EXHIBIT 10.10
Exhibit VI
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[FORM OF] PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT (this "Agreement") is dated as of
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January 31, 2000 and entered into by and among Levi Xxxxxxx & Co., a Delaware
corporation ("Company"), each of the undersigned direct and indirect
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Subsidiaries of Company (each of such undersigned Subsidiaries being a
"Subsidiary Grantor" and collectively, "Subsidiary Grantors") and each
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Additional Grantor that may become a party hereto after the date hereof in
accordance with Section 21 hereof (Company, each Subsidiary Grantor, and each
Additional Grantor being a "Grantor" and collectively, "Grantors") and Bank of
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America, N.A. as Collateral Agent for and representative of (in such capacity
herein called "Secured Party") Administrative Agent and the several financial
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institutions ("Banks") from time to time party to the Credit Agreement referred
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to below.
PRELIMINARY STATEMENTS
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A. Pursuant to the Amended and Restated 1999 180 Day Credit Agreement
dated as of January 31, 2000 (said Amended and Restated 1999 180 Day Credit
Agreement, as amended to the date hereof, and as it may hereafter be further
amended, modified, or supplemented from time to time, being the "Credit
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Agreement"; the terms defined therein and not otherwise defined herein being
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used herein as therein defined), by and among Company, the several financial
institutions from time to time party thereto (collectively, "Banks"); the
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several financial institutions party thereto as Co-Documentation Agents; Bank of
America, N.A. as Administrative Agent (in such capacity, "Administrative
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Agent"); and Bank of America, N.A. as Collateral Agent (in such capacity,
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"Collateral Agent"), Banks have made certain commitments, subject to the terms
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and conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company.
B. Subsidiary Grantors have executed and delivered that certain Guaranty
dated the date hereof (said Guaranty, as amended to the date hereof, and as it
may hereafter be further amended, modified, or supplemented from time to time,
being the "Guaranty") in favor of Secured Party for the benefit of Banks and
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Administrative Agent, pursuant to which each Subsidiary Grantor has guarantied
the prompt payment and performance when due of all obligations of Company under
the Credit Agreement.
C. It is a condition precedent to the effectiveness of the Credit
Agreement that Grantors listed on the signature pages hereof shall have granted
the security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, based upon the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in order to induce Banks to enter into the Credit Agreement, each Grantor hereby
agrees with Secured Party as follows:
Section 1. Grant of Security. Each Grantor hereby assigns to Secured
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Party, and hereby grants to Secured Party a security interest in, all of such
Grantor's right, title and
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interest in and to the following, in each case whether now or hereafter
existing, whether tangible or intangible, or in which such Grantor now has or
hereafter acquires an interest and wherever the same may be located (the
"Collateral"):
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(a) all equipment in all of its forms, all parts thereof and all accessions
thereto (any and all such equipment, parts and accessions being the
"Equipment");
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(b) all inventory in all of its forms, including (i) all goods held by such
Grantor for sale or lease or to be furnished under contracts of service or so
leased or furnished, (ii) all raw materials, work in process, finished goods,
and materials used or consumed in the manufacture, packing, shipping,
advertising, selling, leasing, furnishing or production of such inventory or
otherwise used or consumed in such Grantor's business, (iii) all goods in which
such Grantor has an interest in mass or a joint or other interest or right of
any kind, and (iv) all goods which are returned to or repossessed by such
Grantor and all accessions thereto and products thereof (collectively, the
"Inventory") and all negotiable and non-negotiable documents of title (including
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without limitation warehouse receipts, dock receipts and bills of lading) issued
by any Person covering any Inventory (any such negotiable document of title
being a "Negotiable Document of Title");
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(c) all accounts, contract rights, chattel paper, documents, instruments,
general intangibles and other rights and obligations of any kind owned by or
owing to such Grantor and all rights in, to and under all security agreements,
leases and other contracts securing or otherwise relating to any such accounts,
contract rights, chattel paper, documents, instruments, general intangibles or
other obligations (any and all such accounts, contract rights, chattel paper,
documents, instruments, general intangibles and other obligations being the
"Accounts", and any and all such security agreements, leases and other contracts
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being the "Related Contracts");
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(d) all deposit accounts ("Deposit Accounts"), including the restricted
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deposit account established and maintained by Secured Party pursuant to Section
11 (the "Cash Collateral Account"), together with (i) all amounts on deposit
from time to time in such deposit accounts and (ii) all interest, cash,
instruments, securities and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the foregoing, including Deposit Accounts listed on Schedule 1(d);
(e) the "Securities Collateral", which term means:
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(i) all shares of stock, partnership interests, interests in joint
ventures, limited liability company interests and all other equity
interests now or hereafter owned by such Grantor in any Person that is, or
becomes, a direct Subsidiary of such Grantor, including all securities
convertible into, and rights, warrants, options and other rights to
purchase or otherwise acquire, any of the foregoing now or hereafter owned
by such Grantor, including those owned on the date hereof and described on
Schedule 1(e)(i), and the certificates or other instruments representing
any of the foregoing and any interest of such Grantor in the entries on
the books of any securities intermediary pertaining thereto (the "Pledged
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Shares"), and all dividends, distributions, returns of capital, cash,
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warrants, options, rights, instruments, rights to vote or manage the
business of such Person pursuant to organizational documents governing the
rights and obligations of the
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stockholders, partners, members or other owners thereof and other property
or proceeds from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such Pledged Shares;
provided, that if the issuer of any of such Pledged Shares is a controlled
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foreign corporation (used hereinafter as such term is defined in Section
957(a) or a successor provision of the Internal Revenue Code), the Pledged
Shares shall not include any shares of stock of such issuer in excess of
the number of shares of such issuer possessing up to but not exceeding 65%
of the voting power of all classes of Capital Stock entitled to vote of
such issuer, and all dividends, cash, warrants, rights, instruments and
other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
Pledged Shares;
(ii) all indebtedness from time to time owed to such Grantor by any
obligor that is, or becomes, a direct or indirect Subsidiary of such
Grantor, including the indebtedness described on Schedule 1(e)(ii) and
issued by the obligors named therein, and the instruments evidencing such
indebtedness (the "Pledged Debt"), and all interest, cash, instruments and
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other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the
Pledged Debt; and
(iii) all other investment property as that term is defined in the
Uniform Commercial Code ("UCC") of any relevant jurisdiction, of such
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Grantor;
(f) the "Intellectual Property Collateral", which term means:
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(i) all rights, title and interest (including rights acquired
pursuant to a license or otherwise) in and to all trademarks, service
marks, designs, logos, indicia, tradenames, trade dress, corporate names,
company names, business names, fictitious business names, trade styles
and/or other source and/or business identifiers and applications pertaining
thereto, owned by such Grantor, or hereafter adopted and used, in its
business (including, without limitation, the trademarks specifically
identified in Schedule 1(f)(i), as the same may be amended pursuant hereto
from time to time) (collectively, the "Trademarks"), all registrations that
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have been or may hereafter be issued or applied for thereon in the United
States and any state thereof and in foreign countries (including, without
limitation, the registrations and applications specifically identified in
Schedule 1(f)(i), as the same may be amended pursuant hereto from time to
time) (the "Trademark Registrations"), all common law and other rights in
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and to the Trademarks in the United States and any state thereof and in
foreign countries (the "Trademark Rights"), and all goodwill of such
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Grantor's business symbolized by the Trademarks and associated therewith
(the "Associated Goodwill");
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(ii) all rights, title and interest (including rights acquired
pursuant to a license or otherwise) in and to all patents and patent
applications and rights and interests in patents and patent applications
under any domestic or foreign law that are presently, or in the future may
be, owned or held by such Grantor and all patents and patent applications
and rights, title and interests in patents and patent applications under
any domestic or foreign law that are presently, or in the future may be,
owned by such
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Grantor in whole or in part (including, without limitation, the patents and
patent applications listed in Schedule 1(f)(ii), as the same may be amended
pursuant hereto from time to time), all rights corresponding thereto
(including, without limitation, the right, exercisable only upon the
occurrence and during the continuation of an Event of Default, to xxx for
past, present and future infringements in the name of such Grantor or in
the name of Secured Party or Banks), and all re-issues, divisions,
continuations, renewals, extensions and continuations-in-part thereof (all
of the foregoing being collectively referred to as the "Patents"); and
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(iii) all rights, title and interest (including rights acquired
pursuant to a license or otherwise) under copyright in various published
and unpublished works of authorship including computer programs, computer
data bases, other computer software, layouts, trade dress, drawings,
designs, writings, and formulas owned by such Grantor (including the
registered works listed on Schedule 1(f)(iii), as the same may be amended
pursuant hereto from time to time) (collectively, the "Copyrights"), all
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copyright registrations issued to such Grantor and applications for
copyright registration that have been or may hereafter be issued or applied
for thereon by such Grantor in the United States and any state thereof and
in foreign countries (including, without limitation, the registrations
listed on Schedule 1(f)(iii), as the same may be amended pursuant hereto
from time to time) (collectively, the "Copyright Registrations"), all
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common law and other rights in and to the Copyrights in the United States
and any state thereof and in foreign countries including all copyright
licenses (but with respect to such copyright licenses, only to the extent
permitted by such licensing arrangements) (the "Copyright Rights"),
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including each of the Copyrights, rights, titles and interests in and to
the Copyrights, all derivative works and other works protectable by
copyright, which are presently, or in the future may be, owned, created (as
a work for hire for the benefit of such Grantor), authored (as a work for
hire for the benefit of such Grantor), or acquired by such Grantor, in
whole or in part, and all Copyright Rights with respect thereto and all
Copyright Registrations therefor, heretofore or hereafter granted or
applied for, and all renewals and extensions thereof, throughout the world,
including the right to renew and extend such Copyright Registrations and
Copyright Rights and to register works protectable by copyright and the
right to xxx for past, present and future infringements of the Copyrights
and Copyright Rights;
(g) all information used or useful or arising from the business
including all goodwill, trade secrets, trade secret rights, know-how, customer
lists, processes of production, ideas, confidential business information,
techniques, processes, formulas, and all other proprietary information;
(h) to the extent not included in any other paragraph of this Section
1, all other general intangibles (including tax refunds, rights to payment or
performance, choses in action and judgments taken on any rights or claims
included in the Collateral);
(i) all plant fixtures, business fixtures and other fixtures and
storage and office facilities, and all accessions thereto and products thereof;
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(j) all books, records, ledger cards, files, correspondence, computer
programs, tapes, disks and related data processing software that at any time
evidence or contain information relating to any of the Collateral or are
otherwise necessary or helpful in the collection thereof or realization
thereupon; and
(k) all proceeds, products, rents and profits of or from any and all
of the foregoing Collateral and, to the extent not otherwise included, all
payments under insurance (whether or not Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral. For
purposes of this Agreement, the term "proceeds" includes whatever is receivable
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or received when Collateral or proceeds are sold, exchanged, collected or
otherwise disposed of, whether such disposition is voluntary or involuntary.
Notwithstanding anything herein to the contrary, in no event shall the
Collateral include, and no Grantor shall be deemed to have granted a security
interest in (i) any of such Grantor's rights or interests in any license,
contract or agreement to which such Grantor is a party or any of its rights or
interests thereunder or any of its rights or interests in other property to the
extent, but only to the extent, that such a grant would, under the terms of such
license, contract or agreement or otherwise, result in a breach of the terms of,
or constitute a default under, any license, contract or agreement to which such
Grantor is a party (other than to the extent that any such term would be
rendered ineffective pursuant to the UCC or any other applicable law (including
the Bankruptcy Code) or principles of equity) or any Negative Pledge permitted
under the Credit Agreement on such rights or interests; provided, that
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immediately upon the ineffectiveness, lapse or termination of any such
provision, the Collateral shall include, and such Grantor shall be deemed to
have granted a security interest in, all such rights and interests as if such
provision had never been in effect and (ii) any real property leasehold, unless
a Grantor has executed a leasehold mortgage or leasehold deed of trust covering
such real property leasehold.
Notwithstanding anything herein to the contrary, neither Company nor any
Grantor shall be deemed to have granted a security interest in (i) any Principal
Property, (ii) any Capital Stock of any Restricted Subsidiary or (iii) any
Pledged Debt of or issued by any Restricted Subsidiary.
Section 2. Security for Obligations.
