AMENDED AND RESTATED SECURITY AGREEMENT dated as of March 31, 2006 among ENNIS, INC. and THE OTHER PARTIES HERETO, as Grantors, and LASALLE BANK NATIONAL ASSOCIATION, as the Administrative Agent
EXHIBIT 10.19
Execution Copy
AMENDED AND RESTATED SECURITY AGREEMENT
dated as of March 31, 2006
among
XXXXX, INC.
and
THE OTHER PARTIES HERETO,
as Grantors,
as Grantors,
and
LASALLE BANK NATIONAL ASSOCIATION,
as the Administrative Agent
as the Administrative Agent
THIS AMENDED AND RESTATED SECURITY AGREEMENT dated as of March 31, 2006 (this
“Agreement”) is entered into among XXXXX, INC. (the “Parent”) and each other Person
signatory hereto as a Grantor (together with any other Person that becomes a party hereto as
provided herein, and including the Parent, the “Grantors”) in favor of LASALLE BANK
NATIONAL ASSOCIATION, as the Administrative Agent for all the Lenders party to the Credit Agreement
(as hereafter defined).
RECITALS:
A. The Lenders have severally agreed to extend credit to the Parent and the other Grantors
pursuant to the Credit Agreement. The Parent is affiliated with each other Grantor. The Parent
and the other Grantors are engaged in interrelated businesses, and each Grantor will derive
substantial direct and indirect benefit from extensions of credit under the Credit Agreement.
B. The Grantor and Administrative Agent entered into a Security Agreement dated as of November
19, 2004 (the “Original Agreement”).
C. The Grantor and Lender desire to amend and restate, in its entirety, the Original
Agreement, and it is a condition precedent to each Lender’s obligation to extend credit under the
Credit Agreement that the Grantors shall have executed and delivered this Agreement to the
Administrative Agent for the ratable benefit of all the Lenders.
AGREEMENT:
Now Therefore in consideration of the premises and to induce the Administrative Agent and the
Lenders to enter into the Credit Agreement and to induce the Lenders to extend credit thereunder,
each Grantor hereby agrees with the Administrative Agent, for the ratable benefit of the Lenders,
as follows:
SECTION 1 DEFINITIONS.
1.1 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 UCC: Accounts, Certificated Security, Commercial Tort Claims, Deposit
Accounts, Documents, Electronic Chattel Paper, Equipment, Farm Products, Goods, Health Care
Insurance Receivables, Instruments, Inventory, Leases, Letter-of-Credit Rights, Money, Payment
Intangibles, Supporting Obligations, and Tangible Chattel Paper.
1.2 When used herein the following terms shall have the following meanings:
Assigned Agreements means (i) the Agreement and Plan of Merger, dated as of June 25,
2004, by and among the Parent, its wholly-owned subsidiary, Midlothian Holdings LLC, a Delaware
limited liability company (“Merger Sub”) and Centrum Acquisition, Inc., a Delaware
corporation (the “Target”), as amended by the First Amendment to Agreement and Plan of
Merger, dated as of August 23, 2004, among the Parent, Merger Sub and the Target, (ii) the
Indemnity Agreement dated as of June 25, 2004 by and among Xxxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxx
XxXxxxxx, Xxxxxx Xxxxxx, Merger Sub and the Parent, (iii) the First Amendment Agreement dated as of
June 25, 2004 by and among Xxxx Xxxxxx, an individual and resident of the State of Nevada, Ayes
Xxxx Xxxxxx, an individual and wife of Xxxx Xxxxxx, Xxxx Xxxxxxx, and individual and resident of
the State of Nevada, the Target, the Parent and the Merger Sub; (iv) Stock Pledge and Escrow
Agreement, dated as of the date hereof, by and among the Parent, Midlothian, Xxxxxxxx Xxxxxx, Xxxxx
Xxxxx, Xxxx XxXxxxxx and Xxxxxx Xxxxxx and JPMorgan Chase Bank, N.A., as escrow agent, and (v)
Escrow Agreement, dated as of the date hereof, by and among Parent, Merger Sub, the Target, Xxxx
Xxxxxx, Xxxxxx Xxxx Amndani and Xxxx Xxxxxxx and JPMorgan Chase Bank, N.A., as escrow agent.
Agreement has the meaning set forth in the preamble hereto.
Chattel Paper means all “chattel paper” as such term is defined in Section
9-102(a)(11) of the UCC and, in any event, including with respect to any Grantor, all Electronic
Chattel Paper and Tangible Chattel Paper.
Collateral means (a) all of the personal property now owned or at any time hereafter
acquired by any Grantor or in which any Grantor now has or at any time in the future may acquire
any right, title or interest, including all of each Grantor’s Accounts, Chattel Paper, Commercial
Tort Claims, Deposit Accounts, Documents, Equipment, Fixtures, General Intangibles, Health Care
Insurance Receivables, Farm Products, Goods, Instruments, Intellectual Property, Inventory,
Investment Property, Leases, Letter-of-Credit Rights, Money, Supporting Obligations and Identified
Claims and Pledged Equity, (b) all books and records pertaining to any of the foregoing, (c) all
Proceeds and products of any of the foregoing, and (d) all collateral security and guaranties given
by any Person with respect to any of the foregoing. 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.
Contract Rights means all of the Grantors’ rights and remedies with respect to the
Assigned Agreements.
Copyrights means 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 those listed on Schedule 5, all registrations and
recordings thereof, and all applications in connection therewith, including all registrations,
recordings and applications in the United States Copyright Office, and the right to obtain all
renewals of any of the foregoing.
Copyright Licenses means all written agreements naming any Grantor as licensor or
licensee, including those listed on Schedule 5, granting any right under any Copyright,
including the grant of rights to manufacture, distribute, exploit and sell materials derived from
any Copyright.
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Credit Agreement means the Amended and Restated Credit Agreement of even date herewith
among the Parent, the other Grantors, the Lenders and the Administrative Agent, as amended,
supplemented, restated or otherwise modified from time to time.
Excluded Property means (a) any permit, lease, license, contract or other agreement
held by any Grantor or any contract or agreement to which any Grantor is a party (including any
rights thereunder) that validly prohibits the creation by such Grantor of a security interest
therein or under the terms of which the creation of a security interest therein shall constitute or
result (i) in the abandonment, invalidation or unenforceability of any right, title or interest of
any Grantor therein or (ii) in a breach or termination pursuant to the terms of, or a default
under, any such lease, license, contract, property rights or agreement (other than any such permit,
lease, license, contract or other agreement, the terms of which prohibiting creation of a security
interest or having the result described in clauses (i) and (ii) above would be rendered ineffective
pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or
provisions) of any relevant jurisdiction or any other applicable law (including the Bankruptcy
Code) or principles of equity); provided, however, that any such Grantor shall
make its best efforts to receive the consent of such contracting party for the assignment of any
material permit, lease, license, contract or other agreement to the Administrative Agent, upon the
request of the Administrative Agent; (b) any permit, lease, license, contract or other agreement
held by any Grantor to the extent that any requirement of law applicable thereto prohibits the
creation of a security interest therein (other than any such permit, lease, license, contract or
other agreement, to the extent that any requirement of law applicable thereto prohibiting the
creation of a security interest therein would be rendered ineffective pursuant to Sections 9-406,
9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant
jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity);
(c) Equipment owned by any Grantor on the date hereof or hereafter acquired that is subject to a
Lien securing a purchase money obligation or obligation under a Capital Lease permitted to be
incurred pursuant to the provisions of the Credit Agreement if the contract or other agreement in
which such Lien is granted (or the documentation providing for such purchase money obligation or
obligation under a Capital Lease) validly prohibits the creation of any other Lien on such
Equipment; and (d) equity interests in foreign Subsidiaries; provided, however,
that in each case described in clauses (a), (b) and (c) of this definition, such property shall
constitute “Excluded Property” only to the extent and for so long as such permit, lease, license,
contract or other agreement or Requirement of Law applicable thereto validly prohibits the creation
of a Lien on such property in favor of either Administrative Agent and, upon the termination of
such prohibition (howsoever occurring), such property shall cease to constitute “Excluded
Property.”
