grantor or in which a Grantor now holds or
hereafter acquires any interest, and, in any event, shall include, without
limitation, all inventory, goods and other personal property which are held
by
or on behalf of a Grantor for sale or lease or are furnished or are to be
furnished under a contract of service or which constitute raw materials, work
in
process or materials used or consumed or to be used or consumed in a Grantor’s
business, or the processing, packaging, promotion, delivery or shipping of
the
same, and all finished goods whether or not such inventory is listed on any
schedules, assignments or reports furnished to the Collateral Agent or the
Administrative Agent from time to time and whether or not the same is in transit
or in the constructive, actual or exclusive occupancy or possession of a Grantor
or is held by a Grantor or by others for a Grantor’s account, including, without
limitation, all goods covered by purchase orders and contracts with suppliers
and all goods billed and held by suppliers and all inventory of a Grantor which
may be located on the premises of a Grantor or of any carriers, forwarding
agents, truckers, warehousemen, vendors, selling agents or other
Persons.
“Investment
Property”
means
any “investment property,” as such term is defined in Section 9-102(a)(49) of
the UCC (or any other then applicable provision of the UCC) and shall include,
without limitation, all certificated securities (including, without limitation,
those listed on Schedule
I),
uncertificated securities, security entitlements, Securities Accounts, commodity
contracts and commodity accounts as each such term is defined in the
UCC.
“Letter-of-Credit
Right”
means
any “letter-of-credit right,” as such term is defined in
Section 9-102(a)(51) of the UCC (or any other then applicable provision of
the UCC).
“Payment
Intangible”
means
“payment intangible,” as such term is defined in Section 9-102(a)(61) of
the UCC (or any other then applicable provision of the UCC).
“Pledged
Collateral”
means,
collectively, the notes, the stock, partnership interests, limited liability
company interests, and all other Investment Property of any Grantor, all
certificates
or other instruments representing any of the foregoing,
all
security entitlements of any Grantor in respect of any of the foregoing, all
Distributions, interest, cash, warrants, rights, instruments and other Property
or Proceeds from time to time received, receivable or otherwise distributed
in
respect of or in exchange for any or all of the foregoing.
“Proceeds”
means
“proceeds,” as such term is defined in Section 9-102(a)(64) of the UCC (or any
other then applicable provision of the UCC), and, in any event, shall include,
without limitation, (a) any and all Accounts, Chattel Paper, Instruments,
cash or other forms of money or currency or other proceeds payable to a Grantor
from time to time in respect of the Collateral, (b) any and all proceeds of
any insurance, indemnity, warranty or guaranty payable to a Grantor from time
to
time with respect to any of the Collateral, (c) any and all payments (in
any form whatsoever) made or due and payable to a Grantor from time to time
in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental authority
(or any Person acting under color of governmental authority), (d) all
certificates, Distributions, cash, Instruments and other Property received
or
distributed in respect of or in exchange for any Investment Property, and
(e) any and all other amounts from time to time paid or payable under or in
connection with any of the Collateral.
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EXHIBIT
99.4
“Secured
Obligations”
shall
mean and include (a) in the case of the Borrower, (i) the Obligations (as
defined in the Credit Agreement) and (ii) all other amounts payable by the
Borrower from time to time to any of the Lenders, the Administrative Agent
or
the Collateral Agent under the Credit Agreement and the other Credit Documents
or any of the Lenders or their Affiliates under the Lender Rate Contracts,
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including all fees and disbursements
of counsel to any of the Lenders, the Administrative Agent and the Collateral
Agent that are required to be paid by the Borrower pursuant to the terms of
the
Credit Agreement or any other Credit Document or any of the Lenders or their
Affiliates under the Lender Rate Contracts) and (b) in the case of each
Subsidiary Grantor and GPI, all liabilities and obligations, howsoever arising,
owed by such Subsidiary Grantor or GPI to the Collateral Agent, the
Administrative Agent or any Lender of every kind and description (whether or
not
evidenced by any note or instrument and whether or not for the payment of
money), direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising pursuant to the terms of the Guaranty or any
of
the other Credit Documents to which such Subsidiary Grantor or GPI is a party,
including, without limitation, all interest (including interest that accrues
after the commencement of any bankruptcy or other insolvency proceeding by
or
against such Subsidiary Grantor or GPI, whether or not allowed or allowable),
fees, charges, expenses, attorneys’ fees and accountants’ fees chargeable to and
payable by such Subsidiary Grantor or GPI hereunder and thereunder.
“Securities
Account”
means
“securities account,” as such term is defined in Section 8-501(a) of the
UCC (or any other then applicable provision of the UCC).
“Security
Agreement”
means
this Security Agreement and all exhibits and schedules hereto, as the same
may
from time to time be amended, modified, supplemented or restated.
“Software”
means
“software,” as such term is defined in Section 9-102(a)(75) of the UCC (or
any other then applicable provision of the UCC).
“Subsidiary
Grantor”
shall
have the meaning given to that term in the recitals hereto.
“Supporting
Obligation”
means
“supporting obligation,” as such term is defined in Section 9-102(a)(77) of
the UCC (or any other then applicable provision of the UCC).
“UCC”
means
the Uniform Commercial Code as the same may, from time to time, be in effect
in
the State of New York; provided,
however,
in the
event that, by reason of mandatory provisions of Governmental Rules, any or
all
of the attachment, perfection or priority of the Collateral Agent’s security
interest in any collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the State of New York, the term “UCC” shall
mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such
provisions.
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EXHIBIT
99.4
Unless
otherwise defined herein, all other capitalized terms used herein and defined
in
the Credit Agreement shall have the respective meanings given to those terms
in
the Credit Agreement, and all terms defined in the UCC shall have the respective
meanings given to those terms in the UCC. The rules of interpretation set forth
in Article I of the Credit Agreement shall, to the extent not inconsistent
with
the terms of this Security Agreement, apply to this Security Agreement and
are
hereby incorporated by reference. References in this Security Agreement to
“Sections” are to sections herein unless otherwise indicated.
SECTION
2. Grant
of Security Interest.
As
security for the Secured Obligations of such Grantor (not any other Grantor),
and in order to induce the Collateral Agent, the Administrative Agent and the
Lenders to enter into the Credit Agreement and to make the Revolving Loans
and
Letters of Credit available to and for the benefit of the Borrower upon the
terms and subject to the conditions thereof, each Grantor hereby grants,
assigns, conveys, mortgages, pledges, hypothecates and transfers to the
Collateral Agent on behalf of itself, the Administrative Agent, the Lenders
and
Affiliates of Lenders party to Lender Rate Contracts a security interest in
and
to all of such Grantor’s right, title and interest in, to and under each of the
following, whether now owned or hereafter acquired or in which such Grantor
now
holds or hereafter acquires any interest (all of which being hereinafter
collectively called the “Collateral”):
(a) All
Accounts;
(b) All
Chattel Paper;
(c) All
Commercial Tort Claims;
(d) All
Contracts;
(e) All
Deposit Accounts;
(f) All
Documents;
(g) All
Equipment;
(h) All
General Intangibles (including Payment Intangibles);
(i) All
Instruments;
(j) All
Inventory;
(k) All
Investment Property;
(l) All
Pledged Collateral;
(m) All
Letter-of-Credit Rights;
(n) All
Securities Accounts;
(o) All
Supporting Obligations;
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EXHIBIT
99.4
(p) All
Property of such Grantor held by the Collateral Agent, the Administrative Agent
or any Lender, or any other party for whom the Collateral Agent, the
Administrative Agent or any Lender is acting as agent hereunder, including,
without limitation, all Property of every description now or hereafter in the
possession or custody of or in transit to the Collateral Agent, the
Administrative Agent any Lender or such other party, for any purpose, including,
without limitation, safekeeping, collection or pledge, for the account of such
Grantor, or as to which such Grantor may have any right or power;
(q) All
other
goods and personal property of such Grantor whether tangible or intangible
and
whether now or hereafter owned or existing, leased, consigned by or to, or
acquired by such Grantor and wherever located;
(r) To
the
extent not otherwise included, all Proceeds of each of the foregoing and all
accessions to, substitutions and replacements for, and rents, profits and
products of each of the foregoing.