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(a) This Agreement secures, and the Collateral assigned by each
Grantor is collateral security for, the prompt payment or performance in full
when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including without limitation the payment of
amounts that would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code), of all Secured Obligations of such
Grantor. "Secured Obligations" means:
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(i) with respect to Company, all obligations and liabilities of
every nature of Company now or hereafter existing under or arising out of
or in connection with the Credit Agreement and the other Loan Documents,
and
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(ii) with respect to each Subsidiary Grantor and Additional
Grantor, all obligations and liabilities of every nature of such Grantors
now or hereafter existing under or arising out of or in connection with the
Guaranty;
in each case together with all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Company or any other Grantor,
would accrue on such obligations, whether or not a claim is allowed against
Company or such Grantor for such interest in the related bankruptcy proceeding),
reimbursement of amounts drawn under Lender Letters of Credit, fees, expenses,
indemnities or otherwise, whether voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such obligations
or liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from Secured Party, Administrative
Agent or any Bank as a preference, fraudulent transfer or otherwise, and all
obligations of every nature of Grantors now or hereafter existing under this
Agreement.
(b) Any and all security interests, liens, rights and interest of
Secured Party in and to any or all of the Collateral are subordinated to any and
all security interests, liens, rights and interest of the several financial
institutions party to the Bridge Credit Agreement from time to time in and to
any or all of the Collateral pursuant to the Intercreditor Agreement.
Section 3. Grantors Remain Liable.
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Anything contained herein to the contrary notwithstanding, (a) each Grantor
shall remain liable under any contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Secured Party of any of its rights hereunder shall
not release any Grantor from any of its duties or obligations under the
contracts and agreements included in the Collateral, and (c) Secured Party shall
not have any obligation or liability under any contracts, licenses, and
agreements included in the Collateral by reason of this Agreement, nor shall
Secured Party be obligated to perform any of the obligations or duties of any
Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.
Section 4. Representations and Warranties.
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Each Grantor represents and warrants as follows:
(a) Ownership of Collateral. Except as expressly permitted by the
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Credit Agreement and for the security interest created by this Agreement, such
Grantor owns the Collateral owned by such Grantor free and clear of any Lien.
Except as expressly permitted by the Credit Agreement and such as may have been
filed in favor of Secured Party relating to this Agreement, no effective
financing statement or other instrument similar in effect covering all or any
part of the Collateral is on file in any filing or recording office.
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(b) Locations of Equipment and Inventory. All of the Equipment and
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Inventory is, as of the date hereof, or in the case of each Additional Grantor,
the date of the applicable counterpart entered into pursuant to Section 21
hereof (each, a "Counterpart") located at the places specified in Schedule 4(b),
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except for Inventory which, in the ordinary course of business, is in transit
either (i) from a supplier or a processor to a Grantor, (ii) between the
locations specified in Schedule 4(b), (iii) from a supplier or a Grantor to a
processor, or (iv) to customers of a Grantor.
(c) Office Locations. The chief place of business, the chief
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executive office and the office where such Grantor keeps its records regarding
the Accounts and all originals of all chattel paper that evidence Accounts are,
as of the date hereof, and have been for the four month period preceding the
date hereof, or, in the case of an Additional Grantor, the date of the
applicable Counterpart, located at the locations set forth on Schedule 4(c);
(d) Names. No Grantor (or predecessor by merger or otherwise of such
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Grantor) has, within the four month period preceding the date hereof, or, in the
case of an Additional Grantor, the date of the applicable Counterpart, had a
different name from the name of such Grantor listed or the signature pages
hereof, except the names listed in Schedule 4(d) annexed hereto.
(e) Delivery of Certain Collateral. Except as permitted by Section
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6.11 of the Credit Agreement, all certificates or instruments (excluding checks)
evidencing, comprising or representing the Collateral (including, without
limitation, the Securities Collateral) have been delivered to Secured Party duly
endorsed or accompanied by duly executed instruments of transfer or assignment
in blank.
(f) Securities Collateral. (i) All of the Pledged Shares described on
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Schedule 1(e)(i) have been duly authorized and validly issued and are fully paid
and non-assessable; (ii) all of the Pledged Debt described on Schedule 1(e)(ii)
has been duly authorized, authenticated or issued, and delivered and is the
legal, valid and binding obligation of the issuers thereof and is not in
default; (iii) the Pledged Shares constitute all of the issued and outstanding
shares of stock or other equity interests of each issuer thereof (subject to the
proviso to Section 1(e)(i) hereof with respect to shares of a foreign controlled
corporation), and there are no outstanding warrants, options or other rights to
purchase, or other agreements outstanding with respect to, or property that is
now or hereafter convertible into, or that requires the issuance or sale of, any
Pledged Shares; (iv) the Pledged Debt constitutes all of the issued and
outstanding intercompany indebtedness evidenced by a promissory note of the
respective issuers thereof owing to such Grantor; (v) Schedule 1(e)(i) sets
forth all of the Pledged Shares owned by each Grantor on the date hereof; and
(vi) Schedule 1(e)(ii) sets forth all of the Pledged Debt in existence on the
date hereof.
(g) Intellectual Property Collateral.
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(i) a true and complete list of all Trademark Registrations and
Trademark applications owned by such Grantor, in whole or in part, that are
material to such Grantor's business, is set forth in Schedule 1(f)(i);
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(ii) a true and complete list of all Patents owned by such
Grantor, in whole or in part, that are material to such Grantor's business,
is set forth in Schedule 1(f)(ii);
(iii) a true and complete list of all Copyright Registrations and
applications for Copyright Registrations owned by such Grantor, in whole or
in part, is set forth in Schedule 1(f)(iii);
(iv) after reasonable inquiry, such Grantor is not aware of any
pending or threatened claim by any third party that any of the Intellectual
Property Collateral owned, held or used by such Grantor is invalid or
unenforceable that is reasonably likely to have a Material Adverse Effect;
and
(v) no effective security interest or other Lien covering all or
any part of the Intellectual Property Collateral is on file in the United
States Patent and Trademark Office or the United States Copyright Office.
(h) Perfection. The security interests in the Collateral granted to
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Secured Party for the ratable benefit of Banks and Administrative Agent
hereunder constitute valid security interests in the Collateral, securing the
payment of the Secured Obligations. Upon (i) the filing of UCC financing
statements naming each Grantor as "debtor", naming Secured Party as "secured
party" and describing the Collateral in the filing offices with respect to such
Grantor set forth on Schedule 4(h), (ii) in the case of the Securities
Collateral consisting of certificated securities or evidenced by instruments,
delivery of the certificates representing such certificated securities and
delivery of such instruments to Secured Party, in each case duly endorsed or
accompanied by duly executed instruments of assignment or transfer in blank,
(iii) in the case of the Intellectual Property Collateral, in addition to the
filing of such UCC financing statements, the filing of a Grant of Trademark
Security Interest, substantially in the form of Exhibit I, and a Grant of Patent
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Security Interest, substantially in the form of Exhibit II, with the United
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States Patent and Trademark Office and the filing of a Grant of Copyright
Security Interest, substantially in the form of Exhibit III, with the United
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States Copyright Office (each such Grant of Trademark Security Interest, Grant
of Patent Security Interest and Grant of Copyright Security Interest being
referred to herein as a "Grant"), the security interests in the Collateral
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granted to Secured Party for the ratable benefit of Banks and Administrative
Agent will constitute perfected security interests therein, to the extent such
security interests may be perfected by filing in the United States or
possession, prior to all other Liens (except for Liens expressly permitted by
the Credit Agreement), and all filings and other actions necessary or desirable
to perfect and protect such security interest have been duly made or taken.
Section 5. Further Assurances.
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(a) Generally. Each Grantor agrees that from time to time, at the
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expense of Grantors, such Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that Secured Party may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable Secured Party to exercise and enforce its rights and remedies hereunder
with respect to any Collateral. Without limiting the generality of the
foregoing, each
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Grantor will: (i) at the reasonable request of Secured Party, xxxx conspicuously
each item of chattel paper included in the Accounts, each Related Contract and,
at the reasonable request of Secured Party, each of its records pertaining to
the Collateral, with a legend, in form and substance satisfactory to Secured
Party, indicating that such Collateral is subject to the security interest
granted hereby, (ii) at the reasonable request of Secured Party, deliver and
pledge to Secured Party hereunder all promissory notes and other instruments
(including checks) and all original counterparts of chattel paper constituting
Collateral, duly endorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to Secured Party,
(iii) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as Secured Party may request, in order to perfect and preserve the
security interests granted or purported to be granted hereby, (iv) furnish to
Secured Party from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as Secured Party may reasonably request, all in reasonable detail,
(v) if requested by Co-Agents, promptly after the acquisition by such Grantor of
any item of Equipment that is covered by a certificate of title under a statute
of any jurisdiction under the law of which indication of a security interest on
such certificate is required as a condition of perfection thereof, execute and
file with the registrar of motor vehicles or other appropriate authority in such
jurisdiction an application or other document requesting the notation or other
indication of the security interest created hereunder on such certificate of
title, (vi) within 45 days after the end of each fiscal quarter of Company,
deliver to Secured Party copies of all such applications or other documents
filed during such fiscal quarter and copies of all such certificates of title
issued during such fiscal quarter indicating the security interest created
hereunder in the items of Equipment covered thereby, (vii) at any reasonable
time, upon request by Secured Party, exhibit the Collateral to and allow
inspection of the Collateral by Secured Party, or persons designated by Secured
Party, and (viii) at Secured Party's request, appear in and defend any action or
proceeding that may affect such Grantor's title to or Secured Party's security
interest in all or any part of the Collateral. Each Grantor hereby authorizes
Secured Party to file one or more financing or continuation statements, and
amendments thereto, relative to all or any part of the Collateral without the
signature of any Grantor. Each Grantor agrees that a carbon, photographic or
other reproduction of this Agreement or of a financing statement signed by such
Grantor shall be sufficient as a financing statement and may be filed as a
financing statement in any and all jurisdictions.
(b) Securities Collateral. Without limiting the generality of the
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foregoing Section 5(a), each Grantor agrees that it will, upon obtaining any
additional shares of stock or other securities required to be pledged hereunder,
promptly (and in any event within ten Business Days) deliver to Secured Party a
Pledge Supplement, duly executed by such Grantor, in substantially the form of
Exhibit IV (a "Pledge Supplement"), in respect of the additional Pledged Shares
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or Pledged Debt to be pledged pursuant to this Agreement. Upon each delivery of
a Pledge Supplement to Secured Party, the representations and warranties
contained in subsections (i)-(iv) of Section 4(g) hereof shall be deemed to have
been made by such Grantor as to the Securities Collateral described in such
Pledge Supplement as of the date thereof. Each Grantor hereby authorizes
Secured Party to attach each Pledge Supplement to this Agreement and agrees that
all Pledged Shares or Pledged Debt of such Grantor listed on any Pledge
Supplement shall for all purposes hereunder be considered Collateral of such
Grantor; provided, the failure of any Grantor to execute a Pledge Supplement
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with respect to any additional Pledged
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Shares or Pledged Debt pledged pursuant to this Agreement shall not impair the
security interest of Secured Party therein or otherwise adversely affect the
rights and remedies of Secured Party hereunder with respect thereto.
(c) Intellectual Property Collateral. Without limiting the generality
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of the foregoing Section 5(a), if any Grantor shall hereafter obtain rights to
any new Intellectual Property Collateral or become entitled to the benefit of
(i) any patent application or patent or any reissue, division, continuation,
renewal, extension or continuation-in-part of any Patent or any improvement of
any Patent or (ii) any Copyright Registration, application for Copyright
Registration or renewals or extension of any Copyright, then in any such case,
the provisions of this Agreement shall automatically apply thereto. Each
Grantor shall, within 45 days after the end of each fiscal quarter of Company,
notify Secured Party in writing of any of the foregoing rights acquired by such
Grantor after the date hereof or the date of the last such notice, as the case
may be, and of (i) any Trademark Registrations issued or application for a
Trademark Registration or application for a Patent made, and (ii) any Copyright
Registrations issued or applications for Copyright Registration made, in any
such case, after the date hereof. Within 45 days after the end of each fiscal
quarter of Company during which any Grantor files an application for any (1)
Trademark Registration; (2) Patent; and (3) Copyright Registration, each Grantor
shall execute and deliver to Secured Party and record in all places where a
Grant is recorded an IP Supplement, substantially in the form of Exhibit V (an
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"IP Supplement"), pursuant to which such Grantor shall grant to Secured Party a
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security interest to the extent of its interest in such Intellectual Property
Collateral; provided, if, in the reasonable judgment of such Grantor, after due
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inquiry, granting such interest would result in the grant of a Trademark
Registration or Copyright Registration in the name of Secured Party, such
Grantor shall give written notice to Secured Party on the day on which such
Grantor would otherwise be required to record the IP Supplement and the filing
shall instead be undertaken as soon as practicable but in no case later than
immediately following the grant of the applicable Trademark Registration or
Copyright Registration, as the case may be. Upon delivery to Secured Party of
an IP Supplement, Schedules 1(f)(i), 1(f)(ii), and 1(f)(iii) hereto and Schedule
A to each Grant, as applicable, shall be deemed modified to include reference to
any right, title or interest in any existing Intellectual Property Collateral or
any Intellectual Property Collateral included on Schedule A to such IP
Supplement. Each Grantor hereby authorizes Secured Party to modify this
Agreement without the signature or consent of any Grantor by attaching Schedules
1(f)(i), 1(f)(ii), and 1(f)(iii), as applicable, that have been modified to
include such Intellectual Property Collateral or to delete any reference to any
right, title or interest in any Intellectual Property Collateral in which any
Grantor no longer has or claims any right, title or interest; provided, the
--------
failure of any Grantor to execute an IP Supplement with respect to any
additional Intellectual Property Collateral pledged pursuant to this Agreement
shall not impair the security interest of Secured Party therein or otherwise
adversely affect the rights and remedies of Secured Party hereunder with respect
thereto.