Fixtures means all of the following, whether now owned or hereafter acquired by a
Grantor: plant fixtures; business fixtures; other fixtures and storage facilities, wherever
located; and all additions and accessories thereto and replacements therefor.
General Intangibles means all “general intangibles” as such term is defined in Section
9-102(a)(42) of the UCC and, in any event, including with respect to any Grantor, all Payment
Intangibles, all contracts and Contract Rights (including all Assigned Agreements and Target
Undertakings), agreements, instruments and indentures in any form, and portions thereof, to which
such Grantor is a party or under which such Grantor has any right, title or interest or to which
such Grantor or any property of such Grantor is subject, as the same from time to time
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may be amended, supplemented or otherwise modified, including, without limitation, (a) all
rights of such Grantor to receive moneys due and to become due to it thereunder or in connection
therewith, (b) all rights of such Grantor to damages arising thereunder and (c) all rights of such
Grantor to perform and to exercise all remedies thereunder; provided, that the foregoing
limitation shall not affect, limit, restrict or impair the grant by such Grantor of a security
interest pursuant to this Agreement in any Receivable or any money or other amounts due or to
become due under any such Payment Intangible, contract, agreement, instrument or indenture.
Grantor has the meaning set forth in the preamble hereto.
Identified Claims means the Commercial Tort Claims described on Schedule 7 as
such schedule shall be supplemented from time to time.
Intellectual Property means the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United States, multinational or
foreign laws or otherwise, including the Copyrights, the Copyright Licenses, the Patents, the
Patent Licenses, the Trademarks and the Trademark Licenses, and all rights to xxx at law or in
equity for any infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.
Intercompany Note means any promissory note evidencing loans made by any Grantor to
any other Grantor.
Investment Property means the collective reference to (a) all “investment property” as
such term is defined in Section 9-102(a)(49) of the UCC (other than the equity interest of any
foreign Subsidiary excluded from the definition of Pledged Equity), (b) all “financial assets” as
such term is defined in Section 8-102(a)(9) of the UCC, and (c) whether or not constituting
“investment property” as so defined, all Pledged Notes and all Pledged Equity.
Issuers means the collective reference to each issuer of any Investment Property.
Original Agreement has the meaning set forth in the recitals hereto.
Paid in Full means (a) the payment in full in cash and performance of all Secured
Obligations, (b) the termination of all Commitments and (c) either (i) the cancellation and return
to the Administrative Agent of all Letters of Credit or (ii) the cash collateralization of all
Letters of Credit in accordance with the Credit Agreement.
Parent has the meaning set forth in the preamble hereto.
Patents means (a) 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 any of the foregoing referred to in Schedule 5, (b) all applications
for letters patent of the United States or any other country and all divisions, continuations and
continuations-in-part thereof, including any of the foregoing referred to in Schedule 5,
and (c) all rights to obtain any reissues or extensions of the foregoing.
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Patent Licenses means 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 any of the foregoing referred to in Schedule 5.
Payments has the meaning set forth in Section 2.2 hereto.
Pledged Equity means the equity interests listed on Schedule 1, together with
any other equity interests, certificates, options or rights of any nature whatsoever in respect of
the equity interests 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 any equity interests of any
foreign Subsidiary be included in the definition of Pledged Equity.
Pledged Notes means all promissory notes listed on Schedule 1, 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).
Pro Rata Share has the meaning ascribed to such term in sub-part (c) of the definition
of “Pro Rata Share” set forth in the Credit Agreement.
Proceeds means all “proceeds” as such term is defined in Section 9-102(a)(64) of the
UCC and, in any event, shall include all dividends or other income from the Investment Property,
collections thereon or distributions or payments with respect thereto.
Receivable means any right to payment for goods sold or leased 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 any Accounts).
Secured Obligations means, individually, with respect to each Grantor, all Obligations
of such Grantor, and collectively, with respect to all Grantors, all Obligations of all Grantors.
Securities Act means the Securities Act of 1933, as amended.
Target Undertakings means, collectively, all representations, warranties, covenants
and agreements in favor of any Grantor, and all indemnifications for the benefit of any Grantor
relating thereto, pursuant to the Assigned Agreements.
Trademarks means (a) all trademarks, trade names, corporate names, the company names,
business names, fictitious business names, trade styles, service marks, logos and other source or
business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in connection therewith,
whether in the United States Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political subdivision thereof, or
otherwise, and all common-law rights related thereto, including any of the foregoing referred to in
Schedule 5, and (b) the right to obtain all renewals thereof.
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Trademark Licenses means, collectively, each agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any Trademark, including any of
the foregoing referred to in Schedule 5.
UCC means the Uniform Commercial Code as in effect on the date hereof and from time to
time in the State of Illinois, provided that if by reason of mandatory provisions of law,
the perfection or the effect of perfection or non-perfection of the security interests in any
Collateral or the availability of any remedy hereunder is governed by the Uniform Commercial Code
as in effect on or after the date hereof in any other jurisdiction, “UCC” means the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof
relating to such perfection or effect of perfection or non-perfection or availability of such
remedy.
SECTION 2 GRANT OF SECURITY INTEREST.
2.1 Grant. Each Grantor hereby assigns and transfers to the Administrative Agent, and
hereby grants to the Administrative Agent, for the ratable benefit of the Lenders and (to the
extent provided herein) their Affiliates, a continuing security interest in all of its 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.
Notwithstanding anything to the contrary contained in this Section 2, the security interest
created by this Agreement shall not extend to any Excluded Property. The Grantors shall from time
to time at the request of the Administrative Agent give written notice to the Administrative Agent
identifying in reasonable detail the Excluded Property (and stating in such notice that such
property constitutes “Excluded Property”) and shall provide to the Administrative Agent such other
information regarding the Excluded Property as the Administrative Agent may reasonably request and
(ii) from and after the Closing Date, no Grantor shall permit to become effective in any document
creating, governing or providing for any permit, lease or license, a provision that would prohibit
the creation of a Lien on such permit, lease or license in favor of the Administrative Agent unless
such Grantor believes, in its reasonable judgment, that such prohibition is usual and customary in
transactions of such type and is otherwise permitted by the Credit Agreement.
2.2 Collateral Assignment of Rights under the Assigned Agreements. Each Grantor
hereby irrevocably authorizes and empowers the Administrative Agent or its agents, in their sole
discretion, to assert, either directly or on behalf of any Grantor, at any time that an Event of
Default is in existence, any claims any Grantor may from time to time have against a party with
which such Grantor has a contractual relationship pursuant to an Assigned Agreement (a
“Contracting Party”) with respect to any and all of the Contract Rights or with respect to
any and all payments or other obligations due from such Contracting Party or any of its affiliates
to the Parent under or pursuant to the Assigned Agreement (“Payments”), and to receive and
collect any damages, awards and other monies resulting therefrom and to apply the same on account
of the Secured Obligations. After the occurrence of any Event of Default, the Administrative Agent
may provide notice to any Contracting Party that all Payments shall be made to or at the direction
of the Administrative Agent for so long as such Event of Default shall be continuing; provided,
however, that upon a termination or waiver of such Event of Default the
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Administrative Agent shall promptly notify the Contracting Party that all Payments shall, from
that point forward, be made to the Grantor. Each Grantor hereby irrevocably makes, constitutes and
appoints the Administrative Agent (and all officers, employees, or agents designated by the
Administrative Agent) as such Grantor’s true and lawful attorney (and agent-in-fact) for the
purpose of enabling the Administrative Agent or its agents to assert and collect such claims and to
apply such monies in the manner set forth hereinabove.
SECTION 3 REPRESENTATIONS AND WARRANTIES.
To induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Co-Borrowers thereunder,
each Grantor jointly and severally hereby represents and warrants to the Administrative Agent and
each Lender that:
3.1 Title; No Other Liens. Except for Permitted Liens, the Grantors own 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 filings evidencing Permitted Liens and filings for which termination
statements have been delivered to the Administrative Agent.
