EXHIBIT 10.3
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COLLATERAL AGREEMENT
DATED AS OF
OCTOBER 20, 2004,
AMONG
INTERNATIONAL WIRE GROUP, INC.
THE SUBSIDIARIES OF
INTERNATIONAL WIRE GROUP, INC.
IDENTIFIED HEREIN
AND
BNY MIDWEST TRUST COMPANY
AS COLLATERAL AGENT
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TABLE OF CONTENTS
PAGE
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ARTICLE I
Definitions
SECTION 1.01. Indenture.............................................................. 1
SECTION 1.02. Other Defined Terms.................................................... 1
SECTION 1.03. Rules of Interpretation................................................ 5
SECTION 1.04. Intercreditor Agreement................................................ 5
ARTICLE II
Pledge of Securities
SECTION 2.01. Pledge................................................................. 5
SECTION 2.02. Delivery of the Pledged Collateral..................................... 6
SECTION 2.03. Representations, Warranties and Covenants.............................. 7
SECTION 2.04. Certification of Limited Liability Company and Limited Partnership
Interests.............................................................. 8
SECTION 2.05. Registration in Nominee Name; Denominations............................ 8
SECTION 2.06. Voting Rights; Dividends and Interest.................................. 8
ARTICLE III
Security Interests in Personal Property
SECTION 3.01. Security Interest...................................................... 10
SECTION 3.02. Representations and Warranties......................................... 12
SECTION 3.03. Covenants.............................................................. 13
SECTION 3.04. Other Actions.......................................................... 17
SECTION 3.05. Covenants Regarding Patent, Trademark and Copyright Collateral......... 20
ARTICLE IV
Remedies
SECTION 4.01. Remedies Upon Default.................................................. 21
SECTION 4.02. Application of Proceeds................................................ 23
SECTION 4.03. Grant of License to Use Intellectual Property.......................... 24
SECTION 4.04. Securities Act......................................................... 24
SECTION 4.05. Registration........................................................... 25
ARTICLE V
Indemnity, Subrogation and Subordination
SECTION 5.01. Indemnity and Subrogation.............................................. 26
SECTION 5.02. Contribution and Subrogation........................................... 26
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SECTION 5.03. Subordination.......................................................... 26
ARTICLE VI
Miscellaneous
SECTION 6.01. Notices................................................................ 27
SECTION 6.02. Waivers; Amendment..................................................... 27
SECTION 6.03. Collateral Agent's Fees and Expenses; Indemnification.................. 27
SECTION 6.04. Successors and Assigns................................................. 30
SECTION 6.05. Survival of Agreement.................................................. 30
SECTION 6.06. Counterparts; Effectiveness; Several Agreement......................... 31
SECTION 6.07. Severability........................................................... 31
SECTION 6.08. Right of Set-Off....................................................... 31
SECTION 6.09. Governing Law; Jurisdiction; Consent to Service of Process............. 32
SECTION 6.10. WAIVER OF JURY TRIAL................................................... 32
SECTION 6.11. Headings............................................................... 33
SECTION 6.12. Security Interest Absolute............................................. 33
SECTION 6.13. Termination or Release................................................. 33
SECTION 6.14. Additional Subsidiaries................................................ 34
SECTION 6.15. Collateral Agent Appointed Attorney-in-Fact............................ 34
Schedules
Schedule I - Subsidiary Parties
Exhibits
Exhibit I - Form of Supplement
Exhibit II - Form of Perfection Certificate
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COLLATERAL AGREEMENT dated as of October 20, 2004, among
International Wire Group, Inc., the Subsidiary Parties identified herein and BNY
Midwest Trust Company, as Collateral Agent (this "AGREEMENT").
WHEREAS, pursuant to the terms, conditions and provisions of (a) the
Indenture dated as of the date hereof (as amended, restated, supplemented or
otherwise modified from time to time, the "INDENTURE"), among the Company and
BNY Midwest Trust Company, as trustee (the "TRUSTEE"), the Company is issuing
$75,000,000 aggregate principal amount of 10% Secured Senior Subordinated Notes
(the "NOTES") which will be guaranteed on a secured senior subordinated basis by
each of the Guarantors. The Subsidiary Parties are affiliates of the Company,
will derive substantial benefits from the execution of the Indenture and the
issuance of Notes by the Issuer pursuant to the Indenture and are willing to
execute and deliver this Agreement in order to induce the Trustee to enter into
the Indenture and the Holders to purchase the Notes. Accordingly, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. INDENTURE. Capitalized terms used in this Agreement
and not otherwise defined herein have the meanings specified in the Indenture.
All capitalized terms not otherwise defined herein, or in the Indenture, as the
case may be, shall have the meanings specified in the New York UCC (as defined
herein); the term "instrument" shall have the meaning specified in Article 9 of
the New York UCC.
SECTION 1.02. OTHER DEFINED TERMS. As used in this Agreement, the
following terms have the meanings specified below:
"ACCOUNT DEBTOR" means any Person who is or who may become obligated
to any Grantor under, with respect to or on account of an Account.
"ARTICLE 9 COLLATERAL" has the meaning assigned to such term in
Section 3.01.
"COLLATERAL" means Article 9 Collateral and Pledged Collateral.
"COLLATERAL OBLIGATIONS" means the due and punctual payment of the
principal of and interest on the Notes when and as the same shall be due and
payable, whether on an interest payment date, at maturity, by acceleration,
repurchase, redemption or otherwise, and interest on the overdue principal of
and interest on the Notes and performance of all other Security Obligations of
the Indenture Parties to the Holders or the Trustee or the Collateral Agent
under the Indenture, the Notes, this Agreement and the other Indenture
Documents.
"COMPANY" means International Wire Group, Inc.
"CONCENTRATION ACCOUNT" means the cash collateral account
established at the office of Trustee, in the name of the Collateral Agent, for
purposes of this Agreement.
"COPYRIGHT LICENSE" means any written agreement, now or hereafter in
effect, granting any right to any third party under any copyright now or
hereafter owned by any Grantor or that such Grantor otherwise has the right to
license, or granting any right to any Grantor under any copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"COPYRIGHTS" means all of the following now owned or hereafter
acquired by any Grantor: (a) all copyright rights in any work subject to the
copyright laws of the United States or any other country, whether as author,
assignee, transferee or otherwise, and (b) all registrations and applications
for registration of any such copyright in the United States or any other
country, including registrations, recordings, supplemental registrations and
pending applications for registration in the United States Copyright Office,
including those listed on Exhibit II.
"EFFECTIVE DATE" means October 20, 2004.
"EQUITY INTERESTS" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.
"FEDERAL SECURITIES LAWS" has the meaning assigned to such term in
Section 4.04.
"GENERAL INTANGIBLES" means all chosen in action and causes of
action and all other intangible personal property of every kind and nature
(other than Accounts) now owned or hereafter acquired by any Grantor, including
corporate or other business records, indemnification claims, contract rights
(including rights under leases, whether entered into as lessor or lessee,
Hedging Obligations and other agreements), Intellectual Property, goodwill,
registrations, franchises, tax refund claims and any letter of credit,
guarantee, claim, security interest or other security held by or granted to any
Grantor to secure payment by an Account Debtor of any of the Accounts.
"GRANTORS" means the Company and the Subsidiary Parties.
"INDENTURE" has the meaning assigned to such term in the.
preliminary statement of this Agreement.
"INDENTURE DOCUMENTS" means (a) the Indenture, the Notes, and the
Security Documents and (b) any other related documents or instruments executed
and delivered pursuant to the Indenture or any Security Document.
"INDENTURE PARTIES" means the Company and the Subsidiary Parties.
"INTELLECTUAL PROPERTY" means all intellectual and similar property
of every kind and nature now owned or hereafter acquired by any Grantor,
including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade
secrets, confidential or proprietary technical and business information,
know-how, show-how or other data or information, software and databases and all
embodiments or fixations thereof and related documentation, registrations and
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franchises, and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement dated as
of October 20, 2004, between the BNY Midwest Trust Company, as Indenture
Trustee, Congress Financial Corporation (Central), as agent for the financial
institutions who are lenders under the Loan and Security Agreement and Silver
Point Finance, L.L.C. as agent for the financial institutions who are lenders
under the Term Loan.
"LICENSE" means any Patent License, Trademark License, Copyright
License or other license or sublicense agreement to which any Grantor is a
party, including those listed on Exhibit II.
"LOAN AND SECURITY AGREEMENT" means (i) the Loan and Security
Agreement, dated as of October 20, 2004, by and among Omega Wire, Inc., OWI
Corporation, Camden Wire Co., Inc., IWG Resources LLC, International Wire Rome
Operations, Inc. and Wire Technologies, Inc., as Borrowers, Congress Financial
Corporation (Central), as Agent and the lenders from time to time party thereto,
including any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, as the same may be amended,
supplemented or otherwise modified from time to time and (ii) any renewal,
extension, refunding, replacement or refinancing thereof.
"MORTGAGED PROPERTY" means, initially, each parcel of real property
and the improvements thereto owned by any Indenture Party and identified on
Exhibit II hereto, and includes each other parcel of real property and
improvements thereto with respect to which a Mortgage is granted pursuant to
Section 4.11 or 4.12 of the Indenture.
"NEW YORK UCC" means the Uniform Commercial Code as from time to
time in effect in the State of New York.
"NOTES" has the meaning assigned to such term in the preliminary
statement of this Agreement.
"PATENT LICENSE" means any written agreement, now or hereafter in
effect, granting to any third party any right to make, use or sell any invention
on which a patent, now or hereafter owned by any Grantor or that any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.
"PATENTS" means all of the following now owned or hereafter acquired
by any Grantor: (a) all letters patent of the United States or the equivalent
thereof in any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or the equivalent thereof
in any other country, including registrations, recordings and pending
applications in the United States Patent and Trademark Office or any similar
offices in any other country, including those listed on Exhibit II, and (b) all
reissues, continuations, divisions,
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continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
"PERFECTION CERTIFICATE" means a certificate substantially in the
form of Exhibit II, completed and supplemented with the schedules and
attachments contemplated thereby, and duly executed by an Officer of the
Company.
"PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"PLEDGED COLLATERAL" has the meaning assigned to such term in
Section 2.01.
"PLEDGED DEBT SECURITIES" has the meaning assigned to such term in
Section 2.01.
"PLEDGED SECURITIES" means any promissory notes, stock certificates
or other securities now or hereafter included in the Pledged Collateral,
including all certificates, instruments or other documents representing or
evidencing any Pledged Collateral.
"PLEDGED STOCK" has the meaning assigned to such term in Section
2.01.
"PROCEEDS" has the meaning specified in Section 9-102 of the New
York UCC.
"SECURED PARTIES" means (a) the Trustee, (b) the Collateral Agent,
(c) each Holder, (d) the beneficiaries of each indemnification obligation
undertaken by any Indenture Party under any Indenture Document and (e) the
successors and assigns of each of the foregoing.
"SECURITY DOCUMENTS" means this Agreement, the Mortgages, any
agreements pursuant to which assets are added to the Collateral and any other
instruments or documents entered into and delivered in connection with any of
the foregoing, as such agreements, instruments or documents may from time to
time be amended.
"SECURITY INTEREST" has the meaning assigned to such term in Section
3.01.
"SUBSIDIARY PARTIES" means (a) the Subsidiaries identified on
Schedule I and (b) each other Subsidiary formed by the Company or the
Subsidiaries identified on Schedule I after the Effective Date.
"TERM LOAN" means (i) the Working Capital Loan and Security
Agreement, dated as of October 20, 2004, by and among Omega Wire, Inc., OWI
Corporation, Camden Wire Co., Inc., IWG Resources LLC, International Wire Rome
Operations, Inc. and Wire Technologies, Inc., as Borrowers, Silver Point
Finance, L.L.C., as Agent and the Lenders from time to time party thereto,
including any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, as the same may be amended,
supplemented or otherwise modified from time to time and (ii) any renewal,
extension, refunding, replacement or refinancing thereof.