Notwithstanding
the foregoing, “Collateral” shall not include (1) any contract right or General
Intangible (A) if after giving effect to the application of Sections 9-406
through 9-409 of the UCC, the creation of a lien and security in such contract
right or General Intangible would constitute a material breach of the terms
of
such contract right or General Intangible, or would permit any party to any
agreement, instrument or other document comprising such contract right or
General Intangible, or the issuer of any license, permit or authorization
comprising such contract right or General Intangible, to terminate such
agreement, instrument or other document or license, permit or authorization
or
(B) that would otherwise violate any applicable law, rule, regulation or policy
of any Governmental Agency pursuant to any effective term or provision of such
agreement, instrument, document, license, permit or authorization and (2) any
Equity Securities of the Borrower held by GPI; provided,
that
“Collateral” shall include any proceeds of Equity Securities of the Borrower and
any Distributions made with respect to the Equity Securities of the Borrower.
SECTION
3. Rights
of the Collateral Agent; Collection of Accounts.
(a)
Notwithstanding anything contained in this Security Agreement to the contrary,
each Grantor expressly agrees that such Grantor shall (i) not default under
any
of its Contracts, (ii) observe and perform all the conditions and obligations
to
be observed and performed by it thereunder and (iii) perform all of its duties
and obligations thereunder, all in accordance with and pursuant to the terms
and
provisions of each such Contract; provided,
however,
that
such Grantor may suspend performance of its obligations under any such Contract
in the event of a material breach of such Contract by a third party. None of
the
Collateral Agent, the Administrative Agent nor any Lender shall have any
obligation or liability under any Contract by reason of or arising out of this
Security Agreement or the granting to the Collateral Agent of a security
interest therein or the receipt by the Collateral Agent, the Administrative
Agent or any Lender of any payment relating to any Contract pursuant hereto,
nor
shall the Collateral Agent, the Administrative Agent nor any Lender be required
or obligated in any manner to perform or fulfill any of the obligations of
any
Grantor under or pursuant to any Contract, or to make any payment, or to make
any inquiry as to the nature or the sufficiency of any payment received by
it or
the sufficiency of any performance by any party under any Contract, or to
present or file any claim, or to take any action to collect or enforce any
performance or the payment of any amounts which may have been assigned to it
or
to which it may be entitled at any time or times.
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EXHIBIT
99.4
(b) The
Collateral Agent hereby authorizes each Grantor to collect its Accounts,
provided,
that
the Collateral Agent may, upon the occurrence and during the continuation of
any
Event of Default and upon notice to the relevant Grantor, limit or terminate
said authority at any time. If required by the Collateral Agent at any time
during the continuation of any Event of Default, any Proceeds, when first
collected by such Grantor, received in payment of such Account or in payment
for
any of its Inventory or on account of any of its Contracts shall be promptly
deposited by such Grantor in precisely the form received (with all necessary
endorsements) in a special bank account maintained by the Collateral Agent
subject to withdrawal by the Collateral Agent only, as hereinafter provided,
and
until so turned over shall be deemed to be held in trust by such Grantor for
and
as the Collateral Agent’s property, and shall not be commingled with such
Grantor’s other funds or properties. Such Proceeds, when deposited, shall
continue to be collateral security for all of the Secured Obligations and shall
not constitute payment thereof until applied as hereinafter provided. Upon
the
occurrence and during the continuation of any Event of Default, the Collateral
Agent or the Administrative Agent may, in its sole discretion, apply all or
a
part of the funds on deposit in said special account to the Secured Obligations
in accordance with the provisions of Section 7(g),
below,
and any part of such funds which the Collateral Agent or the Administrative
Agent elects not to so apply and deems not required as collateral security
for
the Secured Obligations shall be paid over from time to time by the Collateral
Agent or the Administrative Agent to the Grantors. If an Event of Default has
occurred and is continuing, at the request of the Collateral Agent, the Grantors
shall deliver to the Collateral Agent all original and other documents
evidencing, and relating to, the sale and delivery of such Inventory and the
Grantors shall deliver all original and other documents evidencing and relating
to, the performance of labor or service which created such Accounts, including,
without limitation, all original orders, invoices and shipping receipts.
(c) The
Collateral Agent may at any time, without notice to or the consent of any
Grantor, upon the occurrence and during the continuation of any Event of
Default, notify Account Debtors of the Grantors, parties to the Contracts of
the
Grantors, obligors in respect of Instruments of the Grantors and obligors in
respect of Chattel Paper of the Grantors that the Accounts and the right, title
and interest of the Grantors in and under such Contracts, Instruments, and
Chattel Paper have been assigned to the Collateral Agent, and that payments
shall be made directly to the Collateral Agent. Upon the request of the
Collateral Agent and following the occurrence and during the continuation of
an
Event of Default, the Grantors shall so notify its Account Debtors, parties
to
such Contracts, obligors in respect of such Instruments and obligors in respect
of such Chattel Paper. Upon the occurrence and during the continuation of an
Event of Default, the Collateral Agent may, in its name or in the name of
others, communicate with such Account Debtors, parties to such Contracts,
obligors in respect of such Instruments and obligors in respect of such Chattel
Paper to verify with such parties, to the Collateral Agent’s satisfaction, the
existence, amount and terms of any such Accounts, Contracts, Instruments or
Chattel Paper.
SECTION
4. Representations
and Warranties.
Each
Grantor hereby represents and warrants to the Administrative Agent, the
Collateral Agent and the Lenders that:
(a) Such
Grantor is the sole legal and equitable owner of each item of the Collateral
in
which it purports to grant a security interest hereunder, having good title
or
rights thereto free and clear of any and all Liens, except for the Permitted
Liens.
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99.4
(b) No
effective security agreement, financing statement, equivalent security or lien
instrument or continuation statement covering all or any part of the Collateral
exists, except such as may have been filed by such Grantor in favor of the
Collateral Agent pursuant to this Security Agreement or such as relate to other
Permitted Liens.
(c) This
Security Agreement creates a legal and valid security interest on and in all
of
the Collateral in which such Grantor now has rights, and, as of the date hereof,
except as set forth on Schedule
I
hereto
all filings and other actions necessary or desirable to perfect and protect
such
security interest, other than filing UCC financing statements which was done
or
will be done by the Collateral Agent, have been duly taken or will be taken
contemporaneously with the closing. Accordingly, the Collateral Agent has or
will have upon giving value a fully perfected first priority security interest
in all of the Collateral in which such Grantor now has rights, subject only
to
the Permitted Liens and the failure to be perfected as a result of the actions
described in Part II of Schedule
I.
This
Security Agreement will create a legal and valid and fully perfected first
priority security interest in the Collateral in which such Grantor later
acquires rights, when such Grantor acquires those rights, subject only to the
Permitted Liens and the failure to be perfected as a result of the actions
described in Part III of Schedule
I.
(d) Such
Grantor shall not use any Collateral or permit any Collateral to be used in
violation of (i) any provision of the Credit Agreement, this Security Agreement
or any other Credit Document, (ii) any applicable Governmental Rule or
Contractual Obligation where such violation could reasonable be expected, either
individually or in the aggregate, to result in a Material Adverse Effect, or
(iii) any policy of insurance covering the Collateral where such violation
could
reasonably be expected, either individually or in the aggregate, to result
in a
Material Adverse Effect.
(e) As
of the
date hereof, each Grantor’s exact legal name is set forth on Schedule
V
attached
hereto. Each Grantor was formed under the laws of jurisdiction of its formation
as set forth on Schedule
V
attached
hereto. Each Grantor’s chief executive office, principal place of business, and
the place where each Grantor maintains records concerning the Collateral are
set
forth on Schedule
V
attached
hereto. The Collateral, other than Deposit Accounts and Investment Property
held
in Securities Accounts, is presently located at the location(s) set forth on
Schedule
V
attached
hereto.
(f) As
of the
date hereof, all Collateral with respect to which a security interest may be
perfected by the secured party’s taking possession thereof, including, without
limitation, all Chattel Paper, Instruments and certificated securities, is
set
forth on Part
I
of
Schedule
I.
Except
to the extent not required hereby, and except for action by the Collateral
Agent
and giving of value, all action necessary to protect and perfect such security
interest in each item set forth on Part
I
of
Schedule
I,
including, without limitation, the delivery of all originals of such Collateral
together with any necessary assignment in blank of certificated securities
to
the Collateral Agent, has been duly taken, or shall have been taken, except
as
set forth on Part
II
of
Schedule
I.
As of
the date hereof, all Letter-of-Credit Rights and Commercial Tort Claims of
the
Grantors are set forth on Schedule
II.