3.2 Perfected First Priority Liens. The security interests granted pursuant to this
Agreement (a) upon completion of the filings and other actions specified on Schedule 2
(which, in the case of all filings and other documents referred to on Schedule 2, 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 Lenders, as collateral security for each Grantor’s Obligations, enforceable
in accordance with the terms hereof against all creditors of each Grantor and any Persons
purporting to purchase any Collateral from each Grantor and (b) are prior to all other Liens on the
Collateral in existence on the date hereof except for Permitted Liens for which priority is
accorded under applicable law. The filings and other actions specified on Schedule 2
constitute all of the filings and other actions necessary to perfect all security interests granted
hereunder.
3.3 Grantor Information. On the date hereof, sets forth (a) each Grantor’s
jurisdiction of organization, (b) the location of each Grantor’s chief executive office, (c) each
Grantor’s exact legal name as it appears on its organizational documents and (d) each Grantor’s
organizational identification number (to the extent a Grantor is organized in a jurisdiction which
assigns such numbers) and federal employer identification number.
3.4 Collateral Locations. On the date hereof, Schedule 4 sets forth (a) each
place of business of each Grantor (including its chief executive office), (b) all locations where
all Inventory and the Equipment owned by each Grantor is kept, except with respect to Inventory and
Equipment with a fair market value of less than $50,000 (in the aggregate for all Grantors) which
may be located at other locations and (c) whether each such Collateral location and place of
business (including each Grantor’s chief executive office) is owned or leased (and if leased,
specifies the complete name and notice address of each lessor). No Collateral is located outside
the United States or in the possession of any lessor, bailee, warehouseman or consignee, except as
indicated on Schedule 4.
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3.5 Certain Property. None of the Collateral constitutes, or is the Proceeds of, (a)
Farm Products, (b) Health Care Insurance Receivables or (c) vessels, aircraft or any other property
subject to any certificate of title or other registration statute of the United States, any State
or other jurisdiction, except for personal vehicles owned by the Grantors and used by employees of
the Grantors in the ordinary course of business with an aggregate fair market value of less than
$50,000 (in the aggregate for all Grantors).
3.6 Investment Property. (a) The Pledged Equity pledged by each Grantor hereunder
constitute all the issued and outstanding equity interests of each Issuer owned by such Grantor.
(b) All of the Pledged Equity has been duly and validly issued and is 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) Schedule 1 lists all Investment Property owned by each Grantor. Each 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 Permitted Liens.
3.7 Receivables. (a) No material 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.
(b) No obligor on any Receivable is a governmental authority.
(c) The amounts represented by such Grantor to the Lenders from time to time as owing to such
Grantor in respect of the Receivables (to the extent such representations are required by any of
the Loan Documents) will at all such times be accurate.
3.8 Intellectual Property. (a) Schedule 5 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 owned by any Grantor is valid,
subsisting, unexpired and enforceable and has not been abandoned.
(c) Except as set forth in Schedule 5, none of the material Intellectual Property is
the subject of any licensing or franchise agreement pursuant to which such Grantor is the licensor
or franchisor.
(d) Each Grantor owns and possesses or has a license or other right to use all Intellectual
Property as is necessary for the conduct of the businesses of such Grantor, without
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any infringement upon rights of others which could reasonably be expected to have a Material
Adverse Effect.
3.9 Depositary and Other Accounts. All depositary and other accounts maintained by
each Grantor are described on Schedule 6 hereto, which description includes for each such
account the name of the Grantor maintaining such account, the name, address, telephone and fax
numbers of the financial institution at which such account is maintained, the account number and
the account officer, if any, of such account.
SECTION 4 COVENANTS.
Each Grantor covenants and agrees with the Administrative Agent and the Lenders that, from and
after the date of this Agreement until the Secured Obligations shall have been Paid in Full:
4.1 Delivery of Instruments, Certificated Securities 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
reasonably satisfactory to the Administrative Agent, to be held as Collateral pursuant to this
Agreement. In the event that an Unmatured Event of Default or Event of Default shall have occurred
and be continuing, upon the request of the Administrative Agent, any Instrument, Certificated
Security or Chattel Paper not theretofore delivered to the Administrative Agent and at such time
being held by any Grantor shall be immediately delivered to the Administrative Agent, duly indorsed
in a manner reasonably satisfactory to the Administrative Agent, to be held as Collateral pursuant
to this Agreement.
4.2 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 3.2 and shall defend such
security interest against the claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Administrative Agent and the Lenders from time to time
statements and schedules further identifying and describing the assets and property of such Grantor
and such other reports in connection therewith 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 (i) filing any
financing or continuation statements under the UCC (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 and any other relevant Collateral, taking any actions necessary to enable the
Administrative Agent to obtain “control” (within the meaning of the applicable UCC) with respect
thereto and (iii) if requested by the Administrative Agent,
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delivering, to the extent permitted by law, any original motor vehicle certificates of title
received by such Grantor from the applicable secretary of state or other governmental authority
after information reflecting the Administrative Agent’s security interest has been recorded
therein.
4.3 Changes in Locations, Name, etc. Such Grantor shall not, except upon 30 days’
prior written notice to the Administrative Agent and delivery to the Administrative Agent of (a)
all additional financing statements and other documents reasonably requested by the Administrative
Agent as to the validity, perfection and priority of the security interests provided for herein and
(b) if applicable, a written supplement to Schedule 4 showing any additional location at
which Inventory or Equipment shall be kept:
(i) permit any of the Inventory or Equipment to be kept at a location other than those
listed on Schedule 4; provided, that up to $50,000 (in the aggregate for all
Grantors) in fair market value of any such Inventory and Equipment may be kept at other
locations;
(ii) change its jurisdiction of organization or the location of its chief executive
office from that specified on Schedule 3 or in any subsequent notice delivered
pursuant to this Section 4.3; or
(iii) change its name, identity or corporate structure.
4.4 Notices. Such Grantor will advise the Administrative Agent and the Lenders
promptly, in reasonable detail, of:
(a) any Lien (other than Permitted Liens) 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 Liens created hereby.
4.5 Investment Property. (a) If such Grantor shall become entitled to receive or
shall receive any certificate, option or rights in respect of the equity interests of any Issuer,
whether in addition to, in substitution of, as a conversion of, or in exchange for, any of the
Pledged Equity, or otherwise in respect thereof, such Grantor shall accept the same as the agent of
the Administrative Agent and the Lenders, hold the same in trust for the Administrative Agent and
the Lenders 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
instrument of transfer covering such certificate duly executed in blank by such Grantor and with,
if the Administrative Agent reasonably requests, signature guarantied, to be held by the
Administrative Agent, subject to the terms hereof, as additional Collateral for the Secured
Obligations. Upon the occurrence and during the continuance of an Event of Default, (i) 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 for the Secured Obligations, and (ii) 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
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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 Lien in favor of the Administrative Agent, be
delivered to the Administrative Agent to be held by it hereunder as additional Collateral for the
Secured Obligations. Upon the occurrence and during the continuance of an Event of Default, 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 Lenders, segregated from
other funds of such Grantor, as additional Collateral for the Secured Obligations.
(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 equity interests of any
nature or to issue any other securities or interests convertible into or granting the right to
purchase or exchange for any equity interests of any nature of any Issuer, except, in each case, as
permitted by the Credit Agreement, (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) other than, with respect to
Investment Property not constituting Pledged Equity or Pledged Notes, any such action which is not
prohibited 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 Permitted Liens, 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 Investment Property or Proceeds thereof, except, with respect to such
Investment Property, shareholders’ agreements entered into by such Grantor with respect to Persons
in which such Grantor maintains an ownership interest of 50% or less.
(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 Investment Property 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 4.5(a) with respect to the Investment Property issued by it and (iii) the terms of
Sections 5.3(c) and 5.7 shall apply to such Grantor with respect to all actions
that may be required of it pursuant to Section 5.3(c) or 5.7 regarding the
Investment Property issued by it.
4.6 Receivables. (a) Other than in the ordinary course of business consistent with
its past practice and in amounts which are not material to such Grantor, in addition to its
requirements under the Credit Agreement, 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
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or enforceability of more than 5% of the aggregate amount of the then outstanding Receivables
for all Grantors.