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"TRADEMARK LICENSE" means any written agreement, now or hereafter in
effect, granting to any third party any right to use any trademark now or
hereafter owned by any Grantor or that any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any trademark now or
hereafter owned by any third party, and all rights of any Grantor under any such
agreement.
"TRADEMARKS" means all of the following now owned or hereafter
acquired by any Grantor: (a) all trademarks, service marks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, trade dress, logos, other source or business identifiers, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all registration and
recording applications filed in connection therewith, including registrations
and registration applications in the United States Patent and Trademark Office
or any similar offices in any State of the United States or any other country or
any political subdivision thereof, and all extensions or renewals thereof,
including those listed on Exhibit II, (b) all goodwill associated therewith or
symbolized thereby and (c) all other assets, rights and interests that uniquely
reflect or embody such goodwill.
SECTION 1.03. RULES OF INTERPRETATION. The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation". The word "will" shall be construed to have the same meaning and
effect as the word "shall". Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. INTERCREDITOR AGREEMENT. This Agreement and all rights
and obligations under this Agreement are subject to the Intercreditor Agreement.
The parties to this Agreement and all Persons claiming any right under or in
respect of this Agreement are bound by and (to the extent provided in the
Intercreditor Agreement) entitled to the benefit of the Intercreditor Agreement.
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ARTICLE II
PLEDGE OF SECURITIES
SECTION 2.01. PLEDGE. As security for the payment or performance (as
the case may be) in full of the Collateral Obligations, each Grantor hereby
assigns and pledges to the Collateral Agent, its successors and assigns, for the
ratable benefit of the Secured Parties, and hereby grants to the Collateral
Agent, for the ratable benefit of the Secured Parties, a security interest in,
all of such Grantor's right, title and interest in, to and under (a) the shares
of capital stock and other Equity Interests owned by it and listed on Schedule
8.12 of the Perfection Certificate and any other Equity Interests obtained in
the future by such Grantor and the certificates representing all such Equity
Interests (the "PLEDGED STOCK"); provided that the Pledged Stock shall not
include more than 65% of the issued and outstanding voting Equity Interests of
any Foreign Subsidiary; (b)(i) the debt securities of any Grantor on Schedule
8.12 of the Perfection Certificate, (ii) any debt securities in the future
issued to such Grantor and (iii) the promissory notes and any other instruments
evidencing such debt securities (the "PLEDGED DEBT SECURITIES"); (c) all other
property that may be delivered to and held by or on behalf of the Collateral
Agent, pursuant to the terms of this Collateral Agreement; (d) subject to
Section 2.06, all payments of principal or interest, dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of, in exchange for or upon the conversion of,
and all other Proceeds received in respect of, the securities referred to in
clauses (a) and (b) above; (e) subject to Section 2.06, all rights and
privileges of such Grantor with respect to the securities and other property
referred to in clauses (a), (b), (c) and (d) above; and (f) all Proceeds of any
of the foregoing (the items referred to in clauses (a) through (f) above being
collectively referred to as the "PLEDGED COLLATERAL").
TO HAVE AND TO HOLD the Pledged Collateral, together with all right,
title, interest, powers, privileges and preferences pertaining or incidental
thereto, unto the Collateral Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, forever; subject, however, to the terms,
covenants and conditions hereinafter set forth.
SECTION 2.02. DELIVERY OF THE PLEDGED COLLATERAL. (a) Prior to the
Senior Lender Termination Date (as defined in the Intercreditor Agreement) each
Grantor agrees to deliver promptly to the Agents (as defined in and in
accordance with the Intercreditor Agreement), as bailee for the Collateral
Agent, any and all Pledged Securities. Upon the occurrence of the Senior Lender
Termination Date, each Grantor agrees promptly to deliver or cause to be
delivered to the Collateral Agent any and all Pledged Securities.
(b) Each Grantor will cause any Indebtedness for borrowed money in
principal amount exceeding $1,000,000 owed to such Grantor by any Person to be
evidenced by a duly executed promissory note that (a) prior to the Senior Lender
Termination Date, is delivered to the Agents as bailee for the Collateral Agent
in accordance with the Intercreditor Agreement, and (b) on or after the Senior
Lender Termination Date, is pledged to the Collateral Agent pursuant to the
terms hereof.
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(c) Upon delivery to the Agents or the Collateral Agent, (i) any
Pledged Securities shall be accompanied by stock powers duly executed in blank
or other instruments of transfer reasonably satisfactory to the Agents or the
Collateral Agent, as the case may be, and by such other instruments and
documents as the Agents or the Collateral Agent, as the case may be, may
reasonably request and (ii) all other property comprising part of the Pledged
Collateral shall be accompanied by proper instruments of assignment duly
executed by the applicable Grantor and such other instruments or documents as
the Agents or the Collateral Agent, as the case may be, may reasonably request.
Each delivery of Pledged Securities shall be accompanied by a schedule
describing the securities, which schedule shall be attached hereto as Schedule
8.12 of the Perfection Certificate and made a part hereof; provided that failure
to attach any such schedule hereto shall not affect the validity of such pledge
of such Pledged Securities. Each schedule so delivered shall supplement any
prior schedules so delivered.
SECTION 2.03. REPRESENTATIONS, WARRANTIES AND COVENANTS. The
Grantors jointly and severally represent, warrant and covenant to and with the
Collateral Agent, for the benefit of the Secured Parties, that:
(a) Schedule 8.12 of the Perfection Certificate correctly sets forth
the percentage of the issued and outstanding shares of each class of the Equity
Interests of the issuer thereof represented by such Pledged Stock and includes
all Equity Interests, debt securities and promissory notes required to be
pledged hereunder;
(b) the Pledged Stock and Pledged Debt Securities have been duly and
validly authorized and issued by the issuers thereof and (i) in the case of
Pledged Stock, are fully paid and nonassessable, (ii) in the case of Pledged
Debt Securities issued to a Grantor by Affiliates of any Grantor, are legal,
valid and binding obligations of the issuers thereof and (iii) in the case of
Pledged Debt Securities issued to a Grantor by Persons other than Affiliates of
any Grantor, are, to the knowledge of any Grantor, legal, valid and binding
obligations of the issuers thereof;
(c) except for the security interests granted hereunder and to the
Senior Lenders pursuant to the Senior Lender Collateral Documents, each of the
Grantors (i) is and, subject to any transfers permitted under the Indenture,
will continue to be the direct owner, beneficially and of record, of the Pledged
Securities indicated on Schedule 8.12 of the Perfection Certificate as owned by
such Grantor, (ii) holds the same free and clear of all Liens, other than Liens
created by this Agreement, Permitted Liens and transfers permitted under the
Indenture, (iii) will make no assignment, pledge, hypothecation or transfer of,
or create or permit to exist any security interest in or other Lien on, the
Pledged Collateral, other than Liens created by this Agreement, Permitted Liens
and transfers permitted under the Indenture, and (iv) will defend its title or
interest thereto or therein against any and all Liens (other than the Lien
created by this Agreement and Permitted Liens), however, arising, of all Persons
whomsoever;
(d) except for restrictions and limitations imposed by the Indenture
Documents, the Senior Lender Documents (as defined in the Intercreditor
Agreement) or securities laws generally, the Pledged Collateral is and will
continue to be freely transferable and assignable, and none of the Pledged
Collateral is or will be subject to any option, right of first refusal,
shareholders agreement, charter or by-law provisions or contractual restriction
of any
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nature that might prohibit, impair, delay or otherwise affect the pledge of such
Pledged Collateral hereunder, the sale or disposition thereof pursuant hereto or
the exercise by the Collateral Agent of rights and remedies hereunder;
(e) each of the Grantors has the power and authority to pledge the
Pledged Collateral pledged by it hereunder in the manner hereby done or
contemplated;
(f) no consent or approval of any Governmental Authority, any
securities exchange or any other Person was or is necessary to the validity of
the pledge effected hereby (other than such as have been obtained and are in
full force and effect);
(g) by virtue of the execution and delivery by the Grantors of this
Agreement, when any Pledged Securities are delivered to the Agents as bailee for
the Collateral Agent or to the Collateral Agent in accordance with this
Agreement, the Collateral Agent will obtain a legal, valid and perfected lien
upon and security interest in such Pledged Securities as security for the
payment and performance of the Collateral Obligations; and
(h) the pledge effected hereby is effective to vest in the
Collateral Agent, for the benefit of the Secured Parties, the rights of the
Collateral Agent in the Pledged Collateral as set forth herein.
SECTION 2.04. CERTIFICATION OF LIMITED LIABILITY COMPANY AND LIMITED
PARTNERSHIP INTERESTS. To the extent that the Collateral Agent reasonably
requests, each interest in any limited liability company or limited partnership
controlled by any Grantor and pledged hereunder shall be represented by a
certificate, shall be a "security" within the meaning of Article 8 of the New
York UCC and shall be governed by Article 8 of the New York UCC.
SECTION 2.05. REGISTRATION IN NOMINEE NAME; DENOMINATIONS. The
Collateral Agent, on behalf of the Secured Parties, shall have the right (in its
reasonable discretion) to hold the Pledged Securities in its own name as
pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the
applicable Grantor, endorsed or assigned in blank or in favor of the Collateral
Agent. Each Grantor will promptly give to the Collateral Agent copies of any
material notices or other material communications received by it with respect to
Pledged Securities registered in the name of such Grantor. The Collateral Agent
shall at all times have the right to exchange the certificates representing
Pledged Securities for certificates of smaller or larger denominations for any
purpose consistent with this Agreement.
SECTION 2.06. VOTING RIGHTS; DIVIDENDS AND INTEREST. (a) Unless and
until an Event of Default shall have occurred and be continuing and the
Collateral Agent shall have notified the Grantors that their rights under this
Section 2.06 are being suspended:
(i) Each Grantor shall be entitled to exercise any and all
voting and/or other consensual rights and powers inuring to an owner of
Pledged Securities or any part thereof for any purpose consistent with the
terms of this Agreement, the Indenture and the other Indenture Documents;
provided that such rights and powers shall not be exercised in any manner
that could materially and adversely affect the rights inuring to a holder
of any Pledged Securities or the rights and remedies of any of the
Collateral Agent
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or the other Secured Parties under this Agreement or the Indenture or any
other Indenture Document or the ability of the Secured Parties to exercise
the same.
(ii) The Collateral Agent shall execute and deliver to each
Grantor, or cause to be executed and delivered to such Grantor, all such
proxies, powers of attorney and other instruments as such Grantor may
reasonably request for the purpose of enabling such Grantor to exercise
the voting and/or consensual rights and powers it is entitled to exercise
pursuant to subparagraph (i) above.
(iii) Each Grantor shall be entitled to receive and retain any
and all dividends, interest, principal and other distributions paid on or
distributed in respect of the Pledged Securities to the extent and only to
the extent that such dividends, interest, principal and other
distributions are permitted by, and otherwise paid or distributed in
accordance with, the terms and conditions of the Indenture, the other
Indenture Documents and applicable laws; provided that any noncash
dividends, interest, principal or other distributions that would
constitute Pledged Stock or Pledged Debt Securities, whether resulting
from a subdivision, combination or reclassification of the outstanding
Equity Interests of the issuer of any Pledged Securities or received in
exchange for Pledged Securities or any part thereof, or in redemption
thereof, or as a result of any merger, consolidation, acquisition or other
exchange of assets to which such issuer may be a party or otherwise, shall
be and become part of the Pledged Collateral, and, if received by any
Grantor, shall not be commingled by such Grantor with any of its other
funds or property but shall be held separate and apart therefrom, shall be
held in trust for the benefit of the Agents and the Collateral Agent and
shall be forthwith delivered to the Agents or the Collateral Agent, as the
case may be, in the same form as so received (with any necessary
endorsement) in accordance with the Intercreditor Agreement.
(b) Upon the occurrence and during the continuance of an Event of
Default, and subject to the terms and provisions of the Intercreditor Agreement,
after the Collateral Agent shall have notified the Grantors of the suspension of
their rights under paragraph (a)(iii) of this Section 2.06, then all rights of
any Grantor to dividends, interest, principal or other distributions that such
Grantor is authorized to receive pursuant to paragraph (a)(iii) of this Section
2.06 shall cease, and all such rights shall thereupon become vested in the
Collateral Agent, which shall have the sole and exclusive right and authority to
receive and retain such dividends, interest, principal or other distributions.