Section 6. Certain Covenants of Grantors.
-----------------------------
Each Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy
VI-10
of insurance covering the Collateral, except where such violation would not have
a Material Adverse Effect;
(b) notify Secured Party of any change in such Grantor's name,
identity or corporate structure within 30 days of such change;
(c) give Secured Party 30 days' prior written notice of any change in
such Grantor's chief place of business, chief executive office or residence or
the office where such Grantor keeps its records regarding the Accounts and all
originals of all chattel paper that evidence Accounts;
(d) if Secured Party gives value to enable such Grantor to acquire
rights in or the use of any Collateral, use such value for such purposes; and
(e) except as otherwise not prohibited by the Credit Agreement, pay
promptly when due all property and other taxes, assessments and governmental
charges or levies imposed upon, and all claims (including claims for labor,
services, materials and supplies) against, the Collateral.
Section 7. Special Covenants With Respect to Equipment and Inventory.
---------------------------------------------------------
Each Grantor shall:
(a) keep the Equipment and Inventory owned by such Grantor at the
places therefor specified on Schedule 4(b), or upon 30 days' prior written
notice to Secured Party, at such other places in jurisdictions where all action
that may be necessary or desirable, or that Secured Party may request, in order
to perfect and protect any security interest granted or purported to be granted
hereby, or to enable Secured Party to exercise and enforce its rights and
remedies hereunder, with respect to such Equipment and Inventory shall have been
taken;
(b) except as otherwise permitted by Section 6.6 of the Credit
Agreement, cause the Equipment owned by such Grantor to be maintained and
preserved in the same condition, repair and working order as when new, ordinary
wear and tear excepted, and in accordance with such Grantor's past practices,
and shall forthwith make or cause to be made all repairs, replacements and other
improvements in connection therewith that are necessary or desirable to such
end. Each Grantor shall promptly furnish to Secured Party a statement
respecting any material loss or damage to the Equipment owned by such Grantor,
but only to the extent that such loss or damage is material to the Equipment
owned by Company and its Subsidiaries, taken as whole;
(c) keep correct and accurate records of Inventory owned by such
Grantor, itemizing and describing the kind, type and quantity of such Inventory,
and such Grantor's cost therefor;
(d) if any Inventory is in the possession or control of any of such
Grantor's agents or processors, within 30 days of the Closing Date (with respect
to existing agents or processors) and promptly after any such Inventory comes
into the possession or control of such Grantor's agents or processors (with
respect to future agents or processors), instruct such agent
VI-11
or processor to hold all such Inventory for the account of Secured Party and
subject to the instructions of Secured Party, and use commercially reasonable
efforts, but at no out-of-pocket cost to such Grantor, to obtain waivers or
bailee letters in form and substance reasonably satisfactory to Collateral Agent
from all public warehouses in which Inventory is maintained and all such agents
or processors; and
(e) each Grantor shall, at its own expense, maintain insurance with
respect to the Equipment and Inventory in accordance with the terms of the
Credit Agreement.
Section 8. Special Covenants with respect to Accounts and Related
------------------------------------------------------
Contracts.
---------
(a) Each Grantor shall keep its chief place of business and chief
executive office and the office where it keeps its records concerning the
Accounts and Related Contracts, and all originals of all chattel paper that
evidence Accounts, at the locations therefor set forth on Schedule 4(d) or, upon
30 days' prior written notice to Secured Party, at such other location in a
jurisdiction where all action that may be necessary or desirable, or that
Secured Party may request, in order to perfect and protect any security interest
granted or purported to be granted hereby, or to enable Secured Party to
exercise and enforce its rights and remedies hereunder, with respect to such
Accounts and Related Contracts shall have been taken. Each Grantor will hold
and preserve such records and chattel paper and will permit representatives of
Secured Party at any time during normal business hours to inspect and make
abstracts from such records and chattel paper, and each Grantor agrees to render
to Secured Party, at Grantor's cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto. Promptly upon
the request of Secured Party, each Grantor shall deliver to Secured Party
complete and correct copies of each Related Contract.
(b) Each Grantor shall, for not less than three (3) years from the
date on which each Account of such Grantor arose, maintain (i) complete records
of such Account, including records of all payments received, credits granted and
merchandise returned, and (ii) all documentation relating thereto.
(c) Except as otherwise provided in this Section 8(c), each Grantor
shall continue to collect, at its own expense, all amounts due or to become due
to such Grantor under the Accounts and Related Contracts. In connection with
such collections, each Grantor may take (and, upon the occurrence and during the
continuance of an Event of Default at Secured Party's direction, shall take)
such action as such Grantor or Secured Party may deem necessary or advisable to
enforce collection of amounts due or to become due under the Accounts; provided,
--------
however, that Secured Party shall have the right at any time, upon the
-------
occurrence and during the continuation of an Event of Default and upon written
notice to such Grantor of its intention to do so, to notify the account debtors
or obligors under any Accounts of the assignment of such Accounts to Secured
Party and to direct such account debtors or obligors to make payment of all
amounts due or to become due to such Grantor thereunder directly to Secured
Party, to notify each Person maintaining a lockbox or similar arrangement to
which account debtors or obligors under any Accounts have been directed to make
payment to remit all amounts representing collections on checks and other
payment items from time to time sent to or deposited in such lockbox or other
arrangement directly to Secured Party and, upon such notification and at the
expense of Grantors, to enforce collection of any such Accounts and to adjust,
settle or
VI-12
compromise the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done. After receipt by such Grantor of the
notice from Secured Party referred to in the proviso to the preceding sentence,
(i) all amounts and proceeds (including checks and other instruments) received
by such Grantor in respect of the Accounts and the Related Contracts shall be
received in trust for the benefit of Secured Party hereunder, shall be
segregated from other funds of such Grantor and shall be forthwith paid over or
delivered to Secured Party in the same form as so received (with any necessary
endorsement) to be held as cash Collateral and applied as provided by Section 17
hereof, and (ii) such Grantor shall not adjust, settle or compromise the amount
or payment of any Account, or release wholly or partly any account debtor or
obligor thereof, or allow any credit or discount thereon.
Section 9. Special Covenants With Respect to the Securities
------------------------------------------------
Collateral.
----------
(a) Delivery. Each Grantor agrees that all certificates or
---------
instruments representing or evidencing the Securities Collateral shall be
delivered to and held by or on behalf of Secured Party pursuant hereto and shall
be in suitable form for transfer by delivery or, as applicable, shall be
accompanied by such Grantor's endorsement, where necessary, or duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to Secured Party. Secured Party shall have the right at any time
to exchange certificates or instruments representing or evidencing Securities
Collateral for certificates or instruments of smaller or larger denominations.
(b) Covenants. Each Grantor shall (i) not, except as otherwise not
----------
prohibited by the Credit Agreement, permit any issuer of Pledged Shares to merge
or consolidate unless all the outstanding Capital Stock or other equity
interests of the surviving or resulting Person is, upon such merger or
consolidation, pledged hereunder and no cash, securities or other property is
distributed in respect of the outstanding shares of any other constituent
corporation; provided, if the surviving or resulting Person upon any such merger
--------
or consolidation involving an issuer of Pledged Shares which is a controlled
foreign corporation is a controlled foreign corporation, then such Grantor shall
only be required to pledge outstanding Capital Stock of such surviving or
resulting Person possessing up to but not exceeding 65% of the voting power of
all classes of Capital Stock of such issuer entitled to vote; (ii) cause each
issuer of Pledged Shares not to issue any stock, other equity interests or other
securities in addition to or in substitution for the Pledged Shares issued by
such issuer, except to such Grantor; (iii) pledge hereunder, immediately upon
its acquisition (directly or indirectly) thereof, any and all additional shares
of stock, other equity interests or other securities of each issuer of Pledged
Shares; (iv) pledge hereunder, immediately upon its acquisition (directly or
indirectly) thereof, any and all shares of stock or other equity interests of
any Person that, after the date of this Agreement, becomes, as a result of any
occurrence, a direct Subsidiary of such Grantor; provided, notwithstanding
--------
anything contained in this subsection (iv) to the contrary, such Grantor shall
only be required to pledge the outstanding Capital Stock of a controlled foreign
corporation possessing up to but not exceeding 65% of the voting power of all
classes of Capital Stock of such controlled foreign corporation entitled to vote
and any such Grantor shall not be required to pledge the Capital Stock of any
Restricted Subsidiary; (v) pledge hereunder, immediately upon their issuance,
any and all instruments or other evidences of additional indebtedness from time
to time owed to such Grantor by any obligor on the Pledged Debt; provided,
--------
notwithstanding anything contained in this subsection (v) to the contrary, any
such Grantor shall not be required to pledge any such
VI-13
instruments or other evidences of additional indebtedness owed to such Grantor
by any Restricted Subsidiary; (vi) pledge hereunder, immediately upon their
issuance, any and all instruments or other evidences of indebtedness from time
to time owed to such Grantor by any Person that after the date of this Agreement
becomes, as a result of any occurrence, a direct or indirect Subsidiary of such
Grantor; provided, notwithstanding anything contained in this subsection (vi) to
--------
the contrary, any such Grantor shall not be required to pledge any such
instruments or other evidences of indebtedness owed to such Grantor by any
Restricted Subsidiary; (vii) promptly notify Secured Party of any event of which
such Grantor becomes aware causing loss or depreciation in the value of the
Securities Collateral that has a Material Adverse Effect; and (viii) at the
request of Secured Party, promptly execute and deliver to Secured Party an
agreement providing for the control, as that term is defined in the UCC, by
Secured Party of all securities entitlements and securities accounts of such
Grantor.
(c) Voting and Distributions. So long as no Event of Default shall
-------------------------
have occurred and be continuing, (i) each Grantor shall be entitled to exercise
any and all voting and other consensual rights pertaining to the Securities
Collateral or any part thereof for any purpose not inconsistent with the terms
of this Agreement or the Credit Agreement; provided, no Grantor shall exercise
--------
or refrain from exercising any such right if Secured Party shall have notified
such Grantor that, in Secured Party's reasonable judgment, such action would
have a Material Adverse Effect; and provided further, such Grantor shall give
-------- -------
Secured Party at least five Business Days' prior written notice of the manner in
which it intends to exercise, or the reasons for refraining from exercising, any
such right (it being understood, however, that neither (A) the voting by such
Grantor of any Pledged Shares for or such Grantor's consent to the election of
directors or other members of a governing body of an issuer of Pledged Shares at
a regularly scheduled annual or other meeting of stockholders or holders of
equity interests or with respect to incidental matters at any such meeting, nor
(B) such Grantor's consent to or approval of any action otherwise not prohibited
under this Agreement and the Credit Agreement shall be deemed inconsistent with
the terms of this Agreement or the Credit Agreement within the meaning of this
Section, and no notice of any such voting or consent need be given to Secured
Party); (ii) each Grantor shall be entitled to receive and retain, and to
utilize free and clear of the lien of this Agreement, any and all dividends,
other distributions and interest paid in respect of the Securities Collateral;
provided, any and all (A) dividends, distributions and interest paid or payable
--------
other than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Securities Collateral, (B) dividends and other distributions paid or payable in
cash in respect of any Securities Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus, and (C) cash paid, payable or otherwise
distributed in respect of principal or in redemption of or in exchange for any
Securities Collateral, shall be, and shall forthwith be delivered to Secured
Party to hold as, Securities Collateral and shall, if received by such Grantor,
be received in trust for the benefit of Secured Party, be segregated from the
other property or funds of such Grantor and be forthwith delivered to Secured
Party as Securities Collateral in the same form as so received (with all
necessary endorsements); and (iii) Secured Party shall promptly execute and
deliver (or cause to be executed and delivered) to such Grantor all such
proxies, dividend payment orders and other instruments as such Grantor may from
time to time reasonably request for the purpose of enabling such Grantor to
exercise the voting and other consensual rights which it is entitled to exercise
pursuant to subsection (i) above and to
VI-14
receive the dividends, distributions, principal or interest payments which it is
authorized to receive and retain pursuant to subsection (ii) above.