4.7 Intellectual Property. (a) Such Grantor (either itself or through licensees) will
(i) continue to use each Trademark material to its business in order to maintain such Trademark in
full force free from any claim of abandonment for non-use, (ii) maintain as in the past or improve
the quality of products and services offered under such Trademark, (iii) use such Trademark with
the appropriate notice of registration and all other notices and legends required by applicable
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 Lenders, 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 unenforceable in any way.
(b) Such Grantor (either itself or through licensees) will not do any act, or omit to do any
act, whereby any Patent material to its business may become forfeited, abandoned or dedicated to
the public.
(c) Such Grantor (either itself or through licensees) 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 such Copyrights may become invalidated or otherwise unenforceable. Such Grantor will
not (either itself or through licensees) do any act whereby any material portion of such Copyrights
may fall into the public domain.
(d) Such Grantor (either itself or through licensees) will not do any act that knowingly uses
any Intellectual Property material to its business to infringe the intellectual property rights of
any other Person.
(e) Such Grantor will notify the Administrative Agent and the Lenders 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 the institution of, or any such determination or
development in, any proceeding before 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 a Patent or an application for the registration of a
Trademark with the United States Patent and Trademark Office, or file an application for the
registration of a Copyright with 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 concurrently with the next delivery of financial statements of the Parent
pursuant to Section 10.1 of the Credit Agreement. Upon the 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 Lenders’ security interest in any Copyright, Patent
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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 to maintain and pursue each
application (and to obtain the relevant registration) and to maintain each registration of all
material Intellectual Property owned by it, as commercially reasonable.
(h) In the event that any material Intellectual Property is infringed upon or 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, to the extent, in its reasonable judgment, such Grantor
determines it appropriate under the circumstances, 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.
(i) Upon the occurrence and during the continuance of an Event of Default, Administrative
Agent is hereby granted a license to use, without charge, any Intellectual Property, as it pertains
to any Collateral, in completing, advertising for sale, and selling any Collateral and Grantor’s
rights under all licenses and all franchise agreements shall insure to the Administrative Agent’s
benefit.
4.8 Target Undertakings.
(a) Each Grantor shall keep the Administrative Agent informed of all circumstances bearing
upon any potential claim under or with respect to the Assigned Agreements and the Target
Undertakings and such Grantor shall not, without the prior written consent of the Administrative
Agent, (i) waive any of its rights or remedies under any Assigned Agreement with respect to any of
the Target Undertakings in excess of $50,000, (ii) settle, compromise or offset any amount payable
by the Target to such Grantor under any Assigned Agreement in excess of $50,000 or (iii) amend or
otherwise modify any Assigned Agreement in any manner which is adverse to the interests of the
Administrative Agent or any Lender.
(b) Each Grantor shall perform and observe all the terms and conditions of each Assigned
Agreement to be performed by it, maintain each Assigned Agreement in full force and effect, enforce
each Assigned Agreement in accordance with its terms and take all such action to such end as may
from time to time be reasonably requested by the Administrative Agent.
(c) Anything herein to the contrary notwithstanding, (i) each applicable Grantor shall remain
liable under each Assigned Agreement to the extent set forth therein to perform all of its duties
and obligations thereunder to the same extent as if this Agreement had not been executed, (ii) the
exercise by the Administrative Agent of any of its rights hereunder shall not release any Grantor
from any of its duties or obligations under any Assigned Agreement and (iii) neither the
Administrative Agent nor any other Lender shall have any obligation or liability under any Assigned
Agreement by reason of this Agreement, nor shall the Administrative Agent or any other Lender be
obligated to perform any of the obligations or
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duties of any Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.
4.9 Depositary and Other Deposit Accounts.
(a) No Grantor maintains any depositary or other deposit accounts (the “Deposit
Accounts”) with any bank (the “Deposit Account Banks”) other than those listed in
Schedule 6. Each Grantor hereby authorizes each Deposit Account Bank to provide the
Administrative Agent with such information with respect to the Deposit Accounts as the
Administrative Agent may from time to time reasonably request, and each Grantor hereby consents to
such information being provided to the Administrative Agent. Each Grantor will cause each Deposit
Account Bank to enter into a bank agency or other similar agreement with the Administrative Agent
and such Grantor, in the form attached hereto as Annex I (a “Deposit Account Control
Agreement”) and otherwise in substance satisfactory to the Administrative Agent, in order to
give the Administrative Agent “control” (as defined in the UCC) of such account. Each Grantor
shall direct all Account Debtors to make all payments on the Accounts directly to a the applicable
Deposit Account maintained with the applicable Deposit Account Bank.
(b) No Grantor shall open any depositary or other deposit accounts unless (i) such Grantor
shall have given the Administrative Agent 10 days’ prior written notice of its intention to open
any such new deposit accounts; (ii) such Grantor shall deliver to the Administrative Agent a
revised version of Schedule 6, showing any changes thereto within 5 days of any such
change; and (iii) shall cause such Grantor to enter into a Deposit Account Control Agreement in the
form attached hereto as Annex I and otherwise satisfactory to the Administrative Agent. No
Grantor shall close any Deposit Account maintained with a Deposit Account Bank without the prior
written consent of the Administrative Agent.
(c) If any Grantor or any director, officer, employee, agent of such Grantor, or any other
Person acting for or in concert with such Grantor shall receive any monies, checks, notes, drafts
or other payments relating to or as proceeds of Accounts or other Collateral, such Grantor and each
such Person shall receive all such items in trust for, and as the sole and exclusive property of,
the Administrative Agent and the Lenders and, promptly upon receipt thereof, shall remit the same
(or cause the same to be remitted) in kind to a Deposit Account.
(d) So long as no Event of Default shall have occurred and be continuing, the Grantors may
draw checks on, and otherwise withdraw amounts from a Deposit Account maintained with a Deposit
Account Bank in such amounts as may be required in the ordinary course of business or as permitted
under the Credit Agreement, including, without limitation, to pay or prepay Debt (as defined in the
Credit Agreement) outstanding under the Loan Documents (as defined in the Credit Agreement). If an
Event of Default shall have occurred and be continuing, the Administrative Agent may, at any time
and without notice to, or consent from, any Grantor, order any Deposit Account Bank, pursuant to a
Deposit Account Control Agreement, to transfer, or direct the transfer of, funds from any Deposit
Account maintained at such Deposit Account Bank to satisfy the Grantors’ obligations under the Loan
Documents (as defined in the Credit Agreement).
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(e) For the purpose of this section, each Grantor irrevocably hereby makes, constitutes and
appoints the Administrative Agent (and all Persons designated by the Administrative Agent for that
purpose) as such Grantor’s true and lawful attorney and agent-in-fact (i) to endorse such Grantor’s
name upon said items of payment and/or proceeds of Collateral and upon any Chattel Paper, document,
Instrument, invoice or similar document or agreement relating to any Account of the such Grantor or
goods pertaining thereto; (ii) to take control in any manner of any item of payment or proceeds
thereof; and (iii) to have access to any lock box or postal box into which any of such Grantor’s
mail is deposited, and open and process all mail addressed to the such Grantor and deposited
therein.
4.10 Other Matters.
(a) If any Grantor shall cause to be delivered Inventory or other property in excess of
$50,000 in fair market value to any bailee after the Closing Date, such Grantor shall use
reasonable efforts to cause such bailee to sign a Collateral Access Agreement. Such requirement
may be waived at the option of the Administrative Agent. If any Grantor shall lease any real
property or facilities and the value of property of such Grantor located at such leased real
property is in excess of $50,000 in fair market value after the Closing Date, such Grantor shall
use reasonable efforts to cause the landlord in respect of such leased property or facilities to
sign a Collateral Access Agreement. Such requirement may be waived at the option of the
Administrative Agent.
(b) Each Grantor authorizes the Administrative Agent to, at any time and from time to time,
file financing statements, continuation statements, and amendments thereto that describe the
Collateral as “all assets” of each Grantor, or words of similar effect, and which contain any other
information required pursuant to the UCC for the sufficiency of filing office acceptance of any
financing statement, continuation statement, or amendment, and each Grantor agrees to furnish any
such information to the Administrative Agent promptly upon request. Any such financing statement,
continuation statement, or amendment may be signed by the Administrative Agent on behalf of any
Grantor and may be filed at any time in any jurisdiction.