The
Grantors shall supplement Part
I
of
Schedule
I
and
Schedule
II
from
time to time within thirty (30) days of the end of each fiscal quarter after
obtaining any additional Chattel Paper, Instruments, certificated securities
or
Letter-of-Credit Rights, as applicable; provided,
however,
that if
the fair market value of any such Collateral, individually or in the aggregate,
exceeds $300,000 as determined by the Borrower in good faith, then the Grantors
shall supplement Part
I Schedule
I
and
Schedule
II
within
thirty (30) days after obtaining any such Collateral. With respect to Commercial
Tort Claims, the relevant Grantor shall promptly notify the Collateral Agent
of
any Commercial Tort Claim that it has elected to prosecute.
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EXHIBIT
99.4
(g) As
of the
date hereof, the names and addresses of all financial institutions at which
the
Grantors maintain their respective Deposit Accounts and the account numbers
and
account names of such Deposit Accounts are listed on Schedule
III.
The
Grantors shall supplement Schedule
III
from
time to time within twenty (20) Business Days after the opening of any
additional Deposit Account or the closing or change in the account number of
or
account name on any existing Deposit Account.
(h) The
names
and addresses of all institutions at which the Grantors maintain their
respective Securities Accounts and the account numbers and account names of
such
Securities Accounts are listed on Schedule
IV.
The
Grantors shall supplement Schedule
IV
from
time to time within twenty (20) Business Days after the opening of any
additional Securities Account or closing or changing the account number of
or
account name on any existing Securities Account.
(i) Each
Grantor is the sole holder of record and the sole beneficial owner of all
certificated securities and uncertificated securities pledged to the Collateral
Agent by such Grantor under Section
2
of this
Security Agreement, free and clear of any adverse claim, as defined in
Section 8-102(a)(1) of the UCC (or any other then applicable provision of
the UCC), except for the Lien created in favor of the Collateral Agent by this
Security Agreement and the other Credit Documents. None of the partnership
interests or pledged limited liability company interests pledged by any Grantor
hereunder (i) are dealt in or traded on securities exchanges or in securities
markets, (ii) have terms expressly providing that they are securities governed
by Article 8 of the UCC (other than those pledged limited liability company
interests of Wellspring Productions, LLC), and (iii) are investment company
securities, and they are not, therefore, “securities” governed by Article 8 of
the UCC (other than those pledged limited liability company interests of
Wellspring Productions, LLC).
(j) No
authorization, approval or other action by, and no notice to or filing with,
any
Governmental Authority or any other Person is required for the exercise by
the
Collateral Agent of the voting or other rights provided for in this Security
Agreement, except in connection with a disposition of the Investment Property
as
may be required by Governmental Rules affecting the offering and sale of
securities generally.
(k) Except
as
set forth on Part
II
of
Schedule
I,
each
Grantor has delivered to the Collateral Agent, together with all necessary
stock
powers, endorsements, assignments and other necessary instruments of transfer,
the originals of all stock certificates, instruments, notes, other certificated
securities, other Collateral and all certificates, instruments and other
writings evidencing the same in its possession as of the date
hereof.
(l) All
shares of the pledged Investment Property set forth on Part
I
of
Schedule
I
are duly
authorized and validly issued, fully paid, and non-assessable, and constitute
all of the issued and outstanding shares of capital stock of each issuer. Set
forth in Part
I
of
Schedule
I
is a
true, complete and accurate list of all shares of stock issued by a Grantor’s
direct Subsidiaries and all other securities owned by such Grantor, in each
case, as of the date hereof. The Grantors shall supplement Schedule
I
from
time to time within twenty (20) Business Days after the issuance of any
additional shares of stock by a Grantor’s direct Subsidiaries or additional
securities owned by such Grantor.
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EXHIBIT
99.4
Notwithstanding
the foregoing, during the continuance of an Event of Default, the period of
time
for supplementing the schedules to this Security Agreement as described in
this
Section
4
shall be
promptly after obtaining the relevant Collateral or opening, closing or
modifying the applicable Deposit Account or Securities Account.
SECTION
5. Covenants.
Each
Grantor covenants and agrees with the Collateral Agent that from and after
the
date of this Security Agreement and until the Secured Obligations have been
completely and finally paid in full:
5.1 Further
Assurances; Pledge of Instruments.
At any
time and from time to time, upon the written request of the Collateral Agent,
and at the sole expense of a Grantor, such Grantor shall promptly and duly
execute and deliver any and all such further instruments and documents and
take
such further action as the Collateral Agent or Administrative Agent may
reasonably deem necessary to obtain the full benefits of this Security Agreement
and of the rights and powers herein granted, including, without limitation,
(a)
using its commercially reasonable efforts to secure all consents and approvals
necessary or appropriate for the grant of a security interest to the Collateral
Agent in any Contract or license held by such Grantor or in which such Grantor
has any rights not heretofore assigned, (b) authorizing the filing any financing
statements, amendments or continuation statements under the UCC with respect
to
the security interests granted hereby, (c) filing or authorizing and cooperating
with the Collateral Agent in filing any forms or other documents required to
be
filed with the United States Patent and Trademark Office, United States
Copyright Office, or any filings in any foreign jurisdiction or under any
international treaty, required to secure or protect the Collateral Agent’s
interest in the Collateral, (d) except as set forth on Part
II
of
Schedule
I
hereto,
transferring Collateral to the Collateral Agent’s possession (if a security
interest in such Collateral can be perfected and free from an adverse claim
only
by possession), (e) authorizing filing financing statements as consignor
pursuant to Sections 9-505(a) and 9-324(b) of the UCC (or any other then
applicable provision of the UCC) in such jurisdictions as such Grantor maintains
Inventory on consignment, (f) using its commercially reasonable efforts to
obtain waivers of Liens from landlords and mortgagees as required pursuant
to
the Credit Agreement, (g) obtaining the bailee/access letter with Ditan
Corporation and using its commercially reasonable efforts to obtain written
acknowledgements from other consignees, warehouses and other bailees of the
prior Lien of the Collateral Agent in and to the Collateral and that such third
party is holding possession of the Collateral for the benefit of the Collateral
Agent, and (h) using its commercially reasonable efforts to assist the
Collateral Agent in obtaining control under the UCC with respect to any
Collateral consisting of Deposit Accounts, Securities Accounts, Investment
Property, Letter-of-Credit Rights and Electronic Chattel Paper, excluding any
Deposit Account or Securities Account with a balance that is less than and
is
not expected at any time to exceed $300,000. Each Grantor also hereby authorizes
the Collateral Agent, to the extent not prohibited by applicable Governmental
Rules, to file any such financing statement, amendment or continuation statement
(including consignment filings) without the signatures of such Grantor. If
any
amount payable under or in connection with any of the Collateral is or shall
become evidenced by any Instrument, such Instrument, other than checks and
notes
received in the ordinary course of a Grantor’s business, shall be duly endorsed
in a manner satisfactory to the Collateral Agent and delivered to the Collateral
Agent promptly upon any such Grantor’s receipt thereof. Collateral Agent agrees
to send each Grantor copies of all financing statements and other documents
filed by Collateral Agent.
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EXHIBIT
99.4
5.2 Maintenance
of Records.
Each
Grantor shall keep and maintain, at its own cost and expense, satisfactory
and
complete records of the Collateral, including, without limitation, a record
of
all payments received and all credits granted with respect to the Collateral
and
all other dealings with the Collateral. If requested by the Collateral Agent,
each Grantor shall xxxx its books and records pertaining to the Collateral
to
evidence this Security Agreement and the security interests granted hereby.
If
requested by the Collateral Agent, all Chattel Paper in excess of $100,000
at
any one time shall be marked with the following legend: “This writing and the
obligations evidenced or secured hereby are subject to the security interest
of
Société Générale, as Collateral Agent, created by that certain Security
Agreement, dated as of August 10, 2007, as the same may thereafter from
time to time be amended, modified, supplemented or restated.”
5.3 Indemnification.
In any
suit, proceeding or action brought by or against the Collateral Agent, the
Administrative Agent, a Lender, or any of their respective directors, officers,
employees, agents or any of their respective Affiliates (“Indemnities”)
relating to (A) any Collateral, including any Account, Chattel Paper, Contract,
General Intangible, Instrument or Document for any sum owing thereunder, or
to
enforce any provision of any Account, Chattel Paper, Contract, General
Intangible, Instrument or Document and (2) any and all excise, sales or other
similar taxes which may be payable or determined to be payable with respect
to
any of the Collateral or in connection with any of the transactions contemplated
by the Credit Documents, including any penalties, claims or other losses
resulting from any delay in paying such excise, sales or other similar taxes,
each Grantor shall jointly and severally save, indemnify and keep the
Indemnities harmless from and against all claim, suit, loss, damage or expense
(including attorneys' fees and expenses) suffered by reason of any defense,
setoff, counterclaim, recoupment or reduction of liability whatsoever of the
obligor thereunder arising out of a breach by any Grantor of any obligation
thereunder or arising out of any other agreement, indebtedness or liability
at
any time owing to, or in favor of, such obligor or its successors from any
Grantor, except to the extent determined by a final non-appealable judgment
of a
court of competent jurisdiction to have been caused by the gross negligence
or
willful misconduct of the Indemnities, and all such obligations of the Grantors
shall be and remain enforceable against and only against the Grantors and shall
not be enforceable against the Indemnities except to the extent caused by the
gross negligence or willful misconduct of the Indemnities.