Upon the occurrence and during the continuation of an Event of Default, (i)
upon written notice from Secured Party to any Grantor, all rights of such
Grantor to exercise the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant hereto shall cease, and all such
rights shall thereupon become vested in Secured Party who shall thereupon have
the sole right to exercise such voting and other consensual rights; (ii) all
rights of such Grantor to receive the dividends, other distributions and
interest payments which it would otherwise be authorized to receive and retain
pursuant hereto shall cease, and all such rights shall thereupon become vested
in Secured Party who shall thereupon have the sole right to receive and hold as
Securities Collateral such dividends, other distributions and interest payments;
and (iii) all dividends, principal, interest payments and other distributions
which are received by such Grantor contrary to the provisions of subsection (ii)
of the immediately preceding paragraph or subsection (ii) above shall be
received in trust for the benefit of Secured Party, shall be segregated from
other funds of such Grantor and shall forthwith be paid over to Secured Party as
Securities Collateral in the same form as so received (with any necessary
endorsements).
In order to permit Secured Party to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant hereto and to
receive all dividends and other distributions which it may be entitled to
receive hereunder, (i) each Grantor shall promptly execute and deliver (or cause
to be executed and delivered) to Secured Party all such proxies, dividend
payment orders and other instruments as Secured Party may from time to time
reasonably request, and (ii) without limiting the effect of subsection (i)
above, each Grantor hereby grants to Secured Party an irrevocable proxy to vote
the Pledged Shares and to exercise all other rights, powers, privileges and
remedies to which a holder of the Pledged Shares would be entitled (including
giving or withholding written consents of shareholders or other holders of
equity interests, calling special meetings of shareholders or other holders of
equity interests and voting at such meetings), which proxy shall be effective,
automatically and without the necessity of any action (including any transfer of
any Pledged Shares on the record books of the issuer thereof) by any other
Person (including the issuer of the Pledged Shares or any officer or agent
thereof), upon the occurrence of an Event of Default and which proxy shall only
terminate upon the payment in full of the Secured Obligations.
(d) Investment Property. Company shall not maintain any investment
-------------------
property with any financial or other institution unless such institution has
executed a control agreement in form and substance reasonably satisfactory to
Collateral Agent.
Section 10. Special Covenants With Respect to the Intellectual
--------------------------------------------------
Property Collateral.
-------------------
(a) Each Grantor shall:
(i) diligently keep reasonable records respecting the
Intellectual Property Collateral and at all times keep at least one
complete set of its records concerning such Collateral at its chief
executive office or principal place of business;
VI-15
(ii) use commercially reasonable efforts so as not to permit the
inclusion in any contract to which it hereafter becomes a party of any
provision that could or might in any way impair or prevent the creation of
a security interest in, or the assignment of, such Grantor's rights and
interests in any property included within the definitions of any
Intellectual Property Collateral acquired under such contracts;
(iii) take any and all reasonable steps to protect the secrecy of
all trade secrets relating to the products and services sold or delivered
under or in connection with the Intellectual Property Collateral,
including, without limitation, where appropriate entering into
confidentiality agreements with employees and labeling and restricting
access to secret information and documents;
(iv) use proper statutory notice in connection with its use of
any of the Intellectual Property Collateral, except where the failure to
give such notice would not have a Material Adverse Effect;
(v) use a commercially appropriate standard of quality (which
may be consistent with such Grantor's past practices) in the manufacture,
sale and delivery of products and services sold or delivered under or in
connection with the Trademarks; and
(vi) furnish to Secured Party from time to time at Secured
Party's reasonable request statements and schedules further identifying and
describing any Intellectual Property Collateral and such other reports in
connection with such Collateral, all in reasonable detail.
(b) Except as otherwise provided in this Section 10, each Grantor
shall continue to collect, at its own expense, all amounts due or to become due
to such Grantor in respect of the Intellectual Property Collateral or any
portion thereof. In connection with such collections, each Grantor may take
(and, after the occurrence and during the continuance of any Event of Default at
Secured Party's reasonable direction, shall take) such action as such Grantor or
Secured Party may deem reasonably necessary or advisable to enforce collection
of such amounts; provided, Secured Party shall have the right at any time, upon
--------
the occurrence and during the continuation of an Event of Default and upon
written notice to such Grantor of its intention to do so, to notify the obligors
with respect to any such amounts of the existence of the security interest
created hereby and to direct such obligors to make payment of all such amounts
directly to Secured Party, and, upon such notification and at the expense of
such Grantor, to enforce collection of any such amounts and to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done. After receipt by any Grantor of the
notice from Secured Party referred to in the proviso to the preceding sentence
and during the continuation of any Event of Default, (i) all amounts and
proceeds (including checks and other instruments) received by each Grantor in
respect of amounts due to such Grantor in respect of the Intellectual Property
Collateral or any portion thereof shall be received in trust for the benefit of
Secured Party hereunder, shall be segregated from other funds of such Grantor
and shall be forthwith paid over or delivered to Secured Party in the same form
as so received (with any necessary endorsement) to be held as cash Collateral
and applied as provided by Section 17 hereof, and (ii) such Grantor shall not
adjust, settle or
VI-16
compromise the amount or payment of any such amount or release wholly or partly
any obligor with respect thereto or allow any credit or discount thereon.
(c) Each Grantor shall have the duty diligently, through counsel
reasonably acceptable to Secured Party, to prosecute, file and/or make, unless
and until such Grantor, in its commercially reasonable judgment, decides
otherwise, (i) any application relating to any of the Intellectual Property
Collateral owned, held or used by such Grantor and identified on Schedules
1(f)(i), 1(f)(ii) or 1(f)(iii), as applicable, that is pending as of the date of
this Agreement, (ii) any Copyright Registration on any existing or future
unregistered but copyrightable works (except for works of nominal commercial
value or with respect to which such Grantor has determined in the exercise of
its commercially reasonable judgment that it shall not seek registration), (iii)
application on any future patentable but unpatented innovation or invention
comprising Intellectual Property Collateral, and (iv) any Trademark opposition
and cancellation proceedings, renew Trademark Registrations and Copyright
Registrations and do any and all acts which are necessary or desirable to
preserve and maintain all rights in all Intellectual Property Collateral. Any
expenses incurred in connection therewith shall be borne solely by Grantors.
Subject to the foregoing, each Grantor shall give Secured Party written notice
of any abandonment of any Intellectual Property Collateral registered with a
Governmental Authority or any pending patent application or any Patent within 45
days after the end of each fiscal quarter of Company.
(d) Except as provided herein, each Grantor shall have the right to
commence and prosecute in its own name, as real party in interest, for its own
benefit and at its own expense, such suits, proceedings or other actions for
infringement, unfair competition, dilution, misappropriation or other damage,
or reexamination or reissue proceedings as are necessary to protect the
Intellectual Property Collateral. Secured Party shall provide, at such
Grantor's expense, all reasonable and necessary cooperation in connection with
any such suit, proceeding or action including, without limitation, joining as a
necessary party. Each Grantor shall, within 45 days after the end of each
fiscal quarter of Company, notify Secured Party of the institution of, or of any
adverse determination likely to have a Material Adverse Effect in, any
proceeding (whether in the United States Patent and Trademark Office, the United
States Copyright Office or any federal, state, local or foreign court) or
regarding such Grantor's ownership, right to use, or interest in any
Intellectual Property Collateral. Each Grantor shall provide to Secured Party
any information with respect thereto requested by Secured Party.
(e) In addition to, and not by way of limitation of, the granting of a
security interest in the Collateral pursuant hereto, each Grantor, effective
upon the occurrence and during the continuation of an Event of Default, hereby
assigns, transfers and conveys to Secured Party the nonexclusive right and
license to use all trademarks, tradenames, copyrights, patents or technical
processes (including, without limitation, the Intellectual Property Collateral)
owned or used by such Grantor that relate to the Collateral and any other
collateral granted by such Grantor as security for the Secured Obligations,
together with any goodwill associated therewith, all to the extent necessary to
enable Secured Party to realize on the Collateral in accordance with this
Agreement and to enable any transferee or assignee of the Collateral to enjoy
the benefits of the Collateral; provided, however, the license granted under
-------- -------
this Section shall not be construed to limit such Grantor's ability to take
reasonable steps, in accordance with its then current business practices, to
protect and preserve the Trademarks, the Trademark Registrations, the Trademark
Rights and the Associated Goodwill. This right shall inure to the benefit of
all successors,
VI-17
assigns and transferees of Secured Party and its successors, assigns and
transferees, whether by voluntary conveyance, operation of law, assignment,
transfer, foreclosure, deed in lieu of foreclosure or otherwise. Such right and
license shall be granted free of charge, without requirement that any monetary
payment whatsoever be made to such Grantor. In addition, each Grantor hereby
grants to Secured Party and its employees, representatives and agents the right
to visit such Grantor's and any of its Affiliate's or subcontractor's plants,
facilities and other places of business that are utilized in connection with the
manufacture, production, inspection, storage or sale of products and services
sold or delivered under any of the Intellectual Property Collateral (or which
were so utilized during the prior six month period), and to inspect the quality
control and all other records relating thereto upon reasonable advance written
notice to such Grantor and at reasonable dates and times and as often as may be
reasonably requested. To the extent that the Credit Agreement permits any
Grantor to license the Intellectual Property Collateral, Secured Party shall
promptly enter into a non-disturbance agreement or other similar arrangement, at
such Grantor's request and expense, with such Grantor and any licensee of any
Intellectual Property Collateral permitted hereunder in form and substance
reasonably satisfactory to Secured Party pursuant to which (i) Secured Party
shall agree not to disturb or interfere with such licensee's rights under its
license agreement with such Grantor so long as such licensee is not in default
thereunder, and (ii) such licensee shall acknowledge and agree that the
Intellectual Property Collateral licensed to it is subject to the security
interest created in favor of Secured Party and the other terms of this
Agreement.
Section 11. Cash Collateral Account.
-----------------------
Secured Party is hereby authorized to establish and maintain as a blocked
account in the name of Company and under the sole dominion and control of
Secured Party, a restricted deposit account designated as "Levi Xxxxxxx & Co.
Cash Collateral Account". All amounts at any time held in the Cash Collateral
Account shall be beneficially owned by Grantors but shall be held in the name of
Secured Party hereunder, for the benefit of Banks, as collateral security for
the Secured Obligations upon the terms and conditions set forth herein.
Grantors shall have no right to withdraw, transfer or, except as expressly set
forth herein, otherwise receive any funds deposited into the Cash Collateral
Account. Anything contained herein to the contrary notwithstanding, the Cash
Collateral Account shall be subject to such applicable laws, and such applicable
regulations of the Board of Governors of the Federal Reserve System and of any
other appropriate banking or governmental authority, as may now or hereafter be
in effect. All deposits of funds in the Cash Collateral Account shall be made
by wire transfer (or, if applicable, by intra-bank transfer from another account
of a Grantor) of immediately available funds, in each case addressed in
accordance with instructions of Secured Party. Each Grantor shall, promptly
after initiating a transfer of funds to the Cash Collateral Account, give notice
to Secured Party by telefacsimile of the date, amount and method of delivery of
such deposit. Cash held by Secured Party in the Cash Collateral Account shall
not be invested by Secured Party but instead shall be maintained as a cash
deposit in the Cash Collateral Account pending application thereof as elsewhere
provided in this Agreement. To the extent permitted under Regulation Q of the
Board of Governors of the Federal Reserve System, any cash held in the Cash
Collateral Account shall bear interest at the standard rate paid by Secured
Party to its customers for deposits of like amounts and terms. Subject to
Secured Party's rights hereunder, any interest earned on deposits of cash in the
Cash Collateral Account shall be deposited directly in, and held in the Cash
Collateral Account.