(c) Each Grantor shall, at any time and from time and to time, take such steps as the
Administrative Agent may reasonably request for the Administrative Agent (i) to obtain an
acknowledgement, in form and substance reasonably satisfactory to the Administrative Agent, of any
bailee having possession of any of the Collateral, stating that the bailee holds such Collateral
for the Administrative Agent, (ii) to obtain “control” of any letter-of-credit rights, or
electronic chattel paper (as such terms are defined by the UCC with corresponding provisions
thereof defining what constitutes “control” for such items of Collateral), with any agreements
establishing control to be in form and substance reasonably satisfactory to the Administrative
Agent, and (iii) otherwise to insure the continued perfection and priority of the Administrative
Agent’s security interest in any of the Collateral and of the preservation of its rights therein.
If any Grantor shall at any time, acquire a “commercial tort claim” (as such term is defined in the
UCC) in excess of $50,000, such Grantor shall promptly notify the Administrative Agent thereof in
writing and supplement Schedule 7, therein providing a reasonable description and summary
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thereof, and upon delivery thereof to the Administrative Agent, such Grantor shall be deemed
to thereby grant to the Administrative Agent (and such Grantor hereby grants to the Administrative
Agent) a security interest and lien in and to such commercial tort claim and all proceeds thereof,
all upon the terms of and governed by this Agreement.
(d) Without limiting the generality of the foregoing, if any Grantor at any time holds or
acquires an interest in any electronic chattel paper or any “transferable record”, as that term is
defined in Section 201 of the federal Electronic Signatures in Global and National Commerce Act, or
in §16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction, such
Grantor shall promptly notify the Administrative Agent thereof and, at the request of the
Administrative Agent, shall take such action as the Administrative Agent may reasonably request to
vest in the Administrative Agent “control” under Section 9-105 of the UCC of such electronic
chattel paper or control under Section 201 of the federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, §16 of the Uniform Electronic Transactions Act, as so
in effect in such jurisdiction, of such transferable record. The Administrative Agent agrees with
the Grantors that the Administrative Agent will arrange, pursuant to procedures satisfactory to the
Administrative Agent and so long as such procedures will not result in the Administrative Agent’s
loss of control, for the Grantors to make alterations to the electronic chattel paper or
transferable record permitted under Section 9-105 of the UCC or, as the case may be, Section 201 of
the federal Electronic Signatures in Global and National Commerce Xxx xx §00 of the Uniform
Electronic Transactions Act for a party in control to make without loss of control, unless an Event
of Default has occurred and is continuing or would occur after taking into account any action by
any Grantor with respect to such electronic chattel paper or transferable record.
SECTION 5 REMEDIAL PROVISIONS.
5.1 Certain Matters Relating to Receivables. (a) At any time and from time to time
after the occurrence and during the continuance of an Event of Default, the Administrative Agent
shall have the right 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, agings and test
verifications of, and trial balances for, the Receivables.
(b) The Administrative Agent hereby authorizes each Grantor to collect such Grantor’s
Receivables, and the Administrative Agent may curtail or terminate such 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 2 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 Lenders only as
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provided in Section 5.5, and (ii) until so turned over, shall be held by such Grantor
in trust for the Administrative Agent and the Lenders, 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.
(c) At any time and from time to time after the occurrence and during the continuance of an
Event of Default, 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 all original orders, invoices and
shipping receipts.
(d) Each Grantor hereby irrevocably authorizes and empowers the Administrative Agent, in the
Administrative Agent’s sole discretion, at any time after the occurrence and during the continuance
of an Event of Default, to assert, either directly or on behalf of such Grantor, any claim such
Grantor may from time to time have against the sellers under or with respect to the Assigned
Agreements and to receive and collect any and all damages, awards and other monies resulting
therefrom and to apply the same to the Obligations. Each Grantor hereby irrevocably makes,
constitutes and appoints the Administrative Agent as its true and lawful attorney in fact for the
purpose of enabling the Administrative Agent to assert and collect such claims and to apply such
monies in the manner set forth above, which appointment, being coupled with an interest, is
irrevocable.
5.2 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
Lenders 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 in
respect of each of the Receivables 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 Lender 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 Lender of any payment relating
thereto, nor shall the Administrative Agent or any Lender 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.
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(d) For the purpose of enabling the Administrative Agent to exercise rights and remedies under
this Agreement, each Grantor hereby grants to the Administrative Agent, for the benefit of the
Administrative Agent and the Lenders, an irrevocable, nonexclusive license (exercisable without
payment of royalty or other compensation to such Grantor) to use, license or sublicense any
Intellectual Property now owned or hereafter acquired by such Grantor, and wherever the same may be
located, and including in such license access to all media in which any of the licensed items may
be recorded or stored and to all computer software and programs used for the compilation or
printout thereof.
5.3 Investment Property. (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
5.3(b), each Grantor shall be permitted to receive all cash dividends and distributions paid in
respect of the Pledged Equity and all payments made in respect of the Pledged Notes, to the extent
permitted in the Credit Agreement, and to exercise all voting and other rights with respect to the
Investment Property; provided, that no vote shall be cast or other right exercised or
action taken which could 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 and distributions,
payments or other Proceeds paid in respect of the Investment Property and make application thereof
to the Obligations in such order as the Administrative Agent may determine, and (ii) any or all of
the Investment Property 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 and other rights
pertaining to such Investment Property at any meeting of holders of the equity interests 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 Investment Property as
if it were the absolute owner thereof (including the right to exchange at its discretion any and
all of the Investment Property upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the corporate or other structure of any Issuer, or upon the exercise by
any Grantor or the Administrative Agent of any right, privilege or option pertaining to such
Investment Property, and in connection therewith, the right to deposit and deliver any and all of
the Investment Property 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 Investment Property
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
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that each Issuer shall be fully protected in so complying and (ii) unless otherwise expressly
permitted hereby, pay any dividends, distributions or other payments with respect to the Investment
Property directly to the Administrative Agent.
5.4 Proceeds to be Turned Over to Administrative Agent. In addition to the rights of
the Administrative Agent and the Lenders specified in Section 5.1 with respect to payments
of Receivables, if an Event of Default shall occur and be continuing, all Proceeds received by any
Grantor consisting of cash, checks and other cash equivalent items shall be held by such Grantor in
trust for the Administrative Agent and the Lenders, 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 any collateral account (or by such Grantor in
trust for the Administrative Agent and the Lenders) established pursuant hereto, shall continue to
be held as collateral security for the Secured Obligations and shall not constitute payment thereof
until applied as provided in Section 5.5.
5.5 Application of Proceeds. At such intervals as may be agreed upon by the Parent
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 from the sale of, or other realization upon, all or any part of the Collateral in
payment of the Secured Obligations in such order as the Administrative Agent shall determine in its
discretion. Any part of such funds which the Administrative Agent elects not so to apply and deems
not required as collateral security for the Secured Obligations shall be paid over from time to
time by the Administrative Agent to the applicable Grantor or to whomsoever may be lawfully
entitled to receive the same. Any balance of such Proceeds remaining after the Secured Obligations
shall have been Paid in Full shall be paid over to the applicable Grantor or to whomsoever may be
lawfully entitled to receive the same. In the absence of a specific determination by the
Administrative Agent, the Proceeds from the sale of, or other realization upon, all or any part of
the Collateral in payment of the Secured Obligations shall be applied in the following order:
FIRST, to the payment of all fees, costs, expenses and indemnities of the
Administrative Agent (in its capacity as such), including Attorney Costs, and any other
Secured Obligations owing to the Administrative Agent in respect of sums advanced by the
Administrative Agent to preserve the Collateral or to preserve its security interest in the
Collateral, until paid in full;
SECOND, to the payment of all fees, costs, expenses and indemnities of the Lenders, in
its Pro-Rata Share, until paid in full;
THIRD, to the payment of all of the Secured Obligations in respect of the Swing Line
Loans to the Swing Line Lender, until paid in full;
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FOURTH, to the payment of all of the Secured Obligations (other than Bank Product
Obligations and Hedging Obligations) consisting of accrued and unpaid interest owing to any
Lender, in its Pro-Rata Share, until paid in full;
FIFTH, to the payment of all Secured Obligations (other than Bank Product Obligations
and Hedging Obligations) consisting of principal owing to any Lender, in its Pro-Rata Share,
until paid in full;
SIXTH, to the payment of the Administrative Agent an amount equal to all Secured
Obligations in respect of outstanding Letters of Credit to be held as cash collateral in
respect of such obligations;
SEVENTH, to the payment of all Bank Products Obligations and Hedging Obligations owing
to any Lender or its Affiliates, in its Pro-Rata Share, until paid in full;
EIGHTH, to the payment of all other Secured Obligations owing to each Lender, in its
Pro-Rata Share, until paid in full; and
NINTH, to the payment of any remaining Proceeds, if any, to whomever may be lawfully
entitled to receive such amounts.