All dividends, interest, principal or other distributions received by any
Grantor contrary to the provisions of this Section 2.06 shall be held in trust
for the benefit of the Agents and the Collateral Agent, shall be segregated from
other property or funds of such Grantor and shall be forthwith delivered to the
Agents or the Collateral Agent upon demand in the same form as so received (with
any necessary endorsement) in accordance with the Intercreditor Agreement. Any
and all money and other property paid over to or received by the Senior Lenders
and the Collateral Agent pursuant to the provisions of this paragraph (b) and in
accordance with the Intercreditor Agreement shall be retained by the Collateral
Agent in an account to be established by the Collateral Agent upon receipt of
such money or other property and shall be applied in accordance with the
provisions of Section 4.02. After all Events of Default have been cured or
waived and the Company has delivered to the Collateral Agent a certificate to
that effect, the Collateral Agent shall, promptly repay to each Grantor (without
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interest) all dividends, interest, principal or other distributions that such
Grantor would otherwise be permitted to retain pursuant to the terms of
paragraph (a)(iii) of this Section 2.06 and that remain in such account.
(c) Upon the occurrence and during the continuance of an Event of
Default, after the Collateral Agent, in accordance with the Intercreditor
Agreement, shall have notified the Grantors of the suspension of their rights
under paragraph (a)(i) of this Section 2.06, then all rights of any Grantor to
exercise the voting and consensual rights and powers it is entitled to exercise
pursuant to paragraph (a)(i) of this Section 2.06, and the obligations of the
Collateral Agent under paragraph (a)(ii) of this Section 2.06, shall cease, and
all such rights shall thereupon become vested in the Collateral Agent, which,
subject to the terms and provisions of the Intercreditor Agreement, shall have
the sole and exclusive right and authority to exercise such voting and
consensual rights and powers; provided that, unless the Collateral Agent shall
have received written objections from Holders of at least 25% in principal
amount of the Notes, the Collateral Agent shall have the right from time to time
following and during the continuance of an Event of Default to permit the
Grantors to exercise such rights.
(d) Any notice given by the Collateral Agent to the Grantors
suspending their rights under paragraph (a) of this Section 2.06 (i) may be
given by telephone if promptly confirmed in writing, (ii) may be given to one or
more of the Grantors at the same or different times and (iii) may suspend the
rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) in part
without suspending all such rights (as specified by the Collateral Agent in its
sole and absolute discretion) and without waiving or otherwise affecting the
Collateral Agent's rights to give additional notices from time to time
suspending other rights so long as an Event of Default has occurred and is
continuing.
ARTICLE III
SECURITY INTERESTS IN PERSONAL PROPERTY
SECTION 3.01. SECURITY INTEREST. (a) As security for the payment or
performance, as the case may be, in full of the Collateral Obligations, each
Grantor hereby assigns and pledges to the Collateral Agent, its successors and
assigns, for the benefit of the Secured Parties, and hereby grants to the
Collateral Agent, its successors and assigns, for the benefit of the Secured
Parties, a continuing security interest (the "SECURITY INTEREST") in, all right,
title or interest in or to any and all of the following assets and properties
now owned or at any time hereafter acquired by such Grantor or in which such
Grantor now has or at any time in the future may acquire any right, title or
interest (collectively, the "ARTICLE 9 COLLATERAL"), including, without
limitation
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Account Collateral, Money and all Deposit Accounts,
together with all amounts on deposit from time to time in such
Deposit Accounts;
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(iv) all Documents;
(v) all General Intangibles including all intellectual property,
Payment Intangibles and Software;
(vi) all Goods, including Inventory, Equipment and Fixtures;
(vii) all Instruments;
(viii) all Investment Property;
(ix) Letter-of-Credit rights and other Supporting Obligations;
(x) All Commercial Tort Claims;
(xi) all books and records pertaining to the Article 9 Collateral;
(xii) to the extent not otherwise included, all Proceeds, Accessions
and products of any and all of the foregoing and all collateral
security and guarantees given by any Person with respect to any of
the foregoing;
(xiii) all cash or cash equivalents received by the Trustee or the
Collateral Agent on behalf of the Trustee pursuant to Article 13 of
the Indenture; and
(xiv) all collateral security and guaranties given by any Person
with respect to any of the foregoing.
(b) Each Grantor hereby irrevocably authorizes the Collateral Agent
at any time and from time to time to file in any relevant jurisdiction any
initial financing statements (including fixture filings) with respect to the
Article 9 Collateral or any part thereof and amendments thereto that contain the
information required by Article 9 of the Uniform Commercial Code of each
applicable jurisdiction for the filing of any financing statement or amendment,
including (a) whether such Grantor is an organization, the type of organization
and any organizational identification number issued to such Grantor and (b) in
the case of a financing statement filed as a fixture filing or covering Article
9 Collateral constituting minerals or the like to be extracted or timber to be
cut, a sufficient description of the real property to which such Article 9
Collateral relates. Each Grantor agrees to provide such information to the
Collateral Agent promptly upon request.
Each Grantor also ratifies its authorization for the Collateral
Agent to file in any relevant jurisdiction any initial financing statements or
amendments thereto if filed prior to the date hereof.
The Collateral Agent is further authorized to file with the United
States Patent and Trademark Office or United States Copyright Office (or any
successor office or any similar office in any other country) such documents as
may be necessary (or, in the reasonable opinion of the Collateral Agent,
advisable) for the purpose of perfecting, confirming, continuing,
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enforcing or protecting the Security Interest granted by each Grantor, without
the signature of any Grantor, and naming any Grantor or the Grantors as debtors
and the Collateral Agent as secured party.
(c) The Security Interest is granted as security only and shall not
subject the Collateral Agent or any other Secured Party to, or in any way alter
or modify, any obligation or liability of any Grantor with respect to or arising
out of the Article 9 Collateral.
SECTION 3.02. REPRESENTATIONS AND WARRANTIES. The Grantors jointly
and severally represent and warrant to the Collateral Agent and the Secured
Parties that:
(a) Each Grantor has good and valid rights in and title to the
Article 9 Collateral with respect to which it has purported to grant a Security
Interest hereunder and has full power and authority to grant to the Collateral
Agent the Security Interest in such Article 9 Collateral pursuant hereto and to
execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other Person other than
any consent or approval that has been obtained.
(b) The Perfection Certificate has been duly prepared, completed and
executed and the information set forth therein, including the exact legal name
of each Grantor, is correct and complete as of the Effective Date. The Uniform
Commercial Code financing statements (including fixture filings, as applicable)
or other appropriate filings, recordings or registrations prepared and filed,
recorded or registered by the Grantors based upon the information provided to
the Collateral Agent in the Perfection Certificate for filing in each
governmental, municipal or other office specified in Schedule 8.4 to the
Perfection Certificate are all the filings, recordings and registrations (other
than filings required to be made in the United States Patent and Trademark
Office and the United States Copyright Office in order to perfect the Security
Interest in Article 0 Xxxxxxxxxx xxxxxxxxxx xx Xxxxxx Xxxxxx Patents, Trademarks
and Copyrights) that are necessary to publish notice of and protect the validity
of and to establish a legal, valid and perfected security interest in favor of
the Collateral Agent (for the benefit of the Secured Parties) in respect of all
Article 9 Collateral in which the Security Interest may be perfected by filing,
recording or registration in the United States (or any political subdivision
thereof) and its territories and possessions, and no further or subsequent
filing, refiling, recording, rerecording, registration or reregistration is
necessary in any such jurisdiction, except as provided under applicable law with
respect to the filing of continuation statements. Each Grantor represents and
warrants that a fully executed agreement in the form hereof and containing a
description of all Article 9 Collateral consisting of Intellectual Property
shall have been delivered to the Collateral Agent on or before the Effective
Date and recorded by such Grantor with respect to United States Patents and
United States registered Trademarks (and Trademarks for which United States
registration applications are pending) and with respect to United States
registered Copyrights for recording by the United States Patent and Trademark
Office and the United States Copyright Office pursuant to 35 U.S.C. Section 261,
15 U.S.C. Section 1060 or 17 U.S.C. Section 205 and the regulations thereunder,
as applicable, and otherwise as may be required pursuant to the laws of any
other necessary jurisdiction, to protect the validity of and to establish a
legal, valid and perfected security interest in favor of the Collateral Agent
(for the benefit of the Secured Parties) in respect of all Article 9 Collateral
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consisting of Patents, Trademarks and Copyrights in which a security interest
may be perfected by filing, recording or registration in the United States (or
any political subdivision thereof) and its territories and possessions, and no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary (other than such actions as are necessary to perfect
the Security Interest with respect to any Article 9 Collateral consisting of
Patents, Trademarks and Copyrights (or registration or application for
registration thereof) acquired or developed after the date hereof).
(c) The Security Interest constitutes (i) a legal and valid security
interest in all the Article 9 Collateral securing the payment and performance of
the Collateral Obligations, (ii) subject to the filings described in Section
3.02(b), a perfected security interest in all Article 9 Collateral in which a
security interest may be perfected by filing, recording or registering a
financing statement or analogous document in the United States (or any political
subdivision thereof) and its territories and possessions pursuant to the Uniform
Commercial Code or other applicable law in such jurisdictions and (iii) a
security interest that shall be perfected in all Article 9 Collateral in which a
security interest may be perfected upon the receipt and recording of this
Agreement with the United States Patent and Trademark Office and the United
States Copyright Office, as applicable, within the three-month period
(commencing as of the date hereof) pursuant to 35 U.S.C. Section 261 or 15
U.S.C. Section 1060 or the one month period (commencing as of the date hereof)
pursuant to 17 U.S.C. Section 205 and otherwise as may be required pursuant to
the laws of any other necessary jurisdiction. The Security Interest is and shall
be prior to any other Lien on any of the Article 9 Collateral, other than those
Permitted Liens that have priority as a matter of law.
(d) The Article 9 Collateral is owned by the Grantors free and clear
of any Lien, except for Permitted Liens. None of the Grantors has filed or
consented to the filing of (i) any financing statement or analogous document
under the Uniform Commercial Code or any other applicable laws covering any
Article 9 Collateral, (ii) any assignment in which any Grantor assigns any
Collateral or any security agreement or similar instrument covering any Article
9 Collateral with the United States Patent and Trademark Office or the United
States Copyright Office or (iii) any assignment in which any Grantor assigns any
Article 9 Collateral or any security agreement or similar instrument covering
any Article 9 Collateral with any foreign governmental, municipal or other
office, which financing statement or analogous document, assignment, security
agreement or similar instrument is still in effect, except; in each case, for
Permitted Liens
SECTION 3.03. COVENANTS. (a) Each Grantor agrees promptly to notify
the Collateral Agent in writing of any change (i) in its corporate name, (ii) in
the location of its chief executive office, (iii) in its identity or type of
organization or corporate structure, (iv) in its Federal Taxpayer Identification
Number or organizational identification number or (v) in its jurisdiction of
organization. Each Grantor agrees to promptly provide the Collateral Agent with
certified organizational documents reflecting any of the changes described in
the first sentence of this paragraph. Each Grantor agrees not to effect or
permit any change referred to in the first sentence of this paragraph unless all
filings have been made by such Grantor under the Uniform Commercial Code or
otherwise that are required in order for the Collateral Agent to continue at all
times following such change to have a valid, legal and perfected third priority
security interest
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in all the Article 9 Collateral. Each Grantor agrees promptly to notify the
Collateral Agent if any material portion of the Article 9 Collateral owned or
held by such Grantor is damaged or destroyed.
(b) Each Grantor agrees to maintain, at its own cost and expense,
such complete and accurate records with respect to the Article 9 Collateral
owned by it as is consistent with its current practices and in accordance with
such prudent and standard practices used in industries that are the same as or
similar to those in which such Grantor is engaged, but in any event to include
complete accounting records indicating all payments and proceeds received with
respect to any part of the Article 9 Collateral, and, at such time or times as
the Collateral Agent may reasonably request, promptly to prepare and deliver to
the Collateral Agent a duly certified schedule or schedules in form and detail
satisfactory to the Collateral Agent showing the identity, amount and location
of any and all Article 9 Collateral.
