EXHIBIT 4.4
EXECUTION COPY
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AMENDED AND RESTATED
GUARANTEE AND COLLATERAL AGREEMENT
made by
K&F INDUSTRIES, INC.
AIRCRAFT BRAKING SYSTEMS CORPORATION
ENGINEERED FABRICS CORPORATION
and certain of their Subsidiaries
in favor of
XXXXXX COMMERCIAL PAPER INC.,
as Administrative Agent
Dated as of December 20, 2002
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TABLE OF CONTENTS
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SECTION 1. DEFINED TERMS.............................................................................. 2
1.1 Definitions............................................................................... 2
1.2 Other Definitional Provisions............................................................. 7
SECTION 2. GUARANTEE.................................................................................. 7
2.1 Guarantee................................................................................. 7
2.2 Right of Contribution..................................................................... 8
2.3 Subrogation............................................................................... 9
2.4 Amendments, etc. with respect to the Borrower Obligations................................. 9
2.5 Guarantee Absolute and Unconditional...................................................... 10
2.6 Reinstatement............................................................................. 12
2.7 Payments.................................................................................. 12
SECTION 3. GRANT OF SECURITY INTEREST................................................................. 12
SECTION 4. REPRESENTATIONS AND WARRANTIES............................................................. 13
4.1 Representations in Credit Agreement; K&F's Representations................................ 13
4.2 Title; No Other Liens..................................................................... 15
4.3 Perfected First Priority Liens............................................................ 15
4.4 Jurisdiction of Organization; Chief Executive Office...................................... 15
4.5 Inventory and Equipment................................................................... 15
4.6 Farm Products............................................................................. 16
4.7 Investment Property....................................................................... 16
4.8 Receivables............................................................................... 16
4.9 Intellectual Property..................................................................... 16
4.10 Vehicles.................................................................................. 17
SECTION 5. COVENANTS.................................................................................. 17
5.1 Covenants in Credit Agreement............................................................. 17
5.2 Delivery of Instruments and Chattel Paper................................................. 17
5.3 Maintenance of Insurance.................................................................. 17
5.4 Payment of Obligations.................................................................... 18
5.5 Maintenance of Perfected Security Interest; Further Documentation......................... 18
5.6 Changes in Name, etc...................................................................... 18
5.7 Notices................................................................................... 19
5.8 Investment Property....................................................................... 19
5.9 Receivables............................................................................... 20
5.10 Intellectual Property..................................................................... 20
5.11 Commercial Tort Claims.................................................................... 22
SECTION 6. REMEDIAL PROVISIONS........................................................................ 22
6.1 Certain Matters Relating to Receivables................................................... 22
6.2 Communications with Obligors; Grantors Remain Liable...................................... 23
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6.3 Pledged Stock............................................................................. 23
6.4 Proceeds to be Turned Over To Administrative Agent........................................ 24
6.5 Application of Proceeds................................................................... 24
6.6 Code and Other Remedies................................................................... 25
6.7 Registration Rights....................................................................... 26
6.8 Deficiency................................................................................ 27
SECTION 7. THE ADMINISTRATIVE AGENT................................................................... 27
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc............................... 27
7.2 Duty of Administrative Agent.............................................................. 28
7.3 Execution of Financing Statements......................................................... 29
7.4 Authority of Administrative Agent......................................................... 29
SECTION 8. MISCELLANEOUS.............................................................................. 29
8.1 Amendments in Writing..................................................................... 29
8.2 Notices................................................................................... 30
8.3 No Waiver by Course of Conduct; Cumulative Remedies....................................... 30
8.4 Enforcement Expenses; Indemnification..................................................... 30
8.5 Successors and Assigns.................................................................... 30
8.6 Set-Off................................................................................... 31
8.7 Counterparts.............................................................................. 31
8.8 Severability.............................................................................. 31
8.9 Section Headings.......................................................................... 31
8.10 Integration............................................................................... 31
8.11 GOVERNING LAW............................................................................. 31
8.12 Submission To Jurisdiction; Waivers....................................................... 31
8.13 Acknowledgements.......................................................................... 32
8.14 Additional Grantors....................................................................... 32
8.15 Releases.................................................................................. 32
8.16 WAIVER OF JURY TRIAL...................................................................... 34
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Schedules
Schedule 1 Notice Addresses of Guarantors
Schedule 2 Description of Pledged Securities
Schedule 3 Filings and Other Actions Required to Perfect Security Interest
Schedule 4 Jurisdiction of Organization, Identification Number and
Location of Chief Executive Office
Schedule 5 Locations of Inventory and Equipment
Schedule 6 Intellectual Property
Annexes
Annex I Assumption Agreement
Annex II Acknowledgment and Consent
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AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT, dated
as of December 20, 2002, made by each of the signatories hereto (together with
any other entity that may become a party hereto as provided herein, the
"Grantors") for the benefit of the Secured Parties (as defined below), in favor
of XXXXXX COMMERCIAL PAPER INC., as Administrative Agent (in such capacity, the
"Administrative Agent") for the banks and other financial institutions (the
"Lenders") from time to time parties to the Amended and Restated Credit
Agreement, dated as of December 20, 2002(as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among AIRCRAFT BRAKING
SYSTEMS CORPORATION and ENGINEERED FABRICS CORPORATION, each a Delaware
corporation (collectively, the "Borrowers"; individually, a "Borrower"), the
several banks and other financial institutions or entities from time to time
parties to the Credit Agreement, XXXXXX BROTHERS INC., as advisor, lead arranger
and book manager (in such capacity, the "Arranger"), XXXXXX COMMERCIAL PAPER
INC., as Administrative Agent, and NATIONAL CITY BANK and BANK ONE, NA, as
Co-Agents.
W I T N E S S E T H:
WHEREAS, the Borrowers are parties to the Credit Agreement,
dated as of October 15, 1997 (as amended, supplemented or otherwise modified,
the "Existing Credit Agreement") with the lenders party thereto (the "Existing
Lenders"), Xxxxxx Brothers Inc., as arranger, Xxxxxx Commercial Paper Inc., as
syndication agent, and Bank One, NA (f/k/a The First National Bank of Chicago),
as administrative agent (the "Existing Administrative Agent");
WHEREAS, in connection with the Existing Credit Agreement, K &
F Industries, Inc. ("K&F") and certain Subsidiaries of the Borrowers guaranteed
the Borrowers' obligations under the Existing Credit Agreement (the "Existing
Guarantees"), and K&F, the Borrowers and certain Subsidiaries of the Borrowers
executed certain security documents (the "Existing Collateral Documents")
pursuant to which K&F, the Borrowers and certain Subsidiaries of the Borrowers
granted security interests in certain of their respective personal property (the
"Existing Collateral") to the Existing Administrative Agent;
WHEREAS, as of the date hereof the Existing Administrative
Agent has resigned as Administrative Agent under the Existing Credit Agreement
and as Collateral Agent under (and as defined in) the Existing Collateral
Documents and has assigned to the Administrative Agent all of its rights in and
to the Existing Collateral and the Existing Collateral Documents;
WHEREAS, the Borrowers, the Lenders, the Arranger and the
Administrative Agent have amended and restated in its entirety the Existing
Credit Agreement pursuant to the terms and conditions contained in the Credit
Agreement;
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrowers upon the terms
and subject to the conditions set forth therein;
WHEREAS, the Borrowers are members of an affiliated group of
companies that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the
Credit Agreement will be used in part to enable the Borrowers to make valuable
transfers to one or more of the other Grantors in connection with the operation
of their respective businesses;
WHEREAS, certain Qualified Counterparties may enter into
Specified Hedge Agreements with one or more of the Grantors;
WHEREAS, the Borrowers and the other Grantors are engaged in
related businesses, and each Grantor will derive substantial direct and indirect
benefit from the extensions of credit under the Credit Agreement and from the
Specified Hedge Agreements; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrowers under the
Credit Agreement that the Grantors shall have amended and restated the Existing
Guarantees and the Existing Collateral Documents on the terms set forth in this
Agreement;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Secured Parties to enter into the Credit
Agreement and any Specified Hedge Agreements, as the case may be, and to induce
the Secured Parties to make their respective extensions of credit to the
Borrowers under the Credit Agreement and their respective financial
accommodations to the Grantors under any Specified Hedge Agreement, as the case
may be, each Grantor hereby agrees with the Administrative Agent, for the
benefit of the Secured Parties, as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein,
terms defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement and the following terms are used herein as
defined in the New York UCC: Accounts, Certificated Security, Chattel Paper,
Commercial Tort Claims, Documents, Equipment, Farm Products, General
Intangibles, Goods, Instruments, Inventory and Supporting Obligations.
(b) The following terms shall have the following
meanings:
"Agreement": this Guarantee and Collateral Agreement, as the
same may be amended, supplemented or otherwise modified from time to
time.
"Borrower Credit Agreement Obligations": the collective
reference to the unpaid principal of and interest on the Loans and
Reimbursement Obligations and all other obligations and liabilities of
the Borrower (including, without limitation, interest accruing at the
then applicable rate provided in the Credit Agreement after the
maturity of the Loans and Reimbursement Obligations and interest
accruing at the then applicable rate provided in the Credit Agreement
after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to either
of the Borrowers, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) to the
Administrative Agent or to any Lender, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection
with, the Credit Agreement, this
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Agreement, the other Loan Documents, any Letter of Credit, or any other
document made, delivered or given in connection therewith, in each case
whether on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Administrative
Agent or to the Lenders that are required to be paid by the Borrowers
pursuant to the terms of any of the foregoing agreements).
"Borrower Hedge Agreement Obligations": the collective
reference to all obligations and liabilities of the Borrowers
(including, without limitation, (i) the obligations pursuant to Section
2.1(a)(ii) and (ii) interest accruing at the then applicable rate
provided in any Specified Hedge Agreement after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to either of the Borrowers,
whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding) to any Qualified Counterparty, whether
direct or indirect, absolute or contingent, due or to become due, or
now existing or hereafter incurred, which may arise under, out of, or
in connection with, any Specified Hedge Agreement or any other document
made, delivered or given in connection therewith, in each case whether
on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the relevant
Qualified Counterparty that are required to be paid by the Borrowers
pursuant to the terms of any Specified Hedge Agreement).
"Borrower Obligations": the collective reference to (i) the
Borrower Credit Agreement Obligations, (ii) the Borrower Hedge
Agreement Obligations, but only to the extent that, and only so long
as, the Borrower Credit Agreement Obligations are secured and
guaranteed pursuant hereto, and (iii) all other obligations and
liabilities of the Borrowers, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this
Agreement (including, without limitation, all fees and disbursements of
counsel to the Administrative Agent or to the Secured Parties that are
required to be paid by the Borrowers pursuant to the terms of this
Agreement).
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by
the Administrative Agent as provided in Section 6.1 or 6.4.
"Copyrights": (i) all copyrights arising under the laws of the
United States, any other country or any political subdivision thereof,
whether registered or unregistered and whether published or unpublished
(including, without limitation, those listed in Schedule 6), all
registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, all registrations,
recordings and applications in the United States Copyright Office, and
(ii) the right to obtain all renewals thereof.
"Copyright Licenses": any written agreement naming any Grantor
as licensor or licensee (including, without limitation, those listed in
Schedule 6), granting any right under any Copyright, including, without
limitation, the grant of rights to manufacture, distribute, exploit and
sell materials derived from any Copyright.
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"Deposit Account": as defined in the Uniform Commercial Code
of any applicable jurisdiction and, in any event, including, without
limitation, any demand, time, savings, passbook or like account
maintained with a depositary institution.
"Excluded Assets": the collective reference to (i) any
contract, General Intangible, Copyright License, Patent License or
Trademark License ("Intangible Assets"), in each case to the extent the
grant by the relevant Grantor of a security interest pursuant to this
Agreement in such Grantor's right, title and interest in such
Intangible Asset (A) is prohibited by legally enforceable provisions of
any contract, agreement, instrument or indenture governing such
Intangible Asset, (B) would give any other party to such contract,
agreement, instrument or indenture a legally enforceable right to
terminate its obligations thereunder or (C) is permitted only with the
consent of another party, if the requirement to obtain such consent is
legally enforceable and such consent has not been obtained; provided,
that in any event any Receivable or any money or other amounts due or
to become due under any such contract, agreement, instrument or
indenture shall not be Excluded Assets to the extent that any of the
foregoing is (or if it contained a provision limiting the
transferability or pledge thereof would be) subject to Section 9-406 of
the New York UCC, and (ii) Foreign Subsidiary Voting Stock excluded
from the definition of "Pledged Stock" set forth in this Section 1.1.