5.6 UCC and Other Remedies. If an Event of Default shall occur and be continuing, the
Administrative Agent, on behalf of the Lenders, 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 Secured Obligations, all rights and remedies of a secured party under
the 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
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 Lender 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 with assumption of any credit risk. The Administrative Agent
or any Lender 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 5.6, 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 or in any
way relating to the Collateral or the rights of the Administrative Agent and the Lenders hereunder,
including Attorney Costs to the payment in
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whole or in part of the Secured Obligations, in such order as the Administrative Agent may
elect, and only after such application and after the payment by the Administrative Agent of any
other amount required by any provision of law, 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 Lender
arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall be deemed reasonable
and proper if given at least 10 days before such sale or other disposition.
5.7 Registration Rights. (a) If the Administrative Agent shall determine to exercise
its right to sell any or all of the Pledged Equity pursuant to Section 5.6, and if in the
opinion of the Administrative Agent it is necessary or advisable to have the Pledged Equity, 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 Equity, 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 Equity, 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 Equity, 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 Equity for the period of time necessary
to permit the Issuer thereof to register such securities or other interests 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 Equity pursuant
to this Section 5.7 valid and binding and in compliance with applicable law. Each Grantor
further agrees that a breach of any of the covenants contained in this Section 5.7 will
cause irreparable injury to the Administrative Agent and the Lenders, that the
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Administrative Agent and the Lenders have no adequate remedy at law in respect of such breach
and, as a consequence, that each and every covenant contained in this Section 5.7 shall be
specifically enforceable against 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.
5.8 Waiver; Deficiency. Each Grantor waives and agrees not to assert any rights or
privileges which it may acquire under Section 9-626 of the UCC. Each Grantor shall remain liable
for any deficiency if the proceeds of any sale or other disposition of the Collateral are
insufficient to pay the Secured Obligations in full and the fees and disbursements of any attorneys
employed by the Administrative Agent or any Lender to collect such deficiency.
SECTION 6 THE ADMINISTRATIVE AGENT.
6.1 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 and at the expense 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 security interest in such Intellectual
Property and the goodwill and general intangibles of such Grantor relating thereto or
represented thereby;
(iii) discharge Liens levied or placed on or threatened against the Collateral, and
effect any repairs or insurance called for by the terms of this Agreement and pay all or any
part of the premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in Section 5.6 or 5.7,
any indorsements, assignments or other instruments of conveyance or transfer with respect to
the Collateral; and
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(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 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,
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; (8) vote any right or interest
with respect to any Investment Property; (9) order good standing certificates and conduct
lien searches in respect of such jurisdictions or offices as the Administrative Agent may
deem appropriate; and (10) 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 security interests therein and to
effect the intent of this Agreement, all as fully and effectively as such Grantor might do.
Anything in this Section 6.1(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 6.1(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) Each Grantor hereby ratifies all that such 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.
6.2 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 shall be
to deal with it in the same manner as the Administrative Agent deals with similar property for its
own account. Neither the Administrative Agent or any Lender nor any of their respective officers,
directors, employees or agents shall be liable for any 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
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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 Lenders hereunder are solely to protect the
Administrative Agent’s and the Lenders’ interests in the Collateral and shall not impose any duty
upon the Administrative Agent or any Lender to exercise any such powers. The Administrative Agent
and the Lenders 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.
6.3 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 Lenders, 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 Lenders with full
and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation,
or entitlement, to make any inquiry respecting such authority.
SECTION 7 MISCELLANEOUS.
7.1 Amendments in Writing. None of the terms or provisions of this Agreement may be
waived, amended, supplemented or otherwise modified except in accordance with Section 15.1
of the Credit Agreement.
7.2 Notices. All notices, requests and demands to or upon the Administrative Agent or
any Grantor hereunder shall be addressed to the Parent and effected in the manner provided for in
Section 15.3 of the Credit Agreement and each Grantor hereby appoints the Parent as its
agent to receive notices hereunder.
7.3 Indemnification by Grantors. THE GRANTORS, JOINTLY AND SEVERALLY, HEREBY AGREE TO
INDEMNIFY, EXONERATE AND HOLD EACH LENDER PARTY FREE AND HARMLESS FROM AND AGAINST ANY AND ALL
INDEMNIFIED LIABILITIES, INCURRED BY THE LENDER PARTIES OR ANY OF THEM AS A RESULT OF, OR ARISING
OUT OF, OR RELATING TO (A) ANY TENDER OFFER, MERGER, PURCHASE OF EQUITY INTERESTS, PURCHASE OF
ASSETS OR OTHER SIMILAR TRANSACTION FINANCED OR PROPOSED TO BE FINANCED IN WHOLE OR IN PART,
DIRECTLY OR INDIRECTLY, WITH THE PROCEEDS OF ANY OF THE LOANS, (B) THE USE, HANDLING, RELEASE,
EMISSION, DISCHARGE, TRANSPORTATION, STORAGE, TREATMENT OR DISPOSAL OF ANY HAZARDOUS SUBSTANCE AT
ANY PROPERTY OWNED OR LEASED BY ANY GRANTOR, (C) ANY VIOLATION OF ANY ENVIRONMENTAL LAWS WITH
RESPECT TO CONDITIONS AT ANY PROPERTY OWNED OR LEASED BY ANY GRANTOR OR THE OPERATIONS CONDUCTED
THEREON, (D) THE INVESTIGATION, CLEANUP OR REMEDIATION OF OFFSITE LOCATIONS AT WHICH ANY LOAN PARTY
OR THEIR RESPECTIVE PREDECESSORS ARE
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ALLEGED TO HAVE DIRECTLY OR INDIRECTLY DISPOSED OF HAZARDOUS
SUBSTANCES OR (E) THE EXECUTION, DELIVERY, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT BY ANY OF THE LENDER PARTIES, EXCEPT FOR ANY SUCH INDEMNIFIED LIABILITIES
ARISING ON ACCOUNT OF THE APPLICABLE LENDER PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS
DETERMINED BY A FINAL, NONAPPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION. IF AND TO THE
EXTENT THAT THE FOREGOING UNDERTAKING MAY BE UNENFORCEABLE FOR ANY REASON, EACH GRANTOR HEREBY
AGREES TO MAKE THE MAXIMUM CONTRIBUTION TO THE PAYMENT AND SATISFACTION OF EACH OF THE INDEMNIFIED
LIABILITIES WHICH IS PERMISSIBLE UNDER APPLICABLE LAW. ALL OBLIGATIONS PROVIDED FOR IN THIS
SECTION 7.3 SHALL SURVIVE REPAYMENT OF ALL (AND SHALL BE) SECURED OBLIGATIONS (AND
TERMINATION OF ALL COMMITMENTS UNDER THE CREDIT AGREEMENT), ANY FORECLOSURE UNDER, OR ANY
MODIFICATION, RELEASE OR DISCHARGE OF, ANY OR ALL OF THE COLLATERAL DOCUMENTS AND TERMINATION OF
THIS AGREEMENT.
7.4 Enforcement Expenses. (a) Each Grantor agrees, on a joint and several basis, to
pay or reimburse on demand the Administrative Agent for all reasonable out-of-pocket costs and
expenses (including Attorney Costs) incurred in enforcing or preserving any rights under this
Agreement and the other Loan Documents.