(c) The Company shall deliver to the Collateral Agent on or before
May 15th in each year beginning with May 15, 2005, an officers Certificate of
the Company (a) setting forth the information required pursuant to the
Perfection Certificate or confirming that there has been no change in such
information since the date of such certificate or the date of the most recent
certificate delivered pursuant to this Section 3.03(c) and (b) certifying that
all Uniform Commercial Code financing statements (including fixture filings, as
applicable) or other appropriate filings, recordings or registrations, including
all refilings, rerecordings and reregistrations, containing a description of the
Collateral have been filed of record in each governmental, municipal or other
appropriate office in each jurisdiction identified pursuant to clause (a) of
this Section 3.03 to the extent necessary to protect and perfect the Security
Interest for a period of not less than 18 months after the date of such
certificate (except as noted therein with respect to any continuation statements
to be filed within such period). Each certificate delivered pursuant to this
Section 3.03(c) shall identify in the format of Schedule 8.11 to the Perfection
Certificate all Intellectual Property of any Grantor in existence on the date
thereof and not then listed on such Schedules or previously so identified to the
Collateral Agent.
(d) Each Grantor shall, at its own expense, take any and all actions
necessary to defend title to the Article 9 Collateral against all Persons and to
defend the Security Interest of the Collateral Agent in the Article 9 Collateral
and the priority thereof against any Lien other than those Permitted Liens which
have priority as a matter of law or in accordance with the Intercreditor
Agreement.
Each Grantor agrees, at its own expense, to execute, acknowledge,
deliver and cause to be duly filed all such further instruments and documents
and take all actions, including such actions as the Collateral Agent may from
time to time reasonably request, to better assure, create, preserve, protect,
perfect and enforce the Security Interest and the rights and remedies created
hereby, including the payment of any fees and taxes required in connection with
the execution and delivery of this Agreement, the granting of the Security
Interest and the filing of any financing statements (including fixture filings)
or other documents in connection herewith or therewith. To the extent that any
Grantor fails to take any action required in the preceding sentence, the
Collateral Agent is irrevocably authorized and empowered, with full power of
substitution, to execute, acknowledge and deliver such security documents,
instruments,
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certificates, notices and other documents and, subject to the provisions of the
Security Documents, take such other actions in the name, place and stead of such
Grantor; provided that the Collateral Agent will have no obligation to act in
the foregoing manner and no liability for any action taken or omitted by it in
good faith in connection therewith. If any principal amount payable in excess of
$1,000,000 under or in connection with any of the Article 9 Collateral shall be
or become evidenced by any promissory note or other instrument, such note or
instrument shall be promptly pledged and delivered to the Collateral Agent, duly
endorsed in a manner reasonably satisfactory to the Collateral Agent.
Without limiting the generality of the foregoing, each Grantor
hereby authorizes the Collateral Agent, with prompt notice thereof to the
Grantors, to supplement this Agreement by supplementing Exhibit II or adding
additional schedules hereto to specifically identify any asset or item that may
constitute Copyrights, Licenses, Patents or Trademarks; provided that any
Grantor shall have the right, exercisable within 20 days after it has been
notified by the Collateral Agent of the specific identification of such
Collateral, to advise the Collateral Agent in writing of any inaccuracy of the
representations and warranties made by such Grantor hereunder with respect to
such Collateral. Each Grantor agrees that it will use its reasonable best
efforts to take such action as shall be necessary in order that all
representations and warranties hereunder shall be true and correct with respect
to such Collateral within 30 days after the date it has been notified by the
Collateral Agent of the specific identification of such Collateral.
(e) Upon reasonable prior notice, the Collateral Agent and such
Persons as the Collateral Agent may reasonably designate shall have, at such
reasonable times and as often as reasonably requested, the right to inspect the
Article 9 Collateral (provided that only one inspection during each fiscal year
of the Company shall be at the Grantors' own cost and expense, provided,
however, that if an Event of Default has occurred and is continuing, all
inspections during the continuance of such Event of Default shall be at the
Grantors' own cost and expense), all records related thereto (and to make
extracts and copies from such records) and the premises upon which any of the
Article 9 Collateral is located, to discuss the Grantors' affairs with the
officers of the Grantors and their independent accountants (provided that the
Grantors shall have been afforded the opportunity to participate in any such
discussion with their independent accountants) and to verify under reasonable
procedures, the validity, amount, quality, quantity, value, condition and status
of, or any other matter relating to, the Article 9 Collateral, including, in the
case of Accounts or Article 9 Collateral in the possession of any third person,
by contacting Account Debtors or the third person possessing such Article 9
Collateral for the purpose of making such a verification. The Collateral Agent
shall have the absolute right to share any information it gains from such
inspection or verification with any Secured Party.
(f) At its option, during the continuance of an Event of Default,
the Collateral Agent may discharge past due taxes, assessments, charges, fees,
Liens, security interests or other encumbrances at any time levied or placed on
the Article 9 Collateral and not permitted under the Indenture, and may pay for
the maintenance and preservation of the Article 9 Collateral to the extent any
Grantor fails to do so as required by the Indenture or this Agreement, and each
Grantor jointly and severally agrees to reimburse the Collateral Agent on demand
for any payment made or any expense incurred by the Collateral Agent pursuant to
the foregoing
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authorization; provided that nothing in this paragraph shall be interpreted as
excusing any Grantor from the performance of, or imposing any obligation on the
Collateral Agent or any Secured Party to cure or perform, any covenants or other
promises of any Grantor with respect to taxes, assessments, charges, fees,
Liens, security interests or other encumbrances and maintenance as set forth
herein or in the other Indenture Documents.
(g) Each Grantor shall remain liable to observe and perform all the
conditions and obligations to be observed and performed by it under each
contract, agreement or instrument relating to the Article 9 Collateral, all in
accordance with the terms and conditions thereof, and each Grantor jointly and
severally agrees to indemnify and hold harmless the Collateral Agent and the
Secured Parties from and against any and all liability for such performance.
(h) None of the Grantors shall make or permit to be made an
assignment, pledge or hypothecation of the Article 9 Collateral or shall grant
any other Lien in respect of the Article 9 Collateral, except as permitted by
the Indenture or the Senior Lender Documents. None of the Grantors shall make or
permit to be made any transfer of the Article 9 Collateral and each Grantor
shall remain at all times in possession of the Article 9 Collateral owned by it,
except that unless and until the Collateral Agent shall notify the Grantors that
an Event of Default shall have occurred and be continuing and that during the
continuance thereof the Grantors shall not sell, convey, lease, assign, transfer
or otherwise dispose of any Article 9 Collateral (which notice may be given by
telephone if promptly confirmed in writing), the Grantors may use and dispose of
the Article 9 Collateral in any lawful manner not inconsistent with the
provisions of this Agreement, the Indenture or any other Indenture Document.
Without limiting the generality of the foregoing, each Grantor agrees that it
shall not permit any Inventory having a value exceeding $1,000,000 to be in the
possession or control of any warehouseman, agent, bailee, or processor at any
time unless such warehouseman, bailee, agent or processor shall have been
notified of the Security Interest and shall have acknowledged in writing, in
form and substance reasonably satisfactory to the Collateral Agent, that such
warehouseman, agent, bailee or processor holds the Inventory for the benefit of
the Agents and the Collateral Agent subject to the Security Interest and shall
act upon the instructions of the Agents and the Collateral Agent in accordance
with the terms and provisions of the Intercreditor Agreement without further
consent from the Grantor.
(i) None of the Grantors will, without the Collateral Agent's prior
written consent, grant any extension of the time of payment of any Accounts
included in the Article 9 Collateral, compromise, compound or settle the same
for less than the full amount thereof, release, wholly or partly, any Person
liable for the payment thereof or allow any credit or discount whatsoever
thereon, other than (i) extensions, compromises, settlements, releases, credits
or discounts granted or made in the ordinary course of business and consistent
with its current practices and in accordance with such prudent and standard
practice used in industries that are the same as or similar to those in which
such Grantor is engaged or (ii) in accordance with the Senior Lender Documents.
(j) The Grantors, at their own expense, shall maintain or cause to
be maintained insurance covering physical loss or damage to the Inventory and
Equipment with financially sound and reputable insurance companies in such
amounts (with no greater risk
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retention) and against such risks as are customarily maintained by companies of
established repute engaged in the same or similar businesses operating in the
same or similar location. Subject to the terms of the Intercreditor Agreement,
each Grantor irrevocably makes, constitutes and appoints the Collateral Agent
(and all officers, employees or agents designated by the Collateral Agent) as
such Grantor's true and lawful agent (and attorney-in-fact) for the purpose,
during the continuance of an Event of Default, of making, settling and adjusting
claims in respect of Article 9 Collateral under policies of insurance, endorsing
the name of such Grantor on any check, draft, instrument or other item of
payment for the proceeds of such policies of insurance and for making all
determinations and decisions with respect thereto. In the event that any Grantor
at any time or times shall fail to obtain or maintain any of the policies of
insurance required hereby or to pay any premium in whole or part relating
thereto, the Collateral Agent may, without waiving or releasing any obligation
or liability of the Grantors hereunder or any Event of Default, in its sole
discretion, obtain and maintain such policies of insurance and pay such premium
and take any other actions with respect thereto as the Collateral Agent deems
advisable. All sums disbursed by the Collateral Agent in connection with this
paragraph, including reasonable attorneys' fees, court costs, expenses and other
charges relating thereto, shall be payable, upon demand, by the Grantors to the
Collateral Agent and shall be additional Collateral Obligations secured hereby.
(k) Each Grantor shall maintain, in form and manner reasonably
satisfactory to the Collateral Agent, records of its Chattel Paper and its
books, records and documents evidencing or pertaining thereto.
SECTION 3.04. OTHER ACTIONS. In order to further insure the
attachment, perfection and priority of, and the ability of the Collateral Agent
to enforce, the Security Interest, each Grantor agrees, in each case at such
Grantor's own expense, to take the following actions with respect to the
following Article 9 Collateral:
(a) Instruments. Subject to the terms of the Intercreditor
Agreement, if any Grantor shall at any time hold or acquire any
Instruments, such Grantor shall forthwith endorse, assign and
deliver the same to the Collateral Agent, accompanied by such
instruments of transfer or assignment duly executed in blank as the
Collateral Agent may from time to time reasonably request; provided,
that the Grantors shall not be required to deliver any Instruments
to the Collateral Agent unless the individual or aggregate amount
evidenced on all Instruments, not yet delivered to the Collateral
Agent, exceeds $1,000,000.