5.4 Limitation
on Liens on Collateral.
No
Grantor shall create, permit or suffer to exist, and each Grantor shall defend
the Collateral against and take such other action as is necessary to remove,
any
Lien on the Collateral, except the Permitted Liens. Each Grantor shall, jointly
and severally, further defend the right, title and interest of the Collateral
Agent in and to any of such Grantor’s rights under the Chattel Paper, Contracts,
Documents, General Intangibles, Instruments and Investment Property and to
the
Equipment and Inventory and in and to the Proceeds thereof against the claims
and demands of all Persons whomsoever.
5.5 Limitations
on Modifications of Accounts, Etc.
Upon
the occurrence and during the continuation of any Event of Default, no Grantor
shall, without the Collateral Agent’s prior written consent, grant any extension
of the time of payment of any of the Accounts, Chattel Paper, Instruments or
amounts due or to become due under any Contract or Document, compromise,
compound or settle the same for less than the full amount thereof, release,
wholly or partly, any Person liable for the payment thereof, or allow any credit
or discount whatsoever thereon other than trade discounts and rebates granted
in
the ordinary course of such Grantor’s business and other than in the cumulative
amount of $300,000.
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EXHIBIT
99.4
5.6 Maintenance
of Insurance.
Each
Grantor shall maintain, with financially sound and reputable companies, the
insurance policies with coverage provisions as required by Section
5.01(d)
of the
Credit Agreement.
5.7 Taxes,
Assessments, Etc.
Each
Grantor shall pay promptly when due all property and other taxes, assessments
and government charges or levies imposed upon, and all claims (including claims
for labor, materials and supplies) against, the Equipment or Inventory, except
to the extent the validity thereof is being contested in good faith and adequate
reserves are being maintained in connection therewith.
5.8 Limitations
on Disposition.
No
Grantor shall sell, lease, license outside the ordinary course of its business,
transfer or otherwise dispose of any of the Collateral, or attempt or contract
to do so, except as permitted by Section 5.02(c)
of the
Credit Agreement.
5.9 Further
Identification of Collateral.
Each
Grantor shall, if so requested by the Collateral Agent, furnish to the
Collateral Agent, as often as the Collateral Agent shall reasonably 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.
5.10 Notices.
Each
Grantor shall advise the Collateral Agent promptly, in reasonable detail, of
(a)
any material Lien, other than Permitted Liens, attaching to or asserted against
any of the Collateral, (b) any material change in the composition of the
Collateral or (c) the occurrence of any other event which could reasonably
be expected to have or result in a Material Adverse Effect with respect to
the
Collateral or on the security interest created hereunder, taken as
whole.
5.11 Right
of Inspection and Audit.
Each
Grantor shall permit the Collateral Agent such rights of inspection and audit
as
provided in the Credit Agreement. In addition, upon reasonable notice to a
Grantor (unless an Event of Default has occurred and is continuing, in which
case no notice is necessary), the Collateral Agent and its agents and
representatives shall also have the right during such Grantor’s ordinary
business hours, to enter into and upon any premises of such Grantor where any
of
the Equipment or Inventory is located for the purpose of conducting audits
and
making physical verifications of such Equipment and Inventory and test
verifications of the Accounts in any manner and through any medium that it
considers advisable, and each Grantor agrees to furnish all such assistance
and
information as the Collateral Agent may reasonably require in connection
therewith.
5.12 Maintenance
of Facilities.
Each
Grantor shall maintain and protect its properties, assets and facilities,
including, without limitation, its Equipment in good order and working repair
and condition (taking into consideration ordinary wear and tear) except to
the
extent not justified by prudent business practices and from time to time make
or
cause to be made all needful and proper repairs, renewals and replacements
thereto and shall competently manage and care for its property in accordance
with prudent industry practices. No Grantor shall remove or cause to be removed,
except in the ordinary course of such Grantor’s business, the Collateral or the
records concerning the Collateral from those premises or from the locations
shown on Schedule
V
without
5 Business Days prior written notice to the Collateral Agent.
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EXHIBIT
99.4
5.13 Continuous
Perfection.
No
Grantor shall change its name, identity or corporate structure in any manner
unless such Grantor shall have given the Collateral Agent at least thirty (30)
days’ prior written notice thereof and shall have authorized or taken all action
(or made arrangements to take such action substantially simultaneously with
such
change if it is impossible to take such action in advance) necessary or
reasonably requested by the Collateral Agent to amend such financing statement
or continuation statement so that it is not seriously misleading.
5.14 Authorizations
with Respect to Financing Statements, etc.
Each
Grantor hereby irrevocably authorizes the Collateral Agent at any time and
from
time to time to file in any filing office in any UCC jurisdiction any initial
financing statements and amendments thereto that (a) indicate the Collateral
(i)
as “all assets” of a Grantor or words of similar effect, regardless of whether
any particular asset comprised in the Collateral falls within the scope of
Article 9 of the UCC of such jurisdiction, or (ii) as being of an equal or
lesser scope or with greater detail, and (b) contain any other information
required by Part 5 of Article 9 of the UCC for the sufficiency or filing office
acceptance of any financing statement or amendment, including (i) whether such
Grantor is an organization, the type of organization and any organization
identification number issued to such Grantor, and (ii) in the case of a
financing statement filed as a fixture filing or indicating any Collateral
as
as-extracted collateral or timber to be cut, a sufficient description of the
real property to which such Collateral relates. Each Grantor agrees to furnish
any such information to the Collateral Agent promptly upon request. Each Grantor
also ratifies its authorization for the Collateral Agent to have filed in any
UCC jurisdiction any initial financing statements or amendments thereto if
filed
prior to the date hereof.
5.15 No
Reincorporation. No
Grantor shall reincorporate or reorganize itself under the Governmental Rules
of
any jurisdiction other than the jurisdiction in which it is incorporated or
organized as of the date hereof.
5.16 Terminations
and Amendments Not Authorized. Each
Grantor acknowledges that it is not authorized to file any amendment or
termination statement with respect to any financing statement relating to any
security interest granted hereunder without the prior written consent of the
Collateral Agent and agrees that it will not do so without the prior written
consent of the Collateral Agent, subject to such Grantor’s rights under
Section 9-509(d)(2) of the UCC (or any other then applicable provision of
the UCC).
5.17 Takings,
Eminent Domain, Condemnation, Insurance Proceeds, etc.
Each
Grantor hereby assigns to the Collateral Agent (a) all awards for damages
suffered or compensation paid by reason of a taking for public use of, or an
action in eminent domain affecting all or any part of, the Collateral or any
interest therein, and (b) all proceeds of any insurance policies paid by reason
of loss sustained to the Collateral or any part thereof (“Condemnation
and Insurance Proceeds”).
Except as otherwise provided in Section
2.06(c)(vi)
of the
Credit Agreement, such Grantor will transfer to the Collateral Agent any and
all
Condemnation and Insurance Proceeds from time to time received by it for
application by the Collateral Agent pursuant to this Security Agreement or
the
Credit Agreement.
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EXHIBIT
99.4
5.18 Pledged
Collateral.
(a) Except
as
set forth on Part
II
of
Schedule
I
hereto,
each Grantor shall deliver to the Collateral Agent, all certificates or
Instruments representing or evidencing any Pledged Collateral, whether now
existing or hereafter acquired, in suitable form for transfer by delivery or,
as
applicable, accompanied by such Grantor’s endorsement, where necessary, or duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Collateral Agent. The Collateral Agent shall
have
the right, at any time in its discretion and during the continuance of an Event
of Default without prior notice to any Grantor, to transfer to or to register
in
its name or in the name of its nominees any or all of the Pledged Collateral.
The Collateral Agent shall have the right at any time to exchange certificates
representing or evidencing any of the Pledged Collateral for certificates of
smaller or larger denominations.