(b) Each Grantor agrees to pay, and to save the Administrative Agent and the Lenders harmless
from, any and all liabilities with respect to, or resulting from any delay in paying, any and all
stamp, excise, sales or other taxes which may be payable or determined to be payable with respect
to any of the Collateral or in connection with any of the transactions contemplated by this
Agreement.
(c) The agreements in this Section 7.4 shall survive repayment of all (and shall be)
Secured Obligations (and termination of all commitments under the Credit Agreement), any
foreclosure under, or any modification, release or discharge of, any or all of the Collateral
Documents and termination of this Agreement.
7.5 Captions. Section captions used in this Agreement are for convenience only and
shall not affect the construction of this Agreement.
7.6 Nature of Remedies. All Secured Obligations of each Grantor and rights of the
Administrative Agent and the Lenders expressed herein or in any other Loan Document shall be in
addition to and not in limitation of those provided by applicable law. No failure to exercise and
no delay in exercising, on the part of the Administrative Agent or any Lender, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege.
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7.7 Counterparts. This Agreement may be executed in any number of counterparts and by
the different parties hereto on separate counterparts and each such counterpart shall be deemed to
be an original, but all such counterparts shall together constitute but one and the same Agreement.
Receipt by telecopy of any executed signature page to this Agreement or any other Loan Document
shall constitute effective delivery of such signature page.
7.8 Severability. The illegality or unenforceability of any provision of this
Agreement or any instrument or agreement required hereunder shall not in any way affect or impair
the legality or enforceability of the remaining provisions of this Agreement or any instrument or
agreement required hereunder.
7.9 Entire Agreement. This Agreement, together with the other Loan Documents,
embodies the entire agreement and understanding among the parties hereto and supersedes all prior
or contemporaneous agreements and understandings of such Persons, verbal or written, relating to
the subject matter hereof and thereof and any prior arrangements made with respect to the payment
by any Grantor of (or any indemnification for) any fees, costs or expenses payable to or incurred
(or to be incurred) by or on behalf of the Administrative Agent or the Lenders.
7.10 Successors; Assigns. This Agreement shall be binding upon Grantors, the Lenders
and the Administrative Agent and their respective successors and assigns, and shall inure to the
benefit of Grantors, Lenders and the Administrative Agent and the successors and assigns of the
Lenders and the Administrative Agent. No other Person shall be a direct or indirect legal
beneficiary of, or have any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Loan Documents. No Grantor may assign or transfer any of its rights
or Obligations under this Agreement without the prior written consent of the Administrative Agent.
7.11 Governing Law. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
7.12 Forum Selection; Consent to Jurisdiction. ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS; PROVIDED THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO PRECLUDE THE ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY
OTHER JURISDICTION. EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF
THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH GRANTOR
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, RETURN RECEIPT
CONFIRMING
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DELIVERY REQUIRED, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE
OF ILLINOIS. EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
7.13 Waiver of Jury Trial. EACH GRANTOR, THE ADMINISTRATIVE AGENT AND EACH LENDER
HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS AGREEMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH AND AGREES THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
7.14 Set-off. Each Grantor agrees that the Administrative Agent and each Lender have
all rights of set-off and bankers’ lien provided by applicable law, and in addition thereto, each
Grantor agrees that at any time any Event of Default exists, the Administrative Agent and each
Lender may apply to the payment of any Secured Obligations, whether or not then due, any and all
balances, credits, deposits, accounts or moneys of such Grantor then or thereafter with the
Administrative Agent or such Lender.
7.15 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 Lender 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 the Lenders, 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 Lenders or among the
Grantors and the Lenders.
7.16 Additional Grantors. Each Loan Party that is required to become a party to this
Agreement pursuant to Section 10.9 of the Credit Agreement shall become a Grantor for all
purposes of this Agreement upon execution and delivery by such Loan Party of a joinder agreement in
the form of Annex II hereto.
7.17 Releases. (a) At such time as the Secured Obligations have been Paid in Full,
the Collateral shall be released from the Liens created hereby, and this Agreement and all
obligations (other than those expressly stated to survive such termination) of the Administrative
Agent and each Grantor hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party, and all rights to the Collateral shall revert to the Grantors.
-27-
At the request and sole expense of any Grantor following any such termination, the Administrative
Agent shall deliver to the Grantors any Collateral held by the Administrative Agent hereunder, and
execute and deliver to the Grantors such documents as the Grantors shall reasonably request to
evidence such termination and release.
(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 the Parent, a Grantor (other than the Parent)
shall be released from its obligations hereunder in the event that all the equity interests of such
Grantor shall be sold, transferred or otherwise disposed of in a transaction permitted by the
Credit Agreement; provided that the Parent shall have delivered to the Administrative
Agent, with reasonable notice prior to the date of the proposed release, a written request for
release identifying the relevant Grantor 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 the Parent stating that such transaction is in compliance with the Credit
Agreement and the other Loan Documents.
7.18 Obligations and Liens Absolute and Unconditional. Each Grantor understands and
agrees that the obligations of each Grantor under this Agreement shall be construed as a
continuing, absolute and unconditional without regard to (a) the validity or enforceability of any
Loan Document, any of the Secured Obligations or any other collateral security therefor or guaranty
or right of offset with respect thereto at any time or from time to time held by the Administrative
Agent or any Lender, (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 Grantor or any other
Person against the Administrative Agent or any Lender, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of any Grantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of any Grantor for the Secured Obligations, in
bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its
rights and remedies hereunder against any Grantor, the Administrative Agent or any Lender 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 other Grantor or any other Person or against any collateral
security or guaranty for the Secured Obligations or any right of offset with respect thereto, and
any failure by the Administrative Agent or any Lender to make any such demand, to pursue such other
rights or remedies or to collect any payments from any other Grantor or any other Person or to
realize upon any such collateral security or guaranty or to exercise any such right of offset, or
any release of any other Grantor or any other Person or any such collateral security, guaranty or
right of offset, shall not relieve any Grantor of any obligation or liability hereunder, 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 Lender against any Grantor. For the purposes hereof
“demand” shall include the commencement and continuance of any legal proceedings.
7.19 Reinstatement. This Agreement shall remain in full force and effect and continue
to be effective should any petition be filed by or against Grantor or any Issuer for liquidation or
reorganization, should Grantor or any Issuer become insolvent or make an
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assignment for the benefit
of creditors or should a receiver or trustee be appointed for all or any significant part of
Grantor’s or and Issuer’s assets, and shall continue to be effective or be reinstated, as the case
may be, if at any time payment and performance of the Secured Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Secured Obligations, whether as a “voidable preference”, “fraudulent
conveyance”, or otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the
Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.
7.20 Effect of Amendment and Restatement. This Agreement is intended to and does
completely amend and restate, without novation, the Original Agreement. Each Grantor hereby
reaffirms and ratifies all security interests granted to the Administrative Agent for the ratable
benefit of the Lenders under the Original Agreement and the parties hereto acknowledge and agree
that such security interests shall continue to secure all Secured Obligations, and nothing herein
shall release or otherwise adversely affect any rights of the Administrative Agent with respect to
the Original Agreement.