(b) Investment Property. Except to the extent otherwise provided in
Article III and subject to the terms and provisions of the
Intercreditor Agreement, if any Grantor shall at any time hold or
acquire any certificated securities that either (i) have an
aggregate value exceeding $1,000,000, or (ii) are certificated
securities issued by any Indenture Party, such Grantor shall
forthwith endorse, assign and deliver the same to the Collateral
Agent, accompanied by such instruments of transfer or assignment
duly executed in blank as the Collateral Agent may from time to time
specify. If any securities now or hereafter acquired from an issuer
by any Grantor are uncertificated, are issued to such Grantor or its
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nominee directly by such issuer and have a value exceeding
$1,000,000, such Grantor shall promptly notify the Collateral Agent
thereof and, at the Collateral Agent's request and option and
subject to the terms and provisions of the Intercreditor Agreement,
pursuant to an agreement in form and substance reasonably
satisfactory to the Collateral Agent, but subject to the terms and
provisions of the Intercreditor Agreement, either (i) cause the
issuer to agree to comply with instructions from the Collateral
Agent as to such securities, without further consent of any Grantor
or such nominee, or (ii) arrange for the Collateral Agent to become
the registered owner of the securities. If any securities, whether
certificated or uncertificated, or other investment property now or
hereafter acquired by any Grantor, which, individually or in the
aggregate, have a value exceeding $1,000,000, are held by such
Grantor or its nominee through a securities intermediary or
commodity intermediary, such Grantor shall promptly notify, the
Collateral Agent thereof and, at the Collateral Agent's request and
option and subject to the terms and provisions of the Intercreditor
Agreement, pursuant to an agreement in form and substance reasonably
satisfactory to the Collateral Agent, either (i) cause such
securities intermediary or (as the case may be) commodity
intermediary to agree to comply with entitlement orders or other
instructions from the Collateral Agent to such securities
intermediary as to such security entitlements, or (as the case may
be) to apply any value distributed on account of any commodity
contract as directed by the Collateral Agent to such commodity
intermediary, in each case without further consent of any Grantor or
such nominee, or (ii) in the case of financial assets or other
investment property held through a securities intermediary, arrange
for the Collateral Agent to become the entitlement holder with
respect to such investment property, with the Grantor being
permitted to exercise rights to withdraw or otherwise deal with such
investment property unless an Event of Default has occurred and is
continuing. The Collateral Agent agrees with each of the Grantors
that the Collateral Agent shall not give any such entitlement orders
or instructions or directions to any such issuer, securities
intermediary or commodity intermediary, and shall not withhold its
consent to the exercise of any withdrawal or dealing rights by any
Grantor, unless an Event of Default has occurred and is continuing,
or, after giving effect to any such investment and withdrawal rights
would occur. The provisions of this paragraph shall not apply to any
financial assets credited to a securities account for which the
Collateral Agent is the securities intermediary.
(c) Electronic Chattel Paper and Transferable Records. If any
Grantor at any time holds or acquires an interest in any electronic
chattel paper or any "transferable record," as that term is defined
in Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act, or in Section 16 of the Uniform Electronic
Transactions Act as in effect in any relevant jurisdiction, which
has a value, individually or in the aggregate, exceeding $1,000,000,
such Grantor shall promptly notify the Collateral Agent thereof and,
at the request of the Collateral Agent, and subject to the terms and
provisions of the Intercreditor Agreement, shall take such action as
the Collateral Agent may reasonably request to vest in the
Collateral Agent control under New York UCC Section 9-105 of
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such electronic chattel paper or control under Section 201 of the
Federal Electronic Signatures in Global and National Commerce Act
or, as the case may be, Section 16 of the Uniform Electronic
Transactions Act, as so in effect in such jurisdiction, of such
transferable record. The Collateral Agent agrees with such Grantor
that the Collateral Agent will arrange, pursuant to procedures
reasonably satisfactory to the Collateral Agent and so long as such
procedures will not result in the Collateral Agent's loss of
control, for the Grantor to make alterations to such electronic
chattel paper or transferable record permitted under UCC Section
9-105 or, as the case may be, Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act or Section 16 of the
Uniform Electronic Transactions Act for a party in control to allow
without loss of control, unless an Event of Default has occurred and
is continuing or would occur after taking into account any action by
such Grantor with respect to such electronic chattel paper or
transferable record.
(d) Letter-of-Credit Rights. If any Grantor is at any time a
beneficiary under a letter of credit now or hereafter issued in
favor of such Grantor with an undrawn face amount exceeding
$1,000,000, such Grantor shall promptly notify the Collateral Agent
thereof and, at the request and option of the Collateral Agent, and
subject to the terms and provisions of the Intercreditor Agreement,
such Grantor shall, pursuant to an agreement in form and substance
reasonably satisfactory to the Collateral Agent, either (i) arrange
for the issuer and any confirmer of such letter of credit to consent
to an assignment to the Collateral Agent of the proceeds of any
drawing under the letter of credit or (ii) arrange for the
Collateral Agent to become the transferee beneficiary of the letter
of credit, with the Collateral Agent agreeing, in each case, that
the proceeds of any drawing under the letter of credit are to be
paid to the applicable Grantor unless an Event of Default has
occurred or is continuing.
(e) Commercial Tort Claims. If any Grantor shall at any time hold or
acquire a commercial tort claim in an amount reasonably estimated to
exceed $3,000,000, the Grantor shall promptly notify the Collateral
Agent thereof in a writing signed by such Grantor including a
summary description of such claim and grant to the Collateral Agent
in such writing a security interest therein and in the proceeds
thereof, all upon the terms of this Agreement, with such writing to
be in form and substance reasonably satisfactory to the Collateral
Agent.
(f) Other Actions as to Any and All Collateral. Each Grantor further
agrees, at the request and option of the Collateral Agent, and
subject to the terms and provisions of the Intercreditor Agreement,
to take any and all other actions the Collateral Agent may determine
to be necessary or useful for the attachment, perfection and
priority of, and the ability of the Collateral Agent to enforce, the
Collateral Agent's Security Interest in any and all of the
Collateral, including, without limitation, (a) executing, delivering
and, where appropriate, filing financing statements and amendments
relating thereto under the Uniform Commercial Code, to the extent,
if any, that a Grantor's signature thereon is
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required therefor, (b) causing the Collateral Agent's name to be
noted as secured party on any certificate of title for a titled good
if such notation is a condition to attachment, perfection or
priority of, or ability of the Collateral Agent to enforce, the
Collateral Agent's security interest in such Collateral, (c)
complying with any provision of any statute, regulation or treaty of
the United States as to any Collateral if compliance with such
provision is a condition to attachment, perfection or priority of,
or ability of the Secured Party to enforce, the Secured Party's
security interest in such Collateral, (d) obtaining governmental and
other third party waivers, consents and approvals in form and
substance satisfactory to Collateral Agent, including, without
limitation, any consent of any licensor, lessor or other person
obligated on Collateral, (e) obtaining waivers from mortgagees and
landlords in form and substance satisfactory to the Collateral Agent
and (f) taking all actions under any earlier versions of the Uniform
Commercial Code or under any other law, as reasonably determined by
the Secured Party to be applicable in any relevant Uniform
Commercial Code or other jurisdiction, including any foreign
jurisdiction.
SECTION 3.05. COVENANTS REGARDING PATENT, TRADEMARK AND COPYRIGHT
COLLATERAL. (a) Each Grantor agrees that it will not, do any act or omit to do
any act (and will exercise commercially reasonable efforts to prevent its
licensees from doing any act as omitting to do any act) whereby any Patent that
is material to the conduct of such Grantor's business may become invalidated or
dedicated to the public, and agrees that it shall continue to xxxx any products
covered by a Patent with the relevant patent number as necessary and sufficient
to establish and preserve its rights under applicable patent laws.
(b) Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such Grantor's
business, (i) maintain such Trademark in full force free from any claim of
abandonment or invalidity for non-use, (ii) maintain the quality of products and
services offered under such Trademark, (iii) display such Trademark with notice
of Federal or foreign registration to the extent necessary and sufficient to
establish and preserve its rights under applicable law and (iv) not knowingly
use or knowingly permit the use of such Trademark in violation of any third
party rights.
(c) Each Grantor (either itself or through its licensees or
sublicensees) will, for each work covered by a material Copyright, continue to
publish, reproduce, display, adopt and distribute the work with appropriate
copyright notice as necessary and sufficient to establish and preserve its
rights under applicable copyright laws.
(d) Each Grantor shall notify the Collateral Agent promptly if it
knows or has reason to know that any Patent, Trademark or Copyright material to
the conduct of its business may become abandoned, lost or dedicated to the
public, or of any materially adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, United States Copyright Office or
any court or similar office of any country) regarding such Grantor's ownership
of any Patent, Trademark or Copyright, its right to register the same, or its
right to keep and maintain the same.
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(e) In no event shall any Grantor, either itself or through any
agent, employee, licensee or designee, file an application for any Patent,
Trademark or Copyright (or for the registration of any Trademark or Copyright)
with the United States Patent and Trademark Office, United States Copyright
Office or any office or agency in any political subdivision of the United States
or in any other country or any political subdivision thereof, unless it promptly
informs the Collateral Agent, and executes and delivers any and all agreements,
instruments, documents and papers, including such documents and papers as the
Collateral Agent may reasonably request, to evidence the Collateral Agent's
security interest in such Patent, Trademark or Copyright, and each Grantor
hereby agrees to execute and file such writings for the foregoing purposes, and
also appoints the Collateral Agent as its attorney-in-fact to execute and file
such writings for the foregoing purposes, all acts of such attorney being hereby
ratified and confirmed; such power, being coupled with an interest, is
irrevocable.
(f) Each Grantor will take all necessary steps that are consistent
with the practice in any proceeding before the United States Patent and
Trademark Office, United States Copyright Office or any office or agency in any
political subdivision of the United States or in any other country or any
political subdivision thereof, to maintain and pursue each material application
relating to the Patents, Trademarks and/or Copyrights (and to obtain the
relevant grant or registration) and to maintain each issued Patent and each
registration of the Trademarks and Copyrights that is material to the conduct of
any Grantor's business, including timely filings of applications for renewal,
affidavits of use, affidavits of incontestability and payment of maintenance
fees, and, if consistent with good business judgment, to initiate opposition,
interference and cancellation proceedings against third parties.
(g) In the event that any Grantor has reason to believe that any
Article 9 Collateral consisting of a Patent, Trademark or Copyright material to
the conduct of any Grantor's business has been or is about to be infringed,
misappropriated or diluted by a third party in a manner which could adversely
affect the conduct of such Grantor's business, such Grantor promptly shall
notify the Collateral Agent and shall, if consistent with good business
judgment, promptly xxx for infringement, misappropriation or dilution and to
recover any and all damages for such infringement, misappropriation or dilution,
and take such other actions as are appropriate under the circumstances to
protect such Article 9 Collateral.
(h) Upon and during the continuance of an Event of Default, each
Grantor shall use its reasonable best efforts to obtain all requisite consents
or approvals by the licensor of each Copyright License, Patent License or
Trademark License to effect the assignment of all such Grantor's right, title
and interest thereunder to the Collateral Agent or its designee if and when the
Collateral Agent may require such Grantor to do so in accordance with the
Intercreditor Agreement.
ARTICLE IV
REMEDIES
SECTION 4.01. REMEDIES UPON DEFAULT. Upon the occurrence and during
the continuance of an Event of Default and the occurrence of the Senior Lender
Termination
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Date, each Grantor agrees to deliver each item of Collateral to the Collateral
Agent on demand, and it is agreed that the Collateral Agent shall have the right
to take any of or all the following actions at the same or different times: (a)
with respect to any Article 9 Collateral consisting of Intellectual Property, on
demand, to cause the Security Interest to become an assignment, transfer and
conveyance of any of or all such Article 9 Collateral by the applicable Grantors
to the Collateral Agent, or to license or sublicense, whether general, special
or otherwise, and whether on an exclusive or nonexclusive basis, any such
Article 9 Collateral throughout the world on such terms and conditions and in
such manner as the Collateral Agent shall determine (other than in violation of
any applicable law or any then-existing licensing arrangements to the extent
that waivers cannot be obtained), and (b) with or without legal process and with
or without prior notice or demand for performance, to take possession of the
Article 9 Collateral and without liability for trespass to enter any premises
where the Article 9 Collateral may be located for the purpose of taking
possession of or removing the Article 9 Collateral and, generally, to exercise
any and all rights afforded to a secured party under the Uniform Commercial Code
or other applicable law. Without limiting the generality of the foregoing, each
Grantor agrees that the Collateral Agent shall have the right, subject to the
mandatory requirements of applicable law, to sell or otherwise dispose of all or
any part of the Collateral at a public or private sale or at any broker's board
or on any securities exchange, for cash, upon credit or for future delivery as
the Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized at any such sale of securities (if it deems it advisable to do so) to
restrict the prospective bidders or purchasers to Persons who will represent and
agree that they are purchasing the Collateral for their own account for
investment and not with a view to the distribution or sale thereof, and upon
consummation of any such sale the Collateral Agent shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any sale of Collateral 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 law) all
rights of redemption, stay and appraisal which such Grantor now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted.