"Foreign Subsidiary": any Subsidiary organized under the laws
of any jurisdiction outside the United States of America.
"Foreign Subsidiary Voting Stock": the voting Capital Stock of
any Foreign Subsidiary.
"Guarantor Hedge Agreement Obligations": the collective
reference to all obligations and liabilities of a Guarantor (including,
without limitation, interest accruing at the then applicable rate
provided in any Specified Hedge Agreement after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to such Guarantor, whether
or not a claim for post-filing or post-petition interest is allowed in
such proceeding) to any Qualified Counterparty, whether direct or
indirect, absolute or contingent, due or to become due, or now existing
or hereafter incurred, which may arise under, out of, or in connection
with, any Specified Hedge Agreement or any other document made,
delivered or given in connection therewith, in each case whether on
account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the relevant
Qualified Counterparty that are required to be paid by such Guarantor
pursuant to the terms of any Specified Hedge Agreement).
"Guarantor Obligations": with respect to any Guarantor, the
collective reference to (i) any Guarantor Hedge Agreement Obligations
of such Guarantor, but only to the extent that, and only so long as,
the other Obligations of such Guarantor are secured and guaranteed
pursuant hereto, and (ii) all obligations and liabilities of such
Guarantor which may arise under or in connection with this Agreement
(including, without limitation, Section 2) or any other Loan Document
to which such Guarantor is a party, in each case whether on account of
guarantee obligations, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees
and
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disbursements of counsel to the Administrative Agent or to any Secured
Party that are required to be paid by such Guarantor pursuant to the
terms of this Agreement or any other Loan Document).
"Guarantors": the collective reference to each Grantor other
than the Borrowers.
"Hedge Agreements": as to any Person, all interest rate swaps,
currency exchange agreements, commodity swaps, caps or collar
agreements or similar arrangements entered into by such Person
providing for protection against fluctuations in interest rates,
currency exchange rates or commodity prices or the exchange of nominal
interest obligations, either generally or under specific contingencies.
For avoidance of doubt, Hedge Agreements shall include any interest
rate swap or similar agreement that provides for the payment by either
of the Borrowers or any of their Subsidiaries of amounts based upon a
floating rate in exchange for receipt by such Borrower or such
Subsidiary of amounts based upon a fixed rate.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or
otherwise, including, without limitation, the Copyrights, the Copyright
Licenses, the Patents, the Patent Licenses, the Trademarks and the
Trademark Licenses, and all rights to xxx at law or in equity for any
infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.
"Intercompany Note": any promissory note evidencing loans made
by any Grantor to K&F or any of its Subsidiaries.
"Investment Property": the collective reference to (i) all
"investment property" as such term is defined in Section 9-102(a)(49)
of the New York UCC (other than any Foreign Subsidiary Voting Stock
excluded from the definition of "Pledged Stock" in this Section 1.1)
and (ii) whether or not constituting "investment property" as so
defined, all Pledged Notes and all Pledged Stock.
"Issuers": the collective reference to each issuer of any
Investment Property.
"New York UCC": the Uniform Commercial Code as from time to
time in effect in the State of New York.
"Obligations": (i) in the case of either of the Borrowers, the
Borrower Obligations, and (ii) in the case of each Guarantor, its
Guarantor Obligations.
"Patents": (i) all letters patent of the United States, any
other country or any political subdivision thereof, all reissues and
extensions thereof and all goodwill associated therewith, including,
without limitation, any of the foregoing referred to in Schedule 6,
(ii) all applications for letters patent of the United States or any
other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation, any of
the foregoing referred to in Schedule 6, and (iii) all rights to obtain
any reissues or extensions of the foregoing.
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"Patent License": all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to
manufacture, use or sell any invention covered in whole or in part by a
Patent, including, without limitation, any of the foregoing referred to
in Schedule 6.
"Pledged Notes": all promissory notes listed on Schedule 2,
all Intercompany Notes at any time issued to any Grantor and all other
promissory notes issued to or held by any Grantor (other than
promissory notes issued in connection with extensions of trade credit
by any Grantor in the ordinary course of business).
"Pledged Securities": the collective reference to the Pledged
Notes and the Pledged Stock.
"Pledged Stock": the shares of Capital Stock listed on
Schedule 2, together with any other shares, stock certificates, options
or rights of any nature whatsoever in respect of the Capital Stock of
any Person that may be issued or granted to, or held by, any Grantor
while this Agreement is in effect; provided that in no event shall more
than 65% of the total outstanding Foreign Subsidiary Voting Stock of
any Foreign Subsidiary be required to be pledged hereunder.
"Proceeds": all "proceeds" as such term is defined in Section
9-102(a)(64) of the Uniform Commercial Code in effect in the State of
New York on the date hereof and, in any event, including, without
limitation, all dividends or other income from the Investment Property,
collections thereon or distributions or payments with respect thereto.
"Qualified Counterparty": with respect to any Specified Hedge
Agreement, any counterparty thereto that, at the time such Specified
Hedge Agreement was entered into, was a Lender or an affiliate of a
Lender.
"Receivable": any right to payment for goods sold, leased,
licensed, assigned or otherwise disposed of, or for services rendered,
whether or not such right is evidenced by an Instrument or Chattel
Paper and whether or not it has been earned by performance (including,
without limitation, any Account).
"Secured Parties": the collective reference to the
Administrative Agent, the Lenders (including any Issuing Lender in its
capacity as Issuing Lender) and any Qualified Counterparties.
"Securities Act": the Securities Act of 1933, as amended.
"Specified Hedge Agreement": any Hedge Agreement entered into
by (i) either of the Borrowers or any Guarantor and (ii) any Qualified
Counterparty.
"Trademarks": (i) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers,
and all goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States
Patent and Trademark Office or in
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any similar office or agency of the United States, any State thereof or
any other country or any political subdivision thereof, or otherwise,
and all common-law rights related thereto, including, without
limitation, any of the foregoing referred to in Schedule 6, and (ii)
the right to obtain all renewals thereof.
"Trademark License": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any
Trademark, including, without limitation, any of the foregoing referred
to in Schedule 6.
"Vehicles": all cars, trucks, trailers, construction and earth
moving equipment and other vehicles covered by a certificate of title
law of any state and all tires and other appurtenances to any of the
foregoing.
1.2 Other Definitional Provisions. (a) The words
"hereof," "herein", "hereto" and "hereunder" and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section and Schedule references are
to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer
to such Grantor's Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) (i) The Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantee to the Administrative
Agent, for the ratable benefit of the Secured Parties and their respective
successors, indorsees, transferees and assigns, the prompt and complete payment
and performance by the Borrowers when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations (other than, in the case
of each Guarantor, Borrower Obligations arising pursuant to clause (ii) of this
Section 2.1(a) in respect of Guarantor Hedge Agreement Obligations in respect of
which such Guarantor is a primary obligor).
(ii) (A) The Borrowers hereby, jointly and severally,
unconditionally and irrevocably, guarantee to the Administrative Agent, for the
ratable benefit of the Secured Parties and their respective successors,
endorsees, transferees and assigns, the prompt and complete payment and
performance by each Guarantor when due (whether at stated maturity, by
acceleration or otherwise) of the Guarantor Hedge Agreement Obligations of such
Guarantor and (B) each Borrower hereby unconditionally and irrevocably
guarantees to the Administrative Agent, for the ratable benefit of the Secured
Parties and their respective successors, endorsees, transferees and assigns, the
prompt and complete payment and performance by the other Borrower when due
(whether at stated maturity, by acceleration or otherwise) of the Borrower Hedge
Agreement Obligations in respect of which the other Borrower is a primary
obligor.
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(b) Anything herein or in any other Loan Document to the
contrary notwithstanding, (i) the maximum liability of each Guarantor hereunder
and under the other Loan Documents shall in no event exceed the amount which can
be guaranteed by such Guarantor under applicable federal and state laws relating
to fraudulent conveyances or transfers or the insolvency of debtors (after
giving effect to the right of contribution established in Section 2.2) and (ii)
the maximum liability of each Borrower under this Section 2 shall in no event
exceed the amount which can be guaranteed by such Borrower under applicable
federal and state laws relating to fraudulent conveyances or transfers or the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(c) (i) Each Guarantor agrees that the Borrower
Obligations may at any time and from time to time exceed the amount of the
liability of such Guarantor hereunder without impairing the guarantee of such
Guarantor contained in this Section 2 or affecting the rights and remedies of
the Administrative Agent or any Secured Party hereunder.
(ii) Each of the Borrowers agrees that the Guarantor Hedge
Agreement Obligations may at any time and from time to time exceed the amount of
the liability of such Borrower under this Section 2 without impairing the
guarantee of such Borrower contained in this Section 2 or affecting the rights
and remedies of the Administrative Agent or any Secured Party hereunder.
(d) Subject to Section 8.15 hereof, the guarantee
contained in this Section 2 shall remain in full force and effect until all the
Borrower Obligations (other than Borrower Obligations arising under Section
2.1(a)(ii) hereof) and the obligations of each Guarantor under the guarantee
contained in this Section 2 (other than Guarantor Obligations in respect of
Borrower Obligations arising under Section 2.1(a)(ii) hereof) shall have been
satisfied by full and final payment in cash, no Letter of Credit shall be
outstanding and the Commitments shall be terminated, notwithstanding that from
time to time during the term of the Credit Agreement the Borrowers may be free
from any Borrower Obligations and any or all of the Guarantors may be free from
their respective Guarantor Hedge Agreement Obligations.
(e) No payment made by either of the Borrowers, any of
the Guarantors, any other guarantor or any other Person or received or collected
by the Administrative Agent or any Secured Party from either of the Borrowers,
any of the Guarantors, any other guarantor or any other Person by virtue of any
action or proceeding or any set-off or appropriation or application at any time
or from time to time in reduction of or in payment of the Borrower Obligations
or the Guarantor Hedge Agreement Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of either of the Borrowers or any
Guarantor under this Section 2 which shall, notwithstanding any such payment
(other than any payment made by such Borrower or such Guarantor in respect of
the Borrower Obligations or the Guarantor Hedge Agreement Obligations or any
payment received or collected from such Borrower or such Guarantor in respect of
the Borrower Obligations or the Guarantor Hedge Agreement Obligations), remain
liable for the Borrower Obligations and the Guarantor Hedge Agreement
Obligations up to the maximum liability of such Borrower or such Guarantor
hereunder until the Borrower Obligations and the Guarantor Hedge Agreement
Obligations are fully and finally paid in cash, no Letter of Credit shall be
outstanding and the Commitments are terminated.
2.2 Right of Contribution. (a) Each Guarantor hereby
agrees that to the extent that a Guarantor shall have paid more than its
proportionate share of any payment made
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hereunder or the Guarantor Hedge Agreement Obligations, such Guarantor shall be
entitled to seek and receive contribution from and against any other Guarantor
hereunder which has not paid its proportionate share of such payment.
(b) The Borrowers and each Guarantor agree that to the
extent that either of the Borrowers or any Guarantor shall have paid more than
its proportionate share of any payment made hereunder in respect of any
Guarantor Hedge Agreement Obligation of any other Guarantor, such Borrower or
such Guarantor, as the case may be, shall be entitled to seek and receive
contribution from and against the other Borrower and any other Guarantor which
has not paid its proportionate share of such payment.
(c) The Borrowers' and each Guarantor's right of
contribution under this Section 2.2 shall be subject to the terms and conditions
of Section 2.3. The provisions of this Section 2.2 shall in no respect limit the
obligations and liabilities of the Borrowers or any Guarantor to the
Administrative Agent and the Secured Parties, and the Borrowers and each
Guarantor shall remain liable to the Administrative Agent and the Secured
Parties for the full amount guaranteed by the Borrowers or such Guarantor
hereunder.