VI-18
Section 12. Secured Party Appointed Attorney-in-Fact.
----------------------------------------
Each Grantor hereby irrevocably appoints Secured Party as such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor, Secured Party or otherwise, from time to time in
Secured Party's discretion to take any action and to execute any instrument that
Secured Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including without limitation:
(a) upon the occurrence and during the continuance of an Event of
Default, to obtain and adjust insurance required to be maintained by such
Grantor or paid to Administrative Agent under the Credit Agreement;
(b) upon the occurrence and during the continuance of an Event of
Default, to ask for, demand, collect, xxx for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(c) upon the occurrence and during the continuance of an Event of
Default, to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with Sections 12(a) and (b) above;
(d) upon the occurrence and during the continuance of an Event of
Default, to file any claims or take any action or institute any proceedings that
Secured Party may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of Secured Party with respect to
any of the Collateral;
(e) except as otherwise permitted by Section 6.5 of the Credit
Agreement, to pay or discharge taxes or Liens (other than Liens permitted under
this Agreement or the Credit Agreement) levied or placed upon or threatened
against the Collateral, the legality or validity thereof and the amounts
necessary to discharge the same to be determined by Secured Party in its sole
discretion, any such payments made by Secured Party to become obligations of
such Grantor to Secured Party, due and payable immediately without demand;
(f) upon the occurrence and during the continuance of an Event of
Default, to sign and endorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with Accounts and other documents
relating to the Collateral; and
(g) upon the occurrence and during the continuance of an Event of
Default, generally to sell, transfer, pledge, make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as though
Secured Party were the absolute owner thereof for all purposes, and to do, at
Secured Party's option and Grantors' expense, at any time or from time to time,
all acts and things that Secured Party deems necessary to protect, preserve or
realize upon the Collateral and Secured Party's security interest therein in
order to effect the intent of this Agreement, all as fully and effectively as
such Grantor might do.
VI-19
Section 13. Secured Party May Perform.
-------------------------
If any Grantor fails to perform any agreement contained herein, Secured
Party may itself perform, or cause performance of, such agreement, and the
expenses of Secured Party incurred in connection therewith shall be payable by
Grantors under Section 18(b) hereof.
Section 14. Standard of Care.
----------------
The powers conferred on Secured Party hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, Secured Party shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral. Secured Party shall be deemed to
have exercised reasonable care in the custody and preservation of Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which Secured Party accords its own property.
Section 15. Remedies.
--------
(a) Generally. If any Event of Default (as defined in the Credit
----------
Agreement) shall have occurred and be continuing, Secured Party may exercise in
respect of the Collateral, in addition to all other rights and remedies provided
for herein or otherwise available to it, all the rights and remedies of a
secured party on default under the UCC (whether or not the UCC applies to the
affected Collateral), and also may (i) require each Grantor to, and each Grantor
hereby agrees that it will at its expense and upon request of Secured Party
forthwith, assemble all or part of the Collateral as directed by Secured Party
and make it available to Secured Party at a place to be designated by Secured
Party that is reasonably convenient to both parties, (ii) enter onto the
property where any Collateral is located and take possession thereof with or
without judicial process, (iii) prior to the disposition of the Collateral,
store, process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent Secured Party deems
appropriate, (iv) take possession of any Grantor's premises or place custodians
in exclusive control thereof, remain on such premises and use the same and any
of such Grantor's equipment for the purpose of completing any work in process,
taking any actions described in the preceding subsection (iii) and collecting
any Secured Obligation, (v) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of Secured Party's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and upon such
other terms as Secured Party may deem commercially reasonable, (vi) exercise
dominion and control over and refuse to permit further withdrawals from any
Deposit Account maintained with Secured Party or any Bank constituting a part of
the Collateral and (vii) without notice to any Grantor, transfer to or to
register in the name of Secured Party or any of its nominees any or all of the
Securities Collateral. Secured Party or any Bank may be the purchaser of any or
all of the Collateral at any such sale and Secured Party, as agent for and
representative of Banks (but not any Bank in its individual capacity unless
Majority Banks shall otherwise agree in writing), shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Secured Obligations as a credit on account of the purchase
price for any Collateral payable by Secured
VI-20
Party at such sale. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of any Grantor, and each
Grantor hereby waives (to the extent permitted by applicable law) all rights of
redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Each Grantor agrees that, to the extent notice of sale shall be required by law,
at least ten days' notice to such Grantor of the time and place of any public
sale or the time after which any private sale is to be made shall constitute
reasonable notification. Secured Party shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given. Secured Party may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. Each Grantor hereby waives any
claims against Secured Party arising by reason of the fact that the price at
which any Collateral may have been sold at such a private sale was less than the
price which might have been obtained at a public sale, even if Secured Party
accepts the first offer received and does not offer such Collateral to more than
one offeree. If the proceeds of any sale or other disposition of the Collateral
are insufficient to pay all the Secured Obligations, Grantors shall be jointly
and severally liable for the deficiency and the fees of any attorneys employed
by Secured Party to collect such deficiency. Each Grantor further agrees that a
breach of any of the covenants contained in this Section will cause irreparable
injury to Secured Party, that Secured Party has no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section shall be specifically enforceable against such
Grantor, and each Grantor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no default has occurred giving rise to the Secured Obligations
becoming due and payable prior to their stated maturities.
(b) Securities Collateral.
----------------------
(i) Each Grantor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, and regulations
promulgated thereunder, (the "Securities Act") and applicable state
--------------
securities laws, Secured Party may be compelled, with respect to any sale
of all or any part of the Securities Collateral conducted without prior
registration or qualification of such Securities Collateral under the
Securities Act and/or such state securities laws, to limit purchasers to
those who will agree, among other things, to acquire the Securities
Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. Each Grantor acknowledges that any such
private sales may be at prices and on terms less favorable than those
obtainable through a public sale without such restrictions (including a
public offering made pursuant to a registration statement under the
Securities Act) and, notwithstanding such circumstances and the
registration rights granted to Secured Party by such Grantor pursuant
hereto, each Grantor agrees that any such private sale shall be deemed to
have been made in a commercially reasonable manner and that Secured Party
shall have no obligation to engage in public sales and no obligation to
delay the sale of any Securities Collateral for the period of time
necessary to permit the issuer thereof to register it for a form of public
sale requiring registration under the Securities Act or under applicable
state securities laws, even if such issuer would, or should, agree to so
register it. If Secured Party determines to exercise its right to sell any
or all of the Securities Collateral, upon written request, each Grantor
shall and shall cause each issuer of any Pledged
VI-21
Shares to be sold hereunder from time to time to furnish to Secured Party
all such information as Secured Party may request in order to determine the
number of shares and other instruments included in the Securities
Collateral which may be sold by Secured Party in exempt transactions under
the Securities Act and the rules and regulations of the Securities and
Exchange Commission thereunder, as the same are from time to time in
effect.
(ii) If Secured Party shall determine to exercise its right to sell
all or any of the Securities Collateral pursuant to this Section, each
Grantor agrees that, upon request of Secured Party (which request may be
made by Secured Party in its sole discretion), such Grantor will, at its
own expense (A) execute and deliver, and cause each issuer of the
Securities Collateral contemplated to be sold and the directors and
officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as
may be necessary or, in the opinion of Secured Party, advisable to register
such Securities Collateral under the provisions of the Securities Act and
to cause the registration statement relating thereto to become effective
and to remain effective for such period as prospectuses are required by law
to be furnished, and to make all amendments and supplements thereto and to
the related prospectus which, in the opinion of Secured Party, 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; (B) use its best efforts to qualify the
Securities Collateral under all applicable state securities or "Blue Sky"
laws and to obtain all necessary governmental approvals for the sale of the
Securities Collateral, as requested by Secured Party; (C) cause each such
issuer to make available to its security holders, as soon as practicable,
an earnings statement which will satisfy the provisions of Section 11(a) of
the Securities Act; (D) do or cause to be done all such other acts and
things as may be necessary to make such sale of the Securities Collateral
or any part thereof valid and binding and in compliance with applicable
law; and (E) bear all reasonable costs and expenses, including reasonable
attorneys' fees, of carrying out its obligations under this Section.
(iii) Without limiting the generality of Sections 10.4 and 10.5 of
the Credit Agreement, in the event of any public sale described herein,
each Grantor agrees to indemnify and hold harmless (to the maximum extent
permitted under the Securities Act or other applicable law) Secured Party
and each Bank and each of their respective directors, officers, employees
and agents from and against any loss, fee, cost, expense, damage, liability
or claim, joint or several, to which any such Persons may become subject or
for which any of them may be liable, under the Securities Act or otherwise,
insofar as such losses, fees, costs, expenses, damages, liabilities or
claims (or any litigation commenced or threatened in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus, registration
statement, prospectus or other such document published or filed in
connection with such public sale, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will (to the maximum extent
permitted under the Securities Act or other applicable law) reimburse
Secured Party and such other Persons for any legal or
VI-22
other expenses reasonably incurred by Secured Party and such other Persons
in connection with any litigation, of any nature whatsoever, commenced or
threatened in respect thereof (including any and all fees, costs and
expenses whatsoever reasonably incurred by Secured Party and such other
Persons and counsel for Secured Party and such other Persons in
investigating, preparing for, defending against or providing evidence,
producing documents or taking any other action in respect of, any such
commenced or threatened litigation or any claims asserted). This indemnity
shall be in addition to any liability which any Grantor may otherwise have
and shall extend upon the same terms and conditions to each Person, if any,
that controls Secured Party or such Persons within the meaning of the
Securities Act.
(c) Collateral Account. If an Event of Default has occurred and is
------------------
continuing and, in accordance with Section 8.2 of the Credit Agreement, Company
is required to pay to Secured Party an amount (the "Aggregate Available Amount")
--------------------------
equal to the maximum amount that may at any time be drawn under all Lender
Letters of Credit then outstanding under the Credit Agreement, Company shall
deliver funds in such an amount for deposit in the Cash Collateral Account. If
for any reason the aggregate amount delivered by Company for deposit in the Cash
Collateral Account as aforesaid is less than the Aggregate Available Amount, the
aggregate amount so delivered by Company shall be apportioned among all
outstanding Lender Letters of Credit for purposes of this Section in accordance
with the ratio of the maximum amount available for drawing under each such
Lender Letter of Credit (as to such Lender Letter of Credit, the "Maximum
-------
Available Amount") to the Aggregate Available Amount. Upon any drawing under
----------------
any outstanding Lender Letter of Credit in respect of which Company has
deposited in the Cash Collateral Account any amounts described above, Secured
Party shall apply such amounts to reimburse the Issuing Lender for the amount of
such drawing. In the event of cancellation or expiration of any Lender Letter
of Credit in respect of which Company has deposited in the Cash Collateral
Account any amounts described above, or in the event of any reduction in the
Maximum Available Amount under such Lender Letter of Credit, Secured Party shall
apply the amount then on deposit in the Cash Collateral Account in respect of
such Lender Letter of Credit (less, in the case of such a reduction, the Maximum
Available Amount under such Lender Letter of Credit immediately after such
reduction) first, to the payment of any amounts payable to Secured Party
pursuant to Section 17 hereof, second, to the extent of any excess, to the cash
collateralization pursuant to the terms of this Agreement of any outstanding
Lender Letters of Credit in respect of which Company has failed to pay all or a
portion of the amounts described above (such cash collateralization to be
apportioned among all such Lender Letters of Credit in the manner described
above), third, to the extent of any further excess, to the payment of any other
outstanding Secured Obligations in such order as Secured Party shall elect, and
fourth, to the extent of any further excess, to the payment to whomsoever shall
be lawfully entitled to receive such funds.
Section 16. Additional Remedies for Intellectual Property Collateral.