(b) Except
as
provided in Section
7,
each
Grantor shall be entitled to receive all cash Distributions and payments of
principal and interest paid in respect of the Pledged Collateral to the extent
permitted to be paid by a Credit Document (other than liquidating or dissolving
Distributions) with respect to the Pledged Collateral. Any sums paid upon or
in
respect of any of the Pledged Collateral upon the liquidation or dissolution
of
any issuer of any of the Pledged Collateral, any distribution of capital made
on
or in respect of any of the Pledged Collateral or any Property distributed
upon
or with respect to any of the Pledged Collateral pursuant to the
recapitalization or reclassification of the capital of any issuer of Pledged
Collateral or pursuant to the reorganization thereof in excess of $50,000 shall,
unless otherwise subject to a perfected security interest in favor of the
Collateral Agent, be delivered to the Collateral Agent to be held by it
hereunder as additional collateral security for the Secured Obligations of
such
Grantor. If any sums of money or Property so paid or distributed pursuant to
the
immediately preceding sentence in respect of any of the Pledged Collateral
shall
be received by such Grantor, such Grantor shall, until such money or Property
is
paid or delivered to the Collateral Agent, hold such money or Property in trust
for the Collateral Agent, segregated from other funds of such Grantor, as
additional security for the Secured Obligations of such Grantor.
(c) Except
as
provided in Section
7,
such
Grantor will be entitled to exercise all voting, consent and corporate rights
with respect to the Pledged Collateral; provided,
however,
that no
vote shall be cast, consent given or right exercised or other action taken
by
such Grantor which would be inconsistent with or result in any violation of
any
provision of the Credit Agreement, this Security Agreement or any other Credit
Document or, without prior notice to the Collateral Agent, to enable or take
any
other action to permit any issuer of Pledged Collateral to issue any stock
or
other equity securities of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any stock
or
other equity securities of any nature of any issuer of Pledged
Collateral.
(d) No
Grantor shall grant control over any Pledged Collateral to any Person other
than
the Collateral Agent.
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EXHIBIT
99.4
(e) In
the
case of each Grantor which is an issuer of Pledged Collateral, such Grantor
agrees to be bound by the terms of this Security Agreement relating to the
Pledged Collateral issued by it and will comply with such terms insofar as
such
terms are applicable to it. In the case of each Grantor which is a partner
in a
partnership, such Grantor hereby consents to the extent required by the
applicable partnership agreement to the pledge by each other Grantor, pursuant
to the terms hereof, of the pledged partnership interests in such partnership
and to the transfer of such pledged partnership interests to the Collateral
Agent or its nominee and to the substitution of the Collateral Agent or its
nominee as a substituted partner in such partnership with all the rights, powers
and duties of a general partner or a limited partner, as the case may be. In
the
case of each Grantor which is a member of a limited liability company, such
Grantor hereby consents to the extent required by the applicable limited
liability company agreement to the pledge by each other Grantor, pursuant to
the
terms hereof, of the pledged limited liability company interests in such limited
liability company and to the transfer of such pledged limited liability company
interests to the Collateral Agent or its nominee and to the substitution of
the
Collateral Agent or its nominee as a substituted member of the limited liability
company with all the rights, powers and duties of a member of the limited
liability company in question.
(f) No
Grantor shall (i) agree to any provision in, or amendment of, a limited
liability company agreement or partnership agreement that adversely affects
the
perfection of the security interest of the Collateral Agent in any pledged
partnership interests or pledged limited liability company interests pledged
by
such Grantor hereunder, including electing to treat the membership interest
or
partnership interest of such Grantor as a security under Section 8-103 of the
UCC (it being understood that Wellspring Productions LLC already has made such
election) or (ii) authorize the issuance of or issue certificates evidencing
any
limited liability company interests pledged by such Grantor hereunder where
such
interests are securities (as defined in the UCC) and the relevant Grantor has
not delivered such certificate to the Collateral Agent.
5.19 Compliance
With Terms of Accounts, Etc.
In all
material respects, each Grantor shall promptly perform and comply with all
obligations in respect of Accounts, Chattel Paper, Contracts, Documents,
Instruments and licenses and all other agreements to which it is a party or
by
which it is bound; provided,
however,
that
such Grantor may suspend its performance thereunder in the event of a bona
fide
dispute or material breach of any such obligations by third parties or if an
Event of Default has occurred and is continuing but could not reasonably be
expected to have a Material Adverse Effect.
SECTION
6. The
Collateral Agent’s Appointment as Attorney-in-Fact.
(a) From
and
after the occurrence and during the continuance of an Event of Default, each
Grantor hereby irrevocably constitutes and appoints the Collateral Agent, and
any officer or agent thereof, with full power of substitution, as its true
and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Grantor and in the name of such Grantor or in its own name,
from time to time at the Collateral Agent’s discretion, for the purpose of
carrying out the terms of this Security Agreement, to take any and all
appropriate action and to execute and deliver any and all documents and
instruments which may be necessary or desirable to accomplish the purposes
of
this Security Agreement and, without limiting the generality of the foregoing,
hereby gives the Collateral Agent the power and right, on behalf of such
Grantor, without notice to or assent by such Grantor, to do the following:
16
EXHIBIT
99.4
(i) ask,
demand, collect, receive and give acquittances and receipts for any and all
monies due or to become due under any Collateral and, in the name of such
Grantor, in its own name or otherwise to take possession of, endorse and collect
any checks, drafts, notes, acceptances or other Instruments for the payment
of
monies due under any Collateral and to file any claim or to take or commence
any
other action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Collateral Agent for the purpose of collecting any and all
such monies due under any Collateral whenever payable;
(ii) pay
or
discharge any Liens, including, without limitation, any tax Lien, levied or
placed on or threatened against the Collateral, to effect any repairs or any
insurance called for by the terms of this Security Agreement and to pay all
or
any part of the premiums therefor and the costs thereof, which actions shall
be
for the benefit of the Collateral Agent and the Lenders and not such Grantor;
and
(iii) (1) direct
any Person liable for any payment under or in respect of any of the Collateral
to make payment of any and all monies due or to become due thereunder directly
to the Collateral Agent or as the Collateral Agent shall direct,
(2) receive payment of any and all monies, claims and other amounts due or
to become due at any time arising out of or in respect of any Collateral,
(3) sign and endorse 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 Instruments
and
Documents constituting or relating to the Collateral, (4) commence and
prosecute any suits, actions or proceedings at law or in equity in any court
of
competent jurisdiction to collect the Collateral or any part thereof and to
enforce any other right in respect of any Collateral, (5) defend any suit,
action or proceeding brought against such Grantor with respect to any
Collateral, (6) settle, compromise or adjust any suit, action or proceeding
described above and, in connection therewith, give such discharges or releases
as the Collateral Agent may deem appropriate, (7) sell, transfer, pledge,
make any agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though the Collateral Agent were the absolute owner
thereof for all purposes, and to do, at the Collateral Agent’s option and such
Grantor’s expense, at any time, or from time to time, all acts and things which
the Collateral Agent may deem necessary to protect, preserve or realize upon
the
Collateral and the Collateral Agent’s security interest therein in order to
effect the intent of this Security Agreement, all as fully and effectively
as
such Grantor might do.
(b) Each
Grantor hereby authorizes and ratifies, to the extent not prohibited by
applicable Governmental Rules, all that the Collateral Agent as said attorney
in
fact shall lawfully do or cause to be done by virtue hereof. The power of
attorney granted pursuant to this Section
6
is a
power coupled with an interest and shall be irrevocable until the Secured
Obligations are completely and indefeasibly paid and performed in
full.
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EXHIBIT
99.4
(c) The
powers conferred on the Collateral Agent, the Administrative Agent and the
Lenders hereunder are solely to protect the Collateral Agent’s, the
Administrative Agent’s and the Lenders’ interests in the Collateral and shall
not impose any duty upon the Collateral Agent, the Administrative Agent or
the
Lenders to exercise any such powers. The Collateral Agent shall have no duty
as
to any Collateral, including any responsibility for (i) taking any necessary
steps to preserve rights against prior parties or any other rights pertaining
to
any Collateral or (ii) 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. Without limiting the generality of the preceding
sentence, 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.
Failure of the Collateral Agent to comply with any such requests at any time
shall not in itself be deemed a failure to exercise reasonable care. The
Collateral Agent shall be accountable only for amounts that it actually receives
as a result of the exercise of such powers and neither it nor any of its
officers, directors, employees, agents or representatives shall be responsible
to a Grantor for any act or failure to act, except for its own gross negligence
or willful misconduct as determined by a final, non-appealable judgment of
a
court of competent jurisdiction.