2.3 Subrogation. Notwithstanding any payment made by
either of the Borrowers or any Guarantor hereunder or any set-off or application
of funds of either of the Borrowers or any Guarantor by the Administrative Agent
or any Secured Party, neither of the Borrowers nor any Guarantor shall be
entitled to be subrogated to any of the rights of the Administrative Agent or
any Secured Party against the other Borrower or any other Guarantor or any
collateral security or guarantee or right of offset held by the Administrative
Agent or any Secured Party for the payment of the Borrower Obligations or the
Guarantor Hedge Agreement Obligations, nor shall either of the Borrowers or any
Guarantor seek or be entitled to seek any contribution or reimbursement from the
other Borrower or any other Guarantor in respect of payments made by such
Borrower or such Guarantor hereunder, until all amounts owing to the
Administrative Agent and the Secured Parties by the Borrowers on account of the
Borrower Obligations are fully and finally paid in cash, no Letter of Credit
shall be outstanding and the Commitments are terminated. If any amount shall be
paid to either of the Borrowers or any Guarantor on account of such subrogation
rights at any time when all of the Borrower Obligations shall not have been
fully and finally paid in cash, such amount shall be held by such Borrower or
such Guarantor in trust for the Administrative Agent and the Secured Parties,
segregated from other funds of such Borrower or such Guarantor, and shall,
forthwith upon receipt by such Borrower or such Guarantor, be turned over to the
Administrative Agent in the exact form received by such Borrower or such
Guarantor (duly indorsed by such Borrower or such Guarantor to the
Administrative Agent, if required), to be applied against the Borrower
Obligations or the Guarantor Hedge Agreement Obligations, whether matured or
unmatured, in such order as the Administrative Agent may determine.
2.4 Amendments, etc. with respect to the Borrower
Obligations. Each Borrower and each Guarantor shall remain obligated hereunder
notwithstanding that, without any reservation of rights against either Borrower
or any Guarantor and without notice to or further assent by either Borrower or
any Guarantor, any demand for payment of any of the Borrower Obligations or
Guarantor Hedge Agreement Obligations made by the Administrative Agent or any
Secured Party may be rescinded by the Administrative Agent or such Secured Party
and any of the Borrower Obligations or Guarantor Hedge Agreement Obligations
continued, and the Borrower Obligations or Guarantor Hedge Agreement
Obligations, or the liability of any other
9
Person upon or for any part thereof, or any collateral security or guarantee
therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Administrative Agent or any
Secured Party (with the consent of such of the Borrowers and the Guarantors as
shall be required thereunder), and the Specified Hedge Agreements, the Credit
Agreement and the other Loan Documents and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders, all Lenders or a Qualified Counterparty, as the case may be) may (with
the consent of such of the Borrowers and the Guarantors as shall be required
thereunder) deem advisable from time to time, and any collateral security,
guarantee or right of offset at any time held by the Administrative Agent or any
Secured Party for the payment of the Borrower Obligations or Guarantor Hedge
Agreement Obligations may (with the consent of such of the Borrowers and the
Guarantors as shall be required thereunder) be sold, exchanged, waived,
surrendered or released. Neither the Administrative Agent nor any Secured Party
shall, except to the extent set forth in, and for the benefit of the parties to,
the agreements and instruments governing such Lien or guarantee, have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Borrower Obligations or Guarantor Hedge Agreement
Obligations or for the guarantees contained in this Section 2 or any property
subject thereto.
2.5 Guarantee Absolute and Unconditional. (a) Each
Guarantor waives any and all notice of the creation, renewal, extension or
accrual of any of the Borrower Obligations (other than any notice with respect
to any Guarantor Hedge Agreement Obligation with respect to which such Guarantor
is a primary obligor and to which it is entitled pursuant to the applicable
Specified Hedge Agreement) and notice of or proof of reliance by the
Administrative Agent or any Secured Party upon the guarantee contained in this
Section 2 or acceptance of the guarantee contained in this Section 2; the
Borrower Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Section 2; and all dealings
between either of the Borrowers and any of the Guarantors, on the one hand, and
the Administrative Agent and the Secured Parties, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in reliance upon
the guarantee contained in this Section 2. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon either of the Borrowers or any of the Guarantors with respect to the
Borrower Obligations (other than any diligence, presentment, protest, demand or
notice with respect to any Guarantor Hedge Agreement Obligation with respect to
which such Guarantor is a primary obligor and to which it is entitled pursuant
to the applicable Specified Hedge Agreement). Each Guarantor understands and
agrees that the guarantee of such Guarantor contained in this Section 2 shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity or enforceability of the Credit Agreement or
any other Loan Document, any of the Borrower Obligations or any collateral
security therefor or guarantee or right of offset with respect thereto at any
time or from time to time held by the Administrative Agent or any Secured Party,
(b) any defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by either of
the Borrower or any other Person against the Administrative Agent or any Secured
Party, or (c) any other circumstance whatsoever (with or without notice to or
knowledge of the Borrower or such Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of either of the
Borrowers for the Borrower Obligations, or of such Guarantor under the guarantee
of such
10
Guarantor contained in this Section 2, in bankruptcy or in any other instance.
When making any demand hereunder or otherwise pursuing its rights and remedies
hereunder against any Guarantor, the Administrative Agent or any Secured Party
may, but shall be under no obligation to, make a similar demand on or otherwise
pursue such rights and remedies as it may have against either of the Borrowers,
any other Guarantor or any other Person or against any collateral security or
guarantee for the Borrower Obligations or any right of offset with respect
thereto, and any failure by the Administrative Agent or any Secured Party to
make any such demand, to pursue such other rights or remedies or to collect any
payments from either of the Borrowers, any other Guarantor or any other Person
or to realize upon any such collateral security or guarantee or to exercise any
such right of offset, or any release of either of the Borrowers, any other
Guarantor or any other Person or any such collateral security, guarantee or
right of offset, shall not relieve any Guarantor of any obligation or liability
under this Section 2, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Administrative
Agent or any Secured Party against any Guarantor. For the purposes hereof
"demand" shall include the commencement and continuance of any legal
proceedings.
(b) Each of the Borrowers waives any and all notice of
the creation, renewal, extension or accrual of any of the Guarantor Hedge
Agreement Obligations and notice of or proof of reliance by the Administrative
Agent or any Secured Party upon the guarantee by the Borrowers contained in this
Section 2 or acceptance of the guarantee by the Borrowers contained in this
Section 2; the Guarantor Hedge Agreement Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee by the Borrowers
contained in this Section 2; and all dealings between either of the Borrowers
and any of the Guarantors, on the one hand, and the Administrative Agent and the
Secured Parties, on the other hand, with respect to any Guarantor Hedge
Agreement Obligation likewise shall be conclusively presumed to have been had or
consummated in reliance upon the guarantee by the Borrowers contained in this
Section 2. Each of the Borrowers waives diligence, presentment, protest, demand
for payment and notice of default or nonpayment to or upon the Borrower with
respect to the Guarantor Hedge Agreement Obligations. Each of the Borrowers
understands and agrees that the guarantee by the Borrowers contained in this
Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or enforceability of the
Guarantor Hedge Agreement Obligations or any other collateral security therefor
or guarantee or right of offset with respect thereto at any time or from time to
time held by the Administrative Agent or any Secured Party, (b) any defense,
set-off or counterclaim (other than a defense of payment or performance) which
may at any time be available to or be asserted by any Person against the
Administrative Agent or any Secured Party, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of either of the Borrowers or
any Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the applicable Guarantor for the applicable
Guarantor Hedge Agreement Obligations, or of the Borrowers under their guarantee
contained in this Section 2, in bankruptcy or in any other instance. When making
any demand under this Section 2 or otherwise pursuing its rights and remedies
under this Section 2 against either of the Borrowers, the Administrative Agent
or any Secured Party may, but shall be under no obligation to, make a similar
demand on or otherwise pursue such rights and remedies as it may have against
any Guarantor or any other Person or against any collateral security or
guarantee for the Guarantor Hedge Agreement Obligations or any right of offset
with respect thereto, and any failure by the Administrative Agent or any Secured
Party to make any such demand, to pursue such other rights or remedies or to
collect any payments from any Guarantor
11
or any other Person or to realize upon any such collateral security or guarantee
or to exercise any such right of offset, or any release of any Guarantor or any
other Person or any such collateral security, guarantee or right of offset,
shall not relieve either of the Borrowers of any obligation or liability under
this Section 2, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Administrative Agent or
any Secured Party against the Borrowers under this Section 2. For the purposes
hereof "demand" shall include the commencement and continuance of any legal
proceedings.
2.6 Reinstatement. The guarantee contained in this
Section 2 shall continue to be effective, or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any of the Borrower Obligations
or Guarantor Hedge Agreement Obligations is rescinded or must otherwise be
restored or returned by the Administrative Agent or any Secured Party upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of either of
the Borrowers or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for,
either Borrower or any Guarantor or any substantial part of its property, or
otherwise, all as though such payments had not been made.
2.7 Payments. Each Borrower and each Guarantor hereby
guarantees that payments by it hereunder will be paid to the Administrative
Agent without set-off or counterclaim (i) in the case of obligations in respect
of Borrower Obligations arising under the Credit Agreement or any other Loan
Document in Dollars at the Payment Office specified in the Credit Agreement and
(ii) in the case of obligations in respect of any Borrower Hedge Agreement
Obligations or any Guarantor Hedge Agreement Obligations, in the currency and at
the place specified in the applicable Specified Hedge Agreement.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the
Administrative Agent, and hereby grants to the Administrative Agent, for the
ratable benefit of the Secured Parties, a security interest in, all of the
following property now owned or at any time hereafter acquired by such Grantor
or in which such Grantor now has or at any time in the future may acquire any
right, title or interest (collectively, the "Collateral"), as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of such Grantor's
Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Documents;
(d) all Equipment;
(e) all General Intangibles;
(f) all Instruments;
12
(g) all Intellectual Property;
(h) all Inventory;
(i) all Investment Property;
(j) all Commercial Tort Claims to the extent they have
been notified to the Administrative Agent pursuant to
Section 5.11;
(k) all Goods and other property not otherwise described
above;
(l) all books and records pertaining to the Collateral;
and
(m) to the extent not otherwise included, all Proceeds
and products of any and all of the foregoing, all
Supporting Obligations in respect of any of the
foregoing and all collateral security and guarantees
given by any Person with respect to any of the
foregoing;
provided, that the Collateral shall not include any Excluded Assets.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Secured Parties to
enter into the Credit Agreement and any Specified Hedge Agreements, as the case
may be, and to induce the Secured Parties to make their respective extensions of
credit to the Borrowers under the Credit Agreement or their respective financial
accommodations to the Grantors under any Specified Hedge Agreement, as the case
may be, each Grantor hereby represents and warrants to the Administrative Agent
and each Secured Party that:
4.1 Representations in Credit Agreement; K&F's
Representations. (a) In the case of each Guarantor, the representations and
warranties set forth in Section 4 of the Credit Agreement as they relate to such
Guarantor or to the Loan Documents to which such Guarantor is a party, each of
which is hereby incorporated herein by reference, are true and correct, and the
Administrative Agent and each Secured Party shall be entitled to rely on each of
them as if they were fully set forth herein, provided that each reference in
each such representation and warranty to each Borrower's knowledge shall, for
the purposes of this Section 4.1(a), be deemed to be a reference to such
Guarantor's knowledge.
(b) In the case of K&F:
(i) K&F (A) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization,
(B) has the corporate power and authority, and the legal right, to own
and operate its property, to lease the property it operates as lessee
and to conduct the business in which it is currently engaged, (C) is
duly qualified as a foreign corporation and in good standing under the
laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification and
(D) is in compliance with all Requirements of Law except to the extent
13
that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(ii) K&F has the corporate power and authority, and the
legal right, to make, deliver and perform the Loan Documents to which
it is a party and has taken all necessary corporate action to authorize
the execution, delivery and performance of the Loan Documents to which
it is a party. No consent or authorization of, filing with, notice to
or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with the execution, delivery,
performance, validity or enforceability of the Loan Documents to which
K&F is a party. This Agreement has been, and each other Loan Document
to which it is a party will be, duly executed and delivered on behalf
of K&F. This Agreement constitutes, and each other Loan Document to
which it is a party when executed and delivered will constitute, a
legal, valid and binding obligation of K&F enforceable against K&F in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair
dealing.
(iii) The execution, delivery and performance of the Loan
Documents to which K&F is a party will not violate any Requirement of
Law or Contractual Obligation of K&F or of any of its Subsidiaries and
will not result in, or require, the creation or imposition of any Lien
on any of its or their respective properties or revenues pursuant to
any such Requirement of Law or Contractual Obligation (other than
pursuant to this Agreement) the consequences of which violation or
Lien, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
(iv) No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the
knowledge of K&F, threatened by or against K&F or any of its
Subsidiaries or against any of its or their respective properties or
revenues (x) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (y) which could
reasonably be expected to have a Material Adverse Effect.