--------------------------------------------------------
(a) Anything contained herein to the contrary notwithstanding, upon
the occurrence and during the continuation of an Event of Default, (i) Secured
Party shall have the right (but not the obligation) to bring suit, in the name
of any Grantor, Secured Party or otherwise, to enforce any Intellectual Property
Collateral, in which event each Grantor shall, at the request of Secured Party,
do any and all lawful acts and execute any and all documents
VI-23
required by Secured Party in aid of such enforcement and each Grantor shall
promptly, upon demand, reimburse and indemnify Secured Party as provided in
Sections 10.4 and 10.5 of the Credit Agreement and Section 18 hereof, as
applicable, in connection with the exercise of its rights under this Section,
and, to the extent that Secured Party shall elect not to bring suit to enforce
any Intellectual Property Collateral as provided in this Section, each Grantor
agrees to use all reasonable measures, whether by action, suit, proceeding or
otherwise, to prevent the infringement of any of the Intellectual Property
Collateral by others and for that purpose agrees to use its commercially
reasonable judgment in maintaining any action, suit or proceeding against any
Person so infringing reasonably necessary to prevent such infringement; (ii)
upon written demand from Secured Party, each Grantor shall execute and deliver
to Secured Party an assignment or assignments of the Intellectual Property
Collateral and such other documents as are necessary or appropriate to carry out
the intent and purposes of this Agreement; (iii) each Grantor agrees that such
an assignment and/or recording shall be applied to reduce the Secured
Obligations outstanding only to the extent that Secured Party (or any Bank)
receives cash proceeds in respect of the sale of, or other realization upon, the
Intellectual Property Collateral; and (iv) within five Business Days after
written notice from Secured Party, each Grantor shall make available to Secured
Party, to the extent within such Grantor's power and authority, such personnel
in such Grantor's employ on the date of such Event of Default as Secured Party
may reasonably designate, by name, title or job responsibility, to permit such
Grantor to continue, directly or indirectly, to produce, advertise and sell the
products and services sold or delivered by such Grantor under or in connection
with the Trademarks, Trademark Registrations and Trademark Rights, such persons
to be available to perform their prior functions on Secured Party's behalf and
to be compensated by Secured Party at such Grantor's expense on a per diem, pro-
rata basis consistent with the salary and benefit structure applicable to each
as of the date of such Event of Default.
(b) If (i) an Event of Default shall have occurred and, by reason of
cure, waiver, modification, amendment or otherwise, no longer be continuing,
(ii) no other Event of Default shall have occurred and be continuing, (iii) an
assignment to Secured Party of any rights, title and interests in and to the
Intellectual Property Collateral shall have been previously made, and (iv) the
Secured Obligations shall not have become immediately due and payable, upon the
written request of any Grantor, Secured Party shall promptly execute and deliver
to such Grantor such assignments as may be necessary to reassign to such Grantor
any such rights, title and interests as may have been assigned to Secured Party
as aforesaid, subject to any disposition thereof that may have been made by
Secured Party; provided, after giving effect to such reassignment, Secured
--------
Party's security interest granted pursuant hereto, as well as all other rights
and remedies of Secured Party granted hereunder, shall continue to be in full
force and effect; and provided further, the rights, title and interests so
-------- -------
reassigned shall be free and clear of all Liens other than Liens (if any)
encumbering such rights, title and interest at the time of their assignment to
Secured Party and Liens expressly permitted by the Credit Agreement.
Section 17. Application of Proceeds.
-----------------------
Except as expressly provided elsewhere in this Agreement and in the
Intercreditor Agreement, all proceeds received by Secured Party in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral shall be applied in the following order of priority:
VI-24
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Secured Party and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by Secured Party in connection
therewith, and all amounts for which Secured Party is entitled to
indemnification hereunder and all advances made by Secured Party hereunder
for the account of Grantors, and to the payment of all costs and expenses
paid or incurred by Secured Party in connection with the exercise of any
right or remedy hereunder;
SECOND: To the payment of all other Secured Obligations (for the
ratable benefit of the holders thereof) and, as to obligations arising
under the Credit Agreement, as provided in the Credit Agreement; and
THIRD: To the payment to or upon the order of Company, or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from such
proceeds.
Section 18. Indemnity and Expenses.
----------------------
(a) Grantors jointly and severally agree to indemnify Secured Party
and each Bank from and against any and all claims, losses and liabilities in any
way relating to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including without limitation enforcement of
this Agreement), except to the extent such claims, losses or liabilities result
solely from Secured Party's or such Bank's gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.
(b) Subject to Section 6.7 of the Credit Agreement, Grantors jointly
and severally agree to pay to Secured Party upon demand (i) the amount of any
and all reasonable costs and expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that Secured Party may
incur in connection with the administration of this Agreement or the failure by
any Grantor to perform or observe any of the provisions hereof and (ii) the
amount of any and all costs and expenses, including the fees and expenses of its
counsel and of any experts and agents, that Secured Party may incur in
connection with the exercise or enforcement of any of the rights of Secured
Party hereunder.
(c) The obligations of Grantors in this Section 18 shall (i) survive
the termination of this Agreement and the discharge of Grantors' other
obligations under this Agreement, the Credit Agreement and the other Loan
Documents, and (ii) as to any Grantor that is a party to a Guaranty, be subject
to the provisions of Section 1(b) thereof.
Section 19. Continuing Security Interest; Transfer of Loans
-----------------------------------------------
Termination and Release.
-----------------------
(a) This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until the payment in
full of the Secured Obligations and the cancellation or termination of the
Commitments and the cancellation or expiration of all outstanding Lender Letters
of Credit, (ii) be binding upon Grantors and their respective successors and
assigns, and (iii) inure, together with the rights and remedies of Secured Party
hereunder, to the benefit of Secured Party and its successors, transferees and
assigns. Without
VI-25
limiting the generality of the foregoing subsection (iii), but subject to the
provisions of Sections 10.7 and 10.8 of the Credit Agreement, any Bank may
assign or otherwise transfer any Loans held by it to any other Person, and such
other Person shall thereupon become vested with all the benefits in respect
thereof granted to Banks herein or otherwise.
(b) Upon the payment in full of all Secured Obligations, the
cancellation or termination of the Commitments and the cancellation or
expiration of all outstanding Lender Letters of Credit, the security interest
granted hereby shall terminate and all rights to the Collateral shall revert to
the applicable Grantors. Upon any such termination Secured Party will, at
Grantors' expense, execute and deliver to Grantors such documents as Grantors
shall reasonably request to evidence such termination. In addition, upon the
proposed sale, transfer or other disposition of any Collateral by a Grantor in
accordance with the Credit Agreement for which such Grantor desires to obtain a
security interest release from Secured Party, such Grantor shall deliver an
officers' certificate (i) stating that the Collateral subject to such
disposition is being sold, transferred or otherwise disposed of in compliance
with the terms of the Credit Agreement, and (ii) specifying the Collateral being
sold, transferred or otherwise disposed of in the proposed transaction. Upon
the receipt of such officers' certificate, Secured Party shall, at such
Grantor's expense, so long as Secured Party has no reason to believe that the
officers' certificate delivered by such Grantor with respect to such sale is not
true and correct, execute and deliver such releases of its security interest in
such Collateral which is to be so sold, transferred or disposed of, as may be
reasonably requested by such Grantor.
Section 20. Secured Party as Agent.
----------------------
(a) Secured Party has been appointed to act as Secured Party hereunder
by Banks. Secured Party shall be obligated, and shall have the right hereunder,
to make demands, to give notices, to exercise or refrain from exercising any
rights, and to take or refrain from taking any action (including without
limitation the release or substitution of Collateral), solely in accordance with
this Agreement and the Credit Agreement; provided that Secured Party shall
--------
exercise, or refrain from exercising, any remedies provided for in Section 15
hereof in accordance with the instructions of Majority Banks.
(b) Secured Party shall at all times be the same Person that is
Collateral Agent under the Credit Agreement. Written notice of resignation by
Collateral Agent pursuant to Section 9.10 of the Credit Agreement shall also
constitute notice of resignation as Secured Party under this Agreement; removal
of Collateral Agent pursuant to Section 9.10 of the Credit Agreement shall also
constitute removal as Secured Party under this Agreement; and appointment of a
successor collateral agent pursuant to Section 9.10 of the Credit Agreement
shall also constitute appointment of a successor Secured Party under this
Agreement. Upon the acceptance of any appointment as Collateral Agent under
Section 9.10 of the Credit Agreement by a successor collateral agent, that
successor collateral agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring or removed Secured
Party under this Agreement, and the retiring or removed Secured Party under this
Agreement shall promptly (i) transfer to such successor Secured Party all sums,
securities and other items of Collateral held hereunder, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Secured Party under this Agreement,
and (ii) execute and deliver to such successor Secured Party such
VI-26
amendments to financing statements, and take such other actions, as may be
necessary or appropriate in connection with the assignment to such successor
Secured Party of the security interests created hereunder, whereupon such
retiring or removed Secured Party shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed collateral
agent's resignation or removal hereunder as Secured Party, the provisions of
this Agreement shall inure to its benefit as to any actions taken or omitted to
be taken by it under this Agreement while it was Secured Party hereunder.
Section 21. Additional Grantors.
-------------------
The initial Subsidiary Grantors hereunder shall be such of the Subsidiaries
of Company as are signatories hereto on the date hereof. From time to time
subsequent to the date hereof, additional Subsidiaries of Company may become
parties hereto as additional Grantors (each an "Additional Grantor"), by
------------------
executing a counterpart substantially in the form of Exhibit VI to this
----------
Agreement. Upon delivery of any such counterpart to Secured Party, notice of
which is hereby waived by Grantors, each such Additional Grantor shall be a
Grantor and shall be as fully a party hereto as if such Additional Grantor were
an original signatory hereto. Each Grantor expressly agrees that its
obligations arising hereunder shall not be affected or diminished by the
addition or release of any other Grantor hereunder, nor by any election of
Administrative Agent not to cause any Subsidiary of Company to become an
Additional Grantor hereunder. This Agreement shall be fully effective as to any
Grantor that is or becomes a party hereto regardless of whether any other Person
becomes or fails to become or ceases to be a Grantor hereunder.
Section 22. Amendments; Etc.
---------------
No amendment, modification, termination or waiver of any provision of this
Agreement, and no consent to any departure by any Grantor therefrom, shall in
any event be effective unless the same shall be in writing and signed by Secured
Party and, in the case of any such amendment or modification, by Grantors;
provided this Agreement may be modified by the execution of a counterpart by an
--------
Additional Grantor in accordance with Section 21 hereof and Grantors hereby
waive any requirement of notice of or consent to any such amendment. Any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given.
Section 23. Notices.
-------
(a) Unless otherwise specifically provided in this Agreement, all
notices, requests and other communications provided for hereunder shall be in
writing (including, unless the context expressly otherwise provides,
telegraphic, telex, facsimile transmission or cable communication, provided that
--------
any matter transmitted by facsimile transmission (i) shall be immediately
confirmed by a telephone call to the recipient at the number specified on the
applicable signature page hereof, and (ii) shall be followed promptly by a hard
copy original thereof) and mailed, telegraphed, telexed, sent by facsimile
transmission, or delivered, to the address or number specified for notices on
the applicable signature page hereof; or, as to any Grantor or Collateral Agent,
to such other address as shall be designated by such party in a written notice
to the other parties, and as to each other party, at such other address as shall
be designated by such party in a written notice to each Grantor and Collateral
Agent.
VI-27
(b) All such notices and communications shall, when transmitted by
overnight delivery, telegraphed, telecopied by facsimile, telexed or cabled, be
effective when delivered for overnight delivery or to the telegraph company,
transmitted by telecopier, confirmed by telex answerback or delivered to the
cable company, respectively, or if delivered, upon delivery.
Section 24. Failure or Indulgence Not Waiver; Remedies Cumulative.
-----------------------------------------------------
No failure or delay on the part of Secured Party in the exercise of any
power, right or privilege hereunder shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
any other or further exercise thereof or of any other power, right or privilege.
All rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
Section 25. Severability.
------------
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
Section 26. Headings.
--------
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
Section 27. Governing Law; Terms; Rules of Construction.
-------------------------------------------
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE UCC PROVIDES THAT THE PERFECTION OF
THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK. Unless otherwise defined herein or in the Credit Agreement,
terms used in Articles 8 and 9 of the Uniform Commercial Code in the State of
New York are used herein as therein defined. The rules of construction set
forth in Section 1.2 of the Credit Agreement shall be applicable to this
Agreement mutatis mutandis.
Section 28. Consent to Jurisdiction and Service of Process.
----------------------------------------------
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE
VI-28
UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH GRANTOR, SECURED PARTY, ADMINISTRATIVE AGENT
AND BANKS EACH CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-
EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH GRANTOR, SECURED PARTY,
ADMINISTRATIVE AGENT AND BANKS EACH IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
---------
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
----------
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. EACH GRANTOR, SECURED PARTY, ADMINISTRATIVE AGENT AND BANKS EACH
WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE
MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
Section 29. Waiver of Jury Trial.
--------------------
EACH GRANTOR, BANKS, ADMINISTRATIVE AGENT AND SECURED PARTY EACH WAIVE
THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY ADMINISTRATIVE
AGENT-RELATED PERSON, COLLATERAL AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH
GRANTOR, BANKS, ADMINISTRATIVE AGENT AND SECURED PARTY EACH AGREE THAT ANY SUCH
CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY.
WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE
RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY
ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION
HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
Section 30. Counterparts.
------------
This Agreement may be executed in one or more counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument; signature pages may be detached from
multiple separate counterparts and attached to a single counterpart so that all
signature pages are physically attached to the same document.
[Remainder of page intentionally left blank]
VI-29
LEVI XXXXXXX & CO.
By:__________________________________________
Name: _______________________________________
Title:_______________________________________
Each of the entities listed on Schedule A annexed
----------
hereto
By:__________________________________________
on behalf of each of the entities listed on
Schedule A annexed hereto
----------
Name: _______________________________________
Title:_______________________________________
BANK OF AMERICA, N.A., as Collateral Agent, as
Secured Party
By:__________________________________________
Name: _______________________________________
Title:_______________________________________
VI-30
Schedule A
----------
Name Notice Address for each Subsidiary
---- ----------------------------------
Grantor
-------
VI-Sch. A-1
Schedule 1(d) to
----------------
Pledge and Security Agreement
-----------------------------
Deposit Accounts
----------------
VI-Sch. 1(d)
Schedule 1(e)(i) to
-------------------
Pledge and Security Agreement
-----------------------------
-------------------------------------------------------------------------------------------------------
PERCENTAGE OF
CLASS STOCK NUMBER OUTSTANDING
OF STOCK OR REGISTERED CERTIFICATE PAR OF SHARES
STOCK ISSUER EQUITY INTEREST OWNER NOS. VALUE SHARES PLEDGED
-------------------------------------------------------------------------------------------------------
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VI-Sch. 1(e)(i)-1
-------------------------------------------------------------------------------------------------------
PERCENTAGE OF
CLASS STOCK NUMBER OUTSTANDING
OF STOCK OR REGISTERED CERTIFICATE PAR OF SHARES
STOCK ISSUER EQUITY INTEREST OWNER NOS. VALUE SHARES PLEDGED
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
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-------------------------------------------------------------------------------------------------------
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VI-Sch. 1(e)(i)-2
Schedule 1(e)(ii) to
--------------------
Pledge and Security Agreement
-----------------------------
--------------------------------------------------------------------------------
AMOUNT OF
DEBT ISSUER PAYEE INDEBTEDNESS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
VI-Sch. 1(e)(ii)-1
Schedule 1(f)(i) to
-------------------
Pledge and Security Agreement
-----------------------------
U.S. Trademarks:
---------------
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ----------- ------ ----
Foreign Trademarks:
------------------
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ----------- ------ ----
Schedule 1(f)(ii) to
--------------------
Pledge and Security Agreement
-----------------------------
U.S. Patents Issued:
-------------------
[Registered
Patent No. Issue Date Invention [Inventor] Owner]
---------- ---------- --------- ---------- -----
U.S. Patents Pending:
--------------------
Applicant's Date Application
Name Filed Number Invention [Inventor]
---- ----- ------ --------- ----------
Foreign Patents Issued:
----------------------
[Registered
Patent No. Issue Date Invention [Inventor] Owner]
---------- ---------- --------- ---------- -----
VI-Sch. 1(f)(ii)-1
Foreign Parents Pending:
-----------------------
Applicant's Date Application
Name Filed Number Invention [Inventor]
---- ----- ------ --------- ----------
VI-Sch. 1(f)(ii)-2
Schedule 1(f)(iii) to
---------------------
Pledge and Security Agreement
-----------------------------
U.S. Copyrights:
---------------
Title Registration No. Date of Issue Registered Owner
----- ---------------- ------------- ----------------
Foreign Copyright Registrations:
--------------------------------
Country Title Registration No. Date of Issue Registered Owner
------- ----- ---------------- ------------- ----------------
Pending U.S. Copyright Registrations & Applications:
---------------------------------------------------
Title Reference No. Date of Application Copyright Claimant
----- ------------- ------------------- ------------------
Pending Foreign Copyright Registrations & Applications:
------------------------------------------------------
Country Title Registration No. Date of Issue [Registered Owner]
------- ----- ---------------- ------------- ----------------
VI-Sch. 1(f)(iii)-1
Schedule 4(b) to
----------------
Pledge and Security Agreement
-----------------------------
Locations of Equipment and Inventory
------------------------------------
Name of Grantor Locations of Equipment and Inventory
--------------- ------------------------------------
VI-Sch. 4(b)-1
Schedule 4(c) to
----------------
Pledge and Security Agreement
-----------------------------
Office Locations
----------------
Name of Grantor Office Locations
--------------- ----------------
VI-Sch. 4(c)-1
Schedule 4(d) to
----------------
Pledge and Security Agreement
-----------------------------
Other Names
-----------
Name of Grantor Other Names
--------------- -----------
VI-Sch. 4(d)-1
Schedule 4(h) to
----------------
Pledge and Security Agreement
-----------------------------
Filing Offices
--------------
Grantor Filing Offices
------- --------------
VI-Sch. 4(h)-1
Exhibit I to
------------
Pledge and Security Agreement
-----------------------------
[FORM OF] GRANT OF TRADEMARK SECURITY INTEREST
WHEREAS, [NAME OF GRANTOR], a ___________ corporation ("Grantor"), owns and
-------
uses in its business, and will in the future adopt and so use, various
intangible assets, including the Trademark Collateral (as defined below); and
WHEREAS, Levi Xxxxxxx & Co., a Delaware corporation, has entered into the
Amended and Restated 1999 180 Day Credit Agreement dated as of January 31, 2000
(said Amended and Restated 1999 180 Day Credit Agreement, as amended to the date
hereof, and as it may hereafter be further amended, modified, or supplemented
from time to time, being the "Credit Agreement"; the terms defined therein and
----------------
not otherwise defined herein being used herein as therein defined) with the
several financial institutions from time to time party thereto (collectively,
"Banks"); the several financial institutions party thereto as Co-Documentation
------
Agents; Bank of America, N.A. as Administrative Agent for Banks; and Bank of
America, N.A. as Collateral Agent for Banks (in such capacity, "Secured Party")
-------------
pursuant to which Banks have made certain commitments, subject to the terms and
conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company; and
[WHEREAS, Grantor has executed and delivered that certain Guaranty dated as
of February 1, 2000 (said Guaranty, as it may hereafter be amended, modified, or
supplemented from time to time, being the "Guaranty") in favor of Secured Party
--------
for the benefit of Banks and Administrative Agent, pursuant to which Grantor has
guarantied the prompt payment and performance when due of all obligations of
Company under the Credit Agreement and the other Loan Documents; and]
WHEREAS, pursuant to the terms of a Pledge and Security Agreement dated as
of January 31, 2000 (as amended, modified, or supplemented from time to time,
the "Pledge and Security Agreement"), among Grantor, Secured Party and the other
-----------------------------
grantors named therein, Grantor has agreed to create in favor of Secured Party a
secured and protected interest in, and Secured Party has agreed to become a
secured creditor with respect to, the Trademark Collateral;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, subject to the terms and conditions
of the Pledge and Security Agreement, Grantor hereby grants to Secured Party a
security interest in all of Grantor's right, title and interest in and to the
following, in each case whether now or hereafter existing or in which Grantor
now has or hereafter acquires an interest and wherever the same may be located
(the "Trademark Collateral"):
--------------------
(i) all rights, title and interest (including rights acquired pursuant
to a license or otherwise but only to the extent permitted by agreements
governing such license or other use) in and to all trademarks, service
marks, designs, logos, indicia, tradenames,
VI-I-1
trade dress, corporate names, company names, business names, fictitious
business names, trade styles and/or other source and/or business
identifiers and applications pertaining thereto, owned by such Grantor, or
hereafter adopted and used, in its business (including, without limitation,
the trademarks specifically identified in Schedule A) (collectively, the
"Trademarks"), all registrations that have been or may hereafter be issued
-----------
or applied for thereon in the United States and any state thereof and in
foreign countries (including, without limitation, the registrations and
applications specifically identified in Schedule A) (the "Trademark
---------
Registrations"), all common law and other rights (but in no event any of
-------------
the obligations) in and to the Trademarks in the United States and any
state thereof and in foreign countries (the "Trademark Rights"), and all
----------------
goodwill of such Grantor's business symbolized by the Trademarks and
associated therewith (the "Associated Goodwill"); and
-------------------
(ii) all proceeds, products, rents and profits of or from any and all
of the foregoing Trademark Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is the
loss payee thereof), or any indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise with respect to any of the
foregoing Trademark Collateral. For purposes of this Grant of Trademark
Security Interest, the term "proceeds" includes whatever is receivable or
--------
received when Trademark Collateral or proceeds are sold, exchanged,
collected or otherwise disposed of, whether such disposition is voluntary
or involuntary.
Notwithstanding anything herein to the contrary, in no event shall the
Trademark Collateral include, and Grantor shall be not deemed to have granted a
security interest in, any of Grantor's rights or interests in any license,
contract or agreement to which Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under, any license,
contract or agreement to which Grantor is a party or any Negative Pledge
permitted by the Credit Agreement on such rights or interests; provided, that
--------
immediately upon the ineffectiveness, lapse or termination of any such
provision, the Trademark Collateral shall include, and Grantor shall be deemed
to have granted a security interest in, all such rights and interests as if such
provision had never been in effect.
Grantor does hereby further acknowledge and affirm that the rights and
remedies of Secured Party with respect to the security interest in the Trademark
Collateral granted hereby are more fully set forth in the Pledge and Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.
[The remainder of this page is intentionally left blank.]
VI-I-2
IN WITNESS WHEREOF, Grantor has caused this Grant of Trademark Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the __ day of _______, 2000.
[NAME OF GRANTOR]
By:__________________________
Name:________________________
Title:_______________________
VI-I-3
Schedule A to
-------------
Grant of Trademark Security Interest
------------------------------------
United States
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ----------- ------ ----
VI-Sch. A-1
Exhibit II to
-------------
Pledge and Security Agreement
-----------------------------
[FORM OF] GRANT OF PATENT SECURITY INTEREST
WHEREAS, [NAME OF GRANTOR], a ___________ corporation ("Grantor"), owns and
-------
uses in its business, and will in the future adopt and so use, various
intangible assets, including the Patent Collateral (as defined below); and
WHEREAS, Levi Xxxxxxx & Co., a Delaware corporation, has entered into the
Amended and Restated 1999 180 Day Credit Agreement dated as of January 31, 2000
(said Amended and Restated 1999 180 Day Credit Agreement, as amended to the date
hereof, and as it may hereafter be further amended, modified, or supplemented
from time to time, being the "Credit Agreement"; the terms defined therein and
----------------
not otherwise defined herein being used herein as therein defined) with the
several financial institutions from time to time party thereto (collectively,
"Banks"); the several financial institutions party thereto as Co-Documentation
------
Agents; Bank of America, N.A. as Administrative Agent for Banks; and Bank of
America, N.A. as Collateral Agent for Banks (in such capacity, "Secured Party")
-------------
pursuant to which Banks have made certain commitments, subject to the terms and
conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company; and
[WHEREAS, Grantor has executed and delivered that certain Guaranty dated as
of February 1, 2000 (said Guaranty, as it may hereafter be amended, modified, or
supplemented from time to time, being the "Guaranty") in favor of Secured Party
--------
for the benefit of Banks and Administrative Agent, pursuant to which Grantor has
guarantied the prompt payment and performance when due of all obligations of
Company under the Credit Agreement and the other Loan Documents; and]
WHEREAS, pursuant to the terms of a Pledge and Security Agreement dated as
of January 31, 2000 (as amended, modified, or supplemented from time to time,
the "Pledge and Security Agreement"), among Grantor, Secured Party and the other
-----------------------------
grantors named therein, Grantor has agreed to create in favor of Secured Party a
secured and protected interest in, and Secured Party has agreed to become a
secured creditor with respect to, the Patent Collateral;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, subject to the terms and conditions
of the Pledge and Security Agreement, Grantor hereby grants to Secured Party a
security interest in all of Grantor's right, title and interest in and to the
following, in each case whether now or hereafter existing or in which Grantor
now has or hereafter acquires an interest and wherever the same may be located
(the "Patent Collateral"):
-----------------
(i) all rights, title and interest (including rights acquired pursuant
to a license or otherwise but only to the extent permitted by agreements
governing such license or other use) in and to all patents and patent
applications and rights and interests in patents and
VI-II-1
patent applications under any domestic or foreign law that are presently,
or in the future may be, owned or held by such Grantor and all patents and
patent applications and rights, title and interests in patents and patent
applications under any domestic or foreign law that are presently, or in
the future may be, owned by such Grantor in whole or in part (including,
without limitation, the patents and patent applications listed in Schedule
--------
A), all rights (but not obligations) corresponding thereto to xxx for past,
-
present and future infringements and all re-issues, divisions,
continuations, renewals, extensions and continuations-in-part thereof (all
of the foregoing being collectively referred to as the "Patents"); and
-------
(ii) all proceeds, products, rents and profits of or from any and all of
the foregoing Patent Collateral and, to the extent not otherwise included,
all payments under insurance (whether or not Secured Party is the loss
payee thereof), or any indemnity, warranty or guaranty, payable by reason
of loss or damage to or otherwise with respect to any of the foregoing
Patent Collateral. For purposes of this Grant of Patent Security Interest,
the term "proceeds" includes whatever is receivable or received when Patent
--------
Collateral or proceeds are sold, exchanged, collected or otherwise disposed
of, whether such disposition is voluntary or involuntary.