The Collateral Agent shall give the applicable Grantors 10 days'
written notice (which each Grantor agrees is reasonable notice within the
meaning of Section 9-611 of the New York UCC or its equivalent in other
jurisdictions) of the Collateral Agent's intention to make any sale of
Collateral. Such notice, in the case of a public sale, shall state the time and
place for such sale and, in the case of a sale at a broker's board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or portion thereof, will first be
offered for sale at such board or exchange. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as the Collateral Agent may fix and state in the notice (if any) of such sale.
At any such sale, the Collateral, or portion thereof, to be sold may be sold in
one lot as an entirety or in separate parcels, as the Collateral Agent may (in
its sole and absolute discretion) determine. The Collateral Agent shall not be
obligated to make any sale of any Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of such Collateral shall have been
given. The Collateral Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In
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case any sale of all or any part of the Collateral is made on credit or for
future delivery, the Collateral so sold may be retained by the Collateral Agent
until the sale price is paid by the purchaser or purchasers thereof, but the
Collateral Agent shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Collateral so sold and, in case
of any such failure, such Collateral may be sold again upon like notice. At any
public (or, to the extent permitted by law, private) sale made pursuant to this
Agreement, any Secured Party may bid for or purchase, free (to the extent
permitted by law) from any right of redemption, stay, valuation or appraisal on
the part of any Grantor (all said rights being also hereby waived and released
to the extent permitted by law), the Collateral or any part thereof offered for
sale and may make payment on account thereof by using any claim then due and
payable to such Secured Party from any Grantor as a credit against the purchase
price, and such Secured Party may, upon compliance with the terms of sale, hold,
retain and dispose of such property without further accountability to any
Grantor therefor. For purposes hereof, a written agreement to purchase the
Collateral or any portion thereof shall be treated as a sale thereof; the
Collateral Agent shall be free to carry out such sale pursuant to such agreement
and no Grantor shall be entitled to the return of the Collateral or any portion
thereof subject thereto, notwithstanding the fact that after the Collateral
Agent shall have entered into such an agreement all Events of Default shall have
been remedied and the Collateral Obligations paid in full. As an alternative to
exercising the power of sale herein conferred upon it, the Collateral Agent may
proceed by a suit or suits at law or in equity to foreclose this Agreement and
to sell the Collateral or any portion thereof pursuant to a judgment or decree
of a court or courts having competent jurisdiction or pursuant to a proceeding
by a court-appointed receiver. Any sale pursuant to the provisions of this
Section 4.01 shall be deemed to conform to the commercially reasonable standards
as provided in Section 9-610(b) of the New York UCC or its equivalent in other
jurisdictions.
SECTION 4.02. APPLICATION OF PROCEEDS. Subject to the terms and
provisions of the Intercreditor Agreement, The Collateral Agent shall apply the
proceeds of any collection or sale of Collateral, including any Collateral
consisting of cash, as follows:
First, to the payment of all costs and expenses incurred by
the Trustee or the Collateral Agent in connection with such
collection or sale or otherwise in connection with this Agreement,
any other Indenture Document or any of the Collateral Obligations,
including all court costs, the fees and expenses of its agents and
the reasonable fees and expenses of its legal counsel, the repayment
of all advances made by the Trustee or the Collateral Agent
hereunder or under any other Indenture Document on behalf of any
Grantor and any other costs or expenses incurred in connection with
the exercise of any right or remedy hereunder or under any other
Indenture Document and any other amounts due to the Trustee or the
Collateral Agent under Section 7.07 of the Indenture;
Second, to the payment in full of the Collateral Obligations
owed to the Holders (the amounts so applied to be distributed among
the Holders pro rata in accordance with the amounts of the
Collateral Obligations owed to Holders on the date of any such
distribution); and
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Third, to the Grantors, their successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.
SECTION 4.03. GRANT OF LICENSE TO USE INTELLECTUAL PROPERTY. For the
purpose of enabling the Collateral Agent to exercise rights and remedies under
this Agreement at such time as the Collateral Agent shall be lawfully entitled
to exercise such rights and remedies, each Grantor hereby grants to the
Collateral Agent, to the extent such Grantor may do so under applicable
contractual restrictions, an irrevocable, nonexclusive license (exercisable
without payment of royalty or other compensation to the Grantors) to use,
license or sublicense any of the Article 9 Collateral consisting of Intellectual
Property now owned or hereafter acquired by such Grantor, and wherever the same
may be located, and including in such license reasonable access to all media in
which any of the licensed items may be recorded or stored and to all computer
software and programs used for the compilation or printout thereof. The use of
such license by the Collateral Agent may be exercised, at the option of the
Collateral Agent, upon the occurrence and during the continuation of an Event of
Default; provided that any license, sublicense or other transaction entered into
by the Collateral Agent in accordance herewith shall be binding upon the
Grantors notwithstanding any subsequent cure of an Event of Default.
SECTION 4.04. SECURITIES ACT. In view of the position of the
Grantors in relation to the Pledged Collateral, or because of other current or
future circumstances, a question may arise under the Securities Act of 1933, as
now or hereafter in effect, or any similar statute hereafter enacted analogous
in purpose or effect (such Act and any such similar statute as from time to time
in effect being called the "FEDERAL SECURITIES LAWS") with respect to any
disposition of the Pledged Collateral permitted hereunder. Each Grantor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were
to attempt to dispose of all or any part of the Pledged Collateral, and might
also limit the extent to which or the manner in which any subsequent transferee
of any Pledged Collateral could dispose of the same. Similarly, there may be
other legal restrictions or limitations affecting the Collateral Agent in any
attempt to dispose of all or part of the Pledged Collateral under applicable
Blue Sky or other state securities laws or similar laws analogous in purpose or
effect. Each Grantor recognizes that in light of such restrictions and
limitations the Collateral Agent may, with respect to any sale of the Pledged
Collateral, limit the purchasers to those who will agree, among other things, to
acquire such Pledged Collateral for their own account, for investment, and not
with a view to the distribution or resale thereof. Each Grantor acknowledges and
agrees that in light of such restrictions and limitations, the Collateral Agent,
in its sole and absolute discretion (a) may proceed to make such a sale whether
or not a registration statement for the purpose of registering such Pledged
Collateral or part
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thereof shall have been filed under the Federal Securities Laws and (b) may
approach and negotiate with a single potential purchaser to effect such sale.
Each Grantor acknowledges and agrees that any such sale might result in prices
and other terms less favorable to the seller than if such sale were a public
sale without such restrictions. In the event of any such sale, the Collateral
Agent shall incur no responsibility or liability for selling all or any part of
the Pledged Collateral at a price that the Collateral Agent, in its sole and
absolute discretion, may in good xxxxx xxxx reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might have
been realized if the sale were deferred until after registration as aforesaid or
if more than a single purchaser were approached. The provisions of this Section
4.04 will apply notwithstanding the existence of a public or private market upon
which the quotations or sales prices may exceed substantially the price at which
the Collateral Agent sells.
SECTION 4.05. REGISTRATION. Each Grantor agrees that, upon the
occurrence and during the continuance of an Event of Default and subject to the
terms and conditions of the Intercreditor Agreement, if for any reason the
Collateral Agent desires to sell any of the Pledged Collateral at a public sale,
it will, at any time and from time to time, upon the written request of the
Collateral Agent, use its reasonable best efforts to take or to cause the issuer
of such Pledged Collateral to take such action and prepare, distribute and/or
file such documents, as are required or advisable in the reasonable opinion of
counsel for the Collateral Agent to permit the public sale of such Pledged
Collateral. Each Grantor further agrees to indemnify, defend and hold harmless
the Collateral Agent, each other Secured Party, any underwriter and their
respective officers, directors, affiliates and controlling persons from and
against all loss, liability, expenses, costs of counsel (including, without
limitation, reasonable fees and expenses to the Collateral Agent of legal
counsel), and claims (including the costs of investigation) that they may incur
insofar as such loss, liability, expense or claim arises out of or is based upon
any alleged untrue statement of a material fact contained in any prospectus (or
any amendment or supplement thereto) or in any notification or offering
circular, or arises out of or is based upon any alleged omission to state a
material fact required to be stated therein or necessary to make the statements
in any thereof not misleading, except insofar as the same may have been caused
by any untrue statement or omission based upon information furnished in writing
to such Grantor or the issuer of such Pledged Collateral by the Collateral Agent
or any other Secured Party expressly for use therein. Each Grantor further
agrees, upon such written request referred to above, to use its reasonable
efforts to qualify, file or register, or cause the issuer of such Pledged
Collateral to qualify, file or register, any of the Pledged Collateral under the
Blue Sky or other securities laws of such states as may be requested by the
Collateral Agent and keep effective, or cause to be kept effective, all such
qualifications, filings or registrations. Each Grantor will bear all costs and
expenses of carrying out its obligations under this Section 4.05. Each Grantor
acknowledges that there is no adequate remedy at law for failure by it to comply
with the provisions of this Section 4.05 and that such failure would not be
adequately compensable in damages, and therefore agrees that its agreements
contained in this Section 4.05 may be specifically enforced.
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ARTICLE V
INDEMNITY, SUBROGATION AND SUBORDINATION
SECTION 5.01. INDEMNITY AND SUBROGATION. In addition to all such
rights of indemnity and subrogation as the Guarantors may have under applicable
law (but subject to Section 5.03), the Company agrees that (a) in the event a
payment of an obligation shall be made by any Guarantor under Section 12.01 of
the Indenture, the Company shall indemnify such Guarantor for the full amount of
such payment and such Guarantor shall be subrogated to the rights of the Person
to whom such payment shall have been made to the extent of such payment and (b)
in the event any assets of any Grantor shall be sold pursuant to this Agreement
or any other Security Document to satisfy in whole or in part an obligation owed
to any Secured Party, the Company shall indemnify such Grantor in an amount
equal to the greater of the book value or the fair market value of the assets so
sold.
SECTION 5.02. CONTRIBUTION AND SUBROGATION. Each Guarantor and
Grantor (a "CONTRIBUTING PARTY") agrees (subject to Section 5.03) that, in the
event a payment shall be made by any other Guarantor under the Indenture or
hereunder in respect of any Obligation or that assets of any other Grantor shall
be sold pursuant to any Security Document to satisfy any Obligation owed to any
Secured Party and such other Guarantor or Grantor (the "CLAIMING PARTY") shall
not have been fully indemnified by the Company as provided in Section 5.01, the
Contributing Party shall indemnify the Claiming Party in an amount equal to the
amount of such payment or the greater of the book value or the fair market value
of such assets, as the case may be, in each case multiplied by a fraction of
which the numerator shall be the net worth of the Contributing Party on the date
hereof and the denominator shall be the aggregate net worth of all the
Guarantors and Grantors on the date hereof (or, (a) in the case of any Guarantor
becoming a party to the Indenture pursuant to Section 4.12 of the Indenture, the
date of the supplement to the Indenture executed and delivered by such Guarantor
or, (b) in the case of any Grantor becoming a party hereto pursuant to Section
6.14, the date of the supplement hereto executed and delivered by such Grantor).
Any Contributing Party making any payment to a Claiming Party pursuant to this
Section 5.02 shall be subrogated to the rights of such Claiming Party under
Section 5.01 to the extent of such payment.
SECTION 5.03. SUBORDINATION. (a) Notwithstanding any provision of
this Agreement to the contrary, all rights of the Guarantors and Grantors under
Sections 5.01 and 5.02 and all other rights of indemnity, contribution or
subrogation under applicable law or otherwise shall be fully subordinated to the
indefeasible payment in full in cash of the Collateral Obligations. No failure
on the part of the Company or any Guarantor or Grantor to make the payments
required by Sections 5.01 and 5.02 (or any other payments required under
applicable law or otherwise) shall in any respect limit the obligations and
liabilities of any Guarantor or Grantor with respect to its obligations under
the Indenture or hereunder, and each Guarantor and Grantor shall remain liable
for the full amount of the obligations of such Guarantor or Grantor under the
Indenture or hereunder.