(v) K&F has filed or caused to be filed all tax returns
required to be filed by it, and has paid all taxes due on said returns
or on any assessments made against it (other than those being contested
in good faith by appropriate proceedings for which adequate reserves
have been provided on its books); and
(vi) The audited consolidated and consolidating balance
sheets of K&F and its consolidated Subsidiaries as at December 31, 2000
and December 31, 2001, and the related consolidated and consolidating
statements of income and of cash flows for the fiscal years ended on
such dates, reported on by and accompanied by an unqualified report
from Deloitte & Touche, LLP, present fairly the consolidated and
consolidating financial condition of K&F and its Subsidiaries as at
such dates, and the consolidated and consolidating results of its
operations and its consolidated and consolidating cash flows for the
respective fiscal years then ended. The unaudited consolidated and
consolidating balance sheet of K&F and its consolidated Subsidiaries as
of and for the fiscal quarters ended March 31, 2002, June 30, 2002 and
September 30, 2002, and the related unaudited
14
consolidated and consolidating statements of income and cash flows for
such fiscal quarters ended on such dates, certified by a Responsible
Officer of K&F, present fairly the consolidated and consolidating
financial condition of K&F and its consolidated Subsidiaries as at such
dates, and the consolidated and consolidating results of its operations
and its consolidated and consolidating cash flows for the fiscal
quarters then ended (subject to normal year-end audit adjustments). All
such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants or Responsible Officer, as the case
may be, and disclosed therein). Neither K&F nor any of its consolidated
Subsidiaries has any material Guarantee Obligations, contingent
liabilities and liabilities for taxes, or any long-term leases or
unusual forward or long-term commitments, including, without
limitation, any interest rate or foreign currency swap or exchange
transaction or other obligation in respect of derivatives, which are
not reflected in the most recent financial statements referred to in
this paragraph. Since December 31, 2001 there has been no development
or event which has had or could reasonably be expected to have a
Material Adverse Effect.
4.2 Title; No Other Liens. Except for the security
interest granted to the Administrative Agent for the ratable benefit of the
Secured Parties pursuant to this Agreement and the other Liens permitted to
exist on the Collateral by the Credit Agreement, such Grantor owns each item of
the Collateral free and clear of any and all Liens or claims of others. No
financing statement or other public notice with respect to all or any part of
the Collateral is on file or of record in any public office, except such as have
been filed in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, pursuant to this Agreement or as are permitted by the Credit
Agreement. For the avoidance of doubt, it is understood and agreed that any
Grantor may, as part of its business, grant licenses to third parties to use
Intellectual Property owned or developed by a Grantor.
4.3 Perfected First Priority Liens. The security
interests granted pursuant to this Agreement (a) upon completion of the filings
and other actions specified on Schedule 3 (which, in the case of all filings and
other documents referred to on said Schedule, have been delivered to the
Administrative Agent in completed and duly executed form) will constitute valid
perfected security interests in all of the Collateral in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties, as
collateral security for such Grantor's Obligations, enforceable in accordance
with the terms hereof against all creditors of such Grantor and any Persons
purporting to purchase any Collateral from such Grantor and (b) are prior to all
other Liens on the Collateral in existence on the date hereof except for Liens
(in the case of Collateral other than Pledged Securities) permitted by
Subsection 7.3 of the Credit Agreement.
4.4 Jurisdiction of Organization; Chief Executive Office.
On the date hereof, such Grantor's jurisdiction of organization, identification
number from the jurisdiction of organization (if any), and the location of such
Grantor's chief executive office or sole place of business or principal
residence, as the case may be, are specified on Schedule 4. Such Grantor has
furnished to the Administrative Agent a certified charter, certificate of
incorporation or other organization document and long-form good standing
certificate as of a date which is recent to the date hereof.
4.5 Inventory and Equipment. On the date hereof, the
Inventory and the Equipment (other than mobile goods) are kept at the locations
listed on Schedule 5.
15
4.6 Farm Products. None of the Collateral constitutes, or
is the Proceeds of, Farm Products.
4.7 Investment Property. (a) The shares of Pledged Stock
pledged by such Grantor hereunder constitute all the issued and outstanding
shares of all classes of the Capital Stock of each Issuer owned by such Grantor
or, in the case of Foreign Subsidiary Voting Stock, if less, 65% of the
outstanding Foreign Subsidiary Voting Stock of each relevant Issuer.
(b) All the shares of the Pledged Stock have been duly
and validly issued and are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal,
valid and binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of,
and has good and marketable title to, the Investment Property pledged by it
hereunder, free of any and all Liens or options in favor of, or claims of, any
other Person, except the security interest created by this Agreement.
4.8 Receivables. (a) No amount payable to such Grantor
under or in connection with any Receivable is evidenced by any Instrument or
Chattel Paper which has not been delivered to the Administrative Agent to the
extent required by Section 5.2.
(b) The amounts represented by such Grantor to the
Secured Parties from time to time as owing to such Grantor in respect of the
Receivables will at such times be accurate.
4.9 Intellectual Property. (a) Schedule 6 lists all
Intellectual Property owned by such Grantor in its own name on the date hereof.
(b) On the date hereof, all material Intellectual
Property of such Grantor described on Schedule 6 is valid, subsisting, unexpired
and enforceable, has not been abandoned and does not infringe the intellectual
property rights of any other Person.
(c) Except as set forth in Schedule 6, on the date
hereof, none of the Intellectual Property is the subject of any licensing or
franchise agreement pursuant to which such Grantor is the licensor or
franchisor.
(d) No holding, decision or judgment has been rendered by
any Governmental Authority which would limit, cancel or question the validity
of, or such Grantor's rights in, any Intellectual Property in any respect that
could reasonably be expected to have a Material Adverse Effect.
(e) Except as set forth in Schedule 4.6 of the Credit
Agreement, no action or proceeding is pending, or, to the knowledge of such
Grantor, threatened, on the date hereof (i) seeking to limit, cancel or question
the validity of any material Intellectual Property or such
16
Grantor's ownership interest therein, or (ii) which, if adversely determined,
would have a material adverse effect on the value of any Intellectual Property.
4.10 Vehicles. The aggregate book value of all Vehicles
owned by all Grantors is less than $1,000,000.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Administrative
Agent and the Secured Parties that, from and after the date of this Agreement
until the Obligations shall have been paid in full, no Letter of Credit shall be
outstanding and the Commitments shall have terminated:
5.1 Covenants in Credit Agreement. In the case of each
Guarantor, such Guarantor shall take, or shall refrain from taking, as the case
may be, each action that is necessary to be taken or not taken, as the case may
be, so that no Default or Event of Default is caused by the failure to take such
action or to refrain from taking such action by such Guarantor or any of its
Subsidiaries.
5.2 Delivery of Instruments and Chattel Paper. If any
amount payable under or in connection with any of the Collateral shall be or
become evidenced by any Instrument, Certificated Security or Chattel Paper, such
Instrument, Certificated Security or Chattel Paper shall be immediately
delivered to the Administrative Agent, duly indorsed in a manner satisfactory to
the Administrative Agent, to be held as Collateral pursuant to this Agreement;
provided, that the Grantors shall not be obligated to deliver to the
Administrative Agent any Instruments or Chattel Paper held by any Grantor at any
time to the extent that the aggregate face amount of all such Instruments and
Chattel Paper held by all Grantors at such time does not exceed $2,000,000.
5.3 Maintenance of Insurance. (a) Such Grantor will
maintain, with financially sound and reputable companies, insurance policies (i)
insuring the Inventory, Equipment and Vehicles against loss by fire, explosion,
theft and such other casualties as may be reasonably satisfactory to the
Administrative Agent and (ii) insuring such Grantor, the Administrative Agent
and the Secured Parties against liability for personal injury and property
damage relating to such Inventory, Equipment and Vehicles, such policies to be
in such form and amounts and having such coverage as may be reasonably
satisfactory to the Administrative Agent.
(b) All such insurance shall (i) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 30 days after receipt by the
Administrative Agent of written notice thereof, (ii) name the Administrative
Agent as insured party or loss payee, (iii) if reasonably requested by the
Administrative Agent, include a breach of warranty clause and (iv) be reasonably
satisfactory in all other respects to the Administrative Agent.
17
(c) Upon the reasonable request of the Administrative
Agent, the Borrowers shall deliver to the Administrative Agent a report of a
reputable insurance broker with respect to such insurance substantially
concurrently with the delivery by the Borrowers to the Administrative Agent of
their audited financial statements for each fiscal year and such supplemental
reports with respect thereto as the Administrative Agent may from time to time
reasonably request.
5.4 Payment of Obligations. Such Grantor will pay and
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all taxes, assessments and governmental charges
or levies imposed upon the Collateral or in respect of income or profits
therefrom, as well as all claims of any kind (including, without limitation,
claims for labor, materials and supplies) against or with respect to the
Collateral, except that no such charge need be paid if the amount or validity
thereof is currently being contested in good faith by appropriate proceedings,
reserves in conformity with GAAP with respect thereto have been provided on the
books of such Grantor and such proceedings could not reasonably be expected to
result in the sale, forfeiture or loss of any material portion of the Collateral
or any interest therein.
5.5 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest created by
this Agreement as a perfected security interest having at least the priority
described in Section 4.3 and shall defend such security interest against the
claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Administrative Agent
from time to time statements and schedules further identifying and describing
the assets and property of such Grantor and such other reports in connection
with the Collateral as the Administrative Agent may reasonably request, all in
reasonable detail.
(c) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of such Grantor,
such Grantor will promptly and duly execute and deliver, and have recorded, such
further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, (i) the filing of any financing
or continuation statements under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with respect to the security interests
created hereby and (ii) in the case of Investment Property, taking, to the
extent required by the Credit Agreement, any actions necessary to enable the
Administrative Agent to obtain "control" (within the meaning of the applicable
Uniform Commercial Code) with respect thereto.
5.6 Changes in Name, etc.. Such Grantor will not, except
upon 15 days' prior written notice to the Administrative Agent and delivery to
the Administrative Agent of all additional executed financing statements and
other documents reasonably requested by the Administrative Agent to maintain the
validity, perfection and priority of the security interests provided for herein:
(i) change its jurisdiction of organization or the
location of its chief executive office or sole place of business or
principal residence from that referred to in Section 4.3; or
18
(ii) change its name.
5.7 Notices. Such Grantor will advise the Administrative
Agent promptly, in reasonable detail, of:
(a) any Lien (other than security interests created
hereby or Liens permitted under the Credit Agreement) on any of the Collateral
which would adversely affect the ability of the Administrative Agent to exercise
any of its remedies hereunder; and
(b) the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the aggregate value
of the Collateral or on the security interests created hereby.
5.8 Investment Property. (a) If such Grantor shall become
entitled to receive or shall receive any certificate (including, without
limitation, any certificate representing a dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Administrative Agent and the Secured Parties, hold the
same in trust for the Administrative Agent and the Secured Parties and deliver
the same forthwith to the Administrative Agent in the exact form received, duly
indorsed by such Grantor to the Administrative Agent, if required, together with
an undated stock power covering such certificate duly executed in blank by such
Grantor and with, if the Administrative Agent so requests, signature guaranteed,
to be held by the Administrative Agent, subject to the terms hereof, as
additional collateral security for the Obligations. Any sums paid upon or in
respect of the Investment Property upon the liquidation or dissolution of any
Issuer shall be paid over to the Administrative Agent to be held by it hereunder
as additional collateral security for the Obligations, and in case any
distribution of capital shall be made on or in respect of the Investment
Property, or any property shall be distributed upon or with respect to the
Investment Property pursuant to the recapitalization or reclassification of the
capital of any Issuer or pursuant to the reorganization thereof, the property so
distributed shall, unless otherwise subject to a perfected security interest in
favor of the Administrative Agent, be delivered to the Administrative Agent to
be held by it hereunder as additional collateral security for the Obligations.
If any sums of money or property so paid or distributed in respect of the
Investment Property shall be received by such Grantor, such Grantor shall, until
such money or property is paid or delivered to the Administrative Agent, hold
such money or property in trust for the Secured Parties, segregated from other
funds of such Grantor, as additional collateral security for the Obligations.
Notwithstanding the foregoing, the Grantors shall not be required to pay over to
the Administrative Agent or deliver to the Administrative Agent as Collateral
any proceeds of any liquidation or dissolution of any Issuer, or any
distribution of capital or property in respect of any Investment Property, to
the extent that (i) such liquidation, dissolution or distribution, if treated as
a Disposition of the relevant Issuer, would be permitted by the Credit Agreement
and (ii) the proceeds thereof are applied toward prepayment of Loans and
reduction of Commitments to the extent required by the Credit Agreement.