Notwithstanding anything herein to the contrary, in no event shall the
Patent Collateral include, and Grantor shall be not deemed to have granted a
security interest in, any of Grantor's rights or interests in any license,
contract or agreement to which Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under, any license,
contract or agreement to which Grantor is a party or any Negative Pledge
permitted by the Credit Agreement on such rights or interests; provided, that
--------
immediately upon the ineffectiveness, lapse or termination of any such
provision, the Patent Collateral shall include, and Grantor shall be deemed to
have granted a security interest in, all such rights and interests as if such
provision had never been in effect.
Grantor does hereby further acknowledge and affirm that the rights and
remedies of Secured Party with respect to the security interest in the Patent
Collateral granted hereby are more fully set forth in the Pledge and Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.
[The remainder of this page intentionally left blank.]
VI-II-2
IN WITNESS WHEREOF, Grantor has caused this Grant of Patent Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the ___ day of ____________, 2000.
[NAME OF GRANTOR]
By:_________________________
Name:_______________________
Title:______________________
VI-II-3
Schedule A to
-------------
Grant of Patent Security Interest
---------------------------------
Patents Issued:
--------------
Registered
Patent No. Issue Date Invention Inventor Owner
---------- ---------- --------- -------- -----
Patents Pending:
---------------
Applicant's Date Application
Name Filed Number Invention Inventor
----- ----- ------ --------- --------
VI-Sch. A-1
Exhibit III to
--------------
Pledge and Security Agreement
-----------------------------
[FORM OF] GRANT OF COPYRIGHT SECURITY INTEREST
WHEREAS, [NAME OF GRANTOR], a ___________ corporation ("Grantor"), owns and
-------
uses in its business, and will in the future adopt and so use, various
intangible assets, including the Copyright Collateral (as defined below); and
WHEREAS, Levi Xxxxxxx & Co., a Delaware corporation, has entered into the
Amended and Restated 1999 180 Day Credit Agreement dated as of January 31, 2000
(said Amended and Restated 1999 180 Day Credit Agreement, as amended to the date
hereof, and as it may hereafter be further amended, modified, or supplemented
from time to time, being the "Credit Agreement"; the terms defined therein and
----------------
not otherwise defined herein being used herein as therein defined) with the
several financial institutions from time to time party thereto (collectively,
"Banks"); the several financial institutions party thereto as Co-Documentation
-----
Agents; Bank of America, N.A. as Administrative Agent for Banks; and Bank of
America, N.A. as Collateral Agent for Banks (in such capacity, "Secured Party")
-------------
pursuant to which Banks have made certain commitments, subject to the terms and
conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company; and
[WHEREAS, Grantor has executed and delivered that certain Guaranty dated as
of February 1, 2000 (said Guaranty, as it may hereafter be amended, modified, or
supplemented from time to time, being the "Guaranty") in favor of Secured Party
--------
for the benefit of Banks and Administrative Agent, pursuant to which Grantor has
guarantied the prompt payment and performance when due of all obligations of
Company under the Credit Agreement and the other Loan Documents; and]
WHEREAS, pursuant to the terms of a Pledge and Security Agreement dated as
of January 31, 2000 (as amended, modified, or supplemented from time to time,
the "Pledge and Security Agreement"), among Grantor, Secured Party and the other
-----------------------------
grantors named therein, Grantor has agreed to create in favor of Secured Party a
secured and protected interest in, and Secured Party has agreed to become a
secured creditor with respect to, the Copyright Collateral;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, subject to the terms and conditions
of the Pledge and Security Agreement, Grantor hereby grants to Secured Party a
security interest in all of Grantor's right, title and interest in and to the
following, in each case whether now or hereafter existing or in which Grantor
now has or hereafter acquires an interest and wherever the same may be located
(the "Copyright Collateral"):
--------------------
(i) all rights, title and interest (including rights acquired pursuant
to a license or otherwise but only to the extent permitted by agreements
governing such license or other use) under copyright in various published
and unpublished works of authorship including,
VI-III-1
without limitation, computer programs, computer data bases, other computer
software layouts, trade dress, drawings, designs, writings, and formulas
(including, without limitation, the works listed on Schedule A, as the same
----------
may be amended pursuant hereto from time to time) (collectively, the
"Copyrights"), all copyright registrations issued to Grantor and
----------
applications for copyright registration that have been or may hereafter be
issued or applied for thereon in the United States and any state thereof
and in foreign countries (including, without limitation, the registrations
listed on Schedule A, as the same may be amended pursuant hereto from time
----------
to time) (collectively, the "Copyright Registrations"), all common law and
-----------------------
other rights in and to the Copyrights in the United States and any state
thereof and in foreign countries including all copyright licenses (but with
respect to such copyright licenses, only to the extent permitted by such
licensing arrangements) (the "Copyright Rights"), including, without
----------------
limitation, each of the Copyrights, rights, titles and interests in and to
the Copyrights, all derivative works and other works protectable by
copyright, which are presently, or in the future may be, owned, created (as
a work for hire for the benefit of Grantor), authored (as a work for hire
for the benefit of Grantor), or acquired by Grantor, in whole or in part,
and all Copyright Rights with respect thereto and all Copyright
Registrations therefor, heretofore or hereafter granted or applied for, and
all renewals and extensions thereof, throughout the world, including the
right (but not the obligation) to renew and extend such Copyright
Registrations and Copyright Rights and to register works protectable by
copyright and the right (but not the obligation) to xxx in the name of such
Grantor or in the name of Secured Party or Banks for past, present and
future infringements of the Copyrights and Copyright Rights; and
(ii) all proceeds, products, rents and profits of or from any and all of
the foregoing Copyright Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is the
loss payee thereof), or any indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise with respect to any of the
foregoing Copyright Collateral. For purposes of this Grant of Copyright
Security Interest, the term "proceeds" includes whatever is receivable or
--------
received when Copyright Collateral or proceeds are sold, exchanged,
collected or otherwise disposed of, whether such disposition is voluntary
or involuntary.
Notwithstanding anything herein to the contrary, in no event shall the
Copyright Collateral include, and Grantor shall be not deemed to have granted a
security interest in, any of Grantor's rights or interests in any license,
contract or agreement to which Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under, any license,
contract or agreement to which Grantor is a party or any Negative Pledge
permitted by the Credit Agreement on such rights or interests; provided, that
--------
immediately upon the ineffectiveness, lapse or termination of any such
provision, the Copyright Collateral shall include, and Grantor shall be deemed
to have granted a security interest in, all such rights and interests as if such
provision had never been in effect.
Grantor does hereby further acknowledge and affirm that the rights and
remedies of Secured Party with respect to the security interest in the Copyright
Collateral granted hereby are
VI-III-2
more fully set forth in the Pledge and Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth
herein.
[The remainder of this page intentionally left blank.]
VI-III-3
IN WITNESS WHEREOF, Grantor has caused this Grant of Copyright Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the ___ day of ___________, 2000.
[NAME OF GRANTOR]
By:_________________________
Name:_______________________
Title:______________________
VI-III-4
Schedule A to
-------------
Grant of Copyright Security Interest
------------------------------------
U.S. Copyrights:
---------------
Title Registration No. Date of Issue Registered Owner
----- ---------------- ------------- ----------------
Pending U.S. Copyright Registrations & Applications:
---------------------------------------------------
Title Reference No. Date of Application Copyright Claimant
----- ------------- ------------------- -------------------
VI-Sch. A-1
Exhibit IV to
-------------
Pledge and Security Agreement
-----------------------------
[FORM OF] PLEDGE SUPPLEMENT
This Pledge Supplement, dated __________________, is delivered pursuant to
the Pledge and Security Agreement, dated January 31, 2000, between Levi Xxxxxxx
& Co., a Delaware corporation, the other Grantors named therein, and Bank of
America, N.A. (as it may be from time to time amended, modified, or
supplemented, the "Pledge and Security Agreement"). Capitalized terms used
-----------------------------
herein not otherwise defined herein shall have the meanings ascribed thereto in
the Pledge and Security Agreement.
Grantor hereby agrees that the [Pledged Shares] [Pledged Debt] listed on
the schedule attached hereto shall be deemed to be part of the [Pledged Shares]
[Pledged Debt] and shall become part of the Securities Collateral and shall
secure all Secured Obligations.
IN WITNESS WHEREOF, Grantor has caused this Supplement to be duly executed
and delivered by its duly authorized officer as of _______________.
[GRANTOR]
By:_________________________
Name:_______________________
Title:______________________
VI-IV-1
Exhibit V to
------------
Pledge and Security Agreement
-----------------------------
[FORM OF] IP SUPPLEMENT
This IP SUPPLEMENT, dated _____________, is delivered pursuant to and
supplements (i) the Pledge and Security Agreement, dated as of January 31, 2000
(as it may be from time to time amended, modified, or supplemented, the "Pledge
------
and Security Agreement"), among Levi Xxxxxxx & Co., a Delaware corporation, the
----------------------
other Grantors named therein, and Bank of America, N.A., as Secured Party, and
(ii) the [Grant of Trademark Security Interest] [Grant of Patent Security
Interest] [Grant of Copyright Security Interest] dated as of ___________, 2000
(the "Grant") executed by Grantor. Capitalized terms used herein not otherwise
-----
defined herein shall have the meanings ascribed thereto in the Grant.
["Grantor"] grants to Secured Party a security interest in all of Grantor's
right, title and interest in and to the [Trademark Collateral] [Patent
Collateral] [Copyright Collateral] listed on Schedule A attached hereto. All
such [Trademark Collateral] [Patent Collateral] [Copyright Collateral] shall be
deemed to be part of the [Trademark Collateral] [Patent Collateral] [Copyright
Collateral] and shall be hereafter subject to each of the terms and conditions
of the Pledge and Security Agreement and the Grant.
IN WITNESS WHEREOF, Grantor has caused this Supplement to be duly executed
and delivered by its duly authorized officer as of ______________.
[GRANTOR]
By:_________________________
Name:_______________________
Title:______________________
VI-V-1
Exhibit VI to
-------------
Pledge And Security Agreement
-----------------------------
[FORM OF] COUNTERPART
This COUNTERPART (this "Counterpart"), dated _______, is delivered pursuant
-----------
to Section 21 of the Pledge and Security Agreement referred to below. The
undersigned hereby agrees that this Counterpart may be attached to the Pledge
and Security Agreement, dated as of January 31, 2000 (as it may be from time to
time amended, modified, or supplemented, the "Pledge and Security Agreement";
-----------------------------
capitalized terms used herein not otherwise defined herein shall have the
meanings ascribed therein), among Levi Xxxxxxx & Co., a Delaware corporation,
the other Grantors named therein, and Bank of America, N.A., as Secured Party.
The undersigned by executing and delivering this Counterpart hereby becomes a
Grantor under the Pledge and Security Agreement in accordance with Section 21
thereof and agrees to be bound by all of the terms thereof. Without limiting
the generality of the foregoing, the undersigned hereby:
(i) authorizes the Secured Party to add the information set forth
on the Schedules to this Agreement to the correlative Schedules attached to
the Pledge and Security Agreement;
(ii) agrees that all Collateral of the undersigned, including the
items of property described on the Schedules hereto, shall become part of
the Collateral and shall secure all Secured Obligations; and
(iii) makes the representations and warranties set forth in the
Pledge and Security Agreement, as amended hereby, to the extent relating to
the undersigned.
[NAME OF ADDITIONAL GRANTOR]
By:_________________________
Name:_______________________
Title:______________________
IX-Sch. 1-1