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(b) Each Guarantor and Grantor hereby agrees that all Indebtedness
and other monetary obligations owed by it to any other Guarantor, Grantor or any
other Subsidiary shall be fully subordinated to the indefeasible payment in full
in cash of the Collateral Obligations.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. NOTICES. All communications and notices hereunder
shall (except as otherwise expressly permitted herein) be in writing and given
as provided in Section 14.02 of the Indenture. All communications and notices
hereunder to any Subsidiary Party shall be given to it in care of the Company as
provided in Section 14.02 of the Indenture.
SECTION 6.02. WAIVERS; AMENDMENT. (a) No failure or delay by the
Collateral Agent, the Trustee or any Holder in exercising any right or power
hereunder or under any other Indenture Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Collateral Agent, the Trustee and
the Holders hereunder and under the other Indenture Documents are cumulative and
are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or consent to any departure by any
Indenture Party therefrom shall in any event be effective unless the same shall
be permitted by paragraph (b) of this Section 6.02, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No notice or demand on any Indenture Party in any case shall
entitle any Indenture Party to any other or further notice or demand in similar
or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except in accordance with the Indenture, pursuant to an
agreement or agreements in writing entered into by the Collateral Agent and the
Indenture Party or Indenture Parties with respect to which such waiver,
amendment or modification is to apply.
SECTION 6.03. COLLATERAL AGENT'S FEES AND EXPENSES; INDEMNIFICATION.
(a) Each Grantor and Guarantor jointly and severally agrees to pay upon demand
to the Collateral Agent the amount of any and all reasonable expenses, including
the reasonable fees, disbursements and other charges of its counsel and of any
experts or agents, which the Collateral Agent may incur in connection with (i)
the administration of this Agreement, (ii) the custody or preservation of, or
the sale of, collection from or other realization upon any of the Collateral,
(iii) the exercise, enforcement or protection of any rights of the Collateral
Agent hereunder or (iv) the failure of any Grantor or any Guarantor to perform
or observe any of the provisions hereof applicable to it.
(b) Without limitation of its indemnification obligations under the
other Indenture Documents, each Grantor and Guarantor jointly and severally
agrees to indemnify the Collateral Agent, the Trustee, the Holders and each
Affiliate of the foregoing Persons (each such Person being called an
"INDEMNITEE") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the fees,
charges and
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disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of, the
execution, delivery or performance of this Agreement or any claim, litigation,
investigation or proceeding relating to any of the foregoing agreement or
instrument contemplated hereby, or to the Collateral, whether or not any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.
(c) Any such amounts payable as provided hereunder shall be
additional Collateral Obligations secured hereby and by the other Security
Documents. The provisions of this Section 6.03 shall remain operative and in
full force and effect regardless of the termination of this Agreement or any
other Indenture Document, the consummation of the transactions contemplated
hereby, the repayment of any of the Collateral Obligations, the invalidity or
unenforceability of any term or provision of this Agreement or any other
Indenture Document, or any investigation made by or on behalf of the Collateral
Agent or any other Secured Party. All amounts due under this Section 6.03 shall
be payable on written demand therefor.
(d) The Collateral Agent shall not be responsible in any manner
whatsoever for the correctness of any recitals, statements, representations or
warranties contained herein. The Collateral Agent makes no representation as to
the value or condition of the Collateral or any part thereof, as to the title of
any Grantor to the Collateral, as to the security afforded by this Agreement or
any other Security Document or as to the validity, execution, enforceability,
legality or sufficiency of this Agreement or any Security Document, and the
Collateral Agent shall incur no liability or responsibility in respect of any
such matters. Except as may be expressly provided in any Security Document, the
Collateral Agent shall not be responsible for insuring the Collateral, for the
payment of taxes, charges, assessments or liens upon the Collateral or otherwise
as to the maintenance of the Collateral, except as provided in the immediately
following sentence when the Collateral Agent has possession of the Collateral.
The Collateral Agent shall have no duty to the Grantors or to the holders of the
Notes as to any Collateral in its possession or control or in the possession or
control of any agent or nominee of the Collateral Agent or any income thereon or
as to the preservation of rights against prior parties or any other rights
pertaining thereto, except the duty to accord such of the Collateral as may be
in its possession substantially the same care as it accords its own assets and
the duty to account for monies received by it. The Collateral Agent shall have
no obligations to file any UCC financing statements or UCC continuation
statements except at the written direction of the Grantors or the Trustee and
upon receipt of such statements completed and in a proper form for filing
provided to the Collateral Agent at least five Business Days in advance of any
requested filing date. The Collateral Agent shall have no obligations to file
any document with any foreign or domestic patent, trademark or copyright office,
or any foreign governmental, municipal or other office. The Collateral Agent
shall not be responsible for the consequences of any oversight or error of
judgment whatsoever, except that the Collateral Agent shall be liable for losses
due to its willful misconduct, gross negligence or bad faith. The Collateral
Agent shall not be required to ascertain or inquire as to the performance by any
Grantor of any of the covenants or agreements contained herein or in the
Indenture, the Notes or the Security Documents. Neither the Collateral Agent nor
any officer, agent or representative thereof shall be personally liable for
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any action taken or omitted to be taken by any such person in connection with
this Agreement or any other Security Document except for such person's own gross
negligence, willful misconduct or bad faith. The Collateral Agent may execute
any of the powers granted under this Agreement or any of the other Security
Documents and perform any duty hereunder or thereunder either directly or by or
through agents or attorneys-in-fact, and shall not be responsible for the
misconduct of any agents or attorneys-in-fact selected by it with due care.
(e) Subject to any additional requirements provided herein or in the
Indenture, in the performance of its duties under this Collateral Agreement the
Collateral Agent shall deem it necessary or desirable that a matter be proved or
established with respect to any Person in connection with the taking, suffering
or omitting of any action hereunder by the Collateral Agent, such matter may be
conclusively deemed to be proved or established by a certificate executed by an
officer of such Person, and absent gross negligence, willful misconduct or bad
faith, the Collateral Agent shall have no liability with respect to any action
taken, suffered or omitted in reliance thereon.
(f) The Collateral Agent may consult with counsel and, in the
absence of bad faith, shall be fully protected in taking any action hereunder in
accordance with any advice of such counsel. The Collateral Agent shall have the
right but not the obligation at any time to seek instructions concerning the
administration of this Agreement, the duties created hereunder or any of the
Collateral from any court of competent jurisdiction.
(g) The Collateral Agent shall be fully protected in relying upon
any resolution, statement, certificate, instrument, opinion, report, notice,
request, consent, order or other paper or document which it believes to be
genuine and to have been signed or presented by the proper party or parties. In
the absence of its gross negligence, willful misconduct or bad faith the
Collateral Agent may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificate or
opinions furnished to the Collateral Agent in connection with this Agreement and
the other Security Documents.
(h) The Collateral Agent shall not be deemed to have actual,
constructive, direct or indirect notice or knowledge of the occurrence of any
Event of Default unless and until the Collateral Agent shall have received a
written notice of Event of Default. The Collateral Agent shall have no
obligation whatsoever either prior to or after receiving such a notice of Event
of Default to inquire whether an Event of Default has, in fact, occurred and
shall be entitled to rely conclusively, and shall be fully protected in so
relying, on any certificate so furnished to it and shall have no obligation to
take or omit to take any action with respect to such notice of Event of Default.
(i) If any dispute or disagreement shall arise as to the allocation
of any sum of money received by the Collateral Agent hereunder, under the
Indentures or under any Security Document, the Collateral Agent shall have the
right to deliver such sum to a court of competent jurisdiction and therein
commence an action for interpleader.
(j) A resignation or removal of the Collateral Agent and appointment
of a successor Collateral Agent shall become effective only upon the successor
Collateral Agent's acceptance of appointment as provided in this Section 6.03.
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(i) The Collateral Agent may resign in writing at any time by
so notifying the Grantors and the Trustee and will thereafter be
discharged from the duties created hereby upon the effectiveness of the
Collateral Agent's resignation pursuant to subclause (iv) below. The
Grantors or the Trustee may remove the Collateral Agent if:
(A) the Collateral Agent is adjudged a bankrupt or an
insolvent or an order for relief is entered with respect to
the Collateral Agent under Title 11, U.S. Code or any similar
federal or state law for the relief of debtors;
(B) a custodian or public officer takes charge of the
Collateral Agent or its property; or
(C) the Collateral Agent becomes incapable of acting.
(ii) If the Collateral Agent resigns or is removed or if a
vacancy exists in the office of Collateral Agent for any reason, the
Trustee shall promptly appoint a successor Collateral Agent.
(iii) If a successor Collateral Agent does not take office
within 60 days after the retiring Collateral Agent resigns or is removed,
the retiring Collateral Agent may petition any court of competent
jurisdiction for the appointment of a successor Collateral Agent.
(iv) A successor Collateral Agent shall deliver a written
acceptance of its appointment to the retiring Collateral Agent, the
Indenture Trustee and the Grantors. Thereupon, the resignation or removal
of the retiring Collateral Agent shall become effective, and the successor
Collateral Agent shall have all the rights, powers and duties of the
Collateral Agent under this Collateral Agreement. The successor Collateral
Agent shall mail a notice of its succession to the Indenture Trustee. The
retiring Collateral Agent shall promptly transfer all property held by it
as Collateral Agent to the successor Collateral Agent, provided all sums
owing to the Collateral Agent hereunder have been paid. Notwithstanding
replacement of the Collateral Agent pursuant to this Section 6.03, the
Grantor's obligations under Sections 6.03(a), (b) and (c) hereof shall
continue for the benefit of the retiring Collateral Agent, and the
Grantors shall pay to any such replaced or removed Collateral Agent all
amounts owed to such replaced or removed Collateral Agent under Sections
6.03(a), (b) and (c) hereof upon such replacement or removal.
SECTION 6.04. SUCCESSORS AND ASSIGNS. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the permitted successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of any Guarantor, Grantor or the Collateral Agent
that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.
SECTION 6.05. SURVIVAL OF AGREEMENT. All covenants, agreements,
representations and warranties made by the Indenture Parties in the Indenture
Documents and in the certificates or other instruments prepared or delivered in
connection with or pursuant to this
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Agreement or any other Indenture Document shall be considered to have been
relied upon by the Holders and shall survive the execution and delivery of the
Indenture Documents and the purchase of the Notes by the Holders, regardless of
any investigation made by any Holder or on its behalf and notwithstanding that
the Collateral Agent, the Trustee or any Holder may have had notice or knowledge
of any Default or incorrect representation or warranty and shall continue in
full force and effect as long as any Obligation remains unpaid.
SECTION 6.06. COUNTERPARTS; EFFECTIVENESS; SEVERAL AGREEMENT. This
Agreement may be executed in counterparts, each of which shall constitute an
original but all of which when taken together shall constitute single contract,
and shall become effective as provided in this Section 6.06. Delivery of an
executed signature page to this Agreement by facsimile transmission shall be as
effective as delivery of a manually signed counterpart of this Agreement. This
Agreement shall become effective as to any Indenture Party when a counterpart
hereof executed on behalf of such Indenture Party shall have been delivered to
the Collateral Agent and a counterpart hereof shall have been executed on behalf
of the Collateral Agent, and thereafter shall be binding upon such Indenture
Party and the Collateral Agent and their respective permitted successors and
assigns, and shall inure to the benefit of such Indenture Party, the Collateral
Agent and the other Secured Parties and their respective successors and assigns,
except that no Indenture Party shall have the right to assign or transfer its
rights or obligations hereunder or any interest herein or in the Collateral (and
any such assignment or transfer shall be void) except as expressly contemplated
by this Agreement or the Indenture. This Agreement shall be construed as a
separate agreement with respect to each Indenture Party and may be amended,
modified, supplemented, waived or released with respect to any Indenture Party
without the approval of any other Indenture Party and without affecting the
obligations of any other Indenture Party hereunder.
SECTION 6.07. SEVERABILITY. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction. The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 6.08. RIGHT OF SET-OFF. If an Event of Default shall have
occurred and be continuing, subject to the terms and provisions of the
Intercreditor Agreement, each Holder is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other obligations at any time owing by such Holder to or for
the credit or the account of any Subsidiary Party against any of and all the
obligations of such Subsidiary Party now or hereafter existing under this
agreement owed to such Holder, irrespective of whether or not such Holder shall
have made any demand under this Agreement and although such obligations may be
unmatured. The rights of each Holder under this Section 6.08 are in addition to
other rights and remedies (including other rights of set-off) which such Holder
may have.