(b) Without the prior written consent of the
Administrative Agent, such Grantor will not (i) vote to enable, or take any
other action to permit, any Issuer to issue any stock or other equity securities
of any nature or to issue any other securities convertible into or
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granting the right to purchase or exchange for any stock or other equity
securities of any nature of any Issuer, unless such securities are delivered to
the Administrative Agent, concurrently with the issuance thereof, to be held by
the Administrative Agent as Collateral, (ii) sell, assign, transfer, exchange,
or otherwise dispose of, or grant any option with respect to, the Investment
Property or Proceeds thereof (except pursuant to a transaction expressly
permitted by the Credit Agreement), (iii) create, incur or permit to exist any
Lien or option in favor of, or any claim of any Person with respect to, any of
the Investment Property or Proceeds thereof, or any interest therein, except for
the security interests created by this Agreement or (iv) enter into any
agreement or undertaking restricting the right or ability of such Grantor or the
Administrative Agent to sell, assign or transfer any of the Pledged Securities
or Proceeds thereof.
(c) In the case of each Grantor which is an Issuer, such
Issuer agrees that (i) it will be bound by the terms of this Agreement relating
to the Pledged Securities issued by it and will comply with such terms insofar
as such terms are applicable to it, (ii) it will notify the Administrative Agent
promptly in writing of the occurrence of any of the events described in Section
5.8(a) with respect to the Pledged Securities issued by it and (iii) the terms
of Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to
all actions that may be required of it pursuant to Section 6.3(c) or 6.7 with
respect to the Pledged Securities issued by it.
(d) Each Issuer that is a partnership or a limited
liability company (i) confirms that none of the terms of any equity interest
issued by it provides that such equity interest is a "security" within the
meaning of Sections 8-102 and 8-103 of the New York UCC (a "Security"), (ii)
agrees that it will take no action to cause or permit any such equity interest
to become a Security, (iii) agrees that it will not issue any certificate
representing any such equity interest and (iv) agrees that if, notwithstanding
the foregoing, any such equity interest shall be or become a Security, such
Issuer will (and the Grantor that holds such equity interest hereby instructs
such Issuer to) comply with instructions originated by the Administrative Agent
without further consent by such Grantor.
5.9 Receivables. (a) Other than in the ordinary course of
business consistent with its past practice, such Grantor will not (i) grant any
extension of the time of payment of any Receivable, (ii) compromise or settle
any Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable in any manner that could adversely affect the value
thereof.
(b) Such Grantor will deliver to the Administrative Agent
a copy of each material demand, notice or document received by it that questions
or calls into doubt the validity or enforceability of more than 5% of the
aggregate amount of the then outstanding Receivables.
5.10 Intellectual Property. (a) Such Grantor (either
itself or through licensees) will (i) continue to use each material Trademark on
each and every trademark class of goods applicable to its current line as
reflected in its current catalogs, brochures and price lists in order to
maintain such Trademark in full force free from any claim of abandonment for
non-use, (ii) maintain as in the past the quality of products and services
offered under such Trademark,
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(iii) use such Trademark with the appropriate notice of registration and all
other notices and legends required by applicable Requirements of Law, (iv) not
adopt or use any xxxx which is confusingly similar or a colorable imitation of
such Trademark unless the Administrative Agent, for the ratable benefit of the
Secured Parties, shall obtain a perfected security interest in such xxxx
pursuant to this Agreement, and (v) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby such
Trademark may become invalidated or impaired in any way.
(b) Such Grantor (either itself or through licensees)
will not do any act, or omit to do any act, whereby any material Patent may
become forfeited, abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) (i)
will employ each material Copyright and (ii) will not (and will not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any material portion of the Copyrights may become invalidated or
otherwise impaired. Such Grantor will not (either itself or through licensees)
do any act whereby any material portion of the Copyrights may fall into the
public domain.
(d) Such Grantor (either itself or through licensees)
will not do any act that knowingly uses any material Intellectual Property to
infringe the intellectual property rights of any other Person.
(e) Such Grantor will notify the Administrative Agent
immediately if it knows, or has reason to know, that any application or
registration relating to any material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse determination
or development (including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court or tribunal in
any country) regarding such Grantor's ownership of, or the validity of, any
material Intellectual Property or such Grantor's right to register the same or
to own and maintain the same.
(f) Whenever such Grantor, either by itself or through
any agent, employee, licensee or designee, shall file an application for the
registration of any Intellectual Property with the United States Patent and
Trademark Office, the United States Copyright Office or any similar office or
agency in any other country or any political subdivision thereof, such Grantor
shall report such filing to the Administrative Agent within five Business Days
after the last day of the fiscal quarter in which such filing occurs. Upon
request of the Administrative Agent, such Grantor shall execute and deliver, and
have recorded, any and all agreements, instruments, documents, and papers as the
Administrative Agent may request to evidence the Administrative Agent's and the
Secured Parties' security interest in any Copyright, Patent or Trademark and the
goodwill and general intangibles of such Grantor relating thereto or represented
thereby.
(g) Such Grantor will take all reasonable and necessary
steps, including, without limitation, in any proceeding before the United States
Patent and Trademark Office, the United States Copyright Office or any similar
office or agency in any other country or any political subdivision thereof, to
maintain and pursue each application relating to any material Intellectual
Property (and to obtain the relevant registration) and to maintain each
registration of
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the material Intellectual Property, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of incontestability.
(h) In the event that any material Intellectual Property
is infringed, misappropriated or diluted by a third party, such Grantor shall
(i) take such actions as such Grantor shall reasonably deem appropriate under
the circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Administrative Agent after it learns thereof and xxx for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution.
5.11 Commercial Tort Claims. If any Grantor shall at any
time commence a suit, action or proceeding with respect to any Commercial Tort
Claim held by it with a value which such Grantor reasonably believes to be of
$5,000,000 more, such Grantor shall promptly notify the Administrative Agent
thereof in a writing signed by such Grantor and describing the details thereof
and shall grant to the Administrative Agent for the benefit of the Secured
Parties in such writing a security interest therein and in the proceeds thereof,
all upon the terms of this Agreement, with such writing to be in form and
substance reasonably satisfactory to the Administrative Agent.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) The
Administrative Agent shall have the right, at any time after the occurrence and
during the continuance of an Event of Default, to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as
the Administrative Agent may require in connection with such test verifications.
At any time and from time to time after the occurrence and during the
continuance of an Event of Default, upon the Administrative Agent's request and
at the expense of the relevant Grantor, such Grantor shall cause independent
public accountants or others satisfactory to the Administrative Agent to furnish
to the Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Receivables.
(b) The Administrative Agent hereby authorizes each
Grantor to collect such Grantor's Receivables, subject to the Administrative
Agent's direction and control after the occurrence and during the continuance of
an Event of Default, and the Administrative Agent may curtail or terminate said
authority at any time after the occurrence and during the continuance of an
Event of Default. If required by the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, any payments of
Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any
event, within two Business Days) deposited by such Grantor in the exact form
received, duly indorsed by such Grantor to the Administrative Agent if required,
in a Collateral Account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent for the
account of the Secured Parties only as provided in Section 6.5, and (ii) until
so turned over, shall be held by such Grantor in trust for the Administrative
Agent and the Secured Parties, segregated from other funds of such Grantor. Each
such deposit of Proceeds of Receivables shall be accompanied by a report
identifying in reasonable detail the nature and source of the payments included
in the deposit.
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(c) At the Administrative Agent's request, each Grantor
shall deliver to the Administrative Agent all original and other documents
evidencing, and relating to, the agreements and transactions which gave rise to
the Receivables, including, without limitation, all original orders, invoices
and shipping receipts.
6.2 Communications with Obligors; Grantors Remain Liable.
(a) The Administrative Agent in its own name or in the name of others may at any
time after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Receivables to verify with them to the
Administrative Agent's satisfaction the existence, amount and terms of any
Receivables.
(b) Upon the request of the Administrative Agent at any
time after the occurrence and during the continuance of an Event of Default,
each Grantor shall notify obligors on the Receivables that the Receivables have
been assigned to the Administrative Agent for the ratable benefit of the Secured
Parties and that payments in respect thereof shall be made directly to the
Administrative Agent.
(c) Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Receivables (or any agreement
giving rise thereto) to observe and perform all the conditions and obligations
to be observed and performed by it thereunder, all in accordance with the terms
of any agreement giving rise thereto. Neither the Administrative Agent nor any
Secured Party shall have any obligation or liability under any Receivable (or
any agreement giving rise thereto) by reason of or arising out of this Agreement
or the receipt by the Administrative Agent or any Secured Party of any payment
relating thereto, nor shall the Administrative Agent or any Secured Party be
obligated in any manner to perform any of the obligations of any Grantor under
or pursuant to any Receivable (or any agreement giving rise thereto), to make
any payment, to make any inquiry as to the nature or the sufficiency of any
payment received by it or as to the sufficiency of any performance by any party
thereunder, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
6.3 Pledged Stock. (a) Unless an Event of Default shall
have occurred and be continuing and the Administrative Agent shall have given
notice to the relevant Grantor of the Administrative Agent's intent to exercise
its corresponding rights pursuant to Section 6.3(b), each Grantor shall be
permitted to receive all cash dividends paid in respect of the Pledged Stock and
all payments made in respect of the Pledged Notes, in each case paid in the
normal course of business of the relevant Issuer and consistent with past
practice, to the extent permitted in the Credit Agreement, and to exercise all
voting and corporate rights with respect to the Pledged Securities; provided,
however, that no vote shall be cast or corporate right exercised or other action
taken which, in the Administrative Agent's reasonable judgment, would impair the
Collateral or which would be inconsistent with or result in any violation of any
provision of the Credit Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing
and the Administrative Agent shall give notice of its intent to exercise such
rights to the relevant Grantor or Grantors, (i) the Administrative Agent shall
have the right to receive any and all cash dividends, payments or other Proceeds
paid in respect of the Pledged Securities and make application thereof to the
Obligations in the order set forth in Section 6.5, and (ii) any or all of
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the Pledged Securities shall be registered in the name of the Administrative
Agent or its nominee, and the Administrative Agent or its nominee may thereafter
exercise (x) all voting, corporate and other rights pertaining to such Pledged
Securities at any meeting of shareholders of the relevant Issuer or Issuers or
otherwise and (y) any and all rights of conversion, exchange and subscription
and any other rights, privileges or options pertaining to such Pledged
Securities as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Securities upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the corporate structure of any Issuer, or upon the
exercise by any Grantor or the Administrative Agent of any right, privilege or
option pertaining to such Pledged Securities, and in connection therewith, the
right to deposit and deliver any and all of the Pledged Securities with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Administrative Agent may determine), all
without liability except to account for property actually received by it, but
the Administrative Agent shall have no duty to any Grantor to exercise any such
right, privilege or option and shall not be responsible for any failure to do so
or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each
Issuer of any Pledged Securities pledged by such Grantor hereunder to (i) comply
with any instruction received by it from the Administrative Agent in writing
that (x) states that an Event of Default has occurred and is continuing and (y)
is otherwise in accordance with the terms of this Agreement, without any other
or further instructions from such Grantor, and each Grantor agrees that each
Issuer shall be fully protected in so complying, and (ii) unless otherwise
expressly permitted hereby, pay any dividends or other payments with respect to
the Pledged Securities directly to the Administrative Agent.
6.4 Proceeds to be Turned Over To Administrative Agent.
In addition to the rights of the Administrative Agent and the Secured Parties
specified in Section 6.1 with respect to payments of Receivables, if an Event of
Default shall occur and be continuing, all Proceeds received by any Grantor
consisting of cash, checks and Instruments shall be held by such Grantor in
trust for the Administrative Agent and the Secured Parties, segregated from
other funds of such Grantor, and shall, forthwith upon receipt by such Grantor,
be turned over to the Administrative Agent in the exact form received by such
Grantor (duly indorsed by such Grantor to the Administrative Agent, if
required). All Proceeds received by the Administrative Agent hereunder shall be
held by the Administrative Agent in a Collateral Account maintained under its
sole dominion and control. All Proceeds while held by the Administrative Agent
in a Collateral Account (or by such Grantor in trust for the Administrative
Agent and the Secured Parties) shall continue to be held as collateral security
for all the Obligations and shall not constitute payment thereof until applied
as provided in Section 6.5.