(d) Each
Grantor also authorizes the Collateral Agent, at any time and from time to
time
upon the occurrence and during the continuation of any Event of Default, to
(i)
communicate in its own name with any party to any Contract with regard to the
assignment of the right, title and interest of such Grantor in and under the
Contracts hereunder and other matters relating thereto and (ii) execute, in
connection with the sale of Collateral provided for in Section 7
below,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral.
(e) If
a
Grantor fails to perform or comply with any of its agreements contained herein
and the Collateral Agent, as provided for by the terms of this Security
Agreement, shall perform or comply, or otherwise cause performance or
compliance, with such agreement, the expenses, including attorneys’ fees and
costs, of the Collateral Agent incurred in connection with such performance
or
compliance, together with interest thereon at a rate of interest equal to the
Default Rate, shall be payable by such Grantor to the Collateral Agent within
five (5) Business Days of demand and shall constitute Secured Obligations
secured hereby.
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EXHIBIT
99.4
SECTION
7. Rights
and Remedies Upon Default.
(a) If
any
Event of Default shall occur and be continuing, the Collateral Agent may
exercise, in addition to all other rights and remedies granted to it under
this
Security Agreement, the Credit Agreement, the other Credit Documents and under
any other instrument or agreement securing, evidencing or relating to the
Secured Obligations, all rights and remedies of a secured party under applicable
Governmental Rules, including, without limitation, the UCC. Without limiting
the
generality of the foregoing, each Grantor expressly agrees that, during the
continuance of an Event of Default, the Collateral Agent, without demand of
performance or other demand, advertisement or notice of any kind (except the
notice specified below of time and place of public or private sale) to or upon
such Grantor or any other Person (all and each of which demands, advertisements
and notices are hereby expressly waived to the maximum extent not prohibited
by
the UCC and other applicable Governmental Rules), shall have the right to
collect the Proceeds from all Collateral (including, without limitation,
Distributions on Pledged Collateral) and may (i) reclaim, take possession,
recover, store, maintain, finish, repair, prepare for sale or lease, ship,
advertise for sale or lease and sell or lease (in the manner provided for
herein) the Collateral, and in connection with liquidation of the Collateral
and
collection of the accounts receivable pledged as Collateral, use, without
charge, any trademark, trade name, trade style, copyright, or process used
or
owned by such Grantor; (ii) forthwith collect, receive, appropriate and realize
upon the Collateral, or any part thereof, and may forthwith sell, lease, assign,
give an option or options to purchase or sell or otherwise dispose of and
deliver said Collateral (or contract to do so), or any part thereof, in one
or
more parcels at public or private sale or sales, at any exchange or broker’s
board or at any of the Administrative Agent’s or Collateral Agent’s offices or
elsewhere at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk and (iii) exercise
(A) all voting, consent, corporate and other rights pertaining to the Pledged
Collateral at any meeting of shareholders, partners or members, as the case
may
be, of the relevant issuer or issuers of Pledged Collateral or otherwise and
(B)
any and all rights of conversion, exchange and subscription and any other
rights, privileges or options pertaining to the Pledged Collateral as if it
were
the absolute owner thereof (including the right to exchange at its discretion
any and all of the Pledged Collateral upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
or
other structure of any issuer of Pledged Collateral, the right to deposit and
deliver any and all of the Pledged Collateral with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Collateral Agent may determine), all without liability except
to account for property actually received by it, but the Collateral Agent shall
have no duty to any Grantor to exercise any such right, privilege or option
and
shall not be responsible for any failure to do so or delay in so doing. Each
Grantor authorizes the Collateral Agent, on the terms set forth in this
Section
7,
to
enter the premises where the Collateral is located, to take possession of the
Collateral, or any part of it, and to pay, purchase, contest or compromise
any
Lien which, in the opinion of the Collateral Agent, appears to be prior or
superior to its security interest. The Collateral Agent shall have the right
upon any such public sale or sales, and, to the extent not prohibited by
applicable Governmental Rules, upon any such private sale or sales, to purchase
the whole or any part of said Collateral so sold, free of any right or equity
of
redemption, which equity of redemption such Grantor hereby releases. The
Collateral Agent may sell the Collateral without giving any warranties as to
the
Collateral and may specifically disclaim any warranties of title, which
procedures shall not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral. Each Grantor further agrees,
at
the Collateral Agent’s request, to assemble the Collateral and make it available
to the Collateral Agent at places which the Collateral Agent shall reasonably
select, whether at such Grantor’s premises or elsewhere.
19
EXHIBIT
99.4
The
Collateral Agent shall apply the net proceeds of any such collection, recovery,
receipt, appropriation, realization or sale as provided in Section
7(g),
below,
the Grantors shall remain liable for any deficiency remaining unpaid after
such
application, and only after so paying over such net proceeds and after the
payment by the Collateral Agent of any other amount required by any provision
of
applicable Governmental Rules, including Section 9-608(a)(1)(C) of the UCC
(or
any other then applicable provision of the UCC), need the Collateral Agent
account for the surplus, if any, to a Grantor. To the maximum extent not
prohibited by applicable Governmental Rules, each Grantor waives all claims,
damages, and demands against the Collateral Agent arising out of the
repossession, retention or sale of the Collateral except such as arise out
of
the gross negligence or willful misconduct of the Collateral Agent as determined
by a final, non-appealable judgment of a court of competent jurisdiction. Each
Grantor agrees that the Collateral Agent need not give more than ten (10) days’
prior written notice (which notification shall be deemed given in accordance
with the Credit Agreement) of the time and place of any public sale or of the
time after which a private sale may take place and that such notice is
reasonable notification of such matters. The Grantors shall remain liable for
any deficiency if the proceeds of any sale or disposition of the Collateral
are
insufficient to pay all amounts to which the Collateral Agent and the Lenders
are entitled, and the Grantors shall also be liable for the attorneys’ fees or
costs of any attorneys employed by the Collateral Agent to collect such
deficiency.
(b) As
to any
Collateral constituting certificated securities or uncertificated securities,
if, at any time when the Collateral Agent shall determine to exercise its right
to sell the whole or any part of such Collateral hereunder, such Collateral
or
the part thereof to be sold shall not, for any reason whatsoever, be effectively
registered under Securities Act of 1933, as amended (as so amended the
“Act”),
the
Collateral Agent may, in its discretion (subject only to applicable requirements
of applicable Governmental Rules), sell such Collateral or part thereof by
private sale in such manner and under such circumstances as the Collateral
Agent
may deem necessary or advisable, but subject to the other requirements of this
Section
7(b),
and
shall not be required to effect such registration or cause the same to be
effected. Without limiting the generality of the foregoing, in any such event
the Collateral Agent may, in its sole discretion, (i) in accordance with
applicable securities laws, proceed to make such private sale notwithstanding
that a registration statement for the purpose of registering such Collateral
or
part thereof could be or shall have been filed under the Act; (ii) approach
and
negotiate with a single possible purchaser to effect such sale; and (iii)
restrict such sale to a purchaser who will represent and agree that such
purchaser is purchasing for its own account, for investment, and not with a
view
to the distribution or sale of such Collateral or part thereof. In addition
to a
private sale as provided above in this Section
7(b),
if any
of such Collateral shall not be freely distributable to the public without
registration under the Act at the time of any proposed sale hereunder, then
the
Collateral Agent shall not be required to effect such registration or cause
the
same to be effected but may, in its sole discretion (subject only to applicable
requirements of Governmental Rules), require that any sale hereunder (including
a sale at auction) be conducted subject to such restrictions as the Collateral
Agent may, in its sole discretion, deem necessary or appropriate in order that
such sale (notwithstanding any failure so to register) may be effected in
compliance with the Bankruptcy Code and other Governmental Rules affecting
the
enforcement of creditors’ rights and the Act and all applicable state securities
laws.