[Signature Pages Follow]
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Each of the undersigned has caused this Amended and Restated Security Agreement to be
duly executed and delivered as of the date first above written.
| LASALLE BANK
NATIONAL ASSOCIATION, as Administrative Agent |
||||||
| By: | ||||||
| Title: | ||||||
| Xxxxx, Inc. | ||
| Xxxxx Business Forms of Kansas, Inc. | ||
| Xxxxxxxx Tool and Machine Co. | ||
| Admore, Inc. | ||
| PFC Products, Inc. | ||
| Ennis Acquisitions, Inc. | ||
| Northstar Computer Forms, Inc. | ||
| General Financial Supply, Inc. | ||
| Calibrated Forms Co. Inc. | ||
| Crabar/GBF, Inc. | ||
| Royal Business Forms, Inc. | ||
| Alstyle Apparel LLC | ||
| A and G, Inc. | ||
| Alstyle Ensenada LLC | ||
| Alstyle Hermosilla LLC | ||
| Xxxxx USA, LLC | ||
| Tennessee Business Forms Company d/b/a Avant-Garde |
||
| TBF Realty, LLC |
| By: | ||||||
| Xxxxx X. Xxxxxxx, President of each | ||||||
| American Forms I, X.X. | ||||||
| Xxxxx XxXxxxx I, L.P. | ||||||
| Texas EBF, X.X. | ||||||
| Xxxxx Sales, X.X. | ||||||
| Xxxxx Management, L.P. | ||||||
| By: Xxxxx, Inc., the sole general partner of each | ||||||
| By: | ||||||
| Xxxxx X. Xxxxxxx, President | ||||||
SCHEDULE 1
INVESTMENT PROPERTY
A. PLEDGED EQUITY
Grantor (owner of Record of such Pledged Equity) |
Issuer | Pledged Equity Description |
Percentage of Issuer |
Certificate (Indicate No.) |
||||||||||
B. PLEDGED NOTES
Grantor (owner of Record of such Pledged Notes) |
Issuer | Pledged Notes Description |
||||||
C. OTHER INVESTMENT PROPERTY
Grantor
|
Investment Property Description | ||||
SCHEDULE 2
FILINGS AND PERFECTION
GRANTOR
|
FILING REQUIREMENT OR OTHER ACTION |
FILING OFFICE | ||||||
SCHEDULE 3
GRANTOR INFORMATION
GRANTOR (exact legal name) |
STATE OF ORGANIZATION |
FEIN | CHIEF EXECUTIVE OFFICE |
Organizational ID |
||||||||||
SCHEDULE 4
A. COLLATERAL LOCATIONS
GRANTOR
|
COLLATERAL | COLLATERAL LOCATION OR PLACE OF BUSINESS (INCLUDING CHIEF EXECUTIVE OFFICE) |
OWNER/LESSOR (IF LEASED) |
||||||||
B. COLLATERAL IN POSSESSION OF LESSOR,
BAILEE, CONSIGNEE OR WAREHOUSEMAN
BAILEE, CONSIGNEE OR WAREHOUSEMAN
GRANTOR
|
COLLATERAL | LESSOR/BAILEE/CONSIGNEE/WAREHOU XXXXX |
||||||
SCHEDULE 5
INTELLECTUAL PROPERTY
Patents and Patent Licenses
Grantor
|
Patent Number |
Patent Application Number |
Date Patent Issued | Date Patent Applied | ||||||||||
Trademarks and Trademark Licenses
Grantor
|
Trademark Number |
Trademark Application Number |
Trademark Registration Number |
Date of Application |
Date of Registration |
||||||||||||
Copyrights
Grantor
|
Copyright Title | Copyright Application |
Copyright Registration Number |
Copyright Application Number |
||||||||||
SCHEDULE 6
DEPOSITARY AND OTHER DEPOSIT ACCOUNTS
GRANTOR
|
FINANCIAL INSTITUTION |
ACCOUNT NAME |
ACCOUNT NUMBER |
CONTACT INFORMATION |
||||||||||
SCHEDULE 7
COMMERCIAL TORT CLAIMS
ANNEX I
FORM OF DEPOSIT ACCOUNT CONTROL AGREEMENT
______________, 2006
[Bank] |
||
Ladies and Gentlemen:
1. (“Bank”) is advised that LaSalle Bank National Association, as
agent (“Agent”) for itself and various other Lenders (“Lenders”) is making, or may in the future
make, loans to [Borrower], a [corporation /limited liability company/limited partnership]
(“Borrower”), with a place of business at , which loans are secured by
substantially all of the assets of Borrower including, without limitation, the deposit accounts
listed on Exhibit A hereto.
2. Borrower and Bank hereby confirm to Agent that the deposit accounts listed on Exhibit A
constitute all of the deposit accounts of Borrower at Bank (the “Bank Accounts”). By its signature
below Bank hereby acknowledges the security interest of Lenders in such Bank Accounts and agrees
that it will comply with all instructions from Agent directing disposition of the funds in the Bank
Accounts without further direction from Borrower. Prior to written notice from Agent directing the
disposition of such funds, which notice shall not be given by Agent unless an Event of Default
exists under the documents evidencing the loans to Borrower by Lenders, Borrower may direct and
Bank shall follow the direction of Borrower with respect to the Bank Accounts. Bank further
represents, warrants and covenants that it has not agreed and will not agree to comply with the
instructions of any other party directing disposition of the funds in the Bank Accounts. All fees,
costs, charges and expenses related to the Bank Accounts shall be payable by Borrower and in no
event shall Agent or any Lender be charged therefor. Bank hereby agrees, with knowledge that
Lenders’ financing of Borrower will be in reliance hereon, that it will not exercise or claim any
right of setoff, deduction, banker’s lien or any other claim against any deposits made in the Bank
Accounts; provided, that Bank may exercise such setoff, deduction, banker’s lien and other claims
solely with respect to fees, service charges and expenses related to the administration of such
Bank Accounts.
3. Bank shall be fully protected in acting only on any order or direction by Agent respecting
the Bank Accounts without making any inquiry whatsoever as to Agent’s right or authority to give
such order or direction or as to the application of any payment made pursuant thereto.
4. This Agreement may not be terminated nor may the Bank Account be closed until sixty (60)
days following actual receipt by Agent of written notice of the proposed termination or closing.
Any additional deposit accounts opened by Borrower at Bank shall also constitute Bank Accounts
subject to the terms hereof.
[Add signature page.]
ANNEX II
FORM OF JOINDER TO SECURITY AGREEMENT
This JOINDER AGREEMENT (this “Agreement”) dated as of [ ] is executed by the
undersigned for the benefit of LaSalle Bank National Association, as the Administrative Agent (the
“Administrative Agent”) in connection with that certain Security Agreement dated as of
[ ] among the Grantors party thereto and the Administrative Agent (as amended, restated,
supplemented or modified from time to time, the “Security Agreement”). Capitalized terms
not otherwise defined herein are being used herein as defined in the Security Agreement.
Each Person signatory hereto is required to execute this Agreement pursuant to Section
7.16 of the Security Agreement.
In consideration of the premises and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each signatory hereby agrees as follows:
1. Each such Person assumes all the obligations of a Grantor under the Security Agreement and
a Co-Borrower under the terms of the Credit Agreement and agrees that such person or entity is a
Grantor and bound as a Grantor under the terms of the Security Agreement and as a Co-Borrower
under the terms of the Credit Agreement, as if it had been an original signatory to such
agreements. In furtherance of the foregoing, such Person hereby assigns, pledges and grants to the
Administrative Agent a security interest in all of its right, title and interest in and to the
Collateral owned thereby to secure the Secured Obligations.
2. Schedules 1, 2, 3, 4, 5, 6 and 7 of the Security Agreement are hereby amended to add the
information relating to each such Person set out on Schedules 1, 2, 3, 4, 5, 6 and 7 respectively,
hereof. Each such Person hereby makes to the Administrative Agent the representations and
warranties set forth in the Security Agreement applicable to such Person and the applicable
Collateral and confirms that such representations and warranties are true and correct after giving
effect to such amendment to such Schedules.
3. In furtherance of its obligations under Section 4.2 of the Security Agreement, each
such Person agrees to deliver to the Administrative Agent appropriately complete UCC financing
statements naming such person or entity as debtor and the Administrative Agent as secured party,
and describing its Collateral and such other documentation as the Administrative Agent (or its
successors or assigns) may require to evidence, protect and perfect the Liens created by the
Security Agreement, as modified hereby. Each such Person acknowledges the authorizations given to
the Administrative Agent under the Section 4.10(b) of the Security Agreement and otherwise.
4. Each such Person’s address for notices under the Security Agreement shall be the address of
the Parent set forth in the Credit Agreement and each such Person hereby appoints the Parent as its
agent to receive notices hereunder.
5. This Agreement shall be deemed to be part of, and a modification to, the Security Agreement
and shall be governed by all the terms and provisions of the Security Agreement,
with respect to
the modifications intended to be made to such agreement, which terms are incorporated herein by
reference, are ratified and confirmed and shall continue in full force and effect as valid and
binding agreements of each such person or entity enforceable against such person or entity. Each
such Person hereby waives notice of the Administrative Agent’s acceptance of this Agreement. Each
such Person will deliver an executed original of this Agreement to the Administrative Agent.
[add signature block for each new Grantor]