6.5 Application of Proceeds. At such intervals as may be
agreed upon by the Borrowers and the Administrative Agent, or, if an Event of
Default shall have occurred and be continuing, at any time at the Administrative
Agent's election, the Administrative Agent may apply all or any part of Proceeds
constituting Collateral, whether or not held in any Collateral Account, and any
proceeds of the guarantee set forth in Section 2, in payment of the Obligations
in the following order:
First, to pay incurred and unpaid fees and expenses of the
Administrative Agent under the Loan Documents;
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Second, to the Administrative Agent, for application by it
towards payment of amounts then due and owing and remaining unpaid in
respect of the Obligations, pro rata among the Secured Parties
according to the amounts of the Obligations then due and owing and
remaining unpaid to the Secured Parties;
Third, to the Administrative Agent, for application by it
towards prepayment of the Obligations, pro rata among the Secured
Parties according to the amounts of the Obligations then held by the
Secured Parties; and
Fourth, any balance of such Proceeds remaining after the
Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have terminated shall be paid
over to the Borrowers or to whomsoever may be lawfully entitled to
receive the same.
6.6 Code and Other Remedies. If an Event of Default shall
occur and be continuing, the Administrative Agent, on behalf of the Secured
Parties, may exercise, in addition to all other rights and remedies granted to
them in this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a secured
party under the New York UCC or any other applicable law. Without limiting the
generality of the foregoing, the Administrative Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon any
Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker's board or office of
the Administrative Agent or any Secured Party or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
The Administrative Agent or any Secured Party shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any such private
sale or sales, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption in any Grantor, which right or equity is
hereby waived and released. Each Grantor further agrees, at the Administrative
Agent's request, to assemble the Collateral and make it available to the
Administrative Agent at places which the Administrative Agent shall reasonably
select, whether at such Grantor's premises or elsewhere. The Administrative
Agent shall apply the net proceeds of any action taken by it pursuant to this
Section 6.6 with respect to any Grantor's Collateral, after deducting all
reasonable costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping of any of the Collateral of such Grantor
or in any way relating to the Collateral of such Grantor or the rights of the
Administrative Agent and the Secured Parties hereunder with respect thereto,
including, without limitation, reasonable attorneys' fees and disbursements, to
the payment in whole or in part of the Obligations of such Grantor, in the order
specified in Section 6.5, and only after such application and after the payment
by the Administrative Agent of any other amount required by any provision of
law, including, without limitation, Section 9-615(a)(3) of the New York UCC,
need the Administrative Agent account for the surplus, if any, to any Grantor.
To the extent permitted by applicable law, each Grantor waives all claims,
damages and demands it may acquire against the Administrative Agent or any
Secured Party arising out of
25
the exercise by them of any rights hereunder. If any notice of a proposed sale
or other disposition of Collateral shall be required by law, such notice shall
be deemed reasonable and proper if given at least 10 days before such sale or
other disposition.
6.7 Registration Rights. (a) If the Administrative Agent
shall determine to exercise its right to sell any or all of the Pledged Stock
pursuant to Section 6.6, and if in the opinion of the Administrative Agent it is
necessary or advisable to have the Pledged Stock, or that portion thereof to be
sold, registered under the provisions of the Securities Act, the relevant
Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the Administrative Agent, necessary or advisable to
register the Pledged Stock, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering of
the Pledged Stock, or that portion thereof to be sold, and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Each Grantor agrees to
cause such Issuer to comply with the provisions of the securities or "Blue Sky"
laws of any and all jurisdictions which the Administrative Agent shall designate
and to make available to its security holders, as soon as practicable, an
earnings statement (which need not be audited) which will satisfy the provisions
of Section 11(a) of the Securities Act.
(b) Each Grantor recognizes that the Administrative Agent
may be unable to effect a public sale of any or all the Pledged Stock, by reason
of certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Administrative
Agent shall be under no obligation to delay a sale of any of the Pledged Stock
for the period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Stock pursuant to this Section 6.7
valid and binding and in compliance with any and all other applicable
Requirements of Law. Each Grantor further agrees that a breach of any of the
covenants contained in this Section 6.7 will cause irreparable injury to the
Administrative Agent and the Secured Parties, that the Administrative Agent and
the Secured Parties have no adequate remedy at law in respect of such breach
and, as a consequence, that each and every covenant contained in this Section
6.7 shall be specifically enforceable against such Grantor, and such Grantor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no Event of
Default has occurred under the Credit Agreement.
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6.8 Deficiency. Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Obligations and the fees and disbursements of any
attorneys employed by the Administrative Agent or any Secured Party to collect
such deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as
Attorney-in-Fact, etc. (a) Each Grantor hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Grantor and in
the name of such Grantor or in its own name, for the purpose of carrying out the
terms of this Agreement, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement, and, without limiting the generality
of the foregoing, each Grantor hereby gives the Administrative Agent the power
and right, on behalf of such Grantor, without notice to or assent by such
Grantor, to do any or all of the following:
(i) in the name of such Grantor or its own name, or
otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of
moneys due under any Receivable or with respect to any other Collateral
and file any claim or take any other action or proceeding in any court
of law or equity or otherwise deemed appropriate by the Administrative
Agent for the purpose of collecting any and all such moneys due under
any Receivable or with respect to any other Collateral whenever
payable;
(ii) in the case of any Intellectual Property, execute and
deliver, and have recorded, any and all agreements, instruments,
documents and papers as the Administrative Agent may request to
evidence the Administrative Agent's and the Secured Parties' security
interest in such Intellectual Property and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on
or threatened against the Collateral, effect any repairs or any
insurance called for by the terms of this Agreement and pay all or any
part of the premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in
Section 6.6 or 6.7, any indorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral;
(v) (1) direct any party liable for any payment under any
of the Collateral to make payment of any and all moneys due or to
become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (2) ask or demand for, collect, and
receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising
out of any Collateral; (3) sign and indorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral;(4) commence and
prosecute any
27
suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any portion thereof
and to enforce any other right in respect of any Collateral; (5) defend
any suit, action or proceeding brought against such Grantor with
respect to any Collateral;(6) settle, compromise or adjust any such
suit, action or proceeding and, in connection therewith, give such
discharges or releases as the Administrative Agent may deem
appropriate; (7) assign any Copyright, Patent or Trademark (along with
the goodwill of the business to which any such Copyright, Patent or
Trademark pertains), throughout the world for such term or terms, on
such conditions, and in such manner, as the Administrative Agent shall
in its sole discretion determine; and (8) generally, sell, transfer,
pledge and make any agreement with respect to or otherwise deal with
any of the Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for all purposes,
and do, at the Administrative Agent's option and such Grantor's
expense, at any time, or from time to time, all acts and things which
the Administrative Agent deems necessary to protect, preserve or
realize upon the Collateral and the Administrative Agent's and the
Secured Parties' security interests therein and to effect the intent of
this Agreement, all as fully and effectively as such Grantor might do;
and
(vi) license or sublicense whether on an exclusive or
non-exclusive basis, any Intellectual Property for such term and on
such conditions and in such manner as the Administrative Agent shall in
its sole judgment determine and, in connection therewith, such Grantor
hereby grants to the Administrative Agent for the benefit of the
Secured Parties a royalty-free, world-wide irrevocable license of its
Intellectual Property.
Anything in this Section 7.1 (a) to the contrary
notwithstanding, the Administrative Agent agrees that it will not exercise any
rights under the power of attorney provided for in this Section 7.1(a) unless an
Event of Default shall have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of
its agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due Revolving Credit Loans that are Base
Rate Loans under the Credit Agreement, from the date of payment by the
Administrative Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys
shall lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the security
interests created hereby are released.
7.2 Duty of Administrative Agent. The Administrative
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the New
York UCC or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar property for its own account. Neither
the
28
Administrative Agent, any Secured Party nor any of their respective officers,
directors, employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Administrative Agent and the Secured Parties hereunder are
solely to protect the Administrative Agent's and the Secured Parties' interests
in the Collateral and shall not impose any duty upon the Administrative Agent or
any Secured Party to exercise any such powers. The Administrative Agent and the
Secured Parties shall be accountable only for amounts that they actually receive
as a result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be responsible to any Grantor for
any act or failure to act hereunder, except for their own gross negligence or
willful misconduct.
7.3 Execution of Financing Statements. Pursuant to any
applicable law, each Grantor authorizes the Administrative Agent to file or
record financing statements and other filing or recording documents or
instruments with respect to the Collateral without the signature of such Grantor
in such form and in such offices as the Administrative Agent determines
appropriate to perfect the security interests of the Administrative Agent under
this Agreement. Each Grantor authorizes the Administrative Agent to use the
collateral description "all personal property" or "all assets" in any such
financing statements.
7.4 Authority of Administrative Agent. Each Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the Secured Parties, be governed by the Credit Agreement and by such
other agreements with respect thereto as may exist from time to time among them,
but, as between the Administrative Agent and the Grantors, the Administrative
Agent shall be conclusively presumed to be acting as agent for the Secured
Parties with full and valid authority so to act or refrain from acting, and no
Grantor shall be under any obligation, or entitlement, to make any inquiry
respecting such authority. Notwithstanding any other provision herein or in any
Loan Document, the only duty or responsibility of the Administrative Agent to
any Qualified Counterparty under this Agreement is the duty to remit to such
Qualified Counterparty any amounts to which it is entitled pursuant to Section
6.5.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or
provisions of this Agreement may be waived, amended, supplemented or otherwise
modified except by a written instrument executed by each affected Grantor and
the Administrative Agent, provided that any provision of this Agreement imposing
obligations on any Grantor may be waived in accordance with Section 10.1 of the
Credit Agreement. No consent of any Qualified Counterparty shall be required for
any waiver, amendment, supplement or other modification to this Agreement.
29
8.2 Notices. All notices, requests and demands to or upon
the Administrative Agent or any Grantor hereunder shall be effected in the
manner provided for in Section 10.2 of the Credit Agreement; provided that any
such notice, request or demand to or upon any Guarantor shall be addressed to
such Guarantor at its notice address set forth on Schedule 1.
8.3 No Waiver by Course of Conduct; Cumulative Remedies.
Neither the Administrative Agent nor any Secured Party shall by any act (except
by a written instrument pursuant to Section 8.1), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default. No failure to exercise, nor any
delay in exercising, on the part of the Administrative Agent or any Secured
Party, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent or
any Secured Party of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy which the Administrative Agent or
such Secured Party would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or concurrently
and are not exclusive of any other rights or remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each
Grantor agrees to pay, or reimburse each Secured Party and the Administrative
Agent for, all its costs and expenses incurred in collecting against such
Grantor under the guarantee contained in Section 2 or otherwise enforcing or
preserving any rights under this Agreement and the other Loan Documents to which
such Grantor is a party, including, without limitation, the fees and
disbursements of counsel (including the allocated fees and expenses of in-house
counsel) to each Secured Party and of counsel to the Administrative Agent.
(b) Each Grantor agrees to pay, and to save the
Administrative Agent and the Secured Parties harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
stamp, excise, sales or other taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement.
(c) Each Grantor agrees to pay, and to save the
Administrative Agent and the Secured Parties harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement to the extent the Borrowers would be required to do so pursuant to
Section 10.5 of the Credit Agreement.
(d) The agreements in this Section 8.4 shall survive
repayment of the Obligations and all other amounts payable under the Credit
Agreement and the other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be
binding upon the successors and assigns of each Grantor and shall inure to the
benefit of the Administrative Agent and the Secured Parties and their successors
and assigns; provided that no Grantor may assign, transfer or delegate any of
its rights or obligations under this Agreement without the prior written consent
of the Administrative Agent.
30
8.6 Set-Off. Each Grantor hereby irrevocably authorizes
the Administrative Agent and each Secured Party at any time and from time to
time while an Event of Default shall have occurred and be continuing, without
notice to such Grantor or any other Grantor, any such notice being expressly
waived by each Grantor, to set-off and appropriate and apply any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Administrative Agent or such Secured
Party to or for the credit or the account of such Grantor, or any part thereof
in such amounts as the Administrative Agent or such Secured Party may elect,
against and on account of the obligations and liabilities of such Grantor to the
Administrative Agent or such Secured Party hereunder and claims of every nature
and description of the Administrative Agent or such Secured Party against such
Grantor, in any currency, whether arising hereunder, under the Credit Agreement,
any other Loan Document or otherwise, as the Administrative Agent or such
Secured Party may elect, whether or not the Administrative Agent or any Secured
Party has made any demand for payment and although such obligations, liabilities
and claims may be contingent or unmatured. The Administrative Agent and each
Secured Party shall notify such Grantor promptly of any such set-off and the
application made by the Administrative Agent or such Secured Party of the
proceeds thereof, provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Administrative
Agent and each Secured Party under this Section 8.6 are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
which the Administrative Agent or such Secured Party may have.