20
EXHIBIT
99.4
In
order
to permit the Collateral Agent to exercise the voting and other consensual
rights which it may be entitled to exercise pursuant hereto and to receive
all
Distributions which it may be entitled to receive hereunder, (i) each Grantor
shall promptly execute and deliver (or cause to be executed and delivered)
to
the Collateral Agent all such proxies, Distribution payment orders and other
instruments as the Collateral Agent may from time to time reasonably request
(each effective only if an Event of Default has occurred and is continuing)
and
(ii) without limiting the effect of clause (i) above,
such Grantor hereby grants to the Collateral Agent an irrevocable proxy to
vote
all or any part of the Pledged Collateral and to exercise all other rights,
powers, privileges and remedies to which a holder of the Pledged Collateral
would be entitled (including giving or withholding written consents of
shareholders, partners or members, as the case may be, calling special meetings
of shareholders, partners or members, as the case may be, and voting at such
meetings), which proxy shall be effective, automatically and without the
necessity of any action (including any transfer of any Pledged Collateral on
the
record books of the issuer thereof) by any other Person (including the issuer
of
such Pledged Collateral or any officer or agent thereof) during the continuance
of an Event of Default and which proxy shall terminate upon the earlier of
the
payment in full of the Secured Obligations or the cure of the Event of Default.
Each Grantor hereby expressly authorizes and instructs each issuer of any
Pledged Collateral pledged hereunder by such Grantor to (i) comply with any
instruction received by it from the Collateral Agent in writing that (A) states
that an Event of Default has occurred and is continuing and (B) is otherwise
in
accordance with the terms of this Security Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that such issuer
shall be fully protected in so complying and (ii) unless otherwise expressly
permitted hereby, pay any Distributions or other payments with respect to the
Pledged Collateral directly to the Collateral Agent if an Event of Default
has
occurred and is continuing and the relevant Grantor has received written notice
of the Collateral Agent’s election to collect any such payments.
(c) Each
Grantor agrees that in any sale of any of such Collateral, whether at a
foreclosure sale or otherwise, 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
Governmental Rules (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 Authority, 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 Grantor for any
discount allowed by the reason of the fact that such Collateral is sold in
compliance with any such limitation or restriction.
(d) Each
Grantor also agrees to pay all fees, costs and expenses of the Collateral Agent,
including, without limitation, attorneys’ fees and costs, incurred in connection
with the enforcement of any of its rights and remedies
hereunder.
21
EXHIBIT
99.4
(e) Each
Grantor hereby waives presentment, protest or any notice or demand not provided
for herein (to the maximum extent not prohibited by applicable Governmental
Rules) of any kind in connection with this Security Agreement or any
Collateral.
(f) Each
Grantor agrees that a material uncured breach of any covenants contained in
this
Section
7
will
cause irreparable injury to the Collateral Agent, the Administrative Agent
and
the Lenders, that in such event the Collateral Agent, the Administrative Agent
and the Lenders would have no adequate remedy at law in respect of such breach
and, as a consequence, agrees that in such event each and every covenant
contained in this Section
7
shall be
specifically enforceable against a Grantor, and each Grantor hereby waives
and
agrees not to assert any defenses against an action for specific performance
of
such covenants except for a defense that the Secured Obligations are not then
due and payable.
(g) .
The
proceeds of any sale, disposition or other realization upon all or any part
of
the Collateral shall be distributed by the Collateral Agent or the
Administrative Agent in the order of priority set forth in Section
6.02(b)
of the
Credit Agreement.
SECTION
8. Limitation
on the Collateral Agent’s Duty in Respect of Collateral.
The
Collateral Agent shall be deemed to have acted reasonably in the custody,
preservation and disposition of any of the Collateral if it complies with the
obligations of a secured party under Section 9-207 of the UCC (or any other
then
applicable provision of the UCC).
SECTION
9. Reinstatement.
This
Security Agreement shall remain in full force and effect and continue to be
effective should any petition be filed by or against a Grantor for liquidation
or reorganization, should such Grantor become insolvent or make an assignment
for the benefit of creditors or should a receiver or trustee be appointed for
all or any significant part of such Grantor’s Property, and shall continue to be
effective or be reinstated, as the case may be, if at any time payment and
performance of the Secured Obligations, or any part thereof, is, pursuant to
applicable Governmental Rules, rescinded or reduced in amount, or must otherwise
be restored or returned by any obligee of the Secured Obligations, whether
as a
“voidable preference,” “fraudulent conveyance,” or otherwise, all as though such
payment or performance had not been made. In the event that any payment, or
any
part thereof, is rescinded, reduced, restored or returned, the Secured
Obligations shall be reinstated and deemed reduced only by such amount paid
and
not so rescinded, reduced, restored or returned.
SECTION
10. Miscellaneous.
10.1 Notices.
Except
as otherwise specified herein, all notices, requests, demands, consents,
instructions or other communications to or upon such Grantor, the Collateral
Agent or the Administrative Agent under this Security Agreement shall be given
as provided in Section
8.01
of the
Credit Agreement.
10.2 Partial
Invalidity.
If at
any time any provision of this Security Agreement is or becomes illegal, invalid
or unenforceable in any respect under the Governmental Rules of any
jurisdiction, neither the legality, validity or enforceability of the remaining
provisions of this Security Agreement nor the legality, validity or
enforceability of such provision under the Governmental Rules of any other
jurisdiction shall in any way be affected or impaired thereby.
22
EXHIBIT
99.4
10.3 Headings.
The
section headings and captions appearing in this Security Agreement are included
solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Security Agreement.
10.4 No
Waiver; Cumulative Remedies.
(a) Neither
the Administrative Agent nor the Collateral Agent shall by any act, delay,
omission or otherwise be deemed to have waived any of its rights or remedies
hereunder or under the Credit Agreement or the other Credit Documents, nor
shall
any single or partial exercise of any right or remedy hereunder or thereunder
on
any one or more occasions preclude the further exercise thereof or the exercise
of any other right or remedy under any of the Credit Documents.
(b) The
rights and remedies hereunder provided or provided under the Credit Agreement
or
the other Credit Documents are cumulative and may be exercised singly or
concurrently, and are not exclusive of any rights and remedies provided by
law
or by any of the other Credit Documents.
(c) None
of
the terms or provisions of this Security Agreement may be waived, altered,
modified or amended except by an instrument in writing, duly executed by the
Grantors and the Collateral Agent (with the written approval or upon the
instructions of the Administrative Agent or the required number of Lenders
as
set forth in Section
8.04
of the
Credit Agreement or such other Person, if such approval is required under the
Credit Agreement). Unless otherwise specified in any such waiver or consent,
a
waiver or consent given hereunder shall be effective only in the specific
instance and for the specific purpose for which given.
10.5 Time
is of the Essence.
Time is
of the essence for the performance of each of the terms and provisions of this
Security Agreement.
10.6 Termination
of this Security Agreement.
Subject
to Section
9,
above,
this Security Agreement shall terminate upon the full, complete and final
payment of the Secured Obligations and the termination of the Revolving Loan
Commitments.
10.7 Successors
and Assigns.
This
Security Agreement and all obligations of the Grantors hereunder shall be
binding upon the successors and assigns of the Grantors, and shall, together
with the rights and remedies of the Collateral Agent on behalf of Administrative
Agent, the Lenders hereunder and Affiliates of Lenders party Lender Rate
Contracts, inure to the benefit of the Collateral Agent, the Administrative
Agent, the Lenders, Affiliates of Lenders party Lender Rate Contracts and their
respective successors and permitted assigns. The Grantors may not assign,
delegate or transfer their rights or obligations under this Security Agreement
without the prior written consent of the Collateral Agent. Any purported
assignment or transfer in contravention of the foregoing shall be null and
void.
No sales of participations, other than sales, assignments, transfers or other
dispositions of any agreement governing or instrument evidencing the Secured
Obligations or any portion thereof or interest therein shall in any manner
affect the security interest created herein and granted to the Collateral Agent
on behalf of the Lenders hereunder.
23
EXHIBIT
99.4
10.8 Further
Indemnification.
Each
Grantor agrees to pay, and to save the Collateral Agent, the Administrative
Agent and the Lenders harmless from, any and all liabilities with respect to,
or
resulting from any delay in paying, any and all excise, sales or other similar
taxes which may be payable or determined to be payable with respect to any
of
the Collateral in which such Grantor has granted, assigned, conveyed, mortgaged,
pledged, hypothecated or transferred to the Collateral Agent on behalf of
itself, the Administrative Agent and the Lenders a security interest or in
connection with any of the transactions contemplated by this Security
Agreement.
10.9 Amendments,
Etc.