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SECTION 6.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS. (a) This Agreement shall be construed in accordance with and governed
by the law of the State of New York.
(b) Each of the Indenture Parties hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or any other Indenture Document, or
for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or any other
Indenture Document shall affect any right that the Collateral Agent, the Trustee
or any Holder may otherwise have to bring any action or proceeding relating to
this Agreement or any other Indenture Document against any Grantor or Guarantor,
or its properties in the courts of any jurisdiction.
(c) Each of the Indenture Parties hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any other Indenture Document in any court referred to in paragraph (b) of this
Section 6.09. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 6.01. Nothing in this
Agreement or any other Indenture Document will affect the right of any party to
this Agreement to serve process in any other manner permitted by law.
SECTION 6.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER INDENTURE DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 6.10.
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SECTION 6.11. HEADINGS. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and are not to affect the construction of, or to betaken into
consideration in interpreting, this Agreement.
SECTION 6.12. SECURITY INTEREST ABSOLUTE. All rights of the
Collateral Agent hereunder, the Security Interest, the grant of a security
interest in the Pledged Collateral and all obligations of each Grantor and
Guarantor hereunder shall be absolute and unconditional irrespective of (a) any
lack of validity or enforceability of the Indenture, any other Indenture
Document, any agreement with respect to any of the Collateral Obligations or any
other agreement or instrument relating to any of the foregoing, (b) any change
in the time, manner or place of payment of, or in any other term of, all or any
of the Collateral Obligations, or any other amendment or waiver of or any
consent to any departure from the Indenture, any other Indenture Document or any
other agreement or instrument, (c) any exchange, release or non-perfection of
any Lien on other collateral, or any release or amendment or waiver of or
consent under or departure from any guarantee, securing or guaranteeing all or
any of the Collateral Obligations, or (d) any other circumstance that might
otherwise constitute a defense available to, or a discharge of, any Grantor or
Guarantor in respect of the Collateral Obligations or this Agreement.
SECTION 6.13. TERMINATION OR RELEASE. (a) This Agreement, the
Security Interest and all other security interests granted hereby shall
terminate when all the Collateral Obligations have indefeasibly been paid in
full.
(b) Upon the sale or other disposition (including by way of
consolidation or merger) of a Guarantor or Grantor or the sale or disposition of
all or substantially all the assets of such Guarantor or Grantor (in each case
other than a sale or disposition to the Company or an Affiliate of the Company
and as permitted by the Indenture and if in connection therewith the Company
provides an Officers' Certificate to the Collateral Agent to the effect that the
Company will comply with its obligations under Section 4.06 of the Indenture),
such Guarantor or Grantor shall be deemed released from all obligations
hereunder without any further action required on the part of the Trustee or any
Holder.
(c) A Guarantor or Grantor also shall be released (i) upon the
designation of such Guarantor or Grantor as an Unrestricted Subsidiary; or (ii)
if the Company exercises its legal defeasance option or its covenant defeasance
option as permitted by Section 8.01 of the Indenture.
(d) If any of the Collateral shall become subject to the
disposition, release or eminent domain provisions set forth in Sections 12.03,
12.04 and 12.06 of the Indenture, such Collateral shall be automatically
released from the Security Interest to the extent provided in Sections 12.03,
12.04 and 12.06 of the Indenture.
(e) In connection with any termination or release pursuant to
paragraph (a), (b) or (c), the Collateral Agent shall execute and deliver to any
Grantor, at such Grantor's expense, all documents that such Grantor shall
reasonably request to evidence such termination
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or release. Any execution and delivery of documents pursuant to this Section
6.13 shall be without recourse to or warranty by the Collateral Agent.
SECTION 6.14. ADDITIONAL SUBSIDIARIES. If, pursuant to Sections 4.11
and 11.03 of the Indenture, the Company is required to cause any Subsidiary that
is not a Subsidiary Party to become a Subsidiary Party, upon execution and
delivery by the Collateral Agent and a Subsidiary of an instrument in the form
of Exhibit I hereto, such Subsidiary shall become a Subsidiary Party hereunder
with the same force and effect as if originally named as a Subsidiary Party
herein. The execution and delivery of any such instrument shall not require the
consent of any other Indenture Party hereunder. The rights and obligations of
each Indenture Party hereunder shall remain in full force and effect
notwithstanding the addition of any new Indenture Party as a party to this
Agreement.
SECTION 6.15. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT. Each
Grantor hereby appoints the Collateral Agent the attorney-in-fact of such
Grantor for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instrument that the Collateral Agent may
deem necessary or advisable to accomplish the purposes hereof, which appointment
is irrevocable, coupled with an interest and shall not be exercisable unless an
Event of Default has occurred and is continuing. Without limiting the generality
of the foregoing, the Collateral Agent shall have the right, upon the occurrence
and during the continuance of an Event of Default and subject to the terms and
provisions of the Intercreditor Agreement, with full power of substitution
either in the Collateral Agent's name or in the name of such Grantor (a) to
receive, endorse, assign and/or deliver any and all notes, acceptances, checks,
drafts, money orders or other evidences of payment relating to the Collateral or
any part thereof; (b) to demand, collect, receive payment of, give receipt for
and give discharges and releases of all or any of the Collateral; (c) to sign
the name of any Grantor on any invoice or xxxx of lading relating to any of the
Collateral; (d) to send verifications of Accounts to any Account Debtor; (e) to
commence and prosecute any and all suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect or otherwise realize on
all or any of the Collateral or to enforce any rights in respect of any
Collateral; (f) to settle, compromise, compound, adjust or defend any actions,
suits or proceedings relating to all or any of the Collateral; (g) to notify, or
to require any Grantor to notify, Account Debtors to make payment directly to
the Collateral Agent; and (h) to use, sell, assign, transfer, pledge, make any
agreement with respect to or otherwise deal with all or any of the Collateral,
and to do all other acts and things necessary to carry out the purposes of this
Agreement, as fully and completely as though the Collateral Agent were the
absolute owner of the Collateral for all purposes; provided that nothing herein
contained shall be construed as requiring or obligating the Collateral Agent to
make any commitment or to make any inquiry as to the nature or sufficiency of
any payment received by the Collateral Agent, or to present or file any claim or
notice, or to take any action with respect to the Collateral or any part thereof
or the moneys due or to become due in respect thereof or any property covered
thereby. The Collateral Agent and the other Secured Parties shall be accountable
only for amounts actually received as a result of the exercise of the powers
granted to them herein, and neither they nor their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence, willful misconduct or
bad faith.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Collateral Agreement as of the day and year first above written.
INTERNATIONAL WIRE GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
EACH OF THE SUBSIDIARIES LISTED
ON SCHEDULE I HERETO
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
BNY MIDWEST TRUST COMPANY
By: /s/ X. XXXXXXXX
_____________________________________
Name: X. Xxxxxxxx
Title: Assistant Vice President
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SCHEDULE I
TO THE COLLATERAL AGREEMENT
SUBSIDIARY PARTIES
IWG RESOURCES LLC
WIRE TECHNOLOGIES, INC.
OMEGA WIRE, INC.
INTERNATIONAL WIRE ROME OPERATIONS, INC.
OWI CORPORATION
CAMDEN WIRE CO., INC.
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EXHIBIT I
TO THE COLLATERAL AGREEMENT
SUPPLEMENT NO. __ dated as of _______, to the Collateral Agreement
dated as of October 20, 2004, International Wire Group, Inc. and each Subsidiary
Party listed on Schedule I thereto (each such subsidiary individually a
"SUBSIDIARY GRANTOR" and collectively, the "SUBSIDIARY GRANTORS"; the Subsidiary
Grantors, and the Company are referred to collectively herein as the "GRANTORS")
and BNY Midwest Trust Company, as Collateral Agent (in such capacity, the
"COLLATERAL AGENT").
A. Reference is made to made to Indenture dated as of October 20,
2004 (as amended, restated, supplemented or otherwise modified from time to
time, the "INDENTURE"), among the Company and BNY Midwest Trust Company, as
trustee (the "TRUSTEE").
B. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Indenture and the
Collateral Agreement referred to therein.
C. The Grantors have entered into the Collateral Agreement in order
to induce the Trustee to enter into the Indenture and the Holders to purchase
the Notes. Section 6.14 of Collateral Agreement provides that additional
Subsidiaries formed by the Indenture Parties shall become Subsidiary Parties
under the Collateral Agreement and shall execute and deliver an instrument in
the form of this Supplement. The undersigned Subsidiary (the "NEW SUBSIDIARY")
is executing this Supplement in accordance with the requirements of the
Indenture and the Collateral Agreement as consideration for credit previously
extended to the Company.
Accordingly, the Collateral Agent and the New Subsidiary agree as
follows:
SECTION 1. In accordance with Section 6.14 of the Collateral
Agreement, the New Subsidiary by its signature below becomes a Subsidiary Party
(and accordingly, becomes a Guarantor and a Grantor), Grantor and Guarantor
under the Collateral Agreement with the same force and effect as if originally
named therein as a Subsidiary Party and the New Subsidiary hereby (a) agrees to
all the terms and provisions of the Collateral Agreement applicable to it as a
Subsidiary Party, Grantor and Guarantor hereunder and (b) represents and
warrants that the representations and warranties made by it as a Grantor and
Guarantor hereunder are true and correct on and as of the date hereof. In
furtherance of the foregoing, the New Subsidiary, as security for the payment
and performance in full of the Collateral Obligations (as defined in the
Collateral Agreement), does hereby create and grant to the Collateral Agent, its
successors and assigns, for the benefit of the Secured Parties, their successors
and assigns, a security interest in and lien on all of the New Subsidiary's
right, title and interest in and to the Collateral (as defined in the Collateral
Agreement) of the New Subsidiary. Each reference to a "Guarantor" or "Grantor"
in the Collateral Agreement shall be deemed to include the New Subsidiary. The
Collateral Agreement is hereby incorporated herein by reference.
SECTION 2. The New Subsidiary represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and
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delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received a counterpart of this Supplement that bears the
signature of the New Subsidiary and the Collateral Agent has executed a
counterpart hereof. Delivery of an executed signature page to this Supplement by
facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Supplement.
SECTION 4. The New Subsidiary hereby represents and warrants that
(a) set forth on Schedule I attached hereto is a true and correct schedule of
the location of any and all Collateral of the New Subsidiary and (b) set forth
under its signature hereto, is the true and correct legal name of the New
Subsidiary, its jurisdiction of formation and the location of its chief
executive office.
SECTION 5. Except as expressly supplemented hereby, the Collateral
Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and in the Collateral Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 8. All communications and notices hereunder shall be in
writing and given as provided in Section 6.01 of the Collateral Agreement.
SECTION 9. The New Subsidiary agrees to reimburse the Collateral
Agent for its reasonable out-of-pocket expenses in connection with this
Supplement, including the reasonable fees, other charges and disbursements of
counsel for the Collateral Agent.
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IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have
duly executed this Supplement to the Collateral Agreement as of the day and year
first above written.
[NAME OF NEW SUBSIDIARY]
By: _________________________________
Name:
Title:
Legal Name:
Jurisdiction of Formation:
Location of Chief Executive office:
BNY MIDWEST TRUST COMPANY
By: _________________________________
Name:
Title:
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SCHEDULE I
TO THE SUPPLEMENT NO
TO THE COLLATERAL AGREEMENT
LOCATION OF COLLATERAL
DESCRIPTION LOCATION
EQUITY INTERESTS
NUMBER OF CLASS OF PERCENTAGE OF EQUITY
ISSUER NUMBER OF CERTIFICATE REGISTERED OWNER EQUITY INTERESTS INTERESTS
DEBT SECURITIES
ISSUER PRINCIPAL AMOUNT DATE OF NOTE MATURITY DATE
INTELLECTUAL PROPERTY
MORTGAGED PROPERTY
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