8.7 Counterparts. This Agreement may be executed by one
or more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
8.8 Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
8.9 Section Headings. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
8.10 Integration. This Agreement and the other Loan
Documents represent the agreement of the Grantors, the Administrative Agent and
the Secured Parties with respect to the subject matter hereof and thereof, and
there are no promises, undertakings, representations or warranties by the
Administrative Agent or any Secured Party relative to subject matter hereof and
thereof not expressly set forth or referred to herein or in the other Loan
Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
8.12 Submission To Jurisdiction; Waivers. Each Grantor
hereby irrevocably and unconditionally:
31
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of the
State of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to such
Grantor at its address referred to in Section 8.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law,
any right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or consequential
damages.
8.13 Acknowledgements. Each Grantor hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents to which
it is a party;
(b) neither the Administrative Agent nor any Secured
Party has any fiduciary relationship with or duty to any Grantor arising out of
or in connection with this Agreement or any of the other Loan Documents, and the
relationship between the Grantors, on the one hand, and the Administrative Agent
and Secured Parties, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Secured Parties or among the Grantors and the Secured Parties.
8.14 Additional Grantors. Each Subsidiary of the Borrower
that is required to become a party to this Agreement pursuant to Section 6.9 of
the Credit Agreement shall become a Grantor for all purposes of this Agreement
upon execution and delivery by such Subsidiary of an Assumption Agreement in the
form of Annex 1 hereto.
8.15 Releases. (a) At such time as the Loans, the
Reimbursement Obligations and the other Obligations (other than Borrower Hedge
Agreement Obligations and Guarantor Hedge Agreement Obligations) shall have been
paid in full, the Commitments have been terminated and no Letters of Credit
shall be outstanding, the Collateral shall be released from the Liens created
hereby, and this Agreement and all obligations (other than those expressly
stated to survive such termination) of the Administrative Agent and each Grantor
hereunder shall
32
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Grantors. At the
request and sole expense of any Grantor following any such termination, the
Administrative Agent shall deliver to such Grantor any Collateral held by the
Administrative Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred
or otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, then the Administrative Agent, at the request and sole expense of
such Grantor, shall execute and deliver to such Grantor all releases or other
documents reasonably necessary or desirable for the release of the Liens created
hereby on such Collateral. At the request and sole expense of either Borrower, a
Subsidiary Guarantor shall be released from its obligations hereunder in the
event that all the Capital Stock of such Subsidiary Guarantor shall be sold,
transferred or otherwise disposed of in a transaction permitted by the Credit
Agreement; provided that such Borrower shall have delivered to the
Administrative Agent, at least ten Business Days prior to the date of the
proposed release, a written request for release identifying the relevant
Subsidiary Guarantor and the terms of the sale or other disposition in
reasonable detail, including the price thereof and any expenses in connection
therewith, together with a certification by such Borrower stating that such
transaction is in compliance with the Credit Agreement and the other Loan
Documents.
(c) No consent of any Qualified Counterparty shall be
required for any release of Collateral or Guarantors pursuant to this Section.
33
8.16 WAIVER OF JURY TRIAL. EACH GRANTOR AND, BY ACCEPTANCE
OF THE BENEFITS HEREOF, EACH AGENT AND EACH SECURED PARTY, HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.
34
IN WITNESS WHEREOF, each of the undersigned has caused this
Amended and Restated Guarantee and Collateral Agreement to be duly executed and
delivered as of the date first above written.
K&F INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President and
Chief Operating Officer
AIRCRAFT BRAKING SYSTEMS
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Assistant Vice President
ENGINEERED FABRICS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Assistant Vice President
35
Schedule 1
NOTICE ADDRESSES OF GUARANTORS
For all Guarantors:
c/o K&F Industries, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
President
Telecopy: (000) 000-0000
Schedule 2
DESCRIPTION OF PLEDGED SECURITIES
PLEDGED STOCK:
Issuer Class of Stock Stock Certificate No. No. of Shares
-------------------------------------- ---------------- ---------------------- ---------------
Aircraft Braking Common 1 100
Systems Corporation
Engineered Fabrics Common 1 100
Corporation
PLEDGED NOTES:
Issuer Payee Principal Amount
-------------------------------------- ------------------------ -----------------------
Aircraft Braking K&F Industries, Inc. $304,6000,000
Systems Corporation
Engineered Fabrics K&F Industries, Inc. $ 48,400,000
Corporation
Schedule 3
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
Patent and Trademark Filings
Actions with respect to Pledged Stock
Other Actions
SCHEDULE 4
LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE
OFFICE
JURISDICTION OF
ENTITY ORGANIZATION CHIEF EXECUTIVE OFFICE
------ ------------ ----------------------
K & F INDUSTRIES, INC. Delaware 000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
AIRCRAFT BRAKING SYSTEMS Delaware 0000 Xxxxxxxxx Xxxx
XXXXXXXXXXX Xxxxx, Xxxx 00000
ENGINEERED FABRICS Delaware 000 Xxxxxxxx Xxxxxx
XXXXXXXXXXX Xxxxxxxx, Xxxxxxx 00000
Schedule 5
INVENTORY AND EQUIPMENT
SCHEDULE 6
COPYRIGHTS AND COPYRIGHT LICENSES
[SEE ATTACHED]
PATENTS AND PATENT LICENSES
[SEE ATTACHED]
TRADEMARKS AND TRADEMARK LICENSES
[SEE ATTACHED]
SCHEDULE 7
VEHICLES
DELETE SCHEDULE
Page 1
ABSC COPYRIGHT REGISTRATIONS
COMPONENT REGISTRATION REGISTRATION DATE OF FIRST
MAINTENANCE MANUALS NUMBER DATE PUBLICATION
------------------- ------ ---- -----------
AP682 Main Whl Assy TX4-532-730 13-Sep-96 13-Feb-90
AP662 Brake Assy TX4-377-955 16-Sep-96 27-Jun-91
AP652 Brake Assy TX4-380-219 16-Sep-96 15-Apr-94
AP747 Brake Assy TX4-376-121 13-Sep-96 29-Apr-94
AP709 Worn Carbon Refurbishment TX4-532-731 00-Xxx-00 0-Xxx-00
XX000 Xxxxx Assy TX4-369-069 13-Sep-96 30-Dec-94
AP729 Main Whl Assy TX4-470-092 16-Sep-96 27-Apr-95
AP761 Wheel Speed Trans. Assy TX4-069-473 6-Jun-95 5-May-95
AP769 Main Whl Assy TX4-085-456 15-Aug-95 30-Jul-95
AP770 Brake Assy TX4-170-193 26-Oct-95 15-Sep-95
AP749 Brake Assy TX4-242-059 18-Mar-96 15-Oct-95
AP765 Brake Assy TX4-168-319 19-Dec-95 16-Oct-95
AP716 Brake Assy TX4-665-983 10-Nov-97 12-Jan-96
AP767 Main Whl Assy TX4-251-954 9-Apr-96 26-Feb-96
AP651 Main Whl Assy TX4-380-970 13-Sept-96 29-Apr-96
AP724 Main Whl Assy TX4-313-684 16-Sep-96 3-May-96
AP768 Brake Assy TX4-330-371 1-Jul-96 13-May-96
Page 2
ABSC COPYRIGHT REGISTRATIONS
COMPONENT REGISTRATION REGISTRATION DATE OF FIRST
MAINTENANCE MANUALS NUMBER DATE PUBLICATION
------------------- ------ ---- -----------
AP731 Main Whl Assy TX4-374-852 13-Sep-96 19-Jul-96
AP766 Brake Assy TX4-387-406 4-Oct-96 27-Aug-96
AP730 Brake Assy (2nd version) TX4-478-665 24-Feb-97 4-Nov-96
AP715 Main Whl Assy TX4 498-330 24-Feb-97 29-Jan-97
AP747 Brake Assy TX4-493-599 27-Feb-97 29-Jan-97
AP758 Main Whl Assy TX4-642-447 6-Oct-97 12-Sep-97
AP689 Main Whl Assy TX4-749-473 30-Mar-98 12-Mar-98
AP767 Main Whl Assy (Rev 1) TX4-779-792 20-May-98 6-Apr-98
AP715 Main Whl Assy (Rev 2) TX4-781-993 19-May-98 10-Apr-98
AP768 Brake Assy (Rev 1) TX4-810-079 2-Jul-98 16-Jun-98
AP690 Brake Assy TX4-823-044 15-Jul-98 22-Jun-98
AP651 Main Whl Assy (11th Edition) TX4-876-693 26-Oct-98 15-Oct-98
AP716 Brake Assy (4th Edition) TX4-905-321 12-Dec-98 19-Nov-98
AP747 Brake Assy (Rev 3) TX4-921-206 20-Jan-99 17-Dec-98
Q82-01 Main Whl Assy (Rev 4) TX4-932-897 8-Feb-99 8-Jan-99
AP789 Brake Assy TX5-042-212 17-Jun-99 2-Jun-99
AP714 Nose Whl Assy (Rev 3) TX5-079-144 18-Oct-99 24-Sep-99
AP775 Brake Control Valve Assy TX5-141-479 13-Jan-00 13-Dec-99
AP785 Brake Assy TX5-064-019 13-Jan-00 13-Dec-99
Page 3
ABSC COPYRIGHT REGISTRATIONS
COMPONENT REGISTRATION REGISTRATION DATE OF FIRST
MAINTENANCE MANUALS NUMBER DATE PUBLICATION
------------------- ------ ---- -----------
AP790 Power Brake Control Valve TX5-134-285 13-Jan-00 13-Dec-99
AP797 Skid Control Unit TX5-130-581 13-Jan-00 13-Dec-99
AP799 Hydraulic Fuse/Shuttle Valve TX5-130-530 13-Jan-00 13-Dec-99
Q85-03 Brake Assy (Rev 3) TX5-134-016 24-Jan-00 16-Dec-99
AP477 Brake Assy (Rev 2) TX5-145-175 18-Feb-00 10-Jan-00
AP638 Main Whl Assy (Rev 4) TX5-144-204 18-Feb-00 10-Jan-00
AP749 Brake Assy (Rev 1) TX5-144-201 18-Feb-00 10-Jan-00
AP731 Main Whl Assy (Rev 4) TX5-149-327 29-Feb-00 11-Jan-00
AP617 Main Whl Assy (Re 7) TX5-152-188 2-Mar-00 15-Feb-00
AP541 Brake Assy (Rev 10) TX5-151-436 2-Mar-00 15-Feb-00
AP616 Brake Assy (Rev 3) TX5-177-149 27-Mar-00 15-Feb-00
AP617 Nose Whl Assy (Rev 3) TX5-183-571 27-Mar-00 15-Feb-00
AP744 Main Whl Assy (Rev 4) TX5-177-151 27-Mar-00 21-Feb-00
AP720 Brake Assy (Rev 1) TX5-177-150 27-Mar-00 1-Mar-00
AP814 Brake Metering Unit TX5-156-021 27-Mar-00 1-Mar-00
AP388 Brake Assy (Rev 26) TX5-177-148 27-Mar-00 2-Mar-00
AP480 Main Whl Assy (Rev 26) TX5-151-438 2-Mar-00 2-Mar-00
AP798 Brake Assy TX5-191-217 13-Apr-00 13-Mar-00
AP299 Main Whl Assy (Rev 12) TX5-191-218 13-Apr-00 15-Mar-00
Page 4
ABSC COPYRIGHT REGISTRATIONS
COMPONENT REGISTRATION REGISTRATION DATE OF FIRST
MAINTENANCE MANUALS NUMBER DATE PUBLICATION
------------------- ------ ---- -----------
AP255 Nos Whl Assy (Rev 5) TX5-186-609 27-Apr-00 4-Apr-00
AP362 Parking Valve Assy (Rev 6) TX5-225-796 10-May-00 18-Apr-00
AP821 Drive Cap Assy TX5-212-123 10-May-00 26-Apr-00
AP589 Skid Control Unit (Rev 4) TX5-225-555 17-Jun-00 9-May-00
AP815 Brake Temp Sensor Assy TX5-236-274 26-Jun-00 9-May-00
AP743 Brake Assy (Rev 4) TX5-249-750 10-Jul-00 2-Jun-00
AP728 Nose Whl Assy (Rev 3) TX5-256-807 28-Jul-00 6-Jul-00
AP730 Brake Assy (Rev 3) TX5-256-930 28-Jul-00 7-Jul-00
AP584 Nose Whl Assy (Rev 7) TX5-174-474 16-Aug-00 12-Jul-00