No
amendment, modification, supplement, extension, termination or waiver of any
provision of this Security Agreement applicable to all Grantors and no approval
or consent thereunder applicable to all Grantors may in any event be effective
unless in writing signed by each Grantor and the Collateral Agent with the
written approval or upon the instructions of the required number of Lenders
as
set forth in Section
8.04
of the
Credit Agreement, and then only in the specific instance and for the specific
purpose given and any such amendment, modification, supplement, extension,
termination, waiver, approval or consent shall be binding upon the Collateral
Agent, each holder of the Secured Obligations and the Grantors. No amendment,
modification, supplement, extension, termination or waiver of any provision
of
this Security Agreement applicable to a particular Grantor, no approval or
consent thereunder applicable to a particular Grantor and no consent to any
departure by any particular Grantor therefrom, may in any event be effective
unless in writing signed by such Grantor and the Collateral Agent with the
written approval or upon the instructions of the Administrative Agent or the
required number of Lenders as set forth in Section
8.04
of the
Credit Agreement, and then only in the specific instance and for the specific
purpose given and any such amendment, modification, supplement, extension,
termination, waiver, approval or consent shall be binding upon the Collateral
Agent, each holder of the Secured Obligations and such Grantor and the
obligations hereunder of all Grantors other than such Grantor shall continue
in
effect. Nothing herein shall in any way modify or limit the effect of terms
or
conditions set forth in any other document, instrument or agreement executed
by
any Grantor or applicable to any Grantor or in connection with the Secured
Obligations, but each and every term and condition hereof shall be in addition
thereto.
10.10 ENTIRE
AGREEMENT.
THIS
SECURITY AGREEMENT REPRESENTS THE COMPLETE AND FINAL AGREEMENT
AMONG THE GRANTORS, THE COLLATERAL AGENT, THE ADMINISTRATIVE AGENT AND THE
LENDERS AND SUPERSEDES ALL PRIOR AGREEMENTS, WRITTEN OR ORAL, ON THE SUBJECT
MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT
ORAL AGREEMENTS OF SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
OR AMONG THE GRANTORS, THE COLLATERAL AGENT, THE ADMINISTRATIVE AGENT AND THE
LENDERS.
10.11 Governing
Law.
This
Security Agreement shall be governed by, construed and enforced in accordance
with, the internal law of the State of New York without reference to conflicts
of law rules (other than Section 5-1401 of the General Obligations Law of the
State of New York), except that matters concerning the validity and perfection
of a security interest shall be governed by the conflict of law rules set forth
in the UCC. Each Grantor hereby consents to the application of New York civil
law to the construction, interpretation and enforcement of this Security
Agreement, and to the application of New York civil law to the procedural
aspects of any suit, action or proceeding relating thereto, including, but
not
limited to, legal process, execution of judgments and other legal
remedies.
24
EXHIBIT
99.4
10.12 Counterparts.
This
Security Agreement may be executed in any number of identical counterparts,
any
set of which signed by all the parties hereto shall be deemed to constitute
a
complete, executed original for all purposes. Transmission by telecopier of
an
executed counterpart of this Security Agreement shall be deemed to constitute
due and sufficient delivery of such counterpart.
10.13 Payments
Free of Taxes, Etc.
All
payments made by the Grantors under this Security Agreement shall be made by
the
Grantors free and clear of and without deduction for any and all present and
future taxes, levies, charges, deductions and withholdings (except as otherwise
provided in the Credit Agreement). In addition, the Grantors shall pay upon
demand any stamp or other taxes, levies or charges of any jurisdiction with
respect to the execution, delivery, registration, performance and enforcement
of
this Security Agreement. Upon request by the Collateral Agent, the Grantors
shall furnish evidence satisfactory to the Administrative Agent and the
Collateral Agent that all requisite authorizations and approvals by, and notices
to and filings with, governmental authorities and regulatory bodies have been
obtained and made and that all requisite taxes, levies and charges have been
paid.
10.14 The
Grantors’ Continuing Liability.
Notwithstanding any provision of this Security Agreement or any other Credit
Document or any exercise by the Collateral Agent or the Administrative Agent
of
any of its rights hereunder or thereunder (including, without limitation, any
right to collect or enforce any Collateral), (i) each Grantor shall remain
liable to perform its obligations and duties in connection with the Collateral
and (ii) the Collateral Agent, the Administrative Agent and any Lender shall
not
assume or be considered to have assumed any liability to perform such
obligations and duties or to enforce any of the Grantors’ rights in connection
with the Collateral.
10.15 Additional
Grantors.
If,
pursuant to the terms and conditions of the Credit Agreement, the Borrower
shall
be required to cause any Subsidiary of the Borrower that is not a Grantor to
become a Grantor hereunder, such Subsidiary shall execute and deliver to the
Collateral Agent a Joinder Agreement in the form of Annex 1 and shall thereafter
for all purposes be a party hereto and have the same rights, benefits and
obligations as a Grantor party hereto on the Closing Date and shall be deemed
to
have assigned,
conveyed, mortgaged, pledged, granted, hypothecated and transferred to the
Collateral Agent for itself and for the pro rata benefit of the Lenders the
security interest described in such Joinder Agreement and Section
2
hereof.
10.16 Additional
Provisions.
The
Borrower hereby acknowledges and agrees that the jury trial waiver, consent
to
jurisdiction and other provisions in Sections
8.09 and 8.12
of the
Credit Agreement apply to this Security Agreement as to the Borrower and are
incorporated herein as though set forth in full. Each Subsidiary Grantor and
GPI
hereby acknowledges and agrees that the jury
trial waiver, consent to jurisdiction and other provisions in Sections
22 and 23
of the
Guaranty apply to this Security Agreement as to each Subsidiary Grantor and
GPI
and are incorporated herein as though set forth in full.
10.17 Administrative
Agent.
With
the consent of the Collateral Agent, the Administrative Agent may take any
and
all action that may be taken under this Security Agreement by the Collateral
Agent.
25
EXHIBIT
99.4
10.18 Materiality.
For
purposes of this Agreement, an agreement or other contract or arrangement
thereof shall be deemed “material”
if the
contract pursuant to the terms thereof would (A) recognize future revenues
in
excess of $250,000, (B) incur liabilities or obligations in excess of $250,000
or (C) likely result in damages or losses in excess of $250,000 by reason of
the
breach or termination thereof.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
26
EXHIBIT
99.4
IN
WITNESS WHEREOF, the Grantors and the Collateral Agent have caused this Security
Agreement to be executed as of the day and year first above
written.
GRANTORS:
GENIUS
PRODUCTS, INC.,
a
Delaware limited liability company
By:
/s/
Xxxxxx
Xxxxxxxxxx
Name:
Xxxxxx Xxxxxxxxxx
Title:
President
GENIUS
PRODUCTS, LLC,
a
Delaware limited liability company
By:
/s/
Xxxxxx
Xxxxxxxxxx
Name:
Xxxxxx Xxxxxxxxxx
Title:
President
AMERICAN
VANTAGE MEDIA, LLC,
a
Nevada
limited liability company
By:/s/
Xxxxxx
Xxxxxxxxxx
Name:
Xxxxxx Xxxxxxxxxx
Title:
President
WELLSPRING
MEDIA, LLC,
a
Delaware limited liability company
By:/s/
Xxxxxx
Xxxxxxxxxx
Name:
Xxxxxx Xxxxxxxxxx
Title:
President
WELLSPRING
PRODUCTIONS, LLC,
a
Delaware limited liability company
By:/s/
Xxxxxx
Xxxxxxxxxx
Name:
Xxxxxx Xxxxxxxxxx
Title:
President
27
EXHIBIT
99.4
CASTALIAN
DC, LLC,
a
Delaware limited liability company
By:/s/
Xxxxxx
Xxxxxxxxxx
Name:
Xxxxxx Xxxxxxxxxx
Title:
Manager
THE
THIRTEEN THIRTY ONE LLC,
an
Illinois limited liability company
By:/s/
Xxxxxx
Xxxxxxxxxx
Name:
Xxxxxx Xxxxxxxxxx
Title:
Manager
CASTALIAN
MUSIC, L.L.C.,
an
Illinois limited liability company
By:/s/
Xxxxxx
Xxxxxxxxxx
Name:
Xxxxxx Xxxxxxxxxx
Title:
Manager
MARATHON
MEDIA, LLC,
a
California limited liability company
By:/s/
Xxxxxx
Xxxxxxxxxx
Name:
Xxxxxx Xxxxxxxxxx
Title:
Manager
ABACUS
MEDIA L.L.C.,
an
Illinois limited liability company
By:/s/
Xxxxxx
Xxxxxxxxxx
Name:
Xxxxxx Xxxxxxxxxx
Title:
Manager
28
EXHIBIT
99.4
COLLATERAL
AGENT:
SOCIÉTÉ
GÉNÉRALE,
as
Collateral Agent
By:
/s/
Xxxxxx
Xxx
Name:
Xxxxxx Xxx
Title:
Director
29