AP795 Nose Wheel Assy TX5-285-266 4-Aug-00 18-Jul-00
AP817 Skid Control Valve TX5-226-979 4-Aug-00 18-Jul-00
AP818 Brake Metering Unit TX5-264-131 16-Aug-00 18-Jul-00
AP608 Brake Assy (Rev 4) TX5-264-130 16-Aug-00 27-Jul-00
AP604 Nose Whl Assy (Rev 4) TX5-274-675 14-Sep-00 9-Aug-00
AP794 Main Whl Assy TX5-267-211 14-Sep-00 18-Aug-00
AP819 A/S Control Unit TX5-281-271 29-Sep-00 14-Sep-00
AP793 Brake Assy TX5-281-270 2-Oct-00 18-Sep-00
AP742 Main Wheel Assy (Rev 2) TX5-286-127 20-Oct-00 26-Sep-00
Guide to Excep Br Control System TX5-346-284 16-Feb-01 15-Nov-00
Page 5
ABSC COPYRIGHT REGISTRATIONS
COMPONENT REGISTRATION REGISTRATION DATE OF FIRST
MAINTENANCE MANUALS NUMBER DATE PUBLICATION
------------------- ------ ---- -----------
Guide to Excep A/C Carbon TX5-338-039 16-Feb-01 1-Dec-00
Guide to Excep A/C Steel Brake TX5-338-038 16-Feb-01 1-Dec-00
Guide to Excep A/C Wheel TX5-338-044 16-Feb-01 1-Dec-00
Guide to Excep Nondestructive TX5-338-043 16-Feb-01 1-Dec-00
AP792 Brake Assy TX5-312-190 21-Dec-00 8-Dec-00
AP736 Main Wheel Assy (Rev 5) TX5-346-318 20-Feb-01 29-Jan-01
AP737 Brake Assy (Rev 4) TX5-334-896 20-Feb-01 29-Jan-01
AP747 Brake Assy (Rev 4) TX5-349-905 6-Mar-01 31-Jan-01
AP795 Nose Wheel Assy (Rev 1) TX5-337-869 20-Feb-01 5-Feb-01
AP786 Brake Assy TX5-377-688 27-Apr-01 23-Mar-01
AP787 Main Wheel Assy TX5-377-679 27-Apr-01 23-Mar-01
AP788 Nose Whl Assy TX5-390-267 18-May-01 23-Mar-01
AP803 Whl Speed Transducer TX5-381-786 30-Apr-01 23-Mar-01
AP639 Brake Assy (Rev 2) TX5-390-266 18-May-01 3-Apr-01
AP473 Brake Assy (Rev 5) TX5-360-662 7-Jun-01 15-May-01
Q73-5 Main Whl (Rev 5) TX5-360-663 7-Jun-01 15-May-01
AP388 Brake Assy (Rev 27) TX5-439-910 4-Sep-01 13-Jul-01
Q73-04 Brake Assy (Rev 6) TX5-431-823 17-Sep-01 1-Aug-01
AP793 Brake Assy (Rev 1) TX5-438-459 19-Sep-01 14-Aug-01
Page 6
ABSC COPYRIGHT REGISTRATIONS
COMPONENT REGISTRATION REGISTRATION DATE OF FIRST
MAINTENANCE MANUALS NUMBER DATE PUBLICATION
------------------- ------ ---- -----------
AP753 Whl Speed Trans Assy TX5-594-995 31-Oct-01 24-Sep-01
AP800 Skid Control TX5-536-749 31-Oct-01 3-Oct-01
AP810 Nose Whl Assy TX5-528-116 31-Dec-01 10-Dec-01
ABSC COPYRIGHT REGISTRATIONS
REGISTRATION DATE OF FIRST
SOFTWARE NUMBER REGISTRATION DATE PUBLICATION
-------- ------ ----------------- -----------
Antiskid/Taxi Brake Select Software TX4-006-455 13-Mar-95 24-Feb-95
SWP 5325 MD11-3
Antiskid/Autobrake Software TX3-942-668 0-Xxx-00 00-Xxx-00
XXX 0000
Xxxxxxxx/Xxxxx Feedback Software TX4-028-875 10-Apr-95 21-Mar-95
SWP 8282, Tier 3
TRADEMARKS
----------
ABSC 1,660,739 15-Oct-91
Discontinued
GY 2,285,060 12-Oct-99
NUGARB Appl No. 76/349,537
October 30,2002
page 1
AIRCRAFT BRAKING SYSTEMS CORPORATION
U.S. PATENTS ISSUED
DOCKET NO. TITLE OF INVENTION PATENT DATE PATENT NO.
---------- ------------------ ----------- ----------
B3172A Locking confirmation for a wheel rim 8/4/87 4,683,930
flange retaining ring
B/A 3263A Fail safe brake valve driver 7/26/88 4,760,491
B/A 3040A Digital antiskid control system 9/20/88 4,773,013
B/A 3210A Electronically actuated aircraft 9/12/89 4,865,162
brakes
B/A 8908A Method of increasing service life of 5/8/90 4,923,056
aircraft carbon brakes
B/A 3259A Motor position feedback controlled 2/26/91 4,995,483
electrically actuated aircraft brake
B 8921A Brake assembly heat shield 3/26/91 5,002,342
DISCONTINUED
JAN 2000
B 9001A Aircraft deceleration brake control 8/4/92 5,136,510
system
B 9015A Coupler for aircraft wheel speed 8/18/92 5,139,461
transducer
DOCKET NO. TITLE OF INVENTION PATENT DATE PATENT NO.
---------- ------------------ ----------- ----------
B/A 3269A Electrical brake pressure limiter and 9/8/92 5,146,408
controller
B 9025A Configuration for demountable wheel 11/9/93 5,259,430
rim flange/split lockring assemblies
ABANDONED
B 9109A Configuration for disk brake torque 6/28/94 5,323,881
tube
B 9207A Pressure balanced brake stack 9/3/96 5,551,534
B 9407A Pre-load device for reducing aircraft 1/7/97 5,590,743
brake Vibration
B 8914A Phase change brake disks 3/25/97 5,613,578
B 0000X Xxxxxx and apparatus for 11/11/97 5,686,117
manufacturing Disc brakes
B 9403A Carbon brake disc structures and 6/23/98 5,769,185
method of making same
B 9704A Metallic aircraft brake disk having 11/22/98 5,850,895
thermal Relief slots
B 9312A Aircraft wheel & beam key attachment 12/21/99 6,003,954
B 9801A Fail safe electrical brake 2/6/01 6,183,051B1
control system for A/C
DOCKET NO. TITLE OF INVENTION PATENT DATE PATENT NO.
---------- ------------------ ----------- ----------
B 9601A Inflation value over pressure 9/21/99 5,954,081
protection
B 9104A Apparatus & technique for making 7/4/00 6,083,436
carbon brake discs
B9204A/ (COMBINED) Apparatus for 7/16/02 6,419,056B1
B9603A/ aircraft brake thermal
B9701A management
AIRCRAFT BRAKING SYSTEMS CORPORATION
FOREIGN PATENTS
Docket No. Title of Invention Patent Date
---------- ------------------ -----------
3210A-GB Electrically actuated aircraft brakes 24 Oct. 90
3210A-FR same as above 03.08.09
3263A-GB Fail-safe brake valve driver 17.07.1991
8908A-CIP-EPC Method and apparatus for increasing 19.01.94
Germany/France the service life of aircraft
Great Britain multiple disc brakes
8914A Phase change brake disks 20.12.96
France/Japan/Great Britain
8923A-GB Thermally balanced brake stack 15.03.1995
ABANDON
9015A-GB Coupler for wheel speed transducer 23.11.1994
9015A-FR Same as above 21.01.94
9024A-GB Demountable wheel rim flange and 24.05.1995
split Lockring assemblies
9025A-FR Configuration for demountable wheel 12.01.96
rim flange/split lockring
Docket No. Title of Invention Patent Date
---------- ------------------ -----------
assemblies
9104A-GB Apparatus for manufacturing carbon 09.04.1997
Brake discs
9104A-GB-DIV Method for manufacturing carbon 09.04.1997
brake Discs
9104A-FR Same as above 09.06.95
B8914A-GB Phase Change Brake Discs 29 July 1998
B9801 Fail Safe Electrical Brake
France/Great Britain Control System for Aircraft
ENGINEERED FABRICS CORPORATION
U.S. PATENTS
Patent No. Issue Date
--------- ----------
4,372,533 02/08/83
4,434,021 02/28/84
4,487,913 12/11/84
4,496,707 01/29/85
4,554,300 11/19/85
4,554,299 11/19/85
4,565,729 01/21/86
4,655,398 04/07/87
4,668,535 05/26/87
3,537,732 11/03/70
5,506,012 04/26/96
5,785,455 04/26/96
TRADEMARKS AND PATENTS
FOLDERS IN "TRADEMARK" FILE BOX
T/M T/M# County
--- ---- ------
Pillow 712,684 USA
Iceguard 646,781 USA
(Sea Sentry 211,795 Canada Same Folder
(Sea Sentry 995,614 USA Renewal Required 10/15/94
(Vithane 785,066 USA Same Folder
(Vithane 149,944 Canada Next Renewal 2/16/2005
EFC-100 2,391,002 USA Renew By 10/3/2010
SCHEDULE 9
EXISTING PRIOR LIENS
Liens in favor of the United States Government on
work-in-progress.
Liens under the Existing Credit Agreement to be terminated at
or after closing.
Annex I
to
Amended and Restated
Guarantee and Collateral Agreement
ASSUMPTION AGREEMENT, dated as of ________________, 200__,
made by ______________________________, a ______________ corporation (the
"Additional Grantor") for the benefit of the Secured Parties (as defined in the
Guarantee and Collateral Agreement referred to below), in favor of XXXXXX
COMMERCIAL PAPER INC., as administrative agent (in such capacity, the
"Administrative Agent") for the banks and other financial institutions (the
"Secured Parties") parties to the Credit Agreement referred to below. All
capitalized terms not defined herein shall have the meaning ascribed to them in
such Credit Agreement.
W I T N E S S E T H :
WHEREAS, Aircraft Braking Systems Corporation and Engineered
Fabrics Corporation (collectively, the "Borrowers"; individually, a "Borrower"),
the Lenders, the Administrative Agent, Xxxxxx Brothers Inc., as Arranger and
National City Bank and Bank One, NA, as Co-Agents have entered into an Amended
and Restated Credit Agreement, dated as of December 20, 2002 (the "Credit
Agreement");
WHEREAS, in connection with the Credit Agreement, the
Borrowers and certain of its Affiliates (other than the Additional Grantor) have
entered into the Amended and Restated Guarantee and Collateral Agreement, dated
as of December 20, 2002 (the "Guarantee and Collateral Agreement") in favor of
the Administrative Agent for the benefit of the Secured Parties;
WHEREAS, the Credit Agreement requires the Additional Grantor
to become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and
deliver this Assumption Agreement in order to become a party to the Guarantee
and Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and
delivering this Assumption Agreement, the Additional Grantor, as provided in
Section 8.15 of the Guarantee and Collateral Agreement, hereby becomes a party
to the Guarantee and Collateral Agreement as a Grantor thereunder with the same
force and effect as if originally named therein as a Grantor and, without
limiting the generality of the foregoing, hereby expressly assumes all
obligations and liabilities of a Grantor thereunder. The information set forth
in Annex 1-A hereto is hereby added to the information set forth in Schedules
_______ to the Guarantee and Collateral Agreement. The Additional Grantor hereby
represents and warrants that each of the representations and warranties
contained in Section 4 of the Guarantee and Collateral Agreement is true and
correct on and as the date hereof (after giving effect to this Assumption
Agreement) as if made on and as of such date.
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:______________________________
Name:
Title:
Annex II
to
Guarantee and Collateral Agreement
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Amended
and Restated Guarantee and Collateral Agreement dated as of December 20, 2002
(the "Agreement"), made by the Grantors parties thereto in favor of the
Administrative Agent for the benefit of the Secured Parties referred to therein.
The undersigned agrees for the benefit of the Administrative Agent and the
Secured Parties as follows:
1. The undersigned will be bound by the terms of the Agreement
and will comply with such terms insofar as such terms are applicable to the
undersigned.
2. The undersigned will notify the Administrative Agent promptly
in writing of the occurrence of any of the events described in Section 5.8(a) of
the Agreement.
3. The terms of Sections 5.8, 6.3(a) and 6.7 of the Agreement
shall apply to it, mutatis mutandis, with respect to all actions that may be
required of it, or prohibited, pursuant to Section 5.8, 6.3(a) or 6.7 of the
Agreement.
[NAME OF ISSUER]
By:________________________
Name:
Title:
Address for Notices:
___________________________
___________________________
___________________________
Fax:_______________________
